Port of Corpus Christi's budget includes $294 million in capital improvements

Port officials plan to spend $294 million in projects in the upcoming year – the lion’s share of the proposed work being Harbor Island development and ship channel improvements.

Outlined in a capital improvement budget, commissioners adopted it as well as a $75 million operating budget Tuesday.

Despite the pandemic, the current year’s budget brought in "record revenues and profits for fourth year in a row," credited to cost controls put into place in early spring, as well as a faster-than-anticipated return to crude export activity, according to the presentation.

But in the upcoming year it is expected there will be a revenue drop attributed to a "price war" and sinking oil demand amid COVID-19 that impacted the Permian Basin, chief financial officer Kent Britton told commissioners Tuesday.

“We think that 2021 will be more challenging as we go forward,” he said. “Obviously, we will continue to monitor that and make adjustments as we go. I think our revenue and earnings will still be healthy, although we will see a decline there so we will see reduced crude exports.”

The port's "cash position is sufficient to handle funding demands," according to the presentation. 

Officials anticipate that decrease will be mitigated, in part, by LNG shipments resuming operations comparable to the first quarter of this year, a memo states.

The agency is expected to fund about $285 million of the total capital improvement costs, with federal grants covering the difference, according to a more detailed presentation given in a budget workshop last week.

Information shown in the presentation hadn’t changed, staff said Tuesday.

Notably, commissioners delayed until mid-year a decision on a proposed 1.34 percent tariff increase to the wharfage, dockage and harbor safety fee.

It had originally been thought it would take effect Jan. 1.

The adjustment – what staff said was the lowest of the annual tariff increases in the past 12 years – had been built into the 2021 operating budget, port staff said. 

It amounted to a projected $1.3 million in new revenue, according to the presentation.

Commissioner Al Jones, in making the motion, said the commission could evaluate the tariff change mid-year to “make sure that that all the inflation figures are justified, all of the assumptions that were made to construct the budget are being fulfilled, and that they're not some really significant issues that may be still at play at that time.”

“There's a huge amount of uncertainty, especially when it comes to that conditions in the oil and gas industry which is so vital to us,” he said.

More: Here's how much cargo sailed out of port during pandemic

More: Port gets grants for fixes to Joe Fulton Corridor, Rincon complex

Kirsten Crow covers government, industry and development in South Texas. Support local news by checking out our subscription options and special offers at Caller.com/subscribe