Proposed coal-export terminal would boost sagging local government budgets

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By Rachel Lerman and Celeste Erickson

Officials in Ferndale are optimistic about how potential industrial development at the Gateway Pacific Terminal would help their struggling community.

“Everybody paid for Intalco,” Ferndale Mayor Gary Jensen said of the 2001 shuttering of a major aluminum smelter that is now running again. “The (Gateway) terminal would be important for the county because of those increased tax values. It will allow us to keep up with the growth of the county.”

If built, the proposed Gateway Pacific Terminal would stand between two existing heavy industries at Cherry Point, west of Ferndale, the BP Refinery and Alcoa-Intalco Works.

The proposed location would be outside the city limits in an unincorporated area.

Tax revenue from the project would go to sectors in Whatcom County including Fire District 7 as well as the Ferndale School District. The estimated property tax and new construction revenue would be divided into several public service districts in Whatcom County such as fire districts, schools, roads, libraries, cemeteries, emergency medical services and water and sewer systems.

The bulk of new money would come from the taxes levied during construction of the facility.

The 1,092-acre site would pay an estimated $54 million per year in state and local taxes during construction, and about $10 million annually after that.

Additional tax revenues generated by building the terminal could help keep tax rates low, said Whatcom County Assessor Keith Willnauer. After construction is completed in two to three years, the property would continue to buoy local tax coffers.

Officials hope to also see a spillover effect into Ferndale proper.  Ferndale has available land for industrial and retail growth, Jensen said.

“When industrial development does well, that affects a lot of people. Right now we are hurting,” Jensen said.

Intalco’s layoffs of 600 workers and shuttering of the facility created cuts in several service areas including schools, fire and government, Jensen said.

In 2005, the plant accounted for $3.3 million in local taxes, which was 1.6 percent of county taxes, according to the Economic Impact of the Washington State Aluminum Industry, a study published by the aluminum industry in 2006.

Ferndale services need funds

Local government officials are desperate to generate more tax revenues.

The Ferndale School District is suffering from state budget cuts. The only thing left to cut are jobs, said Mark Deebach, executive director for business and support services of the Ferndale School District.

Local taxpayers contribute 20 to 25 percent of the district’s overall budget, Deebach said. The state has increased its levy authority so taxpayers can make up for the state’s loss.

The state provides basic education for the school district while levies pay for extra programs. Because of the current economic downturn, the local levies now fund maintenance and operations for the district, he said.

Deebach said the school district can’t fund everything it used to because of the cuts. School districts spend about 80 percent of their expenses on staff, he said.

“If it happened in a vacuum, if nothing else changed other then the Gateway Terminal was built, then, yeah we’d probably raise more money and the tax rate for the individual home owner would go down,” Deebach said. But for schools there are other aspects to consider, such as the state budget.

Until the state can continually fund basic education, the school district will have to ask the taxpayers for the funding, he said.

Schools are not the only district that could use the additional tax revenue.

Fire District 7 Chief Gary Russell said the terminal proposal would have low impact for the fire district, because relatively few emergency calls would be expected there, and yet the terminal would have high value to the community. He said he expects the terminal would have few calls for fire and rescue services.

Compared to the BP refinery next to the proposed Gateway location, the new terminal would have fewer risks for firefighters because a shipping terminal is less dangerous than a refinery, Russell said.

The fire district currently has 30 firefighters and 23 emergency medical technicians, he said. If the terminal passed, the district would likely hire about three firefighters with the rest of the extra income going to capital improvement such as fire trucks, a few of which are due for replacement.

“We want to provide the best level and care of service, the best fire protection that we can,” Russell said. “We can only provide what we have with the dollars that (are provided) to us by the public.”

Celeste Erickson and Rachel Lerman are Western Washington University seniors majoring in journalism.

This story is part of a package produced by the students in the Journalism 450 class at Western Washington University. They were primarily edited by WWU Professor Carolyn Nielsen. InvestigateWest co-founder and senior environmental correspondent Robert McClure advised the students when they were partway through the reporting process, and helped prepare the final stories for publication. View the remaining elements of the package here.