The 18-year-old Marine Service Center, a mainstay of Wrangell’s waterfront economy, collects enough money in fees to cover its expenses — but there is nothing set aside to replace equipment, such as the boatlifts and hydraulic trailer that are essential to the operation.
A 2022 economic analysis pointed out that if equipment replacement and other capital expenses were included in the math, the borough loses money on the service center.
The port commission has started discussing possible rate increases to ensure there is sufficient money in a replacement fund as equipment ages out.
“The first boatlift is more than halfway through its life expectancy,” said Winston J. Davies, port commission chair. If the largest lift, which can pull a 300-ton boat from the water, breaks down, there is no backup, he said.
“We had that study done … we really didn’t use all of its tools,” Harbormaster Steve Miller said of the 2022 report. “It’s going to be a work in progress,” he said of port commission discussions of any rate changes. “We don’t want to do it overnight.”
The report by Juneau-based Rain Coast Data compared Wrangell’s rates to yards in Juneau, Sitka, Hoonah, Seward and Bellingham, Port Townsend and Seattle, Washington. The analysis found that Wrangell’s fees are significantly below average in most categories.
The borough owns the service center, leasing areas to private businesses for repair, maintenance, fabrication and marine industry services and charging individual boat owners for short-term stays to do their own work.
The Rain Coast Data analysis looked out 30 years to determine the actual costs of operations and equipment replacement. The report noted that the two boatlifts would age out in 2036 and 2043, with a total replacement cost of more than $2.3 million in 2021 dollars.
The average short-term cost for leasing shipyard space to work on a boat in Wrangell is 47% below the average of the other ports surveyed.
For businesses that lease space long term to work on boats, “Wrangell has the lowest minimum rate and overall average business lease rate,” the report said.
The Marine Service Center, which on average hauls out 250 vessels a year, charges about 41% less than the average lift rate among shipyards in the 2022 report.
One idea discussed at the commission meeting on Dec. 5 is raising rates during the summer, when non-residents are more likely to use the service center, keeping rates lower during the rest of the year.
“That way, locals can pick cheaper times to come out of the water,” Miller said.
The Port and Harbors Department will work with the borough’s finance director to model out different possible rate increases to see how much money each would raise.
“We’re not shooting for the top end,” Miller said, “maybe the middle.”
Any rate increases would need to come before the port commission and then the borough assembly for a public hearing before approval.
It’s possible new rates could take effect in July, at the start of the borough’s fiscal year, Miller said.
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