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Published: Friday, 1/19/2001

Port turns $2M profit, if estimates prove true

The Toledo-Lucas County Port Authority board of directors should hear news today that pleases even the most critical of board members: The agency last year apparently turned a profit of nearly $2 million, the biggest in its 45-year history.

But don't expect the grins to last long. At today's monthly meeting, board members are set to debate one of the most contentious issues of 2000: giving a raise to agency President James Hartung.

Both issues are expected to highlight today's meeting.

Despite its name, the port authority runs not only the seaport, but also the region's two airports and train station.

In addition, it collects middle-man fees from arranging corporate financing.

Gary Berger, the agency's comptroller, yesterday projected the surplus at $1,958,946. He must still reconcile all outstanding incoming and outgoing payments by mid- March.

If the estimate holds, it would be nearly $200,000 more than the agency's $1.7 million profit in 1998, which was the previous high. Historically, the agency made up to $300,000 a year before turning bigger profits last decade.

Agency officials credit an age-old profit-maker, an emerging one, and surprises along the way for the 2000 surplus.

The port authority's moneymaker has long been dock rents and surcharges on shipped goods.

The surprise came when more companies than usual disposed of dredge - or river-bottom muck - at a port-owned peninsula off Oregon. The extra fees were $350,000.

Another surprise was Toledo Express Airport. It historically has ended years thousands of dollars in the red, but in 2000, it ended $600,000 in the black.

Mr. Berger said the airport didn't fill some positions, avoided too much overtime, and spent less on maintenance.

Pending union negotiations, however, could cut into the surplus. If the 34 employees get back-pay, it could cost the port authority roughly $20,000.

Perhaps the biggest boost - $850,000 - has come from the emerging financing program.

Investors buy the port authority's revenue bonds, and the money goes to the local businesses. The businesses then make monthly payments, a small percentage of which covers port authority fees.

Last year's agency profits are considered all the more significant because 1998's surplus included about $500,000 made from refinancing debt.

Pat Nicholson, the port board's chairman, said it's going to be hard to duplicate it.

“It's like watching someone hit the ball down the fairway 300 yards, and someone says, `Top that,'” Mr. Nicholson said.

Even board member Jerry Chabler, considered the most vocal critic of agency management, was pleased with the projected surplus, provided the figures check out.

But he questioned how the surplus could be so far off from initial 2000 projections of $140,000 profit.

Agency officials have said they preferred to be very conservative in their estimates. They have since said they will become more aggressive in budget estimates.

Mr. Chabler said the key now is boosting the reserve fund. This year's surplus would be added to $1.6 million already in reserve. Historically, the reserve fund has been at least $4 million, he said.

Despite the surplus, the agency isn't ready to give up its 0.4-mill Lucas County property tax levy, which costs the owner of a $100,000 home about $14 a year.

The $1.9 million projected profit is considered a significant milestone for an agency that has fought to improve its public image in the wake of the 1998 levy defeat.

At the time, the agency was criticized for lavish spending and mismanagement, charges board members then denied. Still, the board saw heavy turnover, and a reconstituted board vowed reform a year later to get the levy passed.

Mr. Hartung has argued that he also did his part to get the 1999 levy passed when, in December, 1998, he dropped two benefits guaranteed in his contract: a $160-a-month social membership to the Inverness Club and paid travel for his wife to accompany him on business trips. And, after years of above-average pay increases, Mr. Hartung did not get a raise in May, 1999. He hasn't had one since, maintaining a salary of $129,960.

Last summer, his supporters on the board began a campaign to restore his benefits and get him as much as $7,000 a year pay boost, retroactive to May, 2000.

The request for perks was dropped after critics complained.

But there is still debate about the raise.

Some board members don't support a retroactive raise. And at least one member, Mr. Chabler, won't support any raise until union negotiations are settled.

“It sends a bad signal,” he said.

But Mr. Nicholson pointed to the projected surplus as proof that Mr. Hartung deserves a raise.

“When was the last time you had a record profit and you didn't recognize the contribution of management?” he said.



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