Port Authority defends tariff petition and press for crane funding as aging equipment threatens operations

Director Faye Ballas told legislators the Port Authority of Guam is pursuing a tariff adjustment at the Public Utilities Commission to bring labor charge‑out rates current and to create a sustainable path for capital upgrades, including replacement gantry cranes.

Ballas said the port filed the tariff petition after labor rates last changed in 2020 and cited a PUC consultant report that recommended an annual escalation ("4% or the CPI, whichever is higher"). She and the board have authorized the petition, and Ballas said the matter is now before the PUC; she and the board have not opposed an implementation date of January 2027 if the commission so decides.

Why it matters: Ballas said the port’s main operational risk is failing crane capacity. The ports’ major ship‑to‑shore cranes are about 42 years old and, staff and officials told the committee, maintaining them is increasingly difficult. Ballas warned that losing a crane would delay military cargo and other throughput, and said the port is lining up multiple funding options — merit grants, public‑private partnerships and potential bond borrowing — so procurement can proceed as soon as awards and approvals arrive.

Top points and fiscal details Ballas recounted absorbing an FY2019 shortfall she said totaled $1,800,000 and described later budget reductions that she estimated in the millions; to give hiring flexibility the board established a $2,400,000 vacancy pool, she said. On overtime, Ballas said vessel operations make extra pay unavoidable and that overtime historically has been "at least over $1,000,000 a year." She added the port tracks direct‑labor overtime and ties some of that cost to related vessel revenues.

On the tariff petition, Ballas said the aggregate increase across positions charged to vessel operations is about 17% but that the practical impact is much smaller: "for every canned good, it's one‑tenth of a penny" and "about $60 per container" on average, she said, adding the port provided carriers transparent comparisons of current and proposed bills.

Cranes, procurement and federal rules Ballas said crane procurement is the port’s largest outstanding purchase. The port has prepared specs and scope of work and has been "ready to go to procurement" pending funding. She blamed delays on waiting for merit grant decisions and on a historical Buy America requirement that blocked earlier MARAD awards because gantry cranes are not manufactured in the U.S.; she said MARAD recently waived that requirement for Pacific ports but the merit‑grant award is still pending.

"We need to be able to make these cranes work to get these containers off," Ballas said, noting the PUC’s lifespan estimates for existing cranes fall in the late 2020s to early 2030s and that corrosion and OSHA certification present growing challenges.

Customs coordination and inspection facility Ballas described ongoing coordination with Customs and Quarantine (CQA). She said the port identified a 4‑acre sterile site near the weight transfer station as the preferred location for a dedicated container inspection facility, and that that feasibility work helped Customs secure A&E funding. Ballas said the port has supported Customs’ mobile inspection unit procurement and will continue to offer planning help for a proposed satellite inspection facility in Piti.

Workforce, apprenticeship and stakeholder relations To address labor scarcity for specialized trades, Ballas said the port is working with the Port Users Group to create apprenticeship pathways and a shared temporary labor pool to meet seasonal surges tied to military cargo. She described a board‑approved "out of position" policy that provides immediate partial pay for employees who voluntarily perform higher‑class duties, and a revamped desk‑audit process that allows employees to initiate reviews.

Permitting and contractor activity Ballas acknowledged Coast Guard concerns after Black Construction performed vessel operations at Hotel Wharf the Coast Guard flagged as not permit‑able. To manage the work, the port amended its facility security plan to temporarily cover Hotel Wharf operations while seeking formal Coast Guard permitting; Ballas said the port aims to have permitting resolved by March for Black’s next scheduled activity.

Next steps Ballas said the port is pursuing all funding avenues and may seek bond authorization from the legislature if grant awards require matching funds. The tariff petition remains before the PUC, crane funding depends on merit‑grant decisions and federal waivers, and the port asked the committee for continued legislative support and oversight.

"There’s been no evidence of port employees being involved" in alleged smuggling, Ballas told the committee, and she urged coordination across agencies to improve inspections without demoralizing the workforce.

The oversight hearing closed with the committee chair urging timely follow‑through on modernization, financial controls and interagency coordination; the hearing was adjourned at 11:04 a.m.