Since being named to the board in May 2003, the Georgia native has been the driving force behind several sweeping changes at the State Ports Authority, not the least of which is moving to shutter its unprofitable Port Royal terminal and seeking to cash in on the agency's valuable waterfront holdings on Daniel Island.

Encouraged by Butler's ascendancy to the board's chairmanship in January, observers now say there's little doubt he's been effective and likely will continue making waves.

The ports authority's lean new budget is the latest example.

Approved this week, the budget is expected to swell the SPA's revenue coffers to $122 million while keeping operating expenses flat and reducing administrative costs by 8 percent.

The belt-tightening comes as the SPA is in the midst of dramatic growth -- 14 percent in two years and record cargo volumes in May and June -- with more on the way.

Projections for fiscal year 2005 call for the equivalent of 1.8 million 20-foot shipping containers to pass through the Port of Charles-ton, a number that's likely to secure the port's ranking as the nation's fourth-busiest container port.

Whatever the numbers behind the scenes, legislators in Columbia are noticing that the General Assembly and the SPA seem to be getting along better after years of bitterness and tension, said state Rep. Jim Merrill, R-Daniel Island.

"That's been extremely refreshing," said Merrill, who credits Butler and another Sanford appointee, Carroll A. Campbell III, with building a bridge of goodwill between the Lowcountry's cargo docks and the Statehouse.

What's good for the port is good for the maritime community, said Gerald Bresnihan, director of imports for C.H. Powell Co. in Mount Pleasant and past president of Customs Brokers and Freight Forwarders Association of Charleston.

"The whole maritime community suddenly has this different impression," Bresnihan said. "It's very positive."

Bresnihan and others do, however, wonder if the new board members are not also beneficiaries of good timing.

The SPA's failed bid to build a container terminal on Daniel Island was the primary source of criticism directed at the agency in recent years. With that location abandoned in favor of the former Charleston Naval Base, the controversy fizzled.

Still, not everyone is happy with the port's new course. Some North Charleston residents near the base say the SPA is attempting to force the project through an environmental review with little regard for potential traffic impacts.

Meanwhile, the board's focus on the bottom line has brought some success.

The spending plan adopted by the board this week is nearly $2 million slimmer than what port staff initially requested, said Butler, noting that SPA President and CEO Bernard Groseclose Jr. and other senior management were collaborators in the cost-cutting measures.

"We no longer accept proposals from staff without them being able to justify every expense," Butler said.

Groseclose couldn't recall ever seeing the port raise its cash flows by 16 percent in one year's time, which is what's predicted for next year.

With $50 million in capital projects on the horizon, the idea is to build up the SPA's cash flow so it can issue revenue bonds to help pay for the proposed terminal.

"I don't want people to think we are just cutting costs. We are trying to grow this port," said Butler, whose Butler Properties develops land across the Southeast, including Dollar General stores in Georgia and the Carolinas.

Unlike most state agencies, the SPA is profit-driven and gets no annual appropriations from the state budget. "We are not on a level playing field with other states," Butler said, noting that ports such as Savannah benefit from state subsidies.

The SPA realized a nearly $1 million savings in administrative costs alone by leaving several vacant positions unfilled and capitalizing on early voluntary retirements.

But shrinking staff size while experiencing rapid growth is risky, Groseclose concedes. He said he plans to monitor workloads and overtime pay. At some point, it will become more cost-effective to hire people than pay overtime.

When the SPA took a similar gamble a few years ago, overworked crane operators raised safety concerns and sought representation in the local longshoremen's union.

The SPA has scrutinized every aspect of its business, and more cuts are expected in the coming months.

Even the steamship lines that keep the port's business afloat are feeling the heat, subjects of a new security surcharge set to take effect a week from today.

Ships docking at the port's terminals will be charged $1 for each foot of ship length.

Butler said the new budget takes into account the $1 million the surcharge is expected to generate annually.

Still, the fee will offset only about half the cost of federally mandated security improvements under way at SPA facilities.

In addition, advertising has been scaled back, the port's monthly magazine is now bimonthly, and foreign sales offices have either been closed or scaled back.

Contract services such as banking and legal services are up for grabs as the SPA looks to a competitive marketplace for better deals, Butler said. In some cases, that could mean parting ways with longtime business partners.

"We are not beholden to any old relationships unless those relationships are what's best for the people of South Carolina," Butler said. "You are going to have to have your pencil sharpened to keep the port's business."

SPA BUDGET HIGHLIGHTS

Operating revenues: $122 million

Operating expenses: $96.4 million

Net earnings: $21.8 million

Operating cash flow: $49.4 million

Shipping containers: 1.8 million (measured in 20-foot containers)

Capital Plan: $49.9 million (includes new container cranes, terminal improvements and other projects)

Earnings and cash flow don't reflect payments toward the Cooper River bridge project.

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