7c supp
Item No.: 7c_Supp Meeting Date: October 13, 2015 Economic Development Division 2016 Budget Briefing October 13, 2015 Economic Development Division Portfolio & Asset Management Real Estate Development & Planning Harbor Marina Corp Center (T102) Terminal 91 Uplands Central Waterfront Real Estate Development Admin World Trade Center West Bell Street Garage Office of Social Responsibility Bell Street Retail Leases Workforce Development Bell Street Office Leases Small Business Terminal 34 Pier 69 Leases Pier 2 Uplands and CEM Pier 69 Facilities CEM Terminal 5 SE, Other Conference & Event Centers Tourism Bell Harbor International Conference Ctr World Trade Center Club Smith Cove Cruise Terminal (Events) Eastside Rail Corridor Budget adjustments are made for prior years to ensure apple-to-apple comparison for the reorganization changes. 2 2016 Budget Key Assumptions Commercial Properties target 93% occupancy at year-end 2016. 2015 forecasted occupancy at year-end 89% Bell Harbor International Conference Center revenue down 27% from 2015 Budget and 32% from 2015 Forecast OSR includes funding of Airport Employment Center and Comprehensive Career Pathways program Eastside Rail Corridor: Pending sale to Woodinville assumed to close in 2015 3 Org Revenues By Group Economic Development Division Only Incr (Decr) Incr (Decr) 2014 2015 2015 2016 16-'15 Budget Chg 16-'15 Fcst Chg $'s Thousands Actual Budget Forecast Budget $ % $ % Revenue Portfolio & Asset Management 15,059 15,065 16,032 13,038 (2,027) -13.5% (2,994) -18.7% Central Harbor Mgmt Group 6,135 6,518 6,709 6,750 232 3.6% 42 0.6% Conference & Event Centers 8,924 8,547 9,324 6,263 (2,284) -26.7% (3,061) -32.8% Foreign Trade Zone Program 0 0 0 25 25 NA 25 NA Development & Planning 1,046 960 907 626 (334) -35% (281) -31% Eastside Rail 12 0 7 1 1 17367% (6) -86% Total Revenue 16,117 16,025 16,947 13,666 (2,360) -14.7% (3,282) -19.4% Revenue for 2016 impacted by construction at Pier 66 4 Org Expenses By Group Economic Development Division Expenses Only Incr (Decr) Incr (Decr) 2014 2015 2015 2016 16-'15 Budget Chg 16-'15 Fcst Chg $'s Thousands Actual Budget Forecast Budget $ % $ % Operating Expenses Portfolio & Asset Management 11,842 12,246 11,874 10,362 (1,884) -15.4% (1,512) -12.7% Central Harbor Mgmt Group 2,773 3,795 2,875 2,938 (857) -22.6% 64 2.2% Conference & Event Centers 7,392 7,504 7,999 6,439 (1,065) -14.2% (1,560) -19.5% Portfolio Mgmt Admin & FTZ 1,677 947 1,000 985 38 4.0% (16) -1.6% Development & Planning 829 948 788 1,675 727 76.6% 887 112.6% Eastside Rail Corridor 2,436 210 100 144 (66) -31.4% 44 44.0% Office of Social Responsibility 2,115 2,312 2,228 3,542 1,231 53.2% 1,314 59.0% Tourism 915 981 981 1,174 193 19.7% 193 19.7% Facilities 1,486 1,600 1,426 1,538 (62) -3.9% 112 7.8% Division Admin 440 419 466 405 (14) -3.4% (61) -13.1% Envir Remed Exp/Other (3) 250 0 0 (250) -100.0% (0) -100.0% Total Operating Expenses 20,060 18,967 17,864 18,841 (126) -0.7% 977 5.5% Portfolio Management expense decrease result of lower Conference & Event Center activity due to construction at Pier 66 and lower tenant improvement and broker fee costs at leased properties due to higher occupancy. Increases in Office of Social Responsibility, Tourism, and Development & Planning reflect new and expanded initiatives. Details are provided on upcoming slides. 2016 Expense Budget Supports Economic Development Strategic Initiatives 5 Full-Time Equivalents (FTEs) 2015 Budget 31.5 2015 Changes Commercial Properties: Onsite Prop Rep Trf to Maintenance (1.0) P69 Facilities Delete exempt FTE Assist Mgr Corp Facilities (1.0) Add non-exempt FTE Facilities Specialist 1.0 Adjusted 2015 30.5 2016 Budget Staff Additions: Tourism: Program Assistant 1.0 OSR: 1 Graduate Intern ( .25 FTE) Offset no National Urban Fellow 0.3 OSR: 4 High School Interns (each .25 FTE) 1.0 Net Change 2.3 Proposed 2016 Budget 32.8 Excluding addition of interns, number of FTE's flat from year to year 6 Economic Dev Division Org Expense Budget Economic Development Division Expenses Only 2015 2016 Incr (Decr) $'s Thousands Budget Budget Change % Explanation Baseline Budget Salaries 2,815 2,906 91 3.2% Benefits 1,072 1,144 72 6.7% OPEB 20 22 2 7.5% Salaries & Wages to Cap, Non-op,ERL 0 0 0 NA Total Payroll Costs 3,907 4,072 164 4.2% Add Tourism Program Assistant, Interns Net Payroll Exp (Nnet of to Capital,Non-op,ERL) 3,907 4,072 164 4.2% Utilities 1,995 1,647 (347) -17.4% Surface Water Utility, Water, Sewer Contract Watchmen 253 138 (114) -45.2% Eliminate graveyard & holiday coverage at P69 Conf & Event Op Exp, Mgmt Fee, FF&E 7,408 6,349 (1,058) -14.3% Lower activity due to cruise build out Outside Services 287 271 (16) -5.5% Travel & Other Employee Expense 194 272 78 40.6% Membership Econ Dev Council (fr Pub Affairs) Property Rental 644 587 (57) -8.9% Reclass of payment to Port Jobs Other O&M 1,619 1,708 89 5.5% Total Baseline Budget 16,306 15,045 (1,261) -7.7% Initiatives Tenant Improve, Broker Fees,Space Plan 869 324 (545) -62.7% Higher Occupancy so less leasing activity Office of Social Responsibility 880 1,995 1,115 126.7% Detail on following slide Tourism 402 558 156 38.9% Detail on following slide Misc Appraisals & Other Services 50 75 25 50.0% Consulting Services - RE Strategic Plan 0 600 600 NA Co-op Business Development / FDI 0 100 100 NA Eastside Rail Corridor - Outside Services 210 144 (66) -31.4% Total 2,411 3,796 1,385 57.4% Total Operating Expenses 18,717 18,841 124 0.7% Envir Remediation Liability 250 0 (250) -100.0% Total Expenses 18,967 18,841 (126) -0.7% 7 Office of Social Responsibility 2016 Initiatives $'s Thousands Office of Social Responsibility '16-'15 2015 Budget 2016 Budget Change New Requests 1. Comprehensive Career Pathways - Strategic Investments 0 1,125 1,125 1a. Airport Career Pathways Mapping & Strategy 0 75 75 1b. Airport Career Pathways Implementation (Year 1) 0 100 100 1c. Maritime Workforce Development Initial Strategy 0 150 150 1d. Core Plus (High School to Industry/Post Secondary Transition 0 200 200 1e. Trades Regional Partnership 0 350 350 1f. Manufacturing Industry/Truck Driving 0 150 150 1g. High School Intern Program Expansion (in Salaries & Benefits) 0 0 0 1h. Program Evaluation 0 100 100 2. Port Jobs Six Month Contract Extension 100 50 (50) Continuing Workforce Development Airport Sector 410 450 40 Workforce Development Construction Sector 200 260 60 Small Business Generator Program - Pilot Review 100 100 0 Small Business Generator Program 0 10 10 National Urban Fellowship Program 70 0 (70) Total 880 1,995 1,115 Developing capable employees for key industries 8 Tourism 2016 Initiatives $'s Thousands Tourism 2015 2016 '16-'15 Budget Budget Change 1. New Requests Tourism Grant Program $0 $50 $50 Enhance International Tourism Program 0 50 50 2. Continuing Personal Services United Kingdom Contract 187 250 63 Other International/Visit Seattle 157 157 0 Writing/Design 0 38 38 Other Contracted Services Cruise Plus & General Tourism Promo 58 0 (58) Brochure Printing, One Sheeter 0 13 13 Total $402 $558 $156 Tourism Grant Program supports small communities in King County 9 Economic Development Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Incr (Decr) Incr (Decr) 2014 2015 2015 2016 16-'15 Budget Chg 16-'15 Fcst Chg $'s Thousands Actual Budget Forecast Budget $ % $ % Revenues Operating Revenues 7,310 7,528 7,672 7,449 (79) -1% (223) -3% Conf & Event Ctr Revenue 8,957 8,580 9,357 6,296 (2,284) -27% (3,061) -33% Total Revenues 16,267 16,108 17,029 13,745 (2,363) -15% (3,284) -24% Expenses Econ Dev Exp (excl P69,Conf, OSR, Tour) 4,823 5,006 4,026 4,993 (13) 0% 967 24% Conf & Event Ctr Expense 7,374 7,504 7,999 6,439 (1,065) -14% (1,560) -20% Eastside Rail Corridor 2,436 210 100 144 (66) -31% 44 44% Office of Social Responsibility 57 447 363 1,511 1,064 238% 1,148 316% Tourism 915 981 981 1,174 193 20% 193 20% Maintenance Expenses 3,897 3,732 3,595 3,153 (578) -15% (441) -12% P69 Facilities 64 46 41 177 131 285% 136 332% Maritime Expenses 581 554 554 403 (151) -27% (151) -27% CDD Expenses 361 307 293 609 302 98% 316 108% Police Expenses 476 454 452 169 (285) -63% (283) -63% Corporate Expenses 2,566 1,698 1,675 3,850 2,152 127% 2,175 130% Envir Remediation Liability (3) 250 0 0 (250) -100% 0 NA Operating Expenses 23,546 21,188 20,078 22,623 1,434 7% 2,544 13% Net Operating Income (7,279) (5,080) (3,049) (8,878) (3,797) -75% (5,828) 191% Net Operating Income impacted by construction at Pier 66 and increase in Corporate Allocations 10 Economic Development Division 2016 Capital Budget October 13, 2015 Economic Development 2016 Capital Budget Capital Budget Summary By Status $'s in 000's 2016 2017 2018 2019 2020 2016-20 Commission Authorized/Underway 8,856 625 0 0 0 9,481 Pending 2015/2016 Authorization 1,685 0 0 0 0 1,685 Pending Future Authorization 945 1,253 1,000 1,000 3,000 7,198 Small Capital and Other 972 1,772 1,285 1,104 1,104 6,237 Total 12,458 3,650 2,285 2,104 4,104 24,601 Overall 2016-2020 dollar amount of projects at $24.6 million Funding Capacity for projects not yet determined 12 Economic Development 2016 Capital Budget Commission Authorized*/Underway $'s in 000's 2016 2017 2018 2019 2020 2016-20 T102 Bldg Roof HVAC Replacement 6,050 100 0 0 0 6,150 P69 Roof Beam Rehabilitation 2,766 25 0 0 0 2,791 P69 Built-Up Roof Replacement 40 0 0 0 0 40 Pier 66 Fit & Finish 0 500 0 0 0 500 Total 8,856 625 0 0 0 9,481 Note*: Includes projects where some portion of the budget is authorized by Commission All projects are renewal and replacement 13 Economic Development 2016 Capital Budget Pending 2015/2016 Authorization $'s in 000's 2016 2017 2018 2019 2020 2016-20 P66 Elevator 2,3,4 Upgrades 1,360 0 0 0 0 1,360 Bell St Gar Art Inst Elevator Upgrade 325 0 0 0 0 325 Total 1,685 0 0 0 0 1,685 All projects are renewal and replacement 14 Economic Development 2016 Capital Budget Pending Future Authorization $'s in 000's 2016 2017 2018 2019 2020 2016-20 Econ Dev Pier 66 Roof Fall Protection 420 14 0 0 0 434 P69 Dir Digital Ctrl System Modernization 25 739 0 0 0 764 Econ Dev Contingency Renew & Replace 500 500 1,000 1,000 3,000 6,000 Total 945 1,253 1,000 1,000 3,000 7,198 All projects are renewal and replacement 15 Economic Development 2016 Capital Budget Small Projects $'s in 000's 2016 2017 2018 2019 2020 2016-20 Small Capital Projects 120 1,195 735 500 500 3,050 Fleet Replacement 302 27 0 54 54 437 Econ Dev Technology Projects 250 250 250 250 250 1,250 Tenant Improvements - Capital 300 300 300 300 300 1,500 Total 972 1,772 1,285 1,104 1,104 6,237 Individual projects under each category in this grouping have a cost of $300,000 or less 16
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