In light of recent misinformation regarding the Port’s finances being sent out to the public, I would like to correct these errors. I will remain on the high road and keep focusing on facts, but the facts are damning to Mr Henriksen.
- Prior to filing for office, my opponent had never ever attended a Port meeting.
- One month after filing, he did not attend the June 15 Airport Master Planning meeting for public review and comment on the Ports planning and budgeting for the next 5 years.
- Two months after filing, he attended his first Port Meeting on July 13.
- Four months after filing, he attended the Solid Waste Board Meeting on 9/27 to ask for its support, but openly admitted he had just started to read and try to understand the state laws governing Ports.
- Four and one half months after filing, he presented at the Voters Forum on 10/4, but presented no new ideas or campaign platform of his own.
- After the Voter Forum, Mr Henriksen abandoned his “let’s bring the community together” theme and launched into total attack mode to try to discredit me personally.
All the statements I have made are based on actual facts and the law which I have researched and double checked with other attorneys, accountants, realtors, municipal bond attorneys, and port commissioners around the state.
Below is Henriksen’s most recent email, which is riddled with errors and misstatements.
My responses are in BLUE.
From: Paul for Port [mailto:email@example.com]
Sent: Tuesday, October 24, 2017 6:44 AM
To: Paul for Port <firstname.lastname@example.org>
Subject: Financial Fiction
I have had several people contact me in the last few days wondering about the Port’s finances and questioning various proposals that have been put forward. I would like to address the misinformation with factual data.
1) FALSE: The Port is applying for FAA funding for the former Crawford property and a portion of the former Gunn property. This funding should be available in 2018.
The Port has not applied for FAA funding for the former Crawford property. There are no funds budgeted until 2019 for an Environmental Assessment (EA) which is required before FAA funding could be received. It would take several years and over $200K upfront for an environmental assessment. The former Crawford property valued at less than $200K. There is very little chance that the FAA would approve a grant request or pay for the EA. IF the Port decided to apply it would likely be spending more than the value of the parcel to acquire it.
LBB response: Incorrect.
I have talked to all port commissioners and they told me they were applying for FAA funding to pay for the Crawford property.
An environmental assessment of the property would cost a fraction of $200,000, as any experienced businessperson knows. The assertion that the assessment would cost more than the property is absurd. The Crawford property clearly qualifies for FAA funding, and there is no regulatory barrier to funding it.
The Port has already been turned down twice by the FAA for a grant to reimburse the purchase of the former Gunn property after it was divided. The Gunn property is earning over $20,000. per year in rental income and housing a team of paramedics and EMT’s.
Parcel A of the former Gunn property is clearly eligible for FAA funding, per their own guidelines. Funding will be approved when the request is properly presented. The Gunn property is earning a net rental of $17,360 after expenses. A committee is working on finding replacement housing for current tenants.
Rent Payments $20,160
- rental agency $1200
- washer/dryer $1100
- fence repair $400
- other repairs $100 – $2,800
Net rental Income: $17,360
The 2017 Bond Payment for the Gunn Property is $54,000,
$54,000 – 17,360 = $36,640/yr loss on the Gunn property
2) TRUE: Medivac Needs on Lopez are Important
Both Medivac companies serving Lopez have requested that the Port improve the airport’s poor weather reporting capabilities. This is a request that no commissioner should take lightly, waiting for a tragedy to occur is not acceptable and could make the Port liable. Solving this issue will be expensive and take time. This is an issue the commissioners need to study and bring to the attention of the community, not ignore.
This issue is not being ignored. Island Air has made an inquiry and the issue is being studied. No one else has raised this as an issue; local pilots have said it is not necessary. The cost to add an AWOS is not very expensive.
3) TRUE: According to the Washington State Department of Transportation (WSDOT), Lopez Airport provides significant economic stimulus in the form of jobs, wages and millions of dollars brought into the region annually. In addition to Medivac, commercial and general aviation flights, numerous tradespeople who do business on Lopez arrive and depart from the airport. Please see http://www.wsdot.wa.gov/NR/rdonlyres/212A5750-E6D7-436B-B735-BD47FA9AA9FA/0/NWR_LopezIsland.pdf.
LBB response: Incorrect.
The report cited by Mr. Henriksen is based on an estimated 31,000 flights per year and used a WSDOT formula to estimate economic impact. WSDOT did no studies to establish these numbers, and Port commissioners agree that 31,000 flights per year is a gross exaggeration.
The estimate used for the new five-year master plan is 13,500 flights per year—and even the 13,500 estimate is not based on an actual count. After the Master Planning meeting, we asked neighbors directly adjacent to the airport for their estimates. Most estimated 10-12 flights per day in the summer, and 5-7 the rest of the year. Several neighbors then purchased a motion sensitive video camera. They focused it on the runway for several weeks in July and several weeks in August.
Both test studies showed an average of 12 takeoffs and landings per day. They then field-checked the accuracy of the cameras with neighbors taking turns viewing the runway and comparing their count with the camera recordings. They found some slight discrepancies with short takeoffs and landings. A scientist who has worked extensively with motion sensitive cameras then analyzed the results of both the camera and the human watchers. He suggested they add a 25% factor to eliminate any question of under-reporting. So they increased the number to 15 flights per day, or 5400 flights per year, even though there is much less activity from October-May.
I was not involved in any part of this and just heard the bottom-line report. In short, the WSDOT report has no credibility when an inflated activity number was used as a starter, making the resulting economic projection meaningless.
4) FALSE: The Port of Columbia is a good surrogate for Lopez.
If the Port of Lopez quadrupled the taxes got rid of the airport and hired staff it might be comparable. The Port of Colombia (POC) has a similar sized voting base, 2565 vs. Lopez’s 2062. The similarities end there. The Port of Columbia does NOT have an airport, is located on a state highway and has marine transportation on the Snake River and a large industrial park. Surrounding property values are a fraction of those on Lopez. It has a levy rate and tax income 5x’s that of Lopez, (.41/ 1000 vs, .08/1000.) and receives $366,000.00 vs. Lopez’ $93,000.00. The POC has three commissioners who direct a manager and 3 full time employees vs, Lopez’ 3 commissioners.
LBB response: Incorrect.
I have never used any other port as a surrogate for Lopez, and have always been very careful to preface my comments that these economic development activities are examples of the great things that almost all 75 ports in our state are doing for their communities—but not Lopez. Some activities that other ports engage in may be applicable to Lopez, some may not. As Port commissioner I will seek input from citizens to determine what economic development projects are best for our community.
Fact: The Port of Lopez has received over $10 million in funding over the years and 98% of that has been spent on airport projects. In contrast, almost every other port in Washington has made investments in their communities to re-energize their local economies. Once the Ports made these community investments, they reaped significant returns for their communities; they have hired staff and made money doing it. Our Port is one of the only ports in the state that does not create enough income to hire even a single employee.
5) FALSE: The Port of Lopez receives $150,000.00 annually from the FAA.
The amount of funding the airport receives annually varies significantly from year to year and depends on the proposed projects that are approved by the FAA. The Port matches 5-10% of FAA funds. FAA dollars come from taxes on aviation fuel. The Port receives no operating funds from the FAA. Those funds are provided by tax and rental income.
LBB response: Incorrect.
The Port receives $150,000 per year under its current five-year Master Plan, approved by the FAA. Under its proposed new five-year Master Plan, it will continue to receive a similar amount per year from the FAA. In addition, the Port receives funding from the FAA for special airport projects almost every year, i.e.:
$243,000 in 2016;
$459,000 in 2017; and
$645,000 in 2018.
Airport operating funds are insignificant and easily covered by rentals.
6) FALSE: The Port has a negative cash flow of $50,000.00/year on property investments.These properties were purchased to insure safe operations at the airport by allowing the Port to permanently remove hazardous trees on both ends of the runway. Total bond payments for both parcels of the former Gunn property at the south end total $53,800. The existing house on a portion of one parcel provides annual income of $20,152. This is long term revenue for the port reducing payments for the purchase and reducing reliance on tax revenue. The properties were not purchased as investments. Instead, the Port is paying a net $33,648 and $27,970 of that is principal. If one includes appreciation it’s a positive return.
LBB response: Incorrect.
The Port has issued twenty-year municipal bonds to purchase the Crawford and Gunn properties. As of June 30, 2017, it owed $781,000 of principal. The annual payments to service those bonds is $70,703.
The net rental income received on these two property investments is $17,360.
This is simple math:
Annual payments— $70,703
ANNUAL LOSS: $53,343
As far as appreciation is concerned, Realtors advise it has been minimal, since the Port clearcut the Gunn property instead of selectively logging it. On top of that, the Port’s purchases removed $850,000 of property value off the Lopez tax rolls. The Port could have avoided all of this expense by simply exercising avigation easements and selectively logging these two properties.
7) TRUE: The Port’s cash reserves are more than adequate.
The Port spent cash reserves of $110,000 to permanently remove trees making our airport safe and eliminated the recurring expense of topping trees, $125,000 to fulfill a long promised acquisition of marine access property, $80,000 for a solar system that will save taxpayers far more in its lifetime and $40,000 spent for emergency repairs to our runway lighting needed for nighttime medivacs. And, it still maintains reasonable reserves. These positive and visionary steps should be commended.
LBB response. Partially true.
The Port’s cash reserves are adequate to meet airport needs, but not to meet its statutory mandate to invest in the community. The Port can be much more than an airport: it must rise to the changing challenges to our community.