PORT ANGELES — A proposed $8.7 million Port of Port Angeles 2018 operating budget that leans on continued robust logging-related traffic passed a hurdle Monday when port commissioners unanimously approved introducing a 2018 spending resolution for potential passage in two weeks.
Port commissioners took the action at a work session Monday.
They will hold a public hearing on the budget resolutions and a levy resolution that calls for no increase in the 2018 levy before deciding on the two measures at their Nov. 21 meeting.
The port in 2018 is expected to realize a similar overall 17 percent boost over projections in log handling activity that the countywide taxing district saw in 2017, port Executive Director Karen Goschen said in her budget message.
The logs are transported to the port from forests in Canada, California and other areas destined for Port Angeles Hardwood, Interfor US Inc. west of Port Angeles, and are headed for markets in China and Coos Bay, port Finance Director John Nutter said.
Log yard revenues are projected at $2.26 million for 2017 and $2.33 million for 2018, according to the spending plan.
The budget includes a capital projects fund that exceeds the general fund.
But Goschen said the $9.5 million beginning balance for capital projects for 2018 is part of a capital fund that could be depleted by 2020, forcing the port to borrow money to continue an infrastructure improvement program after 2019.
“We may have to issue additional debt to continue with capital projects,” Goschen said at the meeting.
The capital program includes developing the Marine Trades Industrial Park off Marine Drive, a now empty parcel where the KPly mill once churned out plywood.
The port levy rate that is 19 cents per $1,000 of valuation in 2017 should decrease to 18 cents per $1,000 of valuation, according to the levy resolution commissioners also approved.
They said they did not intend to levy the 1 percent that they could impose in 2018, instead agreeing to bank the $63,000 for possible future spending that could be imposed without voter approval.
The levy will raise $1.47 million in 2017 on $7.7 billion of 2016 countywide property valuation and an estimated $1.49 million in 2018 on $8.3 billion in 2017 valuation.
Levy funds are used for the Community Partner Program, property acquisition and capital improvements.
Goschen was unavailable for an interview later Monday but said in a text message that capital improvements might require commissioners to go to voters for a levy increase in the next few years.
“Each year, the commissioners will look at the list of capital projects, our reserves and then discuss whether we need to raise property taxes to accomplish the strategic goals,” Goschen said in a text message.
“It would be difficult to forecast when they might raise property taxes, but it is likely that we will have that need within the next two to five years.”
The port’s five-year strategic plan includes creating 1,250 new jobs and developing the Marine Trades Industrial Park (MTIP) by 2020.
Capital improvements for 2018 are estimated to cost $4.4 million without grant funding and $4.7 million with grant funding, slightly less than the $9.5 million available.
The 26 projects on tap for next year include $1.8 million for solid waste treatment-asphalting improvements, $800,000 for Multi-Tenant Industrial Building improvements, $375,000 for a new hydraulic loader and $250,000 for MTIP site development.
The project is estimated to cost $6.2 million as of 2020.
An initial construction cost estimate provided by Everett-based Reid Middleton for the wash-down facility, the single most expensive element of the MTIP, was $1.8 million but did not include key elements, port Director of Engineering Chris Hartman said.
“A lot of electrical and mechanical work was missing from the estimate,” Hartman told the commissioners.
Cost-saving measures that commissioners discussed for the wash-down facility Monday that totaled $892,235 included shortening the wash-pad from accommodating up to 175-foot vessels to handling up to 93-foot vessels, saving $239,300.
“Doing a smaller wash pad does not prevent us from going after recruiting boat repair businesses,” commission President Colleen McAleer said.
Goschen said there was “zero return” on the capital investment for the wash-down facility but said operating costs could be covered by user fees.
“It allows businesses to expand in the boat repair category,” she said.
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at [email protected].