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HomeMy WebLinkAboutRES2025-014 Harbor Facility Grant Increase1 1 1 Sponsored by: Sorensen CITY OF SEWARD, ALASKA RESOLUTION 2025-014 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, IN SUPPORT OF RAISING THE MAXIMUM AVAILABLE ALASKA DEPARTMENT OF TRANSPORTATION HARBOR FACILITY GRANT TO $7,500,000 FOR ELIGIBLE PROJECTS ON AN ANNUAL BASIS WHEREAS, Senate Bill 291 established the Municipal Harbor Facility Grant Program on July 1, 2006 in which the total amount of grant money made available to a municipality was limited to not exceed $5,000,000 in a fiscal year; and WHEREAS, the Municipal Harbor Facility Grant is the single most significant funding tool available to Alaska Harbormaster to plan, maintain and recapitalize port and harbor infrastructure; and WHEREAS, testimony from a legislator advocate stated "SB 291 would establish the municipal harbor facility grant fund to which the Legislature would make an annual appropriation from the watercraft fuel tax account and from the state portion of the fisheries business tax. Both sources come from the marine industry so harbor users would generate the revenue for the program"; and WHEREAS, Senate Bill 291 was envisioned to cap the funds that can be used per community per year at $5 million so that a large community couldn't take all the available funds in any given year. The expectation is that communities would establish, maintain, and run an enterprise fund into perpetuity; and WHEREAS, the State of Alaska over the past nearly 30'years has transferred ownership of most of the State-owned harbors, many of which were at or near the end of their service life at the time of transfer, to local municipalities; and WHEREAS, these harbor facilities continue to, require substantial municipal financial investment to maintain and for capital improvement projects; and WHEREAS, construction, shipping and mobilization costs to remote portions of Alaska have outpaced the national consumer price index since the pandemic; and WHEREAS, the United States Bureau of Labor Statistics CPI calculator indicates that $5M in July 2006 when the Sente Bill 291 was enacted would be inflated to $7,500,000 per eligible project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City of Seward, Alaska is in support of raising the maximum available CITY OF SEWARD, ALASKA RESOLUTION 2025-014 Page 2 of 2 Alaska Department of Transportation Harbor Facility Grant to $7,500,000 for eligible projects on an annual basis. Section 2. This resolution shall take effect immediately. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 27th day of January 2025. THE CITY OF SEWARD, ALASKA Sue McClure, Mayor AYES: Barnwell, Finch, Crites, Osenga, Wells, Warner, McClure NOES: None ABSENT: None ABSTAIN: None ATTEST: 7 Kris Peck City Clerk (City Seal) A% OF SFhY%. o� SEAL ;•: r` T....'' `j FOFALP'%s ♦♦ sit/m/ns��� 1 1 1 City Council Agenda Statement Meeting Date: January 27, 2025 To: City Council Through: Kat Sorensen, City Manager From: Tony Sieminski, Harbormaster Subject: Resolution 2025-014: In Support of Raising the Maximum Available Alaska Department of Transportation Harbor Facility Grant to $7,500,000 for Eligible Projects on an Annual Basis Background and justification: The Municipal Harbor Facility Grant Program was established on July 1, 2006 in which the total amount of grant money made available to a municipality was limited to not exceed $5,000,000 in a fiscal year and be funded through watercraft fuel tax and from the state portion of the fisheries business tax. The grant program was started after the State of Alaska transferred responsibility for its state- owned harbors to local municipalities, but many harbors needed new capital investment. It is currently estimated that the backlog of projects necessary to repair and replace these former State- owned harbors has increased to over $500,000,000. However, construction, shipping, and mobilization costs to portions of Alaska have outpaced the national consumer price index since the pandemic. When adjusted from original amount using the United States Bureau of Labor Statistics CPI calculator to July 2023 this would be inflated to $7,500,000. DOT Grant Program The Municipal Harbor Facility Grant Program is managed by DOT & PF. The program provides 50/50 matching funds to eligible applicants. The program was created in 2006 but not funded until 2007. The legislature supplied funding in subsequent years (but not in 2009). The money can only be used for construction ready projects, not for planning or engineering. This grant program is funded on an annual basis at the discretion of the Alaska Legislature and consists of two tiers, Tier I and II. With State revenues projected to decline over the next few years, funding for the municipal Harbor Facility Grant Program will be a bigger challenge for the Legislature. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: Create a thriving port of Seward through harbor improvements, infrastructure expansion, and implementation of management plans. Strategic Plan: Complete the renovation of the Seward Boat Harbor Other: Total amount of funds listed in this legislation: This legislation: Creates revenue in the amount of: Creates expenditure in amount of: Creates a savings in the amount of: Has no fiscal impact X Funds are: Budgeted Line item(s): Not budgeted Not applicable X $ 0 Affected Fund: General Boat Harbor Motor Pool Available Fund Balance SMIC Parking Other Electric Water Wastewater Healthcare Note: amounts are unaudited Finance Director Signature: 45 X Yes Attorney Signature: Not applicable Comments: Administration Recommendation X Adopt Resolution Other: