The auditor told the Port Commission this month that the port’s income is rather thin because they have haven’t finished the terminal. Money pledged from the federal government wasn’t spent in time because the port didn’t have an operator for the facility. The only bidder was a company fronting for a Chinese shipping company that offered less than what was required to meet the port’s needs to fully develop the terminal in a timely fashion.
The auditor went line by line through the port’s assets, particularly those that generate income. He said that Newport is about average for its size among Oregon ports in terms of revenue flow. He said few ports break even, therefore state and federal grants are necessary to keep them growing. Once built, the major improvements generate cash flow that lifts a port up to the next level with increased revenues which can then be leveraged to acquire either borrowed funds or matching funds for state and federal grants. Additional revenue from local property taxes appear to be not in the cards.
The auditor said there are areas of port operations that could be improved, but nothing that would provide enough financial heavy lifting.
So it would seem that the port needs to investigate how lumber and agricultural products might be profitably shipped to other parts of the country, including overseas, to provide revenues to get the port to the next level. It sounds rather familiar in that the port was trying to recruit shipping companies to use Newport for international shipping. But the only bidder was the one Chinese outfit that would not have provided what was deemed to be a lucrative enough arrangement to make the operation self-sustaining and, at the same time, accommodate the fishing industry’s needs for NIT throughout the year. There’s also been a lot of talk that Port of Newport’s user rates for the commercial fishing fleet are not nearly high enough to help with the port’s cash flow challenges.
Pile on top of that heap ‘o problems is the port’s need to rehabilitate Port Docks 5 and 7. Neither are in good shape. The auditor said that growing port facilities and the income that goes with it is the magic formula that moves ports forward.