Juneau's Docks and Harbors Department has been on the wrong end of lots of recent criticism. The Docks and Harbors Board, nine fellow citizens appointed by the Assembly, wishes to set the record straight. These criticisms follow two themes: 1) the rates are too high, and 2) the condition of the harbors and the services provided are not good enough. We disagree, and here's why.
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A recent Empire article gave the impression that another harbor rate increase was coming up. In fact, the only recent rate increase occurred about two years ago, when the board and Assembly approved a three-year graduated increase. Why was this necessary?
Nearly all of Alaska's public harbors were built and owned by the State of Alaska. Unfortunately, the state never reinvested in harbors and user fees throughout Alaska never included the capital costs of harbor infrastructure. Throughout Alaska, the state has been turning harbors over to municipalities, who are taking heat from the public over the deteriorating condition of the facilities. The state essentially ordered cities to assume ownership and financial responsibility, or the facilities would continue to deteriorate. The state agreed to pay a sum of money to each city that opted for ownership, based on the state's own estimate of deferred maintenance obligations. Juneau received approximately $7 million along with title to the harbors, but our own estimate was in the range of $24 million for deferred maintenance.
With only a fraction of the funds necessary for required repairs, the Docks and Harbors Board decided the only responsible action was to assign priorities to needed work, begin a program of rate increases to pay for needed work at the harbors, and seek outside revenues to help with harbor repairs. The Assembly agreed.
With the $7 million from the state, the first priority was replacement of Juneau's oldest and most deteriorated facility, Harris Harbor. This project was completed this spring, quickly and within budget, and is now certainly one of the best small-boat harbors in the state.
Some have suggested that the city should subsidize harbors more than it does - that user fees should not be the only source of funding for harbor projects. Yet nearly $24 million in other public funds have been directed toward harbor projects in recent years: Douglas boat harbor expansion, $6 million in property and sales taxes; Auke Bay commercial loading facility, $3.25 million in property taxes and $1 million from the Denali Commission; Taku Harbor moorage floats, $1 million of state funds; Amalga Harbor launch ramp, $2.25 million federal pass-through funds from the state; Don Statter Boat Harbor parking, $2 million in sales taxes; new Statter harbor launch ramp, $2.5 million in sales taxes; Douglas Harbor breakwater, $3.25 million in federal funds, $800,000 in property taxes and $800,000 in state funds; and Aurora Harbor improvements, $2 million in property taxes.
Juneau voters have generously funded harbors with sales and property taxes, and none of the above projects were or will be built primarily with funds from user fees.
These are major projects and do not include the minor ongoing maintenance that is often a source of friction between harbor users and harbor management. The bottom line is that many of our facilities are well beyond their useful life. Replacing dilapidated infrastructure takes serious money - way more than is charged to harbor patrons.
We wish more outside money was available, but it is not realistic to expect the entire cost of harbor construction and repair to be borne by outside sources when user fees remain relatively low.
The issue of public harbor rates is not simple. Throughout Alaska, user fees are significantly below the actual costs associated with the harbors. Everyone's problem is compounded by the fact that our harbors need replacing, yet over past decades, replacement reserves were never funded.
The Docks and Harbors Board meets at 7 p.m. on the last Thursday of every month in the Assembly chambers. We welcome public participation. We invite you to attend our meetings, learn more and give us feedback.
Bud Simpson is the chairman of Juneau's Docks and Harbors Board.