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Cash-poor port mulls $300K to hire consultant - The Galveston County Daily News : Local News

November 27, 2014

Cash-poor port mulls $300K to hire consultant

Staff says hiring Laredo-based company could payoff in long-run

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Posted: Wednesday, January 23, 2013 12:00 am | Updated: 7:58 am, Tue Apr 23, 2013.

GALVESTON — The Port of Galveston’s governing board today will consider whether to hire a consulting firm — at a cost not to exceed $300,000 — to help make infrastructure improvements and attract cargo and other business to the west end of the public docks.

The Wharves Board of Trustees in a special meeting will consider entering into a professional services agreement with Laredo-based Phoenix Port Partners.

The staff request comes as the port seeks ways to cut costs as expenses rise and revenues decline. Belt-tightening has included limiting travel, a hiring freeze and not giving cost-of-living raises to the port’s 80 or so employees.

Phoenix Port Partners would have among its duties helping find financing for such projects as filling in slips and building piers so ships could tie up on the port’s west end.

Phoenix Port Partners also could help the landlord port find tenants, such as a container terminal operator for the west end, and make recommendations for infrastructure improvements, port Director Mike Mierzwa said.

While the proposition of hiring a consultant sounds pricey when the wharves board is imposing austerity measures, it has the potential to generate revenues, Mierzwa said. Phoenix Port Partners already has identified some potential tenants, he said.

“We think this is going to have the potential to pay off,” he said.

Timing is an issue. The port is pushing to fill the slips on its east and west ends before U.S. Army Corps of Engineers permits expire next year, Mierzwa said.

It could cost as much as $50 million to fill the slips and build piers on the west end alone, he said. But the port only has about $18 million remaining from federal and state grants for such projects, Mierzwa said. And chances it could secure that kind of money any time soon are slim.

The port has projected operating revenues of $27.4 million this year, down $445,405, or 1.59 percent, compared with last year. Operating expenses for next year are expected to be $25.1 million, up $714,275, or 2.93 percent, compared with last year.

Among reasons revenues are expected to be down is the reduced number of grain ships calling at the port. Some of the rent payments tied to the revenues generated by tenants also are down, officials said.

The port has about $55 million in debt, largely from developing and expanding its two cruise-ship terminals.

The port has long sought container cargo. But such efforts have generated concern among residents who fear that work handling containers — semitrailer-sized boxes filled with everything from TVs to tennis shoes — would generate too much truck traffic, pollution and noise. But unlike the east end of the port, the west end is away from neighborhoods and wouldn’t require sending railroad flatcars carrying containers through tourist areas.

The port would seek specialized container cargo and capitalize on the widening of the Panama Canal, Mierzwa said.

Phoenix Port Partners could help the port secure such business, Mierzwa said.

At a glance

What: Wharves Board of Trustees special meeting

Why: To consider spending up to $300,000 on a consultant to develop west end business

When: 1:30 p.m. today

Where: Eighth floor, Shearn Moody Plaza, 123 25th St.