Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
7b
BRIEFING ITEM
Date of Meeting
October 22, 2020
DATE: October 2, 2020
TO: Stephen Metruck, Executive Director
FROM: Elizabeth Morrison, Director Corporate Finance
Scott Bertram, Manager, Corporate Financial Analysis
SUBJECT: Briefing on the Tax Levy Draft Plan of Finance for 2021-2025
EXECUTIVE SUMMARY
This briefing is intended to inform the Commission’s decision on the amount of the tax levy for
the 2021 budget year and to inform the Commission on the Port’s funding of its 2021-2025
Capital Investment Plan (CIP) - the Draft Plan of Finance.
BACKGROUND
Ports in Washington State have authority to levy taxes on property within the port district, within
certain statutory limits; the Port may use this strategic resource for any allowable port purpose
other than the payment of revenue bond debt service. As part of the Port’s budget process, the
Commission establishes the amount of taxes to be levied within the Port district for the budget
year. Staff will provide information on the uses of the tax levy and will seek Commission guidance
on the establishment of the 2021 tax levy amount. For the 2020 budget, the Commission
authorized a levy of $76.4 million as part of a five-year funding plan that included an inflationary
increase of the tax levy of three percent each year from 2019-2023. Both the CIP and the Port’s
funding resources have changed due to the pandemic; however, the funding needs are still
consistent with the five-year tax levy plan. The Draft Plan of Finance incorporates the continued
three percent annual increase in the tax levy, bringing the 2021 tax levy to $78.7 million.
As part of the annual budget process, staff provides a Draft Plan of Finance that is updated each
year for the subsequent five-year CIP and provides information on the funding sources available
to support the CIP. The Draft Plan of Finance is intended to illustrate the Port’s capacity to fund
projects based on the projected available resources. Projected available resources have been
affected by the pandemic, with expected weakness continuing in several Port businesses and
significant uncertainty requiring the Port to incorporate adverse outcomes in its projections.
Staff has developed a Draft Plan of Finance for the Airport as a self-funding enterprise. The Port’s
non-Airport operations – Maritime, Economic Development and the Port’s participation in the
Northwest Seaport Alliance (NWSA) - share funding resources and the Draft Plan of Finance
incorporates funding for both Port and NWSA CIPs.
COMMISSION AGENDA – Briefing Item No. 7b Page 2 of 2
Meeting Date: October 22, 2019
Template revised September 22, 2016.
The briefing will also include a recommendation to change the minimum fund balance targets for
both the General Fund and the Airport Development Fund. These are the Port’s primary
operating funds and minimum balances are part of the Port’s key financial management policies
incorporated in the Draft Plan of Finance. Staff will be recommending an increase to the existing
targets in order to provide additional financial resilience. The new recommended targets are
based on months of operating and maintenance expense – twelve months for the General Fund
and eighteen months for the Airport Development Fund.
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides –Tax Levy and Draft Plan of Finance 2021-2025
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 13, 2020 – The Commission was briefed on the Operating Divisions’ 2021 Operating
Budgets and 2021-2025 CIPs.
September 22, 2020 – The Commission was briefed on the 2021 Central Services Preliminary
Budget.
August 6, 2020 – The Commission held a Budget Retreat discussing the 2021 Tax Levy and
CIP.
July 29, 2020 – The Commission held a Budget Retreat discussing Industry Analysis and SWOT.
July 14, 2020 – The Commission was briefed on 2021 Budget Development.
June 4, 2020 – The Commission was discussed the 2021 Budget.
