PORT ANGELES — The Port of Port Angeles on Monday proposed a 2012 budget of $16,869,070 — a budget that includes no tax increase but calls for major investments in port infrastructure and a large rainy day fund.
Thanks to an overall trend for better-than-expected profits from port business ventures — led by revenues from log exports — the Port of Port Angeles is in better shape than it has been in years.
Now is the time to get some needed work done and put money away for the future, the three port commissioners agreed.
Much of the 2012 budget is almost the same as 2011’s, said Bill James, port director of finance.
However, revenues are $2 million higher than the 2011 budget of $14,724,995.
James said he expects the port to end 2011 with a $2,559,800 surplus.
Sales of debarked logs to China and South Korea are expected to continue for at least the next few years, James said.
Even factoring in six months of an expected slowdown in sales — from this month through next March — the port’s log yard is expected to remain busy, based on reports of customer plans for 2012 export activity, commissioners were told.
The port’s estimate of $1.49 million in revenue is conservative, said Mike Nimmo, marine facilities marketing manager.
The 2011 log yard activity was projected to be about a half-million dollars less.
The port has been talking to a new customer, adding to the log yard’s already busy operations, Nimmo said.
The port commissioners are also considering an increase in log yard handling fees.
“We’re well below market in log handling,” Nimmo said.
Commissioners said they were concerned the port might price itself out of the market.
“These are perilous economic times we are still in,” Commissioner Jim McEntire said.
Currently, the yard charges so much less than its competitors that a small increase won’t change the overall picture, Nimmo told the commissioners.
A 3 percent raise in rates would increase port income while still charging considerably less than Port Angeles’ competitors in Olympia, La Conner and Everett, he said.
Port Angeles currently charges $149 to load a container, while the same services cost $195 in La Conner, $175 in Olympia and $190 in Everett.
Olympia rafts logs for $100 each but does not load containers. Port Angeles currently rafts logs for $79.89.
The port plans to use some of the profits from its recent fortunes to make major repairs to the main ship pier, Terminal 1, which was built in the 1920s.
That pier is central to the port’s financial health, serving as a primary port facility for oil tankers under repair, U.S. Navy submarine escort ships and other major ship operations, James said.
The project isn’t going to happen overnight, with work continuing through 2014 or 2016, he said.
Other projects on the port’s list of projects is alternative energy development, work on Terminal 3, waterfront or industrial property purchases and continued work on the composite manufacturing campus next to William R. Fairchild International Airport.
There is no port property tax rate increase in 2012 included in the budget.
The port will receive $1,347,598 from property taxes in 2011, and expects a similar amount next year.
According to port policy, property tax funds are used to pay for port infrastructure or for debts incurred in financing for repairs or construction.
The port raised the levy 1 percent last year but not the year before, Commissioner John Calhoun said.
The commission also is considering possible full repayment or refinancing of the port’s largest loan as well as cost-of-living raises for port employees.
The commission will hold a public hearing on the 2012 budget at 9:30 a.m. Monday, Nov. 14, at port headquarters, 338 W. First St., Port Angeles.
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Reporter Arwyn Rice can be reached at 360-417-3535 or at arwyn.rice@peninsuladailynews.com.
