LB HARBOR COMMISSION APPROVES $3M TO COVER ALAMEDA CORRIDOR SHORTFALLBy LBReport.com
LONG BEACH — Long Beach’s Board of Harbor Commissioners voted 4-0 to approve nearly $3 million “cash advance” to meet an Oct. 1 debt payment.
Reduced to the status of a debtor unable to pay back a loan on terms it previously accepted, the Alameda Corridor Transportation Authority demanded $2.95 million from the Port of Long Beach and the same sum from the Port of Los Angeles, apparently unable to meet a debt payment due on Oct. 1.
In a further stunner, ACTA indicates its plan to deal with its debt involves a taxpayer credit card: a multi-million dollar loan from the Federal Railway Administration.
The item, on the LB Harbor Commission’s Sept. 9 agenda, was accompanied by a Port of LB staff memo that says the federal loan to ACTA is “expected to defer the need for any additional shortfall advances into future years.” An accompanying ACTA cash-demand letter says that while the federal RR agency loan has been completed, ACTA’s “future ability to restructure its debt service obligations through other transactions may also improve ACTA’s debt service capability.”
The ACTA-sought “shortfall advance” was in the Long Beach Harbor Commission agenda, reduced to a sparse one-page transmittal memo from Port staff recommending approval and a one-page letter from the Alameda Corridor Transportation Authority requesting the funds. However it’s not exactly a request. Each Port is required to advance funds to cover any ACTA shortfall up to 20% of the debt service at the time.
ACTA seeks the nearly $3 million “advance” from each of the Ports via an electronic wire transfer by Sept. 24 but indicates it gave notice of the “cash flow” issue in March 2012.
An August 8, 2012 letter by James Preusch, ACTA’s CFO, informs the Ports that while ACTA “shortfall advances” aren’t “expected” to continue through 2019, the amount and duration of future advances is “largely dependent on future San Pedro Bay cargo volumes and the mix of local vs. discretionary cargo.”