We’re in a bind at the Lutak Dock. Let’s take action now so that we’re never in a bind like this again.
Here’s the story. About 50 years ago, the U.S. Army gave Haines the Lutak Dock. The Army had built the earthen embankment dock in the mid-1950s, to build and supply a military tank farm located near the present-day ferry terminal.
After taking ownership, the City of Haines and Haines Borough collected fees for use of the dock from shippers and fuel companies, but never put money aside to replace the dock or do much maintenance. Today, the borough faces a bill starting at $10 million to rebuild the dock to a condition agreeable to Alaska Marine Lines, the shipping company that delivers most of our goods.
We don’t have the money, so it’s likely that you’ll be paying for a new dock with your property taxes. Where the money will come to maintain or replace the dock you’ll be buying, heaven only knows.
The dock is just one of several pieces of vital infrastructure built by the federal or state governments that the borough now owns. Other pieces include our harbors downtown and at Letnikof, the cruise ship dock, bridges at Excursion Inlet and across Klehini River, and paved and unpaved borough roads.
For roads and harbors, we have a little bit of money for maintenance. We have no money for replacing or making major upgrades to any of our facilities. We have inherited huge liabilities with no plan for how to maintain them.
The borough most recently took ownership of the $8 million Klehini River bridge, a facility the State of Alaska owned and maintained for decades.
At a recent borough assembly committee meeting, I suggested two new ways of raising money to pay for infrastructure – user fees or a municipal gasoline and diesel tax.
These are utterly democratic ways of funding infrastructure – users pay for use.
With a fuel tax, drivers of large vehicles that put the most wear on our roads also would pay proportionately more for local road maintenance than, say, drivers of motorcycles. A fee at Klehini would charge users of the bridge a small amount – an annual, $50 sticker akin to the borough’s boat launch fee might work – for maintaining and replacing the bridge.
Money from these sources would go into special accounts and could be drawn only for maintaining and replacing roads and bridges. Think of them as bank accounts saved for a rainy day, like one you’d start at the birth of a child in anticipation of college tuition.
This is what we did not do at Lutak Dock, and why we’re in a predicament there.
The approach we took at Lutak is the “rich kid strategy.” We assumed that we would get money from our parents – in this case, the State of Alaska, which was rich for about 30 years and regularly threw money at communities for projects like this.
Or we would hit up “Uncle” Ted Stevens, a U.S. senator from Alaska who became powerful enough to get his hand all the way into the nation’s cookie jar.
But Uncle Ted is dead and Alaska can hardly pay its own expenses. In fact, the state has been systematically giving away its roads, bridges and harbors to municipalities in the past 20 years to save its own budget.
Taxes on gasoline and diesel and a user fee at Klehini would cover only a fraction of the maintenance and replacement cost of borough roads and bridges, but it would be a start. Towns looking for outside grants fare much better when they can show some amount of a local match.
The numbers here are daunting, which is what makes them important and also why we need to adopt some kind of funding mechanism soon.
A 10-cent per gallon municipal tax on gasoline and diesel, like one recently adopted by the Municipality of Anchorage, would raise between $100,000 and $150,000, using figures supplied by Delta Western, our fuel distributor.
The borough spends about $500,000 each year maintaining roads, money that comes from local sales taxes, including on groceries. The borough has no funds for repaving or rebuilding roads, which is staggeringly expensive. (Rebuilding Third Avenue the short distance between Old Haines Highway and Main Street cost $4 million.)
Let’s say the Klehini River bridge needs replacing after 50 years and a new one costs $20 million compared to the 2017 purchase price of $8 million. To raise just $10 million or half the cost of a new bridge, the borough would have to raise about $200,000 per year for 50 years.
An annual sticker for using Klehini River bridge wouldn’t raise a smidgen of bridge replacement costs, but it would be a start. It also would represent some kind of acknowledgment that bridges, harbors and roads cost a lot of money and that money does not grow on trees, although it did for a time in Alaska.
We can’t rely on the rich-kid strategy. We’re not rich kids anymore.