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

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. A first reading introduces an ordinance; 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 loan forgiveness, money the city would not have to pay back, 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 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.

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.