PORT TOWNSEND — Port of Port Townsend commissioners took steps to retire the agency’s long-term debt, continued reviewing the 2026 operating and capital budget and clarified that a long-term lease agreement with American Cruise Lines for Union Wharf is no longer under consideration.
Wednesday’s meeting also included approval of property tax levies for 2026 and a decision against allowing model aircraft flights at Short’s Farm.
In a unanimous vote, commissioners approved a resolution to use $1.6 million in operational reserves to pay off the port’s remaining long-term debt, specifically a 2018 Limited Tax General Obligation bond that funded infrastructure projects.
“This is a big milestone,” Executive Director Eron Berg said, noting that paying off the debt will allow property tax revenue to be used for future investments rather than for servicing loans.
“We’re eager to move to retire that debt and move forward with a cleaner, more transparent financial structure.”
Berg said a short-term line of credit will remain available for cash flow management.
Commissioners also approved the creation of a new property tax reserve fund that will allow its property tax revenues to be tracked separately and used for economic development and infrastructure projects.
Commissioners also opened a public hearing on the port’s 2026 operating and capital budget.
Connie Anderson, the port’s director of finance and administration, presented the third draft of the budget, which proposes an $8.9 million operating budget projecting roughly $9.8 million in revenue and a net operating income of about $828,000. The budget also includes $18 million in expenditures for capital projects and $11.4 million in additional revenue from grants, capital contributions and property taxes.
Among the proposed changes, the budget includes a 3 percent credit card transaction fee, to take effect in 2026, and seasonal adjustments to parking fees at Point Hudson and the Cupola.
Staff salaries are set for a 2.7 percent cost-of-living adjustment, utility costs are projected to increase 10 percent to 13 percent, and lease revenues are expected to rise by 2 percent.
The port’s five-year capital improvement plan continues its investment in waterfront and marina infrastructure. Commissioners discussed strategies to fund those projects without returning to long-term debt financing.
Among the suggestions was that the port set aside reserves for future dock replacement and other major infrastructure needs.
A major point of discussion was Union Wharf and cruise ship activity. Commissioners clarified that they will not pursue a long-term lease agreement with American Cruise Lines. Their talks will be on determining the frequency of cruise ship visits and how to maintain the aging wharf to support ongoing use.
Commissioners noted that Union Wharf was transferred to the port in previous years and its original maintenance obligations had expired. The draft budget includes $1.2 million in potential work at Union Wharf, though funding has not yet been secured.
Commissioners said the project and associated grant requests could be revisited after they review results from a Port Townsend Main Street Program survey, which will be presented during a workshop at 9:30 a.m. Nov. 12, with possible action at their 1 p.m. meeting.
The board also unanimously approved two property tax levies for collection in 2026. The first sets the port’s general property tax levy at $1,167,000, a 1 percent increase over the previous year (plus revenue from new construction, refunds). The second maintains the Industrial Development District levy at $2,634,289, or $0.2582 per $1,000 of assessed value.
Anderson noted that, after next year’s levy, about $1.3 million to $1.4 million will remain under the current multi-year IDD authorization, which is expected to be fully collected by 2027.
Commissioners declined to advance a proposal that would have allowed limited model gliders and electric-powered model airplanes on a pond at Short’s Farm.
Commissioner Pam Petranek, who said she had grown up flying model planes, said she ultimately concluded the activity was not compatible with wildlife after visiting the site and considering community feedback. Commissioners Pete Hanke and Carol Hasse cited similar concerns.
Berg said the port was “chasing yet another lead” for a possible buyer for the Elmore, the 1890 wooden tugboat that is scheduled for demolition. Its demise its not imminent, he noted, because the port doesn’t have a machine big enough to crush it.
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Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.
