Port of Seattle
2011 Budget Planning Assumptions
August 17, 2010

Background
2009 - Took early and proactive steps to reduce costs;
O&M expense $28M below budget
2010 - Reduced $11 million of additional costs relative to
2009 budget through Zero Based Budgeting
Implemented a voluntary separation program and
eliminated over 110 positions (6.2% of the total workforce)
Currently tracking well against 2010 budget


2

Overall Budget Assumptions
Economic downturn and uncertainty will drive
conservative budgeting for 2011
Process will incorporate Commission guidance
on budget
Revenue assumptions yet to be finalized
Continue to focus on managing O&M costs

3

Historical Port Financial Performance
$Millions
600
500                   458     479             477
448                     449
417
400
300                             275
226     224     237             246     263
200              224     221
191                     204     203     214
100
0
2005    2006    2007    2008    2009    2010
Budget
Revenues    Expenses    NOI
4

Preliminary Payroll Assumptions*
Average pay for performance of 2.5% (may be revised
based on market data and overall budget
considerations)
Market based salary range increase of 1.5% (minimal
cost impact)
Medical cost increase of 3-4% with self-funding
approach
Compares to projected 12% increase if fully insured
Projected pension (PERS) contribution increase from
5.31% to 8.7% effective 7/1/11 (7% blended rate in
2011)
*Non-represented employees
5

Preliminary Operating Budget
Modest increase in payroll costs
Conservative "baseline" budget
Some short-term cost increases due to deferred
maintenance at existing facilities and certain new
initiatives focused on maintaining our
competitiveness and positioning the Port for future
growth

6

2011 Budget Calendar
August
2011 Budget Guidelines released
Commission briefing on Q2 Performance
Commission workshops on division business
and capital plans
Commission workshops on budget assumptions

7

2011 Budget Calendar
September
Prepare preliminary operating & capital budgets
Internal budget reviews by each dept & division
Executive preliminary budget reviews (9/15  9/17)
Commission capital budgets workshops on 9/28

8

2011 Budget Calendar
October
Operating budget Commission workshop on 10/5
Preliminary budget document available to the
Commission on 10/19
Draft Plan of Finance Commission workshop on
10/26
Release 2011 Preliminary Budget and Draft Plan
of Finance Document to the public on 10/28
9

2011 Budget Calendar
November
First reading of budget resolution on 11/9
Second reading of budget resolution on 11/23
December
File statutory budget on 12/2
Release 2011 Final Budget and Draft Plan of
Finance Document to the public by 12/15
10

Port of Seattle
2011 Budget Planning Assumptions
August 17, 2010