First-quarter expense cuts have paid off for the Port of Tacoma.

The port’s operating income – or profit made from the business it does and not including money earned from the tax levy – was up 3.3 percent to $4.8 million as of the end of April when compared with what the port forecast in its 2009 budget.

That number is still 26 percent below where the port was last year at this time. The port made several cuts to its expenses earlier this year – including delaying pay raises, reducing benefits and cutting travel – to combat declining revenue brought on by the global recession.

Port revenue as of April was down almost 9 percent to $30.3 million when compared with both what was budgeted and the previous year’s revenues. The port commission will hear a budget report at its meeting today.

Such cuts translated to a 10 percent reduction in operating expenses from what the organization had originally budgeted and a 4 percent reduction when compared with the previous year.

But the biggest – and most painful – cut came Monday when the port notified 47 of its 256 employees that their jobs had been eliminated. Cost savings from the staff reduction aren’t reflected in the port’s current budget numbers.

A few have questioned why the port is doing layoffs at all, especially after hearing that the port’s return on revenue remains above 15 percent.

The return on revenue – the port’s operating income or profit divided by its total revenues – is one metric the port uses to measure its financial health and indicates the port’s ability to stay profitable.

Port Executive Director Tim Farrell said Wednesday that there’s a difference between being able to “retain employees and having work for them to do.”

The current downturn in trade means the port doesn’t have enough work for all of its current employees – and won’t for awhile, he said.

The number of containers coming through the port was down 16 percent as of April when compared with the previous year. And at the end of last year container volume at the port remained 10 percent below its peak in 2006, when the port handled more than 2 million containers.

The port earns its money through a combination of rent from its shipping terminals and services such as moving containers on and off trains.

Farrell said Wednesday that he doesn’t anticipate container volumes to get back to those peak levels for eight or nine years.

Kelly Kearsley: 253-597-8573

kelly.kearsley@thenewstribune.com