7d supp
ITEM NO. 7d_Supp DATE OF MEETING: October 9, 2012 Aviation Division 2013 Preliminary Operating Budget Commission Briefing October 9, 2012 Industry Status/Trends Summarizing key points from business plan presentation in August: Airline industry is profitable in 2012 in spite of: Weak economic trends/indicators in US Continued economic uncertainty in Europe Cost of oil is relatively high, and volatile Airlines successfully focusing on profit rather than market share Sea-Tac will likely see moderate growth in spite of economic uncertainty SEA is a large hub, has international connections, and has limited competition Alaska Airlines is profitable and growing 2 Sea-Tac Enplanements YTD enplanement growth through August 2012: + 1.8% International +5.8% Maintaining 2012 forecast of 1.5% growth Forecasting growth of 2.2% for 2013 Consistent with long-term growth forecast Will require increased seat capacity as load factors are at all-time high, thus some risk 3 Enplaned Passengers Traffic dropped 3% in recent recession, pointing out resiliency of market demand Faster recovery than after 2001 Assumptions: 2012: 1.5% 2013: 2.2% 2014+: 2.2% Aug-11 Aug-12 % 2012 2013 % Figures in 000's YTD YTD Variance Budget Budget Variance Enplanements 11,034 11,232 1.8% 16,650 17,017 2.2% Landed Weight 13,564 13,430 -1.0% 20,444 20,444 0.0% 4 Financial Goals Aeronautical side of business revenues based on cost- recovery formulas Focus is on managing costs, so CPE is primary measure Non-aeronautical side of business is focused on generating cash flow, so NOI is primary measure Total airport: Increase cash flow after debt service Maintain debt service coverage > 1.25x Maintain unrestricted cash balance > 10 months O&M expenses 5 Budget Targets Targets tied to financial goals Aeronautical: limit growth of O&M to 3.0%, excluding : Airline realignment Regulated materials (RMM) tied to capital projects Grant funded items Non-Aeronautical: grow net operating income, excluding: Surplus of CFC operating revenues over CFC funded operating expenses 6 Budget Drivers: Century Agenda Make Sea-Tac Airport the west coast "Gateway of Choice" for international travel and double the number of international flights and destinations: Increase in 2013 to international incentive program for commitments to Emirates and ANA Meet the region's air transportation needs at Sea-Tac Airport for the next 25 years Sustainability master plan Meet all increased energy needs through conservation and renewable sources: Energy conservation balance technician (consultant) Terminal lighting conservation projects 7 Budget Drivers: Airport Strategies 1. Operate a world-class international airport by: Ensuring safe and secure operations Meeting needs of our tenants, passengers and the region's economy Managing our assets to minimize the long-term total cost of ownership 2. Become one of the top ten customer service airports in the world by 2015 (measured by the ACI ASQ index) 3. Lead the airport industry in environmental innovation and minimize the airport's environmental impacts 4. Reduce airline costs (CPE) as far as possible without compromising operational and capital needs 8 Budget Drivers: Airport Strategies 5. Maximize non-aeronautical net operating income (NOI) consistent with current contracts, appropriate use of airport properties and market demand 6. Continually invest in a culture of employee development, organizational improvement, and business agility 7. Develop valued community partnerships based on mutual understanding and socially responsible practices 9 Budget Drivers: Other Expenses driven by: Payroll and contractual increases Full year of rental car facility / busing service Airline realignment peak year of spending Multiple capital projects in process $17 million in operating budget, drives increase in 2013 airline costs (CPE) New initiatives tied to Century Agenda/Airport Strategies Revenues driven by: Airline revenues assume one-year extension of current airline agreement Revenue increase due to recovering costs for airline realignment Non-airline revenues: Increase in CFC full year at $6.00 (but no increase in 2013) Concessions growth, particularly anticipated new duty free Parking adding valet service, new pricing, new revenue control system 10 10 Aviation Expense Summary Cost increases: Compensation: $3.6 million $000s % Contractual: $579K 2012 Budget 160,969 Rental car facility / busing (see Cost increases (compensation, contractual) 4,171 2.6% Appendix A) Rental Car Facility & Busing 1,815 1.1% Increase in Airline Realignment 8,800 5.5% Airline realignment will total $17 Increase in Regulated Materials 1,519 0.9% million (increase of $8.8M). Subtotal 16,304 10.1% Port project oversight of tenant Budget Requests 5,537 projects One-time items/savings (5,284) Subtotal 253 0.2% Tenant reimbursement Total increase 16,557 10.3% Environmental remediation 2013 Budget 177,526 expense driven by capital projects: North Star $1M Cargo 5 Hardstand contaminated soil . $1M Vertical conveyance $740K GSE Electrical charge stations $350K MT So Low Voltage Sys Upgr $350K 11 New Requests Summary New Requests: $000s Safe/Secure Airport 404 Customer Needs/Capacity 1,929 Asset Management 175 Total 2,508 Customer Service 289 Environmental Innovation 270 Airline Cost Management 200 Non-Aero Revenue Development Costs offset by new revenues 570 Future revenue development costs 1,180 Employee Development 157 Community Partnerships 145 Total 2,811 Other 217 Total New Requests 5,536 12 New Requests Customer Needs/Capacity Safe/Secure Airport Description $000s Description $000s Sustainability Master Plan 1,750 Pest Control 215 Joint Marketing Fund 179 SCBA Replacement 130 1,929 Tarmac Delay Monitor Description 39 Safety Risk Assessments 15 Asset Management Emergency Management College Intern 5 404 Description $000s CUSE/CUSS/FIMS Maintenance Materials 75 Asset Management Estimator (Consultant) 100 175 Pest control contract will be able to treat previously unavailable areas within the Main Terminal SCBA (self-contained breathing apparatus) units for Fire Dept. will replace existing units that are nearing the end of useful life, to be spread over 2 years $250K of Master Plan costs are grant funded by FAA Joint marketing costs committed to Emirates and ANA in 2013 13 New Requests Customer Service Environmental Innovation Description $000s Description $000s Kone Enhanced Escalator/Elevator Service 254 Wetland Delineation 250 South Satellite Node Refurbishment 20 Greenhouse Gas Reporting 20 Music Initiative Development 15 270 289 Kone elevator/escalator service provides for five days/week of repair staffing as opposed to two days/week Wetland Re-Delineation and Greenhouse Gas Reporting items are regulatory requirements 14 New Requests Employee/Organizational Airline Cost Management Development Description $000s Description $000s Continuous Process Improvement Consultant 140 Energy Conservation Balance Technician (Consultant) 100 Host for 2013 Western Region Property Managers Conference 10 Terminal Lighting Conservation 100 Planning Graduate Intern Hourly Rate increase 4 200 Internal Intern program 3 157 Energy conservation projects to study and implement most efficient use of Sea-Tac power/lighting systems CPI initiative already in motion; intended to maximize productivity of Port staff time by streamlining processes 15 New Requests: Non-Airline Description $000s Offset by New 2013 Revenues Valet Management Contract 525 Search Engine Optimization 36 In-Terminal Advertising for Conference Center 9 Subtotal 570 Future Revenue Development Costs Concessions Leasing Consultant 800 Land Development: Brokerage Fee 200 Land Development Planning 120 Parking Consultant Costs 60 Subtotal 1,180 Total Non-Aero Requests 1,750 16 New Requests Community Partnerships Other Requests Description $000s Description $000s Part 150 Noise Compatibilty Study 125 Land Appraisals 120 28th Ave Development 15 Maintenance Uniform dry cleaning increase 40 Landside Parking Audit Assistant 30 Community Development High School Intern 5 Landside Ops Assistant Manager 2 145 Miscellaneous Support Services (Appraisals, Survey, Title Work) 20 Building Dept (Office equipment, ICC eCodes subscription) 5 217 Part 150 implementation shall conclude in 2013; $87K grant funded Landside Parking Audit Assistant and Landside Operations Assistant Manager positions are re-purposing of funded and vacant FTEs within the Operations department; the amount in the request reflects the net change in budget 17 Aeronautical Target 2012 2013 2013 / 2012 Budget Chg $ in 000's Budget Budget $ % Airport Costs 86,717 89,166 2,449 2.8% Utilities Internal Billing 17,052 15,021 (2,031) -11.9% Utilities Other 122 123 0 0.3% Total Airport Costs 103,892 104,310 418 0.4% Corporate Direct Charges & Allocations 31,696 32,390 694 2.2% Captial Development and Other 5,669 6,658 989 17.4% Total Corporate and other Divisions 37,365 39,048 1,683 4.5% Total Aeronautical before Exceptions 141,257 143,358 2,101 1.5% Airline Realignment 8,200 17,000 8,800 107.3% Regulated Materials 2,072 3,555 1,484 71.6% Aero Operating Costs net Non-aero 151,529 163,913 12,385 8.2% Utilities for 2013 budget accounted for surplus from 2011 backup power. Excluding these savings, total Aeronautical costs before exception is up 2.9%. 18 Aeronautical Business 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Actual Budget Forecast Budget $ % Revenues requirement: Capital Costs 81,507 91,876 89,720 95,331 3,454 3.8% Operating Costs net Non-Aero 133,083 143,329 147,688 146,914 3,585 2.5% Airline Realignment - 8,200 5,400 17,000 8,800 107.3% Total Costs 214,590 243,405 242,807 259,244 15,839 6.5% FIS Offset (7,000) (8,000) (8,000) (8,000) - 0.0% Other Offsets (15,417) (14,895) (14,461) (15,467) (571) 3.8% Net Revenue Requirement 192,173 220,510 220,346 235,778 15,268 6.9% Other Aero Revenues 15,590 15,711 15,742 14,721 (989) -6.3% Total Aero Revenues 207,763 236,221 236,088 250,499 14,279 6.0% Less: Non-passenger Airline Costs 14,944 15,390 15,421 14,927 (463) -3.0% Net Passenger Airline Costs 192,819 220,831 220,667 235,572 14,741 6.7% Capital costs increased $3.5M due to scheduled start of principal payments of 2003B bonds ($7.9M), capital interest of 2010B bonds exhausted in 2012 ($2.7M) and allocation from roadway CIPs ($2.0M) offset by refunding of bonds, use of reserve fund interest to offset airfield debt service and lower variable rate interest. Operating costs excluding airline realignment increased $3.6M due to payroll baseline increases, sustainability master plan and environmental remediation liability. Airline realignment increased by $8.8M. Maintaining FIS offset at $8M. 19 19 Aeronautical Key Indicators 2011 2012 2012 2013 2013 / 2012 Budget Chg Actual Budget Forecast Budget $ % Cost Per Enplanement: Capital Costs / Enpl 4.97 5.52 5.39 5.60 0.08 1.5% Operating Costs / Enpl 8.12 8.61 8.87 8.63 0.03 0.3% Airline Realignment / Enpl - 0.49 0.32 1.00 0.51 102.9% FIS/Other Offsets (1.37) (1.38) (1.35) (1.38) (0.00) 0.3% Other Aero Revenues 0.95 0.94 0.95 0.87 (0.08) -8.3% Non-passenger Airline Costs (0.91) (0.92) (0.93) (0.88) 0.05 -5.1% Passenger Airline CPE 11.76 13.26 13.25 13.84 0.58 4.4% Airline realignment increase of $8.8M had incremental impact on CPE of $0.51. Environmental remediation liability increase of $1.5M had incremental impact on CPE of $0.09. 20 20 Non-Airline Budget Target 2013/2012 Budget 2012 2013 Change $ in 000's Budget Budget $ % Non-Aero Revenue 140,955 149,109 8,155 5.8% CFC Operating Revenue (CFC) 8,576 11,418 2,842 33.1% Total Non-Aeronautical Revenue 149,531 160,528 10,997 7.4% Baseline Non-Aero Operating Expense (AV) 37,625 38,493 868 2.3% Internal Utility Billing (AV) (16,501) (14,470) 2,031 -12.3% Other Utilities Expenses (AV) 16,731 17,239 508 3.0% Regulated Materials 1,025 1,060 35 3.4% Non-Aero Operating Expense (Corporate) 20,974 21,569 595 2.8% Non-Aero Operating Expense (CDD/RE/SP) 6,226 4,881 (1,345) -21.6% RCF Operating Expenses (CFC) 7,469 7,439 (30) -0.4% Non-Aero Requests Driven by New Revenue 570 570 n/a Non-Aero Requests Driven by Future Revenues 1,180 1,180 n/a Allocation of Division-Wide Requests to Non-Aero 1,249 1,249 n/a Total Non-Aero Operating Expense 73,549 79,211 5,661 7.7% Non-Aeronautical Net Operating Income 75,982 81,317 5,335 7.0% Adjusted NOI: Non-Aeronautical Net Operating Income 75,982 81,317 5,335 7.0% Less CFC Surplus (1,107) (3,979) (2,872) 259.4% Adjusted Non-Aero Net Operating Income 74,875 77,338 2,463 3.3% 21 Non-Airline Business 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Actual Budget Forecast Budget $ % Revenues: Rental Cars 29,969 26,580 28,359 26,737 157 0.6% CFC Operating Revenues (RCF) 778 8,576 7,083 11,418 2,842 33.1% RCF Reimbursable Revenue - 477 477 1,486 1,009 211.4% RCF Subtotal 30,746 35,633 35,919 39,641 4,007 11.2% Public Parking 49,996 52,480 51,512 53,744 1,264 2.4% Ground Transportation 7,704 7,519 7,419 7,267 (252) -3.4% Concessions 35,404 35,659 37,107 40,763 5,104 14.3% Other 19,109 18,240 18,974 19,113 873 4.8% Total Non-Airline Revenues 142,959 149,531 150,930 160,528 10,997 7.4% RCF Operating Expense 852 8,150 6,858 9,121 972 11.9% Other Operating Expense 58,692 66,490 65,366 68,423 1,933 2.9% Share of terminal O&M 17,610 18,698 18,900 18,768 70 0.4% Less utility internal billing (18,369) (19,789) (19,789) (17,102) 2,686 -13.6% Net Operating & Maint 58,786 73,549 71,336 79,210 5,661 7.7% Net Operating Income 84,173 75,982 79,594 81,317 5,335 7.0% Public Parking revenues increase due to new valet parking to begin services in July and anticipated growth in 1-4 Day and 4+ Day parking transactions. Concession revenues increase due to continued growth in concessions revenue performance in retail, in-flight kitchen, food and beverage plus addition of new tenants and a new duty free operator. Rental Car Facility (RCF) operating expenses increase due to full year of operations. Other operating costs increase due to payroll baseline increases, outside service contractual increases and environmental remediation liability. Internal utilities for 2013 budget account for surplus from 2011 backup power. 22 22 Non-Airline Key Indicators 2011 2012 2012 2013 2013 / 2012 Budget Chg Actual Budget Forecast Budget $ % Revenues Per Enplanement Parking 3.05 3.15 3.09 3.16 0.01 0.2% Rental Cars (excludes CFCs) 1.83 1.60 1.70 1.57 (0.03) -1.6% Ground Transportation 0.47 0.45 0.45 0.43 (0.02) -5.4% Concessions 2.16 2.14 2.23 2.40 0.25 11.9% Other 1.21 1.64 1.59 1.88 0.24 14.8% Total Revenues 8.72 8.98 9.06 9.43 0.45 5.0% Primary Concessions Sales / Enpl 10.30 10.42 10.60 11.25 0.83 8.0% 23 23 Division Summary 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Budget Budget Forecast Budget $ % Revenues: Aeronatical Revenues 207,763 236,221 236,088 250,499 14,279 6.0% Non-Aeronautical Revenues 142,959 149,531 150,930 160,528 10,997 7.4% Total Revenues 350,721 385,751 387,018 411,027 25,275 6.6% Operating Expenses: Baseline Airport Expenses 134,185 149,673 150,478 155,911 6,239 4.2% Airline Realignment - 8,200 5,400 17,000 8,800 107.3% Environmental Remediation Liability 1,428 3,096 4,913 4,615 1,519 49.0% Total Airport Expenses 135,612 160,969 160,791 177,526 16,557 10.3% Corporate 32,407 35,566 35,161 37,208 1,642 4.6% Police Costs 15,804 16,964 16,892 16,891 (73) -0.4% Capital Development/Other Expenses 8,046 11,579 11,579 11,499 (79) -0.7% Total Allocated Expenses 56,257 64,109 63,632 65,598 1,489 2.3% Total Operating Expenses 191,869 225,078 224,423 243,124 18,046 8.0% Net Operating Income 158,852 160,674 162,595 167,903 7,229 4.5% Key Measures: Non-Aero NOI ($ in 000s) 84,173 75,982 79,594 81,317 5,335 7.0% Passenger Airline CPE 11.76 13.26 13.25 13.84 0.58 4.4% Debt / Enplaned Passenger 161.46 152.17 152.17 143.78 (8.40) -5.5% Debt Service Coverage 1.47 1.34 1.39 1.35 0.00 0.4% Traffic: Enplanements 16,397 16,650 16,650 17,017 366 2.2% Landed Weight 20,123 20,444 20,444 20,444 - 0.0% 24 24 Expense Summary by Department 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Actual Budget Forecast Budget $ % Airport Operations: Aeronautical Operations 24,542 25,018 24,813 25,693 676 2.7% Airline Realignment - 8,200 5,400 17,000 8,800 107.3% Landside Operations 8,031 8,639 8,058 8,943 304 3.5% Rental Car Facility (RCF) 730 6,511 5,219 8,297 1,786 27.4% Subtotal 33,303 48,368 43,490 59,933 11,566 23.9% Business Development 4,365 5,464 5,274 6,073 608 11.1% Utilities 15,133 12,923 13,650 13,214 291 2.3% Aviation Director's Office 1,388 1,804 1,929 1,548 (256) -14.2% Fire Department 12,600 11,749 12,307 12,185 436 3.7% Aviation Planning 2,109 1,898 1,902 3,282 1,383 72.9% Aviation Finance & Budget 716 864 864 834 (31) -3.6% Facilities & Infrastructures 1,566 1,884 1,710 1,882 (1) -0.1% Sign Shop 539 458 425 489 31 6.9% Airport Building Dept 332 389 388 402 12 3.1% Aiport Office Building Mgmt 1,155 1,210 1,475 1,504 295 24.4% Aviation Environmental Group 3,418 3,847 3,758 3,887 40 1.1% Aviation Maintenance 49,729 55,379 55,615 56,807 1,428 2.6% Community Partnership 1,415 1,499 1,467 1,293 (205) -13.7% Airport Security 6,044 6,254 6,652 5,715 (540) -8.6% Other (Excluding AV PMG) 372 3,883 4,973 3,864 (19) -0.5% Baseline O&M 134,185 157,873 155,878 172,911 15,039 9.5% Environmental Remediation Liability 1,428 3,096 4,913 4,615 1,519 49.0% Total Airport Expenses $ 135,612 $ 160,969 $ 160,791 $ 177,526 $ 16,557 10.3% Payroll baseline increase of $4.8M Outside services increase of $9.6M due to airline realignment, sustainability master plan and concessions leasing and planning Other airport expenses increase of $1.4M due primarily to RCF Environmental remediation liability increase of $1.5M 25 25 Expense Summary by Accounts 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Budget Budget Forecast Budget $ % Payroll 80,012 93,871 92,735 97,842 3,970 4.2% Outside Services 25,224 29,204 27,803 29,978 774 2.6% Utilities 13,202 12,458 13,054 12,425 (33) -0.3% Supplies 4,928 4,425 5,292 4,284 (141) -3.2% Other Airport Expenses 10,820 9,713 11,594 11,382 1,669 17.2% Baseline Airport Expenses 134,185 149,673 150,478 155,911 6,239 4.2% Airline Realignment - 8,200 5,400 17,000 8,800 107.3% Environmental Remediation Liability 1,428 3,096 4,913 4,615 1,519 49.0% Total Airport Expenses 135,612 160,969 160,791 177,526 16,557 10.3% Payroll variances include: Non-payroll variances include: 2013 baseline increase of $4.8M Airline realignment increase of $8.8M Offset by $817.8K decrease due to the Sustainability master plan increase of $1.3M elimination of 12.0 FTEs airfield terminal Concessions leasing and planning increase of $500K access controllers RCF other airport expenses increase of $1.6M, of which $1.5M are RAC reimbursable Environmental remediation liability driven by capital projects increase of $1.5M 26 26 FTEs 2013 Proposed Budget FTEs FTEs % 2012 Approved Budget 860.02 Customer Service Pathfinders (4.00) Senior Planner 1.00 Airport Office Building On-call Receptionist 0.12 On-call Concessions Marketing Coordinator 0.20 Other 0.75 2012 Baseline 858.09 2013 Budget Changes: AF Security Terminal Access Controllers (12.00) Five Vacant 0.2 Tour Group Coordinator FTEs (1.00) Landside Ops Assistant Manager 1.00 Vacant Parking Cashier (1.00) Landside Parking Audit Assistant 1.00 Community Partnership High School Intern 0.33 Emergency Management College Intern 0.33 Subtotal (11.34) 2013 Budget Proposed FTEs 846.75 -1.3% FTE Rollforward 2013 2013 % Change 2011 2012 2012 Budget Proposed 2013 Bud - Actual Budget Revised Requests Budget 2012 Bud Airport Operations Aeronautical 108.00 110.00 106.75 - 106.75 0.0% Landside 86.50 136.50 136.50 - 136.50 0.0% 194.50 246.50 243.25 - 243.25 0.0% Business Development 20.00 20.75 20.95 - 20.95 0.0% Aviation Services 200.52 200.77 197.65 (11.34) 186.31 -5.7% Facilities 28.00 31.00 35.24 - 35.24 0.0% Maintenance 331.00 361.00 361.00 - 361.00 0.0% Total Aviation Division 774.02 860.02 858.09 (11.34) 846.75 -1.3% 27 27 Aviation FTEs: 2007 2013 28 Key Non-operating Revenues 2011 2012 2012 2013 2013 / 2012 Budget Chg $ in 000's Budget Budget Forecast Budget $ % Customer Facility Charges (Operating) 778 8,576 7,083 11,418 2,842 33.1% Customer Facility Charges (Non-operating) 23,669 21,333 22,826 20,148 (1,185) -5.6% Total CFC Revenue 24,447 29,909 29,909 31,566 1,657 5.5% Passenger Facility Charges (PFC) 62,358 63,448 63,448 64,844 1,396 2.2% Capital Grants & Donations 19,565 28,982 28,982 16,230 (12,751) -44.0% Non-Capital Grants & Donations 1,463 1,479 1,479 1,269 (211) -14.2% CFCs split between non-operating revenues (pays for debt service) and operating revenues 90% of PFCs used to pay debt service on PFC eligible projects Grants tied to specific projects approved for grant funding by FAA 29 Risks & Opportunities Risks: Airline agreement expires 12/31/12. Budget based on extending current agreement on month-to-month basis in 2013 RCF bus drivers contract negotiation may affect costs Economic uncertainty, airline profitability and seat capacity in Seattle market Parking competition Environmental costs for Lora Lake Pending labor settlements vs. baseline budget assumptions Opportunities: Terminal concessions: adding new tenants such as McDonalds, new duty free operator so growth may exceed forecast New international service? 30 30 Financial Forecast $ in 000's 2012 Bud 2013 2014 2015 2016 2017 Airline Revenue 236,220 250,499 246,741 269,824 288,798 303,433 Non-Airline Revenue 149,531 160,528 172,311 180,341 186,850 191,055 Total Revenue 385,751 411,027 419,052 450,165 475,648 494,488 Operating Expense 225,078 243,124 234,301 239,469 246,499 252,877 Net Operating Income 160,673 167,903 184,751 210,696 229,149 241,610 Non-Operating Income 5,251 5,795 3,643 3,303 3,243 3,294 CFC Excess* (903) (3,892) (4,974) (3,636) (3,775) (3,000) Available for Debt Service 165,021 169,806 183,420 210,363 228,616 241,904 Debt Service (179,902) (179,229) (184,034) (203,169) (222,541) (241,289) Debt Service Paid by CFCs 19,683 19,201 19,575 20,177 21,462 22,820 Debt Service Paid by PFCs 37,103 33,800 33,800 33,800 33,800 33,800 Net Cash Flow 41,905 43,577 52,761 61,171 61,337 57,235 Key Measures Total Airport Coverage 1.34 1.35 1.40 1.41 1.37 1.31 Passenger Airline CPE 13.26 13.84 13.31 14.29 15.00 15.42 Debt per Enplaned Passenger 152.17 143.78 146.63 150.84 165.27 164.42 * CFC collections in excess of CFC debt service/O&M are restricted and cannot be used for other revenue bond debt service. 31 31 Appendix A: Summary of RCF/Busing $ in 000's 2012 Budget New Costs 2013 Budget Expenses: CFC $000s Payroll 5,011 395 5,406 Revenues 11,418 Other 2,165 1,420 3,585 Costs 7,439 Total Aviation 7,176 1,815 8,991 Surplus/(Deficits) 3,979 Corporate 127 (106) 21 Reimbursable Capital Development 847 (847) - Revenues 1,486 Subtotal Other 974 (953) 21 Costs 1,486 Total RCF Expenses 8,150 862 9,012 Surplus/(Deficits) - Expenses not CFC covered: Employee Parking (ADF) 30% Allocable to Employee Parking (145) 58 (87) Revenues - Ops Mgr 25% to Employee Parking (59) 59 - Expenses 87 Total ADF funded (204) 117 (87) (87) RCF Reimbursable (477) (1,009) (1,486) Total Surplus 3,892 Total CFC funded 7,469 (30) 7,439 New revenues: RCF Reimbursable 477 1,009 1,486 All CFC-eligible costs paid by CFC Op Rev (a) 8,576 2,842 11,418 CFC operating revenues Total new revenues 9,053 3,851 12,904 Total Surplus/(Deficit) 903 2,989 3,892 (a) Assumes $6.00 per day transaction. 32 Seaport Division 2013 Preliminary Operating Budget Commission Briefing October 9, 2012 33 Terminal 91 Pier 86 Pier 66 Terminal 46 T-18 On-Dock Rail BNSF (SIG - North) Terminal 30 T-5 On-Dock Rail Terminal 18 BNSF (SIG - South) Terminal 25 S Terminal 5 UPRR (ARGO) 34 2013 SEAPORT KEY STRATEGIES In 2011, the Seaport's three Strategic Initiative Teams developed long term Seaport Strategies: 1. Commercial Business 2. Asset Stewardship 3. Green Gateway For 2013, Seaport will advance these strategies in alignment with the Commission's Century Agenda, the CEO's Goals and Key Corporate Initiatives. 35 Key Revenue Assumptions TEU volume at 1.66 million, a 17% decrease from 2012 Budget Cruise forecasts 851,000 passengers a 3% decrease from 2012 Budget Grain volume at 3.4 million metric tons. Due to Midwest drought and favorable prices in South America forecasted to be at levels last seen in 2003. 36 Expense Issues Continuation of Asset Condition Assessments Maintenance Dredging Stormwater NW Ports Clean Air Strategy Utility Increases Alaskan Way Viaduct monitoring related costs Environmental Remediation Liability 37 Org Revenues By Group Seaport Division Only 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenue Lease & Asset Management 82,599 81,000 92,543 92,562 11,562 14.3% Cruise & Maritime Ops 15,668 15,554 16,594 17,133 1,580 10.2% Operating Revenue 98,267 96,553 109,136 109,695 13,142 13.6% Security Grants 394 1,598 2,708 173 (1,425) -89.1% Total Revenues 98,661 98,151 111,844 109,869 11,717 11.9% 38 Org Revenues Lease & Asset Management 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenue Containers 63,643 60,435 73,951 73,040 12,605 20.9% Grain 5,611 6,088 3,843 3,653 (2,435) -40.0% Industrial Properties 13,345 14,476 14,748 15,869 1,393 9.6% Operating Revenue 82,599 81,000 92,543 92,562 11,562 14.3% 39 Org Revenues Cruise & Maritime Operations 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenue Cruise 12,197 11,718 12,718 12,800 1,082 9.2% Docks 3,470 3,836 3,876 4,333 497 13.0% Operating Revenue 15,668 15,554 16,594 17,133 1,580 10.2% Security Grants 394 1,598 2,708 173 (1,425) -89.1% Total Revenues 16,062 17,152 19,302 17,307 155 0.9% 40 Org Expenses By Group Seaport Division Only 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Org Expenses Lease & Asset Mgmt 7,005 8,061 6,600 8,156 94 1.2% Cruise & Maritime Ops 3,160 3,985 4,286 3,897 (87) -2.2% Commercial Strategy 1,551 1,841 1,679 1,895 54 3.0% Environmental Services 2,631 2,828 2,953 3,123 295 10.4% Planning 367 447 394 434 (13) -2.9% Seaport Finance 951 1,012 940 1,040 28 2.8% Seaport Admin 574 758 521 783 24 3.2% Contingency 0 0 0 0 0 NA Capital to Expense 14 0 0 0 0 NA Total Operating Expense 16,254 18,932 17,372 19,328 396 2.1% Security Grants 474 1,476 2,634 0 (1,476) -100.0% Envir Remediation Liability (633) 0 32 1,170 1,170 NA Total Expenses 16,095 20,408 20,038 20,498 90 0.4% 41 Seaport Org Expense Budget Seaport Division Expenses Only 2012 2013 13-'12 Change $'s Thousands Budget Budget $ % COMMENTS Baseline Budget Salaries 5,053 5,404 350 6.9% Less charged to Env Remed Liability Benefits 1,598 1,692 94 5.9% Less charged to Env Remed Liability Wages & Benefits 0 0 0 NA OPEB 35 32 (3) -7.7% Salaries & Wages to Cap/Non-Op/ERL 1,113 902 (211) -19.0% Amt charged to Env Remed Liability Total Payroll Costs 7,800 8,030 230 3.0% In line with Corporate Guidelines Non-Payroll Costs Charges to Capital/Non-Op/ERL (1,521) (1,263) 258 -17.0% Utilities 5,014 5,751 737 14.7% Primarily Surf Water & Sewer (offset by Tenant Reim) Contract Watchmen 597 526 (71) -12.0% Fewer SCCT Events/Less Demand for TWIC Other O&M 4,086 4,079 (6) -0.1% Other Total Baseline Budget 15,975 17,123 1,148 7.2% Initiatives T5 Phase II Maintenance Dredge 500 1,000 500 100.0% Pile Cap (Pilot & Commence Full) 1,200 0 (1,200) -100.0% Prep to remove IHI Cranes 0 128 128 NA T46 Cranes Potential Repairs 25 0 (25) -100.0% Tribal Mitigation 340 351 11 3.2% RFID Expenses 276 164 (112) -40.4% Contract Costs & Subscrip fees only, labor in Maint Bud FF&E - CTA Allowance Usage 134 0 (134) -100.0% T91 slope stabilization survey 35 0 (35) -100.0% 10-Yr Container Terminal Access Study 0 125 125 NA Traffic Studies 100 100 0 0.0% Planning Studies 155 145 (10) -6.5% Terminal Credential & Certifications 75 75 0 0.0% Artifact Permanent Storage 118 117 (1) -0.4% Total Initiatives 2,957 2,205 (752) -25.4% Total Operating Expenses 18,932 19,328 396 2.1% Security Grant Expenses 1,476 0 (1,476) -100.0% Third Party Grants completed in 2012 Envir Remediation Liability 0 1,170 1,170 NA Total Expenses 20,408 20,498 90 0.4% 42 Initiatives $'s in Thousands Initiatives - Proposed for 2013 Budget Maintenance Dredging T-5 maintenance dredging (phase 2) 1,000 Crane Removal Prep to remove IHI cranes from Terminal 18 128 RFID Implementation Costs ($100 grant funded) 164 Plus Marine Maint Wage Costs Tribal Mitigation Contractual Payment 351 Artifact Storage 117 Transportation & Planning Studies 10 Yr Container Terminal Access Study 125 Transportation 100 Planning Studies 145 370 Terminal Efficiency Initiative Terminal Credential & Certification 75 Total 2013 Seaport One-Time Expenses 2,205 2013 Projects/Work Budgeted in CDD T5 and T18 Dredging 180 Holgate to King St. Design Services 10 Tunnel Monitoring 20 210 43 Northwest Ports Clean Air Initiatives and Envir Remediation Liability Classified as Non-Operating Expense $'s Thousands 2013 Non-Operating Expense Budget PSCAA ABC Fuels $625 Trucks 325 Cargo Handling Equip 100 Envir Remediation Liability -Sea 3,050 Envir Remediation Liability -RE 1,750 Total $5,850 44 Full-Time Equivalents (FTEs) FTE's 2012 Budget 59.9 2012 Changes Staff Upgrade: Seaport Finance Staff upgrade 0.0 Staff Addition: Vacant Property Mgr FTE incr to full time 0.1 Adjusted 2012 60.0 2013 Budget No Changes 0.0 Subtotal 0.0 Proposed FTE's for 2013 60.0 45 Full-Time Equivalents (FTEs) Summary Seaport FTE Summary 2008 Bud 2009 Bud 2010 Bud 2011 Bud 2012 Bud 2013 Bud Total Seaport 64.9 61.8 60.4 60.4 59.9 60.0 Less: Interns (2.8) (2.2) (2.2) (2.2) (2.2) (2.2) Adjusted Seaport 62.1 59.6 58.2 58.2 57.7 57.8 46 Century Agenda Linkages $ 000's 2013 Seaport Org Description Operating Budget Planning Study New Regional IY $25 Planning Study Dredging $50 Planning Study Bulk Opportunities $20 NW Cruise Itinerary Project ($30K in 2012) $20 T5 Phase II Maintenance Dredge $1,000 Energy Efficiency Assessments $50 Environmental Services Air Programs $230 Environmental Services Stormwater $1,105 Total $2,500 ** Also Non-Operating PSCAA 47 Seaport Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenues Operating Revenues 98,910 96,980 109,563 110,110 13,129 13.5% Security Grants 394 1,598 2,708 173 (1,425) -89.1% Total Revenues 99,304 98,578 112,271 110,283 11,705 11.9% Expenses Seaport Expenses (excl env srvs) 12,899 15,236 13,800 15,385 149 1.0% Envir Services & Planning 2,127 2,289 2,289 2,675 386 16.9% Maintenance Expenses 4,608 5,817 5,556 6,360 543 9.3% P69 Facilities Expenses 506 531 531 526 (5) -0.9% Other RE Expenses 180 300 300 353 54 17.9% CDD Expenses 3,539 4,388 5,588 3,584 (804) -18.3% Police Expenses 3,578 4,167 4,141 4,271 104 2.5% Corporate Expenses 11,177 12,332 12,176 12,728 396 3.2% Security Grant Expenses 481 1,476 2,634 0 (1,476) -100.0% Envir Remed Liability (633) 0 0 1,170 1,170 NA Operating Expenses 38,463 46,536 47,015 47,053 517 1.1% Net Operating Income 60,842 52,042 65,256 63,230 11,188 21.5% 48 Containers Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Containers 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Container Revenues 63,643 60,435 73,040 12,605 20.9% Maintenance Reimburseable 471 300 300 0 0.0% Total Revenues 64,114 60,735 73,340 12,605 20.8% Expenses Seaport Expenses (excl env srvs) 5,998 7,724 7,748 24 0.3% Envir Services & Planning 1,237 1,222 1,612 390 31.9% Maintenance Expenses 1,546 1,546 1,983 437 28.3% P69 Facilities Expenses 313 336 333 (3) -0.9% Other RE Expenses 8 20 121 100 493.8% CDD Expenses 2,774 2,939 2,519 (420) -14.3% Police Expenses 951 1,093 1,179 87 8.0% Corporate Expenses 6,498 7,115 7,485 370 5.2% Operating Expenses 19,325 21,995 22,980 985 4.5% Net Operating Income 44,789 38,740 50,360 11,619 30.0% 49 Grain Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Grain 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Grain Revenues 5,611 6,088 3,653 (2,435) -40.0% Maintenance Reimburseable 2 1 1 0 0.0% Total Revenues 5,613 6,089 3,654 (2,435) -40.0% Expenses Seaport Expenses (excl env srvs) 277 261 283 21 8.1% Envir Services & Planning 3 1 10 9 1707.2% Maintenance Expenses 34 40 54 15 36.6% P69 Facilities Expenses 28 31 31 (0) -0.7% Other RE Expenses 0 0 0 0 NA CDD Expenses 89 181 138 (43) -23.8% Police Expenses 207 228 221 (6) -2.8% Corporate Expenses 536 615 713 98 15.9% Operating Expenses 1,175 1,357 1,450 93 6.9% Net Operating Income 4,439 4,732 2,204 (2,528) -53.4% 50 Industrial Properties Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Industrial Properties 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Industrial Properties Revenues 13,345 14,476 15,869 1,393 9.6% Maintenance Reimburseable 37 9 9 0 0.0% Total Revenues 13,382 14,486 15,878 1,393 9.6% Expenses Seaport Expenses (excl env srvs) 3,220 3,395 3,435 40 1.2% Envir Services & Planning 562 655 606 (49) -7.5% Maintenance Expenses 997 1,342 1,461 120 8.9% P69 Facilities Expenses 84 83 82 (1) -0.9% Other RE Expenses 137 191 166 (25) -13.1% CDD Expenses 372 605 475 (131) -21.6% Police Expenses 910 1,000 965 (36) -3.6% Corporate Expenses 1,800 1,912 1,972 60 3.2% Operating Expenses 8,081 9,183 9,161 (21) -0.2% Net Operating Income 5,301 5,303 6,717 1,414 26.7% 51 Cruise Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Cruise 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Cruise Revenues 12,197 11,718 12,800 1,082 9.2% Maintenance Reimburseable 90 97 81 (16) -16.1% Total Revenues 12,287 11,815 12,881 1,067 9.0% Expenses Seaport Expenses (excl env srvs) 836 1,198 1,100 (98) -8.2% Envir Services & Planning 220 227 229 2 0.8% Maintenance Expenses 925 1,649 1,618 (31) -1.9% P69 Facilities Expenses 56 55 55 (1) -0.9% Other RE Expenses 15 47 1 (46) -97.7% CDD Expenses 209 448 286 (162) -36.2% Police Expenses 1,055 1,345 1,422 77 5.7% Corporate Expenses 1,366 1,423 1,450 26 1.8% Operating Expenses 4,682 6,392 6,160 (232) -3.6% Net Operating Income 7,605 5,422 6,721 1,299 23.9% 52 Docks - Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Docks 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Docks Revenues 3,470 3,836 4,333 497 13.0% Maintenance Reimburseable 43 21 24 3 14.6% Total Revenues 3,513 3,856 4,357 500 13.0% Expenses Seaport Expenses (excl env srvs) 2,214 2,239 2,456 217 9.7% Envir Services & Planning 105 184 219 35 18.9% Maintenance Expenses 1,092 1,233 1,234 1 0.1% P69 Facilities Expenses 24 26 25 (0) -1.4% Other RE Expenses 20 42 66 24 57.0% CDD Expenses 93 200 161 (38) -19.2% Police Expenses 455 501 483 (18) -3.6% Corporate Expenses 590 675 702 27 4.0% Operating Expenses 4,595 5,100 5,347 247 4.8% Net Operating Income (1,082) (1,244) (990) 254 -20.4% 53 Risks U.S. and Global economic uncertainties - Potential impact on Container and Cruise volumes Competitive Pressures Traffic congestion due to construction Unexpected Repairs Environmental Remediation Liabilities 54 Real Estate Division 2013 Preliminary Operating Budget Commission Briefing October 9, 2012 55 Key Assumptions Recreational marina occupancy rate 92% compared to 94% in 2012 Budget Fishing & Commercial occupancy rates FT 78% and MIC 70% compared to FT 84% and MIC 72% in 2012 Budget Commercial Properties target 95% occupancy at year-end 2013. 2012 Budget target was 90% 56 Key Assumptions (continued) Conference and Event Centers New management agreement in place effective June 1, 2012 Number of BHICC guests down from 2012 Budget. Revenue per guest budgeted to increase Ownership of Eastside Rail Corridor transferred to King County by December 31, 2012 Execution of Deferred Maintenance Plan continues with $2.9 million of projects budgeted for 2013 57 Org Revenues By Group Real Estate Division Only 2011 2012 2012 2013 13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenue Harbor Services 11,503 11,633 11,433 11,611 (22) -0.2% Portfolio Management 18,887 19,820 18,561 19,877 57 0.3% Commercial 9,388 9,807 9,523 10,153 346 3.5% Conf & Event Centers 9,498 10,013 9,038 9,724 (289) -2.9% Development & Planning 914 812 919 850 39 4.7% Eastside Rail 85 22 22 7 (15) -69.3% Facilities & Maintenance 826 542 542 586 44 8.2% Total Revenue 32,214 32,828 31,476 32,930 102 0.3% 58 Org Expenses By Group Real Estate Division Expenses Only 2011 2012 2012 2013 13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Operating Expenses Harbor Services 4,347 4,614 4,680 4,854 240 5.2% Portfolio Management 12,131 12,441 12,042 12,843 402 3.2% Commercial 4,470 4,558 4,921 5,201 643 14.1% Conf & Event Centers 7,661 7,882 7,121 7,642 (240) -3.1% Development & Planning 725 799 750 854 55 6.9% Eastside Rail Corridor 1,585 203 257 177 (26) -12.7% Maintenance 12,621 16,459 14,526 17,350 890 5.4% Facilities 1,382 1,521 1,580 1,482 (39) -2.6% Division Admin 404 378 387 396 17 4.6% Contingency 0 0 0 500 500 NA Capital to Expense 68 0 0 0 0 NA Environ Remed Liability 0 0 0 80 80 NA Total Operating Expenses 33,264 36,416 34,223 38,536 2,120 5.8% 59 Real Estate Org Expense Budget Real Estate Division Expenses Only 2012 2013 Incr (Decr) $'s Thousands Budget Budget Change % Explanation Baseline Budget Salaries 6,120 6,527 407 6.7% Pay incr, net new FTE's Benefits 2,237 2,414 177 7.9% Increase and net new FTE's Wages & Benefits 8,458 8,155 (303) -3.6% Expected efficiency improvements Salaries & Wages to Cap, Non-op,ERL 1,400 836 (564) -40.3% Less Maintenance capital work Total Payroll Costs 18,215 17,933 (283) -1.6% Charges to Cap/Non-Op/ERL (2,044) (1,338) 706 -34.5% Less Maintenance charge to capital Utilities 3,627 3,799 173 4.8% Primarily Surface Water & Water Costs Conf & Event Activity Op Expense 6,944 6,709 (235) -3.4% Less activity Conf & Event Activity Management Fee 927 681 (246) -26.6% New agreement Print Shop Cost Transfers (216) (14) 202 -93.3% Net Print Shop transfer to non-RE groups RE Print Shop Costs (Supplies, Equip Rent) 215 94 (121) -56.1% Print shop closure Other O&M 5,482 5,726 244 4.5% $214K is net Maintenance Increase Total Baseline Budget 33,148 33,588 440 1.3% Initiatives Tenant Improve, Broker Fees,Space Plan 256 722 466 181.9% Leasing up Conf & Event Centers - Cap Allow (exp) 0 240 240 NA Capital Allowance not qualifying for capital Deferred Maint Salaried Staff 158 274 116 73.6% Deferred Maint Wages,Materials Outside Srv 2,337 2,394 58 2.5% Deferred Maint work concludes in 2013 Net Sheds (included in Deferred Maint) 250 250 0 0.0% Work separate from code compliance project Maint Consultants Maximo,Benchmark Analysis 0 210 210 NA CAD Drawings Related to Propw orks Upgrade 50 50 0 0.0% SBM Dock Inspection Consultant 0 75 75 NA Eastside Rail Corridor-Outside Services 192 152 (40) -20.8% FT 25 Year Plan 25 0 (25) -100.0% Contingency 0 500 500 NA To cover potential maint increase Total 3,268 4,867 1,600 49.0% Total Operating Expenses 36,416 38,456 2,040 5.6% Envir Remediation Liability 0 80 80 NA Relates to planned capital proj at FT Total Expenses 36,416 38,536 2,120 5.8% 60 2013 Deferred Maintenance Projects $'s Thousands Deferred Maintenance Projects 2013 Budget P69 carpet replacement 800 P66 fender panel repair 150 T102 asphalt overlay courtyard & roadway 150 T102 asphalt sealcoat to extend life 50 FT C15 Building paint exterior 300 Wood foundation cap on West Wall Build 100 Maximo mobility and integration 150 Contingency 300 Salaries & Benefits to suppport Deferred Maint 274 T91 Building M19 envelope repair 55 T91 SWPPP wetlands tital valve replace 35 P66 redo Anthony's deck area 85 FT Bldg C10 Paint exterior 35 FT Bldg I8 Paint exterior 40 T5 Park repair 50 Other 95 Subtotal per schedule 2,668 Maint Net Shed related work 250 Total Deferred Maintenance Projects 2,918 61 Real Estate Projects Budgeted in CDD $'s in Thousands 2013 Real Estate Projects Budgeted in CDD FT Net Sheds Code Compliance Option 1 $1,000 SBM Paving Condition Assessment 70 SBM Site Plan 50 $1,120 62 Full-Time Equivalents (FTEs) 2012 Budget 165.8 2012 Changes Maintenance - Upgrade Purchasing Staff 0.0 Facilities - Delete Gen Srvs Specialists (print shop closure) (4.0) Facilities - Add Facility Specialist 1.0 Adjusted 2012 162.8 2013 Budget Staff Additions: Harbor Services-Admin, Half-time 0.5 Maintenance - 4 Planners 4.0 Net Change 4.5 Proposed 2013 Budget 167.3 63 Real Estate Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions 2011 2012 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Forecast Budget $ % Revenues Operating Revenues 22,051 22,372 21,995 22,776 404 1.8% Conf & Event Ctr Revenue (BHICC & WTC) 9,518 10,029 9,054 9,740 (289) -2.9% Total Revenues 31,569 32,401 31,049 32,516 115 0.4% Expenses Real Estate Exp (excl Maint,P69,C&E) 9,698 9,908 10,321 10,800 892 9.0% Real Estate Conf & Event (BHICC & WTC) 7,661 7,882 7,121 7,642 (240) -3.1% Eastside Rail Corridor 1,585 203 257 177 (26) -12.7% Maintenance Expenses 7,192 9,687 8,063 9,630 (56) -0.6% Real Estate Contingency 0 0 0 500 500 NA P69 Facilities 150 198 213 178 (21) -10.5% Envir Services & Planning 871 987 987 882 (104) -10.6% Seaport Expenses (excl env srvs) 359 421 421 386 (35) -8.3% CDD Expenses 917 1,266 1,266 2,166 900 71.1% Police Expenses 1,301 1,442 1,433 1,412 (30) -2.1% Corporate Expenses 5,018 5,229 5,177 5,151 (78) -1.5% Envir Remediation Liability 7 0 0 80 80 NA Operating Expenses 34,758 37,224 35,260 39,005 1,781 4.8% Net Operating Income (3,189) (4,823) (4,211) (6,489) (1,666) -34.5% 64 Fishing & Commercial Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Fishing & Commercial 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Operating Revenues 2,549 2,667 2,764 97 3.6% Total Revenues 2,549 2,667 2,764 97 3.6% Expenses Real Estate Exp (excl Maint,P69,C&E) 1,757 1,847 1,882 35 1.9% Real Estate Conf & Event (BHICC & WTC) 0 0 0 0 NA Maintenance Expenses 1,435 1,828 1,723 (105) -5.8% Real Estate Contingency 0 0 83 83 NA P69 Facilities 23 33 30 (3) -10.2% Envir Services & Planning 277 309 299 (10) -3.2% Seaport Expenses (excl env srvs) 67 70 71 0 0.4% CDD Expenses 198 225 1,207 982 436.7% Police Expenses 465 519 508.07 (11) -2.1% Corporate Expenses 866 964 939.33 (25) -2.6% Envir Remediation Liability 0 0 0 0 NA Operating Expenses 5,090 5,795 6,742 946 16.3% Net Operating Income (2,541) (3,129) (3,978) (849) -27.1% 65 Recreational Boating Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Recreational Boating 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Operating Revenues 8,960 8,974 8,924 (50) -0.6% Total Revenues 8,960 8,974 8,924 (50) -0.6% Expenses Real Estate Exp (excl Maint,P69,C&E) 2,684 2,803 3,052 250 8.9% Real Estate Conf & Event (BHICC & WTC) 0 0 0 0 NA Maintenance Expenses 1,543 2,145 2,131 (14) -0.6% Real Estate Contingency 0 0 205 205 NA P69 Facilities 61 81 73 (8) -10.0% Environmental Services & Planning 280 274 263 (11) -4.0% Seaport Expenses (excl env srvs) 67 70 72 2 2.9% CDD Expenses 349 412 580 167 40.6% Police Expenses 372 415 407 (8) -2.0% Corporate Expenses 1,813 1,881 1,925 44 2.4% Envir Remediation Liability 0 0 0 0 NA Operating Expenses 7,170 8,081 8,709 628 7.8% Net Operating Income 1,790 893 215 (677) -75.9% 66 Portfolio Management Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Portfolio Management 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Operating Revenues 9,487 9,894 10,225 331 3.3% BHICC & WTC Seattle Revenue 9,518 10,029 9,740 (289) -2.9% Total Revenues 19,005 19,923 19,965 42 0.2% Expenses Real Estate Exp (excl Maint,P69,C&E) 4,404 4,336 4,922 586 13.5% Real Estate Conf & Event (BHICC & WTC) 7,661 7,882 7,642 (240) -3.1% Maintenance Expenses 3,809 5,220 5,237 17 0.3% Real Estate Contingency 0 0 184 184 NA P69 Facilities 58 72 65 (7) -10.3% Environmental Services & Planning 168 236 228 (8) -3.6% Seaport Expenses (excl env srvs) 186 201 202 1 0.5% CDD Expenses 312 556 319 (237) -42.6% Police Expenses 463.284 507.906 497.181 (11) -2.1% Corporate Expenses 1,872.466 1,978.022 1,967.554 (10) -0.5% Envir Remediation Liability 0 0 0 0 NA Operating Expenses 18,934 20,989 21,263 273 1.3% Net Operating Income 71 (1,066) (1,298) (232) -21.7% 67 Eastside Rail Corridor Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Eastside Rail Corridor 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Operating Revenues 85 22 7 (15) -69.3% Total Revenues 85 22 7 (15) -69.3% Expenses Real Estate Exp (excl Maint,P69,C&E) 1,752 389 343 (46) -11.8% Real Estate Conf & Event (BHICC & WTC) 0 0 0 0 NA Maintenance Expenses 46 64 0 (64) -100.0% Real Estate Contingency 0 0 0 0 NA P69 Facilities 0 0 0 0 NA Environmental Services 30 60 46 (14) -22.8% Seaport Expenses (excl env srvs) 0 0 0 0 NA CDD Expenses 12 8 3 (5) -59.5% Police Expenses 0 0 0 0 NA Corporate Expenses 196 101 21 (80) -79.5% Envir Remediation Liability 0 0 0 0 NA Operating Expenses 2,037 621 413 (208) -33.5% Net Operating Income (1,952) (599) (406) 193 32.2% 68 Re Dev & Plan Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions RE Development & Planning 2011 2012 2013 '13-'12 Bud Chg $'s Thousands Actual Budget Budget $ % Revenues Operating Revenues 918 812 853 42 5.1% Total Revenues 918 812 853 42 5.1% Expenses Real Estate Exp (excl Maint,P69,C&E) 686 737 779 42 5.7% Real Estate Conf & Event (BHICC & WTC) 0 0 0 0 NA Maintenance Expenses 308 427 536 109 25.6% Real Estate Contingency 0 0 28 28 NA P69 Facilities 6 11 10 (1) -9.4% Environmental Services & Planning 115 108 46 (61) -57.0% Seaport Expenses (excl env srvs) 38 80 42 (38) -47.9% CDD Expenses 46 65 57 (8) -12.7% Police Expenses (0) 0 0 0 NA Corporate Expenses 269 305 298 (7) -2.3% Envir Remediation Liability 0 0 0 0 NA Operating Expenses 1,469 1,733 1,796 63 3.6% Net Operating Income (551) (922) (943) (21) -2.3% 69 Risks Potential higher vacancies in commercial properties and recreational marinas Eastside Rail Corridor Deferred maintenance costs Outside legal costs Tenant improvement allowances 70 Capital Development Division 2013 Preliminary Operating Budget Commission Briefing October 9, 2012 71 Priority CDD Goals Deliver projects to operating division customers on time, within budget, meeting agreed scope, and with minimal and mutually-agreed impacts on operations Support divisions beyond projects: including budget plan development; business planning; asset management and reporting; community outreach; negotiations; and technical support and assistance. Provide contracting services. Be prepared for emergencies. Develop the talent, capabilities, motivation and well- being of CDD employees. Keep Port staff and contractor personnel working safely. 72 CDD 2012 & 2013 Budgets 2012 Budget 2013 Budget FTE 255.75 265.5 Total Salaries & Benefits $ 29,510,754 $ 30,989,009 On-site consultants $ 2,575,595 $ 3,709,032 Small Works Constr Contracts $ 992,000 $ 348,420 Total Before Capital Charges $ 36,581,419 $ 39,352,922 Sal/Wag to Capital $ 14,072,691 $ 14,932,455 Capital Projects Overhead $ 5,198,222 $ 6,832,411 On-site consultants to Capital $ 1,794,896 $ 2,443,257 Total Charges to Capital $ (21,065,809) $ (24,208,123) Total Operating Expense $ 15,515,609 $ 15,144,799 73 CDD 2013 by Department O9000: Capital CDD All CDD Development ENG PCS AVPMG SPMG CPO Admn Total FTE 111.5 50 48 17 37 2 265.5 Payroll to Capital 7,135,893 3,420,664 2,574,479 827,077 974,343 14,932,456 Projects Total Salaries & 12,607,014 5,517,750 5,982,451 2,386,308 4,129,999 365,487 30,989,009 Benefits 64140 On-site 1,285,000 5,000 2,419,032 3,709,032 Consultants Total Before Capital 14,903,825 6,618,313 8,875,317 3,841,463 4,731,786 382,218 39,352,922 Charges Total Charges to (10,674,528) (4,352,542) (6,178,231) (1,471,654) (1,531,168) (24,208,123) Capital Projects TOTAL OPERATING 4,229,298 2,265,771 2,697,085 2,369,809 3,200,618 382,218 15,144,799 EXPENSE 74 CDD 2013 New FTEs Dept. Position FTE ENG Construction Manager 1.0 ENG Construction Coordinator 1.0 ENG Construction Coordinator 1.0 ENG College Intern (0.25) PCS Construction Hire 1.0 PCS Construction Hire 1.0 PCS Construction Hire 1.0 AVPMG Capital PM II Airfield 1.0 AVPMG Capital PM III Electrical Engineer 1.0 (Systems) AVPMG Capital PM III TI & Actvtn (NorthSTAR) 1.0 AVPMG Capital PM III Mechanical Engineer 1.0 (Baggage) 75 Corporate 2013 Preliminary Operating Budget Commission Briefing October 9, 2012 76 Corporate Budget Overview Overall increase of 2.8% vs. 2012 budget Key Expense Drivers: Baseline payroll increases Less payroll to capital Higher insurance premiums Century Agenda support Economic Impact Study Contractual funding increase for Port Jobs Systems upgrade, Cloud Computing shift to expense Decline in Corporate Cost as a percent of total operating revenues and expenses 77 Corporate Expense Summary (in $ 000's) Amount Notes 2012 Approved Budget 76,535 Less: 2012 One time Items (638) ICT performance audit, Towers Watson consultant, etc. 2012 Baseline Budget 75,897 Expense Changes Salaries & Benefits (Baseline) 1,313 Per budget guidelines Wages & Benefits (Baseline) (111) Reduce overtime by Police Less Payroll to Capital 812 ICT and PLA program Insurance Premiums 175 Higher premiums due to new RCF and other assets Commission Contingency (250) Reduced from $500K to $250K Other Reductions (663) Eliminated FTEs and reduced other costs Subtotal 1,276 Increase above 2012 Budget 1.7% New Budget Requests Century Agenda 559 $359K for Comm. Office and $200K for Tourism Increase funding for Port Jobs 210 Contractual increase for Port Jobs Economic Impact Study 185 Estimated cost for the study Systems upgrade/replacement 182 Cloud computing - shift to expense Two New FTEs 182 Commission Policy Analyst and Sr Investigator (Legal) Contracted Services for ICT Audit 75 For ICT risk assessment follow-up Other Requests 75 Subtotal 1,469 2013 Preliminary Budget 78,642 Increase above 2012 Budget 2.8% 78 2013 Corporate Budget 2011 2012 2012 2013 '13-'12 Bud Change (in $ 000's) Actual Budget Forecast Budget $ % TOTAL REVENUES 1,559 151 - 155 4 2.4% EXPENSES Executive 1,487 1,539 1,539 1,552 13 0.8% Commission 738 980 962 1,483 502 51.2% Legal 2,975 2,901 2,928 3,012 111 3.8% Risk Management 2,614 2,959 2,809 3,186 227 7.7% Health & Safety 1,053 1,060 1,040 1,138 78 7.4% Public Affairs 6,087 5,815 5,660 5,946 131 2.2% Human Resources & Development 4,921 5,484 5,388 5,468 -16 -0.3% Labor Relations * 941 961 1,111 1,198 237 24.7% Information & Communications Tech. * 19,132 20,194 20,194 20,805 612 3.0% Finance & Budget 1,435 1,543 1,533 1,762 219 14.2% Accounting & Financial Reporting 5,776 6,853 6,797 7,055 202 3.0% Internal Audit 1,080 1,496 1,491 1,311 -186 -12.4% Office of Social Responsibility 1,349 1,476 1,431 1,702 226 15.3% Contingency 105 700 500 450 -250 -35.7% Police 21,154 22,574 22,478 22,574 1 0.0% Total Corporate Costs 71,418 76,535 75,862 78,642 2,107 2.8% * Increases due to shift of payroll from capital to expense. 79 2013 Budget Major Changes 2012 2013 '13-'12 Bud Chg ($ in 000's) Budget Budget $ % Explanations Payroll Costs change Salaries 27,009 28,387 1,378 5.1% Pay increase, new FTEs & OH change Benefits 9,070 9,458 388 4.3% Wage & Benefits 20,183 20,071 (111) -0.6% Police reduce overtime Payroll to Capital Projects 3,320 2,508 (812) -24.5% Salaries charged to capital projects Total Payroll Costs 59,582 60,425 843 1.4% Non-Payroll Changes Equipment Expense 1,219 1,479 259 21.3% Supplies & Stock 648 629 (19) -3.0% Outside Services 10,930 11,179 249 2.3% Economic Impact Study and other Travel & Other Employee Expense 2,583 2,743 159 6.2% Century Agenda support Promotional Expense 268 400 133 49.6% Century Agenda support Telecommunications 815 665 (151) -18.5% Insurance Expense 2,125 2,300 175 8.2% Increase in insurance premiums Charges to Capital Projects (3,320) (2,508) 812 -24.5% Less charge to capital projects Commission Contingency 500 250 (250) -50.0% Other 1,184 1,081 (103) -8.7% Total Non-Payroll Expenses 16,953 18,217 1,264 7.5% TOTAL 76,535 78,642 2,107 2.8% 80 2013 Corporate FTE Summary FTE's 2012 Approved Budget 452.2 Changes in 2012: Public Affairs deleted a Limited Duration and a .5 Intern -1.5 HR&D deleted a Limited Duration position -1.0 ICT added Limited Duration FTE for FMLA backfill 1.0 2012 Baseline 450.7 2013 Proposed New FTEs: Public Affairs transferred a Century Agenda Liaison to Commission -1.0 Commission added a Policy Analyst and a transfer from PA 2.0 Legal added a Sr. Investigator 1.0 LR deleted a PLA Compliance Manager and added a .5 Staff Adm. -0.5 Accounting (AFR) deleted 2 Business Tech and a Record Specialist -3.0 Change in FTEs for 2013 -1.5 2013 Budget Proposed FTEs 449.2 81 Corporate Cost Analysis ($ in 000's) 2011 2011 2012 2012 2013 Budget Actual Budget Forecast Budget Corporate Cost 75,008 71,418 76,535 75,862 78,642 Total Revenue 492,798 483,172 516,882 531,299 553,981 Total Expense 285,844 267,416 309,844 309,673 330,347 Corporate Cost as % of 15.2% 14.8% 14.8% 14.3% 14.2% Revenues Corporate Cost as % of 26.2% 26.7% 24.7% 24.5% 23.8% Expenses 82 Port of Seattle 2013 Preliminary Operating Budget Port-wide Overview 83 Preliminary Payroll Assumptions* Average pay for performance increases by 3.0% Market based salary range increases by 2.0% (minimal cost impact) Medical and dental costs increase is 2.2% Employer's PERS contribution increases from 7.21% to 9.1% (the blended rate is 8.16% for 2013). * Only for non-represented employees 84 2013 Preliminary Budget 2011 2012 2013 '13-'12 Bud Chg ($ in '000s) Actual Budget Budget $ % Explanations Operating Revenues Aeronautical 207,763 236,221 250,499 14,279 6.0% Higher terminal realignment and debt svc costs Non-Aeronautical 142,959 149,531 160,528 10,997 7.4% $5.1M for Concessions and $3.8M for RCF Aviation 350,722 385,751 411,027 25,275 6.6% Seaport 99,304 98,578 110,283 11,705 11.9% T-18 special facility bond refunding Real Estate 31,569 32,401 32,516 115 0.4% CDD 16 - - - n/a Corporate 1,561 151 155 4 2.4% Other Operating Revenues 132,451 131,131 142,954 11,823 9.0% Total 483,172 516,882 553,981 37,099 7.2% Operating Expenses Aviation 135,612 160,969 177,526 16,557 10.3% Terminal Realignment, RCF and other Seaport 16,090 20,408 20,498 90 0.4% Real Estate 33,270 36,416 38,536 2,120 5.8% Deferred Maintenance program CDD 11,026 15,516 15,145 -371 -2.4% See note (1) Corporate 71,418 76,535 78,642 2,107 2.8% Total 267,416 309,844 330,347 20,503 6.6% Net Operating Income 215,756 207,039 223,634 16,596 8.0% Note (1): Total costs including capital increase from $36.6M in 2012 budget to $39.4M in 2013 budget. 85 2013 Preliminary Budget 2012 2013 '13-'12 Bud Chg ($ in 000's) Budget Budget $ % Explanations Payroll Costs change Salaries 71,493 76,170 4,677 6.5% Pay increase, new FTEs & OH change Benefits 24,881 26,056 1,175 4.7% Wage & Benefits 91,254 92,251 997 1.1% Contractual increase and reduced OT Payroll to Capital Projects 22,481 22,683 202 0.9% Total Payroll Costs 210,110 217,161 7,051 3.4% Non-Payroll Changes Equipment Expense 5,960 5,864 (95) -1.6% Utilities 21,181 22,056 875 4.1% Higher service water and sewer costs Supplies & Stock 6,740 6,565 (175) -2.6% Reduce Maintenance Materials Outside Services 62,397 73,007 10,610 17.0% Terminal Realignment and other Travel & Other Employee Expense 5,521 5,839 318 5.8% Century Agenda support Insurance Expense 2,142 2,316 174 8.1% Increase in insurance premium Third Party Mgmt Expense 7,434 7,302 (131) -1.8% Miscellaneous Expense 3,744 5,567 1,822 48.7% Add'l RCF pass-thru exp and RE Cont. Business & Occupation Taxes 3,223 3,560 338 10.5% Higher operating revenues Environmental Remediation Exp 3,096 5,865 2,769 89.4% Charges to Capital Projects (31,191) (32,984) (1,793) 5.7% Other 9,487 8,229 (1,258) -13.3% Total Non-Payroll Expenses 99,734 113,186 13,452 13.5% TOTAL 309,844 330,347 20,503 6.6% 86 Comprehensive Summary 2011 2012 2013 '13-'12 Bud Chg ($ in '000s) Actual Budget Budget $ % Explanations Revenues 1. Aeronautical Revenues 207,763 236,221 250,499 14,279 6.0% Cost Recovery 2. Other Operating Revenues 275,410 280,662 303,482 22,820 8.1% Seaport, R.E., Non-Aero & Corp. 3. Tax Levy 73,179 73,000 73,000 - 0.0% 4. PFCs 62,358 63,448 64,844 1,396 2.2% Increase in enplanements 5. CFC Revenue for Debt Service 23,669 21,333 20,148 (1,185) -5.6% Over-estimated in the 2012 budget 6. Fuel Hydrant 7,683 7,839 7,839 - 0.0% 7. Non-Capital Grants and Donations 8,482 1,779 1,909 129 7.3% 8. Capital Contributions 21,180 31,448 17,068 (14,380) -45.7% Less FAA & DHS grants 9. Interest Income 18,884 5,748 7,296 1,548 26.9% Higher General and ADF fund balance Total 698,608 721,477 746,084 24,608 3.4% Expenses 1. O&M Expense 267,416 309,844 330,347 20,503 6.6% 2. Depreciation 158,107 158,479 171,510 13,031 8.2% More assets and bond refundings 3. Revenue Bond Interest Expense 127,579 135,806 129,314 (6,492) -4.8% Refunding of bonds & lower interest rates 4. GO Bond Interest Expense 15,774 14,926 13,291 (1,635) -11.0% Refunding of bonds & lower interest rates 5. PFC Bond Interest Expense 6,758 6,826 6,367 (459) -6.7% 6. Non-Op Environmental Expense 4,335 5,290 4,800 (490) -9.3% Due to superfund sites 7. Public Expense 18,703 7,722 4,469 (3,253) -42.1% Reduction of FAST I and II projects 8. Other Non-Op Rev/Expense (7,814) 3,576 3,972 397 11.1% Total Total Revenues are $25.0M higher than 2012 budget and $47.9M higher than 2011 actual. 590,858 642,469 664,070 21,601 3.4% Total Expenses are $21.6M higher than 2012 budget and $73.2M higher than 2011 actual. Change In Net Assets Change in Net Assets are $3.4M above 2012 budget and $25.3M lower than 2011 actual. 107,750 79,008 82,014 3,006 3.8% 87 Port-wide FTEs Summary Aviation Seaport Real Estate Capital Dev Corporate Totals 2012 Approved FTE's 860.0 59.9 165.8 255.8 452.2 1,793.7 Mid Year Approval 1.9 0.1 1.0 - 1.0 4.0 Eliminated (4.0) - (4.0) - (2.5) (10.5) Transfers - - - - - - Adjusted 2012 FTE's 857.9 60.0 162.8 255.8 450.7 1,787.2 2013 Budget Eliminated (14.0) - - (0.3) (3.5) (17.8) Transfer - - - - - - New FTE's 2.7 - 4.5 10.0 2.0 19.2 Total 2013 Changes (11.3) - 4.5 9.7 (1.5) 1.4 Proposed 2013 FTE's 846.6 60.0 167.3 265.5 449.2 1,788.6 88
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.