Port of LA adopts $2bn FY 2023/24 budget
The Los Angeles Board of Harbor Commissioners has approved a $2 billion Fiscal Year (FY) 2023/24 annual budget for the Port of Los Angeles. The financial blueprint calls for increased investment in Port operational and public-access infrastructure, as well as support for a range of industry leading sustainability and decarbonization initiatives.
After experiencing sharp declines in cargo volumes in FY 2022/23 due to inflationary pressures and an overall slowdown in global cargo, the Port forecasts modest gains in the fiscal year starting July 1. As a result, the approved budget predicts a 5.1% year-over-year increase to 8.9 million TEUs (Twenty-Foot Equivalent Units) in FY 2023/24.
“This plan lays out a path forward that strategically balances anticipated cargo revenues with important Port priorities,” said Edward Renwick, Vice President of the Los Angeles Harbor Commission. “By responsibly and prudently managing our budgets during the pandemic and during last year’s global cargo slowdown, we are now in a strong position to continue delivering on critical Port investments and initiatives.”
“While economic uncertainties still linger, this plan will help guide us for whatever might come our way, now and in the future,” said Port of Los Angeles Executive Director Gene Seroka. “Bottom line, our strategic, long-term priorities remain the same: Modernize our physical and digital infrastructure to keep us competitive, and invest in community and environmental projects important to our surrounding communities, our region and industry overall.”
The budget includes total operating revenues of $652.9 million, an 8.6% increase over the FY 2022/23 forecast. Shipping services are expected to make up the bulk of operating revenues at 73.3%, followed by rentals at 15.1%.
Supporting daily operations of the Port, the plan’s FY 2023/24 operating expenses are estimated at $372.4 million. Expenses include funding for supply chain efficiency enhancements; facility and infrastructure maintenance; public safety related to goods movement; property and tenant services and management; cruise center operations; and environmental and sustainability programs, among other activities.
Major environmental and decarbonization projects supported in the plan include the Clean Truck Fund Rate (CTFR) program, created to incentivize and support cleaner trucks that serve the Port. The plan also supports a wide range of zero- and near-zero emission equipment demonstration projects currently underway throughout the Port complex.
The plan’s capital budget totals $252.3 million, a 40.6% increase over the previous fiscal year’s forecast. Funds focus on container and cruise terminal modernization, improving transportation in and out of the Port, and public access infrastructure at the LA Waterfront. Through the Port’s Public Access Investment Plan created in 2015, the Port has already invested nearly $253.1 million in public-serving infrastructure improvements. Community projects on tap include the Wilmington Waterfront Promenade, West Harbor in San Pedro, the Front Street Beautification Project, and the Avalon Pedestrian Bridge and Promenade Gateway in Wilmington.
The budget plan is projected to create approximately 4,100 direct and indirect jobs (not including Port employees), of which 3,100 are attributable to capital spending.
In November 2022, Standards & Poor’s upgraded the Port to an AA+ bond rating with a stable outlook on its outstanding bonds, the highest rating given to a seaport without taxing authority. Fitch Ratings also reaffirmed the Port’s AA revenue bond rating in March 2023.