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Finance: Portland (OR)

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Port of Portland Commission Adopts Annual Budget 

The Port of Portland Commission on June 25 adopted the fiscal year 2015-2016 budget, which forecasts moderate revenue increase in all business lines, supports capital improvements for facilities serving customers, and maintains existing infrastructure. 

The budget, which begins July 1, supports the port’s aviation, marine and commercial real estate business lines. Total port operating revenues and operating expenditures are budgeted at $295 million and $190 million, respectively, for FY 2016, compared to the FY 2015 adopted budget of $261 million and $181 million.
 
Ninety-six percent of port revenues come from user-based fees for service, including airline, rental car, parking and concessions revenue, as well as land sales, and marine terminal leases and fees. Approximately $10.5 million of the port’s budget comes from property taxes, or about 7 cents per thousand dollars of assessed value. 

Marine: FY 2016 marine operating revenues are budgeted to increase approximately 3.0 percent or $1.0 million from the FY 2015 Adopted Budget. 

With the departure of container service at Terminal 6, there are impacts to container volumes related longshore labor, and regional importers/exporters. However, because of its land lease structure with ICTSI, Oregon, the port is not subject to the financial swings as a result of changes in container volumes.
 
Mineral bulks are forecast to increase nearly 4 percent as a result of additional facility expansion and improvements at Terminals 4 and 5. These improvements are expected to help further increase record high soda ash volumes. In addition, lower pricing agreements with China are expected to help increase potash export volumes through Portland.
 
The forecast for break bulk activity is flat and the forecast for auto volumes shows increases of 4 percent in FY 2016 due to increased Ford exports and modest import gains.  

Finally, the forecast for grain activity is an increase of nearly 14 percent compared to the FY 2015 Adopted Budget. This increase is due largely to the rising global demand for grain and the expansions at Columbia Grain at Terminal 5. 

Aviation: Approximately 16.8 million passengers are expected to travel through Portland International Airport in FY 2016, a 5-6 percent increase from the record number achieved in FY 2015. The growth is spurred by nine new nonstop flights among airlines serving PDX. Air cargo is projected to grow by 2.5 percent. PDX FY 2016 operating revenues, including airline, rental car, parking and concession revenues, are budgeted to increase 7.7 percent or $15.7 million from the FY 2015 Adopted Budget. 

Commercial Properties: FY 2016 operating revenues are budgeted to increase approximately 298 percent or $18.4 million from the FY 2015 adopted budget. Forecasted land sales of $24.6 million contribute to this forecast as does a healthy local industrial real estate market that is experiencing increasing rental rates, and vacancy rates near historic lows. 

Capital Projects: FY 2016 will see a return to a period of new asset growth while continuing investments in maintaining existing assets and infrastructure. The FY 2016 total capital budget at $217 million (excluding staff time) is higher than last year but lower than peak expenditures of $262.7 million in FY 2009.
 
Marine investments include facility pavement rehabilitation, a new overcrossing in Rivergate Industrial District, and navigation equipment upgrades. 

Major projects at PDX include terminal building improvements such as terminal balancing and efficiency improvements, access control replacement, new security checkpoint exits, post security concessions redevelopment, carpet replacement, and airfield taxiway rehabilitation projects.

In addition, to ensure business park properties are ready when customers are ready, the capital budget includes the continuation of phase two development at the Troutdale Reynolds Industrial Park. 

The FY 2016 Adopted Budget will be available on the Port’s website www.portofportland.com on or before Wednesday, July 15, 2015.
 

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