by Mike Sharkey
Staff Writer
Forget the cruise ships. Forget the addition of major cargo carriers. Forget the yearly increases in the number of cars moved.
The true measure of the Jacksonville Port Authority’s growth since it split from the Jacksonville Airport Authority (the Aviation Authority today) in September 2001 is its budget.
Last week, Deputy Executive Director and Chief Financial Officer Ron Baker submitted the Port’s 2006-07 budget. The number that jumps out is the $44.5 million the Port anticipates in revenue during the next fiscal year. Five years ago, that number was much lower.
“Our first budget, post-split showed operating revenue of $27.7 million. The next year, it was $27.6 million,” said Robert Peek, the director of communications for the Port Authority. “We have had really good growth.”
Movement of containers through the Port accounts for almost half of the Port’s operating revenue, a figure Baker budgeted at $20.7 million. Automobiles account for another $11 million while the rest of the operating budget is comprised of cruise business, various bulk cargo and some income from the military.
According to the budget, the Port anticipates $31.1 million in operating expenses next year, giving them a surplus of $13.4 million.
“We will use that to pay off some depreciation and some debt service,” said Peek. “We have had to borrow to build some things and to buy equipment. We may also set some aside in order to have cash on hand.”
The Port’s largest operating expense is salaries, which account for $10.6 million. Other major expenses include employee benefits ($3 million), dredging ($4 million) and security ($4 million).
Unlike other City departments and agencies, the Port’s overall budget process is a fairly simple, quick procedure. Peek said Baker and Executive Director Rick Ferrin get the credit.
“Since Ron got here, he has really compressed the whole process,” explained Peek. “There has been a lot of continuity the last five years. The heavy lifting only took a few weeks, then we had to get the approval of our board of directors. The budget also has to be approved by City Council.”
Peek said the addition of a cruise business has generated some annual revenue — about $2 million — but its residual effect has been much greater on not just the Port, but the entire area.
“Revenue has been generated and we have certainly made money, but the cruise ships have also stimulated the local hospitality business,” said Peek. “We have done surveys that indicate well over 100,000 people a year board our cruise ships and those are people from out of town who would not have come to Jacksonville otherwise. They are staying in hotels from St. Augustine to Amelia Island.”
Peek said growing the Port Authority’s core business — cargo shipping — has created the kind of steady yearly growth desired by all ports-of-call. The addition of the Japanese shipping line, Mitsui OSK, in 2008 will only add to an already thriving cargo shipping business.
“It will grow significantly. In revenue, we are expecting another $7 million a year,” said Peek. “That will be significant.”
Peek said the Port Authority employs 151 people, a relatively small number given the scope of work the Port performs. However, the peripheral effects are far-reaching. Peek said being a landlord port enables the Port Authority to lease space to related businesses, companies that employ another 7,000 people.
“You can easily quadruple that when you start talking about indirect workers,” said Peek.