Unalaska, AK – The Port of Dutch Harbor is facing revenue shortfalls that could negatively impact the overall city budget. The city's port is loosing a significant amount of business to competing communities, like King Cove and Kodiak, and to the new DH Ports dock here in Unalaska.

"The port has lost a substantial amount of its market share to other competing facilities in the community. And we don't expect that to come back," said Northern Economics president Pat Burden who recently completed a study on the future of the ports for the city. "So it will be a difficult situation for the port enterprise fund to break even."

Burden said that in addition to competition from other ports and docks, the city's facilities are suffering because of fewer boats in the local fisheries and until that changes, the port will continue to lose money. That means less money going into the general fund for other city facilities and programs, like the PCR.

Burden said building the new Carl E. Moses boat harbor on Little South America should bring in some revenue and get boats to stay in Unalaska.

"When we did these studies previously we went around and talked to boat owners - What are the things you really want most in a boat harbor to stay in Dutch Harbor?' It was, We want shore power, we want a slip, and we want location.' They don't want to be way out at the end of the spit. You can't walk there. It takes a cab ride and if you have to get parts and stuff, you're going back and forth all the time."

The new boat harbor will provide all of those things and create premium dock and moorage space that the city can charge more for. It will also make more room for different businesses and facilities to move into the area. The city will profit from those taxes and the increases in property value.

Burden also suggested that the city create a special tax district that would raise property taxes in certain areas, like on the waterfront, and feed the money back into the ports enterprise fund. All of these changes will need to accompany an increase in tariffs to keep the port facilities afloat. It's up to the city council to determine how much, but Northern Economics recommends an annual increase of 4.8 percent.

Though the port is losing money and business to the DH Ports dock, Burden said that the competition is not necessarily a bad thing.

"Their investment will also be a taxable piece of property, a taxable investment. And so the property tax base in the community will increase and the potential property taxes off of that facility will go into the general fund."

The city council heard a special presentation from Burden last week and will decide how to proceed at future meetings.