PORT ANGELES — Port officials have reduced a projected deficit in a preliminary budget that remains in the red because of a $1 million dredging project at the Port Angeles cargo terminal.
Port of Port Angeles commissioners reviewed Tuesday a second draft of the 2020 budget that shows $9.4 million in operating expenses and $8.8 million in operating revenue for a projected deficit of $545,899.
“Right now, after we deduct the $1 million dredging, we’re at a net operating surplus of about $450,000,” port Director of Finance and Administration Melinda Smithson told the three commissioners Tuesday.
An initial draft of the preliminary budget that commissioners reviewed Oct. 8 showed a $773,951 operating deficit.
“The second draft of the 2020 operating budget includes an increase in the operating surplus of $228,052, with the operating surplus ending at (minus) $545,899,” Smithson said in a Tuesday memo.
“After deducting the $1 million in dredging costs, the operating surplus before depreciation is $454,101. Although the dredging costs are not capital, the funds to pay for the cost will be taken from capital reserves.”
The preliminary draft budget is available on the Port of Port Angeles website, www.portofpa.com.
Click on “Agendas” and download the Oct. 15 port commission meeting packet.
Port commissioners will receive a proposed budget on Tuesday and conduct a public hearing on the 2020 spending plan Nov. 5.
A final budget will be adopted Nov. 13.
The $1 million dredging project will deepen the berth at Terminal 3, where cargo vessels are loaded to transport logs overseas, to 45 feet below sea level.
The area was last dredged in 1976.
Sediment has slowly built up in recent decades, causing concern for some large vessel captains, port officials said.
Port Director of Engineering Chris Hartman said the $1 million estimate is a solid number.
“It’s a pretty straightforward project,” Hartman told port commissioners Tuesday.
“The design is there. Permitting is there. So there’s not a lot of unknowns with the project.”
In a later interview, Hartman said the dredging would allow cargo ships to use terminal for the next 30 to 40 years.
“There’s a really slow sedimentation rate within the harbor, which is very fortunate for us,” Hartman said.
Port officials project to end this year with a $379,845 operating surplus, according to a budget spreadsheet.
“In other words, we’re within a hundred grand from year to year by taking the dredging out,” port Commissioner Steve Burke said.
The proposed budget provides a 2.5 percent Consumer Price Index wage increase for port employees.
Commissioners Connie Beauvais, Colleen McAleer and Burke reached a consensus Tuesday on the $86,500 expenditure for the raises.
Burke and McAleer directed staff to include in the proposed budget the 1 percent property tax levy increase as allowed by state law.
Beauvais said she favored raising the levy to an amount equal to the cost of new construction rather than taking the full 1 percent.
“I’m still ‘yes’ on new construction and ‘no’ on 1 percent,” Beauvais said.
Burke said the port had done its best to reduce costs and was “still at a negative.”
“I think from a financial prudence standpoint, I don’t see how you not take 1 percent when you’re running at a deficit,” Burke said.
Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected] dailynews.com.