6a presentation
ITEM NO: 6a DATE OF MEETING: November 28,2017 Port of Seattle Second Reading of the 2018 Budget Commission Meeting November 28, 2017 1 Outline Budget Changes from the First Reading 2018 Budget Overview 2018 Operating Budget 2018 Comprehensive Operating & Non-Operating Budget 2018-2022 Capital Plan 2018 Staffing Summary 5 Year Financial Forecast 2018 Sources and Uses of Funds 2018 Tax Levy Remaining 2018 Budget Schedule 2 Changes from the First Budget Reading Moved CIP C800993 Property Acquisition above the line to be included in the 5-year capital funding plan. Proposed funding source is the Tax Levy Added $200K for Eastside Remote Bag Check-in (and Mass Transit) feasibility study Added 8 additional High School interns to increase the total number from 82 to 90 in 2018 (a budget increase of $44K) Added $50K for Eco Tourism and $50K for International Tourism for a total of $100K additional Tourism funding Added $431K operating revenue and $295K operating expense, which includes 2 new FTEs, to the 2018 budget due to the Property Acquisition noted above Total operating revenues increase by $431K and total operating expenses increase by $639K from the First Reading Budget amendments incorporated into the budget 3 2018 Budget Highlights Operating revenues are budgeted at $670.5M, $50.2M or 8.1% higher than 2017 budget Operating expenses are budgeted at $422.9M, $38.2M or 9.9% increase from 2017 budget Net Operating Income is budgeted at $247.6M, $12.0M or 5.1% above 2017 budget The 2018 capital budget is $895.1M and the 5-year capital spending plan is approximately $3.1 billion The proposed tax levy for 2018 is $72.0M The 2018 budget reflects the Port's growth and continued investments for the region 4 2018 Key Initiatives/Budget Drivers Support for Business Growth and Customer Service Continue to improve Catch up with strong Sea- Grow international and Support the airport customer service Tac growth domestic passenger capital improvement Continue to improve Strengthen the Port's service program safety & security own Centers of Expertise Increase Air Cargo Address growing airport office space needs Growth is a key budget driver 5 2018 Key Initiatives/Budget Drivers Implement Commission Priorities & Initiatives Energy and Sustainability Workforce development Expand tourism Restore and enhance Equity Program opportunities for small & opportunities waterside habitat Priority Hire disadvantaged businesses Advance real estate WMBE Continue internship program development Expand public outreach Budget resources support Commission priorities 6 2018 Operating Budget Summary 2016 2017 2017 2018 Budget Change Budget vs Forecast ($ in '000s) Actual Budget Forecast Budget $ % $ % Operating Revenues 598,466 620,245 623,775 670,479 50,234 8.1% 46,704 7.5% Operating Expenses 325,124 384,660 376,118 422,885 38,225 9.9% 46,767 12.4% Net Operating Income 273,342 235,585 247,657 247,594 12,009 5.1% -63 0.0% A record $670M of operating revenues for 2018 7 2018 Comprehensive Budget 2016 2017 2017 2018 Budget Change ($ in '000s) Actual Budget Forecast Budget $ % Explanations Revenues 1. Aeronautical Revenue - Net 244,235 274,799 266,637 301,082 26,282 9.6% Cost recovery under SLOA. 2. Portwide Non-Aeronautical Revenue 354,231 345,446 357,138 369,398 23,952 6.9% Mainly due to higher revenues from the Airport, Maritime & EDD. 3. Tax Levy 71,678 72,000 72,000 72,000 - 0.0% Assume no change from 2017. 4. PFCs 85,570 89,087 92,087 91,787 2,700 3.0% Higher enplanement forecast for 2018. 5. CFCs 24,715 26,300 26,300 22,161 (4,139) -15.7% Paid off CFC-funded commercial paper in 2017. 6. Fuel Hydrant 6,992 7,024 7,024 7,023 () 0.0% 7. Non-Capital Grants and Donations 6,284 8,595 5,595 5,504 (3,091) -36.0% Lower state grant for T117 in 2018. 8. Capital Contributions 18,108 15,000 10,000 41,379 26,379 175.9% Increase grants reimbursement from FAA and TSA. 9. Interest Income 8,448 10,822 15,822 15,713 4,891 45.2% Slight increase in rates and higher cash balances. Total Revenues 820,261 849,073 852,603 926,047 76,973 9.1% Expenses 1. O&M Expense 325,124 384,660 376,118 422,885 38,225 9.9% New budget initiatives and average pay increase. 2. Depreciation 164,336 166,300 164,300 163,309 (2,991) -1.8% 2017 YTD actual lower than the budget. 3. Revenue Bond Interest Expense 105,567 122,026 107,026 122,544 518 0.4% Assume $700M new bond issuance in 2018. 4. GO Bond Interest Expense 9,765 17,714 14,714 13,501 (4,213) -23.8% Savings from bond refinancing. 5. PFC Bond Interest Expense 5,251 4,985 4,985 4,437 (548) -11.0% Decreased debt service on PFC bonds through amortization. 6. Non-Op Environmental Expense 280 5,441 4,441 2,250 (3,191) -58.7% Revise costs estimates for ERL balance and superfund sites. 7. Public Expense 8,560 2,488 1,488 10,794 8,306 333.8% $6M for Swift & Safe and $2M for Heavy Haul in 2018. 8. Other Non-Op Rev/Expense 7,485 (257) (257) 473 730 -283.8% Total Expenses 626,368 703,357 672,815 740,193 36,835 5.2% Revenues over Expenses 193,893 145,716 179,788 185,854 40,138 27.5% 9. Special Item 147,700 - - - - n/a Second & third payments for Viaduct contribution in 2016. Change In Net Assets 46,193 145,716 179,788 185,854 40,138 27.5% A strong financial position for the Port in 2018 8 Capital Plan Summary Capital Plan Summary by Division $ in 000's 2017 Fcst 2018 2019 2020 2021 2022 2018-2022 Aviation 340,056 815,704 724,212 507,919 459,023 311,828 2,818,686 Maritime 25,076 54,990 33,321 35,521 20,120 14,845 158,797 Economic Development 4,718 9,178 16,979 22,900 8,580 7,180 64,817 Stormwater Utility 1,407 1,700 1,650 2,592 2,150 2,150 10,242 Central Services and Other 7,328 13,556 12,401 10,071 10,873 11,706 58,607 Total 378,585 895,128 788,563 579,003 500,746 347,709 3,111,149 Capital projects have been prioritized by staff. The capital plan does not include $249.9M for our share of the NWSA capital spending between 2018 and 2022. The Port continues to invest in the region with a 5-year capital plan of over $3 billion 9 Revenue per FTE Comparison Operating revenues outgrew FTEs for the past 5 years 10 FTE Summary Central Aviation Maritime Econ Dev. Services Total 2017 Approved FTE's 962.9 162.3 36.0 870.1 2,031.3 Mid Year Approval 15.3 1.0 - 15.5 31.8 Eliminated - - - (1.0) (1.0) Net Transfers - 1.0 (1.0) - - Adjusted 2017 FTE's (note 1) 978.2 164.3 35.0 884.6 2,062.1 2018 Budget Eliminated - - - (1.6) (1.6) Transfer - - - - - New FTE's (notes 2 & 3) 62.2 5.8 1.0 29.0 98.0 Total 2018 Changes 62.2 5.8 1.0 27.4 96.4 Proposed 2018 FTE's 1,040.4 171.0 36.0 912.1 2,159.5 Notes: (1) Includes 1.0 FTE for Stormwater Utility in Maritime Division. (2) Includes 2 new FTEs for WMBE and 1 new FTE for Priority Hire added after the Commission budget briefings. (3) Includes 2 new FTEs for the Salmon Bay Marina and 8 new High School Interns added after the first budget reading. FTEs driven by Commission priorities and growth initiatives 11 5 Year Financial Forecast ($ in 000's) Compound Budget Forecast Budget Forecast Growth OPERATING BUDGET 2017 2017 2018 2019 2020 2021 2022 2018 - 2022 Aeronautical Revenue - Net 274,799 266,637 301,082 358,885 404,903 463,050 485,623 12.7% Portwide Non-Aeronautical Revenue 298,738 305,849 322,751 321,429 325,896 333,284 344,049 1.6% NWSA Distributable Revenue 46,708 51,288 46,647 43,122 42,334 45,815 46,498 -0.1% Total Operating Revenues 620,245 623,775 670,479 724,320 774,724 844,482 878,561 7.0% Total Operating Expenses 384,660 376,118 422,885 432,335 452,860 474,081 491,827 3.8% Net Operating Income Before Depreciation 235,585 247,657 247,594 291,986 321,863 370,402 386,735 11.8% Forecasted revenues and expenses from CIP C800993 Property Acquisition added to forecast Steady growth in Net Operating Income projected 12 Sources of Funds Rental Car Customer Fuel Hydrant Receipts Passenger Facility Facility Charges 0.4% Charges 1.4% Other Receipts Tax Levy 5.6% 0.2% 4.4% Grants and Capital 84% of funding Operating Revenues Contributions 41.2% sources come from 2.9% bond proceeds and operating income. The tax levy makes up less than 5% of the funding sources Proceeds from Bond Issues in 2018. 43.0% Interest Receipts Total Sources: $1,628.9M 1.0% The Port has diversified funding sources 13 Uses of Funds Operating Expenses 24.2% Plan to spend more Capital than half of our Bond Expenditures Redemptions funds on capital 51.2% 9.9% projects in 2018. Interest Operating expenses Payments are less than a 9.4% quarter of total expenditures in 2018. Other Expenses 0.3% Payment to NWSA Public Expense for Capital 0.6% Total Uses: $1,748.0M Expenditures 4.4% Capital spending comprises more than half of Port expenditures 14 2018 Tax Levy The maximum allowable levy for 2018 is $101.6 million. For 2018 the levy will be $72.0 million. The estimated millage rate is $0.1358. The 2018 levy will be used for: General Obligation (G.O.) Bonds Debt Service Regional Transportation projects Environmental Remediation Capital projects meeting specified criteria endorsed by the Commission Economic development initiatives including workforce development and economic development partnership programs Other environmental initiatives including Airport Community Ecology funding and energy and sustainability policy directives The Port uses tax levy for community investments 15 2009-2018 Tax Levy & Millage Rate $ Millions $80 $75.90 $73.50 $73.50 $73.00 $73.00 $73.00 $73.00 $72.00 $72.00 $72.00 $0.70 $70 $0.60 $60 $0.50 $50 $0.40 $40 $0.22 $0.22 $0.23 $0.23 $0.22 $0.30 $30 $0.20 $0.19 $0.17 $0.15 $0.14 $20 $0.20 $10 $0.10 $0 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tax Levy (Left Scale) Millage (Right Scale) The Port has gradually reduced the tax levy amount since 2009 16 Actual vs. Maximum Allowable Levy The Port has forgone $491M in tax revenue since 1991 17 Remaining Budget Schedule File Statutory Budget with King County Dec. 1, 2017 Release the 2018 Final Budget Document Dec. 15, 2017 Statutory budget to be filed with the County on December 1 18 Port of Seattle Second Reading of the 2018 Budget Commission Meeting November 28, 2017 19
Limitations of Translatable Documents
PDF files are created with text and images are placed at an exact position on a page of a fixed size.
Web pages are fluid in nature, and the exact positioning of PDF text creates presentation problems.
PDFs that are full page graphics, or scanned pages are generally unable to be made accessible, In these cases, viewing whatever plain text could be extracted is the only alternative.