2012 Operating Budget Update
Commission Briefing
October 25, 2011
ITEM NO. _7b_Supp________
DATE OF
MEETING: October 25, 2011
Budget Overview
• Key Drivers:
– Baseline payroll increases and contractual increases
– New Rental Car Facility / Busing Services
– Terminal Realignment
– Deferred Maintenance
– Initiatives Tied to Strategic Goals & Century Agenda
– Audit Committee/Internal Audit Initiatives
– Other initiatives including Enterprise Risk
Management, Medical Plan Review/Design, Business
Process Improvement
2
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Budget Changes Summary
($ in '000s)
As of
10/4/11
As of
10/11/11
$
Change
Notes
Operating Revenues
Aeronautical 238,149 235,619 -2,530 Cost recovery
Non-Aeronautical 149,828 150,111 283 Higher Rental Car and Concessions revenues
Other (adjusted) 934 1,234 300 Fed Operating Grant Rev for Fire Dept
Aviation 388,911 386,964 -1,947
Seaport 98,151 98,151 0 No changes
Real Estate 32,828 32,828 0 No changes
CDD 0 0 0 No changes
Corporate 151 151 0 No changes
Other Operating Revenues 131,131 131,131 0
Total 520,042 518,095 -1,947
Operating Expenses
Aviation 162,909 160,851 -2,058 See next slide for details
Seaport 20,408 20,408 0 No changes
Real Estate 37,166 36,416 -750 See next slide for details
CDD 15,528 15,516 -12 Direct Charge Refinement
Corp 76,655 76,535 -120 Remove a proposed Police position and cut $10K
Total 312,666 309,725 -2,941
Net Operating Income 207,376 208,370 994
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Budget Major Changes Since 10/4
Division (in $ 000's) Change Notes
Aviation
1) Remove RCF Traffic Support Specialists (436) Remove 7.6 new FTEs
2) Delay hiring of RCF Bus Drivers (526) Start on 3/1/12
3) Removal AV Maintenance positions (735) Remove 9.0 new FTEs
4) Delay Hiring Some Positions (243) 7 new positions
5) Natural Gas Rate Change (127)
6) Remove Window Cleaning (90)
7) Remove Remote Cruise Facility (84)
8) Add Joint Marketing Fee 300 For new international air services
9) Other Reductions (120) Include the removal of 4 pathfinders and 1.25 interns
Total (2,058)
Real Estate
1) Pier 69 Carpet Replacement (400) Deferred $400K to 2013 ($800K in 2013)
2) Maximo Mobility Intergration (100) Deferred $100K to 2013
3) Pier 69 Concrete Beams Rehab (250) Deferred $250K to 2013
Subtotal (750)
CDD
1) Direct Charge Refinement (12)
Subtotal (12)
Corporate
1) Leadership Conference (10) Reduce new request from $51K to $41K
2) Deleted a Proposed Police Position (110) Redeploy officers from other duties to RCF
Subtotal (120)
TOTAL (2,941)
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Operating Budget Summary
($ in '000s)
2010
Actual
2011
Budget
2011
Forecast
2012
Budget
$
Change
%
Change
Notes
Operating Revenues
Aeronautical 198,329 217,200 214,181 235,619 18,419 8.5% Cost recovery
Non-Aeronautical 135,052 144,601 144,541 150,111 5,510 3.8% Including $9.1M RAC operating revenue.
Other (adjusted) 880 877 877 1,234 357 40.6% $7.8M Fuel Hydrant rev is reclassified as non-op.
Aviation 334,262 362,678 359,599 386,964 24,286 6.7%
Seaport 97,279 98,153 95,961 98,151 -1 0.0% $2.1M reduction in pass-through grant.
Real Estate 30,391 30,942 31,030 32,828 1,886 6.1%
CDD 36 n/a
Corporate 610 1,025 1,202 151 -874 -85.2% $990K for AAPA Conference in 2011 budget.
Other Operating Revenues 128,316 130,119 128,192 131,131 1,012 0.8%
Total 462,578 492,798 487,792 518,095 25,297 5.1%
Operating Expenses
Aviation 126,481 139,575 137,120 160,851 21,276 15.2%
Seaport 19,517 23,242 19,200 20,408 -2,834 -12.2% $2.1M pass-thro grant and $500K for env. reserve exp.
Real Estate 30,739 33,741 33,741 36,416 2,675 7.9%
CDD 9,335 14,278 14,278 15,516 1,237 8.7%
Corp 67,391 75,008 73,969 76,535 1,527 2.0% See notes (1), (2) & (3).
Total 253,464 285,844 278,308 309,725 23,881 8.4%
Net Operating Income 209,114 206,954 209,484 208,370 1,416 0.7%
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Comprehensive Budget Summary
• Total Revenues were $12.2M higher than 2011 budget and $40.5M higher than 2010.
• Total Expenses were $4.2M less than 2011 budget and $10.1M higher than 2010.
• Change in Net Assets were $16.3M above 2011 budget and $30.4M higher than 2010.
2010 Actual
Corporate Cost Analysis
2010
Actual
2011
Budget
2011
Forecast
2012
Budget
Corporate Cost
67,391 75,008 73,969 76,535
Total Revenue
462,651 492,798 487,719 518,095
Total Expense
253,464 285,844 278,547 309,725
Corporate Cost
as % of Revenues 14.6% 15.2% 15.2% 14.8%
Corporate Cost
as % of Expense
26.6% 26.2% 26.6% 24.7%
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($ in 000’s)
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Port-wide FTEs Summary
Aviation Seaport Real Estate Capital Dev Corporate Totals
2011 Approved FTE's 761.9 60.4 164.8 262.5 447.6 1697.2
Mid Year Approval 10.1 0.4 1.0 2.0 3.7 17.2
Eliminated 0.0 -1.7 -1.0 0.0 -0.5 -3.2
Transfers 1.0 0.0 0.0 0.0 -1.0 0.0
Adjusted 2011 FTE's 773.0 59.1 164.8 264.5 449.8 1711.2
2012 Budget
Eliminated 0.0 0.0 0.0 -9.8 0.0 -9.8
Transfer 0.0 0.0 0.0 0.0 0.0 0.0
New FTE's 86.0 0.8 1.0 1.0 2.4 91.2
Total 2012 Changes 86.0 0.8 1.0 -8.8 2.4 81.5
Proposed 2012 FTE's 859.0 59.9 165.8 255.8 452.2 1792.7
Next Steps
• First Reading and Public Hearing of the 2012
Budget on 11/8.
• Second Reading and Final Passage of the 2012
Budget on 11/22.
• Release the 2012 Final Budget and Draft Plan of
Finance Document to the Public on 12/14.
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2012 Operating Budget Update
Commission Briefing
October 25, 2011
ITEM NO. _7b_Supp________
DATE OF
MEETING: October 25, 2011