Anchorage, Alaska, Considering Selling Off Waste Services Division

Sullivan said no decision has been made to put the utility out for bid but that he is looking into it after being approached by private buyers.

“When somebody comes forward with an offer, it’s our due diligence to see whether or not that makes sense, both for the rate payers in that district but also for the entire residency of Anchorage, because they own the utility,” said Sullivan.

The mayor has hired consultants to see how much money a sale might bring in. Anchorage Assemblyman Tim Steele said he’s seen those numbers — and in his view, selling the utility doesn’t make sense.

Solid Waste Services, the city’s garbage service, made over $2 million in 2014. It had a reserve account of approximately $7.8 million at year’s end. SWS has investigated profitable new services and the numbers could look even better. It “ain’t broke.” So why should it be sold or contracted out? A consultant was hired by the mayor to assign a value to SWS and to make recommendations about the merits of a sale. The plan will work, according to the consultant, if residential rates are raised at least 20.85 percent immediately and commercial rates are raised by 2 percent every year after the sale.

The rates will be held at 20.85 percent only if you trust Alaska Waste, the most likely purchaser of SWS, to hold down the rates once it buys the utility. But when Fairbanks, Kenai and Mat-Su concluded that sales of their refuse services to Alaska Waste might work out for them, they sold their operations and Alaska Waste increased the rates. In 2014, Alaska Waste asked the RCA to approve a 158 percent rate increase for residential customers in Fairbanks, 31 percent in Kenai and 26 percent in Mat-Su. Alaska Waste already charges 20 percent more than SWS for residential service in Anchorage.