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New estimates show Port Canaveral’s budget is $17 million in the red

Cruise operations have been closed since the middle of March

PORT CANAVERAL, Fla. – The ongoing shutdown of the cruise industry because of the coronavirus pandemic will put Port Canaveral’s operating budget more than $17 million in the red for the current fiscal year, newly released estimates show.

Port Canaveral Chief Financial Officer Michael Poole will present port commissioners his operating budget revisions during their meeting on Wednesday morning.

The revised budget shows that the port will have an estimated loss of $17.44 million for the fiscal year ending Sept. 30, primarily because cruise operations have been shut down since mid-March. That compares with initial projections last summer that the port would have an $8.34 million profit during the current budget year.

Port Canaveral Chief Executive Officer John Murray said the port continues to have an operating profit, if depreciation costs are not included. But he concedes that the financial picture could be better.

Murray said the depreciation cost in the budget "makes it look a lot uglier than it otherwise would be, but, you know, it's still ugly."

With U.S. cruise operations now shut down until at least Sept. 15, the drastic change in the port's budget in this midyear budget revision is not unexpected. That's because cruise-related operations, including cruise terminal parking, accounted for 77.6% of the port's revenue in the original budget. Port Canaveral is the world's second-busiest port, behind PortMiami.

The port's revised budget shows cruise revenue cut in half for the current budget year — decreasing from $89.79 million to $44.11 million.

Additionally, the port is reducing its expected revenue from fees charged to commercial vehicles picking up or dropping off cruise passengers by $641,640.

Another areas in which COVID-19 affected the port's budget was decreased projected revenue of $1.19 million from Jetty Park, including revenue from campgrounds, the camp store, concessions and parking fees.

Exploration Tower's projected revenue from entry fees, annual pass sales, cafe and gift shop sales, and special event rentals was cut by $220,720.

Both Jetty Park and Exploration Tower were shut down for extended periods because of COVID-19, but have reopened at reduced operating levels.

In addition, the Victory 1 gambling ship on May 28 resumed sailing twice a day from Port Canaveral, as it is not affected by the ongoing Centers for Disease Control and Prevention "no-sail order" for cruise lines.

The port's projected revenue from cargo operations experienced a relatively small decrease of $423,000. That mainly was the result of reducing fuel shipments into the port because of less fuel consumption by motorists and airlines.

The port's total projected operating revenue for the current budget year is $67.20 million, down from the pre-coronavirus estimate of $115.76 million.

To keep its losses from being greater, the port is reducing its operating expenses for the current budget year by $7.02 million.

That includes a $1.21 million reduction in salaries and benefits, largely through furloughs of staff in the port's cruise and recreation sectors, as well as leaving open positions unfilled. The port currently has 189 staff members on the payroll, plus 57 people on furlough and 21 unfilled positions.

Other areas in which the port cut its expenses for the current budget year include:

• Service contracts ($2.08 million).

• Promotion and advertising ($888,885).

• Utilities ($831,095).

• Business travel and training ($454,320).

• Maintenance and supplies ($414,590).

• Police protection and fire services ($318,445).

• Computer support and training ($236,605).

• Lease administration ($217,775).

• Engineering ($170,950).

• Office expenses ($142,185).

• "We've been shaving expenses, left, right and center," Murray said.

• The port had one big gain in its revised budget that wasn't in its original budget — $14.29 million in state grants targeted for a major upgrade to North Cargo Berth 8.

• Poole said any shortfalls in the port's budget will be made up through the port's "unrestricted cash" account.

• Murray emphasized that Port Canaveral has received no grant aid or any form of stimulus from either the federal or state government for disruption of business related to coronavirus.

• "In fact, no seaport in Florida has received any direct support from the federal government or the state government, as a result of the CDC no-sail order, which has severely disrupted operations at Port Canaveral, Port Everglades and PortMiami," Murray said.

• Murray said the port will not commit to any new major projects until cruise operations are running again.

• Dave Berman is government editor at FLORIDA TODAY.

• Contact Berman at 321-242-3649 or dberman@floridatoday.com. Twitter: @bydaveberman