7b Supp
Item No. 7b_Supp Date of Meeting: October 14, 2014 Real Estate Division 2015 Preliminary Operating & Capital Budgets Commission Presentation October 14, 2014 Real Estate Division Reorganization Harbor Services Group combined into the Portfolio and Asset Management Group. Water and land sides of key facilities will report up to a single senior manager position and will be reported on as single assets: Fishermen's Terminal Maritime Industrial Center Shilshole Bay Marina Reorganization is underway. 2015 Budget reflects the new structure. For management reporting, effective with the 2015 Performance Reports. 2 Real Estate Division Reorganization North Harbor Mgmt Group Central Harbor Mgmt Group Fishermen's Terminal Harbor Marina Corp Center (T102) Waterside Central Waterfront Landside World Trade Center West Maritime Industrial Center Bell Street Garage Waterside Bell Street Retail Leases Landside Bell Street Office Leases Shilshole Bay Marina Terminal 34 Waterside Pier 69 Leases Landside Pier 2 Uplands and CEM Other Marinas Other Bell Harbor Marina Harbor Island Marina 3 Key Assumptions Marina occupancy rate 95% consistent with 2014 Budget Fishing & Commercial occupancy rates FT 79% and MIC 70% approximately equal to 2014 Budget Commercial Properties target 95% occupancy at year- end 2015. 2014 Budget target was 92% Bell Harbor International Conference Center revenue up 5% from 2014 Budget Eastside Rail Corridor: Pending sales to Woodinville and Snohomish County close in first quarter 2015 4 Org Revenues By Group Real Estate Division Only Incr (Decr) 2013 2014 2014 2015 15-'14 Budget Chg $'s Thousands Actual Budget Forecast Budget $ % Revenue Portfolio & Asset Management 29,636 30,453 30,444 31,485 1,032 3.4% Central Harbor Mgmt Group 6,183 6,466 6,163 6,518 52 0.8% Conference & Event Centers 7,888 8,110 8,342 8,547 436 5.4% North Harbor Mgmt Group 15,564 15,877 15,939 16,420 543 3.4% Development & Planning 920 808 993 960 152 18.8% Eastside Rail (3) 7 11 0 (7) -100.0% Facilities & Maintenance 840 435 551 358 (77) -17.6% Total Revenue 31,392 31,703 31,999 32,804 1,101 3.5% 5 Org Expenses By Group Real Estate Division Expenses Only Incr (Decr) 2013 2014 2014 2015 15-'14 Budget Chg $'s Thousands Actual Budget Forecast Budget $ % Operating Expenses Portfolio Management 16,144 17,673 17,222 18,727 1,053 6.0% Central Harbor Mgmt Group 2,404 3,038 2,613 3,795 758 24.9% Conference & Event Centers 6,476 6,858 7,043 7,504 646 9.4% North Harbor Mgmt Group 5,661 6,050 5,874 6,481 431 7.1% Portfolio Mgmt Admin 1,604 1,727 1,693 947 (781) -45.2% Development & Planning 751 899 821 948 49 5.4% Eastside Rail Corridor 205 170 1,131 210 40 23.2% Maintenance 16,269 18,050 15,636 18,492 442 2.4% Facilities 1,435 1,509 1,497 1,600 91 6.1% Division Admin 393 410 402 419 10 2.4% Envir Remed Exp/Other 2 600 0.32 250 (350) -58.3% Total Operating Expenses 35,200 39,312 36,710 40,646 1,335 3.4% 6 Real Estate Org Expense Budget Real Estate Division Expenses Only 2014 2015 Incr (Decr) $'s Thousands Budget Budget Change % Explanation Baseline Budget Salaries 6,724 7,327 603 9.0% Increase Maint FTE's, Regraded positions Benefits 2,609 2,953 344 13.2% Increase Maint FTE's, Benefit increases Wages & Benefits 9,412 9,573 161 1.7% OPEB 34 34 0 0.1% Salaries & Wages to Cap, Non-op,ERL 821 803 (18) -2.1% Total Payroll Costs 19,600 20,691 1,091 5.6% Net Payroll Exp (net of to capital,Non-op) 18,779 19,887 1,109 5.9% Utilities 3,916 4,318 401 10.2% Increased rates Conf & Event Activity Op Exp/Mgt Fee 6,530 6,951 422 6.5% Incr Conf & Event activity and higher costs Conf & Event Activity - Furn & Equip Acq 233 456 223 95.9% Facility improvements needed Maintenance Outside Services 1,229 1,582 353 28.7% 2015 projects involve more outside work Maintenance Materials & Vehicle Parts 905 1,061 155 17.2% Increasing material costs Overhead Allocated To Capital (377) (594) (218) 57.8% Increase OH Rate Other O&M 4,015 4,180 164 4.1% Total Baseline Budget 35,230 37,841 2,610 7.4% Initiatives Tenant Improve, Broker Fees,Space Plan 1,127 1,071 (56) -5.0% Maintenance Contingency 300 300 0 0.0% Net Shed related work 140 0 (140) -100.0% Carpet Replacement 1,200 0 (1,200) -100.0% Completed in 2014 Concrete Beam Rehab 570 0 (570) -100.0% Now a capital project W50 Building Demolition 0 975 975 NA Eastside Rail Corridor-Outside Services 144 210 66 45.8% Total 3,481 2,556 (925) -26.6% Total Operating Expenses 38,712 40,396 1,685 4.4% Envir Remediation Liability 600 250 (350) -58.3% Total Expenses 39,312 40,646 1,335 3.4% 7 Maintenance 2015 Significant Projects $'s Thousands Significant Maintenance Projects 2015 Budget P66 beam and knuckle coating -10 year program (split RE/SEA) 130 Powerwash Bell Street Garage exterior wall (RE) 113 Remove asphalt around T102 parking lot (RE) 100 Piling replacement at MIC -one year shift of budget from FT (RE) 100 Vehicle propane project (RE) 100 Expense costs related to Maximo upgrade (RE) 100 Major Rail Road Track repair at T91 per ABAM report (SEA) 97 Horton Street Maintenance Facility repairs (MM) 85 Clean and seal docks at SBM (RE) 77 Repair protective coating building structure, west balcony roof truss at T91 (SEA) 75 Underwater survey of piles and wraps that support C173 (SEA) 69 N. End Maint Office Industrial Permit Inspection & Monitoring Corrective Actions (MM) 66 P69 chiller #2 rebuild (FAC) 56 Total 1,168 RE = Real Estate Div SEA = Seaport Div MM = Marine Maint FAC = P69 Facilities 8 Full-Time Equivalents (FTEs) 2014 Budget 168.3 2014 Changes Director Harbor Services (1.0) Manager North Harbor Facilties 1.0 Adjusted 2014 168.3 2015 Budget Staff Additions: Maintenance Project Specialist 1.0 Business Systems Specialist 1.0 Business Operations Supervisor 1.0 Work Order Intake Specialist 1.0 Staff Reductions: Harbor Services Intern (0.8) Net Change 3.2 Proposed 2015 Budget 171.5 9 Real Estate Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Incr (Decr) 2013 2014 2014 2015 15-'14 Budget Chg $'s Thousands Actual Budget Forecast Budget $ % Revenues Operating Revenues 22,904 23,244 23,192 23,970 726 3.1% Conf & Event Ctr Revenue 7,958 8,132 8,364 8,580 447 5.5% Total Revenues 30,862 31,376 31,556 32,550 1,174 3.7% Expenses Real Estate Exp (excl Maint,P69,Conf) 10,370 11,553 10,832 11,965 412 3.6% Conf & Event Ctr Expense 6,475 6,858 7,042 7,507 648 9.5% Eastside Rail Corridor 205 170 1,131 210 40 23.2% Maintenance Expenses 8,928 9,311 8,777 10,155 844 9.1% P69 Facilities 172 126 126 133 7 5.3% Envir Services & Planning 874 839 839 894 55 6.6% Seaport Expenses (excl env srvs) 408 471 471 483 12 2.6% CDD Expenses 1,364 2,582 2,332 1,773 (809) -31.3% Police Expenses 1,378 1,391 1,391 1,291 (100) -7.2% Corporate Expenses 5,087 5,417 5,377 4,925 (492) -9.1% Envir Remediation Liability 2 600 0 250 (350) -58.3% Operating Expenses 35,262 39,320 38,320 39,587 267 0.7% Net Operating Income (4,399) (7,944) (6,764) (7,037) 907 11.4% 10 Real Estate Division Capital Budget 2015-2019 Commission Review October 14, 2014 Real Estate Capital Budget Review Overall 2015-2019 dollar amount of projects at ~$66 million Virtually all projects are renewal and replacement Funding capacity for projects not yet determined OTHER $8,281 Location Breakout $'s 000's CONTINGENCY $3,000 PIER 69 $2,560 FT $27,656 OTH COM PROPS $4,908 Central Waterfront $7,275 Maritime Ind Ctr SBM $9,805 $808 Harbor Is Marina 12 $1,920 Real Estate 2015 Capital Budget Capital Budget Summary By Status $'s in 000's 2015 2016 2017 2018 2019 2015-19 Commission Authorized/Underway 3,571 0 0 0 0 3,571 Pending 2014/2015 Authorization 3,270 10,165 4,480 1,294 0 19,209 Pending Future Authorization 1,545 8,166 7,332 3,550 8,474 29,067 Small Capital and Other 4,350 3,256 2,741 2,022 1,997 14,366 Total 12,736 21,587 14,553 6,866 10,471 66,213 13 Real Estate 2015 Capital Budget Commission Authorized*/Underway $'s in 000's 2015 2016 2017 2018 2019 2015-19 P69 Built-Up Roof Replacement 100 0 0 0 0 100 SBM Central Seawall Replacement 790 0 0 0 0 790 FT Net Shed 9 Roof Replacement 30 0 0 0 0 30 FT C15 HVAC Improvements 108 0 0 0 0 108 FT C-2 (Nordby) Roof & HVAC 383 0 0 0 0 383 P69 Roof Beam Rehabilitation 2,160 0 0 0 0 2,160 Total 3,571 0 0 0 0 3,571 Note*: Includes projects where some portion of the budget is authorized by Commission 14 Real Estate 2015 Capital Budget Pending 2014/2015 Authorization $'s in 000's 2015 2016 2017 2018 2019 2015-19 SBM Paving 30 670 130 400 0 1,230 SBM Restrms/Service Bldgs Replace 225 2,750 2,450 0 0 5,425 Bell Harb Marina Wavebreak/Pile Wraps 600 3,000 200 0 0 3,800 Marina Mgt Sys Replacement 350 150 0 0 0 500 FT Paving/Storm Upgrades 250 1,700 1,700 894 0 4,544 Harbor Island Marina E Dock 470 0 0 0 0 470 SBM Fuel Dock Bldg Improvement 160 900 0 0 0 1,060 Bell St Garage Art Inst Elevator Upgrade 350 0 0 0 0 350 FT C15 Building Tunnel Improvement 700 0 0 0 0 700 FT C14 (Downie) Roof & HVAC 135 995 0 0 0 1,130 Total 3,270 10,165 4,480 1,294 0 19,209 15 FT Paving / Storm Drain Upgrades (Alligator Cracking and Failed Asphalt) 16 Bell Harbor Marina Wavebreak & Pile Wraps 17 Pier 69 Concrete Beam Rehabilitation 18 Real Estate 2015 Capital Budget Pending Future Authorization $'s in 000's 2015 2016 2017 2018 2019 2015-19 Mar Maint N Office Site Improvement 500 0 0 0 0 500 RE BHICC Roof Fall Protection 420 0 0 0 0 420 T102 Bldg Roof HVAC Replacement 300 3,068 0 0 0 3,368 FT 25 Year Plan Improvements 250 618 0 0 0 868 FT Net Shed 3,4,5 & 6 Roof Rpl 75 2,480 0 0 0 2,555 SBM Lower A Dock Impr. 0 600 0 0 0 600 Harbor Island Marina C Dock 0 500 0 0 0 500 FT Dock 4 Fixed Pier Corr Protect 0 200 3,300 0 0 3,500 FT Dock 3 Fixed Pier Improvmnt 0 200 2,800 0 0 3,000 MIC West & Central Piers Resur 0 0 558 150 0 708 FT S Wall West End Improvements 0 0 174 1,500 0 1,674 Harbor Island Marina ABD Dock 0 0 0 500 0 500 FT W Wall N Fender Replacement 0 0 0 200 2,750 2,950 FT W Wall N Sht Pile Crsn Protect 0 0 0 200 2,575 2,775 FT Net Shed Electrical System 0 0 0 0 2,149 2,149 FT S Wall Cl Fndr Rp & Cor Protect** 0 0 0 0 0 0 FT W Wall S Sht Pile Cor Protect** 0 0 0 0 0 0 FT Net Shed 10 Roof Overlay** 0 0 0 0 0 0 FT Net Shed 11 Roof Overlay** 0 0 0 0 0 0 RE: Contingency Renew &Replace 0 500 500 1,000 1,000 3,000 Total 1,545 8,166 7,332 3,550 8,474 29,067 Note: For projects marked with asteriks **, the cash investment is forecasted to take place in the 2020-2024 timeframe. 19 Real Estate 2015 Capital Budget Small Projects $'s in 000's 2015 2016 2017 2018 2019 2015-19 Small Capital Projects 2,680 1,640 1,085 500 500 6,405 Preliminary Planning 250 250 250 250 250 1,250 RE Technology Projects 250 250 250 250 250 1,250 RE Fleet Replacement 870 816 856 722 697 3,961 Tenant Improvements - Capital 300 300 300 300 300 1,500 Total 4,350 3,256 2,741 2,022 1,997 14,366 20
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