Tuesday, March 9, 2010

LA Port Holds Off Decision on Infrastructure Cargo Fee

The governing board for the Port of Los Angeles has delayed making a decision on whether it should scrap or postpone a per-TEU infrastructure fee that is intended to pay for $1.4 billion in port-area projects.

On Thursday the port's five-member board of commissioners considered an action to delay the collection of the fee, which was approved two years ago, until Jan. 1, 2010. Instead of voting on the item, the commissioners decided to ask staff to come back with more information on whether it was most viable to simply cancel the fee or delay its collection. 

In January 2008, the commission approved a $15-per-TEU infrastructure fee on all boxes moving either in or out of the port and set a Jan. 1, 2009 date as the start of collection. At the time the fee was set to be collected through 2015 in an effort to raise up to $1.4 billion for port-area infrastructure projects like the replacement of the aging Gerald Desmond Bridge.

"Some of these projects have to get done or the port just isn't going to function," Commissioner Joseph Radisich said. "The Desmond Bridge needs to be replaced or it's going to fall down."

In December 2008, the commission revised the fee schedule and came up with a variable rate between $6-per-TEU and $20-per-TEU to be collected through 2016 depending on the needs of ongoing projects. The commission also delayed collection of the fee until July 1, 2009. Shortly before that deadline, the commission again decided to delay the collection start date, this time to July 1, 2010.

The fee scheme was developed in partnership with the neighboring Port of Long Beach and both ports have moved in lock step on approving changes to the fee structure and delays to the collection date.

The Los Angeles port commission could revisit the delay or eliminate topic later this month.