Port Financing Shows Potential

By Joseph Straw

Winning support. Garcia, along with PHA and industry leaders, secured the support of several area lawmakers in the state legislature, including State Rep. Wayne Smith of Baytown and State Sen. Mike Jackson of LaPorte, whose districts sit opposite one another at the mouth of San Jacinto Bay. The two lawmakers introduced companion bills early last year that would authorize establishment of the ship channel security district in Houston. The measure passed (via Jackson’s proposal) and was signed into law by Gov. Rick Perry last June.

The law is only the first step toward establishment of the district, however. Before the district can become a reality, it must get broad support. Specifically, proponents, including PHA and the county, must gather the signatures of at least 50 percent of the port’s private operators—both in number, and total assessed property tax value. Then the plan must be voted on by the Harris County Board of Commissioners.

Thus far, supporters are optimistic about their prospects. The plan enjoys the support of the East Harris County Manufacturers Association (EHCMA), the port region’s major business association representing 125 of its energy and chemical refiners and terminals. Most of EHCMA’s members operate along the Houston Ship Channel, and these businesses would, therefore, be subject to taxation under the district if it is created.

David Seitz, a member of EHCMA’s board of directors and its security committee sponsor, is charged with securing association members’ support for the district proposal. Seitz says he emphasizes to members that the plan is “about more than just terrorism.” It is about being able to handle any emergency, natural or man-made.

Most operators who support the plan do so on the condition that private sector stakeholders exercise strong oversight of procurement from grant funding; most importantly, that federal and matching funds are spent on established and reliable equipment, as opposed to novel applications that carry high maintenance costs and low reliability, Seitz says.

Seitz expects that support from within the association itself may fulfill the authorizing law’s 50-50 petition requirement. Garcia is equally optimistic and expects the district’s establishment by the end of the year, she says.

Governing board. If the district is approved, stakeholders must then appoint officials to a district board of directors. The law divides the port area into four separate zones. No more than two private-sector directors from each zone can serve on the board to prevent any one company from packing the board.

Also on the board will be a municipal official selected by the Harris County Mayors and Councils Association, an at-large member appointed by Harris County leadership, and the executive director of the PHA, or a designee.

Taxes. District taxes would be levied on private port operators based on their assessed property values, Garcia says. Under the authorizing law, the revenues can only be used to match federal security grant funding. Proponents of the district model expect that the long PSGP fulfillment process would provide the region enough time—more than a year—to assess and collect any district taxes needed to satisfy a grant-matching requirement.



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