Charlestown City Council votes to sell water system for $13.4 million

The council officially voted 4-1 to sell its water system for $13.4 million during a special meeting Thursday evening. Indiana American Water has committed $7.2 million over the next five years in infrastructure improvements aimed at eliminating brown water that has plagued the city for years.

"I think long term it's the best financial option," Council President Eric Vaughn said after the meeting. "They have much better resources to do the repairs and ongoing maintenance, and they won't have to go through the political process anytime they need to spend money on it ... They're going to be able to do what needs to be done."

The only dissenting vote was cast by Councilwoman Tina Barnes, who frequently stands outside the majority.

"I really don't feel like it's totally beneficial for the city, that there are things we can do and funding we can ask for to be able to keep these rights," Barnes said.

Foregoing the political process is just one of the reasons supporters of a recently formed nonprofit organization vehemently oppose the sale.

NOW, which stands for "No Outsourcing our Water," is the group working to collect the required number of signatures to bring the sale to a public vote.

Indiana law requires 10 percent of the city's registered voters —that's 560 people in Charlestown — sign a petition to force the matter to an election.

However, it's possible the matter won't be brought to the ballot box, even if the group collects 560 signatures.

If the Indiana Utility Regulatory Commission finds that the Charlestown petition meets certain criteria associated with a distressed utility, the law regarding the public referendum does not apply.

That isn't stopping leaders with NOW.

"We are very confident that we can secure over 1,000 signatures," said nonprofit board member Darlene Williams, who said the council's vote represents a "sad day in Charlestown."

One of Williams' concerns relates to a portion of the contract that leases the city's well fields to Indiana American Water for $1. The 35-year leases is renewable for two more terms.

"This is unacceptable," she said. "Committing our resource to a 105-year term? What are they thinking?"

City officials, on the other hand, say selling the water is more cost efficient solution when it comes to long-term maintenance.

Charlestown Mayor Bob Hall has said the city will use proceeds from the sale to create a $20 monthly credit on sewer bills the first year, decreasing the credit by $5 each year. The city can also tax the water lines, collecting hundreds of thousands of dollars that could be used for sewer improvements.

Water rates are expected to increase from $18 a month for 5,000 gallons to $44 under Indiana American Water. After the sewer credit falls off, the total cost of sewer and water will be slightly more than what Charlestown would charge if it paid for water line improvements itself.

Hall said after the meeting he believes Indiana American Water has better financial resources to solve water quality issues than the city.

"We've made improvements through the years, but we're at the point where it's going to take millions and millions to do it," he said.

The city and Indiana American Water will agree on a timeframe to submit documents to the IURC, after which the commission has 210 days to make a decision on the sale, according to IURC spokeswoman Stephanie Hodgin.