Utility rate hike of 20 percent proposed for Unalaska
Unalaska property owners could see a 20 percent utilities rate hike, if city council members take their consultant's advice.
At last Thursday's meeting, utilities consultant Mike Hubbard recommended an 8 percent increase for wastewater, 7.5 percent more for drinking water, and upping solid waste by 4.5 percent. The water and solid waste landfill hikes would last three years, while the wastewater boost would extend five years.
"Doom and gloom, I guess," said city council member David Gregory, summarizing the utilities' financial situation.
No action will be taken before the Oct. 11 city council meeting, said City Manager David Martinson, as he will be out of town for the next meeting later this month.
The new $35 million wastewater treatment plant, which opened last year, is the biggest contributor to the proposed rate hikes, a situation described by Hubbard as "not very pretty." The plant was mandated by the U.S. Environmental Protection Agency for numerous Clean Water Act violations, despite local opposition. The city spent about $500,000 in legal fees fighting the requirement, and ended up paying a fine of over $300,000.
The overall effect is that rates would "almost double" over the next few years, Hubbard said.
An alternative to the rate hikes is the "do nothing" option, Hubbard said. For the wastewater plant, he said doing nothing would require "cash infusions from the general fund or other sources." The city now has a healthy general fund of $40 million in the bank.
However, Martinson said the $40 million general fund "can quickly erode away" if it funds utility operations. And Mayor Shirley Marquardt said doing nothing is not a viable option.
The council also discussed raising sales taxes to help pay utility costs, although sales tax hikes require the approval of the voters.
The proposed rate hikes are substantially driven by payments on construction loans. The city borrowed $8.6 million for the wastewater plant, and $3.6 million for the water utility.
In other news, Martinson said the retirement of Bill Dunkelberger as longtime building maintenance supervisor is a "sad day for the city," adding that he leaves a well-trained crew at the Unalaska Department of Public Works. Dunkelberger left city employment last week and departed on the state ferry.