Water and sewer rate increase on the way

Nome Common Council Monday evening with a unanimous vote introducing an action that would change Nome ratepayers’ water and sewer bills.
If the utility-rate-raising ordinance survives second reading and final passage at the next council meeting on Nov. 28, residents and businesses would pay 10 percent more for water coming in from city mains and gurgling down drains. The NJUS Board of Directors approved the increase at its meeting Oct. 18 and handed it off to the council for approval.
A deficit in water and sewer revenue has long existed with portions of revenue to support water and sewer maintenance coming from electrical revenues. In 2014 rates went up 14 percent and still left what a rate study said was a 24 percent rate deficit. The NJUS board selected a stair step approach to correct the water and sewer rate rather than a drastic jump in the fee. Thus, the water and sewer rate went up another adjustment of 10 percent. The proposed 10 percent increase for 2016 brings the sewer and water rate to within 4 percent of the needed total increase indicated by the rate study of 2014.
Further analysis will determine whether NJUS needs to raise rates again to cover the 4 percent lag or more, according to John Handeland, utility manager.
The new cost for residential service will show a monthly combined charge of $107.82, with seniors paying $64.69. The serve-yourself water pickup rate will be a flat rate of $49.01.
Commercial and industrial metered water service will have a monthly minimum charge of 62.02 plus a monthly service charge of $8.25 plus a demand charge depending on a meter size. Demand charges range from 5/8 and ¾ inch meter sizes for $13.75 per month to larger than 4 inches at $825.00 per month. Commercial metered accounts will pay 120 percent the water demand charge for sewer service.
In other business the council:
• Responded to the public’s approval of a ballot question calling for a summer tourist seasonal increase in sales tax from 5 percent to 7 percent by unanimously adopting an ordinance up for second reading and final passage. An attempt by Councilman Lew Tobin to exempt fuel from the extra two percent failed for lack of a second to his motion. Councilman Matt Culley said the tax was a good idea in that the city could build a reserve fund for deferred maintenance or to cover emergencies. The ordinance became effective with passage Oct. 24, meaning that on May 1, sales tax will be 7 percent on all retail sales and rentals of goods and services in the City with few exceptions, until Aug. 31.
• Unanimously adjusted the application deadline for sales tax exemption to Dec. 1 of the year prior to the year for which the exemption is sought. Jan. 1 previously served as the deadline.
• Urged the state to fully fund ($18,160,055) the State of Alaska Harbor Facility Grant Program.
• Unanimously passed a resolution opposing the ban on traditional use of legally obtained domestic walrus, mastodon and mammoth ivory.
• Approved unanimously a resolution awarding fuel bids for City of Nome and Nome Public Schools to Bonanza Fuel Inc., the only vendor that responded to the request for quotes. The sales period covers Nov. 1 through   Oct. 31. The costs are the following: heating oil, $3.29 per gallon; equipment fuel, $3.39 per gallon; unleaded gas, $3.39 per gallon, and diesel vehicle fuel, $3.39 per gallon. The contract can be revised at any time for a lower price should the State of Alaska Div. of General Services pricing be lower than the bid award.            
• Approved Mayor Richard Beneville’s reappointment of John Odden to the Nome Planning Commission.