Council Approves Higher Utility Rates

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Jennifer Canfield/KMXT

Last week’s city council meeting brought some better-than-usual news and less-than-exciting news. Coming from the less-than-exciting category is increasing water and sewer rates. Water service will increase an average 10 per cent each year, for the next five years. Higher operating costs aren’t the only thing to blame. Construction of a federally mandated UV water treatment plant is costing the city about $9 million. How much it will cost to operate the new plant is still unknown, but a report by CH2M Hill estimates it to be around $200,000 annually. City Manager Aimee Kniaziowski says the city needs to be diligent about researching utility costs.

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Kniaziowski 1 :34 sec The city needs to be on a routine basis- ideally every five years- to review the rates that are charged to ensure that enough revenue is coming in to cover the costs of operation, maintenance, needed upgrades, capital improvements and so forth. We got a contract with our consulting firm to take a look at those rates again and those two utilities to see if we were acquiring enough in revenues to carry forward and the rate study showed that we were not.

Kniaziowski says that it’s hard to project for sure what would’ve happened if the city had not looked into increasing rates, but details from the report show increasing operating and personnel costs would eventually become problematic.

Kniaziowski 2 :17 sec What ends up happening is that the expenses start outweighing the revenues and the money has to come from somewhere to balance that budget or the services would have to be trimmed back and that’s not a good decision to make with a utility. You have obligations to provide those services.

Better-than-usual news from the meeting included details about the new Kodiak Public Library which Kniaziowski says the city is currently negotiating with Juneau-based MRV Architects to design.

Kniaziowski 3 :20 sec We expect that all the design work will be completed by next year, by summer 2012. They’ll be getting public input. They’ll hold meetings and get feedback from people about what you want it to look like, what you want it to feel like.

The council approved $760,000 to cover the costs of drafting plans for the new library. MRV Architects has designed libraries for Juneau, Haines and Douglas.

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