Port of Vancouver may secure a $50M line of credit
Decisions on funding for projects, director's pay expected Tuesday
Monday, February 25, 2013
The Port of Vancouver's three elected commissioners are poised Tuesday to secure a $50 million line of credit to help pay for the port's rail and other public works projects. They're also expected to review the annual salary of the port's executive director, Todd Coleman, who would add managing that line of credit to his other responsibilities.
The commissioners will take up those and other issues during their regular public hearing, beginning at 9:30 a.m. at the port's administrative building, 3103 N.W. Lower River Road. One proposal would authorize the port to sell a revenue bond as collateral to secure a five-year, $50 million revolving line of credit to pay for infrastructure improvements, including building, maintaining and repairing rail, marine and terminal facilities.
It fits into the port's larger mission to finance capital improvements to attract private investment, lure new tenants and grow the economy. One project that would benefit from the line of credit is the port's signature venture: the $275 million West Vancouver Freight Access project, planned for completion by 2017.
That project aims to enable the port to handle more cargo and do it at a faster rate, with smoother internal operations and the elimination of chokepoints that have slowed connections to the rail main line and international commerce.
Theresa Wagner, the port's communications chief, said Monday the line of credit would give the port the ability to finance projects on a flexible timeline, shifting certain elements around as needed or as opportunities arise, just as it has done with construction of the West Vancouver freight rail project.
"We want to be able to take advantage of opportunities when they present themselves," Wagner said. "And we need a funding source that is also nimble."
An 'extensive review'
Under the line-of-credit proposal, the port would sell a $50 million revenue bond to KeyBank, which would, in turn, extend credit to the port equal to the revenue bond's value. KeyBank's purchase of the bond would act as a form of insurance, or collateral: If the port fails to pay back its credit line, then the bank would have the right to seize a portion of the port's future net operating revenues.
But the port anticipates it will have no trouble paying back what it borrows, Wagner said. She said the line of credit -- which comes with a very low interest rate (just above 1 percent) and plenty of flexibility -- is "the most financially responsible approach possible after exploring all of our options."
Initially, the port had indicated it would seek a loan from the Federal Railroad Administration to continue building its West Vancouver Freight Access project.
But that option was far less flexible than the line of credit, Wagner said, so the port went in a different direction. The line-of-credit option "is one of the least expensive ways for us to get access to money," she said.
The port's three commissioners also are expected to set Coleman's annual salary for 2013. His current salary is $186,524. Commissioners will review Coleman's $500-per-month car allowance, too.
Commission President Jerry Oliver declined to say whether Coleman will receive a pay raise. He noted that when commissioners set Coleman's current salary last year, they praised the executive director's performance.
Coleman, who previously served as the port's deputy executive director, took the port's helm at the end of April 2012. To prepare to decide Coleman's salary this year, Oliver said, commissioners conducted an "extensive review" of his performance.