Maritime, Economic Development CIP and Capital Funding Presentation
Maritime and Economic Development
CIP and Capital Funding
August 6, 2020
1
Agenda
• Budget Timeline
• Capital Planning Process Changes
• 2020 Budget Principles
• Capital Project Priorities
• Review of Financial Capacity
• Review Revised Preliminary Capital Improvement Plan (CIP)
• Discuss projects impacted by lower financial capacity
• Discuss Next Steps
2
Budget Timeline
2021-2025 CIP Budget Dev Review Initial Continue to
Commission 2021 Capital
Planning and Briefing & Preliminary Refine CIP, Approval of
Budget Briefings Spending
Development Funding MD/EDD Funding 2021 Budget
Capacity & Plan of Forecast based
Capacity and
2021-2025 CIP Finance on Q4 Update
Review Budget
& Funding
November 17th
May/June October Jan/Feb 2021
July August 6 August/Sept.
3
Pandemic Challenges Require Iterative CIP
Review with Commission
Typical This Year
• Capital plan is updated quarterly based on • Normal process and schedule is modified
actual spending and updated forecasts due to Pandemic
• In June, Maritime and EDD leadership use • Early June, staff-level CIP review is
most recent quarterly update to begin accelerated starting point
developing CIP for Commission review • CIP undergoing complete review/revision:
• Preliminary funding analysis is used to – Respond to changing business environment
refine CIP – Address funding challenges and
• Updated CIP and funding analysis are – Allow for flexibility in light of uncertainty
presented to Commission in Fall • Preliminary CIP today reflects affordability
4
2021 Budget Guiding Principles
• Preserve Port employment to greatest extent possible.
• Focus on conservative budgeting and cash preservation while maintaining
investments that enhance health of our communities and promote equity.
• Continue to ensure safe operation of Port business gateways.
• Devote sufficient resources and continue to implement practices to ensure
safety of employees, customers and public.
• Continue to assess short- and long-term effects of COVID-19 on Port
industries, operations and facilities.
• Maintain a long-term strategic view of capital improvements with a priority
on investments that:
–Generate revenue
–Provide long-term, sustainable community and economic benefits
–Achieve excellence in aviation and maritime gateways
5
Capital Planning Guidelines
• Maintain construction to help stimulate recovery across the region.
• Capital planning should incorporate potential impacts of COVID-19 on
future operations and facility needs.
• New projects should be prioritized according to the Guiding Principles
and the timing of new construction should consider updated demand
forecasts, cash preservation needs and opportunities to perform work
while business activity is low.
• Project designs and environmental reviews should generally continue to
advance to preserve the option to proceed if grant funding becomes
available or the Port’s financial outlook improves sooner than expected.
• Consider potential added costs related to COVID-19 and the local bidding
environment in preparing and updating project budgets.
6
Capital Improvement Plan Priorities
Asset Financial Community and
Stewardship: Sustainability: Environment:
Maintaining the Port’s capital Making investments that support Stewarding our environment
assets and preserving Seattle’s maritime industries and the Port’s responsibly, partnering with
iconic working waterfront long term funding capacity surrounding communities, and
promoting social responsibility
7
2021-2025 Capital Capacity: Key Assumptions
• Conservative approach where downside risk in 2021 can more
easily be managed by additional adjustments, if warranted
• Key assumptions:
–Cruise activity:
•2021 = 25% of 2021 forecast (Scenario #2 from Commission retreat)
•2022 = partial recovery to 75% of 2022 forecast
–2021 MD & EDD operating expense flat to revised 2020 budget and grows
modestly (change from June scenario assumptions)
–Vacancy & bad debt in 2021 = 7% above average
–Conference and parking 2021 = 50% and 60% of 2020 budget
–No additional support to Airport from tax levy or G.O. bonds
–Tax levy increases 3% per year 2021-2023, then flat
The risk of over-optimism is far greater than risk of pessimism 8
Revised Preliminary Capital Investment Plan
• Maritime and Economic Development have revisited CIP in light
of preliminary capital capacity
MD/EDD Proposed 5-Year Capital Spend
– Initial 2021-2025 CIP: $531 Million $600
$531M
– Reduced capacity drives need to $500 ($144M)
$387M
reduce planned capital spend
$400
$300
approximately $144 Million Total $millions $200
$100
– Revised capacity estimated at $387 $0
Million Initial 2021-25 CIP Revised 2021-25 CIP
In Construction Large Projects Mid-Cap Projects
Small Projects Fleet/Technology/TIs Reserve Funding
9
Preliminary 2021-2025 CIP Spending Recommendation
Initial Revised
Project Group/Name ($millions) Status* 5Y Total 2021 2022 2023 2024 2025 5Y Total Change
In Construction 0.1 0.1 0.0 0.0 0.0 0.0 0.1
Large Projects (> $5M)
T117 Restoration C 21.4 7.7 4.7 0.3 0.3 0.3 13.2
T91 Northwest Fender C 8.4 8.2 0.2 0.0 0.0 0.0 8.4
T46 Replace N Pier Structure D 49.2 1.0 5.2 20.0 23.0 0.0 49.2
T91 Uplands Dev Phase I D 47.7 1.0 17.0 26.0 3.7 0.0 47.7
T91 Berth 6 & 8 Redev D 39.8 1.4 8.1 30.3 0.0 0.0 39.8
New Cruise Terminal D 121.7 0.0 0.0 0.7 4.0 35.0 39.7 Postponed 3 years
P66 Shore Power D 16.5 1.0 15.4 0.1 0.0 0.0 16.5
FT Maritime Innovation Center D 15.2 0.9 5.0 9.8 0.0 0.0 15.7
T91 New Cruise Gangways D 6.9 0.6 4.8 1.5 0.0 0.0 6.9
Cruise Upgrades COVID19 D 6.8 3.5 1.8 1.0 0.5 0.0 6.8 Added to CIP
Large Projects Total 333.3 25.2 62.2 89.6 31.5 35.3 243.7
Mid-Cap Projects ($300K to $5M) 56.4 10.4 15.9 12.5 8.7 1.9 49.4 $7M in spending delayed to 2026+
Small Projects (<$300K) 7.3 2.5 1.3 1.1 1.1 1.3 7.3
Fleet/Technology 12.5 4.2 3.2 2.7 1.4 1.0 12.5
Tenant Improvements 2.8 0.6 0.6 0.6 0.6 0.6 2.8
Reserve & COVID Uncertainty 35.0 5.0 10.0 15.0 15.0 25.0 70.0 Increased for opportunities & uncertainty
EDD Strategic Opportunity Fund 25.0 0.0 0.0 0.0 0.0 0.0 0.0 Moved to Reserve
FT Gateway Building 50.9 1.0 0.0 0.0 0.0 0.0 1.0 Evaluate design, Construction moved to 2026+
T91 Uplands Phase 2 Buildings 0.5 0.0 0.0 0.0 0.0 0.0 0.0 All spending moved to 2026
T91 Uplands Phase 2 Util Infra 7.7 0.0 0.0 0.0 0.0 0.0 0.0 All spending moved to 2026
Revised Total 2021-2025 CIP $531.5 $48.9 $93.2 $121.4 $58.3 $65.0 $386.8
*Project Status: C = Construction | D = Design 10
Key Capital Project Review
Cruise
• Proposed spending on new terminal postponed for 3+ years until cruise industry and economic
uncertainty settles.
• Added spending for COVID-related updates at existing terminals
FT Gateway Project
• Construction postponed to 2026
• Evaluating completing design in 2021
• Focus on T91 Uplands Phase I – provides more flexibility to uncertain market
T91 Uplands Phase 2
• Phase I: Maintain ongoing work in 2021-2025 CIP
• Phase II: all spending moved out to 2026+
Increased Reserves
• Used to address ongoing economic uncertainty, and provide flexibility for new opportunities &
unforeseen needs, including:
• Funding – greater risk to capital capacity and project cost estimates
• Business Needs – uncertainty about post COVID business and facility needs
• Unplanned needs – including NWSA CIP, Airport funding, and regional transportation
11
2021 Preliminary Capital Spending
Initial Revised
Project Group/Name ($millions) Status* 5Y Total 2021 2022 2023 2024 2025 5Y Total Change
In Construction 0.1 0.1 0.0 0.0 0.0 0.0 0.1
Large Projects (> $5M)
T117 Restoration C 21.4 7.7 4.7 0.3 0.3 0.3 13.2
T91 Northwest Fender C 8.4 8.2 0.2 0.0 0.0 0.0 8.4
T46 Replace N Pier Structure D 49.2 1.0 5.2 20.0 23.0 0.0 49.2
T91 Uplands Dev Phase I D 47.7 1.0 17.0 26.0 3.7 0.0 47.7
T91 Berth 6 & 8 Redev D 39.8 1.4 8.1 30.3 0.0 0.0 39.8
New Cruise Terminal D 121.7 0.0 0.0 0.7 4.0 35.0 39.7 Postponed 3 years
P66 Shore Power D 16.5 1.0 15.4 0.1 0.0 0.0 16.5
FT Maritime Innovation Center D 15.2 0.9 5.0 9.8 0.0 0.0 15.7
T91 New Cruise Gangways D 6.9 0.6 4.8 1.5 0.0 0.0 6.9
Cruise Upgrades COVID19 D 6.8 3.5 1.8 1.0 0.5 0.0 6.8 Added to CIP
Large Projects Total 333.3 25.2 62.2 89.6 31.5 35.3 243.7
Mid-Cap Projects ($300K to $5M) 56.4 10.4 15.9 12.5 8.7 1.9 49.4 $7M in spending delayed to 2026+
Small Projects (<$300K) 7.3 2.5 1.3 1.1 1.1 1.3 7.3
Fleet/Technology 12.5 4.2 3.2 2.7 1.4 1.0 12.5
Tenant Improvements 2.8 0.6 0.6 0.6 0.6 0.6 2.8
Reserve & COVID Uncertainty 35.0 5.0 10.0 15.0 15.0 25.0 70.0 Increased for opportunities & uncertainty
EDD Strategic Opportunity Fund 25.0 0.0 0.0 0.0 0.0 0.0 0.0 Moved to Reserve/COVID
FT Gateway Building 50.9 1.0 0.0 0.0 0.0 0.0 1.0 Evaluate design, Construction moved to 2026+
T91 Uplands Phase 2 Buildings 0.5 0.0 0.0 0.0 0.0 0.0 0.0 All spending moved to 2026
T91 Uplands Phase 2 Util Infra 7.7 0.0 0.0 0.0 0.0 0.0 0.0 All spending moved to 2026
Revised Total 2021-2025 CIP $531.5 $48.9 $93.2 $121.4 $58.3 $65.0 $386.8
*Project Status: C = Construction | D = Design
12
Conclusions
• Adjusts to new business realities
• Adjusts to new constrained financial capacity
• Provides flexibility: Levers for different scenarios
• Aligns with guiding principles and supports economic recovery
• Meets critical needs: Asset Preservation, Financial
Sustainability and Environment/Community
13
Next Steps
• Evaluate capital projects based on Commission feedback
• Refine and update financial assumptions and scenarios
• Determine timing for iterative Commission review of CIP: September
• MD/EDD Operating and Capital Budget: October 13th
• Tax Levy & Plan of Finance: October 27th
• NWSA Budget Study Session: October 28th
14
Appendix
15
Impacted Mid-Cap Projects ($300K to $5M)
Initial 5Y Revised 5Y
Project Description CIP Total 2021 2022 2023 2024 2025 Total Variance
FT C3 Bldg Roof Replace C800733 866 0 0 0 34 34 -832
P66 BHM Wavebreak Protect C800536 4,700 0 0 0 -4,700
P66 Fender Overhaul C800674 2,030 0 0 0 -2,030
Salmon Bay Fire Suppression C801071 537 150 537 0 0 687 150
T10 Mooring Dolphins C800181 200 0 0 0 0 -200
T106 Mooring Dolphins C800741 2,440 0 0 100 2,340 600 3,040 600
56,424 10,390 15,908 12,515 8,742 1,857 49,412 -7,012
16
Initial Maritime 21-25 CIP – page 1
Status CIPDescr 2021 2022 2023 2024 2025 2021-25
4 New Cruise Terminal 700 4,000 35,000 55,000 27,000 121,700
4 FT Gateway Building 1,000 17,000 32,890 - 50,890
2 T46 Replace N Pier Structure 1,000 5,200 20,000 23,000 - 49,200
4 T91 Berth 6 & 8 Redev 1,400 8,100 30,250 37 39,787
4 T117 Restoration 20,000 500 285 285 285 21,355
4 P66 Shore Power 950 15,400 100 - - 16,450
4 FT Maritime Innovation Center 900 5,000 9,258 - - 15,158
3 MD Fleet 2021 Beyond 2,530 2,740 2,150 932 500 8,852
4 T91 Northwest Fender 8,150 200 - - 8,350
2 T91 New Cruise Gangways 580 4,800 1,485 15 - 6,880
2 P91 Pass Term Upgrade COVID19 3,500 1,800 1,000 500 6,800
2 P66 BHM Wavebreak Protect - 50 300 4,350 4,700
3 Harbor Mooring Dolphins 20 900 3,580 - - 4,500
3 JBP Pier Replacement 678 195 1,195 1,742 3,810
3 P66 BHM Pile Wraps - 135 475 2,803 13 3,426
2 Maritime Video Camera Project 1,400 1,800 - - 3,200
3 MD: 2021 + Small Projects 655 770 500 500 750 3,175
3 T102 HIM E Dock 265 1,775 1,060 - - 3,100
2 FT C-14 Downey Bldg Improv 55 1,500 1,445 84 3,084
2 T106 Mooring Dolphins 100 2,340 2,440
2 FT C15 Bldg Misc Improv 120 1,200 925 87 2,332
3 P66 Fender Overhaul 358 685 987 - - 2,030
17
Initial Maritime 21-25 CIP – page 2
Status CIPDescr 2021 2022 2023 2024 2025 2021-25
3 SBM Dock X Pier Replacement 520 1,105 - - - 1,625
2 SBM Fuel Float Rehabilitation 50 470 980 1,500
3 Maritime Technology Projects 250 250 250 250 250 1,250
3 MD Tenant Improvements - Cap 250 250 250 250 250 1,250
2 MD Access Control Upgrade 100 900 100 1,100
3 MD: 2020 Small Projects 1,090 - - - - 1,090
3 T91 P91W Slope Stabilization 1,000 - 1,000
2 FT C3 Bldg Roof Replace 34 832 866
2 P90E Timber Pile Caps 800 800
4 Marina Mgt Sys Replacement 640 - - 640
3 Salmon Bay Fire Suppression 537 - 537
3 MD Fleet 2020 500 - - - - 500
3 Cruise Cap Allow - CTA Lease 225 250 - - 475
4 SBM Pad Site Developement - 206 206 - - 412
2 Energy Management System 200 200 400
2 T10 Mooring Dolphins 100 100 200
3 MD: 2019 Small Projects 180 180
3 Salmon Bay Fire Suppression 150 150
2 SBM Lower A Dock Impr. 100 100
4 Cruise per Passenger Allowance 50 50 - - 100
2 FT Net Shed 10 Roof Overlay - 40 40
2 FT Net Shed 11 Roof Overlay - 40 40
5 SBM Restrms/Service Bldgs Rep 32 - - 32
5 SBM Paving 13 13
2 MD Reserve & Cash flow Mgt 6,500 3,500 4,750 4,750 6,500 26,000
TOTAL Maritime CIP 54,211 80,061 150,441 96,826 39,980 421,519
18
Initial EDD 21-25 CIP
Status CIPDescr 2021 2022 2023 2024 2025 2021-2025
4 T91 Uplands Dev Phase I 1,000 17,000 26,000 3,651 - 47,651
2 EDD Strategic Opportunity Fund 12,500 12,500 25,000
2 EDD Reserve & Cash Flow Mgt 2,500 1,500 1,750 1,750 1,500 9,000
2 T91 Uplands Phase 2 Util Infra 500 2,500 4,700 7,700
3 WTC HVAC Replacement 3,070 115 - - 3,185
3 P69 Underdock Utility Rplc 1,800 1,000 - 2,800
3 EDD: 2021 Small Projects + 490 270 500 500 500 2,260
5 P66 HVAC Systems Upgrade 250 1,527 1,777
2 WTC Garage Elevator Mods 50 1,492 216 1,758
3 CW Bridge Elev Modernizations 1,217 400 1,617
3 P66 Roof Upgrades 840 768 - - 1,608
3 Tenant Improvements -Capital 300 300 300 300 300 1,500
3 EDD Technology Projects 250 250 250 250 250 1,250
2 P69 Clerestory and Skylight Re 50 1,002 36 - 1,088
2 WTCW Roof Replacement 30 693 51 - 774
2 T91 Uplands Phase 2 Buildings 500 500
3 EDD: 2020 Small Projects 75 230 - - - 305
3 EDD Fleet 2021 Beyond 35 70 70 90 35 300
5 P66 BHICC Interior Modernize 50 - - 50
12,377 38,510 47,815 8,120 3,301 110,123
19
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.