6c supp
ITEM NO. 6c_Supp ________ DATE OF MEETING: Nov 27, 2012 Port of Seattle 2013 Preliminary Budget Second Reading November 27, 2012 1 Agenda Background Operating Budget Comprehensive Op & Non-Op Budget Capital Budget Tax Levy Remaining Schedule 2 2013 Budget Process Jun. 10 Budget Process Briefing Aug. 14 Budget Assumptions Briefing Aug. 14 Business Plan and Capital Plan Briefing Oct. 2 Capital Budget Briefing Oct. 9 Preliminary Operating Budget Briefing Oct. 23 Tax Levy and Draft Plan of Finance Briefing Nov. 6 Tax Levy Follow-up Briefing Nov. 13 First Reading & Public Hearing of the Preliminary Budget Nov. 27 Second Reading & Final Passage of the Preliminary Budget Nov. 29 Statutory Budget Filed with King County Dec. 14 Release Final Budget and Draft Plan of Finance 3 2013 Preliminary Budget 2011 2012 2013 '13-'12 Bud Chg ($ in '000s) Actual Budget Budget $ % Explanations Operating Revenues Aeronautical 207,763 236,221 249,799 13,578 5.7% Higher terminal realignment and debt svc costs Non-Aeronautical 142,959 149,531 157,826 8,296 5.5% $5.1M for Concessions and $3.8M for RCF Aviation 350,722 385,751 407,625 21,874 5.7% Seaport 99,304 98,578 110,283 11,705 11.9% T-18 special facility bond refunding Real Estate 31,569 32,401 32,516 115 0.4% CDD 16 - - - n/a Corporate 1,561 151 155 4 2.4% Other Operating Revenues 132,451 131,131 142,954 11,823 9.0% Total 483,172 516,882 550,579 33,697 6.5% Operating Expenses Aviation 135,612 160,969 176,291 15,322 9.5% Terminal Realignment, RCF and other Seaport 16,090 20,408 20,498 90 0.4% Real Estate 33,270 36,416 38,536 2,120 5.8% Deferred Maintenance program CDD 11,026 15,516 14,780 -736 -4.7% See note (1) Corporate 71,418 76,535 78,807 2,272 3.0% Total 267,416 309,844 328,912 19,068 6.2% Net Operating Income 215,756 207,039 221,668 14,629 7.1% Note (1): Total costs including capital increase from $36.6M in 2012 budget to $38,988M in 2013 budget. 4 2013 Preliminary Budget 2012 2013 '13-'12 Bud Chg ($ in 000's) Budget Budget $ % Explanations Payroll Costs change Salaries 71,493 76,170 4,677 6.5% Pay increase, new FTEs & OH change Benefits 24,881 26,056 1,175 4.7% Wage & Benefits 91,254 92,251 997 1.1% Contractual increase and reduced OT Payroll to Capital Projects 22,481 22,683 202 0.9% Total Payroll Costs 210,110 217,161 7,051 3.4% Non-Payroll Changes Equipment Expense 5,960 5,864 (95) -1.6% Utilities 21,181 22,056 875 4.1% Higher service water and sewer costs Supplies & Stock 6,740 6,565 (175) -2.6% Reduce Maintenance Materials Outside Services 62,397 72,482 10,085 16.2% Terminal Realignment and other Travel & Other Employee Expense 5,521 5,839 318 5.8% Century Agenda support Insurance Expense 2,142 2,316 174 8.1% Increase in insurance premium Third Party Mgmt Expense 7,434 7,302 (131) -1.8% Miscellaneous Expense 3,744 5,567 1,822 48.7% Add'l RCF pass-thru exp and RE Cont. Business & Occupation Taxes 3,223 3,560 338 10.5% Higher operating revenues Environmental Remediation Exp 3,096 5,865 2,769 89.4% Other 9,487 7,319 (2,168) -22.9% Total Non-Payroll Expenses 99,734 111,751 12,017 12.0% TOTAL 309,844 328,912 19,068 6.2% 5 Key Budget Drivers Operating Revenues ($ in 000's) 2012 Bud 2013 Bud Change $ Change % Aeronautical 236,221 249,799 13,578 5.7% Other Operating Revenues 280,661 300,780 20,119 7.2% Total Operating Revenues 516,882 550,579 33,697 6.5% Operating Expenses Change $ Change % Rental Car Facility & Busing (funded by CFC) 1,815 0.6% Terminal Realignment (cost recovery) 7,800 2.5% Utilities (cost recovery) 875 0.3% Environmental Remediation 2,769 0.9% Deferred Maintanence 558 0.2% B&O Taxes (due to higher operating revenues) 338 0.1% Other Baseline Increase 4,913 1.6% Total Operating Expenses 19,068 6.2% 6 Corporate Cost Analysis ($ in 000's) 2011 2011 2012 2012 2013 Budget Actual Budget Forecast Budget Corporate Cost 75,008 71,418 76,535 75,862 78,807 Total Revenue 492,798 483,172 516,882 531,299 550,579 Total Expense 285,844 267,416 309,844 309,673 328,912 Corporate Cost as % of 15.2% 14.8% 14.8% 14.3% 14.3% Revenues Corporate Cost as % of 26.2% 26.7% 24.7% 24.5% 24.0% Expenses 7 Comprehensive Summary 2011 2012 2013 '13-'12 Bud Chg ($ in '000s) Actual Budget Budget $ % Explanations Revenues 1. Aeronautical Revenues 207,763 236,221 249,799 13,578 5.7% Cost Recovery 2. Other Operating Revenues 275,410 280,661 300,780 20,119 7.2% Seaport, R.E., Non-Aero & Corp. 3. Tax Levy 73,179 73,000 73,000 - 0.0% 4. PFCs 62,358 63,448 64,844 1,396 2.2% Increase in enplanements 5. CFC Revenue for Debt Service 23,669 21,333 20,553 (780) -3.7% Over-estimated in the 2012 budget 6. Fuel Hydrant 7,683 7,839 7,839 - 0.0% 7. Non-Capital Grants and Donations 8,482 1,779 1,909 129 7.3% 8. Capital Contributions 21,180 31,448 17,068 (14,380) -45.7% Less FAA & DHS grants 9. Interest Income 18,884 5,748 7,296 1,548 26.9% Higher General and ADF fund balance Total 698,608 721,477 743,088 21,611 3.0% Expenses 1. O&M Expense 267,416 309,844 328,912 19,068 6.2% 2. Depreciation 158,107 158,479 171,510 13,031 8.2% More assets and bond refundings 3. Revenue Bond Interest Expense 127,579 135,806 129,314 (6,492) -4.8% Refunding of bonds & lower interest rates 4. GO Bond Interest Expense 15,774 14,926 13,291 (1,635) -11.0% Refunding of bonds & lower interest rates 5. PFC Bond Interest Expense 6,758 6,826 6,367 (459) -6.7% 6. Non-Op Environmental Expense 4,335 5,290 4,800 (490) -9.3% Due to superfund sites 7. Public Expense 18,703 7,722 4,469 (3,253) -42.1% Reduction of FAST I and II projects 8. Other Non-Op Rev/Expense (7,814) 3,576 3,972 397 11.1% Total 590,858 642,469 662,635 20,166 3.1% Change In Net Assets 107,750 79,008 80,453 1,445 1.8% 8 FTEs Summary Aviation Seaport Real Estate Capital Dev Corporate Totals 2012 Approved FTE's 860.0 59.9 165.8 255.8 452.2 1,793.7 Mid Year Approval 2.1 0.1 1.0 - 1.0 4.2 Eliminated (4.0) - (3.0) - (2.5) (9.5) Transfers - - - - - - Adjusted 2012 FTE's 858.1 60.0 163.8 255.8 450.7 1,788.4 2013 Budget Eliminated (14.0) - - (0.3) (3.5) (17.8) Transfer - - - - - - New FTE's 2.7 - 4.5 10.0 2.0 19.2 Total 2013 Changes (11.3) - 4.5 9.7 (1.5) 1.4 Proposed 2013 FTE's 846.8 60.0 168.3 265.5 449.2 1,789.8 9 Capital Budget Summary Capital Budget Summary by Category $'s in 000's 2013 2014 2015 2016 2016 2013-17 Commission Authorized/Underway 152,530 151,452 149,476 77,321 15,383 546,162 Pending 2013 Authorization 54,229 138,742 117,700 230,150 122,600 663,421 Pending Future Authorization 6,800 55,060 166,900 198,660 170,722 598,142 Small Capital and Other 11,944 12,650 11,349 10,829 9,942 56,714 Total 225,503 357,904 445,425 516,960 318,647 1,864,439 10 Capital Budget Summary Capital Budget Summary by Division $'s in 000's 2013 2014 2015 2016 2016 2013-17 Aviation 184,240 270,944 312,845 454,769 231,355 1,454,153 Seaport 13,047 62,085 106,055 45,500 69,050 295,737 Real Estate 17,088 16,084 18,062 8,033 9,834 69,101 Corp & CDD 11,128 8,791 8,463 8,658 8,408 45,448 Total 225,503 357,904 445,425 516,960 318,647 1,864,439 11 Sources of Funds K 12 Uses of Funds K 13 Tax Levy Overview Tax Levy Amount Levy amount established by the Commission each year as part of the budget process The maximum allowable levy for 2013 is $91.5 million For 2013 the levy is proposed to be $73.0 million 2013 Tax Levy Uses General Obligation (G.O.) Bonds Debt Service Public Asset Expense: Freight Mobility Seaport and Real Estate Environmental Remediation Liability A portion of Real Estate of operating expenses Real Estate Capital Improvements Argo Road Element capital project (partial funding) Highline School District: Aviation High School Office of Port Jobs 14 Remaining Schedule Statutory Budget Filed with King County Nov. 29, 2012 Release Final Budget Document Dec. 14, 2012 15
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