Public to approve or deny issuing bonds for project in August

Voters in Hannibal will decide in August whether the Board of Public Works (BPW) can issue $17.5 million bonds in pay for the construction of a facility that will change how the city’s water is treated.

City council members unanimously approved the bill, which places the item on the August ballot along with the primaries for regional and statewide elected positions. If approved, the BPW will issue bonds to cover the cost of building a new facility in Riverview Park. Issuing bonds is less expensive than the alternative — a lease.

The result of the August vote would not change the course the BPW board has set to convert the treatment of the city’s water from chloramines to granular activated carbon. The BPW is required by an ordinance approved last year to remove ammonia as a treatment method by March 2020.

While council members had no opposition to placing the issue on the August ballot, at least one person speaking before the council at its Tuesday, May 15, voiced concern about it.

Harry Graves, a Hannibal resident and the Marion County Collector, encouraged the council to not make a decision Tuesday night, and instead to wait until the community became more educated on the topic.

“The council should consider the previous vote on this issue very flawed,” Graves said. “Now that we have a better idea the costs of moving from good water to better water, the public should have another chance to vote on the project.”

Graves was referring to the April 2017 vote in which Hannibal voters approved an ordinance removing ammonia as a treatment method in the city’s water supply by a 1,259 to 894 margin. At the time, it wasn’t clear how much a change in treatment methods would cost. Graves contended the public was not well-informed on the issue.

Encouraging waiting until the true impact to ratepayers can be determined, Graves said increased utility bills are eating up a higher percentage of a family’s costs and that bill increases are outpacing inflation.

Councilwoman Melissa Cogdal countered that enough information was available to the public, and that the April 2017 municipal election had one of the strongest voter turn outs since 2000. The council ultimately moved forward with the bill.

Rates increases

Following Graves at the city council meeting was Heath Hall, the interim general manager of the BPW.

He presented what Graves was looking for: a better understanding of how the water treatment conversion will impact ratepayers.

Hall told the council that the BPW board received more complete figures from Utility Financial Solutions, a Michigan-based company that provided a breakdown of how rates could change for Hannibal ratepayers.

Previously, it was reported water rates could increase between 50 and 60 percent for residential customers.

“Our cost of service study said 54 percent would be the new revenue needed in the water department over the next five years,” Hall said, putting the expected increase right in the middle of expectations.

Hall noted that the treatment method conversion project is not solely responsible for the rate increase. The move to granular activated carbon is responsible for about 30 percent of the 54 percent increase, with another 15 percent attributed to the BPW’s loss of the Ralls County Public Water Supply District No. 1 as a customer, and another nine percent due to inflation.

That breaks down as follows:

• Increase of $10.50 per month per residential customer for the chloramine replacement project by 2023.

• Increase of $5.28 per month per residential customer to account for the loss of PWSD by 2023.

• Increase of $3.72 per month per residential customer for inflation by 2023.

The rate increases would be added gradually over the next five years.

The BPW has not yet bid the project.

“Prices could change either way, up or down,” Hall advised the council.

A public hearing is set for Monday, June 18, at 6 p.m. at the Board of Public Works office to discuss the cost of service study and a 3.5 water rate increase to go into effect on July 1.

Reach editor Eric Dundon at eric.dundon@courierpost.com .