By Delcenia Cosman

Reporter, Homer Independent Press

The Homer City Council adopted a new model for city water and wastewater rates on Monday that incorporates a new minimum use fee. The intent is to build up the city’s reserves for maintenance and future investments in Homer’s utility infrastructure. The rate changes will go into effect on July 1 for the new fiscal year. 

City staff and council members have been weighing ways to address a shortfall in funding for Homer’s water and sewer Capital Asset Repair and Maintenance Allowance Fund since February, when city Finance Director Elizabeth Fischer presented an analysis of the fund balance’s inadequacy in the face of aging utility infrastructure. 

Adoption of Ordinance 26-27, enacting the new rate structure, was postponed during the May 26 council meeting so as to address some discrepancies raised by the Finance Department and Council Member Jason Davis. 

Four rate change scenarios were brought before the council for consideration. On Monday, council members selected Scenario 2, which establishes a monthly 700-gallon minimum use fee and maintains a 15% CARMA transfer, rather than the 20% that the council discussed on May 26.

Under this new rate structure, customers in non-lift zones will see a flat, monthly minimum charge of $26 — $12 for water and $14 for sewer — for consumption of 0 to 700 gallons. Customers in a lift station zone will see a monthly minimum charge of $35 — $12 for water and $23 for sewer. 

Customers who use more than the new monthly minimum will be charged the commodity rate for each gallon more than 700 gallons: $0.0172 for water and $0.0201 for wastewater in non-lift zones, and $0.0172 for water and $0.0322 for wastewater in lift station zones. 

Existing commodity rates are $0.0165 for water in both non-lift and lift station zones, $0.0186 for wastewater in non-lift zones and $0.0294 for wastewater in lift station zones. 

All four scenarios represented some increase to customers’ water and wastewater bills, but a rate comparison sheet attached to Memorandum CC-26-122, provided in the June 8 city council packet, shows Scenario 2 as having the lowest impact to customers.

Scenario 4 represents the structure currently in place by the city — no minimum use fee and a 15% CARMA transfer. During council discussion of Ordinance 26-27 on Monday, Davis said if the city kept that structure, rates would increase by more than 7% for non-lift customers starting July 1 because of the costs to run the city’s water and wastewater systems and the cost of living adjustments for staff for fiscal year 2027. 

Under Scenario 2, the impact to non-lift customers is an approximately 5.82% increase. The impact to lift station customers is 8.93% for both Scenarios 2 and 4; Scenarios 1 and 3 would see 12% and 13% increases, respectively. 

Council members also discussed potential public perception of the new rate structure.

“We’re making a shift to having a minimum charge, and one of the concerns is that people will see their bill go up and think that it’s because of the minimum charge, when actually, the minimum charge will reduce most people’s bills,” Council Member Donna Aderhold said. 

Council Member Bradley Parsons said that the city was actively trying to avoid implementing a user fee.

“This started months ago with a suggestion of just a straight-up user fee, and that user fee was going to impact low-volume users substantially, whereas high-volume (users) would actually see a reduction in water rates,” he said. “We saw that as a regressive move, punishing those who use the least amount of water.

“So the model we’re trying to do is a minimum use number — it’s not a fee, it’s not like, ‘Hey, you have to buy in and get access.’ It’s just a monthly minimum water number.” 

A full recording of the June 8 council meeting is available at www.cityofhomer-ak.gov/citycouncil/city-council-regular-meeting-350. 

The next regular Homer City Council meeting will be 6 p.m. on Monday, June 22 in the Homer City Hall Cowles Council Chambers and via Zoom.