Oak Harbor council pauses vote on local B&O tax after marathon debate over marina dredging, breakwater and rec center funding

Oak Harbor officials opened a public hearing on two ordinances to adopt a local business-and-occupation tax and its administrative code but tabled final action to Aug. 6 after a lengthy council debate and public comment on how the money would be used.

The proposed tax, described by David Goldman, deputy city administrator and finance director, would levy "1 fifth of 1% or 0.002 times a business's gross receipts," with an exemption threshold under the draft ordinance at $5,000,000 (other scenarios discussed included a $2.5 million threshold). Goldman told the council the ordinance sets an effective date of July 1, 2025, with the first collections due Jan. 31, 2026, and that the threshold at $5 million was estimated to affect about 26 businesses and generate roughly $825,000 a year in gross revenue under staff assumptions.

Why it matters: speakers and council members framed the measure chiefly as a way to secure funds quickly to address capital needs at the city marina — principally dredging and a failing breakwater — while also discussing the community's longer-running interest in a recreation center. Byron Scooby, a 45-year marina tenant and member of the Marina Commission, urged the council to act, calling the marina "currently in a crisis situation" and saying engineers' estimates put repairs in the multi‑million dollar range, with a catastrophic failure risk if work is delayed. Several youth‑sports leaders urged council to consider directing funds to a recreation center to serve local youth programs.

Council concerns and next steps: Council members pressed staff on timing for permitting, bond terms and how long a dredge would last. Goldman described two illustrative threshold scenarios and financing implications, and warned that borrowing terms affect how much can be completed: "for 20 years, that money that we would pass the B and O tax would not be able to go towards the rec center. It would all go towards the marina," one council member summarized of staff's bond analysis. Council members asked staff to return with clearer bond-sizing and schedule information, the permitting timeline (including the in‑water window and emergency permit options), and options for other funding vehicles such as a Metropolitan Park District or port/port expansion. The council voted to table the ordinances and continue the public hearing to Aug. 6, 2025, to give staff time to provide those clarifications.

Public testimony: Six members of the public spoke at the hearing. Supporters included Byron Scooby, who emphasized immediate risk to marina infrastructure, and representatives of the North Whidbey Soccer Club who said a city rec center would serve more than 1,000 youngsters and that current field access is inadequate. A resident, Sandy Peterson, opposed the tax on economic‑fairness grounds, warning that businesses will pass costs to consumers.

What council did: The council did not adopt the ordinances tonight. Instead it directed staff to return with more precise financing and schedule details, and set the continued public hearing for Aug. 6, 2025.

What remains uncertain: Council discussed but did not decide whether to prioritize dredging, a breakwater replacement or a combined solution; whether to bond for 15 or 20 years; or whether to pursue parallel voter‑facing options such as a Metropolitan Park District or port special district. Staff was asked to provide bonding scenarios tied to permit and construction timing and to explain the implications of different tax thresholds.