MAINTENANCE COSTS OUTPACE REVENUES

...Turnagain has given both a low-level and high-level maintenance estimate. Since the low-level estimate didn't include epoxy recoating, which is an extremely important measure to combat corrosion, we're just focusing on the high-level estimate. Though there are discrepancies between maintenance cost estimates, they all outpace anticipated revenues over time.

The Borough has not identified any new customers and therefore has not established that the additional maintenance costs of an expensive new dock would be offset by user fees. The Borough says it has the ability to raise user fees to offset costs, but user fees for consumer goods are ultimately paid by consumers through higher prices. In this way, the burden of maintenance costs for the expensive new, large-scale dock would fall on residents of the small Haines Borough tax base.

On a straightline basis, Turnagain Marine projects maintenance costs of $212,000 a year. However, those costs are not evently spread out. For example, Turnagain estimates $3 million would need to be spent on maintenance during years 16 through 20.

Turnagain's high level maintenance estimate

From 2012-2022, the Lutak Dock made a total of $1.5 million — an average of $125,000 per year from user fees (after the deduction of operating expenses, including depreciation).