Indianapolis to Transfer Utilities to Fund Construction Projects
Mayor Greg Ballard signed a memorandum of understanding in March to transfer the city's utilities to Citizens Energy Group, which operates a natural gas distribution company and a district steam heating and chilled water provider in Indianapolis.
Ballard wants to use the $425 million the city would get from the transfer for infrastructure construction. Once the proposal gets all the necessary approvals, the city would receive $262.6 million payment from Citizens in two installments, plus up to an additional $50 million from the wastewater general fund that will remain with the city after the transfer.
"It will allow us to do the much needed construction at a time when we have a great opportunity to give the construction industry a boost, helping to create more local jobs," says Michael Huber, the city's director of enterprise development . The money would mostly go to street improvements and bridge repairs.
There are a lot of moving pieces to the puzzel and the plan is not expected to be finalized before the end of this year, says Dan Considine, manager of corporate communications at Citizens.
"Naturally the community has a lot of questions about this."
Citizens along with city leaders are currently holding public meetings to try and answer some of the community's concerns. Both the mayor and Citizens stress that this proposal is not a privatization of utilities since Citizens is a public charitable trust.
Citizens would also assume $1.5 billion of city debt and would have to raise bonds to finance the transfer, Constantine says. The company is expecting to find about $40 million in annual savings by combining water, wastewater, gas, steam and chilled water systems in Indianapolis all under the Citizens umbrella.