Port unveils FY2026–28 operating and capital budget; biennial CIP relies heavily on fund balance and one-time sources

Interim Deputy Director of Finance Megan Wallace and Budget and Data Analytics Manager Max Zerobin presented the Port of San Francisco’s proposed FY2026–28 biennial operating and capital budget to the commission.

Wallace said the proposed operating budgets are approximately $131.2 million in the first year and $134.6 million in the second year of the biennium; the port projects positive net operating income in each year but will draw from fund balance to support the proposed capital program. The biennial capital budget totals $123.6 million across the two years and funds projects that staff identified as high priorities, including state-of-good-repair work in Fisherman's Wharf (notably a $35 million allocation for Pier 45 West Apron), core utility improvements, resilience-aligned projects and system modernization. The port’s 10-year capital plan nevertheless carries roughly $1.9 billion in unfunded needs, Wallace said.

Max Zerobin described the budget’s revenue assumptions (a conservative base case with about 2% annual operating revenue growth), key cost drivers (salaries and benefits and work orders account for ~80% of operating spending), and personnel changes: operating net additions of roughly eight full-time equivalents (including construction inspection, IT and security positions) and seven new capital positions (offset by reclassification). Zerobin noted the port has historically outperformed conservative budgets on actual revenue and underspent on expenses but emphasized that the gap between revenues and expenses narrows over the five-year projection.

Wallace and Zerobin described funding sources for the CIP, which rely heavily on Harbor Fund balance and include one-time receipts from a Historic Core IFD and interest earnings from a parks bond account. Staff signaled plans to return with a proposal exploring strategic debt issuance (restarting a revenue bond program) and public–private partnerships to preserve cash while financing large resilience and repair projects. Commissioners and public commenters urged staff to pursue financing innovation, bundling of projects, and industry workshops to solicit delivery ideas and private capital opportunities.