City council will meet early tonight to award a contract for building the new wastewater treatment plant. City staff are recommending that Alaska Mechanical of Anchorage get the $19.3 million contract, since they were the lowest responsive bidder.

As the city nails down the budget for that project, and other substantial upgrades at the city’s utilities, it looks like Unalaska residents will see big increases in their bills to help cover the costs.

City staff are suggesting increases of about 22% for water, 44% for wastewater, and 34% for solid waste over the next three years. By July 2015, the average resident's monthly bill would be about $45 more than it is now. Industrial users, including fish processors, would be paying $56,000 more every month.

The proposed rates were designed in consultation with Mike Hubbard, the city's utility consultant from the Financial Engineering Company of Maine. If they're adopted, the utilities would turn a small profit of $100,000 a year instead of running at a loss, as they do now. The city has been providing extra money from the general fund to fill the gap.

Tonight, council will consider ways to phase in the rate increases over several years. And they'll also consider using sales tax revenue to pay for the projects.

Councilors have spoken out against using property tax to defray the utility rate increases before. When they set the property tax rates for fiscal year 2014 at tonight's meeting, they aren't expected to increase them. City staff are recommending that the mil rate stay at 10.5, or $1,050 for every $100,000 of property value.

In work session, council will hash out the operating budget for fiscal year 2014, as well as the capital and major maintenance plan. Council will also hold a public hearing and second reading for a budget amendment that sets aside money for capital projects and corrects prior budgeting errors.

At the end of the meeting, council will go into executive session to talk about union negotiations with Local 302 from the International Union of Operating Engineers. That union represents a wide range of city employees.

Council will meet at 6 p.m. in city hall.