2018-R-1 In Simple Terms

The City of Charlestown’s Public Notice about Resolution 2018-R-1 creating the Indiana-American Economic Development Area published in Wednesday’s newspapers invites citizens to a public hearing on Thursday, March 8 at 9:00 AM at City Hall. During this public meeting people can express any concerns, ask questions, or state remonstrances to the resolution.

A copy of the documents related to the Resolution is available at the end of this article but I’ve also included some observations for people to consider as they weigh the merits of the Resolution and think of questions they want answered at the meeting.

Screen Shot 2018-02-23 at 9.32.32 AM

  1. This Resolution presumes that the sale of the water utility to Indiana American Water will be approved by the Indiana Utility Regulatory Commission (IURC). Currently there has not been a decision reached in the case and the sale is NOT final.
  2. The proposed order of the Office of Utility Consumer Counselor (OUCC) noted significant problems with the proposed sale that will be considered by the IURC in making their decision to approve or deny the sale (full document available at end of article).
    • Indiana American neglected due process by failing to provide proper notification of the sale to existing water customers (OUCC order p 4).
    • Indiana American did not provide a plan to fix the distressed water system (OUCC order p 10). 
    • “Indiana American Water has not shown that the proposed sale is in the public interest” (OUCC order p 19). 
  3. If the sale is approved despite these objections by the OUCC, Indiana American Water, as a private company, will pay property taxes on the water utility. They will be allowed to recoup their costs for repairs, taxes, and the purchase price ($13.5 million) by raising rates for all of their customers, statewide, including Charlestown. 
  4. The Resolution creates a “spider” Tax Increment Financing (TIF) district out of the actual water utility (well, lines, equipment, etc).
  5. The City will use the anticipated revenue from property taxes in this TIF to buy bonds and will divert all future incremental revenue into an isolated fund in order to repay those bonds, and fund other projects.
  6. The money generated from these funds will NOT be used to repair Charlestown’s water utility. 
  7. The money generated from these funds will be used to make “improvements” to the City’s sewer system (which is not being purchased by IAW). 

Sources:

Resolution 2018-R-1 Indiana American Economic District

OUCC Proposed Order

Response received from Mayor Bob Hall when I asked him to explain the purpose of this resolution: “What this legislation does is establish what is called a spider TIF that includes all the waterlines and facilities that is being purchased by Indiana American. As Indiana American takes possession of the distribution system, they as a private company, will be paying property taxes. With the TIF established it will allow the City to capture more of this tax. This will then be used to make needed improvements in the sewer system without raising rates.” (Bob Hall, messenger communication, 02/23/2018)

Author: Treva Hodges

Resident of Charlestown, Indiana. Advocate.

One thought on “2018-R-1 In Simple Terms”

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