Kokomo Tribune; Kokomo, Indiana

March 21, 2014

Water sale will go to voters

Russiaville residents petition to decide in a referendum.

By Scott Smith Kokomo Tribune
Kokomo Tribune

---- — After a marathon meeting Monday, the Russiaville Town Council voted 3-1 to sell the city’s municipally-owned water system.

But the town’s residents will ultimately decide whether the utility will be sold to Indiana-American Water, after a petition drive collected enough signatures to send the decision to a public referendum.

Town Council President Jeff Lipinski said he was fine with the referendum.

“I think ultimately, it’s where it should be, in the hands of people who live in the community,” Lipinski said.

More than 50 people sat through a two-hour public meeting, and then stayed for a subsequent 90-minute council meeting Monday.

The sale would net the town just over $900,000, but opponents of the sale say the price wouldn’t justify the loss of local control over rates.

Representatives for Indiana American and for the Utility Workers Union of America both spoke Monday, along with numerous town residents.

Town officials presented the sale to Indiana-American, which also owns Kokomo’s water system, as a way out of debt for the town.

Lipinski said the town owes more than $1.9 million for work performed on the water utility and the town-owned sewer utility.

The sale to Indiana-American would pay off the water utility debt, and since Indiana-American would pay taxes on the water utility, the tax revenue could be captured to pay off the sewer debt, he explained.

City water ratepayers will likely face rate hikes regardless of whether the city keeps the utility.

Indiana-American, which is allowed to seek statewide rate hikes from the Indiana Utility Regulatory Commission, is currently seeking an increase, and Lipinski said without a sale, the town will be forced to raise rates anyway.

Lipinski said it is still undetermined whether the town will hold a special election for the referendum, or will have the question appear on the November ballot.

Scott Smith can be reached at scott.smith@kokomotribune.com or on Twitter @JasonSSmith1.