Item 6e Supp

ITEM NO.     6e Supp
DATE OF 
MEETING November 10, 2009

Port of Seattle
2010 Preliminary Budget
First Reading/Public Hearing
November 10, 2009

1

Today's Agenda
Background
Operating Budget
Non-Op Budget
Capital Budget
Remaining Schedule
Public Hearing
2

2010 Budget Process
May 19 Budget Process Briefing
Aug. 4  Budget and Tax Levy Briefing
Aug. 11  Seaport and Real Estate Business Plan Briefing
Aug. 18 Aviation Business Plan Briefing
Sept. 17 Preliminary Tax Levy Discussion
Oct. 6   Aviation, Seaport, and Real Estate Operating and
Capital Budgets Commission Workshop
Oct. 8   Corporate and CDD Budgets Commission Workshop
Oct. 20  Draft Plan of Finance & Tax Levy Discussion
Nov. 10  First Reading & Public Hearing, Preliminary Budget
Nov. 24  Final Reading & Public Hearing, Preliminary Budget
Dec. 1  Statutory Budget Filed with King County

3

Summary of Budget Reduction Efforts
Reviewed all key functions
Reduced some programs and functions
Implemented voluntary separation program
Modifying medical benefits
Eliminating 110 FTEs (6.2% of workforce)
Reduced O&M costs by $15M (5.6% of total)
4

Major Budget Changes Since 10/8/09
Reduced operating revenues by $2.3M
Reduced OPEB medical costs by $3,018K
Reduced worker compensation expense
in Aviation Division by $101K
Total operating costs reduced by $3,119K

5

Budget Changes Since 10/8/09
10/8/09 Preliminary  Change
($ in thousands)          2009 Bud 2010 Bud  2010 Bud  from 10/8
Operating Revenue     486,367  480,336  478,059   (2,277)
Operating Expense     277,862  284,650  281,531   (3,119)
NOI Before Depreciation  208,506  195,686  196,528     842
Depreciation          157,036  158,575  158,575 -
NOI After Depreciation    51,470   37,111   37,953     842


6

Operating Budget Summary
(w/o Environmental Reserve)
($ In Thousands)            2006    2007    2008   2009 Bud 2009 Fcst 2010 Bud
Operating Revenue         448,449  461,146  488,996  486,367  460,972        478,059
Operating Expense         223,564  241,800  280,278  277,862  257,374        281,531
Environmental Reserve        (1,262)   5,117    8,889    5,6875,687   24,471
Baseline Operating Expense    224,826  236,683  271,389  272,175  251,687        257,060
Baseline NOI before Depr.      223,623  224,463  217,607  214,192  209,285         220,999
Depreciation              140,190  141,589  144,208  157,036  157,036         158,575
Baseline NOI after Depr.        83,433   82,875   73,399   57,15652,249   62,424


777

Operating Budget Summary
(with Environmental Reserve)
($ In Thousands)            2006    2007    2008   2009 Bud 2009 Fcst 2010 Bud
Operating Revenue         448,449  461,146  488,996  486,367  460,972  478,059
Operating Expense         223,564  241,800  280,278  277,862  257,374  281,531
NOI Before Depreciation       224,885  219,346  208,718  208,505  203,598  196,528
Depreciation              140,190  141,589  144,208  157,036  157,036  158,575
NOI After Depreciation         84,695   77,758   64,510   51,469      37,95346,562



888

Net Operating Income
Operating Revenues, Operating Expenses and NOI
600

500

400
Operating Revenues
$ In Millions                                                                                          Operating Expenses
300                                                                  NOI with Env. Reserve
NOI w/o Env. Reserve

200

100

0
2000  2001  2002  2003  2004  2005  2006  2007  2008  09 Bud 09 Fcst 10 Bud

99

Proposed Budget Changes
Proposed budget changes not included in
Preliminary Budget Document
Revenues:
Reduce $200K for Ground Transportation due to
reduced costs
Expenses:
Add $1.2M for rental and demobilization costs of
emergency backup generators
Increase $110K for International Service Incentive
program

10

Summary of Budget Changes





11

2010 Budget Summary
(with Proposed Changes)
10/8/09  11/10/09 Proposed  Change
($ in thousands)           2010 Bud 2010 Bud 2010 Bud from 11/10
Operating Revenue      480,336  478,059  478,828     769
Operating Expense      284,650  281,531  282,831    1,300
NOI Before Depreciation   195,686  196,528  195,997    (531)
Depreciation          158,575  158,575  158,575 -
NOI After Depreciation     37,111   37,953        (531)37,422

12

Non-Ops Income Summary
($ in millions)                         2009 Bud   2010 Bud  Variance
Revenue Bond Interest Expense           (131,824)  (150,070)  (18,246)
Interest Income                         23,040     15,788(7,252)
Other Non-Op Revenue (Expense)           (2,231)    (2,217)     14
Ad Valorem Tax Revenue               75,899    75,899 -
Grants & Donations                    71,276    50,152   (21,124)
Passenger Facility Charges               62,525    61,273(1,252)
Customer Facility Charges                24,573    28,438    3,865
PFC Bond Interest                    (10,996)   (10,497)     499
GO Bond Interest Expense               (29,199)   (14,432)   14,767
Public Expense                      (24,055)   (45,864)  (21,809)
Total                           59,008     8,471   (50,537)

13

2010 Budget Summary
(Includes Op and Non-Ops)
2009     2010
($ in millions)                 Budget     Budget

Operating Revenue            $486,367   $478,059
Operating Expense             277,862    281,531
NOI Before Depreciation        208,505    196,528
Depreciation                  157,036    158,575
NOI After Depreciation             51,469     37,953
Net Non-Ops Income (Expense)      59,008     8,471
Increase in Net Assets         $110,477    $46,424

14

Port-wide FTEs Summary
Aviation Seaport Real Estate Capital Dev Corporate  Total
2009 Approved FTE's    833.1   61.8    151.1    271.3   472.7 1,790.0 
2010 Proposed FTE's    746.4   60.4    154.8    268.0   450.2 1,679.8 
Net Change       (86.7)   (1.4)     3.7     (3.3)   (22.5)  (110.2)



1515

2010-2014 CIP Summary
(Includes Significant Spending Deferrals)

($ in million)         2010   2011   2012   2013   2014   Total   %
2009 Budget CIP    471.3     280.1343.5 358.6  387.2 1,840.6
2010 Budget CIP   414.0     293.7388.6 184.3  149.0 1,429.5
Net Change       (57.3)  45.1  13.7 (174.3) (238.3)  (411.1) -22%



16

2010 Capital Budget Summary
($ in millions)              Aviation    Seaport  Real Estate  Corporate    Total
Committed               $275.8    $30.6    $15.3    $10.5    $332.3
Business Plan Prospective      $61.1    $10.8     $5.6     $4.2     $81.7
Total                   $337.0     $41.4     $21.0     $14.7    $414.0




1717

2010 Capital Budget by Division
Professional & Tech.
Services Div.
3.2%      Real Estate Division
4.6%
Seaport Division                                     Total Spending: $332.3M
9.2%


Aviation Division
83.0%




Not including $81.7M of Business Plan Prospective Projects

18

5-Year Capital Plan
The 5-year capital plan from 2010-2014 is $1.43 billion
Aviation Committed Projects              $587.5M
Seaport Committed Projects              $ 65.8M
Real Estate Committed Projects           $ 50.5M
Corporate Committed Projects            $ 40.3M
Total Committed Projects           $744.1M
Aviation Business Plan Prospective*       $488.8M
Seaport Business Plan Prospective*       $126.1M
Real Estate Business Plan Prospective*    $ 61.3M
P&TS General (ICT Business Services)*    $ 9.2M
Total Business Plan Prospective*      $ 685.4M
*The preliminary numbers may change pending outcome of tax Levy discussions

19

CIP History 2000  2010
Total Committed CIP

700.0

600.0

500.0

400.0
$ in millions         300.0
200.0

100.0

0.0
2001   2002   2003   2004   2005   2006   2007   2008   2009   2009   2010
Act     Act     Act     Act     Act     Act     Act     Act     Bud    Fcst    Bud
Total Committed CIP  400.0   471.0   467.3   490.4   514.1   470.1   393.0   327.6   604.0   401.7   332.3

20

Remaining Schedule
Second Reading                        Nov. 24, 2009
Statutory Budget Filed with King County    Dec. 1, 2009


21

Port of Seattle
2010 Preliminary Budget
First Reading/Public Hearing
November 10, 2009

22

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