The Haines Borough is considering exponential rate increases for using Lutak Dock, under a proposed ordinance set for a second public hearing Tuesday.

“These rates, in general, haven’t been changed in many years,” said borough manager Mark Earnest. “They’ve just been low, and they’ve been low for a long time.”

The Haines Borough Assembly on Feb. 22 advanced the ordinance to a second public hearing. There was no discussion of the ordinance at that meeting, which lasted more than three hours and drew an overflow crowd to comment on helicopter skiing.

A draft of the ordinance shows that the dockage rate would be a flat fee of $2.50 per foot per 24-hour period, with a minimum charge of $80. Currently, the borough has a sliding scale, from 80 cents per foot for vessels 149 feet or fewer to $2.40 per foot for those 700 feet and above.

“It effectively would double the dockage revenue, because most of the barges that use that facility are in the 300-399 (foot) category,” Earnest said. The existing rate for that size vessel is $1.20 per foot.

Don Reid, vice president of operations for Alaska Marine Lines, said AML uses a 360-foot barge, and a flat rate per foot would be unusual.

“That’s not what’s normal in the industry, from my experience,” Reid said.

Wharfage would increase to $7.50 per ton for general cargo, up from $2. The rate for explosives and other hazardous cargo would rise from $8 to $20.

“It’s a balancing act,” Earnest said. “Again, what we can do is make up for any shortfall in our rates with additional freight … If you were the only port that people could use, you could set your rates at any level you want, and you could get there. What our approach is, is to find that rate that we think is fair, that won’t jeopardize our future commerce.”

Reid of AML said $7.50 per ton for general cargo is “pretty high,” and $2 to $2.50 is common. Reid said he had last discussed proposed changes with Earnest a few weeks ago and was unsure of the ordinance’s progress, but “we’ll certainly give our input on it.”

“When I talked to the city manager, it didn’t sound like they were moving very fast on it,” Reid said.

Jila Stuart, borough chief fiscal officer, said AML paid about $60,000 in dockage and wharfage fees in fiscal year 2010.

“I had looked to see how much revenue we had from Alaska Marine Lines in total, and it would just include dockage and wharfage,” Stuart said. “Wharfage is by far the larger part of that.”

A Northern Economics study dated Feb. 11 suggested rates of $15.81 per ton for general cargo and $63.23 per ton for hazardous or explosive cargo to help cover operations and maintenance at Lutak Dock starting in fiscal year 2012.

The study noted, “These rate recommendations exceed the rates seen in other ports in the region. This report presents the results without any adjustment for market or political factors, though we acknowledge the final rates set by ordinance will likely be lower than the model recommends.”

“The (Northern Economics) recommendation for cargo is substantially higher than what we’re proposing, because we have to balance the economic analysis with the market,” Earnest said. “It wouldn’t do any good to set the rate so high that we would lose potential customers.”

The study stated general cargo and hazardous cargo rates had not changed since 1994. In 2009, the dock handled 11,240 tons of general cargo and 2,214 tons of hazardous cargo.

Rates for processed or unprocessed fish or fish products would remain at $6 per ton, and gravel would stay at 20 cents per ton. The ordinance includes 3 percent annual rate increases, effective Jan. 1 of each year.

Demurrage, the charge assessed against cargo which remains on port property after the expiration of the free time allowed, would increase from 15 cents to 85 cents per square foot per month for general cargo, according to the proposal.