CUMBERLAND — Residents who use Cumberland water could soon get their bill from a different company if the town council approves the sale of the town’s water utility to NineStar Connect.
On Wednesday evening, the Cumberland town council will vote on an ordinance selling the GEM water utility and all of its assets to NineStar for $4 million. As part of the purchase agreement, NineStar will build fiber optics to each home and business in the utility area, which will be completed in 18 to 24 months, according to the ordinance.
The $4 million price tag was determined after an appraisal of the utility. As part of the transaction, NineStar will take over and retire the town’s bond debt the town incurred when it originally purchased GEM Water.
The move will not result in any immediate rate increases for the 700 customers in the utility, officials say.
NineStar Connect President and CEO Mike Burrow calls the purchase a win-win-win for his company, Cumberland and the GEM water customers.
“For us, it gives us a chance for growth and investment in an area where we don’t have a lot of investment currently,” Burrow said. “It allows the town to pursue growth in other areas and I think it’s a win for the customers because now they have more of a say.”
Town officials said they have been exploring ways to grow and increase economic development in the town and didn’t have the financial capacity for the necessary expansion that would come with more growth, according to a news release on the acquisition. That led to them looking to sell the utility.
While there were multiple offers on the utility, Cumberland officials chose NineStar because of the company’s non-profit co-op structure and the ability to bring fiber to the town.
Historically, some GEM water customers outside Cumberland city limits have had no input in the leadership in charge of the utility. Now, with NineStar in charge, those customers will automatically become members of the co-op and be able to vote on NineStar’s board of directors.
Burrow said NineStar would like to see how the utility runs for a couple years before making any decisions about rate increases. He pointed out that water and sewer rate increases are still regulated by the Indiana Utility Regulatory Commission and any proposed rate increase would have to be approved by them after a lengthy submission process.
In addition to selling the water utility to NineStar, the ordinance, if approved, would also sell part of its sewer utility to New Palestine for $875,000. The GEM sanitary utility would be split into two assets, all customers who live south of County Road 200S would be in GEM South, which would move under the control of New Palestine.
The increase of about 700 customers will be a significant boost to NineStar’s expansion of water services. Currently, they only have about 100 customers. The company also provides fiber optics, electricity and sewer services throughout Hancock County.
“We’re in the business of quality of life and quality of place,” Burrow said. “We’re hoping to improve both of those here with the water utility and the fiber.”
