The Long Beach City Council on Tuesday agreed to allow city voters in November to decide if the Port of Long Beach should contribute more to city coffers each year.
The amendment to the City Charter would require the port to contribute 5 percent of its annual gross revenue to the city each year. Currently, the port contributes 10 percent of its net earnings. The change could wind up sending millions more to the cash-strapped city each year---at the expense of the Port of Long Beach.
The City Council meeting also offered a rare glimpse of the increasingly fractious relationship between Long Beach City Hall leadership and officials of the city's semi-autonomous Harbor Department charged with overseeing the port’s management. The Port of Long Beach commission consists of five port commissioners who are nominated by the mayor and confirmed by the city council. On Monday, the port commission voted unanimously to oppose the ballot item.
Tuesday's meeting turned contentious when Harbor Commission President Nick Sramek asked the council to reconsider its vote on the charter change. Sramek pointed to more than $300 million dollars the port has transferred directly to City Hall, paid in taxes for city redevelopment, and/or spent on city projects in the past 15 years.
"We have always been a friend of Long Beach," said Sramek, "Especially in times of need."
He then criticized City Hall for not communicating with the port on the transfer issue.
"Mayor Foster, why don't you just call me if the city needs help?" asked Sramek. "You know my number."
Sramek also questioned City Hall's urgency in bringing the ballot item to a vote without a proper vetting; stating that language to the ballot language was still being changed by City Hall the day of the council meeting.
"There has been no discussion on these issues or even back-up material for you to read," said Sramek. "Why are you in such a hurry that you don't take the time to make sure the items are clearly written?"
Sramek went on to opine that the ballot item was simply another way for the city to get money from the highly profitable port.
Long Beach Mayor Bob Foster in turn criticized some port leadership actions since the start of the global economic meltdown in late 2008, including a decision in late 2008 to give port employees raises while other city workers' wages were frozen. He also chastised the commission for not meeting in a timely fashion on the issue with the city auditor--a move Foster perceived as a lack of courtesy to the auditor.
"[The port is] a subset of the city," Foster said, reminding Sramek that the council’s duty was to focus on the interests of the entire city. "[The port is] not an independent entity. [The port] is just one part of the city. The council has a right to look at what is good for the entire population and not just what may be good for one business."
Port commission vice-president Susan Wise also asked the council to hold off on voting for the ballot measure, stating that the measure could tarnish the port's image with its customers as a fiscally secure operation.
"What it looks like from the outside is that the city is taking more money [from the port] off the top and [the city] does not have respect for the port as an economic entity," said Wise. "I think that risks our reputation."
"The image of the port around the world may be important--it may be important to the port and maybe even the port's business conduct--but this is not about that," said Foster. "This is about the relationship between the city and the port...and that relationship needs to be strengthened."
Foster reiterated his criticism of the commissioners for not meeting with the city auditor. "I don't understand that," said Foster. "This is just a different method of calculating this. No one is trying to gouge the port or do anything untoward to the port."
City Attorney Bob Shannon also blasted Sramek and the other commissioners for refusing to meet with the city auditor prior to Tuesday's vote to discuss the possible charter amendment.
According to Shannon, in response to a request by the auditor to schedule a meeting with the commission, Sramek sent a letter to the City Attorney's office stating his belief that a meeting between the commission and the city auditor may violate state open meeting laws. Shannon went on to say: "I indicated to [Sramek] that in my opinion [such a meeting] was not a violation”.
According to Shannon, Sramek then demanded this opinion be provided to the port commission in writing with legal citations supporting the city attorney’s position. "That is an 'us' versus 'them,' and that is a dysfunctional position to take," responded the clearly irritated Shannon.
Sramek countered that he was told by an attorney that meeting with the auditor could be an open meetings law violation and was merely seeking clarification.
Shannon’s retort was heated: "Who told you that? Was it your attorney? Look at the portion of the [City] Charter that says I am your sole and exclusive legal adviser."
After the mayor called for calm in the chambers, Sramek explained that once the city attorney confirmed there would be no violation he immediately told the other commissioners to meet with the city auditor.
"You refused to meet with [the auditor] without staff [present], didn't you?" challenged Shannon.
"No, no, no," exclaimed Sramek. "That's a lie. That is a lie."
In an apparent attempt to defuse the situation, Mayor Foster offered that Shannon's dialogue with Sramek may have been a misunderstanding. Sramek took exception to this, and brief verbal sparring ensued between the mayor and Sramek before Sramek stepped down from the podium.
Michele Grubbs, vice-president of the Pacific Merchant Shipping Association, also spoke, raising concerns about the financial burden the change in the transfer calculation would place on the port and how this may affect future port business decisions.
Don Wylie, senior vice-president of terminal operator Ports America, also raised concerns about the transfer issue during a time of growing competition from other ports.
"In order for the [Long Beach] port to remain competitive, they must have the funds to develop infrastructure," said Wylie. "If the port is not allowed to continue to invest in infrastructure, then it is going to lose its competitive edge and all the jobs that go with it."
Foster took issue the idea of the increased transfer have a negative impact on the development of the port, stating that "even if we were talking about $2 or $3 million, this is nowhere near the significance" of other port capital projects.
"Let's not use scare tactics about the port's competitiveness," said Foster. "This isn't going to make the port less competitive and it isn't going to touch the port's ability to invest in itself. This is not about investing in the port; this is about a culture that needs to change."
Several other council members expressed a sense of surprise at the back and forth before the item went to a vote.
Council member Suja Lowenthal said she was stunned to hear the comments of the commissioners, adding that she was deeply disturbed "by the disdain" afforded by the port to the city auditor.
Despite the rancor, the ballot item passed 7-1, with Patrick O’Donnell dissenting and James Johnson absent.
In addition to changing the terms of the financial transfer the ballot measure will also ask voters to change separate charter language related to control of oil production property in the port area.
The charter change would strip the port commission of its power to control oil production within the port area and transfer this authority directly to City Hall.
It remains unclear whether City Hall will directly collect the revenue from port-area oil properties if the ballot measure is passed in November. In 2008, when oil prices were high, revenue from oil production in the port-area brought in more than $30 million to the port.
Friday, August 6, 2010
