PORT TOWNSEND — Port of Port Townsend commissioners are tackling next year’s operating budget and reviewing a five-year, $57.6 million capital improvement program.
Together, Wednesday’s sessions underscored both the port’s near-term progress and some uncertainty that lies beyond 2027, when the multi-year, $16.9 million Industrial Development District (IDD) funding expires.
“We know in 2026 there’s a high degree of confidence in what we can do,” Executive Director Eron Berg said, noting that the port already has secured more than $5 million in grant funding for next year. “Each year going out, we have less confidence, but the match dollars we have make these projects real.”
The IDD special levy voters passed in 2019 has supported capital and infrastructure improvements such as the Point Hudson breakwater project.
“I think we’re going to make an exceptionally good case that every IDD dollar was matched by non-IDD dollars at least three to one,” Berg said. “It’s a great investment when your 30 cents goes to capital improvements and economic development across the county.”
Boatyard expansion
The port’s plan to expand its boatyard to the north next year is now uncertain, as staff assess the impact of the Jefferson County Public Utility District’s decision to abandon its long-planned undergrounding of power lines along Sims Way in favor of an overhead alternative.
“It’s too soon to say,” Berg told commissioners. “We’re still operating with the belief that this is a 2026 project, but there are still unknowns that will be known soon.”
The port had been counting on the underground utility relocation to allow it to increase the boatyard’s footprint. It will be weighing how to repurpose its own grant funding tied to the expansion if the project no longer proceeds as planned.
Portions could be redirected to other infrastructure needs, such as Boat Haven stormwater improvements.
That project has hit an unexpected snag as well, as the newly installed tide gates — which are designed to control water flow and prevent flooding — are not sealing properly. Matt Klontz, the port’s capital projects director, said that had slowed the completion schedule and prompted staff to delay paving and to extend construction work into next spring.
The stormwater project is part of the port’s broader effort to control runoff from Sims Way. Contributing to the delay was complex permitting, Klontz explained, and an expansion of the original scope of the project that has doubled its cost from $1.4 million to $2.8 million.
The stormwater project is part of a revised five-year, $57.6 million capital improvement program first presented to commissioners at their Sept. 24 meeting. Overall, 85 percent of the $18 million in 2026 projects have secured funding, Berg said.
2026 budget
Connie Anderson, the port’s director of finance and administration, presented the second draft of the agency’s 2026 consolidated budget, which projects $9.6 million in operating revenues and $8.8 million in operating expenses, leaving a projected net operating income of about $810,000.
“This is an improvement from our last discussion, when we were closer to $650,000,” Anderson said. “We’re in a good position, and we’re continuing to refine the details.”
She added that utilities — water, sewer, stormwater and electricity — are projected to rise about 20 percent after running higher than budgeted in 2025.
The 2026 budget keeps the port’s staffing level flat at 42 full-time positions, but it proposes shifting some duties.
Commissioners revisited whether to begin charging customers a 3 percent fee on credit transactions, which cost the port about $175,000 annually.
“It’s a pretty standard number,” Berg said. “It’s effectively a cost recovery for those who choose to use credit cards.”
Commissioner Pam Petranek noted that the public is largely accustomed to paying small transaction fees, while commissioners Carol Hasse and Pete Hanke said any change should be clearly communicated to customers.
In other business, commissioners debated the future of the Elmore, the 130-year-old converted tugboat that has been sitting on the hard at Boat Haven since February 2023.
Since taking possession of the wooden vessel last year after it failed to sell at auction, the port has made numerous attempts to find a buyer, including setting up a website, www.saveelmore.com.
The port had been preparing to scrap the vessel — at an estimated cost of $70,000 — however, a potential buyer recently surfaced, prompting Petranek to ask that demolition be delayed.
Commissioners unanimously authorized staff to proceed with demolition, but they delayed it at least until their next meeting on Oct. 22. That will allow for time to meet with the interested party to determine whether a viable plan for a sale exists.
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Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.
