Mayor Jim Yarbrough is on the right track suggesting the Port of Galveston needs to pay more of its revenue to the city of Galveston. Here’s my analysis why the residents of Galveston should care.

The city of Galveston owns the Port of Galveston. But what is the city of Galveston? It’s a political entity created by and for the residents of Galveston to provide goods and services that are common to us all. The city of Galveston isn’t a person.

It’s the residents of Galveston who make up the city of Galveston; and by extension, we residents are the owners of the Port of Galveston. We’re like the stockholders of Exxon who are the actual owners of Exxon, and Exxon pays quarterly dividends to its stockholders.

The Port of Galveston is an income producing asset, and I expect it to pay a portion of its profits each year to its owners via payments to the city of Galveston. I also expect the port to retain a certain amount of its profits for future growth. As the port grows, I expect the port to increase its payments.

The residents of Galveston elect a mayor and city council to represent our common interests to provide common goods and services like police and fire protection, infrastructure and clean water. Our council also appoints a board of directors for the Port of Galveston. Both the city council and the wharves board should be representing the residents of Galveston and ensure we residents derive value from our asset. That value should come from payments to the city that benefit all our residents — not just a few.

We can argue the amount of payments each year, and there should be a discussion between the port director and those boards representing the residents. I think Port Director Rodger Rees is doing a fine job, but he’s a businessman and should understand my position. He needs to lay out the long-term plan for future growth and how much earnings need to be retained for that growth. He also needs to acknowledge the port has been underpaying for decades and needs to start increasing payments based on port income.

Kudos to Mayor Jim Yarbrough for addressing an issue so important to the taxpaying residents of Galveston.

Mike Cowan lives in Galveston.

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(6) comments

Theresa Elliott

Points well taken, but the way the increase in Port contributions was presented was the main problem. No discussion with the Port, even though the Mayor sits on the Port Board, a Charter Amendment rather than an agreement, an arbitrary percentage without any study,....all thrown at us before the Port’s first master plan in many years (if ever) is complete......And this article doesn’t mention of the enormous economic impact the Port has for the City which is really the main goal of the Port. We should always be open to reconsideration of agreements as times change but thoughtful discussion and negotiation are the way to move forward.

Don Schlessinger

"Enormous impact?" You're kidding. The port should pay it's fair share just like we island property tax victims do.

Miceal O'Laochdha

No kidding about the enormous economic impact. Read the Martin study conducted for the GEDP and funded by the IDC, to learn the actual economic numbers of primary, secondary, and tertiary economic impact of the maritime industry to Galveston (city and county). It is an eye-opener for sure. And Don, please don't overlook the fact that "we island property tax victims" includes the workers and businesses in the Port.

Ron Shelby

Good editorial Mike.

David Hardee

The port is a unique entity. It is a traditional business (income producer), providing a service and is paying from its profits an agreed rate to its investors which goes into the public funds controlled by the city government.

The city is a taxing agency and service provider.

It would be proper to look at these two entities on the basis of performance. Their squabble about whose money it is should be based on what is the intended use of the available largess.

It is obvious the city finds itself as usual needing more money. The reasons the city needs more money is reported to be – 1. satisfying than $14,000,000 judgment to pay bills accumulated during recovery from hurricanes. 2. the city needs to satisfy pension payments. The city is initiating a 2¢ent tax increase presumably to help settle these deficits. If the 2¢ increase in taxes will satisfy the deficits then the question is - what does the city intend to do with the additional funds it wants to extract from the port.

If the city cannot justify a specific need and use of more funds it is best to leave the money in the port, Money in the public coffers quickly evaporates into mysterious needs and services.

Miceal O'Laochdha

Mr. Cowan, your simile comparing Exxon stockholders to Galveston residents is way off base. Stockholders of any publicly traded corporation earn their right to seek profits by virtue of having purchased their stock. As the City of Galveston provides no tax money to the Port, Galvestonians have not purchased any "stock". The only "stock" being purchased at the POG is done by the tenants and shippers.

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