Review finds about 1 in 4 tested Kodiak moorage charges didn't match published rates

Consultants reviewing City of Kodiak harbor billing found that about one in four moorage charges tested in fiscal 2025 and 2026 did not match the published rate and the vessel's signed agreement. Harbormaster Monte Anderson is scheduled to present the findings to the Port and Harbors Advisory Board on Tuesday.

The errors went both ways. Boat owners were billed about $46,700 too much in fiscal 2025 and $47,600 too much in fiscal 2026. The city billed about $55,800 and $84,200 too little, according to the Harbor Billing Review Council Summary. The figures are rounded, exclude sales tax and cover only lines that could be matched to signed agreements.

The city's fiscal 2025 audit found errors in 5 of 40 harbor billing transactions tested. Kodiak's corrective action plan tied the errors to a 2024 switch to a new billing system and to staff turnover. In April, the Kodiak City Council authorized up to $60,000 for TA Accounting and Consulting Inc. and Lounev Advisory Services LLC to reconcile billing since July 1, 2024, according to the April 23 council minutes.

The consultants flagged 502 billing lines in fiscal 2025, or 27% of those they could test, and 483 in fiscal 2026, or 26%. Thousands of lines went untested because agreements had not been scanned or lines lacked details, and the review said similar errors should be expected among them.

Most flagged lines involved a billed vessel length that differed from the signed agreement: about half in fiscal 2025 and 86% in fiscal 2026. The rest traced to rate selection, rate tables and how billing periods were calculated. Because overcharges and undercharges occurred in similar numbers and the error rate held steady, the consultants wrote, the cause lies in how billing is processed rather than with any individual.

"So going forward, we need to come up with a very good method at which we know what the length of a vessel is," Councilmember Nick Mangini said at the council's Oct. 20 work session.

Harbor management chose to focus older corrections on customers owed a credit rather than recover under-billed amounts, saying collection would likely prove difficult. Since October, staff have run each statement batch through a new verification tool, which typically flags 60 to 70 of roughly 700 to 800 monthly statements. Not every flag leads to a correction.

The report also notes a tax inconsistency. The city taxes moorage as a service at 7%, capped at $210 per transaction, while the mooring agreement calls the charge a lease and the payment rent, which reads more like a rental of real property, capped at $52.50. The review asks the city attorney to confirm which applies.