Kodiak council takes up $5.6 million in state loans for Aleutian Homes pipes

Two Loan Ordinances Head to First Reading

The Kodiak City Council holds first readings Thursday, Oct. 8, at 6:30 pm on two ordinances to borrow up to $5.6 million in state funds for aging Aleutian Homes sewer and water mains. No final vote is set.

One ordinance would borrow up to $3.4 million from the Alaska Clean Water Fund over 20 years at a 2.0875 percent finance charge. The other would borrow up to $2.2 million from the Alaska Drinking Water Fund. Its $1.5 million in forgiveness leaves $700,000 to repay if fully disbursed. Water and wastewater utility revenues secure the loans, and a city finance memo calls for rate studies as debt costs rise.

The Scope of the Work

The Clean Water and Drinking Water funds' priority lists describe about 2,100 feet of 70-year-old sewer main and 2,600 feet of 70-year-old asbestos-cement water main, plus service lines. The project is estimated at $12 million to $14 million.

A 2025 city request said a subdivision water line failed without warning, disrupting residents.

A Multi-Year Build

Contract engineer Chris Lynch told the council Sept. 10: "Aleutian 7 will be constructed in 3 phases so that it's more manageable. So over the next 3 summers." The current packet says at least two phases.