Assembly nixes water and sewer rate hike

TALKEETNA -- It has a broken water line that each year makes a large ice sculpture in town, water service with broken shut-off valves, an outdated record-keeping system that makes it nearly impossible to keep track of who has service and who does not and a budget that's been consistently running in the red.

It's the borough-operated Talkeetna sewer and water service and, for the meantime, it will be staying as it is.

The Mat-Su Borough Assembly on Tuesday held its regular meeting in Talkeetna. It was a move aimed, in part, at giving local residents a chance to weigh in on a topic that has many residents concerned -- a 25-percent rate hike.

The motion failed, with assembly members Betty Vehrs, Bill Allen and Mary Kvalheim voting against the rate hike and assembly members Jody Simpson and Lynne Woods voting in its favor.

The Talkeetna water and sewer system was built more than 15 years ago and, although a considerable amount of work was done to the sewer portion of the system, a lot of information about who's hooked up and where has been lost over the years.

Although it was unlikely the utility would ever generate revenue, it's been doing the opposite almost since it was created. It's been costing the borough upwards of $25,000 a year.

"The basic problem is, it's a small utility -- 150 customers at the most are on it -- and there are no economies of scale," Mat-Su Borough Public Works Director Don Shiesl said.

"It's been a struggle to try to make it pay for itself," said R.G. Denny, a member of the mayor-appointed board that oversees the water and sewer service.

Complicating matters are two loans used by the service area to pay for a recent upgrade to the system.

Two years ago, the sewer system was upgraded with the help of grants from the state Department of Environmental Conservation and the federal Environmental Protection Agency.

To obtain the grants, the service area needed $51,000 in matching funds. That money, Denny said, was taken from the borough's revolving loan fund, with the understanding that it would be covered by borough funds elsewhere.

As the project wrapped up, there were other problems -- the contractor had overruns totaling about $50,000 that needed to be paid.

Again, the money was taken from the revolving loan fund, this time with the understanding that it would be paid back, Denny said.

Shortly thereafter, Denny said, there were changes in management in the public works department, and the previously borrowed $51,000 was added to the amount the service area was responsible for.

"It looked like it was costing us a lot more to operate it and pay the loans back than we could afford," Denny said. "It was time to really look deeply into what was in the ground."

And look they did, Denny said. He and another board member spent untold hours stopping at different lots in the Talkeetna townsite, asking residents about their water and sewer supply. They're still making the rounds, at least once a week, Denny said, to keep up with changes in Talkeetna's transient population.

A transient population is difficult for the public utility because, like phone or electric service, sewer service is billed to a resident, not necessarily a property owner. If a resident defaulted on payments, Shiesl said, the resident was pursued. That's one of the issues Shiesl said he hopes to change, so late payments will automatically become the burden of the property owner.

Another complication to the system is that although some Talkeetna residents live at levels well below the poverty line, sewer and water service is comparable with services in other Mat-Su cities and there are really no alternatives to using the public utilities.

"One of the really complicated things is, the Talkeetna townsite has really small lots," Denny said. Some of the older lots, he said, are just 25 feet wide -- much less than the space required by the state for a safe sewer and water system.

And, with the Talkeetna River a stone's throw away, the lots in the townsite are plagued with a high water table that mixes in with septic systems and creates pollution. Wells are problematic, too, Shiesl said.

Add to that a record-keeping system that's not current and numerous water lines that can't be turned off at a residence -- whether to encourage people to bring their bills current or as a safety measure if a house burns or a line in a home breaks -- and the problems with the system are compounded.

Denny said one of the most interesting cases had him and others in the community guessing for years.

A property owner purchased property and, in the process of building a home, apparently broke a water line, only to find out that water they thought had been turned off was actually on.

Rather than shut off the free service, it was left to run, but to avoid the mess created by running it on the ground, it was shot, fountain-like, into a cottonwood tree above, creating an impressively large ice sculpture.

"We thought it was part of Winterfest," Denny said. "That went on for a few years. Now he's receiving a bill, but he hasn't yet paid."

Other people were getting service for free, some customers were paying residential fees when the service was used for commercial purposes and others were simply skipping payments and skipping town, leaving unpaid bills for the next tenant to deal with.

"Admittedly, we do have some problems in tracking customers," Shiesl said. "We're looking at some computer programs to manage that."

Denny said he and other board members are also working to straighten out the problem, but haven't yet worked out all the kinks.

Community residents he's spoken to are pleased the rate hike failed, he said -- some because they didn't believe the borough should get more for a flawed service and others because the sizable increase, on a fixed income, was more than their budgets could bear.

He said although he's unsure the rate hike would have been the best way to proceed, he's not sure where the fate of the system lies.

"Who knows how it's going to work out," Denny said. "If the borough was more responsive, if there was better communication …"

Shiesl said his department is working on the problem from several fronts. They're looking to see whether needed updates for the projects can be funded by state or federal grants, and borough staff are looking to see whether the loans can be forgiven or extended to reduce the size of the payments property owners must make.

"We have a variety of things we're looking at right now," Shiesl said.

Some of the issues will be addressed at a meeting scheduled for Tuesday in Talkeetna. Shiesl said he will meet with the service area board at the Swiss Alaska Inn at 3 p.m. Tuesday, at a meeting that's open to the public.

Contact Rindi White at rindi.white@frontiersman.com.