The Port of Astoria could lose an estimated $600,000 in revenue from exporting logs to China this fiscal year because of a protracted trade war between the U.S. and Astoria Forest Products’ main customer.
Members of an ad-hoc finance committee, a group of banking, accounting and other financial professionals convened by the Port to help the cash-strapped agency save and make more money in the face of more than $20 million in deferred maintenance needs, are calling into question how the agency responds to such budget challenges.
Jeremy Davis, the finance director for Englund Marine & Industrial Supply and a member of the finance committee, came across the estimated loss while reviewing financial data with Will Isom, the Port’s finance director.
“When the log revenue was lost in November — and now that’s been five months, coming up on six months — what adjustments have been made?” he asked Jim Knight, the Port’s executive director, during a committee meeting Wednesday. “What conversations have we had about, ‘Wow, we’re going to be short $600,000 in revenue this year?’”
He and Isom talk about the Port’s cash position, whether it can sustain operations with less money and if there are budgeted projects that need to be postponed, Knight said.
“That would be something that Will would do intuitively just as a normal part of his process,” Knight said. “I don’t know that it would require that there’s a policy in place.”
But there seems to be a disconnect between Isom, as the Port’s financial expert, and those who make decisions, Davis said. He called for more guidance for the Port Commission from the administration than just monthly financial statements they may not fully understand.
“I don’t know that we’re getting everything out of his professional judgment that is necessary,” Davis told Knight. “It comes to you, and then it probably gets filtered from you, and then it goes to the commission, and then you’re dealing with people who have different competencies than Will has.”
Kevin LaCoste, a vice president for U.S. Bank and another member of the committee, has called for the Port to better account for deferred maintenance and depreciation of its property over time. Having managed to fall more than $20 million behind in maintenance, the agency needs a better protocol to deal with budget shortfalls and avoid falling in such a large hole in the future, he said.
“You’re right,” Knight said. “When it comes to spending money, the rules are crystal clear. But when circumstances change because of anticipated revenue losses, there isn’t a” triggered response.
The finance committee has already reached a consensus on the need to sell some Port buildings, such as the Astoria Riverwalk Inn, Chinook Building and former Seafare Restaurant, to make money. Knight has said there are appraisers valuing the buildings.
The committee could soon take a look at the Port’s debt load, how the agency might look at cutting a certain percentage of its budget if need be and what recommendations it might make to the Port Commission and staff. The Port is in the beginning stages of crafting a budget for the coming fiscal year, which starts in July.