Enacted 2020 Budget Reductions
Budget Guiding Principles Maintain solvency Prioritize spending on investments with long-term, sustainable community and economic benefits Commitment to continuity of POS workforce Focus investments in achieving excellence in aviation and maritime gateways Prioritize programs and projects that generate revenue Continue to assess short- and long-term effects of COVID-19 on Port industries and markets Maintain a long-term strategic view of capital improvements Continued commitment to equity and diversity Continued commitment to environment and sustainability, prioritizing spending on mitigating direct Port impacts for 2020-21 1 2020 Operating Budget Reductions - by Division Total Non- Payroll Payroll to Payroll Payroll Total O&M (in thousands) (Operating) Capital Reduction* Reduction Reduction** (a) (b) (c)=(a)+(b) (d) (e)=(a)+(d) Aviation 2,109 795 2,904 18,271 20,380 Maritime 126 - 126 1,808 1,934 EDD - - - 3,106 3,106 Central Services 1,697 2,006 3,703 8,313 10,010 TOTAL 3,932 2,801 6,733 31,498 35,430 Note: * Total Payroll Reduction includes another $7.4M net reduction for the 3% vacancy factor. ** Total O&M Reduction includes $741K allocated to the NWSA. 2 2020 Operating Budget Reductions by Account 2020 2020 2019 Approved Revised Cost Reductions Expenses by Category (in $000) Actual Budget Budget $ % Salaries & Benefits 138,000 152,684 148,694 3,990 2.6% Wage & Benefits 121,000 135,368 135,426 (58) 0.0% Payroll to Capital Projects 29,570 37,410 34,609 2,801 7.5% Outside Services 108,000 126,827 112,155 14,673 11.6% Utilities 25,855 29,066 28,521 545 1.9% Equipment Expense 11,343 9,158 10,066 (908) -9.9% Supplies & Stock 11,909 9,989 7,963 2,026 20.3% Travel & Other Employee Expense 5,462 7,029 3,752 3,277 46.6% Third Party Mgmt Op Exp 13,329 12,699 8,494 4,205 33.1% B&O Taxes 4,856 5,007 3,949 1,058 21.1% Other Expenses 38,581 24,199 18,316 5,883 24.3% Charges to Capital Projects (56,000) (70,296) (68,233) (2,063) 2.9% TOTAL 451,000 479,142 443,712 35,430 7.4% 3 2020 CIP Deferrals Summary 2020 CIP (in thousands) Deferrals Aviation 23,902 Maritime & EDD 12,300 Central Services 4,422 TOTAL 40,624 4 Workforce Development Programs Summary 2020 Cost 2020 2019 2019 2020 Re ductio Revised YTD Workforce Development Program (in $000) Budge t Actual Budge t n Budge t Spe nding Maritime Secondary Education - - 100 - 100 - Youth Maritime Initiative/Transportation/Bus Charters 252 102 152 50 102 50 Engagement and Strategic Plan - - 200 100 100 - Airport Career Pathways Implementation 251 43 101 - 101 10 Career Advancement Center (formerly Fair Work Center) - - 300 - 300 - Construction Trades - Regional Partnership Services, Pre-App 710 548 650 - 650 114 Airport Employment Center/Employment Cont. Pool 910 819 979 - 979 252 Workforce Dev. General Services/Other expenses 88 17 97 66 31 - Salary & Benefits, & Worker's Compensation 298 205 540 - 540 146 K-12 Career Connected Learning 401 13 - - - 31 Events/Other 10 25 - - - 5 TOTAL 2,920 1,771 3,119 216 2,903 608 5 Diversity in Contracting Programs Summary 2019 2019 2020 2020 Cost Revised 2020 YTD Diversity in Contracting Programs (in $000) Budget Actual Budget Reduction Budget Spending Construction Incubator/Contracting Resource Center 60 29 50 10 40 - Mentor Protg - - 80 80 - - Marketing/Communications/Design Services 5 - 10 10 - - Port Gen 75 49 50 40 10 - Tabor 100 (Hub/A&E) - - - (30) 30 - Linda Kennedy (CPS Technical Writing) - - - (13) 13 4 WMBE Best Practice & Implementation 50 - - - - - Miscellaneous expenses 18 - 6 - 6 11 TOTAL 208 78 196 97 100 16 6 2020 Enhancements Recommendation Uncertainty and Affordability: Overriding principle is caution given continued uncertainty around our key lines of business. Continue with 2020 capital improvements but revisit longer-term projects as part of 2021 budget. Continue existing programs and target short-term additional investments in tourism and workforce development based on priority needs, financial capability Continue discussion on longer-range stimulus efforts. Two-phase approach: Phase #1: $1.5 million for Workforce Development $1.5 million for Tourism Funded through the Port tax levy. If possible, utilize existing contracts to accelerate implementation Phase #2: Re-evaluate expenditures in fall budget process and consider revisions based on outcome with workforce and tourism programs Community Programs Enhancements 2020 Cost 2020 Revised 2020 YTD Enhanced Program ($000) 2020 Budget Re duction Budge t Spe nding 2020 Total Airport Community Ecology (ACE) Fund 522 - 522 47 - 522 Duwamish Valley Community Equity Program 292 - 292 9 - 292 South King County (SKC) Fund 1,500 - 1,500 - - 1,500 EDD Partnership Grants 960 - 960 (27) - 960 Tourism Program 1,536 194 1,342 256 1,500 2,842 Workforce Development 3,119 216 2,903 608 1,500 4,403 TOTAL 7,930 410 7,520 892 3,000 10,520 8
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