9a Presentation Central Services Budget Briefing
Item No. 9a_supp Meeting Date: September 22, 2020 Central Services 2021 Preliminary Budget September 22, 2020 1 Outline for the Presentation Strategy to Budget Process SWOT Analysis 2021 Budget Guiding Principles, Strategy & Actions 2021 Operating Budget FTEs Summary Capital Budget (2021 2025) Appendix with Budget Details and Reports 2 2021 Budget Timeline 2021 Business Budget Budget Briefings First Reading & 2nd Read ing & Plan and CIP Development Public Hearing Final Pass age of Devel opment Briefing for 2019 Budget 2019 Bu dget (Ma y/June) (June/July ) (Sept/Oct) (Mid-November) (Late Nove mber) 3 Strategy to Budget Process Century Agenda g Vision/Goals in 5- 10 Years n SWOT gic Plan Gap Strate Objectives & KPIs 3 5 Years n 2021 Business Plan tatio n e 2021 Budget Annual m le p 2021 Performance Plans Im 4 Century Agenda Drives Port Priorities and Budgets Position the Puget Sound Region as a Premier International Logistics Hub Advance this Region as a Leading Tourism Destination and Business Gateway Responsibly Invest in the Economic Growth of the Region and all its Communities Be the Greenest and Most Energy Efficient Port in North America Become a Model for Equity, Diversity and Inclusion Be a Highly Effective Public Agency Central Services SWOT Summary Strengths Weaknesses Workforce Staffing Challenges Knowledgeable, highly-trained, specialized Multiple vacancies = overworked staff Highly adaptable, seamless move virtual environment Critical maintenance suffers; no capacity for new projects Overreliance on consultants External Relationships Solid relationships with key external stakeholders that are well Inefficient internal processes leveraged by staff Overly complex processes create bottlenecks and an inability to operate efficiently Strong customer Service Technical systems need improvement with increase telework Opportunities Threats Focus on Equity Economy and Resources Current race/economic disparity issues drive equitable Short/long term financial instability; lack of capacity; reduced development opportunities ability to respond Tenants/partners slow to recover in recession Drive economic activity by accelerating capital development and Potential for insufficient revenues to support critical projects maintenance projects Fewer travelers/customers allows for acceleration of COVID Impacts construction projects Potential that pandemic spikes again causing future Capital projects help sustain Port workforce and community uncertainty and related socioeconomic impacts partners Creates challenges for Port operations and facilities 6 2021 Budget Guiding Principles Continue investments that enhance the health of our communities and promote equity Continue to ensure the safe and efficient operation of Port business gateways to support the viability of our customers, tenants and suppliers Devote sufficient resources and continue to implement practices to ensure the safety of employees, customers and the public Strive to preserve employment to the greatest extent possible Continue to assess the short- and long-term effects of COVID-19 on Port industries, operations and facility needs Maintain a long-term strategic view of capital improvements with a priority on investments that generate revenue and provide long-term, sustainable community and economic benefits 7 2021 Budget Strategies o Fund only the most essential programs and services at a sustainable level o Reduce non-essential expenditures and look for ways to increase revenue o Budget revenues very conservatively given the uncertain business outlook o Position the Port to continue leading the recovery and prepare for a return to growth mode o Build in flexibility and options in the event that business conditions change dramatically 8 General Key Budget Actions o Minimal new requests for 2021 budget o No pay increases for non-represented staff in 2021. Labor Relations will collaborate with bargaining units to achieve comparable cost savings. o Significant savings achieved through current hiring freezemany positions frozen until 2022 o Travel and training limited to minimal amount to maintain certifications o Contracted services scaled back to those most essential to maintain operations and advance key initiatives 9 9 Central Services Budget Highlights Total operating expense decrease of $11.9 million, or -8.8% compared to the 2020 Approved Budget Cut $6.9M from payroll budget through hiring freeze, FTEs elimination, and delay hiring for 2021 (with an impact to a total of 62.6 FTEs) Zero-based approach:reviewed all non-payroll items and reduced spending by 22.3% from the 2020 approved budget 10 2021 Preliminary Budget Summary 2020 2020 2021 Inc/(Dec) from 2020 Approved Revised Proposed Approved Budget (in $000's) Budget Budget Budget $ Change % Change Total Payroll Costs (with Capital) 124,540 121,821 118,079 (6,461) -5.2% Total Non-Payroll Costs (with Capital) 46,958 42,050 37,828 (9,130) -19.4% Total Costs (with Capital) 171,498 163,871 155,906 (15,591) -9.1% Sal/Wage-Cap/Govt/Envrs Proj (20,419) (18,535) (19,248) (1,172) 5.7% Cap/Govt/Envrs Projects OH (5,772) (5,378) (5,974) 202 -3.5% OnsiteConsult-Cap/Gov/Env Proj (11,028) (11,975) (8,434) (2,594) 23.5% Total Charges to Capital (37,219) (35,887) (33,655) (3,563) 9.6% Total Payroll Expenses 104,121 103,286 98,831 (5,290) -5.1% Non-Payroll O&M Expense 30,158 24,697 23,420 (6,738) -22.3% Total O&M Expenses 134,279 127,983 122,251 (12,028) -9.0% 11 Central Services Budget by Account 2019 2020 2020 2021 Inc/(Dec) from 2020 Approved Revised Proposed Approved Budget DESCRIPTION (in $000's) Actual Budget Budget Budget $ Change % Change TOTAL OPERATING REVENUE 1,282 40 40 181 141 352.3% OPERATING EXPENSE Majority of savings Salaries & Benefits 66,708 73,710 72,875 72,029 (1,681) (2.3%) Wages & Benefits 20,358 30,411 30,411 26,802 (3,609) (11.9%) is from Payroll to Cap/Govt/Envrs Proj 16,713 20,419 18,534 19,248 (1,172) (5.7%) frozen/deferred TOTAL SALARIES & BENEFITS 103,778 124,540 121,821 118,079 (6,461) (5.2%) FTEs, reduction in Equipment Expense 2,869 2,526 2,139 1,858 (668) (26.4%) Utilities 29 46 39 33 (14) (29.4%) outside services, Supplies & Stock 1,369 1,302 1,169 895 (406) (31.2%) and travel/other Outside Services 26,553 33,753 31,563 27,541 (6,212) (18.4%) Travel & Other Employee Exps 2,548 3,343 1,808 1,358 (1,984) (59.4%) employee expense. Promotional Expenses 658 867 528 316 (550) (63.5%) Telecommunications 611 679 656 616 (63) (9.3%) Property Rentals 975 1,204 1,138 1,092 (112) (9.3%) Worker's Compensation Expense 622 375 375 621 246 65.5% General Expenses 3,169 2,839 2,610 3,498 659 23.2% Overhead Allocations - 25 25 () (25) (100.0%) $15.6M, or 9.1% TOTAL NON-PAYROLL EXPENSES 39,402 46,958 42,050 37,828 (9,130) (19.4%) reduction before TOTAL COSTS BEFORE CAPITAL CHARGES & TRANSF 143,180 ERS 171,498 163,871 155,906 (15,591) (9.1%) charges to capital, Charges to Cap/Govt/Envrs Projects (29,290) (37,219) (35,887) (33,655) 3,563 (9.6%) capital charges also TOTAL OPERATING EXPENSE 113,891 134,279 127,983 122,251 (12,028) (9.0%) reduced. 12 Central Services Budget by Department 2019 2020 2020 2021 Inc/(Dec) from 2020 Approved Revised Proposed Approved Budget Departments (in $000's) Actual Budget Budget Budget $ Change % Change O1100-Executive 2,018 2,355 2,253 2,285 (71) (3.0%) O1200-Commission Office 2,022 2,292 2,014 2,169 (123) (5.3%) O1310-Legal 4,987 4,001 3,948 3,919 (82) (2.0%) O1330-Risk Services 3,137 3,438 3,380 3,939 502 14.6% Across the board O1400-External Relations 7,760 11,070 10,274 9,328 (1,743) (15.7%) O1460-Equity, Diversity and Inclusion 2,337 4,465 5,328 3,743 (722) (16.2%) savings in virtually O1500-Business Intelligence 1,302 2,209 1,516 1,523 (686) (31.1%) all departments. O1600-Engineering 5,696 8,765 5,143 5,580 (3,186) (36.3%) O1700-Port Construction Services 4,341 3,748 3,468 3,619 (129) (3.4%) Department-level O1800-Human Resources 9,187 11,690 10,191 11,385 (304) (2.6%) review materials O1810-Labor Relations 1,230 1,386 1,336 1,346 (40) (2.9%) O1900-Information & Comm. Technology 23,014 26,013 25,695 24,427 (1,586) (6.1%) available to O1980-Information Security 1,203 1,968 1,915 1,913 (55) (2.8%) Commission under O2100-Finance & Budget 2,037 2,219 2,211 2,292 73 3.3% O2200-Accounting/Financial Reporting 7,341 9,024 8,810 8,724 (301) (3.3%) separate cover. O2280-Internal Audit 1,450 1,749 1,589 1,637 (113) (6.4%) O2400-Offic of Strategic Initiatives 1,448 1,619 1,197 1,059 (560) (34.6%) O2700-Environment & Sustainability 976 1,538 1,214 1,035 (503) (32.7%) O2900-Corporate Contingencies 39 (2,702) (100) (1,502) 1,200 (44.4%) O4300-Police Department 27,793 31,444 31,312 28,297 (3,146) (10.0%) O9200-Central Procurement Office 4,452 5,988 5,289 5,533 (455) (7.6%) TOTAL OPERATING EXPENSE 113,891 134,279 127,983 122,251 (12,028) (9.0%) 13 2021 New Budget Requests 12 requests submitted for a total of $666K 6 requests approved for a total of $451K Compensation Program Review Consultant ($150K) HR Outreach Specialist ($117K) Carbon Policy Assistance for 2021 Legislative Session ($75K) Employee Engagement Survey ($70K) Behavior Based Safety Program Development ($26K) Affirmative Action Plan Consulting Services ($9K) 14 Payroll Cost Savings Description (Amount in $000s) # of FTEs Est. Amount 1) Frozen FTEs 43.8 5,184 2) Eliminated FTEs 6.9 621 3) Delay Hiring 12.0 1,071 TOTAL 62.6 6,876 No pay increase budgeted for non-represented staff and equivalent savings assumed for represented staff 43.8 FTEs frozen, 6.9 FTEs eliminated, and 12.0 FTEs hiring delayed in 2021 No furloughs currently included in budget Budget includes a 1.5% vacancy factor 15 2021 FTE Summary 16 Community Program Investments September 22, 2020 17 Port Community Programs and Partnerships The Port is planning to invest $13.5 Million to support community programs and partnerships next year o Supports economic development, workforce development, equity/diversity/inclusion, and sustainability initiatives o $1.4 MM goes to City of SeaTac for community relief Some reductions were made to community programs based on: o Previous spending patterns o Need to share reductions across all Port operations and partnerships Community programs help support 22 staff positions across the Port in Tourism, Diversity in Contracting, Workforce Development, Human Resources and EDI Departments. o These community program budgets include reductions in travel, promotional hosting, and other discretionary expenses These investments are augmented with $2-3 Million annually in sponsorships and memberships. Staff has made similar reductions to 2021 sponsorship/membership budgets. 18 Port Community Program Funding by Activity $1,217,000 8% $1,400,000 9% Economic Development: $817,000 Tourism Dept., Spotlight Advertising, City ED grants, Diversity in Contracting Dept., Maritime Innovation, 6% $5,035,000 SKCF Workforce Development: 35% HS Interns, Workforce Development Dept. Equity, Diversity & Inclusion EDI Dept., Duwamish Community Equity program SeaTac Community Relief $6,732,000 Sustainability: 44% ACE Fund, E&S Committee, Low Carbon Fuel standard, 19 2020 COMMUNITY PROGRAMS 2020 % levy 2019 2020 2020 Cost 2021 2021 Program (in $000) 2020 Adds Revised funding Actual Budget Reduction Reduction (or transfer) Budget Budget Workforce Development 47 1,771 3,119 216 1,500 4,403 -1,721 2,682 Tourism Program 56 1,338 1,536 194 300 1,642 +839 2,481 South King County (SKC) Fund 100 - 1,500 0 - 1,500 -180 1,320 City of SeaTac Community Relief 100 1,400 1,400 0 - 1,400 0 1,400 Diversity in Contracting (formerly Small Business) 13 883 1,520 188 - 1,332 +170 1,502 Airport Spotlight Ad Program 100 934 1,148 0 - 1,148 -448 700 EDD Partnership Grants 100 763 960 0 - 960 -50 910 Equity, Diversity & Inclusion 0 566 1,346 420 - 925 +137 1,062 High School Internship Program 0 529 657 25 - 632 -132 500 Airport Community Ecology (ACE) Fund 100 260 522 0 - 522 -310 212 Duwamish Valley Community Equity Program 100 - 292 0 - 292 -17 275 Energy & Sustainability (E&S) Fund 100 283 250 100 - 150 +100 250 Maritime Blue Partnership 100 - 150 0 - 150 0 150 Low Carbon Fuel Standard Support 0 - 150 45 - 105 -30 75 Sustainable Aviation Fuels & Air Emissions Program 0 - 40 0 - 40 -40 0 TOTAL 60 8,727 14,590 1,188 1,800 15,201 -$1,682 $13,518 =8.1 % = 12.3% 20 reduction addition Central Service CIP September 22, 2020 21 Central Services Capital Projects Summary 2021-2025 Five Year Capital Plan ($000's) * 2021 2022 2023 2024 2025 Total Commission Authorized Projects 1,209 - - - - 1,209 Projects Pending Authorization 3,600 3,450 2,000 2,000 2,500 13,550 Small Capital 4,435 4,809 4,740 4,600 4,488 23,072 CIP Cashflow Management Reserve (2,500) - 1,000 1,000 500 - Total 9,244 8,259 6,740 6,600 6,988 37,831 * Excludes ICT projects budgeted within operating divisions as well as ICT portions of PMG led projects. 22 Commission Authorized Projects 2021-2025 Five Year Capital Plan ($000's) * 2021 2022 2023 2024 2025 Total Commission Authorized Projects Radio System Upgrade U 409 - - - - 409 FEMA Police Boat Acquisition N 800 - - - - 800 Total 1,209 - - - - 1,209 * N = New System or Function U = System Upgrades or Replacements 23 Projects Pending Authorization 2021-2025 Five Year Capital Plan ($000's) * 2021 2022 2023 2024 2025 Total Projects Pending Authorization IT Renewal/Replacement U - - 2,000 2,000 2,500 6,500 POS Offices Wi-Fi U 1,450 1,000 - - - 2,450 Phone System U 1,000 - - - - 1,000 STIA Network Redundancy N - 1,500 - - - 1,500 Environmental Remediation System N 500 - - - - 500 Community Communication Display N - 500 - - - 500 Environmental Mgmt Info System N 350 - - - - 350 ID Badge System Upgrade U 300 450 - - - 750 Total 3,600 3,450 2,000 2,000 2,500 13,550 * N = New System or Function U = System Upgrades or Replacements 24 Small Capital Projects 2021-2025 Five Year Capital Plan ($000's) 2021 2022 2023 2024 2025 Total Small Capital Technology Infrastructure 1,500 1,500 1,500 1,500 1,500 7,500 Technology Business Applications 1,000 1,000 1,000 1,000 1,000 5,000 Enterprise GIS Small Capital 250 250 250 250 250 1,250 Corporate Fleet Replacement 685 645 713 725 748 3,516 Corporate Small Capital 100 100 100 100 100 500 CDD Fleet Replacement 830 940 995 900 660 4,325 Engineering Small Cap 70 374 182 125 230 981 Total - Small Capital 4,435 4,809 4,740 4,600 4,488 23,072 CIP Cashflow Management Reserve CIP Reserve - Central Services (2,500) 1,000 1,000 500 - 25 Remaining 2021 Budget Schedule Operating division budgets briefing (10/13) 2021 Preliminary Budget Document Available to the Commission (10/20) 2021 Tax Levy & Draft Plan of Finance Commission Briefing (10/27) NWSA Budget Study Session by Managing Members (10/28) Introduction and Public Hearing of the 2021 Budget (11/10) Commission Approval of the 2021 ILA between POS and the NWSA (11/10) NWSA Budget Adoption by Managing Members (11/11) Adoption of the 2021 Budget (11/17) Filing of 2021 Statutory Budget with King County Council & Assessor (12/3) Release of 2021 Budget to the Public (12/15) 26 Summary We are continuing to weather the storm Proposed budget maintains essential Port services 2021 budget builds on early actions taken in 2020 in response to pandemic Continued uncertainty regarding recovery pathadditional steps may be required in 2021 if conditions deteriorate Need to maintain vigilance on economic trends and track performance against budget 27 Central Services 2021 Preliminary Budget Appendix September 22, 2020 28 Non-Payroll Costs Reduction Line Description (in $000s) Amount Depts/Comments 1 On-site Consultants (2,920) Engineering (Eng) 2 Travel & Other Employee Expense (1,984) Reduced travel, number of conferences and other employee expenses 3 Equipment Expense (668) Reduced Computer & Telephone Acq. and other equip items 4 Promotional Expenses (550) Reduced events 5 Software Maintenance Transfer to AV Maint (446) ICT Transfer to AV Maintenance 6 Supplies & Stock (406) Reduced Office Supplies ($179K) and General Supplies ($83K). 7 LEAN/Processs Improvement Consultant (350) Office of Strategic Initiative (OSI) 8 ACE/Forterra (310) Remaining sponsorships and Forterra Service Directives 9 Cut several External Relations contracts (224) External Relations 10 Engagement and Strategic Plan (200) Workforce Development (WFD) 11 Airport Surveys (150) Business Intellegence (BI) 12 Behavior Based Safety Training (150) Human Resources (HR) 13 Property Rentals (112) HR ($47K), Police ($38K), WFD ($16K), Exec ($7K), Eng ($6K) 14 Maritime Secondary Education (100) Workforce Development (WFD) 15 External Communications Support (115) External Relations 16 Creative Services (100) External Relations 25 Insurance Expense 715 Risk Mgmt 26 Reduction of Credit Card Rebates 150 Contingency 29
Limitations of Translatable Documents
PDF files are created with text and images are placed at an exact position on a page of a fixed size.
Web pages are fluid in nature, and the exact positioning of PDF text creates presentation problems.
PDFs that are full page graphics, or scanned pages are generally unable to be made accessible, In these cases, viewing whatever plain text could be extracted is the only alternative.