ITEM NO.:

7b_Report

DATE OF
MEETING:

Aug 2, 2011

PORT OF SEATTLE

2011 FINANCIAL & PERFORMANCE REPORT

AS OF JUNE 30, 2011

TABLE OF CONTENTS
Page
I.

Portwide Performance Report

3-5

II.

Aviation Division Report

6-11

III.

Seaport Division Report

12-17

IV.

Real Estate Division Report

18-22

V.

Capital Development Division Report

23-25

VI.

Corporate Division Report

26-28

2

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/11

EXECUTIVE SUMMARY
Financial Summary
The Port's total operating revenues for the first half of 2011 were $243.3 million, $4.4 million below budget.
Aeronautical revenues were $107.5 million, $1.06 million below budget. Other operating revenues were $135.8
million, $3.3 million below budget primarily due to lower revenues from Pass-Through Security Grants, Public
Parking, and Rental Cars, partially offset by higher revenues from Concessions and Container businesses. Total
operating expenses were $125.5 million, $18.0 million below budget mainly due to timing of spending, some
vacant positions, and lower Pass-through Grants expenses. Operating income before depreciation was $117.8
million, $13.6 million above budget. Operating income after depreciation was $38.2 million, $14.3 million
higher than budget. The Port-wide capital spending is forecasted to be $237.1 million for the year, $49.8 million
below the budgeted $286.9 million.

Operating Summary
At the Airport, enplanements and landed weight were 4.9% higher than budget and 2.6% higher than the same
period in 2010, respectively. We are forecasting the 2011 enplanements to grow by 3.5% from 2010. For the
Seaport division, TEUs were 19.6% higher than budget and on the same levels as 2010 through June. We
revised the forecast of TEUs volume from 1.8 million to 1.9 million for 2011. While Grain volumes were 2.1%
below the 2010 levels for the same time period, it was still 9.8% higher than budget. Cruise passengers were
16.4% above budget through Q2 but down 6.8% compared to last June's levels. For the Real Estate division,
occupancy levels at Commercial Properties were at 90%, slightly higher than the 89% in the first half of 2010.
Shilshole Bay Marina occupancy rate was 95.3%, compared to 93.5% for the same period in 2010. Moorage
occupancies at Fishermen's Terminal were 81.8%, lower than the 91.9% in 2010 but it was in line with
budgeted rate.

Key Business Events
We held a number of Centennial Celebration events in the community, including Centennial Video Contest,
Centennial Park Dedication, Centennial "Get to Know Your Port by Bike," Beach Access Opening Centennial
Community Celebration, and Centennial Displays at STIA. We also held the first three Century Agenda Panels
on Fostering Economic Growth, Moving Cargo, and Moving People and set a preliminary goal of increasing
jobs related to Port by 100,000 over 25 years. On the business side, Condor Air began its new service at SeaTac
in June. On the environmental front, we continued to implement the Northwest Ports Clean Air Strategy, there
were 176 participating calls made for the At-Berth Clean Fuels Vessel Incentive Program (ABC Program) in the
first half of the year. We also received the two Environmental Improvement Awards from American Association
of Port Authorities and the 2011 VISION 2040 Award from Puget Sound Regional Council.

Major Capital Projects
We completed a number of capital projects in the second quarter of 2011. These included C1-C88 Baggage
System, New Security Check Point, Terminal 91 Roadway Pavement Replacement, and Fishermen's Terminal
North Dock East Fender System Replacement Projects. Additionally, Rental Car Facility construction also hit a
major milestone - it's ready for tenant improvement construction. Other projects under construction included
Airfield Pavement/Slot Drains Replacement, FIS Booths, PC Air, Terminal 91 Waterline, Terminal 86 Tower
Strengthening, Maritime Industrial Center Central Wall, Fishermen's Terminal Phase 4 South Wall, and East
Marginal Way Grade Separation.

3

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/11

INCOME STATEMENT
Report: Income Statement
As of Date: 2011-06-30
2010 YTD
$ in 000's

Actual

2011 YTD 2011 YTD
Actual

Budget

Budget Variance

Change from 2010

$

%

$

%

Revenues:
Aviation

169,422

180,537

182,663

(2,126)

-1.2%

11,115

6.6%

Seaport

45,050

47,017

49,312

(2,295)

-4.7%

1,967

4.4%

Real Estate

14,998

15,030

15,250

(220)

-1.4%

32

0.2%

-

76

0.0%

76

n/a

Capital Development
Corporate
Total Revenues

-

76

309

620

430

190

44.1%

310

100.3%

229,778

243,280

247,655

(4,375)

-1.8%

13,502

5.9%

59,172

63,614

68,357

4,743

6.9%

(4,442)

-7.5%

Operating & Maintenance:
Aviation
Seaport

8,704

7,783

13,686

5,903

43.1%

922

10.6%

Real Estate

14,472

15,581

17,004

1,424

8.4%

(1,108)

-7.7%

Capital Development

3,402

4,334

7,222

2,888

40.0%

(932)

-27.4%

Corporate

31,802

34,195

37,240

3,045

8.2%

(2,393)

-7.5%

Total O&M Costs

117,553

125,507

143,509

18,002

12.5%

(7,954)

-6.8%

Operating Income Before Depreciation

112,225

117,773

104,145

13,628

13.1%

5,548

4.9%

79,773

79,569

80,217

648

0.8%

204

0.3%

32,453

38,204

23,928

14,276

59.7%

5,752

17.7%

Depreciation
Operating Income after Depreciation

IMPORTANT NOTE:
All the numbers in the table above are on an Org basis while the actual numbers for the operating divisions are
on a Subclass basis.

4

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 06/30/11

KEY PERFORMANCE METRICS
2010 YTD 2011 YTD

2010

2011

2011

Forecast/Budget

Actual

Actual

Actual

Forecast

Budget

Var.

Var. %

Enplanements (in 000's)

7,322

7,678

15,773

16,325

15,845

480

3.0%

Landed Weight (lbs in 000's)

9,404

9,648

19,786

20,089

20,089

-

0.0%

n/a

n/a

11.63

12.20

12.76

(0.56)

-4.4%

Container Volume (TEU's in 000's)

1,008

1,007

2,140

1,900

1,800

100

5.6%

Grain Volume (metric tons in 000's)

2,813

2,754

5,491

5,500

5,500

-

0.0%

Cruise Passenger (in 000's)

347

324

932

807

796

11

1.4%

Commercial Property Occupancy

89%

90%

88%

90%

90%

-

0.0%

Shilshole Bay Marina Occupancy

93.5%

95.3%

94.4%

94.3%

93.4%

0.9%

0.9%

Fishermen's Terminal Occupancy

91.9%

81.8%

87.1%

82.1%

82.0%

0.1%

0.1%

Passenger CPE (in $)

CAPITAL SPENDING RESULTS
2011
Forecast

2011
Budget

Budget
Variance

Plan of
Finance

Aviation
Seaport
Real Estate
Corporate & CDD

185.6
27.7
14.1
9.7

223.7
34.0
16.3
12.9

38.2
6.3
2.2
3.2

231.4
29.5
15.4
12.1

Total

237.1

286.9

49.8

288.3

Division
($ in millions)

PORTWIDE INVESTMENT PORTFOLIO
The investment portfolio for the second quarter of 2011 earned 2.56% against our benchmark (The Bank of
America Merrill Lynch 3-year Treasury/Agency Index) of 0.49%. For the past twelve months the portfolio has
earned 2.03% against the benchmark of 0.60%. Since the Port became its own Treasurer in 2002, the Port's
portfolio life-to-date has earned 3.50% against our benchmark of 2.54%.

5

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

FINANCIAL SUMMARY
$ in 000's

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Operating Revenues
Aeronautical

182,534

198,329

214,181

217,200

(3,019)

-1.4%

Non-Aeronautical

137,348

135,418

144,904

144,965

(60)

0.0%

Other

Forecast/Budget
Var $
Var %

8,359

8,426

8,353

8,353

-

0.0%

Operating Revenues

328,241

342,173

367,438

370,517

(3,079)

-0.8%

Operating Expenses

175,482

177,871

197,463

199,180

1,717

0.9%

Environmental Remediation Liability
VSP, HR10 & Unemployment
OPEB Reversal

1,991
1,196
(4,016)

3,271
-

452
-

1,771
-

1,319
-

74.5%
n/a
n/a

Total Operating Expenses

174,654

181,142

197,915

200,951

3,036

1.5%

Net Operating Income

153,587

161,031

169,523

169,567

(43)

0.0%

Capital Expenditures

191,479

183,578

185,560

223,746

38,186

17.1%





We are forecasting aeronautical revenues to be $3 million less than budgeted due to allocated cost savings
from variable rate debt service and cost savings from delayed costs for the Terminal Realignment project.
A shortage of $60K in non-airline revenues is forecasted due to underperformance in Public Parking and
Rental Cars slightly outweighing strong performance in Concessions and Ground Transportation fees.
Operating expense is forecasted to be $3 million favorable versus budget mainly due to open positions and
delays in projects which require consulting services.
$185.6 million is forecasted to be spent on capital projects in 2011, 82.9% of the 2011 budget of $223.75
million.

A.




BUSINESS EVENTS
Terminal realignment in progress.
In addition to Rental Car Facility construction, building of the Bus Maintenance Facility is now underway.
Condor Air began service in June.

B.

KEY PERFORMANCE INDICATORS
2010
YTD
7,322
9,404

Figures in 000's

Enplanements
Landed Weight

2011
YTD
7,678
9,648

%
Variance
4.9%
2.6%

2010
Actual
15,773
19,786

Growth Rate

Enplanements vs. Prior Year
5%

10%
6.10%
3.44%

5%

2011
%
Forecast Variance
16,325
3.5%
20,089
1.5%

Landed Weight vs. Prior Year

Growth Rate



6.54%

3.91%

3.72%

5.27%

4%

3.62%

3.91%

3.11%
2.63%

3%
2%
1%

1.11%

0%
Jan

0%
Jan

Feb

Mar

Apr

May

Jun

6

Feb

Mar

Apr

May

1.53%

Jun

II.


AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11
International enplaned passengers YTD saw greater growth (6.3% vs. YTD 2010) than domestic
enplanements (4.7% vs. YTD 2010).
Year-to-date cargo landed weight makes up 6.63% of total landed weight, as opposed to 7.4% of total
landed weight at this point in 2010.
The 2011 forecast assumes 3.5% increase in enplaned passengers and a 1.5% increase of landed weight over
2010 actuals.




Key Performance Measurers
$ in 000's
Non-Aero NOI ($ in 000s)
Passenger Airline CPE
Total Operating Cost / Enpl
Debt Service Coverage

C.

2009
Actual
81,159
10.92
11.19
1.32

2010
Actual
78,203
11.63
11.48
1.39

2011
Forecast
82,782
12.20
12.12
1.45

2011
Budget
81,209
12.76
12.68
1.40

Forecast/Budget
Var $
Var %
1,573
1.9%
0.56
4.4%
0.56
4.4%
0.04
3.2%

Actual/Budget
Var $
Var %

OPERATING RESULTS

Year-to-date Revenue and Expense
2009 YTD
Actual

2010 YTD
Actual

2011 YTD
Actual

2011 YTD
Budget

Revenues
Aeronautical
Non-Aeronautical
Other

99,787
68,706
4,177

100,452
64,734
4,234

107,521
68,862
4,217

108,578
69,908
4,177

(1,057)
(1,046)
40

-1.0%
-1.5%
1.0%

Revenues

172,669

169,421

180,600

182,663

(2,063)

-1.1%

Expenses
Salaries & Benefits
Outside Services
Utilities
Supplies & Stock
Other
Total Airport Expenses

39,428
8,688
6,784
2,135
1,212
58,248

37,952
9,062
5,832
1,772
3,277
57,895

38,822
11,185
7,294
2,444
4,079
63,824

40,345
13,786
6,756
2,056
5,022
67,965

1,523
2,601
(538)
(389)
942
4,141

3.8%
18.9%
-8.0%
-18.9%
18.8%
6.1%

Corporate
Police Costs
Capital Development/Other Expenses
Total Operating Expenses (excl. Env Liab)

14,291
6,445
2,114
81,098

15,196
6,811
2,837
82,738

15,307
7,885
3,155
90,171

16,836
8,221
5,500
98,522

1,530
336
2,345
8,351

9.1%
4.1%
42.6%
8.5%

Environmental Remediation

-

1,278

(210)

392

602

153.6%

Total Operating Expenses

81,098

84,016

89,961

98,914

8,953

9.1%

Net Operating Income

91,572

85,405

90,638

83,748

6,890

8.2%

$ in 000's





Aeronautical revenues are less than budgeted YTD by $1.1 million due to seasonality from landing fee
budgets.
Non-aeronautical revenues are less than budgeted due to less growth in long-term parking transactions and
decreased rates in rental cars despite transactions increasing YTD.
Year-to-date expenses are under budget largely due to FTE vacancies and delays to outside service projects
offsetting with expense overrun in utility surface water and deicer fluid due to winter weather.

7

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

Division Summary
$ in 000's

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

Total Operating Revenues

328,241

342,173

367,438

370,517

(3,079)

-0.8%

Operating Expenses
Salaries, Wages & Benefits
Outside Services
Utilities
VSP, HR10 & Unemployment Savings
OPEB Reversal
Environmental Remediation Liability
Other Expenses
Baseline Airport Expenses
Corporate Expenses
Police Expenses
Capital Development/Other Expenses

80,804
21,509
13,209
1,196
(4,016)
1,991
8,183
122,877
31,181
14,461
6,135

76,036
22,519
11,381
3,271
13,275
126,481
32,558
14,317
7,785

81,431
26,007
12,669
452
16,561
137,119
33,317
16,382
11,096

82,363
26,758
12,576
1,771
16,107
139,575
34,043
16,389
10,944

932
751
(93)
1,319
(454)
2,455
726
7
(152)

1.1%
2.8%
-0.7%
n/a
n/a
74.5%
-2.8%
1.8%
2.1%
0.0%
-1.4%

Total Operating Expenses

174,654

181,142

197,915

200,951

3,036

1.5%

Net Operating Income

153,587

161,031

169,523

169,567

(43)

0.0%

Depreciation Expense

117,731

119,538

118,418

118,418

-

0.0%

Non-Operating Rev/(Exp)
Grants & Donations Revenues
Passenger Facility Charges
Customer Facility Charges
Other Non-operating Rev/(Exp)
Total Non-Operating Rev/(Exp)

74,323
59,689
21,866
(109,398)
46,481

30,040
59,744
23,243
(122,549)
(9,522)

28,990
61,933
23,275
(125,464)
(11,267)

28,990
61,320
22,237
(125,464)
(12,918)

613
1,038
1,651

0.0%
1.0%
4.7%
0.0%
-12.8%

82,337

31,971

39,839

38,231

1,608

4.2%

Total Revenue Over Expense




Operating revenues are forecasted to be $3.1 million unfavorable overall due to capital and operating cost
savings in the aeronautical cost centers.
Operating expense is forecast at $3 million favorable due to savings from open positions and savings from
outside services.

8

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

Aeronautical Business Unit Summary

$ in 000's

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

Revenues requirement:
Capital Costs

72,013

82,083

85,554

87,111

(1,557)

-1.8%

Operating Costs net Non-Aero

118,456

122,985

135,793

137,195

(1,401)

-1.0%

190,469

205,067

221,348

224,305

(2,958)

-1.3%

FIS Offset

Total Costs

(5,250)

(7,000)

(7,000)

(7,000)

-

0.0%

Other Offsets

(16,441)

(14,825)

(14,882)

(14,821)

(61)

0.4%

Net Revenue Requirement

168,778

183,243

199,466

202,485

(3,019)

-1.5%

Other Aero Revenues

13,757

15,087

14,715

14,715

-

0.0%

182,534

198,329

214,181

217,200

(3,019)

-1.4%

Less: Non-passenger Airline Costs

12,074

14,885

15,066

15,066

-

0.0%

Net Passenger Airline Costs

170,460

183,444

199,114

202,133

(3,019)

-1.5%

2009

2010

2011

2011

Forecast/Budget

Actual

Actual

Forecast

Budget

Var $

Total Aero Revenues

Var %

Cost Per Enplanement:
Capital Costs / Enpl



5.20

5.24

5.50

(0.26)

-4.7%

Operating Costs / Enpl

7.59

7.80

8.32

8.66

(0.34)

-3.9%

Offsets

(1.39)

(1.38)

(1.34)

(1.38)

0.04

-2.7%

Other Aero Revenues

0.88

0.96

0.90

0.93

(0.03)

-2.9%

Non-passenger Airline Costs

(0.77)

(0.94)

(0.92)

(0.95)

0.03

-2.9%

10.92

11.63

12.20

12.76

(0.56)

-4.4%

Passenger Airline CPE



4.61

We are forecasting an overall savings of $1.6 million to capital costs due to lower than budgeted variable
rate debt service.
Operating costs are forecasted $1.4 million lower than budget due to cost savings from open positions and
outside services cost savings from the Terminal Realignment project.

9

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

Non-Aero Business Unit Summary
$ in 000's
Revenues:
Public Parking
Rental Cars
Concessions
Other

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

49,689
33,320
33,473
20,865

49,416
30,309
33,765
21,929

51,542
32,178
34,366
26,818

52,847
33,833
32,640
25,644

(1,305)
(1,655)
1,726
1,174

-2.5%
-4.9%
5.3%
4.6%

Total Revenues

137,348

135,418

144,904

144,965

(60)

0.0%

Operating Expense

55,916

54,743

63,025

64,397

1,372

2.1%

Share of terminal O&M
Less utility internal billing
Net Operating & Maint
Net Operating Income

17,011
(16,738)
56,189
81,159

16,935
(14,464)
57,215
78,203

17,467
(18,370)
62,122
82,782

17,729
(18,370)
63,756
81,209

262
1,634
1,573

1.5%
0.0%
2.6%
1.9%

2009
Actual

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

Revenues Per Enplanement
Parking
Rental Car
Concessions
Other
Total Revenues

3.18
2.13
2.14
1.34
8.80

3.13
1.92
2.14
1.39
8.59

3.16
1.97
2.11
1.64
8.88

3.34
2.14
2.06
1.62
9.15

(0.18)
(0.16)
0.05
0.02
(0.27)

-5.3%
-7.7%
2.2%
1.5%
-3.0%

Primary Concessions Sales / Enpl

9.66

9.99

10.24

10.12

0.12

1.2%









Growth in enplanements shows revenues increased of 7.0% comparing 2011 to 2010.
Comparisons of Forecast to Budget for revenues include the following:
Public Parking revenues are forecasted to be $1.3 million lower than budget due to transactions falling short
of budgeted expectations.
Rental Car revenues are forecasted to be $1.7 million under budget due to flat industry revenues despite an
increase in transactions.
Concession revenues are forecasted $1.7 million favorable to budget due to strong primary concessions sales
performance, an increase in janitorial monthly rates and advertising revenue from Google partnership.
Forecasting an increase of $1.2 million in Other revenues due to increased Ground Transportation trips,
Utilities sales and anticipated grant reimbursement for Sound Transit work.
The concessions primary Sales per Enplaned passenger (SPE) is forecasted to be $10.24, up from a budgeted
SPE of $10.12.

10

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

Net Cash Flow: NOI after Debt Service and Interest Income
2009
Actual

$ in 000's
Aeronautical
Net Operating Income (NOI)
Debt Service
NOI After Debt Service

2010
Actual

2011
Forecast

2011
Budget

Forecast/Budget
Var $
Var %

65,915
68,767
(2,851)

74,402
73,080
1,323

77,105
75,143
1,961

78,661
76,700
1,961

(1,557)
1,557
(0)

-2.0%
2.0%
0.0%

81,159
39,241
41,917

78,203
41,752
36,451

82,782
41,808
40,974

81,209
42,469
38,739

1,573
661
2,235

1.9%
1.6%
5.8%

Fuel Hydrant Revenue

8,359

8,426

8,353

8,353

-

0.0%

Total Aviation
NOI
Debt Service
NOI After Debt Service

155,433
108,008
47,425

161,031
114,831
46,200

168,240
116,951
51,288

168,223
119,169
49,054

17
2,218
2,235

0.0%
1.9%
4.6%

8,853
(7,845)
48,433

6,297
(7,912)
44,585

5,916
(7,839)
49,366

4,167
(7,839)
45,382

1,749
3,983

42.0%
0.0%
8.8%

Non-Aeronautical
Net Operating Income (NOI)
Debt Service
NOI After Debt Service

Add ADF Interest Income
Less Non-Cash Fuel Hydrant Revenue
Net Cash Flow after D/S & Interest Inc.

D.

CAPITAL SPENDING RESULTS
2011
YTD Actual

2011
Forecast

Rental Car Facility Construction

46,336

78,092

97,488

19,396

19.9%

98,616

Central Plant Preconditioned Air

5,078

15,078

20,000

4,922

24.6%

8,000

Airfield Pavement Replacement

236

4,611

10,500

5,889

56.1%

10,500

Parking System Replacement

311

7,573

9,137

1,564

17.1%

8,994

Terminal Escalators Modernization

419

7,419

8,955

1,536

17.2%

10,000

South Satellite Delta Sky Club Expansion

408

8,739

5,250

(3,489)

-66.5%

5,038

Aircraft RON Parking USPS Site

117

467

5,050

4,583

90.8%

5,661

$ in 000's

2011
Budget

Forecast/Budget
Var ($)
Var (%)

Plan of
Finance

All Other

11,164

63,581

67,366

3,785

5.6%

84,599

Total

64,069

185,560

223,746

38,186

17.1%

231,408





Off-site Road Improvements and Bus Maintenance Facility contractors have gotten off to a very slow start.
Soft costs are also running below forecast for Rental Car Facility.
Site work for PC Air was expected to begin in 4th quarter 2010 but didn't commence until 1st quarter 2011.
Project completion date is not expected to be impacted.
Amount originally budgeted for Airfield Pavement Replacement project was not needed for the scope of the
2011 pavement replacement.

11

III.

SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

FINANCIAL SUMMARY
2010
Actual

$ in 000's
Operating Revenue
Security Grants
Total Revenues

Var $

Budget
Var %

95,772
423
96,195

94,972
3,415
98,387

800
(2,992)
(2,192)

1%
-88%
-2%

Total Operating Expenses

39,321

43,998

47,108

3,110

7%

Net Operating Income

58,530

52,198

51,280

918

2%

Capital Expenditures

11,172

27,651

33,953

6,302

19%






A.



2011
Budget

96,060
1,791
97,850





2011
Forecast

Total Seaport revenues were ($2,049K) unfavorable through the 2nd quarter due to unfavorable Security
Grant revenue ($3,364K) partially offset by Operating Revenue exceeding budget by $1,315K. Operating
Revenues were favorable to budget due to higher crane rent and grain revenue both resulting from higher
volumes. Seaport is forecasting full year Operating Revenue to exceed budget while Security Grant Revenue
will be below budget.
Total Operating Expenses were $7,101K favorable due to postponed or cancelled Security Grant projects
$3,390K being administered for outside parties, lower corporate expenses, and lower Outside Services
largely due to timing. Seaport is forecasting full year expenses to be $3,110K favorable to budget primarily
due to postponed or cancelled Security Grant projects.
Forecasted Net Operating Income for 2011 is estimated to $918K favorable to Budget and ($6,332K) less
than 2010 full year Actual Net Operating Income. The year-to-year change is driven by higher Operating
Expense in 2011 Budget and Forecast.
As of the end of the 2nd Quarter, total capital spending for 2011 is projected to be $27.7M or 81% of the
Approved Annual Budget.

BUSINESS EVENTS
TEU volumes for Seattle Harbor are down .04% as of June 30, 2011 YTD compared to the same period in
2010. Total YTD 2011 volume is 1,007K TEU's.
Consolidated West Coast Port results for the first half of 2011 show an overall increase in TEU volume of
3.9% compared to volumes in 2010.
TEU Volume (in 000's)
Long Beach
Los Angeles
Oakland
Portland
Prince Rupert
Seattle
Tacoma
Vancouver
West Coast - Total:

2011
2,968
3,767
1,142
97
152
1,007
720
1,225
11,077

2010
2,795
3,664
1,086
85
158
1,008
704
1,164
10,661

% change
6.2%
2.8%
5.2%
14.5%
-3.7%
-0.04%
2.3%
5.2%
3.9%

12

III.





SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11
Grain vessels shipped 2,754K metric tons of grain through Terminal 86 in the first half of 2011. Amount is
(2%) below 2010 grain volumes of 2,813K metric tons. 2011 actual volume is 10% higher than 2011 budget
volume.
Cruise passengers for the year-to-date are 16% favorable to budget due to ships sailing at in excess of 100%
occupancy.
Implementation of the Northwest Ports Clean Air Strategy continued: At-Berth Clean Fuels Vessel Incentive
Program (ABC Program), 176 participating calls were made in the first half of the year.
Environmental Awards Received:
o American Association of Port Authorities 2011 Environmental Improvement Awards: (1)
Stakeholder Awareness, Education and Involvement Award for Terminal 117 and (2)
Comprehensive Environmental Management Award for the Northwest Ports Clean Air Strategy
Implementation
o Puget Sound Regional Council 2011 VISION 2040 Award
o Finalist for the 2011 Sustainable Shipping Award in the clean air category

13

III.

SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

B.

KEY INDICATORS

Container Volume - TEU's in 000's

Grain Volume - Metric Tons in 000's

Cruise Passengers in 000's

Net Operating Income Before Depreciation By Business
$ in 000's
Containers
Grain
Seaport Industrial Props
Cruise
Docks
Security
Env Grants/Remed Liab/Oth
Total Seaport

2010
Actual
21,648
2,548
3,150
1,703
(600)
(626)
(855)
26,967

2011
Actual
23,302
2,498
2,743
1,353
(494)
(373)
17
29,045

2011
Budget
20,575
2,010
2,122
736
(594)
(606)
(250)
23,993

14

2011 Bud Var
$
%
2,727
13%
488
24%
621
29%
617
84%
99
17%
232
38%
267
107%
5,053
21%

Change from 2010
$
%
1,655
8%
(50)
-2%
(407)
-13%
(350)
-21%
106
18%
252
40%
872
102%
2,078
8%

III.

SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

C.

OPERATING RESULTS
2011 Year-to-Date
Actual
Budget
47,330
46,014
51
3,415
47,380
49,429

2011 Bud Var
$
%
1,315
3%
(3,364)
-99%
(2,049)
-4%

Year-End Projections
Budget Forecast Variance
94,972
95,772
800
3,415
423
(2,992)
98,387
96,195
(2,192)

Direct Expenses
9,250
Security Grant Expense
710
Environmental Remed Lia Exp
855
Divisional Allocations
1,210
Corporate Allocations
6,198
Total Expense
18,223

10,593
61
(18)
673
7,025
18,335

12,513
3,451
250
1,246
7,976
25,436

1,920
3,390
268
573
951
7,101

15%
98%
107%
46%
12%
28%

24,081
3,451
500
2,511
16,565
47,108

25,293
459
500
1,461
16,285
43,998

(1,212)
2,992
0
1,050
280
3,110

NOI Before Depreciation
Depreciation
NOI After Depreciation

29,045
15,687
13,359

23,993
15,884
8,109

5,053
198
5,250

21%
1%
65%

51,280
31,898
19,381

52,198
31,698
20,499

918
200
1,118

$ in 000's
Operating Revenue
Security Grants
Total Revenue

2010 YTD
Actual
44,508
682
45,190

26,967
15,493
11,474

Seaport revenues were ($2,049K) unfavorable to budget. Key variances are as follows:
Seaport Leasing & Asset Management - favorable $951K
 Containers $973K favorable. Crane Rent Revenue $714K favorable due to higher volumes and related
crane usage at Terminal 5 and Terminal 18. Intermodal Revenue $88K favorable due to higher Terminal 5
intermodal volumes. Miscellaneous Revenue $188K favorable due to more maintenance reimbursable work
performed than budgeted.
 Grain $244K favorable due to actual grain volume exceeding budget by 10%.
 Seaport Industrial Properties ($266K) unfavorable due to lower rent and concession revenues at T91 as well
as lower utility sales revenue and related expense on that site, and due to continued vacancy within Building
2 at Terminal 106.
Cruise and Maritime Operations - unfavorable ($3,000K)
 Cruise $203K favorable primarily due to higher than anticipated passenger volumes.
 Docks $161K favorable primarily due to higher than anticipated security fee revenue ($117K favorable)
from Terminal 91 customers and moorage ($40K favorable).
 Security Grants ($3,364K) unfavorable due to YTD Round 7 pass-through grant activity being less than
budgeted. Examples of 3rd party projects planned for YTD were for the Port of Everett and the Seattle Fire
Department. See offsetting expense variance below.
Seaport expenses were $7,101K favorable to budget. Key variances:
 Security Grant Expenses favorable $3,390K due to Round 7 pass-through grant activity being delayed.
 Outside Services (excluding Corporate, Maintenance and Security Grants) were favorable $1,259K due to
projects and programs with later actual timing or payments than budgeted including Environmental Services
stormwater and air programs $118K, T-5 Dredging $352K (balance of work performed internally), Seaport
Asset Condition Assessments $370K, grain facility external appraisal and asset condition assessment
$150K, Planning T91 Option and Transportation studies $76K, and Seaport Division Admin CTQI
Certifications $75K. Thus far, asset condition assessment work is being done by internal Port staff.
 Corporate costs, direct and allocated were favorable $875K due to lower than anticipated direct charges and
allocations from virtually all orgs/departments including Accounting and Financial Reporting $110K, Office
of Social Responsibility $107K, Human Resources $102K, Public Affairs $83K, Contingency $82K, and
Police $77K.
 Overhead Allocations for Environmental Services favorable $521K due to less direct charging of time to
Business Groups and projects than assumed in developing the overhead rate.

15

III.






SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11
CDD costs were favorable $290K due to overall less spending by CDD groups on non-direct charge, nonoverhead rate eligible expense items partially offset by work performed internally on asset condition
assessments.
Environmental Remediation Liability Expense favorable $268K due to lower estimated future clean-up costs
than assumed in Budget.
Travel & Other Employee Expenses, Promotional Hosting, and Trade Business and Community favorable
$221K primarily due to timing.
Miscellaneous Expense was favorable $202K primarily due to an unused Seaport Division Contingency and
budgeted relocation expenses for former Asia Representative.
All other variances netted to favorable $75K or less than 1% of Total Expenses Budgeted.

NOI Before Depreciation was $5,053K favorable to budget.
Depreciation was $198K, or approximately 1%, favorable to the 2011 Budget.
NOI After Depreciation was $5,250K favorable to budget.
Forecast
As of the end of the 2nd Quarter 2011, Seaport anticipates ending the year $918K favorable to budget for NOI
Before Depreciation. Security Grant Revenue and offsetting Security Grant Expense are forecasted to be
$2,992K lower than budgeted due to delay or cancellation of third party grant projects. Operating Revenue is
forecasted to be $800K favorable to budget primarily due to higher crane rent. Operating Expenses, excluding
Security Grant Expenses, are forecasted to be $118K favorable to Budget. The forecast also reflects a
reclassification in expenses from Divisional Allocations to Direct Expenses. At the beginning of 2011, a change
was made in the way Marine Maintenance charges overhead to expense projects and programs. As a result,
approximately $1,050K of Maintenance related overhead expenses are forecasted to be direct charged to Seaport
and therefore reflected in Direct Expenses rather than in Divisional Allocations. Because this change in
methodology was not in place during the development of the 2011 Budget, these offsetting expense impacts are
reflected in the Forecast.
Change from 2010 Actual
NOI Before Depreciation for YTD 2011 increased by $2,078K from 2010. Revenue is up $2,191K from the
prior year due to an increase in Container revenue of $3,083K resulting from higher crane rent, increase in
container lease rate effective July 2010 and application of straight-line rent adjustment to all container
terminals. Amounts are partially offset by lower Security Grant related revenue. Expenses increased $112K due
to Terminal 5 Maintenance Dredge Project, earlier payment for Tribal mitigation, earlier payment for city street
vacation permits, and higher direct charges and allocations from CDD for asset condition assessment work and
SR99 Tunnel property related work. Amounts were largely offset by lower security grant project driven
expenses and lower Environmental Remediation Liability Expense.

16

III.

SEAPORT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

D.

CAPITAL SPENDING RESULTS

$ in 000's
Terminal 10
Terminal 18
Cruise
Security
Terminal 91 - Industrial Properties
Cranes
All Other
Total Seaport

2011
Estimated
Actual
5,420
4,043
4,205
2,177
3,767
1,353
6,686
27,651

2011
Approved
Budget
5,326
4,616
4,617
3,583
3,568
3,465
8,778
33,953

Variance
EstActs to
EstActs as a % 2011 Plan
Budget
of Budget
of Finance
(94)
102%
5,585
573
88%
5,040
412
91%
2,737
1,406
61%
1,799
(199)
106%
4,073
2,112
39%
2,800
2,092
76%
7,456
6,302
81%
29,490

Comments on Key Projects:
Through the second quarter, Seaport spent 27% of the Approved Capital Budget. Full year spending is
estimated to be 81% of the Approved Capital Budget.
Projects with significant changes in spending were:
 Terminal 5 Crane Cable Reels - Bids came in below estimate.
 Security Projects - Spending moved to 2012.
 All Other - Primary difference is due to savings on projects as the result of lower costs or change
in scope and due to postponing projects.
Changes between the 2011 Plan of Finance and the 2011 Approved Budget represent modifications in
2011 spending estimates made after determination of 2010 actual spending.

17

IV.

REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

FINANCIAL SUMMARY

$ in 000's
Operating Revenue
Total Revenues

88
88

0%
0%

Total Operating Expenses

31,499

35,940

36,079

139

0%

Net Operating Income

(1,678)

(5,145)

(5,372)

227

4%

Capital Expenditures

3,965

14,127

16,339

2,212

14%



A.





Budget
Var $
Var %

30,707
30,707





2011
Budget

30,795
30,795





2011
Forecast

29,820
29,820





2010
Actual

Total Real Estate Division Revenues are $467K unfavorable to budget year-to-date due to lower activity at
Bell Harbor International Conference Center and World Trade Center Club than assumed in the budget
partially offset by favorable revenue variances from Recreational Boating, Commercial Properties and Real
Estate Planning & Development. For the full year, Real Estate is forecasting revenue to exceed Budget due
to increasing activity at Bell Harbor International Conference Center.
Total Operating Expenses are $2,033K, or 11%, favorable to budget primarily due slower start on
Maintenance projects than anticipated and less spending at Bell Harbor International Conference Center due
to lower activity. For the full year, Real Estate is forecasting Operating Expenses to be favorable to
Budget due to more Maintenance work being charged to capital than assumed in the Budget.
Forecasted Net Operating Income for 2011 is estimated to be favorable to Budget for the year and $3,467K
below 2010 Actual. Higher maintenance, corporate and CDD expenses are driving the year over year
change.
At the end of the second quarter, capital spending for 2011 is currently estimated to be $14.1 million or 86%
of the Approved Annual Budget amount of $16.3 million.

BUSINESS EVENTS
Occupancy levels at Commercial Properties were at 90% at the end of the second quarter, which is at the
90% target for the 2011 Budget, but above comparable statistics for the local market 84%.
Through the 2nd quarter, moorage occupancies at Fishermen's Terminal and Maritime Industrial Center
averaged 81% which was below the target 83%. Recreational marinas averaged 94% occupancy for the
second half which was above the target of 92%.
Fishermen's Terminal NW dock fender replacement and Maritime Industrial Center sheet pile replacement
projects are substantially complete. The Fishermen's Terminal south wall replacement project was delayed
due to construction complications, but is expected to be completed in the 3rd quarter.
Fishermen's Terminal net shed pilot program continues with 19 lofts removed through the second quarter
and 37 customers on waiting list to get racking installed when it is approved.
Eastside Rail Corridor - Continuing to develop streamlined procedures and standards to handle the volume
of incoming access requests.
Marine Maintenance - Continuing Deferred Maintenance Reduction Program.

18

IV.

REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

B.

KEY INDICATORS

Shilshole Bay Marina Occupancy

Percent Linear Footage

120.0%
100.0%

2010 Actual

80.0%

2011 Budget

60.0%

2011 Actual

40.0%

20.0%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Fishermen's Terminal Moorage Occupancy
Percent Linear Footage Occupied

120.0%
100.0%
2010 Actual
80.0%

2011 Budget

60.0%

2011 Actual

40.0%
20.0%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Commercial Building

Percent Occupied

100%
90%

88% 90% 89%

89% 90% 90%

90%

87%

88%

90%
2010 Actual

80%

2011 Target

70%

2011 Actual

60%

Qtr 1

Qtr 2

Qtr 3

Qtr 4

Net Operating Income Before Depreciation By Business
$ in 000's
Recreational Boating
Fishing & Commercial
Commercial & Third Party
Eastside Rail
RE Development & Plan
Envir Grants/Remed Liab
Total Real Estate

2010
Actual
1,033
(978)
455
(111)
(248)
0
151

2011
Actual
914
(1,037)
(147)
(944)
(330)
(9)
(1,553)

2011
Budget
344
(1,288)
(1,261)
(325)
(589)
0
(3,119)

19

2011 Bud Var
$
%
570
166%
251
19%
1,114
88%
(619)
-191%
260
44%
(9)
NA
1,566
50%

Change from 2010
$
%
(119)
-12%
(59)
-6%
(602)
-132%
(833)
-748%
(81)
-33%
(10)
NA
(1,704)
-1129%

IV.

REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

C.

OPERATING RESULTS

$ in 000's
Operating Revenue

2010 YTD
Actual
14,857

2011 Year-to-Date
Actual
Budget
14,667
15,133

2011 Bud Var
$
%
(467)
-3%

Year-End Projections
Budget Forecast Variance
30,707
30,795
88

Total Revenue

14,857

14,667

15,133

(467)

-3%

30,707

30,795

88

Direct Expenses
Envir Remediation Liability
Divisional Allocations
Corporate Allocations
Total Expense

13,861
(0)
(1,733)
2,579
14,706

14,477
0
(1,225)
2,968
16,220

16,803
0
(1,865)
3,315
18,253

2,326
0
(641)
347
2,033

14%
NA
-34%
10%
11%

33,221
0
(3,787)
6,645
36,079

31,765
0
(2,375)
6,550
35,940

1,456
0
(1,412)
95
139

NOI Before Depreciation
Depreciation
NOI After Depreciation

151
4,981
(4,830)

(1,553)
5,037
(6,590)

(3,119)
5,007
(8,127)

1,566
(29)
1,537

50%
-1%
19%

(5,372)
(5,145)
10,166
10,166
(15,538) (15,311)

227
0
227

Total Real Estate revenues were ($467K) unfavorable to budget. Key variances are as follows:
Harbor Services: Unfavorable $22K
 Recreational Boating favorable $61K due to 2% or 236 more boat-months at SBM than planned.
 Fishing and Commercial unfavorable ($83K) primarily due to fewer medium and large fishing boats due to
work on the Northwest Dock fender pile replacement project and higher catch quotas than expected which
kept vessels out fishing longer and thus out of the harbor.
Portfolio Management: Unfavorable ($549K)
 Commercial Properties favorable $67K primarily due to higher occupancy at Terminal 102 Marina
Corporate Center and higher occupancy and utility revenue at Fishermen's Terminal Office & Retail than
assumed in budget.
 Third Party Managed Properties unfavorable ($616K) due to lower activity than anticipated at the Bell
Harbor International Conference Center, lower sponsorship revenue and activity at World Trade Center
Club, and lower occupancy at WTC West than assumed in Budget.
Eastside Rail Corridor: Unfavorable ($9K)
 Eastside Rail Corridor unfavorable ($9K) due to considerable unknowns at time of Budget. Budgeted
revenue was based on continuing review of over 844 agreements assigned to the Port from BNSF. As
research and billing progressed it was found that only 240 agreements require payment and they are spread
among annual, 5-year, and 10-year periodic payments.
RE Development and Planning: Favorable $79K
 Terminal 91 General Industrial favorable $62K due to higher revenue from Pacific Maritime Association as
a result of the tenant taking more yard space.
Facilities Management: Favorable $1K
 Pier 69 Facilities Management favorable $1K due to reimbursed tenant work that was not budgeted for
2011.
Maintenance: Favorable $35K
 Maintenance favorable $35K due to recycling revenue.

20

IV.

REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

Total Real Estate expenses were $2,033K favorable to budget. Key variances:










Third Party Management Expense and Management Fees related to the World Trade Center Club, World
Trade Center West and Bell Harbor International Conference Center (BHICC) were favorable $456K due to
expense controls by third party managers and $154K favorable due to timing of acquisition of furniture and
equipment at BHICC and World Trade Center Club.
Outside Services (excluding Maintenance, CDD and Corporate) were favorable $297K primarily due to
lower than expected spending on Eastside Rail Corridor ($224K), slower start on Environmental Services
projects ($97K).
Maintenance expenses were favorable $1,309K primarily due to later start of the Bell Street Garage
sprinkler project, later start of P69 concrete beam project, fewer tenant improvement project, slower work
on net shed pilot program and lower than anticipated overhead charges to the Real Estate Businesses.
Corporate costs, direct and allocated, were favorable $369K primarily due Human Resources $66K,
Accounting & Financial Reporting $55K, Internal Audit $46K, Legal $41K, Public Affairs $29K, Police
$28K, and IT $23K.
CDD costs, direct and allocated were favorable $176K primarily due to $157K in lower allocations than
planned.
Room/Space/Land Rental favorable $73K due to correction of prior accruals related to DNR submerged
land rent for Pier 69 and Pier 66.
Litigated Injuries & Damages unfavorable ($778K) due to reserve for legal expense set up for lawsuit filed.
All other variances netted to an unfavorable ($23K) or about 0.1% of Total Expenses budgeted

NOI Before Depreciation was $1,566K favorable to budget.


Depreciation was ($29K) unfavorable to budget primarily due to unanticipated depreciation at Bell Harbor.
The variance amounted to less than 1% of budget.

NOI After Depreciation was $1,537K favorable to budget.
Forecast
Real Estate anticipates ending the year favorable to Budget by $227K for NOI Before Depreciation. Revenue is
forecasted to exceed Budget by $88K due to increased activity at Bell Harbor International Conference Center.
Expenses are forecasted to be favorable to Budget by $139K primarily due to more Maintenance work being
charged to capital then budgeted and lower than budgeted Corporate allocations. The forecast also reflects a
reclassification in expenses from Divisional Allocations to Direct Expenses. At the beginning of 2011, a change
was implemented in the way Marine Maintenance charges overhead to expense projects and programs. As a
result, approximately $1,050K of Maintenance related overhead expenses will be direct charged to the Seaport
Divison rather than ascribed to Seaport through Divisional Allocations. Because this change in methodology
was not in place during the development of the 2011 Budget, the impact on these offsetting expense impacts are
reflected in the Real Estate Division Forecast.
Change from 2010 Actual
Net Operating Income Before Depreciation decreased by ($1,704K) between 2011 and 2010 as a result of lower
revenue ($191K) and higher expenses ($1,513K). Operating Revenue decreased by $191K due to lower revenue
at the Bell Harbor International Conference Center. Expenses increased by $1,513K in 2011 due to litigated
damages associated with a lawsuit filing, tenant improvement costs, higher utilities and higher corporate costs.
This was partially offset by lower third party management expenses associated with BHICC.

21

IV.

REAL ESTATE DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

D.

CAPITAL SPENDING RESULTS

$ in 000's
FT NW Dock Fender System
FT East Portion South Wall
Small Projects
RE Maintenance Shop Solution
MIC Seawall Replacement
All Other
Total Real Estate

2011
Estimated
Actual
2,305
3,478
1,957
2,282
1,728
2,377

2011
Approved
Budget
3,440
3,232
2,026
1,925
1,707
4,009

14,127

16,339

Variance
EstActs to EstActs as a % 2011 Plan
Budget
of Budget
of Finance
1,135
67%
3,350
(246)
108%
4,668
69
97%
992
(357)
119%
186
(21)
101%
2,123
1,632
59%
4,038
2,212

86%

15,357

Comments on Key Projects:
Through second quarter, the Real Estate Division spent 42% of the Approved Capital Budget. Full year
spending is estimated to be 86% of the Approved Capital Budget.
Projects with significant changes in spending were:
 FT NW Dock Fender System - Actual contractor bids lower than estimate. Work completed.
Changes between the 2011 Plan of Finance and the 2011 Approved Budget represent modifications in 2011
spending estimates made after determination of 2010 actual spending.

22

V.

CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

A.

BUSINESS EVENTS

AVPMG
 Construction has started on the following projects - airfield pavement/slot drains replacement near
south satellite, FIS booths, PC air.
 Parking revenue control system - selected Scheidt & Bachmann
 Rental car facility construction hit a major milestone - ready for tenant improvements construction.
 Construction complete & facility in use - C1-C88 baggage system, new security checkpoint
CPO





ENG




PCS



SPM





On March 31, 2011, the expanded P-Card program was implemented. We hired a P-Card Administrator,
who is conducting compliance reviews (audits) and identifying/addressing non-compliance with CPO-7.
Many CPO team members are completing ESI classes and will attain their ESI & George Washington
University School of Business Masters in Government Contracting Certificate. We hosted 3 classes in
furtherance of this certification.
CPO hosted 4 training sessions (with 59 attendees) related to procurement and administration of
consulting contracts (service agreements). Attendance is down and a number of classes were cancelled.
CPO is evaluating the appropriate number of sessions we should host on a yearly basis.
CPO Service Agreement Section kicked off compliance reviews and is in process of reviewing 8
contracts.

Assistant Directors participated in FEMA Training with Aviation division in Maryland.
Engineering started work on Seaport under-dock inspection project in collaboration with Seaport PMG
and Maintenance. This work was not included in the Engineering Operating Budget.
Second quarter adjustments made for new CDD Overhead Allocation Methodology. Overhead rate
review and adjustments to be implemented for quarters 3 & 4.
Several key projects for the 2nd quarter of 2011 include the installation of the FIS Primary Inspection
Booths at the south satellite, T-91 Waterline & Paving, Noise Remedy Mitigation, and Gate B3 Loading
Bridge
We continued the RFQ process for Asbestos Design and Monitoring and will complete this process
during the 3rd quarter.
Completed the construction phase of Terminal 91 Roadway Pavement Replacement and Fishermen's
Terminal Northwest Dock East Fender System Replacement Projects.
Projects in construction: Terminal 91 Waterline, Terminal 86 Tower Strengthening, Maritime Industrial
Center central seawall, Fishermen's Terminal Phase 4 South Wall, East Marginal Way Grade
Separation.
Continued underdock inspections at Terminal 18 and 46 and began Terminal18 Pile Caps Pilot Project
design.
Awarded Terminal10 Development construction contract. Construction is scheduled to begin in July.

CDD Admin
 SharePoint site development continues.

23

V.

CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

B.

KEY PERFORMANCE METRICS (CDD Dashboard updated)
Key Performance
Metrics

2011 YTD

Construction Soft
Costs

($ in 000's)

36 month rolling
average from

Total Construction:

Q3 2008 thru Q2 2011
Cost Growth During
Construction

Design Schedule
Growth

Construction Schedule
Growth

Performance
Evaluation Timeliness

Total Costs
Total Soft:

Limit construction soft costs
$ 909,790 (100%) (design, construction management,
project management, environmental
$ 733,259 ( 81%) documentation) to no more than
$ 176,531 ( 19%) 25% of total capital improvement
costs.

Total Completed Projects YTD: 5
Discretionary Change:

0.0%

Mandatory Change:

0.1%

Limit average mandatory change
cost growth to 5% of construction
contract award.
Limit average discretionary change
cost growth to 5% of construction
contract award.

($ in 000's)
Total Completed Projects YTD: 5
Avg Design Growth Completed Proj's: 74.5%
Cumulative Value YTD: $99,040
($ in 000's)
Total Completed Projects YTD: 5
Avg Construction Growth Completed
Projects: -2.2%
Cumulative Value YTD: $99,040

Total PREPs due:
Total PREPs on time:
0-30 days (CDD)
0-60 days (HRD)

2011 Procurement
Schedule:
Total Time Specs Execution

Notes

Q2
47
36
(76.6%)
6
(89%)

Good & Services
Major Public Works
Small Works
Service Agreements

24

Limit design growth from initial
Commission project authorization to
construction advertisement to no
more than 10% of originally allotted
duration.
Limit construction growth from
contract award to substantially
complete to no more than 10% of
originally allotted duration

2011 98% PREPs completed within 30
94 days of anniversary date.
69
(73.4%)
14
(88%)
69 days Average number of days, improving
84 days from period to period.
50 days
214 days

V.

CAPITAL DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 06/30/11

C.

OPERATING RESULTS

$ in 000's
Engineering
Port Construction Services
Aviation Project Management
Total Revenues

Notes

2010 YTD
Actual

2011 YTD
Actual Budget

2011 Bud Var.
$
%

Year-End Projections
Budget Forecast Variance

-

63
14
76

-

63
14
76

0.0%
0.0%
0.0%
0.0%

-

-

-

EXPENSES BEFORE CHARGES TO CAPITAL PROJECTS
Capital Development Administration
Engineering
Port Construction Services
Central Procurement Office
Aviation Project Management
Seaport Project Management
Total Before Charges to Capital Projects

197
4,716
3,448
1,572
2,338
1,219
13,490

171
5,479
2,947
1,598
2,561
983
13,739

181
7,694
3,778
2,189
4,324
1,258
19,424

10
2,215
831
591
1,763
275
5,685

5.4%
28.8%
22.0%
27.0%
40.8%
21.9%
29.3%

359
15,225
7,554
4,394
8,637
2,493
38,662

359
13,103
7,236
4,403
8,637
2,371
36,108

2,122
318
(9)
122
2,554

CHARGES TO CAPITAL PROJECTS
Capital Development Administration
Engineering
Port Construction Services
Central Procurement Office
Aviation Project Management
Seaport Project Management
Total Charges to Capital Projects

(4,239)
(2,113)
(735)
(2,003)
(999)
(10,088)

(3,935)
(2,200)
(523)
(2,157)
(589)
(9,405)

(5,456)
(2,169)
(607)
(3,169)
(801)
(12,202)

(1,521)
32
(84)
(1,012)
(212)
(2,797)

0.0%
27.9% (10,892)
-1.5%
(4,338)
13.8%
(1,214)
31.9%
(6,338)
26.4%
(1,602)
22.9% (24,384)

(8,892)
(4,338)
(1,214)
(6,338)
(1,602)
(22,384)

(2,000)
(2,000)

197
477
1,335
838
335
220
3,402

171
1,544
746
1,075
404
393
4,334

181
2,238
1,609
1,582
1,155
457
7,222

10
694
862
507
751
64
2,888

5.4%
31.0%
53.6%
32.1%
65.0%
14.0%
40.0%

359
4,211
2,898
3,189
2,299
769
13,725

122
318
(9)
122
554

OPERATING & MAINTENANCE EXPENSE
Capital Development Administration
Engineering
Port Construction Services
Central Procurement Office
Aviation Project Management
Seaport Project Management
Total Expenses

359
4,333
3,216
3,180
2,299
891
14,278

Notes:

Variance Summary









Vacancies: 24.5 = $1,646K savings from unfilled positions, plus PCS layoffs
(Under)/over Absorption OH Clearing ($1,009K) represents costs expended but not yet allocated as
overhead. Actual capital, expensed and net operating costs will increase to account for the under absorption
value.
AVPMG $712K on-site consulting charged to capital projects, offset by honorarium payments for
escalators contract (MC-0316531)
AVPMG $49K refund upon closing of RST Enterprises claim ($50K reserve expensed Oct 2010)
CPO $9K for unbudgeted moving expenses and prior year consulting fees paid in current year
ENG $780K reduced consultant use, offset by ($80K) unbudgeted expense work; $72K reduced travel
expense
PCS $428K due to accruals of Outside Services and $12K in reduced Equipment Rental
SPM ($212K) reduced charges to capital

25

VI.

CORPORATE FINANCIAL & PERFORMANCE REPORT 06/30/11

A.

BUSINESS EVENTS





















Centennial Celebration events:
o Centennial Video Contest for Schools launched, awards recognition at Commission Meeting
o Centennial Park Dedication
o Centennial "Get to Know Your Port by Bike"
o Beach Access Opening Centennial Community Celebration and Ribbon Cutting Ceremony
o Centennial displays installed at STIA
Held Century Agenda Panels on Fostering Economic Growth, Moving Cargo, and Moving People.
Set preliminary goals and objectives of increasing jobs related to Port by 100,000 over 25 years,
Moving Cargo, and Moving People.
Ship Canal Cleanup, in conjunction with Seattle Marine Business Coalition.
Participated in community outreach programs such as:
o Duwamish Alive! Community Restoration, Kayak Launch Opening and Park Bench Ribbon Cutting
at Terminal 117
o Duwamish Alive! Earth Day Festival
o South Park Bridge Ground Breaking, Community Celebration and Business Casual Reception
o Seattle Maritime Festival
o Northwest Paddling Festival at Jack Block Park
o Emissions Inventory Update outreach meetings
AFR completed a department-wide Risk Assessment & Mitigation "refresh" project, covering all operating
sections and business processes of the AFR department to update business process improvement
opportunities, identify potential control gaps and establish action plans to mitigate risks and potential
exposures.
Completed the liability insurance broker selection process and signed a Category III Contract in May for
five years. The contract includes a small business component of 10%.
Completed Tier 1 of the 2011 Wellness Rewards Tiered Program on April 30th. To date, 935 employees
have completed the health assessment.
Implemented telephonic and online coaching program as part of the Wellness Reward program. To date, 258
are engaged in telephonic coaching.
Installed TeamMate software audit management system.
Ethics Survey was offered to all Port employees. Intake and response system continues to be developed and
implemented. Training program continues to be developed.
HR&D identified as lead on Request for Proposal (RFP) to select a consultant for design of
Portwide process improvement effort. Finalized Scope of Work and expect to advertise RFP in Q2.
ICT has finished building the Port's new website and is working with Public Affairs on Content migration
for a third quarter deployment.
Received the Distinguished Budget Presentation Award for 2011 from Government Finance Officers
Association in June.
Completed the Investment Banking Services procurement process. Six firms were selected to provide
financing support for the next 3-5 years. Of the six selected firms, two are small business firms.
Office of Social Responsibility participated in business events such as the Supplier Diversity Best Practices
Summit, Women of Color Empowered Luncheon, Hire America's Heroes Symposium, Women Veterans
Summit, Northwest Minority Supplier Council Business Conference and the City of Seattle Reverse Vendor
Trade Show.

26

VI.

CORPORATE FINANCIAL & PERFORMANCE REPORT 06/30/11

B.

KEY PERFORMANCE METRICS

Key Performance Metrics
A. High Performance Workplace:
1. Occupational Injury Rate
2. Total Lost Work Days
3. Contract Administration Issues
4. Employee Training
a) New Employee Orientation
b) REALeadership Program
c) MIS Training
d) Required Safety Training
5. Job Openings Created
6. Job Applications Received
7. Tuition Reimbursement
B. Transparency:
1. Rate of Public Meetings
2. Public Disclosure Requests
3. Web site usage

4. Track Constant Contact
5. Increase internal
communications via Compass
C. Accountability:
1. Internal Audits Completed
2. % of Audit Plan Completed
3. Preventable Vehicle Incidents
4. Incurred Auto Liability Costs
D. Other Services and Support:
1. Projects on Budget/Schedule
2. Police Service Calls
3. Police Arrests
4. Attorney Services
5. Labor Contracts Negotiated
6. Account Receivables Collection
(0 - 30 days)
7. Small Business Roster

2011 YTD

2010 YTD/Notes

5.68
313
59

5.45, increased by 0.23
253, increased by 60
28, increased by 31

23
30
6 Classes and 10 users
68%
132
6,210
30 employees participated

21, increased by 2
29, increased by 1
6 classes and 67 users
63%, increased by 8%
97, increased by 35
4,143, increased by 2,067
n/a

6
144
2,036,201 total page views;
1,430,113 unique page views

2, increased by 4
149, decreased by 5
2,428,967 total page views, decreased
by 16%; 1,742,791 unique page
views, decreased by 18%
16,142 contacts at year-end
5,500 visits per day, and 1,200 unique
users.

19,853 active contacts
Site is averaging 6,922 visits
per day, average 807 unique
visitors.
10
32%
31
$50K

7, increased by 3
24%, increased by 8%
38, decreased by 7
$5K, increased by $45K

100%/38%

100%/33% increased by 15%

27,246
245 with no warrant

29,534, decreased by 8%

2
93.3%

306, decreased by 61;
192 with warrant, increased by 3
28 Litigations and claims, increased
by 2
4, decreased by 2
90.8%

1,215

1,122, increased by 93

195 with warrant
30 litigation and claims

27

VI.

CORPORATE FINANCIAL & PERFORMANCE REPORT 06/30/11

C.

OPERATING RESULTS

$ in 000's
Total Revenues

Notes

2010 YTD
Actual
309

Executive
Commission
Legal
Risk Services
Health & Safety Services
External Affairs
Human Resources & Development
Labor Relations
Information & Communications Technology
Finance & Budget
Accounting & Financial Reporting Services
Internal Audit
Office of Social Responsibility
Police
Contingency
Total Expenses

697
404
1,603
1,259
499
2,644
1,741
294
8,696
729
2,946
494
576
9,204
17
31,802

2011 YTD
Actual Budget
620
430

2011 Bud Var.
Year-End Projections
$
%
Budget Forecast Variance
190
44.1%
1,025
1,202
177

694
336
1,529
1,249
542
2,990
2,271
515
8,951
707
2,789
507
531
10,535
48
34,195

99
129
138
134
32
404
439
(53)
219
54
504
114
305
225
302
3,045

793
465
1,667
1,383
574
3,395
2,709
462
9,170
762
3,293
621
835
10,760
350
37,240

12.4%
27.8%
8.3%
9.7%
5.6%
11.9%
16.2%
-11.6%
2.4%
7.1%
15.3%
18.3%
36.5%
2.1%
86.3%
8.2%

1,500
931
2,906
2,789
1,129
7,012
5,285
922
19,511
1,493
6,596
1,215
1,567
21,452
700
75,008

1,460
862
3,055
2,722
1,124
6,795
5,063
922
19,511
1,483
6,415
1,204
1,560
21,443
350
73,969

40
70
(149)
67
5
217
222
11
181
11
6
9
350
1,039

Corporate revenues were $190 thousand favorable compared to budget due to higher operating
grants.
Corporate expenses for the first six months of 2011 were $34.2 million, $3.0 million or 8.2% favorable
compared to the approved budget and $2.4 million or 7.5% higher than the same period a year ago. The $3.0
million favorable variance is due primarily to timing differences between when the items are paid and when
budgeted and not necessarily cost savings.
All corporate departments have a favorable variance except for Labor Relations, which has an unfavorable
variance of $53thousand due to charging less to capital projects than originally anticipated.
Year-end spending is projected to be $1.0 million under budget due primarily to:





D.

External Affairs incurring lower costs than anticipated and vacant positions
Human Resources and Development vacant positions and credit from state for participating in the
Commute Trip Reduction Program
Accounting and Financial Reporting Services vacant positions and rebate from bank for travel program
Not anticipating to use all funds in Contingency

CAPITAL SPENDING RESULTS
($ Millions)

Annual Results:
2011 Plan of Finance

$12.07

2011 Approved Budget

$12.90

2011 Estimated/Actuals

$9.74

Variance (Budget vs Actuals)

$3.16

28