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2. OPERATIONAL REPORT Floyd L. Shelton, Executive Director, reported on the financial growth of the Port, citing net income for 1988 -89 was $498,000, up 88 percent over 1987 -88; increase in revenue from operations; the Port's net income to equity as 5.6 percent and expected increase; net income to revenue as 22 percent; and, increased tonnage, up 80 percent. Mr. Shelton described current and future projects involving utilization of the Port's docks and yacht harbor and general robust health of the Port. 3. SUMMATION Chairman Jack Castle advised that most cities in the country subsidize their Ports, but the Port of Redwood City is self- supporting and self- sustaining; that the California Association of Port Authorities rated the Port of Redwood City as the fastest growing port in California by tonnage increase; described the year's accomplishments of expansion of Pope & Talbot and Simsmetals, dredging, and the conference for the Pacific Coast Association of Port Authorities in August; and on -going and future Port projects that will attract new business from other Pacific Rim countries. In response to questions from Council, Executive Director Floyd Shelton and Port Commissioners discussed the cost of maintaining the infrastructure, discovering the right niche for the Port, no increase in tariffs, competition, need for available land for expansion, decreasing debt service and expected leveling off of revenues. Vice Mayor LaBerge reported the annual report was a good general purpose document that served its purpose, the Port provides services desired by Redwood City citizens and boating enthusiasts from up and down the peninsula, and the Port is a unique asset to Redwood City and a great public relations tool. Councilman Claire lamented the lack of communication between the Council and the Port Commissioners, proposed quarterly review meetings, and suggested that long term and short term goals be included in next years annual report. Councilman Claire described the methodology used to measure the financial health of businesses and suggested that using those methods the Port's financial status was not as positive as the annual report suggested. Councilman Claire pointed to areas of return on total assets, current assets compared to liabilities, and most advantageous use of land to produce the most benefit. Port Executive Director Shelton explained the Port is not operated as a business alone, but as a service agency for the City, residents and visitors and should be evaluated in light of its service. Councilman Claire stated he had been advised for the past eight years that the Port was to be run as a business, and in the past, public use had been discouraged. However, if the Port is to be operated as a service agency and not a business then different parameters should be used to measure its performance and policy decisions made with that use in mind. Joint Council /Port Commission Mtg.Minutes MINUTE BOOK NO. 49 12/5/89 Page No. 169 page 2