HomeMy WebLinkAboutRes2005-081
CITY OF SEWARD, ALASKA
RESOLUTION 2005-81
"-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AMENDING THE PORT AND HARBOR TARIFF BY
INCREASING MOORAGE RATES BY 10% EFFECTIVE JANUARY 1,
2006, TO FUND CONSTRUCTION OF STEP 2 OF THE HARBOR
EXPANSION PROJECT, INCLUDING CONSTRUCTING NEW M, N, 0,
P, AND Q FLOATS IN THE SOUTH HARBOR, AND UPLAND WORK IN
THE SOUTH AND EAST UPLANDS
WHEREAS, at its meeting of April 25, 2005, the Seward City Council approved
Resolution 2005-27 accepting a final harbor expansion configuration (reflected in the
Harbor Layout maps prepared by Tryck, Nyman, Hayes, Inc., dated 4/5/05) for the Harbor
Expansion Project ("the Project"); and
WHEREAS, at its meeting of May 23,2005, the Seward City Council approved
Resolution 2005-36 and authorized Step 1 of three steps in the Project (extending E, F, J
Floats and moving the Fuel and X Floats) which was funded utilizing revenues from the
12.96% increase in moorage rates which was effective January 1, 2005; and
.....
WHEREAS, this resolution pursues direction given to the City administration at
Council's Apri125, 2005 meeting, aimed at funding Step 2 in the Project and authorizes a
10% increase in the harbor moorage rates effective January 1, 2006, to fund a portion of
Step 2, with the remaining funds recommended to come from revenues derived from the
newly created slips and a proposed increase in the passenger fee; and
WHEREAS, failure to make a timely decision on funding new revenue bonds for
this project may result in higher project costs due to rising interest rates, drastically
increasing fuel prices, and the price of steel; and
WHEREAS, Step 2 has an estimated total cost --including bond issue costs-- of
$4.5 million and will construct approximately 106 new slips, add approximately 377
linear feet of moorage and 1,024 feet of skiff space, and will help to reduce the waiting
list which currently stands at 400 customers; and
WHEREAS, a 10% increase in moorage rates will increase the per linear foot rate
per year from the current $35.80 to $39.40 and will generate $116,000 annually.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF SEWARD, ALASKA, that:
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CITY OF SEWARD, ALASKA
RESOLUTION 2005-81
Section 1. The City Council of the City of Seward resolves to amend the Port and
Harbor Tariff to increase the moorage rates by 10%, increasing the linear foot rate from
$35.80 to $39.40.
..J
2006.
Section 2. The increase in the harbor tariff rates shall be effective take January I,
Section 3. This resolution shall take effect ten days after adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska
this 12th day of September, 2005.
THE CITY OF SEWARD, ALASKA
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Vanta Shafer, May r
AYES:
NOES:
ABSENT:
ABSTAIN:
Branson, Dunham, Valdatta, Amberg, Clark, Lorenz, Shafer
None
None
None
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ATTEST:
Je Lewis,
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COUNCIL AGENDA STATEMENT
Meeting Date: September 12, 2005
Through: Clark Corbridge, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: Harbor Tariff Increase of 10% to Fund Step 2 of Harbor Expansion Project
BACKGROUND & JUSTIFICATION:
The Seward City Council has made significant progress toward expanding the Small Boat Harbor, holding no
fewer than 23 meetings in the past 20 months (see attached listing), aimed at addressing harbor-related
expansion and funding issues. At its meeting of April 25, 2005, the Council approved Resolution 2005-27
accepting their final desired expansion configuration (reflected in the Harbor Layout maps prepared by
Tryck, Nyman, Hayes, Inc., dated 4/5/05) with a total price tag of $8,664,215, and directing the
administration to propose a harbor moorage rate increase to fund the entire Harbor Expansion Project (“the
Project”). The $8,664,215 project includes construction of Z-Float, at a price of $2,464,450. The major
hurdle to deciding the harbor configuration has been crossed, and the primary challenge now is to determine
how to fund the project.
The City administration has consistently recommended a three-step approach to funding the entire project:
Step 1 extends the concrete floats on E, F, and J Floats, relocates X Float and the Fuel Float, and moves
water service to X Float; Step 2 constructs the South Harbor, including new M, N, O, P and Q Floats, and
associated upland items in the South and East Harbor; and Step 3 constructs Z Float. A primary goal of the
City has been to complete as much of the project as possible, by the end of 2006. Failure to move forward on
the project immediately may result in higher project costs due to rising interest rates, drastically increasing
fuel prices, and the price of steel. It is for this reason that the administration proposes moving forward with a
rate increase effective January 1, 2006.
At the meetings of May 9 and May 23, 2005, the administration and Council proposed three separate
resolutions aimed at following Council’s April 25 direction to increase moorage rates to fund the expansion
project. All three resolutions failed. There appeared to be broad Council support for easing the rate shock
that would come with substantial moorage rate increases.
At the meeting of May 23, 2005, the Council approved Resolution 2005-36, authorizing Step 1 of the
Project. Step 1 will construct approximately 34 new slips and add 382 linear feet of moorage. This action
was followed by Resolution 2005-52 and 2005-58 approved in June, 2005, authorizing the issuance of up to
$1.5 million in harbor revenue bonds to fund Step 1, utilizing the moorage rate increase of 12.96% which
went into effect January 1, 2005, to pay the bonded indebtedness.
The City Council held public work sessions in July and August to solicit input on funding alternatives to
finance Step 2 of the harbor expansion project. As a result of those work sessions, there appeared to be
consensus on the Council not to consider a marine fuel tax to fund the project, but to consider a mixture of
increase in moorage rates and passenger fees to fund the project.
CITY OF SEWARD, ALASKA
RESOLUTION 2005-
_______________________________________
The administration recommends financing Step 2 of the harbor expansion project (at an estimated cost of $4.5
million, including bond issue costs), through a combination of new slip revenues, increased passenger transit
fees, and harbor moorage rate increases. Step 2 will construct approximately 106 new slips, add 377 linear
feet of moorage, and 1,024 feet of skiff space, and is expected to generate $180,576 in new revenue. The
remaining annual cost burden of $449,000 would be spread among individuals who benefit from year-round
moorage space (10% moorage rate increase generates $116,000), as well as the approximately 166,000
visitors impacting the harbor’s infrastructure as passengers aboard vehicles-for-hire ($2.00 increase in
passenger fee, to $3.50 per person, generates $333,000).
This resolution specifically seeks approval to increase harbor moorage rates by 10% effective January 1,
2006, bringing the per foot linear foot rate from the current $35.80 to $39.40.
FISCAL NOTE:
A 10% increase in the harbor moorage rate represents an increase from the current $35.80 per foot to $39.40
per foot, generating the approximately $116,000 annual revenues required to complete funding for Step 2 of
the harbor expansion project, assuming that the passenger fee is increased by $2.00 per person. The City of
Seward expects to utilize this increase in rates to secure revenue bonds of approximately $4.5 million.
Finance Approval _____________________________________
RECOMMENDATION:
Council approve Resolution 2005- ___, amending the Port and Harbor Tariff by increasing moorage rates by
10% effective January 1, 2006.
CITY OF SEWARD
HARBOR EXPANSION PROJECT
MEETING LIST SINCE JANUARY, 2004
The following list represents the meetings held by the Seward City Council since January, 2004, dealing with the Harbor Expansion
Project and/or harbor financing actions:
January 28, 2004 - Worksession to discuss port and harbor tariff rates
February 23, 2004 - Resolution 2004-19 0 Phase I of the SBH Planning and Development Guide (postponed)
March 8, 2004 - Resolution 2004-19 - Phase I of the SBH Planning & Development Guide (postponed)
April 12, 2004 - Resolution 2004-19 - Phase I of the SBH Planning & Development Guide (failed)
May 10, 2004 - Resolution 2004-56 - TNH contract change #2 re: Phase I contract
May 25, 2004 - Worksession - East Harbor Expansion - Phase I
July 13, 2004 - Worksession - East Harbor Expansion - Phase I
July 26, 2004 - Council discussion on East Harbor Expansion - Phase I
September 16, 2004 - Worksession with PACAB to discuss East Harbor Expansion
October 11, 2004 - Council accepts inner harbor improvements proposal except X-float
December 13, 2004 - Resolution 2004-128 - Port and Harbor Tariff revision
January 10, 2005 - Resolution 2004-128 - Reconsideration of Port and Harbor Tariff revision
March 14, 2005 - Resolution 2005-15 - Pursuing State funding for harbor
April 20, 2005 - Worksession - TNH - East Harbor Expansion
April 25, 2005 - Resolution 2005-27 - Adopting development alternative for East Harbor Expansion
May 9, 2005 - Resolutions 2005-28 and 30 - Proposed moorage rate increase (fails)
May 23, 2005 - Resolution 2005-37 - Proposed moorage rate increase(fails); Resolution 2005-36 authorizes extending E, F, J floats,
move fuel and X-floats, purchase piling, pursue capital financing
June 13, 2005 - Resolution 2005-52 - Transpac Marina Float Contract and Resolution 2005-51 expressing intent to issue bonds to
finance harbor expansion, Phase I
June 27, 2005 - Resolution 2005-58 authorizes harbor revenue bonds to pursue Phase I
July 13, 2005 - Worksession on Harbor Expansion funding alternatives
August 11, 2005 - Resolution 2005-70 - Contract for purchase of pilings
August 24, 2005 - Worksession on Harbor Expansion funding alternatives
September 12, 2005 - Resolutions 2005-___ - Proposed 10% moorage rate increase to fund Harbor Expansion; Resolution 2005-
____ - Proposed $2.00 passenger fee increase to fund Harbor Expansion