According to the staff memo provided from their agenda packet:
RCW & POLICY REQUIREMENTS:
Budget requirements are set forth in RCW 53.35. The final Budget must be adopted and a certified copy filed with the Clerk of the County by the first Monday in December, which is December 5, 2016.
BACKGROUND:
This is the third presentation of the 2017 Capital Budget. The first presentation on August 29th was the introduction of the budget. The introduction presentation discussed the process of creating the budget and presented the first draft of the budget documents. The second presentation on September 6th focused on Capital Project Prioritization. This work session went project by project through all thirtyfour(34) projects shown in the budget.
ANALYSIS:
The attached “Draft Final” 2017 Capital Budget is shown in the format that it will appear in the final budget book.
ENVIRONMENTAL IMPACT:
N/A
FISCAL IMPACT:
The 2017 Capital Budget includes $9,376,000 from the Port’s Capital Improvement Fund and $771,910 from anticipated state and federal grants.
RECOMMENDED ACTION:
No action is recommended at this time. This is the last scheduled Capital Budget Presentation that should reflect the direction provided by the Commission at the two previous work sessions. Additional, input is still much appreciated from the Commission at this time before the budget is finalized in November.
CAPITAL BUDGET
The 2017 Capital Budget includes both a 1-year Capital Projects Budget and a 5-year Capital Improvement Plan. The Capital Projects Budget is funded by a combination of grants, property tax surplus, operating surplus and reserves. Surplus from property taxes is net of general tax levies in excess of debt service expenditures. Surplus from Port operations results from the cumulative excess of revenues over expenses. The operating surplus that is transferred from the General Fund to the Capital Improvement Fund is the amount that exceeds the target fund balance for the General Fund. Periodically, the Port will also issue debt to fund projects.
CAPITAL PROJECT PRIORITIZATION
The capital project prioritization spreadsheet breaks projects down into four (4) categories:
A. Regulatory Required Projects: These projects are required by a regulatory
agency. The Port must complete these projects to be within compliance.
B. Committed Projects: These projects are considered “committed” because of one
of the following reasons:
1. Receipt of outside grant funding. There are five (5) projects in the 2017
Capital Budget that have received grant funding.
2. Project is critical to accomplishing a long-term Strategic Goal.
3. Advisory Committee recommendation that has been accepted by staff and
commission to be included in the budget.
C. Critical Maintenance Projects: In order to prevent further damage or stay on
track with a multi-year programmatic maintenance schedule, these projects are
included in the 2017 Capital Budget. There are fifteen (15) projects within this
category and are prioritized based on need and not scored according to the
same four (4) criteria that is described for “Rated Projects”.
D. Rated Projects: Following regulatory, committed and critical maintenance are the
rated projects. All projects are rated but these projects will be prioritized based
on their total cumulative score. Staff ranked each project according to four (4)
criteria: 1) Job Creation / Retention, 2) Return on Investment, 3) Environmental
Benefit and 4) Strategic Planning Importance. These projects are ranked in
descending order based on their total cumulative score from the four categories.
There are five (5) projects that have a total score less than ten (10) and are
described as “low priority projects”. These projects may be deferred to 2018 due
to the significant project load included in the 2017 Capital Budget.
CAPITAL PROJECTS BUDGET
The total project cost must exceed $5,000 and the asset must have a minimum useful
live of five (5) years in order to be included in the Capital Budget. If it is maintenance
project, then the life of the asset must be extended by five (5) years.
On Sheets V-6 and V-9, the 2017 Capital Budget and the 5-Year Capital Improvement
Plan summarize the capital expenditures by department. Additionally, the investment in
new infrastructure is shown separate for maintaining existing infrastructure. Segregating
between maintenance and new helps staff determine if there is sufficient investment in
maintaining existing infrastructure. The Port has approximately $2,000,000 per year of
depreciation, which is used as an investment target for maintaining its assets.
5-YEAR CAPITAL IMPROVEMENT PLAN
The Five-Year Capital Improvement Plan identifies the most likely Capital Projects
through the year 2021. Projects shown in future years do not obligate or commit the
Port for funding. Each project will go through a more stringent prioritization analysis
prior to being accepted in a current year Capital Projects Budget.
See full Port agenda: http://wa-portofportangeles.civicplus.com/AgendaCenter/ViewFile/Agenda/09122016-183
