I wasn't here in 1965, so this is based mostly on what I've read.  I understand at the time, the City of Anchorage was drawing its water supply from the headwaters of Ship Creek and not from Eklutna Lake.  In addition to the city water, there was a private water / sewer company which evolved out of the old Spenard Public Utility District, which in turn was helped greatly by the incorporation of the GAAB.  John Asplund may have had a lot to do with all that, considering that he headed the Spenard PUD before becoming borough mayor.