Port turns down cash offer from Chelan County to mitigate future property tax revenues

Chelan County Commissioners have been rebuffed in their offer to the Chelan-Douglas Regional Port Authority to pay the port $1.5 million a year for 25 years if it would put aside the tax increment area (TIA) it proposes for Malaga.

The Port commissioners rejected the offer and suggested county commissioners and junior taxing districts instead raise taxes to meet projected revenue shortfalls.

“As you may be aware, the Washington State Department of Revenue recently issued a policy guidance on July 16, 2025, interpreting RCW 84.55.010 as allowing impacted taxing districts to adjust their levy rates to recoup increment revenue otherwise diverted into a TIA,” the regional port letter states. “This policy guidance could substantially reduce the projected impact to Chelan County’s General Fund and County Road Fund.”

County Commissioner Kevin Overbay called the Port’s response to the county offer irresponsible.

“First of all, we don’t wish to create an additional tax burden on our residents, and I find it irresponsible for anyone to suggest in such a cavalier manner that this is a solution,” Overbay said. “Secondly, what the port is referring to is a levy lid lift, which is not new guidance. A levy lid lift is passed only by a vote of the people. The community has spoken out against this TIF proposal. They want to see county, fire and library services protected, not be burdened with paying more taxes because of the port’s speculative plans.”

County Commissioners Shon Smith and Brad Hawkins echoed Overbay’s sentiments.

“We presented a very reasonable alternative to allow the port to pursue and bond for important economic development projects in the Malaga area without harming law enforcement, firefighting and county road services,” Hawkins said. “They blew us off. It’s sad and disgusting.”

“By extending a $37.5 million olive branch, we had hoped the regional port would put all residents first,” Smith said. “We are looking out for the junior taxing districts and our residents. No one wants to see critical services jeopardized or taxes increased right now, especially in response to a port-sponsored TIA.”

The county's financial offer to the port was going to come from the county’s “.09 funds.” The funds are a portion of the state’s sales tax that is remitted back to the county for economic development.

County commissioners proposed that Chelan County transfer $1.5 million annually to the port, a move that would avoid impacting the county’s general and road funds as well as the Wenatchee Valley Fire District and NCW Regional Libraries, the junior taxing districts in the proposed TIA. The general fund property tax pays for public services.

“The county receives non-general fund revenues designated for economic development activities in rural counties (RCW 82.14.370). The county also receives revenues for road improvements,” the Chelan County letter states. “The county is willing to transfer $1.5 million annually to the Regional Port for 25 years from these funds to facilitate wastewater and road improvements in the Malaga area.”

Chelan County has exhausted its options with the regional port, county commissioners said.

“We’ve reached out to the regional port multiple times over the past five months with potential resolutions that would allow for important economic development activities to take place while minimizing impacts to our taxing districts and the people who receive their services,” Overbay said.

"We continue to be open for conversations," said Port CEO Jim Kuntz to KOZI. "We've done the (TIA) project report required by the State of Washington. It's a public record. They've (Chelan County) submitted to us 13 projects to put on the project list for funding. We'll continue to be open to have conversations with them."