Last week, the Sitka Assembly met for the second time this year to discuss enterprise fund budgets for next fiscal year.
Utility rates are set to increase across the board, provided the assembly approves the fund budgets as they currently stand. Electric rates are set to rise by 2.5 percent. Water rates will rise by 2 percent, wastewater rates will increase by 2 percent, solid waste by 4.5 and harbor rates by 5 percent. City staff project that the average household will pay around $186 in additional utility fees per year, if the rate increases are enacted.
Typically the assembly passes the general and enterprise fund budgets in the late spring, but Mayor Steven Eisenbeisz suggested the assembly take another route.
“Right now we’re currently in the process or about to start multiple rate studies and master plans for a bunch of our enterprise funds,” he said. “I just wonder if we don’t wait to set our rates until we see what those plans come back with.”
Several of the rate increases are set to keep up with inflation. The highest rate increase is part of a long-term plan to begin replacing aging Eliason Harbor in a decade. But some of the current master plans are out of date, and city staff are concerned that they don’t paint an accurate picture of what big projects, like the harbor replacement, could really cost in the future.
Eisenbeisz said waiting for updated rate studies could help them decide if they were setting rates too high. Alternatively, if the studies showed larger rate increases were needed, the additional information in the studies could help justify those increases to the public.
Member Valorie Nelson voiced her support for the idea.
“I like your idea, Mr. Mayor and I think the public would appreciate it too,” said Member Valorie Nelson. “I’m not just going to assume those rates studies will say ‘You know what, the citizens of Sitka are not paying enough.'”
Members Thor Christianson and Kevin Knox thought they could consider the information for future budgets, but not necessarily for this year’s budget. Here’s Knox:
“It would be wonderful if we could give a reprieve to our rate payers, but we also need to continue to at least keep up with inflation…Inflation is just a matter of fact,” he said. “The ten years previous to this we didn’t see rate increases. Water was flat for 10 years, and that’s why we’re seeing the spikes that we’re seeing.”
Member Rebecca Himschoot liked the idea of re-examining the rates, and asked if the assembly could revisit rates and make changes as the studies were released. Mayor Steven Eisenbeisz said he believed they could make rate adjustments at any time throughout the year. The assembly didn’t make a decision on how to broach the rate increases for next fiscal year. It will hold its next budget meeting on Thursday, April 1.
