Kodiak Cash Flow Analysis June 7, 2016 Michelle Humphrey Presentation to Kodiak City Council.

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Presentation transcript:

Kodiak Cash Flow Analysis June 7, 2016 Michelle Humphrey Presentation to Kodiak City Council

Agenda Approach Assumptions Findings Recommendations 2

Approach Life Cycle Cost Model Takes into account cost of operating, maintaining, and replacing harbor facilities 50-year study period Cash Flow Model Looks at Enterprise Fund’s cash flows and working capital balance under three moorage rate scenarios  Scenario I: Status Quo  Scenario II: Annual Inflation Based Moorage Adjustments  Scenario III: FY 2017 Flat rate Increase & Annual Inflation Adjustments 3

Findings- Life Cycle Cost Model Net Present Value of Cash Flows: $71.2 million Annualized life cycle cost: $2.03 million Annual moorage rate per foot: $

Recommended FY 2017 Rate Adjustment Slip Size (Linear Feet)Number of Slips Current 2016 Rate Per Foot ($) 2017 Flat Percentage Increase- Rate Per Foot ($) Average Rate Per Foot

Market Comparison Slip Size (Linear Feet) Kodiak Dutch Harbor / CEM ($)Homer ($)Seward ($) 2016 Rates ($)2017 Flat % Increase ($) Average Rate Per Foot

Findings- Cash Flow Model Rate adjustments could reduce harbor system’s debt requirements by over $314 million over 50 years Three rate scenarios analyzed Scenario I: Status Quo Scenario II: Annual Inflation Based Moorage Adjustments Scenario III: FY 2017 Flat Percentage Increase & Annual Inflation Adjustments 7

Projected Working Fund Balance without Debt, Nominal Dollars 8

Preliminary Debt Issuance Plans & Grant Funding Assumptions, Nominal Dollars 9 Harbor FacilityReplacement YearEligible Tier Level Grant Funding (Nominal $) Channel Transient Float2017Tier I1,500,000 St. Herman Harbor2020Tier II5,000,000 St. Paul Harbor2035Tier I5,000,000 Channel Transient Float2057Tier II5,000,000 St. Herman Harbor2060Tier II5,000,000 Status Quo- No Change to RatesFlat Rate Increase & Annual Adjustment YearDebt Issued ($million)YearDebt Issued ($million) Total Debt (Nominal) Total Debt (Nominal) Net Present Value of Debt Net Present Value of Debt

Projected Working Fund Balance with Preliminary Debt Plan, Nominal Dollars 10

Recommendations A 18.5 flat percentage increase in FY 2017 to bring the average annual moorage rate to $61.05 Annual inflation-based moorage rate adjustments based on the PPI for port and waterfront terminal operations (2.8 percent) 18.5% increase year one & annual inflation-based adjustments thereafter to other services (i.e. grid use, used oil disposal, launch ramp…etc.) Develop debt plan based on cash flow needs 11