PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA – STAFF BRIEFING
Item No.
7b
Date of Meeting
October 25, 2011
DATE: October 12, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Dan Thomas, Chief Financial and Administrative Officer
Michael Tong, Corporate Budget Manager
SUBJECT: 2012 Preliminary Operating Budget Update Briefing
BACKGROUND:
The Port is preparing the 2012 budget. The budget process includes setting up and testing new
budget modules in the budget system, budget users training, department and division strategic and
business planning, publishing budget guidelines, establishing budget targets, inputting budget
data into the system, running budget allocations and budget reports, department and division
reviews, Executive reviews, Commission reviews, public comments, Commission approval of the
budget, filing the statutory budget with King County Council and Assessor’s Office, and the
preparation and releasing of the final budget document.
On October 4, 2011, staff briefed the Commission on the Aviation, Seaport, Real Estate,
Capital Development, and Corporate Operating Budgets. Since then, staff made some changes
to the preliminary operating budget based on the input and comments from the Commission in
the briefing. The key changes are as follows:
Operating Revenues
Aeronautical revenues are down by $2,530K mainly due to the effect of lower operating
costs on cost recovery formulas.
Non-aeronautical revenues have increased by $283K primarily due to higher Rental Car
and Concessions revenues.
Other revenues are up by $300K due to a new Federal operating grant for the Fire
Department.
Total operating revenues are reduced by $1,947K as a result of the Aviation Division
revenue adjustments outlined above.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
October 17, 2011
Page 2 of 2
Operating Expenses
Aviation reduced operating expenses by $2,358K mainly through reducing the number of
proposed new FTEs and delays in the projected hiring date of some new positions.
Aviation also added $300K for Joint Marketing due to new international air services
announced recently.
Real Estate delayed $750K of deferred maintenance work to 2013. The delayed projects
include Pier 69 carpet replacement ($400K), Maximo Mobility Integration ($100K), and
Pier 69 Concrete Beams Rehabilitation ($250K).
CDD reduced operating expenses by $12K a result of refining the amount of costs charged
to capital.
Corporate cut $120K from the previously proposed budget by removing a proposed new
Police position and reducing the leadership conference cost.
Total operating expenses have been reduced by $2,941K for all the expense adjustments
outlined above.
As a result of these changes, Net Operating Income (NOI) before depreciation is now
$208.4M, $994K higher than the $207.4M presented on October 4, 2011.
On October 25, 2011, staff will brief the Commission on the details of these changes.
OTHER DOCUMENTS ASSOCIATED WITH THIS BRIEFING:
PowerPoint presentation.
