Item 7b Report
ITEM NO. 7b Supp-2 DATE OF MEETING November 3, 2009 OS QUARTERLY PERFORMANCE REPORT AS OF SEPTEMBER 30, 2009 TABLE OF CONTENTS Page I. Portwide Performance Report 1-3 II. Aviation Division Report 4-8 III. Seaport Division Report 9-13 IV. Real Estate Division Report 14-18 V. Capital Development Division Report 19-20 VI. Corporate Professional & Technical Services 21-22 I. PORTWIDE PERFORMANCE REPORT 9/30/09 INCOME STATEMENT Report: Income Statement As of Date: 2009-09-30 2008 YTD 2009 YTD 2009 YTD 2009 Var $ 2009 Var % 2009 Annual % of Annual Dollars in thousands Actual Actual Budget Bud vs. Act Bud vs. Act Budget Bud Revenues: Seaport 73,233 70,545 73,543 (2,998) -4.1% 94,829 74.4% Real Estate 24,956 23,389 23,246 143 0.6% 31,111 75.2% Aviation 265,684 263,463 269,302 (5,839) -2.2% 358,956 73.4% Capital Development 81 - 81 0.0% - Corporate 840 986 1,129 (143) -12.7% 1,470 67.1% Total Revenues 364,714 358,465 367,221 (8,756) -2.4% 486,367 73.7% Operating & Maintenance: Seaport 13,423 17,646 24,519 6,873 28.0% 32,315 54.6% Real Estate 30,420 20,746 24,005 3,259 13.6% 32,300 64.2% Aviation 92,680 88,591 99,623 11,032 11.1% 132,665 66.8% Capital Development 5,868 4,207 5,231 1,024 19.6% 7,010 60.0% Corporate 48,126 47,299 55,568 8,269 14.9% 73,572 64.3% Total O&M before Depreciation 190,517 178,488 208,946 30,457 14.6% 277,862 64.2% Operating Income Before Depreciation 174,197 179,976 158,276 21,701 13.7% 208,506 86.3% Depreciation 106,997 112,885 117,456 4,571 3.9% 157,036 71.9% Total O&M and Depreciation 297,513 291,373 326,402 35,028 10.7% 434,897 67.0% Operating Income after Depreciation 67,201 67,091 40,819 26,272 64.4% 51,470 130.4% 1 I. PORTWIDE PERFORMANCE REPORT 9/30/09 CAPITAL SPENDING RESULTS ($ Millions) Annual Results: 2009 Plan of Finance $604.00 2009 Approved Budget $436.10 2009 Estimated/Actuals $377.61 Variance (Budget vs Estimated\Actuals) $58.49 PORTWIDE INVESTMENT PORTIFOLIO The investment portfolio for the third quarter of 2009 earned 2.51% against our benchmark (The Merrill Lynch 3- year Treasury/Agency Index) of 1.02%.For the past twelve months the portfolio has earned 3.04% against the benchmark of 1.04%. Since the Port became its own Treasurer in 2002, the Port's portfolio life-to-date has earned 3.80% against our benchmark of 2.93%. 2 I. PORTWIDE PERFORMANCE REPORT 9/30/09 EXECUTIVE SUMMARY The first nine months of 2009 Port of Seattle's overall operating revenues were $358.5 million, $8.8 million below the budget. Total operating expenses were $178.5 million, $30.5 million below budget. Operating income before depreciation was $179.9 million, $21.7 million above the budget. Operating income after depreciation is $67.1 million, $26.3 million above the budget. Port-wide Capital spending was $178.2 million for the first nine months and is forecasted to be $377.6 million for the year, $58.5 million below the budgeted $436.1 million. Aviation Division's Aeronautical revenues were $1.4 million unfavorable due to lower landing fee revenue. Non- aeronautical revenues were unfavorable by $5.1 million due to underperformance of Public Parking and other Landside revenues. Operating expenses were 17.6 million under budget due to expense project delays and implementation of Expense Savings Plan. Operating revenues are forecasted to be $20 million unfavorable due to decline of parking transactions, rental car activity, and concessions, in addition to lower forecast revenue requirements for aeronautical cost centers. Operating expenses are forecasted to be $9.2 million favorable due to savings from furlough, delay of expense projects and corporate allocations which offset with costs for emergency generators and elevator/escalator repairs. Total capital expenditures for 2009 are projected at $238.8 million. Seaport Division revenues were $2.9 million unfavorable primarily due to Security Grant projects commencing later than assumed in budget. For the full year, Seaport is forecasting a $6.2 million unfavorable revenue variance due to later start of Security Grant projects, implementation of the Container Customer Support Package, default of tenant at Terminal 104 and the rent impact of the Terminal 30 crane cable issue. Operating expenses were $8.1 million favorable through September primarily due to the implementation of the 2009 Expense Savings Plan, lower cost of the Terminal 18 maintenance dredge and the Terminal 30 upland dredge disposal projects than budgeted, and due to timing differences in planned operating expenses. For the full year, Seaport is forecasting a $6.9 million favorable expense variance due to later start of Security Grant projects, implementation of the 2009 Expense Savings Plan, lower cost of the Terminal 18 maintenance dredge and the Terminal 30 upland dredge disposal projects, and the reversal of prior year Other Post Employment Benefits (OPEB) medical related expenses. Forecasted Net Operating Income for 2009 is estimated to be $0.7 million favorable to the 2009 Budget and $6.5 million below 2008 Actual. As of September 30, 2009 total capital spending for 2009 was projected at $50.3 million or 50% of the Approved Annual Budget amount of $100.4 million. Real Estate Division revenues are virtually on budget for the year-to-date as a result of offsetting variances within the business groups. For the full year, Real Estate is forecasting a $0.3 million unfavorable revenue variance compared to budget due to lower occupancy at Shilshole Bay Marina and offsetting favorable and unfavorable occupancy levels at commercial property sites. Operating expenses are $4.8 million favorable for the year-to-date primarily due to timing and deferrals related to the 2009 Expense "Deferral" Plan. For the full year, Real Estate is forecasting a $2.3 million favorable expense variance due to implementation of the 2009 Expense "Deferral" Plan and reversal of prior year Other Post Employment Benefits (OPEB) medical related accruals. Forecasted Net Operating Income for 2009 is estimated to be approximately $2.0 million favorable to the 2009 Budget and $1.7 million above 2008 Actual. As of the September 30th update, total capital spending for 2009 was projected at $100.1 million or 95% of the Approved Annual Budget amount of $105.2 million. Capital Development expenses were $1.0 million favorable through nine months mainly due to unfilled staff positions, delayed work and less capital work than original budgeted. A $609 thousand favorable variance at the end of the year is forecasted due to less expense work than budgeted. 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 nine months of 2009 was $8.3 million or 14.9% favorable compared to the approved budget and $827 thousand or 1.7% lower than the same period a year ago. The $8.3 million favorable variance is due primarily to timing of spending and to the implementation of the 2009 Expense Savings Plan. There aren't any major variances to report on since all departments are favorable. However, the unfavorable variance of $10 thousand in Industrial Development Corporation is due to charges incurred for the IDC/ET Fellowship Program. Year-end spending is projected to be $67.8 million, which is $5.7 million below the approved budget. 3 II. AVIATION DIVISION PERFORMANCE REPORT 9/30/09 FINANCIAL SUMMARY 2007 2008 2009 2009 Forecast/Budget Figures in $ 000s Actual Actual Forecast Budget Var $ Var % Revenues Aeronautical 195,029 204,361 193,908 202,913 (9,005) -4.4% Non-Aeronautical 143,975 150,528 137,309 148,289 (10,979) -7.4% Other 8,483 3,440 8,804 8,804 - 0.0% Total Revenues 347,487 358,329 340,021 360,006 (19,985) -5.6% O&M Expenses (excl. Env. Res.) 171,624 192,641 179,119 188,334 9,215 4.9% Savings: OPEB Reversal - - (5,574) - 5,574 n/a Costs: VSP, HR10, Unemployment - - 2,934 - (2,934) n/a Environmental Reserve - 2,542 1,390 1,187 (203) -17.1% Total O&M Costs 171,624 195,183 177,869 189,521 11,652 6.1% Net Operating Income 175,864 163,146 162,152 170,485 (8,333) -4.9% Capital Expenditures 298,387 209,813 238,767 214,743 (24,024) -11.2% We forecast a shortfall of $10.98 million in non-airline revenues as Public Parking, Concessions and other Landside departments will underperform against the budget due to decreased enplanements and reduced amounts of revenue generated per enplaned passenger. Operating expense is forecasted to be $9.2 million favorable due to $11.5 M of Expense Savings Plan offset by $1.75M for emergency generators in preparation of Howard Hanson Dam flooding and $2M for elevator/escalator repairs. Environmental Reserve is forecast to overspend by 200K mainly due to an increase in reserves for the Lora Lake property. Total capital expenditures for 2009 are projected at $238.8 million. A. BUSINESS EVENTS Port staff have been preparing for possible flooding from Howard Hanson Dam failure. Icelandair began service to Reykjavik in July to compensate for SAS discontinuing service in the same month. Lora Lake Apartments were demolished in October. Cell Phone Lot reopened in Q3. B. KEY INDICATORS 2008 2009 % 2008 2009 % Figures in 000's YTD YTD Variance Actual Fcst Variance Enplanements 12,441 11,925 -4.2% 16,081 15,361 -4.5% Landed Weight 16,459 15,597 -5.2% 21,519 20,430 -5.1% Enplanements vs. Prior Year Landed Weight vs. Prior Year -0.50% 0% 2% 0.38% 0.03% -2.16% Growth Rate 0% -4.02% -3.87% -4.59% -4.65% -4.57% -2% -3.95% -5% -6.08% Growth Rate -4% -5.45% -6.27% -6% -7.25% -7.37% -8.11% -7.84% -7.85% -8% -10% -10% Jan Feb Mar Apr May Jun Jul Aug Sept Jan Feb Mar Apr May Jun Jul Aug Sept Enplanements are forecasted to decrease 4.5% from the 2008 actual. 4 II. AVIATION DIVISION PERFORMANCE REPORT 9/30/09 2007 2008 2009 2009 Forecast/Budget Actual Actual Forecast Budget Var $ Var % Non-Aero NOI ($ in 000s) 87,714 86,474 81,209 86,393 (5,183) -6.0% Passenger Airline CPE 11.73 11.89 11.67 11.90 0.23 2.0% Total Operating Cost / Enpl 10.96 12.13 11.82 11.99 0.18 1.5% Debt Service Coverage 1.58 1.42 1.45 1.51 (0.06) -3.9% We forecast CPE to come in lower than both the 2009 budget and the 2008 actual, primarily due to significantly lower interest rate paid to variable rate bond issues and savings from the decision to discontinue OPEB medical benefits to Port retirees. C. OPERATING RESULTS Year-to-date Revenue and Expense 2007 YTD 2008 YTD 2009 YTD 2009 YTD Actual/Budget Figures in $ 000s Actual Actual Actual Budget Var $ Var % Revenues Aeronautical 151,454 149,952 151,895 153,095 (1,201) -0.8% Non-Aeronautical 103,949 114,980 105,400 110,467 (5,067) -4.6% Other 6,373 1,342 6,305 6,528 (223) -3.4% Total Revenues 261,776 266,274 263,599 270,090 (6,490) -2.4% Expenses Airport Expenses 87,057 92,680 88,580 98,657 10,077 10.8% Corporate 12,930 22,288 22,820 26,981 4,161 15.4% Police Costs 6,576 11,148 10,147 11,900 1,753 14.7% Other Charges/CDD 10,458 4,889 3,294 3,934 640 16.3% Operating Expenses (excl Env. Res.) 117,020 131,005 124,841 141,473 16,632 11.8% Environmental Reserve - - 12 966 954 98.8% Total Operating Expense 117,020 131,005 124,852 142,438 17,586 12.3% Net Operating Income 144,756 135,269 138,747 127,651 11,096 8.7% Non-aeronautical revenues are unfavorable year-to-date by $5M due to underperformance of Public Parking and other Landside revenues. Expenses are under budget due to expense project delays and implementation of Expense Savings Plan. 5 II. AVIATION DIVISION PERFORMANCE REPORT 9/30/09 Division Summary 2007 2008 2009 2009 Forecast/Budget Figures in $ 000s Actual Actual Forecast Budget Var $ Var % Operating Revenues 347,487 358,329 339,912 360,006 (20,094) -5.6% Expenses Payroll 82,627 89,458 80,192 84,777 4,585 5.4% Outside Services 28,900 31,928 22,085 23,737 1,652 7.0% Utilities 12,603 12,636 14,817 13,571 (1,246) -9.2% Other 8,981 13,301 10,097 9,393 (704) -7.5% Total Airport Expenses 133,110 147,323 127,190 131,478 4,287 3.3% Corporate/Capital Development 24,260 30,031 37,509 41,113 3,604 8.8% Police 14,253 15,287 14,420 15,743 1,323 8.4% O&M Exclude Env. Reserve 171,624 192,641 179,119 188,334 9,215 4.9% Savings: OPEB Reversal (5,574) 5,574 n/a Costs: VSP, HR10, Unemployment 2,934 (2,934) n/a Environmental Reserve - 2,542 1,390 1,187 (203) -17.1% Total Operating Expenses 171,624 195,183 177,869 189,521 11,652 6.1% Net Operating Income 175,864 163,146 162,043 170,485 (8,442) -5.0% Depreciation Expense 101,118 107,349 115,213 115,605 392 0.3% Non-Operating Rev/(Exp) Grants & Donations Revenues 89,692 49,461 73,652 63,276 10,376 16.4% Passenger Facility Charges 63,114 62,770 61,525 62,525 (1,000) -1.6% Customer Facility Charges 22,570 23,534 22,318 24,573 (2,255) -9.2% Other Non-operating Rev/(Exp) (80,848) (105,378) (116,013) (116,013) - 0.0% Total Non-Operating Rev/(Exp) 94,527 30,386 41,482 34,361 7,121 20.7% Total Revenue Over Expense 169,272 86,183 88,313 89,241 (929) -1.0% Operating revenues are forecasted to be $20 million unfavorable due to decline of parking transactions, rental car activity, and concessions, in addition to lower forecast revenue requirements for aeronautical cost centers. Operating expenses are forecasted to be $9.2 million favorable due to savings from furlough, delay of expense projects and corporate allocations which offset with costs for emergency generators and elevator/escalator repairs. Grants and Donations revenues are forecasted to be $10.4 million higher due to TSA grants not budgeted. 6 II. AVIATION DIVISION PERFORMANCE REPORT 9/30/09 Aeronautical Business Unit Summary 2008 2009 2009 Forecast/Budget Figures in $000s Actual Forecast Budget Var $ Var % Revenues requirement: Capital Costs 81,535 78,791 80,350 (1,559) 0.0% Operating Costs net Non-Aero 131,024 122,532 127,921 (5,389) -4.2% Total Costs 212,559 201,323 208,271 (6,948) -3.3% FIS Offset (5,250) (5,550) (5,550) - 0.0% Other Offsets (15,686) (15,109) (14,052) (1,057) 7.5% Net Revenue Requirement 191,623 180,664 188,670 (8,005) -4.2% Other Aero Revenues 12,738 13,244 14,244 (1,000) 0.0% Total Aero Revenues 204,361 193,908 202,913 (9,005) -4.4% Non-passenger Airline Costs 13,039 14,660 14,830 170 1.1% Net Pasenger Airline Costs 191,323 179,248 188,084 8,835 4.7% 2008 2009 2009 Forecast/Budget Actual Forecast Budget Var $ Var % CPE: Capital Costs / Enpl 5.07 5.13 5.09 (0.04) -0.9% Operating Costs / Enpl 8.15 7.98 8.10 0.12 1.5% Offsets (1.30) (1.34) (1.24) 0.10 -8.4% Other Aero Revenues 0.79 0.86 0.90 (0.04) -4.4% Non-passenger Airline Costs (0.81) (0.95) (0.94) (0.02) 1.7% Passenger Airline CPE 11.89 11.67 11.90 0.23 2.0% Operating costs are forecasted to be lower than budgeted due to budget savings from Expense Savings Plan in addition to savings from the pending OPEB medical reversal. The forecasted increase in passenger airline cost per enplanement (CPE) is lower than budget primarily due to large savings forecasts against enplanements which are now only slightly less than the 2009 budget. Forecasted aeronautical operating costs per enplanement of $7.98 are less than the budget of $8.10 due to cost cutting measures. 7 II. AVIATION DIVISION PERFORMANCE REPORT 9/30/09 Non-Aero Business Unit Summary 2008 2009 2009 Forecast/Budget Figures in $000s Actual Forecast Budget Var $ Var % Revenues: Public Parking 59,111 51,963 57,377 (5,413) -9.4% Rental Cars 35,592 33,850 35,867 (2,018) -5.6% Concessions 33,181 30,300 32,821 (2,521) -7.7% Other 22,644 21,196 22,224 (1,027) -4.6% Total Revenue 150,528 137,309 148,289 (10,979) -7.4% Operating Expense 61,279 55,624 60,329 4,705 7.8% Share of terminal O&M 16,396 17,323 18,105 781 4.3% Less utility internal billing (13,515) (16,848) (16,848) - 0.0% Net Operating & Maint 64,160 56,100 61,586 5,486 8.9% Net Operating Income 86,367 81,210 86,703 (5,493) -6.3% 2008 2009 2009 Forecast/Budget Actual Forecast Budget Var $ Var % Revenues / Enplanement Parking 3.67 3.38 3.63 (0.25) -6.8% Rental Car 2.21 2.20 2.27 (0.07) -2.9% Concessions 2.06 1.97 2.08 (0.10) -5.0% Other 1.41 1.38 1.41 (0.03) -1.9% Total Revenue 9.36 8.94 9.39 (0.45) -4.8% Primary Concessions Sales / Enpl 10.29 9.62 10.19 (0.57) -5.6% Public parking revenues are forecasted to continue to decline on a per enplaned passenger basis. Rental car revenues are forecasted to come in lower than budgeted due to weak rental car activity and the pending expiration of contract agreement in Q4, which will reduce minimum monthly payments. Concessions revenues are forecasted lower than budgeted due to decline in enplanements and reduced revenues on Concourses A and D due to airline moves. D. CAPITAL SPENDING RESULTS 2009 2009 Forecast/Budget 2009 Plan Figures in $000s YTD Actual Forecast Budget Var $ Var % of Finance R/W 16L/34R Reconstruction 52,631 59,631 71,000 11,369 16.0% 82,715 Rental Car Facility 34,010 92,907 40,562 (52,345) -129.0% 119,011 MT 100% Baggage Screening 9,395 10,395 18,000 7,605 42.3% 21,727 Third Runway Projects 8,649 15,052 17,281 2,229 12.9% 47,027 All Other 25,604 60,782 67,900 7,118 10.5% 77,722 Total 130,289 238,767 214,743 (24,024) -11.2% 348,202 Reduced budgeted spending by $109 million vs. plan of finance budget (31%) for 2009. Rental Car Facility restarted after over six months of suspension. 2009 Budget had anticipated claims on Baggage Screening project from contractor which Port staff successfully negotiated down. 8 III. SEAPORT DIVISION PERFORMANCE REPORT 9/30/09 Financial Summary 2008 2009 2009 Forecast/Budget $'s in 000's Actual Forecast Budget Var $ Var % Operating Revenue 85,453 86,187 90,131 (3,944) -4% Environmental Grants 8,833 850 850 0 0% Security Grants 850 1,747 3,955 (2,208) -56% Total Operating Revenues 95,136 88,784 94,935 (6,152) -6% Total Operating Expenses 44,921 45,055 51,928 6,873 13% Net Operating Income 50,215 43,729 43,007 721 2% NOI Excl Envir Grants/Reserve 47,254 46,708 45,532 1,176 3% Capital Expenditures 88,523 50,274 100,425 50,151 50% NOTE:* NOI Excl Envir Grants/Reserve is Before Depreciation Total Seaport revenues were ($2.9) million unfavorable in YTD results primarily due to Security Grant projects commencing later than assumed in budget. For the full year, Seaport is forecasting a $6.2 million unfavorable revenue variance due to later start of Security Grant projects, implementation of the Container Customer Support Package, default of tenant at Terminal 104 and the rent impact of the Terminal 30 crane cable issue. Total Operating Expenses were $8.1 million favorable through September primarily due to the implementation of the 2009 Expense Savings Plan, lower cost of the Terminal 18 maintenance dredge and the Terminal 30 upland dredge disposal projects than budgeted, and due to timing differences in planned operating expenses. For the full year, Seaport is forecasting a $6.9 million favorable expense variance due to later start of Security Grant projects, implementation of the 2009 Expense Savings Plan, lower cost of the Terminal 18 maintenance dredge and the Terminal 30 upland dredge disposal projects, and the reversal of prior year Other Post Employment Benefits (OPEB) medical related expenses. Forecasted Net Operating Income for 2009 is estimated to be $0.7 million favorable to the 2009 Budget and $6.5 million below 2008 Actual. 2008 Actual included $8.8 million in environmental cleanup grants and lower expenses due to fewer one-time expense projects. 2009 expenses include $2.3 million for the Terminal 30 upland dredge disposal project. As of September 30, 2009 total capital spending for 2009 was projected at $50.3 million or 50% of the Approved Annual Budget amount of $100.4 million. The reduction in capital spending is the result of deferring projects. A. BUSINESS EVENTS TEU volumes for Seattle Harbor are down 14.2% YTD 2009 compared to YTD 2008 levels. Total YTD 2009 volume is 1,121K TEU's. Consolidated West Coast Port results for YTD 2009 show an overall decrease in TEU volume of 17.5% compared to the same period last year. TEU Volume (in 000's) YTD 2009 YTD 2008 % change Seattle 1,121 1,307 -14.2% Tacoma 1,194 1,414 -15.6% Los Angeles 4,958 5,923 -16.3% Long Beach 3,700 4,905 -24.6% Oakland 1,507 1,704 -11.6% Vancouver 1,604 1,902 -15.6% Portland 131 187 -29.9% Prince Rupert 180 103 75.2% West Coast - Total: 14,395 17,444 -17.5% 9 III. SEAPORT DIVISION PERFORMANCE REPORT 9/30/09 Grain vessels shipped 3,912K metric tons of grain through Terminal 86 YTD 2009. Amount represents a 17.8% decrease compared to YTD 2008 record volumes, partially due to temporary closures of the Terminal 86 facility in 2009 for grain spout upgrades. Though lower than 2008 volume, actual YTD volume is 10% over 2009 budgeted volume. Market expected to be strong through the remainder of 2009. Cruise passenger for the 2009 season exceeded budget in what was projected to be a soft market for the industry--218 vessel calls with total revenue passenger counts of 875,433 ending in October. In connection with the 2009 Expense Savings Plan, the Seaport Division reduced 2009 Budgeted Operating Expenses by $1.8 million. B. KEY INDICATORS Container Volume TEU's in 000's Grain Volume Metric Tons in 000's Cruise Passengers in 000's 10 III. SEAPORT DIVISION PERFORMANCE REPORT 9/30/09 Net Operating Income By Business In $ Thousands 2008 YTD 2009 YTD 2009 YTD 2009 Bud Var Change from 2008 Actual Actual Budget $ % $ % Containers 27,794 29,076 25,477 3,599 14% 1,282 5% Container Support Props 984 455 1,046 (591) -56% (529) -54% Cruise 6,010 7,196 5,248 1,948 37% 1,186 20% Grain 3,700 3,397 2,819 578 21% (303) -8% Docks/Industrial Props 3,279 3,708 2,579 1,129 44% 429 13% Security (891) (1,088) (1,560) 472 30% (197) -22% Envir Grants/Reserve 3,859 (3,186) (1,263) (1,924) -152% (7,045) -183% Total Seaport 44,734 39,557 34,345 5,211 15% (5,177) -12% C. OPERATING RESULTS IN THOUSANDS $ In $ Thousands 2008 YTD 2009 Year-to-Date 2009 Bud Var Year-End Projections Actual Actual Budget $ % Budget Forecast Variance Operating Revenue 65,789 69,903 69,833 70 0% 90,131 86,187 (3,944) Environmental Grants 6,846 643 425 218 51% 850 850 0 Security Grants 744 207 3,392 (3,185) -94% 3,955 1,747 (2,208) Total Revenue 73,378 70,753 73,649 (2,897) -4% 94,935 88,783 (6,152) Direct Expenses 13,084 16,005 21,071 5,066 24% 27,234 23,424 3,810 Security Expense 1,406 916 4,569 3,653 80% 5,431 2,562 2,869 Environmental Reserve 2,987 3,829 1,688 (2,142) -127% 3,375 3,829 (454) Divisional Allocations 1,716 1,469 1,791 322 18% 2,378 2,275 103 Corporate Allocations 9,451 8,976 10,185 1,209 12% 13,510 12,964 545 Total Expense 28,644 31,196 39,304 8,108 21% 51,928 45,055 6,873 NOI Before Depreciation 44,734 39,557 34,345 5,211 15% 43,007 43,729 721 Depreciation 21,497 20,279 22,856 2,578 11% 30,903 30,439 464 NOI After Depreciation 23,237 19,278 11,489 7,789 68% 12,105 13,290 1,185 NOI Excl Envir Grants/Reserve* 40,875 42,743 35,608 7,135 20% 45,532 46,708 1,176 NOTE:* NOI Excl Envir Grants/Reserve is Before Depreciation Total Seaport revenues were ($2,897K) unfavorable to budget. Key variances are as follows: Containers and Support Properties - unfavorable ($2,107K). Containers ($1,776K) unfavorable. Space Rent revenue ($994K) unfavorable primarily due to later lease commencement at Terminal 30 as a result of crane cable issue. Crane Rent and Intermodal Lift Revenue favorable $108K due to higher usage of port owned cranes at T18 than budgeted and unanticipated activation of T18 intermodal yard. Operating Grant Revenue ($671K) unfavorable due to lower reimbursement from King County for Terminal 30 upland disposal of dredge materials ($425K) because the project cost less than anticipated in the budget and due to RFID grant activities that were budgeted but are no longer expected to take place this year ($389K). Support Properties ($331K) unfavorable primarily due to termination of lease at Terminal 104. 11 III. SEAPORT DIVISION PERFORMANCE REPORT 9/30/09 Cruise and Industrial Properties - favorable $2,132K. Cruise $1,205K favorable primarily due to higher than anticipated passenger volumes including sailings rerouted from West Coast/Mexico itineraries earlier in the year, as well as Savings Rent received in 2009 in excess of 2008 year-end accrual. Bulk Terminals $350K favorable due to grain volume exceeding Budget by 10%. Dock Operations $545K favorable due to a variety of sources including prior year billing adjustment for space leased by American Seafoods $88K, implementation of TWIC related security tariff charges $54K, and higher than anticipated Utility Revenue $92K. Dockage, Wharfage & Berthage revenue was also favorable $93K primarily due to higher than anticipated revenue from preferential use customers. Industrial Properties $32K favorable due to higher than expected Carnitech percentage rent ($77K), partially offset by lower than budgeted revenue from Northland lease due to lower actual CPI adjustment than assumed in budget. Security - unfavorable ($3,185K). Security Grants unfavorable ($3,185K) due to Rounds 6 and 7 grant activities commencing later than planned. Amount more than offset by corresponding favorable expense variance. Expenses were $8,108K favorable to budget. Key variances: Security favorable $3,653K primarily due to Round 6 and 7 grant activities commencing later than planned. Amount is partially offset by corresponding unfavorable revenue variance above. Environmental Reserve unfavorable ($2,142K) due to increase in expected cleanup costs and new obligating events. Outside Services favorable $4,446K largely due timing except for the lower than budgeted cost of the Terminal 30 Upland Dredge Disposal project $1,348K, Terminal 18 maintenance dredge project $770K and certain project items that were eliminated or reduced in the 2009 Expense Savings Contingency Plan $784K. Miscellaneous Expense favorable $954K due to timing of recognition and classification of expense components of T30/T91 project $525K, and Seaport Expense Contingency favorable $225K due to timing. Vehicle Operating Expense favorable $393K due to classification of the cost of the ABC Fuel's program as a non-operating Public Expense $375K. Bad Debt Expense unfavorable ($557K) due to default of tenant at Terminal 104 $304K with the remaining variance primarily due to timing. Maintenance favorable $103K due to lower overhead allocations $197K partially offset by higher direct charges for work on projects related to Cruise and Seaport Industrial Properties $94K. CDD costs, direct and allocated, unfavorable ($178K) due to more staff time spent working on Seaport projects than budgeted. Corporate costs, direct and allocated, favorable $1,415K due to implementation of cost reductions identified in the 2009 Revised Budget ~$378K with the remainder of the variance due to timing. All other variances netted to a favorable $21K or less than 1% of Total Expenses Budgeted. NOI Before Depreciation was $5,211K favorable to budget. Depreciation was $2,578K favorable to budget due to delay in booking of assets for new Terminal 91 Cruise facility, 2 month delay of in-service date for Terminal 30 container facility, and the later than expected timing of granted funded security capital projects. NOI After Depreciation was $7,789K favorable to budget. 12 III. SEAPORT DIVISION PERFORMANCE REPORT 9/30/09 FORECAST As of September 2009, Seaport anticipates ending the year $721K above budget for NOI Before Depreciation assuming that the year-end Environmental Reserve is consistent with the 2009 forecasted level. Revenue is expected to fall below budget ($6,152K) due to implementation of Container Terminal Customer Support Package, default of tenant at Terminal 104, lower cost and thus lower than expected reimbursement from King County for the Terminal 30 upland dredge disposal, 2 month later commencement of the Terminal 30 lease than budgeted and rent abatements related to the crane trench cable issue. Operating expenses are estimated to be favorable by $6,873K due to later start of Security Grant projects, implementation of the 2009 Expense Savings Plan $2,591K, lower than expected cost of the Terminal 18 Maintenance Dredge and Terminal 30 Upland Dredge Disposal projects, and reversal of prior year Other Post Employment Benefits (OPEB) Medical Expense. Favorable amounts are somewhat offset by full year unfavorable Environmental Reserve variance. CHANGE FROM 2008 ACTUAL NOI Before Depreciation decreased by ($5,177K) from 2008 with the majority of the decrease being the retroactive Environmental Grant revenue recognized in 2008 of $6,846K which exceeds the Environmental Grant revenue received in the current year by $6,202K. NOI Excluding Environmental Grants/Reserve increased by $1,868K due to increase in Container and Cruise revenue partially offset by higher expenses relating to significant expense projects in 2009 such as the T30 Upland Dredge Disposal. Container revenue increase resulted from the 2009, nine month, year-to-date impact of the increase in Eagle Rate that went into effect in July 2008 and the commencement of the T30/25 lease. Cruise revenue increase resulted from higher activity and higher rates as compared to 2008. D. CAPITAL SPENDING RESULTS---IN THOUSANDS $ 2009 2009 Variance Estimated Approved EstActs to EstActs as a 2009 Plan SEAPORT DIVISION Actual Budget Budget % of Budget of Finance Container Support Yard 0 28,900 28,900 0% 28,900 Terminal 30/91 Program 28,085 35,774 7,689 79% 46,445 Terminal 10 453 4,091 3,638 11% 4,000 Green Port Initiative 0 2,800 2,800 0% 2,800 Terminal 115 4,025 4,995 970 81% 5,800 All Other 18,811 23,865 5,054 79% 38,740 Total Seaport 51,374 100,425 49,051 51% 126,685 Comments on Key Projects: Through third quarter, Seaport spent 41% of the approved budget. Full year spending is estimated to be 51% of the Approved Budget. Projects with significant changes in spending were: Container Support Yard Acquisition of land for a container support yard has been delayed due to economic conditions. Terminal 30/91 Program Estimated spending reduced due to favorable resolution of potential risks at Terminal 91 facility resulting in not using authorized contingencies including amounts set aside for potential building foundation issues. Terminal 10 Modification of project scope has pushed out the timing of the project. Green Port Initiative After performing a financial evaluation, plans to develop Port owned decant stations have been put on an indefinite hold. nd Terminal 115 - Commission approved funding of construction for Berth 1 on June 2 . Timing of project was adjusted with some additional spending to take place in 2010. Changes between the 2009 Plan of Finance and the 2009 Approved Budget represent modifications in 2009 spending estimates made after determination of 2008 actual spending. 13 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 9/30/09 FINANCIAL SUMMARY 2008 2009 2009 Forecast/Budget In $ Thousands Actual Forecast Budget Var $ Var % Operating Revenue 34,875 30,709 30,961 (252) -1% Environmental Grants 1 150 150 0 0% Total Operating Revenue 34,877 30,859 31,111 (252) -1% Total Operating Expense 38,819 33,096 35,391 2,295 6% NOI Before Depreciation (3,943) (2,236) (4,279) 2,043 48% NOI Excl Envir Grants/Reserve (3,340) (1,472) (3,304) 2,043 62% Capital Expenditures 21,196 100,143 105,165 5,022 5% Total Real Estate Division revenues are virtually on budget for the year-to-date as a result of offsetting variances within the business groups. For the full year, Real Estate is forecasting a $0.3 million unfavorable revenue variance compared to budget due to lower occupancy at Shilshole Bay Marina and offsetting favorable and unfavorable occupancy levels at commercial property sites. Total Operating Expenses are $4.8 million favorable for the year-to-date primarily due to timing and deferrals related to the 2009 Expense "Deferral" Plan. For the full year, Real Estate is forecasting a $2.3 million favorable expense variance due to implementation of the 2009 Expense "Deferral" Plan and reversal of prior year Other Post Employment Benefits (OPEB) medical related accruals. Forecasted Net Operating Income for 2009 is estimated to be approximately $2.0 million favorable to the 2009 Budget and $1.7 million above 2008 Actual. 2008 Actuals included the write-off of costs associated with the North Bay project which were partially offset by higher activity at Bell Harbor International Conference Center and higher occupancies for leased properties. th As of the September 30 update, total capital spending for 2009 was projected at $100.1 million or 95% of the Approved Annual Budget amount of $105.2 million. The most significant project in 2009 is the Eastside Rail Corridor. A. BUSINESS EVENTS Occupancy levels at Commercial Properties were at 94% at quarter-end which is just slightly below the 95% target for the 2009 Budget and above comparable statistics for the local market. Through the 3rd quarter, moorage occupancies at Fishermen's Terminal exceeded the 2009 Budget Target. The Maritime Industrial Center, Shilshole Bay Marina, Harbor Island Marina and Bell Harbor Marina all came in below 2009 Budget Targets. In connection with the 2009 Expense "Deferral" Plan, the Real Estate Division reduced 2009 Budgeted Operating Expenses by $1.4 million, including $0.6 million in Real Estate specific expense projects budgeted in Capital Development. 14 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 9/30/09 B. KEY INDICATORS Shilshole Bay Marina Occupancy 120.0% 100.0% 2008 80.0% Actual Occupied 60.0% 2009 Budget Footage 40.0% 2009 Actual 20.0% Percent Linear 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Fishermen's Terminal Moorage Occupancy 120.0% 100.0% 2008 80.0% Actual Occupied 60.0% 2009 Budget 2009 Footage 40.0% Actual 20.0% Percent Linear 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Commercial Building 110% 98% 98% 97% 97% 100% 95% 95% 95% 95% 95% 94% 95% 90% 2008 Actual Percent Occupied 80% 2009 Target 2009 Actual 70% 60% Qtr 1 2Qtr 3Qtr 4 Qtr Net Operating Income Before Depreciation By Business through 9/30/2009 In $ Thousands 2008 YTD 2009 YTD 2009 YTD 2009 Bud Var Change from 2008 Actual Actual Budget $ % $ % Recreational Boating 1,629 1,879 1,246 633 51% 250 15% Fishing & Commercial (958) (1,211) (1,907) 696 36% (252) -26% Commercial & Third Party 2,106 1,244 (1,282) 2,526 197% (863) -41% Eastside Rail 0 (75) (361) 286 79% (75) NA RE Development & Plan (7,056) (130) (361) 230 64% 6,926 -98% Environmental Reserve (1,018) (124) (488) 363 75% 894 -88% Total Real Estate (5,297) 1,582 (3,152) 4,735 150% 6,880 -130% 15 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 9/30/09 C. OPERATING RESULTS IN THOUSAND'S $ 2008 YTD 2009 Year-to-Date 2009 Bud Var Year-End Projections In $ Thousands Actual Actual Budget $ % Budget Forecast Variance Operating Revenue 25,826 23,168 23,171 (3) 0% 30,961 30,709 (252) Environmental Grants (1,015) 0 75 (75) -100% 150 150 0 Total Revenue 24,812 23,168 23,246 (78) 0% 31,111 30,859 (252) Direct Expenses 28,945 19,908 23,997 4,089 17% 31,821 30,260 1,561 Environmental Reserve (13) 124 563 438 78% 1,125 1,125 0 Divisional Allocations (2,494) (2,208) (2,652) (444) -17% (3,515) (3,399) (116) Corporate Allocations 3,671 3,762 4,491 729 16% 5,960 5,110 850 Total Expense 30,109 21,586 26,399 4,813 18% 35,391 33,096 2,295 NOI Before Depreciation (5,297) 1,582 (3,152) 4,735 150% (4,279) (2,236) 2,043 Depreciation 7,518 7,417 7,896 478 6% 10,528 9,890 638 NOI After Depreciation (12,815) (5,835) (11,048) 5,213 47% (14,807) (12,126) 1,405 NOI Excl Envir Grants/Reserve* (4,296) 1,707 (2,665) 4,371 164% (3,304) (1,261) 2,043 NOTE:* NOI Excl Envir Grants/Reserve is Before Depreciation Total Real Estate revenues were ($78K) unfavorable to budget. Key variances are as follows: Harbor Services: unfavorable ($165K) Recreational Boating unfavorable ($164K) primarily due to higher than budgeted vacancy at SBM. Fishing and Commercial was in line with budget. Portfolio Management: favorable $110K Commercial Properties unfavorable ($62K) due to tenants vacating their premises at Pier 2 and Tsubota, lower than anticipated concession rent at Pier 66 Bell Street and lower than budgeted utility revenue from the Maritime Industrial Center. Unfavorable variances were partially offset by above budget occupancy at T-102. Third Party Managed Properties favorable $171K due to higher than anticipated activity at Bell Harbor International Conference Center $351K partially offset by lower transient and monthly parking revenue at the Bell Street Garage ($58K) and by fewer memberships and lower activity at the World Trade Center Club ($127K). Eastside Rail Corridor: unfavorable ($138K) Eastside Rail Corridor unfavorable ($138K) due to revenue expectations in the 2009 Budget based on the assumption of acquiring the property prior to 2009. RE Development and Planning: favorable $188K Terminal 91 General Industrial favorable $188K due to two tenants not anticipated to remain at T91 in the budget that have continued to occupy on a month to month basis $205K. The positive variance is partially offset by lower than anticipated utility revenue. Environmental Grants: unfavorable ($75K) No environmental grant revenue related to Real Estate Division properties thus far in 2009. 16 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 9/30/09 Expenses were $4,813K favorable to budget. Key variances: Environmental Reserve favorable $438K due to lower cleanup costs than assumed in Budget. Third Party Management Expense favorable $666K due to cost savings at Bell Harbor International Conference Center and due to cost savings and lower activity at the World Trade Center Club. Outside Services (excluding Maintenance, Corporate and Capital Development) favorable $1,405K due to delay in closing Eastside Rail Corridor $300K and due to timing including charges from Environmental Services, broker fees and tenant improvement expenses budgeted for the World Trade Center West Building. Maintenance expenses favorable $713K primarily due to timing, more work charged to capital than budgeted and the deferral of some work in connection with the 2009 Expense "Deferral" Plan. Corporate and Capital Development costs direct and allocated favorable $1,633K primarily due to the cancellation/deferral of projects in connection with the 2009 Expense "Deferral" Plan $1,127K and timing. All other variances netted to an unfavorable ($42K) or less than 1% of Total Expenses Budgeted. NOI BEFORE DEPRECIATION was $4,735K favorable to Budget. Depreciation was $478K favorable primarily due to overstatement of Harbor Service's Depreciation in the Budget. NOI AFTER DEPRECIATION was $5,213K favorable to Budget. FORECAST Real Estate anticipates ending the year $2,043K above budget for NOI Before Depreciation assuming that the year-end environmental reserve adjustments are consistent with budget. Revenue is expected to come in below Budget by ($252K) primarily due to lower occupancies at Shilshole Bay Marina. Operating expenses are estimated to be favorable by $2,295K primarily due implementation of the 2009 Expense "Deferral" Plan and reversal of prior year Other Post Employment Benefits (OPEB) medical accruals. NOI After Depreciation is currently estimated to end the year $1,405K favorable to budget. NOI Excluding Environmental Grants and Reserve, is expected to come in at $2,043K favorable to budget. CHANGE FROM 2008 ACTUAL Net Operating Income Before Depreciation increased by $6,880K between September year-to-date 2008 and 2009. Operating Revenue decreased by $2,658K due to lower activity at Bell Harbor International Conference Center and the Bell Street Garage, partially offset by higher revenues at Shilshole Bay Marina due to construction completion. Environmental Grant Revenue was reported at a negative amount of ($1,015K) in 2008 due to an accrual error. Expenses decreased by $8,523K in 2009 primarily due to the expensing in 2008 of capitalized costs associated with the North Bay development project $7,224K, less activity at Bell Harbor International Conference Center and the 2009 Expense "Deferral" Plan. These favorable variances were partially offset by higher expenses at Shilshole Bay Marina related to higher occupancy. 17 IV. REAL ESTATE DIVISION PERFORMANCE REPORT 9/30/09 D. CAPITAL SPENDING RESULTS---IN THOUSANDS $ 2009 2009 Variance Estimated Approved EstActs to EstActs as a 2009 Plan of REAL ESTATE DIVISION Actual Budget Budget % of Budget Finance Eastside Rail Corridor 96,302 96,302 0 100% 106,955 Small Projects 778 1,753 975 44% 1,665 RE Division Green Initiative 0 1,000 1,000 0% 1,000 Pier 69 North Apron Piling Cathodic 25 1,000 975 3% 1,060 Tenant Improvements - Capital 346 900 554 38% 800 All Other 2,692 4,210 1,518 64% 4,809 Total Real Estate 100,143 105,165 5,022 95% 116,289 Comments on Key Projects: Through third quarter, the Real Estate Division spent 1% of the approved budget. Full year spending is estimated to be 95% of the Approved Budget. Projects with significant changes in spending were: Eastside Rail Corridor No change in estimated spending, but acquisition deadline deferred to 12/15/09. Small Projects Workload issues due to insufficient staffing have pushed the start of some projects into later in 2009 with completion in 2010 or entirely into 2010. Green Port Initiative Construction of a stormwater improvement project now expected to take place in 2010. Pier 69 North Apron Piling Cathodic System Project pushed back until 2010. Tenant Improvements Capital Projects pushed back until 2010. Changes between the 2009 Plan of Finance and the 2009 Approved Budget represent modifications in 2009 spending estimates made after determination of 2008 actual spending. 18 V. CAPITAL DEVELOPMENT DIVISION PERFORMANCE REPORT 9/30/09 A. BUSINESS EVENTS Mowat was the low bidder at 2.44% below the engineer's estimate for the East Marginal Way Grade Separation (EMWGS) Project. T115 Received Berth 1 permits. Construction awarded to Pacific Pile and Marine. Steel piling bids were approximately 10% below the engineer's estimate. T-30 Apron Upgrade SSA commenced container operation on August 3, 2009 - first vessel call on August 9, 2009. Returned $23M in AV CIP project savings. Runway 16L was reopened ahead of schedule and under budget after complete rebuilding. Working with OSR in development of the small business program B. KEY INDICATORS rd Cost Growth on Major Construction for projects completed in 3 Quarter (RE Completion memos issued). PROJECT NON- DISCRETIONARY DISCRETIONARY CHANGE CHANGE 3RD RUNWAY 2007-08 CONSTRUCTION 1.6% 2.6% T-86 GRAIN SPOUT REPLACEMENTS 3.7% 0% T-91 BUILDING W-40 PARTIAL DEMOLITION PROJECT 1.3% 0% T-18 CRANE 36 DEMOLITION 3.0% 0% STAGE 1 MECHANICAL ENERGY CONSERVATION PROJECT 1.2% -0.7% MAIN TERMINAL ROOF REPLACEMENT 1.5% 0% T-91 CRUISE SHIP TERMINAL 10.3% 2.9% EMWGS SR 99 COLUMN RELOCATION 0% - 83.2% EMWGS COLUMN RELOCATION WATERLINE 32.7% - 1.4% C-1 100% BAGGAGE SCREENING 7.8% 38.2% SOUTH CRUISE INPUT PROJECT 9.9% 0% New Construction Management Standard Operation Procedure (SOP) on Field Directives being developed. Review of revised Submittal SOP and new SOP #41 on Project Closeout. rd New Service Agreements in the 3 Quarter are: CONTRACT CONTRACT DOLLAR CATEGORY NUMBER AMOUNT NAVIGANT CONSULTING P-00316114 $186,000 CONSTRUCTION AUDITING FOR RCF PROJECT APPLIED PROFESSIONAL SERVICES S-00316202 $100,000 UTILITY LOCATING SERVICE Small Business Participation: PCS made WBE payments of 11%, SBE payments of 11.3%, MBE payments of 1.2 % and DBE payments of 0.2% for a total 23.7% in Small Business Participation at the end of the third Quarter. Goal: 30% PCS Small Business Participation. 19 V. CAPITAL DEVELOPMENT DIVISION PERFORMANCE REPORT 9/30/09 C. OPERATING RESULTS IN THOUSANDS $ 2008 YTD 2009 YTD 2009 Bud Var. Year-End Projections In $ Thousands Actual Actual Budget $ % Budget Revised Forecast Var. Aviation Project Management Group 597 419 572 152 26.6% 761 721 759 2 Port Construction Services 2,854 1,094 1,059 (35) -3.3% 1,449 1,431 1,384 65 Engineering 906 724 973 250 25.6% 1,351 1,298 1,401 (50) Seaport Project Management Group 560 542 1,096 554 50.5% 1,400 845 917 483 Central Procurement Office 916 1,179 1,110 (70) -6.3% 1,494 1,636 1,664 (170) Capital Development Division Admin. 34 249 421 172 40.9% 554 294 276 278 Total CDD 5,868 4,207 5,231 1,024 19.6% 7,010 6,226 6,401 609 The total YTD budget variance is $1,024K and the year-end variance forecast is $609K. PCS negative variance due to less capital and more expense work/expense project overhead than budgeted, plus the absorption of the full rent at Kilroy after CPO/Construction Services moved to Logistics. CPO negative variance due to FTE expense budgeted in another org but charged to CPO. Positive variances throughout the division are primarily through unfilled positions, implementation of Revised Budget features (i.e., furloughs, reduced travel, etc.), delayed or reduced purchase of equipment and supplies. Positive variances throughout the division are partially reduced (but not totally offset) by less capital work than budgeted, resulting in increased Salary & Budget, Expense Project Overhead and reduced transfer to Capital. 20 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 9/30/09 A. BUSINESS EVENTS Planned and managed a media event to celebrate the inaugural flight of Icelandair. Planned and managed a media event to celebrate the re-start of the Rental Car Facility. Planned and managed multiple media events to celebrate the opening of 16L/34R runway. In partnership with Human Resources, health care premium sharing and wellness rewards have been established for 2010. The Port's new LMS (Learning Management System) has been selected as the "Best Launch to an Organization" at the Plateau annual conference. ICT delivered numerous projects that improved operations, cost effectiveness, and employee productivity. This included Infrastructure enhancements and upgrades needed to increase availability and reliability, and to support continued rapid growth in demand. Finance and Budget began implementation of new banking platform. Implemented the Concur expense system "Cognos", a new and enhanced reporting tool, associated with AFR's implementation late last year of Bank of America's new Concur expense reporting and reimbursement system, a Port-wide web-based online travel, corporate credit card and expense reimbursement system, which replaced the EAGLS system. B. KEY INDICATORS Program/Raptor Relocation program and our response to the US Airways bird strike garnered a second place award from ACI-NA in the Public Relations Campaign category. Received extensive local, regional, national, and international coverage of our Avian Radar/Wildlife Management. Port's first exclusively online Annual Report has received nearly 1,000 views from 16 different countries. Port's public Web site visits at 2.67 million over the past year, up 20.67 percent over previous period More than 200 attended the first three Port 101 series events: Airport, Duwamish River and Cruise. Managed 20 delegation visits and tours at Seaport and P69. Occupational injury rate decreased slightly from 5.89 in the third quarter of 2008 to 5.48 in the second quarter of 2009. Injury cost per worker hour has also decreased from $1.13 in 2008 to $1.08 in 2009. 98% employee completion rate of the health assessment. Opened 117 employment requisitions and processed 4,365 applications. Approximately 48 individual job evaluations have been finalized as of 9/30/09. ICT continued virtualization and data center consolidation strategies have offset over $2 million in new hardware and hardware refresh costs to date. Investment portfolio successfully managed within policy limitations. Completed and presented the following audits to the Audit Committee in the third quarter. o Police Department o Fireworks Concession o Aviation Security o Aviation Acquisition & Relocation o Hertz, Avis and Budget Rental Cars East Marginal Way: Phase 1 - advertised and received bids; Phase 2 - secured FMSIB listing for $3.5M and continued project definition with WSDOT and partners. Police Department Indicators: January Sept. CFS's (Calls for Service) 47,42 4 January Sept Arrests No Warrant 441 January Sept Arrests Warrant 626 21 VI. CORPORATE PROF. & TECHNICAL SERVICES PERFORMANCE REPORT 9/30/09 C. OPERATING RESULTS-- NET OPERATING EXPENSE (in THOUSANDS $) [REPORTED BY ORG] 2008 YTD 2009 YTD 2009 Bud Var. Year-End Projections In $ Thousands Actual Actual Budget $ % Budget Revised Forecast Var. Total Revenues 840 986 1,129 (144) -12.7% 1,470 1,470 1,417 (53) Executive 1,250 1,056 1,173 117 10.0% 1,540 1,449 1,449 92 Commission 704 608 675 67 9.9% 867 844 844 22 Legal 1,992 1,904 2,039 135 6.6% 2,703 2,638 2,720 (16) Risk Services 2,110 1,913 2,150 237 11.0% 2,861 2,838 2,778 84 Health & Safety Services 761 715 744 29 3.9% 985 947 927 58 Public Affairs 2,915 2,393 3,304 911 27.6% 4,270 3,565 3,565 705 External Affairs 808 905 1,021 116 11.4% 1,347 1,249 1,249 98 Economic & Trade Development 1,006 1,002 1,584 581 36.7% 2,099 1,638 1,638 462 Human Resources & Development 2,969 2,668 3,164 496 15.7% 4,165 3,926 3,766 398 Labor Relations 500 458 541 83 15.4% 731 689 663 69 Information & Communications Technology 9,423 12,538 14,793 2,255 15.2% 19,658 18,404 18,404 1,253 Finance & Budget 1,197 1,102 1,296 194 15.0% 1,719 1,645 1,482 236 Accounting & Financial Reporting Services 4,325 4,441 4,882 440 9.0% 6,541 6,352 6,286 255 Internal Audit 502 758 895 137 15.3% 1,211 1,164 1,090 121 Office of Social Responsibility 606 1,062 1,271 209 16.5% 1,647 1,401 1,387 259 Regional Transportation 280 315 374 59 15.8% 498 461 463 36 Police 13,981 13,055 15,100 2,045 13.5% 19,979 18,379 18,371 1,607 Industrial Development Corporation 10 10 - (10) 0.0% - - 10 (10) Contingency 2,784 396 563 166 29.6% 750 750 750 - Total Expenses 48,126 47,299 55,568 8,269 14.9% 73,572 68,338 67,842 5,730 Corporate Professional and Technical Services performance for the first nine months of 2009 was $8.3 million or 14.9% favorable compared to the approved budget and $827 thousand or 1.7% lower than the same period a year ago. The $8.3 million favorable variance is due primarily to timing of spending and to the implementation of the 2009 Expense Savings Plan. There aren't any major variances to report on since all departments are favorable. However, the unfavorable variance of $10 thousand in Industrial Development Corporation is due to charges incurred for the IDC/ET Fellowship Program. Year-end spending is projected to be $67.8 million, which is $5.7 million below the approved budget. D. CAPITAL SPENDING RESULTS ($ Millions) Annual Results: 2009 Plan of Finance $ 12.8 2009 Approved Budget $ 15.9 2009 Estimated/Actuals $ 11.3 Variance (Budget vs Estimated/Actuals) $ 4.6 22
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