November 22, 2012 | Vol. 39, No. 47

City and Harbor Board find way to fund North Harbor

The Petersburg City Council and Petersburg Harbor Advisory Board held a joint work session Monday afternoon in order to decide the method for funding the $2 million shortfall for the North Harbor Project and they came to a decision.

Resolution 2029 states that it is necessary for the City Council to approve a revision to the budget for expenditures unanticipated when the budget was approved.

The Harbor Fund is in need of additional funding to complete the City’s North Harbor Replacement Project and to dispose of the North Harbor dredge spoils.

Since a substantial portion of the project expenses are the electrical and lighting systems in the amount of $1.26 million, 14 percent of the estimated project cost, will be taken from the Electric Fund.

The $1.26 million will come from the electric fund along with $600,000 from the harbor fund by way of the raw fish tax that the harbor will receive this year and another $200,000 from the property development fund that will give the harbor the needed funds with which to finish the project.

With these additional funds the harbor will be forced to increase rates in order to fulfill previous obligations and try to build a reserve to maintain itself for the future.

The projected rate increase will not affect owners of smaller vessels, but will directly affect moorage rates for larger boats.

For vessels 18 to 32 foot the rate will be $34 per lineal foot, which is a decrease from $34.08, that it was before. Vessels that measure 40 and 42 feet will cost owners $38 per lineal foot which is an 11.5 percent increase in rates. The 48 to 50 foot vessels will be moored at a rate of $44 per lineal foot which is a 29.1 percent increase and any vessel 60 foot and over, the rates will be $50 per lineal foot at a 46.8 percent increase.

“We are currently operating about $90,000 in arrears,” Petersburg Harbormaster Glorianne Wollen said. “The bulk of that is because we have about $120,000 in payment to a project we did about six years ago.”

This payment doesn’t end until 2021 and according to Wollen the harbor has been robbing its savings in order to pay this loan and they have depleted the savings in order to pay for the north harbor project.

“This is only a start,” Wollen said. “We will probably be back again next year to increase rates again so we can begin building a reserve for future projects.”

There were some in opposition to using the electrical funds for the harbor project without a method of repayment.

“It was agreed that power and light would increase the electrical rates to the harbor in order to cover a payback period,” Harbor Advisory Board Chair Mike Bangs said. “The $1.26 million that we are talking about is the estimate of the electrical work that is going to be done on the North Harbor.”

The Power and Light enterprise fund had a reserve set aside for the specific purpose to moving operations to Scow Bay.

“The decision to move the operation center for Power and Light out to Scow Bay has been put on hold indefinitely,” Petersburg City Manager Steve Giesbrecht said. “Mainly because this is the money that has been stockpiled for that event.”

Giesbrecht also explained that the rate study for Power and Light has not been completed yet.

“Potentially, we can take $1.26 million from the Power and Light reserve fund, put it into the north harbor, raise the harbor rates and finish the study and realize we have put the fund in a bad position,” Giesbrecht said. “We unfortunately don’t have the time to wait for the study. We need to get this north harbor rolling. It is a risk, but it’s an acceptable risk.”

This money has to be in place in order for the project to go out to bid in January.

“The harbor will be torn apart and dredged starting in August 2013,” Wollen said. “The bid will be awarded in February in order for the finger floats to be ordered and built so they can go in after the dredging.”

Resolution 2029 was approved by a unanimous vote of the council Monday evening during the Petersburg City Council’s regular meeting.

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