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Port’s ’08 Operating Budget Includes Big Boost in Cruise Dockings

Unlike the cost cutting and program slashing taking place at San Diego City Hall, over at the Port of San Diego they’ve adopted a budget that increases staff by 16 positions and the operating budget by 4.8 percent.

At its meeting June 12, the commissioners approved the agency’s 2007-2008 operating budget of $131.4 million, which is above the prior fiscal year operating budget of $125.4 million.

When taking into account capital spending on new and existing projects, new equipment, debt service and public art projects, the entire budget comes to $180.7 million.

The district maintains the tidelands property for its five member cities, San Diego and Chula Vista, Coronado, Imperial Beach and National City.

The two driving forces shaping the new budget are a growing need to maintain the district’s existing infrastructure and increased resources to run the port’s maritime operations, said Port Treasurer Jeff McEntee in his report.

The port’s maritime business has grown in recent years, and now generates 30 percent of the port’s total revenue, or $45.6 million, McEntee said. The main sources of maritime revenue come from its cargo operations at two terminals in San Diego and National City, and fees associated with cruise ship dockings.

The latter is expected to grow from 169 to 280 for the fiscal year starting July 1.

Those ships are expected to carry 1 million passengers, many of whom spend at least one day in the city on either end of their cruises.


Port Adds Jobs

To help with the increased operations, the port district is adding 16 new jobs, including seven in maritime operations and trade development. That brings the total full-time employment at the port to 628.

In terms of total revenues, the port district’s budget expects these will total $154.4 million during the year, up $10.4 million or 7.2 percent from the prior fiscal year.

Rents the port collects from its tenants in the five local cities are projected at $87 million, and make up 56 percent of all the port’s revenue. That’s $2.4 million above what was collected in 2006-07.

Other sources of port revenue for the upcoming year are $37.2 million in fees; $13.2 million in services; and $16.5 million in non-operating revenue such as grants and interest on investments.

Total operating expenses were budgeted at $120.7 million. Personnel expenses make up the port’s largest single expense and budgeted at $62.4 million for the year.

Despite the increased staff, the figure is actually 2 percent below the amount for personnel in 2006-07 because of expected declines in the amount of overtime payments, and reduced expenses for health insurance, retirement and workers’ compensation.


Operating With A Surplus

The port is one of the rare public agencies that have nearly always operated with a surplus because it collects more in revenue than it spends on operations. For the upcoming year, that surplus is $17.2 million, up from $12.4 million in the prior fiscal year.

Those funds are generally funneled back into the budget and mostly allocated to capital improvement projects it supports in each of the five member cities.

For 2007-08, the port plans to spend $33.6 million on capital improvements, including $7 million for the demolition and remediation of a Chula Vista bay front site in preparation for a hotel and convention center by Gaylord Entertainment, and $6.1 million for security enhancements at its two cargo terminals and cruise ship terminal.

The 2007-08 port budget was adopted in a 5-0 vote with two port commissioners, Steve Cushman of San Diego and Rocky Spane of Coronado, absent.

In other port news, Laurie Black was sworn in as the new port commissioner for San Diego. She replaces Victor Vilaplana who resigned because of increased demands of his law practice. Black is a consultant and a former chief of staff to former Rep. Lynn Schenk. She had been considered for the commissioner’s position earlier this year but the San Diego council reappointed Cushman to his third term. San Diego has three commissioners, while the other four cities have one commissioner each.

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