No one should be surprised that the Port of Olympia’s fuel dock venture lost money during its first year of operation on lower Budd Inlet. It was always expected to need five years, starting in 2023, to break even with operational expenses.
There is surprise, however. Fuel sales fell far short of even conservative estimates and expenses were higher than anticipated in the recently concluded first year.
The upshot is it could take longer than expected for the operation to hit break-even.
But that may be OK — there are side environmental and economic benefits to having the marina sell its own fuel with attendants to do the fueling.
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Seeing a boater balancing on the back of a power boat and pouring fuel into a big outboard motor from a jerry can is not a sight for sore kayakers’ or birdwatchers’ eyes.
For now, we agree partly with Port Commissioner Joe Downing, a strong proponent of the fuel dock — at least to say it’s too early to call the project a failure. But a little fiscal concern is appropriate.
The boating community may need time to discover the convenience of the marina fuel dock and thus to grow the traffic.
At the same time, we can’t help but think that Commissioner EJ Zita, who opposed the project, saw some things very clearly a few years ago.
She asked at a hearing – referring to boaters who were urging approval of the $3 million dock facility – if all would buy all their fuel there.
The answer is obvious. They didn’t.
An Olympian news story by reporter Rolf Boone says sales of gasoline and diesel were barely a third of the 336,000 gallons assumed. A half-percent growth rate was assumed each year, which needs to pick up considerably if the dock is ever to break even.
That is going to require help from the boating community and work by the port to get word out through marinas, boating clubs or associations that share information about ports of call.
Port of Olympia is open for business, and those worried about getting stranded if they come this far south needn’t fret.
Also on the down side, fuel dock expenses hit $101,000 for the first year, versus the $90,000 predicted.
Perhaps an even thinner profit margin on fuel is needed to boost sales.
One potential fuel competitor, Mike Zittel of Zittel’s Marina, says the port assumed too rosy an outlook, but he’s glad the port sells fuel at Swantown Marina.
Zittel rents boats and wants its customers to know they can refuel, if needed, once they get to the capital city harbor.
With any red ink story, there are lessons to heed.
One is that public investment doesn’t recoup the cost overnight. Patience is required. And when finances go in the red, there is always a temptation to shift costs and fudge numbers.
Our port commissioners and staff must resist this urge and keep an absolutely straight accounting of profit and loss.
It’s going to take a longer time to pay off the project financing — over 25 years at a rate of $157,000 a year. Until the fuel dock debt is paid off, that will be a loss made up by taxpayers.
This subsidy should be reported as such on port balance sheets and budgets. The public deserves no less than full disclosure.
EDITOR’S NOTE: Port projections for breaking even on operations costs and financing costs have been updated in this version of the editorial. The port’s original estimate for covering debt service out of operational profits was after 15 years in 2032.