Port budget shrinks with less grant funding

The Port of Astoria is tightening its purse strings due to less grant money.

Shrinking grant money is causing the Port of Astoria to further tighten its purse strings for the coming fiscal year starting in July.

Port staff on Thursday proposed a nearly $11.5 million operating budget for the next fiscal year, more than $2.4 million smaller than the agency’s current operating budget and more than $4 million smaller than the fiscal year prior.

Will Isom, finance director for the Port, said the smaller budget is largely a matter of timing.

“We’re in between years, as far as construction goes out at the airport,” he said, adding grant revenue will likely be higher with grant-funded construction projects in the 2019-20 budget.

Multimillion-dollar Federal Aviation Administration grants fund much of the construction at the Astoria Regional Airport and can often make up a large portion of the Port’s budget.

Jim Knight, the Port’s executive director, has said that uncertainty in grant funding, combined with failing infrastructure, limited cash reserves and high debt load, has made creating a balanced budget a challenge.

The Port often uses state ConnectOregon infrastructure grants to fund improvements and act as local matches on federal monies. Knight has called the state grants a lifeline for improving properties like the airport.

The state, however, has canceled the competitive ConnectOregon grants through at least 2019 to focus on several specific transportation projects. Knight has signaled alarm bells, saying the loss of state money could cost the Port and other airports larger FAA grants requiring local matches the Port can’t cover.

The Port last received $1.5 million from the ConnectOregon program to repair the west side of Pier 2, where much of the region’s seafood is transferred from boats to companies operating in the Port’s processing warehouse. But the agency has held the state grant back in hopes of using it as a local match on $10 million worth of pending damage claims it has with the Federal Emergency Management Agency dating back to a December 2015 storm.

FEMA has so far offered about $1.5 million to help recover from the storm damage, Knight said. The Port has employed an engineering firm to prove its higher claims, and recently started reaching out to federal congressional representatives for help to speed the process along.

Next year’s proposed budget includes just over $400,000 in FEMA storm damage grants. The amount was the minimum the agency could hope to get, Isom said.

“If we don’t get the money, the projects aren’t going to move forward,” he said of repairing storm damage. “It’s sort of a middle ground, taking a conservative approach, but at least having something in our budget as a placeholder.”

The Port recently hired Kevin Cronin, former community development director for the city of Astoria, to seek out a more diverse source of grant revenue. He has applied for several grants already, and will seek a federal grant worth at least $25 million from the Department of Transportation to help tackle a larger infrastructure project, Knight said.

The budget has also shrunk in response to the Port Commission’s recent decision to abandon a lease at North Tongue Point, where the agency lost more than $150,000 last year after expenses. Boatbuilder Hyak Maritime purchased the property from Washington Development Corp. and began turning the docks into a shipwright center.

Knight said the Port needs to look at more public-private partnerships to spur development on dilapidated Port properties, even if that means selling buildings but keeping land ownership.

“I’m looking forward to a new era of the Port of developing partnerships that can rebuild these really wonderful properties that have dilapidated buildings on them,” he said.

The Port also has several other unresolved issues that could significantly impact its budget. The agency is negotiating a settlement on a multiyear lawsuit over the operation of the Astoria Riverwalk Inn; approaching a state recommendation on the cleanup of historical petroleum contamination on the central waterfront; choosing how to develop or dispose of other properties it owns on the Skipanon Peninsula; and determining how to most cost-effectively dredge its waterways.

“While staff is confident that it will obtain positive outcomes in each of the unresolved issues, the timing of resolution for several items remains uncertain,” Knight said in his budget message. “It is likely, however, that these issues will be resolved during the coming fiscal year.”

The Port will hold a second hearing of the budget Wednesday. The agency must adopt a new budget by the end of June.

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