After federal mandates forced the city to spend more than $50 million on utilities infrastructure, the Unalaska City Council is debating how much to raise local rates — and how fast.
The goal is to recover the money spent and borrowed to upgrade the city's treatment facilities for water, wastewater, and solid waste.
At a meeting Tuesday night, city councilors considered several options, including hiking utility rates, raising the local sales tax, and poaching money from the general fund.
The worst-case scenario would raise the average resident's utility bill $35 each month, according to Public Utilities Director Dan Winters. On the industrial side, Winters said the average business could see its monthly bill jump by more than $1,500.
If the city chooses that path, the rate hikes would unfold over the course of three to five years. But the Council hasn't made any decisions yet.
Councilors agreed on Tuesday to keep all options in play for now, while narrowing their focus to just one year. That way, Councilor Frank Kelty said the city can make a dent in utility costs and stay flexible as the state tries to solve its massive budget shortfall.
"I can look at one year, but I certainly don't want to lock myself into three or five years," said Kelty. "Even if we have to come back and do this drill again, at least we'll have a better feel of what the Legislature does on taxes. Because you know they're going to have to do something."
Councilors will continue their utilities discussion in November. Whatever they decide, City Manager Dave Martinson said the new rates will go into effect Jan. 1.
Tuesday night, councilors also discussed commercial marijuana for the first time since voters overturned their ban in the municipal election earlier this month.
Under guidance from the city attorney, councilors agreed to start working on regulations that will govern any future pot businesses on the island.
Logistical challenges mean that a potential marijuana industry is still a long ways off for Unalaska, but Martinson said it's better to prepare now.
"I believe the sooner we can get through this process and make these decisions, the better it is for anyone who wishes to try to go down the path of creating a business."
In November, the Council will work on setting hours of operation for marijuana businesses and consider additional taxes for pot products. The planning commission will develop a plan for zoning.