By Laurie Bassett-Edmonds
PECULIAR – The Peculiar Board of Aldermen held a special meeting Monday evening to approve an agreement with Missouri American Water Company for the sale of the City’s water and sewer systems, contingent upon public approval.
If voters choose to move ahead with the change in April, it will be almost identical to the way utilities are handled with the electric or gas companies now. This company is regulated by the Missouri Public Service Commission, and any rate increases would have go through an approval process.
Missouri American Water Company has a 135-year history in Missouri and currently serves 1.5 million customers in over 200 communities. The firm is offering to purchase the City’s water/sewer system for $16.9 million. This amount will pay off the bonds for the City’s water connection to Kansas City.
Six water department employees will be offered jobs, and the company will pay the City an additional $300,000 to help give other water/sewer employees time to find other employment. Goint forward, the City will continue to collect approximately $300,000 annually in sales tax and franchise fees.
According to estimates, approximately 80 percent of customers will see a reduction in rates, averaging between $21-$32/month. Hook-ups for new construction will be at cost. Customers who currently use less than 2,500 gallons per month will see an increase. Existing utility deposits will be refunded to customers.
With ever-increasing unfunded mandates from the state’s Department of National Resources, the City has been struggling to figure out ways to pay for the required improvements, and rate increases have been looming in the future. Missouri American Water Company will invest a minimum of $10 million over the next five years in Peculiar to bring the sewer system up to required standards.
Company representatives explained that MAWC’s volume and buying power, along with its ability to spread the costs of infrastructure improvements over such a large customer base, allow it to offer lower rates.
Alderman Tom Broadhurst said, “This will give the citizens protection against rate increases due to infrastructure replacement and expansion.”
Included in the purchase will be the lines in the ground, the treatment plants, some vehicles, the water tower, the ground storage tank, and the meters. The three-legged water tower is not part of the purchase and will still be owned by the City.
Company representatives said that they don’t accept manhole covers blowing off or sewage in basements. They said that Missouri American Water Company rates 20-21 times better than the industry average. They will prioritize improvements based on public health and safety and come up with a 5-year capital plan.
Customers served by a water district will continue with that district.
Aldermen unanimously approved the resolution on the agreement Monday evening. They also approved the first reading to place the question on the April 7 ballot. The second reading will be Monday, Jan. 21. If approved by the voters, this will retire all City debt except for the G.O. Bonds for the interchange.
In other business, aldermen approved the first reading of an ordinance refunding General Obligation Street Bonds Series 2020. There is still $7.9 million outstanding, but by refinancing these, taxpayers will save more than $500,000 in interest payments and it will shorten the length of the bonds.
The second reading will be at the Feb. 3 meeting.