Kurt Playstead, a water and sewer economist for C2HM Hill, told a Kodiak City Council work session on May 20 that a steady stream of rate increases totaling “roughly” 5 percent per year “with a little bit bigger bump in one year” would keep up with rising expenses and debt service levels.
Kodiak ratepayers have not seen increases since 2011.
“It’s a dynamic community in utilities so things do change and the rate study can change with it,” Swanson said.
This proposal met with mixed approval from the council.
Council member John Whiddon wanted to see more effort put into finding alternatives to the increase.
“It means that the same core base of users are ultimately going to absorb the 40 to 50 percent rate increase (over a 10-year period). To me that’s unacceptable. We have to find a way to mitigate that that we can show the ratepayer that we are doing something to reduce that,” he said.
The city, however, needs to contend with significant increases in observation and measurement costs as well as increasing debt service levels.
Swanson estimated that observation and measurement costs are set to increase from $2.8 million to $4.4 million a year over a 10-year period. The existing debt service is expected to grow from $301,000 in fiscal year 2014 to $1.5 million in fiscal 2024.
“Water is critical because our primary industry uses so much of it. I would hate to see us delay this,” said Council Member Charles Davidson.
City manager Aimée Kniaziowski noted, “I do know that the Clean Water Act and some reinforcement issues become phenomenally expensive for communities — and we’re not going to get a pass on that. If we do have a shortfall, it’s definitely going to have to come from somewhere.”
The council also discussed the impending closure of the Bear Valley Golf Course and a possible need to urge community members champion the cause of keeping it open.
“It’s a quality of life issue,” said Mayor Pat Branson.
The panel also postponed a special meeting earlier due to lack of a quorum to discuss Horizon Lines contract negotiations. Branson said they would schedule an executive session on the issue for May 27.
Public Works Director Mark Kozak also informed the council that water supply ramifications on the Monashka Bay pump house project occurring because of the recent dry weather.