Scott Robbins is working with the City of Alton, Missouri, regarding a proposed replacement of its aging drinking water system. The current drinking water system was installed in the 1950’s (or earlier). The existing water lines are made out of Transite (asbestos-cement), which was a popular choice of engineers for water, sewer, and stormwater pipelines during the 1940s, 1950s, and 1960s. Transite pipe was popular because of its light weight and ease of handling. An estimated 600,000 miles of Transite pipe were installed in the U.S. and Canada. The Transite pipe in the City of Alton’s drinking water system is past its 50-year design life, and as a result, the lines are constantly breaking, which disturbs decades-old buildup on the inside of the pipe, and requires boil water orders and expensive repairs. The picture above shows an example of the Transite water pipe, which has been patched with newer PVC pipe and couplings.

To pay for the cost of the water system replacement, City officials have asked the residents to approve a water and sewer revenue bond. The question on the ballot will read:

“Shall the City of Alton, Mo., issue and sell combined waterworks and sewerage system revenue bonds of the City of Alton, Mo. in an amount not to exceed three million, five hundred thousand dollars ($3,500,000) for the purpose of paying all or part of the costs of acquiring, constructing and equipping improvements and extensions to the combined waterworks and sewerage system of said city, including the acquisition of any necessary rights-of-way, with the cost of operation and maintenance of the combined water works and sewerage system and repayment of the principal of and the interest on the combined waterworks and sewerage system revenue bonds to be payable solely from the revenue and receipts derived and to be derived from the operation of the combined waterworks and sewerage system, and all future expansions and extensions thereof?”

If the revenue bond issue passes, the bonds will be used as a means to secure repayment of a low interest loan and grant package from the USDA-Rural Development and other similar funding sources for the water system replacement. The grant dollars do not have to be repaid and the Rural Development loan dollars are typically available at 2.5% interest, amortized over 33 years. Should the bond issue fail, the City will likely be required to take out private financing through a lease-purchase agreement for the water system repalcement. Private financing will be at a higher interest rate and will not include grant dollars, resulting in higher water bills for city residents.

The bond election is Tuesday, April 7, 2015.