7b supp 1
ITEM NO: 7b_Supp_1____ _ DATE OF MEETING October 22, 2013 Preliminary Tax Levy Funding Plan Discussion October 22, 2013 Executive Summary 2 Topics Port's taxing authority and limits Uses of the tax levy 2013 Uses 2013 cash flow: budget vs. forecast Tax levy forecast 2014-2018 Uses Cash flow projection 3 Port's Taxing Authority Washington State port districts have authority to levy a tax on the value of property within the port district (coterminous with King County) The Port is subject to two limitations on the amount of tax it may levy 45 cent limit 1% limit The more restrictive 1% applies to the Port In 2013, the Port assessed a levy of $73 million The maximum levy the Port could have assessed is $91.5 million based on the 1% limit King County assessed value in 2013 is $313 billion The Port can levy up to the statutory maximum 4 Annual Levy vs. Statutory Max Annual levy is well below statutory maximum Preliminary 2014 maximum levy estimate is $93.3 million 5 Levy Uses - Background The use of the tax levy has been directed by the Commission Levy may be used for any Port costs except payment of revenue bond debt service (but is applied in the calculation of revenue bond coverage) Tax levy resource has traditionally been used to fund investments in the community that are not financially self sufficient Environmental remediation for legacy liabilities Port contributions to regional transportation projects/freight mobility FAST, Argo Yard Road Transportation and Infrastructure Fund to set aside funds for SR99 tunnel and South Park Bridge PortJobs (Airport portion is paid by the Airport) Prior to 2010, broadly supported Seaport and Real Estate capital investments through cash and issuance of general obligation bonds Beginning in 2010, the tax levy is being used to support the Real Estate division (Commission policy for Seaport to be self sufficient) Pays for most capital projects Pays for the annual net operating income shortfall 6 2013 Tax Levy, Forecast vs. Budget Significant Variances $ million Budget Forecast Sources Beginning balance: deferral Beginning balance 48.5 56.3 of FAST from 2012 to 2013 Annual Levy 73.0 73.0 and lower Real Estate CIP Interest Earnings - 0.2 Environmental Recoveries - 3.8 Rail Corridor Reimbursements - 1.4 Recoveries and Total Sources 121.5 134.8 reimbursements: Uses environmental & King Existing G.O. Bond Debt Service 40.4 39.4 County rail corridor payment Environmental Remediation 12.8 12.8 Regional Transportation 2.8 5.0 Regional Transportation: Transportation & Infrastructure fund deposit 6.0 6.0 FAST spending delayed Port JOBS (non-Airport share) 0.2 0.2 from 2012 to 2013 Highline Noise Insulation and Aviation HS 7.2 7.2 Real Estate Capital Projects 16.4 6.2 Real Estate Operating Support 6.4 6.3 Real Estate capital Total Uses 92.1 83.0 spending Ending balance 29.4 51.7 7 2014 Budget and 5-yr Forecast King County estimated assessed value as of Oct. 8 Increased 8%, first increase since 2009 Total estimated assessed value for 2014 is $339 billion Estimated maximum levy for 2014 is $93.3 million Budget and Forecast assumptions Tax levy remains at $73 million Uses are consistent with 2013 Additional $6 million deposit to transportation and infrastructure fund in 2014 future contributions considered annually Early redemption of G.O. bonds for the rail corridor Total outstanding $30 million due in 2014 & 2015 $15 million mature in 2015, callable in 2014 Estimated savings of $703,000 Modest funding shortfall projected beyond the forecast period assuming continuation of a flat levy of $73 million 8 Tax Levy Cash Flow: 2014-2018 5 Years $ million 2014 2014-2018 LEVY SOURCES Beginning Tax Levy Fund Balance 51.72 51.72 Reimbursements - Environmental 7.00 7.00 Eastside Rail Corridor Reimbursements - 13.54 Annual levy 73.00 365.00 Total Sources: 131.72 437.25 LEVY USES General Obligation (G.O.) Bonds Debt Service (DS) G.O. Bonds DS - existing debt 38.11 151.79 G.O. Bonds DS - existing debt Eastside Rail project 30.79 30.79 Future G.O. Bonds DS - contribution to SR99 Tunnel - 56.49 Subtotal G.O. Bond debt service 68.90 239.07 Other uses Regional Transportation Projects 3.37 6.49 Highline Schools NOISE Insulation 2.38 3.55 Environmental Remediation Liabilities 16.01 74.58 Funding of Transportation & Infrastructure Fund 6.00 6.00 Port Jobs & Apprenticeship Opportunities Program 0.06 0.30 Subtotal Other 27.82 90.91 Real Estate Support RE Capital Total 14.78 52.22 RE Operating Subsidy 7.29 37.54 Subtotal RE Support 22.07 89.76 Total Uses: 118.79 419.74 Projected Ending Tax Levy Fund Balance 12.92 17.51 9 Potential Risks and Opportunities Potential additional uses of Potential increases to the the levy fund levy fund New environmental Environmental recoveries: liabilities grants, insurance Property acquisitions proceeds Additional transportation Property sales mitigation/improvements Potential Seaport support Future unfunded initiatives or mandates 10 Discussion & Next Steps Staff seeks Commission direction: Tax levy Uses for 2014 and beyond Tax levy amounts for 2014 and beyond 11 Full Presentation 12 Topics Port's taxing authority and limits Uses of the tax levy 2013 Uses G.O. Bonds Transportation & Infrastructure Fund 2013 cash flow: budget vs. forecast Tax levy forecast 2014-2018 Uses Cash flow projection 13 Port's Taxing Authority Washington State port districts have authority to levy a tax on the value of property within the port district (coterminous with King County) The Port is subject to two limitations on the amount of tax it may levy 45 cent limit 1% limit The more restrictive 1% applies to the Port In 2013, the Port assessed a levy of $73 million The maximum levy the Port could have assessed is $91.5 million based on the 1% limit King County assessed value in 2013 is $313 billion The Port can levy up to the statutory maximum 14 Levy Limits 45 cent limit The amount of the tax levy in any given year is limited to 45 cents per $1000 of assessed value (2013 rate is 23 cents) For 2013, this limit is $140.8 million Excludes the amount needed to pay G.O. bond debt service of $39.6 million in 2013 Total levy under this limit would be $180.4 million 1% limit The maximum levy is increased each year by the 1% limit factor Based on prior year's maximum Increased by the lessor of 1% or inflation plus an addition for new construction The maximum levy for 2013 would have been $91.45 million The 1% limit applies - more restrictive for the Port 15 Annual Levy vs. Statutory Max Annual levy is well below statutory maximum Preliminary 2014 maximum levy estimate is $93.3 million 16 Levy Uses - Background The use of the tax levy has been directed by the Commission Levy may be used for any Port costs except payment of revenue bond debt service (but is applied in the calculation of revenue bond coverage) Tax levy resource has traditionally been used to fund investments in the community that are not financially self sufficient Environmental remediation for legacy liabilities Port contributions to regional transportation projects/freight mobility FAST, Argo Yard Road Transportation and Infrastructure Fund to set aside funds for SR99 tunnel and South Park Bridge PortJobs (Airport portion is paid by the Airport) Prior to 2010, broadly supported Seaport and Real Estate capital investments through cash and issuance of general obligation bonds Beginning in 2010, the tax levy is being used to support the Real Estate division (Commission policy for Seaport to be self sufficient) Pays for most capital projects Pays for the annual net operating income shortfall 17 Tax Levy Uses G.O. Bonds The levy can be pledged to pay general obligation bonds (G.O. bonds) Port currently has $309.56 million G.O. bond debt outstanding State statute limits the amount of G.O. bonds Non-voted limit on the amount of G.O. debt that does not require voter approval 0.25% of assessed value $782 million total in 2013 Voted limit on the total amount of G.O. debt even with voter approval 0.75% of assessed value $2.3 billion in 2013 Port policy limit G.O. bond debt so that debt service does not exceed 75% of the annual tax levy For 2013 54% of levy paid G.O. bond debt service 18 2013 G.O. Bond Debt Service Includes debt 2013 service on Tax Levy Use: GO Debt Service Portion ($ in 000's) Containers multiple series of General Seaport Improvement 1985 G.O. bonds issued Stage II Dredge- Phase I $ 1,389 T-5 Expansion & Upgrades 21,529 to fund projects T-46 Expansion Redevelopment 4,353 T-18 Expansion & Upgrade 6,313 from 1994-2011 T-115 Yard Upgrades 182 Total Containers 33,767 Docks and Commercial Properties T-91 Apron & Infrastructure Improvements 2,901 Pier 17 Dock Replacement 109 T-86 Terminal Upgrades 129 Total Docks and Commercial Properties 3,139 Fishing Fishermen's Terminal Docks & Seawall Renewal 1,634 Special Item & Other Eastside Rail Corridor 805 Total G.O. Bond Debt Service $ 39,346 19 Tax Levy Uses 2013 Major Uses $ million G.O. bond debt service 39.3 Environmental Remediation 12.8 Highline school insulation and Aviation High School 7.2 Real Estate operating support 6.3 Real Estate capital 6.2 Transportation Infrastructure Fund 6.0 Regional Transportation 5.0 20 Transportation & Infrastructure Fund Commission established in 2010 Purpose is to set aside funds for Port contributions to regional transportation projects SR99 Tunnel South Park Bridge (payments in 2013 & 2014) Funds are restricted by policy, not law Transportation & Infrastructure Fund 2013 $ million Beginning balance 36.7 Deposit from tax levy fund 6.0 Interest earnings 0.3 South Park Bridge payment (2.1) Ending balance 40.9 21 2013 Tax Levy, Forecast vs. Budget Significant Variances $ million Budget Forecast Sources Beginning balance: deferral Beginning balance 48.5 56.3 of FAST from 2012 to 2013 Annual Levy 73.0 73.0 and lower Real Estate CIP Interest Earnings - 0.2 Environmental Recoveries - 3.8 Rail Corridor Reimbursements - 1.4 Recoveries and Total Sources 121.5 134.8 reimbursements: Uses environmental & King Existing G.O. Bond Debt Service 40.4 39.4 County rail corridor payment Environmental Remediation 12.8 12.8 Regional Transportation 2.8 5.0 Regional Transportation: Transportation & Infrastructure fund deposit 6.0 6.0 FAST spending delayed Port JOBS (non-Airport share) 0.2 0.2 from 2012 to 2013 Highline Noise Insulation and Aviation HS 7.2 7.2 Real Estate Capital Projects 16.4 6.2 Real Estate Operating Support 6.4 6.3 Real Estate capital Total Uses 92.1 83.0 spending Ending balance 29.4 51.7 22 2014 Budget and 5-yr Forecast King County estimated assessed value as of Oct. 8 Increased 8%, first increase since 2009 Total estimated assessed value for 2014 is $339 billion Estimated maximum levy for 2014 is $93.3 million Budget and Forecast assumptions Tax levy remains at $73 million Uses are consistent with 2013 Additional $6 million deposit to transportation and infrastructure fund in 2014 future contributions considered annually Early redemption of G.O. bonds for the rail corridor Total outstanding $30 million due in 2014 & 2015 $15 million mature in 2015, callable in 2014 Estimated savings of $703,000 Modest funding shortfall projected beyond the forecast period assuming continuation of a flat levy of $73 million 23 Estimated Uses of the Tax Levy 2014-2018 2014-2018 Major Uses $ million General Obligation bond debt service, existing and new for SR 99 239.1 Tunnel funding Funding of Seaport/Real Estate legacy environmental remediation 74.6 costs (non-operating): Includes a portion of Lower Duwamish costs (net of estimated payments by potentially liable parties) Real Estate Capital Improvement Plan 52.2 Real Estate support for net income deficit 37.5 Regional Transportation - FAST Corridor and Argo Road 6.5 Contribution to the Transportation Infrastructure Fund 6.0 Highline Schools noise mitigation program 3.6 PortJobs including Apprenticeship Program 0.3 24 Tax Levy Cash Flow: 2014-2018 5 Years $ million 2014 2014-2018 LEVY SOURCES Beginning Tax Levy Fund Balance 51.72 51.72 Reimbursements - Environmental 7.00 7.00 Eastside Rail Corridor Reimbursements - 13.54 Annual levy 73.00 365.00 Total Sources: 131.72 437.25 LEVY USES General Obligation (G.O.) Bonds Debt Service (DS) G.O. Bonds DS - existing debt 38.11 151.79 G.O. Bonds DS - existing debt Eastside Rail project 30.79 30.79 Future G.O. Bonds DS - contribution to SR99 Tunnel - 56.49 Subtotal G.O. Bond debt service 68.90 239.07 Other uses Regional Transportation Projects 3.37 6.49 Highline Schools NOISE Insulation 2.38 3.55 Environmental Remediation Liabilities 16.01 74.58 Funding of Transportation & Infrastructure Fund 6.00 6.00 Port Jobs & Apprenticeship Opportunities Program 0.06 0.30 Subtotal Other 27.82 90.91 Real Estate Support RE Capital Total 14.78 52.22 RE Operating Subsidy 7.29 37.54 Subtotal RE Support 22.07 89.76 Total Uses: 118.79 419.74 Projected Ending Tax Levy Fund Balance 12.92 17.51 25 Potential Risks and Opportunities Potential additional uses of Potential increases to the the levy fund levy fund New environmental Environmental recoveries: liabilities grants, insurance Property acquisitions proceeds Additional transportation Property sales mitigation/improvements Potential Seaport support Future unfunded initiatives or mandates 26 Discussion & Next Steps Staff seeks Commission direction: Tax levy Uses for 2014 and beyond Tax levy amounts for 2014 and beyond 27
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.