AAPA Seaports Advisory

Finance: Freeport (TX), Virginia

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Port Freeport (TX) Commission Cuts Tax Rate

Port Freeport’s governing commission has voted unanimously to adopt a new, lower tax rate of $0.0401 per $100 of property valuation for the fiscal year beginning October 1. That is down 3.3 percent from this year’s rate and 2.9 percent from FY 2014-15.

Revenue from the tax levy helps fund maintenance and operations expenditures and repays general obligation bond debt. According to its annual report, the port collected tax revenues in FY 2015 amounting to $4.75 million.

"Due to the area growth and overall increases in the district’s tax rolls, this tax rate will cover the annual debt service requirements for the outstanding general obligation bonds and raise slightly more tax collections for maintenance and operations," said Port Executive Director Phyllis Saathoff, PPM®. "The port continues to invest net cash flows from port operations into infrastructure projects to improve the Freeport Harbor Channel and expand facilities to support growth in the port and the area."

Added Port Commission Chairman Ravi Singhania: "The Port Commission remains committed to seeking opportunities to fund the port’s strategic expansion plans but remains vigilant of the impacts to the District’s taxpayers and has lowered the tax rate 2.9 percent. The individual taxpayer will not see an increase in the tax they pay to the port."

Port Freeport ranks among the top 35 U.S. ports based on total cargo tonnage.  Freeport Harbor Channel users include Dow Chemical, Phillips 66, BASF, Tenaris, Vulcan Material, Mammoet, Freeport Liquefied Natural Gas, American Rice, Dole, Chiquita, Seaway, Mediterranean Shipping Company and Hoegh Autoliners.

Virginia: Port Ends Fiscal Year Profitably and with record TEU Volume  

Preliminary unaudited reports for fiscal year 2016 indicate that the Port of Virginia will post an annual operating income of $4.76 million, giving the port a second consecutive year of profitability. July/June is the port’s fiscal year.

"The Port of Virginia’s performance is meeting and exceeding the expectations of my administration," said Gov. Terry McAuliffe. "This financial turnaround is proof that the port’s wise investments in capital projects and people, which are being made in support of a plan for sustainable growth, are yielding very positive results, in terms of reputation abroad, delivery of service, performance at the piers and an increasingly stable financial picture.  
The port had budgeted operating income of $2.69 million for fiscal year 2016; the preliminary result exceeds that amount by $2 million.  

"We knew going into the new fiscal year that we were not going to exceed last fiscal year’s result ($13.6 million operating profit) and we budgeted accordingly," said Aubrey L. Layne, Virginia Secretary of Transportation. "This year we had an aggressive plan for reinvestment, we solidified our volumes, we showed growth in a challenging market and we have a solid financial result to show for the effort."   

The port closed fiscal 2016 with container throughput at an all-time of 2,573,635 TEUs, an increase of 2.5 percent from FY 2014-15.  Other positives included container units (+1.3 percent), rail containers (+9.3 percent), Virginia Inland Port containers (+12.3 percent), and Richmond Marine Terminal barge containers (+15.8 percent).

"We are proud to have posted solid financial results for the second year in a row," said John G. Milliken, chairman of the Virginia Port Authority (VPA) Board of Commissioners. "Our task, however, is not to make money for its own sake, but to put our resources to work creating economic growth and jobs across Virginia. Positive financial results allow us to support the growth at NIT (Norfolk International Terminals) approved by the Governor and the General Assembly and to move forward on our longer term plans to expand Virginia International Gateway and, ultimately, build a new terminal on Craney Island."  

Fiscal year 2016 also included the following accomplishments:
  • Ground breaking for the NIT North Gate, a project that will add 26 new truck gates at the port’s largest terminal
  • A monthly record in October 2015 of 233,466 TEUs
  • A 40-year lease with the City of Richmond to operate Richmond Marine Terminal (RMT)
  • Delivery of a new $4 million mobile harbor crane at RMT
  • Implementation of a SOLAS (Safety of Life at Sea) policy without any disruption to service
  • Hosting the Panamanian ambassador in an event that welcomed the first 10,000-plus TEU vessel to come to   the port via the Panama Canal’s new locks

Gov. McAuliffe’s announcement of a $350 million investment to renovate the upland operation at the south side of Norfolk International Terminals

The port’s economic development efforts helped drive $733 million in investment and create 3,600 jobs across the state.  

"The success of the port this year was a collaborative effort, so it is important to recognize the dedication and hard work -- across the board -- by the port team, our labor partners, industry partners and stakeholders," said Port Authority CEO John F. Reinhart. "We still have our challenges to address, but we have a plan and the right team in place to execute. It’s up to us to continue to work together with our partners, our customers and our colleagues to ensure the vision becomes a reality."

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