How Does Macon's $80 Million Dollar Water Project Only Cost Citizens $52 a Month?

Confused citizens

Macon Mo, citizens are understandably alarmed by the numbers being discussed. The problem is that we still don't have enough information to see the complete financial picture.

There is a number being talked about all over Macon right now, and it isn't difficult to understand why. Fifty-two dollars a month. For some households, an additional $52 on the monthly water and wastewater bill is a serious financial burden. For others, it may be manageable. But when that number is placed beside another number being discussed by Macon Municipal Utilities $80 million dollars the obvious question becomes almost impossible to ignore.

How does $52 a month from a residential customer relate to an $80 million water and wastewater treatment project?

Right now, the honest answer is that the public doesn't appear to have enough information to independently make that calculation. And that may be the most important part of this entire story.

Let's be clear from the beginning. This article is not an argument against replacing Macon's aging water and wastewater treatment facilities. Those facilities are old, the City faces legitimate infrastructure challenges, and there are regulatory requirements that cannot simply be ignored. The question isn't whether Macon needs to deal with its water and wastewater infrastructure.

The question is how much this is going to cost, how it will be financed, and exactly how much of that cost will eventually land on the backs of Macon citizens.

The $52 figure becomes particularly interesting when you do some very basic arithmetic. Fifty-two dollars a month is $624 a year. If approximately 2,400 households were each paying an additional $52 every month, that would generate roughly $1.5 million a year. That's certainly a substantial amount of money, but an $80 million infrastructure project is an entirely different financial universe.

Even if there were no interest, no bond costs, no financing fees, no reserves and no other expenses whatsoever, $1.5 million a year would take more than 50 years to generate $80 million.

Obviously, that's not how municipal infrastructure financing works. And that's exactly why citizens need to see the financing model.

There is an important distinction that should not be lost in the public discussion. The $80 million figure may not mean that MMU intends to borrow $80 million all at once.

In fact, MMU's November 2025 discussions with its financial adviser indicated that a bond election would provide authorization to proceed with financing up to an approved amount. The discussions also contemplated the possibility of constructing the water facility using a portion of the authorized financing and dealing with the wastewater facility at a later time. It seems that a decision has been made to replace the wastewater facitity do to upcoming compliance issues.

Is $80 million the amount MMU actually expects to borrow? Is it the maximum amount voters would authorize? Is it the estimated total cost of both projects, with only a portion actually financed through bonds? Or is the final financing package expected to combine bonds with state loans, grants, subsidies and other sources of money? Those distinctions matter enormously.

We also know that MMU has been discussing Missouri's State Revolving Fund as an important financing option. During previous financing discussions, financial advisers explained that State Revolving Fund financing could be more economical than conventional financing. That is potentially significant because an SRF loan, depending upon the terms and any applicable subsidy, can produce a very different financial result than simply borrowing $80 million through conventional municipal debt.

So once again, the question is simple.

How much of the $80 million is actually expected to come from State Revolving Fund financing? How much could come from grants or subsidies? How much would have to be financed through revenue bonds? And how much would ultimately have to be recovered through water and wastewater rates?

Those numbers are critical if citizens are going to understand what the $52 actually means.

There is another part of this discussion that deserves far more attention than it has received.

MMU has stated that a substantial portion of the water produced by its treatment plant is sold to customers outside the Macon city limits.

That means Macon residential households are not the only customers using the system or benefiting from the infrastructure.

There are residential customers. There are commercial customers. There are industrial customers. There are customers outside the city. There are different rate classifications and different levels of consumption. So, if a new treatment plant is being built to serve the entire system, citizens have a legitimate right to ask how the financial burden will be distributed among all of those customers.

Will the average Macon homeowner actually be responsible for $52 a month? Is that $52 an average? Is it an estimated increase? Does it represent water, wastewater, or both? Does it assume future rate increases? Does it include debt service? Does it include operating costs? Does it represent the impact after state financing assistance? Or is it simply one piece of a much larger financial equation?

We don't know all of those answers yet and that is the problem.

Macon citizens are being asked to digest an enormous number ( $80 million ) while simultaneously hearing another number ( $52 a month ) without having access to the complete financial model necessary to connect the two.

That leaves citizens to do what citizens inevitably do when information is incomplete.

They start doing the math themselves and when they do, they become alarmed.

That's exactly what is happening now. There is also a legitimate reason to look closely at the wastewater side of the equation. MMU has already discussed the need for wastewater rate increases, and previous City Council discussions have acknowledged operating losses and future regulatory requirements. The City's financial records have also shown periods of financial pressure within the wastewater operation.

Again, none of that means a new wastewater facility isn't necessary. It means the financial condition of the existing operation becomes even more important when the community is considering a massive new capital investment. Before anyone asks Macon citizens to approve millions of dollars in future debt, the public should be able to see how the existing utility finances fit into the new plan.

Nobody at Macon Missouri Online, is suggesting that Macon doesn't need to address its water and wastewater infrastructure. We have personally visited these facilities. We have seen the age of the equipment. We have heard the concerns. We understand that doing nothing is not a sensible option.

But recognizing the problem does not mean citizens should be expected to blindly accept the financing solution. There is a huge difference between saying, “Macon needs a new water treatment facility,” and saying, “Macon needs an $80 million financing package.”

The first is an infrastructure question. The second is a financial question and before the second question reaches the voters, the public deserves to understand exactly what it is being asked to approve. We don't need another broad explanation of all the different ways municipal governments can borrow money. We don't need financial terminology that requires citizens to be an accountant to understand what is happening.We need the numbers.

If the project is estimated at $80 million, show us the estimated project cost.

Show us the amount expected from State Revolving Funds. Show us the expected grants and subsidies. Show us the amount that would actually be borrowed through bonds. Show us the interest-rate assumptions. Show us the length of the financing. Show us the annual debt service. Show us the projected contributions from residential, commercial, industrial and outside-city customers. And most importantly, show us exactly how the $52 figure was calculated.

If the numbers work, then show us.

If the $80 million is simply a maximum bond authorization and MMU expects to borrow substantially less, then tell the citizens that.

If state or federal assistance will cover a significant portion of the project, tell us how much.

If future rate increases beyond the $52 are anticipated, tell us that too.

Macon citizens aren't asking for a miracle. We're asking for the math.

We will have an answer as to just how urgent this situation is once the City Council votes, on Monday evening.

Regards Maconites,

R. Dominique - Editor

Citizen of Ward 2 Macon, Mo

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