Kodiak Daily Mirror - City mulls faster rate hike at shipyard
  
City mulls faster rate hike at shipyard
by Drew Herman
Apr 09, 2014 | 190 views | 0 0 comments | 15 15 recommendations | email to a friend | print
The Kodiak City Council seemed to like a proposed new schedule for implementing shipyard rate increases, proposed by the Ports and Harbor Advisory Board and presented during Tuesday’s council work session.

The city-owned shipyard operated at a loss of $91,371 for fiscal year 2013, an amount made up from the general harbor fund.

PHAB chairman Nick Szabo told the council the revised rate change plan aimed at fairness to harbor users who in effect subsidize the shipyard through moorage fees.

“Our primary goal is to close this gap so we aren’t transferring funds from the harbor fund,” he said.

The city implemented a 20 percent rate increase for the shipyard’s lift, block and launch services in May 2013, with the intent of making similar increases each of the following two years to bring the operation to profitability. The new recommendation from PHAB would substitute a one-time increase of 30 percent this spring or summer.

City finance director Mary Munk agreed with PHAB’s recommendation.

“You can see the trend that they are improving but they’re not quite there,” she said.

Harbormaster Marty Owen called the shipyard’s balance for 2013 “considerably better” than previous years.

“We should be very close to breaking even or even ending in the black if we implement another 20 percent rate in 2014,” he said.

Owen said the 50 boats served in 2013 was the yard’s “average” amount of business.

“Most spend about 15 days in the shipyard,” he said.

The new rate plan suggestion from PHAB would include discounts for vessels that stay in the yard longer than two weeks as an enticement for owners to carry out longer projects in Kodiak.

“I think that sounds like a good idea,” city Mayor Pat Branson said.

Council members asked about other ways to increase the volume of business, including marketing and facility improvements.

“A building would make a big difference,” Owen said, since owners would like to work on boats out of the weather. He also said the local service vendors would welcome the ability to rent small shop spaces at the yard.

“We haven’t done much for them, to be perfectly honest,” he said.

Szabo and Owen said the shipyard’s marketing rests on trade publications and a presence at the annual Pacific Marine Expo in Seattle.

“Our entire focus for the city of Kodiak is the shipyard,” Owen said of the Expo.

He said about two-thirds of the boats using the yard have been local.

Branson said the current methods do not count as a “marketing plan.” Council member Rich Walker said it might be time to give that work to a specialist. Council member John Whiddon mentioned the Kodiak Chamber of Commerce as a potential marketer for the shipyard.

Szabo said that a new player managing assets at the Seward shipyard may make the operation there more attractive and that Homer may have long-range plans to enter the field.

“It does sound like there’s going to be more competition,” he said.

As advantages for Kodiak, Owen named the “very versatile” Marine Travelift and the open shop business model.

Fisherman Skip Bolton called the possible local availability of new Rapp Hydema trawl winches “a big thing” for attracting large vessels to Kodiak.

“They’re open for business probably pretty soon,” he said.

The Ports and Harbor Advisory Board meets next on April 22. The city council will hold a regular session at 7:30 p.m. Thursday.

Contact the Daily Mirror newsroom at editor@kodiakdailymirror.com.

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