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MTU members I found the 2017 rate schedule on page 20 of the Port meeting agenda. You can find the full rate schedule on the Port web site There is a 16% increase for 30 foot  or $482/ year and 12.25% increase  for a 40 footer or $528.00/ year See chart for comparative rates around the peninsula. BERTRAM —

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Here is the introduction for the proposal
2017 Moorage Rates will be presented at the Wednesday meeting this week.  You need to read the enclosed argument that they are proposing for raising rates to “market rates’ and to gather your own thoughts. The exact rates are conspicuously absent but will PROBABLY be  revealed Wednesday and is your only opportunity to influence their decision.

Port of Port Townsend 1st Monthly Meeting Agenda Wednesday, January 25, 2017, 5:30 p.m. Port Commission Building 333 Benedict Street, Port Townsend, WA

Bertram

 

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• —-  Bertram Levy 

Anyone  going to the special  budget meeting Monday might want to read some comments I sent to the Port regarding the last budget meeting which I listened to on the web site.

re:  the Budget assumptions.

1. Budget deficit 

       If you listen carefully to Abigail, she prefaced  the loss with the words “after depreciation”.  Depreciation may be fine for the GAAP reporting but it is not a cash event. Nor does it reflect the Port’s true cash neutral position in this budget process.  The reality is that most of the Port depreciating assets will never be replaced. When one considers that the CD docks will be almost a half a century old before they are repaired, most of the assets in the Port will be under water in 50 years.                                                                                                                               Creating a loss by adding depreciation is not a call to arms and should not panic the Commission into excessive rate increases that can discourage clients and suppress access.

               [true net income from operations without depreciation   excess    $785,710, 

            with depreciation        deficit     ($733,322) ]

2.  Increased expenses. 

      The Port is adding two new FT positions as well as $145,000 in consultant fees and the IDC contribution.  These added salaries push expenses beyond the CPI of 2%.  Given the state of the Port that Sam inherited, these positions may be justified but the Commission cannot be expected to make up those expenses in one budget cycle.  These added personnel should be considered an investment that over time will be financially productive and improve the Port’s productivity.

       If the Port exercises some birth control after this, future budgets will absorb the expense of the added personal in the 2017 budget cycle.

3. Diminished cash reserves.  

       The Commission neglected to ask the question where did this $260,000 diminution in cash reserve come from?  It is almost exactly the $270,000 cost for the new ramp.  The Port knew this was coming, it should be of no surprise.  This loss does not mean a trend. Further  investments should be restricted  to productive assets that will replenish the use of the cash reserves.

4.  Reversing the trend in under performing assets should be addressed.  The 2017  budget does not reflect two notably underperforming  cost centers in 2016. The boat yard activity  is down 7% and the ramp annual pass sales are down 20%.  Effort should be made to reverse these trends.  Here are two suggestions to incentivize performance:

       a. Haul out small boat.  The bottom paints are now advertised as good for three year which means we can skip a year or two.  Nevertheless we all see beards growing on the bottoms at a year. Suppose every patron that hauls out in a consecutive  year gets a price break.  It could be a discount or it could be a free wash down.  Or alternatively an extra day free in the yard. 

         b. Ramp The idea is to incentivize buying a pass which is down for 500 to 400 this year.  Right now at $10.00 a boat owner can use the ramp 7 times and still be equal to the  $70.00 annual pass   But suppose it was $15.00.  Now  at 4 times, you’re up to a total of $60.00.  If the patron anticipates 6 uses in a season, the cost becomes $90.00 and the  purchase of a $90.00 pass early in the season becomes more attractive. Also expenses can be cut by either charging for the water or shutting it off and let them wash at home. Alternatively another option is to increase the pass cost to $100  (equal to State ramp fees) which then will come with a card which is the only way to activate the wash down 

thanks for your consideration

Bertram Levy

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THIS IS MEANT TO SIMPLIFY THE CHART PREVIOUSLY POSTED:

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Here is the rate proposal for the moorage tenants.  For the next 5 years the Port is proposing an automatic 5% raise each year. The enclosed chart projects out what you will pay if you allow this to happen.  — Bertram

size	2016	2017	2018	2019	2020	annual 2020
30 foot	$256.77	$269.19	$282.24	$295.94	$302.07	$3624.84
40 foot	$367.98	$385.97	$404.85	$424.69	$445.51	$5346.12

The  second chart compares the new 2017 5% rate increase with the standard 2% for other marinas (hypothetical at this point).  It will make Port Townsend practically the most expensive marina in the region.  Note LHT is lease hold tax of 12.84%

marina	size		rate w LHT	electric hookup	change per month	total/month	annual
Port Townsend 5%		30	$260.95	$8.25	$12.42	$269.20	$3230.35
John wayne 2%		30	$255.51	$10.00		$265.51
Port Angeles  2% *		30	$204.06	$10.00		$214.06
Port Hadlock  2%		30	$269.28 no LHT	NC		$269.28
Port Ludlow 2%		30	$239.00 no LHT	$15.00		$254.00
Port Ludlow NR 1%  **		30	$250.00 no LHT	$15.00		$265.00
Port Townsend 5%		40	$377.72	$8.25	$17.99	$385.97	$4631.60
John wayne 2%		40	$359.10	$10.00		$369.10
Port Angeles  2% *		40	$255.82	$10.00		$265.82
marina	size		rate w LHT	electric hookup	change per month	total/month	annual
Port Hadlock  2%		40	$359.10 no LHT	NC		$359.10
Port Ludlow 2%		40	$351.90 no LHT	$15.00		$366.90
Port Ludlow NR 1%  **		40	$392.70 no LHT	$15.00		$407.70

*  Port Angeles may have a greater increase in 2017. -to be determined

**   NR  non resident rate.  Represents a minority of the tenants.  Commissioner Tucker mistakenly claims this is the true rate since the lower resident rate is discounted because of beach club  dues.  In two personal visits to the harbor master at the PL marina, I was told emphatically that the true rate is the lower resident rate and there is absolutely no connection to beach club dues. The higher nonresident rate  was originally created to  incentivize the NR boat owners to buy Port Ludlow property. The administration is letting the resident rate increase at a greater rate than  the nonresident rate so they can eventually eliminate the nonresident status.  If you have concerns with either of these set of figures, the only opportunity to weigh in is next week.

The final budget proposal will be discussed in the next week and if you want to influence the outcome you need to attend these two meetings

October 24:

 Very critical!!!!  final workshop Monday 1:00 pm, Port Commission Bldg.

October 26:

Port Commission Regular Meeting and Public Hearing on 2017 Budget, 5:30 pm, Port Commission Bldg.

Commentary:

As I said at the last MTU meeting I will no longer advocate for your rates so its up to you.  Nevertheless I will offer some thoughts that you may find useful.

Firstly I really appreciate Sam Gibboney’s efforts to try to sort out the mess she inherited and therefore I want to support her.  For this reason I personally will support a 5% raise in rates this year provided the 5% raise is carried throughout all the other Port services as well.

What I don’t support is the codification of an automatic 5% increase  over the next 4 or 5 years. This is quite out of the ordinary.  In an organization such as the Port, annual rate increases should undergo public scrutiny. Establishing an excessive rate increase over 4 or 5 years frankly feels predatory and undermines the concept of comparable regional prices (market rates) and local access. Its also too easy for the Port to ride on this open revenue stream without looking at alternative ways to either develop alternative sources of revenue or reduce expenses.

As we have discussed before, this is the push by Commissioner Tucker’s group to raise moorage rates until there is no waiting list. For this to happen, at least 40% of the community members must be driven out for more affluent tenants. It ignores the basic guarantee for community access as outlined in the Port’s mission statement

Further, if the marina is going to be the most expensive in the region it should also be held to the same standard as the other marinas in the region.  At present it does not.

1. Port Townsend is the dirtiest marina, boats are constantly covered in yard dust
2. has inadequate parking
3. CD docks are dilapidated
4. Chronic loud radio noise from  yard industries
5. rundown bathroom

In addition the Port is already taking  $40,000 annually  ($80,000 in the last 2 years)  for electric hook up which has been place in the general fund rather than used for electrical maintenance. Secondly there  is proposal to charge for a parking permit.  I see this as another backdoor way to push up rates. I know of no other marina in the region where there is extra fee for parking. Landlords are supposed to provide parking. Tenants should be given preferential parking along the wharf.

Bertram