Aldermen ponder amount of bond money for sewer upgrades to seek in August vote

Bond counsel urges BOA to ‘put a bunch’ on ballot because of low interest

By Buck Collier, Special Correspondent
Posted 4/24/24

HERMANN — The Board of Aldermen will be taking the next two weeks to consider how much bond money City Hall will ask voters to approve in August to finance sewer system improvements.

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Aldermen ponder amount of bond money for sewer upgrades to seek in August vote

Bond counsel urges BOA to ‘put a bunch’ on ballot because of low interest

Posted

HERMANN — The Board of Aldermen will be taking the next two weeks to consider how much bond money City Hall will ask voters to approve in August to finance sewer system improvements.

The city’s bond counsel, Joey McLiney, Monday night urged city officials to “put a bunch (of money) on the ballot” to ensure enough will be available for projects beyond the most immediate needs. His advocacy of a large bond issue — the amount of $20 million is being considered — is prompted by the low-interest rates charged for tapping into the State Revolving Fund, a major source of bond revenue for local governments in financing capital improvements such as water and sewer upgrades.

A bond issue is not the city’s only option for financing the improvements, McLiney explained. Also available is funding through a lease-purchase program, but that carries as much as a 5-percent interest rate while obtaining funds through a bond issue has a price tag, now, of 1.75 percent — that represents a substantial amount of money in saved interest payments over the life of the bonds.

The city earlier this year considered an April vote on a sewer bond issue; but seeing several other agencies and school districts place bond and tax issues on the General Municipal Elections ballot, Hermann officials decided to wait until a later vote.

A bond issue will require a four-sevenths majority, or 57.14 percent, to win approval. The Gasconade County R-1 School District’s $5-million bond issue on the April ballot narrowly failed, receiving 56 percent.

McLiney offered a draft ordinance calling for an August vote. He favors going to the voters as part of the August Primary Elections because, as he told the board, few voters turn out for the primary elections, which increases the city’s chances of passing a bond issue.

Of immediate concern for City Hall is relocating the sewer lift station at Lions Field, which is in a floodplain. The Missouri Department of Natural Resources has issued at least one Letter of Warning to the city about the need to get the lift station to higher ground. When Frene Creek floods — either from flash flooding or the backup of the Missouri River \— the lift station becomes surrounded by water, making it accessible only by boat for city employees needing to work on the station’s pumps during a period of flooding.

Public Works Director Jesse Geltz noted that the lift station concern has been a major topic of discussion for the past two to three years. “This has been going on” a while, he said, adding that workers are called out to the station often to make repairs. “You’d be surprised what gets flushed down the toilet,” he said, referring to items that damage the lift station’s pumps.

According to a proposal from Archer-Elgin of Rolla, the city’s consulting civil engineering firm, about $15 million is needed to meet the most pressing needs, such as relocating the lift station and related work.

While the BOA could adopt an ordinance at its May 13 session calling for an August vote, the deadline to place issues on the Primary Elections ballot isn’t until May 28.

“I would suggest that between now and your next board meeting you be thinking about an amount” to ask for, McLiney said.

Mayor Bruce Cox noted that City Hall will need to make every effort to convince voters of the need for the bond issue. “The bottom line is educating the people,” he said.