FINANCIAL CAPACITY and OPPORTUNITIES

The Port of Coupeville is one of two port districts on Whidbey Island. By geographic area and budget it is the smallest. The amended 2007 budget adopted by the Board of Commissioner May 9, 2007 is a balanced budget represented in the charts below.

2007 BUDGET PROJECTION

Currently, the Port of Coupeville has four significant sources of operating revenue: property tax levy funds, commercial leases/utilities, profit from fuel sales, and marina services.

Levy:Under Washington State statutes, a port district can levy property taxes, not to exceed $0.45 cents per thousand of the assessed value of taxable property in the district. Currently the Port taxation level is $0.22 cents per thousand of a total assessed value of $1,379,761,088. Washington State statute limits the Port from increasing the levy request more than 1% annually, excluding a portion of taxes from new construction. The Ports 2007 levy request to Island County government was $313,746. This includes an administrative bond reserve of $100,100 to secure the payments to Island County for the Greenbank Farm Port Tract acquisition. The remaining $213,646, less the $45,000 management services fee paid to the Greenbank Farm Management Group, leaves $168,646 available for general Port operations. The Island County Treasurer disburses the levy funds monthly, although the property tax collection is in the Spring and Fall. The largest disbursements to the Port occur at these times.

Leases:The Port has five commercial leases. Four are retail spaces at the Coupeville Marine Facility (See Appendix B-2, Coupeville Marine Facility Tenants/Terms) An annual rent increase is levied based on the Consumer Price Index (CPI), (3% for 2007). The fifth commercial lease is with the Greenbank Farm Management Group (GFMG) for a portion of the Commercial Area at the Port Tract of the Greenbank Farm. The Port receives no rent from this lease through 2014. (See Appendix D-2, Summary of Key Terms and Responsibilities Lease and Management Services Agreement)

Fueling and Boating Services: This revenue projection is subject the vagaries of the marketplace. However, the Ports dependence on recreational boaters is decreasing as a result of the Ports active marketing of the fuel and boating facility to tour boats and other commercial vessels. With scheduled sailings and fuel sales to the Mystic Sea and the Island Spirit tour vessels from the facility, and the ongoing fuel sales to Penn Cove Shellfish vessels, the 2007 budget adopted a higher revenue goal. The regular volume of sales will increase the Port profit after basic expenses of fuel, maintenance, insurance, summer dock help, tank inspections and pump calibrations.

Other Revenue: The remaining revenue items are interest on accounts and leasehold taxes paid by Port lessees that are a direct pass-through to the Washington State Department of Revenue.

Revenue Projections: Revenue projections for the life of the 2007-2026 Comprehensive Plan can only incorporate known revenue sources. Given this, it is reasonable to expect that the Port budget will be $750,000 - $1,000,000 by 2026. This assumes an average increase of 4% (1% plus 3% new construction) in the levy and 3% from commercial rents. The intention to maintain the existing mooring capacity of the Coupeville Marine Facility limits fuel and marine services revenue increases. There are, however, two significant dates which will dramatically affect the Ports operations budget.

2014	Greenbank Farm Management Group lease and management services contracts end.
2017	Greenbank Farm Port Tract mortgage will be paid off.

The Port District has four additional funding opportunities: revenue bonds, establishment of local improvement (LID) or industrial development (ULID) districts, general obligation bonds, and State/Federal grant financing.

Revenue Bonds: Revenue bonds are payable solely from Port operating revenues. Revenue bonds and warrants can be issued without voter authorization as long as they comply with statutory limits and the capacity of a Port to manage the debt service from operational revenue streams. With the Port of Coupevilles limited revenue streams it is unlikely revenue bonds are a viable source of funding for capital projects.

LID/ULID: Ports have the statutory authority to establish local improvement districts or industrial development districts within their Port District and levy special assessments on the benefited property to pay for improvements. These are payable in annual payments for up to 20 years. LID/ULIDs are generally used for massive capital improvement projects that benefit numerous large tenants and/or private property owners. The scale of projects contemplated by the Port of Coupeville are not suitable for such financing.

General Obligation Bonds: The Port can issue general obligation bonds (GO Bonds) which are backed by the assessed value of property within the district. Washington State law sets two caps on such taxation without voter approval. First, Ports are limited to levying no more than 106% of the total levy of the previous year AND each property may not be taxed more than 1% of the total assessed value of their property. GO bonds can be issued without voter approval in an aggregate amount not to exceed of one (1) percent (.003%) of the total assessed value of taxable property within the Port District. Exceeding the statutory caps requires voter approval. GO bonds represent a viable opportunity for capital improvement financing for the Port of Coupeville for a project that has widespread community support.

Bank Loans: Such loans would require levy revenue restrictions as collateral. Given the Port of Coupevilles limited operating revenues, bank loans would only be viable for smaller budget improvements that promise rapid return on the investment.

Grant Financing: Grants offer the greatest potential for the capital improvement projects and initiatives the Port of Coupeville is considering. The Port can leverage local dollars as a match for this type of financing. The following are grant programs for which the Port of Coupeville may be competitive. The Port will actively pursue grant opportunities appropriate to its projects.

1. Island County administers grant programs, including but not limited to the following.
   • Rural County Economic Development funding is a competitive grant program open to Island County, Coupeville, Langley, Oak Harbor and Island County Port Districts for economic development projects.
   • 2% Sales Tax funding is a competitive grant program to increase tourism in the October through May shoulder season.
   • Conservation Futures maintenance funding available for maintenance of property purchased with Conservation Futures dollars.
2. Washington State Inter-Agency Committee for Outdoor Recreation (IAC) administers both State and Federal programs, including but not limited to the following.
   • Referendum 215 funds for improvements to motorized boating facilities.
   • Aquatic Lands Enhancement Account which provides public access to the water.
   • Washington Wildlife and Recreation Program (WWRP) funds a broad range of land acquisition, protection, park development, preservation/conservation and outdoor recreation activities.
   • Land and Water Conservation Fund (LWCF) if re-funded by the federal government.
3. Washington State Community, Trade and Economic Development Department (CTED) which administers State ongoing and biennial programs, including but not limited to the following.
   • Public Works Trust Fund and Community Economic Revitalization Board (PWTF) has funding for water projects, but request must come from a city or county.
   • Community Economic Revitalization Board (CERB) offers grant and loan programs for job creation projects.
4. Washington State Department of Transportation and local Regional Transportation Planning Committee funding for such projects as passenger ferries and trails.
5. US Army Corps of Engineers (USCOE) has two programs that may be useful depending on the type of project: Section 103 (Small Beach Protection Projects) and Section 107 (Small Navigation Projects).
6. Farmers Home Administration (FmHA) programs may be sought for non-recreational public improvements.

Port of Coupeville Comprehensive Plan 2007-2026