Seward aims to finish its first water and sewer rate study since 1993 by year's end

Seward's Public Works Department is working to finish a full water and sewer rate study by the end of the year, the first since 1993. Public Works Director Doug Schoessler gave the update to the Seward City Council at a budget work session Tuesday.

The push is tied to state loan money. Schoessler said that when the city presented its financials for its wastewater loans, the lenders made the study a condition, telling the city "you got to finish that rate study or we're not repaying all your grant that we gave you."

The money comes through the state revolving fund run by the Alaska Department of Environmental Conservation, which disburses money it gets from the federal level. Schoessler said the loans can be forgiven, working much like grants, and the city has received forgiveness on most of them. He put the total the city has received at almost $8 million. He said the forgiveness has helped keep rates where they are, because ratepayers otherwise would have had to pay for those projects.

Schoessler said a rate study reached the council around 2020 to 2022 but never came back after a staff member who had just started wasn't comfortable with it, and then COVID hit. The city has made cost-of-living increases since, he said, "but not a rate study to show where we should be."

The study is meant to simplify billing. Schoessler said current rates require staff to work out how many units are in a building. Larger buildings and businesses should be metered and working off a water meter, he said, with rates that match what most communities would be doing.

The year-end target may slip. Schoessler said some records have major data issues that Public Works and the finance department are working through for the city's consultant.

City Manager Kat Sorensen said the proposed budget for fiscal years 2027 and 2028 includes no rate changes from the study, calling it a very status quo budget. She said depreciation in those years puts the water and sewer funds' costs over their revenue, something the city must plan for as it looks toward the rate study.

Schoessler said he will bring the study back to the council. Water and wastewater fees are set by council resolution, according to the city's 2025 utility tariffs. The council is set to hold public hearings on the budget Nov. 9 and Nov. 23.