The Wrangell Port Commission will move ahead with plans to reexamine rates, it decided at its regular meeting on Jan. 7.
The meeting was prefaced by a rate change workshop, where commissioners pored over sheets comparing local lift, storage, work and moorage fees with other communities. The sheets were put together by harbormaster Greg Meissner, who made the case for an increase.
The commission had previously considered a 50-percent raise in work area rates to 75 cents per square foot, but decided last March to wait amid concerns from contractors. But as the Harbor Department put its numbers together later that spring to match funding for the renovation of Shoemaker Bay Harbor facilities, it became clear rates would need to change in order to save money for future projects and upkeep.
Work area rates at the yard have remained unchanged for a decade, and Meissner explained fees systemwide have been slow to keep up with inflation or facility improvements. Meanwhile, harbor reserves have likewise grown slowly: last year by less than $12,000 and about $37,000 the year before.
Down the road when it comes time to upgrade or replace facilities – Shoemaker alone is expected to cost $10.7 million to replace its float network – such an anemic rate of savings will not begin to cover the costs.
“Everything stems from there,” Meissner said of those costs. “What are we making, what are we saving?”
While low rates on the one hand can be a draw to business, he felt current rates had come to a point where they limited the potential for future projects and the personnel to undertake them.
This in mind, last month commissioners decided to take another look at raising fees where they deem increases to be needed. Looking at the numbers, they decided it may take another month to digest properly.
Meissner expected any rate change would take at least two months to initiate, as it involves an ordinance change. If commissioners can devise and approve new rates by March, the City and Borough Assembly will have to hold a pair of meetings and a public hearing before it could take effect.
A special workshop on rates will be held at City Hall at 6 p.m. on Feb. 15, ahead of the commission’s regular meeting scheduled for the following day. Discussion is anticipated to be lengthy, so the meeting will be open-ended.
Other changes may be in the offing. Delivering his monthly update as a person to be heard, contractor Don Sorric asked commissioners to consider offering leaseholders at the boatyard longer leases. Currently contractors have to renew their holdings on a five-year basis.
Initially, the limited lease approach was envisioned as a means to maintain control over the yard’s operations, ensuring leaseholders would be actively engaging in projects. Operating at the yard for the past nine years, Sorric felt the yard had reached a point where business was no longer experimental.
“I think we’ve maybe both outgrown our current relationship,” he said of the city. “If we’re engaged, let’s get married. I think in all fairness it would be a good move for everybody.”
With longer leases in place, he felt contractors would be better incentivized to invest more into the infrastructure of each lot. Sorric’s Superior Marine Services this past year invested close to $900,000 in new shops and equipment, and he told commissioners he would like to add concrete flooring to his work space.
Thinking in the longer term though, he felt short-term leases provided insufficient security for such investment, and would contribute to lower resale value.
“From a buyer’s standpoint, myself at least, I wouldn’t even consider it,” Sorric said.
Commissioners appeared to agree, deciding to look into different options over the next month ahead of their next meeting. Periods of 20 or 30 years were brought up as possible durations.
“I think we’re all on the same page,” Meissner agreed. “We all felt fine with it back then,” he said of the five-year leases, acknowledging times have since changed.
Other contractors have seen longer lease terms as beneficial. Welding contractor Chuck Jenkins has worked in Wrangell since the mid-1980s, and a renewed five-year lease for his boatyard lot was up for approval by the Assembly Tuesday.
Asked his opinion, he said he would not be opposed to having a longer lease.
“Before you know it, five years is up,” he replied. “I would be for doing a longer lease.”
Jenkins Welding has also invested in a covered work facility, underground transformers and other equipment. However, Jenkins felt the investment was necessary for his business, and that lease length would not impact his decision-making one way or the other.
“We would just continue on as normal,” he supposed.
In business locally for five years, shipwright Tyler Thompson felt having a longer lease was not necessarily important for his business. However, he agreed it could be of benefit when it came time to sell one’s business.
Port commissioners will discuss leases further with a workshop on Feb. 16, along with finding funding for the Mariners Memorial.
During last week’s meeting commissioners elected to recommend adding site lighting to project specifications for the upcoming Mariners Memorial, plans for which were approved last month. Funding for the addition would be available in the Heritage Harbor line item. The recommendation moved to the Assembly for its approval on Tuesday.
Renewing conversation from previous meetings, commissioner David Silva brought up the prospect of attracting specialists to set up shop at the boatyard. “What are some of the specialty people we don’t have that could help encourage boats to come in?” he asked Sorric.
The contractor pointed out marine electrical, hydraulics and refrigeration as areas where the yard could use some additional specialization. While his business and other contractors have gradually been taking on projects in those areas, Sorric said having dedicated specialists in those fields would be preferable.
“It’s the people that attract the work,” he figured. He added that any projects brought into the yard would be a boon to other contractors, as he finds vessel owners tend to get other needed refurbishments and upgrades when their vessels are already hauled out.
“All of us shine brightly on the other,” he commented.
However, Sorric posited the best solution would be for Wrangell to produce specialists of its own. Meissner agreed, and pointed out there were already steps being taken in that direction. The high school’s industrial tech program has been getting its students experience in the yard working for various contractors, and a couple of younger locals are already attending refrigeration school.
“In the marine industry there’s a lot of things they can be doing,” Meissner said. “I only think it’s going to get better in the next couple of years.”
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