Adopted Budget
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PORT OF LOS ANGELES ADOPTED ANNUAL BUDGET FISCAL YEAR 2021/22 Los Angeles Board of Harbor Commissioners Jaime L. Lee, President Edward R. Renwick, Vice President Diane L. Middleton, Commissioner Lucia Moreno-Linares, Commissioner Anthony Pirozzi, Jr., Commissioner Eugene D. Seroka, Executive Director Prepared by the Financial Planning & Analysis Division Port of Los Angeles (City of Los Angeles Harbor Department) Fiscal Year 2021/22 Adopted Annual Budget Contents FISCAL YEAR 2020/21 IN REVIEW ....................................................................................... 1 FY 2021/22 ADOPTED ANNUAL BUDGET OVERVIEW ......................................................... 9 OPERATING BUDGET ............................................................................................. 11 CAPITAL BUDGET................................................................................................... 13 STRATEGIC INITIATIVES HIGHLIGHTS ................................................................................ 18 HARBOR REVENUE FUND REPORT .................................................................................... 26 COMPARATIVE STATEMENT OF OPERATIONS .................................................................. 27 REPORT OF REVENUES ...................................................................................................... 28 REPORT OF EXPENSES ....................................................................................................... 29 CAPITAL PROJECTS REPORT .............................................................................................. 30 Port of Los Angeles (City of Los Angeles Harbor Department) Fiscal Year 2021/22 Adopted Budget W e a r e A m e rica’s Port ® – t he nation’s #1 container p ort and the global model for security, sustainability, a nd social responsibility. The Port of Los Angeles (POLA) is America’s Port®, also among the many who advocated for stepping up the nation’s premier gateway for international COVID-19 vaccinations for the Port’s longshore and commerce and the busiest seaport in the Western transportation workforce. As of April 30, 2021, Hemisphere. The Port has ranked as the number one thousands of port workers, including longshore container port by volume and cargo value in the workers and truck drivers, were vaccinated at the United States each year since 2000. Port. Among Southern California’s strongest industries in To keep stakeholders up-to-date with important Port- terms of economic activity and job creation, POLA is related COVID-19 developments and cargo impacts recognized around the world as a model for during the year, Seroka conducted monthly virtual innovation, security, and sustainability. press conferences for international, national, and local media. He also provided regular video updates on new COVID-19 developments and safety protocols YEAR IN REVIEW for Port staff, many of whom were working remotely during the pandemic. The Coronavirus (COVID-19) pandemic and its impact on the U.S. and international supply chain made for Despite the challenges brought about by the one of the most unpredictable years at the nation’s worldwide pandemic, the Port was able to press busiest seaport. Huge swings in cargo volumes ahead on several key initiatives to keep cargo flowing, created unprecedented challenges for shippers, including rollout of several new digital tools to terminal operators, and the Port’s longshore enhance cargo fluidity and predictability. Using data workforce, who had to quickly adjust operations to collected through the Port Optimizer™ digital portal, accommodate extraordinary cargo surges during new tools introduced included the Signal, the Return most months of fiscal year (FY) 2020/21. Signal, and the Control Tower. The Port also initiated a new financial incentive program for truckers to help For the first half of calendar year (CY) 2020, port move trucks faster and more efficiently through cargo volumes were down more than 19%, as the terminals. COVID-19 pandemic quickly spread worldwide and global trade slowed to a crawl. But in July 2020, During FY 2020/21, the Port made significant market momentum shifted, as pent-up consumer progress on several community development projects demand for goods significantly ramped up. This designed to enhance public access to the LA demand remained strong throughout FY 2020/21, Waterfront in both Wilmington and San Pedro. In and the Port ended the fiscal year with its highest- addition, it also continued to build on environmental ever cargo totals. Even under the weight of the initiatives under the Clean Air Action Plan (CAAP), pandemic and subsequent surges in cargo, the Port updated in 2017. The Port’s latest Inventory of Air successfully kept all its terminals operational and Emissions report also showed progress on clean air open throughout the year. goals, with emissions down for the 14th year in a row. POLA also continued its leadership of Logistics Victory CARGO VOLUMES Los Angeles (LoVLA), the City’s program established to help identify and distribute COVID-19 personal Over the course of FY 2020/21, the Port has observed protective equipment (PPE) supplies to healthcare record volumes as consumer demand has rebounded and frontline workers throughout the region. Led by more quickly than anticipated following the onset of Port Executive Director Gene Seroka—appointed by the COVID-19 pandemic. The Port is projected to Los Angeles Mayor Eric Garcetti in March 2020 as the process 10.4 million twenty-foot equivalent units City’s Chief Logistics Officer during the pandemic— (TEUs), an increase of 21.5% over FY 2019/20 LoVLA successfully delivered more than 6.8 million volumes, setting a new annual cargo volume record units of PPE since the pandemic began. Seroka was for the Port. If achieved, the 10.4 million TEUs 1 Port of Los Angeles (City of Los Angeles Harbor Department) Fiscal Year 2021/22 Adopted Budget estimated for FY 2020/21 would exceed the previous x The Signal – Introduced in September 2020, this record of 9.7 million TEUs achieved in FY 2018/19 by new data tool publishes key dashboard data from approximately 700,000 TEUs, or 7.3%. the Port Optimizer, allowing all Port supply chain stakeholders to view in advance how many A strong surge of imports has continued through shipments will be arriving in Los Angeles over a March 2021 as the Port has handled at least 400,000 three-week period. A free service offered by the loaded import TEUs in each of the first nine months Port, the advance information dashboard helps of FY 2020/21. During the first nine months of FY stakeholders better plan and prepare for inbound 2020/21, loaded import volumes of 4.2 million TEUs cargo. The data is broken down by container exceeded the 3.4 million loaded import TEUs received type and includes details on the mode of over the first nine months of FY 2019/20 by transportation, whether rail or truck, once it 25.5%. Continued vaccinations, a new round of arrives in Los Angeles. stimulus checks, and new safety protocols enabling greater in-store retail traffic are all anticipated to x The Return Signal – This free data tool offered sustain increased import demand through June 2021. by the Port lets truckers and the broader trucking community know when and where to return Additionally, loaded export volumes continued to lag empty containers to cargo terminals throughout in FY 2020/21. Through the nine months ending the San Pedro Bay complex. Introduced in March 2021, loaded exports of 1.1 million TEUs November 2020, the tool is updated every five represented a decline of 10.0% relative to the 1.3 minutes with the latest trucking data. million loaded export TEUs handled over the nine- month period ending March 2020. The ratio of loaded x The Control Tower – The Control Tower cargo imports to loaded exports stood at 3.7 through the tracking technology provides real-time port-level nine months ending March 2021, a marked increase views of truck turn times, as well as other truck relative to the 2.7 ratio observed over the nine-month capacity management information, to help cargo period ending March 2020. Furthermore, the Port has owners and other supply chain stakeholders exported nearly 2.4 times more empty TEUs than better predict and plan cargo flows. The first loaded TEUs through March 2021 as trade imbalances phase of the tool—developed in partnership with continue to persist. Wabtec—was launched in February 2020. Additional features will be added in the coming months. SUPPLY CHAIN DIGITIZATION The Port received the American Society of Civil The Port has long advocated for a national strategy Engineers’ “Gamechanger” award in March for its Port to digitize the U.S. maritime industry. The Optimizer™ technology. The award recognizes unprecedented import surge and cargo backlog innovative examples of infrastructure modernization. experienced by the Port in the second half of the year highlighted the need for supply chain optimization Other cargo efficiency initiatives introduced by the and digitization, a key focus for the Port over the last Port this past year included: four years. x Truck Turn-Time and Dual-Transaction Building on the success of the Port Optimizer™—the Incentive Programs – To incentivize drayage cloud-based secure digital portal of maritime shipping and terminal operational efficiencies, the Port data created by the Port in 2017—the Port rolled out rolled out these programs on February 1, 2021. several additional digital tools this past year to These programs