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Port closes $36.65 million revenue bond and presents two‑year operating budget
Summary
The Port reported the issuance of $36.65 million in revenue bonds to fund pier repairs and infrastructure and presented a biannual operating budget under San Francisco’s Proposition A, projecting $67.6M in revenues for 2010–11 and outlining expense pressures from retirement and health costs.
The Port of San Francisco reported this month that it closed a $36,650,000 revenue bond offering intended to fund pier repairs, cruise terminal improvements and backlands infrastructure, and staff presented a two‑year operating budget under the city’s newly mandated biannual cycle.
Executive Director Monique Moyer said the bond issue closed as planned and was split into two series: roughly $14.2 million of tax‑exempt Series 2010A bonds and about $22.4 million of taxable Series 2010B bonds. She said proceeds will support multiple port projects, including elements of the Pier 27 and Pier 35 cruise terminals, roof work at Pier 19, office‑space conversion at Pier 33 and initial study funds for a port‑driven project at Pier 1923. "This represents the first time in 25 years that the port has been able to leverage its balance sheet for new capital projects," Moyer said.
The bond closing coincides with a presentation of the Port’s biannual operating budget. Budget Manager Andre Sacevedo told commissioners the Port projects $67,600,000 in revenues for fiscal 2010–11 (a $3.8 million, or 6 percent, increase driven by commercial and industrial rents and new leases such as the Transbay Cable lease) and $69,000,000 in 2011–12. He highlighted that expense growth is being driven by higher retirement contributions (a projected 43 percent increase in the City’s retirement contribution) and rising health‑care costs.
Sacevedo said the Port is among the first enterprise departments to implement the city’s two‑year budgeting process after voters approved Proposition A. "We’re going to come to you every year with a new two‑year budget," he said, describing the rolling process and next steps: final passage at the Port Commission in late February, review by the mayor’s office and submission to the Board of Supervisors for approval in May and July.
Commissioners asked staff for clarifications on how the enterprise departments were selected for early implementation and whether the mayor’s proposed 37.5‑hour workweek would affect the Port. Sacevedo said the city asked enterprise departments to lead the initial rollout and that the mayor’s proposal would affect enterprise agencies but its impacts are not yet reflected in the presented numbers.
The Port emphasized that annual debt service on the new bonds will begin in fiscal 2010–11 and will run for 30 years. Moyer thanked staff, the City’s Office of Public Finance and outside advisors for completing the transaction.
Next steps: staff will finalize the two‑year operating budget, submit it to the mayor’s office and return to the commission for adoption at the February 23 meeting.
