Juneau’s water and wastewater rates are likely going up in January, but by how much is still fuzzy.
The City and Borough of Juneau Finance Committee Wednesday night recommended a rate increase of 4 percent in January followed by 2 percent increases in July 2021, July 2022, July 2023 and July 2024.
The recommendation was the blend between a 4-percent annual increase recommended by the Utility Advisory Board and a 2-percent increase recommended by the city manager.
The idea came after almost 30 minutes of Assembly members debating the merits of each recommendation and attempting to reconcile infrastructure needs with an unwillingness to pass on the cost of those needs to residents.
[Utility rate increases are likely coming]
“I think we have a solution that solves everything,” said Assembly member Wade Bryson. “The first increase we do 4 and 4. The other three increases we drop down to a 2-percent increase. so it’d be like six years of increases but accomplishing it in five years.”
Current combined utility rates are $130.40 per month, and incoming finance director Jeff Rogers said after five years of increases, that would raise to $146.80. That compares to $158.65 after five 4-percent increases and $143.98 with 2-percent increases.
“I think Mr. Bryson’s solution is brilliant, and I’m ready to vote for it,” said Assembly member Michelle Bonnet Hale.
So were most of the other Finance Committee members.
Mayor Beth Weldon and Assembly members Loren Jones, Alicia Hughes-Skandijs, Carole Triem, Rob Edwardson and Maria Gladziszewski joined Hale in voting for a motion made by Bryson, who also voted for his idea.
Assembly member Mary Becker voted against the motion. Becker was staunch supporter of only a 2-percent increase in order to not pass on additional expenses to residents.
If the Assembly approves the rate increases, the first change would be scheduled for Jan. 1, 2020, and would result in a roughly $5 increase to the average water and wastewater bill, Rogers said. However, the increase would coincide with a $4 hazardous waste fee being removed from utility bills.
In effect, the average billpayer would expect to see a $1 increase on their bill this January.
Airport project
The Finance Committee also made some recommendations that will fund Juneau International Airport’s north terminal rebuild project, which is expected to cost $23.4 million.
Outgoing finance director Bob Bartholomew, in his last Finance Committee meeting, explained the complicated funding picture for the project.
Federal aviation entitlement funds, property taxes, airport passenger facility charges, sales tax and the airport fund balance all factor into the equation, and Bartholomew recommended a handful of ordinance changes that would make it possible.
[Airport’s many projects about to takeoff]
The city was previously authorized by voters in 2012 to sell $6.9 million in general obligation bonds to support the project, but only $1 million worth of bonds were sold. So $5.9 million could come from that with changes to bond ordinances.
The north terminal at the Juneau International Airport on Wednesday, June 12, 2019, will soon be rebuilt. Much of the terminal was built in the 1940s. (Michael Penn | Juneau Empire)
Additionally, Assembly could decide to authorize up to $18 million in revenue bonds to support the project, too. Those bonds would be repaid via passenger fees and federal grants, Bartholomew said.
The cost of interest and construction would exceed committed funds by about $1 million, Bartholomew said, so transfers of $800,000 from the airport’s fund balance and $300,000 from the 2012 voter-approved 1 percent sales tax fund were recommended.
Weldon asked what happens to the city’s sales-tax-funded support for the project if bids for the project come in lower than expected.
“Do we use less sales tax or do they use less fund balance?” Weldon asked.
Bartholomew said different funding sources could be prioritized by Assembly direction.
With that information Weldon made motions to make both transfers on the condition that the sales tax funding be the last resort.
Financing a rebuild of the North Terminal at the Juneau International Airport factored in heavily to the City and Borough of Juneau Assembly Finance Committee meeting. (Michael Penn | Juneau Empire)
Happy trails
Since there is not a Finance Committee meeting set for July, Finance Committee members took time to thank Bartholomew for his seven years as finance director.
“Thank you for many, many years with the city,” Jones said. “I’ve always appreciated his ability to converse with anybody about anything.”
Other Assembly members agreed and thanked Bartholomew for explaining financial concepts in easy-to-digest terms and leaving the city in a good financial situation.
“I really appreciate the time you spent with us explaining the budget,” Weldon said.
• Contact reporter Ben Hohenstatt at (907)523-2243 or bhohenstatt@juneauempire.com. Follow him on Twitter at @BenHohenstatt.
