Cape Girardeau officials explain August 5 ballot to raise annual water-rate cap from 5% to 15%

Mayor Kinder told the Cape Girardeau City Council that the August 5 ballot asks voters to amend the city charter to allow annual water-rate increases up to 15 percent, up from the current 5 percent cap.

The measure, Kinder said, would not automatically raise rates to 15 percent but would permit the city to do so if needed to fund an expansion of the water treatment system. "The ballot language states that our current city charter prohibits utility rates from being raised more than 5% in any given year," Kinder said. "The question for voters is shall this general limitation be amended from 5 to 15%?"

Council members and city staff described the proposal as part of a 10-year financing plan to fund phases 2 and 3 of the city's water master facility plan. Under the plan explained at the meeting, the city would be allowed to raise water rates by up to 15 percent a year for the next three years and then limit increases to 5 percent annually for the following seven years. "The plan is to raise those utility rates 15% for the next 3 years and then take them back down to a 5% increase for the following 7 years," Kinder said.

Officials said the city is not short of water supply but is reaching the production capacity of the current treatment plant and must expand to meet demand from residents, businesses and health-care facilities. "The city does not have a shortage of water. It has a shortage in the production of water," Kinder said.

On financing, Kinder said the total cost for phases 2 and 3 of the master facility plan is "well over a $100,000,000." He told the council the casino fund cannot cover that scale of expense: projected casino-fund revenue for the coming fiscal year is about $2,400,000, and the fund was established to support one-time downtown expenses. "That revenue from the casino fund will not go far enough and will not be brought in nearly fast enough to essential improvements that are urgently needed," Kinder said.

The mayor also said the city has been approached by private companies about selling the water system but that city leaders do not favor privatization. "Private companies raise their revenue just as the city would. But they are also required to raise profit," Kinder said, adding that analyses show city-owned rates would likely remain lower than private ownership even after proposed increases.

Council members said the city has formed a committee to educate voters about the ballot measure and urged residents to consult primary sources. "Go to the city's website at cityofcape.org," Kinder said. Another council member added: "Just because a Facebook post looks like it's official doesn't mean that it's actual news. Read those primary sources and find the information for yourself."

The council did not vote on the measure at the meeting. Officials said outreach and education will continue before the August 5 election and that the final decision rests with voters.

Resources and next steps: city officials asked residents to review materials posted on the City of Cape Girardeau website and to contact city staff with questions in the weeks before the August 5 vote.