Daily Sitka Sentinel

Sitka Voters to Decide on Haulout Funding?

By SHANNON HAUGLAND

Sentinel Staff Writer

As city officials await word on their latest appeal for federal assistance to build a boat haulout, two Assembly members plan to propose a ballot proposition to raise funds for the project.

Assembly member Thor Christianson brought up the idea Monday at the Gary Paxton Industrial Park Board meeting, reporting that he and Kevin Mosher are working on an ordinance placing a question on the Oct. 4 municipal election ballot seeking voter approval on using up to $8.2 million from the sale of the old Sitka Community Hospital for construction of a haulout at the industrial park.

Christianson is the Assembly liaison to the GPIP board, and spoke under the Reports section of the meeting agenda.

The $8.25 million paid by SEARHC for the city’s old hospital facilities has been placed in the city’s permanent fund. (The amount transferred was closer to $8.2 million because of the administrative costs of the sale that were reimbursed to the general fund, city staff said.)

“I think it has a good chance of passing,” Christianson said of his proposal to put the funding question to the voters.

Christianson brought up his and Mosher’s proposal again at Tuesday’s Assembly meeting. He said the plan is to have an ordinance ready for introduction at the July 12 Assembly meeting. The ordinance would have to be approved on second reading at a later meeting in order for the haulout funding proposition to appear on the Oct. 4 ballot.

Sitka has been without a haulout and boatyard – critical infrastructure for a small boat fishing community – since the privately owned Halibut Point Marine haulout was closed earlier this year as the property was developed as a cruise ship terminal. The city was given more than two years’ notice of the planned closure, and the haulout was kept open longer than planned when the 2020 cruise season and over half of the 2021 season were canceled.

The GPIP board has been front and center in the effort to replace the Halibut Point facility, and it has been the city’s priority for legislative funding for the past several years.

The city has issued three requests for proposals for private sector development without success. The latest was in 2021, when terms were approved by the Assembly and the industrial park board for a lease to the Sitka Community Boatyard LLC, but the lease was never executed. SCB was created by a local group with the express purpose of building a haulout and boatyard.

After SCB withdrew its proposal, the project was discussed at the Assembly table, where two members volunteered to work on a city-funded option.

Christianson told the GPIP board Monday that the city expects to hear on its third federal grant application in August. Park Director Garry White said the city also is waiting to hear from the Denali Commission on a grant application for $870,000 to fund engineering, planning and an environmental assessment.

The city charter requires proceeds from sales of city property to go into the Sitka Permanent Fund. The charter says the purpose of the fund is to provide an “ever-increasing income stream” to reduce the tax burden on citizens. Removal of funds from the principal requires approval of the voters in an election.

White said he doesn’t have current estimates on the cost of a haulout, but said $8.2 million should cover the basic needs: a DEC approved washdown pad and treatment facility, a 150-ton travelift and the shoreside construction needed for its operation. But he added he’s not confident about the estimate since it is based on a 2014 study, plus inflation.

“It should be enough to pay for equipment, and based on the numbers I’ve been tracking over time, we should be able to get boats out of the water,” White told the board.

There is general agreement that Sitka needs a haulout, but the question has been how to pay for it. White said it is needed as an economic driver for other industry in Sitka.

“We’ve tried for decades to find outside money and private money to do this,” he said Tuesday. “If the city really wants this infrastructure we have to lead the way on the development.”

Mosher said earlier Tuesday that since he and Christianson volunteered to work on the issue, they considered several options, and agreed the best path forward was a ballot question.

“Since I’ve been on the Assembly we’ve been trying to get a haulout,” Mosher said. “We’ve tried RFPs for a private partnership, we’ve tried grant applications – this has taken a lot of time and effort and monetary resources. ... We’ve already spent money on this. We’ve finally come to the conclusion, if we’re going to build this we’re going to have to pay for it.”

The two Assembly members said they didn’t know if the $8.2 million would be enough for the total cost, but Mosher said it “would be a huge start.”

“Marine industries and fishing are a huge part of our community, we have to support that,” Mosher said. “They are an integral of our economy: what happens to them happens to all of us.”

Christianson added today, “It’s enough money to get boats out of the water. We’ve been dealing with this since we took the park. This has the best chance of actually working.”

He said the sale of the hospital has provided a good opportunity to get the project done.

“We have an unusual situation where we had this sale that gives us the money to build it, but we haven’t budgeted in the difference (in earnings) to the permanent fund yet so we won’t have to cut anything from the general fund – we’re just not getting it.”

Christianson said the increase in sales tax receipts for the new services at the haulout should “go a long ways toward – if not exceeding - the loss from the interest on the permanent fund.”

He said the RAISE grant, if the city is successful, could offset a “significant portion” of the costs.