The Sitka Assembly continued its budget conversations on Tuesday night (2-4-25) as it considered where to set rates for the city’s electric, water, waste and harbor funds.

City staff proposed rate increases across the board for the city’s enterprise funds, including a 6% increase for water and wastewater utilities, a 2% increase for trash collection and a 4% increase for use of the city’s scrapyard and transfer station, a 4% increase to harbor rates, and a 2% increase to electric rates. 

The electric rate, at 2 percent, is lower than projected inflation. That gave some assembly members like Thor Christianson pause, knowing that there could be big expenses coming down the road for the fund. 

“Back in the late ’90s, we had really low rates. I believe it was six cents a kilowatt hour, and there was talk about raising it then,” Christianson said. “And it got pushed down pretty hard. And at the time, as a newbie assembly person, I was like, ‘Okay, yeah, everybody likes a little raise.’ And that cost us bad by not taking, you know, getting behind like that.”

And assembly member JJ Carlson was concerned about the future cost of maintaining  systems that are due for replacement. She pointed to the Granite Creek Lift Station, which went out of service ahead of its scheduled replacement date after an electrical fire last year. 

“I support our push towards asset management, and really looking at and judging the condition of things,” Carlson said. “I’m concerned that this is going to be happening more frequently, and rates that are 6% aren’t going to give us what we need to to meet the needs of our systems.”

Assembly member Tim Pike agreed that repairing and replacing infrastructure that’s wearing out was a concern, but he was encouraged by the city’s progress on a plan for managing the city’s assets as they age.

“I did read in here that one of the things that’s being looked at and being worked toward is how to extend the life of things that we have so that we don’t end up having to replace them right away. Because, I mean, we we can’t afford do to all that,” Pike said.

While some of the proposed rate increases gave assembly members some pause, ultimately there wasn’t a consensus from the assembly to direct city finance director Melissa Haley to change any of them. 

The discussion of utilities went quickly and the assembly moved on to considering budget proposals from the group. Assembly member Scott Saline successfully made a case for adding a full-time refrigeration position into the draft budget. Assembly member JJ Carlson proposed a visitor study which would be funded from the visitor enhancement fund and cruise passenger head tax money. And assembly member Chris Ystad pushed for a Port Director position as part of an anticipated long-term plan to create a port authority in Sitka. 

Haley said she would have the first full draft of the FY26 budget to the assembly by February 18. The budget isn’t set in stone yet- the assembly can still add or remove items. It typically passes its budgets on final reading sometime in May.