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Public Comment From Monday Night Regarding Missouri American Water
 
Posted on Wednesday May 20, 2020
 
Public Comment from the 5-18-2020 Board of Aldermen Meeting regarding Missouri American Water.
 

A citizen asked the following question at the Board of Aldermen meeting on Monday, May 18, 2020, “If the City had to issue $10 million in debt over the next 5 years to match the investment that Missouri American Water (MOAW) is promising, how much will the additional bond charges be on each residents bill each month?” 

 

For the City of Peculiar to issue $10 million in revenue bonds, the minimum amount collected from each customer would need to be increased by $23.86/month.  In contrast, according to our information and from discussions with MOAW, for Missouri American Water to invest the same $10 million, the minimum amount collected from each customer would need to be increased by $1.20/month.

 

The City does not plan to issue $10 million in debt in the next 5 years.  However, in accordance with our 2018 Wastewater Facility Plan that has been approved by the Missouri Department of Natural Resources and the Board of Aldermen, the City plans to do the following:

  1. General Obligation Bonds

    One plan that the city may pursue if the sale of the Water and Sewer systems to MOAW is not approved on June 2nd, is to go to the voters in November 2020 with an  approximately $2.5 million in General Obligation Bonds which are funded through the property tax and not the utility bills. This would essentially be a “no tax increase” issuance as the 1999 Sewer General Obligation Bonds will be retired soon and with the refinancing of the General Obligation I-49 & Peculiar Way interchange bonds early this year.  This would provide for the installation of a New Headworks Building and electrical utility power feeders at the Wastewater Treatment Plant.  

  2. Revenue Bonds

Another optional plan, City staff presented to the Mayor and Board of Aldermen in September of 2019, the current and future six (6) year plan (FY 2019-2024) at the Wastewater Treatment Plant.  In the next 4 years, City staff and their engineering firm (George Butler Associates) recommends improvements and the need for approximately $4.8 million in new infrastructure at the Wastewater Treatment Plant.  While the “no tax” General Obligation Bonds will only allow the issuance of approximately $2.5 million; if the sale of the Water and Sewer systems to MOAW is not approved on June 2nd then this second option will cover the new headworks building which is the most critical infrastructure needed at the Wastewater Treatment Plant.  The additional infrastructure $2.3 million needs at the WWTP above the $2.5 million would need to be funded by either an additional Revenue Bond and paid for with water and sewer rates or the issuance of the “no tax” increase general obligation bonds mentioned in option 1 above and paid with property taxes.

Therefore, this second option would be to refinance all of the current water/sewer revenue bonds to obtain a much improved interest rate with the ability to refinance and restructure the existing revenue bonds to allow for the additional $2.5M in funds without issuing any additional revenue debt and increasing the water and sewer rates.

 

If you have any additional questions, or need any additional information, please let us know and contact Carl Brooks Interim City Administrator/City Engineer at 816-779-2228, or at cbrooks@cityofpeculiar.com.
 
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City of Peculiar | 250 S. Main Street Peculiar, MO 64078  |  Phone: 816-779-5212  |  Fax: 816-779-1004
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