KUCB KIAL Unalaska Community Broadcasting

Council OKs Bond Sale To Fund Expensive City Dock Renovation

Feb 16, 2017

Credit Annie Ropeik

After nearly 10 years, Unalaska has taken one of the final steps in making the Unalaska Marine Center a reality -- finding financing for the $44 million dock renovation.

Mayor Frank Kelty pushed the project forward at Tuesday's City Council meeting, after councilors split over whether to partner with the Alaska Bond Bank Authority.

Kelty broke the tie and voted to authorize the sale of city bonds worth $35 million, which will be shopped to investors for startup cash.

That money will help replace two aging docks and resurface the entire dock face. The goal is to create more flat, usable space for handling cargo safely.

Kelty says the city needs it urgently.

“I look at dock positions three and four and the situation with the wooden T-dock, and I’m not going say it’ll fall in tomorrow. But if one major ship slams into it, we could have a major failure,” said Kelty.

The renovation should take two years, but Unalaska will be paying back investors for 25 years. City officials said they expect to make annual payments of 2.3 million, assuming an interest rate around four percent.

During public comments, Gene Makarin of American President Lines (APL) expressed concern about the project.

Makarin said new docks will encourage the city to compete against private shipping companies like APL and Matson, which could hurt the island’s overall economy. He’s also worried port revenue isn’t high enough for Unalaska to break even after construction.

“What I would like you to do -- as council members responsible for making sure we’re not creating a project that’ll bury the city -- is look at the financials,” Makarin told the council Tuesday.

Former mayor Shirley Marquardt said the cost makes her "toes curl," but she believes upgrades are necessary if Dutch Harbor wants to remain a linchpin port for locals and global trade.

“The public dock is the bread and butter of a community that exists on maritime trade and seafood, and we’ve turned people away so many times in the past," said Marquardt. "We’ll have a barge doing donuts for two or three days, just waiting to get to the dock so we can get export cargo off.”

The City Council will have one more chance to back out of the project, which opens for bids soon. The bond sale is scheduled for April, giving councilors an opportunity to step back if they’re not happy with contractors’ offers.

Meanwhile, councilors upheld the mayor’s veto in a dispute over city staffing needs.

Kelty overrode the council last month when they voted to prioritize adding staff at the Department of Public Safety over hiring a full-time building inspector. The mayor said the island needs an inspector to enforce city ordinances.

“We’re a growing community, and I think we need to have this person online," said Kelty. "I’ve asked the city manager about the nuisance issues we have in this community, and he doesn’t have the manpower to address them.”

In a surprising reversal, the majority of councilors agreed to consider adding the position, even if the city can’t afford to hire anyone for a year or two. The council unanimously voted against an inspector last month, but supported the option Tuesday in a 4-2 vote.

The City Council will continue working on budget priorities at its next session Feb. 28.