Marina rate hike delayed, but ‘inevitable’

The Port of Bremerton commissioners called an increase in marina moorage rates “inevitable” at Tuesday’s regular commissioner meeting but still opted to hold the matter over until Jan. 28, when more specific funding and taxation information will be available.

The port created a hurricane-like backlash when it introduced a possible three percent rate increase at an open house it held at the Port Orchard Marina Jan. 6. Many tenants appeared irate and said the port was foolish to ask for more money during an economic downturn. Most suggested the port either reduce spending or jack up guest moorage rates to make the marinas self-supporting — the port’s primary impetus behind the proposal.

“There are a number of things you can do to create spendable income for what you want to do,” said tenant Gary Hunter.

Hunter was just one member of the port’s ad-hoc committee on moorage rates to speak at Tuesday’s meeting. None of the committee members who addressed the commissioners supported the fee increase, although some said they would tolerate an increase if the port changed its methods of taxation.

Tenant and committee member Rita DiIenno presented detailed worksheets demonstrating how she has paid excess taxes to the port — an overpayment total she calculated at more than $1,400. She said the port is not in compliance with a state law which prohibits landlords from collecting more leasehold tax from their tenants than the tenants would pay in property tax if they owned the property.

The issue is a complex one. Port rents include myriad other services, including utilities and service facilities, apart from the base value of the rectangle of water a boat occupies. DiIenno said she has checked the value of her rectangle of water with the county and concluded she should only be paying about $50 a year in taxes on it — much less than the $420.60 a year she currently pays.

“Leaseholders at the marina have been overpaying tax significantly and it’s been going on for years,” DiIenno said.

The difficulty comes with attempting to segregate property-based tax and utility/service-based tax. The port is currently embroiled in a lawsuit with the state which deals with that exact problem.

Port attorney Gordon Walgren said the port tried at one point to segregate the property and utilities taxes paid by the Airport Diner, located at Bremerton National Airport. Walgren said the state told the port it could not separate the two without delineating exactly what the utilities and services cost — any approximation would render the split invalid.

The benefit, Walgren said, would be a reduction of overall taxes paid. The rate for leasehold tax is usually higher than the rate paid on services and utilities — the state B&O (Business and Occupation) tax.

The lawsuit is in the appeal stage, and Walgren said the port is trying to “hustle” the process along.

“That appeal will have some bearing, I think, with how we handle the matter at the marina,” he said. However, “the state is looking for every possible dollar at this particular time and leasehold tax in part of that.”

For now, the port has agreed to compile what information it can on the port’s sources of revenue and as much as officials can figure out regarding the leasehold tax issue. However, whatever happens with the tax problem, the port is still committed to approving a three percent rate increase — a percentage which works out to between $.11 and $.16 more per linear foot per month.

Another increase is being discussed for next year, although that proposal will also go through the tenant ad-hoc committee before coming before the port commission.

“There’s no good time to raise rates,” said Commissioner Bill Mahan. “Frankly, I don’t think three percent is an exorbitant rate increase considering we haven’t had an increase since 1998.”

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