A $600,000 loan from the Ketchikan Gateway Borough to OceansAlaska, a shellfish seed producer, narrowly passed its final vote during Monday’s Borough Assembly meeting.
With one Assembly member absent, the vote was tied. Agnes Moran, Bill Rotecki and Todd Phillips voted yes; while Mike Painter, Jim Van Horne and Alan Bailey voted no.
So it was up to Mayor Dave Kiffer to break the tie.
“Mayor votes yes,” he said, quickly rapping his gavel to announce that the motion passed.
It was a sudden end to what had been a very long discussion, starting with public comment. Chuck Slagle told the Assembly that he was excited about the potential for the shellfish industry in Southeast Alaska, but he wants to know what the goals are for OceansAlaska.
Slagle said he doesn’t know whether the business plan is a good idea, but, “I do know it’s a good idea that you decide that the end looks like. What does the community get out of this investment?”
OceansAlaska is a nonprofit shellfish seed producer. It has been struggling financially in recent years, and a few months ago officials admitted that the organization mismanaged a grant from the borough.
OceansAlaska now has a new board, which came up with a new business plan. That plan is based on the borough loan to help OceansAlaska get to the point where it can produce enough geoduck and oyster seed to pay for its operations.
The main argument in favor of the loan is that OceansAlaska supports the emerging shellfish farming industry, which needs seed to continue growing.
Greg Fisk and Tomi Marsh are on the OceansAlaska board, and answered detailed questions about their plans during the public hearing on the loan ordinance. Marsh said the board has done research, and talked to other shellfish seed producers to learn best-practices. But, it’s not a uniform industry.
“Just like opening a restaurant or anything else, everybody has a different way of doing it,” she said. “It seems to be, the most important part is how
much work you put into it. You’ve got to put 100 percent into it.”
During Assembly discussion on the topic, the main concern was whether the borough would get its money back. Some Assembly members referred to previous borough investments that have failed.
“I’m getting gun-shy,” said Assembly Member Jim Van Horne. “Looking over everything in the packet, I can’t support this.”
Alan Bailey, who participated by phone, said he has no confidence that the borough will be paid back, and that the industry hasn’t proven itself.
“One cannot hope their way into success,” he said. “I believe the risk outweighs the rewards, and this proposal requires more discussion.”
Mike Painter said he’s not willing to risk the public’s money on this proposal.
Agnes Moran, also participating by phone, said nothing is guaranteed, but this is a good risk for the borough to take.
“We can fritter away this money on community grants – and there’s a valid need for that, but it doesn’t have the potential to advance our economy the way this does,” she said. “And yeah there’s a risk. But I’m probably the most conservative voter on this entire Assembly and I’m willing to take that risk.”
Bill Rotecki said the loan package has detailed reporting requirements. And Todd Phillips said he came to the meeting split 50-50 on whether he would support the loan, but he finally decided to vote yes on the ordinance.
A separate resolution approving the loan agreement, promissory note and security agreement also passed 3-3 with Mayor Kiffer breaking the tie.
The loan agreement calls for the money to be paid out to OceansAlaska over five years. It will be paid back in monthly installments starting in 2019 and ending in 2034.
Also Monday, the Assembly voted 4-2 in favor of the prioritized list of community funding requests that will be sent to state officials. The list was placed in priority order by a committee of borough, City of Ketchikan and City of Saxman officials. It must be approved by each governing body before it is finalized.
The top item on the list is the Swan Lake expansion project, followed by airport improvements, continued infrastructure work at the shipyard, the Mahoney Lake hydroelectric project, viaduct replacement at Sayles and Gorge streets, the Saxman Harbor construction project, a layup facility at Ward Cove, the Performing Arts Center and funding for new ball fields.