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 1
Five Year Financial Plan Schedule Informational Presentation, December 13 th Request for Approval, January 10 th 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 2
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 3
Port Financial Overview Base – High – Low Base Case Projected Surplus/Deficits ($ millions) Moderate revenue growth plus Port initiatives Citywide personnel inflation assumption $15.0 CPI for most non-personnel expenses $10.0 Applied staff knowledge Low Case $5.0 Economic downturn slows revenue growth $- Reduced percentage rents 2018 2019 2020 2021 2022 Limited new leasing $(5.0) High Case $(10.0) Labor negotiations ease salary inflation Maximize revenue growth $(15.0) 4
Base Case: Balancing Uses and Sources $150.0 $100.0 Operating Surplus $50.0 Base Expenses $- Port Initiatives Base Revenues $(50.0) Capital Spending $(100.0) $(150.0) 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. 5
Base Case: Operating Revenue Growth SWL 322-1 & $27.7 Million Operating $15.3 Million (55%) 324 19th/Illinois Revenue Growth Growth from Development Parking Lot Over Five Years 4% 4% New Initiatives NPS Alcatraz Ferry 3% New Pier Baseline Leases & Growth New Interim 45% Initiatives Parking Cargo - Pasha 55% 36% 26% Backlands 27% 6
Base Case: Expenditure Growth Personnel growth Personnel, 34% of total growth due to health and pension Salaries 11% Non-personnel costs 3% average annual growth by CPI Personnel, Designation to capital Designation Benefits to Capital Increases reflect growth in operating revenues to 23% 47% meet Capital Policy All designated funds become Fund Balance to Non- support capital investments in subsequent years Personnel 10% Work Orders & Fire Boat 9% 7
Low Case: Economic Slowdown Projected Budget Deficits Operating deficits projected ($ millions) Reduced Percentage Rents $140.00 No new leasing in Northern Historic $130.00 Waterfront Capital Policy preserves capital investments $120.00 $15.6 million average Capital Budget $110.00 Requires tradeoffs in Operating Budget $100.00 $90.00 2018 2019 2020 2021 2022 Expenses Revenue 8
High Case: Maximizing Potential Projected Budget Surpluses Reduced Spending ($ millions) Labor negotiations lower personnel costs $140.00 Enhanced Revenues $130.00 New leasing in Northern Historic Waterfront $120.00 Maximize potential in Maritime operations $110.00 Pasha Automotive expansion to Pier 96 Cruise parking and special events $100.00 Ship Yard percentage rents All development projects are approved $90.00 2018 2019 2020 2021 2022 Expenses Revenue 9
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) 10
Thank you 11
Recommend
More recommend
