PORT TOWNSEND — Port of Port Townsend commissioners approved a combined operating and capital budget for 2020 with an eye toward gradually building net revenues to tackle a long list of projects in the coming years.
The three commissioners unanimously passed the budget Wednesday with nearly $6.4 million in operating revenues, a 3 percent increase over 2019, and $5.1 million in operating expenses, a 1.4 percent bump from last year.
The port’s net operating income of about $1.3 million is an increase of 11 percent over 2019.
“Going through this was pretty amazing,” Commissioner Pete Hanke said.
“I remember we were just commenting up here about budgets of the past, and we went through a phase where we didn’t even get a physical budget.
“That was very disturbing and frustrating.”
All three commissioners praised port staff for projecting a five-year capital needs assessment, both identifying estimated costs and potential funding sources.
The 33-page document includes a breakdown of each of the port’s facilities, from the Boat Haven moorage and yard operations, plus the managed properties, to the Point Hudson Marina and RV park, Quilcene’s Herb Beck Marina, Jefferson County International Airport and various boat ramp use.
Commissioner Steve Tucker, whose second four-year term will end Dec. 31, said this was the best-prepared budget of all eight he’s seen.
“Our operations are looking a lot better than they have in a long time,” he said. “To me, it’s showing that we’re on the right track and should give the general populace the confidence that, yeah, we can trust these guys with our tax money.”
Commission Chair Bill Putney talked about the progress the agency has made in regard to public transparency, an effort to compile a capital projects list that totals $14.6 million and to identify that the port’s revenues aren’t sufficient to fund those infrastructure needs.
“We’ve really made some progress, I think, of being open and available, not just by public records requests but proactively,” discussing the port’s operations, Putney said.
Commissioners held an open hearing on the budget following previous public workshops during which they went through the process line by line.
No public comment was offered Wednesday. About a dozen people attended.
Finance Director Abigail Berg said a 3 percent increase based on Consumer Price Index (CPI).was instituted across the board.
An additional $5,500 adjustment will be needed in union employees’ health insurance benefits, Berg said.
Interim Executive Director Jim Pivarnik told commissioners some additional changes they might make to rates or fees in the coming weeks will be small.
“It’s not going to affect the budget in any substantial way,” he said.
“We tried to be as fair as possible across the board.”
Hanke said his only area of concern is a five-month process next year when Pivarnik and a new executive director will be on board at the same time. Pivarnik’s contract runs through June 2020.
“That’s probably our biggest outlier, our biggest unknown,” Hanke said.
Pivarnik said the budget accounts for the overlap.
Among some of the expenses were cost-of-living adjustments, including health care and pension contributions, plus a new leasing and contracts administrator position. A director of operations and business development position was eliminated.
The port expects about $807,000 in net operating revenue from Boat Haven moorage operations and $139,000 in net operating revenue from the work and shipyard.
Point Hudson, including the RV park, is expected to bring about $440,000 in net revenue.
Those areas are expected to make up for net losses in Quilcene Marina and RV operations, boat ramp operations and the airport.
The airport runway reconstruction project highlights the capital budget, with more than $2.9 million in construction and $340,000 in construction administration costs.
The port has a grant from the Federal Aviation Administration to cover almost $3.3 million for the runway project, plus $7,800 from the state Department of Transportation for a taxiway connector.
Smaller capital projects estimated in 2020 include the Boat Haven breakwater repair for $300,000, and $250,000 for the Point Hudson jetty repair.
The total estimated capital project expenditures are $4.25 million for 2020.
The port’s cash flow projection lists numbers for the next five years, including a reserve fund at 25 percent of annual operating expenses — estimated to be $1.5 million — that should be fully funded by 2024.
Jefferson County Managing Editor Brian McLean can be reached at 360-385-2335, ext. 6, or at [email protected].