executive director’s report to the · 2016. 2. 5. · short-term $1,424,196 12.6% long-term...

EXECUTIVE DIRECTOR’S REPORT TO THE

PORT OF PORTLAND COMMISSION FOR JANUARY 2016

SAFETY REPORT

Calendar Year (CY) 2015 incident frequency resulted in 117 total incidents as compared to 94 total incidents for CY 2014. Claims frequency for CY 2015 resulted in 46 total claims compared to 27 total claims for CY 2014. The increased claims frequency in CY 2015 has precipitated a comprehensive re-evaluation of the Port of Portland’s safety program. Monthly Report of Injury Incidents

Administrative

There was one non-recordable incident:

• An employee slipped on ice and fell onto the right knee in the employee surface lot. Aviation

There were two non-recordable incidents reported:

• An employee sustained a cut to the left wrist while taking a combative subject into custody (incident occurred in November, reported in December).

• An employee sustained an abrasion to the left elbow while taking a combative subject into custody.

Marine There was one non-recordable incident reported:

• An employee sustained a contusion to the shin while retrieving a detached fence sign in the wind.

Navigation There were two incidents, one recordable and one non-recordable:

• An employee got a splinter while moving a hand along a wooden table.

• An employee sustained a contusion on a knee from a door latch while entering the electrical shop.

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AVIATION REPORT

Month/Month % change FYTD % change

December July-December

Passengers 8.9% 8.6%

Concessions Revenue 13.7% 10.0%

Rental Car Revenue 6.1% 2.1%

Parking Revenue 5.7% 8.6%

Passengers

Portland International Airport set a new passenger record in 2015, serving 16.85 million travelers. Two additional records were set with the largest level of seat capacity, and also the highest load factor at 85.2. The year benefitted from the addition of five international destinations: Guadalajara, Puerto Vallarta and San Jose del Cabo, Mexico; Frankfurt, Germany; and Reykjavik, Iceland. International passenger volumes grew by 21.3 percent to 602,586 travelers. Concessions Revenue

In this twelfth month of concessions transition, combined retail and food and beverage operations reported a 13.7 percent, or $148,000, rent increase on the month, against an 8.9 percent passenger increase. Rent performances from new operators of $237,000 offset last year’s rents from previous operators by 115.5 percent, or $127,000. Additionally, an 11 percent rent increase, or $9,000, from Made in Oregon, associated with the many seasonal sales promotions and storefront events, helped to generate this overall rent performance.

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Rental Car Revenue

Rental car operations reported a 6.1 percent, or $83,000, rent increase for the month compared to last year, against a passenger increase of 8.9 percent. This reflects all operators reporting revenues at Minimum Annual Guarantee (MAG), with the exception of Airport Van Rental and Payless, which have no MAG. The primary reason for the total increase over last year is Budget was invoiced $59,000 at percentage rent last year, versus $106,000 at MAG this year. Parking Revenue by Lot

December unadjusted public parking revenue was $4,793,522, a 5.7 percent increase over December 2014. Transactions were up 10.5 percent to 201,578.

Parking Revenue % Increase

Short-Term $1,424,196 12.6%

Long-Term $1,660,460 2.6%

Economy $1,616,671 2.7%

Valet $92,195 21.0%

Short-term parking revenue was up significantly over December 2014, due in part to increased transactions. During the holiday period (essentially the last two weeks), overflow parking was made available for both the long-term garage and the economy lot. Both products were at capacity and closed for brief periods. Environmental

The Port was recognized by The Climate Registry for the seventh year running for successfully measuring our carbon footprint according to the Registry’s best-in-class program, and then having it verified by a third party. Measuring our carbon footprint each year is a critical step toward refining our actions to reduce our energy usage, costs and carbon emissions.

CAPITAL GRANTS

Marine Staff submitted a reimbursement request to the Oregon Department of Transportation (ODOT) for the ConnectOregon III – Terminal 6 Crane Upgrades project in the amount of $53,752 (Agreement No. 26915). Staff submitted a reimbursement request to ODOT for the ConnectOregon IV – Terminal 6 Wharf Optimization project in the amount of $4,494 (Agreement No. 28695). Property Staff submitted a reimbursement request to the City of Troutdale for the Graham/Swigert Rd intergovernmental agreement in the amount of $550,000, covering the work periods of September 2015, October 2015 and partial month expenses for November 2015 (Agreement No. 2014-102).

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MARINE & INDUSTRIAL DEVELOPMENT REPORT

The figures in the table below show change relative to the prior year.

December 2015 Fiscal Year-to-Date

Total Tonnage -26.7% -37.5% Containers (TEU) -98.1% -97.9% Import Full Containers -100.0% -100.0% Export Full Containers -96.4% -96.0% Breakbulk -- -65.6% Autos 14.8% 13.1% Mineral Bulk -9.2% -20.3% Grain -31.8% -37.5%

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Marine Business Stevedoring Services of America announced that it will cease stevedoring service for steel rail at Terminal 2 effective February 1, 2016. Port staff are working with the customer to facilitate contact with other potential stevedoring companies to preserve the business at Terminal 2. Port staff are working with Kinder Morgan and American Natural Soda Ash Corporation on proposals for additional rail car storage at Terminal 4 to facilitate the unloading of additional trains per month in anticipation of higher volumes.

Industrial

The Troutdale Reynolds Industrial Park Phase II/III project team established an on-site stormwater water treatment system to reduce turbid discharges from the site caused by soil erosion triggered by record rains and flooding of the project site in December. The Regional Solutions Team gathered quickly to provide advice and support to resolve the regulatory matters. Port staff continues to work with Portland General Electric on implementing their master plan for distribution and transmission of power at Gresham Vista Business Park and the surrounding communities. The plan is 95 percent completed and Port staff will be negotiating the final easements during the next few months.

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REAL ESTATE TRANSACTIONS EXECUTED PURSUANT TO DELEGATED AUTHORITY Alaska Airlines, Inc. – Marketing Reimbursement Agreement

Location: PDX

Term: December 1, 2015 to February 18, 2017

Use: Agreement for the promotion of Alaska’s flight between PDX and Omaha, NE.

Peninsula Airways, Inc. – Construction Reimbursement Agreement

Location: PDX

Term: Effective September 11, 2015

Use: Agreement with Peninsula Airways that provides construction and reimbursement provisions to minimize cost and relocation costs to both parties during the terminal construction project.

Matheson Postal Services, Inc. – Operating Agreement

Location: PDX

Term: Effective November 1, 2015

Use: Agreement sets terms and allows Matheson to provide cargo handling services at PDX.

Prospect International Airport Services Corporation – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Prospect to provide cabin cleaning services at PDX.

Christopher D. Rogers – Permanent Waiver and Release of First Opportunity to Purchase Real Property and Construction Obligation

Location: Rivergate Industrial District


Use: The Port is permanently waiving its right of the first opportunity to purchase in connection John D. and Susan H. Miller’s sale to 8938 N. Harborgate LLC of certain property in Rivergate.

Bulkogi dba Bulkogi Fusion – First Amendment to Food Cart Permit

Location: PDX

Term: Effective December 4, 2015

Use: Amendment changes the effective date.

Vanderzanden Farms LLC – First Amendment to Agriculture Use Agreement

Location: Hillsboro Airport (HIO)

Term: Effective September 1, 2015

Use: Amends the rent section of the agreement.

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Intel Corporation – Third Amendment to Facility Lease

Location: HIO


Use: Amendment changes the premises and adds parking spaces.

DTG Operations, Inc. dba Thrifty Car Rental – Second Amendment to Rental Car Limited Service Kiosk Lease

Location: PDX

Term: December 11, 2015 to August 31, 2018

Use: Amendment extends the term of the lease.

The Hertz Corporation – First Amendment to Facility Lease

Location: PDX

Term: September 11, 2015 to August 31, 2018

Use: Amendment extends the term of the lease.

The Hertz Corporation – Second Amendment to Rental Car Concession Lease and Operating Agreement

Location: PDX

Term: December 11, 2015 to August 31, 2018

Use: Amendment extends the term and clarifies environmental responsibilities.

Honeywell International Inc. – Seventh Amendment to Ground Lease

Location: Portland International Center

Term: December 16, 2015 to March 31, 2016

Use: Amendment extends the term for an additional three months.

Patrick A. Weis and Austin Point Aviation, LLC – Consent to Assignment

Location: HIO


Use: Patrick Weis has stopped business operations and Austin Point Aviation, LLC desires to use the facility for non-commercial aircraft storage.

The Hertz Corporation – Fourth Amendment to Lease and Operating Agreement

Location: PDX

Term: December 30, 2015 to June 30, 2016

Use: Amendment extends the term of the lease, description of premises and basic rent.

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Capers Café and Catering Company dba Capers Cafe – Fifth Amendment to Retail Concession Lease

Location: PDX

Term: Effective January 1, 2016

Use: Amendment adds additional storage space.

PDX Logistics Center II, LLC, Capstone Partners LLC, and PDX Logistics Center I, LLC – Second Amendment to Permit and Right-of-Entry

Location: PDX

Term: January 1, 2016 to June 30, 2016

Use: Amendment extends the term for an additional six months to allow completion of work and adds a new permittee.

Beau Delicious! International – Consent to Assignment

Location: PDX

Term: Effective January 1, 2016

Use: The Port consents to an assignment in order to separate Café Yumm! from its parent company for accounting purposes.

Portland Container Repair Corporation – Permit and Right-of-Entry

Location: Roberts Lot, N. Lombard

Term: December 11, 2016 to May 10, 2016

Use: Portland Container Repair Corporation will use the premises at Roberts Lot to temporarily deliver, store and retrieve trailers.

Menzies Aviation (USA), Inc. – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Menzies to provide ground-handling services at PDX.

Troutdale Reynolds Industrial Park (TRIP)-Port of Portland-State of Oregon – Stipulated Supplemental Judgment to Consent Judgment

Location: TRIP


Use: Amends the Port’s Prospective Purchaser Agreement with the State to enlarge the Port’s defenses against liability for historical contamination and to simplify some of the Port’s ongoing obligations.

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Quantem Aviation Services, LLC – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Quantem to provide ground-handling services at PDX.

Portland Provisions, LLC – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Portland Provisions to provide luggage services at PDX.

Matrix Aviation Services, Inc. – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Matrix to provide passenger and ground handling services at PDX.

ISS Facility Services, Inc. – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows ISS to provide aircraft cabin cleaning services at PDX.

HAECO Americas Line Services, LLC – Operating Agreement

Location: PDX

Term: Effective October 1, 2015

Use: Agreement sets terms and allows HAECO to provide aircraft maintenance services at PDX.

CBM Systems, LLC – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows CBM to provide janitorial services at PDX.

Baggage Airline Guest Services, Inc. – Operating Agreement

Location: PDX


Use: Agreement sets terms and allows Baggage Airline Guest Services to provide skycap services at PDX.

PDX Current Year-to-Date Annual Year-to-Date Actual AmountsAdoptedBudget

ActualAmounts

%Variance

AdoptedBudget

CurrentYear

PriorYear

%Variance

Total Passengers (in millions) 8.8 9.2 3.8% 16.8 9.2 8.4 8.6%Landed Weight (Sig & Non Sig lbs. in millions) 5.3 5.5 4.0% 10.1 5.5 5.1 7.6%Operations N/A 113,356 N/A N/A 113,356 111,910 1.3%

Parking Transactions: Valet N/A 7,712 N/A N/A 7,712 5,907 30.6%Parking Transactions: Long-term (P2) Garage N/A 165,862 N/A N/A 165,862 167,979 -1.3%Parking Transactions: Garage N/A 756,600 N/A N/A 756,600 681,967 10.9%Parking Transactions: Economy Lot N/A 226,176 N/A N/A 226,176 203,117 11.4%Parking Transactions: Total N/A 1,156,350 N/A N/A 1,156,350 1,058,970 9.2%Cost per Enplaned Passenger (Rent & Landing Fees) 11.11$

AIRLINE COST CENTER (ALCC) (in millions)Airline Rent, Landing Fees & Other $56.7 $58.1 2.5% $111.2 $58.1 $50.9 14.1%Retail, Food & Beverage 7.7 7.9 2.6% 14.9 7.9 7.3 8.2%Other Non-Airline 2.0 2.2 10.0% 3.8 2.2 2.0 10.0%TOTAL REVENUE $66.4 $68.2 2.7% $129.9 $68.2 $60.2 13.3%

Personnel Services $17.2 $16.5 -4.1% $34.6 $16.5 $16.3 1.2%Materials, Services & Other 24.1 22.6 -6.2% 47.8 22.6 21.0 7.6%TOTAL EXPENSES $41.3 $39.1 -5.3% $82.4 $39.1 $37.3 4.8%

Debt Service & Coverage $23.8 $23.6 -0.8% $47.6 $23.6 $20.7 14.0%less: Interest Income 0.0 0.0 0.1 0.0 0.0 0.0%TOTAL NON-OPERATING $23.8 $23.6 -0.8% $47.7 $23.6 $20.7 14.0%

SURPLUS/(DEFICIT) $1.3 $5.5 323.1% ($0.2) $5.5 $2.2 150.0%

PORT COST CENTER (PCC) (in millions)Parking $29.5 $31.3 6.1% $59.1 $31.3 $28.8 8.7%Rental Cars 11.5 11.4 -0.9% 18.9 11.4 11.2 1.8%Other 10.2 11.0 7.8% 20.0 11.0 10.2 7.8%TOTAL REVENUE $51.2 $53.7 4.9% $98.0 $53.7 $50.2 7.0%

Personnel Services $7.0 $6.7 -4.3% $14.0 $6.7 $6.8 -1.5%Materials, Services & Other 12.9 12.6 -2.3% 24.9 12.6 11.8 6.8%TOTAL EXPENSES $19.9 $19.3 -3.0% $38.9 $19.3 $18.6 3.8%

Debt Service & Coverage $9.0 $8.9 -1.1% $17.9 $8.9 $8.9 0.0%less: Interest Income (0.3) (0.4) 33.3% (0.6) (0.4) (0.3) 33.3%TOTAL NON-OPERATING $8.7 $8.5 -2.3% $17.3 $8.5 $8.6 -1.2%

LESS: REVENUE SHARING $5.3 $5.3 0.0% $10.5 $5.3 $5.1 3.9%

INCOME $17.3 $20.6 19.1% $31.3 $20.6 $17.9 15.1%

General Aviation Current Year-to-Date Annual Year-to-Date Actual AmountsAdoptedBudget

ActualAmounts

%Variance

AdoptedBudget

Current Year Prior Year

%Variance

TOTAL REVENUE $1,696,981 $1,740,040 2.5% $3,434,800 $1,740,040 $1,798,661 -3.3%

TOTAL EXPENSE 1,882,112 2,380,379 26.5% 3,652,709 2,380,379 2,113,550 12.6%

OPERATING INCOME (EXCL. DEP) ($185,130) ($640,339) 245.9% ($217,908) ($640,339) ($314,889) 103.4%

AVIATION DIVISIONFINANCIAL REPORT

December 2015

COMMENTS

ACTIVITY

YTD passenger traffic exceeded the prior year by 8.6%, landed weight by 7.6%, and parking transactions by 9.2%.

AIRLINE COST CENTERS (ACC)

Airline Revenues are ~$1.4M higher than budget due to higher than expected landing activity (over ~$650K), common use rentals (over ~$410K), and leased terminal space (over ~$250K). Retail, Food & Beverage Revenues are ~$200K higher than budget as a result of higher than expected passenger activity. Other Non-Airline Revenues are ~$200K higher than budget as a result of higher Food & Beverage concessionaire utility reimbursements (over ~$140K), as well as Atlantic (over ~$110K), Boeing (over ~$35K), and other miscellaneous and concessions (over ~$80K) revenues.

PORT COST CENTERS (PCC)

Parking Revenues are ~$1.8M over budget due to higher passenger volume and higher than expected parking activity. Rental Car Revenues are lower than budget ~$100K due to lower than budgeted rental activity for National, Dollar, Budget, and Alamo. Other PCC revenues are ~$800K higher than budget as a result of higher than expected In-Flight Meal concessions (over ~$180K), Hotel revenues (over ~$170K), Transportation Network companies (over ~$140K), PIC revenues (over ~$90K), unbudgeted North Cargo revenues (over ~$70K), and PDX GA revenues (over ~$70K).

AIRLINE (ACC) AND PORT COST CENTERS (PCC)

Personnel Services are under budget by ~$1.0M (~$700K ACC, ~$300K PCC) due to police, maintenance, and admin vacancies.Materials and Services are under budget by ~$1.8M (~$1.5M ACC, ~$300K PCC).

• ACC Outside services is under ~$510K. This is due to unspent unified terminal study and passport control costs, lower terminal maintenance costs, lower common use system costs, and lower noise management costs.

• Custodial services is down ~$130K. ACC also received terminal concessionaire marketing reimbursement credits of ~$75K.

Accounts impacting both ACC and PCC have variances related to timing with the largest identified below:

• Outside services (under ~$370K; including Maintenance contracts, lower bond financing fees, HSS FIS support)• Consulting expenses (under ~$340K; including a parking study, Air Trans Center Market Study, Technology Master Plan, CUP Master Plan and

Geotechnical Analysis)• Environmental expenses (under ~$280K)• Inter-departmental transfers (under ~$270K)

• Travel and management expenses (under ~$260K)

These savings are offset by the following areas:

• Insurance (over ~$340K)• Electric power (over ~$180K)

GENERAL AVIATION

Revenues are over budget by ~$40K, primarily due to higher than expected rental car revenues (over ~$30K), landing revenues at HIO (over ~$10K).

Expenses are over budget by ~$500K, primarily due to a $470K write-off for Troutdale's Runway 7-25 non-capitalized costs, as well as water and sewer costs (over ~$50K).

MARINE Annual

Adopted Budget

Actual Amounts

Variance Adopted Budget

CurrentYear

PriorYear

Variance

VOLUMESAutos (Units) 130,296 145,005 11.3% 267,000 145,005 128,238 13.1%

Breakbulk (Short Tons) 54,674 51,150 (6.4%) 110,232 51,150 107,034 (52.2%)Containers (TEUs) 49,538 1,740 (96.5%) 94,000 1,740 81,008 (97.9%)Grain Bulk (Short Tons) 2,213,442 1,325,114 (40.1%) 4,409,247 1,325,114 2,118,498 (37.5%)

Mineral Bulk (Short Tons) 2,547,688 2,099,217 (17.6%) 5,389,200 2,099,217 2,613,665 (19.7%)

All dollars in millions; OIBD = Operating Income Before Depreciation

TOTAL MARINEOperating Revenues $15.4 $13.9 ($1.5) $32.6 $13.9 $16.8 ($2.9)Operating Expenses 15.4 10.6 (4.8) 29.1 10.6 14.2 (3.6)

OIBD $0.0 $3.3 $3.3 $3.5 $3.3 $2.6 $0.7Depreciation 5.1 4.9 (0.2) 10.2 4.9 5.3 (0.4)OPERATING INCOME/(LOSS) ($5.1) ($1.6) $3.5 ($6.7) ($1.6) ($2.7) $1.1

AUTOSOperating Revenues $4.0 $4.6 $0.6 $8.1 $4.6 $3.8 $0.8Operating Expenses 0.7 0.7 0.0 1.2 0.7 0.7 0.0

OIBD $3.3 $3.9 $0.6 $6.9 $3.9 $3.1 $0.8

BREAKBULKOperating Revenues $0.8 $0.8 $0.0 $1.6 $0.8 $1.0 ($0.2)Operating Expenses 0.9 1.0 0.1 1.5 1.0 0.7 0.3

OIBD ($0.1) ($0.2) ($0.1) $0.1 ($0.2) $0.3 ($0.5)

CONTAINERSOperating Revenues $4.4 $3.3 ($1.1) $10.3 $3.3 $5.6 ($2.3)Operating Expenses 5.5 2.1 (3.4) 9.4 2.1 5.3 (3.2)

OIBD ($1.1) $1.2 $2.3 $0.9 $1.2 $0.3 $0.9

GRAIN BULKOperating Revenues $1.4 $1.1 ($0.3) $2.9 $1.1 $1.5 ($0.4)Operating Expenses 0.1 0.0 (0.1) 0.1 0.0 0.0 0.0

OIBD $1.3 $1.1 ($0.2) $2.8 $1.1 $1.5 ($0.4)

MINERAL BULKOperating Revenues $3.2 $2.7 ($0.5) $6.5 $2.7 $3.1 ($0.4)Operating Expenses 0.7 0.4 (0.3) 1.6 0.4 0.7 (0.3)

OIBD $2.5 $2.3 ($0.2) $4.9 $2.3 $2.4 ($0.1)

MARINE SUPPORTOperating Revenues $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Operating Expenses 5.7 5.1 (0.6) 11.2 5.1 5.7 (0.6)

OIBD ($5.7) ($5.1) $0.6 ($11.2) ($5.1) ($5.7) $0.6

MARINE PROPERTY MGMTOperating Revenues $1.6 $1.5 ($0.1) $3.1 $1.5 $1.7 ($0.2)Operating Expenses 1.7 1.3 (0.4) 2.9 1.3 1.1 0.2OIBD ($0.1) $0.2 $0.3 $0.2 $0.2 $0.6 ($0.4)

MARINE ENVIRONMENTAL (T4)Operating Revenues $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Operating Expenses 0.0 0.0 0.0 1.2 0.0 0.0 0.0

OIBD $0.0 $0.0 $0.0 ($1.2) $0.0 $0.0 $0.0

Note: Totals may not add due to rounding

Current Year-to-Date Year-to-Date Actual Amounts

GENERAL FUNDFINANCIAL REPORT

December 2015

COMMENTS

Operating revenues are $1.5M less than the Adopted Budget due to lower ICTSI maintenance services reimbursement revenues; no potash activity at T-5 during the installation of Portland Bulk's new ship loader and lower volumes in November due to the weather; and lower than anticipated grain volumes. Operating expenses are $4.8M under budget, with the largest variances listed below.

• Other expenses are $2.0M under budget due to only $24K in actuals for the T-6 carrier incentive program (budget = $2M).• Contract, Professional & Consulting Services are almost $1.0M under budget due to Berth 501 & 503 grading projects not moving forward

this year based on hydrographic survey results ($200K), T-2 and Berth 401 dredging project savings as a result of in-water disposal and lower than anticipated material (~$89K), and timing of master planning and environmental expenses ($460K).

• Longshore labor expenses are $713K under budget due to lower than anticipated mechanical maintenance activity at T-6. • Personnel services are $549K under budget primarily due to lower than budgeted maintenance overtime and vacant positions as a result

of lower than anticipated T6 maintenance services.• Materials & supplies expenses are $398K under budget primarily due to lower than anticipated materials for T-6 cranes.• Travel and management expenses are $155K under budget.

Business Line Summaries

Autos – YTD auto volumes are 11% higher than forecasted and 13% higher than last year due to Toyota and Ford export volumes.

Breakbulk – YTD tonnage is 6% lower than forecasted and 52% lower than last year due to the drop in fuel prices, which has decreased demand for barite ore (used in drilling oil wells).

Containers – TEUs are down almost 100% from the forecast and last year now that Westwood is the only carrier still calling Portland amid the labor issues at T-6.

Grain Bulk – YTD grain volumes are 40% less than forecasted and 38% lower than last year. Demand is currently very low. In addition, a very strong dollar means buyers can purchase grain elsewhere at a lower relative price.

Mineral Bulk – Overall, volumes are down 18% from the forecast and 20% from last year due to no potash vessel calls during the first two months of the fiscal year (installation of Portland Bulk's new shiploader) and only three vessel calls in November due to the bad weather.

INDUSTRIAL DEVELOPMENT Annual(Includes Land Use Planning) Adopted

Budget Actual

Amounts Variance

Adopted Budget

CurrentYear

PriorYear

Variance

Operating Revenues $2.1 $2.2 $0.1 $3.5 $2.2 $2.0 $0.2Land Sales 24.6 9.5 (15.1) 24.6 9.5 0.0 9.5Operating Expenses 5.1 3.7 (1.4) 9.4 3.7 3.3 0.4Cost of Property Sold 20.2 6.5 (13.7) 20.2 6.5 0.0 6.5OIBD (Op Income Before Depreciation) $1.4 $1.5 $0.1 ($1.5) $1.5 ($1.3) $2.8Depreciation 0.4 0.4 0.0 0.8 0.4 0.4 0.0OPERATING INCOME/(LOSS) $1.0 $1.1 $0.1 ($2.3) $1.1 ($1.7) $2.8

NAVIGATION Annual

VOLUMES Adopted Budget

Actual Amounts

Variance Adopted Budget

CurrentYear

PriorYear

Variance

Dredging Days 105 95 (9.5%) 120 95 107 (11.2%)Cubic Yards Dredged 2,116,921 2,116,921 2,367,389 (10.6%)

Operating Revenues $8.0 $8.2 $0.2 $13.6 $8.2 $9.7 ($1.5)Operating Expenses 7.1 6.9 (0.2) 11.8 6.9 8.7 (1.8)OIBD (Op Income Before Depreciation) $0.9 $1.3 $0.4 $1.8 $1.3 $1.0 $0.3Depreciation 1.1 1.2 0.1 2.2 1.2 0.9 0.3OPERATING INCOME/(LOSS) ($0.2) $0.1 $0.3 ($0.4) $0.1 $0.1 $0.0

Note: Totals may not add due to rounding.

COMMENTS

GENERAL FUNDFINANCIAL REPORT

December 2015

Year-to-Date Actual Amounts

Current Year-to-Date Year-to-Date Actual Amounts

Current Year-to-Date

Industrial Development

Operating revenues are slightly higher than the Adopted Budget due to Troutdale Energy Center option fees and better than anticipated common area maintenance fees. Including land sales, revenues are $15.1M under budget due to the timing of the sales of TRIP Lots 1, 11 and 12, which were all expected to close before November. These sales are now expected to occur in the second half of the fiscal year. Operating expenses are $1.4M under budget, with the largest variances listed below.

• Contracts, Professional & Consulting Services are $750K under budget due to the timing of Gresham Vista traffic study and mitigation expenses ($250K), Hayden Island environmental expenses ($100K), expenses related to TRIP land sales ($171K), and Government Island management fees ($50K).

• Personnel services are $174K under budget due to position vacancies.• Interdepartmental charges are $268K under budget due to lower than anticipated services received from Marine and Engineering.

Navigation

Operating revenues are $158K higher than budgeted due to repower loan reimbursements from the Corps of Engineers that were not assumed in the budget. Operating expenses before depreciation are $239K under budget. There were some signficant materials and supplies purchases in the first quarter ($526K over budget YTD), but the timing of various outside services expenses and lower fuel prices ($921K under budget YTD) help offset these higher expenses.

Contracts Over $50,000 Pursuant to Delegated Authority

Monthly Report for January 2016 (December Activity)

TitleRequestor

DepartmentVendor Name

P.O. Amount

Obtain consulting services for the marketing of Terminal 6.

Commercial Development Administration

Lindsay Hart LLP

$75,000

Purchase replacement computer equipment.

Information Technology

Dell Marketing LP

$102,184

Purchase parts for airfield runway lighting circuits.

Engineering Project Development

Airside Solutions, Inc.

$232,607

Obtain development permits for the Terminal Balancing Project.


City of Portland $257,103

Obtain construction services for the PDX Post Security Concessions Phase 3 Utilities and Grease Separation Project.


Slayden Construction Group, Inc.

$15,170,000

New Purchases

APPROVAL LIMITS (Administrative Policy 7.2.3)

All expenditures require management approval:

BUDGET Approval by managers in an amount delegated by Directors $ 0 - $ 25,000

APPROVAL Approval by Directors $ 25,001 - $250,000

Approval by Executive Director $ 250,001 +

Contracting authority is limited to the following:

CONTRACTING Directors Up to $ 10,000

APPROVAL Buyers Up to $ 50,000

Manager of Contracts & Procurement Up to $ 250,000*

Executive Director Up to $ 500,000*And any amount approved by Commission

TitleRequestor


Original Amount

Previous Changes to

Contract

Current Change to Contract

New Contract Total

Change order Nos. 18, 19 and 20 for additional construction services for the Replacement of PDX Access Control System Project.


Hoffman Construction Company of Oregon

$1,993,816 $40,513,778 $110,516 $42,618,110

Amendment #1 to obtain additional pre-construction services related to the PDX Terminal Balancing Concourse E Extension Project.


Skanska USA Building, Inc.

$489,000 $486,572 $975,572

TitleRequestor


Original Task Order Amount

Previous Changes to Task

Order

Current Change to Task Order

New Task Order Total

Total Contract Activity -

All Task Orders

Task order against contract No. 952 to obtain grease waste collection and disposal.

Airport Properties Terra Hydr, Inc. $55,000 $55,000 $120,998

Task order against contract No. 660 to purchase low-sulfur diesel fuel for the Dredge Oregon .

Navigation Rainier Petroleum Corporation

$58,502 $58,502 $5,585,064

Task order against contract No. 745 to purchase additional printers for the PDX terminal.

Information Technology

ARINC Incorporated

$65,589 $65,589 $1,512,441

Amendment No. 8 to task order against contract No. 300 to obtain janitorial services at Hillsboro Airport for 2016.

Airport Operations Portland Habilitation Center, Inc.

$61,500 $402,302 $71,677 $535,479 $6,432,047

Change Orders and Amendments to Project-Specific Contracts

Contracts in this category are initially awarded with a specific work scope and an identified not-to-exceed project total.

New Task Orders and Changes to Task Orders Against Non-Project Specific Contracts

Items in this category are issued against contracts that were initially awarded with no specific work scope or product quantity identified (e.g., "requirements" or "on-call" contracts). These contracts establish pricing or rates for products or work that may be needed over a stated term. Estimated quantities may be identified, but no guarantee of actual contract compensation or work is made. Contract durations may be short-term or for multiple years with optional renewal/extension terms.

Task order against contract No. 842 to obtain financial planning services for the Capital Improvement Program.

Financial Planning & Analysis

Trillion Aviation $76,000 $76,000 $278,747

Task order against contract No. 767 to obtain design and management services related to the Concourse B and D Loading Bridge Replacement Project.


HNTB Corporation

$242,661 $242,661 $1,155,596

*LIBOR: London Inter Bank Offer Rate. The interest rate that banks charge each other for loans.

PORT OF PORTLAND Investment Report

Quarter Ending December 2015 YIELD COMPARISONS December

Fiscal

Year-to-Date 12 Month Moving Average 12/31/15 12/31/14

Port unrestricted portfolio 0.96% 0.96% 0.92% 0.77%

Series 22 construction funds 0.53% 0.45% 0.41% 0.30%

Local Government Investment Pool (LGIP)

0.59%

0.55%

0.53%

0.54%

90 day LIBOR* 0.61% 0.39% 0.33% 0.23%

PORTFOLIO COMPOSITION

Port of Portland Investment Portfolio

Unrestricted investments $391,093,000

Unrestricted LGIP 34,986,153

Series 22 construction investments 57,500,000

Series 22 construction LGIP 365,783

Total portfolio $483,944,936

Maturity Schedule Actual Portfolio Policy Minimum

1 year or less $189,293,936 39% n/a

2 years and under $340,802,936 70% 55%

3 years and under $471,444,936 97% 75%

5 years and under $483,944,936 100% 100%

Interest Earnings Unrestricted

Portfolio Unrestricted

LGIP Total

Unrestricted

October 2015 $327,975 $14,614 $342,589

November 2015 $302,206 $13,122 $315,328

December 2015 $317,782 $18,175 $335,957

Quarter Total $947,963 $45,911 $993,874 COMMENTS In the last quarter, the composition of the portfolio had minor changes in maturity distribution and diversification. In December, the Federal Open Market Committee (FOMC) unanimously voted to raise the Federal Funds target rate by 0.25%. This much-anticipated increase was the first change in seven years and the first rate increase in nearly ten years. The year 2015 ended with a shortage of liquidity in the fixed income markets, which is expected to continue through 2016. This will likely keep spreads tight and yields low overall. Analysts predict that the FOMC will continue to raise rates in the coming year to a range of 1.00-1.25%. To gain yield, fixed income laddered portfolios, such as the Port’s, may find it advantageous to take advantage of longer-duration investments, as permitted, by investment policies. In the next quarter, staff will be looking for investments in the three- to- five-year maturity range.

Note: Investment portfolio detail available upon request.

Investments Policy Limits: U.S. Treasuries 100%; U.S. Agencies 100%; Corp. Indebtedness 35%; LGIP $47,012,858 maximum

*Port yield shown excludes amounts on deposit in LGIP and restricted cash balances.

66%

3%

22%

8%

1%Port of Portland

Portfolio Diversification

Unrestricted Funds as of 12/31/15

AGENCIES

TREASURIES

CORPORATE INDEBTEDNESS

LGIP

MUNICIPAL OBLIGATIONS

Jan-

15

Feb-

15

Mar-

15

Apr-

15

May-

15

Jun-

15Jul-15

Aug-

15

Sep-

15

Oct-

15

Nov-

15

Dec-

15

Port* 0.78% 0.79% 0.80% 0.80% 0.81% 0.83% 0.84% 0.86% 0.88% 0.90% 0.91% 0.92%

LGIP 0.53% 0.53% 0.53% 0.52% 0.52% 0.52% 0.52% 0.52% 0.52% 0.52% 0.52% 0.53%

LIBOR 0.24% 0.24% 0.24% 0.25% 0.25% 0.25% 0.26% 0.26% 0.27% 0.28% 0.30% 0.33%

0.00%

0.10%0.20%

0.30%0.40%0.50%

0.60%0.70%0.80%

0.90%1.00%

Port of Portland

12 Month Moving Average Yield Comparison

Port*

LGIP

LIBOR

PORT OF PORTLAND

Allocation of non-specific cash and investments available*

As of December 31, 2015, the Port had $189 million in funds available for the General Fund and $244 million available for Portland International Airport.

Non-specific balances reflect neither restricted monies such as construction bond proceeds from the general investment pool, nor do they reflect debt service funds held by the trustees.

*Allocation is an estimate generated based on accounting balances at December 31, 2015 and includes investments, LGIP and cash accounts.

44%56% General Fund

PDX

executive director’s report to the · 2016. 2. 5. · short-term $1,424,196 12.6% long-term...

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