Not flush with cash

WASILLA — If the city has its say, it is about to become more expensive to shower, flush or drink a glass of water.

In the closing minutes of the city council meeting on Monday, the administration introduced a proposal to increase the rates paid for Wasilla city water and sewer services by nearly 100 percent over the next five years.

The new rates will have three purposes, public works director Archie Giddings said. A third will allow the city to break even with the rising operating costs, a third will cover depreciation within the system and a third will be set aside for repairs, he said.

According to the proposal, both the water and sewer services have budget deficits in the hundreds of thousands of dollars because of increased energy costs and expanded infrastructure to maintain. Additionally, depreciation is never fully captured — more than $350,000 for each service in the fiscal year 2008.

With the rates as they are, the water and sewage utilities combined will bring in about $1.3 million in 2009. This needs to increase by an additional $1.2 million to cover all the costs and depreciation, according to the city’s estimates.

“We usually like to revisit the rates every five years,” Giddings said, “but depreciation is rarely captured.”

Mayor Verne Rupright wants that to change. The increase is necessary, he said, because the system is not self-sustaining and there is no money for repairs or in case of a breakdown.

With the rates as low as they are now, the city has to dip into the sales tax revenue to fund repairs to the water and sewer mains, Rupright said.

“The sales tax only goes so far. It’s not going to do replacement,” Rupright said. “We’re not trying to generate big profits for the city, but it should generate enough for replacement.”

Rupright said the rate increase would allow the city to plan for contingencies. With the capital set aside, the city could fix broken lines in an emergency instead of leaving customers potentially without water and sewage service.

“We built this system and put it in place, but we never built anything into the service charge to replace the system,” Rupright said. “When it starts to breakdown, where’s the money going to come from?”

That is the same thing Councilwoman Leone Harris heard from the administration. She said her impression is that if there was a breakdown in the system, the city would not have the money to fund it. The rates haven’t been raised in five years, she said, and it’s just one of those things you have to do.

“It’s like having a savings account for your house. Sooner or later your roof is going to need to be replaced or your heater is going to breakdown, and you’re going to need the money to do that,” Harris said.

Harris said she would potentially support the rate increase but needs to see exactly how the funds are going to be used.

The proposal presented to the council on Monday included two possible schedules for the rate increase. The first would increase the rates 50 percent in the first year followed by a 7.5 percent increase for the next four. In the second, rate payers would see an even 15 percent increase for five years.

In the numbers given by the city, the current combined rate for sewer and water for a residence using a minimum of 5,000 gallons per month is $48.50. This is considerably lower than the $67.60 minimum rate the municipality of Anchorage charges. If the increase happens, the rate for the same residence will be more than $94.

Rupright said an official ordinance should be introduced to the council soon, and he expects a vote on the purposed increases some time this summer.

Asked how he thought the ratepayers were going to react, he said probably not well. However, he said, this is not a new problem but something previous administrations had been ignoring for too long.

“When I had my office on main street, I paid into the system. It was a bargain. I never knew why it was such a bargain until I was mayor,” Rupright said. “I’ve only been mayor for seven months. You have a couple of other administrations before me that were well aware of the problem. This is something that’s not going to go away by ignoring it.”

Contact Todd L. Disher at todd.disher@frontiersman.com or 352-2252.