Unalaska, AK – The city is considering increasing water rates. Currently, the city's water services don't quite break even it costs the city $2.2 million dollars to run the water plant and provide water to all of the business and residences, but they only bring in about $2 million in revenues. Additionally, financial engineer Mike Hubbard says the city needs to set rates so that the revenues are about $250,000 above the costs.

"Expenses can be higher than expected; revenues can be lower than expected," he explained. "We do have to operate the utility as a viable business so we do have to at least break even and this allows us some cushion in case something goes wrong."

Currently residential customers pay a flat rate of about $29 per month, which is slightly higher than necessary to pay for their usage. Metered customers, like the processing plants, pay by the amount they use and their rates are lower than necessary. The different rate change options presented during last week's city council meeting suggested upping rates for metered customers by 19 to 26 percent. City Manager Chris Hladick mentioned that this could hurt the businesses the town relies on to survive. But Hubbard says not raising rates is a mistake.

"If you didn't raise the rates then I think it just sends the wrong signal in getting grants and so on."

Unalaska's water rates haven't changed since the mid-1990s. Hubbard will look at more rate adjustment options, including ones that will only raise residential rates by about $1 per month and will more gradually increase business rates.