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11/17/2012
Habor rate increase proposed

By SCOTT BOWLEN

Daily News Staff Writer

The Ketchikan Port and Harbors Advisory Board is recommending a harbor moorage rate increase of 7 percent for 2013 in anticipation of an expected float and ramp replacement project for Bar Harbor.

Board members voted 4-1 Tuesday to forward the recommendation to the Ketchikan City Council, which will begin its annual city budget deliberations later this month.

Supporting the recommendation were Board Members Mickey Robbins, Jim Castle, Dave Nesje and John Kimmel. Board Member Gail Jackson cast the sole no vote. Jackson said during the board’s deliberations that she would like the board to wait until the next meeting before voting on the issue.

The City of Ketchikan is pursuing a state 50-50 matching grant of about $4.78 million for the Bar Harbor South project that would include replacing Ramp 2 and Floats 9 and 1N, in addition to building a drive-down ramp.

Earlier this year, city voters gave their approval for the city to issue up to $5 million in bonds. The bond funding can be used as the local match for the state grants.

If the state Legislature and governor adequately fund the state Harbor Facility Grant program early next year, the funds would become available in July and enable the construction of the drive-down ramp next winter. That portion is fully funded, according to City of Ketchikan Port and Harbors Director Steve Corporon.

The city would need to issue between $2 million and $2.5 million in bond financing for the replacements of floats 9 and 1N, and Ramp 2, which would occur during the winter of 2014-15, according to Corporon.

At Tuesday’s regular Port and Harbors Advisory Board meeting, Corporon noted that city information provided before the bond election described how harbor rates would need to rise by 7 percent to 7.5 percent for every $1 million in bonds issued by the city for the harbor projects.

Given the likelihood of a $2 million-$2.5 million bond issue for the Bar Harbor work, harbor moorage rates would need to increase by approximately 14 percent-15 percent to service that debt.

The basic issue being considered by the board was whether to recommend an increase of 7 percent or 7.5 for 2013 ahead of a similar percentage increase again for 2014, or to wait and have a 14-percent to 15-increase in 2014.

The board had discussed the topic at an earlier meeting but postponed making a recommendation.

With only five of the eight board members present Tuesday, there was some discussion about waiting until the December meeting to see whether more board members would be in attendance (Board Members John Malouf, Tim Walker and KJ Harris were absent Tuesday).

However, it was unclear whether more members could be present at the December meeting. As noted above, Jackson said she would prefer to wait.

Nesje said he would recommend that the city go with a 7-percent or 7.5-percent increase now.

Robbins said it should be 7 percent rather than 7.5 percent.

"Putting it in a year ahead of time should draw a little bit of interest," Robbins said. "This way, maybe two sevens, that will get us the same amount of money as … a total of 15 at one time. I’d rather see a seven and seven. Nobody likes to get hit with over a 10-percent raise."

Kimmel agreed with splitting the increase, saying he preferred a 7-percent or 7.5-percent boost in one year rather than a larger increase all at once.

Jackson inquired whether rates would have to go up no matter what.

Corporon replied that rate increases would be needed if the city was going to repair and replace things in the harbors.

"If we don't (approve the bonds), there are still going to be rate increases," Corporon said. "It’s probably going to go higher if we have to replace this stuff. We just needed the bond so we could go after the grants."

Robbins made a motion that would recommend a 7-percent increase in harbor rates for 2013 in anticipation of the bond debt service requirements for the project to rebuild floats 9 and 1N, and replace Ramp 2.

Seconded by Castle, the motion was approved 4-1, and will be forwarded to the Ketchikan City Council for council’s upcoming budget deliberations.

There is the chance that the state won’t fund the Harbor Facilities Grant program to the level that would provide grant funding for the proposed Bar Harbor South projects.

"If that doesn’t go through, the decision would be if you want to go forward without the grant, or do you want to try (the grant process) again," Coporon said. "If you go forward without the grant, you definitely would have to raise rates."