It took about 30 minutes to finalize a deal that has been two years in the making.
Eureka Mayor Sean Flower spent a half hour Aug. 4 signing papers that turned over the city’s water and sewer systems to Missouri American Water.
Voters approved the sale of Eureka’s systems for $28 million in August 2020.
“I was sitting there thinking about all the work, the time, the effort, the different hearings and all the people who were involved,” Flower said. “It’s just a good thing to see something start from an idea, then go to closing and be done.”
Flower said Missouri American began service to Eureka the same day the sale was finalized. He said on the morning of Aug. 4, there was a small water main break in the city, and crews from Missouri American took care of it right away.
Flower said the company will start more work in Eureka soon.
“I’ve talked to several of their engineers who are in the process of reviewing all sorts of issues and starting to look at upgrades around town for different things that need to be done,” he said.
Missouri American Water senior director of operations Brian Eisenloeffel said he was happy that the sale had closed.
“It’s been a long process, but we’re glad to finally see (the sale close). Employees are excited,” he said. “I can tell the residents are excited. Most of my employees said they feel like rock stars because people are stopping them all over town in our trucks and asking questions, and then seeing how things are going.”
Eisenloeffel said the No. 1 question the company has received is when the switchover to a different water supply will occur. Eureka residents now receive water from the city’s well system.
Missouri American will build a pipeline to pump water into Eureka from a plant in Wildwood that draws water from the Missouri River. The company could not start construction on the pipeline until the sale closed, according to Missouri American officials.
“We’re looking at 2024,” Eisenloeffel said of when the pipeline will be in operation. “It’s going to take a little time. Construction takes a little while for us to get that pipeline built, but we’re moving as quickly as we can.”
Rate hike
While Eureka’s water source will not change right away, residents’ bills will change.
Eisenloeffel said customers will start being charged a higher rate on the first bills they receive from the company in September.
“Our rates are set by the Public Service Commission, and those rates are to match the rest of our residents in St. Louis County,” he said. “Those took effect when we closed the transaction.”
City Administrator Craig Sabo said the city’s base rate for water service was $15 plus $2.50 for every 1,000 gallons of water used.
Sewer consumption was billed monthly based on the water rate established every January, he said.
Sabo said Missouri American’s base water rate for residential and commercial customers varies by meter size, from $9 to $756.25 per month.
Missouri American’s single-family residential sewer rate is a flat fee of $44.03, and its commercial rate varies, Sabo said.
Flower said the new rates may shock some residents, but he also said the higher cost always was part of the sale and if the sale didn’t go through, the city would have been compelled to raise its rates.
“That was in all the disclosure documents,” he said. “That was in all the discussions we had.
“One good effect is that we actually had the lower city rates for probably an extra year and a half longer than we anticipated,” he said.
A little bit richer
Flower said the city will use $6,584,210.35 of the $28 million it receives from Missouri American to retire Eureka’s debt from building the Timbers of Eureka recreation center and for past water system improvements.
Flower said paying off debt will save the city money in the long run.
“I think it was around $600,000 to $800,000 a year in savings,” he said. “It’s kind of like paying off your mortgage early, and then you don’t have a mortgage payment. It’s a big help.”
Flower said the whole amount went into a new bank account.
“It shows up on our financial statement as basically a utility sale proceeds,” he said.