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PORT of HOUSTON AUTHORITY Self-Evaluation Report Submitted to Texas Sunset Advisory Commission September 2011

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PORT of HOUSTON AUTHORITY Self-Evaluation Report Submitted to Texas Sunset Advisory Commission September 2011 PORT OF HOUSTON AUTHORITY Self-Evaluation Report Submitted to Texas Sunset Advisory Commission September 2011 INTRODUCTION The Port of Houston Authority of Harris County, Texas (herein referred to as the “Port Authority”, the “Authority”, the “Navigation District” or the “District”) is pleased to submit its Self-Evaluation Report to the Texas Sunset Advisory Commission. For one hundred years the Port Authority has served an integral part in the development of the Port of Houston. The Port of Houston spans the upper half of the 52-mile long Houston Ship Channel (the “Channel”) to the Gulf of Mexico. It includes more than 150 public and privately-owned cargo terminals and other industrial facilities along the waterway. The Port of Houston is the nation’s No.1 port in terms of foreign waterborne tonnage and is home to the world’s second largest petrochemical complex. The Port Authority owns and operates nine public terminals in addition to providing security and emergency response services and working with the federal government as the local sponsor of the Houston Ship Channel. The Port Authority was born from the entrepreneurial vision and spirit of early Texas pioneers, who achieved a close partnership of public and private interests to help develop the state’s maritime commerce. This partnership continues today with a strong collaboration among industry and local, state and federal governments. The Port Authority was constituted in January 1911, when Harris County voters authorized the establishment of a navigation district and $1,250,000 in bonds to provide funds to help dredge and maintain a deep-water ship channel to the Gulf of Mexico. The U.S. Congress appropriated the other half of the necessary funds, and work was completed under the jurisdiction of U.S. Army Corps of Engineers. The newly dredged 25-foot deep water channel opened on November 10, 1914. The City of Houston (the “City”) soon thereafter built and operated wharves and docks along the channel. In 1922, the Port Authority assumed responsibility for operations and maintenance of the City’s port facilities along with its responsibility for work on the channel proper. That same year the City’s Harbor Board and the governing body of the Navigation District were merged into a single five-member Board of Navigation and Canal Commissioners, which was subsequently expanded to seven members and renamed the Port Commission. In a series of statutes the Texas Legislature spelled out the Port Authority’s mission, culminating in 1927 with Section 1, Chapter 97, Acts of the 40th Legislature, Regular Session: “the development of deep water navigation and the improvement of rivers, bays, creeks, streams, and canals” within its boundaries. The 1927 Act also gave it the “purpose and authority to acquire, purchase, undertake, construct, maintain, operate, develop, and regulate wharves, docks, warehouses, grain elevators, bunkering facilities, belt railroads … and all other facilities or aids incident to or necessary to the operation of ports or waterways within said District and extending to the Gulf of Mexico.” On January 1, 1958, the Port Authority converted to a navigation district operating under Article XVI, Section 59 of the Texas Constitution, pursuant to Chapter 117, Acts of the 55th Legislature, Regular Session, 1957, in addition to its powers under Article III, Section 52. The 1957 Act further defined the role and governance of the Port Authority, and expanded its responsibilities for operation and development of ports and waterways to include activities “in aid of navigation and commerce thereon.” This underscored its mandate to create jobs and foster economic activity in the region. In this report we focus your attention on three basic components of the Port Authority’s operations: 1. The public component, which seeks to be a good steward of the public welfare, to be accountable to its local and state governmental stakeholders, and to give back to the local communities through sponsorships, education and job creation activities. 2. The terminal operations of the Port Authority, which promote and facilitate commerce by providing efficient and cost-effective marine terminals, for the competitive benefit of the Port of Houston, Texas and the nation. 3. The operation of the Houston Ship Channel, a federal waterway that must be maintained and protected so that future generations can continue to benefit from this vital national resource. The Port Authority plays an integral role in the mission of the overall Port of Houston as the local sponsor of the Houston Ship Channel, which is a major economic engine for the region and the state. The last economic impact study completed in 2006 shows that the Port of Houston is a catalyst for more than 785,000 statewide jobs and nearly $118 billion of annual statewide economic activity, and contributes $3.7 billion annually in local and state taxes. Cargo handling at Port Authority facilities accounted for approximately 15% of the total tonnage moving through the Port of Houston, and for over 50% of the port’s total jobs. The Port of Houston is also a vital link to the rest of the world, engaging in trade and commerce with more than 90% of the world’s countries, including the four “BRIC” nations (Brazil, Russia, India and China), which boast the world’s fastest-growing economies. Despite the recent financial crisis, a total of 31.3 million tons of cargo moved through Port Authority facilities in 2010, an increase of 8.5% over the prior year. The Port Authority is preparing to undertake significant infrastructure improvements to ensure that the Port of Houston can accommodate the advent of larger vessels and increased cargo resulting from the pending Panama Canal expansion in 2014 and expected future growth in the region. We appreciate the opportunity to present an overview of the Port Authority, including issues, challenges, and suggested improvements to help ensure that the Port Authority continues to meet its mission and key functions for the next century. Please note that since the Port Authority is not a state-funded agency, a number of the original questions in this report have been modified to reflect the operations and nature of the Port Authority. We look forward to working with your staff during the review process. Should you have any questions, please do not hesitate to contact us or any of our liaisons listed in Section I on page 1 of this report. Sincerely, James T. Edmonds Chairman, Port Commission Alec G. Dreyer Chief Executive Officer TABLE OF CONTENTS I. Agency Contact Information ............................................................................................................ 1 II. Key Functions and Performance ..................................................................................................... 3 III. History and Major Events .............................................................................................................. 19 IV. Policymaking Structure .................................................................................................................. 25 V. Funding ............................................................................................................................................ 31 VI. Organization .................................................................................................................................... 47 VII. Guide to Agency Programs ............................................................................................................ 51 1. Operations - Container Terminals .................................................................................................. 51 2. Turning Basin Terminals ............................................................................................................... 59 3. Port Security & Emergency Operations ......................................................................................... 67 4. Strategic Planning .......................................................................................................................... 81 5. Engineering & Real Estate ............................................................................................................. 99 6. Finance & Administration ............................................................................................................ 111 7. Legal ............................................................................................................................................ 123 8. Origination ................................................................................................................................... 131 9. Public Affairs & Economic Analysis ........................................................................................... 141 10. Human Resources ........................................................................................................................ 151 11. Executive ..................................................................................................................................... 157 12. Small Business ............................................................................................................................. 163 VIII. Statutory Authority and Recent Legislation ............................................................................... 171 IX. Policy Issues ..................................................................................................................................
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