Daily Sitka Sentinel

Prop. 2 Puts Haulout Funding in Voters' Hands

By SHANNON HAUGLAND

Sentinel Staff Writer

Proposition 2 on the Oct. 4 city election ballot asks whether Sitkans approve designating the proceeds from the hospital property sale - up to $8.18 million – toward construction of a boatyard and haulout at the industrial park.

Polls will be open 7 a.m. to 8 p.m. Tuesday at Harrigan Centennial Hall, where voters from both of Sitka’s election precincts cast ballots.

On the ballot are candidates for mayor, Assembly and School Board, and two ballot questions. Ballot Proposition 1 is  a special sales tax on marijuana sales to fund student activities and related travel. (Story in Monday’s Sentinel). A sample ballot is on Page 2 of today’s Sentinel.

In-person absentee voting is open until 4:30 p.m. today, and will continue 8:30 a.m. to 4:30 p.m. Monday. Other absentee options are voting by mail, fax and personal representative.

As of Wednesday night, 447 ballots had been cast by in-person absentee voters at Centennial Hall, and 72 faxed and mail-in ballots had been received at city hall, the city clerk’s office said.

Ballot Proposition 2

Ballot Proposition 2 proposes dedicating the money the city received from sale of the city hospital property to construction of community haulout and boatyard.

The question reads: 

“Shall the City and Borough of Sitka appropriate and distribute from the Sitka Permanent Fund an amount not to exceed $8,181,040.28, which is the net proceeds received by the municipality from the sale of municipal real property known as the Sitka Community Hospital Site, for the sole purpose of constructing a marine vessel haulout and shipyard at the Gary Paxton Industrial Park? Yes or No.

The Sitka Home Rule Charter says proceeds from any municipal real property sale are deposited in the city Permanent Fund, and can only be withdrawn by a vote of the people in a special or general election.

The ordinance to put the question on the ballot was co-sponsored by Thor Christianson and Kevin Mosher, and was passed on a 6-0 vote.

The idea of funding the boat maintenance facility with the hospital sale proceeds followed the failure of other attempts to fund the project.

Assembly members in general have agreed that Sitka needs a haulout to replace the privately owned facility that has closed, but requests for private funding and government grants were not successful. The owners of Halibut Point Marine closed their haulout earlier this year to pursue tourism projects.

Garry White, director of the Gary Paxton Industrial Park, said the $8.18 million should be enough to purchase haulout equipment, a washdown pad and wastewater treatment. White noted that the item has been a legislative priority since 2002.

He estimated the total project cost may be $10 million to $12 million, including upland utilities.

If the proposition passes, White sees the first logical step as hiring a project manager, and holding public meetings to make sure the right infrastructure is developed to meet the needs of Sitka’s fleet of commercial and recreational boats.

For and Against

Kevin Mosher and Thor Christianson were cosponsors of the proposition now on the ballot.

“The biggest reason is it’s to support the maritime industry in Sitka,” Mosher said. “I believe that industry is crucial to Sitka’s economy and affects all of us. Although historically haulouts in and of themselves have not been huge moneymakers, I believe by keeping the revenue in town from the work being done on the boats should offset that.”

Mosher said he is also responding to comments from the community about the need for a diverse economy, instead of just relying on tourism and health care sector.

“This is a perfect way to do that,” he said.

Mosher and Christianson volunteered at an Assembly meeting to explore haulout funding. Among the options considered included a sales tax and raising harbor fees, both of which they rejected.

“They wouldn’t have passed, first of all,” Christianson said. “Second, they would’ve put more burdens on the average Sitkan.” The harbor fee idea would have put pressure on people to leave the harbors, he added.

Also considered was reinstating the property tax on boats, which Mosher and Christianson agreed would not raise enough money and “be problematic to administer.”

“We were trying very hard to avoid tax increases of any kind,” Christianson said.

“By putting our own resources forward we already have multiple granting agencies interested,” Christianson said. That includes Rasmuson Foundation – whose representatives told city officials at a recent visit to Sitka they would be watching the election results – and grants from the federal Build Back Better infrastructure program.

Members of the fishing fleet, and marine service sector, have spoken in favor of the proposition.

“I, like a lot of boat owners, have experienced emergency situations where hauling out was necessary for immediate repairs,” said fisherman Eric Jordan. “A working haulout is essential infrastructure to support our fishing, subsistence, live-aboard, guiding and recreational vessels.”

While most comments have been supportive, others have raised questions about whether spending funds from the city Permanent Fund in this manner would open the door to more spending from the Permanent Fund on other capital projects.

Other questions have been whether the haulout benefits the community as a whole, or one particular sector, and whether there is a good business plan, a concern voiced in a Sentinel Letter to the Editor by a waterfront business owner Thursday.

Proponents cite the detailed advance work that has already been accomplished. (See Letters to the Editor in today’s Sentinel).

If the ballot question passes, the Assembly would be asked to approve an capital appropriation transferring the $8.18 million from the Sitka Permanent Fund into another fund, in order for it to be spent on the haulout, City Finance Director Melissa Haley said.

The Permanent Fund by the end of July had $33.9 million, including the hospital sale proceeds.

The intent of the income stream is to reduce the tax burden on the citizens of Sitka,” says the city charter.