WALLA WALLA — Robust cash reserves and nonoperating revenue will bolster a hearty 2014 Port of Walla Walla budget, based on a first look at a draft from the agency last week.
The Port’s forecast receipts will top $18 million next year, while the airport will operate with just under $4 million, according to preliminary figures.
The expenditures side of the ledgers will remain incomplete until commissioners convene a Nov. 25 budget retreat to help determine capital projects and focus for the year.
Commissioners took no official action on the budget after a review of the initial document during their regular meeting Thursday.
They did, however, take action on the 2014 tax levy. Commissioners unanimously voted against an increase in the regular property tax levy.
The Port expects to collect almost $1.9 million in its share of property taxes next year. That’s just under the amount the economic development agency anticipates collecting — about $2 million — in leases and utility system revenues in 2014.
“We are fortunate in that we’ve been pretty good stewards of our financial resources,” Port Executive Director Jim Kuntz said. “We have tried over the last five to 10 years to generate more of our income from leasing properties and the utility business and becoming less dependent on property taxes.”
This is at least the fourth consecutive year the agency has opted not to increase the levy. The move had support Thursday from local resident Jerry Zahl, who encouraged commissioners to reject the increase.
“I would discourage an increase in the levy at this time because of the other needs that exist in the community,” Zahl said, referencing the county’s deficit, talk of an increase from the city, construction of a new College Place High School and continued discussions on what to do with Walla Walla High School.
“We have some strong priorities and some troubled areas, and thank goodness yours isn’t one of those troubled areas.”
Notwithstanding the vote, the Port will receive additional revenue in 2014 from new construction, property improvements, new wind turbines and any increases in the value of state assessed property and annexations that have occurred and refunds made.
The Port will start the year with an estimated $7 million in cash reserves and another $7.5 million in nonoperating revenues. The latter includes $3 million in state funding for the Burbank sewer system; $2.7 million in grants and loans for rail work at the Dodd Road Business Park; and $1.3 million in grants for the Dodd Road/Wallula water system.
Kuntz expects the reserves will be drawn down on its “proactive capital projects plan.”
He said the agency expects a larger than typical vacancy rate next year with the relocation of several tenants. That includes a move by the Walla Walla Foundry from the Port’s Crown property on Dell Avenue to the bindery property the foundry purchased. That move is expected by the end of January, Kuntz said. Another tenant, Raft River Vintners LLC, moved out of the Crown property.
Cargill is planning to leave the Burbank Industrial Park at the end of this year. Blue Mountain Mill Works is slated to move from the Melrose Business Park.
In all, Kuntz said staff has identified about $200,000 of annual revenue the agency will be down in 2014 because of new vacancies. He said leads have picked up, and he remains optimistic that new tenants will step in.
Kuntz told commissioners Thursday about 46 percent of current leases are for one year or less. With heftier debt payments coming in the next two years — about $1.1 million in 2014 and $1.6 million in 2015 — he said the Port will be looking deeper at where to focus its efforts to get the most return on investment.
That likely includes postponing the hiring of a project engineer, a position that had been explored for next year.
Port commissioners also said Thursday they will likely not retain federal lobbyist services in 2014 that would likely run upward of $65,000.
“I think for the first time in a long time there are some broad policy issues in the budget,” Kuntz said.
On the airport side lease revenues are expected to generate $2.6 million. The airport will tentatively start the year with about $815,000 in cash reserves. A little more than $315,000 in nonoperating revenue is from the Federal Aviation Administration for ramp construction.
After the Port’s budget retreat, a hearing on the budget and subsequent vote is slated for Dec. 2.