Indiana Mayor Says Private Water Utility Misused Funds

Lawrence, Ind., Mayor Deborah Cantwell is accusing the private company running the city's water utility of siphoning off money for expensive homes, luxury cars and political campaigns.

As reported in The Indy Star, she says Lawrence Utilities LLC — and the former Lawrence officials who formed it — mishandled money paid by residents and made many improper deals.

A spokesman for Lawrence Utilities LLC denied the company had done anything improper.

Cantwell said four consulting companies controlled by the former city workers who created Lawrence Utilities in 2001 received a combined $4 million from the utility in 2003. She also said the principals in Lawrence Utilities have used the web of companies to help pay for personal real estate deals.

The controversy has its roots in a deal former Mayor Thomas D. Schneider arranged in 2001 to give control of the city's waterworks to Lawrence Utilities for up to 50 years under a no-bid contract.

Cantwell, who defeated Schneider in 2003, has sued the company in an attempt to void the contract. The lawsuit is pending. Many residents are upset over the water contract, which led in part to major increases in their bills.

A typical family of four in Lawrence using 7,500 gallons of water a month pays $40.29. The same family in Indianapolis pays just over $20.

Cantwell's comments also come against a backdrop of a power struggle between the Democratic mayor and the Republican City Council. The council has introduced a measure that would give it authority to negotiate with the utility directly as an alternative to the mayor's lawsuit.

Earlier this year, federal officials confirmed that the FBI was investigating the no-bid contract and other financial dealings under Schneider, who was Lawrence's Republican mayor for 16 years.

Key employees of Lawrence Utilities and companies that do business with the company have bought a high-priced condominium in Florida and luxury cars since taking over operations of the water utility, Cantwell said.

Lawrence Utilities has declined to open the related records, maintaining they are separate companies not under a contract with the city of Lawrence.

Source: The Indy Star