By Paul Gottlieb, October 30, 2014, Peninsula Daily News
A 1 percent property tax increase and the addition of one temporary and one permanent position are included in the Port of Port Angeles’ draft 2015 preliminary budget.
The proposed budget shows relatively flat revenue compared with 2014’s.
It also includes a deficit of $404,961.
The deficit is largely due to depreciation of vehicles, equipment and port infrastructure, not because of a cash shortage, said Karen Goschen, the port’s deputy executive director-finance director.
A public hearing on the proposed budget is set for 11 a.m. Thursday, Nov. 13, at the port administrative building, 338 W. First St. in Port Angeles.
In 2015, the 1 percent property tax increase would cost the owners of a $190,000 home in Port Angeles 38 cents more for the year, a $150,000 home in Forks 30 cents more and owners of a $240,000 home in Sequim 48 cents more.
Port commissioners did not impose the 1 percent property tax increase for 2014 but did in 2013, 2011 and 2008.
The spending plan, presented Tuesday at a port commission meeting, foresees $9.14 million in revenue compared with $9.15 million in 2014.
The budget shows $1.5 million in operating surpluses before depreciation, Goschen said.
“This is really showing a flat increase in revenue,” she said.
“But expenses have increased from budget to budget.”
Revenue was higher in 2014 because of log exports. Those are expected to decline by 20 percent because of decreasing demand for logs for China, Goschen said.
The property tax increase would generate $14,008 and be added to the $1.4 million the port already expects to collect as its share of county property taxes in 2015.
The port also expects to receive $6,000 in property taxes on $32 million of projected new construction countywide.
Property tax revenue would be devoted to capital projects, debt service and a small communities program of economic development grants to communities.
Expenditures include $4.5 million for cleanup of the site formerly occupied by Peninsula Plywood, of which $1.5 million might consist of a grant.
The chip tower also would be removed for $100,000.
“Before it becomes an iconic symbol, I’m thinking it would be a good idea to have it brought down,” Goschen quipped.
Commissioner Colleen McAleer said she is reluctant to support a budget that contains red ink.
McAleer participated by telephone from Olympia, where she was attending a conference on composites sponsored by the British American Business Council that included state Department of Commerce officials.
“I’m hesitant to be spending much more than our revenues,” McAleer said.
“My preference is to try to achieve a balanced budget.”
Goschen said some savings might be realized by examining the port’s consulting contracts, which show 14 expenditures for 2015 totaling $325,000.
The expenditures for consultants range from $2,000 for a fleet management study to $25,000 each for log yard aquatic storage review, the port strategic plan, market-economic impact analysis in composite resources, additional consulting for the composite recycling technology center and analysis, and advocacy to ensure sustainable timber, according to port records.
The largest single consultant expense is $50,000 for strategic planning studies for the port’s business lines.
For 2015, additional expenses would include a temporary process improvement analyst who would work under a one-year contract that commissioners would consider renewing for 2016 for what is anticipated as a two-year position.
The contract would pay $103,300 in salary and benefits for 2015.
The person would work in the finance department “to identify and implement improved controls and reporting to ensure full audit and regulatory compliance, and enhance customer service both internally and externally,” Goschen said in her preliminary budget message.
A permanent position of a purchasing contracts grant specialist would begin in April and cost $65,617 in salary and benefits.
The person would be expected to find savings by centralizing purchasing among departments and seeking more competitive prices for all operations and maintenance purchases, from paper clips to $750,000 in log-loading equipment, Goschen said.
A 0.5 full-time-equivalent position also would be added seasonally to the facilities maintenance department to upgrade the appearance of port properties, according to the budget.
Salaries and wages would increase by 1.7 percent for non-represented staff and from a merit increase pool of $40,000.
Represented staff pay would increase by the 1.5 percent consumer price index and will be adjusted for step increases.