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Hannibal Courier - Post - Hannibal, MO
  • BPW rates likely going up

  • Hannibal Board of Public Works customers can count on seeing the rates they pay for electricity, water and sewer going up in the next fiscal year.
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  • Hannibal Board of Public Works customers can count on seeing the rates they pay for electricity, water and sewer going up in the next fiscal year. While no official vote was taken by the BPW Board at its Wednesday work session, all the members expressed agreement regarding the option that would see water and sewer rates each climb by 4 percent, and electricity go up by 3 percent.
    During the roughly hour-and-a-half meeting, the Board considered five different budget options.
    “All the choices are not very good,” said Board member Bud Janes.
    One of the proposed budgets would have included no rate increases or financing. It is projected in the upcoming year that without rate hikes all three city utilities would lose over $1 million – water, over $1.7 million; sewer, over $1.3 million; and electricity, over $1.08 million. It was noted that there is not enough cash in reserve in either the Water or Sewer Funds to absorb such a financial hit.
    While the 4 percent increase will generate over $524,771 for the Sewer Department, the Water Department’s net profit will amount to just under $118,000. It’s conceivable the Water Department profit in the next fiscal year will be less if customers cut back on their water usage as they have done after previous rate hikes.
    Last year on July 1, all customers saw their water rates go up 10 percent and sewer rates increase by 8 percent. Electric rates for residential customers crept up 3 percent.
    Randy Park, Board president, noted that if the BPW wasn’t also planning to borrow money next year the proposed rate increases for water and sewer would have been significantly higher.
    Under one budget proposal, without pursuing a financing option, to just “break even” next year would have required a 35 percent hike in water and 31 percent boost in sewer.
    Driving the need to borrow and raise water and sewer rates is the cost of major capital projects that must be undertaken in the coming year. Heath Hall, BPW director of operations, estimates that $1 million of the Water Department’s improvements and $1.8 million in sewer upgrades are the result of “unfunded mandates” from the federal and/or state government.
    As for the proposed electric rate increase, it’s largely due to the ongoing expenditures to the Prairie State power plant. Bob Stevenson, general manager of the BPW, estimates that next year will be the most challenging for the BPW in regard to its Prairie State obligations.
    It was noted that even with a 3 percent electric rate increase, that department will likely lose over $200,000, unless revenue increases that is generated by the sale of Hannibal’s share of Prairie State power.
    Board member Betty Anderson questioned if 3 percent is sufficient, considering the city’s electric utility will likely result in a financial loss.
    Page 2 of 2 - “I’m never comfortable knowing we’ll go in the red right off the bat,” she said.
    The BPW continues to explore a bonding option in the future. However, it is uncertain if any firm decisions on bonding will be able to be made by the Board before its 2013-14 budget is due.

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