Juneau’s water and sewer system will need a $72 million upgrade over the next decade.
A city and borough utility study indicates rates will have to increase and other sources will be required to generate enough revenue to cover system operating, maintenance and updates.
CBJ Public Works Director Kirk Duncan and a consultant explained future revenue requirements to the Juneau Assembly Monday.
“Our current rates allow for operational costs, but do not allow for system replacement and upgrades,” Duncan said.
Across the country, Duncan said, local governments review their utility rate structure every five or ten years. The last CBJ study was in 2003 and rates went up just after. But most utility infrastructure projects were funded from a variety of sources.
Consultant Karyn Johnson of FCS Group worked on the last Juneau water and sewer rate study.
“From a financial accounting reporting perspective, both the water and wastewater utilities are operating at a financial loss. That’s primarily due to the fact that the rate revenues are not set at a level high enough to cover the annual depreciation expense,” Johnson said.
She said industry standards recommend having on hand a minimum of 30 to 45 days operating and maintenance expenses and a reserve fund for emergency repairs. She said rates should cover depreciation.
Johnson described four revenue scenarios for both water and sewer; each one assumes a rate increase.
Duncan said other revenue sources would include a portion of the CBJ 1 percent sales tax, and $8 million from Juneau cruise ship passenger fees, known as the head tax. That’s because the city provides water to cruise ships during the summer.
“To put things into perspective, we have 275 million dollars’ worth of water and wastewater assets. We’re recommending a 72-million dollar system upgrade over the next years. What that represents is 25 percent of the total system would be replaced in the next ten years, indicating that all the components can last 40 years,” he said.
On Wednesday, Johnson and Duncan will explain the utility system needs to the public, at 7 p.m. in city hall Assembly chambers.
By February, they expect to know how those needs will impact residential and commercial rates.
Once the study is complete, the Assembly will decide how the system will be funded.
Click here to read the study.
- Nicholas Meyer, a Coast Guard Sector Juneau command duty officer said rescue crews searched more than 180 square miles to find Charles.
- University of Fairbanks Ph.D. Candidate Maggie Chan wants to know how and why the fishing charter industry is changing in Southeast and Southcentral Alaska.
- In 2016, the birds were coming later than expected, and their bills weren’t fully orange. Douglas doubts that these latecomers, who lay a single egg per season, could breed successfully.
- Between twin bombings at a Parachinar market, a car bombing near a police office in Quetta and a shooting in Karachi, Pakistan is reeling from attacks claimed by several extremist groups.