ISSUES GET BALLOT TEST TUESDAY; CAPE'S VOTERS FACE UTILITY DECISIONS

Cape Girardeau voters Tuesday will decide the fate of the city's water system and whether to approve new utility franchises with Union Electric Co.

The three election issues are separated on the ballot, but are related in that they involve city utilities and were negotiated as a "package."

Citizens will vote on whether to approve new 20-year electric and gas franchises for Union Electric, and whether the city should issue revenue bonds to finance the purchase of the city's water system from Union Electric and make various improvements to the system.

None of the issues include a tax increase, and a "yes" vote on the proposal to purchase the water system could save residents as much as $6 or $7 a month on their water bills.

City officials have called the proposal to purchase the water system a "bargain" for residents.

To purchase the system, voters will be asked to approve the issuance of $11.8 million in revenue bonds to be financed over 20 years.

If voters reject the proposal, Union Electric will sell the system to a private utility company.

Officials have said an investor-owned company could file with the Public Service Commission for a 49 percent hike in water rates. The city has said it might raise rates a total of 3 percent if it buys the system.

A 49 percent hike would result in an increase of $6 or $7 per month in average residential water bills.

The price of the water system is $8.5 million, which is 30 percent below its assessed value. The remaining $3.3 million in bonds would be used for repairs, maintenance and operation of the system.

The gas and electric franchises are the result of more than three years of negotiations between the city and Union Electric.

City officials have said the new franchises include much more detailed and complete provisions than the old agreements that expired more than two years ago.

Some of the new provisions in the gas and electric franchises include warranties on street repairs when utility work damages city streets; a 10-percent discount on the city's street light bill; the city's right of first purchase should Union Electric sell the electric or gas systems; a termination procedure should Union Electric breach the terms of the franchise; and a provision that allows the city to compete with Union Electric with its own electric and gas business.

If voters reject the franchises, the city and Union Electric will have to start from scratch and begin negotiations again, or the city will have to resubmit the issue to voters.

After the previous franchises expired, Union Electric refused to accept three extensions to the agreements, wanting instead to negotiate new franchises and operate under temporary permits. The utility company is required by law to maintain service even without a franchise agreement.

Without the franchises, Union Electric essentially operates under the regulations set forth by the Missouri Public Service Commission. The company can continue to operate indefinitely without franchise agreements, as it does in many cities.

But Cape Girardeau's city charter, adopted in 1981, requires the franchise agreements for city utilities and cable television service.

The fate of the water system, the only one Union Electric owns and operates, was one item that remained a sticking point through much of the negotiations process.

Cape Girardeau was able to negotiate the purchase of the system as part of a package that includes the electric and gas franchises one reason the price for the water system is 30 percent below its assessed value.