Voters in Petersburg will likely get to decide whether to fund upgrades to the town’s wastewater and water infrastructure. Last week, the Petersburg Borough Assembly voted in favor of a proposition to borrow more than $19 million dollars for the projects. It needs to pass a third vote to be on the ballot this fall.
The borough plans to change its wastewater system because of new state and federal regulations. Utility Director Karl Hagerman said currently, the department treats wastewater by screening out larger solids, and letting sludge settle. Then they pump the treated wastewater into the ocean near town. But that’s different from disinfection.
“We discharge into Frederick Sound, without disinfection and the permit parameters that we have in place, we’ve met those without any issues,” he said. “So myself and other members of the department feel that this is really not needed. But the state of Alaska does have authority over water quality standards, and they’re saying it is needed.”
Going forward, the department will have to disinfect wastewater to reduce fecal coliform – the bacteria that comes from sewage – before it’s piped into Frederick Sound. Right now the department relies on what’s called a mixing zone – an area around the wastewater outflow where it’s diluted by ocean water. Hagerman said there’s no evidence of high levels of the bacteria in Frederick Sound outside that mixing zone. He said the disinfection equipment required to meet the requirements will cost roughly $10 million dollars.
Coastal communities like Ketchikan, Sitka, and even Anchorage will likely have to make the same changes. That’s because they also rely on a waiver from the U.S. Environmental Protection Agency that lets them use mixing zones instead of disinfecting their wastewater. But the state of Alaska recently upped its marine water standards, prompting the federal government to change its permitting process. Last year Wrangell estimated the cost of overhaul to its wastewater plant at more than $12 million dollars.
The department also plans to use a smaller part of the loan to upgrade water and sewer mains around town. Hagerman said that there have been more and more water breaks. He said that’s a sign upgrades are necessary to keep the utility service reliable and safe for customers. He estimates water department repairs at $2.5 million dollars.
The money for Petersburg’s improvement would come from a low-interest loan from the Alaska Department of Environmental Conservation. Water and wastewater customers would repay the loan over the next 20 years through their monthly utility bills. But Hagerman said they might not even have to pay all of it back.
“The state also has a loan forgiveness clause, that they can also, in essence, grant some money towards this series of projects,” he said. “And so not only is it a great interest rate for the long term, but there’s also some quote unquote grant funds involved in this too.”
Hagerman said he’s not sure how much the loan would raise customer rates. He said taking on new debt does throw off the department’s budget a little bit.
“When you’re looking at multiple years of projects, like we are with this ballot initiative, or ballot question, you need to provide enough information to the voters so that they understand you know what it will cost them so they can make a good decision,” he said. “And how we do that is through rate studies.”
The Borough is planning a rate study that will look at the department’s finances and account for things like inflation and labor changes. That will help decide where rates should be set so the department has enough money to support operations. Hagerman said he’s not sure when the study will be complete but he hopes to have it for voters before October’s municipal election.
