2009 Annual Report: Port of San Diego


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2009 Port of San Diego Annual Report
Connecting open space, greenways and people

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2009 Annual Report: Port of San Diego

  1. 1. Annual Report 2009 SAN DIEGO UNIFIED PORT DISTRICT Table of Contents: Chairman’s Message . . . . . . . . . . . . . . . . . . . 2 President’s Report . . . . . . . . . . . . . . . . . . . . 3 Capital Development Program & Major Maintenance Program . . . . . . . . . . 4 Community . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cruise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Employees . . . . . . . . . . . . . . . . . . . . . . . . . 10 Environmental . . . . . . . . . . . . . . . . . . . . . . 12 Maritime . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Public Art. . . . . . . . . . . . . . . . . . . . . . . . . . 16 Public Safety & Homeland Security . . . . . . 18 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . 20 Parks History . . . . . . . . . . . . . . . . . . . . 22 Financials . . . . . . . . . . . . . . . . . . . . . . . . . 24 Board of Port Commissioners . . . . . . . . . . . 55 Gr een way s tr ul y cap tu re th e im ag in at io n an d bo ld ne ss of the Am er ic an spi ri t
  2. 2. Chairman’s Message President’s Report Trust and teamwork are two words new public park), the Draft Environmental Impact Report When I came to the Port in January upcoming North Embarcadero Visionary Plan, which will that describe my year as Chairman for the demolition of the former Teledyne Ryan site near 2009, I was fortunate to join an beautify the waterfront of the Embarcadero area. Other of the Board of Port Commissioners. Lindbergh Field was completed, and the new Pier 32 Marina organization that had a solid projects will enhance public access, promote maritime, Trust de nes the way the Port of San in National City opened. Additionally, an appealable Coastal foundation and a reputation based recreation and sheries, improve the environment, and Diego operates – clear and transparent Development Permit was issued for the North Embarcadero on good governance. Since the Port’s improve security along the San Diego bayfront. governing of the tidelands of San Visionary Plan’s rst phase, and the Port was awarded a $3.5 inception, it has thrived on sound Diego Bay. Teamwork is how we get million grant from the Ruocco Fund to build a new waterfront nancial and business practices— e Port leadership team looks forward to guiding this things done at the Port. e Chair park at the former Harbor Seafood Mart site near Seaport elements that have helped us through vibrant world class organization through these di cult times, of the Board of Port Commissioners Village. a tough 2009. but I’m optimistic that the clouds will clear. I am con dent in sets the agenda, but it is a team of seven commissioners this: the Port’s future is bright. working with the sta at the Port, who see that projects get In the environmental arena, funding was approved for shore e sta at the Port, the Port tenants, business customers o the ground and that the Port is accomplishing its mission. power for cruise ships, a program to take old diesel trucks and the community have demonstrated they are all great I encourage you to take a look at the map inside this o the road got underway and several environmental fund partners. ere were, and still are, many challenges for Port annual report. On that map, you’ll be able to see the miles Protecting the working waterfront continued to be at the projects were completed. Additionally, the Port received a leaders during this nancial downturn, but all of us in the of walkways and paths that are part of the tidelands. All forefront this year after a failed ballot initiative threatened $1 million grant from the U.S. Environmental Protection Port community have tackled these challenges with eagerness. of the Port’s 17 parks are indicated on the map, along with the future of the Port of San Diego’s Tenth Avenue Marine Agency to restore about 160 acres of coastal wetlands in south the public boat launch ramps, shing piers and many other Terminal. e November 2008 initiative, which sought to San Diego Bay. e Port’s revenues in maritime and real estate were down recreational amenities provided to the public by the Port of change land use designations for the area so that more visitor slightly from last year’s numbers, but toward the end of the San Diego. We hope you will have many opportunities for serving industries could be built, would have been detrimental e Port also created a partnership with San Diego Gas year we were beginning to see hopeful and positive signs. New recreation on the tidelands. to the Port’s marine operations and industrial tenants. & Electric. e “energy roadmap” created by SDG&E will maritime contracts were signed that will bring in additional help guide us on conservation e orts. Some of these include automobile imports and other cargoes. People were coming I am grateful for the warm welcome I received when I joined is ght will never be over as long as there are people installing solar panels onto the Port’s Administration building, to San Diego for conventions and staying in tenant hotels the Port team. I look forward to serving you in 2010. who envision a stadium or other type of use for the marine which we accomplished this year, and we’ll be installing them and we were able to move forward with some of our major terminal. Your Board of Port Commissioners is working hard on the new cruise ship terminal building opening in late 2010. projects. to protect the valuable jobs and industries that make up the working waterfront. At the same time, we continue to promote ese programs and projects helped the Port balance its e Port’s operating revenues for scal year 2009 totaled Tenth Avenue Marine Terminal as a viable alternative to Los responsibilities that were set forth in the Port Act, which was $134.5 million, compared to $144.1 million in scal year Angeles and Long Beach. We’ve got the experience, the lay rati ed by the State Legislature in 1962. According to the Act, 2008. Although we were down by about seven percent, the Charles D. Wurster down area and the customer service. the Port is not only expected to build, maintain and operate Port fared better than many other ports around the nation. President & CEO maritime shipping facilities and promote commerce and Port of San Diego revenues are public funds and are used Port of San Diego In addition to promoting maritime activity and acquiring navigation, but it is entrusted with managing and regulating for public infrastructure improvements. Examples are the new trade contracts, we were busy this year promoting Port the waters and tidelands of San Diego Bay for shing and real estate tenants. e tidelands weren’t immune from the recreation. sti ing economy. Our hotels, restaurants and shops felt the pain. Some tenants experienced such low sales that they were I’ve had the great pleasure of serving as your Port Chair twice having di culty paying the rent. To help out these tenants, during my 12 years on the Board of Port Commissioners. the Port established a temporary nancial relief program that During this time, I’ve worked with many elected o cials, allows tenants to defer portions of their lease-required rental union leaders, community representatives and the public payments. to try and do what’s best for the region as a member of this Board. I thank each and every one of you for this opportunity. Another program to help Port tenants was a new marketing campaign. e campaign o ered special o ers at Port restaurants, hotels, shops and attractions in an e ort to attract business. Despite the economic downturn, the Port of San Diego was Stephen P. Cushman successful on several fronts this year: construction began on Chairman, Board of Port Commissioners the Broadway Pier Cruise Ship Terminal, the new Hilton San Diego Bayfront hotel opened (and along with it, a 2 3
  3. 3. CAPITAL DEVELOPMENT PROGRAM & MAJOR MAINTENANCE PROGRAM e Port of San Diego has two programs to help ensure that is past year, the Port began refurbishing 30 of the public Work on the Pepper Park public boat launch ramp in National Other major projects include the demolition of the former infrastructure around the tidelands is improved and maintained. restrooms in Port parks and other public areas. Many of City was completed. e original concrete launch ramp was Teledyne Ryan building near San Diego International Airport. e programs include projects that bene t public access, the the restrooms were built in the 1960s and were in need of demolished and replaced with an eight-lane boat launching ramp e $15 million project will involve demolishing 58 vacant environment, the economy and recreation in the Port’s ve modi cations. e nearly $2 million project was completed and two, 10-foot wide boarding oats. is was a $1.1 million industrial buildings. e project also includes removal and member cities. in late summer. Work included replacing plumbing xtures, project that was co-sponsored by the Port and the California disposal of hazardous construction materials. electrical components, piping and mechanical equipment. Department of Boating and Waterways. State grant funding was e Capital Development Program includes projects that are also used to help pay for it. e Port will soon begin a project to An environmental remediation project is also scheduled in new improvements on the tidelands. Examples include the new A $4 million project that transformed the end of Palm Avenue in remove the public restroom at Pepper Park. It will be replaced Chula Vista. e project will clean up a drainage ditch that used cruise ship terminal on Broadway Pier, and a new restroom in Imperial Beach was also completed. A park-like plaza was created with a modern facility that is compliant with the Americans with to be part of the former BF Goodrich South Campus. e area Pepper Park in National City. and the installation of a landmark public artwork, the “Spirit of Disabilities Act. is scheduled to be redeveloped in the future as part of the Chula Imperial Beach” was installed. e project included a new storm Vista Bayfront Master Plan. Major maintenance initiatives include projects that are the complete water pump station with a built-in pollution diversion system. Projects for 2010 include the installation of shore power refurbishment, or reconstruction, of prior Capital Development Emergency ramps that provide direct access to the beach were equipment at the new Broadway Pier Cruise Ship Terminal and e Port will also begin several major maintenance projects. projects. Examples include pavement reconstruction projects also installed. the B Street Cruise Ship Terminal. e equipment will allow ese include continued maintenance on the Imperial Beach and pier deck and pile replacement. Maintenance of existing cruise ships to plug into clean power while berthed, so that they Pier, repaving parts of Shelter Island and repaving the National infrastructure is becoming increasingly important, requiring don’t have to idle their diesel engines. City and Tenth Avenue Marine Terminals. signi cant investments, as the District’s infrastructure ages. 4 5
  4. 4. COMMUNITY As the administrator of the San Diego Bay tidelands, the Port is environment or maritime along the tidelands. Past recipients tasked with promoting recreation along its shorelines. is means include the Paci c Life Holiday Bowl, for its annual Big Bay providing open space and su cient access to the waterfront of Balloon Parade. e parade and its associated Holiday Bowl San Diego Bay and the oceanfront of Imperial Beach. To heed football game bring thousands of visitors to San Diego and that call, the Port established 17 public parks along the waterfront. to the waterfront. ese visitors support Port businesses and Many of these parks have recreational amenities such as basketball attractions. Past recipients have included the Alpha Project for courts, softball elds, children’s playgrounds and tness courses. the Homeless, the “Gator by the Bay” music festival and the Coronado Chamber Golf Classic. Marketing Fee for Service In addition to the parks, there is the Bayshore Bikeway that nearly recipients have included the San Diego Sport shing Council, encircles the entire bayfront, from Point Loma to Imperial Beach. the San Diego Film Commission, the San Diego Maritime ere are ve public shing piers, four public boat launching ramps Museum and the San Diego Regional Economic Development and 26 marinas and yacht clubs with about 7,000 boat slips. Corporation. ese organizations help promote business on the tidelands and draw thousands of visitors to the waterfront. is year, a one-acre park opened next door to the new Hilton San Diego Bayfront Hotel. Called the San Diego Bayfront Park, e Port continued to reach out to the public by o ering free boat it is open to the public for events, picnics and gatherings. Next and bus tours of the tidelands. As part of its campaign to educate year, the Port will begin work on Ruocco Park, a new park that the community about the importance of the working waterfront, will be located north of Seaport Village at the former Harbor the tours gave an up close and personal look into the intricate Seafood Mart site. operations of several industrial tenants. General Dynamics/ NASSCO, Continental Maritime and even the United States In addition to providing parks and open space, the Port is a Navy participated in the program. e bus and boat tours are a community service provider. Programs such as the Financial way the Port lets county residents learn about the many businesses Assistance Program and Marketing and Fee for Service that rely on the Port’s maritime industry to survive. Along with contribute funds and/or Port services to groups or programs learning about the Port’s business side, the boat tours provided that might need a hand getting started. To qualify for assistance, information on the Port’s environmental initiatives. the group or program must support recreation, sheries, the 6 7
  5. 5. CRUISE Th e co nn ec ti on be tw ee n pe op le + la nd e Port’s cruise business continues to be an economic force Construction for a new cruise facility on Broadway Pier got e Port will be installing equipment at the new terminal to Cruise ship calls for the region. In scal year 2009, 224 ships called on the Port underway. e new building will serve the public as a space for allow cruise ships to plug into shore power. Providing electrical Five-year trend comparison (actual numbers) of San Diego, bringing nearly 814,000 passengers here. Each events and gatherings, while providing the functional space to power to the ships reduces air pollution caused by idling diesel 2005 203 home-ported ship that stops here has an economic impact of $2 accommodate cruise line operations. e bright, modern, steel engines. 2006 219 million on the region. Right now the Port has four seasonally and glass design will include a signature artwork by New York 2007 181 home-ported lines —Holland America, Celebrity, Carnival and artist Leni Schwendinger. e rst 400 feet of the pier will serve is year, Holland America Lines and the Port partnered with Royal Caribbean —which o er cruise itineraries to the Mexican as a public special event area. Adjacent to the building, there will the Alpha Project, a local nonpro t human services organization 2008 297 Riviera, Panama Canal, Hawaii and other destinations. be a pedestrian walkway leading to the west side special event that provides assistance to more than 2,000 local men, women 2009 224 and viewing area. Inside, both levels of the building will include and children each day. e “Ship to Shelter” program donates Although this year’s total number of ships was lower than last more special event space. e public facility/cruise terminal is reusable goods from Holland America cruise ships to local Cruise Passenger Totals year, it was still the Port’s second-best year in the history of its expected to be ready for business in December 2010, and will shelters to help the homeless. Goods include toiletries, cookware, Five-year trend comparison (actual numbers) cruise business. In April, about a dozen ships were rerouted to be the Port’s rst “green” building. It is being designed to obtain dishes, silverware and even televisions. 2005 567,622 the Port because of the threat of the H1N1 u virus in Mexico. a silver-level Leadership in Energy and Environmental Design 2006 621,434 is brought the Port, its tenants and area attractions some (LEED) certi cation, which means it will use less energy and 2007 555,071 unexpected but welcome business. produce less waste. 2008 991,559 2009 813,822 8 9
  6. 6. EMPLOYEES e Employee Recognition Program is another way the Port fosters continuous growth and demonstrates how the Port values Port employees not only look out for their own well being, but its employees. Each quarter, an employee is selected from a slate they participate in programs to help the community and the of nominees submitted by all District divisions. e nominees are environment. Each year, a large percentage of employees participate viewed by their peers as individuals who exemplify the Port’s core in the United Way campaign. Employees hold bake sales, book values of courage, diversity, fairness, fun, integrity and teamwork. sales and craft fairs to help raise money for the annual giving At the end of the year, an employee of the year is selected for a campaign. e San Diego Harbor Police Department sponsors recognition award. blood drives and participates in the local law enforcement “Teddy Bear” drive during the holidays. is program provides toys and To promote health and wellness, the Port’s Health Bene ts stu ed animals to patients at Children’s Hospital. A world-class organization is characterized by strong leadership. ensure this, the Port established the Port Learning Center in 2008. Committee has initiated a series of healthy living seminars which e Port of San Diego prides itself as a top-tier organization. Strong e Learning Center focuses on improving employee performance focus on nutrition and tness. ere is an on-site Weight Watchers Port employees are also active in environmental projects. A group leadership and talented, skilled employees keep it running smoothly. and e ectiveness. Classes are open to all employees and subjects group and a program that allows employees to purchase organic of employees began a composting program at the Port, which range from supervisory training to specialized computer courses. produce from a local farm as part of a community-supported has diverted tons of food waste from the local land ll. ey also Among the 600-plus employees that work at the Port are Harbor Employees have the opportunity to update their skills and learn agriculture program. Additionally, the committee has mapped out participate in bi-annual recyclable electronics events. Police o cers, engineers, architects, trade representatives, electricians, management skills to help advance their careers. local walking routes for employees. carpenters, mechanics and many others. ese employees are encouraged to keep learning and improving at their jobs. To help 10 11
  7. 7. E N V I RO N M E N T A L e Port of San Diego’s environmental department is responsible e Voluntary Vessel Speed Reduction Program is another e ort for several initiatives to improve the air and water around the designed to improve the air quality around the tidelands. In the tidelands. ese include mitigation for construction projects, program, the Port requests cruise and cargo vessel operators as well as stormwater monitoring programs, natural resource to reduce their speed when entering or leaving San Diego Bay. management and several others. A new addition to these initiatives Studies show that when vessel speeds are reduced, there is a is an energy partnership with San Diego Gas & Electric, which signi cant reduction in air emissions. Vessel speeds are tracked will assist the Port with conserving energy. by using data that all vessels transmit to automatic identi cation receivers. e program began in April 2009 and by the end of the e Port entered the second year of the Green Port Program, quarter, 78 percent of the cruise ships and 58 percent of the cargo which was approved by the Board of Port Commissioners in ships visiting the Port had demonstrated compliance. December 2007. e program focuses on six areas—water, energy, air, waste management, sustainable development and e Port received a $1 million grant from the U.S. Environmental sustainable business practices—and spells out how the Port can Protection Agency, which will help restore and enhance about minimize its carbon footprint. 70 acres of coastal wetlands in south San Diego Bay. e work includes excavating about 50,000 cubic yards of material at the Great strides were made to improve the air quality around the Chula Vista Wildlife Reserve to add tidal channels to increase the tidelands. A program to replace or retro t older model trucks water ow into the salt marsh. Another area, Emory Cove, will using the Port’s marine terminals got underway and was embraced have invasive plants removed and native plants added to restore by one of the Port’s largest tenants. Pasha Automotive Services, the shoreline. which processes more than 260,000 automobile imports at the National City Marine Terminal, replaced seven car-carrying A project to install arti cial reef structures o the shoreline of trucks with assistance from Port funds. Five new trucks for Bayside Park in Chula Vista was completed this year. is project APEX, another terminal trucking customer, were funded with received nancial help from the Port’s environmental fund, which the rst of the state grant funds available for port trucks and was established in 2006 to nance environmental projects that matching Port funds. go beyond state and federal compliance. e reef structures provide additional habitat for sh and other sea life in the bay to e Board of Port Commissioners approved funding its shore protect them from predators, resulting in increased populations power projects at the B Street Cruise Ship Terminal and the of marine species. new Broadway Pier Cruise Ship Terminal, currently under construction. e projects will provide infrastructure so that Additionally, solar panels were installed on the Port’s cruise ships can plug into grid-based power while docked, Administration Building. ese panels are providing clean power eliminating the need to run diesel engines. e shore power for more than two percent of the administration building’s energy system will be installed by December 2010. use. is percentage will increase as the building becomes more energy e cient. In 2010, the Port will install solar panels on its General Services building. B r in gi ng gr ee n to th e pe op le 12 13
  8. 8. MARITIME Maritime Revenue Five-year trend comparison (revenue in millions) 2005 2006 2007 2008 2009 $23.7 $35.3 $39.4 $45.9 $43.7 Types of cargo Total tonnage received during scal year 2008-2009 (in metric tons) Dry bulk: 1,264,619 (includes cement, sand and fertilizer) Vehicles: 394,569 Liquid bulk: 153,589 (includes jet, bunker and diesel fuel) Containers: 604,841 Breakbulk: 401,853 Without a doubt, 2009 was a strenuous year for most of the a result of the overseas trips, the Port may be gaining additional Maritime Cargo Tonnage (includes bagged cement, bagged fertilizer, Port of San Diego’s importers and shippers. Automobiles and project cargo such as steel and windmill components, and Five-year trend comparison (metric tons in millions) lumber, palletized fruit, bagged sand and building products seemed to bear most of the weight of the perishables such as mangoes and avocados. miscellaneous steel and wind turbine products.) weak economy, while shipments of containerized fruit and 2005: 3.3 Vehicle units: 264,710 project cargo such as transformers, generators and wind turbine is year, the Port began its rst Mediterranean mooring 2006: 3.6 Container units (TEUS): 96,817 products declined slightly. operation for mega yachts. A lease was granted to San Diego 2007: 3.3 Mooring Company to conduct a two-year trial for the vessels, 2008: 3.3 For the past three years, wind turbines were a dominant import which are generally more than 100 feet long. Mediterranean 2009: 2.8 cargo at the Port’s Tenth Avenue Marine Terminal. In addition mooring is de ned as a vessel docking end-on, as opposed to to the regularly scheduled shipments, six ships arrived with alongside a pier and is commonly used in European harbors in components used to build windmill towers. e towers were the Mediterranean Sea. e rst mega-yacht to take advantage trucked to a wind farm in Palm Springs, California. of the new mooring system was the Princess Mariana. e 252- foot vessel drew admiring glances from the public with its six As the year closed, prospects began improving for auto imports. decks, helicopter and tender craft that can turn into a swimming Pasha Automotive Services, the Port’s auto processing tenant at pool with underwater lighting. the National City Marine Terminal, signed a three-year contract with Glovis America to import 50,000 new Hyundai and Kia e Port of San Diego became the rst West Coast port to automobiles through the Port. e new imports are a promising implement a program geared toward protecting marine terminals sign that the global economy is beginning to recover. from trespassers. e congressionally mandated Transportation Worker Identi cation Credential (TWIC) evolved from the Port commissioners and trade development sta traveled to parts Maritime Transportation Security Act and the Department of of Europe and Michoacán, Mexico, to seek new cargo business. Homeland Security’s e orts to strengthen port security after the In addition, they attended the 2009 Asia Breakbulk Cargo terrorist attacks of September 11, 2001. e program prohibits Conference. ese trips are important because they build lasting anyone without a TWIC identity card from entering a marine partnerships with current customers, attract new customers and terminal without an escort. TWIC card carriers must undergo keep the Port apprised of current trends in cargo movement. As an extensive background check to be approved for the card. 14 15
  9. 9. PUBLIC ART is year, the Port’s Public Art Program underwent an extensive An artistic lighting project for the San Diego-Coronado Bay review to see what was needed to ensure its sustainability over Bridge moved forward with the receipt of proposals from the next several years and to strengthen the foundation on which three artist teams. e project, sponsored by the Port and the it was built. Changes included a recon guration of the Public California Department of Transportation, envisions an artistic Art Committee’s membership to provide a balance of input from design that would illuminate the bridge. e project will include member cities, the Board of Port Commissioners, Port tenants energy-conserving elements and sustainable materials. and the public. In addition, the Board approved a xed annual amount to be set aside for the program’s operation and expenses, Celebrated artist Bernar Venet, whose sculptures are in uenced maintenance of the current art collection and acquisition of by math and theoretical science, loaned the Port of San Diego future works of art. eight large-scale steel sculptures, which were installed around San Diego Bay. e Port partnered with Scott White Contemporary In Imperial Beach, a monumental sculpture by the late A. Wasil Art to bring the renowned exhibit to the waterfront. Venet’s was dedicated at the foot of Palm Avenue and Seacoast Drive. sculptures have been exhibited in major cities in the United “ e Spirit of Imperial Beach” is an 18-foot tall artwork of a States, Asia, Europe, the Middle East and South America. e surfer and his long board. It epitomizes the surf culture of the Port displayed the Venet exhibit for a year. Port’s only oceanfront city and also pays homage to the popular “Sandcastle Days” event that draws thousands of visitors each July. A major goal of the Port’s Public Art Program continued to be incorporating public art into development projects. is year, Family members of the late entertainer Bob Hope traveled to the Port commissioned New York artist Leni Schwendinger the Port this summer to help dedicate a sculpture celebrating the to create the public art component for the new Broadway Pier beloved entertainer. e sculpture of Bob Hope was placed in Cruise Ship Terminal. Schwendinger’s concept consists of an the center of the military tribute artwork, “A Salute to Bob Hope art wall with special lighting that will re ect the motion of the and the Military.” e artwork includes 15 life-sized bronze bay onto the façade of the terminal and on the walkway near the gures representing servicemen and women from the Army, terminal. For the North Embarcadero Visionary Plan, a project Navy, Air Force, Marines and Coast Guard. A group of World that will redevelop a one and a half mile stretch of Harbor Drive War II veterans raised the $1.5 million for the artwork and the along the Embarcadero, the Port commissioned artist Pae White Port dedicated the site at the G Street Mole, which is near other to incorporate public art into a restroom, a shade structure and a military-themed artworks. ticket kiosk. ose public buildings may include artistic lettering on the rooftops, along with unique cut-outs that would cast interesting shapes and patterns onto the Embarcadero’s sidewalk. Th e Po rt Ti de la nd s A r i bb on of gr ee n 16 17
  10. 10. PUBLIC SAFETY & HOMELAND SECURITY is year, the Harbor Police Department continued project is a state-of-the-art surveillance system that monitors A new ordinance regulating the parking of oversize vehicles Six Harbor Police o cers were honored for saving lives in three implementing security measures to safeguard San Diego Bay and all maritime facilities. e system is linked to the Joint Harbor took e ect this year. e purpose of the ordinance is to prevent separate incidents this year. In August 2008, O cers Pedro the harbor from the threat of terrorism. A $3.5 million grant Operations Center, a communications center shared by the Port, overnight camping in the Shelter Island Shoreline Park and Arce, Eric Mitchell and Raul Munoz pulled an unconscious from the Department of Homeland Security was allocated to Coast Guard, Customs & Border Protection and the U.S. Navy. along Shelter Island Drive. Business owners and visitors to man from San Diego Bay and performed cardiopulmonary the Port of San Diego and maritime entities serving its areas. e system is managed around the clock. the area complained of inadequate parking on Shelter Island resuscitation (CPR). ree months later, Sergeant Salvador e grant will enable several bay-wide security projects to move because so many of the oversized vehicles were lined up. e Colin, along with two U.S. Navy personnel, pulled a man from forward, including ones that will develop a ber optic network to e Harbor Police not only monitor San Diego Bay and the Harbor Police conducted numerous community outreach a burning vehicle on Harbor Drive. In May 2009, Harbor ultimately encircle the entire bay, provide security enhancements tidelands, but are under contract with the San Diego County sessions and handed out yers to alert vehicle owners of the Police O cers Timothy Terry and Eugene Wheeldon, used an for the new cruise ship terminal at Broadway Pier, and replace Regional Airport Authority to provide police services to the changes. Oversized vehicles are still allowed on Shelter Island, automated external de brillator on a citizen in cardiac arrest the older Harbor Police patrol and re ghting vessels. airport. ere, the o cers work closely with the Transportation but have designated parking with speci c hours. while on his vessel on San Diego Bay. All of the o cers were Security Administration (TSA). e Harbor Police K-9 unit publicly honored with life-saving commendations and life- Over the past seven years, the Port has been the recipient of includes TSA-certi ed explosives detection dogs. e unit is saving “shirt bars” to wear on their uniforms. about $30 million in law enforcement and security grants. often called to assist other regional police agencies with detecting at money has helped make the Port safer and more secure explosives and narcotics. than before the terrorists attacks of September 11, 2001. One 18 19
  11. 11. REAL ESTATE On Shelter Island, the developers of the Point Loma Marina Real Estate Revenue Sources commercial site completed the rst phase of a project that will Total revenue for scal year 2008-2009: $78,536,468 include three buildings, a 50-slip marina, a 16,000 square foot park and a new shoreline promenade. Also in the area, three Concessions: $48,157,380 (includes hotel rooms, marina slips, sport shing businesses—Fisherman’s Landing, H&M Landing food & beverage, retail) and Point Loma Sport shing—moved ahead with plans to redevelop their sport shing landings. e redevelopment Fixed rent: $21,408,987 (includes ground rent, includes improvements to the existing buildings, an enlarged including boatyards and shipyards) public plaza, and improved access. Completion is scheduled for May 2010. e three companies are also working with the Port Parking: $7,770,734 to nd a solution to the parking issue in the area. A possible Parking meters: $923,517 e Port of San Diego has jurisdiction over some of the most held public outreach meetings on the design of the park, which is remedy is building a parking structure at the former Westy’s Grants: $278,131 beautiful real estate in California. Waterfront parks, gleaming expected to begin construction in 2010. lumber site on North Harbor Drive. Miscellaneous: $2,281 high-rise hotels, pier-side restaurants and marinas with million- dollar yachts are just a small sample. As close to perfection as Other positive news included the opening of the Hilton San In the South Bay, the new, 250-slip Pier 32 Marina opened on they may seem, these venues were not immune to the economic Diego Bayfront Hotel in January 2009. e 1,200-room property the National City waterfront. e Port is recon guring some Real Estate Revenue Trend of the land around the National City Marina to add even more Five-year trend comparison (revenue in millions) downturn experienced this past year. is located next to the San Diego Convention Center and boasts a modern design, public art and a one-acre public waterfront park. visitor-serving uses. Possibilities include a hotel, public park and 2005 $80.9 San Diego Bay, usually one of the top areas for conventions and More good news was the completion of a $10 million expansion a commercial site near the new marina. 2006 $82.4 vacations, was impacted with vacant hotel rooms, fewer diners in and remodel of the Best Western Island Palms Hotel on Shelter 2007 $83.6 Port tenant restaurants and fewer visitors to Port attractions. Island. New rooms were added, giving the hotel a total of 174 In Chula Vista, the Port continues to work with the city on 2008 $87.1 guest rooms. a master plan for its bayfront. e 550-acre development 2009 $78.5 To help alleviate some of the nancial strain on its tenants, the Port incorporates a land exchange with a private developer, which established a temporary nancial relief program. e program An appealable coastal development permit was approved by the will add more than 90 acres of natural protected habitat to the enabled the tenants most severely impacted by the recession Board of Port Commissioners for the rst phase of the North bayfront. Also, the decommissioning of the South Bay Power to defer a portion of their lease-required rental payments. In Embarcadero Visionary Plan. e project will cover about a Plan got underway. e process of decommissioning and addition, the Port created a vigorous marketing campaign to mile and a half of waterfront on Harbor Drive in San Diego and dismantling the plant will take approximately ve years, but will drive visitors to the waterfront. e plan concentrated on driving include widened sidewalks, landscaping, public art and gathering result in additional opportunities for the area. consumers to Port tenants through advertising, promotions and spaces. e rst phase proposes to include the area on Harbor public relations. Drive from the former Navy Pier to the B Street Pier and a portion of West Broadway from the railroad tracks, just past ere was good news on the real estate front. e Port was Paci c Highway to the intersection of Harbor Drive. e project awarded a $3.5 million donation by the Lloyd and Ilse Ruocco is a collaboration between the Port, Centre City Development Foundation to create a 3.3-acre waterfront park at the former Corporation and the City of San Diego. Harbor Seafood Mart, just north of Seaport Village. e Port 3 20 21 2
  12. 12. Port Parks From Sea to Shining Sea Parks History The Port of San Diego has 17 public parks and several other public areas with access to the waterfront. Since 1950, thousands of people have enjoyed these spots for picnics, weddings, family reunions and other celebrations, such as birthdays and holiday parties. In addition to the parks and play areas, there are miles of walkways and a bicycle path that encircles nearly the entire tidelands. Port parks include Shelter Island Shoreline Park, Harbor Island Park, Spanish Landing Park, Tuna Harbor Park, Embarcadero Marina Parks North and South, Point Loma Promenade, San Diego Bayfront Park, Cesar E. Chavez Park, Coronado Tidelands Park, Coronado Landing Park , Pepper Park, Chula Vista Bayside Park, Chula Vista Bayfront Park, Chula Vista Marina View Park, Portwood Pier Plaza, and Dunes Park in Imperial Beach. There are also smaller open areas such as Kellogg Beach, Parque del Sol, and Grand Caribe Shoreline Park, all where the public is welcome. From the Port’s first park on Shelter Island, which dates to 1950, to the most recent addition, the San Diego Bayfront Park, there are plenty of places to enjoy. California Coastal Trail Route In 2008, the first California Coastal Trail insignia in San Diego County was unveiled at Spanish Landing Park. The Port is proud to be included in the 1,200-mile trail that extends along the west coast from Oregon to Mexico. CA Coastal Trail Route 22 23
  13. 13. Financial Statements Management’s Discussion and Analysis and Basic Financial Statements June 30, 2009 (With Independent Auditors’ Report Thereon) Table of Contents Independent Auditors’ Report . . . . . . . . . . 26 Management’s Discussion and Analysis . . . 27 Basic Financial Statements: Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . 33 Statement of Revenues, Expenses, and Changes in District Equity . . . . . . . . . 34 Statement of Cash Flows . . . . . . . . . . . . . . 35 Notes to Basic Financial Statements. . . . . . 36 25 24 25
  14. 14. Mayer Ho man McCann P.C. 2301 Dupont Drive, Suite 200 Irvine, California 92612 Management’s Discussion and Analysis June 30, 2009 e Board of Port Commissioners e nancial management of the San Diego Uni ed Port District (the “District”) o ers readers of these basic nancial statements San Diego Uni ed Port District this narrative overview and analysis of the nancial activities of the District as of and for the year ended June 30, 2009. is Independent Auditors’ Report discussion and analysis is designed to assist the reader in focusing on the signi cant nancial issues and activities, and to identify any signi cant changes in nancial position. We encourage readers to consider the information presented here in conjunction with the accompanying basic nancial statements and the accompanying notes to those basic nancial statements. We have audited the accompanying balance sheet of the San Diego Uni ed Port District (the District) as of June 30, 2009, and the related statements of revenues, expenses, and changes in district equity, and cash ows for the year Financial Highlights then ended. ese nancial statements are the responsibility of the District’s management. Our responsibility is to express opinions on these nancial statements based on our audit. e prior year partial comparative information has been derived from the nancial statements of the District for the year ended June 30, 2008, and in our report dated October 31, 2008, we expressed an unquali ed opinion on those nancial statements. to $130.0 million for scal year 2008. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to nancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. ose standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes Overview of the Basic Financial Statements examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit is discussion and analysis is intended to serve as an introduction to the District’s basic nancial statements, which are comprised also includes assessing the accounting principles used and signi cant estimates made by management, as well as of the basic nancial statements and the notes to the basic nancial statements. e statements are organized so the reader can evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our understand the District as a whole and then proceed to provide an increasingly detailed look at speci c nancial activities. ese opinions. components are described below. As discussed in note 14 to the basic nancial statements, the District is subject to various contingent liabilities arising Basic Financial Statements from legal and environmental matters. e ultimate outcome of these matters cannot presently be determined. Since the District is comprised of a single enterprise fund, no fund level nancial statements are shown. e basic nancial Accordingly, no provision for any loss that may result from the resolution of these matters has been made in the statements provide a broad view of the District’s operations in a manner similar to a private sector business. e statements accompanying nancial statements. provide both short-term and long-term information about the District’s nancial position, which assist in assessing the District’s economic condition at the end of the scal year. e basic nancial statements are prepared using the ow of economic resources In our opinion, the nancial statements referred to above present fairly, in all material respects, the nancial position measurement focus and the full accrual basis of accounting, which basically means they follow methods similar to those used by of the District as of June 30, 2009, and the changes in its nancial position and its cash ows for the year then ended most private sector companies. e basic nancial statements take into account all revenues and expenses connected with the scal in conformity with accounting principles generally accepted in the United States of America. year even if the cash involved has not been received or paid. As described further in Note 9 to the nancial statements, the District changed its method of accounting for post- e Balance Sheet presents all of the District’s assets and liabilities with the di erence between the two reported as “equity.” employment bene ts other than pensions for scal years ending on or after June 30, 2009. Increases or decreases in the District’s equity may serve as a useful indicator as to whether the nancial position of the District is improving or deteriorating over time. e information identi ed in the accompanying table of contents as management’s discussion and analysis is not a e Statement of Revenues, Expenses, and Changes in District Equity presents information showing how the District’s equity changed required part of the basic nancial statements, but is supplementary information required by accounting principles during the two most recent scal years. All changes in equity are reported as soon as the underlying event giving rise to the change generally accepted in the United States of America. We have applied certain limited procedures, which consisted occurs, regardless of the timing of related cash ows. us, revenues and expenses are reported in this statement for some items principally of inquiries of management regarding the methods of measurement and presentation of the required that will not result in cash ows until future scal periods (e.g., invoices for goods or services received but for which payment has supplementary information. However, we did not audit the information and express no opinion on it. not yet been made). In accordance with Government Auditing Standards, we have also issued a report dated October 30, 2009 on e nal required nancial statement is the Statement of Cash Flows. e statement reports cash receipts, cash payments, and net our consideration of the District’s internal control over nancial reporting and our tests of its compliance with changes in cash resulting from operating, investing, and nancing activities. It also provides answers to such questions as, “Where certain provisions of laws, regulations, contracts, grant agreements, and other matters. e purpose of that report did cash come from?”, “What was cash used for?”, and, “What was the change in the cash balance during the reporting period?” is to describe the scope of our testing of internal control over nancial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over nancial reporting or on compliance. at e basic nancial statements can be found immediately following this discussion and analysis. report is an integral part of an audit performed in accordance with Government Auditing Standards and should be Notes to the Basic Financial Statements considered in assessing the results of our audit. e notes provide additional information and more detail that is essential to a full understanding of the data provided in the basic nancial statements. e notes to the basic nancial statements can be found immediately following the basic nancial statements. Financial Analysis Irvine, California One of the most important questions asked about the District’s nances is, “Is the District as a whole better or worse o as a October 30, 2009 result of this year’s activities?” Equity, which is the di erence between assets and liabilities, is one way to measure nancial health or nancial position. Increases or decreases in equity are one indicator of whether the District’s nancial health is improving or deteriorating over time. e Balance Sheet and the Statement of Revenues, Expenses, and Changes in District Equity report information about the District’s activities in a way that will help answer this question. ese two statements report the District’s equity and changes in the District’s equity. 26 27
  15. 15. Management’s Discussion and Analysis Management’s Discussion and Analysis June 30, 2009 June 30, 2009 Balance Sheet Land increased $1.0 million in scal year 2009. is was primarily due to capitalizing the costs for land improvements at the South Campus of the former BF Goodrich site in Chula Vista. To begin our analysis, a summary of the District’s Balance Sheet is presented below. e District’s equity totaled $547.1 million at the end of scal year 2009, compared to $550.9 million at the end of scal year 2008. e largest portion of the District’s equity, e District invested a total of $22.9 million in Construction-in-progress during scal year 2009. Some of these projects were 75.7%, is its investment in capital assets net of related debt. e District uses these capital assets to generate regional economic completed and capitalized during the scal year. growth and to provide services and recreational opportunities to citizens; consequently, these assets are not available for future spending. Following are amounts expended during scal year 2009 for some of the major capital projects: e District’s nancial position at June 30, 2009 and June 30, 2008 is summarized as follows: Assets, Liabilities, and District Equity (Expressed in thousands) $ Change increase 2009 2008 (decrease) % Change Current assets $ 153,079 173,325 (20,246) (11.7) % Other noncurrent assets 87,922 68,122 19,800 29.1 % Capital assets 457,595 452,141 5,454 1.2 % Total assets $ 698,596 693,588 5,008 0.7 % Current liabilities $ 31,205 26,673 4,532 17.0 % Noncurrent liabilities 120,330 115,968 4,362 3.8 % Total liabilities 151,535 142,641 8,894 6.2 % Invested in capital assets (net of related debt) 413,928 405,708 8,220 2.0 % Restricted 29,163 29,861 (698) (2.3) % e $16.7 million decrease in Construction-in-progress was primarily due to projects that were completed and capitalized to the Unrestricted 103,970 115,378 (11,408) (9.9) % appropriate asset categories during scal year 2009. Total District equity 547,061 550,947 (3,886) (0.7) % Total liabilities and Building and structures had additions totaling $6.7 million for scal year 2009. e major additions include $2.3 million for street District equity $ 698,596 693,588 5,008 0.7 % end improvements at Palm Avenue in Imperial Beach; $1.7 million in improvements to the boat launching facility at Pepper Park; $0.9 million for the replacement of the boilers & chillers at the District’s main administration building; $0.8 million for the public art project a “Cannery Workers Tribute;” $0.3 million for replacement of the viewing platform located at Embarcadero Marina Current and noncurrent assets Park North; and, the remaining $0.7 million was for other small projects. Current assets decreased by $20.2 million compared to prior year while noncurrent assets increased $19.8 million. Machinery and equipment increased $7.3 million in scal year 2009. e major increases can be attributed to the purchase and Capital Assets installation of security equipment at cargo and cruise terminals for $5.1 million; $0.8 million for upgrading the R/3 integrated business applications module in SAP; $0.5 million for the purchase of a Harbor Police fast response vessel/rigid hull in atable e District’s investment in capital assets as of June 30, 2009 totaled $835.0 million, with accumulated depreciation of boat; $0.3 million for the purchase of motive equipment; $0.2 million for the purchase of hand-held and vessel mounted sonar $377.4 million, resulting in a net book value of $457.6 million. equipment; $0.2 million for the purchase of four lifeguard towers; and, the remaining $0.2 million increase for other small equipment purchases. Machinery and equipment decreased $0.7 million during the scal year due to assets declared as surplus, Capital Assets which were subsequently retired. (Expressed in thousands) Balance at Balance at Roads and parking lots increased $2.4 million in scal year 2009. is was primarily due to street improvements at the west end Description June 30, 2008 Increases Decreases June 30, 2009 of Palm Avenue located in Imperial Beach. Nondepreciable assets: Land $ 196,266 1,001 - 197,268 Accumulated depreciation increased $18.0 million mainly due to the depreciation expense recorded for the scal year. e $0.7 Construction-in-progress 18,150 22,867 (16,705) 24,312 million decrease in accumulated depreciation is the result of capital assets that were retired during the scal year. Depreciable assets: - Land improvements 7,650 - - 7,650 Buildings and structures 459,904 6,711 - 466,615 Revenues, Expenses, and Changes in District Equity Machinery and equipment 46,118 7,252 (701) 52,669 While the Balance Sheet shows the change in the District’s nancial position, the Statement of Revenues, Expenses, and Changes Roads and parking lots 84,162 2,353 - 86,515 in District Equity provides insights as to the nature and source of the change in nancial position. e District’s summarized Total assets 812,251 40,184 (17,406) 835,029 Accumulated depreciation (360,110) (18,024) 700 (377,434) results of operations for the scal year ended June 30, 2009 are presented on the next page: Capital assets, net $ 452,141 22,160 (16,706) 457,595 28 29
  16. 16. Management’s Discussion and Analysis Management’s Discussion and Analysis June 30, 2009 June 30, 2009 Revenues, Expenses, and Changes in District Equity revenue of $1.3 million due to the transfer of maritime-related leaseholds from the Real Estate Department, and xed rental (Expressed in thousands) revenue of $0.9 million due to retroactive rent adjustments for two large tenants. e remaining $0.1 million decrease was from all other revenue sources. $ Change increase 2009 2008 (decrease) % Change scal year due primarily for police services provided to the San Diego County Regional Airport Authority (SDCRAA) for Operating revenues: Real Estate operations $ 78,536 87,181 (8,645) (9.9) % increased canine patrol services for explosives detection and additional hours of mandatory airport police training. Maritime operations 40,694 42,520 (1,826) (4.3) % Harbor Police operations 12,464 12,289 175 1.4 % grant revenues. Other 2,816 2,140 676 31.6 % Total operating revenues 134,510 144,130 (9,620) (6.7) % Operating expenses: Operating Expenses: Direct expenses Real Estate operations 21,191 21,897 (706) (3.2) % Maritime operations 23,243 23,328 (85) (0.4) % allocation, decreased by $0.7 million primarily due to the reclassi cation of $1.4 million prior year expenses for the Teledyne Harbor Police 32,974 31,049 1,925 6.2 % Ryan building demolition and abatement to a capital project. is decrease was partly o set by a $0.5 million increase in Other operating expenses 11,732 8,442 3,290 39.0 % personnel expense mostly due to the recording of the Annual Required Contribution (ARC) for Other Post Employment Depreciation and amortization 18,117 17,412 705 4.0 % General and administrative expenses 31,428 27,867 3,561 12.8 % Bene ts (OPEB) (see Note 9). Total operating expenses 138,685 129,995 8,690 6.7 % Income (loss) from operations (4,175) 14,135 (18,310) (129.5) % million from $23.3 million in the prior scal year. Pasha automotive terminal operator fees of $2.4 million decreased by $0.7 Nonoperating revenues 11,172 14,794 (3,622) (24.5) % million due to a lower volume of automotive imports. Personnel expenses had a net increase of approximately $0.7 million Nonoperating expenses 16,228 10,692 5,536 51.8 % mostly due to the recording of the ARC for OPEB and the lling of previously vacant positions. e remaining variances were Nonoperating income (loss) (5,056) 4,102 (9,158) (223.3) % spread across various expense categories. Capital contributions 5,347 5,425 (78) (1.4) % Change in District equity (3,884) 23,662 (27,546) (116.4) % Beginning District equity 550,948 527,286 23,662 4.5 % $2.0 million from $31.0 million in the prior scal year. Personnel expense had a net increase of approximately $1.5 million Ending District equity $ 547,064 550,948 (3,884) (0.7) % mainly due to recording of the ARC for OPEB, negotiated salary increases, increases in retirement costs and health insurance premiums. Motive expense increased by approximately $0.3 million primarily due to extensive repairs and maintenance performed on Harbor Police re and emergency vessels. Fire, police, emergency and medical services agreements with member Total operating revenues of $134.5 million decreased $9.6 million from the prior scal year of $144.1 million. Operating expenses cities also increased approximately $0.2 million. of $138.7 million increased $8.7 million from the prior scal year of $130.0 million. million from $8.4 million in the prior scal year. Other operating expenses include the Environmental Services and Miscellaneous Approximately 58% of the District’s total operating revenue was attributable to Real Estate operations, which includes land and cost centers. An increase of $3.0 million from the prior scal year was mainly due to an increase in major maintenance expenses building leases, concession fees, and parking fees. Maritime operations, which includes wharfage, land and building leases, cruise of approximately $1.7 million for repairs to refurbish comfort stations at tideland parks, various pavement repairs, and repairs ship passenger fees, dockage fees, and storage space rental, accounted for approximately 30% of the District’s total revenue. Harbor to the Chula Vista Bayside Park Fishing Pier. Expenses for the Regional Harbor Monitoring Program and Environmental Police accounted for approximately 9% of total operating revenues, which consists of services provided to the San Diego County Fund projects increased approximately $0.9 million from the prior scal year. Personnel expense also had a net increase of $0.4 Regional Airport Authority (SDCRAA), citations issued for vehicle code violations, revenue from piers and oats, and operating million mainly due to the recording of the ARC for OPEB, negotiated salary increases, increases in retirement costs and health grant revenue. Other operating revenue accounted for approximately 3% of the District’s total operating revenue and includes park insurance premiums. Miscellaneous operating expenses increased approximately $0.3 million primarily to due to Port Security usage fees and others. Grant Round 8 expenditures. Non-operating revenue includes legal settlements, interest income, reimbursed legal fees, terminal special facility fees, and miscellaneous other revenue. e largest non-operating revenues are interest income of $5.5 million and terminal special facility scal year primarily due to the recording of the ARC for OPEB of $1.6 million, increases in salaries, retirement costs and group fees of $2.9 million. health insurance of approximately $1.4 million, and increases in marketing costs of $0.4 million for advertising. Following are the major factors that in uenced the scal year 2009 operating revenues and expenses in comparison to scal year 2008: above analysis. Operating Revenues: Concession and Parking revenues decreased approximately $7.0 million due to the unfavorable economic environment and the Non-operating Revenues and Expenses: transfer of maritime-related leaseholds for harbor excursions to Maritime Operations. Other rental revenue decreased $1.3 million due to the completion of Lane Field option payments for scal year 2009. Fixed Rent revenue decreased $0.3 million scal year. Interest on investments decreased approximately $2.7 million from the prior scal year and legal fee reimbursement primarily due to a negotiated rent adjustment which occurred in the prior scal year. e remaining $0.1 million decrease was decreased approximately $2.3 million. Partially o setting these decreases were increases in unrealized gain/loss on investments from various other revenue sources. (GASB 31) of $1.1 million and legal settlements of $1.1 million. were lower by approximately $3.9 million primarily due to a decrease in cargo import activities such as autos, sand, lumber and other imported goods. Cruise ship passenger fees and cruise ship security charges decreased $1.3 million due to lower cruise the prior scal year primarily due to a payment to SANDAG of $5.3 million for the freeway access improvement project. ship calls and fewer passengers embarking and disembarking. Dockage revenue decreased $0.5 million as a result of lower vessel calls compared to prior scal year. ese decreases were partially o set by increases in storage space rentals of $1.8 million primarily due to an increase in the number of vehicle imports being stored at the National City Marine Terminal, concession e following charts show the total District revenues and expenses by major categories for scal year 2009: 30 31