Daily Sitka Sentinel

Assembly Approves Higher Utility Rates

By SHANNON HAUGLAND
Sentinel Staff Writer
    The Assembly voted 4-3 Tuesday night to approve higher water, sewer and garbage rates.
    City Finance and Chief Administrative Officer Jay Sweeney explained that the current rates are meeting costs, but the higher rates will allow the city to build working capital for infrastructure or debt service in the future.
    Tristan Guevin, Kevin Knox, Bob Potrzuski and Mayor Matt Hunter voted in favor. Aaron Bean, Aaron Swanson and Steve Eisenbeisz voted against.
    Afterward resident Helen Craig registered a protest from the audience.
    “You will make it like a ghost town if you don’t start doing things more responsibly,” she said. “You guys need to do a better job. You’re hurting Sitka when you keep raising rates all the time.”
    The rate increases are as follows for residential users. (Commercial rate increases varied, according to use.)
    – from $53.60 to $56.01 for wastewater.
    – from $39.35 per month to $40.53 for water.
    – from $30.32 to $30.95 per month weekly pickup of a 48-gallon solid waste container.
    – from $50.94 to $51.99 per month for weekly pickup of a 96-gallon solid waste container.
    Connection fees for water and sewer also are going up, under the ordinance.
    In a related discussion, the Assembly approved applying for a $5 million state grant to help fund the $13.5 million upgrade to Crescent Harbor, for Phase I of the project. City staff said the project follows a modified master plan to replace timber floats in 2019.
    “A $13.5 million project will maximize the value of a one-time Tier 1 grant,” the city staff report says. “Since the program covers only up to $5 million of eligible construction costs, the city and borough cost of the project would be $8.5 million to cover the remainder of construction and design, permitting, management and contingencies.”
    The vote to go ahead with the grant request was 4-3, with Knox, Potrzuski, Guevin and Hunter in favor, and Swanson, Bean and Eisenbeisz against.
    Those voting against said they were leery of spending money that would mean more rate hikes than the 6 percent annual increases in the master plan, and of burdening citizens with more debt, on top of all the other projects requiring bonds.
    “Five million dollars is a lot of free money, but we can’t afford (the rest),” Eisenbeisz said.
    Bean suggested finding another source of revenue to fund improvements.
    Those voting in favor said the need to repair the harbor is not going to go away and delaying will increase the overall cost. Annual increases will cover the debt service on the improvement, they said.
    “We’re between a rock and a hard place right now,” Potrzuski said.
    It was a similar outcome on the next item, with Assembly members voting 4-3 to apply for $1.5 million from the state to help fund a $3.8 million electrical upgrade to Eliason Harbor.
    “Securing Tier II grant funding for this project would allow the city and borough to complete the necessary electrical replacement with the state of Alaska cost-sharing, thereby reducing the burden on the local rate payers,” city staff said.
    Eisenbeisz said the moorage rate increases anticipated over the long term are unaffordable.
    “A 300 percent increase means no boats,” he said. “Three hundred percent over 18 years is not feasible but if we agree to these grants we’re agreeing to that.”
    But those voting in favor cited the importance of the harbor system, and the availability of funding to help pay for the project.
    “We have to come up with a way to do it,” Potrzuski said. “Getting a good chunk of money from the state is probably a better deal than having to save it on our own. ... We can’t save our way to a harbor. We have to have harbors. This seems like the only plan for doing that and the only way to get a chunk of cash.”
    City Public Works Director Mike Harmon said time is of the essence on these projects, since delaying them means a 3 to 4 percent increase in construction costs per year. On the $13 million Crescent Harbor upgrade, that amounts to a $400,000 cost increase in a single year.
    “The rate increases (to moorage payers) at 6 percent isn’t going to keep up with one year of inflation on that project,” he said.

Downtown Shuttle
    The Assembly passed on first reading an ordinance to spend $10,000 to fund a downtown shuttle to help get cruise ship passengers around downtown.
    Sitka Tribe of Alaska has agreed to operate the shuttle, with the goal of seeing if the service is used, and if it provides a benefit to the tourists as well as downtown businesses.
    There was no plan available for the Assembly to look at, but Interim City Administrator Phil Messina said city staff is working on a memorandum of understanding with STA to start the shuttle, which could be operating as early as Sunday. The general plan is for a 14-passenger mini-bus to make a downtown circuit of Harbor Drive and Lincoln Street on large cruise ship days, starting every 15 minutes from Centennial Hall and making four stops.
    Passenger counts and feedback will provide information on whether to expand or continue the project, Messina said.
    A few Assembly members said they would have preferred a more detailed plan; Messina said comments from the business community proposing the project favor an immediate start.
    “We thought it was important to get this thing going,” he said.
    In general, though, the Assembly was supportive and the measure passed 7-0 on first reading.
    “It’s a good opportunity to pilot something, learn some lessons and expanding in the future,” Guevin said. He said it was also a good use of bed tax money allocated for “visitor enhancement” which will flow through the community in wages, repairs and fuel.
    The $60 per hour charge by STA for the buses in the proposal will fund 168 to 170 hours of operation during peak cruise ship season, the Assembly was told.

GPIP Leases
    The Assembly voted unanimously in favor of a proposed lease and amended lease for Northline Seafoods LLC at the Gary Paxton Industrial Park.
    Owner Pat Glaab has seven employees currently working at the park, retrofitting a barge into a floating fish processing plant, and needs additional space at the park to complete the work.
    The new lease for 43,637 square feet calls for a ramped up lease payment schedule, from zero in the first year to $2,618.22 a month by the end of the second year.
    The new lease area will allow Glaab to create a ramp and drydock his barge at the park while working on it over the winter. Otherwise, GPIP Director Garry White said today, Glaab would have to finish the work elsewhere.
    The vote was 7-0 on the first proposal.
    On the second item, the Assembly approved extending Glaab’s current lease at the park under current terms, plus job credits. A $10,000 credit on lease payments will be allowed for each employee making over $36,000 per year, with credits not to exceed $20,000 annually. The lease credits expire after 3 years.
    After five years, Northline can purchase the property at today’s value of $554,000. The city has first right of refusal to purchase the property if Northline puts it up for sale.
    There was some debate by the Assembly over the terms, but in the end the Assembly was supportive, saying the project for hauling, repairing and upgrading barges would provide good jobs for Sitka.
    “We have to make Sitka a competitive place,” Hunter said, in supporting the lease and amendment. “Seven employees or 20 – that would be phenomenal. I think it looks great, and I hope you guys (Assembly members) agree.”
    The vote was 7-0.

Other Business
    On other agenda items, the Assembly:
    – heard a presentation by an ad hoc group “Bags for Change” to ban the use of plastic bags in Sitka. The merits of enacting a citywide ban, versus voluntary programs, was discussed by the Assembly and the group, which included a grocery store representative.
    – approved an ordinance on first reading covering “defense and indemnification of city officers and employees” against claims and lawsuits “resulting from good faith efforts to perform their official duties and responsibilities.” The Assembly asked a number of questions before passing the ordinance on for public hearing July 25.
    – passed on first reading a supplemental budget ordinance to adjust the FY 2018 operating budget by re-appropriating unspent funds from FY 2017.
    – approved on final reading a supplemental budget ordinance to adjust the 2017 fiscal year budget and adjust appropriations for payments made by the state into the Public Employees Retirement System.
    – appointed Taylor Colvin to the Sitka Planning Commission.
    – approved a grant application for a Certified Local Government grant application by Sea Level Consulting, for a cemetery cataloguing project. The goal of the project is to gather and preserve information about the city cemeteries, city staff said. The grant is for a 60-40 match, with Sea Level Consulting, a business run by Anne Pollnow, providing $16,655 in donated resources. The application is for $24,982 from the Historic Preservation Fund for Certified Local Governments (federal share), city staff said. Bob Sam is the project leader, with Catherine Sopow as assistant researcher and field technician. Pollnow, who is chair of the Sitka Historic Preservation Commission, is the designated project manager, field lead, and database and GIS developer.
    – honored Dorik Mechau with a Service Award for his work on the Library Commission. At the end of the meeting, Richard Wein spoke under persons to be heard, saying Mechau deserves to be honored. (Mechau was not at the meeting.) “He and Carolyn Servid breathed life into the Island Institute. ... It’s people like that who make Sitka special. Their contributions should be mentioned.”
    – forwarded a liquor license transfer to BEAK Restaurant, at 2 Lincoln Street 1A.