Port of Allyn preps 2023 budget for hearing

Coppola plans to retire as port director in 2023

Kirk Boxleitner | Nov 17, 20220

Port of Allyn commissioners’ discussion of its 2023 draft budget on Nov. 7 concluded with commissioners scheduling a public hearing later this month to finalize and approve the budget.Port Executive Director Lary Coppola said the budget’s only staff increases were for cost of living, at the same 8.7% rate as Social Security’s increase. The lack of revenue figures from Mason County as of Nov. 7 would mean refining those figures before the port’s budget is to be voted on on Nov. 21.

“We used last year’s property tax revenue, and added the allowed 1%,” said Coppola, who expected revenues to be higher than that, depending on how much new construction money the port receives.

Coppola said the port nonetheless budgeted its revenues conservatively and its expenses liberally, per their standard policies, also using last year’s new construction numbers.

“Timber trust money has always been an uncertain amount, because of how it’s calculated and distributed,” said Coppola, who recounted how that number has varied from more than $87,000 in 2018 to $5,000 in 2019, with about $14,000 to date in 2022. “It’s not a revenue source we can depend on, so we’ve always budgeted conservatively at $10,000. Anything more than that, we consider a windfall.”

Coppola attributed the port’s “tight” cash flow to the legal expenses of a lawsuit, but emphasized that the port’s general fund has never subsidized its water system, which he credited with running in the black thanks to restructured rates in 2018.

Coppola said the port has arranged a line of credit with Kitsap Bank to pay “a big chunk” of its outstanding legal bills, which he predicted would carry the port through the end of April, when it’s due to receive its next installment of property tax revenue, “which is usually about 65% of the total for the year.”

Before using that line of credit, Coppola explained the port would borrow from its water fund, “because we’ll be essentially paying interest on the amount we borrow back to ourselves, instead of paying it to the bank.”

In the meantime, Coppola listed how the port has “cut expenses to the bone, negotiated a payment plan for the balance of our legal bills, as well as our 2023 insurance premium, and (isn’t) spending any money for anything we don’t need.”

Coppola predicted the repayment of both the port’s entire legal debt and its credit line, elaborating that, “once we get through April, we should be able to completely recover by the end of 2023.”

Fortunately for the port, “everything on the revenue side that’s in the red is taking in more money than we budgeted,” which Coppola acknowledged has been countered by “our expenses exceeding our projections for the first time in seven years.”

Although the port’s legal fees are perhaps its most “glaring example,” Coppola recalled conversations with other port directors to diagnose rising insurance costs as a common malady for ports.

The next highest costs for the Port of Allyn have been utilities, “electric in particular,” but also gas, for the truck and other equipment, and maintenance on its facilities, plus computer and internet costs. With inflation increases from the port’s suppliers factored in, Coppola said, “It’s taken a combined toll.”

By revising the port’s accounting methods, as conducted by an outside company, Coppola said he believes the port will save on labor costs, with a new utility milling module in particular “paying for itself” in labor costs.

“Right now, we have to calculate the amount of water each customer uses, based on meter readings, do the math to match it up to our rates, physically prepare an invoice, physically receive the payment, and post it in the water fund,” Coppola said. “This will just continue to drive up our labor costs.”

By contrast, the utility billing module should be able to calculate the bill based on the meter readings, prepare the invoice and post the payments, once the port receives them.

“We’ll expect revenue to increase from the gazebo, due to the increase in rates implemented this year,” Coppola said. “We now have all the pay stations working correctly as well, so we should capture some additional revenue there.”

Finally, Coppola said he plans to retire from the port in 2023.

“The timing is somewhat uncertain right now, but I’ll give you plenty of notice, once things become more certain,” Coppola said. “My employment contract requires a 30-day notice, but I’d like to have my replacement identified before then, and have a month to work with them, getting them up to speed on everything.”