PORT OF SEATTLE 2017 STATUTORY BUDGET

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1 PORT OF SEATTLE 2017 STATUTORY BUDGET A. INTRODUCTION The "statutory" budget as defined in RCW is to portray "the estimated expenditures and the anticipated available funds from which all expenditures are to be paid." As a cash budget, the Statutory Budget establishes the need for the tax levy and sets upper limits on expenditures, and is not used as an operating budget. The function of controlling and managing the operations of the Port is accomplished with the Operating Budget, which is provided in Sections IV through VII. The 2017 Preliminary will be provided to the Port Commissioners and made available to the general public as required by law (RCW and RCW ). Notice of the Public Hearing, with an announcement that copies of the preliminary budget are available for distribution to any interested persons, was published on October 24 th, 2016, in the DAILY JOURNAL OF COMMERCE, as required by law (RCW and RCW ). The final statutory budget was filed with the King County Council on December 2 nd, 2016, as allowed by RCW B. STATUTORY BUDGET HIGHLIGHTS 1. Tax Levy For 2017, the tax levy amount is assumed to be $72,000,000. The following is a comparison of the tax levy detail between 2016 and 2017: Budget 2016 Budget 2017 Levy Levy Levy Levy Rate Amount Rate Amount For General Obligation Bonds (1) $ $ 34,524,417 $ $ 34,530,286 For General Purposes ,475, ,469,715 Total $ $ 72,000,000 $ $ 72,000,000 (1) Reflects existing G.O. bond debt service only. The Port plans to issue up to $150 million of new G.O. bonds in Tax Levy Rate LEVY.XLSX The tax levy rate is a product of dividing the tax levy dollars by the assessed valuation of personal and real properties within the Port District. Therefore, if assessed valuation increases at a greater rate than the increase in the tax levy amount the Port assesses, the tax millage rate would go down even though the Port's levy dollars may have increased. The exact levy rate is determined by the County Assessor after all taxing agencies have requested their levy dollars, and the assessed valuation dollars are certified. The 2016 preliminary assessed valuation as of October 31, 2016 is $468,699,128,038 after omitted assessments, which are not included in the Port s levy calculation. (The 2016 assessed valuation is used for 2017 tax collection.) This is an increase from the final assessed valuation per the King County Annual Report for 2016 tax collection, which was $424,679,740,443 after omitted assessment See section VII, Tax Levy. XI-1

2 C. RESOLUTION RESOLUTION NO. 3726, As Amended A RESOLUTION of the Port Commission of the Port of Seattle adopting the final budget of the Port of Seattle for the year 2017; making, determining, and deciding the amount of taxes to be levied upon the current assessment roll; providing payment of bond redemptions and interest, cost of future capital improvements and acquisitions, and for such general purposes allowed by law which the Port deems necessary; and directing the King County Council as to the specific sums to be levied on all of the assessed property of the Port of Seattle District in the Year WHEREAS, the Port of Seattle Commission, on the 20 th day of October, 2016, prepared the preliminary budget of the Port of Seattle for the year 2017 and provided for the publication of Notice of Budget Hearing on the adoption of said budget, to be heard on the 8 th day of November, 2016, when taxpayers might appear and present objections to said preliminary budget; and WHEREAS, a public hearing on said preliminary budget was held in the office of the Port Commission, pursuant to notice duly given, in the City of Seattle, County of King, State of Washington, on the 8 th of November 2016, at 1 p.m.; and WHEREAS, all parties present were afforded a full opportunity to present objections to the preliminary budget, and the Port Commission being duly advised in the premises; and WHEREAS, the King County Assessor has notified the Commissioners of the Port of Seattle on the 31 st day of October, 2016, that the regular levy assessed value of the property lying within the boundaries of said district for the year 2016 is $468,699,128,038 (after omitted assessments); and WHEREAS, the King County Assessor has notified the Commissioners of the Port of Seattle on the 31 st day of October, 2016, that the maximum allowable levy is $98,993,903 including $185,986 levy for prior year refunds and the Port intends to retain this levy capacity. NOW, THEREFORE, BE IT RESOLVED, by the Port Commission of the Port of Seattle that the preliminary budget of the Port of Seattle for the year 2017, as presented at the aforementioned hearing, is hereby adopted as the final budget of the Port of Seattle for the Year 2017; and XI-2

3 BE IT FURTHER RESOLVED, that the amount of taxes to be levied by the Port of Seattle on the current assessment rolls to provide for payment of bond redemption and interest on the Port of Seattle General Obligation Bonds, for future expenditures for acquisitions and capital improvements and for such general purposes allowed by law which the Port deems necessary be set and deposited is $72,000,000; and BE IT FURTHER RESOLVED, that the King County Council, State of Washington, be notified that the specific sum herein mentioned being a total of $72,000,000 is necessary to be raised by taxation to meet the payment of bond redemption and interest on Port of Seattle General Obligation Bonds, of future expenditures for acquisitions and capital improvements, and of costs for such general purposes allowed by law which the Port deems necessary, as set forth for the period January 1, 2017 and thereafter; that said King County Council be respectfully requested to make a levy in said amount for the aforesaid purposes; and BE IT FURTHER RESOLVED, that the above is a true and complete listing of levies for said District for collection in the year 2016 and they are within the maximums established by law. ADOPTED by the Port Commission of the Port of Seattle at a duly noticed meeting held this 22 nd day of November, 2016, and duly authenticated in open session by the signatures of the Commissioners voting in favor thereof and the seal of the Commission. XI-3

4 D. TAX LEVY CALCULATION SHEET TABLE XI-1: TAX LEVY CALCULATION SHEET TAXING DISTRICT: Port of Seattle The following determination of your regular levy limit for 2017 property taxes is provided by the King County Assessor pursuant to RCW (Note 1) Using Limit Factor For District Using Implicit Price Deflator Calculation of Limit Factor Levy 96,483,080 Levy basis for calculation: (2016 Limit Factor) (Note 2) 96,483, x Limit Factor ,447,911 = Levy 97,402,564 8,289,213,412 Local new construction 8,289,213, Increase in utility value (Note 3) 0 8,289,213,412 = Total new construction 8,289,213, x Last year s regular levy rate ,405,353 = New construction levy 1,405,353 98,853,264 Total Limit Factor Levy 98,807,917 Annexation Levy 0 Omitted assessment levy (Note 4) 0 98,853,264 Total Limit Factor Levy + new lid lifts 98,807, ,699,128,038 Regular levy assessed value less annexations 468,699,128, = Annexation rate (cannot exceed statutory maximum rate) x Annexation assessed value 0 0 = Annexation Levy 0 Lid lifts, Refunds and Total 0 + First year lid lifts 0 98,853,264 + Limit Factor Levy 98,807,917 98,853,264 = Total RCW levy 98,807, ,986 + Relevy for prior year refunds (Note 5) 185,986 99,039,250 = Total RCW levy + refunds 98,993,903 Levy Correction: Year of Error (+or-) 99,039,250 ALLOWABLE LEVY (Note 6) 98,993,903 Increase Information (Note 7) Levy rate based on allowable levy ,000,000 Last year s ACTUAL regular levy 72,000,000 25,447,911 Dollar increase over last year other than N/C Annex 25,402, % Percent increase over last year other than N/C Annex 35.28% Calculation of statutory levy Regular levy assessed value (Note 8) 468,699,128,038 x Maximum statutory rate = Maximum statutory levy 210,914,608 +Omitted assessments levy 0 =Maximum statutory levy 210,914,608 Limit factor needed for statutory levy Not usable ALL YEARS SHOWN ON THIS FORM ARE THE YEARS IN WHICH THE TAX IS PAYABLE. Please read carefully the notes on the next page. XI-4

5 Notes: 1) Rates for fire districts and the library district are estimated at the time this worksheet is produced. Fire district and library district rates affect the maximum allowable rate for cities annexed to them. These rates will change, mainly in response to the actual levy requests from the fire and library districts. Hence, affected cities may have a higher or lower allowable levy rate than is shown here when final levy rates are calculated. 2) This figure shows the maximum allowable levy, which may differ from any actual prior levy if a district has levied less than its maximum in prior years. The maximum allowable levy excludes any allowable refund levy if the maximum was based on a limit factor. The maximum allowable levy excludes omitted assessments if the maximum was determined by your district s statutory rate limit. If your district passed a limit factor ordinance in the year indicated, that limit factor would help determine the highest allowable levy. However, if the statutory rate limit was more restrictive than your stated limit factor, the statutory rate limit is controlling. 3) Any increase in value in state-assessed property is considered to be new construction value for purposes of calculating the respective limits. State-assessed property is property belonging to inter-county utility and transportation companies (telephone, railroad, airline companies and the like). 4) An omitted assessment is property value that should have been included on a prior year s roll but will be included on the tax roll for which this worksheet has been prepared. Omits are assessed and taxed at the rate in effect for the year omitted (RCW ). Omitted assessments tax is deducted from the levy maximum before calculating the levy rate for current assessments and added back in as a current year s receivable. 5) Administrative refunds under RCW were removed from the levy lid by the 1981 legislature. 6) A district is entitled to the lesser of the maximum levies determined by application of the limit under RCW and the statutory rate limit. Levies may be subject to further proration if aggregate rate limits set in Article VII of the state constitution and in RCW are exceeded. 7) This section is provided for your information, and to assist in preparing any Increase Ordinance that may be required by RCW The increase information compares the allowable levy for the next tax year with your ACTUAL levy being collected this year. The actual levy excludes any refund levy and expired temporary lid lifts, if applicable. New construction, annexation and refund levies, as well as temporary lid lifts in their initial year, are subtracted from this year s allowable levy before the comparison is made. 8) Assessed valuations shown are subject to change from error corrections and appeal board decisions recorded between the date of this worksheet and final levy rate determination. XI-5

6 E. FORECASTED CASH FLOW SUMMARY TABLE XI-2: FORECASTED CASH FLOW SUMMARY Percent ($ in 000's) 2017 of Total Beginning balance of cash & investments $ 1,005,294 SOURCES OF CASH Operating Revenues 620, % Interest Receipts 10, % Proceeds from Bond Issues 675, % Grants and Capital Contributions 23, % Tax Levy 72, % Passenger Facility Charges 89, % Rental Car Customer Facility Charges 26, % Fuel Hydrant Receipts 7, % Other Receipts 3, % Total 1,527, % Anticipated available funds 2,532,657 USES OF CASH Expenses from Operations: Total Operating Expenses 384, % Debt Service: Interest Payments 150, % Bond Redemptions 138, % Total Debt Service 289, % Other Expenses 8, % Public Expense 2, % Capital Expenditures 651, % Total 1,336, % Ending balance of cash & investments $ 1,196,143 Increase (decrease) of cash during year $ 190,849 cashflow.xlsx XI-6

7 FIGURE XI-1: SOURCES OF CASH ($ in 000 s) Grants and Capital Contributions 1.5% Tax Levy 4.7% Fuel Hydrant 5.8% Receipts Rental Car Customer 0.5% Facility Charges Other Receipts 1.7% 0.2% Passenger Facility Charges Operating Revenues 40.6% Proceeds from Bond Issues 44.2% Total Sources : $1,527,363 Interest Receipts 0.7% FIGURE XI-2: USES OF CASH ($ in 000 s) Capital Expenditures 48.8% Total Operating Expenses 28.8% Interest Payments 11.3% Bond Redemptions 10.4% Public Expense 0.2% Other Expenses 0.6% Total Uses : $1,336,514 XI-7

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