After one Lake Ozark alderman vowed to campaign against the measure, the city is taking a step back before taking the final vote on the ballot language for a sewer revenue bond issue.
If approved by November's voters, Lake Ozark would be allowed to issue up to $6 million in revenue bonds to cover the costs of upgrades and expansion of its sewer system.
About $3 million of that will be for necessary upgrades to meet the requirements of the city's consent judgment, City Administrator Dave Van Dee explained to the board. The rest is to have as backup for future expansion and development of the system.
Mainly, he added, in case something does happen to the system, like a natural disaster or another major bypass, the city already has a funding mechanism in place to start repairs immediately.
On the water side, the city has about $5 million to work with in voter-approved bonds. However, over the years the city has maxed out its bonds on the sewer side, owing about $4 million already on the system.
A few months ago, when the city qualified for a grant-loan to help pay for upgrades considered in phase one of the sewer project, the city had to scramble to come up with their portion of the loan after realizing they didn't have enough money left to bond out.
The city isn't spending the $6 million right now, Van Dee said, especially all at once. The Board of Aldermen will have to approve each step when the city is ready to borrow.
What the money does now though, Van Dee explained, is help the city qualify for more funding options including grants and other programs like the State Revolving Loan Fund, which offers low-interest rate loans and combination loan-grants to municipalities.
As it stands, Lake Ozark is looking at a very costly project. And, it's going to get even more expensive if the city has to take out private loans in order to pay for the required fixes in phases two and three, Van Dee said.
If the city only takes out the $3 million needed to cover the expenses of the consent judgment and that funding is exhausted, the city is looking at the same situation of having to take out high-interest loans.
After running the numbers, Alderman Robert Davis wasn't convinced though.
Davis feared sewer customers were already burdened by the city's current sewer-bond debt and wondered how they could take on more if the city wasn't able to pay back the bonds.
He asked that the new ballot language be amended so it was specifically earmarked for expansion however that was as far as his amendment went.
Aldermen approved the first reading to place the language on November's ballot 5-1 with Davis voting against.
"It's poor judgment," Davis said, making a pledge to campaign against the measure.
Without a united front, aldermen held off taking a final vote on the bill.
"We need a (unanimous board) in order to make this work," Alderman Larry Buschjost said.
If the language is approved, the city has several ideas on how to educate the public about the issue.
Bill No. 2010-34
An ordinance of the City of Lake Ozark, Missouri, authorizing and approving a ballot initiative regarding whether the City of Lake Ozark should be authorized to borrow funds not to exceed $6,000,000 for the extension and improvement of the city's sanitary sewer system and authorizing and approving the placement of said question on the ballot for the General Election of November 2, 2010.
Whereas, the City of Lake Ozark, Missouri, has entered into a Consent Judgment and Order of Injunction with the State of Missouri in a lawsuit filed in the Circuit Court of Miller County, Missouri, entitled, State of Missouri ex rel. Jeremiah W. (Jay) Nixon, Attorney General of Missouri, the Missouri Department of Natural Resources, and the Missouri Clean Water Commission v. City of Lake Ozark, Case No. 08ML-CC00141; and,
Whereas, pursuant to said Consent Judgment and Order of Injunction, the City of Lake Ozark, Missouri, was ordered to establish an improvement plan for the sanitary sewer system of the City of Lake Ozark and to eliminate sanitary sewer overflows from said system; and,
Whereas, pursuant to the improvement plan for the sanitary sewer system of the City of Lake Ozark, the City has determined that funds not to exceed $6,000,000 are needed for the extension and improvement of its sanitary sewer system; and,
Whereas, the Board of Aldermen finds it necessary and hereby declares its intent to borrow funds not to exceed $6,000,000 for the purpose of extending and improving its sanitary sewer system and to evidence such borrowing by the issuance of revenue bonds not to exceed $6,000,000;
Now, therefore, be it ordained by the Board of Aldermen of the City of Lake Ozark, Missouri, as follows:
Section 1. A special election is hereby ordered to be held in the City of Lake Ozark, Missouri, on Tuesday, November 2, 2010, on the following question:
Shall the City of Lake Ozark, Missouri, issue revenue bonds not to exceed $6,000,000 for the purpose of extending and improving the City's sanitary sewer system, the cost of operation and maintenance of said sanitary sewer system and the principal and interest on said revenue bonds to be payable solely from revenues derived by the City from the operation of its sanitary sewer system, including all future improvements and extensions thereto?
Section 2. The authorization of the bonds will authorize the City to fix, establish, maintain and collect rates and charges for the services provided by the City through its sanitary sewer system, including all extensions and improvements thereto hereafter constructed or acquired by the City, in addition to the other rates and funds to pay the costs of operation and maintenance of said sanitary sewer system and the principal and interest on the bonds as they become due and to provide for the establishment of reasonable reserves therefor.
Section 3. The form of Notice of Special Election showing said question, a copy of which is attached hereto and made a part hereof, is approved.
Section 4. The City Clerk is hereby authorized and directed to notify the County Clerk of Miller County, Missouri, and the County Clerk of Camden County, Missouri, of the passage of this ordinance no later than the close of business on August 20, 2010, and to include in said notification all of the terms and provisions required by Chapter 115, RSMo, as amended.
Section 5. The maximum principal amount of the bonds expected to be issued is $6,000,000.
Contact this reporter at deanna.wheeler@lakesunonline.com.
