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Lockwood voters Thursday narrowly rejected a ballot proposal to fund a sewer system.

Although there was a simple majority, the vote fell 6.4 percent short of meeting a 60-percent super-majority required by state law on bond requests.

The 715-619 vote represented a 53.6 percent majority in favor of authorizing the Lockwood Water and Sewer District to purchase $21.5 million in general obligation bonds.

Bond ballots must meet two thresholds to pass. One is that there must be 40 percent voter turnout. The proposition met that requirement with 1,334 ballots returned, or 48.7 percent of the 2,739 mailed to eligible voters. The second requirement is that a majority of 60 percent of the voters casting "yes" ballots is needed for the proposal to pass. That's where the Lockwood proposal failed — by 83 votes.

"We passed, but we didn't pass," said district board chairman Carl Peters. "The champagne is going to be on ice a little while longer."

Board members gathered at the district's office on Old Hardin Road to wait for results. Gathered around a speakerphone in the office, they grew quiet when it became apparent the measure failed. Members said they were baffled by the rebuff from voters who voiced their "silent opposition" on the ballots.

"We're disappointed," member Nancy Belk said.

The board members were unsure why the proposal failed: They sent out information fliers; they mailed a card that explained how low interest rates on bonds would help lower landowners' costs and a way to calculate taxpayers' individual costs; they held neighborhood meetings and community gatherings; they worked to limit the size and cost of the project.

After fielding phone calls before the vote to explain the ballot proposal, the members want to hear more about why it failed. Peters suggested sending out a survey. At a minimum, he wants "no" voters to say why they rejected the ballot.

"Tell us why, please," Peters said.

Board member Merrill Walker said he was encouraged by the nearly 50 percent turnout and the simple majority, even though it wasn't enough. People who are put off by the thought of higher taxes need to understand they will see a decrease in fees overtime, he said.

This is the second time Lockwood voters have rejected funding the sewer system, which includes a plan to pump waste under the Yellowstone River to a city of Billings' facility for treatment. In 2001, voters favored the project by a 648-621 margin, also short of the 60 percent majority. Lockwood residents and businesses now rely on septic tanks. There are growing concerns that septic systems will fail as the ground becomes saturated.

This proposal was smaller and asked for less money, partially because of the change in size and because the district had obtained $7.2 million in grants.

One of those grants, $500,000 from the Treasure State Endowment Program, may be in jeopardy because there is no way the district can meet its requirement to begin work by June 30, district manager Rick Russell said. The district could reapply to the Legislature for funding, but each year there is less money available and more competition from other communities, he said.

Additionally, the district was recently included on a consideration list for federal appropriations. Now that money may also be in jeopardy.

Board members are also skeptical that the district could again receive an interest rate of about 4 percent, a rate that would have reduced customers' monthly fees.

A contract with the city of Billings to treat Lockwood waste could also be threatened. The contract requires construction by Sept. 4, 2004, or the agreement will have to be renegotiated. Board members agreed a new contract would most likely come at a higher price.

The district is out the money it cost to run the information campaign and the ballot. Although election costs were not yet available, Russell estimated they would be around $3,000. He said another $3,000 to $4,000 was spent on public meeting notices and the gatherings.

Although the district's budget can't take many more bills of that magnitude, the board firmly believes they can't wait much longer to begin building a system, especially with state and federal money hanging in the balance.

"We can't slack now," board member Stuart Deans said.

"We're not giving up," Peters added.

Becky Shay can be reached at 657-1231 or at bshay@billingsgazette.com

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