Tuesday, September 7, 2010

Mayor Jones Statement Regarding Port of Richmond

The Port of Richmond is owned by the City and managed by the Port of Richmond Commission. A special session of City Council is scheduled today to discuss issues related to the lease of the Port. Mayor Dwight C. Jones issued the following statement on the matter:

“Events in the last two years have resulted in questions concerning the Port’s long-term economic benefit to the City. These events include 1) worldwide economic downturn, 2) loss of the weekly trans-Atlantic shipments, 3) loss of the long-time Port operator, and 4) declining working capital for investments in infrastructure maintenance.

“The financial condition of the Port has deteriorated to such a point that it is not generating sufficient revenue to pay its expenses. In June 2010, the City Council appropriated $1 million in general funds to the Port to cover its operating expenses and authorized another $500,000 of in-kind or cash equivalents to address the immediate infrastructure maintenance needs. While this action was necessary at that time, it is not in the best interest of the city to have an asset that is designed to be self-sustaining to consume general fund resources over the long term.

“In a June 15, 2010 letter, the Administration expressed that ‘the Commission needs to report regularly to City Council and the Administration on its business operations and future outlook. Additionally, the Port must present an in-depth business outline that details the plan for returning the Port to a viable operational status.’ A subsequent Memorandum of Understanding (MOU) signed by the Port Commission Chairman and the city’s Chief Administrative Officer reaffirmed these requirements.

“In July, the Administration provided the Port with almost one quarter of the $1 million general fund appropriation. This initial draw down of the appropriation has allowed the Port to pay all known obligations that have been reported to city. However, the Port is at a point where an additional draw down may be required in order to pay for obligations that have occurred during the month of August and beyond.

“While the Administration and City Council have made substantial efforts to enable the Port’s success during this difficult transitional period, at this point the Port has provided limited information concerning its business outline. This condition of the MOU between the Port and the Administration is the key condition of the provision of funds. Moreover, without a comprehensive business development and marketing plan, it is extremely difficult, if not impossible, for the Port and the city to evaluate the multiple options concerning future Port operations that are currently being discussed.

“Today, the Administration, City Council, and the Port will discuss one key option that is before the Port and analyze how that option aligns with the Port’s business outline. It is our hope that City Council, who has the authority over Port decisions, will soon be in a position to determine the best operating structure for the Port of Richmond.”

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