Editor’s Note: City-Council President Ryan Vaughn read Think Again’s post regarding the water company and asked me if he could post a response. I said sure.
Six hundred words. Hmmmm.
Abdul limits me to 600 words to refute his ridiculous position, that the pending IWC sale to Citizens Energy is a smart deal. It probably won’t take 600.
Water is vital to our economy, and our future. Those who manage it must be trustworthy and competent. Here’s a surprise—I believe Citizens energy fits that bill. IF they are reigned in on PR expenses. (Their PR expenses come from revenue outside of what they collect through ratepayers) They’ve earned a good reputation (which is one of the many reasons the Mayor’s office believes they are the right choice out of the 29 responses to the REI).
But this deal makes little sense for other reasons.
***Philosophically, I’d expect Republicans and Libertarians (who seem to comprise most of IB’s readers) to oppose this deal. It camouflages needed city infrastructure repairs, as a “benefit” of the IWC sale. (The benefit of the sale is 450 million dollars. The city is electing to spend that money on infrastructure repair, one of our greatest needs. For the sake of TA’s argument, lets imagine the alternative – we sell the utilities to Citizens for 450 million without presenting a plan on what we intend to do with the money. I can’t imagine a Mayor who would propose, or a Councillor that would approve, something like that.) Abdul has even fallen into that trap.
***The useful life of a sidewalk or street, under normal use, could stretch 10 years. The bonds being used to float this sale are 20 and 30 years in length. (Inclusive of the PILOT repayment and the borrowing debt for purchase, the deal saves ratepayers 1.47 BILLION dollars over 30 years AND provides us with $450 million for infrastructure improvements immediately. These figures are realized by operating and other synergies Citizens conservatively estimates at $40 million a year.) So, we’d be paying for the car much longer than we use it. Who buys a car this way? This deal is the car-payment equivalent of a 1979 Impala with $40,000 of automotive after-market product. Spinning hubcaps, and flat-screen TVs, folks! Woo-hoo! The Impala alone had one of Detroit’s best engines ever. No need to soup it up and raise the car payment. (Personal note: I’m not sure how this is related to in anyway to this deal, but for the sake of readers clarity – I own a 1979 Chevy; with aftermarket improvements I made myself the car is now worth more now than when it came off the assembly line and when I bought 2 years ago. It just goes to show you, if done properly, this too can be a good investment.)
***Abdul makes the insane argument that those who oppose this sale, must come up with an alternative. That’s not a sound public policy position, because it imposes a cerebral penalty on smart people. (It’s not sound public policy to propose an alternative? I disagree but for the sake of responding, the result of “no alternative” is a ever growing $1.4 billion dollar infrastructure deficit and a 400% increase in utility bills. Having no ideas doesn’t mean nothing happens, it means the inevitable happens.) But here is a Libertarian-inspired thought: sell the utility and do the sidewalks in another manner. (What “other manner?” The only “other manner” would be to raise taxess. Why raise taxes when the city would have 450 million in the bank from selling the utilities?) Straight-up, without the economic shell game. (No shell game here, we’re selling the utilities and using that money to fix infrastructure - pretty straight up.) If we package these two concepts, we fall prey to the saddest PR shenanigans since pet rocks. (Ironically, also a profitable venture).
We aren’t stupid. Voters in three different jurisdictions in this community, supported tax increases in recent referenda, and so did Wishard’s constituency. (Again, why raise taxes when we have money from the utility sale?)
***Not all of IWC’s customers are Indy taxpayers. (Isn’t this a reason in favor of the deal?) Thousands.
You can’t put enough lipstick on this pig to take it to a prom. I fully expect the City-County Council majority to kiss it anyway (The deal has bipartisan support). The world won’t end, but if this Mayor and Council, think that we can be bought with public-works projects sprinkled around town (Since when is doing what you promised to do and what the citizens expect you to do “buying votes?”), well…if we allow that to happen, we deserve what we get, which will be:
A non-transparent deal (There have been over 50 public meetings, 7 Council meetings and there are hundreds of pages of documents available on the web at www.indygov.org), worth hundreds of millions (Yes, when selling a large asset you should recover its value, which happens to be hundreds of millions), for which we’ll be paying for decades (See above – we save $1.47 billion dollars).
Sell IWC for a fair-market price (We are – $262 million). Period. Support whatever public works projects we need and will pay for, through legitimate public discussion (We are. Again, we’ve had 50 public meetings many of which were hosted by the, aptly named, Infrastructure Advisory Committee.)
So, 462 words covered it (Indeed it did.). I didn’t charge you the full 600, because, well…I didn’t need it. See the parallel? I’ll use the extra on another subject, something we really need to talk about.