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Ketchikan City Council started to review the proposed 2020 KPU budget in recent days. Looking the budget over will continue this week.
The Ketchikan Public Utilities budget proposal totals $77.14 million, which is $15.05 million more than the current budget.
In an introduction to the budget by City Manager Karl Amylon and Finance Director Bob Newell, concerns about current utility rates covering costs is noted. Rates — not taxes — pay for Ketchikan’s utilities.
The city’s goal is for each KPU division to pay its own expenses. However, that is realized only by the telecom division. The water division failed to cover its costs annually from 2009 to 2018, while the electric division more often than not fell short over the same period.
The water division had been making progress in overcoming its operating deficit until deferred maintenance issues arose. It has been dealing with maintenance instead of reducing its deficit.
The telecommunications division has been subsidizing both the water and electric divisions, but the manager points out in the introduction that changes in the telecom industry are likely to curtail this practice in the future.
KPU’s proposed budget calls for no changes in staffing except for contracting out janitorial services. It has 114.5 positions. Step increases are included, along with a 2% cost of living increase for represented and non-represented employees as of Jan. 1.
As with the city budget, health insurance premiums are expected to increase 10%, which will be shared between the city and employees. Retirement cost increases will be in line with a new compensation plan, cost of living adjustments and step increases.
A 10% increase also is anticipated for liability and property insurance premiums. Workers compensation expense is expected to remain flat.
Last year KPU didn’t implement a 3.5% electric rate increase because of the drought and resulting diesel surcharges for customers. But that increase is expected to take effect in January.
The cost of power purchased from the Southeast Alaska Power Agency is anticipated to remain static.
Debt service, however, is expected to increase. In the spring of 2020, KPU plans to issue a $11.5 million bond to finance an undersea fiber cable between Ketchikan and Prince Rupert, British Columbia. The annual expense will be about $846,000.
The City Council will be meeting to discuss the budget in days to come. Public comment is welcomed at each meeting.
This is the opportunity for citizens’ to have their say on KPU and its finances.