COUNCIL OFFERS SPLIT SUPPORT FOR WATER VOTE

The Cape Girardeau City Council failed Monday to unanimously endorse a plan to purchase the city's water system from Union Electric.

The council already has approved a measure to place an $11.8 million bond issue on the November ballot to allow voters to decide whether the city should purchase the water system. That price includes $8.5 million for the water system and additional funds for operating costs and system improvements.

But at Monday's meeting Mayor Gene Rhodes and Councilman Doug Richards said they didn't support the proposal.

The failure of the council to unanimously support the purchase frustrated some members, who stressed that a private owner likely would increase residents' water rates more than $6 monthly.

The council voted 5-2 in favor of the endorsement.

"If this body doesn't speak out for this resolution, who will?" asked Councilman David Barklage. "The job of this council is not to provide populist rhetoric or to get reelected, it's to provide leadership for the citizens."

Councilman David Limbaugh said he would never have urged the city to buy the water system if Union Electric hadn't decided to put it on the market. He said the city's negotiated purchase price of $8.5 million for the system is at least 30 percent below the system's market value.

"I think, however difficult it may be for us to take this step to acquire this water system, it's a necessary evil," Limbaugh said. "And it might not even be an evil.

"Once this was foisted on us, we negotiated, and I thought we did a real good job. I think we have a responsibility as a council to the community, that if we don't purchase it if a third party purchases it it will mean a significant rate increase."

Barklage said it's preferable that the city have control over a natural monopoly such as the city-wide water system.

"Because it's a monopoly, because it will be sold, it's much better to have the people control it," he said.

But Richards said he supported letting the citizens decide the measure without the council's endorsement. When pressed on whether he favors the purchase or not, he said: "I have some very strong reservations about the city buying the system. At this point, I'm opposed to it."

Richards said he was concerned that the original purchase price of $8.5 million had increased to $11.8 million on the referendum. He said he questioned some of the operating and repair cost estimates included in the measure.

"I'm concerned about whether we can run the system effectively and efficiently," he said. "I'm concerned about hidden costs of repairs. I don't think the city can run the system for the costs estimated."

But Council Member Mary Wulfers said that those "hidden costs" would be passed on to residents regardless of who owned the system. She also said that a private company would include a profit margin in its purchase price and operating costs that would be passed on to residents in the form of higher fees.

Assistant City Manager Al Stoverink said that based on Public Service Commission estimates for the "book value" of the system, combined with a full rate of return and taxes, a private company would have to increase water rates by an estimated $6.51 monthly a 49 percent hike.

"I will support saving taxpayers that kind of a rate hike," said Barklage.

But Rhodes sided with Richards. "I've been against purchasing the system from day one," he said. "I supported putting it on the ballot to let the people decide." The mayor said he thought private industry could run the system more efficiently than the city.

Councilman Al Spradling III said he supported the purchase "whole-heartedly." He said the city would not only purchase the system for a better price than a private company, but it could also control the rate at which the system would be expanded.

"It's incumbent on the city council and staff to whole-heartedly back the purchase," Spradling said. "One of the main concerns is to lower costs of service to citizens. That's one of the significant portions of why we want to keep this system under our control."

Councilman Hugh White said that although there might be aspects of the proposal he didn't agree with, the city's purchase of the system "makes good common sense."