Bill to ease sale/dissolution of small water districts draws sharp debate over thresholds and safeguards

Representative Bob Bromley (District 162) presented House Bill 2397 to clarify and modernize the process by which small public water districts can be dissolved and sold. Bromley said the bill aims to help financially troubled districts that lack resources to maintain operations and to provide clearer ballot language and judicial guidance on how excess proceeds are handled after debts are retired.

Key elements described by Bromley and sponsors include giving district boards discretion to lower the voter-approval threshold from two-thirds to four-sevenths in some cases, requiring a board vote before a petition goes to court (a board "veto" mechanism), and directing courts on possible uses of surplus proceeds — such as property-tax relief or distribution to local school districts. The bill also preserves Public Service Commission oversight through CCN (certificate of convenience and necessity) review for transfers.

Supporters, including representatives of Missouri American Water and the Missouri Chamber of Commerce, said the reforms were targeted at districts that want to sell and lack the voter turnout or margin historically required; they cited prior near-misses where two-thirds support proved unattainable. "We empower the district board to essentially give them veto power," one proponent said, presenting the board-approval language as an added safeguard.

Opponents — including the Association of Water Districts, Missouri Municipal League interests, and the state public advocate — argued that dissolving a multimillion-dollar public asset should retain the higher two-thirds threshold. Arnie C. (state public advocate) warned that a sale to private, for-profit companies could raise rates and cited an estimate that private ownership can increase customer bills by 30–40%. Trent Watson, representing water-district interests, and Fred Drelling of the Association of Water Districts urged protecting public assets and said membership groups remained opposed to lowering the threshold.

Committee members probed tradeoffs: Representative Taylor asked whether the risk of taking on bond debt justified a higher threshold to create a district than to dissolve it, and opponents stressed the need for robust ballot language and voter awareness when multimillion-dollar assets are at stake. Proponents pointed to safeguards in the bill (board vote, judicial direction on proceeds, PSC oversight) and said the option is intended for districts that choose it, not a mandatory change for all districts.

The hearing drew extensive testimony on local control, bond risk, proceeds use, and whether the change advantaged private buyers. The committee closed the hearing on HB2397 with no immediate committee vote recorded.