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Port of Manchester envisions the right kind of growth
Another port district in South Kitsap is considering expansion plans and the tax revenue needed to fund them.
This time it’s the Port of Manchester.
Having noticed the hard feelings caused by the Port of Bremerton with its higher property tax levy for the Bremerton marina expansion, the Manchester port commissioners are hoping to avoid causing a voter backlash.
It should be interesting to see whether a small community like Manchester can generate support for expanding its port district’s facilities and for the taxes needed to do what they want.
Since port districts ordinarily are expected to adopt a “comprehensive scheme” of improvements they wish to accomplish, it wouldn’t require a lot of extra effort to write a plan that people can read to see what the commissioners are thinking about doing.
The Manchester Port District has received a state grant of $577,447 to pay 75 percent of the cost of expanding a parking lot, so this project may come before an overall plan is adopted showing the estimated costs and revenue sources for everything.
The need to provide matching funds to pay the other 25 percent of the parking lot’s cost could give the port district a chance to try out its ideas for communicating with residents.
If the state’s grant equals 75 percent of the estimated cost, then the total cost is about $770,000 — meaning the port needs to come up with roughly $192,000 in matching funds.
Residents would probably want to know how the matching funds can be obtained, just as they would want to know the costs and possible sources of revenue for projects that are not expected to be done in the immediate future.
This year, the port district’s property tax levy amount is $95,399; and about $41,528 of the levy is being used to pay principal and interest due on bonds issued back in 1997 and 1998.
The levy amount has increased each year, just like most other levies. Since 2001 the average annual increase has been 3.4 percent.
But these annual increases aren’t likely to be enough to provide the needed matching funds, pay current debt service obligations, and fund the port’s operating expenses.
A voter-approved “lid lift” could authorize a property tax increase to provide the matching funds for the parking lot improvements.
Perhaps another bond issue could provide the needed $192,000. The port’s debt limit is about $1.6 million, and current debt obligations use roughly $265,000 of its debt capacity.
But being able to borrow is not the same as being able to repay. If operating expenses and debt service take up most of the current levy, additional revenue would be needed to repay a new debt.
An “industrial development district” property tax like the one imposed by the Port of Bremerton could pay for a lot more than the parking lot, so maybe the commissioners would consider using this authority later — after all the expansion plans are made.
This “IDD” tax authority allows an additional levy for 12 years — the first 6 years with no opportunity for voter approval or rejection, and the second six years with an opportunity for residents to place the tax on the ballot through a petition.
Since the Manchester Port District has apparently not used its “IDD” tax power in the past, the port commissioners could decide to impose it for six years no matter what the voters want.
If the port commissioners want to open the lines of communication with taxpayers living within the district’s boundaries, they should state clearly that the “IDD” tax can be imposed for six years — at a beginning tax rate of 45 cents per $1000 of assessed value — with no opportunity for residents to do anything other than speak to the port district commissioners about it.
That should get the conversation started, if anything can.
Not many residents would be likely to sit quietly and wait, if they know that the port district commissioners don’t have to put a big tax increase on the ballot for their approval or rejection.
Robert Meadows is a Port Orchard resident.