NEW PALESTINE — The long-awaited purchase of a section of Gem Utilities from the town of Cumberland by officials in New Palestine closed last week.
The purchase of the southern portion of the sanitary wastewater utility for $953,539, according to the agreement, now gives full control over that section of the utility to New Palestine.
About 130 Hancock County residents north of New Palestine will eventually pay a lower rate to their new provider, an estimated cost of $67 to $78 per month. The expanded territory includes two neighborhoods under construction.
The deal allows New Palestine to grow its wastewater utility, while Cumberland acquired funds to put toward its debts.
NineStar Connect, a utility providing water, sewer, electric and high-speed fiber services, bought the rest of the utility from Cumberland for $4 million in January 2019. That sale came after Cumberland had acquired Gem Water Utility from developer Steve Reilly in 2010.
The New Palestine acquisition sits between County Roads 200S and 300S, from Jacobi Road west to Mt. Comfort Road. The area includes homes in the Centennial Commons area, town officials said.
Acquiring utility services in the area helps establish territory for the town should it want to pursue annexation in the future. Town officials started working on the purchase as far back as 2018.
Prior to closing the sale, officials in New Palestine reached a “convenant not to sue” agreement with the former utility owner, Reilly, who has sued Cumberland for $90,511 he said the town owes him surrounding the original purchase, according to court documents.
New Palestine plans to disconnect the Gem Utilities south sanitary sewer system from its current treatment plant near County Roads 300S and 450W and connect it to the new plant the town recently built at 4772 S. Bittner Road. The new plant has a capacity of 400,000 gallons per day but with a slight alteration can go up to 500,000 gallons per day, town officials said.
