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HomeMy WebLinkAbout10/25/2022 05. Port Districts • iV4t BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5. For Meeting of: October 25, 2022 ITEM TITLE: Port Districts SUBMITTED BY: Sara Watkins, City Attorney SUMMARY EXPLANATION: At the City Council retreat the Council indicated it was interested in obtaining more information about port districts. The attached memo gives a brief summary of the formation and function of port districts. ITEM BUDGETED: No STRATEGIC PRIORITY: Economic Development APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: ATTACHMENTS: Description Upload Date Type d Legal Memo re Formation of Port Districts 10/19/2022 Corer Memo 2 _______________„„„‘„ ___ c,v......-A \ y -�: 4 i K.__ •'9h 0 Office of the City Attorney City of Yakima MEMORANDUM October 19, 2022 TO: Mayor Janice Deccio & City Councilmembers Robert Harrison, City Manager FROM: Sara Watkins, City Attorney SUBJECT: Port Districts City staff was asked to provide information on the formation of both a port district. Please find below a summary of the requirements as well as an outline of the steps necessary to move forward to form either of these entities. 1. Port Districts Generally. Port districts are independent government bodies that are run by commissioners elected by voters within the port district's boundaries. Ports generally work with businesses and governmental agencies to "promote trade, industrial development, and jobs in their regions.' Ports were originally formed to help facilitate marine transportation and commerce. That has expanded over the years. Port districts are hereby authorized to be established in the various counties of the state for the purposes of acquisition, construction, maintenance, operation, development and regulation within the district of harbor improvements, rail or motor vehicle transfer and terminal facilities, water transfer and terminal facilities, air transfer and terminal facilities, or any combination of such transfer and terminal facilities, and other commercial transportation, transfer, handling, storage and terminal facilities, and industrial improvements. RCW 53.04.010(1). 1 Public Port Districts in Washington:Origins, Kit Oldham(10/20/2010)https://www.historylink.oro/File/9614 200 South Third Street,2"d Fl. I Yakima,WA 98901 P:509.575.6030 I F:509.575.6160 3 Mayor Janice Deccio & City Councilmembers Robert Harrison, City Manager October 19, 2022 Page 2 State law does not require a port district to be adjacent to a body of water with harbor improvements. Instead, the law allows port districts to be created in any location, as long as the port district is established for the purposes allowed. RCW 53.04.015. Port districts are used as an economic development tool and are authorized to improve their lands for industrial and commercial purposes. RCW 53.08.040. RCW 53.08.245 specifically states: "It shall be in the public purpose for all port districts to engage in economic development programs. In addition, port districts may contract with nonprofit corporations in furtherance of this and other acts relating to economic development." Such economic development programs can include apprenticeships and job training programs at Port tenant facilities. Ports can also promote tourism through advertising or distributing information to others. 2. Port District Powers and Financing. Port district powers are outlined by statute. Those powers including acquisition of property, the ability to condemn land for port purposes, and levying and collecting assessments upon property to carry out its purposes. RCW 53.08.010. A port district may also acquire and operate an airport, commercial transportation facilities, and improvements relating to industrial and manufacturing activities. RCW 53.08.020. Port districts can also construct, purchase and maintain facilities to process or freeze agricultural products and perishable commodities. Id. If the port district owns property, it has the authority to lease that property for any purpose and on any terms that the port commission deems property, but no lease can be longer than 50 years with options to extend for an additional 30 years. RCW 53.08.080. Port districts also have the authority to sell property pursuant to RCW 53.08.090 and RCW 53.08.091. In addition to powers related to property, port districts are also authorized to engage in economic development programs such as job training, apprenticeships,job advancement and retention, and occupational education programs. In so doing, the programs must be associated with port tenants, customers and local economic development activities related to port tenants or port- related economic activities that are sponsored by a port and operated by a nonprofit, private or public entity. RCW 53.08.245(2)(a). Ports can also aid with tourism promotion and operate tourism-related facilities in some circumstances. RCW 53.08.255. Ports can be financed through tax levies, up to 45 cents per $1,000.00 of value on real property. RCW 53.36.020. They can also borrow money or issue bonds. RCW 53.36.030. Further, ports can set up local improvement districts to have all the properties specially benefitted by the local improvement pay for said improvements. RCW 53.08.050. It should be noted that any LID set up would require the County Treasurer to perform the duties of the treasurer for the LID. This could require an interlocal agreement between the port and the county for payment for such services, which likely would be covered by the LID assessments. RCW 53.08.050. Ports also can receive gifts of real or personal property. RCW 53.08.110. 4 Mayor Janice Deccio & City Councilmembers Robert Harrison, City Manager October 19, 2022 Page 3 3. Port District Formation. The Council has no role in forming a port district. It must be formed through a petition and ballot proposition to the public. RCW 53.04.023. The following steps would need to be taken to form a Port District: 1. A petition initiating the creation of a port district would be filed with the Yakima County Auditor, outlining the proposed boundaries of the district, the number of proposed commissioners (three or five), describing the boundaries of each of the commissioner districts, and the name of the proposed port district. Such petition must be signed by 10% of the voters residing within the boundaries who voted at the last county general election. 2. The County Commissioners would hold a public hearing on the creation of the proposed district when the auditor certifies the petition. i. Testimony would be taken; ii. The Commissioners could amend the boundaries of the proposed district if it finds that it is in the public interest; iii. If it is proposed to add land then another public hearing would be held; and iv. The Commissioners must find that creation of the port district is in the public interest. 3. The Commissioners then, if finding it is in the public interest to have a port district, will submit a ballot proposition authorizing the creation of the district. The ballot proposition is paid for by the County. 4. The port district will be formed if a majority of the voters voting on the proposition vote in favor. 5. The ballot will also contain the names of people who submit as candidates for port commissioner, however those seats are only filled if the port district is approved. If the County Commissioners sought to form a county-wide port district, then they have the additional option to place the question of port district formation on the ballot only by resolution, without the need for the petition. The entire county would then vote on the formation of the county- wide port district. 4. Additional considerations when determining whether to form a port district. Port districts operate to serve a specific public purpose—in the case of a port district in Yakima that would likely be for economic development and commerce purposes. The money raised by the port district would be used for specific reasons—infrastructure improvements and other benefits associated with port activities. Unlike a city government which has a broad range of 5 Mayor Janice Deccio & City Councilmembers Robert Harrison, City Manager October 19, 2022 Page 4 purposes that need to be funded, the port district's funding would be used solely for those statutorily allowed expenses based on the local port district's activities.2 However, port districts can also create another governmental entity, which could lead to inefficiencies or frustration from constituents who are not familiar with the differences between the port district and the city, or differences between the port district and other special purpose districts in the area. Additionally, people will have to run for office as port district commissioners and traditionally the number of people interested in running for special purpose positions has been lower than those interested in running for City Council or County Commissioner.3 Finally, port districts, once formed, are a separate and independent governmental entity from the city, governed by the port district commissioners. It is formed by the statutory process, and can only be dissolved through the statutory process. If a port district is formed, it should take an active approach to visibility in the community so that community members are aware of the district, its benefits, its roles and its responsibilities, as well as how it is separate and distinct from the city. 2 See Special Purpose Districts in Washington State, MRSC publication, 2003, page 17. https://mrsc.org/getmedia/f8cd14a6-1144-4aae-ba39-cda3be643db5/Special-Purpose-Districts-In- Washi ngton-State.pdf.aspx?ext=.pdf 3"The 1988 Washington Legislative Budget Committee report noted that a sizeable percentage of special district races were uncontested." Id. at 18.