Core Mission Focus and Debt Reduction Efforts
During the last decade, the Authority has held a steady course in returning to its core transportation mission, reversing its sponsoring states’ and congressionally legislated role in economic development throughout the Port District and re-dedicating itself to our principal responsibility of investing in the Authority’s transportation infrastructure: our four bridges, transit line, ferry, security and technology. These ongoing investments will provide the tools necessary to support our key asset, the employees of the Authority and represents an overriding commitment to our customers, pledging not only to “Keep the Region Moving,” but to make certain these regional resources, entrusted to the Authority, remain safe, secure and serviceable.
When the current management team came on board in 2003, we faced mounting budget deficits and debt. At that time, we closely examined not only our capital needs but also our operating standards and our commitment to fiscal reform began in earnest. Mid-year budget cuts were enforced, staff reductions were made from over 1000 employees to less than 900, ongoing restrictions were enacted for travel, vehicle and equipment purchases, and cooperative relationships were formed with other agencies to create efficiencies. The Authority eliminated several non-related lines of business, sold excess properties and attracted new sources of revenue through advertising and leasing. We continue to seek solutions to hold down the ever rising cost of insurance and aggressively pursue federal funding to offset our costs for maintaining infrastructure and improvements in security. In all, these fiscal measures, taken over the last decade have resulted in an unprecedented average annual expense growth of 1.1%. These measures provided the Authority with the opportunity to accelerate the pay down of $100,000,000 of debt. As a result, in December of 2102, independent evaluations by Moody’s and Standard and Poor’s upgraded the outlook on DRPA Revenue/PDP Bonds.
Significant progress has also been made at reducing DRPA’s long term debt costs through a recently completed bond refinancing that will save the Authority more than $11 million a year. Taking advantage of low interest rates, on December 20, 2012, the DRPA sold $153 million in investment-grade, tax exempt, refunding bonds, and proceeds from the sale are being used to refund Port District Project Bonds.
This effort to achieve savings through debt refinancing will continue as DRPA is in the middle of a multi-year plan to restructure its long-term debt. In 2102, DRPA redeemed almost $96 million in debt reducing DRPA’s debt service by an estimated $2.5 million per month, lowering the Authority’s aggregate debt and borrowing costs. Since December 2011, the DRPA has reduced its aggregate debt by approximately $185 million. Currently, the DRPA has approximately $1.1 billion in outstanding debt.
