Kodiak asks again for state harbor money from a program that got nothing this year

Kodiak is asking the state for $5 million to help rebuild St. Herman Harbor, where much of the city's commercial fishing fleet ties up. It asked for $5 million last year, too, but the state's budget put nothing into the program it applied to.

On Thursday, the Kodiak City Council is set to vote on a resolution urging the governor and Legislature to fully fund the state's harbor grant program in next year's budget, at about $20.6 million, according to the council agenda. The same evening, the Kodiak Island Borough Assembly will review a nearly identical proposal from the state's harbormasters, one of 27 new resolutions proposed for a vote at the Alaska Municipal League's annual business meeting. The Assembly takes no votes at work sessions, and Borough Mayor Jared Griffin casts the borough's votes at the league meeting Dec. 11 in Anchorage.

The state built St. Herman Harbor in 1982 and handed it to the city in 1999. Most of its floats are past their useful life, according to an Oct. 1 city report. A 2022 inspection found half the docks twisting and three chained together to keep them from coming apart. Twelve slips are out of service, more than 100 boats are on the waitlist, and the city's analysis assumes the harbor would have to close around 2036 without reinvestment.

Kodiak isn't alone. The state built most of Alaska's public boat harbors in the 1960s and 1970s, then over nearly 30 years transferred most of them to local governments, many near the end of their service lives, the harbormasters' resolution says. In 2006, lawmakers created the Municipal Harbor Facility Grant Program to help. The state pays up to half the construction cost, and the community covers the rest, plus all design and permitting.

The Legislature decides each year how much to put in. The harbormasters say the program has been fully funded only twice in 17 years. This year's state budget included nothing for it, according to the state transportation department, so none of the six projects the department scored last year got money, including Kodiak's. Harbors that answered a league survey reported at least $500 million in needed repairs and replacements at former state-owned harbors.

For next year's budget, eight projects in seven communities, from Haines to Unalaska, are in line. Kodiak's ranks fourth, behind projects in Haines, Wrangell and Unalaska that together would take $13 million. Under the department's rules, money goes down the list in order, so the program would need about $18 million to reach Kodiak.

The money would go to a $33 million phase of the rebuild that would replace floats holding about 55% of the harbor's slips. Last month the federal government awarded about $26 million for that work. "Now we need the State of Alaska to join us as a partner," Mayor Terry Haines said in a city news release after the award.

Replacing the whole harbor is estimated at about $100 million. The city's Oct. 1 report estimates it will be about $45 million short without the state grant and $35 million to $40 million short with it.

Interim City Manager Tim Putney wrote to the council that the program's money has come either in the governor's budget proposal, released in December, or from legislators during the session. "We'll have to wait and see how FY28 funding is handled with the transition to our new Governor," he wrote, adding that Kodiak's project would benefit on timing if it made the governor's budget.

The harbormasters are also asking the league to support raising the most a project can get to $7.5 million, from the $5 million a year per community set when the program began. They say $5 million in 2006 had the buying power of about $7.5 million in 2023, and that construction and shipping costs in remote Alaska have risen faster than inflation since the pandemic.

One resolution in the packet asks Alaska's congressional delegation to help restore federal money for yearly channel dredging in Dillingham, Homer, Ninilchik and Nome, which this year's federal budget request left out. Another would put the league behind changing federal law so communities that host Coast Guard installations, such as Kodiak, can compete for a Defense Department program that helps pay for roads, utilities, schools and other infrastructure outside military bases. Coast Guard installations generally don't qualify now.

The packet also includes a league board resolution on the Alaska LNG project. It supports "continued progress toward an economically viable" project but asks the state and developers to protect local taxing power, set aside money for community impacts before construction and largely settle local tax and impact agreements before, or at the same time as, the final decision to invest in each phase. The governor and lawmakers considered several tax plans this year, and none became law. The main bill, HB 381, stalled on a 19-19 House vote in July. In April, the league urged state senators to let local governments negotiate their own tax deals with the project's developer.