DRAFT - 2021 Operating Budget & Capital Improvement Plan
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2021
Operating
Budget &
Capital
Improvement
Plan
Por t of A n a c o r te s
DRAFT
Table of Contents
Introduction Environmental Program
MESSAGE FROM THE EXECUTIVE DIRECTOR 2 ENVIRONMENTAL STEWARDSHIP 30
WHO WE ARE/WHAT WE DO 3 ENVIRONMENTAL SITES 31
ORGANIZATIONAL CHART 4
COMMISSIONERS 5
Cash Flow Projections
COMMISSIONER DISTRICT MAP 6
DEFINITIONS & ASSUMPTIONS 32
THE BUDGET PROCESS 7
CASH FLOW PROJECTIONS 2021-2025 33
COVID-19 RESPONSE & IMPACTS 9
Long-Term Debt
Operating Budget LONG-TERM DEBT 38
FINANCIAL OVERVIEW 11
2021 BUDGET SUMMARY INCOME STATEMENT 12
AIRPORT 13 Property Tax
MARINA 15 TAX LEVY: TYPES & USES 40
MARINE TERMINAL 17 2021 TAX AT A GLANCE 41
PROPERTIES 19
2021 COMBINED OPERATING BUDGET 21 Supplemental Information
2021 BUDGET – SUPPLEMENTAL COMPARISONS 42
Capital Improvement Plan (CIP)
OVERVIEW 23
CIP CONSOLIDATED SUMMARY 24
2021 CIP 25
2021 CAPITAL PURCHASES 29
Cover Photos: (Top Left) Anacortes Airport runway aerial (Photo by Steve Berentson), (Top Right) Cap Sante Marina Harbor Office (Photo by Karla DeCamp),
(Bottom Left) Aerial view at Marine Terminal Pier 2 (Photo by Dan Crookes), (Bottom Right) Waterfront Festival Dinner at Port Transit Shed (Photo by Karla DeCamp)
1
Message from the Executive Director
Message from the Executive Director
Thank you for your interest in the Port of Anacortes’ 2021 budget. From our 1,000 slip Cap Sante Marina, to our deep water Marine Terminal, to our general aviation
commercial services Airport, to our Port Properties, the Port of Anacortes is a driver of regional economic vitality in the community. With this budget, you will see that the
Port has three overarching priorities that are evident in all of our endeavors:
1) Economic Benefits. The Port of Anacortes is not only a facilitator of domestic and international trade, but also a vital economic institution in and of itself. Despite
the economic challenges posed by COVID-19, the Port plans to invest nearly $15 million in its Capital Improvement Plan in 2021, completing a number of projects
permitted, bid, and started in 2020.
2) Environmental Stewardship. The Port is a committed environmental steward, rising above standards and leading the way across all lines of business. We do this
through our environmental clean-ups, voluntary Green Marine membership at the Marine Terminal, and successful implementation of the Clean Marina and
EnviroStars programs at our Marina. In partnership with the Washington State Department of Ecology, the Port anticipates completing over $6.5 million in
environmental remediation and monitoring activities across its six environmental cleanup sites in 2020 and 2021.
3) Community Leader and Convener. The Port of Anacortes is a mission-driven and responsible operator with Commissioners and dedicated staff leadership who bring
the community, stakeholders and tribal partners together to build partnerships that benefit the community.
In 2020, the Port continued to pursue our North & West Basin Redevelopment project. To that end, the Port has a Memorandum of Understanding with the City of Anacortes
to work collaboratively to achieve a long-range vision for the Marina Uplands, benefiting all of Anacortes and its residents, and to provide for maximizing the highest and
best uses of our Marina properties and the return of the Transit Shed to industrial marine usage.
Despite the impacts of COVID throughout the world, Cap Sante Marina continues its growth as the premier destination marina in the Pacific Northwest. A slow spring was
followed by a record setting summer, keeping Cap Sante as the busiest public marina in the state. It continues to be a hub of activity and economic driver in the Anacortes
community, hosting the first virtual boat show in the United States, the NMTA Anacortes Boat & Yacht Show. In 2020, the Port started procurement and reconstruction of
A-Dock, anticipating a new world-class commercial dock in spring of 2021.
The Marine Terminal was hardest hit in 2020 due to the drop in crude oil prices nationally. Petroleum coke and prilled sulfur remain the primary cargoes shipped from Pier
2, the largest of our shipping terminal piers at the Marine Terminal. In 2020, the Port commissioned a Marine Terminal Modernization Study that will help identify key areas
to pursue and recapitalize in the future to help land other bulk product and diverse cargoes that require deep-water access. Two major repair projects were started in 2020,
including Curtis Wharf corrosion repairs and steel piling cathodic protection and Pier 1 piling and decking repairs.
The Port achieves a great deal in cooperation with our valued partners, including the City of Anacortes, the Anacortes Chamber of Commerce, the Northwest Marine Trades
Association, Pacific Northwest Waterways Association, the Washington Public Ports Association, the Anacortes Waterfront Alliance, the Economic Development Alliance of
Skagit County, Port tenants, Tribes, Skagit County, the Port of Skagit and the residents of our Port district.
If you have any questions or comments regarding the Port, please call me at (360) 293-3134.
Daniel C. Worra
Executive Director
2
Who We Are/What We Do
Who We Are/What We Do
Who We Are
The Port of Anacortes is a municipal corporation of the State of Washington, created in 1926 under provision of the Revised Code of Washington (RCW Title
53 et seq.), to provide for the development and maintenance of harbors and terminals, promote tourism and foster economic activity in its district. With
one of eight natural deep water marine terminal facilities in Puget Sound, its nearly 1,000 slip marina, and its roughly 80 acres of commercial properties,
the Port is instrumental to the success and economic development of the community. The Port is independent from other local or state governments and
has geographic boundaries that consist of Fidalgo, Guemes, Cypress, Sinclair, and neighboring islands, and a small strip of land bordering Padilla Bay up to
and including Samish Island.
A five-member Board of Commissioners elected for four-year terms by Port District voters governs the Port. The Commission delegates administrative
authority to an Executive Director and staff to conduct operations of the Port. The County levies and collects taxes on behalf of the Port as determined by
the Board of Commissioners and acts as treasurer for the Port as defined under RCW 53.36.010.
Industrial Development Corporation of the Port of Anacortes. The Industrial Development Corporation, a public corporation, is authorized to facilitate the
issuance of tax-exempt nonrecourse revenue bonds to finance industrial development within the corporate boundaries of the Port. Revenue bonds issued
by the Corporation are payable from revenues derived as a result of the industrial development facilities funded by the revenue bonds. The bonds are not
a liability or contingent liability of the Port or a lien on any of its properties or revenues other than industrial facilities for which they are issued.
The Port of Anacortes’ five member Port Commission serves as the Board of Directors for the Industrial Development Corporation.
What We Do
The Port provides quality jobs, international trade connections, a strong industrial land base, and economic stability by producing revenue for state and
local services. The Port is authorized by Washington law (RCW Title 53.08) to provide and charge rentals, tariffs and other fees for docks, wharves and similar
harbor facilities, including associated storage and traffic handling facilities for waterborne commerce. The Port may also provide freight and passenger
terminals and transfer and storage facilities for other modes of transportation, including air, rail and motor vehicles. The Port may acquire and improve
lands for sale or lease for industrial or commercial purposes, and may create industrial development districts.
Mission Statement: In partnership with public agencies and private business, develop and manage facilities and services which stimulate private job creation
and commerce, while protecting the quality of life, needs and desires of area residents.
3
Organizational Chart
Organizational Chart
4
Commissioners
Commissioners
Ken Goodwin Commission President 2020 District 1 Term Expires: December 31, 2021
Commissioner Goodwin was elected Port Commissioner in 2017 and began his term in January 2018. A graduate of the University of Washington, with
bachelor’s and master’s degrees in business administration and accounting, Mr. Goodwin’s career includes 40 years as a Certified Public Accountant,
owner/operator of a chain of retail stores in remote Alaska, Director of Finance for the Alderwood Water and Wastewater District, and Commissioner of
the Woodinville Water District for 17 years. He is a Vietnam veteran and served on the Port’s Marina Advisory Committee before becoming Commissioner.
Jon Petrich Commission Vice President 2020 District 2 Term Expires: December 31, 2021
Commissioner Petrich was elected Port Commissioner in 2017 and began his term in January 2018. Commissioner Petrich is employed as a Project
Supervisor and licensed Lead Vessel Operator at National Response Corporation (NRC). He has two bachelor’s degrees from Eastern Washington University
in finance and economics.
Joe Verdoes Commissioner 2020 District 3 Term Expires: December 31, 2023
Commissioner Verdoes was initially elected Port Commissioner in 2015, and began his term in January 2016. Mr. Verdoes was subsequently re-elected in
2019 and began his second term in 2020. Mr. Verdoes is self-employed as a Puget Sound commercial fisherman and local businessman. He has a bachelor’s
degree in business administration from the University of Washington and a master’s degree in developmental studies from Deakin University, Geelong,
Australia. Mr. Verdoes was a member of the Port’s Marina Advisory Committee for seven years. Before becoming a commercial fisherman in 1994, he was
employed as an Economic Development Officer for a small Australian community and operated a dairy farm locally.
Bonnie Bowers Commission Secretary 2020 District 4 Term Expires: December 31, 2023
Commissioner Bowers was elected Port Commissioner in 2019 and began her term in January 2020. Commissioner Bowers is a graduate of Washington
State University and the FBI National Academy. She retired as Police Chief in Anacortes after a 33 year career in public safety. She has a keen interest in
economic development and green industry. Commissioner Bowers is a longtime member of the Anacortes Rotary Club.
Katherine “Kathy” Pittis Commissioner 2020 District 5 Term Expires: December 31, 2021
Commissioner Pittis was elected Port Commissioner in 2017 and began her term in January 2018. Commissioner Pittis had a 21-year career at the Port of
Anacortes, serving in various leadership roles. She served on the Anacortes School Board and on numerous community and regional committees, including
the Governor’s Southern Resident Killer Whale Task Force. Commissioner Pittis is currently serving as the Vice President of the Washington Public Ports
Association Executive Committee.
5
Commissioner District Map
Commissioner District Map
6
The Budget Process
The Budget Process
The budget has several major purposes. It converts the Port’s policies and plans, including its Strategic and Comprehensive plans, into services and future
capital improvement projects. It serves as a vehicle to communicate these plans to the public, and once adopted by the Commission, becomes the work
plan to be accomplished during the next fiscal year.
The annual operating and capital budgets are a forecast of expected resources and the purposeful distribution of those resources. This includes the rate of
taxation for the coming fiscal year. Typically, the operating budget is developed based on historical trends in revenue and expenses, information from
customers and tenants, market projections, and key economic and regulatory assumptions. The 2021 budget was developed in much the same way,
however, the outbreak of the 2019 novel coronavirus (“COVID-19”) is a significant event that has had and will have ongoing, material effects on the finances,
operations, and economy of the Port. (Please see the COVID-19 Response & Impacts section of this document for information and expectations about the
effects of COVID-19, including projected revenues of the Port.) While the Port’s current financial outlook remains positive, the Port cannot predict the
duration and extent of the COVID-19 public health emergency, or quantify the magnitude of the impact on the regional and local economy. This economic
uncertainty as a result of the current global pandemic, shifts in markets (especially those affecting our local refineries), considerable capital requirements
for the Port’s aging infrastructure and development
plans, continued regulatory requirements and
environmental risks remain challenging.
Citizen involvement and understanding of the
budget is a major part of the review process. The
Budget Calendar on the following page provides an
overview of the budget process and important dates
regarding its review and adoption.
Jill R. Brownfield, CPA
Director of Finance & Administration
Photo: Cap Sante Marina (Photo by Rakan AlDuaij)
7
The Budget Process
BUDGET CALENDAR
July
16 Regular Commission Meeting - 2nd Quarter Financial Results
22 Mid-Year Update & Budget Kick-Off
August
6 Regular Commission Meeting
10 Departments submit draft budgets to Finance
11-14 Departmental budget workshops
20 Regular Commission Meeting
21 5 Year Draft CIP submitted to Finance
28 Preliminary 5 Year Cash Flow complete
31 Directors/Project Managers budget workshop CIP/Cash Flow
September
3 Regular Commission Meeting - Tax Levy Discussion
9 Final 5 Year CIP and Cash Flow complete
17 Regular Commission Meeting - Budget Assumptions
18 Draft budget available to Commission
October
1 Special Commission Meeting - Budget Study Session
7 Budget revisions from Study Session complete
9 Preliminary budget available to public
15 Regular Commission Meeting - 3rd Quarter Financial Results
21-22 1st public notice; budget hearing scheduled
28-29 2nd public notice; budget hearing scheduled
November
5 Regular Commission Meeting - Budget Public Hearing & Adoption
6 Certify to County Assessor amount of taxes levied; publish final budget
9 Adopted budget available to public
8
COVID-19 Response & Impacts
COVID-19 Response & Impacts
Background
The COVID-19 pandemic is affecting many parts of the world, including the State, the County, and the Port. Beginning January 31, 2020, and continuing
through the early part of March, federal, state and county officials declared states of emergency in response to the COVID-19 pandemic. On March 19, 2020,
the Port Commission adopted Resolution No. 1361, declaring COVID-19 a civic public health emergency, and therefore giving the Executive Director authority
to exercise emergency powers to ensure the continued operation of the Port and its facilities in response to COVID-19. The State Governor has issued a
series of proclamations designed to limit social interactions, including orders requiring or encouraging individuals, governments and businesses to take
certain precautionary measures designed to prevent the spread of COVID-19. On March 23, 2020, the State Governor issued a statewide “Stay Home, Stay
Healthy” proclamation, requiring individuals to stay home except for essential activities, banning social and other gatherings, and closing all businesses with
certain exceptions for essential businesses. Washington State currently is following a phased re-opening approach. As of the budget adoption date, Skagit
County is in Phase 2 of the re-opening phases. The Port has and continues to coordinate its
response to the pandemic with the Washington State Department of Health, as well as the
local county public health department.
Operations
Ensuring maximum protection for the health and safety of Port stakeholders has been the
Port’s top priority during this public health emergency. On March 20, 2020, the Port closed
its Main Port Office and Harbor Masters Office to the public, maintaining normal business
hours to serve customers via phone or email. All administrative and other staff who could
feasibly perform their duties remotely, were sent home to do so. Facilities, outside Marina
operations, and security staff were deemed essential to keep Port operating areas open and
responsive to the needs of the Port’s tenants, customers and guests. All meetings, including
regular and special Commission meetings, became virtual as of March 19, 2020.
The Port believes it has a critical role in assisting the community continue through the phased reopening and safely advancing toward the “new normal.” In
July 2020, Port Commissioners and staff adopted a Start Safe Return Plan, aligned with Washington state guidance, which is an implementation tool that
ensures Coronavirus Prevention Practices are deployed to safeguard all stakeholders from biological hazards and address known hazards at all Port facilities.
Key elements include education, social distancing, cleaning and disinfecting, hand washing, and rigid protocol around sick and exposed employees. The Port
continues communicating to customers, visitors, and stakeholders, the importance of staying safe, such as: practicing good hygiene (hand washing, use of
disinfectants, avoiding hand shaking), social distancing, wearing a mouth and nose covering when around groups of people in public and staying home if
feeling sick or unwell.
9COVID-19 Response & Impacts
Potential Financial Impacts
The Port did not formally amend its 2020 adopted budget, but anticipates a potential net adverse impact of approximately $0.6 million as a result of lost
operating income and additional expenses, net of Federal relief. (Please see the Supplemental Information section of this document which estimates 2020
results alongside 2020 budget.) Despite this, the Port currently estimates a positive net operating income in 2020 of approximately $2.3 million (before
depreciation) and has continued to move forward with its capital improvement initiatives as originally planned.
The Port has experienced direct expenses associated with COVID-19 primarily as a result of information technology purchases including additional software
licenses and hardware purchases (to support remote work), temporary essential personnel additional pay (in excess of their regular pay rates) for employees
who were unable to telework, personal protective equipment, a cleaning contract with an outside vendor, and a business tenant rent relief program. The
Port’s 2021 budget forecasts continued expenses related to personal protective and safety equipment, increased cleaning and sanitation, and anticipates
the addition of a full-time custodian position.
The Port has also seen individual revenue streams impacted by COVID-19, primarily as a result of restrictions placed on people to stay home, avoid travel,
not gather, etc. In particular, the price of oil has fallen as a result of a significant decline in global demand. As local refineries decrease production, the Port
anticipates decreased exports of refinery by-products, petroleum coke and sulfur. While, the ultimate impacts of COVID-19 on bulk product exports is
unknown at this time, the Port has estimated a 40% reduction in 2020 of its original budgeted 359,000 metric tons. In 2021, the Port assumes similar results
to that of 2020, and has forecast 238,800 metric tons of petroleum coke and sulfur exports.
Restrictions on gatherings resulted in event cancellations beginning in mid-March 2020 and are currently anticipated to continue into 2021. All of the Port-
hosted community events for 2020 were cancelled impacting both direct venue rental revenue and sponsorship revenues. The Port has not experienced
and does not currently anticipate any material lease defaults among its tenants.
The impacts to the Marina include reduction in guest moorage, use of boat launches, RV nights and fuel sales. Permanent moorage at the Marina has not
been impacted thus far by the pandemic. Guest moorage, which made up 18% of total moorage in 2019, saw a decline of about 25% in guest boater nights
through July 31, 2020, but has since shown signs of recovery.
Due to revenues derived from property and ground leases and T-hangar rentals, the Port predicts that Airport revenues will not be negatively impacted.
Additionally, the Port received $30,000 in Federal Aviation Administration funding award through the Coronavirus Aid, Relief and Economic Security (CARES)
Act, which will offset any potential decrease in Airport revenues.
10Financial Overview
Financial Overview
Revenues
The 2021 budget reflects total operating revenues of $15.150 million, a decrease of approximately 15% from the 2020 adopted budget. As discussed in the
previous pages, the COVID-19 public health emergency has had and will have ongoing, material effects on the finances, operations, and economy of the
Port. While the full impact of the COVID-19 pandemic on the Port and the regional economy is uncertain, the Port anticipates a continued reduction in
demand for oil, thus decreasing the price of fuel and export volumes of petroleum coke and sulfur. Restrictions on travel and social gatherings are also
anticipated to impact event venue rentals and Port-sponsored events. Conversely, Marina activity shows signs of full recovery and the Port maintains a
current waitlist of over 250 customers seeking permanent moorage. Recent property acquisitions and environmental remediation efforts provide
opportunities for increased property lease and marine terminal business. This, along with sufficient debt capacity, is contributing to aggressive future cash
flow projections and capital improvement initiatives. 55% of the total projected 2021 operating revenue is from the Marina, 31% is from the Marine
Terminal, 11% from Properties and the remaining 3% from the Airport.
Non-operating revenues consist primarily of property tax collections. As directed by the Port Commission, property tax levies fund property acquisition,
industrial development including environmental costs, debt service for general obligation bonds, and public access improvements. The budgeted levy of
$1.673 million reflects a rate of $0.21 per $1,000 of the Port district’s preliminary total assessed value.
Expenses
Similar to the reduction in operating revenues, the 2021 budget projects operating expenses of $15.104 million, a 13% decrease from the 2020 budget.
Since not all costs are fixed, increases or decreases in revenues will have a similar effect on operating expenses. On the other hand, while the rate of inflation
has slowed as a result of the global pandemic, some costs, such as insurance have continued to increase. Further, the Port remains committed to process
improvement and providing safe, productive facilities with excellent customer service. The 2021 budget reflects increased expenses associated with
additional communications outreach, facilities maintenance staffing, records retention efforts, and proactive maintenance across all operating areas.
Included in total operating expenses is approximately $2.436 million in depreciation, general and administrative (G&A) expenses of $3.096 million, and
facilities expenses of $1.054 million. G&A expenses are allocated to each operating area as a percentage of total operating expenses. Facilities expenses
are allocated based on direct labor hours.
The 2021 non-operating expenses consist primarily of interest expense on general obligation bonds. The Port has two outstanding general obligation bonds,
totaling $10.385 million. Annual debt service payments in 2021 total $1.572 million, and are anticipated to be paid from operating funds.
Net Income
The 2021 budget reflects a net income, before environmental and capital grants, of $1.630 million, a slight improvement over the Port’s revised expectations
for 2020 of $1.379 million.
112021 Budget Summary Income Statement
2021 Budget Summary Income Statement
OPERATING REVENUES
Airport $ 430,637
Marina 8,392,800
Marine Terminal 4,737,524
Properties 1,589,288
Total Operating Revenues 15,150,249
OPERATING EXPENSES
Airport 567,430
Marina 6,796,661
Marine Terminal 3,877,869
Properties 1,426,699
Total Operating Expenses 12,668,659
Net Operating Income Before Depreciation 2,481,590
Total Depreciation 2,435,800
NET OPERATING INCOME 45,790
Non-Operating Revenues 1,821,860
Non-Operating Expenses (237,963)
NET NON-OPERATING 1,583,897
Net Income Before Environmental 1,629,687
Environmental Grants and Recoveries 1,828,126
Environmental Expenses (2,481,533)
NET ENVIRONMENTAL (653,407)
Capital Grants 2,440,800
NET INCOME $ 3,417,080
Photo: MV Bluefin Research Support Vessel Berthed at Pier 2 (Photo by Port Staff)
122021 Operating Budget: Airport
Airport
Overview: The Anacortes Airport serves as a vital link for postal, commercial, recreational and passenger services, primarily to the San Juan Islands. The
Airport is also strategically located for emergency services in the case of natural disasters in and around the surrounding areas.
Building and property leases, hangar rentals and fuel sales comprise the majority of Airport revenues. While significant declines in the price of oil and State-
imposed travel restrictions due to the COVID-19 global pandemic contributed to reduced gross fuel sales in 2020, other Airport revenue streams have been
unaffected.
The Port owns and leases forty hangars. A consistent waitlist over the past few years indicates steady demand for this hangar space, despite statistics, which
show decreasing numbers of private pilots in the United States. Core building and property tenants, most of which are in long-term lease agreements, are
Micro AeroDynamics, Aeronautical Services, Northwest Marine Technology, Inc., Rugby Aviation DBA San Juan Airlines, and 48 Degrees North Aviation. Of
note, Northwest Marine Technology, Inc. recently signed a new 30-year lease agreement and constructed a 7,900 square foot building, including a hangar,
enabling eight new full-time employees. In recognition of their business expansion, they were selected as the Port’s Economic Development Partner Award
for 2020.
Budgeted revenues in 2021 total $431,000, an approximate 2% increase over 2020-budgeted revenues. Based on the downturn in the economy as a result
of COVID-19 and current Consumer Price Index (CPI) data, no CPI increases have been factored into any of the Port’s long-term leases in 2021. Due to
consistent demand, 10% rate increases have been forecast in hangar rentals. Fuel sales have been forecast conservatively, using a trailing twelve month
average of fuel cost, reduced by nearly 20% to reflect volume decreases through July 31,
2020.
2020 Improvements and 2021 Significant Initiatives:
In 2020, the Port, in cooperation with the FAA, completed a comprehensive obstruction
survey to enable future projects within the Airport Improvement Plan. In response to
the COVID-19 pandemic, Congress adopted the Coronavirus Aid, Relief, and Economic
Security (CARES) Act. As part of this act, the Port was awarded $30,000 in grant monies
administered through the FAA, which were used to fund parking area pavement
improvements. In 2021, the Port will wrap-up stormwater management feasibility work
and begin pre-construction elements on the selected approach to improvements.
Utilizing FAA grant awards, the Port will complete north tie down apron improvements,
and lastly, the Port will complete additional pavement or asphalt improvements outside
the operational fence.
Photo: Airport Asphalt Project (Photo by Port Staff)
132021 Operating Budget: Airport
OPERATING REVENUES
Building & Ground Leases $ 153,544
T Hangar Storage 121,943
Fuel Sales 143,750
Other 11,400
Total Operating Revenues 430,637
OPERATING EXPENSES
Fuel for Resale 125,000
Facilities & Operations 301,225
G&A Allocation 141,205
Total Operating Expenses 567,430
Net Operating Loss Before Depreciation (136,793)
Depreciation 311,751
NET OPERATING LOSS $ (448,544)
Photos: (Top) Airplane Flying Over the San Juans, (Bottom) Airport Fog Seal Project (Photo by Port Staff)
142021 Operating Budget: Marina
Marina
Overview: Located in Fidalgo Bay and containing nearly 1,000 boat slips, Cap Sante Marina is one of the Northwest’s premier boating destinations as well
as home to many local commercial fishermen, tour companies, yacht brokerage firms, and other commercial marine businesses. Proximity to the downtown
corridor, exemplary customer service, competitive fuel pricing, and quality amenities result in thousands of visiting boaters from early spring to late fall each
year. Typically, events such as the Anacortes Chamber of Commerce’s Waterfront Festival, the NMTA Anacortes Boat and Yacht Show, and the Summer
Concert Series draw numerous visitors and community members to the Marina and downtown Anacortes businesses. Based on the COVID-19 pandemic
restrictions and guidance, the Port cancelled all community events scheduled in 2020, with the largest impact being on Marina revenues in the months of
April, May, and June.
Moorage revenues and fuel sales comprise over 90% of the Marina’s total revenues. Significant declines in the price of oil and travel restrictions due to
COVID-19 contributed to reduced gross fuel sales in 2020, as well as declines in guest moorage nights. However, permanent moorage, which represents
80% of total moorage, was not affected. As of July 31, 2020, the waitlist for permanent moorage numbered more than 250 customers, and those seeking
slips larger than 36 feet in length can expect a 12-24 month wait. The remaining 10% of Marina revenues consists of items such as; boat launch fees, boat
trailer and recreational vehicle parking, web locker and outside gear storage rent, and retail sales. While many of these categories were impacted by COVID-
19 in the spring and early summer of 2020, the reopening of commercial and recreational crabbing and families seeking outdoor activities such as boating
contributed to typical volumes in July and August.
Budgeted revenues in 2021 total $8.393 million. While the original 2020 budget forecast revenues of about $9.223 million, revised revenues as a result of
COVID-19 are estimated at $7.996 million. Thus, the 2021 budget is an increase of about 5% over projected 2020 results. Key assumptions include;
recreational permanent moorage rate increases of 3-6%, depending on slip size, 3% guest moorage rate increases, and no increase for commercial moorage
customers. Fuel volumes are expected to return to pre-COVID amounts, but at prices of only about 5% ahead of 2020 averages and the Port anticipates
partial closure of its RV parking area due to redevelopment planned for 2021.
2020 Improvements and 2021 Significant Initiatives:
The Marina underwent many small, but crucial, process improvements and maintenance projects in 2020, including electrical work on North-end docks to
the addition of fiber optics for greater connectivity and reliability in processing transactions to remote offices and a Marina-wide Wi-Fi upgrade of
infrastructure originally installed in 2013. The Port also completed a pier expansion at the entrance to P and Q docks for pedestrian and small boat launch
users’ safety.
The much-anticipated A-Dock recapitalization project is underway with completion slated for spring 2021. The Port also anticipates completing electrical
service upgrades at B-dock, primarily used by commercial fishermen and other commercial marine businesses, and to install an additional high speed fuel
dispenser at the fuel dock. The north basin docks, specifically O, P & Q docks, as well as T-Dock, are the next in line for recapitalization and funds for planning,
permitting, and remedial repairs in the short-term, round out the Port’s 2021 capital plans.
152021 Operating Budget: Marina
OPERATING REVENUES
Moorage $ 5,052,895
Fuel Sales 2,553,842
Operating Grants 3,780
Other 782,283
Total Operating Revenues 8,392,800
OPERATING EXPENSES
Wages & Benefits 1,065,371
Fuel for Resale 2,000,660
Facilities & Operations 2,070,080
G&A Allocation 1,660,550
Total Operating Expenses 6,796,661
Net Operating Income Before Depreciation 1,596,139
Depreciation 965,692
NET OPERATING INCOME $ 630,447
Photos: (Left) Cap Sante Marina voted 2020
Best Moorage Facility, (Right) Cap Sante
Marina’s Fuel Dock, Fido’s Fuel
162021 Operating Budget: Marine Terminal
Marine Terminal
Overview: The Port’s Marine Terminal facility consists of three deep-water working piers, Pier 1, Pier 2, and Curtis Wharf. The Marine Terminal achieves its
revenues through cargo shipments, short and long- term lease of dock space, other ground leases and transient dockage revenue from berthing of vessels,
barges and tugboats.
Pier 1 houses the Port’s historic Transit Shed, currently used as a community events center and administrative offices, as well as providing moorage for a
variety of vessels. In addition, Dakota Creek Industries, a primary tenant of the Port, uses Pier 1 for its floating dry dock in support of its shipbuilding and
repair operations while M&M Seafood operates a seafood processing area.
Pier 2, the primary use of which is exporting dry bulk cargoes, is the most active part of the Port’s Marine Terminal. At 37 ½ feet draft, it is the Port’s deepest
pier. Pier 2 has 14 acres of paved asphalt-cement surfacing, a self-contained stormwater management system, a 460-foot concrete cement frontage pier,
and a stationary ship loader. Currently, the Port’s primary bulk product commodities are petroleum coke and prilled sulfur; both of which are by-products
of the refining process.
Curtis Wharf is a working wharf and dock providing periodic vessel moorage to a range of commercial users, including the American Spirit and American
Constellation cruise ships, which visit throughout the spring, summer, and fall, as well as home to a seafood processing facility.
Budgeted revenues in 2021 total $4.738 million. As mentioned previously, the COVID-19 global pandemic has had a devastating effect on oil prices as a
result of plummeting demand. While the true impact is unknown at this time, the Port estimates bulk product exports of 220,000 metric tons in 2020,
roughly 40% less than originally forecast. In 2021, bulk product shipments are conservatively estimated at 238,800 metric tons. Tariff increases for other
Marine Terminal activity, such as dockage, has been estimated at 3%, to be adjusted mid-year. The Port expects to welcome back American Cruise Lines to
Curtis Wharf for the 2021 sailing season based on recent berthing reservations.
2020 Improvements and 2021 Significant Initiatives:
In 2020, the Port received final permitting and commenced construction on Pier 1 Piling Repairs and Curtis Wharf Corrosion Repairs and Cathodic Protection.
Both projects are anticipated to be complete by year-end. The Port also completed a Marine Terminal Modernization Feasibility Study, which was funded in
part by a Community Economic Revitalization Board grant. Recommendations and findings from the study will help to guide the Commission and staff on
future capital investments.
The 2021 Capital Improvement Plan forecasts about $1 million in infrastructure improvements to various Marine Terminal facilities, including Phase 2 of
Corrosion Repairs and Cathodic Protection on Curtis Wharf, paving the street and entrance to Curtis Wharf, a Port Maintenance Building Extension to protect
critical assets from the elements and Pier 2 cleat design and replacement.
172021 Operating Budget: Marine Terminal
OPERATING REVENUES
Terminal Services $ 1,528,128
Handling 2,265,226
Ground Leases 536,386
Other 407,784
Total Operating Revenues 4,737,524
OPERATING EXPENSES
Wages & Benefits 32,784
Longshore/Stevedoring 2,266,126
Facilities & Operations 633,529
G&A Allocation 945,430
Total Operating Expenses 3,877,869
Net Operating Income Before Depreciation 859,655
Depreciation 835,980
NET OPERATING INCOME $ 23,675
Photos: (Bottom) Lakeside Industries Marine Terminal Asphalt Repairs in May 2020 Supporting DCI, Transpac
& Cortland Tenants, (Top) MV Nord Madeira First Port of Call Celebration in February 2020
182021 Operating Budget: Properties
Properties
Overview: Properties consists of building and ground leases not associated with the other three operating areas, rental of the Port’s Transit Shed and
Seafarers’ Memorial Park Building, and revenue and expense related to Port-sponsored events.
Over 90% of Properties’ revenues are determined by already negotiated lease rates (many long-term) with increases set by CPI or by a fixed rate. Concerns
for Port tenants and their businesses at the onset of the COVID-19 pandemic resulted in a Commission-adopted rent deferral program in March 2020. The
program, which offered deferment of up to three months’ worth of rent (exclusive of leasehold tax) to year-end, penalty-free, received low participation
indicating financial strength and business continuity amongst Port tenants. However, CPI increases have virtually disappeared as a result of the slowdown
in the economy. The Port has assumed no major lease defaults and assumed no CPI increases in its lease rates for 2021 budgetary purposes.
The remainder of Properties’ revenues comes from venue rentals and sponsorship and ticket sales for Port-sponsored events. State-mandated restrictions
on social gatherings and community events resulted in the cancellation of all events beginning in mid-March 2020. It is anticipated that these cancellations
continue throughout year-end. Rental activity for 2021 is assumed to resume in the 3rd quarter.
Because most Port-sponsored events occur in the latter half of the year, the Port anticipates
hosting all of its typical events in 2021, though with reduced sponsorship revenues.
2020 Improvements and 2021 Significant Initiatives:
In 2020, the Port continued North and West Basin Redevelopment planning efforts. This project,
which involves repurposing the Transit Shed to a marine industrial use and moving the Port’s
Events Center and Administrative Offices to the Marina’s North and West Basin, also includes
an RV Park (with full amenities), establishment of a ground lease pad for potential future
developments, and enhancement of waterfront public access areas. The Port is working towards
100% design and plans to begin the first phase of development, to include the redevelopment
of the RV Park, an RV Park Restroom Facility, and improved vehicle parking near J-K-L Docks in
2021.
Developing properties to the highest and best use remains a top priority for the Port. In 2019,
the Port purchased three properties; the Rockwell site, consisting of nearly 7 acres of zoned
light manufacturing property near the Airport, the N Avenue/3rd Street property near Curtis
Wharf, and the Bartholomew property, consisting of over 4 acres of zoned heavy manufacturing
property including five warehouses and office buildings. In 2020, the N Avenue/3rd Street property was renovated in order to relocate an existing Port tenant
and the Bartholomew property has been 60% leased to various business enterprises. The Port’s 2021 capital plan includes preparation of the Rockwell site
for future development for which the Port is already receiving inquiries from potential tenants. Photo: RV Park Aerial
192021 Operating Budget: Properties
OPERATING REVENUES
Property Rents $ 1,487,384
Venue/Event Revenues 50,770
Operating Grants 12,000
Other 39,134
Total Operating Revenues 1,589,288
OPERATING EXPENSES
Wages & Benefits 532,657
Facilities & Operations 544,892
G&A Allocation 349,150
Total Operating Expenses 1,426,699
Net Operating Income Before Depreciation 162,589
Depreciation 322,377
NET OPERATING LOSS $ (159,788)
Photos: (Top) Bartholomew Property Acquisition, (Bottom Left)
Port of Anacortes Summer Concert Series voted 2020 Best Live
Entertainment Venue (Bottom Right) Anthony’s at Cap Sante
Marina, Anthony’s Cabana, and Port of Anacortes Esplanade
Tables
202021 Combined Operating Budget
2021 Combined Operating Budget
Marine
Airport Marina Terminal Properties Non-Op Totals
OPERATING REVENUES
T Hangar Storage $ 121,943 $ - $ - $ - $ - $ 121,943
Fuel Sales 143,750 2,553,842 - - - 2,697,592
Moorage - 5,052,895 - - - 5,052,895
Terminal Services - - 1,528,128 - - 1,528,128
Handling - - 2,265,226 - - 2,265,226
Building & Ground Leases/Rents 153,544 - 536,386 1,487,384 - 2,177,314
Venue & Event Revenues - - - 50,770 - 50,770
Operating Grants - 3,780 - 12,000 - 15,780
Other 11,400 782,283 407,784 39,134 - 1,240,601
TOTAL OPERATING REVENUES 430,637 8,392,800 4,737,524 1,589,288 - 15,150,249
OPERATING EXPENSES
Wages & Benefits - 1,065,371 32,784 532,657 - 1,630,812
Longshore/Stevedoring - - 2,266,126 - - 2,266,126
Fuel for Resale 125,000 2,000,660 - - - 2,125,660
Facilities & Operations 301,225 2,070,080 633,529 544,892 - 3,549,726
G&A Allocations 141,205 1,660,550 945,430 349,150 - 3,096,335
TOTAL OPERATING EXPENSES 567,430 6,796,661 3,877,869 1,426,699 - 12,668,659
NET OPERATING INCOME (LOSS)
BEFORE DEPRECIATION (136,793) 1,596,139 859,655 162,589 - 2,481,590
Depreciation 311,751 965,692 835,980 322,377 - 2,435,800
NET OPERATING INCOME (LOSS) $ (448,544) $ 630,447 $ 23,675 $ (159,788) $ - $ 45,790
212021 Combined Operating Budget (continued)
Marine
Airport Marina Terminal Properties Non-Op Totals
NON-OPERATING
Revenues $ - $ - $ - $ - $ 1,821,860 $ 1,821,860
Expenses - - - - (237,963) (237,963)
NET NON-OPERATING - - - - 1,583,897 1,583,897
NET INCOME (LOSS)
BEFORE ENVIRONMENTAL (448,544) 630,447 23,675 (159,788) 1,583,897 1,629,687
ENVIRONMENTAL ACTIVITY
Grants and Recoveries - - - - 1,828,126 1,828,126
Expenses - - - - (2,481,533) (2,481,533)
NET ENVIRONMENTAL ACTIVITY - - - - (653,407) (653,407)
Capital Grants 440,800 500,000 - 1,500,000 - 2,440,800
NET INCOME (LOSS) $ (7,744) $ 1,130,447 $ 23,675 $ 1,340,212 $ 930,490 $ 3,417,080
22Capital Improvement Plan Overview
Overview
Port Commissioners and Staff developed the 2021 Capital Improvement Plan (CIP) through a robust scoring effort in 2019 for budget years 2020-
2021. This biennial process involves identifying all potential projects, including previously unfunded or backlogged projects, some new, and several
ongoing projects. Some of the projects date back to the Port’s 2008 Comprehensive Plan. The project inventory is reevaluated and prioritized every
other year to best meet the Port’s priorities.
The 2021 CIP continues to focus on deferred maintenance across all operating areas, along with new redevelopment opportunities within the Marina
and newly acquired properties.
At the Airport, the Port will continue planning efforts towards the maintenance and improvement of the stormwater detention pond, north tie down
apron improvements including pavement rehabilitation and installation of subsurface edge drains. Additionally, pavement improvements outside the
operational fence will complete the pavement rehabilitation project started in 2020.
At the Marina, work will continue on the A-Dock Recapitalization project. First estimated to be completed by 2019, the intensive permitting process
delayed the project, which is now on-track for completion in 2021. The Port also anticipates completing upgrades to electrical service at B-Dock and
installing an additional high speed fuel dispenser at the fuel dock to increase capacity. As a follow-on to a recent condition report and stakeholder
outreach, 2021 will include a focused feasibility planning effort for T-Dock Reconfiguration and Replacement. The North Basin docks, specifically O, P
& Q docks, are next in line for recapitalization and repairs in the short-term, pending procurement of necessary permits, round out the Port’s 2021
capital plans for the Marina.
While a recently completed Marine Terminal Modernization Feasibility Study will help to guide the Commission and staff on future capital investments
at the Marine Terminal, 2021 will see a continuation of four in-progress projects. Port staff will proceed with the final phase of Curtis Wharf corrosion
repairs and cathodic protection system. Pier 2 cleat design will explore additional cleat additions to increase safety and efficiency during loading
events. The Port maintenance building extension will provide a covered area for storage of the Port’s equipment that currently are exposed to outdoor
elements and Curtis Wharf entrance paving will improve access for upland services that support marine trade activity.
Within Properties, the newly acquired Rockwell property will see design and site development construction efforts. Planning efforts continue on the
North and West Basin Redevelopment with significant investments in design and permitting in the North Basin anticipated in 2021, These components
include a fully upgraded Cap Sante Marina RV Park which will create a first-rate RV Park with 25 spaces (2 ADA compliant) complete with dedicated
utilities, green spaces, privacy hedges, and a restroom facility. Reconfiguration and paving of the parking lot area that serves J-K-L Docks, will also be
included in the North Basin upgrades in 2021.
2021 Capital Procurement primarily includes equipment purchases to replace assets at the end of their useful lives. Included in planned purchases in
2021 are new signs at the Airport and Bartholomew Properties, MT Acrulog for sulfur monitoring at the Marine Terminal, Brivia Access Controls at
the Marina, additional Wi-Fi capacity at the Marina and flooring overlay at the Seafarers’ Memorial Park Building.
232021 CIP Consolidated Summary
CIP Consolidated Summary
Prior Year(s) TOTAL PROJECT FUNDING
Current Year Current Year Cash Future Year(s)
Cost Center Project Carry PORT GRANTS
Project Budget Expenditures Project Spend
Forward Dollars Dollars
Airport $ 90,000 $ 534,000 $ 624,000 $ - $ 183,200 $ 440,800
Marina 6,711,800 575,000 7,286,800 - 6,786,800 500,000
Marine Terminal 500,000 485,000 985,000 - 985,000 -
Properties 735,000 5,020,000 5,755,000 - 4,255,000 1,500,000
Capital Procurement - 96,200 96,200 - 96,200 -
Total for All Projects $ 8,036,800 $ 6,710,200 $ 14,747,000 $ - $ 12,306,200 $ 2,440,800
242021 Airport CIP
2021 CIP
Airport CIP
Future TOTAL PROJECT FUNDING
Prior Year(s) Current Year Current Year
Project Year(s) PORT GRANTS
Project Title Project Carry Project Cash
Type Project
Forward Budget Expenditures Source Dollars Source Dollars
Spend
Airport
Stormwater
Facility
Improvements $ 90,000 $ - $ 90,000 $ - Tax Fund $ 90,000 --- $ -
M&R
(Pre-
construction)
North Tie Down
Facility General FAA /
Apron - 464,000 464,000 - 23,200 440,800
M&R Fund WSDOT
Improvements
Outside
Operational Facility General
- 70,000 70,000 - 70,000 --- -
Fence Pavement M&R Fund
Improvement
Total Airport Projects $ 90,000 $ 534,000 $ 624,000 $ - --- $183,200 --- $440,800
252021 Marina CIP
Marina CIP
Prior TOTAL PROJECT FUNDING
Current Future
Year(s) Current Year PORT GRANTS
Year Year(s)
Project Title Project Type Project Cash
Project Project
Carry Expenditures Source Dollars Source Dollars
Budget Spend
Forward
A-Dock General .09
Economic
Demolition and $5,611,800 $ - $5,611,800 $ - / Tax $5,111,800 Skagit $500,000
Development
Replacement Fund County
B-Dock Electrical General
Facility M&R 625,000 - 625,000 - 625,000 --- -
Upgrades Fund
North Basin Docks
General
O-P-Q Float Rehab Facility M&R 475,000 325,000 800,000 - 800,000 --- -
Fund
(Construction)
T-Dock
Economic Tax
Reconfiguration - 150,000 150,000 - 150,000 --- -
Development Fund
(Feasibility)
Additional High
Speed Fuel Economic General
- 100,000 100,000 - 100,000 --- -
Dispenser Development Fund
(Construction)
Total Marina Projects $6,711,800 $ 575,000 $7,286,800 $ - --- $6,786,800 --- $ 500,000
262021 Marine Terminal CIP
Marine Terminal CIP
Prior TOTAL PROJECT FUNDING
Year(s) Current Year PORT GRANTS
Current Year Future Year(s)
Project Title Project Type Project Cash
Project Budget Project Spend
Carry Expenditures Source Dollars Source Dollars
Forward
Curtis Wharf
Corrosion
Repairs and
General
Cathodic Facility M&R $ 500,000 $ - $ 500,000 $ - $ 500,000 --- $ -
Fund
Protection
system
(Phase 2 of 2)
Pier 2 Cleat General
Facility M&R - 150,000 150,000 - 150,000 --- -
Design Fund
Port
Maintenance General
Facility M&R - 200,000 200,000 - 200,000 --- -
Building Fund
Extension
Curtis Wharf General
Facility M&R - 135,000 135,000 - 135,000 --- -
Entrance Paving Fund
Total Marine Terminal Projects $ 500,000 $ 485,000 $ 985,000 $ - --- $ 985,000 --- $ ---
272021 Properties CIP
Properties CIP
Prior TOTAL PROJECT FUNDING
Current Future
Year(s) Current Year PORT GRANTS
Year Year(s)
Project Title Project Type Project Cash
Project Project
Carry Expenditures Source Dollars Source Dollars
Budget Spend
Forward
RCO &
Cap Sante Marina
Economic General .09
RV Park $ - $3,470,000 $3,470,000 $ - $1,970,000 $1,500,000
Development Fund Skagit
Redevelopment
County
Cap Sante Marina
Economic General
RV Park Restroom - 660,000 660,000 - 660,000 --- -
Development Fund
Facility
N/W Basin
Community Tax
Redevelopment 400,000 140,000 540,000 - 540,000 --- -
Development Fund
(Planning)
Rockwell Site
Economic Tax
Development 335,000 - 335,000 - 335,000 --- -
Development Fund
(Pre-Construction)
N/W Basin
Development - Community Tax
- 750,000 750,000 - 750,000 --- -
Cap Sante Marina Development Fund
Parking Lot (JKL)
Total Properties Projects $735,000 $5,020,000 $5,755,000 $ - --- $4,255,000 --- $1,500,000
282021 Capital Purchases
2021 Capital Purchases
Prior TOTAL PROJECT FUNDING
Current Future
Year(s) Current Year PORT GRANTS
Year Year(s)
Project Title Project Type Project Cash
Project Project
Carry Expenditures Source Dollars Source Dollars
Budget Spend
Forward
Miscellaneous
Capital Purchases
General
within Equipment $ - $ 96,200 $ 96,200 $ - $ 96,200 --- $ -
Fund
Executive Director
Authority
Total Capital Procurement Projects $ - $ 96,200 $ 96,200 $ - --- $ 96,200 --- $ -
Photos: (Top Left) Quiet Cove Before Project Began, (Bottom
Left) Quiet Cove Project Progress in September 2020 (Right)
Quiet Cove COVID-Style, Social-Distancing Groundbreaking by
Executive Director, Dan Worra
29Environmental Program
Environmental Stewardship
Environmental Stewardship
The Port of Anacortes is committed to protecting and enhancing the natural environment through implementation of a proactive environmental program
of prevention, remediation and education. Our strategies encompass:
The development and implementation of preventative measures to lessen the possibility of environmental damage or degradation.
The identification and rehabilitation of environmental damages or degradation on Port properties.
The orientation and education of staff, tenants and the general public regarding environmental requirements and issues.
Participation in voluntary environmental stewardship programs and certifications.
After three consecutive years at the silver level, the Port of Anacortes was awarded the Northwest Clean Air Agency (NWCAA) Partners for Clean Air Gold
Award. The Gold Award recognizes business in Island, Skagit and Whatcom counties that demonstrate at least three consecutive years of compliance with
air quality regulations and implemented additional clean air practices. Of more than 490 businesses registered with NWCAA, the Port is one of only 6
businesses in Skagit County to earn the Gold Award in 2020.
Clean Marina
Cap Sante Marina is EnviroStars certified under Clean Marina Washington which is an incentive-based certification program in which marinas assess their
operations and implement improvements to better protect the environment. Clean Marina Washington provides marina best management practices (BMPs)
that are practical and affordable actions that can reduce pollution at the source. By effectively implementing BMPs, marinas and marina tenants may be
able to avoid more expensive and restrictive measures being placed on the boating public by regulatory agencies.
Green Marine
To benchmark and further improve its environmental performance, the Port’s Marine Terminal became a Green Marine participant in 2019 and underwent
self-evaluation with external verification in 2020. Green Marine is an environmental certification program for the North American marine industry dedicated
to advancing environmental excellence. The program stems from a voluntary initiative by the maritime industry to exceed regulatory requirements. Green
Marine is a rigorous, transparent and inclusive program that targets prioritized environmental issues such as greenhouse gases, community impacts, and
water and land pollution.
Voluntary Cleanup Program: Wyman’s Aquatic Habitat Mitigation Site
In 2014, the Port embarked on a cleanup project on the far east end of the Port’s Marine Terminal. This project provides compensatory mitigation for
adjacent development. Through cooperation with DOE’s Voluntary Cleanup Program, the Port excavated 13,550 cubic yards of upland and intertidal material
to provide high quality intertidal habitat along the Guemes Channel. Post construction monitoring continues, with consistent evidence that the site is
meeting its established functional objectives.
30Environmental Program
Environmental Sites
Environmental Sites
The Port of Anacortes has identified six contaminated sites on various Port properties that require investigation, and potential remediation, in order to
comply with state environmental laws and regulations. Since 2008, the Port, in partnership with the Washington State Department of Ecology (DOE), current
and former tenants and their insurance carriers, former site operators, and the Port’s own historical insurance carriers, has completed in excess of $60
million in clean-up actions.
To date, clean-ups have occurred and are significantly completed at the Cap Sante Marine site, the in-water portion of Dakota Creek Industries Shipyard
(DCI), the former Scott Paper Mill site, and the former Shell Tank Farm site. The former Scott Paper Mill site was completed in 2011 and the Port plans to
complete the DOE required 10-Year Sediment Sampling and Mitigation Monitoring work in 2021. In total, the Port has forecast $188,000 in post-construction
monitoring costs associated with these sites in its 2021 non-operating budget.
The remaining sites, which are in various stages of remedial investigation, feasibility studies, alternative analysis or remediation activities, include the
uplands portion of DCI, the former Pier 2 Log Haul Out site (also known as “Log Pocket”), and the Quiet Cove site. The latter, purchased in 2013, is located
adjacent to Curtis Wharf. To fast-track economic development, the Port in cooperation with its funding partners, including DOE, developed an interim action
for remediation activities which commenced in August 2020. This $3.5 million project is anticipated to be substantially complete by year-end and the Port
estimates roughly $360,000 in closeout and post-construction monitoring expense in 2021.
Also in 2021, the Port anticipates commencement of remediation activities on the uplands portion of DCI, pending acceptance by the Port and DOE of an
approved clean-up action plan. Continued remedial investigation and alternatives analysis on the Log Pocket site round out the 2021 environmental cost
budget.
Model Toxics Control Act (MTCA)
Critical to the ongoing success of the environmental remediation program is the funding of clean-up activities by the Model Toxics Control Act (MTCA),
which is funded through several different mechanisms, including a tax assessed on hazardous materials. In recent years, MTCA fund balances were
significantly overspent (due to a variety of factors including reduced revenues from historically low prices on petroleum products), but through concerted
efforts at the state level, shortfalls were covered with bond packages and the Port has continued to receive necessary awards to advance clean-up projects
each biennium. The Port currently has over $5.5 million in grant awards, guaranteed through June 30, 2021. MTCA funding continues to be a legislative
priority for the Port.
31Cash Flow Projection: Definitions & Assumptions
Definitions & Assumptions
Port Funding Sources
General Fund: Non-restricted cash fund derived from Port operations and used for the daily operation of the Port.
Construction Fund: Non-restricted cash fund used to collect money for future construction projects. Capital projects outlined in the Capital
Improvement Plan to be funded by the General Fund are financed with cash from this source.
Property Sales Proceeds Fund: Restricted cash fund derived from proceeds from the sale of surplus Port properties. The Port Commission restricts
the use of this fund for property acquisition and/or industrial development.
Environmental Fund: Non-restricted cash fund which is an accumulation of cash receipts related to cost recovery settlements with third parties
regarding environmental remediation costs. These funds are set aside to be used for current and future environmental remediation and cleanup
costs. The Port is currently teaming with the Washington State Department of Ecology on “Focus Fidalgo” which includes long-term post-
construction monitoring and clean-up of six sites in the Port District over the next few years.
Property Tax Fund: Restricted cash fund which is an accumulation of property tax revenues received. Uses of this fund are property acquisition,
industrial development including environmental costs, debt service for general obligation bonds and public access, as established by the Port
Commission.
Estimated Cash from Operations: Estimated cash from operations is the result of Net Operating Income less Depreciation plus capitalized and reclassified
wages. Net Operating Income is the result of operations from the Port’s operating areas: Airport, Marina, Marine Terminal and Properties. In general, these
operating areas are expected to generate sufficient revenues to pay for operating costs including normal maintenance and repair, allocation of general and
administrative costs and debt service on capital projects.
Interest Earned on Investments: Interest income is budgeted conservatively for 2021. Estimated interest earnings in future years were calculated based
upon estimated average investment balances and current interest rates of less than 1%.
Operating Reserve: Operating reserve is established by Commission resolution and is currently based upon a three-month average of historical monthly
expenditures.
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