Local 21 Port Financial Condition and Budgetary Review Released

On Thursday August 16th, IFPTE Local 21 presented our detailed “Financial Condition and Budgetary Review” to the Port Board of Commissioners.
After a thorough review of the Port of Oakland’s finances and financial history, we have determined that:

The Port Has Achieved Financial Recovery

  • The Port has a history of under projecting revenue and over projecting expenditures.
  • The Port’s own projections show substantial fiscal improvements over the next three years.
  • Unrestricted Reserves are being budgeted at an annual average of $185m.


The Port has a strong financial standing and is positioned to see further improvement through FY 2015; Revenues exceeded budgeted income every year

  • Revenue and debt service coverage ratios have improved in each of the last three fiscal years.
  • Actual revenue exceeded projected revenue by $3.43m in FY 2010 and $16.08m in FY 2011.
  • Net revenue exceeded budgeted levels by $16.03m in FY 2010 and $20.29m in FY 2011.


The Port’s Debt Service Coverage Ratio is Well Above Required Levels, Even With No Labor Concessions and a 3.2% COLA

  • The Debt Service Coverage Ratio (DSCR) is projected to be 1.38 in FY 2013 and 1.4 in FY 2014 and 2015. This is well above the minimum level of 1.1 required by the Port’s bond covenants.
  • With zero budgeted labor concessions and a 3.2% COLA provided to all Local 21-represented employees, the DSCR would be 1.34 in FY 2013, 1.32 in FY 2014, and 1.31 in FY 2015 – still well above the minimum level required.


Port Seeking to Hold Excessive Level of Reserves, $78m, or 73% Above and Beyond the Requirement

  • The Port is engaged in excessive collateralization of existing debt by seeking to budget an average annual level of $185m in unrestricted cash reserves over and above the required debt service reserve fund set-aside of $107.2m, required for FY12-13.
  • In light of the Port’s own projections of future market conditions, this level of unrestricted reserves far exceeds levels justified by any foreseeable financial contingencies, and asking for additional concessions to maintain this level of reserves is unjustifiable.

 

Local 21-represented employees have been working more, for less pay

  • Concessions, combined with attrition has resulted in Port employees doing more work, and for less pay.
  • Given the extraordinary circumstances of the Port and the economic downturn, Local 21 members were willing to do their share to help save jobs and continue to provide a high level of services.
  • Concessions are no longer justified, given the Port’s current finances and future projections.
  • Alternately, there is strong evidence supporting a cost of living increase to help employees keep up with growing costs of living in the Bay Area and finally be compensated for their sacrifices.