Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

A rate hike for utilities could be on the horizon.

Haines Borough staff on Tuesday proposed increasing water and sewer rates by 5% each year for four consecutive years.

The hike, which staff originally planned to propose in 2020 but waited due to the pandemic, would compensate for a combination of ballooning water and sewer fund expenses, state and federal funding cuts and high inflation.

The current monthly residential flat rate for water and sewer is $91.20. That would jump to $95.75 in July, then $100.55 a year later, $105.55 the year after that, and finally $110.80 in 2025.

Commercial water and sewer rates would also jump by 5% a year under the borough’s proposal, which will be subject to public scrutiny and changes at the borough finance committee level and later the assembly.

The current rate schedule was developed in 2015 and included three consecutive yearly increases.

Water fund expenses increased 42% in fiscal year 2019 and haven’t dropped since, and sewer fund expenses climbed 23% between fiscal years 2018 and 2020 according to a memo submitted to the finance committee by borough chief fiscal officer Jila Stuart. “Primarily, the increases are for materials, design, repairs and maintenance,” Stuart said.

The high expenses are due in part to funding cuts. The state eliminated a grant program in 2017 that used to cover 70% of the cost of municipal water and sewer projects. Adding to that, inflation recently hit a 39-year high — at 7% in 2021.

Borough manager Annette Kreitzer said raising water and sewer rates will be necessary to afford basic infrastructure maintenance. “If you’re not putting aside enough money to help replace your infrastructure, you’re not doing your due diligence for your enterprise funds,” Kreitzer said. Utility rates “are the underpinning” for maintaining safe and reliable drinking water and sewer systems. “Pipes don’t last forever,” she said.

The finance committee will discuss the proposed rate increase at a meeting on Wednesday, Feb. 16.