Item 6e Supp
ITEM NO. 6e Supp DATE OF MEETING November 10, 2009 Port of Seattle 2010 Preliminary Budget First Reading/Public Hearing November 10, 2009 1 Today's Agenda Background Operating Budget Non-Op Budget Capital Budget Remaining Schedule Public Hearing 2 2010 Budget Process May 19 Budget Process Briefing Aug. 4 Budget and Tax Levy Briefing Aug. 11 Seaport and Real Estate Business Plan Briefing Aug. 18 Aviation Business Plan Briefing Sept. 17 Preliminary Tax Levy Discussion Oct. 6 Aviation, Seaport, and Real Estate Operating and Capital Budgets Commission Workshop Oct. 8 Corporate and CDD Budgets Commission Workshop Oct. 20 Draft Plan of Finance & Tax Levy Discussion Nov. 10 First Reading & Public Hearing, Preliminary Budget Nov. 24 Final Reading & Public Hearing, Preliminary Budget Dec. 1 Statutory Budget Filed with King County 3 Summary of Budget Reduction Efforts Reviewed all key functions Reduced some programs and functions Implemented voluntary separation program Modifying medical benefits Eliminating 110 FTEs (6.2% of workforce) Reduced O&M costs by $15M (5.6% of total) 4 Major Budget Changes Since 10/8/09 Reduced operating revenues by $2.3M Reduced OPEB medical costs by $3,018K Reduced worker compensation expense in Aviation Division by $101K Total operating costs reduced by $3,119K 5 Budget Changes Since 10/8/09 10/8/09 Preliminary Change ($ in thousands) 2009 Bud 2010 Bud 2010 Bud from 10/8 Operating Revenue 486,367 480,336 478,059 (2,277) Operating Expense 277,862 284,650 281,531 (3,119) NOI Before Depreciation 208,506 195,686 196,528 842 Depreciation 157,036 158,575 158,575 - NOI After Depreciation 51,470 37,111 37,953 842 6 Operating Budget Summary (w/o Environmental Reserve) ($ In Thousands) 2006 2007 2008 2009 Bud 2009 Fcst 2010 Bud Operating Revenue 448,449 461,146 488,996 486,367 460,972 478,059 Operating Expense 223,564 241,800 280,278 277,862 257,374 281,531 Environmental Reserve (1,262) 5,117 8,889 5,6875,687 24,471 Baseline Operating Expense 224,826 236,683 271,389 272,175 251,687 257,060 Baseline NOI before Depr. 223,623 224,463 217,607 214,192 209,285 220,999 Depreciation 140,190 141,589 144,208 157,036 157,036 158,575 Baseline NOI after Depr. 83,433 82,875 73,399 57,15652,249 62,424 777 Operating Budget Summary (with Environmental Reserve) ($ In Thousands) 2006 2007 2008 2009 Bud 2009 Fcst 2010 Bud Operating Revenue 448,449 461,146 488,996 486,367 460,972 478,059 Operating Expense 223,564 241,800 280,278 277,862 257,374 281,531 NOI Before Depreciation 224,885 219,346 208,718 208,505 203,598 196,528 Depreciation 140,190 141,589 144,208 157,036 157,036 158,575 NOI After Depreciation 84,695 77,758 64,510 51,469 37,95346,562 888 Net Operating Income Operating Revenues, Operating Expenses and NOI 600 500 400 Operating Revenues $ In Millions Operating Expenses 300 NOI with Env. Reserve NOI w/o Env. Reserve 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 09 Bud 09 Fcst 10 Bud 99 Proposed Budget Changes Proposed budget changes not included in Preliminary Budget Document Revenues: Reduce $200K for Ground Transportation due to reduced costs Expenses: Add $1.2M for rental and demobilization costs of emergency backup generators Increase $110K for International Service Incentive program 10 Summary of Budget Changes 11 2010 Budget Summary (with Proposed Changes) 10/8/09 11/10/09 Proposed Change ($ in thousands) 2010 Bud 2010 Bud 2010 Bud from 11/10 Operating Revenue 480,336 478,059 478,828 769 Operating Expense 284,650 281,531 282,831 1,300 NOI Before Depreciation 195,686 196,528 195,997 (531) Depreciation 158,575 158,575 158,575 - NOI After Depreciation 37,111 37,953 (531)37,422 12 Non-Ops Income Summary ($ in millions) 2009 Bud 2010 Bud Variance Revenue Bond Interest Expense (131,824) (150,070) (18,246) Interest Income 23,040 15,788(7,252) Other Non-Op Revenue (Expense) (2,231) (2,217) 14 Ad Valorem Tax Revenue 75,899 75,899 - Grants & Donations 71,276 50,152 (21,124) Passenger Facility Charges 62,525 61,273(1,252) Customer Facility Charges 24,573 28,438 3,865 PFC Bond Interest (10,996) (10,497) 499 GO Bond Interest Expense (29,199) (14,432) 14,767 Public Expense (24,055) (45,864) (21,809) Total 59,008 8,471 (50,537) 13 2010 Budget Summary (Includes Op and Non-Ops) 2009 2010 ($ in millions) Budget Budget Operating Revenue $486,367 $478,059 Operating Expense 277,862 281,531 NOI Before Depreciation 208,505 196,528 Depreciation 157,036 158,575 NOI After Depreciation 51,469 37,953 Net Non-Ops Income (Expense) 59,008 8,471 Increase in Net Assets $110,477 $46,424 14 Port-wide FTEs Summary Aviation Seaport Real Estate Capital Dev Corporate Total 2009 Approved FTE's 833.1 61.8 151.1 271.3 472.7 1,790.0 2010 Proposed FTE's 746.4 60.4 154.8 268.0 450.2 1,679.8 Net Change (86.7) (1.4) 3.7 (3.3) (22.5) (110.2) 1515 2010-2014 CIP Summary (Includes Significant Spending Deferrals) ($ in million) 2010 2011 2012 2013 2014 Total % 2009 Budget CIP 471.3 280.1343.5 358.6 387.2 1,840.6 2010 Budget CIP 414.0 293.7388.6 184.3 149.0 1,429.5 Net Change (57.3) 45.1 13.7 (174.3) (238.3) (411.1) -22% 16 2010 Capital Budget Summary ($ in millions) Aviation Seaport Real Estate Corporate Total Committed $275.8 $30.6 $15.3 $10.5 $332.3 Business Plan Prospective $61.1 $10.8 $5.6 $4.2 $81.7 Total $337.0 $41.4 $21.0 $14.7 $414.0 1717 2010 Capital Budget by Division Professional & Tech. Services Div. 3.2% Real Estate Division 4.6% Seaport Division Total Spending: $332.3M 9.2% Aviation Division 83.0% Not including $81.7M of Business Plan Prospective Projects 18 5-Year Capital Plan The 5-year capital plan from 2010-2014 is $1.43 billion Aviation Committed Projects $587.5M Seaport Committed Projects $ 65.8M Real Estate Committed Projects $ 50.5M Corporate Committed Projects $ 40.3M Total Committed Projects $744.1M Aviation Business Plan Prospective* $488.8M Seaport Business Plan Prospective* $126.1M Real Estate Business Plan Prospective* $ 61.3M P&TS General (ICT Business Services)* $ 9.2M Total Business Plan Prospective* $ 685.4M *The preliminary numbers may change pending outcome of tax Levy discussions 19 CIP History 2000 2010 Total Committed CIP 700.0 600.0 500.0 400.0 $ in millions 300.0 200.0 100.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009 2010 Act Act Act Act Act Act Act Act Bud Fcst Bud Total Committed CIP 400.0 471.0 467.3 490.4 514.1 470.1 393.0 327.6 604.0 401.7 332.3 20 Remaining Schedule Second Reading Nov. 24, 2009 Statutory Budget Filed with King County Dec. 1, 2009 21 Port of Seattle 2010 Preliminary Budget First Reading/Public Hearing November 10, 2009 22
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