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Utility says it's close to deal with city

City councilmen expecting to make a decision on condemning Aqua Indiana’s southwest water utility Tuesday night heard instead that the city and Aqua Indiana might be close to negotiating a deal.

The council was prepared to hold a public hearing on the proposal for the city to forcibly buy the private utility that serves about 12,000 people on the city’s southwest side. The hearing was expected to include lengthy presentations from both Aqua Indiana and City Utilities, followed by debate and a decision.

But then Aqua Indiana officials announced they were close to a deal with the city, and after many phone calls, the official presentations and decision were put off until Feb. 5 to allow the two sides more time to hammer out a deal.

Officials went ahead, however, with public testimony on the issue, listening to more than a dozen of the nearly 80 people who crowded into the council’s chambers.

“We’ve had very positive discussions in the last few weeks,” Aqua Indiana President Tom Bruns said after the meeting. “Hopefully by Feb. 5 we’ll have something with more meat on it to discuss.”

But when City Utilities Director Kumar Menon was asked if the two sides were close to a deal, he said simply, “No.”

He did agree, however, that progress had been made.

“I would say we’ve moved positions much closer to each other, but there are lot of details yet to work out,” Menon said. “We’ve been negotiating for eight or nine years, so I’m glad they believe that (we’re close). That’s good.”

Councilman Russ Jehl, R-2nd, was a customer of Aqua Indiana’s north system before the city took it over several years ago.

“I’m crossing my fingers with the citizens hoping this gets worked out, because good riddance,” Jehl said.

Council members’ only real concern seemed to be that the purchase would require a rate increase citywide and said they are reluctant to make current customers pay for it. Glynn Hines, D-6th, said City Utilities officials need to lay out a business plan that shows how the purchase can be made without raising rates.

Many members of the public, however, pleaded for a takeover. Henry Mazzola said Aqua Indiana’s parent company, Aqua America, is best not at providing water to its customers but at providing profits to its shareholders.

“Their business strategy is one of acquisition,” he said. “Then they file for rate increases.”

Ian Cook said rates are excessive while water quality is low.

“I’m philosophically opposed to hostile takeovers, but if there’s no other way, I urge you gentlemen to vote for condemnation,” Cook said.

Betty Kubesh said her water is gray and smells like rotten eggs, making her afraid to drink it. But when a drought forced Aqua Indiana to connect to Fort Wayne’s water supply and City Utilities served about 10 percent of Aqua’s customers for several months, including Kubesh, her water was “sparkling” she said.

“Please give me back my Fort Wayne water,” Kubesh said.

Others said they have to use filters and water softeners or buy bottled water, others complained of clothes that won’t come clean and dishes and appliances that are ruined by Aqua’s water.

But some testified their water from Aqua Indiana is fine. Cameron Kal said he had good water until the temporary switch to City Utilities.

“I think a lot of this is politically motivated,” Kal said. “You simply want to expand … for your own gain.”

Officials said they received 120 phone calls from residents in favor of condemnation and five against.

Mayor Tom Henry announced the condemnation proposal in November, citing a long history of residents’ complaints about water quality, quantity and pressure and high rates. He said the city cannot tolerate poor service in such a critical area when it can provide better water in greater quantity, at higher pressure and lower rates.

Aqua Indiana officials say they receive few complaints and have addressed issues with infrastructure improvements.

Aqua Indiana says its southwest system is worth about $60 million; the city contends the system is worth a fraction of that.