7b presentation
ITEM NO: __7b_Supp_2___ DATE OF MEETING: February 25, 2014 REVISED: February 25, 2014 Port of Seattle 2013 Performance Report Commission Briefing February 25, 2014 2013 Major Revenue Variances Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Aero Revenues 233,000 238,735 245,623 (6,888) -2.8% 5,734 2.5% SLOA III Incentive - 14,304 - 14,304 0.0% 14,304 0.0% Seaport Security Grants 2,226 - 173 (173) -100.0% (2,226) -100.0% Public Parking 49,781 52,205 50,948 1,257 2.5% 2,424 4.9% Rental Cars 38,072 39,860 37,972 1,888 5.0% 1,788 4.7% Concessions 37,998 41,311 41,263 49 0.1% 3,313 8.7% Ground Transportation 7,900 7,958 7,267 691 9.5% 59 0.7% Airport Commercial Properties 5,700 6,019 5,536 483 8.7% 319 5.6% Utilities 7,206 6,332 6,871 (539) -7.8% (874) -12.1% Container 64,853 63,046 63,833 (788) -1.2% (1,808) -2.8% Seaport Industrial Properties 15,279 16,330 15,878 451 2.8% 1,051 6.9% Cruise 13,051 13,216 12,881 335 2.6% 166 1.3% Grain 3,749 1,634 3,654 (2,020) -55.3% (2,115) -56.4% Dock 4,750 5,330 4,357 973 22.3% 580 12.2% Recreational Boating 8,979 9,220 8,924 296 3.3% 241 2.7% Commercial Properties 9,846 9,998 10,225 (227) -2.2% 151 1.5% Conference & Event Centers 8,863 7,958 9,740 (1,782) -18.3% (905) -10.2% Other 10,454 11,222 10,488 735 7.0% 769 7.4% Subtotal 286,480 291,639 289,837 1,802 0.6% 5,159 1.8% TOTAL 521,706 544,678 535,633 9,045 1.7% 22,972 4.4% 2 2013 Major Expense Variances Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Salaries & Benefits 93,657 96,635 101,451 4,816 4.7% 2,978 3.2% Wages & Benefits 87,917 92,647 92,384 (263) -0.3% 4,730 5.4% Payroll to Capital Projects 18,527 20,112 22,698 2,586 11.4% 1,585 8.6% Equipment Expense 6,752 7,091 6,117 (974) -15.9% 340 5.0% Supplies & Stock 8,477 7,251 6,586 (666) -10.1% (1,226) -14.5% Outside Services 49,920 54,882 69,790 14,908 21.4% 4,962 9.9% Utilities 22,408 22,631 22,256 (375) -1.7% 223 1.0% Travel & Other Employee Exps 4,171 4,183 5,788 1,606 27.7% 11 0.3% Promotional Expenses 1,159 1,410 1,592 181 11.4% 251 21.7% Other Expenses 32,698 28,730 28,459 (271) -1.0% (3,968) -12.1% Charges to Capital Projects (27,518) (28,490) (32,998) (4,508) 13.7% (972) 3.5% TOTAL 298,169 307,083 324,123 17,040 5.3% 8,914 3.0% 3 2013 Operating Income Summary Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Aeronautical Revenues 233,000 238,735 245,623 (6,888) -2.8% 5,734 2.5% SLOA III Incentive - 14,304 - 14,304 0.0% 14,304 0.0% Other Operating Revenues 288,706 291,639 290,010 1,629 0.6% 2,933 1.0% Total Operating Revenues 521,706 544,678 535,633 9,045 1.7% 22,972 4.4% Total Operating Expenses 298,169 307,083 324,123 17,040 5.3% 8,914 3.0% NOI before Depreciation 223,537 237,595 211,510 26,085 12.3% 14,058 6.3% Depreciation 167,279 171,361 171,510 149 0.1% 4,082 2.4% NOI after Depreciation 56,258 66,234 40,000 26,234 65.6% 9,976 17.7% Income before Depreciation was $237.6M, $26.1M higher than budget and $14.0M higher than 2012 actual. Income after Depreciation was $66.2M, $26.2M higher than budget and $10.0M higher than 2012 actual. 4 Net Operating Income Comparison Operating Revenues, Operating Expenses and NOI 600 500 The Port generated a In Millions of Dollars record $544.7M operating revenue in 400 2013. 300 NOI before depreciation for 2013 was $237.6M, also a record. 200 100 - 2006 2007 2008 2009 2010 2011 2012 2013 Other Operating Revenues Aeronautical Revenues Total Operating Expenses NOI 5 Comprehensive Financial Summary Fav (UnFav) 2012 2013 2013 Rvsd Rvsd Bud Variance ($ in 000's) Actual Actual Budget $ % Explanation Revenues 1. Operating Revenues 521,706 544,678 535,633 9,045 1.7% See details in the previous slides 2. Tax Levy 72,678 72,738 73,000 (262) -0.4% In line with budget 3. PFCs 62,385 64,661 64,844 (182) -0.3% In line with budget 4. CFCs 20,577 20,389 20,553 (163) -0.8% In line with budget 5. Fuel Hydrant 8,123 7,270 7,839 (568) -7.3% 6. Non-Capital Grants & Donations 3,349 3,377 1,909 1,468 76.9% More contributions than budgeted 7. Capital Contributions 30,714 20,838 17,068 3,769 22.1% Unbudgeted contribution for T46 8. Interest Income 8,172 (1,107) 7,296 (8,403) -115.2% Due to unrealized loss on investments Total 727,704 732,845 728,142 4,703 0.6% Expenses 1. O&M Expense 298,169 307,083 324,123 17,040 5.3% See details in the previous slides 2. Depreciation 167,279 171,361 171,510 149 0.1% In line with budget 3. Revenue Bond Interest Expense 122,170 115,316 129,314 13,999 10.8% 4. GO Bond Interest Expense 14,447 11,479 13,291 1,812 13.6% Savings from bond refunding 5. PFC Bond Interest Expense 6,778 6,212 6,367 155 2.4% In line with budget 6. Public Expense 22,876 5,640 4,469 (1,171) -26.2% More donations than budgeted 7. Non-Op Environmental Expense 14,358 4,765 4,800 35 0.7% In line with budget 8. Other Non-Op Rev/Expense 25,749 452 3,972 3,520 88.6% Environmental insurance payments Total 671,826 622,307 657,846 35,539 5.4% Retro Adjustment to Net Position 30,898 - - - 0.0% Increase In Net Assets 24,980 110,537 70,295 40,242 57.2% 2013 Total Revenues were $732.8M, $13.7M higher than the budget and $5.1M higher than 2012 actual. 2013 Total Expenses were $622.3M, $35.5M lower than the budget and $49.5M lower than 2012 actual. Change in Net Assets for 2013 was $110.5M, $40.2M above the budget but $85.5M higher than 2012 actual. 6 Capital Spending by Division 2012 2013 2013 Budget Division Actual Actual Budget Variance ($ in millions) Aviation 81.8 108.8 174.7 65.8 Seaport 10.8 5.7 11.1 5.5 Real Estate 2.3 6.1 12.2 6.1 Corporate & CDD 4.2 9.7 15.8 6.1 Total 99.2 130.2 213.8 83.5 Capital spending for each division came in below budget in 2013. Total capital spending was $130.2M for 2013, $82.7M lower than budget. 7 Aviation 2013 Performance Report Commission Briefing February 25, 2014 Aviation Business Highlights Business events: ' New airline agreement (SLOA III) as of November 2013, effective retroactive to 1/1/13 ' Airline realignment largely complete Overview: ' Enplaned passengers up 4.7% over 2012 (3.0% adjusting for non-revenue passengers) ' Operating expenses below budget by $11.9 million Airport baseline O&M 4.4% below budget, and flat compared to 2012 ' Non-Airline revenues up 5.1% over 2012, 2.7% above 2013 budget ' Significant reduction in airline costs due to new airline agreement (SLOA III) 2013 CPE of $11.90 vs. $13.23 in 2012, 2013 budget of $13.65 Revenue sharing of $9.7 million ' Capital program: 2013 spending of $109 million, or 62% of the 2013 annual budget 9 Activity 2012 2013 % Change Enplaned Passengers (000s) Domestic 14,983 15,604 4.1% International 1,614 1,772 9.8% Total 16,597 17,376 4.7% Operations 309,597 317,186 2.5% Landed Weight (million lbs.) Cargo 1,291 1,387 7.5% All other 18,696 19,562 4.6% Total 19,987 20,949 4.8% Cargo - metric tons Domestic freight 155,220 155,867 0.4% International freight 82,090 88,580 7.9% Mail 46,299 48,261 4.2% Total 283,609 292,708 3.2% 2012 passenger figures do not include non-revenue passengers. Comparable year-over-year change is 3.0%. 10 Operating Expenses 2012 2013 2013 Fav (UnFav) Year-end ForecastIncr (Decr) Revised Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % n/a $ - % Operating Expenses: n/a - Payroll 87,654 91,285 94,210 2,926 3.1% 3,630 4.1% Outside Services 24,954 25,668 28,951 3,283 11.3% 715 2.9% Utilities 13,671 13,025 12,625 (400) -3.2% (646) -4.7% Other Airport Expenses 19,972 15,900 16,760 860 5.1% (4,072) -20.4% Baseline Airport Expenses 146,252 145,878 152,547 6,669 4.4%n/a (373) - -0.3% Airline Realignment (1), (2) 4,867 10,462 16,069 5,608 34.9% 5,595 115.0% Environmental Remediation Liability 5,321 7,345 4,615 (2,730) -59.2%n/a 2,024 - 38.0% Total Airport Expenses (1) 156,439 163,685 173,232 9,547 5.5% 7,246 4.6% Corporate (3) 34,239 35,581 36,965 1,383 3.7% 1,342 3.9% Police Costs 16,156 16,600 16,699 100 0.6% 443 2.7% Capital Development/Other Expenses (3) 9,730 10,042 10,888 846 7.8% 311 3.2% Total Operating Expenses 216,565 225,908 237,784 11,876 5.0%n/a 9,343 - 4.3% Notes: (1) Includes Airline Realignment costs incurred by other Divisions (2) Excludes Environmental Remediation Liability expense related to Airline Realignment (3) Reduced by Airline Realignment costs reflected above 11 Aeronautical Business 2012 2013 2013 Fav (UnFav) Incr (Decr) Revised Rvsd Bud Change from 2012 $ in 000's Actual Actual Budget $ % $ % Revenues: Movement Area 71,100 Apron Area 7,907 Terminal Rents 135,422 Federal Inspection Services (FIS) 7,771 Total Rate Base Revenues 222,199 Commercial Area 8,373 Subtotal before Revenue Sharing 233,000 230,572 245,623 (15,051) -6.1% (2,428) -1.0% SLOA II Other 17,905 17,905 n/a 17,905 Revenue Sharing (9,743) (9,743) n/a (9,743) n/a Total Airline Revenues 233,000 238,735 245,623 (6,888) -2.8% 5,734 2.5% Operating Expense 147,032 151,963 157,662 5,700 3.6% 4,931 3.4% Net Operating Income 85,968 86,772 87,960 (1,188) -1.4% 804 0.9% Debt Service (77,922) (81,395) (78,069) (3,326) 4.3% (3,473) 4.5% Net Cash Flow 8,046 5,377 9,891 (4,514) -45.6% (2,670) -33.2% 12 Non-Airline Business 2012 2013 2013 Fav (UnFav) Incr (Decr) Revised Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Non-Aero Revenues Rental Car 38,072 39,860 37,972 1,888 5.0% 1,788 4.7% Public Parking 49,781 52,205 50,948 1,257 2.5% 2,424 4.9% Ground Transportation 7,900 7,958 7,267 691 9.5% 59 0.7% Concessions 37,998 41,311 40,528 784 1.9% 3,313 8.7% Other 19,273 19,431 19,848 (417) -2.1% 159 0.8% Total Non-Aero Revenues 153,022 160,765 156,563 4,203 2.7% 7,743 5.1% Non-Aero Expenses RCF Operating Expense 6,196 6,481 7,771 1,289 16.6% 285 4.6% Operating Expense 64,855 64,704 67,532 2,828 4.2% (151) -0.2% Share of terminal O&M 18,366 20,054 21,436 1,381 6.4% 1,688 9.2% Less utility internal billing (19,883) (17,294) (17,295) (1) 0.0% 2,589 -13.0% Operating Expense 69,533 73,945 79,443 5,498 6.9% 4,412 6.3% Net Operating Income 83,489 86,820 77,120 9,700 12.6% 3,331 4.0% Less: CFC Surplus (3,702) (5,005) (3,465) (1,540) 44.5% (1,303) 35.2% Adjusted Non-Aero NOI 79,787 81,815 73,655 8,160 11.1% 2,028 2.5% Debt Service (43,166) (46,435) (48,824) 2,389 -4.9% (3,269) 7.6% Net Cash Flow 36,621 35,380 24,831 10,549 42.5% (1,241) -3.4% Key Measures Total Revenues / Enpl 9.22 9.25 9.20 0.05 0.6% 0.03 0.3% Primary Concessions Sales / Enpl 10.91 11.23 11.25 (0.02) -0.2% 0.32 2.9% 13 Summary Results and Key Measures 2012 2013 2013 Fav (UnFav) Incr (Decr) Revised Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Operating Revenues: Aeronautical Revenues 233,000 238,735 245,623 (6,888) -2.8% 5,734 2.5% SLOA III Incentive Straight Line Adj 14,304 (5) 14,304 14,304 Non-Aeronautical Revenues 153,022 160,765 156,563 4,203 2.7% 7,743 5.1% Total Operating Revenues 386,023 413,804 402,186 11,618 2.9% 27,781 7.2% Total Operating Expense 216,565 225,908 237,784 11,876 5.0% 9,343 4.3% Net Operating Income 169,458 187,896 164,402 23,494 14.3% 18,439 10.9% Net Non-Operating items paid from ADF (183) (4,045) 1,549 (5,594) -361.1% (3,862) 2110.7% SLOA III Incentive Straight Line Adj (14,304) (14,304) (14,304) Debt Service (121,087) (127,831) (126,894) (937) -0.7% (6,744) 5.6% Net Cash Flow 48,188 41,716 39,057 2,659 6.8% (6,471) -13.4% Key Measures Enplaned Passengers (in 000's) 16,597 17,376 17,017 360 2.1% 779 4.7% CPE after Revenue Sharing ($) 13.23 11.90 13.65 1.75 12.8% (1.33) -10.1% Debt Service Coverage (before Revenue Sharing) 1.40 1.40 1.31 0.09 6.9% - 0.0% Debt Service Coverage (after Revenue Sharing) 1.33 n/a n/a Days cash on hand (10 months = 304 days) 462 437 304 133 43.8% (25) -5.4% Debt per enplaned passenger 153 141 145 4 2.8% (12) -7.8% 14 Capital Budget $ in 000's 2013 2013 Budget Variance Description Actual Budget $ % Highline School Insulation 0 12,363 12,363 100.0% Convert Ticket Zone 2 Pushback 3 5,500 5,497 99.9% Doug Fox Site Improvements 454 3,870 3,416 88.3% NS NSAT Renovations & NSTS Lobbies 3,539 6,700 3,161 47.2% Rental Car Facility Construction 5,030 8,038 3,008 37.4% Convert Ticket Zone 3 FlowThru 10,563 10,750 187 1.7% Cent Plant Preconditioned Air 6,187 5,385 (802) -14.9% GSE Electrical Chrg Stations 10,396 9,050 (1,346) -14.9% All Other 72,669 112,995 40,326 35.7% Total Spending 108,841 174,651 65,810 37.7% Insulation project for Highline School was delayed by the school district. Spending on the Zone 2 ticket counter project for United has been accrued but is not reflected in Project Costing. 15 Seaport 2013 Performance Report Commission Briefing February 25, 2014 Seaport 2013 Business Overview Net Operating Income exceeded budget by $.5 million Business Volume TEU Volume was 1,593K, down 16% from 2012. Grain volume was at 1,351K metric tons, down 57% from 2012 and 60% under 2013 budget. The 2013 cruise season included 870,994 passengers and 187 sailings. Ships sailed at 106% occupancy. Activated 1 new Foreign Trade Zone. Truck Radio Frequency Identification successfully implemented. Environmental Adopted 2013 update to Northwest Ports Clean Air Strategy and began implementation by obtaining grants to provide ScRAPS incentives for a total of 180 trucks. Terminal 117 and Terminal 91 clean up projects underway. $5.4 million in clean-up project costs were recovered from grants and insurance. 17 Seaport 2013 Financial Summary Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Budget Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Operating Revenue 101,715 99,586 100,603 (1,017) -1% (2,129) -2% Security Grants 2,226 0 173 (173) -100% (2,226) -100% Total Revenues 103,941 99,586 100,777 (1,190) -1% (4,355) -4% Seaport Expenses (excl env srvs) 13,684 14,225 14,971 745 5% 542 4% Environmental Services 2,207 2,270 2,675 404 15% 64 3% Maintenance Expenses 6,040 6,392 6,076 (316) -5% 352 6% P69 Facilities Expenses 532 510 526 16 3% (22) -4% Other RE Expenses 233 290 353 64 18% 56 24% CDD Expenses 4,244 3,583 3,475 (108) -3% (661) -16% Police Expenses 3,969 4,173 4,223 49 1% 204 5% Corporate Expenses 11,538 11,736 12,678 941 7% 198 2% Security Grant Expense 2,227 23 0 (23) NA (2,204) -99% Envir Remed Liability 26 1,248 1,170 (78) -7% 1,222 4719% Total Expenses 44,700 44,452 46,147 1,695 4% (248) -1% Net Operating Income 59,241 55,135 54,630 505 1% (4,107) -7% Revenue Variance: Grain Revenue: ($2,020K) volume came in 60% below budget due to market conditions. 18 Seaport Business Groups NOI Before Depreciation 2013 Fav (UnFav) Incr (Decr) 2012 2013 Revised 2013 Rvsd Bud Var Change from 2012 $ in 000's Actual Actual Budget $ % $ % Containers 44,613 42,142 41,550 592 1% (2,471) -6% Grain 2,473 407 2,232 (1,825) -82% (2,066) -84% Seaport Industrial Props 6,290 7,269 6,801 468 7% 979 16% Cruise 7,040 7,117 6,786 331 5% 76 1% Maritime Operations (340) 220 (961) 1,181 123% 560 165% Security (808) (771) (608) (163) -27% 37 5% Env Grants/Remed Liab/Oth (27) (1,249) (1,170) (79) -7% (1,222) -4575% Total Seaport 59,241 55,135 54,630 505 1% (4,107) -7% Significant Variances: Grain: Revenue unfavorable variance as a result of volume 60% below budget due to market conditions. Maritime Operations: Favorable moorage and wharfage revenue. 19 Seaport Capital 2013 2013 2013 Budget Variance $ in 000's Actual Budget $ % Seaport $5,673 $11,129 $5,456 49% Significant Variances: T46 Dock Rehabilitation - $1.5M moved out due to reprioritization of T46 projects. Pier 66 Apron Pile Wrap $.8M timing extended into 2014. Pier 34 Mooring Dolphins - $.5M timing of project pushed out 1 year. Terminal 91 Lighting Upgrade $.5K majority of work moved out to 2014. 20 Real Estate 2013 Performance Report Commission Briefing February 25, 2014 Real Estate 2013 Business Overview Full Year Net Operating Income exceeded budget by $1,821K Occupancy Rates/Activity Commercial property at 91% occupancy, below target of 92% but above 2013 Seattle market average of 88%. Marinas: Fishermen's Terminal and Maritime Industrial Center at 78% average occupancy, on target. Recreational marinas at 96%, above target of 92%. Conference and Event Center activity below budget due to significant new competitive challenges and perceived impact of waterfront transportation projects. Real Estate Development & Planning Closed on the sale of the T91 West Yard site to King County and City of Seattle. Selected Panattoni as the developer for the Des Moines Creek Business Park project and executed a letter of intent. Marine Maintenance Completed the Deferred Maintenance Correction program. Achieved a safety first: Zero work days lost due to accidents. Snohomish County Council approved purchase of Eastside Rail Corridor. 22 Real Estate 2013 Financial Summary Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Budget Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Revenue 22,445 22,882 22,776 106 0% 438 2% Conf & Event Ctr Revenue 8,863 7,958 9,740 (1,782) -18% (905) -10% Total Revenue 31,308 30,840 32,516 (1,675) -5% (468) -1% Real Estate Exp(excl Conf, Maint,P69) 10,564 10,377 11,300 923 8% (187) -2% Conf & Event Ctr Expense 6,816 6,474 7,642 1,168 15% (342) -5% Eastside Rail Corridor 293 200 177 (23) -13% (92) -32% Maintenance Expenses 9,110 8,928 9,535 607 6% (182) -2% P69 Facilities Expenses 198 172 178 6 3% (26) -13% Seaport Expenses 1,244 1,254 1,268 15 1% 9 1% CDD Expenses 1,084 1,447 2,131 684 32% 362 33% Police Expenses 1,374 1,380 1,396 16 1% 6 0% Corporate Expenses 4,836 5,094 5,117 23 0% 258 5% Envir Remed Liability 6 2 80 78 97% (4) -65% Total Expense 35,525 35,327 38,824 3,497 9% (198) -1% Net Operating Income (4,217) (4,486) (6,308) 1,821 29% (269) -6% Conference and Event Center activity below budget due to significant new competitive challenges and perceived impact of waterfront transportation projects. 23 Real Estate Business Groups NOI Before Depreciation 2013 Fav (UnFav) Incr (Decr) 2012 2013 Revised 2013 Rvsd Bud Var Change from 2012 $ in 000's Actual Actual Budget $ % $ % Recreational Boating 1,352 1,061 283 777 274% (291) -22% Fishing & Commercial (3,053) (2,947) (3,940) 993 25% 106 3% Commercial Properties (3,359) (2,365) (2,891) 526 18% 994 30% Conference & Event Centers 1,974 1,032 1,660 (628) -38% (942) -48% Eastside Rail (433) (531) (406) (125) -31% (99) -23% RE Development & Plan (692) (734) (934) 201 21% (42) -6% Envir Grants/Remed Liab/Oth (7) (2) (80) 78 97% 4 67% Total Real Estate (4,217) (4,486) (6,308) 1,821 29% (269) -6% Favorable variances largely driven by favorable expense results. Conference and Event Center activity below budget due to significant new competitive challenges and perceived impact of waterfront transportation projects 24 Real Estate Capital 2013 $ in 000's 2013 2013 Budget Variance Actual Budget $ % Real Estate 6,060 12,165 6,105 50% Significant Variances: FT C15 HVAC Improvements - $2.2M timing extended into 2014. Small Projects - $1.3M timing of various projects extended into 2014. P69 N Apron Corrosion Control $.6M contractor bid below estimate. SBM Central Seawall Replacement - $.7M timing extended into 2014. P66 Steam Replacement ($1.1M) project was unexpected and thus not included in 2013 Budget. 25 Capital Development 2013 Performance Report Commission Briefing February 25, 2013 2013 Key Business Events International Arrivals Facility (IAF) project initial authorization by Port Commission Completed preliminary design & gate needs analysis for North Satellite renovations Electronic payments for all contracts; improved reporting on subconsultant payments Revised Terms and Conditions for consulting contracts Construction Submittal Continuous Process Improvement initiative Presented at American Society of Civil Engineers/Coastal Ocean Ports and Rivers Institute conference PCS performed approximately 113 small works projects during 2013 Terminal 5 Maintenance Dredging Project completed Pier 66 Steam Replacement Project completed on accelerated timeline 27 Q4 Capital Development Key Metrics Project Hard/Soft Costs CDD Construction Soft Costs % 100% 90% 31% 32% 80% 31% 30% 25% 70% 60% 50% 40% 69% Total Soft Costs 30% 68% 69% 70% 75% Total Construction Costs 20% 10% 0% Q2 2012 - Q1 2013 Q3 2012 - Q2 2013 Q4 2012 - Q3 2013 Q1 2013 - Q4 2013 Q1 2011 - Q4 2013 (36 month average) 28 Capital Development Key Metrics Cost Growth During Construction 29 Capital Development Key Metrics continued Design Schedule Growth Initial Planned Actual Design Commission Construction Construction Project Schedule Authorized Start Contract Award Contract Award Growth of Design (Execution) (Execution) 4th Quarter 2013 East Marg Way Grade Sep. 9-Apr-02 23-Oct-09 11-Jan-10 2.9% PBL Conc D Rep & Refurb 22-Feb-11 5-Jun-12 20-Jul-12 10% Utility Relo for Sound Transit 14-Feb-12 9-Jan-13 27-Feb-13 15% Ext Gates/Airfield Improve 14-Jun-11 11-Apr-12 25-May-12 15% Refub Pas Loading Brdg/Wlkwy 28-Feb-12 13-Jun-13 19-Jul-13 7.6% 30 Capital Development Key Metrics continued Construction Schedule Growth Planned Actual Planned Actual Construction Construction Construction Substantial Substantial Project Schedule Contract Award Contract Award Completion of Completion of Growth (Execution) (Execution) Construction Construction 4th Quarter 2013 East Marg Way Grade Sep. 23-Oct-09 11-Jan-10 2-Sep-11 6-Jul-12 51.4% PBL Conc D Rep & Refurb 5-Jun-12 20-Jul-12 21-Apr-13 9-Aug-13 40.0% Utility Relo for Sound Transit 9-Jan-13 27-Feb-13 28-Jun-13 28-Jun-13 0.0% Ext Gates/Airfield Improve 11-Apr-12 25-May-12 30-Apr-13 19-Apr-13 -3.2% Refub Pas Loading Brdg/Wlkwy 13-Jun-13 19-Jul-13 31-Oct-13 31-Oct-13 0.0% 31 Capital Development Key Metrics continued Procurement Timeliness Total Time Receipt of Scope to Execution (Avg # Days) 2012 2013 Goods & Services 125 days 55 days Major Public Works 61 days 77 days Small Works 50 days 54 days Service Agreements 202 days 169 days 32 Q4 Operating Results by Account Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 Operating Expenses $ in 000's Actual Actual Budget $ % $ % Salaries & Wages 14,296 14,767 15,341 574 3.7% 471 3.3% Wages & Benefits 1,288 1,090 666 (424) -63.7% (198) -15.4% Payroll to Capital Projects 12,171 13,592 14,947 1,355 9.1% 1,421 11.7% Equipment Expense 484 370 490 120 24.5% (114) -23.5% Supplies & Stock 433 551 355 (196) -55.2% 118 27.3% Outside Services 4,456 4,051 6,056 2,005 33.1% (405) -9.1% Travel & Other Employee Expense 266 298 489 191 39.1% 32 12.0% Other 935 1,114 783 (332) -42.4% 179 19.2% Charge to Capital (20,350) (21,145) (24,223) (3,078) 12.7% (795) 3.9% Total 13,978 14,688 14,904 216 1.4% 710 5.1% 33 Q4 Capital Development Financials Summary Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 $ in 000's Notes Actual Actual Budget $ % $ % Total Revenues 32 26 - 26 0.0% (7) -20.4% Expenses Before Charges To Cap/Govt/Envrs Propects Capital Development Administration 362 380 378 (3) -0.7% 19 5.1% Engineering 12,619 13,318 14,853 1,535 10.3% 698 5.5% Port Construction Services 7,064 7,301 6,894 (407) -5.9% 237 3.4% Central Procurement Office 4,435 5,025 4,510 (515) -11.4% 589 13.3% Aviation Project Management 7,266 7,289 8,679 1,390 16.0% 24 0.3% Seaport Project Management 2,582 2,520 3,813 1,293 33.9% (62) -2.4% Total Before Charges to Capital Projects 34,328 35,832 39,126 3,294 8.4% 1,505 4.4% 34 Corporate 2013 Performance Report Commission Briefing February 25, 2014 2013 Key Business Events Deployed the Flight Information Management System (FIMS II) on-schedule with no major issues. Successfully deployed PeopleSoft Financials Upgrade with minimal issues. Added Airport Wi-Fi Enhancements to Concourses B and C at Sea-Tac airport. Successful deployed the Police Records Management System in October. Coordinated joint seaport (Seattle and Tacoma) presentation on global competitiveness to the state pilotage commission. Organized Port/stakeholder presentation to state Joint Transportation Committee. Issued $139.1 million Intermediate Lien Revenue Refunding Bonds, Series 2013 yielding a present value savings of $9.58 million. Received a number of awards in the Port's budgeting, financial reporting, wellness program, and other areas. 36 2013 Corporate Key Metrics Conducted 42 small business outreaches. 236 small businesses registered on new roster system. 157 placements to the Apprenticeship Opportunity Project. 21 employees participated in the Tuition Reimbursement Program. Posted 205 job openings and received 7,520 job applications. 129 attendees participated in the New Employee Orientation. 97% completed required safety training. Negotiated 26 labor contracts. Completed 28 internal audits. Handled 15 litigations and claims. Responded to 310 public disclosure requests. 37 2013 Corporate Budget Variances Fav (UnFav) 2012 2013 2013 Rvsd Rvsd Bud Variance $ in 000's Actual Actual Budget $ % Explanations Total Revenues 444 450 155 295 190.3% Unbudgeted Police grants Executive 1,585 1,729 1,806 77 4.3% Travel and misc. savings Commission 799 1,009 1,445 435 30.1% Payroll and misc. savings Legal 3,083 3,548 3,012 (536) -17.8% Unanticipated outside legal fees Risk Services 2,648 2,902 3,166 264 8.3% Lower insurance cost & payroll Health & Safety Services 1,009 1,079 1,118 39 3.5% Miscellaneous savings Public Affairs 5,860 5,893 5,946 52 0.9% Outside svcs and misc. savings Human Resources & Development 5,227 5,264 5,425 162 3.0% Saving in outside services and travel Labor Relations 1,094 1,152 1,153 1 0.1% Miscellaneous savings Information & Communications Technology 19,486 20,339 20,505 166 0.8% Vacancies and more chg to capital Finance & Budget 1,467 1,544 1,777 233 13.1% Delay economic impacts study Accounting & Financial Reporting Services 6,056 5,734 6,835 1,101 16.1% Vacancies and more chg to capital Internal Audit 1,334 1,202 1,361 158 11.6% Outside svcs and payroll savings Office of Social Responsibility 1,448 1,644 1,702 58 3.4% Savings in travel and general expn. Police 21,793 22,483 22,318 (165) -0.7% Unbudgeted expenses Contingency 367 266 450 184 41.0% Miscellaneous savings Total Expenses 73,263 75,788 78,019 2,231 2.9% 38 Corporate Major Expense Variances Fav (UnFav) Incr (Decr) 2012 2013 2013 Rvsd Rvsd Bud Variance Change from 2012 $ in 000's Actual Actual Budget $ % $ % Salaries & Benefits 34,972 36,360 37,633 1,273 3.4% 1,388 4.0% Wages & Benefits 19,074 20,027 20,017 (10) 0.0% 953 5.0% Payroll to Capital Projects 2,453 2,850 2,508 (341) -13.6% 396 16.2% Equipment Expense 1,580 1,992 1,166 (826) -70.8% 412 26.0% Supplies & Stock 559 464 624 160 25.6% (95) -17.0% Outside Services 10,673 10,915 11,156 241 2.2% 242 2.3% Travel & Other Employee Exps 2,208 2,231 2,734 503 18.4% 23 1.0% Insurance Expense 2,110 2,156 2,300 144 6.2% 46 2.2% Litigated Injuries & Damages 210 (16) - 16 n/a (227) -107.7% Other 1,820 1,653 2,390 736 30.8% (167) -9.2% Charge to Capital (2,397) (2,844) (2,508) 335 -13.4% (447) 18.7% Total 73,263 75,788 78,019 2,231 2.9% 2,525 3.4% 39 Corporate Cost Analysis 2011 2012 2013 2013 Actual Actual Actual Budget ($ in 000's) Corporate Cost 71,418 73,263 75,788 78,019 Total Revenue 483,172 521,706 544,678 535,633 Total Expense 267,416 298,169 307,083 324,123 Corporate Cost as % of Total Revenues 14.8% 14.0% 13.9% 14.6% Corporate Cost as % of Total Expenses 26.7% 24.6% 24.7% 24.1% 40 Uses of Tax Levy Update Commission Briefing February 25, 2014 2013 Tax Levy 2013 Forecast 2013 Budget Oct. 2013 Actuals (1) Variances from Sources October Update Beginning balance 48.5 56.3 56.3 Annual Levy 73.0 73.0 73.0 Environmental Investment Earnings - 0.2 0.5 remediation Environmental Recoveries - 3.8 4.2 spending delays Rail Corridor Reimbursements - 1.4 1.4 Total Sources 121.5 134.8 135.3 Highline Schools Uses noise mitigation G.O. Bond Debt Service 40.4 39.4 39.4 Environmental Remediation 12.8 12.8 10.9 spending delayed Regional Transportation & Freight Mobility (2) 2.8 5.0 4.4 Real Estate capital Transportation & Infrastructure fund deposit 6.0 6.0 6.0 Port JOBS 0.2 0.2 0.2 spending slower Aviation Noise Projects 7.2 7.2 0.7 than expected Real Estate Capital Projects 16.4 6.2 3.5 Lower Real Estate Real Estate Operating Support 6.4 6.3 4.5 Total Uses 92.1 83.0 69.4 operating expenses reduced need for Ending balance 29.4 51.7 65.9 levy support (1) Unaudited (2) Includes FAST, Argo roadway 42 Looking Ahead Based on 2013 results, staff recommends an additional $7 million deposit to the Transportation & Infrastructure Fund ' $5 million proceeds from sale of a portion of the Eastside Rail Corridor to Snohomish County Deposit to occur after sale closes around June, 2014 ' $2 million savings from lower Real Estate operating expenses ' This is in addition to the $6 million deposit included in the 2014 budget Total 2014 deposit will be $13 million Total cash available for SR99 Tunnel will be $51.7 mil. 43
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