7c Supp
ITEM NO. 7c_Supp
DATE OF
MEETING Aug 17 2010
Seaport Division
2011 Business Plan Overview
Commission Presentation
August 17, 2010
1
2011 SEAPORT BUSINESSS PLAN
I. Seaport Strategies
A. Commercial (Business)
1. Container
2. Cruise
3. Grain
4. Other Maritime
B. Asset Stewardship
C. Green Gateway
II. Financials & Financial Outlook
III. Risks
IV. Recap
2
Pier 90/91 Pier 86
Pier 66
Terminal 46
BNSF (SIG - North)
Terminal
Terminal 18 On-Dock Rail 30
Terminal 5 On-Dock Rail BNSF (SIG - South)
Terminal 5 Terminal 18
Terminal 25
South
UPRR (ARGO)
3
2011 SEAPORT KEY STRATEGIES
Based upon review and development work, the
Seaport identified three Key Initiatives in 2010 for
refinement in 2011 as long term Seaport Strategies:
1. Commercial (Business)
2. Asset Stewardship
3. Green Gateway
In addition, Seaport will support Key Corporate
Initiatives including SharePoint and Metrics.
4
Seaport Asset Stewardship
CONTAINERS CRUISE GRAIN & OTHER
2011 CIP $17.4 M 2011 CIP $11.9 M 2011 CIP $17.8 M
T18 Dock Repair/Rehab P66 Shore Power T91 Water Main
T5, T18 & T30 Completions CTA Lease Allowance T86 Grain Facility
CAPITAL* (Major Projects) T10 Truck Parking Mooring Dolphins
2012-2015 CIP $140-$150 M 2012-2015 CIP $15-$20 M 2012-2015 CIP $125-$130 M
T5 New Cranes (4) P91 Slope Stabilization T91 Berth 8
T46 Development T91 Widen West Berth P91 Fender System
2016-2020 CIP $95-$100 M 2016-2020 CIP $5-$10 M 2016-2020 CIP $150-$200 M
Dock Repair/Rehab Second Gangway per Berth T91 Berth 8
Container Support Yards Dredge P90 East Waterway
Prospective $300-$350 M Prospective $30-$50 M Prospective $20-$30 M
Shore Power T91 Parking Garage New Buildings
New Docks P66 Fender System Industrial Land Acquisitions
Container Support Yards New Docks/Barge Layberth
$15-20 M $1-5 M $5-10 M
EXPENSE* Maintenance Dredging Inspections/Repairs Security Grant Round 8 Study
Dock Inspections/Repairs Signage/Traffic Controls Inspections/Repairs
* Preliminary Estimated Costs Based on Current CIP and Completed Asset8/18/20105
Condition Assessments
Seaport Asset Stewardship
CONTAINERS CRUISE GRAIN & OTHER TOTAL
Docks Docks Docks Preliminary
Utilities Utilities Utilities Estimated Costs
Cranes Gangways Grain Spouts Based on
ASSET CATEGORIES Pavement Pavement Pavement Current CIP
Other Other Other and Completed
Asset Condition
Assessments
2011 CIP* $17.4 $11.9 $17.8 $47.1 M
2012-2015 CIP* $145.2 $16.9 $128.9 $291.0 M
2016-2020 CIP* $97.5 $5 $169.5 $272.0 M
EXPENSE PROJECTS* $16.7 $1.2 $9.5 $27.4 M
TOTAL (10 YEARS)* $276.8 $35.0 $325.7 $637.5 M
PROGRAMMED $0.6 $0.8 $1.0 $2.4 M
MAINTENANCE**
PROSPECTIVE (10 YEARS)* $303.2 $0 $26.8 $330.0 M
*Preliminary Estimated Costs Based on Current CIP and Completed Asset Condition Assessments
**Estimated Annual Cost Based on 2010 Budgeted Amounts
8/18/2010 6
2011 SEAPORT KEY STRATEGIES
Commercial (Business) Focus Areas
Optimize NOI & utilization of Port assets
Retain and attract customers to our gateway
Market Seattle's "Fee Free", Business Friendly,
Collaborative, and Green Gateway advantages
Partner with Port of Tacoma in Joint Cooperation
Facilitate efforts to assure freight mobility and
terminal access during road project construction
Partner with stakeholders to effectively manage
Seaport business growth and harbor impacts
Manage costs to assure best value ("bang for the
buck") and return on investments.
7
Seaport Commercial (Business)
CONTAINER CRUISE GRAIN & OTHER
Competitive Threats Competitive Threats Competitive Threats
Panama Canal Worldwide competition for Relocation to other areas due
Canada cruise assets. to complexity of requirements
Terminal Efficiency & Costs Canadian Competition New Longview grain terminal
Fees & Trade Barriers Cost competitiveness Loss of support businesses
Customer Retention Passenger satisfaction
Terminal efficiencies
Optimize NOI Optimize NOI Optimize NOI
Maximize utilization of assets Maximize SCT facility utilization Retention/growth of current
Competitive rates, taxes, fees Asset stewardship investments business
Asset stewardship investments Larger vessels Positive return on investments
Key infrastructure investments More passengers Identify new markets &
Volume retention/expansion Efficient airport-seaport opportunities for revenue
connections Asset stewardship investments
Foster Green Agenda
Seaport Environmental Initiatives Foster Green Agenda Foster Green Agenda
Green Gateway Mktg Strategy Shore power (cold ironing) Recycling program
Sustainable investments Wastewater treatment/retention Stormwater System
Green Gateway marketing
8
Updated Summer 2008
CONTAINER EXPANSION PLAN
Multi-Party "Work Packages" for Growth
Fundamental Port Role Should Change to Stimulate
and Facilitate Projects By Others
Overall Utilization of Labor Must Increase
TOTAL PORT CONTAINER CAPACITY (TEU)
2M 3M 3.5M 4M 5M
2005 Volume = 2.1
WORK PACKAGE #1Work Package #1 WORKWork WORKWork Work Package #4
UNDERWAYUnderway PACKAGE #2Package #2 Package #3 WORK PACKAGE #4
PACKAGE #3
TERMINALS TERMINALS TERMINALS TERMINALS
T-30 re-activate T-5 increase internal CY T-5 RTG Ops T-5 18-acreexpansion
T-25 expansion16 acres T-46 additionalRTG ops
RAILYARDS RAILYARDS
RAILYARDS Wide Span Gantry Cranes at Main On-dockIY at T-18 or 16th Ave Yard RAILYARDS
SIG northexpansion SIG conversion to IY SIG south expansion
T-5 IY secondshift SIG StacyYard conversion New RemoteRailroad ~ 200 acres,
MAINLINE ARGO domesticrelocation shared with Port of Tacoma
OFF-DOCK SoundTransit / BNSF new track ARGO re-designedfor high density
20-acrethird party container support agreement Seattle to Tacoma Needed less if Wide Span Gantry Cranes
operations
Crown StampedePass proliferate into other harbor area intermodal
TRAFFIC yards
Duwamishcorridor concept MAINLINE
SR-519 or acceptablealternative Tukwila-Tacomatrack Operational
T-5 surface streetintersection OFF-DOCK improvements
Sumnerconnection may negate MAINLINE
East MarginalWay grade separation 20-acre third party container support Vancouverbypass need for some Couldbe constrained?
Continuousday gate hours Ellensburg/Lindcutoff of these
TRAFFIC
SpokaneStreet Viaduct projects OFF-DOCK
1st Ave S. & East Marginal Way PointDefiance bypass
Viaductconstruction accommodates T-25/30 off-site yard 20 acres
Increase use of night gates
freight OFF-DOCK 40-acrethird party container support
20-acrethird party container support
TRAFFIC
TRAFFIC Steadynight gates
SR-509
Morenight gates
2
9
2011 SEAPORT KEY STRATEGIES
Asset Stewardship Focus Areas
Complete projects currently underway
Perform key asset condition assessments
Refine scope, cost estimates, and timing of future
projects
Incorporate clear prioritization criteria for projects
Incorporate Green Gateway criteria for projects
Develop future project schedules contingent upon
available funding
Manage costs to assure best value ("bang for the
buck") and return on investments.
10
2011 SEAPORT KEY STRATEGIES
Green Gateway Focus Areas
Monitor Clean Truck Program to assure
objectives met
Grow ABC (At Berth Clean) Fuels and "Green
Gateway Partners" Programs
Partner with stakeholders to implement/ manage
stormwater program
Use Herbert's Carbon Footprint study to market
our "Green Gateway" advantages
Expand collaboration to advance our strategies &
Port competitiveness
Consider future technologies that reduce impacts
11
Green Gateway
Reduce our environmental impact and capitalize on
green marketing opportunities for the Seaport
Moving People Sustainable Promoting
Focus and Goods Operations Sustainable
Efficiently and Facilities Communities
Collaborate with stakeholders to promote and
Collaborate with stakeholders to reduce Sustainably manage operations, projects and
implement environmental polices and
environmental impacts associated with the property for the long term benefits of the
Criteria programs that decrease environmental
movement of goods through the Port citizens of Washington
impacts
Promote "green" as benefit Leader in low impact development Good stewards of natural resources
Leader in green cargo Promote energy and water conservation Enhance public engagement in the
Reduce carbon footprint Develop culture to integrate "green" into region
our daily work Promote transparent communications
cost
SMS/EMS *
ECAP
Key Initiatives Pilot Project * Superfund
Cost Recovery
Emissions Inventory Stormwater
Energy Audits *
NWPCAS Habitat
Incorporate Green into
Herbert Study Outreach and
our daily plans and
Green Gateway Partnerships (PSP)
activities *
Partners Green Facilities *
Green Leases *
*
New strategic initiatives
10
Green Gateway
Compliance Green Port Green Marketing
Port of Seattle Discretionary Projects Customers
Cost recovery that integrate with Business Carriers / Cargo Owners
SEPA goals or position us for Cruise lines / passengers
success Rail
Tenants Existing Programs Messaging:
Stormwater ABC Fuels Program Faster, Better, Cleaner
ECAP ScRAPS Program Strategic Partnerships
costSpill Prevention Plastic Pilings Green Gateway routing
T46 lighting (Herbert Study)
CHE
Community Above and Beyond Port Projects
Lower Duwamish Shore Power Recycling program
Agreed Orders LNG Green Landscaping
Spill Prevention Educational Seminars
UST Community Seminars
Derelict Vessel
Project Permitting
Restoring Aquatic Habitat
COMMERCIAL (BUSINESS)
Seaport Lines of Business
14
CONTAINER BUSINESS
Market Outlook:
Overall transpacific volumes projected at a 3%
growth
Revenue Assumptions:
Seattle volume forecast is for 1.8m TEUs
Major Work:
Targeted customer calls
Collaboration to sell our gateway
(Terminals/Carriers/Railroads)
Strong multi-media program
15
CONTAINER BUSINESS
Major Work
Commercial strategy development/Green
Gateway Market
Asset Assessments
Monitor performance of Clean Truck Plan
Implement Radio Frequency Identification
Detection (RFID) system to support Clean
Truck Program
Lease T106
Completion of planned projects
Facilitate establishing s chassis program
Work with stakeholders to minimize
construction/congestion issues
16
CONTAINER BUSINESS
Financial Overview
Containers & Support Props 2008 2009 2010
$'s in 000's Actual Actual Budget
Revenue 56,428 59,655 59,651
Direct Expenses 8,361 10,573 6,877
Income from Operations 48,067 49,082 52,774
Divisional Allocations 6,096 5,426 6,254
Corp Allocations 7,314 7,300 7,852
Net Operating Income 34,658 36,356 38,668
Depreciation 17,254 18,634 19,374
Net Income 17,404 17,721 19,294
11
CONTAINER BUSINESS
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
Street Vacation Related Projects* 3,520 6,300
T18 S. End Fendering* 2,362 0
T10 Interim Development* 5,178 0
T108 Paving & Stormwater Upgrade 750 7,250
T18 Fender Damage Replacement 2,450 2,966
Container Support Yard-3.5M T#1 0 30,000
RFID Readers - Clean Truck Program 600 400
T108 Leased Area Paving 250 2,750
T18 Pile Cap Improvements 1,700 6,800
Future Projects 0 88,500
Total 16,810 144,966
Note *: Authorized or partially authorized
18
CRUISE BUSINESS
Market Outlook:
Global Market Projection is growth of 12%
While Alaska Cruising remains a desirable product, global vessel
deployment decisions will reduce 2011 vessel calls
Revenue Assumptions:
Cruise business to Alaska projected at a 7% reduction in
passengers
Major Work:
Market mid-week vessel slots
Seek multi-year agreements for P66 customers
Determine direction for future cruise terminal ops.
Asset assessments
Complete approved capital projects
Evaluate feasibility of Shore Power at P-66
8/18/2010 DRAFT 19
CRUISE BUSINESS
Financial Overview
Cruise 2008 2009 2010
$'s in 000's Actual Actual Budget
Revenue 9,375 10,744 10,503
Direct Expenses 2,133 2,827 1,817
Income from Operations 7,243 7,917 8,686
Divisional Allocations 976 972 1,326
Corp Allocations 1,558 1,605 2,269
Net Operating Income 4,709 5,340 5,091
Depreciation 3,749 4,199 5,144
Net Income 959 1,141 (53)
13
CRUISE BUSINESS
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
P66 Bag Corridor & Passenger Screening* 20 0
T91 Mobile Gangways* 38 0
T30/91 Projects-Cruise Improvements* 635 254
Cruise Capital Allow-CTA Lease* 475 206
Cruise TI Allowance-CTA Lease* 200 90
P91 Fender System Upgrade* 1,815 2,990
T91 Second Gangways Per Berth 1,000 3,500
P91 Slope Stabilization 3,000 3,300
P66 Shore Power 7,000 7,700
Widen T91 West Cruise Vessel Berth 200 2,100
Total 14,383 20,140
Note *: Authorized or partially authorized
21
GRAIN BUSINESS
Market Outlook:
Projection for 2011 is another strong year for
exports volumes through Seattle
(Corn/Soybeans X Midwest)
Revenue Assumptions:
Projecting increase of 10% in 2011 volume vs
2010 budget
Major work:
Tower strengthening & spout replacement
Negotiations for new Long Term Lease
22
GRAIN BUSINESS
Financial Overview
Grain 2008 2009 2010
$'s in 000's Actual Actual Budget
Revenue 7,053 6,049 5,533
Direct Expenses 702 322 214
Income from Operations 6,351 5,727 5,319
Divisional Allocations 307 234 216
Corp Allocations 986 744 707
Net Operating Income 5,058 4,748 4,396
Depreciation 508 531 541
Net Income 4,550 4,217 3,855
15
GRAIN BUSINESS
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
T86 Grain Facility Modernization* 2,000 7,100
Total 2,000 7,100
Note *: Authorized or partially authorized
24
OTHER MARITIME BUSINESS
Market Outlook:
Long term leases in place maintaining full occupancy of
facilities. Historical demand for commercial vessels
should continue.
Revenue Assumptions:
Increase dockage by10-15 percent
Vessel calls planned to remain flat
Major Work:
Seek new/additional commercial moorage business
Complete scheduled Capital Projects
Develop re-cycling program/facilities for T-91
25
OTHER MARITIME BUSINESS
Financial Overview
Docks & Industrial Properties 2008 2009 2010
$'s in 000's Actual Actual Budget
Revenue 12,519 13,349 12,848
Direct Expenses 4,045 4,537 5,523
Income from Operations 8,474 8,812 7,325
Divisional Allocations 1,925 1,513 1,980
Corp Allocations 2,534 2,266 2,638
Net Operating Income 4,016 5,033 2,708
Depreciation 5,081 5,692 6,043
Net Income (1,065) (659) (3,335)
15
OTHER MARITIME BUSINESS
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
T91 Water Main Repl N of Bridge* 3,800 0
T91 Pave Entry Intersection* 300 0
Pier 90 C175 Roof Replacement 100 1,100
N Harbor Island Mooring Dolphins* 1,525 0
T91 Berth 6&8 Redev-Phse 1 1,000 33,115
T46 N Slip Replace Sprinkler Syst 1,000 0
Pier 90 Additional Bollards (11) 814 0
Dredge Pier 90 East Berths 400 5,600
Future Projects 0 1,000
Total 8,939 40,815
Note *: Authorized or partially authorized
27
SEAPORT SECURITY
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
Seaport Security Grant Rnd 7* 198 0
Seaport Security 2009 ARRA* 479 0
Seaport Security Grant Rnd 8 880 0
Seaport Security Grant Rnd 9 875 0
Seaport Security Grant Rnd 10 100 800
Total 2,532 800
Note *: Authorized or partially authorized
28
GREENPORT & OTHER
Capital Projects
Capital Project - $'s in 000's 2011 2012-2015
Seaport Green Port Initiative 580 3,800
Seaport Small Projects* 1,365 2,600
Other 545 2,194
Future Projects 0 53,600
Total 2,490 62,194
Note *: Authorized or partially authorized
29
SEAPORT ASSET STEWARDSHIP
Asset Categories:
1. Docks 5. Pavement
2. Utilities (i.e. water, sewer, electrical 6. Dredging
3. Cranes 7. Other
4. Buildings
Major Work 2011:
Dredge T-5 Continue inspections
Condition assessments Cranes
Buildings
Inspect underdocks
Inventory of utilities Identify stormwater
Develop asset inventory system system requirements
30
SEAPORT ASSET STEWARDSHIP
Projects
&
Capital Budget
31
Terminal 5
Project Key Goal 2011 2012-15 2016-20 Total
New Cranes (4) Comm Strat $0 $25,000 $25,000 $50,000
Total $0 $25,000 $25,000 $50,000
32
Terminal 18
Project Key Goal 2011 2012-15 2016-20 Total
Fender Damage Replacement Asset Stew $2,450 $2,966 $0 $5,416
Pile Cap Improvements Asset Stew 1,700 6,800 0 8,500
Crane Drive Upgrades Asset Stew 0 3,000 0 3,000
Rail Crossings Asset Stew 0 1,000 0 1,000
S. End Fendering Comm Strat 2,362 0 0 2,362
Total $6,512 $13,766 $0 $20,278
33
Terminal 25
Project Key Goal 2011 2012-15 2016-20 Total
Container Yard Phase 2 Comm Strat $0 $14,500 $0 $14,500
Total $0 $14,500 $0 $14,500
34
Terminal 46
Project Key Goal 2011 2012-15 2016-20 Total
T-46 Development Comm Strat $0 $25,000 $12,500 $37,500
North Slip Sprinkler Replacement Asset Stew 1,000 0 0 1,000
Total $1,000 $25,000 $12,500 $38,500
35
Pier 66
Project Key Goal 2011 2012-15 2016-20 Total
Bag Corridor and Passenger Comm Strat $20 $0 $0 $20
Screening
Shore Power Green Port 7,000 7,700 0 14,700
Total $7,020 $7,700 $0 $14,720
36
Terminal 86
Project Key Goal 2011 2012-15 2016-20 Total
Grain Facility Modernization Comm Strat $2,000 $7,100 $0 $9,100
Total $2,000 $7,100 $0 $19,100
37
Terminal 10
Project Key Goal 2011 2012-15 2016-20 Total
Interim Development Comm Strat $5,178 $0 $0 $5,178
Total $5,178 $0 $0 $5,178
38
Terminal 108
Project Key Goal 2011 2012-15 2016-20 Total
Paving and Stormwater Upgrade Asset Stew $750 $7,250 $0 $8,000
Leased Area Paving Asset Stew 250 2,750 0 3,000
Total $1,000 $10,000 $0 $11,000
39
Terminal 91
40
Terminal 91
Project Key Goal 2011 2012-15 2016-20 Total
Mobile Gangways Comm Strat $38 $0 $0 $38
T-30/91 Projects Comm Strat 635 254 0 889
P91 Fender System Upgrade Asset Stew 1,815 2,990 0 4,805
T-91 2nd Gangways per Berth Comm Strat 1,000 3,500 5,000 9,500
P91 Slope Stabilization Asset Stew 3,000 3,300 0 6,300
T-91 West Vessel Berth Widening Comm Strat 200 2,100 0 2,300
T-91 Water Main Replacement Asset Stew 3,800 0 0 3,800
T-91 Pave Entry Intersection Asset Stew 300 0 0 300
P90 C175 Roof Replacement Asset Stew 100 1,100 0 1,200
T-91 Berth Redevelopment Asset Stew 1,000 34,115 18,830 53,945
Pier 90 Bollards Comm Strat 814 0 0 814
Pier 90 East Berth Dredging Asset Stew 400 5,600 0 6,000
Total $13,102 $52,959 $23,830 $89,891
41
Other
Project Key Goal 2011 2012-15 2016-20 Total
N Harbor Island Dolphins Comm Strat $1,525 0 0 1,525
Street Vacations Comm Strat 3,520 6,300 0 9,820
Container Dock Life Extension Asset Stew 0 20,000 25,000 45,000
RFID Readers Green Gate 600 400 0 1,000
Container Support Yard Comm Strat 0 30,000 35,000 65,000
CTA Leases Comm Strat 675 296 0 971
Total $6,320 $56,996 $60,000 $123,316
42
Seaport Draft Capital Plan Summary
As of 08/05/2010
$'s in 000's 2011 2011-2015 2016-2020 Total
Committed 28,235 93,985 17,797 111,782
Bus Plan Prospective 18,919 229,184 254,130 483,314
47,154 323,169 271,927 595,096
Other Prospective 0 198,576 329,950 528,526
Total 47,154 521,745 601,877 1,123,622
43
SEAPORT FINANCIAL OUTLOOK
Operating Revenue (excluding grants and
reimbursements) is projected to increase
by 5% compared to 2010 Budget
Primary components of revenue:
In place leases
Volume: Cruise, Grain, Crane Rent
Grants/Reimbursements
44
SEAPORT FINANCIAL OUTLOOK
Expense Trends and Risks
Comprehensive Asset Condition
Assessments
Maintenance Dredging
Repair Costs/Crane Removal
Stormwater
NW Clean Air Strategy
Environmental Reserves
Tribal Fishing coordination
45
SEAPORT FINANCIAL OUTLOOK
In $ Thousands 2008 2009 2010 2010 2010 Bud Var
Actual Actual Forecast Budget $ %
Operating Revenue 85,404 89,844 91,151 90,134 1,017 1%
Security Grants 850 847 2,535 2,535 0 0%
Total Revenue 86,254 90,691 93,686 92,669 1,017 1%
Direct Expenses 22,237 24,329 22,260 21,631 (629) -3%
Security Expense 1,715 1,640 3,756 3,756 0 0%
Environmental Reserve 866 24 1,500 1,500 0 0%
Divisional Allocations 2,335 2,123 2,575 2,575 0 0%
Corporate Allocations 12,734 12,430 13,862 13,862 0 0%
Total Expense 39,887 40,545 43,953 43,324 (629) -1%
Net Operating Income (NOI) 46,367 50,145 49,733 49,345 388 1%
11
2011 SEAPORT BUSINESS PLAN
RISKS
1. Competitive threats (see slide 6)
2. Economic recovery stalls or contracts
3. Traffic congestion due to construction
4. Increased taxes/fees due to State budgetary
pressures
5. Legislation or regulation that impacts port
competitiveness
47
2011 SEAPORT BUSINESS PLAN
RECAP/KEY MESSAGES:
1. Overall business outlook is positive but U.S. economy
and global outlook uncertain
2. Revenue streams remain solid and looking for new
opportunities
3. Seaport will build upon "Green Initiatives" successes
and "Green Gateway" marketing
4. Capital Projects closely tied to Business Plans
5. Asset Stewardship is a critical area of work
6. Develop/further Northern Green Transportation Corridor
7. Continue "Fee Free", Business Friendly and
Collaborative approach and marketing messages
48
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