After months of debate, Oak Harbor council adopts local business and occupation tax to fund marina repairs (5–1)

The Oak Harbor City Council voted 5–1 on Aug. 6 to adopt a local business and occupation (B&O) tax aimed at funding repairs and upgrades at the Oak Harbor Marina, including dredging and breakwater work.

The ordinance (No. 19‑98) adds a city B&O tax to Oak Harbor Municipal Code Title 3. Under the ordinance approved by council, businesses with annual gross receipts above $4,000,000 would be subject to the tax; the adopted quarterly threshold is $1,000,000. The ordinance’s effective date is Oct. 1, 2025. Mayor Pro Tem called the vote; Councilor Wigenstein cast the lone opposing vote.

David Goldman, deputy city administrator and finance director, led the presentation and reiterated the scale of marina needs and the revenue options the city has analyzed. Goldman laid out phase‑1 marina projects (dredging and breakwater work) and larger phase‑2 dock reconfiguration options, and he presented a range of cost and revenue scenarios developed with consultant Moffatt & Nichol.

Goldman summarized the capital numbers presented to council: a maximum dredging estimate of about $13.2 million (2026 dollars) and a minimum dredging scenario of roughly $10 million, with 20‑year debt service estimates shown in staff slides; maintenance dredging over the following decade was estimated at about $5.5 million; breakwater repair/renovation and wholesale replacement options were outlined on slides with multi‑million dollar price ranges. Goldman also explained revenue options — retiring existing debt service, adjusting the municipal dredging fee (projected to collect about $250,000 in 2026 under current rates), utility tax adjustments, lodging tax allocations through LTAC (lodging tax advisory committee), and the local B&O tax — and walked council through several modeled scenarios showing different mixes of these revenues.

Public comment was extensive. Marine users and community members urged the council to act to preserve the marina:

- JJ Jones, a long‑time Oak Harbor resident, marine attendant and chair of the Marine Advisory Commission (speaking as an individual), urged approval: "I urge you to pass the b and o tax," he said, arguing that the marina has been maintained largely on the backs of tenants and that capital work could not be deferred indefinitely.

- Former Mayor Pro Tem and councilor Beth Muns said the marina is a community asset used by youth sailing programs and other groups and told council, "Do not kick the can down the road again. Support the B and O tax." She urged a higher threshold to limit impact on small businesses.

- Marita Ashley, a current Marine Advisory Commission member and marina tenant, said the marina is "a gem" and warned she has heard tenants talking about leaving because of uncertainty; she urged the council to consider the $4–5 million threshold range to protect small businesses.

- Jeff Ward, a resident who does not have a boat in the marina, said he supported a funding mix to preserve the facility because of the broader community benefits.

Council deliberations spanned several hours. Council members tested multiple combinations of revenue sources and thresholds (presented as scenarios by staff) and debated the equity of asking a small number of businesses to carry the burden versus spreading costs via a utility tax, lodging tax, property tax mechanism (e.g., a port district or Metropolitan Park District) or higher dredging fees. Several councilors said they favored a mix of revenue options while continuing to pursue formation of a port district or Metropolitan Park District as a longer‑term funding mechanism.

Motion and votes: Councilor Armes moved to adopt ordinance 19‑98 establishing the local B&O tax with a $4,000,000 annual threshold ($1,000,000 quarterly) and an Oct. 1, 2025 effective date; Mayor Pro Tem seconded. The motion passed 5–1 (Councilor Wigenstein opposed). The council then adopted ordinance No. 2000, an administrative chapter to implement the tax (Title 3.99), unanimously.

Directions to staff and next steps: Council gave staff direction to prepare follow‑up actions required to put the new tax into effect and to pursue complementary revenue steps discussed during the hearing. Specific directions conveyed in public discussion and in the meeting’s post‑vote conversation included:

- Staff to return with an updated master fee schedule so that any marina dredging fee or breakwater fee adjustments can be adopted by resolution; Goldman indicated a fee schedule item would come back for council consideration.

- Staff to explore lodging‑tax (LTAC) allocations to direct a portion of lodging tax revenues to marina funding and to pursue other grant opportunities; council instructed staff to try to secure about $55,000 in LTAC support as part of broader revenue mix discussion, while noting LTAC awards are not guaranteed.

- Continued outreach and formation steps around creation or expansion of a Port District or Metropolitan Park District as a longer‑term solution.

Other formal actions taken the same night: the council approved a Transportation Improvement Board grant application for pavement work on SE Barrington Drive (unanimous) and approved accounts‑payable vouchers (one abstention from Councilor Marshall). Those votes and the administrative ordinance for the B&O tax were taken in the same meeting; the B&O ordinance is the principal policy change.

Ending: The B&O ordinance provides a near‑term revenue option the city can use to borrow for marina capital needs. Council members expressed differing thresholds for acceptable revenue mixes; several urged rapid work toward a port‑district solution while adopting the B&O tax as a stopgap to preserve marina operations and enable borrowing for immediate capital needs.