The West Coast’s public ports have staked their current and future success on more than $12 billion in investments in port infrastructure and facilities. Port revenue bonds—rather than taxpayer dollars—primarily funded these investments.
West Coast ports are looking to devote another $4.7 billion in their terminals and other infrastructure to support their seaport operations. In California, where a full 35% of all national port infrastructure development spending will take place, this new infusion comes on top of development that created nearly $6 billion in equity at the ports.
The ports estimate that nearly $2.7 billion of these new projects will be paid for by existing revenues and user fees, and nearly $1.24 billion will be leveraged by future user fee revenues in the form of additional revenue bonds. One by-product of this approach is the ability of our ports to rely on a proven model of private revenues, user fees and tariffs to finance infrastructure development through commercial debt instruments. This “partnership” has enabled the ports to shore up cash flow and help them address liquidity constraints without relying on public funds. As a result, only a small amount of capital expenditures are financed through General Obligation bonds, resulting in extremely low levels of exposure and risk to the public at-large.
Port revenue bonds are retired through revenues, user fees and tariff charges paid principally by PMSA member companies, and are beneficial to the public and private sectors. As a model public-private partnership, these port infrastructure investments have come to symbolize how well-planned and beneficiary-financed transportation infrastructure can benefit both commerce and the public alike.
The West Coast ports’ strong financial performances—and the consistent operating record of their tenants—enable ports to meet their goals and responsibilities as public agencies without relying on public tax dollars for support in California and with minimal public funding in Washington state.