Aug 25, 2026 Port of Galveston Meetings - Wharves Finance Committee

[A. CALL TO ORDER]

[00:00:04]

PEOPLE.

OKAY.

IT'S RIGHT AT NINE O'CLOCK.

SO I'M GONNA CALL THE, UH, FINANCE COMMITTEE GAL.

DID YOU? MY NAME'S COMMITTEE NAME C AND WE ALSO HAVE MY NAME COMMITTEE MEMBER SHEILA .

AND ALSO IN ATTENDANCE IS FINANCE COMMITTEE MEMBER JEFF PATTERS.

CHAIRMAN JEFF PATTERSON.

TRUSTEE MAYOR.

OW.

TRUSTEE PEARSON.

TRUSTEE ERIC AND ROGER RE BROWN.

SO WE, AND WE HAVE A, A FORUM EVEN THOUGH ONE OF OUR MEMBERS IS NOT HERE COMMITTEE.

THAT'S CORRECT.

WE'RE, WE'RE IN GOOD.

STILL IN GOOD SHAPE.

UH, ARE THERE ANY DECLARATIONS OF CONFLICTS OF INTEREST FROM THE TRUSTEES? OKAY, THEN I WOULD LIKE TO, UH, HAVE THE, UH, IMPLICATION TODAY.

IT'S GONNA BE DONE BY REVEREND LAWSON.

ALRIGHT.

MORNING.

HOW ARE YOU? GOOD MORNING.

WE CHANGED UP ON YOU THERE.

GOOD MORNING.

GOOD MORNING.

GOOD MORNING FATHER.

THANK YOU FOR GATHERING US HERE TODAY.

PLEASE LOOK UPON THE BOARD MEMBERS AND UH, JOB THAT THEY HAVE AHEAD OF THEM.

BLESS THE PORT OF TON AND ALL WHO WORKS AND COME THROUGH THE PORT.

GO WATCH OVER THESE BOARD MEMBERS.

THANK YOU FOR THEM.

LET THEM KNOW THAT THE DECISION THEY MAKE TODAY IS THE LEGACY THEY WILL LEAVE BEHIND.

LORD, YOU SAID NO MATTER WHAT, YOU CALM THE RAIN.

SO WHETHER THE RAIN, THE WIND, HURRICANE OR STORM, LET NOTHING DAMAGE THE CITY OF.

AMEN.

AMEN.

THANK YOU.

WHAT? I GOTTA TAKE A PICTURE OF YOU.

I KNOW .

I, NO, I CALLED HIM CHARLESTON.

'CAUSE THE FIRST MEETING I WENT TO JAMAICA BABY.

JUST SO I GO TO THE MEETING, I'M LOOKING FOR A REGULAR MEETING.

THEY PACKED.

THE OVERFLOW IS PACKED.

THEY DOWN THE STEP, THEY OUTSIDE.

I SAY, OH, COACH, YOU KNEW JOEL .

COME ON.

COME ON JOE.

I'M SENDING THIS SOMETHING .

DON'T ME, BRAD.

GOD BLESS Y'ALL.

THANK YOU.

THANK YOU SO MUCH.

THANK YOU VERY MUCH.

ALRIGHT, SO, UH, NOW WE'RE GONNA HAVE

[B. PRESENTATIONS AND ANNOUNCEMENTS]

UM, AND THEY ARE DEALING WITH BOTH TEXAS A AND M, GALVESTON AND GALVESTON COLLEGE AND THE FUNDING THAT WE'VE PROVIDED FOR SCHOLARSHIPS.

ARE WE GONNA MOVE INTO THAT ROOM? YES, WE'RE GONNA DO WHAT KATHY? WE'RE GONNA DO WHAT KATHY TELLS.

GOOD MORNING.

GOOD MORNING.

SO THIS MORNING THE GALVESTON WORKS IS PRESENTING $28,000 TO TEXAS A AND M 18,000 AND TO GALVESTON COLLEGE, 10,000 IN TO, UH, ENRICH THEIR MARITIME SCHOLARSHIPS AT EACH OF THOSE, UH, IN, IN, AT EACH OF THOSE ENTITIES.

AND, UM, AFTER THESE FUNDS WERE RAISED DURING MARITIME DAY EVENTS.

SO THANK YOU TO ALL OF OUR SPONSORS WHO MADE THAT POSSIBLE.

SO I'M GONNA INTRODUCE, UH, COLONEL MICHAEL FOSSUM TO BE FOLLOWED BY DR.

TRACY WATTS.

AND THEN WE'LL STEP INTO THE OTHER ROOM AND HAVE QUICK PICTURES OF THE CHECK PRESENTATION.

SO FIRST, UH, COLONEL FOSSUM IS VICE PRESIDENT OF TEXAS A AND M UNIVERSITY CHIEF OPERATING OFFICER, TEXAS A AND M AT GALVESTON, SUPERINTENDENT TEXAS A AND M MARITIME ACADEMY.

AND TO BE FOLLOWED BY DR.

TRACY WATTS, PRESIDENT OF GALVESTON COLLEGE.

AND WAS MY, UH, FIRST OPPORTUNITY TO MEET HER TODAY, AND WE CERTAINLY WELCOME HER TO THE COMMUNITY.

THANK YOU.

OKAY, I HOWDY.

THANK YOU FOR MAKING ME FEEL AT HOME BY RETURNING THAT HOWDY.

I WANNA SAY THANK YOU TO THE GALVESTON WARS BOARD OF TRUSTEES FOR CONTINUING THE IMPACT ON BOTH TEXAS A AND M AND GALVESTON

[00:05:01]

UH, THIS CONTINUED SUPPORT'S INCREDIBLE.

IT REALLY IS, AND IT ENSURES THE FUTURE, UH, STUDENT RECIPIENTS RECEIVE MORE SCHOLARSHIP DOLLARS, MAKING THEIR EDUCATION EVEN MORE ATTAINABLE.

YESTERDAY WE STARTED CLASSES FOR THE FALL SEMESTER.

THIS IS THE LARGEST INCOMING CLASS OF CADETS AT TEXAS A AND M MARITIME ACADEMY IN OUR HISTORY.

WITH OVER 240 NEW CADETS, OUR ENROLLMENT IN THE ACADEMY HAS GROWN 70% IN THE LAST TWO YEARS.

THAT'S TO MEET THE, THE IMPERATIVE THAT WE HAVE TO GROW.

THIS GROUP OF INCOMING CADETS ALSO INCLUDES THE INAUGURAL FOUR STUDENT RECIPIENTS OF THE GALVESTON WARS ENDOWED SCHOLARSHIP.

WE'RE EXCITED FOR YOU TO MEET 'EM AND, AND IN THE FUTURE AND SEE YOUR GENEROUS SUPPORT IN ACTION.

THIS GROWTH, THOUGH, REPRESENTS OUR FOCUSED EFFORT TO MEET THE CRITICAL NEEDS OF THE MARITIME INDUSTRY.

IN AN EXCITING NEW CHAPTER OF TRAINING WITH THE LONE STAR STATE, OUR NEW TRAININGSHIP, KEEP YOUR EYES OUT FOR HER ARRIVAL.

SHE'LL BE ARRIVING AT OUR DOCK ON SUNDAY, SEPTEMBER 6TH.

UH, THAT'S SUNDAY OF LABOR DAY WEEKEND.

AND I, IT, IT IS VERY CLEAR THEY HAVE A PAYMENT INCENTIVE FOR DELIVERY ON THAT DAY, , BECAUSE I COULD NOT GET 'EM TO SLIP TO TUESDAY, BUT WE, WE, THERE, THERE WILL NOT BE A PUBLIC EVENT FOR THAT.

UH, WE HAVE A LOT OF WORK TO DO ON THE SHIP, UH, AND WE ARE PLANNING A BIG, UH, HOME PORT CELEBRATION AND IT WILL BE A BIG ONE ON SATURDAY, NOVEMBER 21ST.

THE WEATHER'S GONNA BE COOLER AND WE'RE GONNA BE ON THE OTHER SIDE OF THE ELECTION CYCLE.

SO WE THINK THAT'S GONNA BE A BETTER TIME TO DO IT AND REALLY CELEBRATE THE ARRIVAL OF THAT SHIP.

I WANT TO THANK YOU.

I REALLY WANT TO THANK YOU AGAIN FOR YOUR TRUST, SUPPORT, COMMITMENT TO OUR FUTURE, THE FUTURE MARINERS AND MAR MARITIME INDUSTRY LEADERS FOR YOUR ONGOING SUPPORT OF STUDENT SCHOLARSHIPS AT TEXAS AND GALVESTON.

GOD BLESS YOU.

THANK YOU.

THANK YOU.

ALRIGHT, I, I JUST WANTED TO BRING UP, I THINK I HEARD YOU SAY THE OTHER DAY THAT, UM, YOU GUYS HAVE SUCH HIGH ENROLLMENT THAT YOU'RE HAVING TO PUT SOME OF THE CADETS AND STUFF ON THE SHIP TO SLEEP, RIGHT? , I THOUGHT IT WAS INTERESTING YOU JUST TOLD THAT.

IT, IT, IT, THAT IS, UH, THE, THE, THE QUESTION WAS WHAT ABOUT, YOU KNOW, HOUSING? UH, WE HAVE IN SIGNIFICANT OVER 2, 200, 250 MORE STUDENTS ON CAMPUS THIS FALL THAN LAST FALL.

SO IT REALLY PUTS A SQUEEZE ON OUR HOUSING AND, UH, YOU KNOW, WHAT THAT SHIP IS, UH, IS SET UP TO ACCOMMODATE.

UM, AND SO WE WILL BE, WE'VE GOT, UH, A LARGE NUMBER OF, OF, UH, SOPHOMORE, JUNIOR AND SENIOR, UH, CADETS THAT ARE LIVING IN A HOTEL RIGHT NOW, UH, OFF CAMPUS INTO THE WATER PARK AS A TEMPORARY HOUSING.

AND ONCE WE GET THE SHIP HERE AND GET IT SET UP, THEN WE'LL MOVE, MOVE IT ON.

UH, IT WON'T BE HARDSHIP, IT'LL BE, THEY'RE IN, UH, NOT THE, THE OLD SHIP WOULD'VE BEEN HARDSHIP, , BUT THIS IS REALLY A, REALLY A GREAT FIT AND FINISH TO THE ROOMS. AND THEN A LOT OF THE ROOMS ARE FOUR PERSON ROOMS, TWO BUNK BEDS, ONE BATHROOM.

WE'RE PUTTING 'EM IN TWO DOOR ROOM INSTEAD OF FOUR.

THERE'S TWO DESKS.

IT'S GONNA BE GREAT.

IT'S GONNA BE A SHORTER WALK TO CLASS AND THE, UH, CHOW HALL AND EVERYTHING ELSE.

SO WE'RE, AND THEY'RE HERE TO BE MARINERS.

SO THIS IS NOT A TERRIBLE HARDSHIP.

WE'RE GONNA GET THROUGH IT, BUT IT'S EXCITING TO HAVE THOSE KIND OF PROBLEMS. AND THE YEAR AHEAD, WE'VE GOTTA EXPAND OUR SIMULATOR CAPABILITY AND OTHER THINGS TOO.

AND I'LL BE COMING TO YOU FOR A LETTER OF SUPPORT FOR THE LEDGE FOR THAT.

SO THERE'S, THERE'S A LOT OF EXCITING THINGS.

THANK YOU.

ANY, ANY ? HI, GOOD MORNING CHAIR MEMBERS OF THE BOARD OF TRUSTEES AND I AM DR.

TRACY WATTS.

I AM THE PRESIDENT OF GALVESTON COLLEGE AND I JUST WANNA THANK YOU ALL FOR THE OPPORTUNITY TO BE HERE AND, UM, TO SAY A FEW WORDS THIS MORNING.

I JOINED GALVESTON COLLEGE IN JULY AND SO I HAVE HAD THE AN OPPORTUNITY TO GO AND LEARN MORE ABOUT OUR ISLAND COMMUNITY AS WELL AS MEET WITH SO MANY OF YOU, AS WELL AS OUR BUSINESS AND COMMUNITY LEADERS.

IT'S BEEN A TRUE HONOR.

SO ON BEHALF OF GALVESTON COLLEGE, OUR BOARD OF REGENTS, THE GALVESTON COLLEGE FOUNDATION, AND MOST IMPORTANTLY OUR STUDENTS, I WANNA EXPRESS OUR SINCERE APPRECIATION TO THE, UH, GALVESTON WARS BOARD OF TRUSTEES, MR. RES, UM, FOR THE ADDITIONAL CONTRIBUTION TO THE MARITIME EDUCATION ENDOWMENT AT GALVESTON COLLEGE.

WE ARE EQUALLY GRATEFUL FOR THE CONTRIBUTION FROM EARLIER THIS YEAR.

AND THIS CONTRIBUTION NOW OFFICIALLY, UM, WILL INITIATE THE ENDOWMENT AT GALVESTON COLLEGE.

YOUR CONTINUED INVESTMENT IN GALVESTON COLLEGE IS AN INVESTMENT IN STUDENTS AND IN THE FUTURE OF OUR REGION'S MARITIME WORKFORCE.

THESE CONTRIBUTIONS WILL HELP CREATE OPPORTUNITIES FOR OUR STUDENTS IN HIGH DOMAIN CAREERS WITHIN THE MARITIME INDUSTRY AND OUR SKILLED TRAITS, AND THEN CAREERS THAT ARE ESSENTIAL TO THE ECONOMIC STRENGTH OF GALVESTON, AS WELL AS THE GULF COAST.

SO WE GREATLY

[00:10:01]

SO AGAIN, THANK YOU ON BEHALF OF ALL, ALL OF OUR BOARD OF REGENTS, OUR STUDENTS AND THE FOUNDATION, WE SINCERELY APPRECIATE YOUR PARTNERSHIP.

I'M SO GLAD TO BE HERE AND TO GET TO KNOW ALL OF YOU.

THANK YOU.

WE'LL JUST SAY, AND I THINK, UH, TRUSTEE GONZALES HAS JOINED BY VIDEO MAYBE, BUT I WOULD JUST HIGHLIGHT WILLIE WAS RIGHT HERE, WAS A BIG SUPPORTER OF NOT JUST WITH A AND M, BUT ALSO REACHING OUT TO OTHER PARTS OF THE COMMUNITY.

SO I JUST WANT TO ACKNOWLEDGE TRUSTEE GONZALEZ WAS A BIG PART OF GALVESTON COLLEGE BEING INCLUDED IN THIS EFFORT.

WELL, THANK YOU SO MUCH.

WE APPRECIATE THAT.

APPRECIATE THAT.

ALRIGHT, JOIN US.

OKAY.

SEE, THAT'S DEBATABLE.

HOW YOU DOING? HI, HOW ARE YOU? WE'RE ALL KEEP IT FOCUSED.

THAT'S WHAT SAID HE'S, SO THAT MEANS CAN HE MAKE THAT BIGGER? YOU'RE SUPPOSED TO HANDLE THE SEAL NOW.

IT IS.

FLIP IT OVER.

WE'RE ALL ABOUT SAVING MONEY SO WE CAN PUT MORE MONEY IN SCHOLARSHIPS.

HAVE A BIG PRICE, BUT IF YOU DON'T GO PRICE.

ALRIGHT, HERE WE GO.

2,400.

OKAY.

WE'RE, WE'RE RIGHT UP AGAINST IT.

NICE.

YEAH, WE CAN DO THAT EVERY YEAR.

YEAH.

GOOD DAY.

WE CAN GET, YOU KNOW, THE LUNCH.

YEAH, IT'S A GOOD RIDE.

IT'S A GOOD TIME TO DO SOMETHING EVERY, OKAY.

THAT WAS A GREAT OPPORTUNITY.

SO WILL WILLIE HAS JOINED US NOW.

HE CAN'T PARTICIPATE 'CAUSE HE WASN'T SUPPOSED TO.

AH, OKAY.

FOR THIS MEETING, HE'LL PARTICIPATE.

OKAY, GOTCHA.

THANK YOU.

WATCH.

HE, HE CAN WATCH RIGHT? CAN HE CAN'T PARTICIPATE OR CAN'T I SEE, I SEE THE PALM TREE SWAY.

THIS IS GONNA BE OKAY.

OKAY.

SO WE'RE GONNA MOVE ON TO, UH, GENERAL BUSINESS.

UH, FIRST ITEM C ONE, THE

[C.1 APPROVAL OF THE MINUTES ]

[00:15:01]

OKAY.

AND I WOULD SECOND THAT.

AND WE ALSO WOULD CALL MOTIONS .

THEY'RE APPROVED.

WOULD'VE BEEN IMPRESSIVE IF IT FAILED.

, WHAT DO WE DO IF AT THE TIME NOW WE'RE IN THE,

[C.2 PUBLIC COMMENTS ]

GOOD MORNING.

GOOD MORNING.

I'M HERE TODAY TO DISCUSS WHAT I CONSIDER THE MOST EGREGIOUS SIGNING OF SECRET MOUS IN THE HISTORY OF THE COURTHOUSE.

THE EGREGIOUS CONTRACT, THE COURT DIRECTOR DOES NOT HAVE THE AUTHORITY TO SIGN A BINDING.

MOU CLAUSES DOES NOT HAVE THAT ABILITY.

SO I THINK THE FIRST, THE ORIGINAL MOU AND THE FIRST AMENDMENT, MOU, IS VOID BECAUSE THEY, HE DOESN'T HAVE THAT AUTHORITY.

ONLY THE BOARD HAS THAT AUTHORITY AND OUR CHARTER AND OUR DUTIES, POLICIES AND PROCEDURES.

AND IT'S NEVER BEEN DONE.

AT LEAST THAT CAME OUT AND THAT WE'RE NOW SITTING ON A RECOMMENDATION TO TAKE PROPERTY AWAY FROM YEAR 19 IS ABSOLUTELY EGREGIOUS.

IN ADDITION TO THAT, I'M NOT GONNA GO OVER THE TERMS WITH YOU 'CAUSE ALL YOU HAVE TO DO IS READ IT AND SEE YOU HAVE MAJOR PROBLEMS. YOU HAVE UNTIL JANUARY OF 2027.

SO WHY ARE YOU PUTTING IT ON THIS BOARD MEETING? BECAUSE YOU THINK YOU HAVE THE FOUR VOTES, YOU EVEN HAVE YOUR ONE CALLING IN AND NEXT MONTH YOU HAVE A CHANGE OF THE BOARD.

IT, IT'S JUST UNBELIEVABLE TO ME THAT WE GOT TO THIS POINT.

AND SO YOU REALLY NEED TO INVESTIGATE HOW DO WE GET HERE? HOW DID THE PORT DIRECTOR HIDE AN MOU AND A FIRST AMENDMENT FROM THE BOARD AND THE PUBLIC.

AND IF YOU DID VOTE ON IT, TELL US THE DATES YOU VOTED ON IT.

'CAUSE IT'S NOT IN YOUR BACKGROUND MATERIAL.

IF YOU BELIEVE HE HAS THE AUTHORITY TO DO BINDING STUFF ALSO ON THE CITY, BECAUSE IF YOU APPROVE IT, YOU START SPENDING MONEY IMMEDIATELY AND THEY ALREADY HAVE THINGS THEY SAY THEY HAVE DONE FOR YOU AND THEY WANT RECOUPMENT BACK FROM THE MONEY.

I'M WONDERING IF THAT HAS TO DO WITH THE TRANSPORTATION STUDY PEOPLE KEEP TALKING ABOUT, BECAUSE I'VE NEVER SEEN THAT STUDY, BUT I KNOW ROYAL CARIBBEAN DID ONE.

AND IS THAT WHAT THEY'RE TRYING TO GET RECOUPMENT BACK FOR? I DON'T KNOW, EGREGIOUS .

I HOPE YOU REJECT IT.

UH, IF YOU DON'T REJECT IT, YOU AT LEAST DEFER IT.

BUT THAT YOU CHARGE A TARIFF TO OUR P 19 PEOPLE AND IT'S A BIG TARIFF FOR THEM.

AND YOU SIGN A CONTRACT THAT HAS THESE TERMS. THEY'RE INDEFENSIBLE TERMS AND I CAN'T BELIEVE WE'RE HERE.

I CAN'T BELIEVE THERE WASN'T A NEWSPAPER ARTICLE ABOUT IT.

THERE WAS AN ARTICLE, UM, I THINK IT WAS A SEED TRADE TYPE ARTICLE THAT TALKS ABOUT NEVER HAVE THEY SEEN A CONTRACT WITH CERTAIN THINGS THAT YOU HAVE BEEN BOUND TO.

AND SO WHEN THEY SAY NON-BINDING, THEY ARE JUST BLOWING SMOKE BECAUSE YOU HAVE BINDING CLAUSES.

SO REAL QUICKLY ON YOUR CASH FLOW, UH, YOUR CASH PLAN, I HOPE YOU ALSO, UH, DISCUSS IT AND DEFER IT BECAUSE I SEE YOUR COUPLE ISSUES AND I DON'T HAVE TIME.

THANK YOU.

THANK YOU.

THANK YOU CHARLOTTE.

OKAY, SO DOWN

[D.1 CFO Report/Consent Agenda]

SO , WE WON'T, WE WON'T HOLD IT AGAINST YOU.

AND I ENDORSE THAT .

YEAH, WE HAVE A VERY FULL AGENDA TODAY AND, UH, I'M JUST GONNA TRY TO GET THROUGH IT AS FAIRLY QUICKLY.

DO NOT HESITATE TO STOP AND ASK QUESTIONS IF YOU HAVE ANY.

OKAY, LET'S START OFF WITH A MONTH.

THIS MONTH, UH, OUR REVENUE'S HALF A MILLION DOLLARS OVER BUDGET.

WE HAVE 3.4 MILLION IN NET INCOME, HALF A MILLION DOLLARS OVER BUDGET ON THE REVENUES.

THAT WAS PREDOMINANTLY DRIVEN BY, UH, HALF, WELL, $400,000 IN PARKING.

OPERATING EXPENSES BEFORE DEPRECIATION.

[00:20:02]

UM, THAT WAS MAINLY RELATED TO, UH, SALARIES RELATED EXPENSES SUCH AS SOME, SOME OF THE CONTRACT WORK, TRAVEL, THINGS OF THAT NATURE.

OUR NON OPERATING INCOME WAS A MILLION UNDER BUDGET.

THAT'S REALLY JUST DUE TO THE TIMING OF THE GRANT.

YOU KNOW, WE, WE DO OUR BEST TO PROJECT WHEN WE'RE DOING TIMING OF THE GRANTS IN OUR, IN OUR BUDGETS, BUT SOMETIMES IT'S, WE DON'T GET IT RIGHT IN THE RIGHT PERIOD.

SO, UH, THAT, THAT'S WHERE WE ARE FOR THE MONTH.

HERE'S OUR, UH, MONTH TO DATE INCOME.

IF ANYONE HAS ANY QUESTIONS, WE'LL DELVE INTO IT A LITTLE DEEPER.

UM, THIS IS OUR, OUR FINANCIAL STATEMENTS.

UM, NOTICE THAT CAPITAL EXPENDITURES WE'RE 2.6 MILLION.

WE'RE SLOWING DOWN ON CAPITAL EXPENDITURES RIGHT NOW.

IT'S JUST, IT'S JUST, UH, WE'RE WRAPPING UP PROJECTS.

YOUR REVENUES FOR THE MONTH.

UH, ANYONE HAS ANY QUESTIONS ON THAT? NO.

WE'LL MOVE ON.

REVENUES YEAR TO DATE.

YEAH, FINANCIAL EXPENSES FOR THE MONTH.

THAT WAS A GOOD MONTH.

68 MILLION WE'RE RUNNING WELL THERE.

AND THEN LET'S GET TO THE YEAR TO DATE.

YEAR TO DATE, NET INCOME, WE'RE AT 36.7 MILLION.

OUR REVENUES ARE 2.1 MILLION OVER BUDGET.

THEY'RE, AGAIN, PRIMARILY DUE TO PARKING.

PARKING IS RUNNING ABOUT 1.2 MILLION OVER BUDGET.

PASSENGER SERVICE CHARGES ARE RUNNING ABOUT 700,000 OVER BUDGET.

THAT'S 1.9 MILLION UP TO 2.1.

OPERATING EXPENSES BEFORE DEPRECIATION WERE 2.3 MILLION UNDER BUDGET, UH, SALARIES AND RELATED EXPENSES, AGAIN, THAT'S TRAVEL, ACTUAL SALARIES PAID AND, UH, SOME CONTRACT LABOR AND THEN INSURANCE AND THINGS OF THAT NATURE.

WE'RE 1.4 MILLION UNDER.

UH, AND THE REST IS SMALLER AMOUNTS.

OUR NON-OPERATING INCOME IS UNDER 1.2 MILLION.

UH, DUE TO TIMING, NOT OPERATING THE EXPENSE WELL, WE'RE, UM, GETTING CLOSE TO THE, IN WRAPPING UP THE IKEN BARREL AMOUNTS.

THAT'S, WE THOUGHT WE'D HAVE IT.

WE HAD PROJECTED TO HAVE IT DONE THIS MONTH IS THAT THIS MONEY'S LEFT IN BARREL THAT WE HAVEN'T GOT YET.

AND THERE'S SOME IN I THAT'S JUST STILL IS STILL IN PROCESS.

OKAY, HERE ARE OUR FINANCIALS FOR THE MONTH.

CAPITAL EXPENDITURES.

WE HAVE ACTUALLY SPENT 38 MILLION.

WE EXPECTED TO SPEND 41 MILLION SO FAR THIS YEAR.

WE'VE STILL GOT NO TRAILING COSTS THAT WE'VE GOTTA WRAP UP ON SOME OF THESE MAJOR PROJECTS.

THAT'S GONNA BRING THAT MORE IN LINE WITH WHAT WE HAD ANTICIPATED SPENDING FINANCIAL REVENUES.

UM, IF ANYONE HAS ANY QUESTIONS THERE, BE HAPPY TO DELVE INTO IT.

NOW WE'LL MOVE INTO REVENUES.

YEAR TO DATE.

REVENUES, UM, WHAT I'M GONNA POINT OUT HERE IS CRUISE IS STILL WELL OVER 50% OF OUR REVENUES.

TIME.

YOU GET PASSENGER FEES, PARKING A SMALL AMOUNT, A PORTION OF THE REAL ESTATE, AND THEN GROUND TRANSPORTATION IN THERE.

CRUISE IS STILL THE VAST MAJORITY OF THE REVENUE, BUT OUR REVENUE SO FAR, 78.7 MILLION.

OUR FINANCIAL EXPENSES YEAR TO DATE, UM, UTILITIES WERE DOWN PART OF THAT.

IT WAS JUST STRAIGHTENING UP WHERE WE WERE AND FINALLY GETTING RESOLUTION TO THE UTILITIES FROM LAST YEAR WHERE WE WERE OVERCHARGED ON SOME WATER AND WE GOT IT.

GETTING THAT RESOLVED.

INSURANCE IS HIGHER, UH, UH, JUST, UH, DUE TO THE MIX OF ON OUR INSURANCE AND THEN DEPRECIATION INCREASE.

AND WE'RE GONNA HAVE THAT.

WE WE'RE HAVING THAT, UH,

[00:25:01]

EXPENSES WE'RE AT 42 MILLION.

THAT'S JUST OUR NORMAL OPERATING EXPENSES.

YOU'RE GONNA SEE THAT OUR DEPRECIATION IS RUNNING ABOUT 26% OF OUR COSTS.

EMPLOYEE EXPENSES ARE RUNNING ABOUT THE SAME.

THAT'S WHAT I WOULD EXPECT ON OUR OPERATING EXPENSES.

OKAY, LET'S LOOK AT THE PRODUCTION LINE SUMMARY KEY.

I WANT TO KEY ON FOUR NUMBER SHIELD REAL QUICK.

NET OPERATING INCOME BEFORE ALLOCATION AND DEPRECIATION.

THE CONTRIBUTION MARGIN ON CREWS AND PARKING CREWS.

32 MILLION PARKING, 16.4.

SEE HOW THAT WARPS EVERYTHING ELSE.

BUT THAT'S WHAT'S IMAGINALLY US TO DO THE CAPITAL PROJECTS THAT WE'RE DOING ELSEWHERE.

THEN YOU GO DOWN THROUGH HERE AFTER THE ALLOCATIONS DOWN AT THE VERY BOTTOM AND AFTER THE DEPRECIATION, THE ACTUAL CONTRIBUTION ON THOSE TWO ITEMS IS 20, IS RUNNING ABOUT $27 MILLION.

16 ON CRUISE AND RIGHT AT 11 ON, UH, PARKING.

OKAY.

TRAVEL.

WELL, WE HAVE SEA TRADE COMING UP.

THAT'S ALWAYS, THAT ALWAYS IS ONE OF OUR MORE EXPENSIVE ITEMS IN TRAVEL.

UM, OTHERWISE WE'RE RUNNING 128,000 BELOW BUDGET.

UH, PART OF THAT WILL GET CAUGHT UP, BUT WE WILL BE SUBSTANTIALLY UNDER BUDGET.

PEOPLE ARE DOING MORE ONLINE AND REMOTE TRAINING RIGHT NOW.

OUR CASH POSITION, UM, UNDER I LOOK AT UNRESTRICTED AND LEGAL AND, UH, INTERNALLY RESTRICTED AND THE SAME LIGHT.

UH, EVEN THOUGH THE INTERNALLY RESTRICTED ARE FOR CAPITAL AND, AND THINGS THAT WE KNOW, WE THAT A LOT OF IT'S WHAT WE HAVE TO PAY OUT OF OPERATIONS.

WE JUST SET IT ASIDE DURING THE COURSE OF THE YEAR.

AND THEN LEGALLY RESTRICTED IS DEBT SERVICE RESERVE, UH, INTEREST IN SEEKING FUND AND, AND THEN BOND REMNANTS THAT WE HAVEN'T SPENT.

LOCAL VENDORS, UH, 16% OF OUR ORDINARY PAYMENTS WENT TO LOCAL VENDORS THIS MONTH, YEAR TO DATE, BROTHER.

OUR OVER DATE 90 DAY BALANCE, WE'VE GOT THAT DOWN AS OF THIS MORNING TO $44,000 UP.

IT WAS AT A HUNDRED THOUSAND WHEN WE PUBLISHED THE BOOK.

ANY, ANY QUESTIONS THERE? NO.

I WENT FINANCIAL, UH, THE A AR AGING HERE YOU'LL SEE THE A AR AGING.

WE ARE DOING, I BELIEVE A VERY GOOD JOB OF KEEPING THE AGING IN CHECK.

UH, SOME OF THE VENDORS, IT TAKES THEM 60 DAYS.

WE BILL THEM, THEY BILL THEIR VENDOR, THEY GET PAID, WE GET PAID.

AND DEPENDING UPON WHAT TIME OF THE MONTH THAT HAPPENS, IT'S JUST STILL, BUT WE'RE LOOKING AT AND 88% BASICALLY THAT'S UNDER 30 DAYS.

I'M VERY PLEASED WITH HAVING THAT AMOUNT UNDER 80 DAYS.

UNDER 30 DAYS.

EXCUSE ME.

OUR CURRENT CASH POSITION.

HERE'S A COUPLE OF THINGS I WANT TO POINT OUT.

WE WERE TALKING ABOUT INTERNALLY CASH, INTERNALLY RESTRICTED CASH.

WE HAVE, WE PLACE MONEY INTO THE DREDGING ACCOUNT EVERY MONTH.

WE ALSO HAVE TO ACCRUE FOR THE CCL MARKETING INCENTIVE.

WE JUST PAID THE CCL MARKETING INCENTIVE.

WE'RE BUILDING IT UP FOR THE NEXT PAYMENT.

THE DREDGING THAT AT TIMES GOES IT, IT BUILDS, WE DO DREDGING IT, STRIP IT FALLS DOWN DRASTICALLY AND THEN IT STARTS BUILDING BACK UP.

THEN A LEGALLY RESTRICTED INTEREST IN SINKING FUND.

YOU'LL NOTICE SERIES 20 23, 20 24 A AND 2024 B

[00:30:01]

LEGALLY RESTRICTED DEBT SERVICE RESERVE FUNDS, THOSE ARE REQUIRED FOR US TO HOLD AND IN INTEREST BEARING ACCOUNTS.

AND THEN LEGALLY RESTRICTED THE BOND PROCEED TOWARD DOWN TO 1.7 MILLION FROM THE LAST BOND ISSUE THAT WE'RE STILL PAYING OUT THE TRAILING COST MUST, UH, UM, ON THE CAPITAL PROJECTS THAT WE'VE JUST FINISHED AND MAKING SURE ALL THE PUNCH LISTS ARE DONE, WE WILL HAVE SOME MONEY LEFT OVER THAT WE'LL DEDICATE TO, UH, ANOTHER WATERFRONT PROPERTY.

IT WON'T BE THAT MUCH LESS THAN A MILLION POINT OUT.

AGAIN, MARK, WE TALKED ABOUT IT LAST MONTH, BUT WE, WE NOW WE'VE GOT ALL THE COMMITTED CAPITAL PROJECTS.

WE HAD, WE HAVE ALL THAT MONEY NOW WE HAVE ALL THAT MONEY SET ASIDE.

SO IT'S, IT'S IN, IT'S IN, IT'S ALL IN FRONT OF US.

YEP.

SO WE'RE, WE'RE WE'RE THINGS THAT WE SAID WE'RE GONNA HAPPEN ARE HAPPENING NOW AND WE'RE MOVING FORWARD.

STAFFING AT, UH, AS OF 7 31, WE HAD 138 EMPLOYEES.

THAT'S SIX EMPLOYEES LESS THAN WHAT WE HAD SLIDE.

VERY GOOD.

UH, WE ARE SIX POSITIONS UNDER BUDGET AS OF JULY 31ST FOR THE EQUIVALENT PAY PERIOD LAST YEAR WE TWO WE'RE UP TWO EMPLOYEES.

OKAY.

UNDER THE SIX EMPLOYEES THAT WHAT YOU WERE PROJECTING AS FAR AS WHEN WE WERE GONNA BRING PEOPLE ON DURING THE YEAR.

PART OF THAT IS WHEN WE, UH, BRINGING PEOPLE ON DURING PART OF THE YEAR, THEY, WE DIDN'T BRING 'EM ALL ON JANUARY 1ST.

AND SOME OF 'EM, WELL WE HAVE, WE DO HAVE SOME SOME TURNOVER.

TURNOVER.

THE MAYORS SOON TO BE FAVORITE SLIDE.

I'VE GOT THE NUMBER.

OKAY.

YEAR TODAY, WE'VE GIVEN THE CITY RELATED TO THE PILOT OR SET ASIDE MONEY FOR THE PILOT PAYMENT.

UH, WE'RE PAYING THE TRANSIT TERMINAL MONTHLY LOCAL SALES TAX.

Y'ALL ARE GETTING THAT WHEN THE CITY PAYS, WHEN THE STATE PAYS OUT TO YOU.

UH, ADDITIONAL PASSENGER CHARGES AND LONG-TERM PARKING FEES WE'RE PAYING MONTHLY SO FAR.

Y'ALL RECEIVED TWO POINT, UH, 1 MILLION FOR, UH, THE FIRST SEVEN MONTHS OUT OF THE YEAR.

THE CITY BUDGETED 4 MILLION FOR NEXT YEAR, CORRECT? CORRECT.

YEP.

AND THEN WE HAVE ONE DOCKAGE DISCOUNT, THE GORDON CASE THEN CAN I UH YES.

ASK GRETTA A QUESTION ABOUT THAT DOCKAGE OF THAT, UH, GARDEN.

K YES.

THAT'S, SHE'S BEEN THERE FOR QUITE A WHILE.

YES.

WE'VE HAD TO MOVE HER AROUND SO WE DON'T HAVE A LEASE AGREEMENT WITH HER.

SO WE GIVE HER LONG TERM, UH, DOCKAGE DISCOUNTS.

WE MOVED HER FROM 15 OVER TO THE WEST END.

RIGHT.

AND SHE SERVICES, UH, VESSELS WITH LUBRICATION OF WOOL.

OKAY.

UH, THROUGHOUT THE MONTH.

SO SHE IS, SHE'S BEEN HERE FOR ABOUT FIVE YEARS OR SO.

OKAY.

YEAH.

JUST CAN'T FIND HER OWN PERMANENT HOME.

OKAY.

THANK YOU.

OKAY, LET'S TALK ABOUT THE BUDGET.

WE'RE MOVING FORWARD WITH DEVELOPING THE 2027 BUDGET.

UH, I NEED SOME HELP FROM Y'ALL.

THE WEEK OF OCTOBER 12TH.

WE NEED TO HAVE, START LOOKING AT A DATE THAT THE BOARD USUALLY THE ENTIRE WE NEED TO FINANCE COMMITTEE, BUT WE, MOST OF THE TIME THE ENTIRE BOARD SHOWS UP OR THOSE THAT CAN, UH, THE WEEK OF THE 12TH IS, UM, MONDAY.

I DON'T HAVE MY CALENDAR WITH ME UP HERE, BUT THAT'S ON A MONDAY THAT WEEK.

AND I THINK THE 12TH IS, UH, IS COMMITTED.

SOMETHING ELSE IS GOING ON.

BUT ONE DAY THAT WEEK WE NEED TO BLOCK OFF TWO TO FOUR HOURS JUST TO TALK ABOUT THE BUDGET FOR 2027.

MARK THE 12TH IS COLUMBUS STATE.

OH, THAT WHAT IT IS A CITY.

IT'S NOT, NOT A FOR HOLIDAY, BUT IT'S A CITY HOLIDAY BANK.

HOLIDAY BANK HOLIDAY.

IT'S ALSO AN EXTRA DAY UNDER THE OPEN MEETINGS ACT FOR US.

[00:35:01]

AND THEN WITH THE INTENT OF GIVING US TIME TO ADDRESS THOSE ISSUES, GIVE US ABOUT A WEEK TO ADDRESS THOSE ISSUES.

AND THEN BRING THE BUDGET TO THE BOARD FOR APPROVAL AT THE OCTOBER 27TH BOARD MEETING.

THAT GIVES US SOME TIME FOR SLIPPAGE IF WE HAVE TO, BUT WE'D LIKE TO GET IT OUTTA THE WAY BEFORE THE HOLIDAYS THIS YEAR.

AND DOESN'T MEAN IF WE, IF WE HAVE QUESTIONS RAISED AND WE CAN'T LET IT SLIP INTO NOVEMBER, I WOULD PREFER NOT TO LET IT SLIP PAST THE NOVEMBER MEETING.

BUT WE DO NEED SOME, WE DO WANT Y'ALL'S INPUT.

WE WANT TO SHOW YOU WHAT WE'VE GOT AND ANY, ANY COMMENTS THAT THE BOARD WILL HAVE, UM, THAT WEEK SO WE COULD START MAKING THOSE CHANGES.

SO ANGIE WILL GET WITH Y'ALL AND PULL Y'ALL TO FIND THE DATE.

BUT, WE'LL, I, SOMETIMES IT TAKES TWO HOURS, SOMETIMES IT TAKES HALF A DAY.

DEPENDS ON HOW MANY QUESTIONS YOU'LL RAISE.

SO WITH THAT, IF Y'ALL HAVE NO QUESTIONS, THAT GETS ME THROUGH MY CFO REPORT.

UM, AND, AND ITEMS ONE THROUGH, I THINK THE ONLY OTHER ITEM LEFT IS THE, UH, UH, TRAVEL ONE.

DO WE WANT TO DO THAT AND THEN, UH, MAKE A RECOMMENDATION ALL AT ONCE? YES.

OKAY.

WHICH ONE IS THAT? WELL, WE, UM, WE HAVE THE MASTER PLAN CAPITAL SCHEDULE.

OH, IT, UM, UH, IS IN YOUR BOOK.

I, IF YOU WANNA TAKE A LOOK AT THAT.

I MEAN, I'M SORRY.

I THINK JUST REALLY MOVING AROUND, UH, YOU KNOW, PAYMENT SURVEYING, BRINGING THE ACTUALS, THE STUFF CURRENT.

I THINK THAT'S PROBABLY THE ONLY ROBERT HERE.

THAT'S NUMBER NINE.

HE'S HERE.

SO, UH, ROBERT, YOU WANT TO DISCUSS THE CHANGES TO THE, OR TO OUR ORIGINAL ONE REAL QUICK.

LET'S SEE IF I HAVE WE GOT, THAT'S, UH, CONSENT AGENDA ITEM NINE.

THE MAJORITY OF THE, OF THE EVERYTHING HIGHLIGHTED IN GREEN IS, IT MEANS A CHANGE.

UH, IT WAS JUST ALL THE GREEN ITEMS MAINLY MEAN THAT THERE WAS A PAYMENT MADE.

SO THERE'S, UH, REDUCED THE BALANCE.

SO THAT'S LEFT ON THAT PROJECT AND ALSO INCREASE THE CASH PAID FOR THIS YEAR.

UH, WE DO THIS ON A CASH BASIS AND THE ONLY OTHER ONE I WOULD LIKE TO HIGHLIGHT WOULD BE THE WALKWAY.

THERE'S TWO RIGHT THERE IN THE, THE SECOND SECTION THAT WAS PUSHED OVER TO NEXT YEAR.

UH, BECAUSE THAT PROJECT'S NOT TO BE MOVED OVER.

UH, THAT'S NOT HAPPENING THIS YEAR.

THOSE GRANT FUNDS AND OPERATION KNOWLEDGE WILL NOT BE BEING SPENT, UH, ASSOCIATED WITH THAT GRANT THIS YEAR.

BUT THE REST OF THE HIGHLIGHTED AGREEMENT JUST MEANS THE PAYMENT HAS BEEN, HAS BEEN MADE.

NO NEW PROJECTS ADDED OR ANYTHING? NO SIR.

NO SIR.

THERE ARE NEW PROJECTS ON THERE SUCH AS THE MICRO GRID, BUT THERE'S NOTHING, NO, UH, ACTIVITY HAS HAPPENED ON THAT YET THIS YEAR.

GOT IT.

BUT THAT WAS ADDED A FEW MONTHS AGO.

YEAH.

OKAY.

OKAY.

THANK Y'ALL.

ALRIGHT, THANK YOU.

AND THEN THE, THE UH, LAST PIECE ON THE CONSENT AGENDA IS TAB EIGHT RIGHT BEFORE THAT, UH, THIS IS TRADE DEVELOPMENT.

GOOD.

IS THERE ANYTHING ON THAT NEXT MEETING? BLESS YOU.

EXCUSE ME.

IT'S IN THIS MEETING CONFERENCE.

OKAY.

AND OUR PORT DIRECTOR'S BEEN INVITED TO BE A SPEAKER AND UH, AT A WORLD PORT CONFERENCE THAT'S GONNA GIVE US A HUGE WORLDWIDE STAGE TO PROMOTE THE PORT OF GALVESTON, THE CITY OF GALVESTON, AND THE GULF COAST AREA.

UM,

[00:40:02]

I DON'T, WELL, WE HAVE A A, A BUDGET ON HERE TO ASK AS ACCORDING TO POLICY, THE BOARD MUST APPROVE UM, INTERNATIONAL TRIAL.

INTERNATIONAL TRIAL.

UM, SO I WAS INVITED ABOUT SIX WEEKS AGO.

UM, AND WE JUST NOW GOT THE, REALLY, THE FINAL PIECES OF IT.

I MEAN, I'M NOT LISTED ON THE AGENDA YET BECAUSE I HAVEN'T TOLD 'EM.

COME.

AND SO THAT'S, THAT'S WHAT WE NEED TO DO RIGHT HERE.

DO HAVE THE BOARD, UH, DECIDE I'M FLYING OVER THERE.

IT'S STRAIGHTFORWARD FLYING OVER BUSINESS CLASS 'CAUSE IT'S AN OVERNIGHT FLIGHT TO GET THERE AND THEN COMING BACK, REGULAR CLASS, UH, COMING BACK AND THEN THERE'S NO REGISTRATION FEES.

UM, THE COMPANY INVITING ME OVER THERE HAS, UH, PICKED UP THE FEES TO ME AND THEN WE JUST HAVE SOME, WE JUST HAVE THE EXPENSES GOING OUR, UH, OUR POLICY.

BUT DOES IT REQUIRE A VOTE AND SHOULDN'T IT BE BEFORE THE UH, FULL BOARD, RIGHT? IT IS, ISN'T IT? YEAH.

IT'LL BE A RECOMMENDATION HERE TO GO TO THE BOARD, SO.

GOT IT.

DO WE NEED TO HAVE A, DO WE NEED TO TAKE IT UP OURSELVES? OKAY.

DO YOU WANNA MAKE A MOTION? I, I'D LIKE TO MAKE A MOTION TO DEFER THIS VOTE TO THE FULL BOARD LATER, LATER TODAY.

I'LL SECOND THAT ALL.

AND THEN I HAVE, WE NEED A, A, UH, A RECOMMENDATION TO ON ALL THE REST OF THE ITEMS TOO.

OH, OKAY.

YES, I'M GETTING TO THAT.

SO I'D MAKE A MOTION TO APPROVE ALL THE ITEMS, UH, CONSENT AGENDA TODAY AND INCLUDING THE CHANGES TO THE MASTER PLAN.

AND I SECOND THAT AND WE'LL VOTE AND WE'LL VOTE.

YAY.

ANY MORE DISCUSSION? NO.

SO NOW WE'RE DOWN TO, UH, THE DATE OF THE NEXT MEETING.

RIGHT? UH, WE GOT A CASH RESERVE POLICY.

WE GOT

[D.2 Discuss and Consider Approval of Cash Reserve Policy of the Board of Trustees of the Galveston Wharves]

OH, THAT'S RIGHT.

WE JUMPED OVER THAT.

OKAY.

CASH RESERVE POLICY, IF YOU'LL FLIP OVER BEHIND THE ORANGE TAB, THE ITEM TWO, IT, IT'S JUST BUSINESS.

SO, SO GOING, GOING BACK TO THE AGENDA.

DID, DID YOU GUYS MAKE A RECOMMENDATION FOR THE EXCEPTION OF, UH, H TO THE BOARD TO APPROVE? YOU THINK THAT'S WHAT WE USUALLY DO, ISN'T IT? THEY, THEY DID.

OKAY.

I JUST DIDN'T HEAR IT.

I'M WE'LL TALK ABOUT THAT.

WE'LL TALK ABOUT H YOU NO, YEAH.

ALRIGHT.

THE BOARD HAS ASKED, WE'VE BEEN DISCUSSING THAT, SETTING UP A CASH RESERVE.

THIS WILL BE AN INTERNAL CASH RESERVE THAT WE WILL CONTRIBUTE TO IN BUILD UP TO OVER 24 MONTHS.

WHENEVER, IF THERE COMES A TIME THAT WE NEED TO TEMPORARILY PULL DOWN MONIES FROM THIS, IT WILL REQUIRE BOARD APPROVAL IN ADVANCE.

SO, AND THEN WE WILL REPLENISH IT.

UH, WE DISCUSSING AND REPLENISH IT.

BUT THE GOAL IS TO BUILD UP INITIALLY A $20 MILLION RESERVE.

THAT $20 MILLION RESERVE WILL BE MADE UP OF ONE YEAR OF DEBT SERVICE AND THE OPERATING IN THREE MONTHS, 90 DAYS OF OPERATING EXPENSES.

WE WILL REEVALUATE.

AND THAT'S WHAT IT SAYS IN THE POLICY.

NOW, IN THE PROCEDURES, I BELIEVE IT TALKS ABOUT HOW WE'RE GOING TO MAKE SURE WE DO THIS.

AND IF, UH, WHAT WE'RE GOING TO DO IS EACH YEAR WHEN WE PASS THE BUDGET, WE'RE GONNA REPAY THE 90 DAY DOLLAR AMOUNT WE NEED FOR THE OPERATING EXPENSE.

SO THIS YEAR, I'M, I'M, THESE ARE HYPOTHETICAL NUMBERS.

SAY WE NEEDED $6 MILLION IN 2026, IT SAID THAT'S WHAT WELL 3 MILLION FOR, UH, TO COVER 90 DAYS OF OPERATING EXPENSE.

WHEN WE PASS THE 2027 BUDGET, IF IT SAYS, OH, WE NEED THREE AND A HALF MILLION DOLLARS TO COVER OUR OPERATING EXPENSE, WE WILL PROSPECTIVELY INCREASE THAT $3 MILLION TO 300 TO THREE AND A HALF MILLION DOLLARS ON THE BONDS.

AS WE WILL ALSO BE FUNDING ONE

[00:45:01]

WE WILL HAVE AN ADDITIONAL YEAR'S WORTH OF BOND SERVICE BUILT UP AT THE END OF TWO YEARS.

AND WHEN WE REISSUE, IF WE ISSUE ANY ADDITIONAL DEBT AFTER WE REISSUE THAT DEBT, WE WILL OVER THE, ANOTHER, THE, THE TWO YEARS AFTER ISSUANCE BUILD UP ENOUGH TO COVER THE BOND SERVICE, UH, ANNUAL DEBT SERVICE ON THAT BOND ISSUE.

SO IT'S, YOU KNOW, IF WE ISSUE NO DEBT AND NOTHING AND THE OPERATING AMOUNT CHANGES, AT THE END OF TWO YEARS, WE'LL HAVE $20 MILLION THEN THAT WILL BE ADJUSTED UPWARDS OF DOWN WHICH THE DEBT, NEW DEBT ISSUANCE OR DEBT RETIREMENT.

AND WE'LL ALSO RAISE, GO UP AND DOWN BASED UPON THE AVERAGE MONTHLY OPERATING CASH THAT'S NEEDED FOR OPERATIONS BASED UPON BUDGET.

AND IT ALSO, IT ALSO IS, MAKES THE ASSUMPTION THAT OUR MAJOR LINE OF REVENUE, UM, DISAPPEARS BECAUSE THAT WOULD BE THE, THAT WOULD BE THE CATASTROPHIC VENT THAT WOULD CAUSE US TO HAVE TO, TO HAVE TO GO TO THIS FUND IF IT WAS PROLONGED.

SO WHAT IT DOES IS IT NETS OUT REVENUES AND THEN ALL EXPENSES THAT ARE ASSOCIATED WITH THE CRUISE BUSINESS.

MM-HMM .

AND THAT'S WHERE WE'RE ARRIVING AT.

WHAT THAT, UH, OPERATIONAL RESERVE NUMBER IS FOR THREE MONTHS IS.

YEAH.

SO BASICALLY WE, WE TAKE WHAT OUR TWO, OUR REVENUES ARE, OUR OPERATING EXPENSES ARE THOSE OPERATING EXPENSES THAT ARE, UH, VARIABLE AND RELATED TO CREWS ARE REMOVED.

THE REVENUES RELATED TO CREWS ARE REMOVED.

THAT'S WORST CASE SCENARIO.

WE LOSE CREWS AND THAT GIVES US A CUSHION TO COVER EVERYTHING UNTIL WE'RE ABLE TO RECOVER, REGROUP, AND GET BACK.

WE'VE SEEN WHAT'S HAPPENED.

WE'VE ACTUALLY PROVED THIS MODEL WILL MORE THAN WORK DURING, UH, THE NO SALE ORDER PERIOD.

SO IT'S, IT'S NOT UNREASONABLE.

AND UH, UH, YOU ALSO ASSUME WE STILL, WE STILL HAVE CARGO.

YEP.

AND WE CONTINUE WITH CARGO LAY IN LAY BUSINESS RENTAL INCOME WE USED, WE DID NOT INCREASE LAY BUSINESS.

WE LEFT LAY BUSINESS IN AS BUDGETED.

BUT IN REALITY, IF, UM, CARGO GOES, IF CRUISE GOES AWAY FOR A WHILE, WE'LL PICK UP EXTRA LAY, BUT WE'RE NOT GONNA COUNT THAT.

WE'RE ONLY GONNA COUNT WHAT WE BUDGET.

OKAY.

I'M GONNA, UH, JUST AS A QUESTION, UM, DO WE, UH, WE'RE GONNA TREAT THIS BASICALLY AS INTERNALLY RESTRICTED? CORRECT.

AND WE'RE GONNA YES, SIR.

AND WE'LL, IT'LL SHOW UP IN OUR FINANCIAL REPORTS AS A PART OF THAT CATEGORY.

IT WILL, IN OUR INTERNAL REPORTS, IT'LL SHOW UP AS INTERNALLY RESTRICTED ON OUR PUBLISHED .

IT SHOWS UP AS NON-RESTRICTED CASH.

GOT IT.

IT'S AS THE OTHER PARTS OF INTERNALLY RESTRICTED.

CORRECT.

TO BE TREATED GENERALLY.

AND FROM AN ACCOUNTING PERSPECTIVE, IT'LL BE TREATED THE SAME AS OUR INTERNALLY RESTRICTED FUNDS ARE NOW.

YES, SIR.

GOT IT.

AND THE, THE IDEA IS TO INVEST THIS MONEY BY THE INVESTMENT POLICY, BUT WE'RE GOING TO STAIR STEP, WHICH MEANS WE'RE GONNA INVEST PART OF IT, SAY FOR 90 DAYS, PART OF IT FOR SIX MONTHS, PART OF IT FOR A YEAR, AND PART OF IT, UH, GO OUT AS FAR AS WE CAN, BUT IT'S GONNA BE STAIR STEP SO THAT WE CAN GET MATURITIES ON CERTAIN DATES AND TRY TO EARN A LITTLE MORE MONEY WHEN WE GET TO $20 MILLION.

I CAN FUND SMALL CAPITAL PROJECTS OUT OF, NOW LET'S TALK ABOUT INTEREST UNTIL IT'S FULLY FUNDED.

INTEREST EARNED ON THIS MONEY WILL STAY IN THAT FUND.

ONCE THE FUND IS FULLY FUNDED, INTEREST WILL GET SWEPT INTO THE GENERAL ACCOUNT.

OKAY.

SHEILA, UM, TONY, UM, DO YOU, IT IT'S FIRST OF ALL, THANK YOU,

[00:50:01]

WE'VE TALKED ABOUT IT FOR A LONG, LONG TIME ON THIS BOARD AND I'M VERY PLEASED THAT WE ARE MOVING FORWARD WITH THIS.

UM, IS, IS THIS POLICY WRITTEN IRONCLAD THAT MONEY CANNOT BE SPENT WITHOUT BOARD APPROVAL? YES.

OKAY.

WITH THAT I'LL APPROVAL.

I'LL SET.

AND I WOULD LIKE TO SAY THAT I THINK THE STAFF DID A GREAT JOB PUTTING THIS TOGETHER.

AND I'LL SAY, WE MENTIONED SEVERAL TIMES IT HAS TO HAVE BOARD APPROVAL.

YES.

WELL, YES.

WELL, BUT THEN YOU SAID, I MEAN IN YOUR, IN YOUR CONVERSATION JUST NOW, YOU SAID YOU COULD USE IT FOR SMALL INTEREST SMALL PROJECTS ONCE THE FUND IS FULLY FUNDED, WE COULD USE THE INTEREST FROM IT ON THAT.

BUT UNTIL THE FUND IS FULLY FUNDED, ALL INTEREST STAYS WITH THE FUND.

OKAY, GOOD.

MY MISUNDERSTANDING.

NO, NOT A PROBLEM.

THIS IS NOT A PROBLEM.

I WANNA MAKE SURE EVERYONE UNDERSTANDS.

AND I WOULD SAY TOO, YOU PROBABLY, YOU KNOW, AS YOU GO WITH THIS FOR A YEAR OR TWO, FIVE YEARS, YOU CAN ALWAYS TWEAK IT RIGHT AS YOU FIND WELL IT WORKS AND, AND ADJUST IT.

BUT I THINK DECA WHAT SHEILA SAID, I KNOW WE'VE TALKED ABOUT THIS PROBABLY SINCE I'VE BEEN ON THE BOARD AND I DON'T KNOW, WE REALLY WEREN'T NECESSARILY IN A GREAT POSITION BECAUSE WE WERE SPENDING A LOT OF CASH.

BUT I REALLY APPRECIATE YOU GUYS NOW THAT WE KIND OF GOT TO THE BOARD, GOT STEADY STATE OPERATIONS THAT YOU GUYS TOOK THE TIME AND I THINK PUT TOGETHER A VERY THOROUGH POLICY, UH, TO MOVE FORWARD.

SO THANK YOU GUYS FOR DOING THAT.

AND I WILL SAY THAT WE, WE DID MENTION TO THE RATING AGENCY THAT WE WERE CONTEMPLATING THIS AND WE WERE BRINGING IT TO THE BOARD AND THEY WERE EXCITED ABOUT IT.

THAT GIVES US, SO WHAT'S, WHAT'S GREATER THAN A PLUS? IS THERE AN EXTRA PLUS AND AN EXTRA PLUS? YEAH.

TRIPLE EIGHT.

PLUS TRIPLE PLUS PLUS.

AND IT GOES ALL THE WAY UP TO THREE PLUSES.

YEAH.

ALRIGHT.

ON OUR WAY.

ALRIGHT.

FORWARD, DID YOU TWO VOTE? NOT YET.

OKAY.

AND SO WE'RE WHERE IT'S TIME TO VOTE, RIGHT? ALL THOSE IN FAVOR? AYE.

AYE.

OKAY.

ANY OTHER QUESTIONS? OKAY.

THANK Y'ALL.

THANK YOU.

THANK YOU.

THANK YOU MARTIN.

ALRIGHT,

[E. COMMENTS FROM THE FINANCE COMMITTEE MEMBERS]

I REALLY, I REALLY AM PLEASED THAT WE GOT THAT POLICY.

ALRIGHT.

SO I'M GOING TO ADJOURN THE, UH, FINANCE COMMITTEE.

TRY TO KEEP IT UNDER AN HOUR.

YOU DID.

YOU MAYBE TAKE A LITTLE FIVE MINUTE BREAK AND THEN WE WILL CONVENE.