By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly tonight will review rate increases and capital projects on their way to approving the budget for fiscal year 2023.
The special meeting will start at 6 p.m. in Harrigan Centennial Hall. The only items on the agenda are reviews of the enterprise funds and internal service funds. The Assembly can also revisit the general fund.
On Feb. 17 the Assembly reviewed options for rate increases for utilities and harbors, and key financial issues facing each fund. There are eight enterprise funds, including all of the utilities, plus harbors, Gary Paxton Industrial Park, Marine Services Center, and the airport.
City staff plugged in the options expressed by the Assembly on Feb. 17, and the results will be reviewed tonight along with the capital projects planned for the year. Wastewater and solid waste are above the rate of inflation; water and electricity are below; and harbor rates are slightly below.
The main decision point tonight is on the harbor rate. The Assembly approved a 6.3 percent increase, but the Port and Harbors Commission recommended an 8.3 percent hike. Finance Director Melissa Haley has pointed out some factors in the harbor budget: the need to plan for capital projects on the horizon, and the impact of lower fish tax revenues caused by the pandemic.
“High load dock repair (at Crescent Harbor) needs more funding to complete,” the powerpoint slide says. “... higher than anticipated costs of smaller projects are putting pressure on the working capital.”
Assembly members can make motions to revisit their previous proposals on rates tonight or at any time before the budgets are approved at the May 10 and 24 Assembly meetings.
Harbors – 6.3 percent Increase
The 6.3 percent harbor rate increase would raise charges by $30.20 per quarter, for a 40-foot boat. The 8.3 percent increase proposed by Port and Harbors would take that to $39.70. Haley said the fund isn’t currently generating enough working capital to invest in replacement of significant infrastructure, including Eliason Harbor. Other economic factors are playing a role, including the lack of state funding for harbor projects.
Electric – 4 percent increase
The proposed rate increase of the electric fund is 4 percent, which is lower than the rate of inflation. Bond re-funding in recent years have helped keep rate increases lower than the rate of inflation, Haley said.
The city is working on grant proposals to fund some of the major projects, including phase 2 and 3 of the Green Lake hydro rehabilitation project.
The city also has other projects on the list for fiscal year 2023, including diesel generation upgrades ($1.2 million) and transmission and distribution improvements ($930,000).
A 4 percent increase in rates is estimated to cost $9.75 more per month for an average 1,500 kwh user. The option projects lower increases next year of 3 percent and 2.5 percent in two years.
Water – 5 percent
The water fund saw larger rate increases in previous years. The Assembly this year selected the lowest rate increase among the options presented by city staff.
Haley said the fund is generating working capital to help cover the debt service of the new critical secondary water filtration plant. The plant will be used only when needed.
The 5 percent increase will increase costs by $2.57 per month. (New rate: $54.54 per month.)
Wastewater – 8 percent increase
The wastewater fund is expecting to see high capital costs in line with expected new federal requirements “in the near future.” One of the main projects in this fund is $1.3 million to rehabilitate the Thomsen Harbor lift station.
The 8 percent increase, which was the midrange option selected by the Assembly, will add $5.24 a month in rates. (New rate: $70.71.)
Solid Waste - 7.5 percent
The city is using the remainder of its economic development fund to purchase a $3 million compactor required by the city’s waste shipper, but the city is continuing to pursue grant possibilities through the USDA.
Rates are “largely driven by contract rates” set by the city’s waste handling and disposal contract, the powerpoint says. The Assembly opted for the midrange 7.5 percent increase, and a 4 percent increase for the scrapyard and transfer station charges.
The 7.5 percent increase will take monthly charges up by $4.23 per month. (New rate $69.24 for a 90-gallon container.)
The airport terminal fund has a few changes on the horizon including renovating the airport terminal. City staff is expecting that enplaned passenger revenue is back to or exceeding pre-pandemic levels.
The city is saving for the $20 million airport terminal improvement through passenger facility charges but is also pursuing grants for the project.
