People in Galveston have come up with several ways to describe how the city council disclosed a charter change proposition that would substantially increase the amount of money the Port of Galveston must pay the city each year.
That the city “sprang” it upon port leaders has been popular, as has been the idea it was a “sneak attack.”
It struck us as a “shot across the bow,” if you want to stick to the old-saw theme, or maybe a “brush-back pitch,” if you’re into baseball.
Yarbrough told The Daily News on Friday there had been two motivations for rolling out the controversial proposition without much discussion and forewarning for the Wharves Board of Trustees and the port’s administrative leaders, both of whom were stunned when they learned about it.
One was to get the attention of Port Director Rodger Rees and his supporters on the wharves board.
Another was to open a discussion about whether the port is contributing enough in direct dollars to the city’s operations and to the direct benefit of its residents; and if not, how much that amount should be.
The proposition, which the council has discussed putting to voters in a November referendum, would change the charter to require the port each year to pay the city $400,000 or 2 percent of its budgeted operating revenue, whichever was more.
The $400,000 would be a substantial increase over the $160,000 a year the charter already requires the port to pay. It’s more than double, obviously, but maybe not unreasonable, and, because it’s a flat rate, at least predictable. What’s causing heads to spin among wharves trustees and on the eighth floor of Shearn Moody Plaza is the 2 percent of budgeted operating revenue.
Had that requirement been on the books this fiscal year, the port would have owed the city more than $800,000, port leaders said.
The idea the port should contribute many more hard dollars to city’s operations isn’t new. Former council member Norman Pappous, for example, argued for years the port should be, and always had been, expected to pay much more than the token $160,000, about 25 percent of which ultimately goes to the public school district.
His argument got traction among some residents, but not much among officials and Yarbrough was among those most opposed to funneling money from the port, which has as many critical needs as the city.
So what has changed enough to have the mayor inclined, as he put it, to advocate for picking the port’s pocket?
One is frustration about unwillingness among port leaders to work constructively or even communicate consistently with the city, Yarbrough said.
“I just can’t get them to cooperate on looking for efficiencies,” Yarbrough said. “So yes, part of it was to get their attention.”
There were numerous concerns with the port’s accounting, contracting and hiring practices, Yarbrough said.
Among them was a spike in the number of voided checks, which had been two or three or four but recently shot up to almost 90 checks totaling more than $2 million, that the port staff had not clearly accounted for, he said.
Another reason is that the financial circumstances of both the port and the city are about to change, one for the better and one for worse, he said.
The port’s finances already had improved under Rees’ leadership, and its revenue might increase by as much as $8 million a year in a deal being negotiated with Royal Caribbean Cruises for a third passenger terminal, Yarbrough said.
Meanwhile, the city faces increased costs for police and fire salaries, police pension contributions and health insurance, he said.
Looming over all that is a state-imposed 3.5 percent cap on the city’s ability to increase revenue.
“That cap won’t affect us much for the first two years, but it will in year three and we have to get pieces in place to deal with that,” he said.
Yarbrough argued the amounts spelled out in the proposition — $400,000 and about $800,000 — would not be debilitating to the port, as some have suggested.
“I don’t know what $162,000 would have been in terms of the tax rate back in 1962,” he said. “I haven’t done the numbers, but it was probably 10 cents; $400,000 would be less than a penny and $800,000 would be a little more than penny.”
The first motive for floating the proposition definitely was successful. The mayor has everybody’s attention. The questions now are whether the city could make better use of a lot of port money than could the port itself, and whether all that could be debated and decided before about Aug. 19, the deadline for calling a charter referendum.
Both of those seem hard to sell in the short time there is to do it, but Yarbrough argues otherwise.
“Put it to the voters,” he said. “If it goes down, it goes down.”
• Michael A. Smith