By SHANNON HAUGLAND
Sentinel Staff Writer
At a special budget meeting Thursday, Assembly members arrived at a general consensus on utility rate increases and added a $50,000 expenditure to the fiscal year 2024 budget to help build small houses for Sitkans experiencing homelessness.
The first part of the more than two-hour meeting was dedicated to reviewing five of the funds in the city budget – water, wastewater, electric, solid waste and harbors – that are supported by user fees. The other “enterprise funds” in the budget are for the marine service center, the Gary Paxton Industrial Park, and the airport terminal, and will be reviewed at future meeting.
The entire budget is expected to be completed by the end of March and presented for public hearing and final approval by the Assembly in May.
In the second hour of Thursday’s meeting Assembly members considered two proposals put forward by member Crystal Duncan: $50,000 for Hix’i Saani (Little Houses) Community capital project at the end of Jarvis Street, and $20,000 for participation in the Race, Equity, and Leadership (REAL) Institute.
In the discussion of the enterprise funds, Assembly members talked about the effects of high inflation and “mandated additions to infrastructure,” such as an unexpected “effluent disinfection” requirement for wastewater treatment. The estimated cost of the new infrastructure is $7 million.
Assembly members in general said they didn’t want to raise utility rates, but would have to do it to continue providing services at higher operating and infrastructure costs.
“We are not keeping up with inflation but we need to try to keep these funds healthy so we can continue to build capital and fix this infrastructure,” said Assembly member Kevin Mosher.
“I don’t think anybody wants to increase rates on anyone,” agreed Tim Pike. “It sounds simplistic but there’s maintenance necessary on every piece of infrastructure we use and it requires an investment. ... I’m not jumping up and down, excited about this. But I do believe in investing in our future and investing in our infrastructure to keep it maintained so we don’t end up having to come to ratepayers and really raising rates.”
Rate increases proposed were 3 percent for electricity, 6 percent for water, 8.5 percent for wastewater, 6.75 percent for solid waste, and 7.3 percent for harbors. The harbor raise may change after the city staff gets feedback on the rates from the Port and Harbors Commission. The budget year starts July 1.
City staff said the higher electric rate would increase costs an average $309 annually for a large home with electric heat and be lower for smaller homes and homes using other heat sources.
In the discussion on the homeless housing, most of the five Assembly members present reacted favorably to a donation to the Hix’i Saani (Little Houses) Community capital project, though differing on the amount.
Finance Director Melissa Haley said she is finalizing the general fund budget draft today, and will include the proposals for $50,000 for the houses project, and $20,000 for race equity training.
