Anchorage, Alaska, Considering Selling Off Waste Services Division

David Bodamer, Executive Director, Content & User Engagement

May 13, 2015

2 Min Read
Anchorage, Alaska, Considering Selling Off Waste Services Division

Anchorage, Alaska is moving quickly in an effort to sell its waste services division. 

Anchorage Mayor Dan Sullivan broached the idea back in March. The Anchorage Assembly then passed a resolution Tuesday evening outlining a structure for the sale. 

According to KTVA Alaska:

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.

The Alaska Dispatch News has published an editorial opposing the idea.

The paper argued the sale could lead to big increases in residences' solid waste bills:

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.

About the Author(s)

David Bodamer

Executive Director, Content & User Engagement, Waste360

David Bodamer is Executive Director of Content & User Engagement for Waste360 and NREI. Bodamer joined Waste360 in January 2014. He has been with NREI since September 2011 and has been covering the commercial real estate sector since 1999 for Retail Traffic, Commercial Property News and Shopping Centers Today. He also previously worked for Civil Engineering magazine. His writings on real estate have also appeared in REP. and the Wall Street Journal’s online real estate news site. He has won multiple awards from the National Association of Real Estate Editors and is a past finalist for a Jesse H. Neal Award. 

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