OSAGE COUNTY — Osage County Public Water Supply District No. 3 (PWSD #3) has an important ballot measure up Tuesday, when patrons will be asked to approve the issuance of revenue bonds. Results …
OSAGE COUNTY — Osage County Public Water Supply District No. 3 (PWSD #3) has an important ballot measure up Tuesday, when patrons will be asked to approve the issuance of revenue bonds. Results of the election will dictate costs to district patrons for improvements. The work is scheduled for the system over the next 10 years, with an estimated cost of $5,600,000.
Passage of the measure makes the district eligible for a grant from the Missouri Department of Natural Resources (DNR) for half that amount. The other half would then be eligible for a low-interest DNR loan. The current rate on such loans is 1.5%, a fraction of what commercial loans now cost. Failure of the measure would require the entire amount to be financed commercially. Those rates are now running up to 7%. The estimated impact on future water bills is almost a 50% savings, should the measure carry.
District officials emphasize the work will be done. The county’s growth and the waterworks’ aging infrastructure demand it. The only question is the impact to district patrons in the coming years. “We’re going to do it,” asserted Terris Gates, P.E., Integrity Engineering, Inc., Rolla. “It’s just how we’re going to pay for it.”
The district has contracted Integrity to oversee the work.
Increasing demand stresses areas of the district. Insufficient pressure during periods of peak usage has led to pressure being too high on occasion between those areas and the source pump. A third well and tower are necessary to alleviate the two extremes across the system. They will be combined with strategically-placed pressure reduction valves. Steady, reliable pressure is needed for fire protection. So is potable water for household and farm use. There will be an emergency generator at the new well.
As the current system of mains ages, there have been increasing incidents of breaks and leaks. A stretch along Twin Ridge Road is in especially critical condition in this regard. This project will completely replace that main and upgrade others.
The projected work will address pressure, main repair, and the ability to flush lines. The district will also connect the whole system into a loop, integrating all three towers. This strategy will include 22 new flush and fire hydrants and 32 new shut-off valves. With that hardware in place, much shorter lengths of line can be isolated. This will reduce the number of customers affected in any one incident and vastly improve fire protection ability while a main is being repaired.
Purchase of real estate will be negligible. Less than an acre of land south of Hwy. 50, east of Hwy. 89, and west of Rt. CC will be acquired for the new well and tower. Pipe to be laid in order to complete the loop should fit along unobtrusive easements. “This pipe can move,” Gates insisted.
There are no plans to utilize any eminent domain. Most of the project will involve replacing smaller lines with larger ones. Installing valves, regulators, and short connections will require no acreage.
NOT DRIVEN BY STATE TECH
District officials are adamant this project is not a special favor to State Tech. Some observers have asked, noting the college is the district’s largest customer. Also, construction west of Linn at the Osage Country Club, owned by State Tech, and planned work on the water district’s loop project are coincidentally close to each other.
District officials offer answers to these two concerns. First, State Tech pays for their water on the same basis as any other customer. Plus, the school has no pressure problems at the main campus east of Linn. The college has its own water tower to ensure that pressure. The water comes from PWSD #3, but the problems this project addresses are not any in which State Tech has much interest.
Second, State Tech purchases only potable water for the country club from the district. By far, the most water the institution uses is for its fairways and greens. This doesn’t require potable water, and the golf course has its own wells for non-potable water used in grounds maintenance. The college will welcome the improvements, but no more than other commercial customers. The school will also pay the same higher rates, hoping for the smaller increase provided by the bond issue.
The main driver is county growth, “and it’s all over [the district],” said PWSD #3 Board President Vince Boillot. “We’re just trying to stay ahead of the game.”
HOW THE RATES WILL INCREASE
PWSD #3 has always charged some of the lowest rates in the state of Missouri. “We are competitive,” Boillot said.
This ballot issue is the district’s attempt to keep that reputation intact for the next 10 years. The work to be done must be paid for, but officials emphasize paying for only half of it will have a dramatic effect. So will paying dramatically lower interest rates on the other half.
The plan is to roll the rate increases out only as work is done. The grant money will be spent, and the borrowed money will only be drawn as the project progresses. Integrity has produced a projection for how those 10 years will go. It includes what money will have to be spent and when. The cost difference between a passed bond issue and a failed one is dramatic.
Currently, an average user of 5,000 gallons per month pays less than $30. Assuming passage of the measure, that patron will see the rate increase to about $32 in two years. That is less than the rate of other inflation during the last two years. In four years, it will probably be in the range of $35. After six years, it’s expected to be around $39. In eight years, $42 is projected. Once completed, if all goes to plan, that user should be paying just less than $46. That’s an annual inflation rate of 5-6%. Other goods and services may increase at that rate with no improvement in the product. Improved dependability and service are what this project’s all about.
Should the issue fail at the polls, the district will be forced to borrow the entire amount. It would then pay standard construction loan interest. At existing rates, that would leave the average user paying around $85 in 10 years. That would still be competitive by industry standards, but PWSD #3 would rather offer the lower rate, a savings of better than 45%.
“That’s why the bond is so vital,” said Gates.
A simple majority of voters will pass the measure. Passage is required for PWSD #3 to become eligible for the grant and the reduced interest rate. “Bonds are the least expensive way to fund water improvements,” Gates concluded.
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