Amid rare revenue drop, Massport tightens its belt
Agency will cut $13m by trimming payroll, other costs
Citing an estimated decline in revenue, the Massachusetts Port Authority said yesterday that it will slash its workforce by 6 percent, implement a wage freeze, and reduce spending as part of a plan to cut its fiscal year 2010 budget by $13 million.
With the exception of the aftermath of the Sept. 11 terrorist attacks, the 2010 fiscal year marks the first time that operating revenue is projected to decline in more than 30 years. Revenue for the fiscal year, which begins July 1, is expected to fall 5 percent, to $31.3 million, due to drops in real estate revenue, shipping-cargo volume at Conley Terminal in South Boston, and passenger numbers - down 3 million at Logan International Airport from the peak in 2007.
As a result, the Massport board yesterday voted to cut the 2010 fiscal year budget by 3.4 percent, to $364 million. As part of the cut, the authority will lower spending by $17 million, following a $13 million spending cut in the 2009 fiscal year.
“This is a prudent and conservative budget that recognizes the economic realities that are facing the airlines and the traveling public,’’ said Betsy Taylor, Massport’s finance director.
The authority will achieve the workforce reduction through a hiring freeze. Additionally, the authority will reduce overtime spending, cut its long-term retirement benefit liability by 40 percent, and freeze wages for nonunion employees and for union members whose contracts expire in July. Spending on consultants, travel, and training will also be trimmed.
Separately, US Transportation Secretary Ray LaHood said yesterday that Massport will receive $5.3 million from the Federal Aviation Administration, the second installment of a $13.3 million allocation for improvements to Logan Airport’s Runway 9-27. The funds are part of the American Recovery and Reinvestment Act.
Work on the 7,000-foot runway, which will be resurfaced with an environmentally friendly “warm mix’’ asphalt, which is heated to a lower temperature than traditional asphalt, could start as early as next week.
The Westfield-Barnes Airport is also receiving stimulus funds for runway improvements. The FAA has granted the City of Westfield $503,000, the second installment of a $1.3 million face lift for the airport’s primary runway.
The FAA is allocating $1.1 billion to airports under the Recovery and Reinvestment Act. About 3,400 airports are eligible.
Katie Johnston Chase can be reached at johnstonchase@globe.com 