Sitkans may see another round of utility rate increases this year, even if the city keeps its budget mostly status quo.
When the Sitka Assembly met last week, they heard a presentation from city staff on the state of each enterprise fund: electric, water, wastewater, solid waste and harbors.
Finance Director Melissa Haley presented a budget that included 2.5 percent increases to electric and wastewater rates, a 4 percent increase to water rates, a 4.5 percent bump for solid waste and 5 percent for moorage.
Haley said that those rates were mostly set to keep up with inflation and to keep departments operating at the same level of service next year. Some of the bigger hikes, like moorage, were planned to keep big projects on track.
“What we don’t want to do is put ourselves in a situation where we’re gonna see spiked rate increases. We feel that the slow and steady are going to be much easier for the community to absorb,” she said. “We’re reacting still to literally decades of not increasing rates, where the rates stayed flat even in times of inflation.”
Haley said they desperately needed updated master plans for most of the funds to get a better idea of the needs for each department, like replacing aging infrastructure. She said budgeting without a good picture of the whole system was like “flying blind.”
Assembly member Valorie Nelson said she was not in favor of any rate increases, noting that rates have increased each year over the last decade, and Sitkans were feeling the weight of those increases.
“There are just a lot of people that can’t afford to pay for a cup of coffee,” she said.
Member Thor Christianson said he didn’t see any alternative to raising rates in order to keep up with inflation. Assembly member Crystal Duncan said they should look to the community for possible solutions.
“To me it makes sense to increase rates consistently. None of us want to do it, so I’m open to hearing further discussion and feedback to what community members are recommending if they want to keep rates flat,” she said. “How do we do that?”
During public comment, one member of the public offered a suggestion. Richard Wein, who is a former Sitka Assembly member, said the city should develop a comprehensive waste management plan to save money.
“I have said for years that we need to be waste independent here on Sitka, because it may, at some point, we may not be able to dump our trash in other states,” he said.
Finance Director Haley proposed one option in the budget that would avoid more steep rate increases for the harbor fund. The city has budgeted moorage rate increases every year over the next decade, with the plan to kick off a major overhaul of Eliason Harbor in 2032. Haley proposed an alternative budget that would delay the replacement of Eliason Harbor, and instead invest $5 million to extend the harbor’s life by 10 years. That would give them time to pay down the city’s other debts before tackling the harbor, which would put the city in a better place financially. Haley said city staff would need to explore the idea further.
“I am not an engineer, I have no idea how much it would actually cost or if it would be feasible,” she said.
Enterprise funds are only one piece of the city’s budget puzzle. The assembly reviewed the general fund earlier this month, and the group will meet again on Thursday (2-25-21) to discuss school funding with the Sitka School Board.
