Chesterton Tribune

 

 

Valpo wants to buy Damon Run assets; customers push back

Back To Front Page

 

The Valparaiso City Utilities (VCU) is poised to purchase the infrastructure assets of the Damon Run Conservancy District (DRCD), which provides sanitary sewer service to several hundred residents of Liberty Township as well as to Porter Regional Hospital, Liberty Elementary and Intermediate schools, and Sunset Hill Farm County Park.

The actual treatment of wastewater, on the other hand, is provided by the Portage Utility Service, and in September the Portage Sanitary Board and VCU entered into a new agreement: the Damon Run Conservancy District Wastewater Services Agreement Assignment.

DRCD customers are invited to comment on the proposed sale at a meeting scheduled for 6 p.m. Thursday, Oct. 10 at the VCU business office, 205 Billing St.

In addition, the VCU will provide a presentation on the proposed sale to the Valparaiso City Council at the latter’s meeting at 7 p.m. Monday, Oct. 1, at the City Council’s Chambers, 166 Lincolnway.

In a letter dated Aug. 31 and sent to its customers, DRCD said that the deal to sell its assets to VCU follows “many months of review and analysis,” and that the sale “will result in a material cost savings to you.”

“Specifically, with the proceeds from the sale of the sewer assets the Board will refund the DRCD’s outstanding debit,” DRCD said in the letter. “Because we will be able to reduce the amount of debt outstanding plus take advantage of today’s low interest rates, the DRCD annual debt payments will drop materially. This savings will be passed on to you through a much lower tax bill.”

According to the letter, VCU will issue bonds when it purchases DRCD’s assets, and those bonds will be paid from the revenues generated by customers’ sewer bills. The new monthly sewer bill will come directly from VCU and be comprised of two components. The first: the bill for day-to-day operations. The second: the surcharge assessed to retire the bonds issued to purchase DRCD’s assets.

“Due to VCU’s size, skills, and experience of its workforce, in the future we expect the day-to-day operations portion of the bill to remain lower and more stable than if the DRCD continued to own the utility and contract out operations,” DRCD said in the letter. “With the addition of the portion of the sewer bill being used to facilitate payment of the bonds, the new sewer bill will be higher than the sewer bill you currently pay. Importantly, however, the decrease on your water bill and your tax bill will more than offset the sewer increase and actually produce an estimated net reduction in overall utility costs of approximately 30 percent per year to you as a customer.”

DRCD customers currently pay around $300 a month for DRCD sanitary sewer and water service, an amount assessed to their mortgages.

Pushback

DRCD and VCU may have been exploring the feasibility of the sale for “for months,” but that comes as news to at least one Liberty Township resident, who told the Chesterton Tribune this morning that he’s deeply concerned about a “lack of transparency” on VCU’s part and the appearance of the sale as a done deal. “The whole thing just stinks,” he said.

Meanwhile, in an e-mail to the Tribune a DRCD customer shared the same concern about transparency. And she added that the sale looks to her and her neighbors like the preliminary to a land grab. “There is word Valpo wants to annex the residents who are currently on Damon Run and the surrounding areas,” she said.

Chesterton Town Attorney Chuck Parkinson, for his part, noted that the Chesterton Utility has itself approached the DRCD with an eye to purchasing its assets. But the DRCD was non-responsive. “The Town of Chesterton has reached out to the Damon Run Conservancy District exploring the possibility of a sale of the DRCD sewer infrastructure to the Town of Chesterton, to be treated by Chesterton,” he said. “But there’s been no response.”

 

 

Posted 10/9/2019

 
 
 
 

 

 

Search This Site:

Custom Search