2014 PORT OF HOUSTON AUTHORITY 2014 Annual Report
2 Message from Port Commission Chairman :: Janiece Longoria
2014 Annual Report
Port of Houston Authority
PORT
of
HOUSTON AUTHORITY
MISSION
TO MOVE THE WORLD AND DRIVE REGIONAL PROSPERITY
AMERICA’S DISTRIBUTION HUB FOR THE NEXT GENERATION
VISION
table of
CONTENTS MESSAGE FROM PORT CHAIRMAN JANIECE LONGORIA......................................... 6
THE PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY........................ 10 MESSAGE FROM EXECUTIVE DIRECTOR ROGER GUENTHER..................................... 12
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SECTION 01
FINANCIAL PERFORMANCE........................................................................................................ 14 2014 FINANCIAL INFORMATION............................................................................................... 20
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SECTION 02
OPERATIONAL PERFORMANCE..................................................................................................22
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SECTION 03
COMMUNITY, GOVERNMENTAL & ENVIRONMENTAL COMMITMENT.......................... 32
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SECTION 04
CENTENNIAL RECOGNITION...................................................................................................... 42 2014 RECOGNITION OF SERVICE............................................................................................ 48
6 Message from Port Commission Chairman :: Janiece Longoria
MESSAGE FROM PORT CHAIRMAN JANIECE LONGORIA
2014 WAS A GREAT YEAR We started the year on a high note with the appointment of Roger Guenther as our Executive Director, and throughout the year his performance was exemplary. We capped the year with the Centennial celebration that highlighted the vision and collaboration that brought the Houston Ship Channel to fruition on November 10, 1914. One hundred years later, on November 10, 2014, stakeholders came together on the banks of the Turning Basin to honor the Houston Ship Channel's 100-year milestone, and to renew their commitment to continued partnership to create jobs and to fuel economic prosperity for our Port’s future. We are grateful for the many leaders in our region who work for the best interest of the Port of Houston, our state, and our nation.
2014 Annual Report
We also exceeded our expectations for performance as we set new operating and financial records in 2014. We achieved record results in the areas of operating revenue, net operating income, cash flow and cargo tonnage. Our facilities moved 19.4 million tons of container cargo, continuing to show consistent growth for this business line. The Port Authority also recorded unprecedented export tonnage for bulk materials and grain. Additionally, a record year in steel throughput solidified our ranking as the number one port in the nation for breakbulk material. As the nation's leading breakbulk port, we were proud to host the 25th annual Breakbulk Americas Transportation Conference and
Port of Houston Authority
Exhibition that brought more than 5,000 participants to the convention – the largest gathering of breakbulk and project cargo professionals in the Americas, and a record turnout for this yearly event. We were pleased with the announcement that after hosting the event for a third time, Houston would become the permanent primary venue for future conventions, including one in October of this year. In addition to significant impact from the Breakbulk Americas Conference, the local economy also got a boost from our hosting the well-attended 2014 American Association of Port Authorities Annual Convention. The four-day event is AAPA's largest membership meeting of the year, and included technical and policy committee meetings, business sessions, and networking opportunities for port professionals and others in the marine transportation industry. We were heartily complimented for the quality of the events, and our showcasing of Houston and the region to people from all over the country, many of whom were in our region for the first time.
Although we are proud of our record performance in 2014, we are not resting on our laurels. We understand the need to remain competitive, to continue to diversify our business, and to attract cargo opportunities that are aligned with our significant strengths – including our growing population base and consumer reach, our strategic location on the Gulf Coast, a robust petrochemical industry, an exemplary relationship with our labor force, our dedication to innovation and our unparalleled customer service. Some examples follow on the next page.
19.4Mil tons of cargo moved by container
8 Message from Port Commission Chairman :: Janiece Longoria
The Port Authority continues to expand Foreign Trade Zone No. 84 that serves the Greater Houston region and that contributes to job creation and economic development. The zone experienced a record year of activity in 2014, with five authorizations, the highest number in the zone’s 30-year history. The five sites that were added included Mitsubishi Caterpillar Forklift America Inc., Toshiba, Millet Duty Free, Westway Terminals, and Sage V Foods. This was also the first year that the zone brought multiple expansions in a 12-month period, which was accomplished with the addition of Texas Triangle Park and Generation Park – important new expansion projects. This foreign-trade zone is an important tool as it continues to influence businesses to relocate to our region, or to maintain or expand manufacturing and distribution operations for the benefit of our economy. Through innovation and customer service, we have addressed the needs of our customers and are ready for the growing exports of petrochemical products to foreign markets through an expanded Panama Canal expected to come online in the second quarter of 2016. Many of our customers advised that their exports may double or perhaps triple in two to five years. We have responded through infrastructure upgrades, innovative technology, and expanded hours at our facilities to assure that this cargo can move efficiently through our facilities. In addition, because of our excellent and stable relationship with our labor force that has spanned many decades, we have attracted cargo from Asia that historically had been destined for the West Coast. We are receiving significant interest from shippers to divert cargo through our port because of the certainty that we offer shippers for speedy unloading and distribution of their goods. As we continue to grow, we also look for new opportunities for cargo diversification. For example, because of our consumer reach of 144 million consumers within 1,000 miles, and our strategic location on the Gulf Coast, we are committed to partnering in the
2014 2014 Annual Report
HISTORIC YEAR OF PERFORMANCE
Port of Houston Authority
WE DO NOT TAKE FOR GRANTED THE LEGACY THAT HAS BEEN ENTRUSTED TO US development of refrigerated cargo facilities at the Port of Houston. In 2014, we issued a request for proposals seeking interest in the development of refrigerated cold storage facilities on prime real estate with ready access to our Bayport Container Terminal. We have received significant interest, and are very close to bringing this opportunity to fruition for the benefit of our port, the consumers in our region and job growth from corollary operations including labor, warehousing, distribution, and logistics. We are also very proud of our position as a recognized leader in the area of environmental stewardship and are proud to partner with our stakeholders in finding solutions to improve air and water quality. The Port Authority will maintain its leadership in initiatives to reduce diesel emissions and improve air quality through clean diesel technology and the potential for an alternative fueling station on our premises just off Port Road across from our Bayport Container Terminal. We are also dedicated to workforce development and maritime education, partnering with local schools, universities, and industry interests all represented in the Port of Houston Partners in Maritime Education (PHPME) program. We are committed to developing
the next generation of maritime professionals, which is critical to meet the increasing demand as our port continues to grow. Importantly, we are dedicated to transparency and accountability in all that we do at the Port of Houston Authority. Our policies and procedures are routinely reviewed and updated, our meetings are open and clear, and through our recently approved Strategic Plan, our vision and mission is captured and communicated. We honor the distinction between the role of staff to operate and manage the organization, and the Commission’s role of oversight. Together, staff and the Commission work in their respective roles for the benefit of the institution, our workforce, and our citizens. Finally, we do not take for granted the legacy that has been entrusted to us. For 100 years, the Houston Ship Channel and the Port of Houston have served as the foundation of our economy. Vision and partnership brought the Houston Ship Channel to fruition, and vision and partnership will drive success for our future. Working in partnership with our elected officials, industry, our labor force, the Houston Pilots, and our communities and stakeholders, we renew our commitment to the best and highest goals that we can achieve for the benefit of generations to come.
10
THE PORT COMMISSION of
THE PORT OF HOUSTON AUTHORITY JANIECE LONGORIA CHAIRMAN
Ms. Longoria is an honors graduate of The University of Texas, and received her J.D. from The University of Texas School of Law in 1979. She is a name partner with Ogden, Gibson, Broocks, Longoria, & Hall, LLP. She has served as chairman of the Port of Houston Authority Commission since being unanimously appointed by the City of Houston and County of Harris in January 2013. The Port of Houston is the leading economic engine for the greater Houston region, and she is the first woman to hold this position in the 100-year history of the Port of Houston. Ms. Longoria is on the Board of Directors of CenterPoint Energy, Inc., a provider of electricity transmission and distribution service for the Houston metropolitan area and natural gas distribution service in six states. She serves on CenterPoint Energy's audit committee, and serves on its nominating and governance committee. She is the former vice chairman of The University of Texas System Board of Regents, and a former board member of UTIMCO. Ms. Longoria has also been active in many non-profit organizations, and has served on the Board of Directors and the executive committee of the Board of Visitors of the UT MD Anderson Cancer Center. She currently serves on the boards of directors of The University of Texas Law School Foundation, the Greater Houston Partnership, and the Texas Medical Center, among others. She has received numerous honors and recognitions for her community and board service, including the Distinguished Alumnus Award from The University of Texas; the 2008 Sandra Day O’Connor Award For Board Excellence; the Female Executive of the Year Award from the Houston Hispanic Chamber of Commerce; and has been recognized as a “breakthrough woman” and inducted into the Hall of Fame by the Greater Houston Women’s Chamber of Commerce.
Stephen H. DONCARLOS
Dean E. CORGEY
2014 Annual Report
Clyde FITZGERALD
Janiece LONGORIA
John D. KENNEDY
Theldon R. BRANCH, III
Roy D. MEASE
Port of Houston Authority
JOHN D. KENNEDY
THELDON R. BRANCH, III
PORT COMMISSIONER
PORT COMMISSIONER
John D. Kennedy retired as a colonel in the U.S. Army after 27 years of military service that focused on logistics, leadership, and management. Following his military career, he served for a decade as city manager of the City of Nassau Bay, Texas. Mr. Kennedy was appointed to the Port Commission by the Harris County Commissioners Court in December 2012. He is Chairman of the Procurement and Small Business Development Task Force and serves on the Governance Committee and Community Relations Committee.
Theldon R. Branch, III is chairman and chief executive officer of The Branch Companies, a privately-held, Houston-based holding company that oversees investments in real estate, financial assets, the automotive industry, and construction. He is the managing partner and member of the Executive Committee of Dufry Houston and Branch/McGowen Ventures, and holds the Economic Development Finance Professional certification. Mr. Branch was appointed to the Port Commission by the Houston City Council in September 2013. He serves on the Procurement and Small Business Development Task Force, Audit Committee and Community Relations Committee.
DEAN E. CORGEY
STEPHEN H. DONCARLOS
PORT COMMISSIONER
PORT COMMISSIONER
Dean E. Corgey has 40 years of maritime experience, including work as a merchant mariner. An elected union official, he serves as a vice president of the Texas AFL-CIO, on the West Gulf Ports Council of the AFL-CIO Maritime Trades Department, and on the executive board of the Harris County AFL-CIO. He is a member of the National Defense Transportation Association, American Maritime Partnership, and the Navy League of the United States. Mr. Corgey was appointed to the Port Commission by the Houston City Council in January 2013. He serves on the Pension and Benefits Committee and Community Relations Committee.
Stephen H. DonCarlos has held office as mayor of the City of Baytown since May 2006. He is an attorney with the firm of Reid, Strickland & Gillette, L.L.P. Mr. DonCarlos has served as chair of the Harris County Hospital District; was on the Board of Directors of the Baytown Chamber of Commerce; and is a member of the East Harris County Bar Association, the Board of Directors of the Texas Medical Center, and the Houston Bar Association. Mr. DonCarlos was appointed to the Port Commission by the Harris County Mayors’ and Councils Association in September 2013. He is chairman of the Governance Committee and serves on the Community Relations Committee.
CLYDE FITZGERALD
ROY D. MEASE
PORT COMMISSIONER
PORT COMMISSIONER
Clyde Fitzgerald is a 50-year veteran of the Houston waterfront. He is president of the South Atlantic & Gulf Coast District of the International Longshoremen’s Association and ILA Local 28. He also serves as vice president of the hemisphere-wide International Longshoremen’s Association, AFL-CIO, and is a member of its Executive Council. Mr. Fitzgerald was appointed to the Port Commission by Harris County Commissioners' Court in June 2013. He is Chairman of the Pension and Benefits Committee and serves on the Audit Committee and Community Relations Committee.
Roy D. Mease is a lawyer with a private practice in Pasadena, Texas. He served as a member of the Pasadena City Council for eight years. Mr. Mease is chairman of the Pasadena Second Century Corporation, which is the city’s economic development entity. He was appointed to the Port Commission by the Pasadena City Council in September 2013. Mr. Mease serves on the Procurement and Small Business Development Task Force and Community Relations Committee.
12 Message from Port Executive Director :: Roger Guenther
MESSAGE FROM EXECUTIVE DIRECTOR ROGER GUENTHER We completed another record-setting year in 2014 and I would like to begin by expressing gratitude to the Port Commission for its service and leadership; to our customers, users, and community stakeholders for their partnership with us; and to the Port Authority employees and ILA labor for their dedication to success. The unified and collective effort of all of our stakeholders is the key to what continues to make the Port of Houston a great economic engine for not only our region, but for the state of Texas and the nation.
These results are vital to our continued success as we prepare for even greater growth and prosperity in the future. They will contribute to, but not fully fund, a significant capital investment plan that includes new and redevelopment projects totaling more than $1 billion over the next five years.
During fiscal year 2014, our terminals handled more than 37 million tons of cargo, an increase of 5 percent and a new record for the Port Authority. The leading growth commodity was steel, which in itself reflected a new record of 6.6 million tons crossing our docks, exceeding the previous record of 6.3 million tons. The container business remains our core economic engine for jobs and the local economy, and last year’s container tonnage also represented a new record for the Authority. Our other business lines also performed well, with one of our best years to date for grain and bulk exports.
Our maintenance department provided outstanding support to efficient container operations with another year of exceptional crane reliability. With nearly 30,000 hours of crane operating hours for the year, our cranes achieved more than 99 percent reliability — well above the national average. Our container terminals continue to deliver high productivity levels for our customers.
These are but a few representative examples of healthy growth, and as you would expect, these record tonnages have resulted in solid financial results for the Authority, including $261 million in operating revenue, $39 million in net operating income, and $116 million in cash flow.
Many factors allowed us to achieve this success in 2014. I will share a few of the highlights contributing to an exceptional year for the Port Authority.
Through the leadership of our Safety Department, specific emphasis has been placed on a system of robust safety audits, capturing safety data, and rectifying potential safety hazards through which Port Authority has seen its incident rate drop tremendously. By engaging all departments, our staff has made a huge impact by raising the awareness of safety as a core value for all employees.
“
We increased our cruise business out of the Bayport Cruise Terminal in Pasadena with the return of
2014 INITIATIVES Among the most significant initiatives that began last year was the commencement of the deepening and widening of the Barbours Cut and Bayport channels. This $80 million project funded by the Port Authority is crucial to the continued success of accommodating the larger vessels that need to call on Houston.
Port of Houston Authority
Princess Cruises for a second season and the return of Norwegian Cruise Line. We saw 38 sailings in 2014, providing cruise services to 107,865 passengers. The firm Martin Associates estimates an economic impact of $50 million to the greater Houston region with each cruise season and the creation of nearly 200 jobs. We initiated agreements strategically that use our real estate assets effectively in support of cargo operations. Examples of these include agreements with Enterprise for the export of ethane, and with Frontier Logistics for the export of plastic resins. Diligent efforts were made by our Operations staff to accommodate new alliances of container carriers, including the 2M, an alliance between the world’s two largest container lines (Maersk and MSC) to allow for their growth through our facilities. And among the most significant initiatives that began last year was the commencement of the deepening and widening of the Barbours Cut and Bayport channels. This $80 million project funded by the Port Authority is crucial to the continued success of accommodating the larger vessels that need to call on Houston. But there is always more to do. And our initiatives for 2015 are already in motion. We have a renewed emphasis on strategic planning for the Port Authority that captures our goals, mission and vision for the future. With guidance from our Commission and input from our staff and stakeholders, we are collectively defining what success looks like for the Port.
Our staff has a priority for 2015 to explore and develop an even more diverse range of cargo, as well as additional trade lane services, to fortify the position of leadership of the Port of Houston in the U.S. Gulf. Specifically, we are seeking opportunities for the shipment of refrigerated goods through our port. We are also positioned to be ready for potential trade opportunities with Cuba. And although the East Asia trade lane has grown rapidly in recent years, we will continue to market Houston to attract further services to take advantage of the Panama Canal expansion. In addition, the Port Authority will continue to modernize and improve its facilities to handle increased cargo fueled by population growth, an expanded Panama Canal, and growing customer demand along the Houston Ship Channel for generations to come. We are also continuing preparations to accommodate the influx of plastic exports that will rapidly expand in the next two to three years. Finally, we will no doubt continue to strongly advocate for funding of current maintenance dredging needs as well as future expansion requirements for growing commerce through the busiest waterway in the nation. We are extremely pleased with the significant achievements in 2014 and we are excited about the future. We Are Ready!
I AM PROUD TO SAY THAT
WE ARE READY!
01
FINANCIAL PERFORMANCE
2014 Annual Report
Port of Houston Authority
Operating Revenue was at a historic high of $261 million, producing $39 million in net operating income and $116 million in cash flow that will be reinvested in facility improvements. 280 260 240 220 200 0 2012
2013
2014
16 Section 01 :: Financial Performance
FINANCIAL HIGHLIGHTS Record-setting performance in 2014 resulted in outstanding financial results for the Port of Houston Authority. With continued growth in vessel and cargo activity across all business lines, the Port of Houston Authority realized a 13 percent increase in operating revenues compared to the prior year, reaching a record $264 million in 2014. This marked the fifth consecutive year that year-over-year increases have been recorded. More than 90 percent of this revenue was generated directly from vessel and cargo operations, with $171 million coming from operations of the Barbours Cut and Bayport container terminals. The increased activity at the terminals resulted in a 9 percent increase in operating expenses compared to the prior year. The Port Authority realized operating income of $44 million in 2014, leading to growth of 36 percent above the prior year. The outstanding operating results contributed to a $69 million increase in the Port Authority’s overall net position.
2014 Annual Report
A condensed look at the Port Authority’s 2014 financial performance is available on pages 20 and 21 of this annual report. The Port Authority was also honored with two awards for financial reporting. The organization received the 2014 Texas Comptroller Leadership Circle Platinum Award for financial reporting, scoring a perfect 22 out of 22 items. The Comptroller of Public Accounts launched the Leadership Circle program in 2009 to recognize local governments across Texas that strive to meet a high standard for financial transparency online. In addition, for the 40th consecutive year, the Port Authority received the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association. The award was given for its 2013 Comprehensive Annual Financial Report.
Port of Houston Authority
INVESTING FOR THE FUTURE: The Port Authority is diligently preparing for the rapid growth that lies ahead. To meet its customers’ growing cargo needs, the Port Authority is planning to invest more than $1 billion during the next five years in expansion and improvement projects to handle increased volumes through its facilities. The deepening and widening of the Barbours Cut and Bayport channels leading to the Port Authority’s container terminals began in 2014. This $80 million project, funded entirely by the Port Authority, is vital. The operating depth of those channels is being increased by five feet and widened to accommodate larger vessels. Dredging at Barbours Cut is largely completed. Work on the Bayport channel began in November 2014 and is expected to be completed in November 2015. Dredging of both channels will be completed well in advance of the opening of the Panama Canal expansion, expected in 2016. Those projects began following the issuance of United States Army Corps of Engineers permits authorizing the dredging.
In addition to investments on the waterside, the Port Authority is also investing heavily in its terminal infrastructure on the land side. The redevelopment of the Barbours Cut Terminal Dock No. 1 was completed in 2014 in preparation for the arrival of four new Super Post-Panamax wharf cranes. The cranes capable of handling ships 22 containers wide are expected to be placed into operation in Fall 2015. This is part of an estimated $700 million reconstruction project designed to increase efficiency, handle larger vessels, and double the container-handling capacity of the terminal within its existing footprint. Two 10-acre high density container yards have also been redeveloped. The Bayport Container Terminal also continues to expand to meet demand. In 2014, the Port Authority was awarded a Transportation Investment Generating Economic Recovery (TIGER) discretionary grant of $10 million to partially fund a wharf extension at Bayport. This grant will fund 700 feet of additional wharf for a total of 4,000 feet at its completion. At full build-out, the Port Authority will have 7,000 feet of wharf at Bayport.
2014 SIGNIFICANT INITIATIVES The deepening and widening of the Barbours Cut and Bayport channels leading to the Port Authority’s container terminals began in 2014. This $80 million project, funded entirely by the Port Authority, is critical. The operating depth of those channels is being increased by five feet and widened to accommodate larger vessels.
1912
The Washington was one of a handful of dredges working on the Houston Ship Channel in 1912. Dredging was completed a year ahead of schedule in September 1914.
18 Message from Port Commission Chairman :: Janiece Longoria
LEADING BREAKBULK PORT IN THE NATION The Port Authority’s Turning Basin Terminal handles more breakbulk cargo than any other portReport in the United States. 2014 Annual
Port of Houston Authority
The Port Authority’s Turning Basin Terminal handles more breakbulk cargo than any other port in the United States. To enhance its handling capabilities, structural improvements are being made at the terminal, with a $4.8 million project underway at City Dock 20, as well as $6.7 million in improvements at City Dock 23 set to begin after the first project is completed. The reconstruction of the upper level road was completed and has increased mobility and efficiencies for handling breakbulk cargos at the Turning Basin Terminal. Transit sheds no longer in use were removed, providing more maneuvering room on the wharves. This area has been undergoing a three-year renovation to expand the capacity of the wharves through concrete repair, wharf rehabilitation, and other projects. ECONOMIC DEVELOPMENT AND NEW BUSINESS: The Port Authority had a very successful year leveraging the value of its real estate assets. Enterprise Products Partners L.P., one of the largest publicly traded partnerships and a major North American provider of midstream energy services, announced plans to build an ethane export facility on the ship channel. The company signed a 30-year agreement with the Port Authority for use of its property adjacent to Enterprise’s existing terminal at Morgan’s Point. This endeavor will offer additional positive benefits to the local economy. The facility is expected to begin operations in the third quarter of 2016. Enterprise also plans to construct a pipeline from its Mont Belvieu, Texas, natural-gas liquids fractionation and storage complex to provide direct access to ethane supply. The export terminal will have the capacity to load fully refrigerated ethane at approximately 10,000 barrels per hour. Other announcements included lease agreements with Houston Fuel Oil Terminal Company, Oiltanking, also recently purchased by Enterprise products, Texas Petroleum Group, and LyondellBassell. These agreements not only contribute to the Port Authority’s bottom line, but are also substantial job creators and major investments in our region. COSCO, which began weekly service to Houston just two years ago and has seen steady growth, chose Houston for the consolidation of its new operations
center, anchoring this company in Houston and creating additional jobs in the region. Our Operations staff has accommodated new alliances of container carriers, including the 2M, an alliance between the world's two largest container lines, Maersk and MSC, to allow for their growth through our facilities. The Port Authority is committed to partnering in the development of refrigerated (reefer) facilities at the Port of Houston. In 2014, a request for proposals was issued, seeking interest in the development of refrigerated cold storage on prime real estate with ready access to Bayport Container Terminal. The Port Authority continued to pursue reefer cargo, specifically imports of stone fruit, citrus, vegetables, and flower trade via Houston. As part of ongoing efforts to promote the Port of Houston, the Port Authority continues to grow Foreign Trade Zone (FTZ) #84. It is one of the largest and most active zones in the United States, and is rapidly growing. The FTZ #84 services the greater Houston area in Texas, including the counties of Harris, Fort Bend, and Brazos. In an 18-month period, FTZ #84 expanded the zone project twice, and added eight single-user sites and three subzones. This rapid growth has enlarged the Houston FTZ to more than 30 different sites, which handle virtually any commodity from steel to liquid bulk to automobiles. In 2014, FTZ #84 had direct employment numbers within the zone of more than 14,500 full time jobs—the most of any Foreign Trade Zone in the United States. The Port of Houston Authority is proud to be contributing to the economic development of the surrounding communities through the two cruise lines sailing out of the Bayport Cruise Terminal in Pasadena, Texas. Bringing cruise business to Houston is just one of the many ways that the Port Authority fulfills its mission of economic development and job creation for our community. The Port Authority’s cruise season runs from mid-October through mid-April.
FOREIGN TRADE ZONE #84 is one of the largest and most active zones in the United States, and is rapidly growing.
20 Port of Houston Authority :: 2014 Financial Information
PORT OF HOUSTON AUTHORITY CONDENSED STATEMENTS OF NET POSITION As of December 31, 2014, 2013 and 2012 (in thousands)
2014
2013
2012
Current and other assets
$484,007
$469,701
$480,030
Capital assets
1,480,184
1,433,134
1,367,251
TOTAL ASSETS
$1,964,191
$1,902,835
$1,847,281
41,263
41,519
33,418
736,745
754,298
771,129
55,011
45,042
48,453
833,019
840,859
853,000
749,755
685,717
596,224
43,290
51,793
77,384
Unrestricted assets
338,127
324,466
320,673
TOTAL NET POSITION
1,131,172
1,061,976
994,281
$1,964,191
$1,902,835
$1,847,281
ASSETS:
LIABILITIES: Current liabilities Long-term debt (including current portion) Other non-current liabilities
TOTAL LIABILITIES NET POSITION: Net investment in capital assets Restricted assets
TOTAL LIABILITIES AND NET POSITION
2014 Annual Report
Port of Houston Authority
PORT OF HOUSTON AUTHORITY CONDENSED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the years ended December 31, 2014, 2013 and 2012 (in thousands)
2014
2013
2012
Operating revenues
$263,897
$233,673
$225,375
Operating expenses
219,666
201,255
201,521
44,231
32,418
23,854
5,520
3,208
(282)
Nonoperating revenues (expenses) related to property taxes
17,075
18,223
21,395
Income before capital contributions
66,826
53,849
44,967
2,370
13,846
9,433
$69,196
$67,695
$54,400
$107,281
$90,138
$76,019
53,988
49,514
44,425
(149,109)
(151,140)
(99,303)
(3,018)
(40,180)
194,933
9,142
(51,668)
(173,792)
46,621
98,289
272,081
$55,763
$46,621
$98,289
Operating income Nonoperating revenues (expenses)
Capital contributions from federal agencies
Change in net position CONDENSED STATEMENTS OF CASH FLOWS Cash provided by operating activities Cash provided by noncapital financing activities Cash used in capital and related financing activities Cash used in investing activities
Net (decrease) increase in cash and cash equivalents Balances at beginning of year Balances at end of year
22 Message from Port Commission Chairman :: Janiece Longoria
02
OPERATIONAL PERFORMANCE
2014 2014 Annual Annual Report Report
Port of Houston Authority
PHA 2014 Total Tonnage Breakdown (short tons) The Port Authority moved more than 37 million tons of cargo in 2014 — an increase of 5 percent over 2013. A record 19.4 million tons of container cargo was handled.
▶ Containers: 51.57%
2014
▶
Bulk Cargo: 28.62%
▶ Steel: 17.61% ▶ Other Cargo: 2.20%
24
24 Section 02 :: Operational Performance
OPERATIONAL PERFORMANCE Record totals of container and steel tonnage also highlighted the Port of Houston Authority’s performance in 2014. The Port Authority moved more than 37 million tons of cargo in 2014—an increase of five percent from 2013. A record 6.6 million tons of steel, which was five percent higher than what was handled in 2013, was the most steel crossing Port Authority docks since 2008.
2014 Annual Report
Port of Houston Authority
37Mil
TONS OF CARGO IN 2014 —an increase of 5 percent over 2013
Although that record performance in steel helps preserve the Port Authority’s status as the leading breakbulk port in the United States, the Port Authority also is the recognized leader in container activity in the U.S. Gulf of Mexico. More than two-thirds of the containers that move through the gulf come across Port Authority docks.
1956
In 2014, activity at the Barbours Cut and Bayport container terminals, which accounts for about two-thirds of the Port Authority’s operating revenue, resulted in 1.95 million TEUs handled and 19.4 million tons. Construction continued in 2014 on four new shipto-shore cranes ordered from Konecranes for the Barbours Cut container terminal. The new state-ofthe-art cranes are part of the redevelopment of that terminal and are scheduled for delivery and installation in 2015.
Containerization was born when the world’s first container ship, M/V Ideal X, sailed with 58 truck trailers from New York/New Jersey and unloaded at the Port of Houston in April 1956.
26 Section 02 :: Operational Performance
The Port Authority also realized exceptional crane reliability in 2014. With nearly 30,000 crane-operating hours for the year, the organization achieved more than 99 percent reliability — well above the national average.
Vessel calls to PHA facilities increased in 2014. Of the 8,339 total vessel calls at the Port of Houston, 3,654 were at PHA terminals, which was 2 percent more than in 2013. To further improve efficiency, the Port Authority uses advanced technology. Optical Character Recognition (OCR) at container-terminal truck gates automatically reads the license plate, container number, and chassis number for each truck entering the terminal and identifies this information in the gate system.
2014 Annual Report
The automated identification, classification, and inspection of containerized cargo and equipment occur without stopping traffic flow and without the driver ever exiting the truck. In 2014, the Port Authority introduced a Spanish-language version of its mobile app that allows truck drivers to use their smart phone or tablet to check on the status of the container they need to retrieve.
Port of Houston Authority
To further enhance services to customers and the trucking industry, gate operating hours were also expanded in 2014. The expanded hours, which give truckers extended access to the yards at Barbours Cut and Bayport, was done in partnership with U.S. Customs and Border Protection. Maintaining and improving efficiency at the public terminals through more modern facilities and equipment is essential to meeting the Port Authority’s mandate to promote and facilitate commerce.
Significant infrastructure improvements will continue over the next few years, with the aim of accommodating the increasing arrival of larger vessels at the port (and increased cargo resulting from the pending Panama Canal expansion), as well as regional population growth, which is expected to continue over the next few years. The Port Authority will continue its preparations to handle increased demand for goods as the regional population grows and the Panama Canal widening project is completed.
ENHANCING SERVICE BY EXPANDED GATE HOURS
28
HEALTH, SAFETY, SECURITY AND EMERGENCY MANAGEMENT (HSSE) Protecting the nation’s busiest port is a collaborative effort involving multiple disciplines and shared community resources. The Port of Houston stretches 25 miles along the 52-mile long Houston Ship Channel. The Assistant Administrator of the Federal Emergency Management Agency (FEMA) for Grant Programs, visited the port and saw first-hand how millions of dollars in port security grants are invested here. The vast port was viewed by helicopter,with representatives from Harris County and the city of Houston also participating in the tour. A more keen understanding of the importance of the Port of Houston and the complexities involved in providing security was gained through this tour. A better understanding of the Houston Ship Channel Security District and how the port works in partnership with many private industries to best utilize security resources and funding was also developed.
MILLIONS OF DOLLARS IN PORT SECURITY GRANTS ARE INVESTED 2014 Annual Report
Port of Houston Authority
In 2014, the Port Authority was ISO 2800 re-certified for a third time, and a fourth terminal — the Turning Basin Terminal — was added with an ISO 28000 certification through 2017. Houston is the first port authority to develop a Security Management System (SMS), and to become certified by the international security designation of ISO 28000:2007 ― systematically expanding the SMS to more port facilities and ensuring enhanced supply-chain security. The initial 2008 certification was earned after a threeyear process of developing the SMS, and its application to the Port Police and the perimeter security operations, at both the Barbours Cut and Bayport container terminals. In 2009, the Port Authority’s Manchester Liquid Bulk Terminal was added to the list of certified facilities.
SAFETY IS OUR PRIORITY
The ISO 28000 international standard sets stringent requirements for a security management system that incorporates all aspects of business management. Measures developed by the Port Authority to meet these standards include improvements in security processes, procedures, and practices; more detailed and efficient monitoring and documentation; broader training of the Port Authority police force and security partners; and more thorough processing of vehicles through its gates. This achievement is one of many firsts at the Port of Houston Authority, and demonstrates the Port Authority’s leadership in security management.
30 Section 02 :: Operational Performance
Cooperation is essential to keeping the port safe and secure. For example, a collision between two vessels in the Houston Ship Channel caused a partial closure. The Port Authority, as a member of the Port Coordination Team, did its part to assist with response by deploying a fireboat to monitor the situation, report back to the command center, and ensure that the safety zones remained secure.
peace officers with the same duties and arrest powers as any Texas peace officer. Sharing intelligence is vitally important, and the Port Police keeps those lines of communications open.
The Port Police also lends assistance and works collaboratively with a number of federal and local agencies. All of the port's police officers are certified and licensed
Six annual USCG inspections and 12 unannounced USCG spot-checks were conducted successfully.
Also in 2014, a full-scale emergency exercise and tabletop/functional drills were held to increase skills and collaboration between agencies and local entities.
THE PORT COORDINATION TEAM The Port Coordination Team plays a vital role in the safety and security of the Houston Ship Channel. It consists of local maritime interests including:
▶ Port of Houston Authority ▶ Port of Texas City ▶ Port of Galveston ▶ Port of Freeport ▶ Offshore Port/Gulfport (Lightering) ▶ Gulf Intracoastal Canal Association (Towing) ▶ West Gulf Maritime Association ▶ Houston Pilots ▶ Galveston-Texas City Pilots ▶ Brazos (Freeport) Pilots ▶ Oil refiners
2014 Annual Report
▶ Oil terminals ▶ Chemical carriers ▶ Chemical facilities ▶ Non-VTS users (recreation/fishing) ▶ Harbor tugs ▶ NOAA (Navigation Response Team) ▶ NOAA (National Weather Service) ▶ U.S. Army Corps of Engineers ▶ USCG Waterways Management (Sector and MSU) ▶ USCG Vessel Traffic Service ▶ USCG sector commander (or representative)
Port of Houston Authority
A TYPICAL WEEK An average week involves numerous health, safety, security, and emergency-management activities. Additional dispatcher staffing was added to each shift to increase efficiency and productivity.
FIRE DEPARTMENT ▶ 4 HAZMAT calls ▶ 6 EMS calls ▶ 2 fires ▶ 110 fire hydrant inspections ▶ 287 fire extinguisher inspections ▶ 5 building inspections
POLICE DEPARTMENT ▶ 787 call or event responses ▶ 452 checks/access control ▶ 61 safety citations issued ▶ 1 arrest ▶ 137 vessel movement assists ▶ 6 damage to property investigations ▶ 53 traffic control assists
EMERGENCY MANAGEMENT DISPATCH CENTER ▶ 798 calls for assistance ▶ 161 vessels’ movements recorded
SECURITY DEPARTMENT ▶ 1 82 on-call gate openings
(other than regular main access gates)
▶ 4,016 vehicles randomly inspected ▶ 730 TWIC cards randomly verified ▶ 9 audits ▶ 2 training courses conducted ▶ 3 incident investigations
CREDENTIALING DEPARTMENT ▶ 285 assisted with access requirements
32 Message from Port Commission Chairman :: Janiece Longoria
03
COMMUNITY, GOVERNMENTAL & ENVIRONMENTAL COMMITMENT
2014 2014 Annual Annual Report Report
Port of Houston Authority
Small Business Development Program
In 2002, the original goal set by the Port Commissioners was 35 percent participation by small businesses in eligible Port Authority contracts. To date, a total of $404 million has been awarded to small businesses.
35%
34
GOVERNMENT RELATIONS
Paul (Chip) Jaenichen, Acting MARAD Administrator, Roger Guenther, PHA Executive Director, and Dan Harman, Maritime Division Director, TxDOT
KEY VISITS Visits by elected officials, and other important stakeholders, underscore the significant impact of the ship channel on the region and nation and as a part of the global transportation system.
2014 Annual Report
Active engagement with the federal government on national policy issues affecting the port is a key element in meeting the Port Authority’s mission to facilitate commerce and generate jobs. Among the top concerns are funding for ship channel dredging, national trade policy, port security, environmental regulation, and freight mobility. To that end, Port Commission Chairman Janiece Longoria led representatives from the Port of Houston Authority and key port industries in a series of meetings with local and regional U.S. Congressional delegates in Washington D.C. They discussed the Port of Houston’s federal policy priorities, including appropriations for dredging, the Water Resources Reform and Development Act (WRRDA), port security grants, and pending Corps of Engineer permits. This was in addition to a meeting earlier in the year with top leaders to discuss funding the channel in the President’s budget. They also met with members of the Office of Management and Budget. Maintaining the Houston Ship Channel at its authorized depth and width is vitally important for exporting domestic goods worldwide and importing products essential to quality of life within the US. In 2014, advocacy efforts helped the Port Authority secure an increased allocation for the ship channel in the presidential budget as well as appropriation for dredging. WRRDA, signed into law by President Obama in 2014, sets target appropriations for the full use of the Harbor Maintenance Trust Fund over time, and contains provisions that would direct resources to ports like the Port of Houston that are considered “nationally significant” and “energy transfer” ports. The Congressional delegation came together again, in a bipartisan manner, to support the modernization projects for Bayport and
Port of Houston Authority
Barbours Cut channels by including a provision in the WRRDA legislation. The channels are being dredged to match the depth of the main channel. The Houston Ship Channel’s centennial year was highlighted in July by a visit from the 53rd U.S. Army Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers, Lt. Gen. Thomas P. Bostick. He and Corps staff from the Southwest Division and Galveston District were provided an aerial tour to observe the economic growth occurring along the federal waterway. They met with Port Authority officials to review and discuss federal projects currently underway in, and planned for, Houston. Congressional visitors to the port for briefings and tours included Congressman Bill Shuster, Chairman of the House Transportation and Infrastructure Committee, who was briefed on the Houston Ship Channel and WRRDA legislation. Other visitors included Congressman Gene Green, Congressman Randy Weber, Congressman Pete Olson, and Congressman John Culberson (and staff). Key staff members of Congressman Michael McCaul, who serves as chairman of the House Homeland Security Committee, were briefed on port security issues as well. Acting U.S. Maritime Administrator (MARAD) Paul “Chip” Jaenichen met with Port Authority officials and learned more about the wharf 2 extension project at Bayport that received a $10-million TIGER Grant. When awarded the grant, the U.S. Department of Transportation called the expansion a prime “example
of a project that will help jump-start local and national economic growth.” Port Authority leadership also met with Texas Railroad Commissioner Christi Craddick. Craddick was briefed on matters regarding the licensing and permitting of pipelines at the Port Authority. The Railroad Commission of Texas is the primary regulator of the oil and gas industry in Texas. The Port Authority also served as host for state legislative hearings. The Texas Senate Veterans Affairs and Military Installations Committee held a hearing at Bayport on veteran’s issues. A hearing by the Texas House Committee on International Trade & Intergovernmental Affairs, chaired by Rep. Rafael Anchia, included testimony about international trade at maritime ports and coastal waterways in Texas. Leaders from the Texas Transportation Commission, the governing body of the Texas Department of Transportation (TxDOT), held their regular commission meeting at the Bayport Cruise Terminal in June. They also toured the port and held a workshop in Kemah that focused on the state’s maritime system and included an update from the Texas ports community. As the Houston Ship Channel enters a second century of international service, the Port Authority will continue to work together with local and regional officials to ensure this vital national asset remains globally competitive for the efficient movement of commerce in the future.
1986
Visitors have come from all over the world to tour the Port of Houston. Chairman Archie Bennett greets Prince Charles from the royal family of Great Britain during his visit in 1986.
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ENVIRONMENTAL STEWARDSHIP Environmental stewardship is an integral part of the Port Authority’s activities. The organization focuses upon, and regularly evaluates, opportunities for improving environmental practices. The North American Emission Control Area (ECA), established in August 2012, requires ocean-going vessels to begin using lower-sulfur fuel when calling at U.S. ports. This has made the greatest difference in air quality among all related efforts. In 2014, the Port Authority began updating one of its most important environmental tools, the Goods Movement Emission Inventory (GMEI). The GMEI will continue to provide estimates of emissions from ocean-going vessels, harbor vessels, cargo-handling equipment, rail, and trucks. It is anticipated that the GMEI report will show improvements in air quality resulting from the ECA, along with the successful use of various grants to reduce vehicle and equipment emissions. Although the port continues to grow and handle more cargo, air quality is forecasted to continue improving due to the aforementioned initiatives.
2014 Annual Report
Another valuable tool is the Port Authority’s Clean Air Strategy Plan (CASP), a multi-source, multi-pollutant program to reduce emissions from maritime and associated maritime transportation sources. In 2014, the process to measure progress toward the CASP goals began, and the CASP will be updated again in 2015. Partnership is essential to better coordination of air-quality improvement. Our existing partnership with the Environmental Defense Fund strengthens and enhances our environmental efforts and emission-reduction strategies, as well as our port tenant/user outreach. As an example, we have enjoyed another successful partnership with the Houston-Galveston Area Council (H-GAC) on the development of H-GAC’s Voluntary Advance Path Forward Plan (PM2.5). This voluntary-action plan was submitted to the EPA as a result of collaboration between area businesses and industries, citizens, environmental groups, and local governments. This plan will help the area remain on the proper track for the goals of PM2.5. The Port Authority has been a longtime advocate of alternative fuels as a way to reduce emissions. An alternative-fuel station Request for Proposals (RFP) was developed in 2014 for a parcel of land near the Bayport Container Terminal, which serves approximately 2,000 trucks every weekday. The goal is to help facilitate the transition to cleaner-burning natural gas as a fuel for trucks in the Port of Houston area, improving air quality. Education is key to encouraging others in the adaptation of new strategies. The Port Authority participated in, and helped with, outreach to the local trucking community and port tenants for the 2014 Greater Houston
Port of Houston Authority
Natural Gas Vehicle Alliance conference. This conference provided information on current vehicle and engine options for natural gas, and the availability of fueling stations in the Greater Houston region and the state. The economic benefits of using lower-cost natural gas were presented at the conference, along with current Texas Emissions Reduction Plan (TERP) grant opportunities. The drayage loan program is a low-interest loan program that enables eligible truck owners to finance new trucks with more modern engines and emission control systems. It is administered by H-GAC with outreach support from the Port Authority to port users and tenants. Furthermore, the Port Authority submitted a federal Diesel Emission Reduction Act (DERA) application for nearly $900,000 that will be passed through to H-GAC to support its drayage truck replacement program. The application has been selected for funding, and the Port Authority is finalizing paperwork with the EPA so that a formal award can be offered in 2015. A second grant for a similar amount also was selected for funding and its award was subsequently announced by EPA Administrator Gina McCarthy. That grant will have a match by two companies of more than $1.6 million and a total commitment of more than $2.5 million. The Port Authority will administer the grant and pass through the funds to the companies. The Port Authority partnered with the Environmental Defense Fund for that grant. Other environmental initiatives in 2014 included the mitigation of 4.5 acres of oyster reef required from the dredging of the Bayport channel. Wetland impacts were mitigated through the use of the Wetland Mitigation Bank.
Special acoustic attenuation is required of the dredging equipment due to its proximity to the LaPorte and Shoreacres communities. This includes sound-deadening materials on diesel engines and pumps, as well as sound blankets. To reduce sound and air emissions, an electric dredge is being used for part of the project. Leadership in environmental affairs has long been a hallmark of the Port of Houston Authority. In 2002, the organization became the first U.S. port authority to attain, and also be recertified to, the international standard for environmental management systems, known as ISO 14001. An annual internal and compliance audit of Port Authority facilities was conducted in 2014 in preparation for a successful ISO 14001 certification in 2015. Two departments — Project Construction Management and Real Estate — were integrated into the PHA ISO 14001 EMS Program in 2014. As the nation‘s first ISO 14001-compliant port, it is fundamental for the Port of Houston Authority to expand and improve environmental management efforts into more areas of port operations.
127% MORE RECYCLED IN 2014 ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶
89,872 tons of concrete 13,324 gallons of used oil 5,206 tons of wood dunnage 140 tons of scrap tires 60.38 tons of scrap steel 38 tons of paper products 15 tons of cardboard 0.16 ton of plastic 0.81 ton of aluminum
38 Section 03 :: Community, Governmental & Environmental Commitment
COMMUNITY OUTREACH The Port of Houston Authority plays an important role in the quality of life of surrounding communities and the state. Foremost in the Port Authority's outreach goals is creating opportunities for individuals and businesses.
Since 2002, the Small Business Development Program has been recruiting small businesses — more than 1,100 to date — and offering them training on how to do business with the port. Through a variety of events, numerous opportunities are now available for small businesses to interact with port staff. This includes leveraging relationships with other organizations (including certifying organizations and civic groups) to reach more businesses. The original goal set by the Port Commissioners in 2002 was 35 percent participation by small businesses in eligible Port Authority contracts. To date, some $404 million has been awarded to small businesses. The first “Military to Maritime” career fair was held at the Port of Houston Authority in 2014. More than 500 men and women who serve and have served their country through the armed services met with 50 exhibiting companies that were anxious to recruit veterans. Participants attended seminars on marine licensing and career transitioning, took vessel tours, and visited with other veterans who have successfully moved into maritime industry careers. The Maritime & Logistics Youth Expo remains an important event in the recruitment of new talent for the maritime workforce. This year, more than 300 students came out to see the port firsthand, and interact with more than 40 maritime industry employers and academic sponsors. More than 1,000 of the brightest local high school students have been recruited for the maritime academies developed in four area school districts.
2014 Annual Report
Port of Houston Authority
CREATING OPPORTUNITIES FOR INDIVIDUALS AND BUSINESSES Through exposure to the wide range of career opportunities in the maritime and logistics fields, the students learn how to pursue these careers, either through employment after graduation or higher education at local colleges and universities offering advanced maritime studies. Many of the 136 students who graduated in the spring went on to port careers. Other students have continued their education and are currently enrolled in the maritime programs at Houston Community College, San Jacinto College, Texas Southern University, the University of Houston, and Texas A&M University-Galveston.
40 Section 03 :: Community, Governmental & Environmental Commitment
UNIQUE OPPORTUNITY FOR STUDENTS The winter cruise season at the Port of Houston offered a unique opportunity for the students. A job fair was held to fill part-time jobs at the Bayport Cruise Terminal for local maritime students. In all, 36 students from area high schools and community colleges were hired. As a part of the Houston Ship Channel's Centennial, an educator’s guide was created for maritime academy instructors. A curriculum guide for uniform class instruction is currently in development in collaboration with the Houston Independent School District and other partners.
2014 Annual Report
During the summer, secondary and college-level STEM and CTE educators and guidance counselors from as far away as Virginia gathered at the Port of Houston and other maritime industry facilities to participate in a week-long program hosted by the SMART (Southeast Maritime and Transportation) Center’s Summer Maritime Transportation Institute. This offered them a first-hand look at the high school and college maritime education programs. It was so successful that the group is returning in 2015 with more teachers and counselors who want to learn how to replicate this important workforce training effort.
Port of Houston Authority
Port employees are active in volunteer endeavors, such as giving blood at Port Authority-sponsored blood drives or donating household goods and clothing to the Salvation Army. Over the past 17 years, the Port Authority has hosted 58 blood drives, collecting a total of 1,837 units to help save 5,511 lives. During the 2014 holiday season, the Port Police officers used their own money to buy bicycles as a reward to good students at a local elementary school. This devotion to community can be found throughout the Port Authority. Understanding how the community feels about the Port Authority’s efforts is critical to developing successful outreach programs. The Chairman’s Citizen Advisory Council, comprised of community members representing areas all along the Houston Ship Channel, regularly provided Port Commission Chairman Longoria with beneficial input in 2014. Keeping the public informed about new initiatives is important. Two public meetings were held in 2014 about the channel dredging projects at Barbours Cut and Bayport Container Terminals. The second meeting included elected officials and city staff, as well as a special presentation on the sound mitigation of the
Tours offer an opportunity for residents and visitors to see the port in action. The port commission acquired its first inspection vessel in 1928 to cruise tour groups through the port. In 1958, a new inspection vessel, the M/V Sam Houston, was christened.
project, which aims to minimize the impacts of dredging activities on local community members. Additional meetings were held by Port Authority staff with citizens’ advisory groups, city councils, and community and special interest groups such as the Galveston Bay Foundation and the Houston Yacht Club. Since 1958, the free tours aboard the M/V Sam Houston have offered the general public the opportunity to learn about and see the port firsthand. In 2014, a record number of 33,146 visitors experienced the port on the 90-minute boat tour, an increase of nearly 5,500 from 2013. Additionally, Community Relations, Small Business and Maritime Education — along with Government Relations and Corporate Communications — were deeply engaged in a number of activities and events throughout the year. Through the Speakers Bureau, Port commissioners and Port Authority staff worked with 125 community groups, reaching an audience of nearly 14,000 by making presentations to organizations and groups in 2014.
1928
42 Message from Port Commission Chairman :: Janiece Longoria
04
CENTENNIAL RECOGNITION
2014 2014 Annual Annual Report Report
Port of Houston Authority
Houston Ship Channel The Houston Ship Channel has shaped the economic and industrial landscape of our region for the past century, and is well-positioned to continue providing a strong economic stimulus into the next century.
CELEBRATING
100 years
44
CENTENNIAL CELEBRATION The first century of achievements for the Houston Ship Channel has been remarkable. The Port Authority worked with Promote Houston Ship Channel 2014, Inc.’s Board (led by longtime former PHA Executive Director Tom Kornegay as Chairman) to raise awareness of this historic milestone for the Houston Ship Channel.
2014 Annual Report
Promote Houston Ship Channel 2014 Inc., a nonprofit corporation made up of various stakeholders representing ship channel interests, was established to celebrate the channel’s centennial and educate the public about the impact of the channel upon the region. The group worked for more than a year to shape the many aspects of the centennial celebration, culminating in a historic event marking the channel’s 100th anniversary, November 10, 2014. The board supported a series of commemorative projects to educate and excite the public about the Houston Ship Channel’s past, present and future significance. Those projects included an award-winning PBS historic documentary and television special; an educational curriculum guide for high school students in the greater Houston area; a “Stories of a Workforce: Celebrating the Centennial of the Houston Ship Channel” exhibit at the Houston Public Library’s Julia Ideson Building; and a centennial commemorative book.
Port of Houston Authority
HOUSTON'S SHIP CHANNEL PAST, PRESENT AND FUTURE SIGNIFICANCE The Port of Houston Authority, along with Title Sponsor Exxon Mobil and other Houston Ship Channel partners, proudly welcomed almost 2,000 individuals and families to the Port of Houston during the Get on Board! Centennial Family Festival, which was held at its Bayport Cruise Terminal on Saturday, September 6, 2014. People from around the region attended this free family festival and enjoyed learning more about the importance of the Houston Ship Channel. The event featured interactive elements and attractions, maritime exhibits, demonstrations by the Port Authority's fireboats, and opportunities to board a U.S. Coast Guard cutter and Houston Pilots vessels. A tugboat tug-of-war and vessel tours gave the public a chance to see the port up close. The Turning Basin was the site of a re-dedication ceremony on Nov. 10, 2014, exactly 100 years after the original ceremony. Hundreds of dignitaries watched as Katherine Lee Stacy, the great-great granddaughter of Sue Campbell, repeated her ancestor’s words and rechristened the Houston Ship Channel by throwing a wreath made of white roses overboard from the Port of Houston Authority’s tour boat, the M/V Sam Houston. Cannons provided by the Sons of the Republic of Texas fired, signaling the promise of another century of prosperity for the channel and the Port of Houston that flourished along with it.
U.S. Representative Gene Green, U.S. Representative Sheila Jackson Lee, Harris County Judge Ed Emmett, Houston Mayor Annise D. Parker, Harris County Precinct 2 Commissioner Jack Morman, ExxonMobil Chemical Company Senior Vice President Matt Aguiar, Port Chairman Emeritus Ned Holmes, and Promote Houston Ship Channel 2014 Chairman Tom Kornegay all participated in the event. Port Commission Chairman Janiece Longoria served as the event’s host. Congresswoman Jackson Lee presented a flag, which flew over the U.S. Capitol in honor of the anniversary. Texas State Senator Sylvia Garcia presented a resolution in recognition of the occasion. In honor of this historic occassion, the American Association of Port Authorities (AAPA) graciously rescheduled its annual convention in Houston for November (rather than at its usual time in October) so conference delegates could also celebrate the channel’s centennial. U.S. Vice President Joe Biden gave an inspiring keynote address to hundreds of attendees, promoting funding for port infrastructure. The Vice President is the highest-ranking official to appear at the AAPA convention during its 103-year history.
The port’s Turning Basin and the Houston Ship Channel were dredged to 25 feet and formally opened during festivities on November 10, 1914.
1914
46 Section 04 :: Centennial Recognition
For five months, an exhibition by the Houston Arts Alliance entitled Stories of a Workforce: Celebrating the Centennial of the Houston Ship Channel was a valuable part of the celebration. This collection of interviews and stories, assembled through the Library of Congressfunded Working the Port project, documented the voices of the men and women who made their living in the many occupations that have been a part of the Houston Ship Channel’s growth and development. A 2015 Telly Award-winning documentary, produced by the Texas Foundation for the Arts, debuted on Houston Public Media TV 8, Houston’s Public Broadcasting System (PBS) affiliate. It also subsequently aired in Austin. The documentary focuses upon the historic project that began more than 100 years ago to dredge a deep-water channel to Houston from the Gulf of Mexico. The Houston Ship Channel, the Panama Canal, and the Intracoastal Waterway remain three of the most important 20th-century civil engineering projects. The Promote Houston Ship Channel board served as the official centennial committee. Its members included Tom Kornegay of Kornegay & Company, LLC; Walt Buchholtz of ExxonMobil; Captain Bill Diehl of the Greater Houston Port Bureau; Jonathan Glus of the Houston Arts Alliance; Roger Guenther of the Port of Houston Authority; Darylene Harris of Shell Oil Company; Eddie Miranda of the Greater Houston Partnership; John Rolfe of the Greater Houston Convention & Visitors Bureau; Joe Pyne of Kirby Corporation; Patrick Studdart of Buffalo Marine Service, Inc.; Tom Tellepsen II of the Houston International Seafarers Center; and Lawrence Waldron of Vopak.
2014 Annual Report
NUMEROUS LOCAL COMPANIES AND ORGANIZATIONS GENEROUSLY SPONSORED THE CENTENNIAL EVENTS Sponsors included ExxonMobil; Port of Houston Authority; CenterPoint Energy; Enterprise Products Partners L.P.; Houston Pilots; Kirby Corporation; International Longshoremen’s Association; Oiltanking; Shell Oil Company; Suderman & Young Towing Company; the Tellepsen Family; Buffalo Marine Services, Inc.; Dannenbaum Engineering Corporation; Greater Houston Convention and Visitors Bureau; Greater Houston Port Bureau, Inc.; Intercontinental Terminals Company; Moran-Gulf Shipping Agencies, Inc.; Odfjell; Gulf Winds International, Inc.; Houston Arts Alliance; Jacob Stern & Sons, Inc.; Kornegay and Company, LLC; LyondellBasell; the Nolan and Bobbie Richardson Family; Vopak; Amegy Bank, N.A.; Greater Houston Coffee Association; and Seafarers International Union.
Port of Houston Authority
HISTORICAL
LANDMARK IN PLACE A Texas historical marker was also installed at the Turning Basin Terminal during the Centennial celebrations. The marker commemorates Houston's civic and business leaders who worked for many years to persuade Congress of the value of dredging a deep-water channel from the Gulf of Mexico to Houston. A ceremony attended by the Texas Historical Commission was held to unveil the marker. The Houston Ship Channel has shaped the economic and industrial landscape of our region for the past century, and is well-positioned to continue providing a strong economic stimulus into the next century.
This collection of interviews and stories, assembled through the Library of Congress-funded Working the Port project, documented the voices of the men and women who made their living in the many occupations that have been a part of the Houston Ship Channel’s growth and development. The first direct shipment of cotton to Europe left the Port of Houston on the M/V Merry Mount. A total of 23,719 bales of cotton was shipped to Liverpool, England.
1919
48 2014 Recognition of Service
THE PORT OF HOUSTON AUTHORITY sincerely appreciates the hard work and dedication of the following employees for their many years of service.
2014 Annual Report
Port of Houston Authority
recognition of
SERVICE
TOLORIA M. ALLEN Senior Contract Compliance Administrator ▶ Small Business Mentoring Program
BARBARA J. COMPTON Records Manager ▶ Records and Information Management
RON L. COMPTON Construction Inspector ▶ Project and Construction Management
WILLIAM H. DILWORTH Security Systems Administrator ▶ Information Technology
TED M. FISHER Tradesman IV ▶ Turning Basin Maintenance
LLOYD C. GABLER Mechanic ▶ Barbours Cut Terminal Maintenance
ARTHUR R. GARRISON Manager, Construction ▶ Project and Construction Management
LUIS R. GODINEZ Tradesman IV ▶ Barbours Cut Terminal Maintenance
BARBARA A. LORING Senior Manager Real Estate ▶ Real Estate
DEBORAH J. McELROY Generalist, Human Resources ▶ Human Resources MICHAEL A. REILLY Manager, Maintenance ▶ Bayport Terminal Maintenance
RUBY RODRIGUEZ Logistics Coordinator ▶ Barbours Cut Terminal
SARA P. VAN SICKLER Customer Service Manager ▶ Bayport Terminal
TRACIE S. WESTBROOKS Terminal Services Associate ▶ Bayport Terminal
50 About :: The Port of Houston Authority
ABOUT THE PORT OF HOUSTON AUTHORITY The Port of Houston Authority is an autonomous governmental entity of the state of Texas. Chartered to create job growth and economic development, it is governed by seven non-paid, appointed commissioners. The Port Authority is the local sponsor of the Houston Ship Channel. It owns and/or operates eight primary cargo terminals and one cruise terminal.
Editorial Staff Phyllis Saathoff ▶ Deputy Executive Director ▶ Corporate Affairs Lisa Ashley ▶ Director ▶ Corporate Communications Bill Hensel ▶ Manager ▶ Corporate Communications Edwin Henry ▶ Corporate Communications Specialist Maggi Stewart ▶ Corporate Communications Specialist Esther de Ipolyi ▶ Writer
Design Gilbreath Communications, Inc.
Photography David Bray Photography Chris Kuhlman ▶ CK Productions
© 2015 Port of Houston Authority. All Rights Reserved.
2014 Annual Report
Port of Houston Authority
111 East Loop North | Houston, Texas 77029 P.O. Box 2562 | Houston, Texas 77252-2562 Phone: 713-670-2400 Fax: 713-670-2429 www.portofhouston.com
PORT OF HOUSTON AUTHORITY