City Manager proposes

rate cut for harbor moorage

Mike Tozzo

April 20 , 2006.

Petersburg fisherman could be getting their wish as the $415,251 in the Harbor Trust could be utilized to bring down the current harbor rates. City Manager, Bruce Jones, said in his report that utilizing the Harbor Trust money along with the $122,550 from excess raw fish tax would bring the debt owed by the harbor down to $62,199.

“The remaining debt can be eliminated by excess fish tax received late this fall and the result is that the rate for harbor moorage could be reduced to $32 per foot for two years,” said Jones. If the rates were set at $32 per foot, two years from now the rates would have to be looked at again and a decision made on whether to raise the rates or use some of the excess raw fish tax for operations and maintenance.

“It does make sense to tackle the debt and move forward,” said Bill Tremblay, Council member. One thing Tremblay did caution people about is that excess raw fish tax doesn’t necessarily mean a reduction in rates in the future. “A reduction in rates shouldn’t be a top priority until we get a significant enterprise fund built up again.”

The Harbor Advisory Board does have a goal of where they would like to be in five years. “Utilizing this $415,000 will help them get to where they want to be,” said Dan Hickman, Council member. Mayor Smith did say that he is still pushing for getting some of the fuel tax. “Since the state doesn’t own the harbors any more, what do they need it for?,” said Smith. “They should let the communities tax the five cents for the harbors.”

Dewey Duvall, Council member, said he is in favor of using the money to get rid of the debt. “If it leaves the harbor with only $62,000 we should be able to get rid of that debt completely and get it out of the way,” said Duvall.

“I am opposed to using the Harbor Trust Fund for that purpose,” said Paul Anderson, Council member. What Anderson brought up is that the council has already passed the resolution for the payback of the debt at $75,000 a year for ten years. “I don’t think this is the proper way to go about it unless there is some sort of stipulation or change in the ordinance to pay back that Harbor Trust Fund,” said Anderson.

Anderson said keeping the rates low is fine but wants to know where the payback on the $415,000 is? Jones responded, once the debt is paid then excess funds will go into the harbor to build the trust back up. “Some of the raw fish tax should go back to the harbor but I want to make sure that this trust fund gets paid back because in five or six years we’re going to be ready to do the North Harbor and we’re going to have to utilize that money.”

“We can’t forget that we have close to $2.5 million building interest to go towards replacing the North Harbor,” said Jones. Council member Dennis Lewis, who was appointed just before the third reading of the ordinance to raise the harbor rates, said that just after the rate increase passed he asked for all of the raw fish tax to go to the harbors.

In the last three months Lewis said that the city has gotten a reduction in the rates, got a majority of the indebtedness paid off and also got money from raw fish tax for the harbor. “I think we’ve accomplished something as a mayor and a council and with the rate reduction, that’s one more step in our favor,” said Lewis. “So I am in favor of what’s transpired up to date.”

Councilor Ed Sarff mentioned discussing this idea at the finance meeting last Tuesday and says that it seems to be a solution. “The only thing I am concerned about is that this is crisis management here and I think we have to make sure next year we have that additional amount instead of having something large come up and we don’t have the money.”

In his report, Jones said that success of any rate change would depend on the staff of the Harbor and the oversight of the Harbor Advisory Board. “I have sent my calculations to the Harbor Advisory Board for their review and it is hoped that they will meet and make a recommendation to the Finance Committee in time for an Ordinance revising the Harbor Rates to be on the agenda May 1.