Highmark reports $29,000 loss running Kodiak shipyard as vessel count falls

Highmark Marine Fabrication lost $29,264 operating the City of Kodiak Shipyard in the year ending Sept. 1, as vessels serviced fell to 40 from 54, according to the company's annual update included in the packet for the Port and Harbors Advisory Board's Tuesday meeting.

Highmark has run the city-owned yard under a public-private partnership since Sept. 1, 2020. It reported paying the city $241,308, a $232,908 annual payment plus $8,400 in sales tax. That sum and $543,096 in operating expenses exceeded its $755,140 gross income.

Boats stayed longer. Lay days, the days boats spent hauled out, rose 49 percent, to 1,592, and the average stay climbed to 39 days from 22. Lay-day revenue rose 41 percent, to about $221,000, while revenue from hauling, blocking and launching boats slipped 3 percent, to about $381,000. Average revenue per vessel rose 10 percent, to $18,418.05 from $16,690.23, even as new vessels fell to seven from eight. The 40-vessel total matches the count from two years earlier.

Highmark attributes the decline to the fishing economy. The local commercial fleet, its primary customer base, faces "acute global market volatilities and price pressures despite a recovery in harvest volumes," the company's report said, so "vessel maintenance continues to be deferred as a cost." The company said it has offered seasonal discounts to ease costs for local users and expects yard traffic to recover as markets stabilize and fish prices improve.

Highmark said it doubled the towing vessels serviced and reported 50 full-time employees, 85 percent of them year-round residents. Completed upgrades include five electrical hookups for boats, two water spigots and 250 feet of spill response boom. Work continues on modernizing overhead lighting, resurfacing the Travelift pier and compacting new vessel laydown areas.

The city approved Highmark's first rate increase since its 2020 agreement took effect, raising lift equipment fees by about 10 percent as of July 1, according to the packet for the Kodiak City Council's Oct. 20 work session.

At that work session, Acting City Manager Josie Bahnke said "Highmark's performance during this last year continues to be highly acceptable, and the terms of the agreement remain in the public interest." She pointed to a June 12 city letter setting four one-year renewal terms running from Sept. 1, 2025, through Aug. 31, 2029. Under the agreement, each renewal depends on the city making that finding after an annual review.