FREQUENTLY ASKED QUESTIONS

Our Answers

Here you will find answers to some of the frequently asked questions about Port Freeport. For additional or specific inquiries, please call (800) 362-5743.

What is the purpose of the $130 million bond package for Port Freeport?

A federal cost-shared project to deepen and partially widen the Channel has been authorized by Congress.  Voters authorized the Port to issue ad valorem tax bonds to fund the local sponsor share of the Freeport Harbor Channel Improvement Project. The ballot language and bond resolution clearly state it is “for the purpose of improving, constructing or developing the Freeport Harbor Channel Improvement Project.”

Why did Port Freeport have to call a bond election to issue the bonds?

Ad valorem tax bonds must have the approval of the voters before they can be issued.

Why does Port Freeport have taxing authority?

Port Freeport is a government entity that was created by the Brazoria County voters in 1925 to be the local sponsor for the Freeport Harbor Channel and engage with the U.S. Army Corps of Engineers in Freeport Harbor Channel maintenance and improvements.  The voters also gave the Port taxing authority to fund activities related to cost-share responsibilities for Freeport Harbor Channel navigation improvements.

Why doesn’t the federal government pay for the entire Freeport Harbor Channel Improvement Project?

Most federal government programs will not pay the entire cost of a project. It is typical for the federal government to require a specified amount of matching funds from the sponsor. For the Freeport Harbor Channel Improvement Project, it is estimated the U.S. Army Corps of Engineers will commit $165 million toward construction of the $295 million project; the $130 bond package will account for Port Freeport’s cost share.

What is the benefit of being the deepest port in Texas?

At a depth of 46 feet, Freeport Harbor Channel is not designed to handle the larger global vessels that are in service today. A deeper channel will enable Port Freeport to market the Port to a wider range of global vessels, expand its capacity and customer base and potentially attract new liner services. This, in turn, is expected to facilitate additional economic opportunities such as new jobs and increased purchases of supplies, fuel and other services.

Will Port Freeport be able to accommodate larger vessels with the completion of the Freeport Harbor Channel Improvement Project?

The current channel, at a depth of 46 feet, is not designed to handle the larger global vessels that are in service today. The new generation vessels that carry more cargo require deeper water and expanded areas for navigation. A deeper channel will enable Port Freeport to market the Port to a wider range of global vessels including those that now transit the expanded Panama Canal.

Will vessels transiting the expanded Panama Canal be able to call Port Freeport after the completion of the Freeport Harbor Channel Improvement Project?

Yes. The Freeport Harbor Channel Improvement Project will deepen the channel from its current depth of 46 feet to depths ranging from 51 to 56 feet at its deepest point.  The cargo capacity of the Neo-Panamax class ships transiting the new Panama Canal locks is 2 to 3 times that of the old Panamax class ships and draft 48 to 50 feet.

How is Port Freeport able to issue bonds without a total tax rate increase?

The current total tax rate of $0.0401 includes approximately three cents directed to Maintenance and Operations (M&O) and one cent dedicated to debt service to retire debt.  A combination of things supports the intention to hold the tax rate at its current level:

  • The bonds for the Freeport Harbor Channel Improvement Project will be issued over several years in multiple series as work on the channel progresses and as new value from expiring industry tax abatements is added to the tax roll. Approximately $10.8 billion in new taxable value from expiring tax abates will be added to the tax rolls during the years 2021 and 2028. This phased issuance enables the Port Commission to manage the tax rate at its current level.
  • A previous tax-supported bond issue will be fully repaid in 2019, creating additional capacity within the existing tax rate.
  • A larger portion of the current rate can be dedicated to debt service and less to maintenance and operation.  The Port Freeport Commission anticipates directing approximately three cents to debt service and one cent to M&O.  Maintaining at least one cent for maintenance and operation supports a higher credit rating for Port bonds.

Will more jobs will be available at Port Freeport with the Freeport Harbor Channel Improvement Project?

The Freeport Harbor Channel has been deepened several times throughout its history to facilitate reliable movement of commerce which has supported commercial and industrial expansion in Brazoria County and created new employment opportunities.  Many companies located here in the area including BASF, The Dow Chemical Company, Freeport LNG, and Phillips 66 use marine transportation to move their products globally.   A 2016 study by the Texas A&M Transportation Institute determined the Freeport Harbor Channel is impacting more than 126,000 jobs.  Having a deeper channel designed for a wider range of global vessels expands marketing opportunities to attract new business to the Port and support more employment in many areas including International Longshoremen, stevedores, truckers, businesses providing supplies, fuel, maintenance and more.

Will the Freeport Harbor Channel Improvement Project require land acquisition?

No land acquisition is required to complete the Freeport Harbor Channel Improvement Project.

Will the project require the jetties to be moved?

No widening of the channel inside the jetties is needed.  The distance between the jetties is 1,200 feet and the current channel width is 600 feet.

Will this bond package be used to fund landside improvements?

The voters authorized the Port to issue ad valorem tax bonds to fund the local sponsor share of the Freeport Harbor Channel Improvement Project.  The ballot language and bond resolution provide the legal restriction for how the bonds are spent and state specifically they are to be used “for the purpose of improving, constructing or developing the Freeport Harbor Channel Improvement Project.”  Other landside projects related to the inland movement of cargo are not part of this bond program.

What is the current tax rate for Port Freeport?

The current total tax rate of $0.0401 includes approximately three cents directed to Maintenance and Operations (M&O) and one cent dedicated to debt service to retire debt.

Will the Port tax rate change, with the approval of the bond package?

The bond package can be accomplished without an increase in the Port’s total tax rate of $0.0401.  A combination of things supports holding the tax rate at its current level:

  • The bonds for the Freeport Harbor Channel Improvement Project will be issued over several years in multiple series as work on the channel progresses and as new value from expiring industry tax abatements is added to the tax roll. Approximately $10.8 billion in new taxable value from expiring tax abates will be added to the tax rolls during the years 2021 and 2028. This phased issuance enables the Port Commission to manage the tax rate at its current level.
  • A previous tax-supported bond issue will be fully repaid in 2019, creating additional capacity within the existing tax rate.
  • A larger portion of the current total tax rate can be dedicated to debt service and less to maintenance and operation. The Port Freeport Commission anticipates directing approximately three cents to debt service and one cent to M&O.  Maintaining at least one cent for maintenance and operation supports a higher credit rating for Port bonds.

Does area industry pay taxes to the Port?

Commercial and industrial entities in the Navigation District pay 70% of the Port’s total annual tax levy.  That percentage is expected to increase as new taxable value is added to the tax rolls from expiring tax abatements.

Why is Port Freeport doing this deepening project now?

The Freeport Harbor Channel Improvement Project was authorized by Congress in 2014.  The current channel, at a depth of 46 feet, is not designed to handle the larger global vessels that are in service today. The new generation vessels that carry more cargo require deeper water and expanded areas for navigation. A deeper channel will enable Port Freeport to market the Port to a wider range of global vessels including those that now transit the expanded Panama Canal.

The Channel Improvement Project will be completed in multiple segments and contracts.  Completion of the engineering and design for the first segment and award of the first contract is expected in calendar year 2020. The total project will take approximately 5 to 6 years to construct.

How much of the bond is going toward channel deepening and partial widening?

100% of the bond package will be used for the Freeport Harbor Channel Improvement Project.  The ballot language and bond resolution provide the legal restriction for how the bonds are spent and state specifically they are to be used “for the purpose of improving, constructing or developing the Freeport Harbor Channel Improvement Project.”

Who is responsible for maintaining the channel?

The federal government is responsible for maintaining the Freeport Harbor Channel.  A Harbor Maintenance Tax is collected by the federal government on cargo imported into United States ports.  This tax is used to fund the U.S. Army Corps of Engineers budget to maintain federal channels in our nation’s ports including the Freeport Harbor Channel.

If the federal government doesn’t come through with their full portion of the project cost, what will happen to the tax rate?

No change in the tax rate is anticipated if the federal government does not come through with its full share of the project cost, but the project could take longer to construct. The Project will be completed in multiple segments and contracts.

Where will the dredge material be placed?

The material dredged from the channel will be placed in three existing areas, the offshore ocean dredge material disposal site (ODMDS) and dredge material placement areas (DMPA) 1 and 8, located on Port-owned property. The U.S. Army Corps of Engineers has awarded a contract to raise the containment dike around Placement Area 1 increasing capacity for the Freeport Harbor Channel Improvement Project. The levy raise is expected to be complete in April 2019.

When will dredging begin and how long will it take?

The Freeport Harbor Channel Improvement Project was authorized by Congress in 2014.  The Project will be completed in multiple segments and contracts.  Completion of the engineering and design for the first segment and award of the first contract is expected in calendar year 2020. The total project will take approximately 5 to 6 years to construct.

What is the average value of a home on the tax roll? How much would that resident homeowner annual tax be for the Port?

The Brazoria County Appraisal District  reports the average value home in the Navigation District is $155,000. If a resident taxpayer owning a home valued at $155,000 applies for the Homestead exemption granted by the Port, that value will be reduced by $31,000 leaving a taxable value of $124,000.  At 4 cents that generates an annual tax levy of $49 or $4 per month.

Do taxpayers that are 65 and Older or Disabled get any additional exemptions?

If a homeowner resident is 65 and over or disabled, they are eligible for the Homestead exemption plus an additional $150,000 exemption offered by the Port. Brazoria County Appraisal District reports the average value home in the Navigation District is $155,000. If a resident taxpayer owning a home valued at $187,500 applies for these exemptions, the taxable value will be $0 and they will pay NO tax to the Port

How will the Freeport Harbor Channel Improvement Project affect shoreline erosion?

The Environmental Impact Statement (EIS) prepared by the U.S. Army Corps of Engineers states shoreline impacts from construction of the Locally Preferred Plan (LPP) Alternative of the Freeport Harbor Channel Improvement Project would be so slight that they would not be noticeable against the background changes in shoreline position at either the Surfside or Quintana beaches, and for areas 0.5 to about 3 miles from the jetties, the erosion rate could decrease by up to 0.5 foot/year.  The full EIS can be found http://www.swg.usace.army.mil/Portals/26/docs/Planning/FINAL%20FHCIP%20FEIS_Vol-I_August%202012.pdf.

Will there be a significant environmental impact related to the Freeport Harbor Channel Improvement Project?

According to the Environmental Impact Statement (EIS) prepared by the U.S. Army Corps of Engineers, no significant environmental impacts are expected in relation to the Freeport Harbor Channel Improvement Project.  The EIS was a comprehensive study that included the following: dredged material management, air quality, shoreline erosion, economics, historic resources, protected species, navigation, recreation, water and sediment quality, energy needs, hazardous materials, and in the general, the welfare of the people.  The full EIS can be found http://www.swg.usace.army.mil/Portals/26/docs/Planning/FINAL%20FHCIP%20FEIS_Vol-I_August%202012.pdf.

How is the depth of the Freeport Harbor Channel measured by the U.S. Army Corps of Engineers?

Previously, the Galveston District of the U.S. Army Corps of Engineers used Mean Low Tide (MLT) as its vertical measurement for navigation projects. Recently, the internationally recognized Mean Lower Low Water (MLLW) has become the new standard of measure. MLLW is the average minimum tidal depth likely to be encountered by maritime operators. The Freeport Harbor Channel Improvement Project will deepen the channel from its current depth of 46 feet to a maximum level of 56 feet mean lower low water at its deepest point.

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