Airport Highlights 2008 0905 - Laserfiche WebLink

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por~r of oar July 1, 2008 I JUL - 3 2008 OAR R. BENJAMIN Executive Director Dear Community Partner: L CITY OF SAN LEANDRO ~ I am writing to personally inform you of the current state of the Port of Oakland, which oversees more than 20 miles of waterfront that includes: the Oakland Seaport, Oakland International Airport and more than 1,000 acres of land for commercial and public purposes. When I became Executive Director of the Port a year ago, we embarked on a five-year alignment strategy to transform the Port of Oakland to meet the challenges of a changing global economy and environment. Unfortunately, like many of you, we are now being challenged by the economy. Airline bankruptcies, declining imports, skyrocketing fuel costs and a weak dollar are impacting Port revenues while our expenses and debt payments continue to rise. The Port does not receive tax dollars from the City or County. The Port does have bond debts, money it borrowed to construct improvements to its facilities. Bond debt requires the Port to maintain a certain ratio of net revenue to debt payments. This will become more challenging when the Port's debt payments increase this coming fiscal year, which begins July 1, 2008. The Port is currently facing an $18.6 million shortfall in developing a FY 2008-09 budget that meets our obligations. Although we had already started reducing overhead last year as part of our alignment strategy, this year we must consider several additional measures, including eliminating vacant positions, eliminating or deferring certain construction projects, enhancing revenues by pursuing new public-private partnerships and restructuring certain debt payments to improve our debt service coverage ratios. Unfortunately, all these measures do not appear to be enough to meet the Port's obligations without some reduction in staff. We estimate we may need to layoff 60-70 of our approximately 600 employees. The Port has issued 60-day Worker Adjustment Retraining and Notification Act (WARN) notices to all potentially affected employees. Actual layoff notices would not be issued until after the Board of Port Commissioners adopts a final 2008-09 budget, currently scheduled for mid July. We want to reassure you and all of our community stakeholders that safety, service, quality facilities and environmental stewardship remain our priorities at the Port of Oakland. While reducing Port staff will be extremely difficult, ultimately, it's our responsibility to ensure the Port of Oakland's long-term viability so we all can continue delivering economic benefits to the community and region. As our valued community partner, we appreciate your continuing support of the Port of Oakland as we continue to pursue this challenging transformation. 1 will continue to keep you apprised of future developments. Until then, please feel free to contact the Port with any of your questions or to arrange a meeting. I have asked the Social Responsibility Division to facilitate response to your questions and they can be reached by contacting the new director, Diann Castleberry, at (510) 627.1302 or by email: dcastleberry@portoaklantl.com. Sincerely, .,~ ~- Omar R. Benjamin Executive Director 530 Water Street ^ Jack London Square ^ P.O. Box 2064 ^ Oakland, California 94604-2064 Telephone: (510) 627-1100 ^ Facsimile: (510) 627-1826 ^ Web Page: www.portofoakland.com