Port of Olympia projects $10.7 million in revenue for 2016

The Port of Olympia commission has approved the port’s budget for 2016, projecting $10.7 million in revenue next year. That is slightly higher than this year, but is still down from rosier times in 2014.

In 2014, the port generated $13.1 million in revenue — $7.4 million from the marine terminal. For 2016, marine terminal revenue is forecast at $4.3 million.

The reason for the drop in revenue is because of a continuation of factors that the port experienced this year: falling oil prices slowed the need for fracking sand imports, while a stronger U.S. dollar cut into log exports.

This year, there has been a call for diversifying cargoes at the port, and it so far has resulted in a shipment of 1,400 dairy cows to Vietnam.

A closer look at the budget for next year shows that after expenses, plus depreciation — a noncash charge that accounts for the falling value of port assets over time — the port has an operating deficit of $2.6 million. That compares with an operating deficit of about $444,000 in 2014.

But the port can show net income of about $483,000 for next year because of the $5.1 million in property taxes and $541,000 in grant funds it receives.

Resident Bob Jacobs of Olympia took aim at the budget during the Port’s Nov. 23 meeting, criticizing the lack of effort to reduce the port’s property tax levy and that the levy is used to subsidize port operations. He believes the marine terminal will never make money.

“It’s time to let it go and find better uses for the public land,” Jacobs told the commission.

But Commissioner Michelle Morris took issue with Jacob’s use of “subsidize,” saying that property taxes are used to pay down bonds and for environmental cleanup, but are not used to fund port operations.

The port levies a property tax countywide. For next year, the property tax levy rate will fall to about 18 cents per $1,000 of assessed value from about 19 cents this year. The rate is falling because of an overall increase in the assessed value of county property.

Using the example of a $216,000 single-family residence, a homeowner will pay about $39 to the port next year, Finance Director Jeff Smith said.

In addition to the property tax levy, the port will take the value of new construction to raise roughly $5.1 million. The port did not raise property taxes by 1 percent — the state allows increases of up to 1 percent annually without a vote of the people — but instead banked that increase for future use.

Key projects for the port next year include the redevelopment of its Tumwater Town Center site and redirecting a city of Olympia stormwater outfall.

This story was originally published November 24, 2015 at 12:57 AM with the headline "Port of Olympia projects $10.7 million in revenue for 2016."