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Town takes unusual step to gain control of utility

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The town of Mooresville’s legal fight to reclaim control of its water utility is so rare in Indiana that observers say just one other community has taken such drastic action.

But lawyers representing the Morgan County community in its lawsuit against Indiana American Water think history is on their side. And that history could prove powerful.

The Indiana Supreme Court and the Legislature in the past five years weighed in on a similar issue following a years-long battle involving the city of Fort Wayne and its water utility operator.

“I am sure, given the length of time that litigation took, it could be a very expensive procedure,” said Bette Dodd, a utility lawyer at Lewis & Kappes who is not involved in the Mooresville suit. “But some of the gray areas have been resolved.”

Indiana American Water is a unit of Voorhees, N.J.-based American Water Works Co. Inc. with nearly 300,000 customers in 51 communities throughout the state. It has served Mooresville since 2000, when it bought Hoosier Water Co. Inc.

Officials of Mooresville sued Indiana American Water in Morgan Superior Court in late December.

Prompted by a fear of rising water rates, the officials want to acquire the town’s water utility through eminent domain. The legal action follows the town’s attempt to purchase the utility for $6.5 million, an offer too low for the liking of Indiana American Water.

Indiana American Water fired the first salvo in the dispute by suing the town in October, charging that officials violated due process by approving an ordinance to pursue their purchase of the utility.

Sorting out the legal morass could take time, judging from the 10 years Fort Wayne has spent to gain control of its water utility. Even so, the legal waters Mooresville will maneuver might not be as murky now that a precedent has been set.

“I think the path is pretty clear,” said Chris Janak, a lawyer at Bose McKinney & Evans LLP who represents the town. “Mooresville is allowed by law to do this.”

Indiana American Water’s attorney, however, is not so sure.

“There are first-impression things that will still have to be dealt with,” said Cristy Wheeler, the company’s corporate counsel. “It’s very unusual in Indiana, and it’s never happened to us.”

For guidance, Mooresville can turn to Fort Wayne’s tiff with Aqua Indiana, a division of Bryn Mawr, Pa.-based Aqua America Inc. that began in 2002. Dissatisfied with service, the city attempted to use eminent domain to force a sale of part of Aqua’s service area.

The Indiana Supreme Court sided with Fort Wayne in 2007 and the city took control of a portion of the service area the following year. The city now is attempting to gain control of the entire area by purchasing the rest of Aqua’s service area.

Between the Supreme Court decision and Fort Wayne’s follow-up battle with Aqua America, in 2009, the General Assembly passed a law supporting the court’s decision backing use of eminent domain to purchase a private utility.

Mooresville’s acquisition of Indiana American Water might seem like a lock, then, but legislation introduced this session by state Sen. Jim Merritt, R-Indianapolis, is much more friendly to water utilities.

Senate Bill 548 would allow communities to buy their water utilities only after the utilities fail to remedy repeated violations. And even then, a city would need public approval through referendum.

The Indiana Chamber of Commerce supports parts of the legislation but thinks a referendum may be unnecessary, said Vince Griffin, vice president of energy and environmental affairs.

“It seems to have some very rigorous things in there,” he said, “but we like it to not be easy for a municipality to divorce you and take over.”

While lawmakers debate the bill, Mooresville and Indiana American Water continue hurling barbs.

Janak, Mooresville’s lawyer, says the utility has raised rates and plans to raise them even more without investing in the town’s water infrastructure.

“As clear as the law is, it is incredibly contentious,” he said. “More than it should be.”

Indiana American Water says the average customer in Mooresville pays about $35 per month, which would rise to $39 with its plans to improve infrastructure.

“We’ve been scratching our heads all along about what’s been going on here,” Indiana American Water President Alan DeBoy said. “They think they can operate it at lower rates and more efficiently, but it’s not logical because they have no scale.”•

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  1. Is this a social parallel to the Mosby prosecutions in Baltimore? Progressive ideology ever seeks Pilgrims to burn at the stake. (I should know.)

  2. The Conour embarrassment is an example of why it would be a good idea to NOT name public buildings or to erect monuments to "worthy" people until AFTER they have been dead three years, at least. And we also need to stop naming federal buildings and roads after a worthless politician whose only achievement was getting elected multiple times (like a certain Congressman after whom we renamed the largest post office in the state). Also, why have we renamed BOTH the Center Township government center AND the new bus terminal/bum hangout after Julia Carson?

  3. Other than a complete lack of any verifiable and valid historical citations to back your wild context-free accusations, you also forget to allege "ate Native American children, ate slave children, ate their own children, and often did it all while using salad forks rather than dinner forks." (gasp)

  4. "So we broke with England for the right to "off" our preborn progeny at will, and allow the processing plant doing the dirty deeds (dirt cheap) to profit on the marketing of those "products of conception." I was completely maleducated on our nation's founding, it would seem. (But I know the ACLU is hard at work to remedy that, too.)" Well, you know, we're just following in the footsteps of our founders who raped women, raped slaves, raped children, maimed immigrants, sold children, stole property, broke promises, broke apart families, killed natives... You know, good God fearing down home Christian folk! :/

  5. Who gives a rats behind about all the fluffy ranking nonsense. What students having to pay off debt need to know is that all schools aren't created equal and students from many schools don't have a snowball's chance of getting a decent paying job straight out of law school. Their lowly ranked lawschool won't tell them that though. When schools start honestly (accurately) reporting *those numbers, things will get interesting real quick, and the looks on student's faces will be priceless!

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