Port of Galveston Director Steve Cernak reported today to the Board of Trustees of the Galveston Wharves that the port earned $1,388,173 in revenue in September and had operating expenses of $974,505, realizing a net income of $58,271. Listen  RealPlayer  MP3

"It is of interest to the board to note that we had actually budgeted a loss for the month of $196,994," Cernak said.  "So that represents a turnaround of about $250,000 in round numbers.  In a positive direction."

Cernak noted that rail revenues were over budget, wharfage was under budget, passenger service charge is on budget and dockage is over budget due to increased grain movements.

The wharves board voted unanimously to approve an agreement with the Galveston Port Facilities Corporation to provide for carpet cleaning services at Cruise Terminal 2 with Michael Rogers of All Care Products, who also cleans the carpet at Cruise Terminal 1.

The wharves board approved a "declaration of emergency and impairment of port operations" and approved an emergency dredging contract for an area on the north side of the Galveston Channel in the vicinity of the Pelican Island Storage Terminal, which has experienced heavy shoaling.

"When the water depth at the berth is less than 30 feet, PISTI is required to pay penalty charges to their customer," Cernak said.  "PISTI has also indicated that they have had to turn away a new customer since they would have to guarantee a contiuous depth of 40 feet at their facility in order to meet the requirements of their contract with this customer."

The wharves board voted 6-0-1, with Mayor Lyda Ann Thomas abstaining, to accept the report of Freddie Meier of Frost Bank and Shrub Kempner, president of Kempner Capital Management, on the financial status of the Galveston Wharves Defined Benefit Pension Plan. Listen  RealPlayer  MP3

"Good performance," said Meier.  "Over the long term it has significantly outperformed the actuarial assumption rate, which is seven and one-half percent."

Kempner agreed with Meier that the economy will generate the "kind of return" that the wharves board needs.

"We are not going to have a recession," Kempner stated.  "This is crunch time and there is a lot of doubt, as I have been predicting for some time; and there is an economic slowdown," but he added that there is a surge in manufacturing for export and other areas.

"Unemployment is simply not being hit the way it would be if there was a real significant slowdown," Kempner said.  "On balance, we are going to scrape through with a slowdown, but no recession."

Kempner told the wharves board committee that passage of the 4B sales tax issue is important to the port; and he urged passage this year, not 2008, claiming that funds will be lost if there is a lapse.

"For five years, from 2009 to 1014 we would lose $2 million a year that could be spent on beach renourishment, on beach parks and on streets and drainage," Kempner said.  "All because a bunch of people want to draft it ahead of time and be so specific." 

All other agenda items were approved with unanimous votes.