Port of Vancouver approves budget, including property tax increase
1% hike will help secure lending for massive rail project
Originally published November 8, 2011 at 1:30 p.m., updated November 8, 2011 at 5:07 p.m.
The Port of Vancouver Board of Commissioners voted 2-1 on Tuesday to adopt a 46 percent increase in the port’s budget for 2012, including a hike in property taxes of 1 percent, to ramp up construction of a massive rail network that’s projected to create thousands of jobs.
The commissioners’ discussion of next year’s $84.65 million spending plan focused almost exclusively on the merits and drawbacks of bumping up the port’s property tax collections by about $99,000 to roughly $10 million. The owner of a property with an assessed value of $250,000 would pay $103.61 — up $1.97 from 2011 — for the port’s share of property tax collections.
Commissioner Nancy Baker, voting in favor of the port’s spending plan, said it’s the port’s “responsibility to create jobs” for the community, and the major focus of the budget — the West Vancouver Freight Access project — will do that. Commissioner Brian Wolfe, in also voting yes, said that while he’d like to see the port eventually wean itself off property taxes, “I don’t know this is the right time to start doing that.”
Wolfe said the port plans to borrow from the federal government to help pay for its freight rail project, and the 1 percent increase in property tax revenue is needed to show lenders the port is financially stable.
Commissioner Jerry Oliver, who cast the dissenting vote, said the timing isn’t right to ask taxpayers for more. Savings can be found in the port’s budget, he said, adding, “We can squeak by.”
The elected commissioners’ vote, following a public hearing, sets the port on a path toward finishing the $150 million West Vancouver Freight Access project.
The freight rail project is a 27-mile expansion of rail tracks to speed cargo and handle more of it. The port wants to complete it by 2017.
But it shouldn’t use more taxpayer dollars to do it, Ron Morrison, a Vancouver resident, told commissioners during Tuesday’s hearing. Calling the property tax increase “arrogant and wrong,” Morrison said the port is telling the public “we need the money in our pockets, not yours” in a time of high unemployment and penny-pinching.
Vancouver resident Ed Barnes disagreed, urging commissioners to approve the 2012 spending plan to support a “five-star port.” Barnes said the community will benefit from the investments the port makes to spur economic development.
Port executive director Larry Paulson said the port anticipates some $500 million in investment from new port tenants and business expansions because of the West Vancouver rail project, as well as the deepening of the Columbia River channel.
He said the port’s spending will result in more jobs, and more revenues from the taxes new businesses pay, including sales and business and occupation taxes, which help pay for public services.
“The bigger picture has to be looked at,” Paulson said.
The port’s 111-square-mile district encompasses 300,000 property taxpayers.
The port does not use its property tax levy to pay for day-to-day operations. Rather, property tax collections only go to environmental projects, such as cleaning up contaminated property, and to service the debt the port takes on for capital projects, such as rebuilding docks and expanding its capacity to handle cargo.
Property taxes make up roughly 15 percent of the port’s revenue pie. The rest comes from tenant rents, shipping fees and other non-tax revenue sources.
The port anticipates revenues from typical sources, including tenant rents, shipping fees and property-tax revenues, of $66.37 million in 2012, up by about 28 percent from this year’s budget. That’s based on strong returns on grain and scrap metal exports, and on the port’s imports of wind energy components and oil refinery equipment.
Also fueling the port’s rise in revenues is a major influx of grants. Next year, the port’s grant funding more than triples to $19.07 million, with more than half coming from the U.S. Department of Transportation for the freight access project.
The port anticipates borrowing $18.33 million from the federal government to help build the freight rail project
That would be the first installment of a total $80.5 million the port aims to borrow to finish its planned network of rails.
The port expects to create 1,000 permanent jobs in the next five to 10 years as it expands its rail capacity, helps existing companies expand their operations, and builds out Terminal 5 — where Australian mining giant BHP Billiton plans to build a potash export facility.
Port officials forecast that the West Vancouver Freight Access project, which the port has already been constructing incrementally, will create about 4,000 construction jobs during the life of the project.