Indianapolis mayoral candidate fears 100% rate increase

Mayoral candidate warns that utility's rates will jump once 5-year freeze ends.

By John Fritze

October 28, 2003

Republican mayoral candidate Greg Jordan Monday called on the city to renegotiate a contract with the city's water utility to stem rate hikes expected in 2007.

The city purchased the Indianapolis Water Co. last year for $515 million and imposed a five-year rate freeze for customers. But after that, Jordan said, rates could jump dramatically unless something is done now.

"We know that we're going to have these rate hikes, and I think it's important that we position ourselves now and begin negotiations now . . . rather than wait until the 11th hour," Jordan said.

He did not speculate how much the rate would go up but said that payments on the bonds used to buy the utility would more than double that year.

Michael O'Connor, a campaign aide for Democratic Mayor Bart Peterson, said the city saved ratepayers money by purchasing the utility and freezing rates. Any future hikes, he added, would have to be approved by state regulators.

O'Connor said that if a private company had purchased the water utility, ratepayers would have had little protection from immediate rate increases.

"We've managed to avoid any rate increases by conducting it this way," O'Connor said.

The water utility, which has about 400 employees, is currently managed by USFilter and has about 1 million customers in Central Indiana. An average family of four pays $21 a month for water, company spokeswoman Carolyn Mosby said.

At a news conference Monday -- just eight days before the Nov. 4 election -- Jordan also said the city should reopen negotiations to give the utility's employees a benefits package Peterson promised in 2001 before the city's purchase of the utility was finalized.

Call Star reporter John Fritze at 1-317-444-2752.