Waterworks Plant to Receive Improvements

(posted Mar 27)

A public meeting will be conducted some time in April to further explain the 15 month construction project scheduled for the T.W. Moses water plant located at 7601 W. 56th Street.

The plant improvements are necessary to comply with federal requirements to eliminate additional contaminants from the water supply by 2012.

Lou Ann Baker, Vice President of Communications and Community Affairs for Veolia Water, told residents at City County Councilor Janice McHenry's March 21 town hall meeting that the EPA is requiring all surface water intake plants to eliminate additional contaminants.

Baker does not anticipate flow, water quality or taste problems during the construction. If a situation required shutting down the Eagle Creek reservoir facility, the city's three other water treatment plants can compensate for any problems.

Baker said the different taste in the water is due to the annual change in chlorination for maintenance. Every year in January, the company changes the type of chlorine to disinfect the 4,600 miles of pipe in the system. Veolia will change back to the normal chlorine on April 1. The practice has been done for over 30 years; but this year's process has lasted longer because of the construction going on at other plants.

The water company may also seek public support to restrict hazardous cargo traffic across the 56th Street causeway. Baker said the completion of Ronald Reagan Parkway has increased truck traffic on 56th Street. Veolia is concerned that a hazardous cargo truck could go over into the causeway, contaminating the water by the inlets to the plant. "It would be a very bad thing," she said. Veolia is now working with local emergency planning committee to develop a plan.

Pike resident Don Rothenberger wanted to know who was accountable for the 17.5% rate increase that was caused by securing bonds with a variable rate. Baker replied the previous administration and the Indianapolis Bond Bank had arranged the financing. The water company needs a rate increase to due to reliance on variable interest rates to finance the bonds. The bond debt is about $21 million above what was anticipated.

She said the Board of Waterworks has filed a petition with Indiana's Utility Regulatory Commission for an immediate increase to keep it solvent.

Jim Steele, interim director of the Department of Waterworks, reported to the Board of Waterworks that close to 95% of the bonds are expected to become fixed rate by June as the result of the restructuring proposed at its March 19 meeting. Three of the debts total just under half a billion dollars.

Steele summarized a February 26th meeting with three bond rating agencies, noting two of the three firms downgraded the debt rating. The total cost to transition of the bonds to a fix rate is $99 million, with $82 million to unwind the SWAP agreements, and $13 million for debt reserve fund.

The board also approved Veolia's incentive fee for 2008 performance. Veolia's management fee was $40,525,823, including $10,131,456 in incentive fees, based on 37 performance measurements used to determine the bonus payment. The department agreed that Veolia is entitled to 96.5% of the incentive fee.