Kodiak Daily Mirror - Kodiak Shipyard still running big deficit
Kodiak Shipyard still running big deficit
by James Brooks/ editor@kodiakdailymirror.com
Dec 19, 2012 | 370 views | 0 0 comments | 2 2 recommendations | email to a friend | print
Kodiak's city-owned shipyard lost more than $300,000 in the last fiscal year, and new shipyard rate increases are needed to balance the 3-year-old shipyard's books, the Kodiak Port and Harbor Advisory Board (PHAB) agreed Tuesday.

An official recommendation will be voted upon during the committee's January meeting, but during a Tuesday meeting the mood appeared to be clearly in favor of higher costs for shipyard users.

"I look at that price as a bargain," PHAB member Stormy Stutes said of current rates, "and it can't be, because we have to pay for it."

The rate increase discussion came as harbormaster Marty Owen presented the harbor department's fiscal year 2012 report. The harbor department operates the Kodiak Shipyard and the harbor department under separate accounts, but the shipyard has repeatedly run into the red since it began operations in October 2009 and has been kept afloat primarily by transfers from the city's harbor fund. That fund operates and maintains the city's harbors with fees paid by harbor users.

Kodiak's shipyard is considered a do-it-yourself operation where the city provides space for shipowners to work on their boats using contractors based in the city of Kodiak.

According to financial records provided by Owen, the shipyard posted a loss of $302,000 in fiscal year 2012, which ended June 30. In the previous fiscal year, the shipyard lost $281,000.

During the same period, the number of boats using the yard rose from 49 in FY11 to 54 in FY12.

That generated more fees for the use of the shipyard's enormous boatlift, but the boats using the lift stayed in the yard for less time, hurting revenue. Expenses fell in FY12, but that decline wasn't enough to offset the decline in "lay days," the number of days a boat rents space in the Near Island shipyard.

Erasing the deficit and making the shipyard self-supporting would require doubling the shipyard's rates, deputy harbormaster Lon White said.

Currently, the shipyard charges $2.20 per foot per day for boat storage. Stutes, a boat owner, said doubling that fee wouldn't be unreasonable. Ten years ago, he paid $12,000 just for his boat to be taken out of the water using a shipyard in Seward.

"If you doubled the rate, I'm serious, it's not prohibitive," he said.

PHAB member Tim Abena agreed and said it costs $10,000 in fuel alone to reach a shipyard in Seattle. While Seattle offers more services, those may not be worth the additional cost to get there, he said. He suggested a one-year, 50 percent jump in fees.

PHAB chairman Nick Szabo balked at approving a motion on Tuesday, suggesting that doing so wouldn't give shipyard users a chance to comment on a proposal. In addition, he said, harbor staff need time to draft options for PHAB to forward to the city council.

In the end, PHAB asked Owen to draft a stair-step proposal where fees for various services would be raised over a set period until the shipyard breaks even.

In addition, new PHAB member Joe Bailor is organizing a form to be filled out by shipyard users. The form asks boat owners to list what they spent in the city of Kodiak during their stay in the shipyard.

Bailor, economic development director for the Kodiak Chamber of Commerce, said data from the forms will give shipyard backers ammunition in the fight to keep the shipyard operating. Several members of the Kodiak city council have previously raised concerns about the shipyard's operating losses.

"I think you're going to get the city council off of your back a little bit," Bailor said. "That will go a long way to say, OK, we may be book-losing some money, but we're doing something for the community."

Any PHAB recommendation must be approved by the Kodiak City Council to become effective.

Contact Mirror editor James Brooks at editor@kodiakdailymirror.com.

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