The Sitka Assembly passed the 2015 city budget unanimously last night (Tues 5/27/14). It was the budget’s first reading – it must pass the assembly one more time before it becomes law.
The budget includes no tax increases and no service cuts, so the big news is utility rates, which are slated to rise.
Water rates will increase by about 15-percent, sewer rates by 9.5-percent, electricity rates by 10-percent. Garbage rates might go up, too, and it’s likely that moorage rates in the harbor will rise as well.
All those rate increases might be expected to prompt some push-back from the public, but when Mayor Mim McConnell opened the budget discussion on Tuesday night…
McCONNELL: Is there any public comment?
She was met with silence. Not one member of the public stepped forward to object to – or praise – the 2015 city budget.
But assembly members and city staff said they’ve gotten plenty of feedback outside the meeting room.
“It’s almost getting to the point lately where I can’t go out in public without somebody wanting to buttonhole me to tell me how expensive it is to live in Sitka,” said city finance director Jay Sweeney.
Sweeney has heard enough concern about the cost of utilities that he felt compelled to issue a bit of a manifesto.
“This I hear all the time: ‘You’re making it too expensive to live in Sitka.'” he said. “So I ask the question: is the high cost of living really something local government can control? Really? Or is local government a convenient scapegoat for overall economic trends which make economic circumstances difficult for some people?”
Sweeney said that a typical Sitka home – say, about 1,800 square feet, with electric baseboard heat and an oil stove – will pay about $250 each month for utilities. That includes water, sewer, electricity and trash. That family can expect to see their monthly bill go up by about $20, or potentially a bit more if garbage rates increase.
Given Sitka’s median income, Sweeney said, that’s pretty reasonable.
“One thing is clear to me: that Sitka’s utility costs are not seriously out of whack with the national average,” he said. “And so my perspective is, they’re right. It’s expensive to live in Sitka. But it’s not utility rates making it an expensive place to live.”
The rate increases are being prompted by a range of issues. For instance, electricity rates are going up to cover the costs of the Blue Lake dam expansion. Water and sewer rate hikes will go toward replacing aging water mains and sewer lines.
But Assembly Member Mike Reif said the main reason current rate increases are so jarring is that the city has to make up for years without any increases at all.
Of electricity rates, Reif said, “We raised the rates last time I was on the assembly, 20 years ago. [Then] we didn’t raise them one cent for twenty years. If we had just raised them with inflation, we would have had significant reserves and we would have been in much healthier situation.”
Meanwhile, assembly members stressed that this year’s budget doesn’t even tackle some of the biggest issues facing the city.
“This is a budget that is balanced from an operations standpoint but not an infrastructure standpoint,” said Deputy Mayor Matt Hunter.
In other words, while the budget covers the cost of maintaining city services, it doesn’tcover the cost of maintaining and replacing key infrastructure. The big issue here is roads. Sitka needs to come up with millions of dollars a year to repair and replace its road system — money that, right now, the city doesn’t have.
Before Tuesday night’s meeting, assembly members toured Edgecumbe Drive, which the city is planning to reconstruct entirely over the next two years. The experience clearly left an impression.
“Roads are really, really expensive,” said member Phyllis Hacket. “It just kind of blows my mind how expensive roads are.”
But, just as the assembly was about to adjourn for the night, Hunter injected a lighter tone into the discussion.
“I realized that I missed the most important part of what I was trying to say,” Hunter said. “I sounded very doom-and-gloomy, but we are optimistic as an assembly. We’ve talked a lot about tackling this problem and we are making strides in the right direction.”
He added, “We’re going to get through it.”
You can find more coverage of the Sitka Assembly here.