Five Year Financial Plan Fiscal Years 2017-18 to 2021-22 INFOR - - PowerPoint PPT Presentation

Five Year Financial Plan

Fiscal Years 2017-18 to 2021-22

INFOR ORMATIONA NAL L PRESENT NTATION ON DECEMBER 13, 13, 2016 2016 PRESENTED B BY: MEGHAN WALLACE, FINANCE & PROCUREMENT MANAGER

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Five Year Financial Plan

Schedule

 Informational Presentation, December 13th  Request for Approval, January 10th

Presentation

 City Outlook  Port Financial Overview  Base, Low, and High Case Scenarios  Strategic Considerations  Next Steps

Photo Credit: http://www.super8sanfrancisco.com/blog/wp-content/uploads/2016/05/ferry-building.jpg

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City Outlook

City Five Year Financial Plan will be released on December 14, 2016 Major Assumptions

• Economy is strong, but tempered
• Employee Benefits have high annual inflation rates

20% average pension contributions 9% current employee healthcare 7% retiree healthcare

• Other Personnel and Non-Personnel

Consumer Price Index, 3% average annual growth Assumes no savings from labor negotiations

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Port Financial Overview

Base Case

• Moderate revenue growth plus Port initiatives
• Citywide personnel inflation assumption
• CPI for most non-personnel expenses
• Applied staff knowledge

Low Case

• Economic downturn slows revenue growth
• Reduced percentage rents
• Limited new leasing

High Case

• Labor negotiations ease salary inflation
• Maximize revenue growth

$(15.0) $(10.0) $(5.0) $- $5.0 $10.0 $15.0

2018 2019 2020 2021 2022

Base – High – Low

Projected Surplus/Deficits ($ millions)

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$(150.0) $(100.0) $(50.0) $- $50.0 $100.0 $150.0

Operating Surplus Base Expenses Port Initiatives Base Revenues Capital Spending

Base Case: Balancing Uses and Sources

Operating Surpluses are designated to capital, supporting $17 million average capital budgets. Port Initiatives will make the Port reach $125 million revenues within the five-year forecast.

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Base Case: Operating Revenue Growth

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New Initiatives 55% Baseline Growth 45%

$27.7 Million Operating Revenue Growth Over Five Years

New Pier Leases & Interim Parking 36% Backlands 27% Cargo - Pasha 26% NPS Alcatraz Ferry 3% SWL 322-1 & 324 Development 4% 19th/Illinois Parking Lot 4%

$15.3 Million (55%) Growth from New Initiatives

Base Case: Expenditure Growth

Personnel, Salaries 11% Personnel, Benefits 23% Non- Personnel 10% Work Orders & Fire Boat 9% Designation to Capital 47%

Personnel growth 34% of total growth due to health and pension Non-personnel costs 3% average annual growth by CPI Designation to capital Increases reflect growth in operating revenues to meet Capital Policy All designated funds become Fund Balance to support capital investments in subsequent years

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Low Case: Economic Slowdown

Operating deficits projected

• Reduced Percentage Rents
• No new leasing in Northern Historic

Waterfront Capital Policy preserves capital investments

• $15.6 million average Capital Budget
• Requires tradeoffs in Operating Budget

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$90.00 $100.00 $110.00 $120.00 $130.00 $140.00 2018 2019 2020 2021 2022

Projected Budget Deficits ($ millions) Expenses Revenue

High Case: Maximizing Potential

Reduced Spending

• Labor negotiations lower personnel costs

Enhanced Revenues

• New leasing in Northern Historic Waterfront
• Maximize potential in Maritime operations

Pasha Automotive expansion to Pier 96 Cruise parking and special events Ship Yard percentage rents

• All development projects are approved

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$90.00 $100.00 $110.00 $120.00 $130.00 $140.00 2018 2019 2020 2021 2022

Projected Budget Surpluses ($ millions) Expenses Revenue

Strategies: Investment Planning

Debt vs. Pay-Go

• Base Case has capacity for $2 million additional annual debt service
• Estimated $24 million bond proceeds
• Financial Plan highlights need for sound fiscal planning

Investment decisions must look at return on investment Investments should cover debt service costs early on

Capital Improvement Plan

• More detail than Capital Plan
• Prepares staff for biennial Capital Budget
• Allows for:

Strategic prioritization of investments Positioning for external funding sources (e.g. grants and P3s)

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Thank you

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