In December, the mayor sent an ordinance to council asking them to approve both the “necessity for takeover” and the “condemnation” phases of the Aqua Indiana utility takeover. This ordinance was set to be discussed by council this week. During the necessity for takeover phase, the city would make offers to Aqua Indiana, and follow other “negotiation” steps, to agree on a price tag to purchase the company. City Council should give the mayor this authority to negotiate, and by doing so would signal agreement that an attempt to take over the utility should be made.
This first phase (necessity and negotiation) triggers a chain of events, likely to include multiple independent appraisals of the utility and its assets, giving council a better understanding of what the utility might cost in the future. For the sake of transparency, this phase should be carefully looked at by City Council before proceeding. Then, if and when an agreement cannot be reached (agreement is unlikely because Aqua Indiana has little incentive to sell), the second phase is condemnation.
During condemnation, a judge would decide the value of the entire utility company, and the city would then have the ability to take over by purchasing the company (IC 8-1.5-2-15 & IC 32-24).
City Council could pass the ordinance as written this month, then, in some amount of time (the process could take years) it will be asked to approve financing for the condemned utility. If City Council passes the ordinance as is, they would be giving the mayor power to condemn Aqua Indiana before having any estimates as to what it may cost to purchase the utility in the future. City Council would be surrendering all of their oversight power until the very end of the process, after a judge has determined a price.
By then, it will be too late for oversight on cost, council will be all but forced to approve. They could of course vote “no” to financing the purchase, and the takeover would fail. After years of negotiation and thousands in legal fees from both sides, the residents on the southwest side would be the big losers, and council would certainly be painted as the “bad guys” by the mayor’s office.
Negotiation and condemnation authority should be granted separately by City Council. By asking for both powers now, the mayor is asking for a blank check from the city’s fiscal body. While it may make the process more expedient from the city’s perspective, it certainly undermines the value of the people’s voice on City Council and regard for taxpayer dollars.
At the risk of being politically demonized, City Council should use their constituent-given power to control the final price tag as much as possible. The entire city, which this council represents, will no doubt be forced to pay for the takeover in some fashion, further expanding the need for transparency.
Most agree the utility should be taken over by the city, but we should not write a blank check to the mayor for acquisition of a poorly performing utility. City Council should approve necessity and negotiation only, and if no agreement on price can be found, the mayor can return to council and ask for condemnation approval. At that point, council will have a much better estimate of cost.
The council will be portrayed as trying to slow the process, but by splitting the ordinance into two parts, City Council can proceed retaining the most oversight and acting responsibly on behalf of all city taxpayers. The mayor’s strategy to combine the two phases is both for efficiency and political good standing. If the council prudently chooses to split the two processes in order to have more say in the final cost, they will no doubt be painted as “impeding progress.”
No matter what, it presents a unique and difficult decision for Councilman Mitch Harper, who has said he plans to run for mayor in 2015. Nearly all of Harper’s constituents are served by Aqua Indiana. This southwest part of the city, Harper’s district, is a must-win for any Republican candidate and a sought-after district for Democrats.