11b. Presentation
2023 Budget Development Briefing
Item No.: 11b_SUPP Meeting Date: July 26, 2022 Port of Seattle 2023 Budget Development Briefing July 26, 2022 1 Agenda • Environmental Scan • Business Forecast • 2023 Budget Principles/Strategies • 2023 Budget Considerations • 2023 Budget Calendar 2 Environmental Scan • Continued recovery in the Airport and Cruise businesses • Economic & pandemic uncertainties (recession, supply chain disruptions) • Inflation at a 40-year high • Great Resignation and competitive job market • Increased regulation/external policy changes • Increased focus on community related issues • More staff needs for operations and capital projects delivery 3 Passenger Recovery Forecast Annual Change Vs. 2019 2020 -61.2% -61.2% 2021 79.1% -30.5% 2022 29.4% -10.1% 2023 8.2% -2.8% 2024 2.6% -0.2% 2025 2.5% 2.3% 2026 2.5% 4.8% 2027 2.0% 6.9% • Achieve 2019 passenger level by 2024 4 Cruise Operations 1999-2022 2022 Estimate 1.3M Passengers 296 Ship Calls 5 2023 Budget Guiding Principles • Maintain continued vigilance on the health and safety of employees, customers and the public as pandemic uncertainties continue • Ensure the efficient operation of Port business gateways with the potential for nearly full recovery in Port business volumes • Support regional equitable economic recovery through advancing the Port’s capital improvement plan and continued investment in community programs • Continue to invest in employee recruitment, retention and development 6 2023 Budget Strategies • Maintain expense growth in line with projected revenue growth • Carefully evaluate the need for additional FTEs as current recruiting resources are stretched thin with a large backlog of new and replacement FTEs • Incorporate expectations for continued high inflation into operating and capital plans • Utilize realistic assumptions regarding the ability to execute our five-year CIP when estimating project completion dates and the timing of projected cash flows • Continue to refine opportunities to incorporate an equity lens in developing and reviewing budgets and operational plans • Strengthen the focus on sustainability and resiliency in spending and business plans 7 Key 2023 Budget Considerations • Economic and pandemic uncertainties • Balancing expenses with projected revenues, approach to expense targets • Pay increase assumptions • General and construction cost inflation • Ability to fill vacant/new FTEs • Incorporating resiliency initiatives • Advancing Equity in Budgeting 8 2023 Budget Calendar (Commission Items in Blue) 5/20 – 2023 Budget Planning Discussion with ELT 6/14 – Commission Retreat: Budget and Organizational 7/12 – 2023 Budget Guidelines available 7/26 – 2023 Budget Process and Schedule Commission Briefing 8/01 – Commission Budget Retreat 8/05 – Central Services Department new budget requests due to F&B; Commission Priorities due to ED 8/15 – 08/23: Executive review of Central Services Department Budgets/New Requests 9/12 – Executive review of combined Central Services Budget 9/14 – Executive review of Maritime and EDD Operating & Capital Budgets 9/15 – 2023 North Harbor Budget to the NWSA 9/15 – Executive review of Aviation Operating & Capital Budgets 9 2023 Budget Calendar (Commission Items in Blue) 09/27 – Central Services Budget and Port wide Budget Overview Commission briefing 10/11 – Operating Divisions Commission Budget Study Session 10/14 – POS/NWSA ILA Service Directives due to the NWSA 10/18 – 2023 Preliminary Budget Document available to Commission 10/20 – 2023 Preliminary Budget Document available to the public 10/25 – Tax Levy & Draft Plan of Finance Commission briefing 10/27 – NWSA Budget study session with Managing Members 11/07 – NWSA Budget adoption by Managing Members 11/08 – Introduction of preliminary 2023 Budget and public hearing 11/15 – Adoption of 2023 Budget 12/01 – File the 2023 Statutory Budget with King county 12/15 – Publish the 2023 Final Budget to the public 10 Port of Seattle 2023 Budget Development Briefing Q&A’s 11
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