GALVESTON — The Port of Galveston, its free cash dipping uncomfortably low because of Hurricane Ike repairs, will ask its governing board today to allow it to apply for a $3.7 million federal loan.
The Wharves Board of Trustees will convene a special meeting today to consider applying for a Federal Emergency Community Disaster Loan, repayment of which is secured by a pledge of the port’s revenue.
The principal amount of the loan is $3,739,399. Interest on the loan is tied to 91-day Treasury Bill, which is a short-term U.S. government debt obligation. The yield Thursday on three-month T-bills was about 0.18 percent.
But in other disaster-stricken cities, the federal government has converted such loans to grants.
Use of the loan proceeds is restricted to operational expenses, which include salary, overhead and insurance costs, said Port Director Steve Cernak.
As the landlord port, with about 85 employees, awaits insurance payouts and promised federal funding to repair damage Hurricane Ike inflicted Sept. 13, much of its cash has gone to making emergency repairs to the public docks to keep tenants in business, Cernak said.
“The free cash we have available for these investments is limited,” Cernak said.
Last month, the port’s free cash had dwindled to $39,000. Still, the port isn’t destitute and its financial picture improved this month with the arrival of a $4.5 million advance in insurance proceeds, Cernak said.
The port announced last month it had received a $10 million grant from the U.S. Department of Commerce to make repairs to piers 14-18. And just before Hurricane Ike, the port secured $28 million through the Texas Industry Development loan program to restore some aged and rotting docks.
The port did not lose any tenants after Hurricane Ike, nor did it lay off any employees.
The port, which is not supported by taxes, had before the storm been on track to make a record $25 million in revenues this year.
But Cernak expects revenues to be about $24 million, which is an accomplishment given the hurricane and a recession, officials have said.
“There’s light at the end of the tunnel,” Cernak said. “This is a short-term need.”
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At A Glance
WHAT: The Galveston Wharves Board of Trustees Meeting to consider approval of an application for a $3.7 million FEMA Community Disaster loan
WHEN: 8:30 a.m. today
WHERE: Wharves Board meeting room, 123 25th St., on the island, eighth floor
