The $52 Water Bill Increase Could Look Very Different at 6.5%
Macon voters will decide on November 3 whether to authorize up to $80 million for two new water treatment plants. The projected residential rate increase depends heavily on the interest rate.
By R. Dominique
Macon voters will face an $80 million water and wastewater treatment bond question on the November 3 ballot. The proposal would provide the financing authority for two new treatment plants. One for drinking water and one for wastewater.
If the Citizens of Macon " Vote YES" and approve the $80 million dollar bond for the two new water treatment plants, we may qualify for grants, as well as below-market "State Revolving Fund" financing. This is where the 2% finance rate comes from. If we vote no, we lose the grants & good finance rate. We may face a rate of 6.5% financing +/- ...
Macon Municipal Utilities’ voter-information handout estimates that a residential customer using 4,000 gallons would eventually pay approximately $52.66 more per month if the full $80 million project were financed at an anticipated State Revolving Fund rate of approximately 2%.
But what happens if the financing rate is substantially higher?
Using the same $80 million principal and 30-year repayment period, financing at 6.5% instead of 2% would increase the bond payment by approximately 71%.
Applied proportionally to the city’s projected $52.66 residential increase, the monthly increase would be approximately $90 .
Your monthly bill may increase $90 per month instead of $52.66 !!!
Financing assumption | Estimated monthly increase |
Approximately 2% | $52.66 |
6.5% | Approximately $90.05 |
Difference | Approximately $37.39 more per month |
This is a mathematical comparison, not a prediction of Macon’s final bill. The city’s documents state that actual rates will depend on the final interest rate, construction bids, project scope, grants, and the amount ultimately borrowed.
The city is pursuing below-market State Revolving Fund financing. Its handout says Missouri DNR targets SRF loans at approximately 30% of the market rate, with current market rates listed at 6.25% to 6.75% and estimated SRF rates of approximately 1.875% to 2.025%. Those rates remain subject to eligibility, availability, and approval.
The point is simple: the interest rate matters. A projected $52.66 monthly increase at approximately 2% is not the same financial burden as an increase of roughly $90 at 6.5%.
The November 3 bond question gives MMU authority to borrow up to $80 million. It does not guarantee that the full amount will be borrowed or that the final interest rate will be 2%.
Before voting, Macon customers should understand not only the projected rate increase—but also how that projection changes if the financing rate changes.
The choice is in the hands of the citizens of Macon, Mo. How will you vote?
"Tick-Tock Maconites" .. Just 60 days until the election!
Regards,
R. Dominique - Editor
