7b supp
ITEM NO. _7b_Supp________ DATE OF MEETING: October 25, 2011 2012 Operating Budget Update Commission Briefing October 25, 2011 Budget Overview Key Drivers: Baseline payroll increases and contractual increases New Rental Car Facility / Busing Services Terminal Realignment Deferred Maintenance Initiatives Tied to Strategic Goals & Century Agenda Audit Committee/Internal Audit Initiatives Other initiatives including Enterprise Risk Management, Medical Plan Review/Design, Business Process Improvement 2 Budget Changes Summary As of As of $ ($ in '000s) 10/4/11 10/11/11 Change Notes Operating Revenues Aeronautical 238,149 235,619 -2,530 Cost recovery Non-Aeronautical 149,828 150,111 283 Higher Rental Car and Concessions revenues Other (adjusted) 934 1,234 300 Fed Operating Grant Rev for Fire Dept Aviation 388,911 386,964 -1,947 Seaport 98,151 98,151 0 No changes Real Estate 32,828 32,828 0 No changes CDD 0 0 0 No changes Corporate 151 151 0 No changes Other Operating Revenues 131,131 131,131 0 Total 520,042 518,095 -1,947 Operating Expenses Aviation 162,909 160,851 -2,058 See next slide for details Seaport 20,408 20,408 0 No changes Real Estate 37,166 36,416 -750 See next slide for details CDD 15,528 15,516 -12 Direct Charge Refinement Corp 76,655 76,535 -120 Remove a proposed Police position and cut $10K Total 312,666 309,725 -2,941 Net Operating Income 207,376 208,370 994 3 Budget Major Changes Since 10/4 Division (in $ 000's) Change Notes Aviation 1) Remove RCF Traffic Support Specialists (436) Remove 7.6 new FTEs 2) Delay hiring of RCF Bus Drivers (526) Start on 3/1/12 3) Removal AV Maintenance positions (735) Remove 9.0 new FTEs 4) Delay Hiring Some Positions (243) 7 new positions 5) Natural Gas Rate Change (127) 6) Remove Window Cleaning (90) 7) Remove Remote Cruise Facility (84) 8) Add Joint Marketing Fee 300 For new international air services 9) Other Reductions (120) Include the removal of 4 pathfinders and 1.25 interns Total (2,058) Real Estate 1) Pier 69 Carpet Replacement (400) Deferred $400K to 2013 ($800K in 2013) 2) Maximo Mobility Intergration (100) Deferred $100K to 2013 3) Pier 69 Concrete Beams Rehab (250) Deferred $250K to 2013 Subtotal (750) CDD 1) Direct Charge Refinement (12) Subtotal (12) Corporate 1) Leadership Conference (10) Reduce new request from $51K to $41K 2) Deleted a Proposed Police Position (110) Redeploy officers from other duties to RCF Subtotal (120) TOTAL (2,941) 4 Operating Budget Summary 2010 2011 2011 2012 $ % ($ in '000s) Actual Budget Forecast Budget Change Change Notes Operating Revenues Aeronautical 198,329 217,200 214,181 235,619 18,419 8.5% Cost recovery Non-Aeronautical 135,052 144,601 144,541 150,111 5,510 3.8% 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 334,262 362,678 359,599 386,964 24,286 6.7% 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 462,578 492,798 487,792 518,095 25,297 5.1% Operating Expenses Aviation 126,481 139,575 137,120 160,851 21,276 15.2% Seaport 19,517 23,242 19,200 20,408 -2,834 -12.2% $2.1M pass-thro grant and $500K for env. reserve exp. Real Estate 30,739 33,741 33,741 36,416 2,675 7.9% CDD 9,335 14,278 14,278 15,516 1,237 8.7% Corp 67,391 75,008 73,969 76,535 1,527 2.0% See notes (1), (2) & (3). Total 253,464 285,844 278,308 309,725 23,881 8.4% Net Operating Income 209,114 206,954 209,484 208,370 1,416 0.7% 5 Comprehensive Budget Summary ($ in 000s) 2010 Actual 2011 Budget 2012 Budget Change $ Change % Explanations Revenues 1. Aeronautical Revenues 198,329 217,200 235,619 18,419 8.5% Cost recovery 2. Operating Revenues 264,250 275,598 282,476 6,878 2.5% 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 682,690 711,006 723,190 12,184 1.7% Expenses 1. O&M Expense 253,464 285,844 309,725 23,881 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% Reduction in capitalized interest 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 5,654 (11,551) -67.1% Reduction of FAST I and II projects 8. Other Non-Op Rev/Expense 7,276 2,521 3,576 1,055 41.9% Total 630,220 644,438 640,282 (4,156) -0.6% Change In Net Assets 52,470 66,568 82,907 16,340 24.5% Total Revenues were $12.2M higher than 2011 budget and $40.5M higher than 2010. Total Expenses were $4.2M less than 2011 budget and $10.1M higher than 2010. Change in Net Assets were $16.3M above 2011 budget and $30.4M higher than 2010. 6 Corporate Cost Analysis ($ in 000's) 2010 2011 2011 2012 Actual Budget Forecast Budget Corporate Cost 67,391 75,008 73,969 76,535 Total Revenue 462,651 492,798 487,719 518,095 Total Expense 253,464 285,844 278,547 309,725 Corporate Cost as % of Revenues 14.6% 15.2% 15.2% 14.8% Corporate Cost as % of Expense 26.6% 26.2% 26.6% 24.7% 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 86.0 0.8 1.0 1.0 2.4 91.2 Total 2012 Changes 86.0 0.8 1.0 -8.8 2.4 81.5 Proposed 2012 FTE's 859.0 59.9 165.8 255.8 452.2 1792.7 8 Next Steps First Reading and Public Hearing of the 2012 Budget on 11/8. Second Reading and Final Passage of the 2012 Budget on 11/22. Release the 2012 Final Budget and Draft Plan of Finance Document to the Public on 12/14. 9 ITEM NO. _7b_Supp________ DATE OF MEETING: October 25, 2011 2012 Operating Budget Update Commission Briefing October 25, 2011
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