Revenue expected to climb at Port as officials plan small hike in taxes

Import of ceramic proppants, export of logs bring about a ship a week to call at Olympia

rboone@theolympian.comNovember 19, 2013 

Under a steady drizzle Monday afternoon at the Port of Olympia, loading operations for the log ship Aster K, a Weyerhaeuser vessel, are carried out before its scheduled departure Friday to Hiro, Japan. Log imports are part of what’s driving increased revenue at the port.

STEVE BLOOM/STAFF PHOTOGRAPHER

The Port of Olympia expects to generate $13.7 million in revenue in 2014, a figure pushed higher by the steady to improving number of exports and imports at the marine terminal.

The marine terminal is expected to account for more than $8 million of next year’s total revenue, largely because of the growing business of importing ceramic proppants and the export of raw logs.

Ceramic proppants, viewed as controversial by some, are a sand-like material used in the oil and gas extraction process known as hydraulic fracturing, or fracking.

The port is working with a ceramic proppant company named Rainbow Ceramics, but also is hearing from other similar companies that have expressed interest in working with the port, finance director Jeff Smith said.

Another marine terminal tenant, Pacific Lumber and Shipping, also expects to ship more logs next year to China, while Weyerhaeuser, the port’s largest marine terminal tenant, expects its exports to Japan to remain steady, Smith said.

“Break-bulk cargoes are driving the change in revenue,” he said.

Ship traffic at the port has risen sharply the past few years, from a few ships a year to almost one per week, he said. The port is expecting 42 ship visits in 2013, a 50 percent increase over 2012, according to port data.

The port also expects to hit an important milestone this year and next year, showing operating income for the first time in a dozen years — even after including depreciation, Smith said.

The port anticipates operating income of $190,000 in 2013, largely because of a $3 million settlement the port struck with International Paper — half of which it will share with the state Department of Ecology — and $163,000 in operating income in 2014.

However, because of significant environmental expenses of $1.24 million next year, the port expects to show a deficit before its property tax levy is included.

For next year, the port is proposing to increase the amount it collects from property taxes by 1 percent from this year, plus the value of new construction. If approved by the commission, the port will collect $4.95 million in taxes next year, up from $4.84 million this year.

The property tax levy, if approved, would be about 19 cents per $1,000 of assessed valuation, or just less than $40 a year for a homeowner whose home is valued at about $203,000. The median price of a home in Thurston County in October was $203,495, Northwest Multiple Listing Service data show.

Bob Jacobs of Olympia, who attended a public hearing on the port budget, said Monday that he is unhappy with the port’s plan to raise taxes, particularly after the port has shown some improvement in its financial operations.

“Why hasn’t that tax gone down?” he said.

He also said Monday that he is urging the commission to establish an objective citizens budget committee — one not just staffed with fans of the port — to evaluate revenues and expenses.

The port expects to spend $17.6 million next year as part of its capital spending plan, with about half of it going toward the marine terminal — including $5 million for a new mobile crane to replace one of the two existing cranes.

The port is expected to adopt its budget Nov. 25.

Rolf Boone: 360-754-5403 rboone@theolympian.com

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