Commissioners Present: Benye Weber, Ann McDonald and Marshall Bronson.

Others Present: Jim Patton (Executive Director), Molly MacLeod-Roberts (Edwards & Associates), Kasia Pierzga and Justin Burnett (Whidbey Examiner), Nathan Whalen (Whidbey News-Times), Coupeville Residents: Marianne Burr, Julie Lauderdale, Rob Harbour, Mike Diamanti, Gary Wray and Millie Fonda, Greenbank Residents: Sharon Dunn and Tom Baenen.

Call to Order: The special meeting was called to order at 11:00 a.m. by Commissioner Weber in Room B-102, Island County Commissioners Hearing Room, located at #1 NE 6^th Street, Coupeville, WA, followed by the Pledge of Allegiance.

Purpose of the Meeting: Commissioner Weber stated that the purpose of the meeting was to hold a press conference on the issue of the Port's request on the General Election ballot of November 4, 2008, for authorization to increase its regular property tax levy by 6 cents per $1,000 of assessed valuation of property taxes within the Port district. This special meeting is open to the public, but comments and questions from the public will be limited to this sole issue.

Introduction of Moderator: Patton introduced Kasia Pierzga, Editor and Publisher of the Whidbey Examiner. He noted that Pierzga is a resident of Jefferson County and is therefore ineligible to vote on this issue.

Port of Coupeville Ballot Measure: At Weber's request, Patton read the following legal description of the limited proposition (as shown on the Voters Pamphlet) into the record:

The Board of Commissioners of the Port of Coupeville, Island County, Washington, adopted Resolution No. 146 concerning an increase of its regular property tax levy. This proposition will authorize the Port of Coupeville to increase its regular property tax levy, current rate approximately 15 cents per $1,000 of assessed valuation, by 6 cents per $1,000 of assessed valuation for property taxes to be collected in the years 2009 through 2017, which will allow an increase in the district's regular property tax levy to exceed the 1 % annual levy increase that otherwise is allowed without voter approval under chapter 84.55 RCW.

Should this proposition be approved? [ ]Yes [ ]No

Commissioners' Statements: Weber read her written statement aloud (on file in the Port office).

McDonald stated, We all as citizens have these two fabulous pieces of history: the Greenbank Farm and the Coupeville Pier. I know I personally would like to maintain them and have them flourish, and I, too, am asking for your support. I know these two venues mean as much to you as they do to me, so we look forward to a positive vote on November 4^th. Thank you.

Bronson commented that the crowd today was the largest at a Port meeting since he became Commissioner. He stated, I took office in January of this year, and one of the first things I noticed was the fact that there was no money. The Port was under-funded and overextended, not by plan, but by the fact of the obligations which were taken, especially in the acquisition of the Greenbank Farm. I think that the Pier and the Greenbank Farm are both very integrated into the history of the island, and the history of our town and area. They are also integrated financially - the success of Coupeville oftentimes depends, I think, on that vision of the Pier, and it attracts people. It also is an enhancement to the downtown activities. It is our problem and it is our responsibility to maintain that Pier in operable condition so that it can be used. It is the same with the Greenbank Farm. As a lynchpin between the north and south ends of the Island and its communities, the Farm has always been an area of activities. It is an area the Port is responsible for and the Port is trying to make it into a financially independent unit, but you can't start with ground zero and come up with independence in the short time that we've had. The last thing is the community development factors which revolve around all of these areas. This involves all of the Island community. In this particular case within the Port district, we are talking about a levy for a smaller area to maintain these buildings. We think it is necessary and it affects us. When we talk about the levy, it isn't on you, it's on us. I thank you for your attendance and hope we can resolve any questions you have.

Questions from the Press:

Justin Burnett of the Whidbey News-Times asked if the Board believes that the purchase of the Greenbank Farm is in line with the Port's mission of economic development. Weber said Yes, and McDonald said Absolutely. McDonald added that there are shops and they've had various other tenants including seed growers and an Alpaca farm. It is definitely tied into economic development, and that is what Port districts are about. Bronson noted that in most cities and counties, airports and industrial areas are owned by Port districts. The Port of Coupeville is not ready for an airport or industrial area, but the Greenbank Farm was an opportunity that was pressed upon the Port by the public, and it is therefore the Port's goal to make it a successful venture. It cannot be done without a considerable amount of capitalization. Bronson said improvements have been made continually and the Farm makes more money now than it ever made before. He said the Farm runs because of the volunteers that help supplement that, and eventually it is the Port's goal that it should be entirely economically independent and perhaps even pay for a coat of paint here and there.

Burnett asked when the Board anticipates that will happen. Weber said she would hope within the next 5 years - 10 years at the most. She noted that 12 Port district citizens worked for 14 months to develop the Port's Comprehensive Plan. One of the initiatives in that Plan is the development of a Master Site Plan for the Greenbank Farm. The Port has hired a Master Site Plan Coordinator to lead four focus groups to provide input and data on the Master Site Plan. The groups are Recreational, Agricultural, Commercial and Environmental and the volunteers in those groups have been meeting for 10 months. They will come together and provide comments and recommendations for the Master Site Plan to the Board of Commissioners. The Board will then open it up for public scrutiny. Weber explained that the Board is also working on another proposal to the State Legislature for a capital budget project. She said the Board understands this is a difficult economic time, but the Port needs assistance with this.

Kasia Pierzga of the Whidbey Examiner asked what could be done to make Greenbank Farm more self-sustaining. She knows the Port has a long-term plan, but asked, What is the first step? Weber said the first step is to complete the Master Site Plan, and noted that more than 40 people from a wide area of backgrounds and specialization are working on it. The Port will focus on what can be done and then find money and volunteer help to put it together. Weber said, I think it's doable. Bronson said the Greenbank Farm was sort of an amorphous blob - a large piece of property with a few buildings on it. The question is, What should the Port do with it? It is currently divided into agricultural, recreational, environmental and commercial areas. The Master Site Plan is important to determine best use for the areas and readjust accordingly. Bronson said the Farm can't attract the full range of economic activities until that is place. Weber added that they expect the focus groups to have their draft recommendations to the Board at the beginning of November.

Pierzga asked if trying to reach consensus on how the Farm could become more self-sustaining is a bit of an obstacle. Bronson said No - it was in the beginning, but as the groups have talked within their particular activities, they have 'sintered down' and come up with parallel responses in all areas. He thinks the end result will be a great deal of unanimity of thought in that process. Weber noted that Bronson is the Port's Liaison to the Greenbank Farm, so he has attended most of the focus group meetings. She and McDonald attend different monthly meetings for other groups and organizations. She made it clear that the Board does not receive compensation for attending any of those meetings as individual representatives of the Port - they are only compensated for the Port's scheduled meetings of the Board of Commissioners. Weber and McDonald occasionally attend the focus group meetings, but they and Bronson do not provide input at the meetings. The Board wants the input to be from the focus group members, who are all volunteers. McDonald stated that the four focus groups would be meeting together as a plenary on Thursday, October 23^rd at 4:30 p.m. in Barn A at the Greenbank Farm. Regarding the Farm's financial future, McDonald said she thinks it will improve with time. The Greenbank Farm Management Group (GFMG) has worked really hard to bring in new and additional tenants. The Community Supported Agriculture (CSA) program that is just starting will bring an enormous amount of coverage. There is a potential for new buildings in the future and a lot of innovative ideas. She said the GFMG does a terrific job, and she thinks the Port will definitely see a building of income that will ultimately allow the Farm to be financially independent. Right now though, the Port is at a crisis point and needs financial help.

Weber explained that when the Port entered into the agreement with Island County and the Nature Conservancy to purchase the Greenbank Farm, the result was that the Port would make payments for the purchase over 20 years. Those payments are approximately $100,000 per year and the Port has been paying that amount for 10 years out of the present Port of Coupeville district levy. The Port also pays $49,000+ per year to the GFMG for managing the property on the Port's behalf. The $100,000 payment comes right off the top of the Port's levy revenue and is taken by the Island County Treasurer. The Port has no choice about paying off the bonds and does not actually ever see that money. That money will always be paid and the Farm cannot be lost due to lack of payment - even if the Port would have to cut elsewhere.

Pierzga asked why the Board didn't seek a levy lift last year, instead of waiting until the reserves were so low. Weber said she personally had hoped it would work out; that they wouldn't see so many unforeseen expenses. The Board discussed it and fought it as long as they could, but money had to be paid in order to take care of two 100-year old facilities. She explained that the restaurant at the Farm recently had to shut down temporarily because a grease trap had not been installed and grease was damaging the septic system. Additional unforeseen expenses will have to be paid for that repair and it will have to come out of the Port's reserves because the Port is responsible for the infrastructure. Bronson clarified that the GFMG takes care of the operation and maintenance and activities on the Farm, but the Port district pays for capital improvements and repairs to capital facilities and infrastructure. When the Port purchased the Farm, the Board thought their $400,000 balance would be sufficient and an additional levy was not needed. There were capital expenditures that had to be made, though, in order to allow people to use the Farm in a way to make it productive. Weber reported that from 2003 to 2007, the Port paid $293,498 to provide adequate repairs and improved infrastructure at the Greenbank Farm, including building a new concrete tank and a new pump house for the potable water system, repair and remodeling of Barn B, painting and repairs of Barn A, and refurbishment of the caretaker's cottage.

Pierzga asked how the GFMG fee of $50,000 is spent. She also asked if the Board believes it is being spent wisely and the Farm is being managed effectively. Bronson said, The answer is yes. He explained that he and Patton go over the Farm's expenditures each month with GFMG President, Tom Baenen, and GFMG Treasurer, Michael Stansbury. Bronson said that, as a paid contractor, the GFMG is responsible for the running of the Farm, and the Port works in coordination with the GFMG at all stages and all levels. The Board feels they are getting the best possible management.

Pierzga said in looking at how the Farm is managed, she noted that it took a really long time to get the entrance sign built and that was an issue for some of the businesses there, because they didn't get good visibility. Right now there's a sign frame but still no sign. Since the sign has been needed for some time, so, she asked, Why it is taking so long? Bronson said that the GFMG relies heavily on volunteers for the Farm's operations, and they are not always available for specific schedules and there are many different projects.

Pierzga wondered if the GFMG's goals were aligned with the Port's goals of economic development, because if it takes years to erect a decent sign to direct people to the businesses and help them be successful, it seems the GFMG has overlooked a pretty basic thing that's really key to the successful operation of businesses that are hard to see from the road. Bronson noted that the Port's purchase of the Farm had happened very quickly, and a core group of people were responsible for the purchase because they didn't want to see the Farm broken up. He explained that the long-term goals of some of those people have not always been in consonance with the development of economic activity at the Farm. One of the results of the focus groups has been the realization by people that the Farm cannot be maintained unless it has a viable economic foundation. The focus groups are beginning to align with the fact that the Farm has to be run as a commercial establishment on a community basis. Bronson concluded by saying the sign would probably be completed within the next week or two.

Pierzga asked how the Board can assure taxpayers they are getting a return on their investment for economic development, since that has to be purpose of the Port district on anything it owns, including the Farm. Bronson emphasized that there are two parts to the Port district - the Greenbank Farm and the Coupeville Pier, and economic development occurs at both places. The Board is obligated to do their very best to come up with a responsive action for the Farm as soon as possible.

Pierzga said if it takes 10 years to get a good sign up there, she questions whether the money spent on economic development at the Farm is money well spent. Bronson felt that was an unfair conclusion to take all of the last 10 years and base it all on whether the sign is up or not, doesn't quite come kind to the point. He noted that the GFMG and its philosophy had changed in the last two years, and now the direction has been set. The sign is only one element, and there are many other parallel activities that have been successful.

Weber noted that the public's investment has increased because of the development and the buildings that have been improved and built at the Farm. The GFMG and the Port of Coupeville managed to procure from the state the capital budget project for $1.3 million which paid for the new large barn with shops and offices, so the return on the investment has been great. The Farm has shown some economic development and has provided between 40 and 60 jobs, including jobs for home-based companies in the Port district. It has also provided a training program for 4-H students and Pea Patches for local farmers and 4-H students. The Farm also provides the wonderful availability of open spaces for public use, which can't be seen at a cash register.

Burnett asked if the 40-60 jobs included those employed by the GFMG, and Weber said yes, they were included.

Burnett asked if the Port would ever get any financial proceeds from the Farm, and Weber said she hopes the Port will in the future. She noted that the agreement with the GFMG ends in 2014, and in the spring of 2012, the Board will have to assess and evaluate the performance of the GFMG and decide what direction they should go in. Bronson explained that the long-term objective of the Port is a long-term economic gain for the Farm. The Board anticipates the Farm will one day more than pay for its own maintenance costs, but when that will occur is indeterminate.

Questions from the Public:

Julie Lauderdale of Coupeville asked when the original levy to purchase the Greenbank Farm was passed. Weber explained there was never a levy to purchase the Farm - the funds came from the existing Port levy, and no new levy or levy increase for the Port has ever been brought before the people. As a taxpayer, Lauderdale said she was concerned and overwhelmed by all the proposals to increase taxes on the ballot this year (the Port, the pool on the South end, etc.). She and her husband are retired and very concerned about their tax dollars and whether they can afford to live on the island five years from now. She said the Port has no idea whether or not the Farm will be successful, and she fears this will only be the first of many levies to come. Lauderdale suggested they may have bought something they couldn't afford, and maybe they should look at selling it as a means to generate income. Weber said she understood Lauderdale's concerns, adding that she and her husband are also retired. Weber said, We make the choice on prioritizing what we would like to do and see. She said when people decide to live on Whidbey, it is with the knowledge that they will make less money here, but they have prioritized things like community involvement, location, etc.

Regarding the possibility of selling the Farm, Weber said it had never come up until the Board announced that they were considering a levy lift. She explained that she is not even sure the Port can legally sell the Farm since it was purchased with a portion of a package of county bonds and a sale could affect the value of the bonds. Weber stated, I personally am NOT for selling that Farm. She made the choice to support the purchase of the Farm some time ago when she talked with other district residents about it, and she is still for supporting the Farm. It is a priority decision for her, just as levies for the hospital, school district, library and fire districts are. We all have to make decisions that affect our pocketbook She reiterated her support of the Greenbank Farm.

Regarding a future levy, Bronson pointed out that the levy lift proposal has a sunset clause. When the obligation to purchase the Farm is paid off, that is the end of the levy increase and the levy rate will return to the current rate. He said if the Port didn't have to pay the $100,000+ per year for the Farm's purchase, then it would have enough money and would not need any increase in the levy. Hopefully by the time the levy increase has expired, the Farm will be making money. It is very unlikely another levy increase would be proposed.

McDonald pointed out that Port's income from the existing levy is $327,400. The $100,000 payment for the Farm's purchase and the $50,000 paid to the GFMG leaves just over half of that income for the Port's operating reserves. She agreed with McDonald and Bronson that after this levy increase, she did not expect there would not be a need for any additional levies.

Pierzga asked the Board to discuss the amount spent on the Pier versus the Farm. Weber said from 2003-2007, the Port spent $35,545 on necessary repairs (including the Port basement), compared to $293,498 for the Farm. Bronson noted that the Pier really needs to be painted, and the Port will need to address that need sooner rather than later.

Pierzga asked What is the Port's return on investment for the Pier? Weber reported that 2007 revenue totals were as follows: Rent: $30,248, Fuel Sales: $62,000; and Marina Services: $13,275. She noted that fuel purchases totaled $56,000, so the Port's net for fuel was only $6,000. That $6,000 is a trade-off item since it is used to pay a small portion of the wages of the harbormaster, dockhand, and handyman. Associated costs with the rent revenues include $5,000 for the Department of Natural Resources' lease, $3,000+ for security and fire systems, $2,000+ for office supplies, $6,000 for materials and supplies and nearly $17,000 for insurance for all the Port's properties.

Weber said all of the Port's financial statements, budgets and Minutes from meetings are available to the public at the Port office, and all Board decisions are made in public. She encouraged the public to call Patton and schedule a time to review any documents.

Marianne Burr of Coupeville asked when was the Port's latest State audit, and Weber said it was January 2008, for years 2004-2006, and there were no findings. The audit is also available to the public at the Port office.

Larry Ogle of Coupeville said, It looks to me like the Port of Coupeville is a losing proposition all the way around. It's not sustainable without additional tax revenue from the taxpayers. He asked if the Board has looked at the possibility of taking the focus off of the Greenbank Farm and developing a marina. Ogle said he came here in 2001 and the Farm has been nothing but an albatross and a millstone around everybody's neck because it is a dead loser. It has never made a dime. He said it is obvious the levy will happen again when this one ends in 2017. Regarding the focus groups, he asked how they could expect to form a consensus with 40 people. Ogle said he knows it was an emotional issue when it was purchased, but there were never any plans on how it would be sustainable. In a household, if your expenses are more than your income, you have to cut your losses and divest yourself of assets to keep your head above water. He said, I am in favor of not selling the Farm, but perhaps a portion of it. Maybe it can't be done because of the way it was purchased, but he thinks they should look into it as a favor to the taxpayers. He said the Board is obligated to make it run without additional levies.

Pierzga asked if it is possible to develop a marina at the Coupeville Wharf. Weber said No. and she noted that the Port is even limited as to the number of buoys and moorings they can have. The Washington State Department of Fish and Wildlife, the Shoreline Protection Act and US Corps of Engineers would not permit it. Bronson said there is no chance that a new marina could be built because of all the state and federal regulations.

Rob Harbour of Coupeville said at 6 cents per thousand, if his property's assessed value is $400,000, he would pay an additional $24 per year. He said that is not much money. According to his recent tax statement, the only thing that's less is the cemetery district. The county, the hospital and the library are all higher than the Port. Harbour thinks paying $24 per year for 9 years to essentially pay off the mortgage for Greenbank Farm is a really good deal. Harbour asked if the Port has enough to take care of the Wharf. He also asked if there is a capital facilities plan for the Farm for anticipated capital expenses, or will they be surprised by more capital needs? Weber said she doesn't have a crystal ball. She explained that each year the Board has wanted to maintain an operating reserve of $90,000, but they haven't made it the last several years. Last year they ended with about $50,000 and at the end of this year they expect to have about $53,000.

Patton clarified that from the purchase of the Farm in 1997 until 2003, virtually nothing was spent on the Farm to upgrade any of the buildings or infrastructure. In 2003-2004, it was clear that the state was going to provide $1.5 million for a new building on the Farm, but there was no way to get permits for that building without first improving the infrastructure (potable water system, new pump house, etc.). Those costs are all non-recurring and will last for an indefinite period.

Bronson stated that if the proposition passes, there will be enough in the reserves for the maintenance of the Pier, although not all of it can be done in one year. He also noted that one of the results of the focus groups is that a lot of outside funding for the Farm is being realized, including from the CSA and other sources. The funding supports the events and activities on the Farm which are actually income generators, increasing the value and the operating capabilities of the Farm. Groups like the CSA and Northwest Agricultural Business Center (NABC) are making the Farm more economically viable. Weber explained that the Port has partnered with NABC, and that a local group interested in agri-business has received a $40,000 grant for undertaking a CSA project at the Farm.

Lauderdale asked if the Board has a Plan B if the levy fails. Weber stated that, as a Board, the Commissioners have not discussed a Plan B. Their main emphasis at the Port's public meetings centered on the decision to seek the levy increase and following the required procedures to place it on the ballot and provide information to the public, in strict accordance with the Public Disclosure Commission's requirements. Lauderdale said, So all this time that reserves have been dwindling every year, there's never been any discussion except now, at the end of it all, a levy request with no other options. Weber repeated, As a Board, we never discussed another plan. She explained that as a member of the Board, she had discussed options available with the Port's Executive Director. Weber didn't know if her fellow Board members had done that or not.

Ogle asked What was the source of the additional funding that Bronson had referred to - are they taxpayer funds, private donations, or what? Bronson said it is both public money and private donations, because the GFMG, as a not-for-profit fundraising organization, can and does solicit very hard for private donations. The public part comes from national and state agencies that have programs specifically designed to support efforts like this. Ogle concluded that public money is the same as taxpayer funds, so he said, We're looking at more public money to keep this running. Bronson said, Yes, you are - national and state money. He added that it was not to keep it running though, it is to support the various programs. Bronson also noted that it is not Greenbank Farm that asked for that money - it is other groups that are asking for the money so they can operate at Greenbank Farm.

Gary Wray of Coupeville said although he might initially come across as being in opposition to the Port of Coupeville, he is actually very much in favor of it. He said the Board is basically up against the history of the Greenbank Farm. He said the Port Commission's job is economic development, but they are being pulled into conservation by a lot of groups. Wray feels they need to concentrate on economic development - making the Farm work as it is. He doesn't think anybody would support the Port's selling of the Farm or the Pier. Wray believes the Board needs to educate the citizens, and he doesn't think the proposition is going to pass. The $150,000 per year from the proposed levy increase would cover the Farm's mortgage and the GFMG's fee. He noted that many people are not aware of the infighting that initially occurred at the Greenbank Farm and that the GFMG was brought in as a result to improve operations and manage the Farm, and that is why they are paid the $50,000 per year. The GFMG has also brought in grant money. Since the agreement with the GFMG expires in 2014, Wray suggested the levy could be structured so that in 2014, $50,000 of it goes away and then in 2017 the rest of it ends.

Wray also asked about fuel at the Pier: Has it ever been asked why do we have fuel at the Pier? Is it making money for the Port or is it breaking even when you factor everything in? Does it pay for the individual to pump the fuel? Does it pay for the additional insurance obligation for having fuel at the Pier?

Wray noted that the Port had a $400,000 reserve when all this started in 1997 and it has dwindled away. He said it probably would have been better if they had addressed this problem a long time ago, but we're here where we're at. He believes they need to educate people new to the island about the Farm - that it is a treasure and we can't get rid of it. He thinks those newcomers are worried about their taxes and the Port needs to educate them about how the Farm benefits all of us with tourist dollars, etc. He noted that the benefits of the Farm are probably difficult for the Port to track. Regarding fuel at the Pier, Wray surmised that boaters come to the Pier and spend money in Coupeville's restaurants and shops because there is fuel available there. If there was no fuel there, the boaters would go on up to the San Juan Islands instead. Weber agreed.

Wray acknowledged that educating the public is a very difficult task for the Board. The public wants to know if the Farm is being operated to the best advantage of economic development. He said the public is mostly unaware that under the GFMG contract, the Port cannot make money off the Farm until that agreement ends. All income goes back to the GFMG until 2014.

Wray said, I think it (the levy increase) will fail, and you need a back-up plan. If this is a levy for bonds, according to Page 10 of the Port's Comprehensive Plan, he discerned that the bonds are only for capital improvement financing that has widespread community support. He said the Board is asking for money for everyday operations. Weber said he was referring to General Obligation Bonds, and the proposition is not a levy for a GO Bond, it is a different method for raising funds.

Weber said she appreciated his being here, sharing your thoughts, being a supporter, and helping us educate the general public about our needs and what we as individuals can do.

Pierzga asked if there were any other questions. There were none.

Bronson thanked everyone for coming, and noted a considerable range of thoughts and opinions had been presented. He said most of their questions were not ones the Board hadn't pondered, but the Board doesn't always have the facility to answer in a way that is appropriate. Bronson added that Plan B always exists, whether you like it or not, and Plan B is going to be get along with your life with the amount of funds you've got. He hopes they have been dividing it up in a nice and balanced fashion, and they will reexamine that.

McDonald said she also appreciated all the people who attended the meeting, and added that she had learned some interesting things from their questions and comments.

Weber thanked everyone for coming and sharing their concerns with the Board.

ADJOURNMENT: Commissioner Weber adjourned the meeting at 12:23 p.m.