Port of Port Angeles sees million-dollar deficit

Published 1:30 am Thursday, July 30, 2026

PORT ANGELES — The Port of Port Angeles ran an operating deficit of about $1.06 million before depreciation in the first half of 2026 — more than $1 million deeper than budgeted.

Commissioners Connie Beauvais and Colleen McAleer on Tuesday pressed staff on what was driving the decline and what was being done to reverse it. Commissioner Kelly Kidwell had an excused absence.

Through June, operating revenue came in about $1.09 million, or 19 percent below budget, while total expenses finished the six months essentially on target and even slightly under budget, according to the financial report presented by Chief Finance and Administrative Officer Jennifer Baker.

McAleer, noted the deficit worked out to roughly $177,000 a month.

“At what point do we take action to eliminate what we can?” she asked.

Chief Executive Officer Paul Jarkiewicz framed the gap as a revenue problem rather than a spending one.

“The shortfall is not caused by additional expenses,” he told the board.

“We are taking steps to address that.”

Staff had intensified business development, pushing every department — not just the commercial and marketing teams — to look for new revenue, he said.

The port was working hard to recruit vessels and cargo to the terminal, pursuing new leases for marine trades space and reviewing vacancies before filling them to hold down costs, he said.

He added that the port was reforecasting the 2026 budget and expected grant reimbursements to bring the year-end bottom line closer to break-even.

Jarkiewicz cautioned against cutting too deeply, pointing to a $43 million capital improvement plan and aging infrastructure that still needed repair. Trimming expenses to offset the revenue gap, he said, “will hurt ourselves in the long run.”

The message from commissioners was, nevertheless, to do better.

Lack of activity at the marine terminal was the biggest contributor to the shortfall. Its operating revenue came in nearly 50 percent below budget for the year. No cargo ships came through in the first four months and the port has not seen a log ship in more than two years, Jarkiewicz said, attributing that to a soft timber market rather than a lack of effort.

No chip barges have come through recently, though Chief Operating Officer Chris Hartman said one was scheduled to arrive July 30. The offshore support vessel Cable Innovator, a regular terminal customer, has been away on a mission and its return is uncertain after repairs, Hartman said.

The Intermodal Handling and Transfer Facility, formerly known as the log yard, is running at about a quarter of last year’s volume.

Marine Trades Manager Marty Marchant said slow transient traffic and high fuel costs had slowed commercial fishing and transient traffic. He also cited closures of Discovery and Dungeness bays and the Strait of Juan de Fuca to shellfish harvesting as having a negative impact.

The port took over operations and fuel sales at the Boat Haven and Boat Yard from PetroCard this month, and Marchant said it was making improvements for tenants, including new ways to pay. Where PetroCard had mailed monthly bills that tenants paid by check, the port’s system lets tenants choose how to pay — with automatic monthly charges to a debit card, credit card or bank account — or keep receiving an invoice and paying by check, as before. The change comes at no cost to tenants, he said.

Leasing has helped sustain revenue. The port’s properties — including space at William R. Fairchild International Airport and office, storage and warehouse buildings — are nearly fully leased, at an overall occupancy of 99.97 percent, Director of Economic Development Caleb McMahon reported.

In her quarterly update to the board, Grants and Government Affairs Manager Katharine Frazier reported the port was managing about $54.7 million in grant-funded projects, with the local match at 12.5 percent — well under the 20 percent many federal programs require.

She said the port recently landed an unexpected $1.2 million from the state Department of Ecology for a stormwater project at the Intermodal Handling and Transfer Facility, and that two new tier-four log stackers were due to arrive in November and December — earlier than anticipated.

________

Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladaillynews.com