7c supp
ITEM NO: 7c_Supp_1___ DATE OF MEETING: Sept 13, 2016 2017 Budget Briefing September 13, 2016 Agenda 2017 Budget Process Overview Strategic Positioning for Growth (SPG) Key Budget Assumptions for 2017 2017 Key Budget Initiatives 2017 Key Budget Dates Q&A's 2 2017 Budget Process Overview Commission review and approval of Long Range Plan (LRP) Conduct Strategic Positioning for Growth (SPG) Initiative for operating divisions to fully align department activities with strategic and operational plans Commission review of business environment and industry conditions, key budget drivers Update division business plans Develop key assumptions and targets Issue budget calendar and guidelines Prepare operating and capital budgets Develop funding plans Review and approve budgets/funding plans File Statutory Budget Operating divisions implemented SPG budgeting Initiative 3 Strategic Positioning for Growth Overview Commission - Century Agenda Goals Long Range Strategies Plan (LRP) Dept. Objectives Activities KPIs Division Business Plans - Budget $$s Strategies and Objectives Actions Long Range Plan (LRP) Departments Operating Plans Departments Operating Plans Strategies, Objectives, Actions Departments Operating Plans Strategies, Objectives, Actions and $$ Long Range Strategies, Objectives, Actionsand $$ Plan (LRP) and $$ SPG allows better resources alignment to support Century Agenda and LRP 4 2017 Operating Alignment 22.3 10% 165.9 $58.3 million, or 26%, of 36.0 74% 16% Division Activities tied to the Century Agenda/High Performance Organization in $ millions Century Agenda HPO Division Only Strategies $224.2 million 2017 Baseline Budget reviewed in SPG 5 Century Agenda Initiatives 4.4 20% 2.1 9% 13.8 62% 1.9 9% in $ millions Green Initiatives Logistics Hub Small business and Workforce Tourism and Business Gateway Century Agenda Initiative Aviation Maritime Econ Dev Grand Total % Division Division Division Century Agenda - Green Initiatives 2.1 2.3 0.1 4.4 19.8% Century Agenda - Logistics Hub 0.5 0.6 1.1 2.1 9.6% Century Agenda - Small business and Workforce 0.2 0.3 1.5 1.9 8.6% Century Agenda - Tourism and Business Gateway 11.9 0.7 1.2 13.8 62.0% TOTAL 14.6 3.8 3.8 22.3 100.0% $22.3 million directly tied to achieving Century Agenda objectives 6 Key Budget Assumptions Average Pay for Performance increase of 3.5% projected in 2017 for non-represented employees Represented pay increases based on individual contracts, including CPI increases (0-6%) and/or STEP increases 1% Port-sponsored medical benefit cost increase Blended PERS rate increase from 11.2% to 12% High school intern pay rate of $15 per hour Enplanement growth of 4% in 2017 Cruise passenger growth of 9.2% to over 1 million Key assumptions in line with previous years 7 Aviation: 2017 Budget Preview 2017 operating and capital budgets will reflect resource needs to implement long range plans and to meet near-term operational and facility needs Operating Budget Needs Capital Budget Needs Improve customer service Shortage of gates: Concourse D Ramp Operations terminal; Concourse B gate reconfiguration Improve facility cleanliness Baggage system capacity: C-61 Enhance security Terminal space shortage: C-1 building expansion Complete SAMP & environmental review Roadway congestion: widen arrivals approach Next phase of flight corridor safety program Aging infrastructure: renewal & replacement 2017 budget will reflect strategic and operational priorities 8 Maritime: 2017 Budget Preview Operating Budget Needs Capital Budget Needs On-going Maintenance Activities Replace Net Shed Roofs Customer Service Surveys Pier 91 South Fender System FT Strategic Plan Implementation FT Strategic Plan Capital Construction Energy Conservation Projects Rehabilitation at Harbor Island Marina Docks Cruise Passenger Experience Improvements Cruise Terminal Tenant Upgrades Stormwater Utility Implementation Stormwater System Expenditures Organizational Growth and Century Agenda Demands Fueling Need for Resources 9 Economic Development: 2017 Budget Preview Budget based on managing Port real estate needs and supporting regional economic growth Operating Budget Needs Capital Budget Needs Implementation support for RE Strategic RE Strategic Plan pre-development work at Plan T91 , FT, and/or other locations Oversight and maintenance of aging Improvements at Bell Harbor International facilities Conf. Center Expansion of Workforce Development P69 lobby updates programs Small business programs such as Incubators Tenant improvements of which many are and PortGen expensive Tourism expansion programs Structural building/facility work such as T102 roof replacement P66 elevators 2017 budget will reflect strategic and operational priorities 10 2017 Budget Calendar September Staff prepares operating and capital plans 09/27 Commission briefing: Corporate budget October 10/11 Commission briefing: Operating division's budgets 10/18 2017 Preliminary Budget document available to the Commission 10/20 Public release of 2016 Preliminary Budget document 10/24 Publish public notice on budget 10/25 Commission briefing: Tax levy & Draft Plan of Finance 2017 preliminary budget will be available to the public on 10/20 11 2017 Budget Calendar - Con't. November 11/8 First reading of budget resolution and public hearing 11/8 Approval of the ILA/Service Directives (POS & NWSA) 11/22 Second reading and final passage December 12/02 File statutory budget with King county 12/15 Publish the 2017 Final Budget document First and second budget readings in November 12 2017 Budget Briefing Q&A's
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