2017 Tax Levy

&

2017 Statutory Budget

NWSA-POT 2017 Inter Local

Agreements

Commission Meeting

November 15, 2016

• 2017 Tax Levy

• 2017 Key Messages & Forecast Update

• 2017 Statutory Budget

• Public Hearing and Budget Resolutions

• NWSA – POT 2017 Inter-Local

Agreements

Agenda

2

2017 Tax Levy

3

* 2017 Preliminary assess valuations as of September 2015

** Based on 2017 preliminary valuations and targeted millage rate

*** Post September 2016 refundings. Cash basis

2016 Forecast 2017 Budget

Assessed Valuation* $81,750,009,927 $90,713,390,689

Target Millage Rate per $1000 valuation $0.18635 $0.18365

Total Port Tax Levy** $15,013,389 $16,659,514

Debt Service on G.O. Bonds*** $13,047,366 $11,831,945

Remainder for Governmental Projects $1,966,023 $4,827,569

2016 Tax Levies by Taxing District

Source: Pierce County Assessor

4

($ millions)

5

Debt: Outstanding & Projected Principal

Balance 2017 2017 Balance

12/31/2016 Issues Repayments 12/31/2017

G.O. Bonds 159.0$ -$ (5.3)$ 153.7$

Senior Rev. Bonds 180.6 - (1.8) 178.8

Sub. Rev. Bonds 277.7 - (5.0) 272.6

Commercial Paper 25.0 - 0.0 25.0

Total 642.3$ -$ (12.1)$ 630.2$

2017 Statutory Budget

• Healthy operating income of $20.4 million

• Net income of $13.4 million

• Proposed tax millage rate same as 2016

• Capital investments include rail and road

infrastructure and maintenance and

rehabilitation of Port assets not licensed to

the NWSA

• Debt service above commission policy of 2x

2017 Key Messages

7

• Revenues are based on NWSA, POT real estate and POT bulk

businesses.

• Split NWSA Distributable Income (Net Income) 50/50 = $46.7

million for the Port of Tacoma

• Real Estate and Bulk based on existing leases and cargo forecast

• Lease Revenue

– Based on existing customers & lease commitments

• 2017 environmental expenses include $1.4 million recognition of

future liabilities

2017 Key Assumptions

8

Other Expenses will be greater than 2016 forecast by $6.6M

Non Operating Revenue lower by $5M

– Grant income decreases by $3.5M to $2.3M in 2017

– Gain on land sale at Frederickson offset by write off of assets

– No budgeted asset impairments

– No budgeted market adjustments for investments

Non Operating Expenses higher by $1.6M

– Decreased revenue bond interest expenses of $2.1M

– Election expenses of $750k in 2017

– FAST corridor contribution of $2M for SR 516 (Willis road)

– Building demolition costs of $500k

2017 Key Assumptions

9

2016 2016 2017 Better

Budget Forecast Budget / (Worse)

Port Revenue 19.3$ 23.4$ 21.7$ (1.7)$

Joint Venture Revenue 51.8 55.2 46.7 (8.5)

Total Revenue 71.1$ 78.6$ 68.4$ (10.2)$

Total Operating Expenses 46.8 44.7 48.1 (3.3)

Income from Operations 24.3 33.9 20.4 (13.5)

Return on Revenue 34.2% 43.1% 29.8% (13.3%)

Other Income (Exp) (8.8) (10.4) (18.2) (7.8)

Net Income before Tax Levy 15.5 23.4 2.2 (21.3)

Tax Levy 15.0 15.0 16.6 1.7

G.O. Interest (8.5) (7.3) (5.4) 1.9

Net Income 21.9$ 31.1$ 13.4$ (17.7)$

Debt Sevice Coverage Ratio 2.3 2.5 2.2 (0.3)

Return on Assets 1.8% 2.5% 1.0% (1.5%)

2016 Forecast vs 2017 Budget($ millions)

10

2017 Statutory Cash Budget

11

($ Thousands) 2017

Beginning Cash & Investments $228,942

Projected Sources of Funds

Revenues 68,438.0

Expenses (18,569.6)

Memberships (331)

Promotional hosting POT (57)

Promotional hosting NWSA (POT share) (111)

Funds Provided by Operations $49,370

Interest Income 2,613

Other, Net 1,144

Ad valorem tax revenue (net) 16,612

Projected Sources of Funds $69,739

Projected Uses of Funds

Investment in Nortwest Seaport Alliance 43,916

Debt Payments (Principal and Interest) - GO Bonds 11,832

Debt Payments (Principal and Interest) - Revenue Bonds 26,572

Debt Payments (Principal and Interest) - Commercial Paper 188

Capital Spending - Planned Projects 44,365

Projected Uses of Funds $126,873

Projected Borrowing

Commercial Paper Borrowing 0

Total Borrowing $0

Projected Ending Cash & Investments $171,808

2017 Memberships over $10,000

• AAPA, PNWA, WCIT, and CAGTC membership moved to NWSA

• Membership costs subject to small variations based on fees tied to 2016 actual results

2016 2017

WA Public Ports Assoc. (WPPA) 194,000$ 210,000$

Puget Sound Regional Council 44,000 44,000

American Assoc. of Port Auth. 40,000 -

Pacific NW Waterway Association 13,400 -

Tacoma/Pierce Co. Chamber 25,000 25,000

WA Council on Int'l Trade 10,000 -

Executive Council for Greater Tacoma 14,000 14,000

Coalition for America's Gateways 10,000 -

Total over $10,000 350,400$ 293,000$

12

RCW 53.36.120 & 130 requires that Port

expenditures for Industrial Development,

Trade Promotion, and Promotional hosting be

specific budgeted items

The 2017 statutory budget includes $167,000

for promotional hosting

• Includes POT’s 50% portion of NWSA

hosting

• 2017 Statutory limit based on Port

revenue is $196,000

2017 Promotional Hosting

13

• Cash available in future years for facilities investment or debt

retirement

• 2021 reflects $25M retirement of Commercial Paper

($ millions)

14

2017-2021 Ending Cash

Public Hearing

Resolution No. 2016-09

• Consider Resolution 2016-09 adopting a

budget for the Port of Tacoma for the year

2017

Resolution No. 2016-10

• Consider Resolution 2016-10 to direct the

Secretary to certify to the Clerk of the

County Council of Pierce County,

Washington, tax levy of $16,659,514 for

the year 2017

Resolution No. 2016-11

• Consider Resolution 2016-11 addressing

the tax levy requirements pursuant to

RCW 84.55.120 and RCW 84.55.092;

and preserving the opportunity for future

increase in the limit factor for maximum

levy capacity pursuant to RCW

84.55.0101

• Continuing Inter-Local Agreement for support services

• Affirms the expected level of services and associated costs

among the Homeports and NWSA

• NWSA CEO will approve the ILA’s for the NWSA

• Request Commission approval of the Inter-Local Agreements for

support services with The NWSA.

2017 Inter-Local Agreements

19