Item No. 9d_attach
.
Meeting Date: March 13, 2018

PORT OF SEATTLE

2017 FINANCIAL & PERFORMANCE REPORT

AS OF DECEMBER 31, 2017

TABLE OF CONTENTS

Page
I.

Portwide Performance Report

3-6

II.

Aviation Division Report

7-16

III.

Maritime Division Report

17-21

IV.

Economic Development Division Report

22-27

V.

Central Services Division Report

28-32

2

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 12/31/17

EXECUTIVE SUMMARY
Financial Summary
The Port's operating revenues for 2017 were $630.4M, which is $10.1M above budget and $31.9M higher than the
2016 actuals. Excluding Aeronautical revenues, which are based on cost recovery, other operating revenues were
$367.9M, $22.5M above budget and $13.7M higher than the 2016 actuals due mainly to higher revenues from
Public Parking, Airport Dining and Retail, Ground Transportation, Non-Aero Commercial Properties, Cruise and
an unanticipated lump sum payment from Des Moines Creek Business Park (DMCBP) Phase II for pre-paid
frontage fees. Total operating expenses were $371.3M, $13.3M below budget from savings in payroll, mainly due
to vacancies and hiring delays, and outside services due to delays in Terminal expense projects, Sustainable
Airport Master Plan (SAMP) projects, Airport Community Ecology (ACE) Fund and Energy & Sustainability
Fund spending. Operating income before depreciation was $259.1M, $23.5M above budget but $14.1M lower than
2016. The Port-wide capital spending for 2017 was $324.5M which is $283.2M below budget.
Operating Summary
At the Airport, the enplanement growth for 2017 was 2.7% and landed weight was 4.2%. The enplanement growth
rates for domestic and international passengers were 2.3% and 5.9%, respectively. Total cargo metric tons were
16.2% above the 2016 actuals. For the Maritime division, Grain volumes were 17% higher than expected, and for
the first time in 2017, the number of cruise passengers exceeded the million passenger mark. For the Economic
Development division, the overall occupancy of buildings managed by Portfolio Management was at 98% for
2017, above the 95% target for 2017. The occupancy level at Shilshole Bay Marina was at 94.8%, slightly higher
than the 2016 occupancy level of 94.6%. Fishermen's Terminal occupancy level was at 81.9%, lower than the
84.7% occupancy level recorded in 2016.
Key Business Events
The Port Commission approved an Energy and Sustainability motion outlining the Port's commitment to protect
public health and the environment, and to reduce its carbon footprint throughout the region. In line with its
environmental and sustainability goals, the Port became the first U.S. port to set a 10-year goal to transition away
from fossil fuels to aviation biofuels. The Port and City of SeaTac executed a 10-year Interlocal Agreement, which
establishes a mutual and cooperative system to recognize respective jurisdictional authorities. The Port also
awarded new custodial contracts to increase opportunities for small and disadvantaged businesses. Aeromexico
started air service to Mexico City in November. In December, the Port Commission voted to purchase the Salmon
Bay Marina which supports the Century Agenda goal to double the number of jobs in the region related to fishing
and maritime industry. The Port also welcomed Stephen Metruck as the new Executive Director.
Major Capital Projects
The Sustainable Airport Master Plan (SAMP) is progressing towards preferred alternative. The construction for the
International Arrivals Facility (IAF) has begun, and 90% of the design has been completed. The overall South
Satellite (SSAT) Interim Improvements project has been delayed due to scope change required by an adjacent
project. The North Satellite Expansion project is underway, and phase 1 work has been finalized which includes
completing underground utilities, replacing 400 Hz generators, installing rain harvest tanks, and replacing 30% of
the new chilled water pipeline. Design reviews for the Terminal 5 Modernization was completed with tenant/
commercial team input on modifications to follow. The Port substantially completed or placed into closeout 27
projects, including Bag Claim Wall Panels, Central Terminal WiFi Expansion, Air Cargo 4 Fence, Variable
Frequency Drive Motor Replacement.

3

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 12/31/17

PORTWIDE FINANCIAL SUMMARY

$ in 000's
Aeronautical Revenues
Other Operating Revenues
Total Operating Revenues
Total Operating Expenses
NOI before Depreciation
Depreciation
NOI after Depreciation

2016
Actual
244,235
354,232
598,467
325,285
273,182
164,336
108,846

2017
Actual
262,451
367,917
630,368
371,317
259,051
165,021
94,030

Fav (UnFav)
Incr (Decr)
2017 Budget Variance Change from 2016
Budget
$
%
$
%
274,799 (12,348) -4.5%
18,216
7.5%
345,446
22,471
6.5%
13,685
3.9%
620,245
10,123
1.6%
31,901
5.3%
384,660
13,343
3.5%
46,032 14.2%
235,585
23,466 10.0%
(14,131) -5.2%
166,300
1,279
0.8%
685
0.4%
69,285
24,744 35.7%
(14,817) -13.6%

MAJOR OPERATING REVENUES SUMMARY

$ in 000's

2016
Actual

2017
Actual

2017
Budget

Aeronautical Revenues
Public Parking
Rental Cars - Operations
Rental Cars - Operating CFC
Airport Dining and Retail
Employee Parking
Ground Transportation
Non-Aero Commercial Properties
Airport Utilities
Fishing & Commercial Vessels
Maritime Operations
Recreational Boating
Cruise
Grain
Maritime Industrial
Marina Office & Retail
Central Harbor Management
Conference & Event Centers
NWSA Distributable Revenue
Other
Total Operating Revenues (w/o Aero)

244,235
69,540
37,082
12,122
55,196
9,329
12,803
9,992
7,233
2,927
6,181
10,255
15,422
5,382
6,306
3,949
7,827
8,022
61,584
13,080
354,232

262,451
75,106
35,051
10,641
54,611
9,617
15,684
18,042
7,018
2,854
6,443
11,086
17,596
5,427
6,799
3,988
8,634
9,133
54,925
15,263
367,917

274,799
73,568
37,815
12,931
51,348
8,482
14,417
12,141
7,118
3,052
6,069
11,081
16,502
4,508
6,605
4,012
8,055
7,943
46,708
13,089
345,446

(12,348)
1,538
(2,764)
(2,290)
3,264
1,134
1,267
5,901
(101)
(198)
374
5
1,093
919
193
(24)
579
1,190
8,217
2,174
22,471

18,216
5,566
(2,031)
(1,481)
(584)
288
2,881
8,050
(215)
(73)
262
831
2,174
45
493
39
807
1,111
(6,659)
2,183
13,685

TOTAL

598,467

630,368

620,245

10,123

31,901

4

Budget
Variance

Change
from 2016

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 12/31/17

MAJOR OPERATING EXPENSES SUMMARY
Fav (UnFav)
$ in 000's
Salaries & Benefits
Wages & Benefits
Payroll to Capital Projects
Equipment Expense
Supplies & Stock
Outside Services
Utilities
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses
Charges to Capital Projects
TOTAL

Incr (Decr)

2016
2017
2017 Budget Variance Change from 2016
Actual
Actual Budget
$
%
$
%
102,873 112,837 125,263 12,426
9.9%
9,964
9.7%
99,917 108,041 112,647
4,606
4.1%
8,124
8.1%
21,744 25,708 27,327
1,618
5.9%
3,965
18.2%
7,106 11,118
7,438 (3,679) -49.5%
4,012
56.5%
8,792 10,238
8,040 (2,199) -27.3%
1,447
16.5%
70,116 83,603 101,106 17,503
17.3%
13,487
19.2%
21,123 23,529 21,752 (1,777)
-8.2%
2,406
11.4%
4,200
4,767
6,203
1,436
23.1%
567
13.5%
1,178
1,408
1,997
589
29.5%
230
19.5%
25,118 34,818 24,419 (10,399) -42.6%
9,700
38.6%
(36,880) (44,750) (51,532) (6,781)
13.2%
(7,870)
21.3%
325,285 371,317 384,660 13,343
3.5%
46,032
14.2%

The 2017 actuals are $46.0M higher than the 2016 actuals primarily due to the following:
• Payroll - $18.1M higher mainly due to the addition of FTEs for Full Employee Screening, Construction Support,
Maintenance, Rental Car Facility Busing, and other growing business needs and support services.
• Outside Services - $13.5M higher largely due to more consultant expenses, more capital and expense projects, and some
capital to expense write-offs.
• Other Expenses - $9.7M higher due to environmental liability expenses ($3.3M), DMCBP Phase II Frontage Fees ($3.6M)
and Third Party Management fee ($1.1M), the last two are more than offset by higher revenues.

TOTAL OPERATING AND NON-OPERATING REVENUES AND EXPENSES
Fav (UnFav)
Budget Variance

2016

2017

2017

($ in 000's)
Revenues

Actual

Actual

Budget

$

%

1. Operating Revenues
2. Tax Levy
3. PFCs
4. CFCs
5. Fuel Hydrant
6. Non-Capital Grants & Donations
7. Capital Contributions
8. Interest Income
Total
Expenses
1. O&M Expense
2. Depreciation
3. Revenue Bond Interest Expense
4. GO Bond Interest Expense
5. PFC Bond Interest Expense
6. Public Expense
7. Non-Op Environmental Expense
8. Other Non-Op Rev/Expense
Total
Special Item
Increase In Net Position

598,467
71,678
85,570
24,715
6,992
6,284
18,108
8,448
820,262

630,368
71,702
88,389
25,790
7,000
7,647
29,983
12,174
873,053

620,245
72,000
89,087
26,300
7,024
8,595
15,000
10,822
849,073

10,123
(298)
(698)
(511)
(24)
(947)
14,983
1,351
23,979

1.6%
-0.4%
-0.8%
-1.9%
-0.3%
-11.0%
99.9%
12.5%
2.8%

325,285
164,336
105,567
9,765
5,251
8,560
280
12,087
631,131
147,700
41,431

371,317
165,021
97,748
13,891
4,931
4,588
4,464
12,732
674,693
198,360

384,660
166,300
122,026
17,714
4,985
2,488
5,441
(257)
703,357
145,716

13,343
1,279
24,278
3,823
55
(2,100)
977
(12,990)
28,665
52,644

3.5%
0.8%
19.9%
21.6%
1.1%
-84.4%
18.0%
5050.8%
4.1%
0.0%
36.1%

Major Budget Variance Explanations:
• Capital Contributions: $15.0M above budget mainly due to contribution from NCL for the Pier 66 Cruise Terminal
Improvement.
• Interest Income: $1.4M higher than budget mainly due to higher funds balance.
• Revenue Bond Interest Expense: $24.3M favorable to budget mainly due to savings from revenue bond re-financing.
• Other Non-Op Expense: $13.0M higher than budget mainly due to earlier assets retirement resulted from new project
constructions at the airport.
5

I.

PORTWIDE FINANCIAL & PERFORMANCE REPORT 12/31/17

KEY PERFORMANCE METRICS

Enplanements (in 000's)
Landed Weight (lbs. in 000's)
Passenger CPE (in $)
Grain Volume (metric tons in 000's)
Cruise Passenger (in 000's)
Shilshole Bay Marina Occupancy
Fishermen's Terminal Occupancy

2016
Actual
22,796
27,276
10.10
4,389
984
94.6%
84.7%

Fav (UnFav)
Incr (Decr)
2017
2017
Budget Variance Change from 2016
Actual
Budget
Chg.
%
Chg.
%
23,416
23,929
(513) -2.1%
620
2.7%
28,431
27,726
705
2.5%
1,155
4.2%
10.45
10.88
0.43
4.0%
0.35
3.5%
4,363
3,720
643
17.3%
(26)
-0.6%
1,072
1,039
32
3.1%
88
9.0%
94.8%
95.4%
-0.6% -0.6%
0.2%
0.2%
81.9%
84.3%
-2.4% -2.8%
-2.8%
-3.3%

CAPITAL SPENDING RESULTS

$ in 000's
Aviation

2016
Actual
153,889

Maritime

5,744

2017 Budget Variance
2017
$
%
Actual
Budget
294,497 554,717 260,220 46.9%
20,489
34,518
14,029 40.6%

Economic Development

4,731

3,739

6,304

2,565

40.7%

Central Services & Other (note 1)

5,097

5,798

12,147

6,349

52.3%

169,461

324,523

607,686

283,163

46.6%

TOTAL

Note:
(1) "Other" includes Street Vacation projects and Storm Water Utility (SWU) capital projects.

PORTWIDE INVESTMENT PORTFOLIO
During the fourth quarter of 2017, the investment portfolio earned 1.51% versus the benchmark's (the Bank of
America Merrill Lynch 1-3 Year US Treasury & Agency Index) 1.90%. Over the last twelve months the portfolio
and the benchmark have earned 1.42% and 1.52%, respectively. Since the Port became its own Treasurer in 2002,
the life-to-date earnings of the Port's portfolio and the benchmark are 2.50% and 1.79%, respectively.

6

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

FINANCIAL SUMMARY

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

247,811

266,027

278,375

(12,348) -4.4%

(3,576)

(3,576)

(3,576)

(0)

244,235

262,451

Non-Aeronautical Revenues

221,021

Total Operating Revenues

$ in 000's
Operating Revenues:
Gross Aeronautical Revenues

Incr (Decr)
Change from 2016
$
%

18,216

7.4%

0.0%

(0)

0.0%

274,799

(12,348) -4.5%

18,216

7.5%

236,803

226,645

10,157

4.5%

15,781

7.1%

465,256

499,254

501,444

(2,191) -0.4%

33,997

7.3%

Total Operating Expense

261,226

297,449

302,711

5,262

1.7%

36,223

13.9%

Net Operating Income

204,030

201,804

198,733

3,071

1.5%

(2,226) -1.1%

Capital Expenditures

153,887

294,497

554,717

260,220

46.9%

SLOA III Incentive Straight Line Adj
Aeronautical Revenues

(1

140,610

91.4%

(1) Annual non-cash amortization of $17.9M lease incentive credited in 2013.

Division Summary 2017 Actuals vs 2017 Budget
•

Net Operating Income for 2017 is $3.1M higher than budget (1.5% favorable)
o Operating Revenue is $2.2M lower than budget (0.4% unfavorable) - primarily due to lower Aeronautical
revenue ($12.3M) due to lower aero costs and higher revenue sharing, partially offset by higher Non-Aero
revenue ($10.2M) driven by strong performance in Airport Dining & Retail, Clubs & Lounges, Parking,
and Ground Transportation, as well as a one-time lump sum payment of $5.4M in Commercial Properties.
o Operating Expenses are $5.3M lower than budget (1.7% favorable) - primarily due to lower charges from
Corporate and other divisions ($13.3M savings), partially offset by higher than anticipated Airport
expenses ($8.1M) due to significant unplanned expenditures for higher than anticipated snow removal
costs, environmental liability expense, and capital to expense write-offs, as well as a one-time lump sum
amortization expense ($3.6M) associated with the lump sum payment received in Commercial Properties
this year.

Division Summary 2017 Actuals vs 2016 Actuals
•

2017 Net Operating Income is $2.2M lower than prior year (1.1% lower NOI)
o 2017 Operating Revenue is $34.0M higher than prior year (7.3% higher) - due to strong growth in both
Aeronautical revenue ($18.2M) and Non-Aero revenue ($15.8M). The increase in Aero rate based revenue
is primarily due to cost recovery on higher operating expenses to support increased airline activity,
partially offset by higher revenue sharing in 2017. The growth in Non-Aero revenue is driven by higher
passenger volumes with strong performance in Parking, Airport Dining & Retail, Clubs & Lounges, and
Ground Transportation, as well as a 2017 one-time lump sum payment of $5.4M in Commercial
Properties.
o 2017 Operating Expenses are $36.2M higher than prior year (13.9% higher) - due to higher Airport
expenses ($30.5M) for planned incremental spending to address operational impacts of increased
passenger volumes, as well as significant unplanned expenditures in 2017 for snow removal costs,
environmental liability expense, capital to expense write-offs, and a one-time lump sum amortization
expense ($3.6M) associated with the lump sum payment received in Commercial Properties this year. In
addition, charges from Corporate departments and other divisions were ($5.7M) higher in 2017.

7

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

A. BUSINESS EVENTS
•
•
•
•
•
•
•
•
•

Passenger growth slowed in 2017, still up 2.7% over the prior year. International passenger volumes grew by
5.9% in 2017.
New air service:
o Aeromexico started service to Mexico City in November 2017
o Air France announced new service to Paris, France beginning March 25, 2018
Cargo metric tons up 16% in 2017, compared to prior year.
Customer Service: achieved Airport Service Quality (ASQ) targets for 2017
Airport dining and retail program awarded lease group 3 in June 2017 and awarded lease group 4 in February
2018.
Sustainable Airport Master Plan - progressing towards preferred alternative.
Capital program: proceeding with construction on major projects: IAF, NSAT, Baggage Optimization,
Concourse D Hardstand Terminal and Alternative Utility Facility.
Inter-local agreement executed with City of SeaTac.
Airline lease agreement (SLOA) negotiations continued into early 2018, with agreement on key terms reached
in February 2018.

B. KEY PERFORMANCE METRICS

2016

2017

% Change

Enplaned Passengers (000's)
Domestic
International
Total

20,385
2,411
22,796

20,862
2,554
23,416

2.3%
5.9%
2.7%

Operations

412,170

416,124

1.0%

2,323
26,107
28,431

23.0%
2.8%
4.2%

242,470
123,735
59,651
425,856

24.5%
8.2%
4.1%
16.2%

Landed Weight (In Millions of lbs.)
Cargo
1,888
All other
25,387
Total
27,276
Cargo - Metric Tons
Domestic freight
194,754
International freight
114,350
Mail
57,326
Total
366,430

8

Passenger Activity
Change Market
Airline
2016-17 Share
Alaska+Virgin
-0.1% 49.6%
Delta
10.3% 22.2%
Southwest
-9.5%
6.7%
United
5.4%
6.4%
American
-0.8%
5.9%
2017 Cargo - Metric Tons:
• Strong growth in cargo volume from
existing domestic and international
carriers.
• 2017 reflects first full year of activity for
new air services that commenced mid2016:
o New Domestic Freight services Prime Air/Amazon and DHL
o New International Freight services AeroLogic and AirBridge.

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Key Performance Measures

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Vairance
$
%

Key Performance Metrics
Cost per Enplanement (CPE)
Non-Aeronautical NOI (in 000's)

10.10
128,833

10.45
133,108

10.88
118,521

0.43
14,587

4.0%
12.3%

0.35
4,275

3.4%
3.3%

Other Performance Metrics
O&M Cost per Enplanement
Non-Aero Revenue per Enplanement
Debt per Enplanement (in $)
Debt Service Coverage (After Rev Sharing)
Days cash on hand (10 months = 304 days)
Aeronautical Revenue Sharing ($ in 000's)

11.46
9.70
104
1.53
416
(37,395)

12.70
10.11
114
1.57
381
(42,313)

12.65
9.47
110
1.50
304
(33,093)

(0.05)
0.64
(4)
0.08
77
(9,219)

-0.4%
6.8%
-3.5%
5.1%
25.4%
-27.9%

1.24
0.42
10
0.04
(35)
4,917

10.9%
4.3%
9.4%
2.9%
-8.4%
13.2%

Activity (in 000's)
Enplanements

22,796

23,416

23,929

(513)

-2.1%

619

2.7%

Incr (Decr)
Change from 2016
$
%

Notes:
• Reduction in CPE reflects lower airline costs due to higher revenue sharing (driven by increased nonairline revenues), and increased enplaned passengers.
• Improved debt service coverage compared to budget reflects increased cash flow from growth in
enplanements.

9

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

C. OPERATING RESULTS
Division Summary

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

Gross Aeronautical Revenues (1)
SLOA III Incentive Straight Line Adj (2)
Aeronautical Revenues (1)
Non-Aeronautical Revenues
Total Operating Revenues

247,811
(3,576)
244,235
221,021
465,256

266,027
(3,576)
262,451
236,803
499,254

278,375
(3,576)
274,799
226,645
501,444

(12,348)
(0)
(12,348)
10,157
(2,191)

-4.4%
0.0%
-4.5%
4.5%
-0.4%

18,216
(0)
18,216
15,781
33,997

7.4%
0.0%
7.5%
7.1%
7.3%

Operating Expenses:
Payroll
Outside Services
Utilities
Other Airport Expenses
Total Airport Direct Charges

101,879
37,863
14,690
20,655
175,087

114,463
41,055
16,374
28,292
200,184

119,886
45,279
15,187
18,004
198,355

5,423
4,224
(1,187)
(10,289)
(1,829)

4.5%
9.3%
-7.8%
-57.1%
-0.9%

12,585
3,192
1,684
7,637
25,098

12.4%
8.4%
11.5%
37.0%
14.3%

4,463
129
4,592

7,147
2,856
10,003

3,775
3,775

(3,372)
-89.3%
(2,856)
N/A
(6,228) -165.0%

2,684
2,727
5,411

60.1%
2114.7%
117.8%

Total Airport Expenses

179,679

210,187

202,130

(8,056)

-4.0%

30,508

17.0%

Police Costs
Capital Development
Other Central Services
Maritime/Economic Development
Total Charges from Other Divisions

18,183
9,319
50,099
3,946
81,547

17,652
14,701
51,004
3,904
87,262

19,173
22,378
54,673
4,356
100,581

1,521
7,677
3,669
452
13,318

7.9%
34.3%
6.7%
10.4%
13.2%

(531)
5,382
905
(41)
5,715

-2.9%
57.8%
1.8%
-1.1%
7.0%

$ in 000's
Operating Revenues:

Environmental Remediation Liability
Capital to Expense
Total Exceptions

Total Operating Expense

261,226

297,449

302,711

5,262

1.7%

36,223

13.9%

Net Operating Income

204,030

201,804

198,733

3,071

1.5%

(2,226)

-1.1%

CFC Surplus

(4,899)
2,160
3,576
(133,982)
70,885

(2,750)
3,481
3,576
(131,060)
75,052

(5,561)
3,691
3,576
(133,876)
66,562

2,812

50.6%
5.7%
0.0%
2.1%
12.8%

2,149
1,321
0
2,922
4,167

43.9%
61.2%
0.0%
2.2%
5.9%

Net Non-Operating Items in / out from ADF (3)
SLOA III Incentive Straight Line Adj
Debt Service
Adjusted Net Cash Flow

210
(0)
2,817
8,489

(1) Aero revenues are net of revenue sharing.
(2) For Accounting purposes, the 2013 reduction in the airline revenue requirement of $17.9 million was treated as a lease incentive and is being amortized over five years.
(3) Per SLOA III definition of Net Revenues.

10

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Operating Expenses - 2017 Actuals compared to 2017 Budget:
Total Operating Expenses are lower than the 2017 Budget by $5.3 million due to the net of the following:
•

•

Aviation Direct Operating Expenses are higher than budget by $1.8 million due to the following:
Positive Variance of $9.6M

Negative Variance of $11.5M

Payroll
$5.4M
Vacancies & hiring delays
4.1M
New labor agreement impacts
(0.8M)
Snow-related incremental labor costs
(0.3M)
YE pension adjustment
2.4M
Outside Services (savings & work deferred to future year)
$4.2M
SAMP related projects - slower spending
3.9M
Airport Signage Master Plan
0.5M
Contracted Snow Removal costs
(0.5M)
Electric cart service (light rail shuttle)
(0.3M)
Curbside Assistance (Rental Car)
(0.2M)
All other Outside Services
0.8M

Utilities
Other Aviation Expenses
DMCBP Phase II pre-paid frontage exp
Litigated & Non-litigated Damages
Clubs & Lounges op exp (revenue growth)
Snow removal - supplies expense
Furniture & Equipment acquisition
Worker's Comp
All other Aviation Expenses

3.6M
1.5M
0.4M
0.6M
2.3M
1.1M
0.8M

Operating Expenses Exceptions are higher than budget by $6.2 million due to the following:
Positive Variance - none

Negative Variance of $6.2M
Environmental Remediation Liability
IAF soils
NSAT soils
NSAT asbestos
RMM projects deferred to future years
Capital to Expense
Obsolete exit lane equipment
SSAT - HVAC equipment
Cellphone lot - temporary traffic signal
All other Capital to Expense items

•

$1.2M
$10.3M

$3.4M
3.1M
0.9M
0.7M
(1.3M)
$2.9M
1.9M
0.7M
0.1M
0.2M

Operating Expense charges from Central Services and other divisions are lower than budget by $13.3 million
due to the following:
Positive Variance of $13.3M
Police savings
Capital Development savings
Aviation PMG (projects delayed/deferred)
PCS
Engineering
Other Central Services savings
Human Resources
Accounting & Financial Reporting
ICT
Executive
Office of Strategic Initiatives
All other Central Services departments
Maritime & EDD Divisions

Negative Variance - none
$1.5M
$7.7M
6.1M
0.5M
1.1M
$3.7M
0.8M
0.7M
0.6M
0.5M
0.5M
0.6M
$0.5M

11

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Operating Expenses - 2017 Actuals compared to 2016 Actuals:
Total Operating Expenses increased in 2017 by $36.2 million due to the net of the following:
•

Aviation Direct Operating Expenses increased in 2017 by $25.1 million due to the following:
Increase of $25.1M
Payroll - incremental staff (growth driven)
Outside Services
SAMP related spending
NERA grant spending (FAA pilot program)
Airport Signage Master Plan
All other Outside Services
Utilities
Other Aviation expenses
DMCBP Phase II pre-paid frontage fee exp
Furniture & Equipment acquisition
Worker's Comp
All other Aviation expenses

•

Decrease - no material amount
$12.6M
$3.2M
1.1M
0.6M
0.4M
1.1M
$1.7M
$7.6M
3.6M
2.3M
1.2M
0.5M

Operating Expense Exceptions increased in 2017 by $5.4 million due to the following:
Increase of $5.4M
Environmental Remediation Liability
IAF soils
NSAT soils
NSAT asbestos
Lora Lake (lake parcel) increase in 2016
All other RMM adjustments
Capital to Expense
Obsolete exit lane equipment
SSAT - HVAC equipment
All other Capital to Expense items

•

Decrease - no material amount
$2.7M
3.5M
1.9M
1.3M
(4.1M)
0.1M
$2.7M
1.9M
0.7M
0.1M

Operating Expense charges from Corporate and other divisions increased by $5.7 million in 2017 due to the
following:
Increase of $6.3M
Capital Development
Aviation PMG
PCS
Engineering
All other CDD
Other Central Services

Decrease of $0.5M
$5.4M
4.1M
0.5M
0.7M
0.1M
$0.9M

12

Police

$0.5M

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Aeronautical Business Unit Summary
Fav (UnFav)
Budget Variance

Incr (Decr)
Change from 2016

2016

2017

2017

$ in 000's

Actual

Actual

Budget

$

Revenues:
Movement Area
Apron Area
Terminal Rents
Federal Inspection Services (FIS)
Total Rate Base Revenues

94,725
14,028
155,852
11,227
275,832

108,638
16,771
155,431
16,951
297,791

109,845
15,957
163,565
12,437
301,803

(1,206)
814
(8,134)
4,514
(4,012)

-1.1%
5.1%
-5.0%
36.3%
-1.3%

13,913
2,743
(421)
5,724
21,958

14.7%
19.6%
-0.3%
51.0%
8.0%

Commercial Area
Subtotal before Revenue Sharing

9,379
285,211

10,574
308,365

9,665
311,468

909
(3,103)

9.4%
-1.0%

1,195
23,154

12.7%
8.1%

Revenue Sharing
Other Prior Year Revenues
Gross Aeronautical Revenues

(37,395)
(5)
247,811

(42,313)
(26)
266,027

(33,093)
(9,219)
(26)
278,375 (12,348)

-27.9%
N/A
-4.4%

(4,917)
(20)
18,216

13.2%
384.0%
7.4%

Total Airport Direct Charges
Total Exceptions
Total Charges from Other Divisions
Total Aeronautical Expenses

122,573
4,315
42,149
169,037

138,964
8,193
46,597
193,755

139,445
2,519
52,421
194,385

481
(5,674)
5,824
630

0.3%
-225.3%
11.1%
0.3%

16,391
3,878
4,448
24,717

13.4%
89.9%
10.6%
14.6%

Net Operating Income

78,774

72,272

83,990

(11,718)

-14.0%

(6,501)

-8.3%

Debt Service (1)
Net Cash Flow

(89,997)
(11,224)

(86,564)
(14,292)

(88,740)
(4,750)

2,176
(9,542)

2.5%
-200.9%

3,433
(3,068)

3.8%
-27.3%

%

$

%

NOTE: (1) Debt service is forecasted/budgeted on an annual basis only. Thus, quarterly data is not available.

Airline Rate Base Cost Drivers

$ in 000's
(1)

O&M
Debt Service Gross
Debt Service PFC Offset
Amortization
Space Vacancy
TSA Operating Grant and Other
Rate Base Revenues
Commercial area
Total Aero Revenues

2016

2017

2017

Actual

Actual

Budget

165,427
190,523
118,641
113,832
(32,831) (33,057)
28,215
29,654
(2,638)
(2,264)
(982)
(897)
275,832 297,791
9,379
10,574
285,211 308,365

190,645
117,336
(33,099)
29,637
(1,486)
(1,230)
301,803
9,665
311,468

Fav (UnFav)
Budget Variance
$

%

(123) -0.1%
(3,504) -3.0%
42 -0.1%
18 0.1%
(778) 52.4%
334 -27.1%
(4,012) -1.3%
909 9.4%
(3,103) -1.0%

O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses

13

Incr (Decr)
'Change from
2016
$
%
25,096 15.2%
(4,809) -4.1%
(226) 0.7%
1,439 5.1%
374 -14.2%
85 -8.7%
21,958 8.0%
1,195 12.7%
23,154 8.1%

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Aeronautical - Budget Variance
•

Aeronautical net operating income is $11.7M lower than budget.
o Aeronautical revenue is $12.3M lower than budget:
 Lower than budgeted rate base revenue ($4.0M) due to lower debt service payments due to increased
application of capitalized interest, savings from variable rate bond interest, and higher debt service
exclusions.
 Higher revenue sharing ($9.2M) due to strong non-aero businesses performance and lower debt service
payments.
o Aeronautical operating expenses are $0.6M lower than budget:
 Airport Direct Charges - $0.5M lower than budget despite significant unplanned expenditures for snow
removal costs, installation of additional kiosks for FIS processing, partially offset by savings due to
SAMP costs deferred to future years and payroll savings due to vacancies & hiring delays.
 Exceptions:
 Capital to Expense - $2.1M higher than budget primarily due to Aero share of expense charge
from obsolete exit lane equipment ($1.5M) and SSAT HVAC ($0.5M),
 Environmental Remediation Expense - $3.6M higher than budget primarily due to higher than
expected soil contaminants related to IAF ($3.0M) project.
 Charges from other divisions - $5.8M lower than budget primarily due to delays in planned terminal
building projects.

Aeronautical - Year over Year Changes
•

Aeronautical net operating income is $6.5M lower than 2016.
o Aeronautical revenues are $18.2 higher year over year - higher rate based revenues are offset by higher
revenue sharing:
 Higher rate based revenue ($22.0M) primarily due to higher operating expenses to support increased
airline activity.
 Higher revenue sharing ($4.9M) - due to increase in non-aero revenues driven by higher passenger
volumes.
o Aeronautical operating expenses in 2017 are $24.7M higher than 2016:
 Airport Direct Charges - $16.4M higher than prior year primarily due to targeted spending to support
increased airline activity and operational impacts of capital projects.
 Exceptions - $3.9M higher than prior year primarily due to remediation of regulated materials for the
IAF and NSAT projects ($6.7M), partially offset by the prior year increase in ERL reserve for Lora
Lake (Lake parcel - $4.1M).
 Charges from other divisions - $4.4M higher than 2016.

14

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Non-Aero Business Unit Summary

$ in 000's
Non-Aero Revenues
Rental Cars - Operations
Rental Cars - Operating CFC
Public Parking
Ground Transportation
Airport Dining & Retail & Leased Space
Commercial Properties
Utilities
Employee Parking
Clubs and Lounges
Other
Total Non-Aero Revenues

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

37,082
12,122
69,540
12,803
56,348
9,992
7,233
9,329
3,028
3,545
221,021

35,051
10,641
75,106
15,684
58,980
18,042
7,018
9,617
5,041
1,624
236,803

37,815
12,931
73,568
14,417
55,635
12,141
7,118
8,482
2,729
1,807
226,645

(2,764)
(2,290)
1,538
1,267
3,345
5,901
(101)
1,134
2,311
(184)
10,157

-7.3%
-17.7%
2.1%
8.8%
6.0%
48.6%
-1.4%
13.4%
84.7%
-10.2%
4.5%

(2,031)
(1,481)
5,566
2,881
2,633
8,050
(215)
288
2,013
(1,921)
15,781

-5.5%
-12.2%
8.0%
22.5%
4.7%
80.6%
-3.0%
3.1%
66.5%
-54.2%
7.1%

Total Non-Aero Expenses

92,189

103,695

108,124

4,429

4.1%

11,506

12.5%

128,833
(4,899)
123,934

133,108
(2,750)
130,358

118,521
(5,561)
112,960

14,587

12.3%

4,275

3.3%

2,812
17,398

50.6%
15.4%

2,149
6,425

43.9%
5.2%

(43,984)
79,949

(44,495)
85,863

(45,136)
67,824

641
18,039

1.4%
26.6%

(511)
5,914

-1.2%
7.4%

Net Operating Income
Less: CFC (Surplus) / Deficit
Adjusted Non-Aero NOI

(1)

Debt Service (1)
Net Cash Flow

Note: (1) CFC excess and Debt service are forecasted/budgeted on an annual basis only. Thus, quarterly data is not available.

Non-Aero - Budget Variance
•

Non-Aeronautical net operating income is $14.6M higher than budget.
o Non-Aeronautical revenues are $10.2M higher than budget:
 Commercial Properties revenue favorable ($5.9M) primarily due to one-time lump sum payment of
$5.4M for prepaid frontage fee reimbursement.
 Strong performance continues in Airport Dining and Retail ($3.3M), Clubs & Lounges ($2.3M),
Public Parking ($1.5M), and Ground Transportation ($1.3M).
 Rental Car continues to be challenged by other transportation alternatives.
o Non-Aeronautical operating expenses are $4.4M lower than budget:
 Airport Direct Charges - $2.3M higher than budget primarily due to amortization of prepaid frontage
fees associated with one-time lump sum payment received in 2017 from DMCBP Phase II ($3.6M).
Other unplanned spending incurred includes higher operating expenses associated with expanded
hours for airport Clubs & Lounges, electric cart shuttle service to airport light rail station, rental car
curbside service reinstated this year, and increased honey buckets deployed throughout Landside
locations to increase customer service. This unplanned spending was partially offset by savings in
Payroll and Outside Services which includes delayed spending on SAMP-related projects.
 Exceptions - $0.5M higher than budget due to Non-Aero share of Terminal Building Capital to
Expense write-offs, partially offset by savings in Environmental Remediation Liability expense due to
planned RMM projects deferred to future years.
 Charges from other divisions - $7.5M in savings from Shared Services departments.

15

II.

AVIATION DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Non-Aero Year over Year Changes
•

Non-Aeronautical net operating income is $4.3M higher than 2016.
o Non-Aeronautical revenues in 2017 are $15.8M higher than 2016
 Commercial Properties revenue increased $8.0M primarily due to one-time lump sum payment
($5.4M) received in 2017 for prepaid frontage fee reimbursement. Remainder of revenue growth came
from newly developed properties ($1.3M), In-flight Kitchen revenue ($0.8M), and NERA 3 grant
reimbursement for FAA pilot program ($0.5M).
 Public Parking revenue $5.6M higher than prior year primarily due to tariff rate increase in April 2017,
partially offset by City of SeaTac parking tax increase in same year.
 Strong performance in 2017 drove incremental revenue from Airport Dining & Retail ($2.6M), Clubs
& Lounges ($2.0M), and Ground Transportation ($2.9M).
 Rental Car continues to be challenged by other transportation alternatives.
o Non-Aeronautical operating expenses in 2017 are $11.5M higher than 2016:
 Airport Direct Charges - $8.7M higher than prior year due to 2017 amortization of prepaid frontage
fees associated with one-time lump sum payment received from DMCBP Phase II ($3.6M). Other
increases due to higher payroll costs, NERA 3 grant spending (FAA pilot program), and other
expenses related to increased passenger volumes.
 Exceptions - $0.8M higher ERL costs and $0.7M higher Capital to Expense charges in 2017 due to
Non-Aero share of Terminal Building Capital to Expense write-offs.
 Charges from other divisions - $1.3M higher than 2016.

D. CAPITAL RESULTS
$ in 000's
Description
(1)
International Arrivals Fac-IAF
(2)
Concourse D Hardstand Holdroom
(3)
Add'l Baggage Makeup Space IAF
(4)
Checked Bag Recap/Optimization
(5)
Alternate Utility Facility
(6)
NS NSAT Renov NSTS Lobbies
(7)
N. Terminals Utilities Upgrade
(8)
Additional STS Cars
(9)
GSE Electrical Chrg Stations
(10)
Service Tunnel Renewal/Replace
(11)
Concourse B Roof Replacement
(12)
Fuel System Modifications
(13)
SSAT Infrastructure HVAC
(14)
Concessions Infrastructure
(15)
Concourse B Gate Reconfigure
All Other
Total Spending

2017
Actual
100,198
7,149
1,938
14,444
14,635
57,149
1,218
635
3,359
1,716
7,456
613
2,183
7,215
74,589
294,497

2017
Budget
202,598
22,163
13,475
24,256
23,998
64,285
7,996
6,525
5,390
8,000
5,995
11,600
4,748
4,800
9,819
139,069
554,717

Budget Variance
$
%
102,400 50.5%
15,014 67.7%
11,537 85.6%
9,812 40.5%
9,364 39.0%
7,136 11.1%
6,779 84.8%
6,525 100.0%
4,755 88.2%
4,641 58.0%
4,279 71.4%
4,144 35.7%
4,134 87.1%
2,617 54.5%
2,604 26.5%
64,480 46.4%
260,220
46.9%

(1) Early work packages delayed 3 months.
(2) Delays resulting from scope and design changes. Purchase of PLBs delayed due to procurement strategies and phasing
constraints.
(3) Program delays, technical issues with chargers, and coordination among project team resulted in spending delays.
(4) Milestone-based contract deferred payments to later in the development cycle. Budget was developed before a vendor had
been selected.
(5) Delays in spending on the design service directive. 2017 budget developed in early stages of the project.
(6) Major construction contract was cancelled as a result of roof site conditions.
(7) Clear Bag Reconciliation project was cancelled; TSA Search Room was delayed due to irregular bid; and Security Zone
Tracking Enhancements project was delayed due to contract execution issues with CPO.

16

III.

MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

FINANCIAL SUMMARY
Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

$ in 000's

2016
Actual

2017
Actual

2017
Budget

Revenues:
Operating Revenue
Security Grants
Total Revenues

50,810
0
50,810

54,183
0
54,183

51,830
0
51,830

2,354
0
2,354

5%
NA
5%

3,374
0
3,374

7%
NA
7%

Total Operating Expenses

40,268

42,164

46,502

4,339

9%

1,896

5%

Net Operating Income

10,542

12,020

5,327

6,692

126%

1,477

14%

Capital Expenditures

5,746

20,489

34,518

14,029

41%

14,743

257%

•
•
•
•

Total Maritime Revenues were $2,354K favorable to budget driven by $919K at the Grain terminal from
higher than budgeted volumes and $1,093K in Cruise from 32K more passengers than expected. Increase from
2016 driven by Cruise, Recreational Boating, and Portfolio Management.
Total Operating Expenses were $4,339K favorable to budget primarily due to lower maintenance, timing of
cruise related outside services, EDD tenant improvements, and allocated central services. Expenses increased
$1,896K from 2016.
Net Operating Income before Depreciation was $6,692K favorable to budget and $1,477K higher than 2016.
Capital Expense ended 2017 at $20.5M, 59% of the $34.5M approved annual budget.

Net Operating Income before Depreciation by Business

$ in 000's
Fishing & Operations
Recreational Boating
Cruise
Bulk
Maritime Portfolio
All Other
Total Maritime

2016
Actual
(3,149)
1,016
8,326
4,215
249
(115)
10,542

2017
Actual
(1,451)
1,305
8,599
4,030
167
(630)
12,020

2017
Budget
(2,334)
642
5,718
2,934
(1,150)
(483)
5,327

Fav (UnFav)
2017 Bud Var
$
%
883
38%
663
103%
2,881
50%
1,095
37%
1,317
NA
(147)
NA
6,692
126%

Incr (Decr)
Change from 2016
$
%
1,698
54%
289
28%
273
3%
(185)
-4%
(83)
-33%
(515)
NA
1,477
14%

A. BUSINESS EVENTS
• Cruise - Broke the million passenger mark for the first time in 2017. Grand reopening of Pier 66 Cruise
Terminal with NCL. Successful launch of Port Valet Service.
• Grain - Volumes 17% higher than expected.
• Fishing & Commercial Operations - Continued to advance work on FT redevelopment. USCGC Munro held
its commissioning Ceremony at T91. Event was well attended by high ranking officers and senators.
• Recreational Boating - New liveaboard authorization agreement finalized with Shilshole Liveaboard
Association. Vessel Management System selected and contract signed.
• MD Portfolio Management: Negotiated long-term ground lease for Duke's restaurant at Shilshole Bay
Marina. Maintained 97% occupancy.
• Marine Maintenance - Leading the organization in small business utilization with 38.92% of goods, services,
and small works conducted by small businesses.
• Storm Water Utility - Exceeded assessment goal by 11% and achieved 88% of rehabilitation goal.

17

III.

MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

B. KEY INDICATORS
Grain Volume - Metric Tons in 000's

700
600
500
400
300
200
100
0

2016 Actuals
2017 Budget
2017 Actuals

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Cruise Passengers in 000's

300
250
200

2016 Actuals

150

2017 Budget

100

2017 Actuals

50
0
Jan

Feb

Mar

Apr

May

Jun

Jul

18

Aug

Sep

Oct

Nov

Dec

III.

MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

C. OPERATING RESULTS
Fav (UnFav)
Budget Variance
$
%
2,354
5%
0
NA
2,354
5%

Incr (Decr)
Change from 2016
$
%
3,374
7%
0
NA
3,374
7%

2016
Actual
50,810
0
50,810

2017
Actual
54,183
0
54,183

2017
Budget
51,830
0
51,830

M aritime Expenses (excl M aint)
M aintenance Expenses
P69 Facilities Expenses
Other ED Expenses
Environmental & Sustainability
Police Expenses
Captial Development Expenses
Other Central Service Expenses
Envir Remed Liability

10,722
9,900
299
3,488
1,358
3,921
1,010
9,454
115

11,548
10,420
301
3,871
1,125
3,756
748
10,007
389

12,791
11,439
343
4,262
1,701
3,867
1,177
10,924
0

1,243
1,019
42
391
576
111
429
917
(389)

10%
9%
12%
9%
34%
3%
36%
8%
NA

825
520
2
383
(233)
(165)
(263)
553
273

8%
5%
1%
11%
-17%
-4%
-26%
6%
237%

Total Expenses

40,268

42,164

46,502

4,339

9%

1,896

5%

NOI Before Depreciation
Depreciation

10,542
17,351

12,020
17,410

5,327
16,672

6,692
(737)

126%
-4%

1,478
59

14%
0%

NOI After Depreciation

(6,809)

(5,390)

(11,345)

5,955

52%

1,419

21%

$ in 000's
Operating Revenue
Security Grants
Total Revenues

Maritime Division Revenues were $2,354 K favorable to budget. Key variances are as follows:
•

Fishing & Operations - favorable $176K
o Maritime Ops - favorable $374K.
o Fishing & Commercial - unfavorable ($198K) driven by fishing vessels at FT.

•

Cruise Operations - favorable $1,094K
o Dockage - favorable $228K from 32K more passengers than budget.
o Space Rental is favorable $632K from 32K more passengers than budget.
o Utility Revenue is favorable $108K.

•

Recreational Boating - favorable $5K
o Shilshole Bay Marina ($73K) unfavorable due to berthage & moorage ($125K) and parking revenue
($15K), offset by utility revenues $32K and guest moorage $53K.
o Bell Harbor Marina $73K favorable with higher guest moorage than budgeted.
o Harbor Island Marina $5K favorable.

•

Bulk - favorable $919K
o Grain terminal loaded 4,362,603 metric tons in 2017 which is 17% higher than budget of 3,720,000.

•

Maritime Portfolio Management -favorable $169K
o FT Office & Retail - $96K favorable to budget with $43K in higher space rental, $22K from higher food
& beverage revenue, and $11K from utility sales revenues.
o MIC Office & Retail - ($128K) unfavorable to budget due to loss of C-3 Worldwide revenue.
o SBM Office & Retail - $7K favorable to budget.
o Maritime Industrial - $193K favorable to budget due to higher revenue from WA DOT lease at T-106
and new yard leases at T-115 & T-108 Uplands.

19

III.

MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

Total Maritime Division Expenses were $4,339K favorable to budget. Key variances are as follows:
•

•
•
•
•
•

Maritime Expenses (excluding Maintenance and including Environmental Remediation Liability) were
$855K favorable to budget. Major variances were as follows:
o Salaries & Benefits were $292K favorable due to open positions in Fishing & Operations and Cruise,
partially offset by Recreational Boating.
o General Expenses were ($230K) unfavorable primarily from $371K of environmental booked in general
expenses and budgeted in remediation liability.
o Travel & Other Employee Expenses ($9K) unfavorable.
o Outside Services were $349K favorable driven by timing of Smith Cove Cruise Terminal baggage claim
resurface.
o Equipment Expense was $351K favorable driven by delays in cruise "Best in Class" initiatives and CTA
allowance.
o Promotional were $227K favorable due to timing of Destination Awareness and Best in Class
promotional spending.
Maintenance Expenses were $1,019K favorable to budget from project delays and timing of billings.
Other Economic Development Expenses were $391K favorable to budget.
Environment & Sustainability Expenses were $576K favorable to budget.
Capital Development Expenses were $429K favorable to budget.
Other Central Service Expenses were $917K favorable to budget due primarily to open FTEs.

Change from 2016 YTD Actual
•
•

•

Net Operating Income (NOI) before Depreciation for 2017 increased by $1,478K - Revenue grew 7%
while expenses grew 5%.
Revenues increased by $3,374K - Revenue from Cruise increased $2,174K primarily from additional
customers and higher tariff rates, Recreational Boating increased $840K from rate increases, and Maritime
Portfolio Management increased $531K from yard leases at T-115 & T-108 along with extension of WDOT
lease at T-106.
Expenses, direct and allocated, increased by $1,896K - Variance driven by growth in Maritime related
expenses of $825K primarily from the Cruise Port Valet program, $602K in increased maintenance costs with
a mix of more work and higher rates, along with increases in Other Central services such as Public Affairs,
Accounting, HR, IT, and Accounting. Finance, Central Procurement, and Environmental & Sustainability
decreased from job vacancies along with Police & Capital Development which decreased due to changes in
capital and allocation mix.

20

III.

MARITIME DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

D. CAPITAL SPENDING RESULTS

$ in 000's
Cruise Terminal Tenant Improv
P91 South End Fender
FT Net Shed 3,4,5 &6 Roof Rpl
Small Projects
Contingency Renewal & Replace.
SBM Restrms/Service Bldgs Rep
Maritime Fleet Replacement
T91 Building C-173 Roof Overl
T91 P91W Slope Stabilization
FT Re Development Phase I
T91 Camel Replacements
All Other
Total Maritime

2017
Actual
13,545
153
1,711
1,392
0
663
584
969
152
640
30
650
20,489

2017
Budget
15,228
3,347
2,837
2,685
2,000
1,694
1,586
1,321
650
580
0
2,590
34,518

Budget Variance
$

%

1,683
3,194
1,126
1,293
2,000
1,031
1,002
352
498
(60)
(30)
1,940
14,029

11%
95%
40%
48%
100%
61%
63%
27%
78%
90%
100%
75%
41%

Comments on Key Projects
For 2017, Maritime spent 59% of the annual approved budget.
Projects with significant changes in spending were:
•
•
•
•
•

Cruise Terminal Tenant Improvement: Gangway design and fabrication delayed until 2018.
P91 South End Fender: Work to begin in Jan 2018 due to advertisement delay and permitting issues.
Small Projects: Several projects started in 2017 have the bulk of their spending in 2018.
Shilshole Bay Marina Restroom and Services Building Replacement: Construction start date delayed to
summer 2018.
Maritime Fleet Replacement: Variance due to timing of vehicle orders and deliveries.

21

IV.

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

FINANCIAL SUMMARY

$ in 000's

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

Revenues:
Operating Revenue

15,903

17,791

16,030

1,761

11%

1,888

12%

Total Revenues

15,903

17,791

16,030

1,761

11%

1,888

12%

Total Operating Expenses

21,135

25,397

29,069

3,672

13%

4,262

20%

Net Operating Income

(5,232)

(7,606)

(13,039)

5,433

42%

(2,374)

-45%

Capital Expenditures

4,757

3,739

6,304

2,565

41%

(1,018)

-21%

•
•
•
•

Total Economic Development Division (EDD) revenues were $1,761K or about 11% favorable to budget
primarily due to higher occupancy at T-102 Harbor Marina Corporate Center and T-91 Uplands, and greater
than expected activity at the Bell Harbor International Conference Center and Bell Street Garage.
Total Operating Expenses were $3,672K or 13% favorable to budget due to lower spending than budgeted
across all groups except for Maintenance.
Net Operating Income for 2017 was $5,433K favorable to budget and $2,374K below 2016 Actual.
Capital spending for full year 2017 was $3.7 million or 59% of the approved budget of $6.3 million.

A. BUSINESS EVENTS
Portfolio Management
•
•
•

Overall occupancy of buildings managed by Portfolio Management was at 98% at the end of 2017, above the
95% target for 2017. Portfolio Management's occupancy is above the average of 96% for the comparable
office markets and near the average of 99% for comparable industrial markets.1
Developing Pier 66 interior modernization investment plan.
Worked with Victoria Clipper to evaluate space needs related to their plans to bring larger vessel to Seattle.

Tourism
•
•
•
•

Designed a stunning booth for the World Trade Market held in London.
Instigated, designed, and operated Two Nation Vacation familiarization tours.
Initiated the Airport Tourism "Spotlight" program.
Conducted a London Sales mission to discuss UK co-op marketing programs.

Pier 69 Facilities:
•
•

P69 Solar Project was approved by Commission.
45% of spending was directed to small business enterprises.

Real Estate Development
•
•

Completed Salmon Bay Marina acquisition.
Began design work for the Fishermen's Terminal redevelopment.

1

Market averages are calculated based on Costar building occupancies reported for:
Office: Class B & C office space in Ballard/U District, Queen Anne/Magnolia, Belltown/Denny Regrade, Pioneer Square/Waterfront, and South Seattle.
Industrial: Georgetown/Duwamish North, SoDo, and West Seattle

22

IV.
•
•
•

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17
Finalized long-term ground lease with Trammell Crow at Des Moines Creek North development.
Development at NERA 2 and 3 sites is underway by Panattoni.
Finalized lease with City of Seattle for Tent City 5 at Tsubota property.

Small Business
•
•
•
•

Facilitated community engagement, best practice assessment and policy development which resulted in the
first reading of a new Diversity in Contracting policy, for Commission consideration. (passed 1/9/18).
Lead public sector partners to form the "Center for Public Sector Contracting" business and contracting
resource initiative.
Worked with consultants and industry stakeholders to complete the Food Manufacturing (incubator) needs
assessment and initiate the strategic business plan for the Maritime Innovation Center.
29 approved applications in 2017/2018 EDD Partnership Grants.

Workforce Development
•
•
•

Co-convened two community engagement sessions in partnership with King County Executive's Race and
Equity team.
Attended the Duwamish Valley Community Workshop convened by Environmental & Public Affairs and
participated in roundtable discussions on workforce development.
Participated in Food Service and Hospitality convening to identify possible opportunities to connect social
enterprises.

23

IV.

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

B. KEY INDICATORS
Building Occupancy by Location:
100%
95%

Central Harbor
T-91 Uplands

90%

Marina Office & Retail
T-91 Industrial

85%
80%

T-106 Warehouse
Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Net Operating Income before Depreciation by Business

$ in 000's
Portfolio M anagement
Conference & Event Centers
Tourism
Workforce Development
Small Business
EDD Grants
Env Grants/Remed Liab/ERC
Total Econ Dev

2016
Actual
(3,925)
538
(1,117)
(517)
(2)
(20)
(188)
(5,232)

2017
Actual
(5,236)
762
(1,265)
(1,113)
(2)
(751)
(1)
(7,606)

2017
Budget
(7,551)
(848)
(1,312)
(2,269)
(100)
(960)
0
(13,039)

24

Fav (UnFav)
Incr (Decr)
2017 Bud Var
Change from 2016
$
%
$
%
2,316
31%
(1,310)
-33%
1,609
190%
224
-42%
47
4%
(148)
-13%
1,156
51%
(596)
-115%
98
98%
1
NA
209
22%
(731)
NA
(1)
187
-99%
5,433
42%
(2,374)
-45%

IV.

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

C. OPERATING RESULTS

2016
Actual
7,881
8,022
15,903

2017
Actual
8,658
9,133
17,791

2017
Budget
8,088
7,943
16,030

Conf & Event Centers
P69 Facilities Expenses
Small Business
Workforce Development
Tourism
RE Dev & Planning
EDD Grants
EconDev Expenses Other
M aintenance Expenses
M aritime Expenses (Excl M aint)
Environmental & Sustainability
CDD Expenses
Police Expenses
Central Services
Envir Remed Liability

3,526
6,932
180
21
522
1,093
595
20
628
2,787
31
62
250
157
4,331
0

3,879
7,639
206
64
850
1,234
214
751
773
3,666
52
260
387
51
5,370
0

4,220
7,935
234
161
1,999
1,285
303
960
1,354
3,592
64
451
439
173
5,899
0

Incr (Decr)
Fav (UnFav)
Budget Variance Change from 2016
$
%
$
%
571
7%
777
10%
1,190
15%
1,111
14%
1,761
11%
1,888 N
12%
341
8%
353
10%
296
4%
707
10%
29
12%
26
14%
96
60%
43
204%
1,148
57%
329
63%
51
4%
141
13%
89
29%
(381)
-64%
209
22%
731
3703%
581
43%
145
23%
(74)
-2%
879
32%
11
18%
21
66%
191
42%
198
323%
52
12%
137
55%
122
70%
(106)
-67%
529
9%
1,039
24%
(0)
NA
0
NA

Total Expense

21,135

25,397

29,069

3,672

13%

4,262

20%

NOI Before Depreciation
Depreciation
NOI After Depreciation

(5,232)
3,682
(8,914)

(7,606)
3,863
(11,469)

(13,039)
3,854
(16,893)

5,433
(9)
5,424

42%
0%
32%

(2,374)
181
(2,555)

45%
5%
29%

$ in 000's
Central Harbor Properties
Conf & Events Centers
Total Revenue

Central Harbor Properties

Total Economic Development Division Revenue was $1,761K favorable to budget. Key variances:
•
•

Central Harbor Properties were $571K favorable mainly due to higher than anticipated parking revenue at
the Bell Street Garage $64K, and higher occupancy at T-102 Marina Corporate Center $183K, Terminal 91
Uplands $168K, Tsubota $75K, and WTC West $18K.
Conference & Event Centers were $1,190K favorable due to higher event activity at Bell Harbor
International Conference Center (BHICC), with an especially strong December, despite the ongoing
construction of the P-66 Cruise Terminal expansion project and Alaskan Way street construction.

Total Economic Development Expenses were $3,672K favorable to budget. Key variances:
•
•
•
•
•
•
•

Portfolio Management - was $341K favorable mainly due to lower than anticipated spending for tenant
improvements and broker fees at T-102 & WTC West and lower staff charges for property managers.
Conference & Event Centers - were $296K favorable mainly due to timing of expenditures for WTC Seattle
Interior Refresh project.
Workforce Development - was $1,148K favorable mainly due to lower than planned spending for Workforce
Development programs.
EDD Grants - were $209K favorable primarily due to grant funds either underspent or unspent by the
recipients.
Economic Development Other - was favorable $581K mainly due to lower than budgeted spending of EDD
Opportunity Funds.
Environmental - expenses were $191K favorable due to lower spending than planned on outside services
$158K.
Police - expenses were $122K favorable.
25

IV.

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

•

Central Services - costs, direct and allocated, were favorable $529K primarily due to lower than anticipated
direct charges and allocations from Public Affairs $130K, Finance $111K, Information Technologies $106K,
Accounting $76K, Office of Strategic Initiatives $40K, and Human Resources $34K.
All other variances net to a favorable variance of $255K.

•

NOI before Depreciation was $5,433K favorable to budget.
•

Depreciation was ($9K) or 0% unfavorable to budget.

NOI after Depreciation was $5,424K favorable to budget.
Change from 2016 YTD Actual
Net Operating Income before Depreciation decreased by ($2,374K) between 2017 and 2016 as a result of higher
revenue $1,888K and higher expenses ($4,262K).
Revenues increased by $1,888K due to higher revenue from Conference & Events Center $1,111K and higher
revenue for Portfolio Management $777K.
Expenses increased by $4,262K primarily due to increases of $707K from Conference & Events Center mainly
because of greater revenue. EDD Grants increased $731K. Maintenance expenses increased $879K. Central
Services expenses increased $1,039K.
CONTRIBUTIONS TO OTHER DIVISIONS

$ in 000's

2016
Actual

2017
Actual

Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

Revenues:
Maritime Industrial
Marina Office & Retail
Total Revenues to Other Divisions

6,306
3,949
10,255

6,799
3,988
10,787

6,605
4,012
10,618

193
(24)
169

3%
-1%
2%

493
39
531

8%
1%
5%

Expenses to Other Divisions
Maritime Portfolio Mgmt
NOI Before Depreciation

10,006
249

10,620
167

11,768
(1,150)

1,148
(1,317)

10%
115%

614
(82)

6%
-33%

26

IV.

ECONOMIC DEVELOPMENT DIVISION FINANCIAL & PERFORMANCE REPORT 12/31/17

D. CAPITAL SPENDING RESULTS

$ in 000's
T102 Bldg Roof HVAC Replacemt
Small Projects
P66 Elevator 2,3,4 Upgrades
BHICC Interior Modernization
BHICC Fit & Finish Improvement
P69 Solar Panel System
P69 Lobby
All Others
Total Economic Development

2017
Actual

2017
Budge t

Budge t Variance
%

$

1,598
220
396
134
443
13
3
932

1,610
909
705
580
500
300
215
1,485

12
689
309
446
57
287
212
553

1%
76%
44%
77%
11%
96%
99%
37%

3,739

6,304

2,565

41%

Comments on Key Projects:
For 2017, Economic Development spent 59% of the annual approved capital budget.
Projects with significant changes in spending were:
•
•
•
•

P69 Solar Panel System -Overall project cost reduced from $1,370K to $515K.
BHICC Interior Modernization - Start of design is later and process is taking longer than anticipated.
P69 Lobby - On hold pending further direction from Economic Development Division.
P66 Elevator 2, 3, 4 Upgrades - Construction slow to start due to tenant considerations.

27

V.

CENTRAL SERVICES FINANCIAL & PERFORMANCE REPORT 12/31/17

A. BUSINESS EVENTS
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

The Port appointed Stephen Metruck as Executive Director.
The Port Commission took action on Climate Change and Sustainability.
The Port became the first U.S. port with 10-year goal to transition to sustainable aviation fuels.
The Port and City of SeaTac approved Interlocal Agreement as partnership for mutual success.
The Port welcomed Air France announcement of nonstop service to Paris.
The Port continued working with TSA on Enhanced Accessible Screening Program (EAPS) to improve
passenger throughput, as well as the threat created by long public dwell times in the airports unsecured
common areas.
The Port awarded unique custodial contracts to increase performance and small business opportunities at SeaTac Airport.
Executed events and tours to help build community awareness and support for the Port including near-Port
communities and throughout King County.
Conducted outreach and signage program to support Alaskan Way/Pier 66 transportation construction project.
The Port awarded more than $85,000 to Airport Communities for Environmental Projects.
Continued working with stakeholders on Fishing Fleet Modernization priority and tourism.
Prepared, negotiated and implemented collective bargaining agreements and provided consultation on
administration of collective bargaining agreements to Port divisions and oversight committees.
Received the "Certificate of Achievement for Excellence in Financial Reporting" from the Government
Finance Officers Association (GFOA) of the United States and Canada for the twelfth consecutive year.
Received the 2017 Distinguished Budget Presentation Award from the Government Finance Officers
Association (GFOA) of the United States and Canada for the tenth consecutive year.
Filed the Port's Statutory Budget with King County Council and Assessor as required by law; and released the
final 2018 Budget document to the public.
The Port Commission authorized the issuance and sale of intermediate lien revenue and refunding bonds in one
or more series in the aggregate principal amount of not to exceed $800 million.
Issued General Obligation Bonds of $127,345,000 to reimburse the Port's 2016 contribution to the Alaskan
Way Viaduct Replacement Project.
Discussed comprehensive data analytics strategy for WMBE program focusing on division level goal setting
and tracking, department spending reports, and roles and responsibilities going forward.
Increased the telecommunications capacity for Airport Operations and Tenants.
Supported implementation of new revenue control system at the Airport to minimize revenue loss.
Upgraded the Human Capital Management (HCM) system.
Baggage Optimization Phase 1 construction continues. 20% completion by end of 2017 goal achieved.
Began construction of the Service Tunnel at the south end and on the 3rd floor of parking garage installing
reinforcing dowels and widening the gap between the tunnel and the garage.
Terminal Security Enhancements Phase I Windows - 90% design complete.
North Satellite - Construction well underway - completed Phase 1 basement & foundations, underground
utilities including the Temporary Chiller, FAA approved Crane 7460, mobilized crane and began setting steel,
replaced 400 Hz generators etc.
Completed several infrastructure upgrades to improve security and performance.
The Port substantially completed or placed into closeout 27 projects, including Bag Claim Wall Panels, Central
Terminal WiFi Expansion, Air Cargo 4 Fence, Variable Frequency Drive Motor Replacement.

28

V.

CENTRAL SERVICES FINANCIAL & PERFORMANCE REPORT 12/31/17

B. KEY PERFORMANCE METRICS
Key Performance Indicators/Measures

YTD 2017

A. Century Agenda Strategies
1. Small Business Participation - Annual / Small Works (portwide)
2. Small Business Participation - Annual / Major Construction
(port-wide) including Mega projects
3. Small Business Participation - Annual / Goods & Services
(port-wide)
4. Small Business Participation - Service Agreements (port-wide) Annual (including Legal department Service Agreements)
B. High Performance Organization - Customer Satisfaction
1. Respond to Public Disclosure Requests
2. Information and Communication Technology System
Availability
3. Service Desk % First Call Resolution
4. Customer Survey for Police Service Excellent or Very Good
5. Oversee Implementation and Administration of CBAs
agreements
6. Number of Jobs Openings

76.9%

72.7%

29.9%

17.25%

24.6%

23.7%

49.3%

42.1%

519
99.8%

438, increased by
81
99.8%

39%
83%
147

40%
92%
113

590

408, increased by
182
74%
252

7. Percent of annual audit work plan completed each year
82%
8. Request of information and guidelines for integrity & business
263
conduct
C. High Performance Organization - Talent Development & Safety
24 classes, 166
1. MIS and Clarity Training
attendees
7,084

95%
4.26
1.60

16 classes, 115
attendees
388, increased by
6,696 due to 3
new classes in
2017
91%
3.61
1.22

31.6%
yes
4 days
95%
1.51%
$928

34.2%
yes
3 days
96%
1.28%
$1,895

2. Employee Development Class Attendees/Structured Learning
3. Required Safety Training
4. Occupational Injury Rate
5. Total Lost work day case rate
D. Financial Performance
1. Corporate costs as a % of Total Operating Expenses
2. Clean independent CPA audits involving AFR
3. Timely process disbursement payment requests
4. Keep receivables collections 85% current (within 30 days)
5. Investment Portfolio Yield
6. Litigation and Claim Reserves (in $ thousand)

29

YTD 2016/Notes

V.

CENTRAL SERVICES FINANCIAL & PERFORMANCE REPORT 12/31/17

C. OPERATING RESULTS

$ in 000's

Notes

2016
Actual

2017
Actual

2017
Budget

Fav (UnFav)
Budget Variance
$
%

Incr (Decr)
Change from 2016
$
%

Total Revenues

1,186

68

367

(299)

-81.4%

(1,118)

-94.2%

Executive
Commission
Legal
Public Affairs
Human Resources
Labor Relations
Internal Audit
Office of Strategic Initiatives
Security and Preparedness
Contingency
Finance
Accounting & Financial Reporting Services
Information & Communication Technology
Finance & Budget
Finance & Budget
Aviation Finance & Budget
Maritime Finance & Budget
Business Intelligence
Risk Services
Sub-Total

2,185
1,569
3,365
6,033
7,001
1,268
1,455
8,356
1,420
369

1,287
1,685
3,741
7,112
8,418
1,678
1,603
5,743
1,754
381

1,944
1,830
3,288
7,847
9,035
1,313
1,770
6,264
2,065
250

657
145
(453)
735
618
(365)
167
521
310
(131)

33.8%
7.9%
-13.8%
9.4%
6.8%
-27.8%
9.4%
8.3%
15.0%
-52.4%

(898)
116
376
1,079
1,417
410
148
(2,614)
335
12

-41.1%
7.4%
11.2%
17.9%
20.2%
32.3%
10.2%
-31.3%
23.6%
3.3%

6,550
20,158
4,810
1,647
1,950
1,212
1,004
3,202
35,725

6,751
21,633
4,998
1,871
1,897
1,229
1,211
3,077
37,670

7,763
22,420
5,873
2,181
2,184
1,508
1,458
3,470
40,985

1,013
787
875
309
287
279
247
393
3,315

13.0%
3.5%
14.9%
14.2%
13.1%
18.5%
17.0%
11.3%
8.1%

201
1,475
188
224
(53)
17
207
(125)
1,945

3.1%
7.3%
3.9%
13.6%
-2.7%
1.4%
20.6%
-3.9%
5.4%

Core Support Services

68,745

71,071

76,591

5,519

7.2%

2,326

3.4%

Police

23,045

22,095

23,884

1,789

7.5%

(950)

-4.1%

Total Before Cap Dev & Environment

91,790

93,166

100,475

7,309

7.3%

1,376

1.5%

4,493
3,488
2,823
999
416
12,218

5,284
3,709
6,942
1,007
428
17,370

7,092
4,079
13,005
912
447
25,535

1,808
370
6,063
(95)
19
8,165

25.5%
9.1%
46.6%
-10.4%
4.3%
32.0%

791
221
4,119
9
12
5,152

17.6%
6.3%
145.9%
0.9%
2.9%
42.2%

3,745
2,098
722
148
6,712

3,779
2,157
670
368
6,975

6,301
2,385
723
2,523
11,932

2,522
228
53
2,154
4,958

40.0%
9.6%
7.4%
85.4%
41.5%

34
59
(52)
221
262

0.9%
2.8%
-7.2%
149.7%
3.9%

111,172

117,511

137,942

20,431

14.8%

6,339

5.7%

Capital Development
Engineering
Port Construction Services
Aviation PMG
Seaport PMG
Capital Development Admin
Sub-Total
Environment & Sustainability
Aviation Environmental Program Group
Maritime Environmental & Planning
Noise Programs
Environment & Sustainability Admin
Sub-Total
Total Expenses

Central Services revenues were $299K unfavorable compared to budget due to lower revenues.
Central Services expenses for the year-ended 2017 were $117.5M, $20.4M or 14.8% favorable compared to
budget and $6.3M or 5.7% higher than the same period a year ago. The $20.4M favorable variance is due to vacant
positions throughout the year, delayed hiring, delayed projects and cost savings realized in most departments. The
$6.3M increase from prior year is primarily due to higher Payroll and Outside Services Costs.
All Central Services departments had a favorable variance except for:
•
•

Legal - unfavorable variance of $453K is due to unanticipated Legal Expenses.
Labor Relations - unfavorable variance of $365K is due to unanticipated Legal Expenses.
30

V.
•

CENTRAL SERVICES FINANCIAL & PERFORMANCE REPORT 12/31/17
Contingency - unfavorable variance of $131K is due to unbudgeted funds for the Radio Systems Consultant
Services contract.

All other departments with a favorable variance are:
• Executive - favorable variance of $657K is due to savings in Payroll due to a vacant position throughout the
year and savings in Travel & Other Employee Expenses.
• Commission - favorable variance of $145K is due to savings in Payroll due to vacant positions throughout the
year, which are now filled.
• Public Affairs - favorable variance of 735K is due to savings in Payroll due to vacant positions throughout the
year and savings primarily in Outside Services, Travel & Other Employee Expenses and General Expenses.
• Human Resources - favorable variance of $618K is due to savings in Payroll due to vacant positions
throughout the year.
• Internal Audit - favorable variance of 167K is due to savings in Payroll due to two vacant positions and
savings in Outside Services due to utilizing in house staff in lieu of consultants.
• Office of Strategic Initiatives - favorable variance of $521K is due primarily to savings in Payroll due to
vacant positions throughout the year and other savings in Outside Services and Travel & Other Employee
Expenses.
• Security and Preparedness - favorable variance of $310K is due to savings in Payroll due to a vacant
position and savings in Outside Services and Travel & Other Employee Expenses.
• Accounting and Financial Reporting - favorable variance of $1.0M is due to savings in Payroll due to
several vacant positions throughout the year and savings in Travel & Other Employee Expenses and in General
Expenses due to Credit Card Rebates.
• Information & Communication Technology - favorable variance of $787K is due to savings in Payroll due
to vacant positions throughout the year.
• Finance & Budget - favorable variance of $875K is due to savings in Payroll due to vacant positions and
savings in Outside Services for the Economic Impact Study due to changes in the scope of work.
• Business Intelligence - favorable variance of $247K is due to savings in Payroll due to vacant positions and
savings in Travel & Other Employee Expenses.
• Risk Services - favorable variance of $393K is due to savings in Payroll due to vacant positions which are
now filled and lower property insurance renewal.
• Police - favorable variance of $1.8M is due to savings in Payroll due to vacant positions throughout the year
and reallocating benefit costs based on employer contributions for DRS-eligible employees.
• Capital Development - favorable variance of $8.2M is due to savings in Payroll due to vacant positions
throughout the year and savings in Outside Services due to delayed projects.
• Environment & Sustainability - favorable variance of $5.0M is primarily due to delayed spending on SAMP
NEPA/SEPA Environmental Review, as well as ACE and Energy & Sustainability-funded programs.
2017 Actuals compared to Prior Year:
•
•
•
•
•
•
•
•
•

Executive - decrease of $898K is due to lower Payroll Costs, Travel Expenses and Property Rentals.
Commission - increase of $116K is due to higher Payroll Costs including two additional staff.
Legal - increase of $376K is due to higher Payroll Costs and Legal Expenses.
Public Affairs - increase of $1.1M is due to higher Payroll Costs including additional staff transferred into the
department, and additional savings in Outside Services, and General Expenses.
Human Resources - increase of $1.4M is due to higher Payroll Costs including additional staff, the Internship
Program Manager and the full time equivalent of 16.4 High School Interns during the summer, and increase in
Outside Services and Equipment Expenses.
Labor Relations - increase of $410K is due to higher Payroll Costs and Legal Expenses.
Internal Audit - increase of $148K is due to higher Payroll Costs and Outside Services.
Office of Strategic Initiatives - decrease of $2.6M is due to lower Outside Services Costs due to delayed
projects.
Security and Preparedness - increase of $335K is primarily due to higher Payroll Costs including additional
staff, Supplies & Stock and Outside Services.
31

V.
•
•
•
•
•
•
•
•
•

CENTRAL SERVICES FINANCIAL & PERFORMANCE REPORT 12/31/17
Contingency - increase of $12K is due to higher Outside Services Costs.
Accounting and Financial Reporting - increase of $201K is due to higher Payroll Costs.
Information & Communication Technology - increase of $1.5M is due to higher Payroll Costs including
additional staff, Equipment Expense and Outside Services.
Finance & Budget - increase of $188K is due to higher Payroll Costs, Outside Services, Travel Expenses and
General Expenses.
Business Intelligence - increase of $207K is due to higher Payroll Costs, Equipment Expense and Outside
Services.
Risk Services - decrease of $125K is due to lower Insurance Costs.
Police - decrease of $950K is due to lower Payroll Costs and General Expenses.
Capital Development - increase of $5.2M is due to higher Payroll Costs and Outside Services Costs.
Environment & Sustainability - increase of $262K is due to higher Payroll Costs.

D. CAPITAL RESULTS

$ in 000's
Infrastructure - Small Cap
Services Tech - Small Cap
Enterprise GIS - Small Cap
Constr Doc Mgmt Sys Repl.
Maximo Upgrade
Project Cost Mgmt System
Remote Data Business Continuity
POS Website Redevelopment
Supplier Database System
Corporate Firewall
Cap Dev Fleet Replacement
Cap Dev Small Cap
Other (note 1)
TOTAL

2017
Actual
966
577
32
403
186
220
171
717
41
578
282
168
447
4,788

2017
Budget
1,581
1,150
400
427
371
900
480
796
700
800
589
340
789
9,323

Budget Variance
$
%
615
573
368
24
185
680
309
79
659
222
307
172
342
4,535

Note:
(1) "Other" includes remaining ICT projects, Central Services fleet replacement
and small capital acquistion.

32

38.9%
49.8%
92.0%
5.6%
49.9%
75.6%
64.4%
9.9%
94.1%
27.8%
52.1%
50.6%
43.3%
48.6%