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New Franklin water rates likely to increase

Justin Addison Editor/Publisher
Posted 9/15/20

The City of New Franklin is not purchasing the amount of water from the Howard County Regional Water Commission (HCRWC) as stipulated in the agreement between the two entities. The announcement came …

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New Franklin water rates likely to increase

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The City of New Franklin is not purchasing the amount of water from the Howard County Regional Water Commission (HCRWC) as stipulated in the agreement between the two entities. The announcement came during the New Franklin’s monthly meeting of the Board of Aldermen on Monday, Sept. 14.

When the HCRWC came into existence, a New Franklin city employee provided what turned out to be an elevated estimate of how much water the city would need to purchase, which would then be sold to its utility customers. The shortfall means that New Franklin is now in arrears of nearly $40,000.

“We’re not taking the amount we said we would,” explained Ward 2 Alderman Robbey Harvey, who also serves as chair of the HCRWC.

The city now wants to revise its agreement with the water commission. But the change will not come without a cost. It will likely mean the city will have to increase the charge to its customers by at least $1 per 1,000 gallons of water used. “We’ve got to revamp (the agreement),” Harvey said. “We need to lower what we said we were going to take. In order to do that we’re going to have to raise the rates to make up the difference.” 

The city is currently running a deficit of around seven percent, with regard to the water, which affects the city’s ability to make debt service payments. The city also hopes to refinance its bonds.

“In order to redo the bonds, we have to show how much everybody is going to take and what they’re going to pay. And that’s the time to adjust everybody,” Harvey said.

The Missouri Department of Economic Development in 2014 approved $500,000 in Community Development Block Grant (CDBG) funds to assist the Cities of Fayette and New Franklin, Howard County, and the HCRWC to establish a regional water supply and treatment system and replace unreliable public water suppliers.

The City of Fayette is also purchasing less water than what it had agreed, putting it about $200,000 in debt to the HCRWC.

The regional water plant—located at 165 County Road 350 just north of New Franklin—serves the residents of the cities of Fayette and New Franklin, and the Public Water Supply District #1 of Howard County. In addition to the water plant, the regional water project included wells, elevated storage, and transmission lines to the three entities served by the plant.

Engineers initially estimated plant construction to cost about $15.5 million. But the bids came in substantially lower at a total of $12,549,389. Funding came largely from the U. S. Department of Agriculture-Rural Development which provided $7,442,000 in low-interest loans (with an interest rate of 2.875%) and $6,455,000 in grants, for a total of $13,897,000. In addition, the Missouri Department of Economic Development awarded $500,000 to each member entity of the HCRWC.

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