By Chris Schelb
September 21, 2005
Build the dock, use public funds via a bond. Same old plan and it is weak. The problems with this method of finance are that even though tourists are supposed to pay off the $70 Mil. debt, it still ties the city to a bond that prevents other large projects from taking place. Bonds are like credit, once you have maxed it out, you do not get anymore until you pay down the debt or pay a higher rate of interest to borrow.
Another weakness is that if the tour boat operators should decide to cut back on the flow of passengers, then there would be less revenue to pay down the bond debt. That puts the city in an unfair bargaining position with the tour boat operators because Ketchikan would not have "the power of the purse."
ALTERATIVE OPTION: Let the tour boat operators finance their own dock. Lease the waterfront to them for the dock. Collect a payment for the land use, which would go into trust. Agree that at the end of the lease, the dock reverts to the city. The trust money can be used to either refurbish the dock or tear it out depending on future needs.
This method makes the tour boat operators stake holders in the project. Under method one, the tour ships could pull up anchor and never come back. That would leave the city with an unpaid bill for for dock and no method to satisfy the bond requirements. With the second method, capitalism works. It is the tour boat operator's dock. If they want to leave, so be it, but when they go they also take the debt obligation with them.
By using the second method it takes away the "bully factor." There would be no need for the tour operators to try and make demands under threats of pulling out of business in Ketchikan. This option would also force the tour operators to do what is best for the city as as opposed to the current model which is slowly strangling itself because of the encouragement of gem dealers and the lack of the "real Alaska" experience.
Face it, if the tour operators
do not have the faith to put their own money into this market,
why should Ketchikan? If the tour folks want a dock, they should
build it themselves. Payments for the dock would come from the
same place, the tourists, regardless of which party builds the
structure. With the second method, the obilgator would be the
user instead of the resident homeowner. Who has more to lose?
Remember, the tour boats have the ocean and can relocate anywhere.
A city is stuck geographically where it is located. Do not
get stuck with a dock that you cannot pay for or use.
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