Effingham Daily News, Effingham, IL

June 20, 2013

Teutopolis Deal would allow village to buy water from Newton

Bill Grimes
Daily News

---- — TEUTOPOLIS — Teutopolis and Newton are on the verge of completing a long-term deal that could supply Teutopolis with up to 360,000 gallons of water a day.

While that figure is far more than Teutopolis' current usage of 130,000 gallons per day, consulting engineer Shannon Woodard said Wednesday the pending agreement would more than account for any future growth in the village.

Woodard and Newton Mayor Mark Bolander told the Teutopolis Village Board Wednesday that Newton had plenty of water to sell water to Teutopolis for an indefinite period of time.

"They can produce, treat and store 1 million gallons per day," Woodard said. "Even if you receive all your water from Newton, you wouldn't get anywhere near the plant's capacity."

Bolander said he was not opposed to a long-term agreement.

"There would be no intent on our part to stop this agreement," he said.

Woodard said the best course of action would be to allow Teutopolis Village Attorney Bill Austin and Newton City Attorney Max Tedford work out the legal paperwork. He said paperwork may be ready in time for the board's July 3 meeting.

"They (the attorneys) can figure out the best way to word the agreement," he said.

The water would be piped from Newton to Teutopolis, a distance of about 21 miles, through an eight-inch line that would be financed by alternate revenue bonds totaling no more than $1.6 million.

Stephen Adams, a vice president of Bernardi Securities in Fairview Heights, said the village would be wise to sell the bonds as soon as possible because of a fear that interest rates may soon rise.

"Rates are low now, but we can't know how long they will stay that way," Adams said. "Rates are starting to spike up, so the longer you wait, the rates will increase."

Adams said a review of village audits shows that Teutopolis could qualify for an "A" bond rating that would enable the village to get a relatively low interest rate.

"Size may be a disadvantage, but they (bond rating firms) will look at your audits," he said.

Adams said the process lasts 60 to 75 days from beginning to end. That process, he said, includes publication of legal notices, the actual sales and board action in the form of an ordinance.

"Nothing is set in stone until the ordinance is passed," Adams said.

Adams said he would make an agreement letter available for the July 3 board meeting.

Woodard said the project should be complete by mid-2014.

Teutopolis has been buying water from Effingham for the past several years. Woodard declined to say why the village was seeking another source to supplement its own water production, but said the pending deal with Newton was a "win-win for both sides."

Woodard said financial terms of the sale are pending.