BOA approves pact with state for February natural gas loan

BOA approves pact with state

for February natural gas loan

Ray Scherer

The city of Hermann has received approval -- and agreed to -- the terms of a loan with the state of Missouri that will reimburse natural gas costs from the February polar vortex.

The Hermann Board of Alderman passed a resolution Monday night that authorizes the city to execute a loan agreement with the Missouri Department of Natural Resources Division of Energy. The agreement provides financing the city's wholesale natural gas costs it and residents incurred during the polar outbreak of Feb. 10 to 20.

All told, the city's full bill of $561,815.91 will be covered by the emergency loan. The circumstances leading to the costs for Hermann, and those of other Missouri municipalities during the same period, are currently being reviewed and investigated at the state and federal levels of government.

Officials said that without the loan, the costs associated with providing the natural gas service during mid-February would have been passed on to residents. The state announced the $50 million loan program in mid-May while cities such as Hermann wrestled with their own potential solutions to the financial crisis.

Hermann quickly submitted an application for the loan and was successful in gaining approval from the state, said City Administrator Trish Heaney. 

The loan allows the city to pay back the amount at zero interest, over a full five years, in semi-annual installments. Heaney said the estimated range of impact to residents' bills should fall somewhere between 10 and 17 percent.

"We can recoup our emergency funds," she said, referring to a program that Hermann had set up to pay for emergency utility infrastructure repairs.

City leaders are hailing the announcement and agreement.

"It was a godsend," said Alderman David Faerber of the loan benefiting Hermann.

"It's a good thing," said Mayor Bruce Cox.

Also Monday night, Heaney offered information on reports that Hermann's water had turned cloudy from taps on Monday.

"We're very apologetic about that," she told the board. "It's completely safe. It's air in the line."

Heaney said she checked with the water department late in the day, and learned there would be some troubleshooting on the situation. One possibility is that the cloudy water may be stemming from the See Tal well, she added.

In another development on Monday night, Alderwoman Susan Lenger reminded residents to ensure they secure a permit and place fencing around outdoor pools that happen to be at least 24 inches deep. Lenger said the action is necessary as a safety precaution for the community's children. The pertinent building code that covers such a matter was updated by the city in 2020 to include the language.