Friday, October 22, 2010

SoCal Port Industry Leaders Oppose Measure D

A coalition of leaders representing Southern California's goods movement industry have joined the fray over a contentious City of Long Beach ballot initiative, warning that Measure D threatens the economic well-being of the Port of Long Beach and the positive economic impact the port has on the region.

Measure D, drafted by Long Beach Mayor Bob Foster and Council member Gary DeLong, seeks to turn over control of all port-controlled oil property and revenues to City Hall. The measure also seeks to change the way an annual port-to-city transfer of port profits is formulated, from 10 percent of net income to 5 percent of gross revenues.

In a release issued earlier this week, the coalition unanimously opposed Measure D, arguing that it "threatens local jobs and will make it more difficult for the Port of Long Beach to hold its position as a premiere international port and solid economic engine for the region."

“Measure D is just a bad idea,” said Dan Meylor, President, Los Angeles Customs Brokers and Freight Forwarders Association. “City politicians put it on the ballot without thinking about the negative impact on the local economy, jobs, or important projects ensuring clean air in the Long Beach Community. It will likely affect the Port’s bond ratings and associated borrowing costs, driving up the cost of every project and program and reducing the number of these that can be accomplished, which in turn will drive discretionary cargo to other ports in the United States.”

In addition to the LACBFFA, the coalition includes the LA/LB Propeller Club, the Pacific Merchant Shipping Association, the Harbor Association of Industry and Commerce, FuturePorts, and the California Marine and Intermodal Transportation System Advisory Council, or CALMITSAC. Members of the various groups represent nearly all the major stakeholders in the Southern California shipping industry.

Much of the groups' concern focuses on the potential for the measure to limit the port's ability to invest in development.

“Measure D could put a halt to the continued economic viability of the Port. Failing to invest in the Port only puts us at a greater disadvantage in the years to come,” stated William Lyte, past president of the Harbor Association of Industry and Commerce.

Lyte's concerns were echoed by Sue Dvonch, Vice President, Propeller Club of Los Angeles-Long Beach.

“Those involved in international commerce play a vital and important role in our state’s economic structure, and they are concerned that Measure D will threaten California’s position as a leading global gateway and will negatively impact our economy should we fail to adequately invest in our state’s transportation infrastructure.” said Dvonch.

Long Beach Mayor Foster has argued that the ballot measure is meant to clarify language in the City Charter and is not an attempt to take more money from the port. Despite no analysis being conducted to determine the future financial impacts of the measure, Foster has maintained that the fiscal impacts to the port will be minor.

However, a study conducted by port staff prior to the announcement of the ballot measure estimated that the port expected to make $120 million in oil revenues from existing wells between 2010 and 2014. This would mean, if Measure D is approved by voters, that an average of $24 million a year will be diverted from the port to City Hall coffers.

In addition, based on the net and gross revenues of the port over the past ten years, the city stands to receive an average of $3 million more per year via the annual transfer under the "5 percent of gross" formulation proposed in the ballot measure.

A recent PMM Online analysis found that the long-term impacts of Measure D could include: threats to the port's exceptionally positive bond credit rating; impacts to the port's timely investment in infrastructure; the possibility of increased cargo diversions; and, threats to the autonomy of the port from city politics.

A recent poll of likely Long Beach voters conducted by Research found that 36.6 percent of Long Beach voters oppose the measure, 27.7 percent favor the measure and 35.7 percent are undecided.