Oak Harbor commission weighs B&O tax options, dredging funding and facility reserve plan

At a Marina Advisory Commission meeting, David Goldman, Deputy City Administrator and Finance Director, briefed the commission on Business & Occupation (B&O) tax options under consideration by City Council and on how those revenues could be used to support marina capital needs, including dredging and breakwater work.

Goldman said the administration plans to return to council “at the May or early June for further consideration” with two exemption options for discussion: exempting the first $2,500,000 of a business’s gross receipts or exempting the first $5,000,000. He said either option would affect a small share of local businesses—roughly 25 to 60 firms depending on the exemption chosen—and that council could choose to commit revenue to marina uses or leave the revenue source unrestricted. “It looked like the city council narrowed down their focus to 2 options,” Goldman said.

Why it matters: dredging and breakwater repairs are recurring, high-cost needs for the marina. Commission members repeatedly said the city must identify a reliable revenue stream rather than rely on one-time measures. Goldman described the dredging program as ongoing, not a one-time expense, and said a combination of revenue sources—fees, enterprise reserves, and bonding—will likely be required.

Key funding and reserve details

- Goldman presented estimates and tradeoffs for using a new revenue stream as security for borrowing, repeating a prior calculation that about $800,000 per year in dedicated revenue could support roughly $11 million in borrowing, depending on interest rates and market conditions. “I calculated that, I remember when I did it for 800000. I think we could borrow like $11,000,000 at 800,000,” he said.

- The commission reviewed a newly established facility replacement reserve for marina assets. Goldman said the reserve schedule is driven by Public Works’ lifecycle estimates; the largest single line item is a parking-lot rehabilitation estimated at $1,100,000, which the schedule spreads over five years (roughly $200,000 a year). He described the reserve as the marina’s portion of a citywide facilities reserve program and said the intent is to build predictable funding for routine future replacements.

- Commissioners pressed staff about scope and priorities for the reserve. Several members argued that structural items tied directly to marina viability—electrical systems, pump-outs, the breakwater—should receive equal or higher priority than a parking lot. Staff said dredging and breakwater work are expected soon and will likely be financed through a bond or a mix of grants and debt; the facility reserve covers longer-term, scheduled replacements.

Operational and program details discussed

- Dredging: Commissioners and staff discussed tradeoffs between a full dredge and scaled options to reduce near-term cost. An engineering proposal from Moffett & Nichols suggesting selective reductions could reduce costs by millions but might shorten the useful life of the dredging work. Commissioners emphasized the risk of “saving now, paying more later.”

- Slip configuration and revenue mix: Staff described a long-standing plan to reconfigure some covered docks into side ties to attract larger, year-round vessels that provide steadier revenue; some commissioners cautioned that shifting toward larger slips could change public perception of the marina as an exclusive resource.

- Grants and other funding: Staff said the city is pursuing multiple threads—state and federal grants, potential EDA funding, the B&O-tax proposal, and both revenue and general-obligation bonds—and that the administration is coordinating permitting and updated engineering estimates to present to council.

- Other capital items: Commissioners asked staff to prioritize electrical upgrades, pump-out service in slips (a previously funded grant), and replacement of the marina boat; staff confirmed applications or grant efforts are in process for a new boat and for spill/hazmat equipment funding.

Commissioners and staff agreed to continue outreach and analysis before council decisions. Goldman and staff said the administration will refine cost estimates and return with a package for council consideration in May or early June.

Ending: Commissioners asked staff to bring back clearer cost breakdowns, a public-facing explanation of proposed revenue commitments, and a timeline tying permitting, grant applications and bonding decisions to the engineering schedule for dredging and breakwater work.