Proposed constitutional amendment will help Mo. cities receive grants, loans for stormwater program

On Nov. 4, Missourians will vote on a proposed amendment to the state constitution that would give the Missouri Department of Natural Resources more flexibility in providing grants and loans to communities for stormwater infrastructure. Amendment 4 revises the language in Article III, Section 37(h) of the state constitution relating to the sale of state stormwater control bonds administered by the department...

Oct 17th, 2008

JEFFERSON CITY, MO, OCT. 16, 2008 -- On Nov. 4, Missourians will vote on a proposed amendment to the state constitution that would give the Missouri Department of Natural Resources more flexibility in providing grants and loans to communities for stormwater infrastructure. Amendment 4 revises the language in Article III, Section 37(h) of the state constitution relating to the sale of state stormwater control bonds administered by the department.

The proposed changes to the constitutional language address three main issues. Under the proposed amendment, the state's 17 first-class counties, the city of St. Louis and the Metropolitan St. Louis Sewer District would be offered their share of the bond funds. Any unused funds would be offered to the original applicants that have remaining needs. Currently, the constitution requires the funds be divided up according to a prescribed formula and set aside regardless of whether a county uses their funds or not. The proposed amendment facilitates more timely distribution of the bond funds to counties that will use the funds.

Since the last bond sale in 2002, the Internal Revenue Service has enacted certain restrictions on tax exempt bond sales. The IRS requires that the tax exempt bonds be spent within three years of a sale. This amendment would ensure that all funds are allocated within this timeframe. Without this amendment the state may have to return funds to bondholders early, depriving communities of needed funds. In 2007, approximately $1.9 million was forfeited from the stormwater program for this reason.

The current constitutional language also dictates that the bonds must be offered in a combination grant and loan. The proposed amendment would eliminate this requirement resulting in the department being able to disperse more funds as grants and in a timely manner.

Finally, the amendment creates a revolving fund for loan repayments. This ensures the bond funds are used for stormwater projects into the future.

In addition to changes to the constitutional language, parallel changes to the state statutes governing the stormwater grant and loan program will be put into effect if the constitutional language is changed next month.

In November 1998, Missouri voters approved $200 million in state stormwater bonds. The bonds are used for stormwater planning and construction projects in first class counties and the city of St. Louis. The bond funds are used by participants for loans that cover up to 100 percent of the project cost or as a 50 percent match grant. To date, $45 million of the $200 million in authorized bonds has been sold. The last bond sale was in 2002. The department has awarded all the bond proceeds sold thus far.

The stormwater funds are allocated through a formula in the state constitution. The formula allocates the available funds based on the applicant's population. There are currently 17 first-class counties, which include Boone, Buchanan, Callaway, Camden, Cape Girardeau, Cass, Clay, Cole, Franklin, Greene, Jackson, Jasper, Jefferson, Platte, St. Louis, St. Charles and Taney.

>> More information about Missouri stormwater grants and loans

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