Port Of Los Angeles Adopts 2016/17 Budget
The Los Angeles Board of Harbor Commissioners has approved a $1.17 billion fiscal year (FY) 2016/17 annual budget for the Port of Los Angeles.
As in years past, budget allocations closely align and support the four key objectives of the Port’s 2012-2017 Strategic Plan, which include: development of a world-class infrastructure that promotes growth; implementation of an efficient, secure and environmentally sustainable supply chain; improved financial performance of port assets; and strengthened relationships with port stakeholders.
“Our port strategic plan has been a great tool to keep us consistently focused and committed to our infrastructure and operational priorities,” said Vilma Martinez, Harbor Commission president. “The budget allocations allow us to stay the course and continue building a healthy, strong and vibrant port that is ready to compete globally in the years ahead.”
The FY 2016/17 budget includes $452.8 million in operating receipts, a principal mechanism for funding day-to-day operations. This represents a 5.7-percent increase over the prior year budget, largely due to anticipated growth in cargo volumes and related shipping service revenues.
Cargo volumes have been on the upswing since service levels returned to normal during the first half of 2015. Implementation of a chassis pool program and continued supply chain optimization efforts are also showing positive results in terms of cargo velocity. This is expected to continue in FY 2016/17, with cargo volumes projected to grow by 1.9 percent over the prior year budget to approximately 8.5 million TEU.
“We’ve worked extremely hard to optimize the supply chain at both the national and international levels,” said port executive Director Gene Seroka. “While this work needs to continue, our supply chain initiatives have started to show early results.”
The port’s newly approved $146.1 million capital improvement plan anticipates a 24-percent decrease relative to the prior year budget. Completed capital projects in FY 2015/16 included the TraPac Intermodal Container Transfer Facility, TraPac terminal buildings and main gate, the John S. Gibson Intersection/Northbound Interstate-110 ramp access improvements, as well as Interstate-110/State Route 47 connector improvements.
Key terminal projects budgeted to continue in FY 2016/17 include TraPac backland improvements, Yusen Terminals, Inc. berth redevelopment, electrical infrastructure at the World Cruise Center, wharf rehabilitation at the WWL Vehicle Services terminal, as well as wharf improvements at the port’s liquid bulk terminals.
The FY 2016/17 budget includes operating expenses of $249.0 million, a 3.6-percent increase over the previous year, and driven primarily by increases in salaries and benefits and a reduction in capitalized expenditures.
The approved budget enables the port to meet important financial metrics, including maintaining its AA debt rating, surpassing a 2.0 times debt service coverage, generating at least a 45-percent operating margin and preserving a prudent level of cash reserves. The FY 2016/17 budget also supports the creation of 3,940 jobs within the region.
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