MI2 operating systems presents plan for new Cape water plant

Cape Girardeau City Council met Monday, July 15, to receive a presentation made by MI2 operating systems proposing a public-private partnership to construct a new water plant along with other improvements.

The presentation was primarily given by Red Letter Communications’ Jim Riley, M Property Services (MPS) LLC chairman Paul McKee and Crawford, Murphy and Tilly Inc.’s Amanda Whithers. MPS is a company that delivers capital and manages projects in designs, builds and operations and MI2 is a company that McKee founded after he sold Environmental Management Corp. (EMC). McKee created and founded EMC, according to MI2’s presentation, and had contracts in “80 communities and 12 industrial sites.”

Riley said while he owns a part of MI2 he came to the council as a person who also has had “30 years” invested in the Cape Girardeau community. He said their proposal has had input from Crawford, Murphy and Tilly Inc., the same firm that had evaluated the water system in 2021 identifying that their existing lime system had reached the end of its usefulness.

“(MI2) We brought forth this new set of solutions, a proposed new water treatment plant benefiting from modern technologies and techniques. Locating drilling and new deep-water wellfield to tap into new cleaner source water based on a comprehensive leak detection sound survey, select replacement and repair of the distribution system,” Riley said.

Along with these solutions, MI2 included the option of a public-private partnership or concession agreement “financing the capital improvements.”

"In a concession agreement, the city would retain ownership of all infrastructure, but basically does a master lease with NPS and MI2 who would assume all risks for annual operating expenses,” Riley said.

Crawford, Murphy and Tilly Inc. provided a summary of their estimates of the city’s current trajectory and then what it would look like if they went with MI2’s plan. The plan for the new plant would include the millions of gallons per day that would go up to 11.

Capital Improvement costs by Crawford, Murphy and Tilly Inc.’s calculations:

* Current water plant improvements — $52.1 million;

* MI2’s new water plants and deep wells — $62 million;

Booster station improvements:

* Current water plant improvements — $8.2 million;

* MI2’s new water plants and deep wells — $8.2 million;

High-priority water main replacements:

* Current water plant improvements — $32.6 million;

* MI2’s new water plants and deep wells — $32.6 million.

Withers said when their company turned in the evaluation in 2021, the year they looked into a new plant, they thought it would be too expensive. She said since the plant is located on a hill it could be more expensive than if the improvements were being put in on a surface.

“You’re also working with an older plant. When you’re retrofitting something of that age, there’s always going to be additional costs,” Withers said.

Withers said with the MI2 plan, they would use the existing new lime system the city has already ordered and use the old wells as a backup.

McKee did point out between both plans the city’s current and the public-private partnership that the city’s water rates would still need to increase. The presentation also noted that the partnership with MI2 and the city would go on for 30 years.

According to the presentation, before the city would agree with MI2, the company would need to do a $1.27 million study which would allow MI2 to test well capacity and water quality, conduct a water loss survey, preliminary engineering, evaluate the facilities and operations and do financial modeling.