By Marissa Luck, November 7,2014, The Daily News
The Port of Longview is projecting another year of record revenue in 2015, but rising costs will eat into its profits, according to a preliminary budget released Thursday.
“It’s a balanced budget, but it’s fairly tight,” said Norm Krehbiel, chief operating officer. “There’s not a lot of discretionary spending that’s possible. There’s no real a huge surplus.”
The port projects its operating revenue will increase to $36.25 million next year, a 15 percent gain over 2013 and a 2 percent gain over this year.
But its operating expenses — staff, longshore labor, maintenance and other costs — also are forecast to be 15 percent over 2013 levels.
The port expects to have a net profit of $4.2 million next year, down from a projected $5.2 million this year and $4.85 million in 2013.
While the port forecasts revenue growth conservatively, any drop in cargo would decrease expenses and revenue proportionally, Krehbiel said. He also pointed to fact that the port has enough reserves to cover three months of expenses.
The port operates entirely on income it gets from moving cargo and sales and rentals. Its property tax levy goes for large capital projects and major maintenance projects.
Administrative expenses will rise next year by nearly $380,000, to $3.2 million, a 12 percent increase. These costs includes hiring a new staff member in the finance department, as well as a 2 percent cost-of-living adjustment for administrative staff.
Overall, nine employees are expected to receive additional merit-based raises ranging from 1 percent to 3 percent. The port expects to hire two employees in the environmental and planning department and an administrative position to manage Willow Grove Park and its Barlow Point property.
Port commissioners have not decided on improvements to make at Willow Grove since voting to take back the park from Cowlitz County in October. They hope to survey the public for suggestions. The preliminary budget allots $250,000 for possible improvements — such as new playground equipment — at the popular park along the Columbia River.
The port also intends to spend $1.25 million to improve its stormwater treatment system, a state mandate. Another big ticket item is $695,232 for upgrading the Berth 2 conveyor and the demolition of three old buildings.
The capital budget does not include funds for purchasing property for the anticipated expansion of its rail corridor from two to three tracks. The project is expected to cost an estimated $10 million. Krehbiel said the port does not expect to reach a deal for land needed for the project until 2016. Port officials say rail expansion is needed to attract new job-creating tenants to the waterfront.
The port continues to negotiate with Haven Energy to build a propane export terminal at Berth 4. However the only line item on the budget for redeveloping that berth is $261,157 for constructing a layberth that would allow ships to temporarily dock while waiting for other berths to clear.
Commissioners also discussed increasing their contribution to the Kelso/Longview airport to $90,000. That would enable the airport to unlock $300,000 in funding from the Federal Aviation Administration for capital improvements, Port of Longview CEO Geir-Eilif Kalhagen said.
Port commissioners will vote on the final budget at 9:30 a.m. Nov. 25.