In a public meeting last Thursday morning, Port of Chehalis CEO Lindsey Senter discussed details of two preliminary fiscal year 2023 budgets with the port commissioners.
“One is asking for more money, the other is saying all operations are net-zero,” Senter said.
The first proposal discussed was the net-zero budget, in which total revenues received by the port was $10,210,099.57.
Expenses included $311,995.60 in regular staff wages and $9,108.00 in commissioner wages, both of which included the 10.1% cost-of-living adjustment to the port’s payroll. It also factored in higher service costs, including $16,470 spent on utilities, janitorial services and security. The proposal also includes an increase in funding contributed to the Economic Alliance of Lewis County.
All expenses for the port itself under this budget totalled $711,295.86 with operational expenses for the port’s lines of business $94,980.00.
The total spent on capital and other projects, which includes the Berwick Creek habitat and flood project, totalled $2,123,906.00
An additional $279,917.71 was set aside for loan payments, which left the surplus for the net-zero budget at $7 million.
Commissioner Mark Giffey, who attended remotely, expressed some concern over whether capital revenues being spent on operating expenses would actually be enough.
“You’ve got $7 million of capital asset sales and as we go through the budget of operating expenses we’re saying there this much in operating revenue, but a lot of that to me is because we sold a capital asset,” Giffey said.
Senter explained that the $7 million in capital sales in the net-zero proposal wouldn’t actually be considered operations revenue as the port is simply required to report when it does receive money.
“This budget in particular basically balances zero. If you ignore the $7 million we got, that’s what we would be functioning off of. Initially it shows a surplus of $7 million stating that everything that we spent was balanced out by everything in operational revenues,” said Senter. “That’s why it shows that plus $7 million, is that $7 million would go straight to the bank account and we wouldn’t be using it.”
Giffey also noted that there was a lack of beginning and end cash totals on the budget, which Senter stated was left out due to it being too early still to make an estimation.
“It’s kind of tough to make an estimation at this point because we’re not at the end of the year,” Senter added.
The second budget discussed, the one asking for more money, included capital expenses. Senter explained the details of the capital expense budget, which included the same 10.1% cost-of-living adjustment in the net-zero budget but a higher regular staff wage total of $405,697.60 due to the hopeful addition of a new finance employee at the port as well as keeping a new employee who came on this year.
Total expenses for the port, wages included, would be $957,270.77 under the capital expense budget. Other operational expenses totaled $177,320.00 with an additional $2,277,406.00 being spent on capital and other port projects.
A total of $280,552.69 was set aside for loan payments.
Revenues for this budget were slightly higher due to increases in investment interest earned and the leasehold excise tax. The total revenues added up to $10,218,500.33. The surplus at the end for the capital expense budget would be $6,525,950.87. The difference between this and the surplus for the net-zero budget is $474,049.13.
“To clarify, most of that was capital expense difference,” said Senter.
With the port’s fiscal year 2023 budget still in its infancy, Giffey encouraged the other commissioners and Senter to keep more than just next year in mind when proposing more budget changes, especially with items such as staffing.
“You’ve shown us what ‘23 looks like, but what does ‘24 and ‘25 look like if we make these changes to our operation expenses?” Giffey asked.
Senter stated that she and the other staff members were working under the assumption that a lot of the money in question would be used to pay off debt. She added that currently the port does not face any early payment fees with the debts in question either.
There will be more meetings concerning the fiscal year 2023 budget. Commissioner Mark Anders cautioned his fellow commissioners and Senter to keep the current economy and inflation in mind when considering future budget adjustments.
“Being a survivor of the 1980s and late 70s, and I remember what happened then. Your cost of money will eat you alive and it's transitory. I really hate to see us throw away something that from a cost of money perspective in the net-present values is very favorable to us. When you have to replace that investment with much higher-cost money, you really haven’t gained anything. In fact, you’ve shot yourself in the foot,” Anders said.
The next round of discussions concerning the fiscal year 2023 budget are set for the Port of Chehalis’ bi-weekly meeting at 10 a.m. on Oct. 6.
Both budget proposals can be found on the port’s website here https://portofchehalis.com/agenda-and-minutes/ in the “next meeting agenda” folder.
