Borough seeks solutions for port deficit

PALMER — With Port MacKenzie continuing to operate in the red, the Mat-Su Borough is looking at ways to pay down the debt the port has incurred.

“Our ongoing costs so far, until we get the rail complete, are exceeding our revenues that are earned,” said Borough Manager John Moosey.

That has been the case every year for the past decade, with the exception of 2009, when the port generated more revenue than expenses.

Recently, though, the Government Accounting Standards Board has changed its rules on operations like that.

“They’re looking at how local governments present their financials to be what they consider more accurate and more open to the public,” Moosey said. “They are recommending that we now pay for the port services out of our general fund, or we make a contribution from our general fund, which we are probably going to do to cover the ongoing costs.”

Moosey said that the port has racked up close to $8 million in debt because it operates at a deficit. Paying that off all at once would be equivalent to raising property taxes by 1 mill, so instead the borough is going to pay it off in installments.

For this budget cycle, Moosey said, he thinks that the cost out of the general fund to pay for the port will be something like $700,000. In a budget year in which the borough is looking at less help from the state, a budget that’s either flat or shrinking, is significant.

What also would have been significant — an attempt by the state Legislature to claw back grant money the borough received, but hadn’t spent yet. At a borough budget meeting last week, Assemblyman Steve Colligan asked borough port director Marc Van Dongen about one of those claw-backs — $900,000 left in a project to pave the last bit of the port access

road.

Van Dongen said that $500,000 of that was destined to be paired with $1.5 million of state money to finish up that paving.

The borough needs another $283,000 of it to pay for mitigation the U.S. Army Corps of Engineers has ordered it to do before it can get any more permits to do work on the port.

The other attempt at a claw-back was on a project to upgrade Machen

Road.

“It’s really a frontage road for Parks Highway. It’s a new road trying to relieve traffic on Parks Highway, and it was really designed to be done in conjunction with the upgrade of Parks Highway,” Moosey said.

He said the borough had also been delayed in its attempts to scoop up right-of-way on which to build the road.

“Right of way is very difficult for us to obtain,” he said.

But, as of Monday, Moosey said it looked like the Legislature had changed its mind.

“Right now, it doesn’t look like it’s happening,” Moosey said. “I’m not moving forward until I get a confirmation. But on both of those issues it doesn’t look like they’re clawing back anything.”

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.