Tell City annexation and situational politics

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What we have here is “situational politics,” a belief that the end justifies the means. For two or perhaps three decades, Tell City politicians have discussed the imperative of annexation but the dominant political party has never gained the political courage to actually vote for an annexation ordinance.

There is basically one reason. The local rural electrification cooperative, currently known as Southern Indiana Power.

Southern Indiana Power is the premiere threat in the annexation issue and it is clear to everyone that they would oppose annexation.

Why would Southern Indiana Power oppose annexation? The reason is that current Indiana law (Indiana Code 8-1.2.3 Sections 1 through 6) gives the Tell City Electric Department the unrestricted right to immediately serve the electric consumers within any annexed area.

The current law protects long-standing public policy ensuring that municipal corporations have the unfettered right to provide complete services within its boundaries.

The Tell City Electric Department would be required to purchase Southern Indiana Power electric facilities serving those consumers and to pay monetary damages to Southern Indiana Power for the loss of revenue. The purchase price and damage amounts are fair and just and are defined in the law. The terms are not onerous and provide a viable investment.

The structure and content of the current law, in the main, was the result of negotiations between the Municipal Electric Group Associations and the Rural Electric Cooperative Group Associations.

The result of those negotiations was a joint petition of the negotiators which was accepted by the Legislature and became the current law.

The purpose of the joint petition was to eliminate the ruinous litigation that was previously unavoidable. Subsequent amendments have tweaked the law but have retained the basic principles of it.

Tell City, after much procrastination, has finally mustered the political courage to create an annexation initiative.

Wait, that is not what actually happened. There was still that threat from Southern Indiana Power. So what did the mayor and the common council do? What they did was give away the future of the electric department for short-term political silence from Southern Indiana Power.

In the 2014 legislative session, Senate Bill 381 was introduced. The gist of SB 381 is to remove the unfettered and immediate right of municipal electric utilities to serve consumers within the municipal boundaries.

This would include facilities related to sewer, water and area lighting services required to be provided by laws relating to annexation.

Indiana Municipal Electric Association and the Indiana Municipal Power Agency, through a grassroots effort of the 72 members of IMEA, defeated SB 381. An announcement of the defeat of SB 381 IMPA cited the membership of IMEA as 72. Certainly there is an error. Contrary to the collective wisdom of the association, Tell City approved an agreement with Southern Indiana Power that runs contrary to the position of the other 71 members of IMEA.

IMEA issued a memorandum of opposition to SB 381 and one of the paragraphs is stated verbatim herein “The timing and manner of which this legislation has been introduced is suspect. SB 381 is being advocated by the statewide rural electric co-ops. The issues involved are very complicated and controversial and deserve a coordinated and collaborative discussion among all electric utility stakeholders which did not occur.”

There is the appearance that that statement applies to the local agreement with Southern Indiana Power. There was an orchestrated effort to obtain the approval(s) without divulging the content of the agreement to the public. Even after the utility board had approved the agreement in a public meeting there was an effort to withhold a copy of the agreement.

The current public policy in the state of Indiana allows a municipal corporation (Tell City) to annex additional land area into its corporate boundary. Current long-standing public policy and law (IC 8-1-2.3) gives municipal electric utilities, the absolute and immediate right to serve all electric consumers in the municipal corporate boundaries including any current or future annexations.  

Why is the local agreement with Tell City such a disaster?  There are many specific reasons but here are the general and important reasons.

(1) The agreement removes any decision making from any future utility board or any future administration.

(2) The agreement was approved without the due process necessary for such an important issue.

(3) It is contrary to public policy.

(4) It is an administrative and managerial nightmare.

(4) It runs contrary to and undercuts the position of 71 other members of the Indiana Municipal Electric Association and the Indiana Municipal Power Agency.

(5) Service to annexed customers would have, under TCED rates, offset the increased taxes and that was negated by the local agreement. The “notice of annexation” sent to owners in the annexed area gave the distinct impression that they would be served by TCED.

The utility board and the administration cannot claim ignorance in their actions. Tell City Electric Department is a member of IMEA, buys power from IMPA and in addition Marlow Smethurst, the current superintendent of Tell City Electric Department, is also chairman of the IMPA Board of Directors.

Joyce is a Tell City resident and retired superintendent of the Tell City Electric Department.