The Port of Los Angeles is tightening its belt for another year. Harbor commissioners last week approved a $909.6 million budget for fiscal year 2010-11, a reduction of nearly 20 percent compared with its projected budget for the current year. And even when compared to the smaller amount that the port actually expects to spend of its current budget, next year's budget is still down 3.4 percent. Operating revenues for the coming year reflect a modest growth of 2 percent in container volumes, but an overall 5.3 percent decline in income largely, due to the drop in clean truck program fees.

The $70 per forty-foot container fee charged on boxes moved by non-complaint trucks - which was established to help fund cleanup of the trucking fleet that services the port - is scheduled to disappear in 2012 when the drayage fleet completes its conversion to clean trucks.

Although down more than 25 percent from this year's capital programs allocation, the port plans to spend $266.3 million on capital projects - almost a third of the total 2010-11 budget. That represents the single largest slice of the port's spending plan, an indication that completing major development projects such as the TraPac and China Shipping terminal expansions remains a top priority.

Another key priority is customer retention and attraction. The new budget increases spending on business development trips, maintains most customer discounts and incentives, and beefs up staff by adding a marketing executive to lead the existing team.

Compared with expected spending for the current year, overall operating expenses will edge up by 2.5 percent.

One of the most interesting aspects of the port's 2010-11 budget is the result of a convoluted effort to help out the City of Los Angeles with its $485 million budget mess. Last year, in order to "share the city's pain," the port - which is not tax-funded - lowered staffing levels through attrition from 970 employees in July 2009 to 949 in January 2010. Port staff was reduced even further after 77 port employees signed up for a retirement incentive package.

In 2010-11, the port again will "share the city's pain" this time by hiring L.A. city workers to reduce layoffs. Assuming no attrition at the port, the result will be a workforce that is expected to reach 989 in 2010-11 - 19 employees more than when the port started sharing the city's pain in 2009.

Between scheduled raises, increased pension contributions, and the added cost of processing the extra 77 retirements, salaries and benefits are expected to jump nearly 13 percent over what the port estimates it is spending on salaries and benefits for 2009-10.

L.A. Port Budget

-- The Cunningham Report