Water, sewer fees may rise 32-37%

Assembly recommends across-the-board increase to cover inflation, improvements

Posted: Thursday, September 04, 2003

Juneau residents and business owners will see their highest water and sewer bills ever under a rate-increase plan recommended for approval during a Juneau Assembly work session Wednesday night.

The plan would raise the monthly water and wastewater bill for about 7,750 unmetered residences from $58.50 to $77.52, a 32.5 percent jump. Several hundred apartments and businesses billed via water meters face increases of 34 percent. And the Alaskan Brewing Co., the community's largest water user and wastewater discharger, will see a hike of about 37 percent.

The increases, one of three rate-hike options proposed by city staff and a consultant, won a unanimous recommendation from all nine members of the Assembly at Wednesday's Committee of the Whole meeting. Before bills rise, however, the Assembly must pass an ordinance detailing the hike, an action expected within a month or two.

City utilities need the money to cover cost increases, equipment upgrades and maintenance. A city report said the water utility excepts to need $15.7 million for improvements through fiscal year 2012, while the wastewater utility needs $22.3 million.

"We simply have not kept up with inflation," said City Manager Rod Swope. "We should have been increasing rates periodically or regularly over the last couple of years and we have not be doing that."

Basic water rates have not changed for 12 years. The basic sewer rate has increased 27 percent in the same period.

Still, the water-rate increase is only about $3.50 of the $19 combined hike for residential customers. The sewage-rate increase makes up the rest, due to the need for substantial upgrades, said city Public Works Director Joe Buck.

He said the Juneau-Douglas treatment plant, near Thane Road, is beyond its projected life and will need major improvements to keep operating. And the trouble-plagued Mendenhall Valley plant, which was fined by the federal Environmental Protection Agency after 1999 violations, uses a complex and expensive system that discharges into a game refuge.

"The treatment criteria is very high on us," Buck said.

The preferred rate-hike plan has similar across-the-board increases for all users. Two other plans would have based fees on the cost of services, increasing rates for larger users by as much as 124 percent.

Alaskan Brewing, the only company facing the highest increase, protested the size of the hike.

President Geoff Larson said his company supported improvements to the water and wastewater systems it depends on to produce high-quality beer. But he said the operation provides an economy of scale that should not be penalized.

Larson cited a survey of national utilities showing an average 27 percent discount to industrial users. But even without the hike, the company pays twice the national average for water and sewer, he said.

Larson said the brewery found the rate recommended by the Assembly, an increase of 37 percent, acceptable.

"It's probably, of all the evils, the least of all evils for us," he said.

Assembly member Jim Powell made the motion for the across-the-board rate-hike plan.

"That seemed to be the fairest approach," he said. "That's still a substantial increase for everyone."

Mobile home park and apartment owner Wright Services suggested a delay in the hike. Property manager Dennis Harris said the company usually adjusts rents once a year and might have to absorb the increase if it goes into effect too soon.

"It really helps a lot of you give us six months notice when you raise the rates," he said.

Utility officials and Assembly members, however, said the increase is needed soon to balance the books.

"We need to have them kick in immediately to cover the cost for this year," Buck said.

Ed Schoenfeld can be reached at eschoenfeld@juneauempire.com.

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