Ketchikan Gateway Borough Mayor Rodney Dial told a Greater Ketchikan Chamber of Commerce lunch crowd on Wednesday that the borough would fully fund the School District “to the maximum amount allowed by law” again this year, as it has in years prior, during his annual State of the Borough address.
He said that he does not speak for the Assembly, but that the borough will fund the School District “to the cap” through cash appropriations or by writing off more of the district’s health care debt. Among other topics, Dial also spoke about major borough transportation and recreation projects and answered audience questions during his address at the luncheon.
PILT and Secure Rural Schools
The Secure Rural Schools and Community Self-Determination Act and its many reauthorizations have provided federal funds to previously timber-dependent communities in an attempt to help pay for local roads and schools since 2000 following the decline of timber industry. The borough has received federal money, sometimes totaling around $1 million, from SRS to help fund the School District.
Congress failed to reauthorize SRS last year and it has not been included in recent budgetary legislation so the borough is uncertain whether it will receive SRS funds in this and future fiscal years. If SRS is not reauthorized, the Assembly will have the final say in how dollars are reallocated to cover the decreased revenue.
During his address, Dial said that for the past two years the borough has been advocating through the National Association of Counties to increase federal “Payments in Lieu of Taxes.”
According to the federal Department of the Interior’s website, PILT payments are meant to “help local governments offset losses in property taxes due to the existence of nontaxable federal lands within their boundaries.”
PILT payments are calculated based on population, among other things, which Dial said can put boroughs like Ketchikan Gateway at a disadvantage because it has “large federal land holdings,” but “a small population.”
“So what we've been arguing is that we want a per-acre minimum because we still have to provide the same level of services in those areas regardless of the population level,” Dial said.
He also said that population calculations should count tourists, especially with Shelter Cove Road set to open to the public, because it could increase area visitors and further strain the North Tongass Volunteer Fire Department and Ketchikan Volunteer Rescue Squad when accidents and emergencies occur.
“So what we're really doing is we're advocating to be treated fairly and to get a fair share of PILT funds for that land that we have to provide services for, but we can't tax,” Dial said.
Dial told those in attendance that the borough is “pushing” an increase in PILT funding as an alternative to SRS as he has “never seen” the Alaska delegation “more pessimistic” about reauthorizing SRS funding.
Airport and rec center expansion
Dial said that in 2025 the Ketchikan International Airport expansion is set to begin, “entirely without local tax monies.”
He said that the expansion will include relocating and expanding security, ticketing and baggage screening stations, adding a waiting room and air taxi hold-room and second boarding bridge in an attempt to “improve passenger capacity, access, comfort and safety.”
“Now to pay for this project, the state will contribute nearly $27 million, airport reserves will pay for $5.5 million, a passenger-charge reimbursed bond will provide funding for $5.2 million, and various grants will provide nearly $5 million more.”
Dial also said that the Gateway Recreation Center had about 35,000 more visits in 2024 than in 2023 and that the borough is looking to expand the facility.
“I'm confident that we'll find a way to accomplish this goal in the coming years without a tax increase, just like we did with the ballfields,” Dial said.
In a phone call with the Daily News Thursday morning, Dial said that the Rec Center expansion could most likely end up being funded like the airport expansion – with multiple funding sources.
“And one suggestion was, we do have some money in the Housing Fund – it was money that we put into that fund during COVID,” Dial said. “We actually didn’t spend all of our COVID funds, and so we put some of that money into a savings for other purposes. And it was to support housing, but we’ve really not used any of that money over the years.”
Dial said that another idea, discussed at the last Borough Assembly meeting, was to reallocate funds that are no longer being spent on the canceled skate park roof project due to engineering difficulties associated with the foundation that increased the price too much, to the Rec Center expansion.
He also said there is capacity to bond part of the project.
According to a slide presented by Dial during his talk, which can be found on the borough website at www.kgbak.us/173/Mayor-and-Assembly, the Rec Center expansion is estimated to cost about $9.4 million and add almost 13,000 square feet.
The Borough Assembly has the ultimate say in how the expansion project gets funded but, according to the slide show from Dial’s State of the Borough address, the Assembly directed staff to not raise taxes to fund the expansion.
The most recent directive came from the annual Policy Session this year to move forward with the final design portion of the project.
Transportation
Most of the questions fielded from constituents in attendance were about transportation – specifically getting to and from the airport and an Alaska Marine Highway System stop in Hyder or Prince Rupert.
One constituent wanted to know whether there would be two ferries running between Gravina and Revillagigedo and whether there could be a bus that goes across on the ferry.
Dial said that under the original access expansion plan, there was supposed to be “a little trolley running back and forth” that would “load up people's luggage” and allow people with disabilities to cross back and forth. He said that because of “value engineering,” a method of assessment that seeks to provide a function at the lowest possible price point, the borough “had to reduce some of those ideas” and use the paratransit system, now operated by the borough, to provide that service.
Borough Manager Ruben Duran joined Dial at the podium and said the nonprofit that was running the paratransit operation “was struggling” and that the borough absorbed the function as a result but is struggling to find drivers.
“The first thing we did was we took the vehicles, we got back, they were our vehicles, and started making that available so we can handle individuals who need to get across that cannot make those ramps,” Duran said.
He also explained that the state Department of Transportation project originally included funding to run three vehicles between Revilla and Gravina but the cost of reassessing and rebuilding the new ramps after they had damaged a City of Ketchikan Fire Department ambulance and Federal Aviation Administration work truck hindered further development.
Duran said that paratransit operates a back-and-forth route and that the borough intends to eventually make it a regularly scheduled route.
During his address, Dial also said that in 2024 the borough “implemented advanced paratransit software to improve efficiency.”
Dial said another hurdle the borough needs to overcome is the cost associated with the per-passenger ferry fee.
“I do remember in the past when this issue came before the Assembly, and this is before transit really started restructuring itself, we (the borough) were paying about $100 a ride over there,” Dial said. “It was really expensive.”
Dial also said that Rep. Nick Begich “has been in some conversations” with Elon Musk’s Boring Company, which according to its website, “creates safe, fast-to-dig, and low-cost transportation, utility and freight tunnels.”
He said that Begich “was interested in exploring a route to the airport again.”
“And we said, ‘Well, go for it, let us know, we’ll make the decision once you figure out all the specifics,’” Dial said. “But, I mean, we’re told by contractors on this island it costs $2 million a mile just to build a road to borough standards, so if you can build a tunnel for $10 million a mile, that's pretty good. We won't need a mile.”
Another constituent asked whether any additional parking would become available at the airport on Gravina.
Dial said “there’s no current plans for expansion of parking” but that “the Assembly has considered this.”
“We have actually had those discussions on do we move rental car parking over to the land side to free up more parking, especially for people with disabilities, that need to be able to park over there,” Dial said. “Another option that we talked about is there's a concern that we may have some people that just use it as long-term storage for vehicles, because our airport parking rates are so low compared to everywhere else in the country. I mean, you go to some places in the country, you're paying $30 a night to park a car, and you're paying $4 at the (Ketchikan) airport. So, that's another thing that we might look into is having some trigger that would kick in if a vehicle stayed, let's say, more than two weeks or a month, parking rates could double, triple. I mean, something like that.”
A luncheon guest asked about getting an Alaska Marine Highway System ferry to Prince Rupert, and Dial said that that was a “big issue” discussed when the borough went to lobby in Washington, D.C., this winter.
“The alternative is Hyder, right, that always comes up,” Dial said. “But we hear there's a lot of negatives to Hyder. No border protection in Hyder, you know, it's farther away, so you'd have to basically have two crews on a ship, versus maybe one if you're going to Prince Rupert. So, there's a number of issues. We can tell you that, what everybody was telling us, is that Prince Rupert would probably be the first choice to try to make that work. The Canadians seemed supportive of that when we talked to Canada. We see it as something that benefits both countries. So all I can say is that we push the issue really hard, and we even addressed it with our state representatives when we were all in Juneau.”
In an afternoon phone call with the Daily News, AMHS Public Information Officer Sam Dapcevich said that a trip to Hyder might not require a full two crews and that the domestic port would allow AMHS to avoid acquiring a more expensive “Safety of Life at Sea” (SOLAS) compliant vessel.
Future projects
This year, Dial said that work will begin on many large projects in addition to airport expansion.
He said that Dudley Drency Field improvements will continue with lower field demolition, site grading, new dugouts, concrete work and fencing and other improvements.
“Another project will be the South Tongass water main replacement that will involve construction of a 100,000-gallon steel water tank and pump station to support growth in the service area,” Dial said. “This project is currently dependent upon state or federal grant funding. And as previously mentioned, we will continue in 2025 with updating the comprehensive plan that will guide decision making on topics such as land use, economic development, transportation, community facilities, housing and more.”
He also said the borough will continue rebuilding the South Tongass Volunteer Fire Department station, most of which is expected to be covered by insurance following last year’s fire that destroyed the station, vehicles and equipment.