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Port presents two-year operating and capital budgets; proposes $7.42M supplemental for cruise terminal
Summary
Port staff presented proposed biannual operating budgets (FY 2012–13 and 2013–14) and a two-year capital program, highlighting revenue improvements, a $1.5M contingency for the cruise terminal and a request to forward a $7.42M supplemental appropriation to the Board of Supervisors for the cruise terminal cash timing.
Port staff delivered a multi-part budget briefing on Feb. 14 that covered the biannual operating budget, the proposed capital budget and a supplemental appropriation request for the cruise terminal.
Elaine Forbes, deputy director of administration and finance, explained the shift to a fixed two-year budget cycle and said the port must balance operating needs with a long-term five-year financial plan. Staff noted existing financial policies including a 15 percent operating reserve and a debt-service coverage requirement of at least two times net revenues.
Megan Wallace, the port's budget manager, walked the commission through year-to-year comparisons and said the proposed FY 2012–13 budget is $95.6 million (an $8.5 million increase from the prior year) and the FY 2013–14 budget is $98.2 million. Wallace attributed much of the revenue growth to parking, commercial/industrial rents and increased cruise activity; she said parking revenue rose about $1.5 million and commercial rent approximately $2.4 million in recent trends.
Forbes and Wallace emphasized capital shortfalls: staff estimated a $2.2 billion backlog of repair needs across the port's portfolio, with only about $693 million of identified funding and $264 million earmarked for enhancements. Staff recommended forming or adopting a capital policy to designate operating surpluses for capital and noted a proposed target of allocating $2.9 million in operating surplus to capital in FY 2013–14.
Separately, staff brought Item 9C: a request to forward to the Board of Supervisors a supplemental appropriation of $7,420,000 for the cruise terminal budget. Forbes said that appropriation is for cash timing within a previously approved $62.4 million Phase 1 cruise terminal budget and listed funding sources including fund balance ($3,448,000 approx.), shore-side power reimbursement, port revenue bonds ($1,100,000) and $700,000 in savings from the Pier 19 roof project. The motion was made, seconded and carried.
Commissioners questioned assumptions used for parking-meter revenue (142 new meters), the $2 million annual America's Cup contingency line in the operating budget, and the extent to which the port can rely on citywide financial changes (redevelopment dissolution, IFDs, future GO bond measures). Staff said the $2 million America's Cup item is an annual project budget to cover potential environmental review, parklets and other event-related costs.
Staff said they will return on Feb. 28 for the finance committee and come back to the Port Commission in March for final budget actions; the Board of Supervisors will take up the mayor's proposed budget later in the spring.
Provenance: budget presentations and cruise-terminal appropriation motion recorded from SEG 509 through SEG 1459.
