Item No. 9c
Meeting Date: October 23, 2018

Economic Development Division
2019 Preliminary Operating Budget
Commission Briefing
October 23, 2018

1

Division Priorities Driven by Century Agenda
Century Agenda

Implementation

Strategic
Planning

Vision
Cross Functional
Evaluation

5- 10
Years

Gap

Strategies and Objectives
(Long Range Plans)

3-5
Years

2019 Business Plan
2019 Budget
2019 Performance Plans

Annual

Division Priorities
• Promote international travel
and cruise adventures
• Promote women and minority
business enterprise (WMBE)
and small business growth
• Advance equitable workforce
training within key Port
industries
• Develop port properties to
support aviation, fishing and
maritime industries
2

Key Budget Assumptions
•
•
•
•
•
•

Maintain zero base budgets for nonrevenue
generating departments
Commercial Properties target 95% occupancy
at year-end 2019.
Conference and Event Center revenue up 13%
from 2018 budget*.
Economic Development Partnership Grants
continued.
Continued funding of Workforce Development.
Tourism initiatives continued.

*Based on draft 2019 budget from Columbia Hospitality Inc.

Near full occupancy, continued Workforce Development and Grant initiatives
3

EDD P&L Summary
$ in 000's
Revenue
Conf & Event Centers
Total Revenue
Expenses
Portfolio Management
Conf & Event Centers
P69 Facilities Expenses
RE Dev & Planning
EconDev Expenses Other
Maintenance Expenses
Maritime Expenses (Excl Maint)
Total EDD & Maritime Expenses
Small Business
Workforce Development
Tourism
EDD Grants
*Total EDD Initiatives
Environmental & Sustainability
CDD Expenses
Police Expenses
Other Central Services
Aviation Division
Total Central Services & Aviation
Envir Remed Liability
Total Expense
NOI Before Depreciation
Depreciation
NOI After Depreciation

2017
Actual
8,658
9,133
17,791

2018
Budget
8,985
9,537
18,522

2018
Forecast
9,097
9,949
19,046

2019
Budget
8,930
10,795
19,725

Incr (Decr)
Budget Variance
$
%
(55)
-1%
1,258
13%
1,203
6%

Incr (Decr)
Budget to Forecast
$
%
(167)
-2%
846
9%
679
4%

3,875
7,639
206
214
763
3,657
52
16,406
64
850
1,234
751
2,900
260
387
51
5,269
113
6,080
0
25,387
(7,596)
3,863
(11,459)

3,778
8,465
289
211
1,227
3,055
344
17,370
140
1,992
1,460
960
4,552
398
329
158
5,816
127
6,829
0
28,751
(10,229)
4,156
(14,385)

3,778
8,465
289
211
1,227
3,055
344
17,370
140
1,292
1,460
960
3,852
363
264
156
5,700
127
6,611
0
27,833
(8,787)
4,156
(12,943)

4,128
9,374
225
216
1,262
4,071
389
19,664
199
2,010
1,463
960
4,632
395
235
228
5,533
155
6,547
0
30,844
(11,119)
3,819
(14,937)

350
908
(65)
5
35
1,017
45
2,294
59
18
3
0
80
(2)
(94)
70
(283)
28
(281)
0
2,093
(890)
(337)
(553)

350
908
(65)
5
35
1,017
45
2,294
59
718
3
0
780
33
(29)
72
(167)
28
(63)
0
3,011
(2,332)
(337)
(1,994)

9%
11%
-22%
2%
3%
33%
13%
13%
42%
1%
0%
0%
2%
-1%
-29%
44%
-5%
22%
-4%
NA
7%
9%
-8%
4%

9%
11%
-22%
2%
3%
33%
13%
13%
42%
56%
0%
NA
20%
9%
-11%
46%
-3%
22%
-1%
NA
11%
27%
-8%
15%

*Portion of 2019 EDD initiatives
assigned to tax levy:
• Small Business - $88K
• Workforce Dev. - $1,624K
• EDD Grants - $960K

Near full occupancy, continued Workforce Development and Grant initiatives
4

Portfolio Management Financial Trend
Revenue up $1.2M/6.5%
Expenses up $2.0M/8.3%
Opportunities:
• T91 Development
• Pier 2 and CEM ground
leases
Risks/Challenges:
• Allocation Structure
• Aging facilities -
expensive to maintain
• Takes years to generate
higher revenues from
existing leases

Conference and Events Center growing revenues and associated costs
5

Portfolio Management- Key Strategies and Initiatives
• Grow and promote Conference and Event Center facilities
while working to increase gross margin
• Migrate tenant billing system for NWSA
• Maximize Parking Revenues
• Negotiate Step up leases across for both Maritime &
Economic Development Divisions

Focus on improved security and customer service
6

Diversity in Contracting/Small Business Assistance
 Implement Diversity in
Contracting Policy/Program

 Provide greater access to Port
opportunities through
education, events, and
assistance
 Expand supplier diversity
 Develop tools and conduct
assessments to measure and
monitor inclusion in contracting

 Support construction business
incubator in partnership with
other public and private
stakeholders

Promoting opportunity for Disadvantaged Businesses
7

Small Business 2019 Initiatives
$ in 000's
2018 Budget
Technical Assistance/Outreach
Construction Business Incubator
Port Gen/Mentoring/Contractor Assistance
Procurement Technical Assistance Center Support
Marketing/ Communication/Design Services
Champion of Inclusion Recognition Event
Supplier Diversity and Program Evaluation
OMWBE Certification
WMBE Best Practice and Implementation

Total

2019 Budget

'19-'18
Change

150
75
15
15
20

60
75
15
5
10

(90)
0
0
(10)
(10)

15
50

15
50

0
0

340

230

(110)

Balanced efforts in Small Business
8

Workforce Development
 Manage airport employment
office in partnership with
PortJobs
 Implement and Strengthen
Regional Construction Trades
Partnership
 Advance aviation career
pathway training initiative
 Invest in regional Career
Connected Learning initiative

Pedro Reynaga, Harbor Operations Intern

Advancing Workforce Development with an equity lens
9

Workforce Development 2019 Initiatives
$ in 000's

'19-'18
Change

2018 Budget

2019 Budget

500
350
75
710
1,635

500
350
60
710
1,620

0
0
(15)
0
(15)

Developing Initiatives
Airport Career Pathways Implementation
Maritime Career Exploration Initiative
K-12 Career Connected Learning
Total Developing Initiatives

250
250
400
900

250
250
400
900

0
0
0
0

Workforce Development Support

25

28

3

Total Workforce Development

2,560

2,548

(13)

Contracted Initiatives
Airport Employment Center (contracted)
Airport Employment Center and Classroom
Employment Continuity Pool Program
Construction Trades - Regional Partnership Services, Pre-Ap
Total Contracted Initiatives

Continued efforts in Workforce Development
10

Tourism
 Promote the cruise industry through
outreach to travel influencers (trade
and media) both domestically and in
priority international markets (UK,
Germany, China & Australia).
 Increase the value of tourism
throughout Washington
•
•
•

Increase reach of Tourism Marketing
Support Program
Enhance Airport Spotlight program
Use WeChat airport site to serve as portal
for destinations in Washington.

Norwegian Bliss Marks Arrival of Larger Cruise Ships

Promoting Cruise, Extended Stays & Use of our Maritime and Aviation Facilities
11

Tourism 2019 Initiatives
$ in 000's
2018 Budget
New Requests
Int. Representation & Work (Australia/China)
Continuing
Adv/Marketing (WeChat, FT, Cruise)
Europe Representation & VS Sponsorship
Tourism Grants
London Trvl Show / Tourism Development
Fam Tours / New Service Inaugural Activity
Total

2019 Budget

'19-'18
Change

98

98

142
410
200
65
62

133
275
200
39
83

(9)
(135)
0
(26)
21

879

828

(51)

Focused on Increasing International and US Tourists to Region & State
12

Real Estate Management and Development
 Ground lease Des Moines Creek West,
Pier 2, CEM A and Terminal 106
properties
 Initiate Bell Harbor Conference Center
Modernization
 Manage real estate portfolio to generate
positive NOI after depreciation and corporate
allocations by year-end 2024.

 Complete design work on new light
industrial facilities at Terminal 91 and
Fishermen's Terminal
 Develop a "second 25 years" renewal,
replacement, and modernization
strategy for P69 HQ facility.

Pier Two

Using our Real Estate & Capital Assets to Advance the Century Agenda
13

Real Estate Development 2019 Initiatives
$ in 000's

'19-'18
Change

2018 Budget

2019 Budget

Appraisals
Development Advisory Consulting

50
250

50
250

0
0

Total

300

300

0

Ongoing

Initiatives centered on executing Real Estate Strategic Plan
14

EDD Admin 2019 Initiatives
$ in 000's

2018 Budget

2019 Budget

960
100
0
60
500
1,620

960
100
93
60
500
1,713

'19-'18
Change

Ongoing
ED Partnership Grants
Membership: Economic Dev Council
Membership: Trade Dev Alliance
Promotional Hosting/Sponsorships
Opportunity Fund
Total

0
0
93
0
0
93

Continuation of ED Partnership Grants & additional public partnerships
15

Pier 69 Facilities 2019 Initiatives
$ in 000's

P69 Lobby Refresh expense portion
P69 Shuttle
Total

'19-'18
Change

2018 Budget

2019 Budget

200
0

0
200

(200)
200

200

200

-

Managing changes in congestion
16

Full-Time Equivalents (FTEs)
2018 Budget

36.0

2018 Changes

Addition of Sr Administrative Assistant, Small Business

(1.0)
(1.0)
1.0

Adjusted 2018

35.0

Elimination of Business Analyst, Small Business
Elimination of Manager, Small Business

2019 Budget
Staff Additions:
WMBE Manager

1.0

Net Change 2019

1.0

Proposed 2019 Budget

36.0

No Change in FTE
17

2019 Operating Divisions' Budget Timeline
2019 Business
Plan and CIP
Development

Budget
Development
Briefing

Briefing

(May/June)

(June)

(October 9th)

Budget

First Reading &
Public Hearing
for 2019 Budget

2nd Reading &
Final Passage of
2019 Budget

(Mid-November)

(Late November)

Will cover operating budget and capital budget
18