The Port of San Francisco is projecting a 17% operating revenue shortfall for the fiscal year, or $20.8 million, due to losses of maritime revenue, the absence of cruise ships, the move by Tesla to furlough workers at its facility at Pier 80 and real estate losses, staff told Port Commission members on Tuesday.
The port plans to account for this shortfall through $9.4 million in expenditure savings including salary savings from vacant positions, savings in work orders to other departments and reductions in contractual services.
“We are also projecting that we will defer contributing $11.4 million in net operating income to future capital needs,” said Katie Petrucione, the port’s chief financial officer “With these changes staff expects to be able to balance the port’s budget for the current fiscal year.”
The following two years will be harder to predict though. Petrucione put forward two projections, one forecasting a 50% decrease from expected revenue in 2021, and the more optimistic version still putting the 2021 shortfall at 34%.
The budget submitted in February assumed that there would be $84 million in capital, but that is no longer an accurate assumption, Petrucione said.
City departments have been given extra time to revise budgets for this fiscal year, as they scramble to account for the impact of COVID-19. The Port Commission will put forward a revised budget in late May or early June. There will be an opportunity this winter for departments to make further revisions as the impact of COVID-19 on revenue becomes more clear.
The Port Commission is confident that they will be able to avoid layoffs and balance their budget by cutting operating costs and capital projects and spending their fund balance.