1. Preliminary “DRAFT” 2019 Projected Year End Highlights
September 9, 2019
Melinda Smithson, Dir Finance & Admin
and Department Staff
Melinda

2. Agenda 2019 Projected Year End Property Tax Levy Next Steps
Assumptions Pertaining to Projections by Line of Business
Revenue Projections (1st Draft)
Expense Projections (“preliminary” still in process)
Property Tax Levy
Next Steps
Melinda
11/3/2019

3. 2019 Budget vs Projected Revenue
Melinda
11/3/2019

4. Marine Terminal - Revenues
Cargo volume lower than budgeted
Budgeted 14 vessels and 84.0 million board feet
YE Projections are 8 vessels and 43.3 million board feet
Reasons for decreases:
* Tariffs on Logs Affected YE Volume & Revenues
Tanker days less than budgeted
Budgeted 60 tanker days
YE Projections are 35 tanker days
* Vessels going to dry dock in Asia more frequently resulting in less maintenance work on Terminal 1
* Alaska oil production up - result is less out of service days
Projected revenues are $1.5 million under budget
Karen
11/3/2019

5. Marine Terminal - Expenses
$1 million T3 dredging delayed till 2020
Permit obtained, but too late for in-water work
Slightly under budget across other line items
Operating Surplus* estimated at $1.5 million
Which is $.5 million under budget
* Before depreciation and allocations
11/3/2019

6. Marine Trades Area (MTA)
Revenues
Expenses
Boat Yard revenue higher than anticipated
Increase in general boat yard activity
New wash down facility revenues not budgeted
Projected to be $75k higher
Slightly under budget across most line items
Projected to be $20k lower
Karen
Operating Surplus* around $170k
11/3/2019

7. Log Yard - Revenues Multiple factors resulting in decreased revenues:
Domestic mill closures
Tariff uncertainty for export logs
Tenant reduced Port log yard presence
Oregon blowdown reduced domestic barging
Barging ceased to LaConner
3% CPI increase in rates as of Jan 1, 2019 was rolled back Sept 1, 2019 to reduce significant impact of tariff increases & timber market conditions
Revenues projected to be $1 million
which is under budget by $1.2 million
Karen
11/3/2019

8. Log Yard Expenses
Supplies, supplemental FM labor and other expenses are under budget due to a decrease in overall activity.
Expenses may be
under budget by $.5 million
Likely to break even or have a small deficit
instead of $700k Operating Surplus*
11/3/2019

9. Operating Deficit* around $300k
Airport Aeronautical
Revenues
Expenses
New lease with medical transport company
Projected to be $30k higher
$250k tree removal project was delayed because trees are growing slower than the model
Increased salaries due to maintaining higher level of staffing and community relations outreach
Operating Deficit* around $300k
11/3/2019

10. Airport Rental Property
Revenues
Expenses
One lease terminated early which was partially offset by a new lease and a short carryover of another lease
Projected to be $35k under
Broker fee not incurred, continued to use staff to market the building while negotiating with potential tenants
Other line items over and under
Operating Surplus* around $700k
Which is $150k better than budget
11/3/2019

11. Operating Surplus* around $1.3 million
Marinas
Revenues
Expenses
Higher activity related to increased recreational fishing opportunities
Projected to be $75k higher
Essentially on track with budget
Operating Surplus* around $1.3 million
11/3/2019

12. Maintenance Departments
Both Mech Shop and Facilities Maintenance are essentially on track with budget
11/3/2019

13. Likely to be under budget
Administration
Salaries under budget due to staff transitions
Outside services under budget because several consulting projects were postponed (strategic plan, grant writing, job analysis)
$150k contingency was not used
Likely to be under budget
in expenses by $300k to $500k
11/3/2019

14. Likely to be over budget
Business Development
Over budget in outside services because of pursuing opportunities in thermally modified hemlock CLT (cross laminated timber)
Increased activity in community and public relations
Likely to be over budget
in expenses by $200k
11/3/2019

15. 2019 Projected Operating Revenues
2019 Projected
Over (Under) Budget %
Comments
2019 Budget
Marine Terminal
$ 2,348,692
$(1,509,734)
(39%)
Cargo volume was budgeted at 84.0 million board feet based on 14 vessels while YE projections are for 43.3 million board feet based on 8 vessels. Decrease due in part to trade tariffs. Tanker days were budgeted at 60 days while projected YE is 35 days.
3,858,426
Marine Trades Area
$ ,702
$ ,162
16%
Boat Yard revenue slightly higher than anticipated
478,540
Log Yard
$ ,861
$(1,238,275)
(57%)
Lower due to domestic mill closures (barge volume) and reduced export log handling - mainly due to trade tariffs imposed on logs originating from the U.S.
2,184,136
Airport
$ ,371
$ ,184 8%
Airport revenues projected to be over budget due to a new structure lease with a medical emergency transport provider.
341,187
Airport Rental Properties
$ 1,140,633
$ (33,703)
(3%)
Slightly under budget due to lease ending early offset by lease held over on a month to month basis
1,174,336
Marinas
$ 2,977,109
$ ,351 3%
Moorage revenues projected to be above budget primarily due to favorable recreational fishing opportunities.
2,900,758
Rental Properties
$ ,996
$ (7,000)
(6%)
Slightly under budget due to lease cancellation
118,996
Total Op Revenues
$ 8,448,364
$(2,608,015)
(24%)
Lower due to volume reductions at the Marine Terminal and Log Yard.
11,056,379
All
Operating Expenses likely to be under budget ~ $2 million
Op Surplus* likely to be ~ $300k to $500k
* Before depreciation
11/3/2019

16. Non-Operating Activity
$2 million additional revenue from environmental insurance settlement
11/3/2019

17. Property Tax Levy History
YEAR
INCREASE
2008 1%
2009
Banked
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2019 Banked Capacity =
$60,516
Melinda
2020 Budget: Property Tax Levy 1% or Banked?
11/3/2019

18. Next Steps Questions? Guidance for staff? Revised Budget Calendar
Operating Surplus Target
Property Tax Levy
Revised Budget Calendar
September 18 – Date changed from September 17
2019 Operating Projections Revenues & Expenses; Introduce 2020 Operating Budget Assumptions; Tax Levy Proposal
Melinda
11/3/2019