Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

Assembly reverses on trash regulation

 


The Haines Borough Assembly Wednesday reversed a decision made earlier this month and is now in favor of borough regulation of garbage collection rates.

The question divided the assembly at its March 2 meeting, where Mayor Jan Hill broke a 3-3 tie in favor of sending a letter to the Regulatory Commission of Alaska, supporting regulation of garbage collection rates by the agency, rather than by the municipality.

Community Waste Solutions’ acquisition of Acme Transfer’s collection permit makes CWS the town’s sole refuse utility. Regulation over collection rates is advisable to preserve the public interest, according to regulatory commission of Alaska administrative law judge Jim Walker.

CWS warned the assembly at its March 2 meeting that state regulation would lead to a spike in collection fees. The warning drew skepticism from member Margaret Friedenauer who said CWS offered no proof to substantiate its claim.

Friedenauer, along with members Ron Jackson and Mike Case, argued the state has the expertise to regulate rates.

Members Tom Morphet and Heather Lende voted in favor of local regulation, citing the City of Haines controlled rates until 2002. When Acme Transfer, a competing trash hauler, went into business and eliminated CWS’ monopoly, the imperative for rate regulation was removed.

On Wednesday, however, Jackson changed his vote after Morphet asked for the assembly to reconsider its earlier decision.

After a conversation with Walker, Morphet said he understood the RCA would evaluate collection rates on income from collection, not including self-haul. Morphet argued that many Haines residents take their garbage to the landfill and predicted that would throw off RCA’s model for setting rates.

“They’re going to look at our collection rates, how much income we bring from collection, which I believe now is relatively low, (then) look at (CWS’) overall expenses – and the net result of state regulation under this scenario is that collection rates are going to go through the roof,” Morphet said.

CWS representative Sally Garton told the assembly this week that, worst case scenario, rates could increase by $27 a month per customer.

Friedenauer questioned how CWS came up with the number when the state regulatory commission doesn’t have that information.

“How can we guarantee that rates won’t go up if we take over?” Friedenauer asked. “Are we going to do everything we possibly can to keep the rates where they are no matter what, because that’s what we’re hoping for, not because that’s what’s good for dealing with solid waste? I’m not convinced we have the ability and the funding to even do the oversight.”

Lende questioned why CWS wouldn’t want state regulation since it would drive collection fees up.

“It’s interesting to me that (CWS) don’t want the state regulation because then I’m kind of wondering if there’s other issues involved in the state regulation, that (regulations) may affect the business model of Community Waste Solutions, or for that matter our whole community’s landfill, that suddenly there may be an issue with that,” Lende said.

When Garton spoke to the assembly this week, she said CWS is trying to “do what’s right for the community.”

She also cited the costs CWS and its customers would incur should the state take over regulation, including a 1.089 percent charge of customer billings along with the costs associated with a state-mandated revenue requirement and cost of service study.

According to a memo written by a law firm hired by CWS, such studies cost $28,000 in Ketchikan and $145,000 in Juneau.

Attorney Paul Jones of the Anchorage-based law firm Kemppel, Huffman and Ellis wrote “…the burdens of economic regulation can be significant for any regulated utility, and is even more pronounced for small utilities such as CWS …the norm in rural Alaska is for utilities to be regulated at the local level – by local governments, tribal entities, or cooperative Boards of Directors – rather than by the RCA.”

The firm’s letter wasn’t discussed during the meeting.

Assembly member Case said the power to regulate rates should be given to the state, which has the most experience with the oversight.

“We do have this entity that has set rates before and the world has not really come to an end buried in trash,” Case said. “I would like them to set the rates. I think they’re the experts, so to speak, until proven otherwise.”

The assembly voted 4-2 to send a second letter to the RCA and inform them the borough is interested in local oversight over garbage collection rates.

 
 

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