7d supp
Item No. 7d_supp Date: Sept 30, 2014 Corporate 2015 Preliminary Budget Briefing September 30, 2014 2015 Corporate Budget Overview Continued focus on managing Corporate cost growth ' Overall increase of 0.8% vs. 2014 budget ' Adjusting for budget transfers to other divisions and one-time items in the 2014 budget, baseline budget increase is 2.3%. ' New budget additions for 2015 total $501K. Net reduction of 0.3 FTEs Key Expense Drivers: ' Baseline payroll increases ' Payroll increases partially offset by $709K one-time items in the 2014 budget. 2 2015 Corporate Budget Summary Description Amount % Notes ($ in '000) 2015 Preliminary Budget 81,267 2014 Approved Budget 80,637 Increase from 2014 Approved Budget 630 0.8% Adjusted for Budget Transfers 549 0.7% PLA Group & 1.0 FTE from PA Adjusted for One-time Items 709 0.9% Exculde the one-time items in the 2014 budget Increase from Baseline 1,889 2.3% 3 2015 New Budget Additions No. Dept Description Amount 1 HR&D OD/Metrics Analyst 95,376 2 HR&D Sr. Total Comp Analyst 109,880 3 F&B Financial Analyst I (6 months) 57,068 4 AFR Critical Year-end Workload Coverage 20,000 5 AFR Billing Invoices/Statements Mailing Service Centrally Budget 28,600 6 Internal Audit Contracted Services for Construction Auditing Program 60,000 7 Internal Audit Software 15,000 8 Internal Audit Peer Review by Association of Local Government Auditors 15,000 9 Contingency Increase in Portwide Contingency 100,000 TOTAL 500,924 4 2015 Corporate Budget By Expense Type 2014 2015 '15-'14 Bud Chg ($ in 000's) Budget Budget $ % Explanations Payroll Expenses Total Payroll Expenses 59,992 61,112 1,120 1.9% New FTEs and pay & benefits increases Non-Payroll Expenses Equipment Expense 1,216 1,118 (98) -8.1% Purchases for Airport Jobs in 2014 budget Supplies & Stock 551 453 (99) -17.9% Reduced office and other supplies Outside Services 11,326 11,215 (111) -1.0% Removal of EIS and Disparity Study Travel & Other Employee Expense 2,653 2,603 (50) -1.9% Promotional Expense 466 346 (119) -25.6% Moved Int'l Tourism Promo to Outside Svcs Telecommunications 642 628 (14) -2.2% Insurance Expense 2,300 2,350 50 2.2% Higher insurance cost expected for 2015 Contingencies 450 550 100 22.2% Related to implementation of Res. 3694 Other 1,040 892 (148) -14.2% Total Non-Payroll Expenses 20,645 20,155 (490) -2.4% TOTAL 80,637 81,267 630 0.8% 5 2015 Corporate Budget By Department 2013 2014 2014 2015 Budget Change (in $ 000's) Actual Budget Forecast Budget $ % REVENUES Total Operating Revenues 479 155 269 340 185 119.1% EXPENSES Executive 1,728 1,818 1,818 1,798 -19 -1.1% Commission 1,013 1,645 1,645 1,565 -80 -4.9% Legal 3,545 3,264 3,141 3,156 -108 -3.3% Risk Management 2,901 3,173 3,138 3,249 77 2.4% Health & Safety 1,078 1,190 1,185 1,190 0 0.0% Public Affairs 5,890 6,069 5,946 5,937 -132 -2.2% Human Resources & Development 5,259 5,655 5,513 5,958 303 5.4% Labor Relations 1,151 1,319 1,282 1,024 -295 -22.3% Information & Communications Tech. 20,323 20,850 20,850 21,435 585 2.8% Finance & Budget 1,543 1,856 1,848 1,713 -143 -7.7% Accounting & Financial Reporting 5,724 7,081 6,805 7,350 269 3.8% Internal Audit 1,201 1,422 1,500 1,552 131 9.2% Office of Social Responsibility 1,644 2,187 2,291 1,910 -278 -12.7% Contingency 266 450 250 550 100 22.2% Police 22,458 22,658 22,474 22,879 221 1.0% Total Operating Expenses 75,731 80,637 79,686 81,267 630 0.8% 6 2015 Corporate FTE Summary FTE's 2014 Approved Budget 453.4 Changes in 2014: Mid-Year Approvals 4.1 Eliminated -4.6 Internal Transfer to Aviation -1.0 2014 Baseline 451.9 2015 Budget Changes: Eliminated -2.0 Internal Transfers -3.5 Propposed New FTEs 5.2 Change in FTEs for 2015 -0.3 Proposed FTEs for 2015 451.6 7 Potential Budget Additions Office of Social Responsibility and Public Affairs have requested funding for expansion of Workforce Development and Tourism programs in line with Century Agenda strategies These are not currently included in the Preliminary Budget beyond baseline amounts Internal Audit has requested an additional FTE for a Construction Auditor. The Preliminary Budget assumes $60K in Outside Services in lieu of hiring an FTE in 2015funding the full FTE would require an additional $43K ' This is subject to Audit Committee review/recommendation 8 Proposed Expansion of Tourism and Workforce Development Programs Tourism $50K - Provide grant funding to community applicants to promote statewide tourism $500K Expand outreach in existing and new international markets; develop cruise workshop for local businesses doing business with the cruise industry $75K Contribution to Washington Tourism Alliance Workforce Development $1.7 million First year of multi-year contract for expanded workforce development program in the Aviation, Maritime and Construction sectors $34K Expanded internships and other internal Port programs 9 Program Funding Considerations Proposed program expansion represents significant increases Tourism ($ in '000) to baseline budgets 2015 Baseline Budget 981 Staff recommends funding both Additional Request 625 programs, including baseline, Total 1,606 with the Port's Tax Levy Workforce Development Reduces allocations to 2015 Baseline Budget 767 operating divisions Additional Request 1,692 Mitigates concerns Total 2,459 regarding airport revenue diversion Broad community benefitsappropriate for levy funding 10 Capital Development Division 2015 Preliminary Budget Briefing September 30, 2014 Priority CDD Goals Deliver projects to operating division customers on time, within budget, meeting agreed scope, and with minimal and mutuallyagreed impacts on operations Support divisions beyond projects: including budget plan development; business planning; asset management and reporting; community outreach; negotiations; and technical support and assistance. Provide contracting services. Be prepared for emergencies. Develop the talent, capabilities, motivation and well-being of CDD employees. Keep Port staff and contractor personnel working safely. 12 CDD Budget Comparisons 2014 YE 2013 Actual 2014 Budget Forecast 2015 Budget FTE 274.3 285.1 289.1 300.1 Total Salaries & Benefits $29,415,599 $ 35,156,665 33,785,162 $ 37,868,837 On-site consultants $2,091,198 $ 6,268,910 4,914,393 $ 6,307,400 Small Works Constr Contracts $1,045,682 $ 744,750 740,983 $ 1,796,400 Total Before Capital Charges (+ Int. Trfs) $ 35,698,726 $ 46,134,430 43,380,765 $ 50,612,167 Sal/Wag to Capital $ (13,591,527) $ (17,027,657) (16,785,062) $ (17,866,998) Capital Projects Overhead $ (5,730,328) $ (8,809,619) (8,051,369) $ (8,243,478) On-site consultants to Capital $ (1,908,658) $ (3,297,039) (3,153,325) $ (6,307,400) Total Charges to Capital $ (21,144,696) $ (29,134,316) (27,989,756) $ (32,417,876) Total Operating Expense $ 14,554,030 $ 17,000,114 15,391,009 $ 18,194,21 13 CDD 2015 Operating Budget In 000 dollars 2013 2014 2014 2015 Budget Actual Budget Forecast Budget Change $ % AVPMG 1,157 2,601 2,311 4,582 1,981 76.2 CPO 3,351 3,608 3,281 3,119 (489) (13.6) ENG 4,999 5,490 4,718 5,637 147 3.7 PCS 3,390 3,310 3,532 3,609 299 9.0 SPM 1,276 1,587 1,155 828 (759) (47.8) CDD Admin 380 404 394 419 15 3.7 Total 14,553 17,000 15,391 18,194 1,194 7.0 14 CDD 2015 New FTEs Dept. Position FTE Budget % Notes Exp AVPMG Capital PM I ADR 1.0 $85,000 17% Eff. 4/14. If not approved, on-site consultant expense must be increased. AVPMG Capital PM III ADR 1.0 $145,000 17% Eff. 4/14. If not approved, on-site consultant expense must be increased. AVPMG Program Controls Manager 1.0 $145,000 11% Eff. 4/14. If not approved, on-site consultant expense must be increased. AVPMG Management Analyst 1.0 $110,000 30% Eff. 4/14. If not approved, on-site consultant expense must be increased. AVPMG Senior Administrative 1.0 $65,000 5% Eff. 4/14. If not approved, workload must be Assistant redistributed to current staff. AVPMG AVPMG Cost Estimator 1.0 $105,000 11% Eff. 4/14. If not approved, workload must be redistributed to current staff. AVPMG Cost Engineer #1 1.0 $81,000 11% Eff. 4/14. If not approved, on-site consultant expense must be increased. AVPMG Cost Engineer #1 1.0 $81,000 11% Provides a development opportunity for students. CPO Senior Contracts 1.0 $98,408 90% Eff. 4/15. If not approved, increased workload Administrator / CPI LEAN (from major capital program growth and Specialist increased demand for services) must be redistributed to current staff, and will negatively impact implementation of Procurement Efficiency recommendations. ENG ENG Asset, Facility & 1.0 $68,124 100% Eff. 4/14. If not approved, operating costs Financial Specialist increase, efficiency decreases, and potential policy non-compliance may occur. Total 10.0 15 CDD 2015 Expense Projects Division Impact Projects Construction Logistics Expansion S. 160th GT Lot Expansion - ERL Aviation $5,268,311 2014 AF facilities Activation Main Garage Fire Damage PLB Removal; eGSE Installation RAC Remediation Landside operations support TI Work: 2014 RCF Landside/AV Terminal Domestic Piping Branch Replacement Air Cargo Road Safety Improvements Signage South Link Arc Flash Study/Mitigation Dining/Retail Concession Development NSAT Utilities Support PSE, CNN, etc. 2014 Concessions Tenant RMM Baggage Handling System Concessions Communication Fdr 101 Taps/Fire Station Elect-Training South Satellite Interior Renovations Airfield pavement management system EXP-Vert Conv MTEE Maintenance AV small jobs GC/CM Early Work Support AV O&M Roof Replacement - ERL plus Capital Projects with Expense Components T-5 Crane Sales North Argo Express Access Elem II Seaport $378,390 T-5 Maintenance Dredging EMWGS II T-18 Maintenance Dredging Viaduct project T-18 Remove IHI Cranes SP small jobs P91 E. Cruise Maintenance Dredging SP O&M Argo Element III Gate Real Estate $1,066,048 FT Net Shed code compliance RE small jobs FT Net Sheds RE O&M AVPMG $1,874,000 CPO $502,060 ENG $705,620 Total CDD $6,712,749 PCS $3,507,500 SPM $123,569 16
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