Port of Port Angeles Projects 46% Revenue Increase from Log Exports in 2014

By Paul Gottlieb, November 13, 2013, Peninsula Daily News

The Port of Port Angeles’ log yard is going gangbusters, with exports to China and South Korea expected to continue into 2014.

The port’s preliminary 2014 spending plan projects a 46 percent increase in log yard revenue compared with 2013.

The logs are grown on privately owned growing grounds.

The trend is consistent with across-the-board projected increases in revenue for the junior taxing district.

The plan foresees the busy Marine Drive log yard generating $1.8 million at its location west of the port’s Boat Haven.

That compares with $1.1 million projected for 2013 and $987,000 realized in 2012.

“It’s a significant increase over what we expect to end up with this year,” port interim Executive Director Ken O’Hollaren told Commissioners John Calhoun and Paul McHugh at the board’s regular meeting Tuesday. Commissioner Jim Hallett was on vacation.

O’Hollaren expanded on that theme in an interview Wednesday.

“We’ve had a strong export market, and it is expected to continue into next year,” he said.

Exports are largely to China, with some to South Korea, said Karen Gochen, port director of finance.

O’Hollaren said log yard activity also is expected to increase after Ketchikan, Alaska-based Alcan Forest Products LP, which is leasing about a half-acre from the port at the log yard, places a debarker there for logs that will be handled by port employees for export.

“We are looking to grow the business of log handling on the North Olympic Peninsula, and this really helps to solidify their presence in Port Angeles with the debarker in our yard,” O’Hollaren said.

Logs are offloaded at Terminal 3, where 83 million board feet is expected to be taken off vessels in 2014 compared with 87 million board feet this year.

The difference of 4 million board feet is equal to slightly less than a full vessel load, O’Hollaren said.

“The projections are very comparable,” he said.

The port also plans to fill the long-vacant positions of log yard machine operator and will hire a marine terminal operations supervisor.

Among the 6.7 full-time-equivalent positions that would be added in 2014 include a full-time property manager, a full-time director of environmental affairs and 1.7 full-time-equivalent security positions.

The budget anticipates $9.1 million in revenues and $7.3 million in expenditures.

Here are some other highlights of the spending plan for 2014, which commissioners are expected to approve after a Nov. 25 public hearing:

■   William R. Fairchild International Airport is projected to have a 4 percent increase in revenue to $354,050 and a continuation of the landing fee waiver for Kenmore Air, which operates the only commercial passenger service on the Peninsula.

Lower revenue is projected for landing and parking fees “due to reduced activity for commercial passenger service and AeroFlight Executive Services discontinuing flights,” according to the port staff’s preliminary budget presented Tuesday.

The Seattle-based company no longer offers charter service, an AeroFlight spokeswoman said Wednesday.

■   An increase of 14 percent in revenue to $1.3 million is projected for the Port Angeles Boat Haven, where a much-debated moorage rate increase will go into effect in 2014.

■   An increase of 1 percent in revenue to $1.1 million is projected for John Wayne Marina near Sequim.

■   The port boat yard will see a 28 percent budget increase to $305,100 and a fee increase for mandatory stormwater improvements, according to projections.

■   A “slight decrease in activity” is projected at the port’s public boat ramps, according to the budget report.

Expenditures of $11,272 are projected for finishing work on boat ramp floats for rub-rail materials, fasteners and installation.

■   Port rental property revenues are expected to increase 4 percent to $1.5 million.

Fifteen leases were renegotiated to reflect full market value, port Director of Business Development Colleen McAleer said at Tuesday’s meeting.

McAleer, elected last week to McHugh’s Sequim-area District 1 commissioner position, filed a port lease-related whistle-blower complaint in May that found no illegalities but that is currently being reviewed by the state Auditor’s Office.

■   Expenditures for capital projects include $2.2 million in improvements to Terminal 1, where vessels berth for topside repair, and $1.2 million in improvements to International Airport.

Port capital expenditures of $2.2 million were matched with $2.7 million in federal grants.

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