The City of Sitka receives drinking water and hydroelectricity from Blue Lake. Due to an upcoming inspection and concerns about the penstock, which regulates the flow from Blue Lake, the city is getting state loans to create a secondary water source for Sitka at Indian River – an $18 million project. The cost is driven by new federal requirements which declare Indian River’s water turbidity too high for safe drinking. (Photo courtesy of Flickr / Creative Commons user thedamian)

The Sitka Assembly has approved several rate increases on first reading. Wastewater, solid waste and moorage are slated to go up 6% to pay for infrastructure and water delivery by  22% increase. Electric rates are not changing this year, but do fluctuate with the seasons and could change if consumers buy more.

Why the big boost to water rates? It’s all to pay for a secondary water source, which would kick in during a planned or emergency outage. A water outage could happen in 2019, when FERC (Federal Energy Regulatory Commission) will inspect the penstock regulating Blue Lake. The $18 million project will be paid for with a loan from the state.

Assembly member Steven Eisenbeisz said this rate increase to water, which amounts to $8.92 a month for most residents, is the only one he would support.

“With the information that’s currently in front of me, I do believe that our secondary water source is a necessity. It’s not that we want to build it. It’s that we will be mandated to build it. I need to find a way to pay for that,” Eisenbesiz said.

Only Assembly member Richard Wein opposed the water hike. It passed, on first reading, along with the other rate increases to wastewater, garbage, and moorage. Eisenbeisz voted against everything, but the water hike.

Speaking during persons to be heard, Kevin Mosher implored the Assembly not to raise rates any more. He argued that the capital plans, which are driving rates to pay for infrastructure, are based on assumptions that usage will stay the same. He continued, “[Assumptions] that people will not use less, that people will not convert to alternative methods, [like using] fuel oil or smaller garbage cans. And so increasing these [rates] based on those  assumptions…I think that would be a faulty thing,” Mosher said.

The Assembly also made a decision on how to divide the money within the Fisheries Enhancement Fund, a $42,000 pot. It broke down as such: the Sitka Sound Science Center received $22,500, the Alaska Longline Fishermen’s Association received $10,000, and the Chinook Futures Coalition received $9,500.

That last vote – for Chinook Futures – was close, 4-2, with Mayor Matthew Hunter and Assembly member Kevin Knox voting against.

The fish box tax was set up by voters in 2004 to pay for “fisheries enhancement.” The definition of fisheries enhancement was debated Tuesday night, with Sitka Sound Science Center Director Lisa Busch saying it meant aquaculture. She requested the full $42,000 to pay for the SSSC hatchery and historic Mill Building.

“This tax is an excise tax which means the money collected should benefit the people who are being taxed, in this case guided sport [fishermen]. When the fish sent from our hatchery return, they are caught by commercial fishermen and sport and guided sport fishermen. They’re also caught by little kids who climb down the rocks on the sea walk and families who head to our beach after work. We see them as our community’s fish,” Busch said.

Chinook Futures Coalition is making a one time request for this money (Chinook Futures Coalition Proposal), which they will use to pay for a legislative liaison to recover lost king salmon allocations.

Assembly member Kevin Knox made a motion to reconsider how the money was divided between the Sitka Sound Science Center and ALFA at the end of the meeting. He said later to KCAW over the phone that he would have included Chinook Futures in that reconsideration, but legally couldn’t as he did not approve their funding request in the first place.

The Assembly also approved a resolution to eliminate fees at the fishermen’s work float and drive down load zone from September 15th through March 15th. Harbor Master Stan Eliason hopes this will encourage some to do major boat repairs in winter, so it doesn’t bottleneck over the summer.

The Assembly also approved an application for a Justice Assistance Grant (JAG) to hire a police officer to perform drug investigations and directed the city administrator to seek federal Pitterman-Robertson funding to build a public-use cabin. The city currently operates the Tom Young Memorial Cabin, which generates $8,000 in revenue a year.

Trident Seafoods Corporation pulled their request to lease space at the Gary Paxton Industrial Park and it may come up at a future meeting. The company wanted to do further legal review. Assembly member Aaron Bean was absent from this meeting.

The Assembly’s next meeting is tomorrow to hear an appeal from Tamico, Inc. on how the city awarded a bid for replacing the pilings at the O’Connell Bridge Lightering Facility. The contract went to Turnagain Marine. The Assembly may enter executive session to discuss some, or all, of this matter.

In October, voters will be asked a ballot question that, if passed, would raise the mill rate for the first time in 20 years. (Photo by Rachel Waldholz/KCAW)

On Tuesday night (08-10-16), the Sitka Assembly (08-10-16) approved placing a question on the October 4th ballot to raise the property tax cap from 6 mills to 8 mills.

This means that for every $1,000 your home is worth, you would pay $8 in taxes instead of $6. With state and federal funding sources uncertain, the Assembly is looking for local sources of revenue to meet the city’s budgetary needs.

An early draft of the ordinance bundled a mill increase with tax breaks, such as repealing the sales tax on groceries, offering a homestead exemption for the first $50,000 of a property’s value, and funding the school district to a certain percentage of the cap. The final ballot question doesn’t include any of these measures.

See property tax ballot proposition here: Ord 2016-26

This bothered citizen Larry Crews, who wanted the ballot language to specify how the money would be spent. “The way it’s written right now I would highly oppose it and I would expect everyone else in this town would oppose it in this town, until you can be more specific about what you want to do with it,” Crews said.

Deputy Mayor Matt Hunter responded that writing the ballot question that way would be illegal. The power to repeal the sales tax on groceries, for example, rests with the Assembly, not the citizens. So, to insert a non-binding agreement into a ballot question would violate state law.

Furthermore, state law requires that ballot propositions pose a single question, to avoid confusing voters. “That’s why our questions have to be extremely explicit and simple and that’s why our initial ballot initiative was illegal and unfortunately we can’t ask more than one question in the ballot question,” Hunter said.

While the Assembly wasn’t swayed to revise the ballot question, Steven Eisenbeisz did agree with one aspect of Crews’ comment. Eisenbeisz said, “There have been lots of promises thrown around at the Assembly table. If you vote for this, we’ll do this. If you vote for it, we’ll do this. I believe that this ballot initiative is going to pass tonight and put the responsibility back in the hands of the citizens. But we as an Assembly need to figure out, before election time, what of those promises do we intend to fulfill. We need to lay that out in some sort of ordinance that would become effective if this passes and let the citizens know exactly what we are going to do.”

The Assembly is already drafting two ordinances, which – if the ballot question passes – would pass as well. One, sponsored by Eisenbeisz and Swanson, would subsidize the electric fund. The other, sponsored by Tristan Guevin and Bob Potrzuski, would repeal the sales tax on groceries. The Assembly will consider these ordinances at a future meeting.

In new business, the Assembly will approved a collective bargaining agreement with the International Brotherhood of Electrical Workers. Wages will increase by $1.25 an hour this year and by $1 in 2017 and 2018.

The Assembly also approved a final plat for the Nakwasina Sound Subdivision, which includes 122 acres of waterfront land on the Lisianski Peninsula. While a 50 foot easement along the waterfront will be open to the public, 18 parcels will now be available for private purchase.

The Assembly approved zoning for land once under state ownership, boxed in red. The 18 lots and 1 tract of the Nakwasina Sound Subdivision will now be available for residential development.

The Assembly also approved an Open Space (OS) designation for the subdivision. Senior Planner Michael Scarcelli said open space zoning would allow for residential development while preserving the rural character of the area. Hotels, for example, would not be allowed. “There’s not going to be city services out there, so the open space is the preferred method to preserve the type of habitat and use,” Scarcelli said.

The Assembly also – on second and final reading – increased moorage rates by 5% and water and wastewater rates by 1%.

Before adjourning, the Assembly met to discuss its loans of over $600,000 to the Baranof Island Brewing Company. BIBCO received its first loan from the Southeast Economic Development Fund in 2011, and has been struggling with repayment. After 45-minutes of closed-door discussion, the Assembly issued a statement saying that the brewery will only have to pay interest on its loans until April 1st, 2018. Principal and interest payments will be put on hold until that time.