Update Acting Executive Director Deborah Ale Flint
November 1, 2012
Update from Port of Oakland Acting Executive Director Deborah Ale Flint
Focused on Progress Toward Financial Sustainability and Maintaining 24/7 Operations for Customers and Community
To our business, community, elected, and labor partners, and as I have shared with our employees in person and in writing, I am as disappointed as you are at the allegations of improper expenditures. As Acting Executive Director, I take these allegations seriously, and assure you that we are acting as swiftly and thoroughly as possible to address them.
We have hired an international law firm, Arnold & Porter, to serve as independent outside counsel in the on-going investigation. They are working methodically, and as quickly as responsible and possible. We do not know how long it is going to take, and cannot prejudge what the investigators will conclude. We have also taken decisive personnel action to ensure business continuity, but without prejudging the investigation. Simultaneously, we are accelerating work to strengthen our policies and procedures. We intend to communicate with the public on these matters as soon as new information is available.
While we have taken these decisive actions on the issue of alleged improper expenditures, we also continue our progress toward financial sustainability on other fronts.
- The Port recently refinanced some of its $1.3 billion in outstanding debt to achieve $60 million in net present value savings. These savings are spread over many years, and will save us about $9 million a year from 2014 to 2020, which will help us address increasing costs and over $850 million in unfunded liabilities and capital needs.
- We are actively negotiating with three of four Port unions and are in the Fact Finding phase of impasse proceedings with our largest union, SEIU Local 1021, seeking sustainable contracts that will still keep our employees the best compensated, on average and for similar work, in the region.
While we continue making progress toward financial sustainability, addressing allegations of past improper expenditures, strengthening our policies, and seeking sustainable labor contracts, we must also keep our 24/7 job-creating business operations running.
We have in fact been making important progress on multiple business objectives, including several recently that may have been overlooked:
- Last week we received an allocation of the first $65.8 million in state funding for the $500 million first phase of the Oakland Army Base redevelopment that is going to deliver enhanced rail connectivity, helping us grow our maritime trade and maintain our healthy 50/50 balance of imports and exports. The bid documents for that project were published on time this past Tuesday, October 30, 2012.
- We just welcomed the largest vessel ever to call North America, the Ultra Large Container Vessel (ULCV) MSC Beatrice, with a capacity of over 14,000 TEUs. The Port of Oakland is one of only two ports in the U.S. that has welcomed this new generation of vessels.
- Our largest air cargo tenant, FedEx has decided to operate its newest and largest cargo planes at OAK. The first of two Boeing 777 aircraft, which will ultimately provide direct air cargo service to Asia, were placed into service in the last several weeks. The initial operations are flights to Memphis, with service to Tokyo beginning in November.
All of these accomplishments and the recent bond refinancing are thanks to the good and hard work across multiple divisions of dedicated public employees at the Port of Oakland.
It’s even more important for the Port to stay focused on our mission during this time. The Port has been the steward of state lands and maritime and aviation transportation assets for more than 85 years, navigating through numerous ups and downs. We are a $437 million plus operation with nearly 500 employees that serves millions of passengers and importers and exporters every day, powering over 73,000 jobs in the region and over $600 million in tax dollars every year for local, state, and federal governments. It is often incorrectly reported that our operations are funded by local tax dollars – they are not. They are funded by business revenue from our tenants, which we must carefully reinvest in our facilities and growing more business. The reality is that the Port generates tax revenue from its operations.
We are intent to the restore the trust of our partners and stakeholders, and each other within the Port. The Port's commitment to this community, its business and labor partners, and its employees is unwavering.
To the citizens of Oakland who are disappointed and outraged by this situation, I have a very simple message: I am too. But make no mistake, none of these developments shakes my confidence that we will get to the bottom of this and then take appropriate action. In our 85-year history as an organization, this Port has been through adversity before. We have also been innovative and facilitated changes in Maritime and Aviation that transformed both industries. I have no doubt that we will emerge from this time an even better and stronger organization.
About the Port of Oakland:
The Port of Oakland oversees the Oakland seaport, Oakland International Airport, and 20 miles of waterfront. The Oakland seaport is the fifth busiest container port in the U.S.; Oakland International Airport is the second largest San Francisco Bay Area airport offering over 300 daily passenger and cargo flights; and the Port’s real estate includes commercial developments such as Jack London Square and hundreds of acres of public parks and conservation areas. Together, through Port operations and those of its tenants and users, the Port supports more than 73,000 jobs in the region and nearly 827,000 jobs across the United States. The Port of Oakland was established in 1927 and is an independent department of the City of Oakland. Connect with the Port of Oakland and Oakland International Airport through Facebook, or with the Port on Twitter, YouTube and at www.portofoakland.com.
Director of External Affairs
Port of Oakland