7c Supp
ITEM NO.: _ 7c_______ DATE OF MEETING: 10/12/2010 Preliminary Tax Levy Discussion October 12, 2010 Topics Tax Levy Background 2010 Budget Preliminary 2011 Budget Policy Discussion 2 Tax Levy Overview Tax Levy Amount Levy amount established by the Commission each year as part of the budget process Statutory limitations on annual collection; Port is below maximum General Purpose tax levy authorized for "any lawful Port purpose" Tax Levy Uses Payment of General Obligation bond debt service Port policy annual debt service is no more than 75% of levy collection General Purpose use established by Commission policy Non-aviation environmental remediation Regional freight mobility projects Real Estate Division Support Airport noise mitigation ineligible for airport funding 3 Levy Capacity Statutory maximum levy exceeds current levy amount Maximum increases each year by 1% + allowance for new construction 4 Century Agenda: Funding Policy & Strategy Principles The Port should be primarily funded through the self-sustaining enterprises that are at the core of its mission. Revenues from the Port's tax levy should be used for activities that are not fully self-sustaining and cannot be funded in another manner. These activities should directly support the Port's core mission, provide for critical infrastructure investments, or provide environmental mitigation that cannot be funded through its enterprises. The Port should demonstrate to the public that it has managed its financial resources as a disciplined steward of the public interest, guided by priorities set forth in its strategic plan The Port should foster a culture of partnership and collaboration in pursuing public and private funding partnerships for investments that reap shared benefits to all its partners, and that no single entity can achieve independently. Adopted August 4, 2009 5 Tax Levy Background Funding Context Airport financially self sufficient Except for portions of mitigation not eligible for Airport funding Seaport financially self sufficient beginning 2010 Levy continues to fund G.O bond debt service bonds previously used for Seaport assets Environmental remediation - mostly legacy items King County Property tax - 2009 Port 2% All Other 15% State Schools 22% County 13% Local Schools Municipal 29% 19% 6 Existing G.O. Bond Debt Service (1) 2009 (in 000's) Containers Stage II Dredge- Phase I $922 T-5 Expansion & Upgrades 18,089 T-46 Expansion Redevelopment 4,458 T-18 Expansion & Upgrade 12,074 Total Containers $35,544 Docks and Commercial Properties T-91 Apron & Infrastructure Improvements 2,219 Pier 17 Dock Replacement 122 T-86 Terminal Upgrades 120 Total Docks and Commercial Properties $2,461 Commercial Properties World Trade Center Garage 640 Fishing Fishermen's Terminal Docks & Seawall Renewal 1,778 Total G.O. Bond Debt Service $40,423 (1) Debt service on bonds originally issued between 1994 and 2004 7 Levy Sources and Uses 2010 Adopted Budget & Forecast Amount Flat amount at $73.5 million for five years Uses Seaport and Real Estate Environmental mitigation Regional Transportation Freight mobility projects/FAST Corridor Eastside Rail Corridor Transportation and Infrastructure Fund Highline School District Noise mitigation and Aviation High School Not eligible for Airport funding Non-Aviation portion of Port Jobs program Real Estate Division support Capital Plan NOI shortfall 8 2010 Budget Levy Forecast (as of Nov. 2009) $'000 2010 2011 2012 2013 2014 LEVY USES G.O. DS -existing 40,426 40,438 40,442 40,444 40,442 Other uses Roads and Transportation Projects 15,744 5,709 3,100 School Construction & Noise Insulation 9,075 650 10,554 1,744 - Sea & RE Environmental Expenditures 8,712 5,587 13,894 6,000 6,000 Transportation & Infrastructure Fund 13,000 - - 13,000 18,900 PortJobs 46 46 46 46 46 Subtotal Other 46,577 11,992 27,594 20,790 24,946 Real Estate Support RE Capital 16,996 22,050 12,350 8,425 4,781 RE Operating Subsidy 3,450 3,166 2,988 3,583 3,611 Subtotal RE Support 20,446 25,216 15,338 12,008 8,392 Total Uses 107,449 77,646 83,374 73,242 73,780 LEVY SOURCES Available Balance 48,000 14,051 9,905 31 289 Annual levy 73,500 73,500 73,500 73,500 73,500 Total Sources 121,500 87,551 83,405 73,531 73,789 Projected Ending Fund Balance 14,051 9,905 31 289 9 9 Changes since last year Changes reflected in levy update Projected environmental mitigation expenditures have increased as projects move forward in scoping and review process Real Estate needs have increased Capital spending plan Better estimates on deferred maintenance Potential needs/changes not yet fully incorporated pending further Commission discussion and direction SR99 tunnel contribution South Park Bridge Additional environmental expenditures 10 Preliminary 2011-2015 Tax Levy Forecast $'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 11 Policy Discussion Currently forecasted levy uses exceed sources assuming continued flat dollar amount Options include increasing future levy and/or reducing spending Near-term decisions: Levy amount for 2011 and direction regarding 5-yr planning assumptions 12
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