Talkeetna is currently struggling with a growing debt from its water and sewer system. It’s one example of a problem that is rapidly spreading through the state, where small communities can’t pay the operating and maintenance costs of systems more than twenty years ago with federal funds.
With the debt for the water and sewer system growing each year, many options are being weighed on how to stop the financial leaking. In the short term, Mat-Su Borough Assembly Member Vern Halter proposed an appropriation in the 2014 budget that will send $75,000 to the sewer and water system, which should alleviate operational shortfall. That is not the long term solution, however, because the per-capita cost of running the system year to year is simply unsustainable, says Advisory Board chair Jane Steere.
“The basic operating cost, not separating high users from low users…it’s like $1600 a year, per customer. That’s just the bare minimum operating–no repairs, no problems, no loan repayment.”
Those loans, both from the Borough and other entities, total over $600,000. With fewer than 200 rate payers, the cost of operating the system while recovering from debt would be financially crippling to the small businesses that would likely be asked to pay the largest share, according to board member Karen Schapansky.
The recent focus of the Board has been to try to find ways to get funding from outside sources. Tammy Helms is with the Rural Utility Business Advisor Program, or RUBA, and she says that, across the state, more systems are currently subsidized than not. Her office, which is part of the Department of Commerce, specializes in helping small communities with financial water and sewer issues, but Helms that, in Talkeetna’s case, the current administrative structure is an obstacle.
“We serve communities that have a population of 1,500 or less that manage their own utility. Talkeetna kind of falls in the gap with that, because the Borough actually manages your utility.”
Robert Gerlach, a member of the Talkeetna Community Council, says that mismanagement has left the community with a system that it cannot possibly support on its own, even through incorporation.
“There’s just no way that we can come up with that kind of money. We have, actually, no interest in relieving the Borough. A lot of us who have lived here a long time feel like the Borough kind of shoved it down our throats, and then the Borough doesn’t seem to want to manage it–doesn’t seem to want to do anything. We don’t know where we could come up with the base. If we try to incorporate in order to get some kind of a tax base…last time it was voted down by more than two-thirds.”
Helms says that there are other options, short of incorporation, that could bring relief.
“There might be some revenue sources that are available to you when your numbers go down as far as who you’re serving, because there are more grants out there for smaller communities. And so trying to work with the Borough to not take on the debt, but basically become a contractor, then you’re having a little bit more control.
According to Helms, Talkeetna is far from alone it is financial issues with sewer and water. In answer to Robert Gerlach’s estimate that the system sees nearly five times more use in the summer than in the winter, Helms brought up McGrath, Seldovia, and Kodiak as other examples of communities where the consumption and cost often spikes due to an influx of outside visitors.
Currently, the Sewer and Water Advisory Board is reviewing the draft of a Borough plan to use a $100,000 grant from the State to assess the current physical and financial state of Talkeetna’s plumbing. The Board is of the opinion that they will find that there simply isn’t enough money in Talkeetna to foot the bill, and that financial relief will be necessary.