GUAM PORT AUTHORITY RECORDS PROFIT

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By Gaynor Dumat-ol Daleno

HAGATNA, Guam (Pacific Daily News, Oct. 26) - After having shown dismal performance for nearly a decade, the Port Authority of Guam has shown improved fiscal responsibility, ending fiscal 2003 with reported net earnings of $775,000.

The public auditor’s office, in announcing the results of a financial audit, called the port agency’s latest annual financial status "a monumental increase from the previous year, when the port had a net loss of $5.4 million."

Part of what helped the agency brighten its financial picture was its decision not to fill dozens of jobs as they were vacated.

Through attrition, the port agency decided not to fill a variety of jobs, from clerks to cargo checkers to crane operators, said Mike Henderson, the port agency’s spokesman.

Last fiscal year, the port agency reduced its staff numbers by 42 from 398 employees, a summary of the audit findings states. The audit was conducted by Deloitte Touche Tohmatsu.

"A large part of it is the attrition of the employees, and we’ve been very, very careful of the expenditures," said Henderson, on the agency’s improved financial picture.

The report stated, however, that the decrease in staff numbers only translated into a $322,767 reduction in salaries and benefits.

Increased business activities at the port agency facilities boosted the agency’s gross revenues, from $22.6 million in fiscal 2002 to $28.6 million a year later, according to results of the audit.

The agency ended the fiscal year with lots of cash -- more than $10 million.

But a lot of that cash is not disposable income for the agency --$8.5 million represents insurance payments. The agency will use the money to pay for repairs caused by a 2001 earthquake, Typhoon Chaba and Supertyphoon Pongsona, Henderson said.

He said changes to the port agency’s tariff also helped, like setting deadlines for shippers to take their containers off the port and assessing charges to containers that overstay.

The agency’s operating revenues increased by 26 percent while operating expenses increased by 3 percent. As a result, the port reported earnings of $1.4 million from operations for the first time in three years, according to the report.

Insurance payments received by the port agency were not counted as operating revenues, and the insurance money cannot be used for something else besides repairs, said Public Auditor Doris Flores Brooks.

Brooks’ office stated that the port agency’s improved finances happened "in a year when nearly all autonomous agencies had significant losses."

But while commending the port agency, Brooks’ office also raised a few areas of concern.

The port agency’s receivables for fiscal 2003 increased by 42 percent, or $1.1 million, and the agency has paid for higher insurance cost.

The Port saw a 35 percent increase in insurance expenses, amounting to $645,695 from just a year ago, the public auditor’s office stated.

The report also mentions up to $1 million in another repair cost the agency faces stemming from rough seas caused by Typhoon Chaba. When Chaba hit in August, the North Korean vessel M/V Ajman 2 was forced to make an emergency stop at the commercial port. As a result of being docked at the seaport during the storm, the agency’s Pier 5 was damaged. The initial estimate for the repair of external damage is $352,000, but a more in-depth inspection of the area could result in damage in excess of $1 million, the report states.

October 27, 2004

Pacific Daily News: www.guampdn.com

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