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Report suggests changes for port


After a messy, public battle for power at the port of Baltimore ended with the resignation of its chief executive this year, frustrated lawmakers and port interests urgently debated how to separate politics and waterfront business.

There were private grumbling, State House hearings and a proposed bill to cut some of the port's ties to the administration of Gov. Robert L. Ehrlich Jr. but no consensus.

Now, a recently completed report commissioned by the state, at a cost of $300,000, offers advice on running the port more like a business and less like a state agency. Port and government officials will mull it over this summer.

The report, conducted by New York-based Mercer Management Consulting, doesn't advocate the sort of extensive change, such as making the port independent of the Maryland Department of Transportation, that some lawmakers proposed. But it does call for giving port executives more power over day-to-day operations and easing state rules on hiring and spending.

"We have something to put our arms around," said Helen Delich Bentley, former congresswoman and a port adviser. "One thing is clear: We need to make some changes so the port has some autonomy."

The report is getting attention as a new executive director prepares to take the helm of the Maryland Port Administration today. F. Brooks Royster III, a former port of Miami official, takes over for James J. White, who headed the port for six years until resigning amid what he called meddling in hiring and spending matters by his bosses in the Department of Transportation.

The departure angered Democratic legislators who oversee the state's maritime interests and some port customers, who wrote letters and e-mail to state officials that they feared the business and stability White brought would dissolve.

Facing much of the criticism was Transportation Secretary Robert L. Flanagan, appointed more than two years ago by Ehrlich, the first Maryland Republican governor in 36 years. Flanagan said last week that he was obligated to question possible overspending on such things as $200 pens and tickets to sporting events, and that Ehrlich had a prerogative to appoint people to work there.

He said lawmakers should not move too hastily to give the port exemptions from state rules aimed at protecting taxpayer money.

Taxpayer money

For now, the report concluded, the port needs taxpayer money to pay for such capital needs as clearing the bay channels, cranes and land because the port's direct revenue is only enough to cover operating expenses. The report said the port could not become independent from the state unless another funding source is found.

The report is dated May 17, but work began on it last year, before the public dust-up between Flanagan and White.

Its authors said their recommendations were not influenced by the clash but are timely because of it.

"We were very explicit in the report that we believe things need to be changed," said Mark Kader, a Mercer director who wrote the report along with Manny Hontoria, a Mercer principal. "They are not some nice-to-haves."

Kader said they would have made the same recommendations whether the White and Flanagan disagreement had happened or not.

Other ports face similar political and structural problems and are dealing with them.

"What will happen if nothing is changed is Baltimore's competitive position will continue to become more difficult," Kader said. "It will hurt business and if it hurts business, you can figure out the side effects."

For his part, Flanagan said he opposes port independence but not to loosening some rules. He said he would rely heavily on the advice of Royster, the new port director, who said he would immediately start talks with port interests.

'Move carefully'

However, Flanagan warned: "I do think we need to move carefully. The important thing right now for the port and its various constituencies is to all work together to build business and to make it clear to everyone on the outside that wants to do business with us that we are united."

Legislators were briefed on the results of the report said it's not clear if that unity would need to be legislated.

Sen. George W. Della, a Baltimore Democrat who sponsored a bill to separate the port from the transportation department, said there will be hearings on the recommendations.

The recommendations included streamlining of bureaucracy normally applied to all state agencies on port travel, staffing and salaries and buying land, supplies and equipment. They aim to cut decision-making time and to give port officials more budgeting power.

'Unanswered questions'

In deciding which changes to pursue, Della said, "The unanswered questions I ask myself are 'What's in the best interests of the port?' and 'How do we make it as efficient and customer friendly as possible?'"

George F. "Bud" Nixon Jr., head of a group of private port businesses, said he was not among the 30 port stakeholders interviewed for the report, and said the findings were still making their way around.

"It's going to take some soak time," he said. "If we're smart, we'll take the summer to digest this and make up our minds."

Port recommendations

A state-commissioned report advises that Maryland should:

Give the port executive more power to negotiate contracts with customers without state approval.

Exempt certain positions from state salary caps.

Exempt port purchases from the state's bidding process.

Expand the authority of the executive director to manage day-to-day budgets, instead of requiring outside approvals.

Develop a method to determine the economic impact of investments in land and other items.

Determine a secure and adequate funding stream, such as authorizing bond sales or diverting a portion of state taxes, to cover capital needs, including land purchases. This funding stream would be essential to establishing an independent port.

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