City Tables Utility Rate Increases For Now

Monday, December 03 2012

For months, Unalaska’s city council has been debating the best way to pay off more than $40 million in upgrades to its utilities. Sales tax hikes and rate increases have both been floated as solutions.

But now, the city’s consultant says the 65 percent rate increase that he described as inevitable as recently as October might not be necessary after all.

That’s what Mike Hubbard, of the Financial Engineering Company, told city council at a special meeting last Wednesday. Hubbard says he knows that the announcement was unexpected.

"Yeah, I apologize for that," he says. "Originally, when I started the analyses several months ago, I was using some older data in making projections of both revenues and expenses. At that time, it looked like with just the ongoing operations, we were going to need some pretty significant rate increases."

Hubbard had been using data from the last two fiscal years to make his recommendations.

In the first few months of fiscal year 2013, the city’s been earning more revenue and spending less. Hubbard says that if Unalaska continues down this track, the city could make a big dent in its debt service by raising the sales tax half a percent.

That research surprised city council. But Hubbard says he was equally surprised to learn that the city was ready to start increasing utility rates as soon as January 1.

He didn’t find out about that plan until city manager Chris Hladick mentioned it during the meeting. Hladick says the city didn’t want to waste time raising rates, if that was what was required.

"If we needed to increase the rates now, based on information he had created in June -- he didn’t have this year’s first three months of data," says Hladick. "You would want to do that sooner than later, do some incremental increases is what’s that called. You would want to do that over time instead of all at once."

Hladick says that even though Hubbard recommended the rate hikes, he hasn’t been a big part of the implementation.

"We’ve been talking about it internally here," Hladick says. "Mike’s a consultant and lives in Maine, so he’s not always in on all the conversations that happen here."

In light of the new information from Hubbard, the city is taking rate increases off the table until June. The soonest they would go into effect is July 1. This spring, the final construction contracts will go out to bid, and the city will know the final cost of the utility upgrades. Unalaska will also know if it can count on additional state funding, which might come through during the legislative session.

In the meantime, city council will continue discussing tax increases. Most councilors said they could support raising the sales tax by a half a percent. That issue would have to go to a special election in May.


Uknowmeinthealeutians on Thursday, December 06 2012:

Nobody ever said our City Council were the smartest people in the world..
Just look who they have in there....Bring ole Bradshaw back....He will clean the place up....

TripleU on Tuesday, December 04 2012:

Older Diesel engines can be retrofitted for low NOx with internal parts and SCR to meet Federal standards. Water? all they need to reduce is turbidity ....since the City adds around 5 times the ADEC standard of chlorine to kill "bacteria" from Fox dung I guess? Never did understand why so much chlorine in pristine snow melt water. The Big Thors Hammer from the Feds is on the Waste water treatment plant - understood - time for the City to open up its $20 million coffers to pay for their mistakes.... not pass it on to community

Triple Ummmmmm on Tuesday, December 04 2012:

"TripleU" Follow the bouncing ball... The Feds are saying "do these upgrades or we'll come down on you like the hammer of Thor" (loved that movie), water included. "Did we need new Wartsila Engines for the powerhouse?" & "did our population increase so much that we needed a new powerhouse?" Come on man follow whats going on. People ARE using more power and the Feds are also cracking down on emissions which means the old Cats you are talking about weren't going to make the federal standards. The old powerhouse is right around 70 years old and 3-4' of steel reinforced concrete, do you know how much it would cost to change anything in there to fit any HE generators? I don't but can only imaging it would be a grip. I know it's easy to post using only emotion, but at some point maybe we should actually look into stuff. Just an idea TripleU.

TripleU on Tuesday, December 04 2012:

Take the needed funds for the Wastewater treatment plant out of the workers pensions - they should have known they were out of compliance - their fault not the communities. Other upgrades?! Did we need new Wartsila Engines for the powerhouse? Why not stick with Caterpillar? They have local mechanics - Wartsila has around 4 mechanics in all of North America...who must be flown out here and housed during their time repairing the engines. For that matter did our population increase so much that we needed a new powerhouse? I have not seen it. Water - needed of course - but do we need upgrades? seems the processors and public have plenty - Fish quotas are not rising - why do we need upgrades? The cost of living here is already very high.....make it higher and the City employees may be pricing themselves out of a job and their pensions

Just Saying on Monday, December 03 2012:

I cannot belive the actions of the city manager and members of the council jumping into and giving up so easy on the community and willing to apply increases to residence without fully understanding,questioning,and fighting for the community. Hladick all you see is a way to increase costs with little or no regard for members of the community. And shame on you council members for allowing this to happen. This is another great example of the careless thought and actions of the city management team including Hladick and Fulton. Oh thats right he left because of unethical behaviors...imagine that...City Council.....it is time to think about getting a new administrative staff. You cannot change stupid but you can give us better.
Just saying


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