• Thu. Dec 1st, 2022

Water and sewer sale clears final hurdle | Local News

ByWillie M. Evans

Jun 25, 2022

The sale of Eureka’s water and sewer systems is about to close – exactly two years after voters approved the sale.

Missouri American Water will buy the city’s water and sewer systems for $28 million on August 4, Mayor Sean Flower said. Eureka voters approved the sale of the systems in the August 4, 2020 election.

The sale cleared its final hurdle on June 9 when the Missouri Public Service Commission voted 4-1 to approve the transfer. The commission regulates investor-owned electric, natural gas, steam, water, and sewer utilities in Missouri.

“I was happy and a bit relieved,” Flower said. “It was very nice to get a final decision on that because the whole system was sort of in limbo. We’re running it, but you don’t know if you’re going to keep it and make improvements to it or if you will sell it and move on.

Missouri American Water Chief Operating Officer Brian Eisenloeffel said Eureka residents will receive their first bill from Missouri American Water 30 days after the sale closes. However, residents of Eureka will have to wait to start getting different water.

“We still have a pipeline to build,” he said. “We weren’t able to innovate and start construction until the acquisition was final.”

Eisenloeffel said a 5-mile pipeline will be built between the company’s water plant in Wildwood and Eureka. He said the project would take about two years.

However, Eureka residents will receive service from the company once the sale closes, Eisenloeffel said.

“You could see our trucks. You may see our employees who will work at the sewage treatment plant to treat the sewage immediately,” he said.

He also said Missouri American has extended its offerings to current city employees who work on water and sewer systems. He did not say how many planned to work for Missouri American after the sale.

City Administrator Craig Sabo said Eureka has 11 employees who work on the water and sewer systems who could be offered jobs.

One thing residents will get soon after the sale is new water meters, Eisenloeffel said.

“We will be working to change the water meters fairly quickly right after the closing date,” he said. “It’s an automated meter, it communicates with the cellular data system and communicates with our billing systems to make sure they’re getting accurate bills.”

Two-year sale

Flower said utility sales typically take about three or four months, but the Eureka sale took much longer. He said the sale had two extensions due to the COVID-19 pandemic and the commission rolled back to the price of $28 million.

During the preparation of the sales contract, three appraisers were employed to determine the value of the two systems.

The city hired Dinan Real Estate, Missouri American hired Joe Batis and these two appraisers hired Elizabeth Goodman Schneider to provide a third opinion.

In January 2020, Kelly Simpson of Flinn Engineering, who worked with the appraisal companies, determined that the two systems were worth $16.1 million, according to the commission’s report.

After receiving the engineering company’s report, the three appraisers determined the systems were worth $18 million, but that price rose to $28 million in March 2020 after appraisers combined the value systems with the amount charged to customers.

“I think it was fair,” Eisenloeffel said of the evaluation process. “We rely on the professional judgment of the evaluators. We respect those numbers, and I think they’re very accurate.

Flower said he did not understand the award was in dispute since the evaluation process had been followed.

“The law says we use an appraisal to determine the price, we did and followed that rule,” he said.

Flower said the city plans to use about $5 million from the sale to pay off debt from building the Timbers of Eureka Recreation Center and operating the water system.

Flower said city officials are considering many other projects that can be funded with the remaining $23 million. He said the city could use some of the money to help fund the construction of a new Allenton Bridge and to fund road, stormwater and park improvement projects.

“We can basically lend each other money and kind of pay it back so that we don’t pay interest to outside banks,” he said. “It gives us a lot of flexibility with the financing part.”

Flower said he would be proud to see the sale go through.

“It’s just a huge deal for Eureka,” he said. “It’s not all the time that you take something from start to finish and accomplish it.”