DELAWARE RIVER PORT AUTHORITY 2009 Budget Presentation December 10, 2008
Overview of Presentation Major Financial Issues/Trends Major Financial Goals/Strategies Overview of 2009 Proposed Capital Program Overview of 2009 Proposed Operating Budgets Major Revenue Assumptions Major Expense Assumptions 2
Major Financial Issues/Trends Capital Budget Bond project funds from the 1999 Revenue Bond issue were exhausted in October 2008. DRPA began using General Funds as of end of October 2008. DRPA will reimburse its General Fund for any 2008-2009 reimbursable capital expenditures with proceeds from future revenue bond issue, backed by revenues from toll increase Board authorization for Reimbursement of Expenditures expected at December Board meeting Funding for new capital program will be via a series of bond issues to minimize debt service costs and pay-as-you-go for short-lived capital assets Operating Budgets Significant increase in DRPA and PATCO revenues attributable to new toll and fare schedules approved by Board in August 2008 (implemented 9/14/08). Operating budget growth must be managed to provide sufficient coverage for capital program PATCO subsidy expected to decrease by $0.4 million Debt service- reflects debt service for both fixed and synthetic fixed debt (variable rate debt plus swap) and anticipated costs of new bond issue / principal repayment in 2009 ($13.5m / $11.1m) DRPA expects two large swaptions to be exercised in September 2009 approx. $511 million (notional amount) General Fund annual contribution increasing due to toll / fare increase GASB 45 $2.8 million contribution 3
2009 Operating Budget Major Financial Goals/Strategies New revenue bond issue to fund first 2 years of capital budget New issue expected 2 nd Qtr. 2009 dependent on financial markets. Continued maintenance/repair of DRPA facilities Cost containment of personnel and non-personnel expenditures DRPA / PATCO budgeted increase of 4 positions Finalize swap management policy to provide more flexibility in debt portfolio Maintain or Improve Investment Grade Ratings Revenue Bonds: A3 (Moody s), BBB+ (S&P) PDP Bonds: Baa3 (Moody s), BBB- (S&P) 4
Overview of Proposed Capital Program 2009 Capital Budget Funding Proposed Total Net Capital Budget (2009 fiscal year) $104.0 Million 2009 Capital Budget Total Cost to Complete (Includes years 2009 and beyond) $434.3 Million Projected Capital Program Requirements (Includes Federal/State funding) 2009 through 2013 (and beyond) $1.042 Billion 5
2009 Proposed Capital Program DRPA Share Estimated Project Cost ($000's)* 2009 2010 2011 2012 2013/Later Total Benjamin Franklin Bridge $10,599 $11,875 $13,160 $5,200 $26,000 $66,834 Walt Whitman Bridge 12,550 43,100 41,800 41,350 74,000 212,800 Commodore Barry Bridge 2,365 6,010 5,330 19,600 30,400 63,705 Betsy Ross Bridge 2,790 7,800 7,450 11,000 0 29,040 Multi Bridges or All Facilities 19,821 24,135 29,808 28,475 73,729 175,969 Total Multi Bridges or All Facilities $48,125 $92,920 $97,548 $105,625 $204,129 $548,348 Facility Security 19,790 12,193 11,000 5,000 18,000 65,983 PPC 630 570 9,950 9,150 950 21,250 PATCO 30,852 83,290 88,020 86,740 84,860 373,762 Technology 4,615 16,575 11,625 0 0 32,815 Total Capital Program $104,012 $205,548 $218,143 $206,515 $307,939 $1,042,158 * Net of Federal/State Funding 6
Overview of 2009 Proposed Operating Budgets DRPA Operating Budget (less PPC, E-ZPass CSC, One Port Center) +3.41% Total DRPA Operating Budgets (incl. PPC, E-ZPass CSC, One Port Center) +4.35% PATCO Operating Budget +6.31% Total DRPA/PATCO Operating Budgets +5.03% 7
Overview of 2009 Proposed Allocation of Revenues 2009 BUDGETED REVENUES (Millions of Dollars) Bridge Tolls (net of snow reserve) E-ZPass Other Revenues One Port Center PATCO Fares / Other Revenue PPC (Ferry, Cruise) Interest Misc. Total $240.63 2.00 1.78 23.80 0.62 9.71 2.92 $281.46 2009 BUDGETED USE OF REVENUES (Millions of Dollars) DRPA Operating Expenses NJ E-ZPass Customer Service Center One Port Center PPC Expenses PATCO Operating Expenses Debt Service - Revenue and Port District Project Bonds Letter of Credit Fees Operating Leases / Commitments OPEB Contribution Deposit to General Fund Total $ 74.76 5.06 1.96 1.38 45.15 117.36 3.27 3.83 2.80 25.89 $281.46 8
Overview of 2009 Proposed and 2008 Approved Allocation of Revenues Revenues (Millions of Dollars) 09 Budget 08 Budget Increase (Decrease) Bridge Tolls (net of snow reserve) $240.63 $195.42 $45.21 23.13% E-ZPass Membership Fees 2.00 2.00 0.00 0.00% One Port Center 1.78 1.73 0.05 2.89% PATCO Fares / Other Revenue 23.80 20.72 3.08 14.86% PPC 0.62 0.68 (0.06) -8.82% Interest 9.71 14.64 (4.93) -33.67% Miscellaneous 2.92 2.68 0.24 8.96% Total $281.46 $237.87 $43.59 18.33% % Uses of Revenue (Millions of Dollars) DRPA Operating Expenses $74.76 $72.30 $2.46 3.40% NJ E-ZPass Customer Service Center 5.06 4.41 0.65 14.74% One Port Center 1.96 1.65 0.31 18.79% PPC Expenses 1.38 1.34 0.04 2.99% PATCO Operating Expenses 45.15 42.46 2.69 6.34% Debt Service Revenue Bonds 86.57 68.55 18.02 26.29% Debt Service Port District Project Bonds 30.79 30.79 0.00 0.00% Letter of Credit Fees 3.27 1.06 2.21 208.49% Biennial Inspection 0.00 2.44 (2.44) -100.00% Operating Leases / Commitments 3.83 3.73 0.10 2.68% OPEB 2.80 0.00 2.80 Deposit to General Fund 25.89 9.14 16.75 183.26% Sub-Total $281.46 $237.87 $43.59 18.33% Less: General Fund deposit 25.89 9.14 Total $255.57 $228.73 $26.84 11.73% 9
Major Revenue Assumptions DRPA: Toll Revenues - $240.6 million - $45.2 mil. increase (up 23.1%) Toll revenues based on estimated actual 2008 projected revenues of $205 mil. plus approx. $3.1 million/month in new revenues (incl. 3 snow days) Reflects new toll schedule and September 2009 revision to E-ZPass commuter discount program (commuter discount changes from $12 to $6 per 18 trips as of September 2009) Interest income : $4.9 million decrease (down 33.7%) Significantly lower rates on projected higher principal amounts resulting in significant drop in interest earnings on General Fund investments Reflects use of General Fund to fund capital expenditures in 2009 E-ZPass: $2.0 million - flat vs. 2008 E-ZPass membership fees PATCO: $23.8 million - $3.1 million increase (up 14.9%) Passenger ridership expected to increase by 6.3% to 10.1 million passengers (up from 9.5 million budgeted for 2008) Average passenger fare higher - $ 2.22/fare vs. $2.04 (in 2008) 10
Major Revenue Assumptions Ferry: $65,000 no change $50K Contract fee from Hornblower plus $15K in misc. revenue (misc. charter fee) Cruise: $0.6 million - $69k decrease (down 11.1%) Eight (8) Cruises (2008 budget 10 cruises) Cruise operation anticipates a deficit of $0.8 million, slightly higher than 2008 budgeted deficit ($0.7 mil.) 11
Major Expense Assumptions DRPA budget-to-budget increase - $2.5 million (up 3.4%) Projected salary/ese expense increase of $1.8 million (incl. payroll, healthcare, pension and other costs) Staffing of 625 Employees (includes 54 Public Safety employees assigned to PATCO) vs. 619 in 2008 Increased medical insurance contributions for most employees incr. 0.5% Other non-payroll related expenses increasing by $0.6 million (or 3.45%) vs. 2008 (incl. increased repairs/maintenance, professional services fees, vehicle repair costs, etc.) E-ZPass CSC Operations $0.6 million increase (up 14.6%) Increased costs attributable to higher projected contractual transaction fees (up 4.5% from $0.067 to $0.07/transaction) and increase in E-ZPass utilization at DRPA facilities PATCO Increase of $2.7 million increase (up 6.3%) Staffing 341 total positions (incl. temps) vs. 343 in 2008 budget Payroll related expenses - $1.2 million increase (up 3.9%) $1.5 million increase (11.8% incr.) in non-payroll related expenses (primarily driven by budgeted increases in purchased power, communications, direct material and utility costs, etc. Total DRPA / PATCO budgeted positions: 966 vs. 962, increase of 4 positions 12
Major Expense Assumptions (con t) PPC Operations (Ferry and Cruise) combined increase of $38,000 Ferry operating expenses increasing by $30,000 vs. 2008 budget. (Ferry operation expected to experience small net loss in 2009) Cruise Terminal budgeted expenses increasing by approximately $8,000 vs. 2008 budget 13