Cape Girardeau, Mo. – If voters approve an Aug. 5 charter amendment, the City of Cape Girardeau still plans to keep increases as low as possible to fund improvements. Water bill revenue can only be used for the water system, and may not be used to fund other programs or projects.
WATER-INCREASE-PROJECTION
The plan of rate increases is depicted above for 99% of residential water users. After the passage of the charter amendment, the City plan moving forward is to increase rates 10%, then the next two years will be 15%. Projections are to increase the rates by 5% in the 4th year. Annual rate adjustments will be evaluated annually thereafter during the City’s budget process.
Under this model, citizens would retain control over the City’s rate structure, water system, and related billing policies. Citizens would lose local control if a private company owned the utility.
In 2024, three companies approached the City interested in purchasing the water system. Each company indicated that rates would need to increase, and customers would still bear the cost of improvements while also funding profits for the private entity. Private utility companies do not need a public election to increase their service rates.
“Every company we met with said rates need to increase,” noted Mayor Stacy Kinder.
City water rates are much lower than most and are not enough to qualify for grants. The acceptable national standard Affordability Index (AI) for water is 1.0 percent. This means the average household using 5,000 gallons of water per month pays 1% of its income to pay the water bill. Various state and federal funding sources look at a city’s AI to determine if its residents are paying their part. The City’s current AI is 0.76, meaning the rates are too low to qualify for state or federal grants to help with funding needs.
The current utility rate cap in the City’s charter allows the City to raise utility rates up to 5% any given year. Voters will decide August 5, 2025, on whether to allow the city to possibly raise utility rates up to 15% annually. The water infrastructure proposal raises rates only to fund the necessary improvements and is done so at a slower rate for users than in what was proposed in the one-step rate increase considered in 2024. A 15% increase for most residents today would be up to $4.71/month.
If the water proposal fails a second time, the water system would become increasingly less reliable, and the city will need to consider water conservation and/or privatization.
“We have to keep clean, reliable water available in Cape Girardeau,” said Kinder. “To continue down the same path we have been will not provide the needed improvements and will compromise the quality and quantity of water we have here. This is not a safe, workable option for the community.”
The City bought the water system in 1992 from United Electric (now Ameren). An election is not required to sell the system.
For more information about the water rate proposal, visit cityofcape.org/water or contact the City at (573) 339-6320.
