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Port of Coupeville says tax increase is the only option
is partly to blame
COUPEVILLE Port of Coupeville officials stressed Wednesday at their regular meeting that there was no way around a property tax increase if the port wants to stay afloat financially.
Weve reached the end of our operating reserves, said Jim Patton, executive director of the port.
Port of Coupeville commissioners, the public owners of Greenbank Farm, want to put a property tax levy increase on the Nov. 4 ballot. The measure, if approved, will raise the ports operating levy by
6 cents. An increase of 6 cents per $1,000 of assessed valuation will raise the total levy to
21 cents per $1,000.
Patton told the port commissioners last month that the ports finances were in bad shape due to little new income but continuous payments for the ports two premier properties, Greenbank Farm and the Coupeville wharf.
This time, he explained how the port had gotten itself into the financial mess.
In 1997, the port had collected $406,305 from its annual maintenance levy. But then the port dipped into its coffers to make improvements to the wharf, cutting the operating reserves nearly in half.
The same year, the port also purchased Greenbank Farm from Island County for $1.3 million, to be repaid over 20 years beginning in 1998.
In 1998, the port took another $100,993 from the remaining $219,125 in the maintenance levy fund to make the first payment on the administrative bond that the county and port set up for the Greenbank Farm payments.
That left only $95,864 for maintenance that year, Patton said.
Every year since, at least $100,100 has been deducted from the ports levy to make bond payments. There has never been a separate levy to pay off the bonds, he added.
He said the port faced increased costs, but was also limited by the 1 percent levy cap in the state of Washington, a law that has been invalidated by the Washington Supreme Court in 2007.
Patton explained that it took seven years to get the maintenance portion of the levy back to where it was before the purchase of the farm.
In 2004, the maintenance levy finally reached $173,275.
After that, things looked brighter. In 1999 and 2000, the port managed to grow its operating reserves back to an all-time high of $469,211 and kept its average operating reserve above $400,000 through 2002.
Patton said that was due to the board of port commissioners not spending any money on the properties at the time.
But then they had to begin spending money, Patton added.
In 2003, the cost of owning Greenbank Farm and the wharf caught up with the port. Remodeling Barn B at the farm and other cost shrunk the reserves to $157,727.
In 2004, the port began paying the Greenbank Farm Management Group $45,000 per year, another big chunk out of the budget, but held the reserves above $136,000, Patton said.
But the lease granted to the management group in 2004 also obligated the port to pay for a new portable water system that included paying for easements, a road, a reservoir tank, a pump house and permits. The purchase of the system in 2005, plus an increase in insurance for the aging buildings at Greenbank and Coupeville, reduced the operating reserves to $87,977.
Weve never been able to recoup from that, Patton said.
More renovations to Greenbank Farm and the Coupeville wharf in 2006 and 2007 reduced the funds to only $52,983 by the end of last year.
The normal monthly costs for January and February 2008 essentially eliminated the operating reserves altogether, Patton said.
Patton added that the Island County Assessors Office said the ports annual levy allotment will be $327,559 this year.
That money wont last long, however.
The arrival of the first increments of that levy this month will begin to restore the operating reserves, but costs that weve budgeted for this year will offset the income from the levy leaving the port with about the same operating reserve at the end of the year as at the beginning, about $50,000, Patton said.
Patton said that the ports books show that the port has always spent its money responsibly.
The conclusion is that a levy lift is imperative, Patton said.
Commissioners agreed and said they support the campaign for the levy lift.