Port financial stability

HOOD RIVER — The Port of Hood River’s 2026-27 fiscal year (FY) budget, which the port’s budget committee approved by unanimous vote May 5, represents a historic moment in port operations, as revenues from Hood River Bridge tolls will no longer offset any gaps in the port’s general fund.

The budget is scheduled for a final hearing and adoption in June.

Since acquiring the bridge in 1950 from the Oregon-Washington Bridge Company, the port has increasingly relied on toll revenues to sustain non-bridge operations. The port initially focused on acquiring old fruit canneries and Ken Jernstedt Airfield, followed by marina and waterfront development.

That began to change just over a decade ago, when port leadership recognized costs of repairing and maintaining this second-oldest, sub-standard Columbia River bridge crossing, built in 1924, would soon become unsustainable. A new bridge would be needed, and a new organization — subsequently established as the Hood River–White Salmon Bridge Authority — would be needed to build it. A key transition point came in FY 2024-25, when bridge operations were removed from the port’s general fund.

Now, the port looks to remaining revenue sources, parking fees, airport leases, moorage fees and industrial property leases, primarily to fund waterfront recreation. (Property tax revenue is negligible, with only $102,000 representing less than one percent of projected 2026-27 revenue.) The total budget, including a $19.5 million beginning balance, $9.4 million in toll revenue (all of which must be dedicated to bridge operations, repairs and replacement as of July 1, 2026), leases, grants and other resources, is projected at $43 million.

As Kevin Greenwood, port executive director and budget officer, noted in his formal message to the budget committee last week, “The port must realign its financial model to ensure non-bridge activities are sustainably funded without toll subsidies.

“We want to make sure the decisions we’re making allow the port to function competently into the future,” he added in his opening remarks on May 5. “The most important outcome of this year’s budget is to make measurable progress in increasing net operational income.”

For instance, that means reducing and ultimately eliminating historic net operational losses at the airport (projected net operating income deficit of $169,280 in FY27), marina basin (projected $208,304 net income deficit) and the port’s commercial buildings (projected $125,315 net income deficit). Actual losses in 2026 show recent improvements, especially in the marina basin, which entered the current budget year with a projected $504,986 income deficit but ended with a much-reduced $50,223 negative balance. Commercial revenue deficit was also less than anticipated.

But the airport deficit grew, with a $343,147 ending net income deficit compared with a $283,836 beginning negative balance. The goal is to break even at the airport by 2030, anticipating new revenue from added hangar capacity and future land leases. For instance, $55,000 is projected in FY27 from hangar expansion under way now. The port will continue capital investment in the airport, including $689,000 to design and engineer a new terminal building, $150,000 for hangar completion, and $98,000 to prepare future land leases.

While some of these costs are offset by $735,000 in grants, terminal building construction is contingent on uncommitted federal funding. The 6,300 square foot building is expected to cost just over $9 million, of which $6.7 million would come from the U.S. Economic Development Administration. The port also hopes to sell its former Hanel mill site, investing proceeds in the airport and waterfront transportation infrastructure; that sale is still pending, with Amazon the prospective buyer.

“Airport operating revenue continues to grow, and losses are narrowing as new hangars come online,” Greenwood told the budget committee. “The goal for this department is to be financially sustainable. The new T-hangar project is nearing completion. This project leveraged over $1.5 million in grant funds and is expected to be a strong revenue generator.”

Some port properties just aren’t expected to generate net revenue, but rather fall within the domain of traditional government services. A prime example: waterfront recreation, which is projected to lose $501,617 in FY27 on stable operational revenues of $57,500. The waterfront recreation department’s ending deficit this year was $750,971, driven partly by overhead costs. The port anticipates reduced waterfront expenses by reducing capital investment.

Increased parking revenue will help curb waterfront deficits. The port expects operational revenue to grow from $525,000 this year to $650,000 in FY27, reflecting 130 new spaces added in 2026. On the expense side, lower personal services costs should cut expenses from $577,118 to $517,676.

The upcoming port budget reflects a newly established capital reserve fund, designed to grow each year in anticipation of major long-term costs, such as roof replacements for the port’s commercial and industrial buildings. The port covered these previously from contingency funds, but there was no intentional, long-range effort to identify major costs well in advance and set monies aside to cover them. With the loss of bridge revenue, the port can no longer afford that luxury. Capital improvement plans will be developed for port-owned buildings, with initial fiscal transfers for each site: Big 7, Halyard, Jensen, Timber Incubator and Wasco buildings.

And then there’s the bridge itself, with three separate funds:

• Bridge Fund: As of July 1, all bridge revenues will be dedicated to bridge-related costs such as repair, operations, maintenance and replacement. A $3.8 million deposit will go to the bridge authority account, which will ultimately build up necessary reserves for a federal bridge construction loan. Toll revenue in FY27 is projected at $9.4 million, reflecting only slight growth over the previous year. (There will be no toll increase next year; the latest increase was in 2023.)

• Bridge Replacement Fund: This is a legacy fund established several years ago to receive state and federal funding toward design and permitting for the new bridge. As responsibilities transfer to the bridge authority, this fund is projected to close out in FY27, with the remaining $2.5 million projected to be spent by the end of 2026.

• Bi-State Bridge Replacement Fund: This receives toll revenues from the 2023 rate increase, and is dedicated to build up necessary reserves for a future federal bridge construction loan. The goal is to accumulate $20-$25 million to support a bond issuance of more than $100 million. The bridge authority, not the port, will issue that bond, which is contingent on a complete financing package. (Should the federal loan not occur, the bridge authority would look to other bond sources.) As of June 30, 2026, the port will have transferred almost $10 million into the replacement fund, with an additional $3.8 million transfer expected in FY27.

Following the budget committee’s approval May 5, next steps in budget approval are a June 26 hearing, followed by anticipated adoption that day. The port commission may not alter the approved budget by more than 10 percent without holding a supplemental budget process.

Budget committee members were John Benton, Larry Brown, Bonifacio Romero, Judy Newman and Jonathan Tillman. Port commissioners are Heather Gehring, president; Tor Bieker, vice president; Kristi Chapman, secretary; Kathryn Thomas, treasurer; and Ben Sheppard, commissioner.