Memorandum 16-084 New Moorage Rate Structure

Memorandum ID: 
16-084
Memorandum Status: 
Backup

Details

Memorandum 16-084

TO:                       MAYOR BETH WYTHE & HOMER CITY COUNCIL

FROM:                  PORT & HARBOR ADVISORY COMMISSION

THROUGH:         BRYAN HAWKINS, PORT DIRECTOR/HARBORMASTER

DATE:                   MAY 13, 2016

SUBJECT:           NEW MOORAGE RATE STRUCTURE

 

Background

As you know, the Port and Harbor Advisory Commission and Port and Harbor staff has been hard at work since 2011 on the subject of harbor moorage rate increases and fee structure changes with the goal of making Homer Harbor’s moorage rates sustainable and equitable.  The commission’s first goal of rate increases and sustainability was completed by amending the Terminal Tariff with Resolution 14-115, annually increasing moorage rates to be consistent with the Consumer Price Index, and Resolution 15-072, have moorage fees increased 3.2% per year for ten consecutive years, both taking effect January 1, 2016.

 

The secondary goal regarding equitability and the application of the fee structure to harbor users was first studied in 2014 and a square foot model was discussed, but after much input from large vessel owners that a square foot model was unfair, they ultimately decided against it.  The commission then began looking into a graduated liner method for applying the rates to harbor users.  Resolution 15-073 was adopted by City Council on August 15, 2015, allowing the Port and Harbor to contact with Northern Economics to assist the Port and Harbor Commission and staff in developing a graduated moorage rate structure, accompanied by a linear method version for comparison.

 

Northern Economics prepared a final study on January 12, 2016 and presented their findings to staff and the commission at their regular meeting on January 27, 2016.  They recommended two rate structures and different approaches to applying each option.  The first recommended alternative, Alternative A, was a progressive graduated rate structure with tiers set at a constant interval of 5 feet and a rate increase between tiers starting at 1.0 percent and decreasing to 0.1 percent with larger vessel sizes. The second recommended alterative, Alternative B, was a progressive continuous rate structure in which the annual moorage rate is calculated using the following equation:

Permanent Moorage Rate

(

$

)

$43.49 + ($0.05 x foot) x vessel length per foot

foot

foot

 

Two more discussions and public hearings were held on this topic and the commission came to a final consensus at their March 23, 2016 meeting and voted a unanimous yes to the following motion:

STOCKBURGER/DONICH MOVED TO ADOPT ALTERNATIVE B AT FIVE CENTS PER FOOT INCREASE AND CAP THE VESSEL SIZE AT 86 FEET.

 

As stated previously, the current Marina billing software cannot support a different billing method.  This software is out of date and falling further and further behind in supplying our needs; Harbor Staff has been working on finding a replacement software program, so far realizing that there is not a program currently on the market that fits our needs and we will have to have a custom program made.  Staff is still hoping to resolve this issue before the end of the year so a new rate structure can be implemented by January 1, 2017.

 

Recommendation

Approve Resolution 16-054 amending the City of Homer Fee Schedule and Resolution 16-055 amending the Port of Homer Terminal Tariff No. 600 to change from the standard per linear foot moorage rate structure to a graduated rate structure of $0.05 increase per linear foot, based on the given equation, and cap the increases at the 86 foot vessel size.  This new rate structure shall take effect January 1, 2017.  An extension will be requested by Port and Harbor staff if there is a delay in implementing the new Marina billing software.

 

 

Attached:  Resolution 14-115 Amending Terminal Tariff to Include Annual CPI Moorage Rate Increases

                                        Resolution 15-072 Amending Terminal Tariff to Include 3.2% Moorage Rate Increases for 10    Years

                                                       Resolution 15-073 Approving the 3.2% Moorage Rate Increase & to Contract with Northern

                                                          Economics for a Harbor Rate Structure Study

                       Northern Economics Moorage Rate Structure Study dated January 12, 2016

                         Port & Harbor Advisory Commission Meeting Minutes dated March 23, 2016 Re: Pending Business –  

                            Harbor Rates