Port of Oakland to cut 2021 budget by nearly 16% as pandemic hits revenue
Date: Wednesday, July 1, 2020
Source: DC Velocity
Plan will allow facility to maintain "essential" operations at airport, seaport, and real estate, leaders say.
The Port of Oakland has slashed its 2021 budget by nearly 16%, citing coronavirus-induced business declines that are forecast to continue dampening revenues from both its aviation and maritime sectors.
The pandemic has already depressed revenues in the port’s 2020 fiscal year, which ends on June 30, the port said. Oakland International Airport passenger volume plummeted 80% to 96% this spring, and a full recovery in the aviation sector could take two to three years. Meanwhile, maritime business could recover faster, but Oakland’s total cargo volume is off 7.8% this calendar year.
In response, the port last week approved a fiscal year 2021 budget that is down 15.84% from fiscal 2020, ringing in at $432.5 million in operating and capital expenditures and debt service payments, compared to $513.6 million spent on those departments last year.
“This budget is based on neither unsubstantiated hope nor on speculation of any worst-case scenario,” Port of Oakland Executive Director Danny Wan said in a release. “It is based on best estimates of how our business may recover, assuming that our communities and country make slow but steady progress in containing the Covid-19 virus.”
Beginning on July 1, the port’s new budget will serve three main goals: protecting cash reserves; ensuring adequate revenue to pay down debt; and maintaining full operations at its airport, seaport, and commercial real estate holdings, port leaders said.
The news follows the port’s announcement in May that it planned to slash its capital improvement budget and curb its discretionary spending and use of contractors in an effort to keep its essential infrastructure running despite a coronavirus-triggered “hole in the budget.”