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Audits show maritime revenue decline for Port of Gulfport

By TED CARTER

As it entered the final stages of a multi-year restoration of the Port of Gulfport, the Mississippi State Port Authority ended fiscal 2015 with a net operating loss of $11.5 million, a 2015 audit report shows.

A drop of $600,000 in revenues from fiscal 2014 levels contributed to the shortfall. But the main contributor was $9.1 million in expenses that will be reimbursed from federal Community Development Block Grant funds, the audit prepared by Alexander/Van Loon/Sloan/Levens/Favre reported.

The loss side also includes a 4 percent decline in maritime revenues, or $268,999.

Last fiscal year, the Authority had an operating revenue increase of $567,000 over the previous year, with revenues reaching $14.7 million. Maritime revenues also rose in fiscal 2014 by $300,000, according to the fiscal 2014 audit.

The $99 million the Mississippi State Port Authority spent on post-Katrina Port of Gulfport restoration in fiscal 2015 helped the Authority achieve a net position increase of $84.6 million. The audit notes net position is the difference between reported assets and liabilities.

“Over a period of time, increases or decreases in the Authority’s net position are an indicator of whether its financial health is improving or deteriorating,” the auditors say.

With the $99 million spent on capital assets in fiscal 2015., the port completed the Small Craft Harbor breakwater, wharf enhancements on the West Pier and Shed 50 rail improvements on the East Pier. Workers began pile driving for the West Pier warehouse and tenant maintenance and repair shop. Workers also began construction to accommodate three rail-mounted gantry cranes to be imported from China.

Analysis of the Authority’s current year cash flow shows a net increase of $1.7 million in cash from the previous year. This, the auditors said, compares to an $8.1 million increase in fiscal 2014 and a $14.7 million increase in cash flow from fiscal 2013.

Port restoration money is drawn from $566 million the U.S. Department of Housing and Urban Development is providing in exchange for a commitment to create 1,300 direct jobs.

HUD initially set aside the $566 million to provide low-to-moderate-income housing after 2005’s Katrina destruction.

An absence of progress hitting the jobs milestone set by HUD led the Mississippi Development Authority to ask HUD to count jobs created by port tenant Island View Casino Hotel, an 18-story, 407-room $58 million property that opened in April with expectations of hiring 300 workers.

HUD has yet to act on the jobs substitution request, a port spokeswoman said this week.

The difficulty of hitting the jobs goal from port jobs only is noted in projections consultants Parsons Brinckerhoff included in an economic impact report for a U.S. Army Corps of Engineers environmental assessment of the Port of Gulfport’s long-range expansion plans.

In their report, the consultants say the port would have to increase freight tonnage to 400,000 twenty-foot-equivalents (TEUs) to create 1,640 direct jobs, a measure based on creation of 4.1 direct jobs for each increase of 1,000 TEUs. At 20 feet long and eight feet wide, a TEU is roughly half the size of most of today’s truck transport containers.

Getting to the 400,000 TEU level would require the port to more than double its vessel calls, going from about 250 a year to 667 a year, Parsons Brinckerhoff estimated.

The consultants project the port’s TEU volume will be 287,732 in 2020, based on business levels and freight handling capacity at completion of the port’s restoration. By 2030, it should reach 411,671 TEUs, 563,982 in 2040, 769,398 in 2050 and 1,049,631 in 2060.

Parsons Brinckerhoff says container volume generates employment through direct on-port container handling; off-port warehousing, distribution and truck transport of containers; other off-port services such as freight forwarders and ship services; and other container transport associated with rail shipments.

For conventional port terminals, it was determined that each 1,000 TEUs create a need for 1.25 full-time workers handling in-port functions such as stevedoring.

Under industry standards applied by Parsons Brinckerhoff, it would take the Port of Gulfport until sometime between 2040 and 2050 to create 2,500 direct jobs.

About Ted Carter

2 comments

  1. Good story, Ted Carter. thank you. I would add that more than 50% of revenues of the “Fantasy Port” are rent from Island View Casino.

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