Higher rates are likely for all of Juneau's residents

Posted: Monday, January 17, 2005

If you think Juneau's water and wastewater rate is already too high, prepare for an increase. Both rates are likely to continue rising, an ad hoc utility advisory board concluded.

An eight-member board, which Juneau Mayor Bruce Botelho appointed last February, said that historically, the city has maintained a low utility rate by collecting revenues only enough to pay for operating and maintaining costs.

"The only way to lower the customer service rate in this situation is to raise additional revenues through other types of taxes or grants," said the final report that was released last Monday. However, "outright grants have become, and will continue to be, difficult to come by and certainly not to be counted upon."

The board doesn't recommend subsidizing utility operations through other public revenues.

It "simply shifts, but does not diminish, the burden of Juneau citizens and businesses," the report said.

A consultant the city hired in 2003 recommended the Assembly examine water and wastewater fee structure every two years and raise it by 13 percent by 2007 and another 13 percent by 2009.

Before the Assembly approved a 39 percent increase in utility rate in 2003, the last time the city raised water rate was in 1991. During the past six years, the city raised wastewater rate three times, only sufficient to cover operation and maintenance costs.

One of the board's tasks is to compare Juneau's water and wastewater rates with those in other communities.

Juneau's water rate is right in the middle, $22.61 per month, compared with $37.32 in Fairbanks and $16 in Sitka. However, Juneau's wastewater rate is the highest, $54.91.

But the board members said it would be unfair to make these comparisons without understanding the specific challenges in every community.

"Because sewage effluent from the Mendenhall Treatment Plant is discharged to a sensitive environment, Juneau is required to provide secondary treatment for the effluent," said Geoffe Larsen, vice chair of the board, to the Assembly Public Works and Facilities Committee. "Some other communities are required to provide only primary treatment, which is less costly both in construction and operation costs."

The board suggested the Assembly establish a permanent board to help draft utility policies. The Assembly adopted the suggestion and directed the Assembly Human Resources Committee to establish the board. All the current members on the ad hoc board are likely to stay.

Public Works Director Joe Buck said the board already came up with some innovative approaches to managing the city's water and wastewater, such as developing a long-term plan with at least a 30-year time frame. Right now, the planning is done every 10 years.

"If you think in terms of 10 years, it wouldn't be cost-effective to build another treatment plant in the valley. But if you plan in terms of 30 years, it might make sense," Buck said.

• I-Chun Che can be reached at ichun.che@juneauempire.com.

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