Palmer wins water, sewer rights

Negotiations for medical center utility rights ends

By DANIEL SPOTH-Frontiersman reporter

PALMER -- The city of Palmer was awarded the hotly contested rights to provide water and sewer services to the upcoming Mat-Su Valley Medical Center following a week of negotiations between Palmer, Wasilla and Valley Hospital.

The city outlined the details of the result of these negotiations and voted unanimously to sign a service agreement during a special city council meeting Friday evening. Under the terms of the settlement drafted by the two cities, Palmer will receive sewer rights to the hospital, to be constructed this spring, as well as all lands east of Trunk Road, while Wasilla will receive rights to the majority of the Parks Highway corridor and all lands west of Trunk Road.

The new hospital will be one of Palmer's largest single water and sewer customers, larger than either the existing hospital or Palmer High School, the city's other two largest users.

Tom Healy, Palmer city manager, said the verbal negotiations were undertaken by the cities and the hospital to avoid a costly and difficult hearing, and thus dodge thousands of dollars in attorney and legal fees.

Part of the agreement reached by the city is a commitment to perform water and sewer service to the hospital for one year, whereupon a cost-of-service study will be performed by Palmer and rates charged to the hospital will be adjusted according to the findings.

Several members of the Palmer City Council expressed concern that, as a result of this regulated rate, Palmer could eventually be forced to provide very costly service to the upcoming facility, and the rates charged to the rest of the city's utility users could reflect this.

"I don't answer to some industry standards board; I answer to the rate payers in Palmer," Council Member Tony Pippel said.

However, Healy does not believe that these findings will dictate a large change in the amount charged to the hospital. "The current rate is reasonably close to what it might be when we perform the study," Healy said at the Friday meeting. "I don't think the city will lose out on this arrangement."

Rick R. Koch, Public Works superintendent for the city, believes that after a year of service to the hospital, Palmer won't have to worry about any prospective changes in rate costs.

"Our rates are sufficient so that after a year of service we won't find ourselves in the negative," Koch said. "On any technical issue, our utilities were the ones who won, hands down," said Koch, who attributes Palmer's receipt of the water and sewer rights to the city's superior efficiency and long record of positive relations between utility providers and customers.

Koch did, however, note that service to the hospital would cost perhaps 20 percent more than service to one of the city's other customers of equal size but closer proximity, though he believes that rates to the facility will remain low.

The final step in the resolution of the water and sewer debate is the approval of the agreement by the Regulatory Commission of Alaska in late March. Should the agreement receive the RCA's blessing, the city will proceed with construction plans.

Palmer is proud to provide water and sewer service to the new facility, and looks forward to a long period of cooperation between the city and hospital, council members said.

"I'm as pleased with this as I have been with anything that's been accomplished in this city since I've been here," said Pippel at the close of Friday's meeting.

Contact Daniel Spoth at daniel.spoth@frontiersman.com.