Port of Hueneme Releases FY2013 Audit

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Financial Picture Looks Strong; Gets Award of Excellence

We work extremely hard to ensure we meet the test of generally accepted accounting principles as shown in our clean audit and Award of Excellence.

The Port of Hueneme realizes another strong year in FY2013 achieving a record revenue total of approximately $13.4 million in Gross Operating Revenue for a 10.4% increase over FY 2012. The Port’s CEO, Kristin Decas and CFO, Andrew Palomares submitted the auditor’s report to the Port’s Board of Harbor Commissioners at its Commission Meeting of October 28, 2013.

Commissioner President, Jason Hodge, noted "The numbers tell a very positive story about the Port’s financial performance and show our commitment to fiscal responsibility. That is our top priority and our fundamental responsibility to the public we serve. We will remain steadfast in our commitment to adopt policies that ensure we continue to achieve the highest possible accounting standards."

Ms. Decas acknowledged the year’s performance with a note of cautious optimism, "We are proud of our record and most pleased to see the uptick in revenues, but recognize we are faced with climbing expenses and have challenges ahead. The increases in revenue at this time are vital to replenishing our working capital reserves that have been depleted from the investment in major capital projects, including the installation of Shoreside Power. We commit to remaining vigilant in our effort to watch expenses and balance the budget."

Charles Z. Fedak & Company, the Port’s auditor, made an appearance and highlighted the results of their audit for FY2013. The auditors concluded, "The financial statements present fairly, in all material respects, the respective financial position of the Oxnard Harbor District [the Port] as of June 30, 2013, and the respective changes in net assets and cash flows for the year then ended in conformity with generally accepted accounting principles of the United States."

Consistent with the auditors remarks, the Port’s accounting demonstrates an extremely effective track record receiving for the third year in a row, a recognition for Excellence in Financial Reporting awarded by the Government Finance Officers Association, GFOA.

Mr. Palomares remarked, "We work extremely hard to ensure we meet the test of generally accepted accounting principles as shown in our clean audit and Award of Excellence. We make certain all port financial transactions are performed in an open and transparent environment and that we follow a proper and accountable code of conduct."

According to the audit, the Port closed in the black at a net income before capital contributions at $682,500 compared to $221,300 for an increase of $461,200. Overall total revenues rose $1.5 million while expenses increased by $1.02 million. The rise in expenses is primarily a result of increased insurance costs and new accounting requirements requisite to recording previously differed bond costs. The Port’s net assets grew by $7.2 million in FY 2013, an increase from the previous year’s $4.2 million.

Further, the audit shows that the Port realized best year in volume since inception in 1937. The record year is in large part due to continued economic recovery at the national level. Growth is also attributed to business retention and a sustained customer base. The agricultural product market made strong returns in fiscal year 2013. The banana trade hit a peak year realizing an historic increase of 5.7%. Traditionally the banana business shows an inelastic response to economic trends, but this year showed unprecedented increases. This in part stemmed from the increased capacity of the DelMonte ships and the transition of Chiquita from a 10 day service to a weekly service. Del Monte’s dual use ships with roll-on/roll-off capabilities allowed for increased cargo diversification and higher exports. Yara fertilizer and environmental solution products continued to see significant gains in market share increasing their cargo throughput by 23.9%. The Port saw growth in the handling of other fresh fruit and vegetable commodities with activity up 6.9% in imports and 103.3% in exports.

The charts below highlight the overall performance of the Port in FY2013 compared to FY2012.

            FY 2012             FY 2013            % Increase    
Metric Tons: 1,317,716        1,438,596        8.5%
Revenue:    $12,050,478     $13,692,599     12%

The Port continues to utilize a monthly financial reporting system to monitor and maintain operating expenses versus current budget and prior year actual results to maintain expenses at the lowest possible levels.

In Fiscal Year 2012, the Port refunded its entire outstanding revenue bond debt to take advantage of lower interest rates within the public bond market. This strategic decision allowed the Port to realize a $2.7 million saving over the remaining term of the Port’s entire outstanding debt which fully matures in 2024. The Port’s capital outlay during Fiscal Year 2012 was as follows;

FY2013 $8.3 million Port Capital Improvements

Key components:
$ 3.1 million – Shoreside Power
$ 2.0 million - Port Security (grant funded)
$ 2.8 million - Joint Operating Security Centers
$ 0.4 million - Facility Upgrades and Maintenance

The Port has budgeted $12.2 million for its Fiscal Year 2014 capital outlay program. The sources of funding come from the following: General Fund 55.1%, Revenue Bonds 8.1% and State/Federal Grants 36.7%. The primary project scheduled for the Fiscal Year 2014 capital program is the shoreside power project.

The Port’s Financial Year End Comprehensive Annual Financial Report is in final draft preparations and will be available on the Port of Hueneme’s website, http://www.portofhueneme.org.

The Port of Hueneme is one of the most productive and efficient commercial trade gateways for niche cargo on the West Coast. The Port is governed by 5 locally elected Port Commissioners. The Port moves $7 billion in goods each year and consistently ranks among the top ten U.S. ports for automobiles and fresh produce. Port operations support the community by bringing $1 billion in economic activity and creating 9,448 trade-related jobs. Trade through the Port of Hueneme generates more than $63 million in annual state and local taxes which funds vital community services.

We Make Cargo Move

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Will Berg
Port of Hueneme
+1 (805) 377-1500 Ext: 2234
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Christina Birdsey
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