Hoping to stabilize its existence until the 2015 projected completion of the project to dredge the shipping channel the Port St. Joe Port Authority this week advertised for proposals to establish a line of credit.
Port Authority board members unanimously voted Monday to request proposals for a half million dollar line of credit aimed primarily at maintaining “bare bones” operations.
Board members seek a note with a five-year balloon at a fixed interest rate with interest due at the end of the term of the agreement.
“We are at the point we need to make a very responsible decision,” said board member Jason Shoaf who motioned the proposal to the full board. His hope is the line of credit would be drawn upon only to meet operational expenses.
“We need to have a responsible bare bones budget to keep the doors open.”
In the near term, the most critical of those expenses is liability insurance, the required annual audit, directors’ insurance and Florida Ports Council dues.
That would, at the least, maintain the Port Authority’s existence as the dredging logistics, costs and funding come into focus with a projected completion of the project next year.
With no revenue and little in the bank, the Port Authority is trying to meet expenses estimated at just under $70,000 per year.
Shoaf said that given cash on hand, the Port Authority has funding for the next two months before the fiscal uncertainty arrives.
A community fundraising campaign raised $30,000.
“That worked but we should continue down that road,” said board chair Leonard Costin.
The board could get some help from friends.
The Florida Ports Council is at least considering abating annual due requirements – roughly $12,000 – of the Port of Port St. Joe by up to two years to allow the projected port development to take hold and bring revenue to the Port Authority.
In addition, Shoaf and the authority’s insurance consultant are in discussions with the insurance company on meeting the obligations on liability and directors’ insurance, estimated at roughly $15,000, under a payment plan.
The Port Authority is seeking assistance from the private lending markets after being informed that any loan the board might be provided would likely not be tax-exempt.
While trying to meet basic expenses is the goal, Port Authority members were also cognizant that to secure a line of credit would require leveraging the one asset the board has, the former Arizona Chemical property which is in the port’s hands free and clear.
And given that the property was secured through a grant/donation package some $1.5 million, collateralizing it for less than $500,000 was unpalatable for board members.
The key, board member Eugene Raffield said, was simply to be a viable board when the dredge work to which so much is devoted was completed.
“We’ve got to survive until that ship channel is dredged,” Raffield said. “Without that ship channel being dredged nothing is going to happen.”
Contracts which would formalize the collaborative agreement between the Port Authority, St. Joe Company and two energy companies committed to shipping through the Port of Port St. Joe are near final.
The contracts were largely a request of the state which wanted a formal partnership with a public body in the mix on the port development as part of multi-million grants to improve rail lines entering Gulf County and dredging of the ship channel.
Up until now the agreements with Enova and Green Circle consisted of Letters of Intent with the St. Joe Company. The contracts will make the Port Authority a party to the agreements to ship over 1 million tons through the port.
The contract with Green Circle is awaiting approval by the Florida Department of Transportation and should be complete within two weeks; the Enova contract is with that company for final comments.
Local resident Chuck Livengood has joined the Port Authority as an unpaid administrative assistant.
He replaces Nadine Lee who left for personal reasons last month.