Commissioners Present: Benye Weber, Bruce Bryson and Ann McDonald

Others Present: Jim Patton (Executive Director), Molly MacLeod-Roberts (Edwards & Associates) and Tom Baenen (GFMG President)

Call to Order: The Special Meeting was called to order at 3:40 p.m. by Commissioner Weber in the Port Office located at 24 Front Street in Coupeville, WA, followed by the Pledge of Allegiance.

PURPOSE OF THE SPECIAL MEETING:

The Board of Commissioners will consider all of the comments and recommendations received from the public regarding the Preliminary Budget for 2008 that was approved at the regular public meeting on September 12, 2007. The Board will determine whether alterations to that budget are appropriate and will adopt the Final Budget for 2008.

The public is invited to attend this Special Meeting but there will not be an opportunity for public input.

Presentation of public comments and recommendations on the Preliminary Budget for 2008 (Patton): Patton noted that the law required public notification that the Preliminary Budget had been approved and was available to the public. A legal notice was published in all three newspapers and copies of the Preliminary Budget have been available in the Port office since its approval. Patton reported that there were no visitors or telephone calls regarding the budget. He said that as result, the proposed final budget is the same as the preliminary with the exception of amendments to reflect the correct allocation of the expenses for the Caretaker's Cottage at the Greenbank Farm and the shift of funds from painting the Wharf to improving the GFMG office in Barn A at the Farm.

Presentation of issues for Board decisions (Patton): Patton presented and discussed two diagrams: Budget Status 2007 and Operating Reserves 2007. Copies of both are attached to these Minutes. He noted the Port is financing current expenses out of the Operating Reserve while waiting for the Fall allotment from the levy. Patton explained that in 2007, there were several unexpected costs including the repair and refurbishment of the restaurant and the cost of advertising the two rental spaces on the Wharf. The loss of several months' rents from those spaces exacerbated the problem. He said the revenue from the levy would not be available until next month. Current balances: Weber said that even after the Port's Fall portion of the property taxes has been collected, there will be much less in the Operating Reserve than we began the year with. She said the Port can't live off just the levy income and noted the remaining balance is going to be well below the Board's year-end goal of $100,000. Weber said every invoice needs to be carefully considered, and the Port needs to look at non-levy sources of revenue. She said she would be skipping the WPPA small ports conference in an effort to cut back expenses. Patton said he had arranged with the Department of Natural Resources to wait for payment of non water-dependant rents until November, and Pat Andrews, the electrician who worked on the Port office basement, said he was also prepared to wait for payment. The Levy: Patton explained that the Levy is the principal source of funding for the Port. For 2008, the Port could expect to receive a 1% increase over the $313,745.88 Levy received last year, plus a 3.4% increase for taxes accruing to Island County for new construction and improvements and increased value of county-assessed property. Consequently, the Port's rounded Levy Request for 2008 would be $327,400. Of that amount, $100,100 would be automatically set aside by the County Treasurer for repayment of the Administrative General Bonds used to purchase the Greenbank Farm in 1997. The bonds will be completely repaid in 2017. The total Levy available to the General Fund for 2008 is $227,300. Revenues: Patton noted that although the Gross Revenues for 2008 are projected to be $377,455, because leasehold payments, utilities and sales tax on fuel sales are pass-through items, and most of the revenue from fuel sales is offset by the costs of buying fuel and operating the fueling service, the amount of Port income would actually be only $280,000. Expenses: Patton noted that he had amended the budget to reflect the changes the Board agreed on and approved at the Regular meeting on September 12, 2007. Per the Board's instructions, Patton reduced the Port's G & A Construction, Repair & Maintenance budget of $30,000 to $20,930. Greenbank Farm's Construction, Repair & Maintenance budget was increased to include $12,500 for work on Barn A's office space and the budget for Greenbank Farm Management Group's fee was increased for 2008 as approved by the Board. The resulting total for the Port Greenbank Farm expenses for 2008 is now $81,465 and not $73,425. Operating Reserves: Patton reported the 2008 End of Year Operating Reserves are estimated at $98,154, but that number would depend largely on the amount of Operating Reserves at the end of this current year. Bond Fund: Patton explained he was uncomfortable with how the bond fund balance had been tabulated previously, because historically the budget has not shown the actual balance remaining on the bond for the purchase of the Greenbank Farm in 1997. Two sets of administrative (non-voted) bonds were used by the Port to purchase the Port's 151 acre tract at the Farm: one set for $300,000 and another set for $1,000,000. The $300,000 set is paid off as of 2007. Beginning in 2008, the Port will pay off the second set of $1,000,000 over the next 10 years. The Bond Fund Balance at the beginning of the year will be $1,040,147. Island County has been authorizing $100,100 from the Levy each year for debt service on the bonds, but the bond repayment for 2008 is estimated at $103,054. Patton was waiting for a return phone call from Lois Rusher at the Treasurer's office to find out if the difference would be coming out of the Port's General Fund. If so, the budget for the General Fund would need to be adjusted accordingly, but Patton planned to ask Dan Jones, the Assistant Tax Assessor, to change the authorized Levy for bond payment to match the amount we are actually scheduled to pay. Additional revenue: Baenen pointed out a slush fund is created when property is taken out of forest or open agriculture zoning and the back property taxes are collected. A percentage of that money goes to the taxing district where the property is located. That money is not included in the County's estimate as it is unknown before the fact. Baenen said that money is supposed to be distributed quarterly, but a few years ago the Island County Treasurer was actually 3 years behind in distributing that money. He recommended the Port should check with the County to be sure the money is being disbursed quarterly. Patton said that he would check on that.

Discussions and decisions by the Board: Weber asked McDonald and Bryson if they had any questions. They did not. Weber also indicated that she did not have any questions.

Adoption of the Final Budget for 2008:

ACTION: A motion was made by Bryson and seconded by McDonald to approve and adopt the Final Budget for Fiscal Year 2008 as presented. The motion passed unanimously. The Budget was signed by the Board of Commissioners and certified by Executive Director Patton.

Patton read aloud Ordinance/Resolution No. 143 and presented it to the Board for adoption and approval.

ACTION: A motion was made by Weber and seconded by McDonald to approve and adopt Ordinance/Resolution No. 143 authorizing an increase over the actual levy amount from the previous year of $3,137. The motion passed unanimously. Ordinance//Resolution No. 143 was signed by the Board of Commissioners and will go into effect immediately. A copy of this resolution is on file at the Port office.

Patton read aloud the Levy Certification which Charles Edwards had signed as Auditing Officer for The Coupeville Port District and which will be forwarded to the Island County Treasurer and the Tax Assessor. A copy of this certification is on file at the Port office.

Additional discussions by the Board: Bryson said he wished to discuss an item that indirectly pertained to the budget. He feels the Port is beyond the point that they need to consider a levy lift asking for additional money. He said a levy lift would be relatively painless and would not be a tremendous increase for taxpayers. Bryson said it was scary for the Port to have only $2,000 left in its Operating Reserves. He said the Port should have a minimum of $125,000 in reserve for emergencies and also in order to have matching funds available. Tax rate discussion: Weber said the current levy is at $0.22 per $1,000 assessed value and it can be lifted up to a rate of $0.45 per $1,000. Patton explained that after the law was changed to permit only a 1% increase in the Levy per year, the tax rate per thousand lost its meaning. He said that because the property tax base went up so much in the Port district last year, the tax rate has dropped to 15¢ per $1,000. It is still true, however, that the ceiling for ports is $0.45 per thousand. Baenen (the former Island County Tax Assessor) explained that when the base is increased, the rate is automatically reduced. He said the Port is locked in at 1%, but could seek a lift up to a certain amount of dollars or up to a certain per cent instead. For instance, the Port could ask a levy lift for $155,000 in excess of the previous year. Patton said in order to seek ask the public for a levy lift, a taxing district like the Port needs to be able to tell a convincing story of real need. The Port of Coupeville's Master Site Plan for the Greenbank Farm will provide the story the public needs to hear. Patton said he thinks a levy lift is a good idea. He also brought up another alternative: that of an Industrial Development District (IDD) levy. An IDD can be voted in at a regular Board meeting without going before the public in an election, however the Port would need to have a carefully thought out plan and the IDD would have to be consistent with the Port's obligation to protect the environment. The Board agreed that, as laid out in the Comprehensive Plan, they would look into sources of revenue. Bryson said he brought up the issue for informational discussion only and no decision making would occur today.

ADJOURNMENT: There being no further business to come before the Board, Weber adjourned the meeting at 4:30 p.m.