Faces $12 Million Budget Shortfall
Consumers and manufacturers are feeling the pinch of the
recession, but so are government budgeters... including those at
the Port of Oakland, operator of Oakland International Airport
(OAK).
Business and vacation travellers know Oakland is a popular
airport alternative to San Francisco International, but the Port of
Oakland also depends heavily on freight business. During a
recession shipping volume drops, and many shippers reduce the use
of air freight in favor of slower, cheaper means.
In Oakland's case, that means despite layoffs and other cost
reductions, the port will face a budget shortfall of over $12
million in the coming year. About $11 million of that is blamed on
falling aviation revenue, while the maritime division is down about
a million dollars.
Marilyn Sandifur, the port's public information officer, tells
The Oakland Tribune, "The global economic crisis has redefined what
we are able to do. The port's situation is very different today
than it was a year ago or even three months ago."
Last year, the Port instituted a hiring freeze, and shed another
40 employees in August, for a total of about 100 positions. At its
December 18 meeting, the Board of Port Commissioners voted to
temporarily lay off remaining, nonessential staff for 13 days this
fiscal year, affecting over half its 575 employees, for a total
estimated savings of about $1.3 million.
Other measures approved include limiting expense growth to 1
percent next fiscal year and 3 percent thereafter. Past expense
growth has averaged 7 percent. Capital projects will be reduced or
delayed. On-airport improvements, which have traditionally been
handled by the port to meet the specification of tenants, will be
subcontracted to the private sector.
A new concessionaire is being sought to modernize and manage the
Outer Harbor Terminal, in exchange for a 50-year contract.
The Port of Oakland will also seek a private developer to manage
168 acres which were formerly part of the Oakland Army Base. The
Port once planned to move its intermodal rail yard there, but now
hopes to leave the management and risks of that project to the
private sector.
Victor Uno, president of the Board of Port Commissioners summed
up the Port's situation, as well as that of many businesses and
households. "We are working hard to address... overarching
financial concerns," he said, "and 2009 will be a very challenging
year."