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

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.

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.

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.

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.

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.

The current total tax rate of $0.040000 includes approximately one cent directed to Maintenance and Operations (M&O) and three cents dedicated to debt service to retire debt.  A combination of things supports the intention to decrease or 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.  Maintaining at least one cent for maintenance and operation supports a higher credit rating for Port bonds.

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 2019 study by the Texas A&M Transportation Institute determined the Freeport Harbor Channel is impacting more than 150,000 jobs statewide.  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.

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

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.

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.

The current total tax rate of $0.040000 includes approximately one cent directed to Maintenance and Operations (M&O) and three cents dedicated to debt service to retire debt.

The bond package can be accomplished without an increase in the Port’s total tax rate of $0.040000.  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.  Maintaining at least one cent for maintenance and operation supports a higher credit rating for Port bonds.

Commercial and industrial entities in the Navigation District pay over 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.

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.  The contract award for the first segment was awarded in September 2020 and that dredging work we commenced in April 2021. The total project will take approximately 5 years to construct.

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.”

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.

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.

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 awarded a contract to raise the containment dike around Placement Area 1 increasing capacity for the Freeport Harbor Channel Improvement Project. That work was completed in March 2020.

The Freeport Harbor Channel Improvement Project was authorized by Congress in 2014.  The contract award for the first segment was awarded in September 2020 and that dredging work we commenced in April 2021. The total project will take approximately 5 years to construct.

If a resident taxpayer owning a home valued at $218,750 applies for the Homestead exemption granted by the Port, that value will be reduced by $43,750 leaving a taxable value of $175,000.  At 4 cents that generates an annual tax levy of $70 or $5.40 per month.

If a homeowner resident is 65 and over or disabled, they are eligible for the Homestead exemption plus an additional $175,000 exemption offered by the Port. If a resident taxpayer owning a home valued at $218,750 applies for these exemptions, the taxable value will be $0 and they will pay NO tax to the Port.

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.

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.

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.