By Rolfe Boone, October 23, 2013, The Olympian
The Port of Olympia dove into its finances for a proposed fuel dock at Swantown Marina, explaining the cost and estimated fuel sales to about 100 people at a second community gathering Monday night.
Once again, the port faced a range of questions about the proposal and heard from supporters who say a fuel dock is needed.
It also introduced a new element to the proposal Monday night: The dock will serve commercial boats as well as recreational boats and pump both gasoline and diesel.
Finance director Jeff Smith said commercial sales are expected to be more stable, representing 260,000 gallons of the projected first-year sales of 390,000 gallons. Smith added that recreational fuel sales alone would still pay for the dock.
The fuel dock, which is proposed for Swantown Marina near the recreational boat launch, is expected to cost $1.9 million and initially require $30,000 in annual maintenance costs, Smith said.
The port does not expect to issue debt to pay for the dock, but would tap reserves from the port’s general fund.
Revenue figures were not discussed, but Smith said the dock would pay for itself, generating an internal rate of return of 4.7 percent based on annual sales of 390,000 gallons. If the dock sells a smaller amount, say 360,000 gallons, the port still expects a positive rate of return of 2.3 percent.
Olympia resident Bob Jacobs said the port’s estimated rate of return equates to a thin margin. Why not put it up for bid to a private fuel dock operator and avoid the potential for losses? Jacobs asked.
Port Executive Director Ed Galligan said the port had issued requests for proposals for a builder or builder/operator of the fuel dock and no one responded.
Galligan added later that he is “not closed to the idea.”
Another person asked whether the port would unfairly compete with other marinas. Galligan said they plan to examine what other fuel docks are charging and not “unfairly undercharge.”
Thurston County at one time was home to four fuel docks. Now there are two: Boston Harbor and Zittel’s Marina at Johnson Point.
The Port of Olympia commission could decide whether to move forward with fuel dock design plans as early as Nov. 12.