A proposed increase of more than 60% in water rates and 80% in sewer rates during the next five years has some unhappy residents wanting answers to a lot of questions before it gets to the Juneau Assembly for a vote.
Proposed increases highlighted by the city’s utilities division at its website would raise water rates 10.25% and wastewater 12.75% a year for each of the next five years for Residential Flat Rate customers. The accumulating increases mean a current monthly water bill of $40.72 would be $66.33 as of July of 2029 and a current sewer bill of $106.08 this year would be $191.58 by 2029.
Officials discussing the increases during an open house Thursday night at Thunder Mountain Middle School said other options with lower rate hikes exist, if bonds or other funding measures are implemented. Comments from the meeting as well as other public input are being collected for when the matter will be presented to the Assembly during the coming months.
Juneau residents in October approved a $10 million bond to fund wastewater improvements by a 7,000 to 3,565 vote, with utilities officials saying Thursday the proposed rate hikes would have been higher had the measure failed. Some Assembly members have said since the election it may be tough to come back next year with another bond measure — especially if a rate increase is also implemented.
Alan Steffert, a project engineer for the City and Borough of Juneau, explains alternatives considered when assessing infrastructure improvements including utilities upgrades during a meeting to discuss a proposed fee increase Thursday night at Thunder Mountain Middle School. (Mark Sabbatini / Juneau Empire)
However, the City and Borough of Juneau hasn’t been keeping up with inflation by increasing its rates 2% a year since 2020, which is a primary reason there is a need to catch up now to cover costs ranging as operating facilities, maintenance and upgrades, and disposal of treated sewage, said Paul Quinn, a project manager for the FCS Group, a Washington-state company hired by CBJ to compile a rate increase study.
“We’ve been trying to kind of kick the can down the road and now we are where we are, and we have to look at how to move forward,” he said during Thursday’s meeting.
Among the rapidly increasing costs are shipping about 1,200 tons of dried and treated sewage biosolids south for disposal per year, said Brian McGuire, CBJ’s utilities superintendent.
“We’ve seen quite a bit of escalation in everything that leaves here,” he said, adding “one year we saw a 40% increase in just the shipping.”
But residents in turn expressed concern about the rising costs they’re already paying for utilities.
“We just got done with five rate increases just recently and those rate increases are as much as what I was charging on (utilities) on my apartments,” said Jim Sidney, who with his wife co-owns Swampy Acres. “The new rate increases are going to be here in five years and so now you’re making your rental units go sky high by an additional $200 here in the next five years. We’ve got to be able to stop our inflation in town to where we can get it under control. Is it going to be where we can privatize the sewer system where we can get it run by private people so we don’t have these tremendous wages going out?”
CBJ Public Works Director Denise Koch, in response, noted that a rate comparison of other Alaska communities in the FCS Group study notes Fairbanks, which has a private operator, had the highest rates among those surveyed.
Multiple options are included in the company’s report for water and wastewater rates and other funding. The water options include a “cash” option covering costs through rate fees and existing municipal funds, while a “debt” option suggests having 20% of infrastructure costs over five years covered with state loans.
The “debt” option would result in water bills increasing by about 40% to $57.11 in five years, compared to $66.33 under the cash option.
Similar options are proposed for covering wastewater costs. However, CBJ officials note the city isn’t considered a good candidate for some government loans because it’s not considered a disadvantaged community.
Quinn also said the study considers three different levels of funding capital project costs, from minimal to cover critical short-term needs to higher end to cover major needed improvements.
“Under that reduced plan that we’re going to be discussing results for tonight that’s about $60 million of costs through 2030,” he said. “Now you look at the extensive plan that’s (about) $520 million of cost. The extensive plan identifies all the projects that the utilities are going to need to fund at the current point in time. What staff has done is they’ve prioritized projects — so what is absolutely critical to get done today? What do we what do we need to make sure? What do we need to do to make sure we can provide reliable service over the next five years? So that’s what that reduced plan does. It has identified the absolute critical projects that absolutely need to get done over the next five years in order to continue providing you all service.”
“It is important to note that under the reduced plan, there is still a small risk to utility service,” Quinn added. “Staff has evaluated this and they do feel comfortable moving forward under this reduced plan in order to keep rates as manageable as we can.”
Residents, beyond saying they’re unhappy about the prospect paying more for utilities, questioned officials during the meeting about what type of customers are paying what rates for their volume of usage. Some asked, for instance, about the city’s volume of water use and sewage during the cruise ship season, and whether the passengers/companies responsible were in some way paying for that use.
“They are charged a different rate schedule than you all,” Quinn said. “I believe it’s the industrial rate schedule of the utility and so, on a per-gallon basis, they pay more than anyone else in the community. So they are paying their share.”
McGuire said CBJ’s public works department has also applied for and at times gotten Marine Passenger Fees, which are collected from each passenger and used toward purposes meant to offset impacts and/or improve city services used by tourists.
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
Paul Quinn, a project manager for the FCS Group based in Washington state, explains the process resulting in a proposal to increase water and wastewater rates during a meeting Thursday night at Thunder Mountain Middle School. (Mark Sabbatini / Juneau Empire)
