Proposed Annual Budget Presentation to the Board of Harbor - - PowerPoint PPT Presentation

Proposed Annual Budget Presentation to the Board of Harbor Commissioners

April 7, 2017

Today’s Focus

• Goals for the FY 2017/18 Budget
• Budget Cash Flow
• Operating Revenues
• Operating Expenses
• Next Steps for Approval of Budget
• Bureau Budgets
• Capital Improvement Program (CIP) Budget

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Goals for FY 2017/18 Budget

• Allocate resources to support objectives of

strategic plan

• Manage expense growth relative to

revenue growth

• Maximize positive cash flow

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Budget Cash Flow

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(gross)

($ in millions) Actual FY 2015/16 Forecast FY 2016/17 Proposed FY 2017/18 Variance

• Prop. – Forcst.
• Fav. (Unfav.)

Operating Revenues 441.3 461.8 475.4 13.6 Less: Operating Expenses (226.3) (237.5) (256.0) (18.5) Operating Income 215.0 224.3 219.4 (4.9) Less: Debt service (84.4) (87.6) (80.1) 7.5 Sub Total 130.6 136.7 139.3 2.6 Less: Capital Improvement Plan (148.3) (124.7) (97.7) 27.0 Less: Capital Equipment & Allocations (17.7) (22.0) (30.5) (8.5) Cash Earned (Needs), before Grants & Other (35.4) (10.0) 11.1 21.1 Plus: Capital Grant Receipts 40.5 33.7 10.2 (23.5) Plus: Other Items, Net 1.3 30.2 2.7 (27.5) Cash from Operations and Investments 6.4 53.9 24.0 (29.9)

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FY 17/18 Proposed Budget At-a-Glance

Components

($ in millions)

FY 16/17 Adopted Budget FY 16/17 Estimate FY 17/18 Proposed Budget ∆% Prop. Budget to Adopted ∆% Prop. Budget to Estimate Cargo Volumes

(TEUs)

8,525 8,754 9,000 5.6% 2.8% Operating Revenues $452.8 $461.8 $475.4 5.0% 2.9% Operating Expenses $249.0 $237.5 $256.0 2.8% 7.8% Operating Income $203.8 $224.3 $219.4 7.7% 2.2% Capital Improvement Program (CIP) $146.1 $124.6 $97.7 33.1% 21.7%

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Operating Revenues and Expenses

Past, Present, Proposed, Projected

$402 $407 $401 $410 $397 $426 $447 $441 $453 $462 $475 $518 $529 $518 $516 $254 $210 $210 $200 $205 $205 $234 $226 $249 $238 $256 $265 $272 $278 $285 $150 $200 $250 $300 $350 $400 $450 $500 $550

Operating Revenues Operating Expenses Operating Income $148 $197 $191 $210 $192 $221 $213 $215 $204 $224 $219 $253 $257 $240 $231

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FY 17/18 Revenues – $475.4M

Shipping Services, $396.5M, 83.4%

Rentals, $51.6M, 10.9% Royalties & Fees, $10.5M, 2.2% Clean Truck Program, $2.4M, 0.5% Other Operating Revenue, $14.4M , 3.0%

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FY 17/18 Revenues & Cargo Volumes $475.4M & 9.0M TEUs

($ in thousands) Adopted FY 16/17 Forecast FY 16/17 Proposed FY 17/18

Δ$ Adopted Vs. Proposed Δ% Adopted Vs. Proposed Δ$ Forecast Vs. Proposed Δ% Forecast Vs. Proposed

Shipping Services

$382,617 $374,034 $396,531 $13,914 3.6% $22,497 6.0%

Rentals

$41,706 $47,148 $51,603 $9,897 23.7% $4,455 9.4%

Royalties & Fees

$10,326 $10,430 $10,484 $158 1.5% $54 0.5%

Clean Truck Program

$2,264 $2,319 $2,388 $124 5.5% $69 3.0%

Other Operating Revenue

$15,896 $27,907 $14,422 ($1,474) (9.3%) ($13,485) (48.3%)

Total Operating Revenue

$452,809 $461,838 $475,428 $22,619 5.0% $13,590 2.9%

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TEUs in millions Adopted FY 16/17 Forecast FY 16/17 Proposed FY 17/18

Δ% Adopted Vs. Proposed Δ% Forecast Vs. Proposed

Cargo Volumes (TEUs) 8.52 8.75 9.00 5.6% 2.8%

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FY 17/18 Operating Expense Categories $256.0M

Salaries & Benefits, $136.5M, 53.3%

City Services, $46.9M, 18.3% Outside Srvcs., $34.6M, 13.5% *Other Operating Expenses, $26.9M, 10.5% Materials & Supplies, $7.0M, 2.7% Marketing & Public Relations, $3.2M, 1.3% Travel Expenses, $0.9M, 0.4%

*Other Operating Expenses include $(13.7) in Indirect Allocations to Overhead. Without Allocations, Other Operating Expenses are $40.6M.

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FY 17/18 Drivers of OPEX Increases

(relative to the FY 16/17 Adopted Budget)

• Operating Expenses Increases (+$7.0M net)

Mandatory Increases: $7.8M

• $2.7M Salaries and Benefits
• $4.5M City Services
• $562K Provisions for Bad Debt

Other Increases: $1.6M

• $1.2M Cruise Tariff Incentive
• $440K Misc. Other Operating Expenses

 Bike Share & P-Bid

• Current Reductions ($2.4M)
• ($1.5M) Outside Services (Reimbursable EIR)
• ($459K) Utilities & Telephone Services
• ($258K) Materials & Supplies
• ($76K) Marketing & PR
• ($20K) OH Allocations
• ($11K) Travel

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Authorized Positions and Salaries and Benefits Expenses (in millions)

948 1,073 997 989 989 994 994 994 998 999 999 $95.4 $99.3 $96.8 $103.7 $104.9 $109.5 $118.1 $121.4 $123.6 $129.4 $136.5 $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 800 900 1000 1100 1200 1300 1400 1500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Forecast 2018 Proposed

Fiscal Year Authorized Positions

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Salaries and Benefits Actuals ($ in millions)

Authorized Positions Salaries and Benefits Expenses ($ in millions)

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Outside Services Budgeted & Actual

FY 2008 – FY 2018 (Proposed)

($ in thousands)

$37,937 $31,940 $26,860 $30,810 $29,426 $31,905 $27,613 $30,924 $30,918 $32,599 $61,797 $52,085 $39,971 $37,277 $36,598 $35,217 $35,718 $35,144 $38,745 $36,118 $34,635 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Forecast) 2018 (Proposed) Thousands of $ Outside Services (Actual & Estimate) Outside Services (Budgeted & Proposed)

Fiscal Year

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FY 17/18 Proposed Outside Services $34.6M

Division $ % Primary Drivers Environmental Mgmt. $7.3M 21% Environmental Assessment Svcs.: Remediation/Site

Restoration, Water Quality, Air Quality , and CEQA

Maintenance

• Improv. Prog.

$5.7M 16% Hiring Hall, Maint. Dredging, Asphalt & Paving, Contract

Services for Deferred Maint. Program

C&M $5.6M 16% Hiring Hall; Underwater Diving; and Buildings, Wharves,

Grounds, & Equipment Maintenance Svcs.

Information Technology $4.3M 13% Information Systems Consulting, and Hardware & Software

Computer Maintenance

Port Police $2.9M 8%

Security Camera Maintenance and Repair, Equipment & Computer Maint. Support Services & Rentals

WF/Comm. Real Estate $2.7M 8%

Cruise Terminal Operations, Real Estate Consulting, Bike Share Program, and Appraisals

City Attorney $1.8M 5%

Outside Legal Counsel

All Other Divisions $4.3M 13% Mayoral Trade Missions, Data Acquisition, Financial Services,

Information Consulting Services, and Others

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FY 17/18 City Services $46.9M

Fire - LAFD, $26.6M, 57%

Recreation & Parks, $10.4M, 22%

City Attorney, $5.6M, 12%

Personnel, $1.2M, 2% Controller, $0.6M, 1% CAO, $0.4M, 1% Treasurer, $0.3M, 1% Other, $1.9M, 4%

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FY 17/18 City Services – $46.9M Service Details

City Department $ % Description Fire - LAFD $26.6M 57%

LAFD Fire Services

Recreation & Parks 10.4M 22%

Parks & Facilities Maintenance (Parks, Aquarium, Museums, Beaches, Lifeguards, Construction Services, Rangers)

City Attorney 5.6M 12%

In-house Legal Counsel

Personnel 1.2M 2%

Employee Relations and Records Management

Controller 619K 1%

Payroll, FMS, and Disbursements

CAO 350K 1%

Inspector General, Misc. Administration

Treasurer 336K 1%

Investment and Cash Management

Other Departments 1.9M 4%

Business Assistance Virtual Network (BAVN), Video Production Services, Lab & Special Testing, Mayor’s Liaison, City Clerk Publications, Printed Materials, and Other Services

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City Services - Adopted vs. Proposed

($ in thousands)

Adopted FY 16/17 Proposed FY 17/18

Δ$ Adopted Vs. Proposed Δ% Adopted Vs. Proposed

Fire – LAFD $24,353 $26,610 $2,257 9.3%

• Rec. & Parks

9,122 10,391 1,269 13.9% City Attorney 5,191 5,553 363 7.0% Personnel 827 1,155 328 39.7% Controller 306 619 313 102.3% CAO 452 350 (102) (22.5%) Treasurer 367 336 (31) (8.5%) Other 1,826 1,888 61 3.3%

Total City Services

$42,444 $46,902 $4,458 10.5%

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Historical Expenditures

FY 2011– FY 2018

$103,693 $104,910 $109,463 $118,053 $121,367 $123,609 $133,832 $136,507 $30,810 $29,426 $31,905 $27,613 $30,924 $30,918 $36,118 $34,634 $31,436 $34,058 $33,393 $35,356 $37,762 $40,609 $45,001 $46,902 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 2011 2012 2013 2014 2015 2016 2017 (Adopted) 2018 (Proposed)

$ in thousands

Salaries & Benefits Outside Services City Services

Fiscal Year

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Year-to-Year % ∆

FY 14 FY 15 FY 16 FY 17 FY 18

Salaries & Benefits

7.8% 2.8% 1.8% 8.3% 2.0%

City Services

5.9% 6.8% 7.5% 10.8% 4.2%

Outside Services

• 13.5%

12.0% 0.0% 16.8%

• 4.1%

Scheduled Next Steps

Milestones Timeframe Budget & Finance Committee Budget Hearings April/May 2017 Board Budget Adoption June 1, 2017

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Board of Harbor Commissioners

Executive Director

MARKETING & CUSTOMER RELATIONS BUREAU Cargo/Industrial Real Estate Cargo Marketing Environmental Management Planning & Strategy Wharfingers Waterfront/Commercial Real Estate DEVELOPMENT BUREAU Construction Construction & Maintenance Engineering Goods Movement FINANCE & ADMINISTRATION BUREAU Contracts & Purchasing Human Resources Accounting Debt & Treasury Financial Management Management Audits Risk Management PUBLIC SAFETY & EMERGENCY

• MGMT. BUREAU

Information Technology Port Pilots Port Police Chief of Staff EXTERNAL AFFAIRS BUREAU Commission Office Communications Government Affairs Trade Development City Attorney

Port of Los Angeles Organizational Chart

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BUREAU BUDGETS

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MARKETING & CUSTOMER RELATIONS BUREAU

Cargo/Industrial Real Estate Environmental Management Cargo Marketing Planning & Strategy Waterfront/ Commercial Real Estate Wharfingers

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5,000 10,000 15,000 20,000 25,000 30,000 35,000

FY15/16 Actuals FY16/17 Adopted FY16/17 Estimates FY17/18 Proposed

$25,007 $32,240 $29,242 $31,069

Net Operating Expenses

Marketing & Customer Relations Bureau Operating Budget-at-a-Glance

$(000s)

Budget Highlights

• FY 17/18 Proposed Net Operating

Expenses: $31.1M

• 6.2% increase relative to

FY 16/17 Estimate

• 3.6% reduction relative to the

FY 16/17 Adopted Budget

• Cruise Tariff Incentive in FY 17/18



+$1.2M Addition

• Summary of Proposed Budget

changes relative to FY 16/17 Budget

• Environmental Assessment Srvcs.



28% Reduction or -$2.8M Reimbursable EIRs

• Summary of Proposed Budget changes

relative to FY 15/16 Actuals

• Environmental Assessment Svcs.



+$1.5M Increase

• Salary & Benefits



+$1.2M Increase

• Other Outside Services



+$1.0M Increase

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FY 2017/18 Goals & Initiatives for Marketing & Customer Relations Bureau Align with Strategic Plan Objectives

Objective 1: World-Class Infrastructure that Promotes Growth

• Finalize CEQA analysis on Berth 100, Everport, Yang Ming, Jankovich, PBF, Shell,

Valero, and Philips 66/Kinder Morgan

• Berths 191-194: Initiate CEQA for new dry bulk terminal (new customer)
• Process new leases following CEQA certification for Jankovich, PBF, Shell, Valero, and

Philips 66/Kinder Morgan

• Develop a 2050 Plan to guide long-term port development
• Amend the Port Master Plan to provide flexibility to accommodate changing dynamics

and new projects

• Complete lease negotiations with Alta Sea
• Initiate lease negotiations with HPEC at site in Terminal Island rail loop
• Public Access Investment Plan – Engage community to prioritize public access projects

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FY 2017/18 Goals & Initiatives for Marketing & Customer Relations Bureau Align with Strategic Plan Objectives

Objective 2: An Efficient, Secure, and Environmentally Sustainable Supply Chain

• Implement Supply Chain Optimization recommendations that improve cargo

velocity through the port container terminals

• Clean Air Action Plan (CAAP) update 2017- engage port stakeholders and

develop a strategy to meet the initiatives in the CAAP

• Facilitate development and leverage grant opportunities to encourage the

usage of near zero and zero emission technologies

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FY 2017/18 Goals & Initiatives for Marketing & Customer Relations Bureau Align with Strategic Plan Objectives

Objective 3: Improved Financial Performance of Port Assets

• Continue to be the number one container port in the nation by enticing new cargo
• Re-purpose land and increase port land utilization by initiating request for proposals

(RFPs) to seek potential customers/developers for vacant port parcels

• Perform site assessments, complete environmental analysis and remediate legacy soil

and ground water contaminations in an expeditious manner in support of development activities

• Ensure leases reflect current market-based rents, compensations resets are

conducted timely, and use tariff adjustments to keep pace with economic conditions

• Conduct feasibility studies for the Cruise terminal operations, Warehouse 1 reuse,

Cabrillo Way Marina operations, and utilize ULI TAP to create private development strategy for Wilmington Waterfront

• San Pedro Public Market – complete coordinated design of public/private project

elements

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FY 2017/18 Goals & Initiatives for Marketing & Customer Relations Bureau Align with Strategic Plan Objectives

Objective 4: Strong Relationships with Stakeholders

• Ensure the Port of Los Angeles is best positioned to attract new customers by

enabling facility and infrastructure improvements and provide upgraded wharves that will attract larger vessels

• Update the Cargo Leasing Guidelines to meet the changing landscape
• Manage all Harbor Department properties to ensure permit compliance
• Compile results from the Customer Satisfaction survey and develop strategies that

addresses any deficiencies

• Per the Mayor’s directive, facilitate film permit process
• Share environmental strategies with partner ports and environmental agencies
• LA Waterfront – complete bike share program and expansion of the rubber-tire

trolley service

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Marketing & Customer Relations Bureau Division Budgets

• Environmental Management
• Salaries & Benefits: $4.6M, net of capital allocations ($141K)
• Outside Services:



Site Restoration Services ($3.7M), major programs include: Waste management services ($1.5M), Port- wide environmental emergency response services ($500K) and baseline assessments ($358K)



Air Quality & California Environmental Quality Act Services ($1.9M)



Water Quality Services ($1.2M) major programs include: Total Maximum Daily Loads -TMDL( $640K) and Water Resources Action Plan outreach and implementation ($235K)

• Other Operating Expenses:



Environmental Incentives ($2.8M), includes: Vessel Speed Reduction Program ($1.6M), Technology Advancement Program ($800K), Environmental Ship Index ($300K), and Marina Engine Exchange ($50K)



Clean Truck Program ($1.1M ), which is offset by Clean Truck Program Revenue

Totals may differ due to rounding

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27 Capital Expenses (CAPEX) Operating Exp (Gross Exp - CAPEX) Division ($ in thousands) Budgeted Positions Salaries & Benefits Outside Services Other Operating Exp

Total Gross Exp

Allocations to Capital Budget

Net Operating Expense

Environmental Management 28 4,598,619 7,277,670 4,182,952 16,059,241 (938,592) 15,120,649 Cargo Marketing 10 1,853,656 225,552 1,628,264 3,707,472

• 3,707,472

Cargo/Industrial Real Estate 13 2,115,403 289,376 30,950 2,435,729

• 2,435,729

Waterfront/Commercial Real Estate 14 2,050,035 2,675,976 1,040,648 5,766,659

• 5,766,659

Planning & Strategy 8 1,087,727 60,000 191,240 1,338,967

• 1,338,967

Wharfingers 23 2,656,081 1,500 42,023 2,699,604

• 2,699,604

TOTAL 96 14,361,521 $ 10,530,074 $ 7,116,077 $ 32,007,672 $ (938,592) $ 31,069,080 $

Gross Expenses

Marketing & Customer Relations Bureau Division Budgets

• Cargo Marketing
• Salaries & Benefits: $1.9M
• Cruise Tariff Incentive: $1.2M
• Outside Services and Other Operating Expenses:



Travel ($285K), Mayoral Trade Missions ($175K), and Foreign Trade Zone Consultant ($50K)

• Cargo/Industrial Real Estate
• Salaries & Benefits: $2.1M
• Outside Services and Other Operating Expenses:



Cal Pacific Agreement ($190K), Appraisals ($40K), and Asset Management System ($48K)

• Waterfront/Commercial Real Estate
• Salaries & Benefits: $2.1M
• Outside Services and Other Operating Expenses:



Cruise terminal operating agreement ($1.9M), Bike Share Program ($475K), Property rentals and leases ($460K), San Pedro Historic Waterfront Business Improvement District - P-BID ($390K), and Real Estate Consulting Services ($120K)

• Planning & Strategy
• Salaries & Benefits: $1.1M
• Outside Services and Other Operating Expenses:



2050 Plan Consulting Services ($45K), Subscription for PIERS import/export data ($174K)

• Wharfingers
• Salaries & Benefits: $2.7M

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DEVELOPMENT BUREAU

Construction Construction & Maintenance Engineering Capital Improvement Program Maintenance Improvement Program Goods Movement

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10,000 20,000 30,000 40,000 50,000 60,000 70,000

FY15/16 Actuals FY16/17 Adopted FY16/17 Estimates FY17/18 Proposed

$51,883 $58,670 $53,752 $61,317

Net Operating Expenses

Development Bureau Operating Budget-at-a-Glance

$(000s)

Budget Highlights

• FY 17/18 Proposed Net Operating

Expenses: $61.3M

• 14.1% increase relative to

FY 16/17 Estimate

• 4.5% increase relative to the

FY 16/17 Adopted Budget

• Summary of changes relative to

FY 16/17 Adopted and Estimate:

• Outside Service Increases for

Dredging, Hiring Hall, and Wharf & Facility Maintenance



+$1.7M vs. Adopted



+$2.2M vs. Estimate

• Salary increases



+$670K vs. Adopted



+$3.7M vs. Estimate

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FY 2017/18 Goals & Initiatives for Development Bureau Align with Strategic Plan Objectives

Objective 1: Develop World-Class Infrastructure that Promotes Growth

• Develop a Capital Improvement Program (CIP) that improves the Port’s
• perational strength and financial sustainability
• The FY 17/18 Proposed CIP includes $97.6M for terminal, transportation,

security, public access, and maritime services projects

• Refer to subsequent slides for further details
• Deliver terminal and infrastructure projects on time and within budget
• Monitor and report through the Project Development Committee
• Design to minimize future maintenance
• Optimize maintenance to extend infrastructure life and utility
• Continue to implement findings of the Electrical Safety Audit
• Complete proposed deferred maintenance projects in the upcoming fiscal

year

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Development Bureau Division Budgets

• Construction
• Salaries & Benefits: $5.7M, net of capital allocations ($6.7M)
• Outside Services primarily relate to database and software licensing costs as well as

equipment maintenance ($225K)

• Other Operating Expenses include: Materials and Supplies ($94K) and Travel ($57K)
• Engineering
• Salaries & Benefits: $9.8M, net of capital allocations ($6.4M)
• Outside Services include: IT support ($260K ), software licenses ($146K), and office

equipment maintenance ($47K)

• Other Operating Expenses include: Materials and Supplies ($180K) and Travel ($53K)

Totals may differ due to rounding

04/17/2017 Capital Expenses (CAPEX) Operating Exp (Gross Exp - CAPEX) Division ($ in thousands) Budgeted Positions Salaries & Benefits Outside Services Other Operating Exp Total Gross Exp Allocations to Capital Budget Net Operating Expense Construction 69 12,392,641 $ 225,390 $ 218,308 $ 12,836,339 $ (7,300,414) $ 5,535,926 $ Construction & Maintenance 284 32,757,981 5,627,900 5,055,590 43,441,471 (4,509,495) 38,931,975 Engineering 91 16,207,095 452,845 275,701 16,935,641 (7,385,720) 9,549,920 Maintenance Improvement Program

• 5,000

5,695,716 657,402 6,358,118 6,358,118 Goods Movement 4 690,963 273,070 15,446 979,479 (38,730) 940,749 TOTAL 448 62,053,679 $ 12,274,921 $ 6,222,447 $ 80,551,047 $ (19,234,359) $ 61,316,688 $

Gross Expenses

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Development Bureau Division Budgets

• Construction & Maintenance
• Salaries & Benefits: $31.8M, net of capital allocations ($948K)
• Outside Services include: Hiring Hall salaries and benefits ($1.3M) and the following

maintenance needs ($4.4M):



Building repairs and upgrades: $1.4M



Wharves: $1.3M



Fountain maintenance, refuse disposal and landfill dumping: $600K



Equipment: $550K



Electrical equipment safety analysis and derrick barge broker services: $250K



IT Consulting Service & Computerized Maint. Mgmt. System: $210K



Rail: $75K



Fencing: $50K

• Other Operating Expenses primarily relate to materials and supplies ($4.5M),

maintenance equipment rental ($250K) and Bureau of Sanitation and Street Lighting services ($85K)

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Development Bureau Division Budgets

• Maintenance Improvement Program
• Outside Services include:



Maintenance dredging ($1.9M)



Deferred maintenance ($1.4M)



As-needed marine improvements ($905K)



Asphalt & concrete recycling ($600K)



Sidewalk repair program ($275K)



Infrastructure maintenance program ($250K)



Terminal electrical infrastructure inspections & maintenance ($143K)



Maintenance paving & management program ($130K)



Other repairs and support ($110K)

• Other Operating Expenses primarily relate to materials and supplies ($484K)
• Goods Movement
• Salaries & Benefits: $652K, net of capital allocations ($39K)
• Outside Services primarily relate to transportation planning services including a

rail study ($273K)

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CAPITAL IMPROVEMENT PROGRAM

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Proposed Capital Improvement Program (CIP) Budget FY 2017/18 $97.6M*

Terminals, $41.6M, 43%

Public Access & Environmental Enhancements, $18.2M, 19%

Maritime Services, $27.8M, 28%

Transportation, $7.8M, 8%

Security, $2.2M, 2%

*Includes Salaries and Benefits

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Public Access Investment Plan LA Waterfront Projects

04/17/2017

Project Elements

($ in millions)

PREVIOUS YEARS FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 TOTAL CIP COST

Harbor Blvd (Sampson Way) & 7th Street Intersection $ 2.16 $ 2.80 $ 8.70 $ 1.11 $ 0.03 $ 14.80 Ports O' Call Berths 80-83 Waterside Improvements 0.15 0.58 2.57 2.16 0.24 5.70 Ports O' Call Promenade and Town Square 0.97 0.33 1.70 14.90 12.80 1.00 31.70 Ports O' Call Demolition & Clean Up 0.20 0.40 1.60 1.30 0.20 3.70 Harbor Blvd from Miner St. to SP Slip 0.16 0.52 4.33 0.99 6.00

Total San Pedro Waterfront: $ 61.90

Wilmington Waterfront Promenade and Catalina Freight Demo 0.43 1.21 1.76 23.87 24.39 1.04 52.70 Wilmington Waterfront - Avalon Promenade and Gateway (Pedestrian Bridge) 0.02 0.14 0.97 4.80 15.00 2.80 0.07 23.80

Total Wilmington Waterfront: $ 76.50 TOTAL: $ 3.58 $ 4.99 $ 14.63 $ 53.18 $ 56.67 $ 5.28 $ 0.07 $ 138.40

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50,000 100,000 150,000 200,000 250,000

FY 14/15 Actual FY 15/16 Actual FY 16/17 Adopted FY 16/17 Estimate FY 17/18 Proposed

$237,156 $148,329 $146,091 $124,663 $97,669

Capital Improvement Program

Capital Improvement Program Budget-at-a-Glance

$(000s)

• FY 17/18 Proposed CIP: $97.7M
• 21.7% decline relative to

FY 16/17 Estimates

• 33.1% decline relative to the

FY 16/17 Adopted Budget

• Key Expenditures:
• Public Access and Environmental

Enhancements: $18.2M

• World Cruise Center: $11.2M
• YTI Development: $8.1M
• Deferred Maintenance: $8.0M
• MOTEMS: $7.9M
• Transportation Projects: $7.8M
• TraPac Development: $2.5M

Budget Highlights

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Projects in Design Proposed in FY 17/18 Budget

($ in millions)

Project Title Proposed Budget FY 17/18 Project Total

Marine Oil Terminal Engineering and Maintenance Standards (MOTEMS) Program $7.7 $151.1 Wilmington Waterfront Promenade 1.7 52.2 Berths 226-232 (Everport) Redevelopment 1.8 52.0 San Pedro Waterfront - Ports O’ Call Promenade & Town Square 2.0 33.0 Wilmington Waterfront - Avalon Promenade and Gateway 1.0 23.8 West Basin Lead Track Gap Closure 0.5 8.9 Portwide Street Resurfacing Projects 3.5 6.5 San Pedro Waterfront - Harbor Boulevard From Miner Street to San Pedro Slip Roadway Improvements 0.6 6.0 San Pedro Waterfront , Berths 80-83: Waterside Improvements 0.2 5.7

Total $19.0M $339.2M

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Planned Construction Starts Proposed in FY 17/18 Budget

($ in millions)

Project Title Proposed Budget FY 17/18 Project Total

San Pedro Waterfront: Ports O’ Call Promenade and Town Square $2.0 $33.0 Berths 196-199 & 200A: Wharf Rehabilitation 5.4 12.3 Port Police 700 MHz Radio System Phase II 1.3 8.4 Portwide Street Resurfacing Projects 3.5 6.5 San Pedro Waterfront , Berths 80-83: Waterside Improvements 0.6 5.7 Berth 240 A, B & C: Seawall Improvements – ExxonMobil 1.7 4.5 Berth 93: Cruise Terminal - Customs and Border Protection Improvements 2.0 3.2 Berth 200: Rail Yard and Track Connections Enhancements 2.0 3.0 Berths 179-181: Wharf and Bollard Repair 1.0 1.1

Total $19.5M $77.7M

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Construction Finishes Proposed in FY 17/18 Budget

($ in millions)

Project Title Proposed Budget FY 17/18 Project Total

Berths 91-93: Alternative Maritime Power (AMP) Upgrade and Retrofit Improvements 9.0 12.9 Berth 142: Crane Maintenance Building 0.5 9.5 Berths 212-224: Intermodal Container Transfer Facility 4.7 6.5 Portwide Street Resurfacing Projects 3.5 6.5 Berth 84: Maritime Museum Wharf Rehabilitation 1.0 3.9 Badger Avenue Bridge Rehabilitation 1.0 2.0 Berth 164: MOTEMS Repairs – Valero .07 1.4 Berth 163: MOTEMS Repairs – Nustar .05 1.3 Berth 179-181: Wharf and Bollard Repair 1.0 1.1 Berth 402-403: Expansion Joint Repaving 0.2 0.3

Total $21.0M $45.4M

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Unallocated Capital Improvement Program Fund and Deferred Maintenance

($ in millions)

Category Proposed Budget FY 17/18

Unanticipated Construction $2.0 Consultants 3.5 In-House Labor Allocations 0.5 Parts and Materials 1.0 Other 8.0 Unallocated Subtotal $15.0 Deferred Maintenance 7.9 Total $22.9M

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PUBLIC SAFETY & EMERGENCY MANAGEMENT BUREAU

Information Technology Port Pilots Port Police

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10,000 20,000 30,000 40,000 50,000 60,000 70,000

FY15/16 Actuals FY16/17 Adopted FY16/17 Estimates FY17/18 Proposed

$54,909 $59,141 $57,471 $60,208

Net Operating Expenses

Public Safety & Emergency Mgmt. Bureau Operating Budget-at-a-Glance

$(000s)

Budget Highlights

• FY 17/18 Proposed Net Operating

Expenses: $60.2M

• 4.8% increase relative to

FY 16/17 Estimate

• 1.8% increase relative to the

FY 16/17 Adopted Budget

• Summary of changes relative to

FY 16/17 Adopted and Estimate:

• Higher Salaries and Benefits and

filling vacancies



+$1.2M vs. Adopted



+$2.8M vs. Estimate

• Reduced Materials & Supplies



• $220K vs. Adopted



• $228K vs. Estimate
• Increased Outside Services



+$149K vs. Adopted



+$95K vs. Estimate

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FY 2017/18 Goals & Initiatives for Public Safety & Emergency Management Bureau Align with Strategic Plan Objectives

Objective 2: An Efficient, Secure, and Environmentally Sustainable Supply Chain

• Maintain critical computer and telecommunications services that support

the Port’s objectives and keep business going

• Provide safe and continuous movement of commercial ships in and out of

the Port, supporting customer and industry needs

• Implement security and public safety strategies that support goods

movement, emergency management, risk mitigation, and recovery strategies

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Public Safety & Emergency Mgmt. Bureau Division Budgets

• Information Technology
• Salaries & Benefits: $7.5M, net of capital allocations ($535K)
• IT Consulting: $1.8M, Software Maintenance: $1.6M, Telephone: $1.5M, Hardware

Maintenance: $956K

• Port Pilots
• Salaries & Benefits: $10.3M



Offset by $11.5M in pilotage revenues

• Port Police
• Salaries & Benefits: $32.9M
• Port security service expenses: $2.5M ($1.9M eligible for grant reimbursement)
• Law enforcement/safety equipment and supplies: $723K

Totals may differ due to rounding

04/17/2017

Capital Expenses (CAPEX) Operating Exp (Gross Exp - CAPEX) Division ($ in thousands) Budgeted Positions Salaries & Benefits Outside Services Other Operating Exp

Total Gross Exp

Allocations to Capital Budget

Net Operating Expense

Information Technology 45 8,039,510 $ 4,341,622 $ 1,614,459 $ 13,995,591 $ (1,518,702) $ 12,476,889 $ Port Pilots 30 10,266,259 156,250 169,407 10,591,916 $

• 10,591,916

Port Police 231 32,893,825 2,860,905 1,384,873 37,139,603 $

• 37,139,603

TOTAL 306 51,199,595 $ 7,358,777 $ 3,168,739 $ 61,727,111 $ (1,518,702) $ 60,208,409 $

Gross Expenses

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EXTERNAL AFFAIRS BUREAU

Commission Office Communications

• Community Relations
• Media Relations
• Graphics Services

Government Affairs Trade Development

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2,000 4,000 6,000 8,000 10,000 12,000

FY15/16 Actuals FY16/17 Adopted FY16/17 Estimates FY17/18 Proposed

$10,143 $10,362 $10,912 $10,455

Net Operating Expenses

External Affairs Bureau Operating Budget-at-a-Glance

$(000s)

Budget Highlights

• FY 17/18 Proposed Net Operating

Expenses: $10.5M

• 4.2% reduction relative to

FY 16/17 Estimate

• 0.9% increase relative to the

FY 16/17 Adopted Budget

• Summary of changes relative to

FY 16/17 Estimate and Adopted :

• Salaries & Benefits (low vacancies

throughout FY 16/17)



• 9.2% or -$553K
• vs. Estimate



+ 3.3% vs. Adopted

• Outside Services



+3.9% vs. Estimate



+1.9% vs. Adopted

• Vs. Adopted



Reductions in Business Promotional, Travel, Materials & Supplies, and City Services

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FY 2017/18 Goals & Initiatives for External Affairs Bureau Align with Strategic Plan Objectives

Objective 4: Strong Relationships with Stakeholders

• Attract visitors to the L.A. Waterfronts of Wilmington and San Pedro
• Participate in various community groups, chambers of commerce, and

neighborhood councils

• Support the activation and growth of the L.A. Waterfront in an effort to attract a

minimum of 250,000 visitors for Port-sponsored events

• Spotlight the L.A. Waterfront as a tourist destination
• Educate stakeholders about the Port through consistent, relevant, and

compelling narrative and programs

• Place newsworthy stories across various media platforms to attain earned media

value of at least $5 million during the course of the year

• Continue to promote the Trade Connect program to increase U.S. export
• pportunities
• Develop relationships with administrative and elected officials
• Continue to establish Port leadership on important policy issues
• Provide administrative support to the Board of Harbor Commissioners

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External Affairs Bureau Division Budgets

Totals may differ due to rounding

04/17/2017

• Commission Office
• Salaries & Benefits: $513K
• Outside Services for BoardVantage – online board material management

($18K)

• Government Affairs
• Salaries & Benefits: $822K
• Federal & State advocacy contracts ($499K)

Division ($ in thousands) Budgeted Positions Salaries & Benefits Outside Services Other Operating Exp

Operating Expenses

Commission Office 5 513,236 18,000 31,560 562,796 Government Affairs 4 821,599 499,722 75,300 1,396,621 Trade Development 3 562,555 150,000 101,625 814,180 Community Relations 12 1,906,937 $ 265,500 $ 3,451,469 $ 5,623,906 $ Graphics Services 9 1,040,212 78,200 152,695 1,271,107 Media Relations 5 618,437 141,763 26,497 786,697 Communications Subtotal 26 3,565,586 $ 485,463 $ 3,630,661 $ 7,681,711 $ TOTAL 38 5,462,976 $ 1,153,185 $ 3,839,146 $ 10,455,308 $

Gross Expenses

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External Affairs Bureau Division Budgets

• Trade Development
• Salaries & Benefits: $563K
• LAREX (export and foreign investment initiatives) contract ($150K) and customer

meetings and events ($62K)

• Communications
• Salaries & Benefits: $3.6M
• Outside Services ($485K), include: audio-visual services, photographers, writers, ad

agency fees, graphic, design, mail services, media tracking, and translation services Operating Expenses include:



Community Investment Program ($1.1M)



Public events ($697K)



Advertising for trade/business and LA Waterfront ($450K)



Port-wide memberships ($369K)



Marketing expenses for business development ($356K)



Divisional sponsorships ($225K)



City Services ($157K)

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FINANCE & ADMINISTRATION BUREAU

Finance

• Accounting
• Debt & Treasury
• Financial Management
• Management Audit
• Risk Management
• Harbor Dept. Operating

Contracts & Purchasing Human Resources

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10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

FY15/16 Actuals FY16/17 Adopted FY16/17 Estimates FY17/18 Proposed

$73,790 $77,682 $75,550 $81,745

Net Operating Expenses

Finance & Administration Bureau Operating Budget-at-a-Glance

$(000s)

Budget Highlights

• FY 17/18 Proposed Net Operating

Expenses: $77.7M

• 8.2% increase relative to

FY 16/17 Estimate

• 5.2% increase relative to the

FY 16/17 Adopted Budget

• Summary of changes relative to

FY 16/17 Adopted and Estimate:

• Higher Overall City Services



+$4.3M vs. Adopted



+$1.6M vs. Estimate

• Provision for Bad Debt CPI Inc.



+$500K vs. Adopted



+400K vs. Estimate

• Electricity primarily related to

Alternative Maritime Power



• $364K vs. Adopted



+ $2.3M vs. Estimate

• Salary & Benefit LACERS Credit



$371K additional credit

• vs. Adopted

04/17/2017 Note 1: The Harbor Operating Division budget of $63.0M contains global expenses for City Services ($40.9M), Utilities ($18.7M), and Provisions for Bad Debt ($7.1M)

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FY 2017/18 Goals & Initiatives for Finance & Administration Bureau Align with Strategic Plan Objectives

Objective 4: Strong Relationships with Stakeholders

• Provide financial and administrative support to the Harbor Department
• Work with and across divisions to maximize return on Port’s assets
• Help to evaluate and prioritize business opportunities
• Review financial policies
• Provide timely, accurate, and transparent financial reporting to stakeholders
• Maintain ‘AA’ credit rating
• Partner with Controller’s Office to conduct Industrial & Administrative Survey
• Identify and mitigate risks to reduce claims and protect Port assets
• Make the Harbor Department the employer of choice by providing
• pportunities for professional development and promoting excellence
• Continue outreach for equity, access, and inclusion for Port

contracting/procurement opportunities

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Finance & Administration Bureau Division Budgets

* Salaries & Benefits listed within the Special Projects division relate to provisional benefits (vacation/sick-time payouts and true- ups/pension adjustments) which may be distributed throughout FY 2017/18.

Totals may differ due to rounding

04/17/2017

Capital Expenses (CAPEX) Operating Exp (Gross Exp - CAPEX) Division ($ in thousands) Budgeted Positions Salaries & Benefits Outside Services Other Operating Exp

Total Gross Exp

Allocations to Capital Budget

Net Operating Expense

Accounting 30 3,566,910 $ 374,083 $ 30,877 $ 3,971,870 $ (375,474) $ 3,596,395 $ Debt & Treasury 5 811,774 110,000 19,690 941,464 (88,272) 853,192 Financial Management 10 1,695,534 10,030 1,705,564 (161,702) 1,543,862 Management Audits 3 495,900 226,000 2,215 724,115 (63,548) 660,567 Risk Management 10 1,389,116 200,000 3,403,100 4,992,216 (448,918) 4,543,299 Harbor Operating

• 68,657,700

68,657,700 (5,700,368) 62,957,332 Special Projects*

• 534,355
• 534,355
• 534,355

Finance Subtotal 58 8,493,588 $ 910,083 $ 72,123,612 $ 81,527,284 $ (6,838,283) $ 74,689,001 $ Contracts & Purchasing 20 2,541,546 455,000 194,628 3,191,174

• 3,191,174

Human Resources 19 3,612,658 23,703 228,213 3,864,574

• 3,864,574

TOTAL 97 14,647,791 $ 1,388,786 $ 72,546,453 $ 88,583,031 $ (6,838,283) $ 81,744,748 $

Gross Expenses

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Finance & Administration Bureau Division Budgets

• Finance
• Salaries & Benefits: $8.5M
• Outside Services include: Various audit services ($350K), ERP IT consultants ($250K),
• ccupational health and safety ($120K), and financial advisors & services ($180K)
• Other Operating Expenses include global departmental expenses for:



City Services ($40.9M), which includes LAFD, Rec & Parks, and City Attorney



Utilities ($18.7M)



Provision for bad debts ($7.1M)



Insurance ($3.3M)

• Contracts and Purchasing
• Salaries & Benefits: $2.5M
• Outside Services include: Canon photocopier rental services ($235K)
• Other Operating Expenses include: City Services for Contract Compliance Certification

and Equal Employment Opportunity Compliance ($131K)

• Human Resources
• Salaries & Benefits: $3.6M



Includes HR salaries and benefits ($3.2M) as well as Port-wide tuition reimbursement ($290K) and other Port-wide employee benefits ($139K)

• Other Operating Expenses include: Departmental vanpool program ($160K)

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