Monday evening’s meeting of the Port Commission was spent largely on discussing rate increases, with an hour-long workshop focused on moorage fees.
The way harbormaster Greg Meissner figured it, stalls at the moment are not paying nearly enough for themselves, which will be a problem further down the line.
At the present, dockside moorage fees are at a flat $25 per foot, a cost which has not changed for the better part of a decade. More than half of fees collected go into savings for deferred maintenance, which in turn gets used toward the purchase of replacement harbor facilities once the present ones are beyond repair.
What Meissner proposes is a change in rates according to vessel length, broken down into the zero to 30-foot, 31 to 35, and 56 and up range. Respectively, these would be raised to $28, $33, and $38 per foot, per year.
Part of his reasoning for spreading out the rates that way is because larger vessels cost more money to accommodate. Smaller stalls take up less space and use less material, thereby costing less. At the present, Meissner estimated only the 20-foot stalls nearly pay for themselves.
How this would look to vessel-owners’ pocketbooks would depend on their vessel size. As a given example, the owner of an 80-foot boat would see an increase from $2,000 a year to $3,040, slightly above 50 percent. The owner of a 55-foot vessel would go from $1,375 to $1,815, a 32-percent increase. The owner of a 30-foot boat would see a 12-percent increase, from $750 to $840 each year.
The increases are expected to better keep in line with deferred and operating maintenance costs. For all rates, $13 of the per-foot fee would go toward operating costs, or current maintenance operations. Thus, only slightly more than half would go into deferment for the smallest vessels, while nearly two-thirds of rates would do so for the largest.
To justify these increases, Meissner ballparked possible costs for individual fingers and their utilities 45 years ahead, or the estimated life of a harbor. Using cost estimates for the Shoemaker Bay float replacement as a basis, he roughly estimated what those costs may be by 2061 due to inflation. While inexact, he made the case it gave a general, even optimistic idea of what it might cost to replace floats at Wrangell’s three harbors.
Taking Heritage Harbor as an example, its 11 80-foot stalls could together cost in excess of $2.3 million when they are ready to be replaced. Under the fee structure being proposed, over their lifetime the same stalls would earn $990,000.
“If you look at what an 80-foot finger would make over its lifetime, it’s not even close,” he said.
The extrapolation does not take into account a fee structure set to increase incrementally each year, another alternative he had proposed to commissioners set at about one percent. But even with that taken into account, fees would scarcely be enough to make a match for grant funding.
On that topic Meissner was less optimistic, pointing out the state’s current financial worries and declining prospects for oil revenue in the foreseeable future. He counted Wrangell as fortunate enough to have had Heritage and Shoemaker Bay harbors already financed with state funding. But currently Department of Transportation project budgets seem unlikely to allow for the $5 million match Wrangell will need to rebuild Shoemaker, with no guarantees that situation will change for the better. Shoemaker Bay facilities are now nearing 40 years old, and commissioner John Martin pointed out those at Reliance are already 50 and will also need to be replaced.
During the workshop commissioners were questioned by members of the audience. One inquirer wondered whether it would be preferable to bond for these projects. Meissner countered that a downside would be the interest the city would have to pay on any bonding, and pointed out it would not solve the savings issues for future projects.
“When it comes to borrowing, and especially in large chunks, you’re going to have to pay, and pay a lot,” added commission chair Clay Hammer. He felt saving what money they could would be a more responsible course for the Harbor Department. “In attempting to forward-fund these things it makes the taxpayers’ money, the rate payers’, stretch a lot further.”
With next year’s budget also in mind, Meissner pointed out that any draft he would submit to the Borough Assembly would be contingent on user rates, which include boatyard and storage fees the commission is also considering.
“For us to make any change it’s going to be an ordinance change,” he said.
This means a proposal has to go through two public hearings at the Assembly level, ahead of a June 14 deadline to submit a department budget. Meissner pointed out they would need to step up their meeting schedule a bit to finish in time. Commissioners agreed to hold another workshop on March 21 at 6 p.m. to discuss yard rates, with a goal to have a decision by the end of April.
The extension of lot leases at the yard – another issue under consideration after last month’s meeting – would likely be shelved until the fall, after the budget season is over.
At the meeting, contractor Don Sorric expressed his hope for a decision sooner than that. In January he had formally
recommended the commission consider extending leases, in his case for 50 years. He explained it would make it
easier to finance capital
investments and also enable him to sell the business at some point when he eventually retires.
“Everything’s on hold until we get this hashed out,” Sorric said. “It weighs heavily on our progress. With it on hold, we’re going to explore other options.”
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