The Sacramento-Yolo Port Commission held a special meeting last month to consider amendments to the Joint Port Governance Agreement and the Harbors and Navigation Code. Most of the provisions in the agreement were intended to protect the financial interests of the other member jurisdictions. These include Yolo County, Sacramento County, and the City of Sacramento.

The Joint Port Governance Agreement was first executed on January 16th, 2006. At that time, the City of West Sacramento had taken majority control over all of the business transactions of the Sacramento-Yolo Port District. The agreement served as the outline for the Port’s governing structure and the makeup of the Sacramento-Yolo Port Commission. It also placed restrictions on the disposition and development of certain Port real estate holdings, including Seaway and the North Terminal. It limited the use of eminent domain powers outside of the City of West Sacramento. The Port was required to propose legislation that would reflect specific provisions of the Joint Port Governance Agreement.

The Sacramento-Yolo Port District was established in 1947. And the Port, which was known as the Port of Sacramento until 2009, opened in 1963. In December 2005, the Port entered into a contractual agreement with the City of West Sacramento for them to manage and operate the Port. When the State of California passed AB 2939 (Wolk) in September of 2006, the make-up of the Sacramento Yolo Port District was changed from the Commission comprising seven regional members to the current model of one Yolo County Supervisor and four representatives from the City, appointed by the Mayor.

Essentially, the legislation removed the Port from the jurisdiction of Sacramento County/City, and left the primary governance to West Sacramento and Yolo County. This district has eminent domain within the boundaries of West Sacramento. Areas of Yolo County and Sacramento County must receive those counties’ agencies approval to intervene with services within the respective counties.

The Joint Port Governance Agreement could not have anticipated the fiscal instability that the Port would experience over the next decade. The financial investment and staff resources required from West Sacramento were unexpected. Since West Sacramento took control of the District in 2006, there have been a number of financial impacts that have decreased the expected income. Many longstanding revenue sources from cargo commodities, such as fertilizer, wood chips, cement, and rice, have sharply declined or relocated to other ports.

The Deep Water Ship Channel Deepening project had hopes of expanding the region’s economy as well as the transportation structure. But this project was seriously affected by cost increases and environmental obstacles. The channel needs to be regularly dredged to maintain an adequate depth for oceangoing ships. The dredging process affects water quality and can harm the spawning habitat of salmon and Delta smelt.

The Port and City were responsible for additional debt from environmental liability as well as deferred maintenance. The City was forced to provide operating subsidies to cover the Port deficits. Over the last 10 years, West Sacramento has invested over $15 million in the Port. This does not reflect any costs of administration.

The Port Business Plan was adopted in 2013. It included a recommendation for the Sacramento-Yolo Port District to revisit terms of the Joint Port Governance Agreement. One section requires Seaway to be sold by January 15th, 2016 unless the parties agree to an extension. The Joint Port Governance Agreement outlines how the Riverfront Enhancement Fund will be used and managed and provides that the fund shall be controlled by the City of Sacramento and Sacramento County.

Potential solutions were discussed at the Sacramento-Yolo Port Commission meeting. The West Sacramento City Council could delete the section that requires Seaway to be sold by January 15th. They could delete the section that requires approval of other jurisdictions prior to selling or dismantling the North Terminal or Deep Water Channel. The Sacramento-Yolo Port Commission’s comments and/or recommendations will be presented to the West Sacramento City Council at their next meeting.

Sources: 2013 Port of West Sacramento Business Plan, AB2939, CA State Law Governing River Port Districts, Sacramento-Yolo Port Commission December 16^th, 2015 meeting