KETCHIKAN, Alaska (AP) – Officials in Ketchikan have approved an ordinance that more than doubles water rates for the southeast Alaska city’s seafood processors over the next three years.
The City Council approved the ordinance in a 5-2 vote on Thursday. Water rates will increase by 35 percent each year over the next three years for Ketchikan’s three fish processors E.C. Phillips and Son, Trident Seafoods and Alaska General Seafoods, The Ketchikan Daily News reported.
The new water rates come in response to a consulting firm’s study that found all rate classes were paying more than their share of the cost of providing water service except for the seafood processors. The three companies accounted for nearly half the cost of production but were paying less than 5 percent of generated revenue, according to the study.
Paul Cyr, with E.C. Phillips and Son, has spoken out against the argument that seafood processors are being subsidized by the city or other ratepayers.
“We’ve not requested a subsidy, or received a subsidy,’’ Cyr said. “Water, in the form of rain, is one of the natural resources we have in excess here in Ketchikan, and it should be used to retain businesses rather than run them out of town. If there’s any subsidizing taking place, the fishing industry subsidizes the city through fish taxes and self-imposed enhancement taxes.’’
Cyr added that the seafood processors will not be able to “handle this kind of a giant increase’’ in water rates.
The fishing industry is recovering from a unsuccessful pink salmon season, and fish processors are unable to raise the costs of their products because prices are part of the global market, Cyr said.
Councilman Bob Sivertsen said in an April 6 meeting on the water-rates proposal that the city wanted to create an even playing field with the rate classes.
“It’s not just to balance the budget on the fish processors’ backs,’’ Sivertsen said. “We’re going to look at other rates too, be it sewer, water, power, garbage, whatever it is. The city provides a service, and they have to pay for that. Our population base isn’t growing, but our costs definitely are.’’
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