By Larry Persily

The borough is waiting for an engineering firm’s final cost estimate before the assembly will consider whether to seek a low-interest loan from the state to extend water and sewer lines across the Skagway River to the Klondike Highway.

A year-old preliminary estimate compiled at the start of the project put the construction cost at $6.16 million, which includes more than a mile each of 8-inch sewer pipe and 10-inch water line.

“It is pricey,” Mayor Andrew Cremata said Dec. 30. But it’s an expense the municipality needs to confront “if we’re identifying housing as a major concern for the community,” he said.

“It will open up a vast amount of land,” said Matt Deach, chair of the Planning and Zoning Commission, who called the lack of housing in town “an emergency.”

The assembly’s Public Works Committee approved a draft resolution Dec. 19, authorizing the borough manager to apply for a loan through a program administered by the Alaska Department of Environmental Conservation.

When the borough has the cost numbers from PDC Engineers, the resolution will be added to an assembly meeting agenda and available for public comment.

“It will be ready to go when we get the numbers from the engineers,” expected later in January, said Assembly Member Orion Hanson, Public Works Committee chair.

The community has been talking for several years about extending the water and sewer lines across the river to open up land for new housing and other development, Hanson said. The extension would allow construction of a new recreational vehicle park, making the land currently occupied by the Garden City RV Park on State Street available for permanent housing.

In seeking a state loan, the borough would need to figure out how to repay the funds, Hanson said. The municipality would need to determine a hook-up fee for the new service, probably something more than the existing fee, since the availability of water and sewer lines would increase property values in the new service area, Hanson said.

In his report at the assembly’s Dec. 23 meeting, Borough Manager Brad Ryan noted that borough code requires: “Water mains west of the Skagway River shall be extended only at the expense of the customers served.” Code also requires the same of sewer line extensions across the river.

“Obviously, there needs to be discussion on how this project will be financed,” the manager said in his report. Regardless of that pending issue, the municipality plans to apply for the low-interest state loan and can always decline to take the money, Ryan said in his report.