7a Report
ITEM NO.: 7a Report DATE OF MEETING: Aug. 10, 2010 Q 2 PERFORMANCE REPORT AS OF JUNE 30, 2010 TABLE OF CONTENTS Page I. Portwide Performance Report 3-5 II. Aviation Division Report 6-10 III. Seaport Division Report 11-15 IV. Real Estate Division Report 16-19 V. Capital Development Division Report 20-21 VI. Corporate Professional & Technical Services 22-25 2 I. PORTWIDE PERFORMANCE REPORT 6/30/10 INCOME STATEMENT Report: Income Statement As of Date: 2010-06-30 2009 YTD 2010 YTD 2010 YTD 2010 Var $ 2010 Var % 2010 Annual % of Annual 2010 Var % Dollars in thousands Actual Actual Budget Bud vs. Act Bud vs. Act Budget Bud Act vs. 2009 Revenues: Aviation 172,318 169,422 173,445 (4,023) -2.3% 354,299 47.8% -1.7% Seaport 43,713 45,050 43,780 1,270 2.9% 92,544 48.7% 3.1% Real Estate 15,490 14,998 14,479 518 3.6% 29,923 50.1% -3.2% Capital Development 81 - - - 0.0% - -100.0% Corporate 157 309 9 300 3337.2% 18 1718.6% 97.3% Total Revenues 231,759 229,778 231,713 (1,935) -0.8% 476,784 48.2% -0.9% Operating & Maintenance: Aviation 58,248 59,172 64,968 5,795 8.9% 129,221 45.8% 1.6% Seaport 9,610 8,704 11,526 2,821 24.5% 22,466 38.7% -9.4% Real Estate 13,464 14,472 15,713 1,241 7.9% 31,629 45.8% 7.5% Capital Development 2,758 3,402 3,840 439 11.4% 7,555 45.0% 23.3% Corporate 29,933 31,802 36,413 4,610 12.7% 71,958 44.2% 6.2% Total O&M before Depreciation 114,014 117,553 132,459 14,907 11.3% 262,829 44.7% 3.1% Operating Income Before Depreciation 117,745 112,225 99,253 12,972 13.1% 213,955 52.5% -4.7% Depreciation 75,243 79,773 79,201 (572) -0.7% 158,575 50.3% 6.0% Total O&M and Depreciation 189,257 197,326 211,660 14,335 6.8% 421,404 46.8% 4.3% Operating Income after Depreciation 42,502 32,453 20,052 12,400 61.8% 55,380 58.6% -23.6% IMPORTANT NOTE: We reclassified $2.2 million operating grant revenues and $20.0 million environmental expenses from operating accounts to non-operating accounts after the 2010 budget was finalized. The numbers shown in the "Budget" columns hereinafter reflect all the changes after the account reclassifications. Seaport, Real Estate and Corporate revenues for 2009 were also reduced by $380K, $5K and $358K, respectively due to reclassification from operating to non-operating revenues in order provide meaningful comparison. 3 I. PORTWIDE PERFORMANCE REPORT 6/30/10 EXECUTIVE SUMMARY The second quarter Port of Seattle's overall operating revenues were $229.8 million, $1.9 million or 0.8% below the budget. Total operating expenses were $117.6 million, $14.9 million or 11.3% below budget. Operating income before depreciation was $112.2 million, $13.0 million or 13.1% above the budget. Operating income after depreciation is $32.4 million, 12.4 million or 61.8% above the budget. Port-wide Capital spending was $91.4 million for the second quarter and is forecasted to be $247.8 million for the year, $59.0 million below the budgeted $306.8 million. Aviation Division's revenues were $169.4 million, $4.0 million or 2.3% below budget. Aeronautical revenues were $4.7 million unfavorable and non-aeronautical revenues were $630K below budget mainly due to higher revenues from Rental Cars and Concessions, partially offset by lower revenue from Public Parking. Total operating expenses were $84.0 million, $9.4 million or 10.0% under budget due to delays in contract spending. Aviation is forecasting a shortfall of $5.8 million in aeronautical revenues and $1.3 million in non-airline revenues at the end of the year. Operating expense is forecasted to be $178K unfavorable due to unemployment and worker's compensation claims. Total capital expenditures for 2010 are projected at $201.4 million or 81.3% of the approved annual budget amount of $247.6 million. Seaport Division revenues were $45.2 million, $1.3 million or 3.0% favorable year-to-date primarily due to higher crane rent and grain volumes. For the full year 2010, Seaport is forecasting a $1.0 million favorable revenue variance due higher crane rent and higher grain volumes than budgeted. Total operating expenses were $18.2 million, $3.8 million or 17.0% favorable through June primarily due to timing differences. For the full year, Seaport is forecasting a $629K unfavorable expense variance due to unbudgeted T-18 fender pile repairs and two barge layberth projects delayed to 2010 from the fourth quarter of 2009. Net operating income for 2010 is forecasted to be $388K favorable to the 2010 budget and $513K below 2009 Actual. 2009 Actual expenses were lower due to impact of reversal of prior year Other Post Employment Benefit (OPEB) accruals. Total capital spending for 2010 is projected to be $19.8 million or 64.0% of the approved annual budget. Real Estate Division revenues were $14.9 million, $441K or less than 3.0% favorable to budget year-to-date due to lower than budgeted activity at Bell Harbor International Conference Center largely offset by favorable revenue variance for Commercial Properties and the Harbor Services Group. For the full year, Real Estate is forecasting revenue to be $149K above budget. Operating expenses were $14.7 million, $1.7 million or 10% below budget primarily due to timing. For the full year, Real Estate is forecasting operating expenses to be $149K above budget. Net operating income for 2010 is estimated to be on budget for the year and $3.7 million below 2009 Actual. Capital spending for 2010 is currently estimated to be $8.0 million or 68% of the approved annual budget amount of $11.8 million. Capital Development Division total expenses (including charges to capital projects) were $13.5 million, $3.6 million or 21.0% below budget mainly due to some unfilled staff positions and delay of some project spending. Operating expenses were $3.4 million, $439K or 11.4% favorable in the first two quarters. The division is forecasting a $378K unfavorable variance at the end of the year. The division delivers projects and provides technical and contracting services in support of the business plans and infrastructure needs of the Port's operating divisions. As such, the CDD does not have its own capital improvement program. Corporate Professional and Technical Services performance for the first half of 2010 was $31.8 million, $4.6 million or 12.7% favorable compared to budget and $1.9 million or 0.62% higher than the same period a year ago. The $4.6 million favorable variance is due primarily to timing differences between when the items are paid and when budgeted and not necessarily cost savings. For the full year, Corporate is forecasting operating expenses to be $330K below budget. Total capital expenditures for 2010 are projected at $10.5 million or 62.9% of the approved annual budget amount of $16.7 million. 4 I. PORTWIDE PERFORMANCE REPORT 6/30/10 KEY PERFORMANCE INDICATORS 2009 YTD 2010 YTD 2009 2010 2010 Forecast/Budget Actual Actual Actual Forecast Budget Var. Var. % Enplanements (in 000's) 7,376 7,322 15,610 15,361 15,361 - 0.0% Landed Weight (lbs in 000's) 10,079 9,404 20,388 19,890 20,364 (474) -2.3% Passenger CPE (in $) n/a n/a 10.92 12.45 12.67 (0.22) -1.7% Container Volume (TEU's in 000's) 692 1,004 1,585 1,800 1,600 200 12.5% Grain Volume (metric tons in 000's) 2,543 2,813 5,512 5,533 5,000 533 10.7% Cruise Passenger (in 000's) 341 347 875 850 849 1 0.1% Shilshole Bay Marina Occupancy 95.1% 93.6% 95.5% 94.0% 94.6% -0.6% -0.6% Fishermen's Terminal Occupancy 87.3% 91.6% 80.6% 81.0% 78.5% 2.5% 3.2% CAPITAL SPENDING RESULTS 2010 2010 Budget Plan of Division Est. Actual Budget Variance Finance ($ in millions) Aviation 209.6 247.6 38.0 275.8 Seaport 19.8 30.8 11.0 30.6 Real Estate 8.0 11.8 3.8 12.1 Corporate 10.5 16.7 6.2 10.5 Total 247.8 306.8 59.0 329.1 PORTWIDE INVESTMENT PORTFOLIO The investment portfolio for the second quarter of 2010 earned 2.34% against our benchmark (The Bank of America Merrill Lynch 3-year Treasury/Agency Index) of 0.70%. For the past twelve months the portfolio has earned 2.41% against the benchmark of 1.00%. Since the Port became its own Treasurer in 2002, the Port's portfolio life-to-date has earned 3.53% against our benchmark of 2.77%. 5 II. AVIATION DIVISION PERFORMANCE REPORT 06/30/10 FINANCIAL SUMMARY 2008 2009 2010 2010 Forecast/Budget Figures in $ 000s Actual Actual Forecast Budget Var $ Var % Operating Revenues Aeronautical 204,361 182,534 205,625 211,392 (5,768) -2.7% Non-Aeronautical 150,528 137,348 133,776 135,128 (1,352) -1.0% Other 3,440 8,359 8,353 8,803 (450) -5.1% Operating Revenues 358,329 328,241 347,754 355,324 (7,570) -2.1% Operating Expenses 192,641 175,482 182,855 182,677 (178) -0.1% Environmental Reserve 2,542 1,991 2,971 2,971 - 0.0% VSP, HR10 & Unemployment - 1,196 - - - n/a OPEB Reversal - (4,016) - - - n/a Total Operating Expenses 195,183 174,654 185,826 185,648 (178) -0.1% Net Operating Income 163,146 153,587 161,928 169,676 (7,748) -4.6% Capital Expenditures 209,813 191,479 201,353 247,567 46,214 18.7% We forecast a shortfall of $1.3 million in non-airline revenues as Public Parking transactions continue to underperform versus budget. Operating expense is forecasted to be $178K unfavorable due to unemployment and worker's compensation claims. Total capital expenditures for 2010 are projected at $201.3 million. A . BUSINESS EVENTS Delta began service to Osaka and Beijing in June. Held Part 150 technical reviews and public workshops during Q2. Planning for a temporary backup power solution was supported by Alaska Airlines. B. KEY INDICATORS 2009 2010 % 2009 2010 % Figures in 000s YTD YTD Variance Actual Forecast Variance Enplanements 7,376 7,322 -0.7% 15,610 15,361 -1.6% Landed Weight 10,079 9,404 -6.7% 20,388 19,890 -2.4% Enplanements vs. Prior Year Landed Weight vs. Prior Year -0.91% 5% 0% Growth Rate 2.42% -3.28% -2% 0.97% -4% -6.73% -0.79% -6% -7.89% 0% -1.29% -2.35% Growth Rate -8% -10.33% -3.08% -10% -11.65% -12% Jan Feb Mar Apr May Jun -5% -14% Jan Feb Mar Apr May Jun Enplanements are forecasted to decrease 1.6% from the 2009 actual. Landed weight is forecasted to decrease 2.4% from last year. 6 II. AVIATION DIVISION PERFORMANCE REPORT 06/30/10 2008 2009 2010 2010 Forecast/Budget Figures in $ 000s Actual Actual Forecast Budget Var $ Var % Non-Aero NOI ($ in 000s) 86,474 81,159 73,664 74,998 (1,333) -1.8% Passenger Airline CPE 11.89 10.92 12.45 12.67 0.22 1.7% Total Operating Cost / Enpl 12.13 11.19 12.10 12.09 (0.01) -0.1% Debt Service Coverage 1.40 1.41 1.33 1.36 (0.02) -1.8% We forecast CPE to come in lower than the budget primarily due to significant savings to Passenger Terminal debt service. C. OPERATING RESULTS Year-to-date Revenue and Expense 2008 YTD 2009 YTD 2010 YTD 2010 YTD Actual/Budget Figures in $ 000s Actual Actual Actual Budget Var $ Var % Revenues Aeronautical 95,972 99,787 100,452 105,164 (4,712) -4.5% Non-Aeronautical 74,179 68,450 64,734 64,104 630 1.0% Other 4,296 4,177 4,234 4,177 58 1.4% Revenues 174,447 172,413 169,421 173,445 (4,024) -2.3% Expenses Salaries & Benefits 37,891 39,428 37,952 38,796 845 2.2% Outside Services 10,516 8,688 9,062 11,311 2,250 19.9% Utilities 6,509 6,784 5,832 7,001 1,168 16.7% Supplies & Stock 1,911 2,135 1,772 1,949 177 9.1% Other 3,753 1,212 3,277 4,548 1,270 27.9% Total Airport Expenses 60,580 58,248 57,895 63,605 5,710 9.0% Corporate 13,681 14,291 15,196 17,560 2,364 13.5% Police Costs 7,377 6,445 6,811 7,658 847 11.1% Other Charges/CDD 2,475 2,114 2,837 3,189 352 11.1% Total Operating Expenses (excl. Env Res) 84,113 81,098 82,738 92,011 9,273 10.1% Environmental Reserve - - 1,278 1,363 85 6.2% Total Operating Expenses 84,113 81,098 84,016 93,374 9,358 10.0% Net Operating Income 90,334 91,316 85,405 80,071 5,334 6.7% Non-aeronautical revenues are greater than budget due to strong YTD concessions sales per enplaned passenger. Expenses are under budget due to delays in contract spending and savings in utilities commodity costs. 7 II. AVIATION DIVISION PERFORMANCE REPORT 06/30/10 Division Summary 2008 2009 2010 2010 Forecast/Budget Figures in $ 000s Actual Actual Forecast Budget Var $ Var % Aeronatical Revenues 204,361 182,534 205,625 211,392 (5,768) -2.7% Non-Aeronautical Revenues 150,528 137,348 133,776 135,128 (1,352) -1.0% Other Revenues 3,440 8,359 8,353 8,803 (450) -5.1% Total Operating Revenues 358,329 328,241 347,754 355,324 (7,570) -2.1% Operating Expenses Payroll 89,458 80,804 78,728 78,141 (586) -0.8% Outside Services 31,928 21,509 23,687 23,847 160 0.7% Utilities 12,636 13,209 11,548 12,762 1,214 9.5% VSP, HR10 & Unemployment Savings - 1,196 - - - n/a OPEB Reversal - (4,016) - - - n/a Environmental Reserve 2,542 1,991 2,971 2,971 - 0.0% Other Expenses 13,301 8,183 12,466 11,501 (966) -8.4% Baseline Airport Expenses 149,865 122,877 129,399 129,221 (178) -0.1% Corporate/Capital Development 30,031 37,316 41,257 41,257 - 0.0% Police 15,287 14,461 15,170 15,170 - 0.0% Total Operating Expenses 195,183 174,654 185,826 185,648 (178) -0.1% Net Operating Income 163,146 153,587 161,928 169,676 (7,748) -4.6% Depreciation Expense 107,349 117,370 116,933 116,933 - 0.0% Non-Operating Rev/(Exp) Grants & Donations Revenues 49,461 74,323 37,208 37,208 - 0.0% Passenger Facility Charges 62,770 61,234 61,273 61,273 - 0.0% Customer Facility Charges 23,534 21,866 23,575 22,475 1,100 4.9% Other Non-operating Rev/(Exp) (105,378) (111,304) (130,586) (130,586) - 0.0% Total Non-Operating Rev/(Exp) 30,386 46,120 (8,529) (9,629) 1,100 -11.4% Total Revenue Over Expense 86,183 82,337 36,466 43,114 (6,648) -15.4% Operating revenues are forecasted to be $7.57 million unfavorable due to decline of parking transactions and lower revenue requirements for Air Terminal operations. Operating expenses are forecasted to be $178K unfavorable due to unemployment expenses and worker's compensation claims. Potential major planning projects regarding Sound Transit Link Light Rail extension and Terminal Development studies may negatively impact operating expenses for the rest of the year. Customer Facility Charges are forecasted to collect $1.1 million more than budgeted due to rental car transaction days staying 5% over initial projections. 8 II. AVIATION DIVISION PERFORMANCE REPORT 06/30/10 Aeronautical Business Unit Summary 2008 2009 2010 2010 Forecast/Budget Figures in $000s Actual Actual Forecast Budget Var $ Var % Revenues requirement: Capital Costs 81,535 71,872 86,905 92,610 5,705 6.2% Operating Costs net Non-Aero 131,024 118,482 125,714 125,604 110 0.1% Total Costs 212,559 190,355 212,620 218,214 5,815 2.7% FIS Offset (5,250) (5,250) (7,000) (7,000) - 0.0% Other Offsets (15,686) (16,441) (14,092) (15,062) 970 -6.4% Net Revenue Requirement 191,623 168,663 191,528 196,152 (4,625) -2.4% Other Aero Revenues 12,738 13,871 14,097 15,240 (1,143) -7.5% Total Aero Revenues 204,361 182,534 205,625 211,393 (5,768) -2.7% Less: Non-passenger Airline Costs 13,039 12,074 14,315 16,752 2,437 14.5% Net Passenger Airline Costs 191,323 170,460 191,311 194,641 (3,331) -1.7% 2008 2009 2010 2010 Forecast/Budget Actual Actual Forecast Budget Var $ Var % Cost Per Enplanement: Capital Costs / Enpl 5.22 4.60 5.66 6.03 (0.37) -8.1% Operating Costs / Enpl 8.39 7.59 8.18 8.18 0.01 0.1% Offsets (1.30) (1.39) (1.37) (1.44) 0.06 -4.5% Other Aero Revenues 0.79 0.89 0.92 0.99 (0.07) -8.4% Non-passenger Airline Costs (0.84) (0.77) (0.93) (1.09) 0.16 -20.5% Passenger Airline CPE 11.89 10.92 12.45 12.67 (0.22) -2.0% Operating costs are forecasted to be $110K higher due to unemployment costs, overtime pay to cover minimum staffing in the Fire Department and worker's compensation claims in Maintenance. Forecasted passenger airline cost per enplanement (CPE) of $12.45 is lower than budget primarily due interest savings in debt service related to the Terminal. 9 II. AVIATION DIVISION PERFORMANCE REPORT 06/30/10 Non-Aero Business Unit Summary 2008 2009 2010 2010 Forecast/Budget Figures in $000s Actual Actual Forecast Budget Var $ Var % Revenues: Public Parking 59,111 49,688 49,368 51,812 (2,444) -4.7% Rental Cars 35,592 33,321 31,014 31,014 - 0.0% Concessions 33,181 33,482 32,023 29,953 2,071 6.9% Other 22,644 20,858 21,371 22,350 (979) -4.4% Total Revenues 150,528 137,348 133,776 135,128 (1,352) -1.0% Operating Expense 61,279 55,916 57,405 57,422 17 0.0% Share of terminal O&M 16,396 17,011 17,172 17,175 3 0.0% Less utility internal billing (13,515) (16,738) (14,466) (14,466) - 0.0% Net Operating & Maint 64,160 56,189 60,111 60,131 19 0.0% Net Operating Income 86,367 81,159 73,664 74,998 (1,333) -1.8% 2008 2009 2010 2010 Forecast/Budget Actual Actual Forecast Budget Var $ Var % Revenues Per Enplanement Parking 3.67 3.18 3.21 3.37 (0.16) -4.7% Rental Car 2.21 2.13 2.02 2.02 0.00 0.0% Concessions 2.06 2.14 2.08 1.95 0.13 6.9% Other 1.41 1.34 1.39 1.45 (0.06) -4.4% Total Revenues 9.36 8.80 8.71 8.80 (0.09) -1.0% Primary Concessions Sales / Enpl 10.29 9.66 9.94 9.78 0.16 1.6% Public parking revenues are forecasted to underperform due to decline in transactions by 12.6% over prior year. Concessions revenues are forecasted higher than budgeted due to steady gains in sales per enplanement ($10.08 in May). D. CAPITAL SPENDING RESULTS 2010 2010 2010 Forecast/Budget Plan of Figures in $ 000s YTD Actual Forecast Budget Var $ Var % Finance Rental Car Facility 62,505 149,678 174,699 25,021 14.3% 157,818 Third Runway Projects 562 2,765 7,714 4,949 64.2% 5,549 North Expressway Relocation (817) 5,202 5,600 398 7.1% 13,000 RW 16C-34C Panel Replacement 230 3,246 5,450 2,204 40.4% 0 Aircraft RON Parking USPS Site 5,025 5,247 5,210 (37) -0.7% 5,100 3rd R/W Overflights Acq (ATZ) 577 3,827 4,000 173 4.3% 2,138 Cent Plant Preconditioned Air 1,212 1,962 3,500 1,538 43.9% 10,500 Loading Bridges Utilities 27 427 2,900 2,473 85.3% 3,500 Alaska Air 2 Step Ticket Counters 0 20 2,015 1,995 99.0% 0 All Other 10,035 28,979 36,479 7,500 20.6% 78,227 Total 79,356 201,353 247,567 46,214 18.7% 275,832 Turner Construction behind their original cash flow projections for Rental Car Facility. Pond M of Third Runway project will not be completed in 2010. Runway 16C/34C panel replacement bids came in significantly under engineer's estimate. Scope changes of Preconditioned Air project extended design schedule. 10 III. SEAPORT DIVISION PERFORMANCE REPORT 06/30/10 FINANCIAL SUMMARY 2009 2010 2010 Forecast/Budget $'s in 000's Actual Forecast Budget Var $ Var % Operating Revenue 89,844 91,151 90,134 1,017 1% Security Grants 847 2,535 2,535 0 0% Total Revenues 90,691 93,686 92,669 1,017 1% Total Operating Expenses 40,545 43,953 43,324 (629) -1% Net Operating Income 50,145 49,733 49,345 388 1% Capital Expenditures 44,677 19,771 30,784 11,013 36% Total Seaport revenues were $1,348K favorable in YTD results primarily due to higher crane rent and grain volumes. For the full year 2010, Seaport is forecasting a $1,017K favorable revenue variance due higher crane rent and higher grain volumes than budgeted. Total Operating Expenses were $3,826K favorable through June primarily due to timing differences. For the full year, Seaport is forecasting a ($629K) unfavorable expense variance due to higher than budgeted T-5 maintenance dredging costs, two barge layberth expense projects delayed to 2010 from Q4 2009 and expense component of T-115 Berth 1 project. Forecasted Net Operating Income for 2010 is estimated to be $388K favorable to the 2010 Budget and ($413K) lower than 2009 Actual. nd As of the end of the 2 Quarter, total capital spending for 2010 is projected to be $19.8 million or 64% of the Approved Annual Budget. A. BUSINESS EVENTS TEU volumes for Seattle Harbor are up 45.2% as of June 2010 compared to YTD 2009 levels. Total YTD 2010 volume is 1,004K TEU's. Consolidated West Coast Port results for 2010 show an overall increase in TEU volume of 15.8% compared to volumes in 2009. YTD YTD TEU Volume (in 000's) 2010 2009 % change Long Beach 2,795 2,333 19.8% Los Angeles 3,664 3,186 15.0% Oakland 1,086 961 12.9% Portland 85 89 -4.8% Prince Rupert 158 98 61.5% Seattle 1,004 692 45.2% Tacoma 704 803 -12.4% Vancouver 1,164 1,041 11.7% West Coast - Total: 10,657 9,203 15.8% Grain vessels shipped 2,813K metric tons of grain through Terminal 86 YTD 2010. Amount represents a 10.6% increase compared to YTD 2009 volumes. 2010 volume is 23% higher than 2010 budgeted volume. The 2010 cruise season commenced in late April. The current season anticipates 223 sailings and 850,000 passengers, including a new Carnival Cruise Line home port vessel. As of June 2010, there have been 86 cruise calls and over 347,000 passengers. Implementation of the Northwest Ports Clean Air Strategy continues: At-Berth Clean Fuels Vessel Incentive Program (ABC Program), 166 participating calls were made in the first half of the year representing a threefold increase over the same period in 2009. Under the Scrappage and Retrofits for Air in Puget Sound program (ScRAPS Program) 199 pre-1994 drayage trucks have been taken off the road since the inception of the program. 11 III. SEAPORT DIVISION PERFORMANCE REPORT 06/30/10 B. KEY INDICATORS Container Volume TEU's in 000's Grain Volume Metric Tons in 000's Cruise Passengers in 000's Net Operating Income Before Depreciation By Business In $ Thousands 2009 YTD 2010 YTD 2010 YTD 2010 Bud Var Change from 2009 Actual Actual Budget $ % $ % Containers 19,118 21,647 18,356 3,291 18% 2,529 13% Container Support Props 266 337 372 (35) -9% 70 26% Cruise 1,792 1,703 1,008 695 -69% (89) 5% Grain 2,214 2,548 1,971 577 29% 334 15% Docks/Industrial Props 2,804 2,214 1,248 966 77% (590) -21% Security (638) (626) (811) 185 23% 12 2% Envir Grants/Reserve 0 (855) (350) (505) -144% (855) NA Total Seaport 25,555 26,967 21,794 5,173 24% 1,412 6% 12 III. SEAPORT DIVISION PERFORMANCE REPORT 06/30/10 C. OPERATING RESULTS In $ Thousands 2009 YTD 2010 Year-to-Date 2010 Bud Var Year-End Projections Actual Actual Budget $ % Budget Forecast Variance Operating Revenue 43,714 44,508 42,254 2,254 5% 90,134 91,151 1,017 Security Grants 129 682 1,588 (906) -57% 2,535 2,535 0 Total Revenue 43,842 45,190 43,842 1,348 3% 92,669 93,686 1,017 Direct Expenses 11,023 8,886 10,787 1,901 18% 21,631 22,260 (629) Security Expense 529 1,074 2,201 1,128 51% 3,756 3,756 0 Environmental Reserve 0 855 750 (105) -14% 1,500 1,500 0 Divisional Allocations 1,001 1,210 1,282 73 6% 2,575 2,575 0 Corporate Allocations 5,736 6,198 7,028 830 12% 13,862 13,862 0 Total Expense 18,287 18,223 22,049 3,826 17% 43,324 43,953 (629) NOI Before Depreciation 25,555 26,967 21,794 5,173 24% 49,345 49,733 388 Depreciation 13,571 15,493 15,901 408 3% 31,974 31,974 0 NOI After Depreciation 11,984 11,474 5,893 5,581 95% 17,370 17,758 388 Total Seaport revenues were $1,348K favorable to budget. Key variances are as follows: Containers and Support Properties - favorable $1,475K. Containers $1,564K favorable. Crane Rent Revenue $1,291K favorable due to higher volumes and related crane usage at Terminal 5 and Terminal 18. Intermodal Revenue $186K favorable due to higher Terminal 5 intermodal volumes. Support Properties ($84K) unfavorable due to lower volumes than budgeted at Terminal 18 liquid bulk facility. Cruise and Industrial Properties - favorable $1,179K. Cruise $263K favorable due to higher than anticipated passenger volumes $101K, higher than anticipated utility revenue $90K and maintenance reimburseable work not anticipated in budget $61K. Bulk Terminals $535K favorable. Terminal 86 grain volume exceeded budget by 23%. Docks $77K favorable due to higher than anticipated revenue from maintenance services performed for customers, and higher than anticipated license to use fees, partially offset by lower than anticipated berth and related utility usage by preferential use customers and tariff use customers. Industrial Properties $305K favorable primarily due to higher than anticipated utility revenue $172K at Terminal 91. Space rent was also higher than budget $125K due to increased rents from leases which were amended after completion of the budget, higher than anticipated Carnitech percentage rent, and CPI adjustments higher than anticipated in budget. Environmental Reserve Grants - unfavorable ($400K). Environmental Reserve Grant revenue ($400K) unfavorable due to delay in timing of corresponding cleanup project. Security Grants - unfavorable ($906K). Security Grants ($906K) unfavorable due to Rounds 6 and 7 grant activities commencing later than planned. Amount more than offset by corresponding favorable expense variance. Expenses were $3,826K favorable to budget. Key variances: Security Expenses favorable $1,128K due to Rounds 6 and 7 grant activities commencing later than planned. Amount largely offset by corresponding unfavorable revenue variance. Seaport Salaries and Benefits direct charged to Seaport favorable $173K due to elimination of the SPT&S Director's position, open positions in Environmental Services and Seaport Marketing, and due to timing differences associated with the way salary increases are reflected in the Budget. For Budget purposes, salary increases are averaged over the 12 months in the year rather than being reflected in the actual month of the scheduled pay increase on an employee by employee basis. Advertising expense, Promotional Hosting and Trade Business and Community favorable $175K due to timing. 13 III. SEAPORT DIVISION PERFORMANCE REPORT 06/30/10 Outside Services (excluding Corporate, Maintenance and Security Grants) were favorable $1,075K largely due to delay in timing of 2010 projects and programs as compared to the timing assumed in the Budget. Projects and programs with later actual timing or payments include Environmental Services $388K for storm water and air programs, continuation of the under dock inspection program $150K, installation of bollards at Pier 90 $200K, crane repairs at Terminal 46 $120K, a rail survey and tenant improvements at Terminal 115 $35K, and a condition assessment and associated repairs at Terminal 103 $50K. Miscellaneous Expense was favorable $250K due to unused Seaport Division Contingency budget $250K. Corporate costs, direct and allocated, were favorable $900K due to lower than anticipated direct charges and allocations from virtually all departments including Police $189K, Public Affairs $112K, Human Resources $109K, Contingencies $96K, and Accounting and Financial Reporting $86K. All other variances netted to a favorable $125K or less than 1% of Total Expenses Budgeted. NOI Before Depreciation was $5,173K favorable to budget. Depreciation was $408K, or approximately 3%, favorable to the 2010 Budget. NOI After Depreciation was $5,581K favorable to budget. FORECAST As of the end of June 2010, Seaport anticipates ending the year $388K favorable to budget for NOI Before Depreciation. Revenue is expected to exceed budget by $1,017K due to higher container terminal volumes resulting in higher crane rent and higher grain volumes resulting in higher grain concession revenues. Operating expenses are estimated to be unfavorable by ($629K) due to higher than budgeted expected spending on T-5 maintenance dredging, two barge layberth expense projects delayed to 2010 from Q4 2009, T-115 Berth 1 expense component, and estimated Seaport costs related to the Viaduct project. CHANGE FROM 2009 ACTUAL NOI Before Depreciation for June 2010 year-to-date increased by $1,412K from 2009. Revenue is up $1,347K from the prior year due to higher lease rents related to the newly redeveloped Terminal 30 $1,669K, higher security grant revenue $553K, higher cruise revenue $326K and higher grain revenue $269. Amounts were partially offset by 2009 revenue from King County for the T30 Upland Dredge Disposal project ($1,382K). Overall expenses in 2010 are $65K lower due to a significant reduction in direct expenses from 2009 related to the Terminal 30 Upland Dredge Disposal project $2,644K offset by higher expenses in 2010 for security grant expenses and corporate and divisional allocations. 14 III. SEAPORT DIVISION PERFORMANCE REPORT 06/30/10 D. CAPITAL SPENDING RESULTS 2010 2010 Variance Estimated Approved EstActs to EstActs as a 2010 Plan SEAPORT DIVISION Actual Budget Budget % of Budget of Finance Terminal 18 1,173 4,771 3,598 25% 3,319 Terminal 5 1,712 4,744 3,032 36% 6,468 Terminal 10 533 4,607 4,074 12% 4,412 Security 3,361 3,258 (103) 103% 826 Terminal 115 4,012 3,793 (219) 106% 1,841 All Other 8,980 9,611 631 93% 13,752 Total Seaport 19,771 30,784 11,013 64% 30,618 Comments on Key Projects: Through the second quarter, Seaport spent 21% of the Approved Capital Budget. Full year spending is estimated to be 64% of the Approved Capital Budget. Projects with significant changes in spending were: Terminal 18 Street Vacations Due to changes in the timing of the project, some spending was moved out to 2011. Terminal 18 Pile Cap Improvements Funds moved to 2011. Project under evaluation. Terminal 10 Interim Development Construction pushed to 2011. th st Terminal 5 Crane Cable Reels Equipment delivery expected in 4 quarter 2010 or 1 quarter 2011. Security Security Grant Round 7B & Security Grant 2009 ARRA were approved by the Commission on January 5, 2010 for $1,315K ($1,173K of which is reimburseable from grantors). These projects were not included in the 2010 Plan of Finance or Approved Budget. Majority of spending expected in 2011. Changes between the 2010 Plan of Finance and the 2010 Approved Budget represent modifications in 2010 spending estimates made after determination of 2009 actual spending. 15 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 06/30/10 FINANCIAL SUMMARY 2009 2010 2010 Forecast/Budget $'s in 000's Actual Forecast Budget Var $ Var % Operating Revenue 30,132 29,947 29,798 149 1% Total Revenues 30,132 29,947 29,798 149 1% Total Operating Expenses 29,569 33,105 32,956 (149) -0.5% Net Operating Income 563 (3,158) (3,158) 0 0% Capital Expenditures 74,039 8,032 11,793 3,761 32% Total Real Estate Division Revenues are $441K, or 3%, favorable to budget year to date due to higher than budgeted activity at Bell Harbor International Conference Center. For the full year, Real Estate is forecasting revenue to come in $149K over budget due to favorable activity at Bell Harbor International Conference Center partially offset by lower activity at the World Trade Center Club and closure of the Portside Caf. Total Operating Expenses are $1,716K, or 10%, below budget primarily due to timing. For the full year, Real Estate is forecasting Operating Expenses to be $149K over budget due to correction of an expense obligation relating to prior years, adjustments in liability reserves and costs related to a tug sinking at Fishermen's Terminal. Forecasted Net Operating Income for 2010 is estimated to be on Budget for the year and $3,721K below 2009 Actual. At the end of the second quarter, capital spending for 2010 is currently estimated to be $8 million or 68% of the Approved Annual Budget amount of $11.8 million. A. BUSINESS EVENTS Occupancy levels at Commercial Properties were at 89% at the end of the second quarter, which is below the 90% target for the 2010 Budget, but above comparable statistics for the local market 87%. nd Through the 2 quarter, moorage occupancies at Fishermen's Terminal exceeded 2010 Budget Targets and at the Maritime Industrial Center were below target. Recreational Marinas were slightly below the target of 93% at 92%. Vessel Liability Insurance requirement effective at Fishermen's Terminal on January 1, 2010. Compliance at 93%. Terminated Portside Caf management agreement and issued RFP for leasing the facility. Closed sale on a portion of Eastside Rail Corridor to the City of Redmond. 16 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 06/30/10 B. KEY INDICATORS Shilshole Bay Marina Occupancy 120.0% Percent Linear Footage 100.0% 2009 Actual Occupied 80.0% 2010 Budget 60.0% 2010 Actual 40.0% 20.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Fishermen's Terminal Moorage Occupancy 120.0% Percent Linear Footage Occupied 100.0% 2009 Actual 80.0% 2010 Budget 60.0% 2010 Actual 40.0% 20.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Commercial Building 100% 90% 95% 95% 94% Percent Occupied 93% 90% 90% 90% 90% 88% 89% 2009 Actual 80% 2010 Target 70% 2010 Actual 60% Qtr 1 Qtr 2 Qtr 3 Qtr 4 Net Operating Income Before Depreciation By Business In $ Thousands 2009 YTD 2010 YTD 2010 YTD 2010 Bud Var Change from 2009 Actual Actual Budget $ % $ % Recreational Boating 1,172 1,033 462 571 124% (139) -12% Fishing & Commercial (659) (978) (1,530) 552 36% (319) 48% Commercial & Third Party 1,001 455 (564) 1,019 181% (546) -55% Eastside Rail (72) (111) (128) 16 13% (40) 56% RE Development & Plan (137) (248) (246) (2) -1% (112) 82% Environmental Reserve 0 0 0 0 NA 0 NA Total Real Estate 1,307 151 (2,006) 2,157 108% (1,156) -88% 17 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 06/30/10 C. OPERATING RESULTS In $ Thousands 2009 YTD 2010 Year-to-Date 2010 Bud Var Year-End Projections Actual Actual Budget $ % Budget Forecast Variance Operating Revenue 15,348 14,857 14,417 441 3% 29,798 29,947 149 Total Revenue 15,348 14,857 14,417 441 3% 29,798 29,947 149 Direct Expenses 13,126 13,861 15,391 1,531 10% 30,949 31,046 (97) Environmental Reserve 0 0 0 0 NA 0 0 0 Divisional Allocations (1,482) (1,733) (1,893) (160) 8% (3,802) (3,750) (52) Corporate Allocations 2,397 2,579 2,924 345 12% 5,808 5,808 0 Total Expense 14,041 14,706 16,423 1,716 10% 32,956 33,105 (149) NOI Before Depreciation 1,307 151 (2,006) 2,157 108% (3,158) (3,158) 0 Depreciation 4,944 4,981 4,830 (152) -3% 9,659 9,659 0 NOI After Depreciation (3,638) (4,830) (6,835) 2,005 29% (12,817) (12,817) 0 Total Real Estate revenues were $441K favorable to budget. Key variances are as follows: Harbor Services: Favorable $141K Recreational Boating favorable $8K. The variance amounted to less than 1% of Budget. Fishing and Commercial favorable $134K due to a shift in the mix of boat sizes to larger vessels. In addition, a delay in the net shed loft removal project has allowed for continued revenue. Portfolio Management: Favorable $484K Commercial Properties favorable $15K due to Fugro continuing to pay base rent at P69 in 2010 $50K. The 2010 Budget assumed Fugro would terminate their lease upon vacating the premises prior to 2010. Favorable amount partially offset by higher than budgeted vacancy at T102 ($37K). Third Party Managed Properties favorable $469K due to higher than anticipated activity at the Bell Harbor International Conference Center. Eastside Rail Corridor: Unfavorable ($104K) Eastside Rail Corridor unfavorable ($104K) due to the delayed implementation of revenue collection procedures. RE Development and Planning: Unfavorable ($21K) Terminal 91 General Industrial unfavorable ($21K) due to M.T. Housing vacating Terminal 91 in 2009. The 2010 Budget assumed occupancy throughout the year. The negative variance is partially offset by a new tenant for the rest of 2010 at the former NW Harvest building. Facilities Management: Unfavorable ($72K) Pier 69 Facilities Management ($72K) due to lower revenues from the Pier 69 Caf. The management agreement associated with the Pier 69 Caf was terminated April 30, 2010. Full year negative revenue variance is forecasted to be ($211K). Expenses were $1,716K favorable to budget. Key variances: Salaries and Benefits for Real Estate employees favorable $173K due to timing assumed for Salary increases in the budget and open positions $54K and budgeted higher than actual benefit percentages $119K. Third Party Management Expense and Management Fees related to the Pier 69 Caf were favorable $92K due to the termination of the management agreement on April 30, 2010. Full year favorable expense variance is forecasted to be $292K. Third Party Management Expense and Management Fees related to the World Trade Center Club, World Trade Center West and Bell Harbor International Conference Center were favorable $106K due to expense controls by third party managers. 18 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 06/30/10 Outside Services (excluding Maintenance, Corporate and Capital Development) were favorable $689K due to unused broker fees and tenant improvement allowances at T102 and World Trade Center West $194K and delayed Eastside Rail Corridor consulting and reimbursement expenses $218K. Environmental Services direct charges $174K also contributed to the favorable variance. Maintenance expenses were favorable $446K primarily due to delayed work scheduled during the first half of 2010. Corporate costs, direct and allocated, were favorable $415K primarily due to positive variances in Human Resources $101K, Police $71K, ICT $53K, Public Affairs $50K, and Accounting & Financial Reporting $46K and Contingencies $32K. All other variances netted to an unfavorable ($205K) or about 1% of Total Expenses Budgeted. NOI BEFORE DEPRECIATION was $2,157K favorable to Budget. Depreciation was ($152K) unfavorable to Budget due to higher than anticipated depreciation at SBM ($82K) and allocated from Human Resources ($49K). The variance amounted to 3.1% of Budget. NOI AFTER DEPRECIATION was $2,005K favorable to Budget. FORECAST Real Estate anticipates ending the year at Budget for NOI Before Depreciation due to offsetting revenue and expense variances. Revenue is forecasted revenue to come in $149K over budget due to favorable activity at Bell Harbor International Conference Center partially offset by lower activity at the World Trade Center Club and closure of the Portside Caf. Expenses are forecasted to be $149K over budget due to correction of an expense obligation relating to prior years, adjustments in liability reserves and costs related to a tug sinking at Fishermen's Terminal. CHANGE FROM 2009 ACTUAL Net Operating Income Before Depreciation decreased by ($1,156K) between 2009 and 2010 as a result of lower revenue and higher operating expenses. Operating Revenue decreased by $491K due to higher vacancies at World Trade Center West, Terminal 102, Pier 69 Offices and the Tsubota Steel site. Expenses increased by $665K in 2010 due to higher Maintenance expenses, Corporate direct charges and allocations, and Utility expenses. D. CAPITAL SPENDING RESULTS 2010 2010 Variance Estimated Approved EstActs to EstActs as a 2010 Plan REAL ESTATE DIVISION Actual Budget Budget % of Budget of Finance Small Projects 1,760 2,321 561 76% 1,810 FT NW Dock Fender System 340 2,000 1,660 17% 2,000 RE Maintenance Shop Solution 2,169 1,800 (369) 121% 2,100 RE Division Green Initiative 0 1,300 1,300 0% 1,300 Fleet Replacement 598 950 352 63% 950 All Other 3,165 3,422 257 92% 3,966 Total Real Estate 8,032 11,793 3,761 68% 12,126 Comments on Key Projects: Through second quarter, the Real Estate Division spent 13% of the Approved Budget. Full year spending is estimated to be 68% of the Approved Budget. Projects with significant changes in spending were: FT NW Dock Fender System Construction delayed until 2011. RE Division Green Initiative Determination of projects to move forward was deferred until 2011. Changes between the 2010 Plan of Finance and the 2010 Approved Budget represent modifications in 2010 spending estimates made after determination of 2009 actual spending. 19 V. CAPITAL DEVELOPMENT DIVISION PERFORMANCE REPORT 06/30/10 A. BUSINESS EVENTS Completed initial draft engineering department (and PCS) re-evaluation in June 2010. Updated the PCS Compass website to include a monthly featured project that includes construction updates and customer comments. Started a major project coordination effort for the 25+ projects scheduled to be in construction in and adjacent to the south satellite in the next 3 years, particularly 2011. Completed the T91 cruise terminal art plan. Audit conducted by FHWA on EMWGS project-specific documentation resulted in very good report with full concurrence of accurate project documentation. This success assures Port's continuing status as a fully certified lead agency for the administration of state and federal grant funds. Drafted CPO P-card Procedures for review and finalization for a 3rd 4th Quarter implementation. Conducted 6 classes for CPO-1, Evaluation and Source Selection, and Contract Administration. Trained 148 employees. B. KEY INDICATORS Key Indicators 2010 YTD 2009 YTD/Notes Construction Soft Costs (in 1,000s) Limit construction soft costs (design, construction 36 month rolling average from Total Costs $ 1,362,355 (100%) management, project Q3 2007 through Q2 2010 Total Construction: $1,097,053 ( 81%) management, environmental documentation) to no more Total Soft: $265 ( 19%) than 25% of total capital improvement costs. Cost Growth During Total Completed Projects YTD: 8 Limit average mandatory Construction change cost growth to 4% of Discretionary Change: 4% construction contract award. Mandatory Change: 18.36% Limit average discretionary change cost growth to 4% of construction contract award. Total Completed Projects YTD: 8 Project Schedule Growth Limit time growth from initial Average Growth Completed Projects: 39.7% Commission project authorization to substantially Cumulative Value YTD: $7,899,854 complete to no more than 10% of originally allotted duration. Procurement Schedule: Request for Services Actual average # of days Service Agreements to Receipt of Scope 62 Receipt of Scope to Advertisement Receipt of Proposal to 19 Notice of Selection 86 Notice of Selection to 71 Contract Execution Procurement Schedule: Receipt of Proposal to 14.5 Actual average # of days Purchasing Notice of Intent to Award Receipt of Intent to 10.8 Award to Contract Execution Receipt of Request for 9.7 Services to Contract Execution Performance Evaluation Total PREPs due 46 % PREPs completed within 30 Timeliness this quarter: days of anniversary date. 42 (91%) 10 point improvement over Total PREPS done Q1 Timeliness = 81% on time: 20 V. CAPITAL DEVELOPMENT DIVISION PERFORMANCE REPORT 06/30/10 C. OPERATING RESULTS 2009 YTD 2010 YTD 2010 Bud Var. Year-End Projections In $ Thousands Actual Actual Budget $ % Budget Forecast Variance Total Revenues 81 - - - 0.0% - - - EXPENSES BEFORE CHARGES TO CAPITAL PROJECTS Capital Development Administration 161 197 194 (2) -1.2% 387 400 (13) Engineering 4,926 4,716 6,732 2,017 30.0% 13,574 13,574 - Port Construction Services 2,923 3,448 3,406 (41) -1.2% 6,814 6,855 (41) Central Procurement Office 1,637 1,572 2,062 490 23.8% 4,171 4,171 - Aviation Project Management 2,454 2,338 3,333 995 29.9% 6,545 6,545 Seaport Project Management 1,272 1,219 1,349 130 9.6% 2,672 2,522 150 Total Before Charges to Capital Projects 13,372 13,490 17,077 3,588 21.0% 34,162 34,066 96 CHARGES TO CAPITAL PROJECTS Capital Development Administration - - - - 0.0% - - Engineering (4,393) (4,239) (6,159) (1,920) 31.2% (12,418) (12,418) - Port Construction Services (2,352) (2,113) (2,614) (501) 19.2% (5,228) (4,727) (501) Central Procurement Office (763) (735) (964) (229) 23.8% (1,983) (1,983) - Aviation Project Management (2,195) (2,003) (2,515) (513) 20.4% (5,006) (5,006) - Seaport Project Management (910) (999) (986) 14 -1.4% (1,971) (1,998) 27 Total Charges to Capital Projects (10,613) (10,088) (13,237) (3,149) 23.8% (26,607) (26,133) (474) OPERATING & MAINTENANCE EXPENSE Capital Development Administration 161 197 194 (2) -1.2% 387 400 (13) Engineering 533 477 574 97 16.9% 1,156 1,156 - Port Construction Services 571 1,335 792 (543) -68.5% 1,585 2,128 (543) Central Procurement Office 873 838 1,098 261 23.7% 2,188 2,188 - Aviation Project Management 259 335 818 483 59.0% 1,539 1,538 Seaport Project Management 361 220 364 143 39.4% 701 524 177 Total Expenses 2,758 3,402 3,840 439 11.4% 7,555 7,933 (378) Summary of Budget Variances: Unfilled positions reduced salary and benefit expense ($55K SPM) Worker Comp expenses over budget due to injury claim ($41K PCS) and unbudgeted charges Outside Services over budget PCS (unbudgeted expense work $311K) SPM (unbudgeted $35K: Kennedy & Jenks, project estimator costs) CDD Admin ($13K: Dwayne Lee, metrics/performance development) General Services currently underbudget (SPM projects $125K YE positive variance) Reduced capital work and increased expense work: Capital charges below budget ($501K PCS, offset by SPM projected $27K YE overage) 21 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 6/30/10 A. BUSINESS EVENTS Together with the WSDOT, SDOT, King County, planned the Alaskan Way Viaduct MOA signing/SR 519 Ribbon-cutting to sign the port's agreement to contribute to the AWV Replacement Program and celebrated the opening of the Royal Brougham overpass. All local television, newspapers, and several radio outlets covered event. Coordinated the port's participation in a 100+ person delegation from China led by the China Council for the Promotion of International trade. Drafted a letter on behalf of the US West Coast Collaboration to US Secretary of Transportation Ray LaHood to provide feedback on the draft USDOT Strategic Plan. Finalized Eastside Rail Corridor closing and signing ceremony with City of Redmond. Published 2009-2010 Annual Report to the Community online and printed 200 copies for distribution. Participated in the SR 519 ribbon-cutting ceremony for new westbound I-90 off-ramp and Royal Brougham Way overpass. Together with the Seattle Marine Business Coalition and City's Office of Economic Development, hosted the Mayor's Industrial Tour showcasing Fishermen's Terminal/MIC, Terminal 91, Viaduct and Cargo Terminals/Duwamish River industrial area. Participated in the Seattle Maritime Festival events showcasing Port's environmental programs (Working Waterfront Workshop: Environmental Leadership, Stewardship and Collaboration), commitment to fishing community (Stories of the Sea), and vibrant maritime industry (Family Fun Day/Tug Races). Promoted and supported the Clean Trucks program by participating in the third Truckers Resource Fair and Drayage Truck Registry communications support; Planned and managed Clean Truck event with Cascade Sierra Solutions and PSCAA. Celebrated the 2010 cruise season opening with coverage on all local mainstream and Web-based media outlets as well as trade and industry publications. All stories featured the positive economic impact to the region. Negotiated final terms and conditions for benefits broker and signed a two year contract with Towers Watson. Presented the Final briefings to Commission for self funding benefits Resolution and a Competition waiver for claim administration services were done on May 11th and received Commission approval. Signed a contract with Aon Risk Services for the pilot Enterprise Risk Management project for Harbor Services. Held kick-off training for 17 mentor/mentee pairs in the third iteration of MEEM, the Port's mentoring program. ICT implemented the Ironport Data Loss Prevention filter, which provides more accurate filtering of the Port's security sensitive information (SSI). ICT delivered numerous smaller projects that improved operations, cost effectiveness, and employee productivity. Received the Distinguished Budget Presentation Award from the Government Finance Officers Association of America in May. Successfully upgraded the Clarity Budget System from 6.1 to 6.2. Hosted an international delegation from Ireland coordinated by Boston College. Visit included a tour of Seaport facilities and meeting/presentation. Police completed Accreditation through the Washington Association of Sheriffs and Police Chiefs, the department has begun work toward seeking national Accreditation through the Council on Accreditation of Law Enforcement Agencies. 22 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 6/30/10 B. KEY INDICATORS Key Indicators 2010 YTD 2009 YTD/Notes Occupational Injury Rate 5.45 per 100 employees 4.70, increased by 0.75 Lost Work Day Rate 2.62 cases (18 cases) 1.52 (11 cases), increased by 1.1 Lost Work Days 253 days 445 days, decreased by 192 Annual Safety Training 63% completed 60%, increased by 3% Vehicle Incidents 58, preventable 34 46, 9, increased by 26% Total Incidents Reported 73 94, decreased by 29% Risk Management Overall $5.6 million $1.4 million, increased by 300% Reserves (exclude environment) Overall Cost of Risk $11.32/$1,000 $14.42/$1,000, decrease by $3.1/$1,000. Workplace Accommodations to 432 days 223 days, increased by 209 Injured Workers Spirit and Wellness Onsite Class 396 employees 151, increased by 245. Participation Health Assessment 97% completed 93%, increased by 4% Property Insurance $1.2 million $1.2 million, no change Internal Audit 7 audits presented to the Audit Clear Channel Committee Disbursement (AP & Payroll) AV Business Development Border Concessions, International Portside Caf ICT Department Employment 97 job openings 170, decreased by 73 4,143 applications received 5,268, decreased by 1,125 301 interviews 542, decreased by 241 New Employee Orientation 21 new hires 69, decreased by 48 MIS Training Classes 6 classes, 67 employees No classes conducted in 2009 completed Spring Employee Forums 440 participated 28 questions submitted Job Evaluations 72 completed 60, increased by 12 Labor Contract Negotiated 4 contracts; 9 MOU; 1 PLA Employee Discipline/Grievance 15 incidents; 20 disciplines; 11 grievances Internal Communication via Average 1,600 visitors/month 1,567, increased by 33. This Compass Intranet site won an Award of Merit in the AAPA Communications Awards Program. 23 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 6/30/10 Key Indicators 2010 YTD 2009 YTD/Notes E-newsletters and bulletins 15,200 subscribers for 34 topic 24,238 subscribers for 24 topic areas areas Port Web Site Usage 5,489,892 Page views, 8,644,671 page views in the year 1,950,719 visits 2009. Environmental Annual Report 1,200 visits since April and more Won an Award of Merit in the Readership than 10,000 page views. AAPA Communications Awards Program. Annual Report Readership 1,924 total visits May-July 650, increased by 1,274. The 08- 09 Report won an Award of Excellence in the AAPA Communications Awards Program. Attorney Services Prosecute, 58 active litigation and claims Defend Claims and Litigation matters Records Management 138 Public Disclosure Requests Respond to Public Disclosure Requests Records Management Assure 17,000 boxes archived. 500 new that Port records are being boxes in storage. 2,000 maintained and managed in destroyed. accordance with State law Increase Mobility and Productivity 1,212 employees have laptops 1,011, increased by 201 Service Desk Incidents 11,537 13,259, decreased by 1,722 Percent of ICT Projects 89% 91%, decreased by 2% Completed on Budget Port's annual target of purchasing 3 of 5 divisions met the 10% at least $20 million or 10% of all utilization goal goods and services from qualified small businesses Increase in small business 1,123 on registered roster Spokane Street Widening/FAST Approved MOA with City for Corridor $3.4M contribution Police Services 29,534 calls received 30,711, decreased by1,177 Arrests 306 with no warrant 426 with no warrant, decreased 192 with warrant by 120; 296 with warrant, decreased by 104. 24 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 6/30/10 C. OPERATING RESULTS 2009 YTD 2010 YTD 2010 Bud Var. Year-End Projections In $ Thousands Actual Actual Budget $ % Budget Forecast Variance Total Revenues 157 309 9 300 3337.2% 18 338 320 Executive 715 697 790 92 11.7% 1,536 1,536 - Commission 422 404 473 69 14.7% 868 868 - Legal 975 1,603 1,506 (98) -6.5% 2,923 3,163 (241) Risk Services 1,253 1,259 1,515 256 16.9% 3,009 2,992 17 Health & Safety Services 468 499 572 73 12.8% 1,095 1,091 4 External Affairs 2,407 2,644 3,209 565 17.6% 5,997 5,997 - Economic & Trade Development 1 660 - - - 0.0% - - - Human Resources & Development 1,740 1,741 2,376 635 26.7% 4,838 4,588 250 Labor Relations 319 294 393 99 25.3% 784 784 - Information & Communications Technology 7,722 8,696 9,527 831 8.7% 19,033 19,033 - Finance & Budget 719 729 772 43 5.5% 1,529 1,525 4 Accounting & Financial Reporting Services 2,928 2,946 3,363 417 12.4% 6,716 6,654 61 Internal Audit 460 494 531 37 7.0% 1,109 1,108 1 Office of Social Responsibility 534 576 760 184 24.3% 1,458 1,456 2 Police 8,299 9,204 10,252 1,048 10.2% 20,314 20,282 32 Contingency 313 17 375 358 95.3% 750 550 200 Total Expenses 29,933 31,802 36,413 4,610 12.7% 71,958 71,628 330 Note: 1) Economic & Trade Development was dissolved for 2010. Corporate revenues were $300K favorable compared to budget due to higher operating grants. Corporate expenses for the first six months of 2010 were $4.6 million or 12.7% favorable compared to budget and $1.9 million or 6.2% higher than the same period a year ago. The $4.6 million favorable variance is due primarily to timing differences between when the items are paid and when budgeted and not necessarily cost savings. All Corporate departments are favorable with the exception of Legal, which was $98K over budget due to the establishment of a litigated reserve for $140K. Year-end spending is projected to be $330K under budget. D. CAPITAL SPENDING RESULTS ($ Millions) Annual Results: 2010 Plan of Finance $ 10.50 2010 Approved Budget $ 16.70 2010 Forecast $ 10.50 Variance (Budget vs. Forecast) $ 6.20 25
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