Tuesday, October 24, 2006

VRUC Appeal Dooms Contract Talks with Greendale.

VRUC Appeal Dooms Contract Talks with Greendale
submitted by Jack Arduin
This article appeared in HVL Echoes newpaper this month.

After working with the VRUC board for three months, I would like to give the residents who elected me an update on the affairs of the VRUC. Let’s begin by assessing our current situation. First, we have now spent more than $1,000,000 on fees for the expansion of our territory (outside development) and to build a sewage treatment plant. This is all being done so we can spend over $4,000,000 dollars to build a plant that will need to be expanded at a later date. We currently have not generated one dollar in revenue from these endeavors and we are unable to get a discharge permit from IDEM to operate a facility. In roughly three years our water contract with Greendale will run out and be terminated. We will no longer have water unless the VRUC is able to build its own well. This too will greatly increase our costs over our current fee schedule with Greendale. Our infrastructure continues to leak and we are awash with infiltration problems. We continue to only pay interest on our original $2,000,000 debt incurred in 1996 and have no plans to pay down the principal. For VRUC services you are continually charged one of the highest fee schedules in the state of Indiana.

In order to begin to solve our problems, I contacted Greendale to set up a meeting to ask for a long term water and sewer contract which would lock VRUC/HVL into a low cost contract (less than 30% of your fees go to Greendale) for both water and sewer services that would be far cheaper than our other option of trying to build our own water and sewage treatment facilities. The Greendale fees that would be charged VRUC/HVL would be the same as what is currently charged to Greendale customers. The contract would eliminate the $400,000 per year legal expenses that have been incurring over the past several years. Despite all of the past legal actions that the VRUC board has taken against them, Greendale had enough confidence in Stan Beeler and myself to enter into discussions. Finally, moving in the right direction, the meeting was set for Wednesday September 6th.

Prior to the meeting, Greendale passed an ordinance that called for a $3350 tap fee to be charged in the construction of all new homes that are built that tap into the Greendale’s system which includes Greendale, HVL and outside developments. The tap fees are to be put in a separate account as governed by the state and can only be used to increase Greendale’s capacity, therefore providing an insurance fund for existing customers like you and me from having to pay fee increases to pay for new customers. These tap fees will ultimately be a burden to only builders as they are already charging as much as they can for homes that they build and will not be able to pass them along to new customers. Also, I can estimate that over 80% of such fees would be charged outside of Hidden Valley. The VRUC board president called a meeting that was not to be attended by the public. In the meeting, the ordinance was discussed and we incorrectly interpreted the wording to mean that it would allow Greendale to in effect charge the VRUC tap fees for increases in output. Most of us agreed that we needed to file an appeal by September 5th to get Greendale to amend the wording in the ordinance. Greendale had no plans to charge an additional fee to VRUC. That was not the intention of the ordinance. In a conversation with Greendale over the upcoming meeting, I mentioned our concerns over the ordinance. Greendale, once again, bent over backward to accommodate us and called a special meeting to amend the wording of the ordinance. Greendale asked the VRUC to give them the specific clarifying wording we needed to be added to the ordinance and it would be added at the meeting before our contract discussions. By VRUC filing an appeal, Greendale had to postpone their special meeting because they could not legally amend their ordinance before the VRUC appeal was resolved. I immediately informed the other members of the VRUC board that we needed to stop and not file the legal action and give Greendale the language which I suggested (less than a sentence was necessary), or we would be jeopardizing the much more important contract negotiations. Without my knowledge, the other members of the board opted to file a legal action against Greendale anyway. There was no need whatsoever to file this appeal. Despite our action, Greendale again agreed not to call off the meeting if we could just give them the wording that we wanted in the ordinance and withdraw the legal action. The current board opted not to do so. Greendale was forced to cancel the meetings. Instead of acting in good faith, correcting the ordinance and negotiating a new long-term contract with Greendale, the VRUC board decided it would rather take Greendale to court.

This example should give you insight into how the VRUC’s relationship with its sole and lowest cost supplier has been completely mismanaged. The Board’s actions only proved to Greendale that, despite the turnover of several members on the Board of Directors which was a mandate for change, we would still not act in good faith with Greendale on simple issues in which they were extremely accommodating to us.

After a meeting of the lawyers, the VRUC Board finally dropped their legal action against Greendale at the end of September. Greendale officials have stated that they are willing to negotiate again, but only, with myself and Stan Beeler. Stan and I will continue to negotiate to obtain a water and sewer contract ensuring a long-term low cost sewage treatment service and a low cost water supply for our future.

Thanks for your interest.

Jack Arduin

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