NARRATIVE BEN DAVIS CONSERVANCY DISTRICT
The Ben Davis Conservancy District (BDCD) was formed in 1949 and was the first Conservancy District established in Indiana. The District was specifically formed as a means of providing wastewater service to a residential area whose homes were on the verge of being condemned due to failing septic systems with no alternative to correct.
The BDCD is owned by the property owners (freeholders) in the district and is managed by a threeperson elected Board of Directors who are also freeholders. The District encompasses a large part of Wayne Township in Marion County and contains approximately 6,000 parcels that represent an estimated population of 12,000 persons.
Since installation of the sanitary sewers in 1958, wastewater from the District has been transported to the treatment plant that was operated by the City of Indianapolis. In 2011, the City assets were sold to Citizen’s Energy Group (CEG) and the District received notice that their agreement would be renegotiated and the rates increased. After a lengthy and expensive court battle, it was mandated that the requested rate increases be phased in over an 8-year period. As part of the agreement, CEG agreed that it would not object if the District pursued another alternative.
Over the past few decades, the District has been able to operate with only minimal increases to the annual budget. Between 2018 and 2025, the treatment rates will be increased by nearly 900%. In 2026 the rates will again be raised to take into account any increases that occurred during the previous 8 years. The rates will continue to increase in order to keep pace with higher charges from CEG which will be financially devastating since the majority of property owners in the District have low or fixed incomes. The median household income is $36,700 which is well below the average for the state.
The Board members, as well as most of the staff, reside, own property, and work in the District so are well aware of the negative impacts these increases have had on the community. A study to evaluate other alternatives indicated that a new plant would be less costly than continuing to transport the wastewater to CEG. A dedicated plant will also allow the District to control costs.
After a 3-year search for suitable property, the site at 900 S. Tibbs Avenue was purchased. Approvals from the State took another a year. This property previously contained a treatment plant that the Chrysler Foundry operated for several decades. Because of this, the site carries an Environmental Restrictive Covenant which prevents future residential use.
The plant will discharge to Neeld Ditch with stringent effluent limits that are issued and regulated by the Indiana Department of Environmental Management (IDEM). The District already completed an anti-degradation demonstration which required a 30 day public notice period. All comments received were positive.
The last step is to obtain an NPDES permit from IDEM to allow the discharge. There are 2 entities who are objecting to the discharge; one being a neighborhood organization who is objecting because they feel the discharge will pollute the drainageway even though 100% of all wastewater plants discharge to a waterway and are heavily regulated by IDEM (discharge is probably cleaner than swimming pool water) and the other being CEG who will lose millions in revenue if the District disconnects even though they promised not to object.
NARRATIVE BEN DAVIS CONSERVANCY DISTRICT - SUPPLEMENTAL INFORMATION
After going through most of the permitting and regulatory processes, CEG offered to purchase the District assets for $10 million dollars, which is approximately the price it cost to install the system 65 years ago. If BDCD sold to CEG the BDCD ratepayers would pay the current CEG treatment rate or a higher rate. BDCD’s current rates are cheaper than CEG and BDCD projects that BDCD rates will be cheaper than CEG rates in the future.
CEG is regulated by the Indiana Utility Regulatory Commission (IURC). The IURC is one of 10 states in the United States that allows “fair value” adjustments to rate base for setting rates for utility acquisitions. When CEG purchased Westfield sewage works it asked for and received a $17 million dollar “fair value” adjustment for rate purposes. This means that CEG can bill back the purchase price of a utility to the customers of that utility. So, if CEG gave the BDCD customers a credit on their bill – they could also raise rates to either offset that credit or to bill more than the credit.
Other IURC procedures allow CEG to request rates based on double leverage. This would also increase the cost of CEG sewage service to BDCD customers.
BDCD has asked for a provision in any future purchase offer that CEG will not collect back the purchase price of the utility in customer rates and charges in the future. CEG has declined to include this provision in its purchase offers.
CEG has been investigated by the IURC in the past for both customer service problems and for excessively high management compensation. BDCD believe it can provide better customer service and service at a lower cost than can CEG.
CEG is not offering to buy the BDCD to save the BDCD ratepayers money. Two years after CEG purchased Westfield Utilities, CEG asked for a 24% rate increase. CEG is offering to purchase BDCD because it can make money from the BDCD customers.
Numerous studies of rate comparisons between publicly owned utilities (like BDCD) and privately owed utilities (like Citizen’s Westfield) conclude that publicly owned utilities (like BDCD) provide less expensive utility service to their ratepayers.
FOR MORE INFORMATION, PLEASE VISIT: Ben Davis Conservancy District – Reliable and Affordable Sanitary Sewer Service (bdconservancy.com)
The Ben Davis Conservancy District has provided its community reliable and affordable sanitary sewer service for 65 years, but they are looking for help. The Conservancy has a plan to build a treatment plant, and they need support for a permit. Their treatment plant would benefit its community by allowing the Conservancy to control its costs.
Take Their Survey
They want to know what you think. Should the Ben Davis Conservancy District construct a treatment plant? Use this link to complete the survey: Survey – Ben Davis Conservancy District (bdconservancy.com)