Training Analysis

[Water Consumption]

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The loss of cruise revenue is just one of the hits to the Port’s revenues during the pandemic. Rent payments have also plummeted from the Port’s tenants. The agency has forgiven about $14 million in rent for 225 tenants to help them weather the economic toll and has also deferred collecting tens of millions of dollars in rent from others. Parking revenue has also taken a dive. There was a 54% drop in the past year compared to before the pandemic, a decline from $20.1 million to $9.3 million, according to Port officials. California’s share of the federal stimulus recovery funding is about $26 billion. Port officials remain in conversations to secure the stimulus funding. It’s unclear when they may receive an answer. Lt. Governor Eleni Kounalakis, a former Port Commission member and current chair of the State Lands Commission, is among those who recently wrote to Gov. Gavin Newsom to request the stimulus funds for the ports. Kounalakis addressed the financial challenges facing ports like those in San Francisco and San Diego in an April 22 letter to Newsom and called them “a critical component of California’s economic recovery.” “California’s ports are backbones to local economies and home to treasured local, regional and international tourism destinations,” she wrote. “Supporting local ports now will save thousands of jobs and ensure speedy economic recovery for California.” Port officials have a strategy to navigate from out of stormy economic times to avoid layoffs in their proposed budget next fiscal year, which begins July 1. That includes repurposing $17.7 million in funding from “low priority capital projects” that was previously allocated as well as $9.1 million from completed or overfunded projects, not hiring for vacant positions and pursuing a $20 million loan from The City. In fiscal year 2019-2020, the Port’s annual budget was $146.8 million, which declined in the current fiscal year to $124.8 million, according to The City’s adopted two-year budget. The Port has proposed a $131 million budget for next fiscal year. “To date, the Port has managed the pandemic recession through a combination of expenditure reductions, decreases to future capital investments, defunding prior capital projects, and use of fund balance,” Forbes wrote in an April 23 memo to the Port Commission. “While this approach has maintained critical operations and minimized short term impact to the organization, it is simply unsustainable in the long term. The Port has a $1 billion state-of-good repair capital backlog and forecasted need of an additional $1 billion over the next 10 years.” She added that “reliance on fund balance, the port’s sole reserve, is untenable without substantially risking its bond ratings as well as its ability to continue operations through additional unforeseen events.” Port officials said the pandemic has reduced their revenues to a level not seen since 2005 and forecast they will not fully recover for another five years. Randy Quezada, a Port spokesperson, said the stimulus funding is part of “several strategies to address what will be a five-year recovery.” “All stimulus money received will go towards avoiding layoffs, reimbursement to the port for tenant relief and rent forgiveness and restore capital maintenance repairs that keep the waterfront safe and secure,” Quezada said Thursday.