HBPW's water revenue up 8 percent over year

HBPW reports water revenue increased by 8% despite Ralls County Public Water Supply District No. 1 discontinuing wholesale purchase of water from the organization and setting up their own water distribution system.
By Hannibal Courier-Post
Posted: Jan. 8, 2020 12:48 pm

HANNIBAL | When Public Water Supply District No. 1 of Ralls County announced it would be building its own water distribution system, a good deal of concern was expressed at the Hannibal Board of Public Works over the impact the loss of its largest water customer would have on its bottom line. However, since August when the PWSD No. 1 stopped purchasing water for resale from the HBPW its water sales remain solid. “We are not seeing the loss of usage to Ralls County like we thought initially,” said Mathew Munzlinger, interim general manager of the HBPW, during the December meeting of the HBPW Board.

According to Munzlinger, it is estimated that lost sales to PWSD No. 1 amounts to 39 million gallons, based on 2018 sales. However, during that same time sales to other customers have increased by about 28 million gallons.

“Overall the top 10 water customers have increased their usage by approximately 18 percent over their 2018 consumption,” said Munzlinger, who during the December HBPW Board said General Mills is a “big part” of the water usage increase.

“This is a welcome surprise as it has not resulted in the anticipated financial hit,” Munzlinger said.

Munzlinger stopped short of predicting whether the increase in industrial usage will remain the same in 2020.

“At this time it is unknown if this trend will continue,” he said.

Water production was actually down at the water treatment plant in September and October, but it was up in November compared to 2018 production numbers.

While water production has fluctuated since the departure of PWSD No. 1, water department revenue in the current fiscal year, which started July 1, has actually increased.

“Water revenues are up approximately 8 percent this fiscal year to date due to rate increases more than offsetting the decrease in gallons sold,” Munzlinger said.

The loss of PWSD No. 1 has been cited as one reason for the water rate increases that HBPW customers are seeing every six months. Because the impact has not been as great as anticipated, is there a chance that the amount of the rate increases could be scaled back in the future if the pattern continues?

“The main cause of the rate increase is the granular activated carbon facility being constructed at the water treatment plant,” Munzlinger said. “Should the trend continue then there is the possibility that the rate increases could be scaled back at some point in the future. However, we would like to have some history operating the new facility and have a good understanding of the associated costs before scaling back the proposed increases.”



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