The Sitka Assembly may consider putting a cap on utility rate increases next fiscal year. The idea was raised when the assembly began deliberations over next year’s budget in a special meeting on Thursday (12-18-25).
Several assembly members talked about balancing funding capital projects and not overburdening Sitkans with utility rate increases.
First-time assembly member Katie Riley said while Sitkans’ appetite for rate increases is small, their appetite for functional services and a working city is high. Finding that balance, she said, is key.
“The thing that I am really concerned about is how we got here in the first place, and the fact that rates were so low for so long, and it is just really important to me that we are not unduly burdening future generations of Sitkans in the same way that we are having to deal with right now,” Riley said. “I feel very strongly about speaking up for the young people that are going to be living in this community and having to make the same difficult decisions that we’re making right now, and not putting them in a worse spot.”
After years of low rates, Sitkans have faced several years of increased costs.
Sikta’s city administrator John Leach said sometimes rate increases are inevitable. He used Ketchikan as an example. Earlier this year, the Ketchikan City Council approved a 12.5% electric rate hike, following a 6.2% increase the year before that, in large part because rates had been kept artificially low for years, to the detriment of the utility’s infrastructure.
“If you keep them low for so long, and then the cost of maintaining it keeps going up,” Leach said. “If you’re not tracking along that line, you create that void there, and that void is all that lost revenue, which equals deferred maintenance. And that deferred maintenance will eventually get to that point where the infrastructure fails. So you’re weighing that risk of, ‘Do I want to run it to failure and assume that that cost is going to be lower than what it would have been if we had maintained it throughout that period of time?’ So it’s a good conversation for everybody to hear that balance that we’re trying to maintain.”
Mayor Steven Eisenbeisz suggested putting a cap on rate increases and asked city staff for guidance. Assembly member Kevin Mosher agreed, and said he wanted to see options.
“We have been increasing over the past several years, seven, eight years, for quite a bit, and for a good reason,” he said. “But I think it’s not going to hurt to look at it, see what we can do.”
Ultimately, the assembly said they were happy to start budget conversations earlier than usual, and thanked city staff for their effort. The assembly typically kicks off the budgeting process in the new year for the city’s general and enterprise funds, with the goal of passing a final budget in May.
