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The SMART Lake: East Locust Creek Reservoir

The East Locust Creek Reservoir was sized and sited to address the most acute water shortage in the State of Missouri. Because of the geology, topography and climate of the 10 County region around Milan, Missouri, as well as the lack of an adequate fresh water aquifer, the area has lived under the threat of drought. The $69 million, 2,235 acre Reservoir is designed to provide 7 million gallons of water per day to over 54,000 people in a ten county region. The formation of the Commission is a part of the Department of Natural Resources strategic consolidation and the Reservoir is viewed as the ultimate solution to address the acute water supply shortage. Currently, the North Central Regional Water Commission, a seller of wholesale water, provides 622,000 gallons of treated water per day to over 3,000 customers, in addition to raw water sold to Farmland. The current source of water is the 200 acre Elmwood Lake, augmented by a pump station and line from Locust Creek (as well as an emergency water line to Trenton).

The Natural Resources Conservation Service (NRCS) is the Federal sponsor for the Reservoir project and East Locust Creek Reservoir represents the largest ever undertaken by NRCS. The Commission is the local sponsor and they will own and operate the Reservoir.

The first phase of project financing occurred in 2006 with a $6 Million Municipal Bond that funded the purchase of the water plant and acquisition of the property needed for the siting of the dam.

The second phase of project financing closed in August of 2011 with a $10 million Municipal Bond for the primary purpose of providing funds for land acquisition. Debt service on the bond will be provide through, a county-wide ½ cent retail sales tax adopted in April, 2010 (passed by 81.25% of voters), a $1.00 per thousand gallon water rate increase, and operating funds. In addition to these sources of funds, the Commission drafted “Lake Authority” legislation which was signed into law in July, 2011. This Lake Authority Legislation enabled the Commission to do the following: control activities in the Watershed, allow landowners to retain land closer to water’s edge, reduced the footprint of the Reservoir by 1,500 acres (saving $3 million), and create a TIF District which will produce between $8 and $22 million for the project depending on the rate of development around the Reservoir.

The final phase of project financing will come in 2016 through the USDA. The Project Team plans to refinance the 2006 and 2011 debt as well as round out any remaining project funding through the USDA RD loan program.

The Reservoir incorporates a number of unique or novel approaches including:

  • Multi-level State and Federal funding
  • Lake Authority legislation
  • Control of activities in the watershed supplying the reservoir
  • Private ownership near the water’s edge with dock access and easements
  • A ½ cent county sales tax to support reservoir construction
  • Missouri’s largest Tax Increment Financing District
  • A sewer project to remove the threat of contamination
  • A SMART Lake design to promote environmental mitigation and restore distressed systems
  • Use of mitigation equity in the first-ever State-owned stream and wetland mitigation bank

Along with NRCS there are four other Federal stakeholders, including, the U.S. Army Corps of Engineers, the Department of Agriculture, the Environmental Protection Agency, and the Fish and Wildlife Service. On the State level there are five stakeholders including the Department of Natural Resources, the Department of Conservation, the Department of Transportation, the Department of Health and Senior Services and the Department of Economic Development.