After a robust spring and summer at the Port, staff is currently working on the 2015 budget. By law, we must approve and file the budget by the end of November. To that end, we will be presenting the draft to the Commissioners this month for comment and prioritization.
As a fee-based government, our biggest issue looking at the coming year is finding a balance between maximizing revenue while maintaining our competitive position. This summer, we conducted a review of every other Port and boatyard in the region, and confirmed that virtually all of our fees are either significantly below market, or some of the lowest in the region. While that helps us to be competitive in terms of bringing work to the many businesses in the Port, we are also faced with a significant backlog of maintenance projects and the increasing cost of maintaining our compliance with State ecology standards. So while we don’t want to dramatically raise rates, we do have to look at how meet the growing revenue needs of the Port.
The Commissioners take the lead here in determining our priorities for the coming year, so as always, I encourage you to engage with your Commissioners to give them your opinion about how we move forward,
When I compare where we are this year to last year, by most measures it appears we are in a better place. The overall macroeconomic picture is better, with both marine trades and tourism doing well. In talking with many of the businesses around the Port, I get the strong sense that folks are feeling positive about the future. That’s a good place to be.
Probably the biggest concern we have in the coming year (and beyond) is how we deal with environmental costs. Washington has lost nearly half of its boatyards in the past few years due to the cost of meeting Department of Ecology stormwater standards. We are currently in the State’s highest level of response (Level 3) for mitigating zinc and copper levels, and the costs to mitigate these are significant. The Port’s operating permit is contingent on us solving these issues – we can’t ignore it and hope the problem goes away. I applaud all of the Port businesses who are working with us to meet these standards. You’ll be hearing much more from us moving foward about environmental compliance.
From a project perspective, in addition to installing stormwater mitigation, we are also breaking ground on the new AWOS weather system at the Jefferson County International Airport – which is mostly funded (95%) by the FAA and the State. Additionally, we are applying for grants to help fund the expansion of the boat ramp facilities at Boat Haven. This is a project that many of you want to see completed, and we are committed to doing whatever we can to ensure that this vital piece of infrastructure meets your needs.
The following comments are offered at the request of Larry Crockett for comments on his “October 2014 Note from the Director” which was just published on the Port web page.
Having read the October 2014 Note from the Director, I agree with him that it is a delicate balance between keeping the yard rates low enough to stimulate work and meeting the expense of the ongoing Stormwater compliance project. That project will probably be half a million dollar or more in the coming year. Those funds will surely have to come from increased yard rates and the general fund.
Mr. Crockett is correct that our yard rates are lowest in the region. Not so with moorage! The marina survey done earlier this year clearly showed that Port Townsend moorage rates are significantly higher than either Clallam’s Port of Port Angeles or the Kitsap county marinas. When moorage rates in each county are compared to the corresponding mean family incomes, we are the highest ratio in the entire Western Washington
The report should not have omitted a discussion of the urgent need to replace the failing Port Hudson jetty. This project and the Stormwater compliance have been prioritized by the Port’s administrative consultant, Eric Toews, as the two most important pressing problems. A collapse of the jetty in a storm would close Point Hudson. Initial estimates for replacement of the jetty are at a minimum 4 to 5 million dollars. While grants are being applied for and a bond will need to be secured, the out of pocket development cost and permitting alone in the next year or two could be hundreds of thousand dollars. Making provisions for paying for this must be kept front and center in this and any budget process for the foreseeable future.
I agree with Mr. Crockett that the ramp expansion is a noble project that will improve community access but Mr. Toews has given it the lowest priority rating. In addition the cost estimates are incomplete and even with the grant that will be awarded, completion of the project could be far more costly. Given the 40 % cost overrun of the administration building last year, there needs to be a serious correction in the Port’s management style before embarking on any new projects.
No mention in this report is made of how to pay for this project. Diverting fund from the Boat Haven reserve funds where repair of the New day docks and CD docks have been prioritized is unacceptable.
Finally the director discusses increasing rates for it’s patrons, but there is no discussion of cutting costs. The administration costs continue to seriously rise and there is no restraint on hiring consultants and outside contractors. The Commissioners should strive to reduce administration costs dollar for dollar with every rise in Port fees.
The Commissioner’s have a daunting task to balance the mission statement of maintaining infrastructure, stimulating jobs and providing community access with the need for financial solvency.
This can only be accomplished with careful business plans and the will to meticulously review the Port’s accounting data.