A coalition of trade and transportation groups have joined the political fray over Long Beach City Hall appropriations of millions in Port of Long Beach funds.
In a letter presented to the port's five-member governing board on Monday, the six groups asked the five port commissioners to reject a City Hall request for $16.9 million in port funds.
The signatories to the letter included the Foreign Trade Association, FuturePorts, the Harbor Association of Industry and Commerce, the Los Angeles Customs Brokers and Freight Forwarders Association, the Pacific Merchant Shipping Association and the Los Angeles-Long Beach Propeller Club.
Under the city charter, the City Council is allowed to make an annual request of 5 percent of the port's gross operating revenues. If approved by the port board, these transferred port funds revert to the control of City Hall, but must be spent in the city tidelands areas on specific and well-defined maritime, maritime-related and maritime recreation uses.
The transfer funds are maintained in a City Hall-controlled Tidelands Operations Fund (TOF), but, by law, cannot be co-mingled with the city's general revenue funds.
In the letter, the groups pointed out the port's numerous financial contributions to the city, including covering millions in debt payments for the Aquarium of the Pacific, extending the debt on the Convention Center, providing funds for the multi-million dollar Colorado Lagoon restoration project, as well as paying millions of dollars to local nonprofits.
"In addition, based on the port’s FY 2011 and FY 2012 budgets, the port will have provided the City of Long Beach more than $100 million in oil revenues, oil lease revenues and two annual transfers," said the letter.
"The international trade community appreciates the need for the port to support the City of Long Beach. That support can only exist if the port remains economically healthy and competitive. It is for these reasons that the port needs to use these funds to invest in infrastructure that will generate thousands of new jobs and help the local economy."
The port is in the midst of a nearly $4 billion ten-year capital improvement plan, with $630 million in capital expenditures planned for FY 2012 alone. The groups pointed out in the letter that in order to fund these 2012 capital expenditures, the port must issue $300 million in new public debt and draw down reserves by $60 million.
In addition, the groups said that current cargo volumes are beginning to soften and the port is facing competitive threats in the shape of the impending 2014 opening of the Panama Canal's expanded locks and the aggressive investments in alternative ports such as Prince Rupert in Canada.
"Based on these risk factors, the fiscally prudent action would be for the Port to retain the $16.9 million and use these funds for infrastructure projects such as the Middle Harbor, Gerald Desmond Bridge and cold ironing," the letter said.
"These projects will create jobs, improve the environment and prepare the port for the future."
The port has yet to receive a formal request from the city regarding the annual transfer, but the City Council has approved the request. Port officials said the actual formal request for the transfer is likely to be delivered to the port within the next several weeks, after which the port board can take up the request for discussion.
Thursday, July 14, 2011
