Anchorage — Anchorage Water & Wastewater (AWU) presented its proposed 2026 operating and capital budgets to the assembly, describing modest net changes from the 2025 revised appropriation and signaling larger pressures from rising utilities and security costs.

OMB staff summarized AWU’s proposal: water operating is proposed at $54.9 million for 2026, up slightly from 2025 after reversal of one‑time dividend moves and several position reallocations; wastewater operating is proposed at $56.6 million, including a net addition of four positions previously moved between water and wastewater. The combined headcount shifts reflected internal reassignments rather than an overall large hiring push.

AWU staff told the assembly that security costs are the most notable operating increase. The primary drinking‑water treatment plant now has continuous armed security staff, a change made earlier in the year and reflected in the 2026 budget. AWU managers said that rising costs for contracted services and utilities drove other operating increases; selected line items cited included contractual security, alarm services and higher utility expenses tied to core operations.

On capital, AWU described a split funding approach: water capital projects are mostly funded from equity while wastewater capital relies more heavily on debt. AWU staff noted a number of capital projects are grant‑funded and were not yet finalized; when grant awards are confirmed the assembly will be asked to accept and appropriate the grants and add projects to the capital improvement budget. Staff indicated some grant awards are anticipated in mid‑November and would be included in first‑quarter appropriations.

Assembly members asked how capital priorities are determined. AWU managers said master plans (water and wastewater) and facility plans guide project lists; condition assessments and a prioritization matrix are used to sequence work across design, right‑of‑way and construction phases. Members also asked whether the overall debt level for wastewater is sustainable; AWU finance staff said current debt usage is consistent with recent years but noted continued monitoring is required as rates and costs change.

What happens next: staff said grant awards, first‑quarter budget revisions and the municipal budget amendment process will provide further detail for AWU items that are contingent on external funding or ongoing technical work.