Officials for Marion Heights Conservancy District on Monday moved one step closer to selling the district’s water system to Indiana American Water Co.

District and water company representatives testified in a public hearing at the Vigo County Annex, at First and Oak streets, before an administrative law judge with the Indiana Natural Resources Commission, part of the Indiana Department of Natural Resources.

The conservancy district was formed in the mid-1960s to provide potable water and currently serves 412 customers in the unincorporated town of St. Mary-of-the-Woods and Marion Heights subdivision, north of West Terre Haute, said Tom McKinney, vice chairman of the district.

Jason Stephenson, attorney for Indiana American Water Co., said the company would acquire the assets of the conservancy district for $900,000. The district has $600,000 in debt, which would be paid off from the sale of the district’s water system.

In addition, the district’s board has stated it would then distribute any profits from the sale back to district ratepayers, with amounts based on length of time paying water bills to the district. In addition, it would allow the district to cover any unpaid bills by subtracting from proceeds that go back to those customers.

An evidentiary hearing on the sale was held in December before the Indiana Utility Regulatory Commission, Stephenson said.

“With the economic climate, plus the cost of wells, treatment and distribution and more stringent regulations, it became more and more expensive for a small district like us to provide water,” McKinney said prior to the public hearing.

“Indiana American Water has more resources and can provide water at a lower rate,” McKinney added.

Indiana American Water Co. is requesting a rate increase in Terre Haute to $44.62 per month, from $32.11. The rate in Terre Haute is based upon typical residential usage of 6,000 gallons per month. That rate increase is now before the Indiana Utility Regulatory Commission. Even with that increase, McKinney said conservancy district customers would pay less than they currently pay for water.

In addition, McKinney said the district faced a future rate increase as the district looked to improve its water treatment facility. McKinney told the administrative law judge that the facility is currently in good condition, operating at about 80 percent capacity.

“We feel that because of resources, Indiana American can provide as good as or better service as we can for a lower cost,” he said. “We think it is a win-win for our district.”

Stephenson said benefits to existing district customers include economies of scale from a single systemwide water rate, spreading out costs. As an example, Stephenson pointed to the city of West Lafayette, which required a new water treatment plant.

“Absent the single tariff pricing, West Lafayette’s rates would have gone up 180 percent, but because of the advent of single tariff pricing … the maximum the rates will go up are in the neighborhood of 42 percent,” he said.

There were no objections to the sale voiced at the hearing, with fewer than 10 people in attendance. Administrative law judge Sandra Jensen said she plans to have her report on the sale ready to go before the Natural Resources Commission at its April 7 meeting. The Vigo County Circuit Court would then decide whether or not to approve the sale.

Howard Greninger can be reached at (812) 231-4204 or

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