What can the Port do to keep or earn your...

What can the Port do to keep or earn your support in the future?

Port of Cleveland
on Dec 07, 2012

The Port of Cleveland is a major contributor to the region's economy directly and indirectly, while also supporting development and being a steward for environmental sustainability, but could we be doing more to serve you and the community? How can we maintain or earn your support moving forward?

Participants (11) See All

What do you think?

Anonymous
on 2014-04-18T02:57:57+00:00
Login or Register to contribute to this conversation

Recent Activity

Sandy Livingston
on Jan 10, 2013
"Glad you like what you've seen on our website. This week we also added a Q&A on the Civic..."
Joshua Mole
on Jan 08, 2013
"I have checked out and continue to explore the Port's Website on its financing services, and I..."
Sandy Livingston
on Jan 07, 2013
"Joshua, I truly appreciate your interest and thoughtful input. Many people don't understand our..."
Joshua Mole
on Jan 03, 2013
"Well I am happy to hear that the Port is working on some of those ideas. I have put some more..."
Sandy Livingston
on Dec 26, 2012
"Joshua, Happy Holidays and thanks for taking the time to suggest your ideas. We truly..."
Joshua Mole
on Dec 24, 2012
"Show the people what you do, show them that the port works hard for average people. 1. I like..."
Sandy Livingston
on Dec 21, 2012
"Just like the Sewer District, RTA, the MetroParks, and the County land bank the Port Authority is..."
Sandy Livingston
on Dec 11, 2012
"Mark, We believe as do communities around the country and the global that have ports that there..."
Nancy Reeves
on Dec 11, 2012
"Dan, To add a little more meat to the bones of your explanation of municipal bonds used for..."
Mark W. Schumann
on Dec 11, 2012
"Dan, thank you for that reply. First off, I apologize for the Bond Fairy nomenclature. The..."
Dan Moulthrop
on Dec 11, 2012
"Mark--a couple of points. This dialogue could potentially be more productive if you would stop..."
Mark W. Schumann
on Dec 11, 2012
"Sandy, I understand that property tax revenues didn't go to Eaton's move, but you have to admit..."
Sandy Livingston
on Dec 11, 2012
"Mark, We are not subsidizing businesses moving out of downtown.  In fact, we will not finance..."
Jill Miller Zimon
on Dec 11, 2012
"The Port's page indicates that it was created as a collaboration between the city and county in..."
Mark W. Schumann
on Dec 11, 2012
"Jill, I don't have a problem in theory with a city/county collaboration to run the port. I do..."
Jill Miller Zimon
on Dec 11, 2012
"The question, "what would you need us to do to earn your support" is a frequently used question..."
Mark W. Schumann
on Dec 10, 2012
"That's disingenuous, Jill. Obviously, they could answer my very clear questions as a start."
Jill Miller Zimon
on Dec 10, 2012
"So Mark, how would you state in the affirmative what it is the Port could do to earn your support?"
Sandy Livingston
on Dec 10, 2012
"Jill, thanks for the question. The Port strives to cover all operating costs associated with..."
Mark W. Schumann
on Dec 10, 2012
"The "so they could move their headquarters from downtown Cleveland to the suburbs" part is still..."
Jill Miller Zimon
on Dec 08, 2012
"Sandy, could you say something about the notion of who should be paying for the Port's costs? The..."
Jill Miller Zimon
on Dec 08, 2012
"Sandy - there's this conversation going on as well - we'll try to bring it over here since it is..."
Sandy Livingston
on Dec 07, 2012
"Angie – this is Sandy Livingston, vice president of external affairs at the Port. I'm glad you..."
Angie Schmitt
on Dec 07, 2012
"A few years ago, you guys gave $150 million to Eaton Corporation in low-interest loans so they..."
Port of Cleveland
on Dec 07, 2012
"Another very important question is public awareness? Do you know what the Port does for the..."

Port of Cleveland

Port of Cleveland - 2014-04-18T02:57:58+00:00 - "The Port of Cleveland is a major contributor to the region's economy directly and indirectly,..."

Continue Reading

Jill Miller Zimon
on Dec 08, 2012 - 1:11 pm

Sandy, could you say something about the notion of who should be paying for the Port's costs? The suggestion has been made in that conversation to which I linked just above that only those who "directly" use the Port's facilities should have to pay. Jeff Hess's responded can be read here.

In my opinion, the Port does more than just provide a facility for direct use. There is a value that attains to our community that is associated with the existence of the Port, separate from direct use, just as with public education (so I would never expect that only people who directly use public education be the only ones paying for it - there is great value that enures to all of us because of public education).

How do you place these perspectives...in perspective?

 

 

Responses(2)

Sandy Livingston
on Dec 10, 2012

Jill, thanks for the question. The Port strives to cover all operating costs associated with running the Ports cargo docks by charging fees, rents, etc. to the direct users.  We are getting closer  to breakeven, but we can’t just raise rates indiscriminately because that could hurt local employers who use the port for shipping.  Users of the federal navigation channels (including Cleveland) also pay a federal user fee based on cargo value called the Harbor Maintenance Tax.  We generally get about $9 million from this fund appropriated for dredging and breakwater-upkeep work the  U.S. Army Corps of Engineers does each year at Cleveland Harbor.  

 

There are other important capital repairs and improvements that are needed – including the stabilization of Franklin Hill – but are not covered by this harbor tax. Those improvements would potentially benefit many private and public parties, which makes it much harder to assign and collect fees  from a particular user or beneficiary to cover costs.  If we fix Franklin Hill so it no longer threatens the ship channel and the sewer pipe that runs through the hillside, and at the same time open that land up as a waterfront park and  extension of the tow path trail all the way to Wendy Park, how would we allocate the costs among the beneficiaries and then collect fees?  Do we then charge a toll to go through the area?     

 

We see this type of infrastructure spending as a public obligation because there is no practical way to charge for use, and the benefits are widely shared.  That’s why we proposed using a portion the Port’s Countywide property tax levy as a local funding source.  Our intent was to use the Port levy proceeds to then leverage additional state and federal dollars.

 

 
Sandy Livingston
on Dec 21, 2012

Just like the Sewer District, RTA, the MetroParks, and the County land bank the Port Authority is a special purpose  organization.

 

This structure is common. Port authorities exist as stand alone agencies across the U.S. and globally because this “public enterprise” model is proven to work best.  General purpose governments (municipal, county, state) are designed to deliver governmental services to the public funded largely from tax revenues.  Ports mostly provide “private goods” to business users and sometimes provide certain types of “public goods” to the general public as well.  Ports compete aggressively for shipping business with each other and with other modes of transport. 

 

A county government would be an inefficient port manager because it is not set-up to operate as a business, nor should it be.  Ports are set up to offer facilities and services to private firms, hence the more business-like board/management governance structure.  This allows for the proper balance between operating “at the speed of business,” while still being fully accountable to the public.  All Port board meetings are public meetings , we post board minutes on our website,  the Ports annual audit is review by the  State Auditor, and  the port is subject to public disclosure laws.   

 

Anyone can also review ORC 4582,  the state statute that sets out the powers/authorities of ports.

Our Port is well positioned with our statutory authority and financial expertise to help borrowers finance new construction and expansion projects. That is why borrowers on more than 70 projects in sectors from manufacturing to health-care to the arts – have come to us for financing. It has been a successful program that works well.

 

 
Expand This Thread
Port of Cleveland
on Dec 07, 2012 - 11:55 am

Another very important question is public awareness? Do you know what the Port does for the region?How do you think the Port can most effectively increase public awareness about its work and impact in the community?

 

Responses(21)

Angie Schmitt
on Dec 07, 2012

A few years ago, you guys gave $150 million to Eaton Corporation in low-interest loans so they could move their headquarters from downtown Cleveland to the suburbs. That was "economic development" and as so worth our tax dollars, according to the board. Personally, I was outraged to see my tax money be spent that way. It seems more like a hand out than economic development. The impression I had at the time, and I attended a meeting about it, was that the port board was run by a bunch of good-old-boys from the business world and they were doing favors for their friends. Public feedback, which me and a few friends attended the meeting to provide, did not really seem to make a whit of difference as we were not part of the circle of "important people" doing the deciding. I left with the impression that the port was a filthy organization.

 
Sandy Livingston
on Dec 07, 2012

Angie – this is Sandy Livingston, vice president of external affairs at the Port. I'm glad you asked about our financing because many people in the community misunderstand the program and this gives us an opportunity to help clarify. We did not "give" $150 million to Eaton Corporation.  We issued bonds to assist in the financing of the construction of the company's new world HQ.  The bonds were purchased by private investors and none of the Port Authority’s tax dollars were used to assist in this project.  The obligation to repay those bonds rests with the company, not the Port Authority.  I’m sorry you have the impressions you do as I can assure you they are not accurate.

 
Jill Miller Zimon
on Dec 08, 2012

Sandy - there's this conversation going on as well - we'll try to bring it over here since it is germane to your input (thank you for that! There does seem to be a whole lot of conflating or at least entanglement of notions in people's minds - all the more reason to have a this conversation!). I'll link to this conversation, here, over at that link on FB too. Thanks.

 

 
Mark W. Schumann
on Dec 10, 2012

The "so they could move their headquarters from downtown Cleveland to the suburbs" part is still true, and I echo Angie's concern on this. Why are we subsidizing businesses moving out of downtown, and what on earth does that have to do with the port?

Why does the magical tax-free bond fairy work for a secretive, unelected board? For that matter, why is there a Port Authority when we already have a perfectly valid county government?

Funding a separate "authority" just automatically looks shady, especially when it engages in "economic development" projects that have nothing whatsoever to do with the port.

 
Jill Miller Zimon
on Dec 10, 2012

So Mark, how would you state in the affirmative what it is the Port could do to earn your support?

 
Mark W. Schumann
on Dec 10, 2012

That's disingenuous, Jill. Obviously, they could answer my very clear questions as a start.

 
Jill Miller Zimon
on Dec 11, 2012

The question, "what would you need us to do to earn your support" is a frequently used question in all kinds of evaluation processes, which is a process the Port is pursuing here as it takes a look at how it can do better.

To recap for anyone reading but in particular Sandy Livingston of the Port who is reading and responding in this thread, your questions are:

"Why are we subsidizing businesses moving out of downtown, and what on earth does that have to do with the port?"

"Why does the magical tax-free bond fairy work for a secretive, unelected board? For that matter, why is there a Port Authority when we already have a perfectly valid county government?"

Sandy provided some information below related to the first question (in response to a question I suggested also about financing) and I'm sure she will provide information related to the second.  Have you checked out the Port's website? I found these two pages but I bet there's more that might help you:

http://www.portofcleveland.com/about-the-port/faq/

http://www.portofcleveland.com/about-the-port/history/

Thanks for asking these questions - I'm sure others are interested in the answers too.

Just out of curiosity, do you think that a collaboration between the City of Cleveland and the County, in order to manage the Port, is a bad thing? And other odditiies, if you're into these things, when it comes to county-wide administration of activities and assets important to us: did you know that the County health department isn't a part of the actual county government? It's free-standing.

Still looking forward to knowing what affirmative activities the Port should be doing in your estimation!

 

 
Mark W. Schumann
on Dec 11, 2012

Jill, I don't have a problem in theory with a city/county collaboration to run the port. I do have a problem with yet another special-purpose government entity that has its own board, its own dedicated revenue source, its own taxing and bonding authority, and no effective public oversight. (I.e., you can't vote the board out, and most people can't name even one board member in the first place.)

You could probably say the same thing about the library systems, but at least we're pretty sure that library boards aren't engaging in nine-figure public financing deals for unrelated business endeavors.

So to me that's the main thing: Why do we even need a separate Port Authority? How is that better than a Cuyahoga County Division of Port Control?

The question of what "affirmative activities" the Port Authority could be doing--doesn't come into play if its necessity isn't even established.

 
Jill Miller Zimon
on Dec 11, 2012

The Port's page indicates that it was created as a collaboration between the city and county in 1968. Does that change your view at all (I'm not suggesting it should or does - just wondering - since it's been in existence in this way for so long - I was only 6 and not living here then so I can't say why it happened from any firsthand knowledge!)?

As for what it should do, I don't know that its existence as separate from being a cabinet level division of the county (and having no city formal connection) changes the need for the public to think about what it should be doing, so I guess that's still an essential question to consider (all of us, not just you obviously!).

 
Sandy Livingston
on Dec 11, 2012

Mark,

We are not subsidizing businesses moving out of downtown.  In fact, we will not finance the relocation of a company within the County unless  both political subdivisions consent, as was the case with Eaton. None of the Port’s property tax levy proceeds were used in the Eaton transaction or in any other financing transaction.  Economic development authorities (or finance authorities) are common throughout the United States.  In the state of Ohio, they are called Port Authorities, due to the flexibility contained in the statute.  Cleveland and Toledo are different in this regard because they also happen to run maritime terminals. Furthermore I would note that we are a public agency, our board meets and makes decisions in public and members of the public are welcome to attend and offer their comments.

 

 
Mark W. Schumann
on Dec 11, 2012

Sandy, I understand that property tax revenues didn't go to Eaton's move, but you have to admit that the Tax-Free Bond Fairy is a subsidy mechanism. (Why else would Eaton want it?)

Can you address my question about the need for the Port Authority to be separate from Cuyahoga County? Specifically:

  1. What public benefit is there--in terms of cost, accountability, or just plain awesomeness--in having an entirely separate institution with its own board, its own taxing authority, and its own bonding authority?
  2. Why is it good to have an unelected board appointed by City and County officials?

 

 
Dan Moulthrop
on Dec 11, 2012

Mark--a couple of points. This dialogue could potentially be more productive if you would stop referring to a widely used development tool in the derisive and dismissive tone that comes with "Tax Free Bond Fairy." (I don't have to point out that while you may find it humorous, it's not exactly civil.)As I understand the world of municipal and government bonds, it's the investors who buy the bonds that get preferential tax treatment, not the entity being loaned the money that the bond issuance creates.

Also, is it the bond issuing authority that the law provides that is an issue for you? If so, the Port is the wrong entity to take issue with. That's more like an issue for the General Assembly that created the law allowing for ports to act as economic development authorities. 

I'll take a stab at #2: We already have more than enough elected positions in this County, and voters are, more or less, at capacity in terms of their ability to educate themselves and select qualified candidates (the down-ballot judicial elections are a good example). Governments routinely create boards and appoint members to represent community interests. NOACA and AMATS are great examples of this too. The collaborative City-County Port Board has had some issues, but I think it's fair to say that with the new CEO and the new County exec, we've entered a new era of greater accountability and more effective oversight. 

So, since the legislature created the Port Authority and we, as a community, have these tools at our disposal, perhaps we can help the Port think about solutions and how to best use their formidable resources and talents. 

 
Mark W. Schumann
on Dec 11, 2012

Dan, thank you for that reply.

First off, I apologize for the Bond Fairy nomenclature.

The tax-free nature of the bonds is a subsidy to the company on whose behalf they're issued. It has to be, because a) why else would they bother? and b) the tax break is exactly why wealthy investors are willing to accept lower interest rates on these bonds compared to ordinary corporate bonds. The tax-free, um, thing? Cuts your borrowing costs significantly. It's a handout to Eaton and others similarly situated.

I'm not questioning the Port Authority's license to issue bonds. As you say, that's a state decision. What I'm questioning is why we need an extra flap of government here to do "economic development" when state, county, and city governments already have "economic development" departments--especially given that extraordinary bond-issuing power in the hands of an unelected board. We have ways to make those deals if we need to. Why have this one?

The topic of this conversation was: "What can the Port [Authority] do to keep or earn your support?" My answer is: "To begin with, they can explain to me why the Port Authority should even exist as a separate entity." I'm really not seeing the need for an extra, free-floating, unaccountable flap of government dedicated to "economic development" here. (It's a "flap" because it doesn't really consititute a layer but it's kind of in the stack there somewhere.)

You are right, NOACA is a fantastic example of what we're talking about. You weren't here yet, Dan, when that scandal hit. Like the Port Authority, NOACA had (and has) a board that's one step removed from elected accountability and an Executive Director thus two steps removed. It didn't go well.

Making the Port a function of county government would:

  • preserve all existing Port investments
  • enhance accountability
  • remove an extra flap of government
  • bring Port governance into public view through the normal County Council committee process
  • bring Port finances (and auditing) into the County Fiscal Officer's realm

I'm not seeing the downside in folding the existing Port Authority into a new Cuyahoga County Division of Port Control. So absent a compelling reason to maintain an entirely separate institution, no, I don't support the Port Authority.

I would be really interested in reasons why we need a standalone Port Authority. I can't think of any.

 

 
Nancy Reeves
on Dec 11, 2012

Dan,

To add a little more meat to the bones of your explanation of municipal bonds used for economic development:

The income which investors earn on municipal bonds is not taxed (generally) by the federal government or the state of issue (meaning the federal government and the state forfeit the taxes they would have received on the interest the investors earn on the bonds).  Because the investors do not have to pay taxes on the interest income they are earning, they are willing to accept a lower interest rate on their bond investment.  Because the bonds pay out a lower interest rate, a private corporation which is the recipient of the bond financing gets a financing with a lower interest rate.

So the public subsidy to the private corporation is indirect, but essentially the lower interest rate on the financing available to the private corporation is the result of the taxes that are forfeited on the investment income being earned by the private investors.  Had those investors invested directly in the private corporation, rather than via the municipal bond, the private corporation would have had to pay a higher rate of interest to entice investors.

 
Sandy Livingston
on Dec 11, 2012

Mark,

We believe as do communities around the country and the global that have ports that there is real value in having an independent agency serve this function. I'm happy to provide more information. I've got several deadlines to meet this week, so I'm writing today to say I will get back to you, but it won't be for a couple of days.

 
Joshua Mole
on Dec 24, 2012

Show the people what you do, show them that the port works hard for average people.

1. I like the Website and Social Media, especially pictures of boats coming into port and being loaded with Cleveland goods for export. I would like to see more of it if possible (or maybe a blog about what Flotsam and Jetsam are dragging up with lots of pictures). Good Job and I think your followers will continue to grow.

2. Show the public at every opportunity the decaying infrastructure that the port wants to help fix. For Example make YouTube videos of Mr. Friedman measuring the cracks in Irishtown bend or the failing bulkheads, then revisit the site every year to show the continuing deterioration, until it is fixed.

3. Let the public in as much as safety will allow.

a. I know that there will be the Tall ship festival in July of 2013 (see the link) and I believe that the port is playing a part in it. I would encourage the port to use the opportunity to show the public its facilities and the infrastructure that the port wishes to fix. For Example trolley tours of the port or of the cracks in Irishtown bend; Or even better but much more expensive rent a tour boat for a day and offer free tours of the port/river with an emphasis of educating the passengers on the ports needs and dreams.

b. The port knows when a boat is coming in, let people come in to watch (little boys are fascinated by such things) from public viewing platforms or designated areas. I have more but I will stop here.  I hope this helps, Joshua Mole

 
Sandy Livingston
on Dec 26, 2012

Joshua,

Happy Holidays and thanks for taking the time to suggest your ideas. We truly appreciate the input. And I want you to know we're thinking along the same lines. While Flotsam and Jetsam were at work during this inaugural season we did post pictures -- on social media and our website. We know there's quite a bit of interest in the boats, which is terrific. They have completed their work for the current season and will be back out in April. We'll start posting more pictures then. We agree that it is important to show people pictures of places like Franklin Hill -- and we have discussed taking pictures to help document the continued vertical separation of sections of the slope. We've also discussed developed more opportunities for people to see ships at the port. And are the title sponsor of the Tall Ships Festival and we're already working with the Rotary Club of Cleveland on the planning. It looks like it will be a great event! Please keep your ideas coming!

 
Joshua Mole
on Jan 03, 2013

Well I am happy to hear that the Port is working on some of those ideas. I have put some more thought into it and this is what I have realized / come up with.

1. It seems that the Port's Financing is what is the most contraversial now. Which is not surprising after the financial crisis. I see that there are at least two reasons why people do not like the ports Financing. 1. The project that is being financed (ie. Eaton's Headquarters) or 2. the way financing takes place (ie. tax-free bonds). I think that different ways of educating the public (ie short YouTube videos) on how financing works could help with the second reason (Like how Nancy Reeves post above about how tax free bonds work), I am not so sure about the first.

2. Help to finish the Tow Path Trail,

Also, and this is unrelated to the question, I would like to volunteer for the Tall Ship Festival, so if there is something I can do let me know.

 
Sandy Livingston
on Jan 07, 2013

Joshua,

I truly appreciate your interest and thoughtful input. Many people don't understand our development finance program. We do have a section on our website about it (www.portofcleveland.com/development-finance/) and we plan to add more information here on the Civic Commons as well. For example,  the Eaton bonds are not tax-exempt.  Additionally, the IRS determines what is exempt and what isn’t, not the Port. 

We are looking to do videos this year to provide another way to explain what the Port does. I'm also delighted that you'd like to volunteer for the Port of Cleveland 2013 Tall Ships Festival. The Port is the title sponsor and the Rotary Club of Cleveland is the lead organizer. Please give me a call or send me your email and I can put you in touch with the right people. You can reach me directly at: Sandra.Livingston@portofcleveland.com or 216-377-1341. Thank you. again. 

 
Joshua Mole
on Jan 08, 2013

I have checked out and continue to explore the Port's Website on its financing services, and I believe it is very good. There are pictures and maps that help to break down the information, which is much better than paragraphs of text. Unfortunantly, most of the general public will not take the time to explore that wealth of essential information. which is why pictures or short/entertaining videos are more efective.

I think the Port and NASA are very simular, both have to take complex subjects and explain them to the public. See the link to a Youtube video that NASA made to explain the complexities of getting a spacecraft to Mars. I think if the Port made a simular video it could go a long way in explaining and neutralizing anger directed at the Port.

 
Sandy Livingston
on Jan 10, 2013

Glad you like what you've seen on our website. This week we also added a Q&A on the Civic Commons about the development finance program to provide additional information in another forum.  (see the development finance subpage). A video is definitely on our to-do list for 2013. And we'll let Civic Commons readers know when it's completed. Thank you!

 
Expand This Thread