Neosho council approves first reading to pursue sale of water and sewer systems to Missouri American Water; town hall scheduled

The Neosho City Council voted unanimously to approve the first reading of an ordinance authorizing an agreement between the City of Neosho and Missouri American Water that would allow the company to seek approval from the Missouri Public Service Commission to acquire the city's water and wastewater systems for a proposed sale price of $34,500,000.

City Manager David Kennedy told the council the agreement is one step in a multi-week process: a first-reading vote clears the way for public details and then for Missouri American and the city to present the proposal to the Public Service Commission, which has final authority on any sale. "If council votes tonight to approve the first reading, then we have to come back in another couple weeks and vote on it again," Kennedy said, adding that PSC review would follow any council approvals.

Residents urged caution during an extended visitors'-business period. A number of speakers said they preferred the city retain ownership or raise local rates to fund upgrades. One resident, who identified himself as having made a large investment to connect to the city system, said he would have felt differently about making that investment if the system had been sold: "I wouldn't have felt so proud about doing that for Missouri American Water," he said. Another caller with municipal water experience, Charles Brown of Webb City Water, told the council he reduced water loss in his system and offered to help Neosho find leaks rather than sell.

Council members and staff said the proposal follows more than a year of study and negotiation. City officials repeatedly cited the system's long-term maintenance backlog, a roughly 60% water-loss rate the city has been unable to eliminate, and past attempts to fund improvements through bonds and grants as reasons the issue has come before the council. Finance staff said the purchase agreement includes language that Missouri American would accept the city's current rates at the time of sale and that a PSC tariff imposing a flat sewage rate (instead of usage-based billing) is a non-starter for the city and was removed from the draft language.

Council members also asked about employee impacts. City staff said Missouri American indicated it would offer positions to qualified employees and that workers would have a choice whether to remain with the city or accept employment with the company.

Before adjourning, the council scheduled a town-hall-style meeting for 06:30 p.m. on the 12th at the Civic auditorium where Missouri American representatives are expected to present details and answer questions. Kennedy and other council members emphasized the first-reading vote does not finalize a sale: the PSC will review any formal application and citizens will have multiple opportunities to comment before any transfer is approved.

The ordinance cleared first reading on a recorded roll-call vote of 7-0. The council said any decisions about how sale proceeds would be used would come to the council for approval at a later time.