Unalaska's city utility rates should take a sharp turn upwards within two years to pay for new federally-mandated construction projects. The actual amounts aren't clear yet, but homeowners could end up paying an extra $100 per month for wastewater, landfill and drinking water, according to the city's utilities consultant, Mike Hubbard.
Hubbard suggested raising rates sooner rather than later to avoid a "huge rate shock." The spendiest item is the new wastewater treatment plant, projected at about $25 million by the city. Hubbard said monthly wastewater bills could climb from the present average of $66.31 per month, to between $107 and $136 monthly.
The solid waste landfill bill could also double, from the present average of $17.34 monthly.
Water rates should rise, but less dramatically, by around 34 percent.
The total monthly bill for all utilities is now about $251, and is projected to rise to between $308 and $351 depending on financing methods, said Hubbard, of the Financial Engineering Company, based in Maine.
The consumer impact of the $50 million bill could be offset with increased sales taxes, consultant Mike Hubbard said at a recent city council meeting. The presentation was called a "high level rate review," based on projections, since the actual costs won't be known until later when the projects are constructed.
"This is going to be shocking," said council member Dennis Robinson, calling for increasing city sales taxes by 1 or 1.5 percent, with the increase specifically earmarked for the construction projects. The city sales tax is currently 3 percent.
Robinson opposed raising property taxes which he said are not paid by the "huge" transient population, which benefits from city services including roads, water, library, swimming pool, and the airport terminal.
"This is one case where the city of Unalaska and its residents need help," Robinson said.
The new sewage plant will provide an additional level of treatment, known as secondary treatment, a requirement of the consent decree between the city and U.S. Environmental Protection Agency which avoided a "lengthy and expensive trial" and included a $340,000 fine paid by the city, according to city manager Chris Hladick. That's substantially less than the originally proposed fine of more than $150 million for 4,870 violations of the federal Clean Water Act, Hladick wrote in a memo.
"EPA filed the lawsuit, in part, because Unalaska refused to agree to secondary treatment as part of the settlement discussions with EPA on the permit violations. In 1979, EPA adopted a 'special policy' and published a notice in the Federal Register indicating some Alaska villages need not apply for the exemption. Unalaska was included on this list and is currently exempt from secondary treatment. EPA maintains that this "Alaska Village Policy" is a policy directive that can be dispensed with on a case-by-case basis, and is not binding on the agency," Hladick wrote in a memo prepared for the city's annual trip to Washington, D.C.., to lobby for federal money for local projects.
"The required rate increases are extreme," the city manager said. The EPA is mandating three of the four rates-boosting projects. The fourth one, not mandated, is landfill expansion. The three mandated projects are the landfill leachate tank, and the new wastewater and water plants.
The new $12.9 million water plant will provide an additional level treatment aimed at killing the cryptosporidium parasite that causes severe diarrhea and dehydration, and Hladick said that bug is not a problem locally.
In another issue, the city delegation plans to discuss with federal lawmakers proposed cuts in the fisheries research budget of the National Marine Fisheries Service. Hladick wrote that a congressional budget proposal would cut $2.4 million for fish stock surveys for the Bering Sea and Gulf of Alaska, and reduce the budget of regional fishery management councils by $7.5 million.
Without enough money to carefully manage the fishery, the North Pacific Fishery Management Council "will be forced to take a precautionary approach in establishing annual fish quotas. This will mean smaller quotas, fewer jobs, and less tax revenue for federal, state and local governments," Hladick wrote.
The city also seeks to be included in revenue sharing from oil and gas development on the Outer Continental Shelf.
Hladick said currently proposed legislation is limited to communities within 300 miles of offshore development, which would exclude Unalaska.
"We will be impacted by Shell's activity probably more so than Barrow or Wainwright," Hladick wrote in his federal priorities memo.