Budget Supports Port Strategic Plan Focused on Enhancing Sustainable Infrastructure, Supply Chain, Financial Performance and LA Waterfront

SAN PEDRO, Calif. — June 8, 2015 — The Los Angeles Board of Harbor Commissioners has approved a $1.001 billion fiscal year (FY) 2015/16 annual budget for the Port of Los Angeles. The approved budget aligns with the policy direction and goals set out in the Port’s updated 2014 Strategic Plan that focuses on building the Port’s core businesses and overall financial sustainability. 

“To stay globally competitive and retain our position as the nation’s number one container port, we must continue to deliver exceptional value to our port customers, while also creating opportunities for local job creation and economic growth,” said Ambassador Vilma Martinez, Harbor Commission President. “This budget assures that we can achieve that.”

“We’ve put together a well-thought-out, strategic budget that will allow the Port to build sustainable world-class infrastructure and cargo capacity, as well as make improvements benefiting our local Port community,” said Port Executive Director Gene Seroka. “Most importantly, this budget will help build our financial strength and stability over the long-term.”

The FY 2015/16 budget includes total operating revenues of $428.6 million, which represents a 1.5 percent increase over last year’s FY 2014/15 estimates. The increase is attributed to anticipated growth in alternative maritime power (AMP)™-related utility reimbursements, plus a forecasted increase in shipping services’ revenues and overall cargo volumes.  Cargo volumes for FY 2015/16 are projected to be 8.4 million TEUs, a two percent uptick from the estimated actual FY 2014/15 TEU volumes of 8.2 million.

Operating expenses total $233.5 million and will focus on maximizing the value of Port assets by increasing cargo revenue and utilization of Port facilities, while simultaneously strengthening stakeholder relationships, customer service and the appeal of the LA Waterfront as a visitor destination. Total operating expenses represent a 3.2 percent increase, largely due to mandated increases in salaries and benefits, city services, legal counsel costs and higher AMP™-related electricity expenditures.

In line with its objective to develop world-class infrastructure that promotes growth, the Port’s approved Capital Improvement Program budget totals $198.8 million. The amount represents a 17.8 percent reduction from FY 2014/15, due primarily to completion of major transportation initiatives like the Berth 200 Rail Yard and the South Wilmington Grade Separation during the previous budget cycle.

Capital improvements for FY 2015/16 will include major construction advancements at the TraPac Container Terminal, large-scale redevelopment at the Yusen Terminals Inc. (YTI), as well as improvements at the World Cruise Center and at terminals operated by China Shipping, Evergreen and APL. 

Along the LA Waterfront, capital improvement projects include Sampson Way and 7th Street intersection improvements, development of a promenade and Town Square at 6th Street, and the design of a Wilmington Waterfront Promenade.

The Port’s updated Strategic Plan was approved by the Board of Harbor Commissioners in fall 2014. The Plan includes four primary objectives, including building a world class infrastructure that promotes growth; ensuring an efficient, secure and environmentally sustainable supply chain; improving the financial performance of Port assets; and building strong relationships with Port stakeholders. 

For the FY 2015/16 budget, approximately 4,890 direct and indirect jobs are projected to be created, of which 3,200 are attributable to capital spending. The adopted budget enables the Port’s financial performance to be consistent with its “AA” bond rating, the highest given to a port without taxing authority.

The Port of Los Angeles is America’s premier port and has a strong commitment to developing innovative strategic and sustainable operations that benefit Southern California’s economy and quality of life. As North America’s leading seaport in terms by container volume and cargo value, the Port of Los Angeles facilitated $290 billion in trade during 2014. Port operations and commerce facilitate more than 148,000 jobs (about one in 12) in the City of Los Angeles and 531,000 jobs (or one in 16) in the five-county Southern California region. The San Pedro Bay Ports support more than 1 million California jobs and 3.1 million nationwide.