7d Supp Corrected
ITEM NO. 7d_Supp DATE OF MEETING Oct. 26, 2010 Tax Levy Discussion Follow-up Revised October 26, 2010 Levy Sources and Uses Current Assumptions Amount Assumed annual amount of $73.5 million for five years based on prior Commission direction Uses Seaport and Real Estate Environmental expenditures Regional Transportation - Freight mobility projects/FAST Corridor Highline School District Noise and Aviation High School - Not eligible for Airport funding Non-Aviation portion of Port Jobs program Support Real Estate Division Capital Plan fundingwould require project deferrals Offset income shortfall Transportation Infrastructure Fund established in 2010 separate balance Not currently included SR99 Tunnel, S. Park Bridge, other environmental costs 2 Preliminary 2011-2015 Tax Levy Forecast Presented on October 12, 2010 $'000 2011 2012 2013 2014 2015 LEVY USES G.O. DS - existing 40,438 40,442 40,444 40,442 30,746 Other uses Roads and Transportation Projects 9,100 5,050 600 - - School Construction & Noise Insulation 650 7,160 3,028 1,094 - Sea & RE Environmental expenditures - preliminary 11,559 23,985 18,348 3,952 10,009 Transportation & Infrastructure Fund 4,000 PortJobs 46 46 46 46 46 Subtotal Other 21,355 36,241 22,022 5,092 14,055 Real Estate Support RE Capital Total 20,357 20,477 12,109 11,455 11,395 RE Operating Subsidy 5,372 5,312 5,707 5,175 5,086 Subtotal RE Support 25,729 25,789 17,816 16,630 16,481 Total Uses 87,521 102,472 80,281 62,164 61,282 LEVY SOURCES Beginning Tax Levy Fund Balance 26,634 12,613 (16,359) (23,140) (11,805) Rail Corridor reimbursements less repayment of GF loan Annual levy 73,500 73,500 73,500 73,500 73,500 Total uses (87,521) (102,472) (80,281) (62,164) (61,282) Projected Ending Tax Levy Balance 12,613 (16,359) (23,140) (11,805) 413 Transportation & Infrastructure Fund Balance 13,000 13,000 13,000 13,000 17,000 3 Follow Up Items from October 12 Discussion Background information on projected vs. actual year-end Levy fund balance Background information on G.O. bond refunding savings Additional information on environmental expenditures Evaluation of Seaport funding contribution for previously expensed environmental costs Areas for discussion: Five year levy assumption Real Estate capital plan Potential additional uses SR 99 Tunnel contribution South Park Bridge 4 Tax Levy Fund Balance Budget vs. Actual Actual balance is typically higher due to: Grant receipts not budgeted due to uncertainty Delays in capital spending Lower G.O. debt service budget included bonds for rail corridor (2008 & 2009) Partially off-set in some years by: Higher environmental costs Acquisition of the rail corridor with cash (2008 & 2009) Tax Levy Ending Fund Balance ($ million) budget actual actual v. budget 2005 10.3 15.5 5.2 2006 0.4 11.7 11.2 2007 0.2 32.1 31.9 2008 10.1 42.2 32.0 2009 6.8 9.3 2.4 5 G.O. Bond Refunding Opportunity to refund $80 million of G.O. bonds Current estimated Present Value savings is $7 million Reduces amount of tax levy needed for debt service about $1.9 million 2011-2015 Annual savings increase over time Final maturity in 2025 $'000 2011 2012 2013 2014 2015 G.O. DS - existing 40,438 40,442 40,444 40,442 30,746 Savings from G.O. bond refunding (110) (257) (404) (542) (662) Post Refunding DS - estimate 40,328 40,185 40,040 39,900 30,084 6 Analysis of Potential Seaport Funding of Previously Booked Environmental Costs Seaport booked $24 million of additional environmental liabilities from 2005-2009 $23 million categorized as non-operating expense, related to legacy costs; $1 million categorized as operating expense The increase in environmental liabilities is primarily associated with Terminal 117 sediments Terminal 91 Clean-up Lower Duwamish East Waterway In addition, the Seaport projects booking additional liabilities of $21 million during 2010-2011 (primarily non-operating) Total amount from 2005-2011 will be approximately $45 million Using Seaport funds to cover these expenses would require an offsetting reduction in planned capital spending 7 Impact of $24M Seaport Funding Contribution for Environmental Costs LEVY SCENARIO: SUMMARY TABLE - Flat Levy with Seaport Contribution $'000 2011 2012 2013 2014 2015 LEVY USES G.O. DS - existing 40,438 40,442 40,444 40,442 30,746 Other uses Roads and Transportation Projects 9,100 5,050 600 - - School Construction & Noise Insulation 650 7,160 3,028 1,094 - Sea & RE Environmental expenditures - preliminary 11,559 23,985 18,348 3,952 10,009 Transportation & Infrastructure Fund 12,000 16,273 PortJobs 46 46 46 46 46 Subtotal Other 21,355 36,241 22,022 17,092 26,328 Real Estate Support RE Capital - Committed 15,357 8,522 3,444 2,555 1,995 RE Capital - Business Plan Prospective 5,000 11,955 8,665 8,900 9,400 RE Capital Total 20,357 20,477 12,109 11,455 11,395 RE Operating Subsidy 5,372 5,312 5,707 5,175 5,086 Subtotal RE Support 25,729 25,789 17,816 16,630 16,481 Total Uses 87,521 102,472 80,281 74,164 73,555 LEVY SOURCES Beginning Tax Levy Fund Balance 26,634 36,886 7,914 1,133 468 Seaport contribution for Environmental Exp. 24,273 Annual levy 73,500 73,500 73,500 73,500 73,500 Total uses (87,521) (102,472) (80,281) (74,164) (73,555) Projected Ending Tax Levy Balance 36,886 7,914 1,133 468 413 Transportation & Infrastructure Fund Balance 13,000 13,000 13,000 25,000 41,273 Note: assumes surplus fund balances deposited in Transportation and Infrastructure Fund 8 Environmental Costs Cash Expenditures Seaport and Real Estate cash expenditures forecasted to be paid over next five years Net of any payments by potentially liable parties Does not include estimates of possible recoveries from grants, insurance or litigation Primarily legacy costs (non-operating) Seaport and RE Environmental Payments ($'000) 2011 2012 2013 2014 2015 5-YR TOTAL For liabilities previously booked 9,290 17,804 12,255 1,352 478 41,180 For liabilities expected to be booked in 2011 1,067 1,137 1,727 1,756 112 5,799 For anticipated future liabilities 1,201 5,044 4,366 844 9,419 20,874 Total forecasted payments 11,559 23,985 18,348 3,952 10,009 67,853 9 Seaport Projects to be Deferred if Funds Required Early $24 million payment to tax levy fund (projects budgeted 2011-2012) Pier 66 Shore Power $14.7M Seaport Green Port Initiative $1.9M T91 Berths 6 & 8 Redevelop $6.0M (additional $'s in 2013-2014) P90 C175 Roof Replacement $1.2M $45 million payment to tax levy fund (in addition to above projects) Container Dock Upgrades $ 5.0M T18 Pile Cap Improvements $5.1M T10 Interim Development $5.6M (authorized project) RFID Readers $1.0M T108 Paving Overlay $3.0M Pier 90 Additional 60T Bollards $.8M Fleet Replacement $0.5M 10 Real Estate CIP FT & MIC Total capital plan is $75.8 million of which $36.2 million is for Fishermen's Terminal and the Maritime Industrial Center FISHERMEN's TERMINAL & MIC Total 2011- CIP Budget Status2 CIP Number Project Description 2011 2015 Committed C800175 MIC Seawall Replacement 2,123 2,123 C800386 FT NW Dock E Fender Sys Repl 3,350 3,350 C800136 FT S. Wall Reconstruction P4 4,668 4,668 C800137 FT C15 HVAC Improvements 340 3,794 Committed Sum 10,481 13,935 Bus Plan Prospective C800045 FT Net Shed Solution 500 16,600 C800005 FT Paving/Storm Upgrades 750 1,500 C800191 FT C14 (Downey) Bldg Improvements 0 450 C800344 FT C-2 Bldg Roof & HVAC Rplmnt 50 1,175 C800446 FT C15 Bldg Subsidence Imp 150 2,500 Bus Plan Prospective Sum 1,450 22,225 Total Fishermen's Terminal and MIC 11,931 36,160 11 Other Real Estate Capital Projects OTHER REAL ESTATE Total 2011- CIP Budget Status2 CIP Number Project Description 2011 2015 Committed C800187 RE Maintenance Shop Solution 186 186 C800115 Fleet Replacement 173 4,465 C800116 2007 Small Projects 2 2 C800209 RE: 2009 Small Projects 100 100 C800243 RE Preliminary Planning 250 1,250 C800244 RE Technology Projects 250 1,250 C800302 RE Div: Green Port Initiative 200 1,500 C800305 RE: 2010 Small Projects 225 225 C800313 P69 N Apron Piling Cathodic 1,400 2,903 C800359 RE: 2011 Small Projects 665 665 C800447 RE: 2012 & Beyond Small Proj 2,000 C800126 Tenant Improvements -Capital 775 2,742 C800304 Bell Harb Lighting Ctrl Upgrad 650 650 Committed Sum 4,876 17,938 Bus Plan Prospective C800216 RE: Contingency Renew.&Replace 3,000 17,000 C800004 SBM Fuel Dock Building 100 1,000 C800088 Central Seawall Replacement 915 C800196 T102 Bldg Roof Replacement 100 2,430 C800345 P66 Chiller Upgrades 350 350 Bus Plan Prospective Sum 3,550 21,695 Total Other Real Estate 8,426 39,633 GRAND TOTAL REAL ESTATE CIP 20,357 75,793 12 Conclusion & Next Steps Additional questions or information requests? Staff is seeking Commission discussion and direction on key issues: Funding of environmental costs Potential Real Estate CIP deferrals 2011 Levy amount and assumptions for 2011-2015 for capital planning Funding for SR 99 Tunnel and South Park Bridge Remaining Schedule November 9, 2010 First Reading of the 2011 Budget November 23, 2010 Second Reading of the 2011 Budget 13
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