Voters to decide on $1.5 billion in water and sewer bond initiatives. What to know
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- Kansas City voters will decide two $750 million KC Water bond questions on Aug. 4.
- Question 4 bond funds would support the Water Main Replacement Program and replacements.
- Question 5 bond funds would rehabilitate sewer mains and meet the federal consent decree.
KC Water wants $1.5 billion in bond financing to fund improvements for the city-owned utility company’s sanitary sewer system and for improving and extending its water system.
Kansas City voters will be asked two separate bond questions during the primary election, both worth $750 million in bond financing. The two-question proposal is part of four bond initiatives and a sales tax extension the city put on the Aug. 4 ballot.
City officials say the bond financing would be used to pay for needed upgrades to its water mains that deliver water throughout the city and its sewer system that disposes of wastewater.
Some of those upgrades are not up for debate. KC Water is required by court order through a federal consent decree to upgrade its sanitary sewer system.
KC Water officials warned city leaders that if the bonds fail, the utility company would need to pursue more costly financing options, which would require KC Water to increase rates for its users.
Here’s what to know about your vote and KC Water’s plan for the funding.
Ballot language
The two bond questions will appear on the ballot as Question 4 and Question 5.
Question 4: Shall the City of Kansas City, Missouri issue waterworks revenue bonds in the principal amount of $750,000,000.00 for the purpose of rehabilitating, expanding and improving the City’s waterworks system, including acquiring necessary land and rights of way, in order to provide for its continuing operation and to maintain compliance with federal, state and judicial requirements, with the principal of and interest on said revenue bonds to be payable solely from the revenues derived by the City from the operation of its waterworks system, including all future rehabilitations, improvements and expansions thereto?
Question 5: Shall the City of Kansas City, Missouri issue sanitary sewer revenue bonds in the principal amount of $750,000,000.00 for the purpose of rehabilitating, expanding and improving the City’s sanitary sewer system, including acquiring necessary land and rights of way, in order to provide for its continuing operation and to maintain compliance with federal, state and judicial requirements, with the principal of and interest on said revenue bonds to be payable solely from the revenues derived by the City from the operation of its sanitary sewer system, including all future rehabilitations, improvements and expansions thereto?
What a yes vote would mean?
A ‘yes’ vote on Question 4 would authorize $750 million of bond financing to pay for KC Water’s capital improvement and extension projects to the city’s water system, including drinking water to households.
A ‘yes’ vote on Question 5 would authorize $750 million of bond financing to pay for KC Water’s capital improvement projects to the city’s sewer system, including the mandated improvements.
Officials for KC Water have said that the bonds are the “lowest cost” financing tool for capital improvement projects, allowing to spread the cost of the projects over many years.
The utility company said the combined $1.5 billion funding is needed because KC Water has $2.9 billion worth of capital improvement project costs for both the water and sewer systems over the next five years.
What a no vote would mean?
A ‘no’ vote on Question 4 would reject $750 million of bond financing to pay for KC Water’s capital improvement and extension projects to the city’s water system, including drinking water to households.
A ‘no’ vote on Question 5 would reject $750 million of bond financing to pay for KC Water’s capital improvement projects to the city’s sewer system, including the court-mandated improvements.
The utility company would not be able to use the bond funds. However, Hugh Wooden, a senior finance analyst for KC Water, said the utility company would resort to using other financing tools that would come with higher interest rates to cover the cost of the improvement projects, which would ultimately come at a higher cost to customers.
Wooden said KC Water would need to ask for “significant rate increases” to pay for the other financing options.
Planned projects
City officials say the utility company plans to use the water bond funds from Question 4 to help pay for its Water Main Replacement Program. KC Water aims to replace 28 miles of water mains every year to help minimize breaks and help ensure that the city’s water distribution infrastructure is durable.
The sewer bond funds from Question 5 would be used to rehabilitate sewer mains, build additional green infrastructure and make upgrades to pump stations.
City officials said these upgrades would allow KC water to continue to comply with the Federal Consent Decree it has been under since 2010. The court-ordered agreement with federal agencies requires the city to upgrade its sewer system to address KC Water violations of the federal Clean Water Act by discharging untreated sewage.
