LONG BEACH NET INCOME PLUMMETS SHIFTING AROUND OF FUNDS CITED

LONG BEACH NET INCOME PLUMMETS SHIFTING AROUND OF FUNDS CITED

Net income at the normally profitable Port of Long Beach plummeted to $26.7 million in the fiscal year ending June 30 from $68.8 million the year before due to the transfer of revenues to non-maritime activities.

The port's cash on hand likewise took a dive to $45.8 million from $426.9 million the previous fiscal year as the port committed hundreds of millions of

dollars to escrow accounts for capital projects.Michael J. Slavin, director of the port's finance division, said net income dropped this past year due to the transfer of $24.4 million to a railroad mitigation fund and $13.7 million to the City of Long Beach under state legislation allowing cities to take "excess" harbor revenue.

The port also spent $2.2 million more than it took in during a transition period when the Queen Mary tourist attraction was turned over to the city.

Without these transfers of more than $40 million, Mr. Slavin said, the port's net income would have been about $67 million, or about $1.8 million less than in fiscal 1992. The port's operating revenue in fiscal year 1993 was $100.9 million, up slightly from $99.9 million in fiscal 1992.

The railroad mitigation project includes the building of sound walls and other environmental modifications along the Union Pacific Railway line, which transports coal and other bulk products through a residential neighborhood.

The transfer of port revenues to the city's general fund occurred under state legislation that allowed California cities experiencing budget problems to take excess harbor revenues. The Port of Long Beach's two-year contribution, all of which was paid in the fiscal year ending June 30, totaled almost $13.7 million.

Although the legislation, known as SB-844, has expired, it had an impact on the port's operations. In the past, the port often kept hundreds of millions of dollars on hand for various capital projects.

This past year, however, the port transferred $150 million to an escrow fund for purchase of Union Pacific property earmarked for cargo facilities, and $100 million into escrow to be used eventually for purchase of 20 miles of railroad right of way for the Alameda Corridor intermodal project.

If the legislature this year would introduce a bill similar to SB-844, the port would have much less cash on hand that could be considered "excess"

funds.

The current fiscal year, which began on July 1, looks better for cargo volume. In July, container cargo was up 12 percent over July 1992, and preliminary figures for August show container volume up about 35 percent.

Don Wylie, director of trade and maritime services, said most of the carriers serving the port experienced increased cargo volumes in the past two months. This was especially true of the partnerships of Maersk Inc. and Sea- Land Service Inc. and Kawasaki Kisen Kaisha ("K" Line) and Mitsui O.S.K. Lines, which started express services to the booming Southeast Asia region this past year.

Mr. Wylie said the Korean-flag lines, Hanjin Shipping Co. and Hyundai Merchant Marine, are expanding rapidly, and Zim Israel Navigation Co. this summer moved to Long Beach from the neighboring Port of Los Angeles.

Another factor responsible for the cargo surge in August, he said, is that there were five Mondays in the month. The Southern California ports are known as "weekend ports" because vessel rotations are such that ships arrive over the weekend to link up with eastbound intermodal trains. The vessels are then loaded with export cargo and leave the ports on Monday.