PORT TOWNSEND — Port of Port Townsend commissioners have learned that the cash position of the port is not where staff would like it to be and the jetty replacement project could be revised or postponed indefinitely.
At the first reading of a proposed 10-year bond resolution Wednesday, Executive Director Sam Gibbony told commissioners that staff recommends bond proceeds be used for two purposes: construction costs associated with the Point Hudson south jetty project and the replenishment of cash in the port’s budget.
The second reading is scheduled for a special port commission meeting set for May 8.
“We will be opening bids on May 7,” Gibbony said. “At that point, if it appears we don’t have the resources to award the contract, we could choose to postpone that second reading. That would allow staff to come up with some recommendations on how to proceed forward.
“Staff remains concerned that, despite every effort, issuance of this bond as presented combined with the remaining grant monies, may leave the port with insufficient resources to complete the south jetty,” Gibbony cautioned the commissioners.
Gibbony told commissioners that cash flow is “currently below recommended levels.
“In 2017, cash was used to pay for stormwater improvements in the yard and the repair of the Boat Haven jetty at the commercial basin. It was originally planned for a bond of $1.06 million to pay for the stormwater improvement. We value-engineered the project and got the cost down considerably, so it didn’t make sense to bond for it. So we spent cash, and that lowered our cash reserves.”
“We have to see how the bids come in, and give you our assessment on where we are,” Gibbony continued.
“An approach of a redesign of the jetty or modification of the bid, or taking off some elements would likely lower the price.”
Gibbony said another option would be to reconfigure the bond issuance to lower it or change its use such as to replenish cash resources for repair roofs and other maintenance projects.
“Until we open the bids, we aren’t going to be able to make a recommendation. Should the bids come in high, the commission has the option of either postponing indefinitely the second reading or postponing it for a set amount of time until we can come up with a set of recommendations,” Gibbony said.
The Limited Tax Obligation Bond is set at $3.2 million and has a “not to exceed” amount of $3.4 million. The additional funds provide a cushion that would be used in the event of market fluctuations, bond issuance expenses (currently estimated at approximately $73,000) or for a change in the project that could affect the estimate such as the cost of Chinese steel specified in the design parameters.
The requested bond amount is based on cash flow projections and the ability to service the bond debt, the port’s long-term general obligation bonding capacity, and preliminary cost estimates based on 60 percent of design of the south breakwater jetty.
The final cost estimate for the jetty replacement has been affected by conditions such as the imposition of steel tariffs and bid specification changes.
Gibbony said port staff continues to work diligently to “provide the best conditions for a bid environment.” She gave the examples of a construction easement secured from the Northwest Maritime Center and working with permitting agencies to allow for increased vibratory hammer use.
“The message I want to deliver to you is that we are working every angle to create a favorable bid environment,” Gibbony said.
There is interest to construct the south jetty by contractors. At a mandatory pre-bid meeting last week, seven companies attended. Gibbony was “pleasantly surprised by that number.”
“I just want to make sure that as we are moving forward that your consideration of issuance of the bond amount does not guarantee that we will be able to afford the project.”
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Jefferson County Editor/Reporter Jeannie McMacken can be reached at 360-385-2335 or jmcmacken@peninsuladailynews.com.
