Fewer boats came through Kodiak's city shipyard this year, and its operator lost money

Fewer boats came into Kodiak's city-owned shipyard this year, and the company that runs it lost money.

Highmark Marine Fabrication serviced 40 vessels in the year that ended Sept. 1, down from 54 the year before, and lost $29,264 operating the yard, according to its annual report to the city.

The company attributes the drop to the fishing economy. Its main customers, the local commercial fishing fleet, face "acute global market volatilities and price pressures despite a recovery in harvest volumes," the company wrote, and "vessel maintenance continues to be deferred as a cost."

The boats that did come out of the water stayed longer, an average of 39 days, up from 22. Revenue from days boats spent on land rose 41%, to about $221,000, while hauling, blocking and launching revenue slipped 3%, to about $381,000.

Highmark reported $755,140 in gross income from the yard. Against that, it paid the city $241,308, a $232,908 annual payment plus $8,400 in sales tax, and spent $543,096 on operating costs.

The 40 vessels matched the yard's count from two years earlier. It serviced 54 in the year in between.

Highmark said it has offered seasonal discounts to ease costs for local boat owners. It said it is "hopeful" traffic will pick back up as markets settle and fish prices improve.

The company said it doubled the number of towing vessels it serviced. Working with the city, it added five shore power hookups and two water spigots, and it added 250 feet of spill response boom.

Highmark has run the yard since 2020. In June, the city approved the first rate increase the company has requested since then, raising lift equipment fees by about 10% as of July 1. Interim City Manager Tim Putney wrote in his approval letter that the shipyard was adjusting its fees "to counteract substantially rising labor, parts, and material costs."

In June, the city and Highmark also agreed to renew the contract for another year, through Aug. 31, 2027. Two more one-year renewals are possible, which would carry the agreement through August 2029. Each depends on the city finding, after an annual review, that Highmark's performance is acceptable and the terms remain in the public interest.

At the City Council's Oct. 20 work session, Josie Bahnke of the city manager's office said, "Highmark's performance during this last year continues to be highly acceptable, and the terms of the agreement remain in the public interest."