The Port of Hood River’s current financial condition is summarized in this overview based on the detailed Audit Report for the Fiscal Year ending June 30, 2016. Two key government-wide statements specify the Port’s Net Position and changes. Net Position – the difference between assets and liabilities – is one way to measure the Port’s financial health. Government-wide financial statements of the Port are divided into two categories:
Governmental funds – The Port maintains two governmental funds: the General Fund and the Bridge Repair and Replacement Fund. The General Fund records transactions related to policy-making and planning with regard to the Port’s mission and strategic plan, general administration, and a portion of support services. The Bridge Repair and Replacement fund is a Special Revenue Fund used to record capital improvements, repair and replacement activity associated with the bridge as well as any debt-related activities.
Business-type funds – Business type activities are used to distinguish operating revenues and expenses from non-operating items. The Port maintains an enterprise fund called the Revenue Fund which records the following fees: bridge tolls; lease revenues from industrial, commercial and mixed-use properties; rent for marina boat slips and airport hangars; fees for recreational events and programs.
Statement of Net Position
Net Position serves as a useful indicator of a government’s financial position especially when viewed over multiple time periods. Port assets exceeded liabilities by $39,291,242 at the fiscal year close, representing a $1,558,865 increase over the prior year.
Table 1 depicts an increase in total assets of $2,860,371, which is primarily attributable to a $2 million in loan proceeds less development costs for the Lower Mill site, plus the gain on sale of waterfront land for development.
The largest portion of the Port’s Net Position, at 79%, are net investment in capital assets (e.g. bridge, land, buildings, and equipment) and reported net of accumulated depreciation less any outstanding related debt. The Port uses these capital assets to provide services to the public; thus, they do not represent resources available for future spending. Restricted Net Position total of $833,660 represents cash and investments that are legally restricted for debt service related from bridge bonds. Finally, the remaining $7,569,590 is unrestricted meaning it is available to meet the Port’s ongoing obligations.
Statement of Activities
As with the statement of Net Position, the Port reports governmental activities by the two distinct funds, the General Fund and the Bridge Repair and Replacement Fund. As indicated in Table 2, total Net Position of the Port increased by $1,558,865 or 4% compared to the prior year.
Governmental Activities – The Net Position for governmental activities increased $334,311 or 5% from the prior year. This increase is primarily due to higher interfund transfers from the enterprise fund to the governmental funds for capital improvements and professional services related to the fall 2015 bridge allision.
Financial highlights of governmental fund activities for the year include:
- Nearly $326,000 in bridge allision-related costs, with $45,121 in lift span improvements.
- Property taxes continue to increase around 2.3% as projected.
- Debt service remained stable.
- Personnel costs increased $27,000 (including additional staff time dedicated to bridge allision).
Business-type Activities – Business type activities generated a $1,224,554 (4%) increase in the Port’s total Net Position. The financial results for this year include a $343,275 increase in toll revenues (9.4%), with bridge traffic accounting for 5.6%. The remaining 3.8% relates to the elimination of toll tickets and a discount reduction for electronic tolling customers. In 2016, the Expo Center and adjacent parking lot were sold to a private developer, and a vacant parcel on No. 2nd Street and Riverside Drive was sold to provide commercial/industrial development. These property sales and the write-off of the Wasco tenant lease improvement amounted to a gain of $1,320,336. Capital grants continued to play an integral role to the Port, with over $470,000 received in 2016 (including $260,000 for environmental clean up of Lower Mill site, $42,485 for Hook launch area development, and $61,377 for the airport master plan).
Financial Analysis and Outlook:
The Port is involved in a variety of activities that contribute to the economic health and vitality of the community. The major source of funds for Port operations continues to be the toll bridge, accounting for 61% of operating revenues. Lease revenues and other fees increased slightly. The Port had a 94% occupancy rate as the year ended. The Port receives property taxes that account for 1% of total revenues. Capital grants continue to play a vital role in how the Port develops its properties, which includes airport improvements, infrastructure along the waterfront, and light industrial properties. The Port receives an operating grant from the Oregon Marine Board to assist in the operations of the Marina. Federal Aviation Administration grant funding generally requires a 10% match. The Port continues to develop light industrial properties that may result in new tenants and jobs. The Lower Mill site and undeveloped land at the waterfront (Lot 1) will hold future opportunities.
The Port looks at its business units in the following categories: Bridge, Leased Properties, Undeveloped Property, Recreation, Marina, Airport and Economic Factors.
Request for Information – A full Financial State of the Port with more detail can be found online at portofhoodriver.com. If you have questions about this report or would like additional information, please contact the Port’s Chief Financial Officer Fred Kowell at firstname.lastname@example.org.