PORT TOWNSEND — Port Townsend’s 2018 financial projections are strong, buoyed by new construction, property valuations and an increase in sales tax revenues, said Finance Director Nora Mitchell.
Mitchell told Port Townsend City Council members Monday the city’s property values are at an all-time high, with $1.6 billion in assessed value.
“Our general fund revenues are strong, and will exceed the adopted revenues, with approximately $9.1 million compared with the adopted revenues of $8.6 million,” Mitchell reported.
“One of the major increases in the revenue section is retail sales tax. We expected to have $2.3 million, but we believe it will come in closer to $2.5 million. The next two months will be important for us to understand if we will hit that number or perhaps exceed it.”
Mitchell said increased construction numbers have helped and more sales tax related to construction is expected for the next couple months.
“We made some changes to the tax and license structure, the combination we hoped would be revenue neutral. It looks like it will be slightly higher than planned. We think that is because of construction. And, increased retail sales tax also drives up the B&O taxes as people report their gross sales to us.”
For the 2019 budget, Mitchell reported that the general fund is projected to hit $9.2 million, part of which is an increase related to property taxes and new construction values.
The other areas related to retail sales are forecasted to have a 3 percent increase.
The utility tax is based on what Mitchell says are what utility revenues are expected to be, the largest being water and sewer.
“Those are calculated on rate increases adopted that will go into effect in 2019. We adopted the additional 2 percent that was to sunset after this year, but will continue on for an additional five years.”
City Manager David Timmons said that retail sales tax is really tied to the heavy purchase items.
“It isn’t necessarily tied to retail sales related to the tourist trade,” he said. “That is an awful lot of money that has to be generated through retail sales.
“The heavy lifting is being done by the new construction, like the school and new homes. If you purchase a major appliance from a central warehouse and its delivered to the city, it’s tax credited to the city.”
Timmons said the city is considering a new revenue source from a car license tab fee of $20.
“It would generate $160,000. There’s also another option for a voted fee at higher rate or a voted sales tax add on. The revenue will be earmarked for non-motorized improvements for bike and pedestrian access. That would create a funding source for our street projects list.”
He said that next year, the city will begin looking at developing new projects, such as one involving the sewer system in 2020.
“We are are also pursing a TIB (Transportation Improvement Board) grant for bicycles and pedestrians, and a Safe Routes for Schools project on Discovery Road,” he said.
Timmons also anticipates some major infrastructure projects to being next year.
“State projects at Fort Worden include a lot of utility infrastructure work that is currently being designed and a pier replacement that is a multi-year project. The PDA is also working on Maker’s Square. We’re also looking at projects that relate to reinvestment at port facilities including Boat Haven and Point Hudson. ”
He also reported an uptick in commercial private activity for buildings downtown and on Upper Sims Way which he expects will continue into next year.
“When things begin to slow down, that will reflect on the sales tax,” Timmons said. “We need to be careful not to ride that bubble into permanency.”
Jefferson County Editor/Reporter Jeannie McMacken can be reached at 360-385-2335 or at [email protected]