6a supp
ITEM NO. 6a Supp____________ DATE OF MEETING: Nov 8, 2011 Port of Seattle 2012 Preliminary Budget First Reading/Public Hearing November 08, 2011 1 Agenda Background Operating Budget Comprehensive Op & Non-Op Budget Capital Budget Tax Levy Remaining Schedule Public Hearing 2 2012 Budget Process Jun. 7 Budget Process Briefing Aug. 16 Budget Assumptions Briefing Aug. 16 Business Plan and Capital Plan Briefing Sept. 27 Capital Budget Briefing Oct. 4 Preliminary Operating Budget Briefing Oct. 25 Draft Plan of Finance, Tax Levy, and Operating Budget Follow-up Briefings Nov. 8 First Reading & Public Hearing, Preliminary Budget Nov. 22 Final Reading & Public Hearing, Preliminary Budget Dec. 1 Statutory Budget Filed with King County Dec. 14 Release Final Budget and Draft Plan of Finance 3 Proposed Budget Changes 1. Reduce public parking revenues by $1.3 million Initial budget figure based on forecast in early August. Anticipated growth for August, September & October has not been realized. Q3 2011 forecast is $2.7 million below 2011 budget, but still $730K above 2010 Proposed budget = $52.48 million, which is $2.3 million (4.7%) above the Q3 2011 forecast 2. Add FTE for emergency preparedness training for $118,000 Mid-year approval in 2011. Omitted from 2012 budget by mistake. Total cost includes salary, benefits, computer, & training 3. Add Public Expense (Non-op) for increased obligation to WSDOT for improvements to SR 518 totaling $2,068,055 Commission authorized up to $10 million in May, 2007 (Res. 3578) Port previously paid $7,931,945. WSDOT will invoice Port for remaining obligation in early 2012. Funding source is Airport Development Fund 4 Key Budget Drivers Operating Revenues 2011 Bud 2012 Bud Change $ Change % Aeronautical 217,200 235,669 18,469 8.5% Other Operating Revenues 275,598 281,176 5,578 2.0% Total Operating Revenues 492,798 516,845 24,047 4.9% Operating Expenses 2011 Bud 2012 Bud Change $ Change % Rental Car Facility & Busing (funded by CFC) 6,609 2.3% Increase in Terminal Realignment (cost recovery) 5,200 1.8% Increase in Environmental Remediation 1,325 0.5% Deferred Maintanence 596 0.2% Increase O&M due to Less Charge to Capital 2,006 0.7% Unavoidable Contractual Increase 1,664 0.6% Other Baseline Increase 6,599 2.3% Total Operating Expenses 285,844 309,843 23,999 8.4% 5 Operating Budget Summary 2010 2011 2011 2012 $ % ($ in '000s) Actual Budget Forecast Budget Change Change Notes Operating Revenues Aeronautical 198,329 217,200 214,181 235,669 18,469 8.5% Cost recovery Non-Aeronautical 135,052 144,601 144,541 148,811 4,210 2.9% Including $9.1M RAC operating revenue. Other (adjusted) 880 877 877 1,234 357 40.6% $7.8M Fuel Hydrant rev is reclassified as non-op. Aviation 334,262 362,678 359,599 385,714 23,035 6.4% Seaport 97,279 98,153 95,961 98,151 -1 0.0% $2.1M reduction in pass-through grant. Real Estate 30,391 30,942 31,030 32,828 1,886 6.1% CDD 36 n/a Corporate 610 1,025 1,202 151 -874 -85.2% $990K for AAPA Conference in 2011 budget. Other Operating Revenues 128,316 130,119 128,192 131,131 1,012 0.8% Total 462,578 492,798 487,792 516,845 24,047 4.9% Operating Expenses Aviation 126,481 139,575 137,120 160,969 21,394 15.3% Seaport 19,517 23,242 19,200 20,408 -2,834 -12.2% $2.1M pass-thro grant and $500K for env. reserve exp. Real Estate 30,739 33,741 33,741 36,416 2,675 7.9% CDD 9,335 14,278 14,278 15,516 1,237 8.7% Corp * 67,391 75,008 73,969 76,535 1,527 2.0% Total 253,464 285,844 278,308 309,843 23,999 8.4% Net Operating Income 209,114 206,954 209,484 207,002 48 0.0% * Include the $1.5M budget for Internal Audit endorsed by the Audit Committee. 6 Comprehensive Budget Summary ($ in 000s) 2010 Actual 2011 Budget 2012 Budget Change $ Change % Explanations Revenues 1. Aeronautical Revenues 198,329 217,200 235,669 18,469 8.5% Cost recovery 2. Operating Revenues 264,250 275,598 281,176 5,578 2.0% Seaport , R.E. Non-Aero & Corp 3. Tax Levy 73,125 73,500 73,500 - 0.0% 4. PFCs 59,744 60,379 63,448 3,069 5.1% Increase in enplanement 5. CFCs 23,243 22,237 21,333 (904) -4.1% Classify portion as ops revenue 6. Fuel Hydrant 7,912 7,839 7,839 0.0% Reclassified from ops revenue 7. Non-Capital Grants and Donations 12,473 8,493 1,779 (6,714) -79.1% EMW winding down 8. Capital Contributions 30,518 32,106 31,448 (658) -2.0% FAA & DHS grants 9. Interest Income 13,096 13,654 5,748 (7,906) -57.9% Lower interest rate 1% vs. 1.86 % Total 682,690 711,006 721,939 10,934 1.5% Expenses 1. O&M Expense 253,464 285,844 309,843 23,999 8.4% Partially due to new RCF/BMF 2. Depreciation 160,775 160,491 158,479 (2,012) -1.3% 3. Revenue Bond Interest Expense 133,239 148,206 135,806 (12,400) -8.4% Lower interest rates & CP balance 4. GO Bond Interest Expense 17,463 13,780 14,926 1,146 8.3% New issue and increase interest 5. PFC Bond Interest Expense 10,187 10,191 6,826 (3,365) -33.0% Savings from bond refunding 6. Non-Op Environmental Expense 22,730 6,200 5,290 (910) -14.7% Due to superfund sites 7. Public Expense 25,085 17,205 7,722 (9,483) -55.1% Reduction of FAST I and II projects 8. Other Non-Op Rev/Expense 7,276 2,521 3,576 1,055 41.9% Total 630,220 644,438 642,468 (1,970) -0.3% Change In Net Assets 52,470 66,568 79,471 12,904 19.4% Total Revenues are $10.9M higher than 2011 budget and $39.2M higher than 2010. Total Expenses are $2.0M less than 2011 budget and $12.2M higher than 2010. Change in Net Assets are $12.9M above 2011 budget and $27.0M higher than 2010. 7 Port-wide FTEs Summary Aviation Seaport Real Estate Capital Dev Corporate Totals 2011 Approved FTE's 761.9 60.4 164.8 262.5 447.6 1697.2 Mid Year Approval 10.1 0.4 1.0 2.0 3.7 17.2 Eliminated 0.0 -1.7 -1.0 0.0 -0.5 -3.2 Transfers 1.0 0.0 0.0 0.0 -1.0 0.0 Adjusted 2011 FTE's 773.0 59.1 164.8 264.5 449.8 1711.2 2012 Budget Eliminated 0.0 0.0 0.0 -9.8 0.0 -9.8 Transfer 0.0 0.0 0.0 0.0 0.0 0.0 New FTE's 87.0 0.8 1.0 1.0 2.4 92.2 Total 2012 Changes 87.0 0.8 1.0 -8.8 2.4 82.5 Proposed 2012 FTE's 860.0 59.9 165.8 255.8 452.2 1793.7 8 Capital Budget Summary $'s in 000's 2012 2013 2014 2015 2016 2012-16 Commission Authorized/Underway 275,735 114,480 36,173 3,240 9,500 439,128 Pending 2012 Authorization 104,871 167,556 101,447 17,388 5,927 397,189 Pending Future Authorization 11,205 66,920 113,590 129,917 300,831 622,463 Small Projects 14,568 16,043 7,445 6,041 5,742 49,839 Total * 406,379 364,999 258,655 156,586 322,000 1,508,619 * There are some small changes to the 5-year capital plan from the last capital budget follow-up on 10/4/11 due to adjustments made for some Aviation CIPs. 9 2002 - 2012 CIP Spending 10 Tax Levy Overview Tax Levy Amount - $73.5 million Levy amount established by the Commission each year as part of the budget process Statutory limitations on annual collection; Port is below maximum Tax Levy Uses Payment of General Obligation bonds debt service Port policy debt service is no more than 75% of levy General purpose use established by Commission policy Seaport and Real Estate non-operating environmental remediation Regional freight mobility projects Real Estate division support Highline Schools noise mitigation program Non-Aviation portion of Port Jobs program SR 99 Tunnel contribution in 2016 11 Tax Levy Sources and Uses 5 Years $'000 2012 2012-2016 LEVY SOURCES Beginning Tax Levy Fund Balance 41,618 41,618 Eastside Rail Corridor Partners Reimbursements 5,000 31,000 2012 proposed tax Annual levy 73,500 367,500 Total Sources: 120,118 440,118 levy is $73.5 million LEVY USES 2012 maximum levy General Obligation (G.O.) Bonds Debt Service (DS) G.O. Bonds DS - existing debt 40,353 211,437 (1) is estimated to be G.O.Bonds DS - new (SR99 Tunnel) 17,944 Subtotal G.O. Bonds DS 40,353 229,381 $90 million Other uses Roads and Transportation Projects 3,954 9,189 Additional $13 Aviation School, and Highline & other Schools NOISE Insulation 650 11,283 (2) million balance in the Environmental Remediation Liabilities, Seaport & Real Estate - prelim. 15,889 67,597 Funding of Transportation & Infrastructure Fund 23,000 42,250 Transportation & PortJobs 72 486 Port Jobs Apprenticeship Program 54 342 Infrastructure Fund Subtotal Other 43,619 131,147 Real Estate Support (3) RE Capital Total 14,524 54,031 RE Operating Subsidy 4,922 22,355 Subtotal RE Support 19,446 76,386 Total Uses: 103,417 436,914 Projected Ending Tax Levy Fund Balance 16,700 3,203 Notes: (1) Assumes bond issue of $226 million for 25 yrs at 6%. (2) Includes project cash flows for environmental projects already or expected to be expensed and liabilities booked (3) Includes Committed and BP Prospective projects 12 Change to Seaport Funding Plan Updated information on Seaport fund balance provides more funding capacity Required project deferrals from 2012-2016 5-yr planning period is reduced from $25 million to $14 million Still need to defer $68 million in 2013-2014 (compared to $73 million previously) 13 Change to Seaport Funding Plan 2012-2016 ($mil.) 2012-2016 ($mil.) Oct. 25, 2011 Nov. 8, 2011 Seaport Funding Sources Net income 40 41 Operating funds 22 31 Grants 2 2 Existing revenue bond proceeds 5 5 Future revenue bond proceeds 201 202 TOTAL 271 282 Seaport CIP Committed 42 42 Business Plan Prospective 254 254 TOTAL 296 296 Funding Shortfall (25) (14) 14 Remaining Schedule Second Budget Reading Nov. 22, 2011 Statutory Budget Filed with King County Dec. 01, 2011 Release Final Budget Document Dec. 14, 2011 15 Port of Seattle 2012 Preliminary Budget First Reading/Public Hearing November 08, 2011 16
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