Jessie Stensland reports from the Oak Harbor City Council meeting of Tue., May 20, 2025 for the Whidbey News-Times. Read the whole story.
Oak Harbor officials’ plan to adopt a business and occupation tax to help fund marina dredging, the construction of a marina breakwater and a city recreation center fell apart during vigorous debate at a city council meeting Tuesday.
In the end, the council voted 4-3 to table the tax proposal until Aug. 6 after several council members questioned the city’s financing plans and argued that the North Whidbey community should first explore the creation of a metropolitan park district.
As presented, the proposed tax would affect only 26 businesses, or the top 1% of businesses by earnings.
They Said It
David Goldman, deputy city administrator and finance director, explained that the proposed B&O tax would exempt the first $5 million that businesses earn. At a rate of 0.002, the tax would earn an estimated $825,000 a year.
He also showed options of lowering the exemption level to $2.5 million or $1 million — which would affect more businesses and raise more money — although council members previously supported the upper level.
Goldman argued that a B&O tax on large, corporate businesses would help level the playing field with homegrown, smaller businesses harmed by big-box stores. He said research bears this out.
Sandi Peterson, a candidate for council, spoke against it.
Mayor Ronnie Wright was clearly not pleased with the delay and pointed out that the city loses out on nearly $64,000 every month the tax isn’t in effect.
During lengthy discussions, Councilmember Eric Marshall emphasized apparent problems with the plan, or lack of planning, on the city’s part. He pointed out that the city’s proposal to use the proceeds from the B&O tax to pay the debt service on a 20-year bond to fund $10 million in dredging would leave little money for the breakwater or the recreation center.
In addition, Marshall said the city’s own consultant concluded that the dredging would only last 10-13 years before it needed to be done again. Goldman acknowledged that the bond would then have to be for 15 years, which could bring the annual debt service up to about $1 million a year — and that means another project likely couldn’t be financed with the tax.
Councilmember Tara Hizon, however, countered that the B&O tax, as previously discussed, was only meant be one part of a financing plan that would require several different revenue sources.
“It was the consensus of council that we need to pursue every available avenue, every available funding source, every available voter initiative because there is no one solution,” she said.
Likewise, Councilmember Barbara Armes said the city is working with state and federal officials, including to U.S. Rep. Rick Larsen, to obtain funding for the projects. According to Larsen’s office, there is a provision in the Water Resources Development Act that requires the Army Corps of Engineers to look at the channel and breakwater in Oak Harbor to determine if federal assumption of maintenance, including dredging, is merited.
Armes emphasized how the marina is important to the community beyond just boat owners. She spoke about how children recently visited the young salmon being raised in a pen at the marina and how the facility supports the downtown core.
“If we get rid of it, what will it be?” she asked. “Because once we get rid of it, it will never come back.”
Marshall proposed that the community should consider a metropolitan park district, which he said could raise more money from a larger number of people. Metropolitan park districts are similar to park and recreation districts but generally offer more fiscal capacity and flexibility, according to Municipal Research and Services Center.
Marshall said the voters have shown time and time again that they will support taxes if there is a well-grounded proposal.
“They will approve additional expenditures if you show them the value of what you are giving them,” he said. “Right now we can’t do that because we don’t even have a solid plan in place internally.”
City officials have also discussed the creation of a port district on North Whidbey. Under state law, the decision to place such a measure on the ballot would be in the hands of the county commissioners. Commissioner Jill Johnson said nobody from the city has approached her about the port district idea, although she talked to a city council member about a possible metropolitan park district — which she said seems to make more sense.
In his comments, Councilmember Jim Woessner argued that the city wasn’t thinking big enough and needs a full-scale plan before adopting any B&O tax. He said the city hasn’t put serious thought into the numbers because “we’ve been trying to pull this thing together on a shoestring budget.”
“And I think shoehorning ourselves into trying to be frugal right now might be a mistake,” he said.
On the Ballot in November 2025
| CITY OF OAK HARBOR |
|---|
| Councilmember, Position 4 Barbara Armes |
| Councilmember, Position 5 James P. Marrow, the incumbent Brit Kraner Marrow was appointed to replace Shane Hoffmire until the results of the election are certified in November. |
| Councilmember, Position 6 Andy Plumlee Sandi Peterson Incumbent Jim Woessner did not file for another term. |
| Councilmember, Position 7 Bryan Stucky |
