Massport Approves FY 2010 Operating Budget
The Massachusetts Port Authority (Massport) today voted to approve an Operating Budget for Fiscal Year 2010 of $364 million, a $13 million decline from the $377 million budget approved by the Board in June 2008.
The FY10 budget lowers the level of Massport spending on operations by $17 million, on top of the $13 million the Board cut from last year's budget. This $30 million reduction “ about 10% of the total -- is necessary if Massport is to successfully negotiate the stark economic climate facing the Authority and its industry partners.
"It's realistic that we are unlikely to see a return of growth until the second quarter of next year, at the earliest," said Massport CEO and Executive Director Thomas J. Kinton, Jr. "The FY10 operating budget is a fiscally prudent business plan that responsibly addresses the financial realities of today's severe economic recession. The budget allows us to honor our commitments to our multiple stakeholders and to provide our customers with the high level of transportation services they need and deserve.
Total projected revenues for FY10 are $551.5 million, a 5% or $31.3 million decline over the current budget. This revenue decline is consistent with nationwide economic trends and represents the first time that operating revenues are expected to decline in more than 30 years of Massport's operations, except for the unprecedented events of 9/11. This drop is due in part to a 7% decline in container volume at the Conley Terminal, real estate revenues down 6.6%, and the fact that three million fewer people are flying through Logan Airport than at its peak in 2007.
To manage the current downturn Massport “which receives no state funding -- has constructed an operating budget for FY10 that:
- Reduces Massport's workforce by 6% through hiring freezes and reductions in overtime;
- Lowers Massport's long term retirement benefit liability 40% -- or $700 million over 30 years â€“ by making a number of eligibility and benefit modifications;
- Imposes an across the board wage freeze for all non-union employees and for those in collective bargaining units whose contracts expire as of July;
- And makes significant cuts in outside services, consultants, travel, training, office supplies, and equipment
The budget increases funding in critical areas, such as safety and security, efforts to promote high occupancy vehicle usage to and from Logan Airport and an earmark of $18.2 million for the legislated Payment in Lieu of Taxes (PILOT) payments for Boston, Chelsea and Winthrop.
Massport is governed by a seven member Board appointed by the Governor of Massachusetts.