The Port of Bremerton Board of Commissioners is considering selling more bonds in the fall to both purchase property near its Bremerton marina and build a road in the South Kitsap Industrial Area.
“It makes perfect sense to sell both bonds together,” said Becky Swanson, the port’s Chief Financial Officer at a study session Tuesday evening, explaining that the port will need approximately $800,000 for the Cross-SKIA Connector and $3.5 million to buy a 2-acre parcel along Washington Avenue in Bremerton intended initially to provide parking for its new marina.
The port would borrow a total of $4.38 million, and both Swanson and financial adviser Alan Dashen recommended issuing General Obligation bonds, rather than revenue bonds, for the debt.
Commissioner Bill Mahan said he was concerned about the public’s perception if the port issued GO bonds.
“We all know there is a group of folks who are not happy with the port, and would say that the port is paying for another project on the backs of the taxpayers,” Mahan said, asking why the port couldn’t issue revenue bonds instead.
Swanson said the debt payments on a 20-year loan would be $367,000, and the port does not generate enough revenue from the Bremerton Marina to make those payments. After operation costs are deducted, Swanson said revenue is estimated at $150,000 a year.
Mahan said the $200,000 could be made up in other ways, such as using tax revenue to pay for operations, then using the marina revenue to make the debt payments.
Chief Executive Officer Cary Bozeman bristled at this suggestion.
“We’re not going to make it better by playing games,” Bozeman said. “That is exactly how the (Kitsap County Consolidated Housing Authority) got into trouble — using this to pay that — and you know that.”
Mahan said he was still concerned about the public’s reaction, and he wanted the port to “develop a comprehensive plan on the difference between the bonds so we have the capability to look at the taxpayers and say we chose the best way to go. If we don’t, I’m going to be hard-pressed to make a motion to pass this.”
Commissioner Larry Stokes suggested inviting Dashen to an open forum where the public can ask questions. When Mahan said he did not want to subject Dashen to that, Stokes said he would attend as well and defend the decision.
“I am not one bit afraid of stepping up to the plate and doing what’s best for the port,” said Stokes, who vehemently opposed issuing GO bonds for the SEED project. “This is what’s best for the port, and I don’t have a problem telling (the public) that.”
Stokes did ask Swanson why the port would be taking a 20-year instead of 15-year loan, saying that he understood that difference between the two is that with the longer loan, “the bank keeps the paper. What if we want to sell half the property and reap some of the money?”
Swanson said she understood that the port could still sell half the property, and the 20-year loan represented debt payments that were about $50,000 lower, giving the port more “flexibility and better financial stability.”
Bozeman agreed, adding that the “port can sell half of it and get its money back.”
Stokes said the move was “a good, economical, sound investment.”
Mahan said he was still worried about the port’s “political problem,” and Dashen said he could prepare a “white paper and bring re-enforcements” to meet the public.
Board president Cheryl Kincer said it was very important to have all commissioners present to vote on the bond issuance. Swanson said she planned to have the resolution prepared for the board’s Sept. 22 meeting, which all commissioners could attend and would give her time to present a check to the KCCHA authority — which currently owns the property — by Sept. 30.
Swanson said the port does not need voter approval for such a measure, and that by state law it can issue bonds as long as it does not exceed its debt capacity. Her conservative estimate was that the port’s debt capacity stands at $13.5 million.
• Also at the study session, CEO Bozeman said he reorganized the port’s management structure and that instead of having the port’s directors — including Swanson, marinas director Steve Slaton and airport director Fred Salisbury — report to Chief Operating Officer Tim Thomson, he changed Thomson’s position to Director of real estate and the industrial park, and will have all directors report directly to him.
“The buck stops at my desk, and I want to be responsible for managing the directors,” he said.
• At the business meeting, Salisbury announced that the Federal Aviation Administration
will be funding the port’s runway rehabilitation project, and although at first it looked as if the money would not be available until the third week of August, Salisbury said he was able to secure enough funds to have the contractor begin work on Aug. 5. he said he expected work to be completed by Oct. 10, and he was “pretty happy the FAA came through for us.”
