FORT WAYNE – Fort Wayne and Aqua Indiana announced a $67 million plan Tuesday for the city to buy the water utility in southwest Fort Wayne and resolve the dispute over the purchase of the company’s former north system.
After more than a year of meetings and deliberations, leaders from the city and Aqua Indiana announced a letter of intent to move the process forward.
The letter of intent was signed last week, and a final contract agreement is expected by the end of next month, with the sale completed early next year, officials said.
This is a tremendous step forward as we work collaboratively to serve residents with reliable and high quality water at an affordable price, Fort Wayne Mayor Tom Henry said. We’ve been concerned about southwest Fort Wayne for some time, ever since they were annexed, because we wanted to make sure that ultimately they would get city water.
The city will pay Aqua $50.1 million in addition to the $16.9 million the city paid Aqua for the north system. The $67 million will cover the cost of all of Aqua’s drinking water facilities in and near Allen County.
In December 2007, the city paid nearly $17 million to buy Aqua’s north system. Aqua officials have said their north system was worth about $40 million.
In 2007, the Indiana Supreme Court upheld the city’s takeover of Aqua Indiana north plant.
While that settled the legal dispute over the city’s authority to declare eminent domain and take over the utility, the price the city must pay remained in dispute.
The Supreme Court ruled in April that the utility is entitled to a full rehearing of the matter, and that includes a request to a trial by jury.
It wasn’t until last summer when a drought forced Aqua Indiana to connect to the city’s water supply that the company and the city realized it was time to sit down and come up with a long-term plan for providing for its customers in the city’s southwest neighborhoods, Henry said.
As a result of all that, Aqua and Fort Wayne realized that they had to sit down and work something out and we couldn’t leave the table until we did, he said.
After the changes are approved, Aqua’s nearly 12,600 customers in southwest Fort Wayne are expected to save $100 to $140 each year on their bills, city officials said.
Customers will also have access to water that has been pre-softened, eliminating the need for a water softener and saving residents an additional $10 to $20 a month.
The soft water is also expected to extend the life of dishwashers, washing machines and other water-using appliances, city officials said.
Aqua Indiana will remain the sanitary-sewer provider in southwest Allen County, but the city will become Aqua’s largest customer in the county, bringing in an average of 1.5 million gallons of sewage each day, Aqua Indiana President Tom Bruns said.
City officials said Fort Wayne residents won’t notice a change because the wastewater will be collected the same way, with about 2 percent of the sewage being sent to Aqua Indiana for treatment.
Current City Utilities customers will not see increased water rates as part of the agreement, Henry added.
Aqua will freeze sewer rates through 2015 for southwest Fort Wayne customers beginning this year and will present rate increase requests to the City Council.
The city has agreed not to pursue a condemnation of Aqua’s sewage facilities for five years as long as the company remains financially healthy and performs within regulatory requirements.
The city agreed to offer comparable jobs to the 10 or 11 Aqua employees who will be affected by the sale.
Aqua Indiana will invest $25,000 annually for 20 years to improve sanity infrastructure and will become a member of the Fort Wayne-Allen County Economic Development Alliance.
But before the sale can go forward, the final contract will need to be approved by the City Council, Aqua America’s board of directors and the Indiana Utility Regulatory Commission.
I know it’s not always easy for former adversaries to work together, but I believe that we’ve crafted a unique solution to a very complex problem, Bruns said.
Henry said he expects the sale to be completed in early 2014.
I’m optimistic that a final contract agreement will be reached soon, Henry said.