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Port optimistic about 2009 budget

By Meghan Erkkinen

Tacoma Weekly
merkkinen@tacomaweekly.com
Published on: November 13, 2008

An uncertain economic environment is creating challenges for the Port of Tacoma as commissioners review and revise the 2009 budget.

Although the national economy has taken a hit over the last several weeks, and cargo volumes at the port have declined slightly over the last two years, staff members expect volumes to grow in the long term.

“We are in a very challenging time,” said Port Executive Director Tim Farrell. “There seems to be a consensus that over the next two years we can see a slightly declining market before we see growth again.”

But, Farrell added, the port’s business model is very robust, and more and more shipping lines are investing in Tacoma. He and port staff stressed focusing on the long term, when the port will see its investments begin to pay off more significantly.

“It’s important to look at the long term because as we look at the programs we’re funding over the short run, over the long run we will be receiving revenue associated with that and that (revenue) will grow over time,” said Deputy Executive Director John Wolfe. “I think it’s important not just to look at the five-year plan but a 20-year plan.”

At the first of three public meetings on the budget Nov. 6, staff gave an overview of the 2009 budget, outlining the port’s five-year capital program and plan of finance, the 2009 statutory operating budget and the 2009 tax levy.

Over the next five years, the port has $1.18 billion worth of planned capital projects, and could spend more on projected and potential projects. Projects include road, rail and water infrastructure, security, environmental remediation, terminal development and land acquisition.

Next year alone, the port has outlined $263 million in planned, projected and potential capital projects.

To fund capital and non-capital projects over the next five years, port staff members have projected revenues from operations, property tax and bond interest that would finance operations and projects. Some commissioners took issue with projections for revenues from operations, which were projected to steadily and significantly increase over the next five years.

“That’s a lot of growth in a market that’s going the other way,” said Commissioner Don Johnson.

Commissioner Connie Bacon also took issue with the projections.

“I have a real concern of promising or intending or showing a capital plan that does not have the revenue to support it,” she said.

Farrell told the commission that staff members are reevaluating the numbers.

“These [revenue projections] are driven by our cargo forecast and the most recent cargo forecast was at the end of September,” Farrell said. “Since the end of September we’ve been on quite a wild ride and we’re in the process now of reexamining those numbers.”

The port will also receive revenue from its annual property tax collection, which will total about $17.1 million in 2009. In the current budget, the tax rate of $0.18 per $1,000 in property value will remain the same, as it has since 2002. Property tax money will go toward debt service and government projects.

During the second budget meeting, Nov. 13 at noon, commissioners will take a more in-depth look at cargo forecasts, capital building plans and the tax levy. The public will be invited to comment on the budget at the meeting. At the third meeting Nov. 21 at 2:30 p.m., the commission will formally adopt the budget. Both meetings are open to the public and will be held in the Fabulich Center, room 104, at 3600 Port of Tacoma Rd.

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