PORT ANGELES — The Port of Port Angeles stands to bank more than $303,000 in interest it needn’t pay on bonds it issued 10 years ago.
What port commissioners probably will do at their Sept. 8 meeting is to exercise their right to “call” the bonds and refund them with a loan from Umpqua Bank.
They introduced the refunding resolution Tuesday and expect to approve it in two weeks.
Instead of paying 4.15 percent to 4.75 percent interest through 2025, they’ll probably pay 2.4 percent to Umpqua Bank if loan rates remain at near-record lows — and keep the difference.
Umpqua’s interest rate was lower than that quoted by KeyBank, which also answered the port’s request for proposals, said Karen Goschen, the port’s finance director.
Not including a 5 percent refinancing fee, refunding will save the port about $37,000 a year, according to Scott Bauer of A. Dashen and Associates of Bellevue, the port’s independent registered municipal adviser.
Standard option
Issuers of general obligation bonds are permitted to “call,” or refinance, them midway to maturity.
The port issued the bonds in 2006 to pay for improvements at the Port Angeles Boat Haven. They otherwise would mature in 2025. Instead, they will be retired Dec. 1.
The savings actually will come in the form of property taxes the port collects throughout Clallam County.
Because the windfall comes from taxes, not from revenues, the unspent interest must be earmarked for capital spending, Goschen told commissioners.
The debt still will be backed by the port’s “full faith and credit,” said Cynthia Weed of K&L Gates LLC in Seattle, the port’s bond counsel.
As for the Portland, Ore.-based Umpqua Bank, whose Port Angeles branch is located at 1033 E. First St., it’s “unlikely” to resell the loan, as it legally can to another financial institution, Weed said.
“They want this bond as part of their community commitment,” she said, “and they’ve made that clear.”
Headline news
In other action Tuesday, commissioners approved a $169,070 professional services agreement with BergerABAM of Seattle to design a headline dolphin and replace timber trestles at Terminal 3.
Cargo ships, mostly log carriers, currently tie up at the 300-foot-long dock with bow lines they wrap back aft to the dock like spring lines.
Port Executive Director Ken O’Hollaren called the arrangement “very unusual” and said it limits the size of vessels that can use the terminal, which could someday berth cruise ships.
The new dolphin would be a freestanding structure west of the terminal.
Terminal 3 was built in the 1960s and underwent a reconstruction by BergerABAM in 1985.
KPly cleanup
Commissioners also approved a change order in cleanup of the former KPly mill site where contractors are excavating contaminated soil and sending it to landfills.
Because they found contaminated water 2 to 4 feet below the surface, remediators must rent equipment to remove gasoline, diesel fuel and oil before pumping the water into Port Angeles city sewers.
Cost of renting, installing, supplying and operating the system will add $141,703 to the cleanup cost but will be paid by the port’s insurers, port staff said.
A month ago, commissioners increased their contract with Alberbrook Quarry of Chehalis by $34,409 after contractors dug up 2,178 more tons of concrete than they expected.
Total cost of the cleanup of the site on Marine Drive now stands at $3,716,717.
“We’re committed to doing this job right,” said Commissioner John Calhoun, “in addition to doing it quickly.”
The 19-acre site of the mill that also operated as PenPly is considered a prime location for marine industries.
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Reporter James Casey can be reached at 360-452-2345, ext. 5074, or at jcasey@peninsuladailynews.com.
