PROPOSED BUDGET

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2008-09 P

ROPOSED

B

UDGET

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PORT OF PORTLAND

2008-2009 BUDGET

B

UDGET

S

UMMARY

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EXECUTIVE DIRECTOR’S MESSAGE

The Port of Portland's mission is to provide competitive cargo and passenger access to regional, national, and international markets while enhancing the region's economy and quality of life. In support of this mission, the Port annually undertakes budget and business planning to identify areas of focus and actions needed to address them. This budget document reflects how the Port will allocate resources in order to meet this vital mission.

Specifically, this budget reflects ongoing investments in aviation, marine, rail, and industrial development necessary to provide competitive cargo and passenger access and takes the Port’s recent successes and ongoing projects into account.

For example:

• The budget demonstrates our continued investment in major infrastructure at our marine terminals, as well as in various other transportation infrastructures to increase freight mobility needs in the region. The next phases of the Columbia River Channel deepening project and various rail yard improvements will help local shippers and businesses remain competitive in a global environment.

• The budget also reflects our historic role in helping our region maintain a supply of land for industrial development. In the coming year we will not only move forward with development activities at the Troutdale Reynolds Industrial Park, but will also continue our work finding other sites that are appropriate for development to help meet the region’s shipping and logistics needs.

• Finally, the budget reflects continued growth at Portland International Airport (PDX), specifically record high passenger levels resulting from additional domestic and

international flights. In the coming year, construction will continue on the largest multi-year capital expansion program ever undertaken at PDX. This program includes such projects as: in-line baggage screening improvements which will replace the temporary screening process implemented in the ticket lobby after 9/11; a second parking garage with a new consolidated headquarters building on top, the first year of the north runway extension program – the environmental assessment and final design, and the completion of the three year project to rehabilitate Taxiway T and the terminal apron. In addition, we will invest in our vital regional airports, such as Hillsboro and Troutdale Airports, to ensure that they continue to serve our region safely and efficiently.

The allocation of resources in the Fiscal Year 2008-2009 Budget will allow the Port to continue to facilitate a major portion of the region’s air passenger and marine cargo movement, and thus meet its mission to support and sustain the region’s economy, through current programs and the pursuit of new opportunities. All of this work will be accomplished through the hard work of a staff and Commission committed to the highest standards of customer service, environmental stewardship, and civic engagement.

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BUDGET OVERVIEW

The Budget for Fiscal Year (FY) 2008-2009 allocates resources to improve the long term competitive position of the Port of Portland and to promote the economic health of the region.

This past year saw continued growth at Portland International Airport (PDX) and resulted in record high passenger levels. PDX was also recognized by Conde Nast Traveler magazine as the “Best Airport in the U.S.” for the second year in a row. With the new non-stop flights to Boston, Orlando, JFK – New York, Mexico City, and Amsterdam, passenger growth at PDX is expected to continue in FY 2008-2009. FY 2008-2009 will also see the continuation of a multi-year process to update the Master Plan for PDX and opportunities to engage the public, airport users and other interested parties in the future of a facility that is a cornerstone of the region’s economy. In addition, construction of a new parking garage, the new Port headquarters building, and the in-line baggage screening improvement process are all underway. These improvements will improve capacity, safety, and customer satisfaction.

The budget for FY 2008-2009 also reflects continued investment in our marine infrastructure to support the growing demands on our facilities, including Terminal 5 berth dock rehabilitation, improvements to the Ramsey Rail Yard, as well as rail expansion in South Rivergate. The rail improvements will help improve the flow of rail cars in and out of the busy industrial area, improving the competitiveness of businesses in the district.

In addition, the President’s budget includes a substantial increase in funding for the Columbia Improvement Project. For the next federal fiscal year, $36 million will be allocated to the deepening project. With this additional funding, the Army Corp of Engineers estimates the project will be completed by 2009, one year earlier than originally projected.

Purchase of the Troutdale Reynolds Industrial Park provides the region and the Port with needed industrial land capacity. The Port is actively marketing the site and anticipates the closure of a large land sale in FY 2007-2008 and another potential land sale in FY2008-2009.

Major Assumptions

Primary volume assumptions for FY 2008-2009 compared to current year projections are as follows: PDX:

• Passenger volume growth expected to slow in FY 2008-2009 to 15.1.2 million passengers, up 2.5% from the current year projection of 14.8 million passengers

• The number of aircraft operations (takeoffs and landings) increasing by 0.5% to 266,325 • Cargo volume increasing by 0.2% to 278,000 short tons

Marine:

• Container volumes decreasing slightly from a projected 149,500 boxes to 144,100 boxes • Automobile volumes decreasing from 460,000 units to 410,000

• Breakbulk volumes increasing 2.5% to 1.1 million short tons • Grain volumes increasing 13% to 4.2 million short tons

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Capital Investments

The Port’s total capital expenditure program (including staff time) is estimated at $294 million; approximately $246 million is for improvements at PDX, while $48 million is targeted for Marine and Industrial Development, General Aviation, Navigation and other divisions. These amounts include projects which have been scoped and for which project plans have begun. Currently there are about $11 million of projects in the Airport Construction Fund and $24 million of projects in the Bond Construction Fund that have not been scoped nor formal project plans developed.

Highlights of the primary capital expenditures at PDX include:

• $118.2 million for the PDX parking garage expansion program (P2) and the new Port headquarters building

• $60.4 million for the first year of the PDX in-line bag screening improvement program This program will bring the EDS equipment in-line with the baggage system behind the ticket counters

• $15.2 million for the completion of the three year project to rehabilitate Taxiways and apron rehabilitation program

• $13 million Airport Way rehabilitation and widening

• $8.7 million north runway extension environmental assessment and construction • $5.7 million PDX deicing system enhancements and long-term solution

• $2.4 million purchase of shuttle buses • $1.5 million PDX parking lot landscaping

• $1.1 million PDX Terminal fire, life, safety system upgrades

• $1.0 million PDX terminal flight information and paging systems upgrade

Proposed capital expenditures for the Port’s Bond Construction Fund in FY 2008-2009 include: • $11.8 million for Troutdale Reynolds Industrial Park (TRIP) improvements

• $8.0 million for improvements to Ramsey Rail Yard • $5.6 million for T5 berth dock rehabilitation

• $3.0 million for Hillsboro Airport runway improvements • $3.1 million for the widening of North Lombard

• $3.0 million for GIS upgrade and enhancement

• $1.4 million for Troutdale Airport taxi-way improvements

Operating Highlights

Marine revenues are projected to increase 2.4% over the FY 2008-2009 Adopted Budget. Increased volumes and associated vessel calls in Mineral bulk, Breakbulk, and Grain bulk are forecast to increase revenues 14%. The increase in other Marine business lines is projected to offset the FY 2008-2009 forecast decrease in Marine Container revenue as a result of the departure of Zim American Integrated Shipping Services Company.

Revenue from land sales is forecast to decrease from $16.3 million budgeted in FY 2007-2008, to $5.1 million in FY 2008-2009. The FY 2008-2009 revenue projection is based on the potential sale of smaller parcels in the Troutdale Reynolds Industrial Park.

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General Fund Operating Expenditures (Personal Services and Materials and Services) are anticipated to decrease by 2.8% from $116.2 million to $112.9 million. The majority of the decrease is due to revised project timing for long-term environmental expenditures.

General and Bond Construction Fund balances will need to be maintained at fairly high levels for a number of years to provide adequate resources for continued operations, the long term capital expenditures anticipated for Marine and rail infrastructure, and to meet the Port’s obligations related to the clean up of Willamette Harbor in Portland.

Portland International Airport is anticipating an increase of 4%, or $7.5 million, in operating revenue from the FY 2007-2008 Adopted Budget compared to the FY 2008-2009 Proposed Budget primarily due to an anticipated increase in parking, rental car, and concession revenues.

PDX operating expenditures (Personal Services and Materials and Services) are anticipated to increase 7%, or $3.7 million, from Adopted Budget for FY 2007-2008 to the FY 2008-2009 Proposed Budget.

Overall FTEs (Full Time Equivalents – a measure of workforce size) are expected to increase from the FY 2007-2008 Adopted Budget of 792 to 829 in FY 2008-2009 primarily reflecting operational requirements and volume growth.

Accounting Basis

This Budget document illustrates the expected financial performance of the Port of Portland for the coming fiscal year if assumptions materialize as stated. In conformance with Oregon Revised Statutes, the Budget shows operations of the Port on a fund basis (Resources and Requirements). All Port Funds are budgeted for on an accrual basis except for certain accrued expenses including some environmental expenses which are budgeted on a working capital basis.

The Port maintains, and continuously seeks to improve, a system of financial controls and processes which are in place to ensure the public of informed decision-making and fiscal accountability.

Steven Schreiber

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PORT OF PORTLAND COMMISSION

Port of Portland Commissioners are appointed by the Governor of the State of Oregon and serve a four-year term.

Judi Johansen President

Mary Olson Vice President

Steve Corey Secretary

Bill Thorndike, Jr. Treasurer

Ken Allen Commissioner

Peter Bragdon Commissioner

Diana Daggett Commissioner

Bruce Holte Commissioner

Paul Rosenbaum Commissioner

PORT OF PORTLAND SENIOR MANAGEMENT

The Port’s senior management structure is shown below. Working in concert with, and under the policy direction of, the Board of Commissioners, the Port is a unique blend of government and private enterprise.

Executive Director Bill Wyatt

General Counsel Carla Kelley

Operation Services Director and CFO Steven Schreiber

Marine & Industrial Development Director Sam Ruda Executive Assistant Pam Thompson Aviation Director Mary Maxwell Human Resources Director Gail Woodworth Public Affairs Director Tom Imeson

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A LOOK AT THE PORT OF PORTLAND

Located in Portland, Oregon, the Port of Portland is the bridge that connects Oregon to the world. The Port manages marine and airport facilities that link to intermodal transportation systems connecting relatively isolated local markets with each other, the nation, and beyond.

History

The Port of Portland was created by the Oregon Legislature in 1891 to dredge a shipping channel from Portland 100 miles to the sea. Today, the Port is charged with promoting aviation, maritime, commercial and industrial interests within Clackamas, Multnomah, and Washington counties (including the City of Portland). The scope of Port services extends beyond this immediate metropolitan area to include farmers and other industries from inland regions of the Northwest. The Port is directed by a nine-member commission, whose members are appointed by the Governor of the State of Oregon and confirmed by the Oregon Senate.

The Port’s location at the confluence of two navigable rivers, two transcontinental railroads, and two interstate freeways has been a factor in the development of facilities and the commodities we ship. Portland’s population size and economic history have dictated our export dominance in trade. It has also influenced the development of distribution facilities that serve markets beyond our geographic boundaries.

Facilities and Services

The Port owns four marine terminals, Oregon’s primary commercial airport, three general aviation airports (Hillsboro, Troutdale and Mulino), and has developed seven commercial/industrial parks. It also owns and operates the dredge OREGON to help maintain the shipping channel on the lower Columbia River.

Operating an award-winning, world-class airport allows cargo and passenger air carriers and a host of vendors to be successful in their businesses, and in turn, millions of passengers and tons of air cargo have ready access to destinations around the globe. Streamlined marine terminals and prime industrial properties offer shippers, ocean carriers and about 1,000 area businesses an opportunity to compete in international markets.

The Port plays a major role in the region’s economy. Based on the calendar year 2006 economic impact study update by the Port:

• More than 30,000 jobs, $1.75 billion in wages, salaries, and consumption impacts, and nearly $180 million in state and local taxes were generated by activities at the Port’s marine and aviation facilities.

• More than $4 billion of business revenue was received by firms providing goods and services to support the activities at the marine terminals and airports.

• The Port generates nearly $8 in tax revenue for every $1 it collects in property taxes.

• Visitor industry impacts at Portland International add an additional 40,000 jobs, $1 million in personal income, and $1.7 billion in business revenue.

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• The Port’s industrial and business parks are home to more than 300 firms, which generate 35,000 jobs and $180 million in state and local tax revenue across the region.

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HOW TO TRACE PORT DOLLARS

The financial structure of the Port is defined by certain dedicated funds that are restricted to certain purposes and/or supported by specific business activities. The Marine & Industrial, Navigation, Engineering and all Corporate Administration Divisions are accounted for in the General and Bond Construction Funds.

The Aviation Division consists of Commercial (Portland International Airport) and General Aviation (Hillsboro, Troutdale and Mulino). General Aviation is accounted for in the General and Bond Construction Funds, while Commercial Aviation is accounted for entirely in the Airport Revenue, Airport Revenue Bond, Airport Construction and Passenger Facility Charge Funds.

BUSINESS ENTERPRISES

Marine Terminals & Industrial Parks

Dredge Oregon General Aviation Portland International Airport OPERATING FUNDS General Bond Construction Airport Funds: Revenue Construction Revenue Bond PFC (Passenger Facility Charge) Funds: PFC Fund PFC Bond Fund OPERATING DIVISIONS MARINE & INDUSTRIAL DEVELOPMENT NAVIGATION AVIATION

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SUMMARY OF RESOURCES AND REQUIREMENTS BY FUND

OPERATING FUNDS

BUDGET 2008-09 *

TOTAL AIRPORT

ALL FUNDS GENERAL REVENUE

RESOURCES BEGINNING BALANCE $ 261,744,403 83,757,804 15,000,000 OPERATING REVENUE 267,033,506 85,316,847 181,716,659 GRANTS/INTEREST INCOME/OTHER 55,315,200 5,028,000 1,704,000 TAXES 8,615,578 8,615,578 0 BOND ISSUES 72,800,000 0 0 SUBTOTAL-RESOURCES $ 665,508,687 182,718,228 198,420,659

TRANSFER FROM OTHER FUNDS 205,889,455 36,893,374 1,994,439

TOTAL RESOURCES $ 871,398,141 219,611,602 200,415,098

REQUIREMENTS FTE's

OPERATING EXPENDITURES

MARINE & INDUSTRIAL DEVELOPMENT 125.2 $ 57,607,687 57,607,687 0

GENERAL AVIATION 8.0 2,200,523 2,200,523 0 ENGINEERING 89.1 10,028,791 10,028,791 0 NAVIGATION 43.8 10,109,794 10,109,794 0 CORPORATE ADMINISTRATION 185.8 31,446,855 31,446,855 0 COMMERCIAL AVIATION 377.3 79,746,340 0 79,746,340 SUBTOTAL-OPERATING EXPENDITURES 829.3 $ 191,139,990 111,393,650 79,746,340 CAPITAL EXPENDITURES

MARINE & INDUSTRIAL DEVELOPMENT $ 37,059,859 0 0

GENERAL AVIATION 5,964,000 0 0 NAVIGATION 200,000 0 0 CORPORATE ADMINISTRATION 5,234,000 0 0 COMMERCIAL AVIATION 245,853,702 0 0 CAPITALIZED LABOR (17,168,881) 0 0 SUBTOTAL-CAPITAL EXPENDITURES $ 277,142,680 0 0

TRANSFER TO OTHER FUNDS 205,889,455 40,671,548 105,663,758

OTHER ENVIRONMENTAL 1,461,054 1,461,054 0

OTHER 10,000 5,000 5,000

DEBT SERVICE PAYMENTS 62,013,245 6,130,970 0

CONTINGENCY 117,965,743 59,949,380 15,000,000

UNAPPROPRIATED BALANCE 15,775,975 0 0

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SUMMARY OF RESOURCES AND REQUIREMENTS BY FUND (CONTINUED)

BOND AIRPORT PFC AIRPORT PFC BOND

CONSTRUCTION CONSTRUCTION FUND REVENUE BOND FUND

10,000,000 120,514,070 16,696,554 5,005,000 10,770,975 0 0 0 0 0 2,337,000 13,420,200 31,808,000 319,000 699,000 0 0 0 0 0 0 72,800,000 0 0 0 12,337,000 206,734,270 48,504,554 5,324,000 11,469,975 46,120,859 66,016,508 0 44,794,275 10,070,000 58,457,859 272,750,778 48,504,554 50,118,275 21,539,975 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 37,059,859 0 0 0 0 5,964,000 0 0 0 0 200,000 0 0 0 0 5,234,000 0 0 0 0 0 245,853,702 0 0 0 (8,427,521) (8,741,360) 0 0 0 40,030,338 237,112,342 0 0 0 8,427,521 8,741,360 42,385,268 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 45,113,275 10,769,000 10,000,000 26,897,076 6,119,286 0 0 0 0 0 5,005,000 10,770,975 58,457,859 272,750,778 48,504,554 50,118,275 21,539,975

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SUMMARY HIGHLIGHTS (BUDGET BASIS)

ADOPTED PROPOSED

SUMMARY OF RESOURCES - ALL FUNDS BUDGET PROJECTED BUDGET PERCENT

2007-08 2007-08 2008-09 CHANGE

BEGINNING BALANCE $ 303,286,517 $ 363,240,970 $ 261,744,403 (14%)

OPERATING REVENUE 265,691,679 268,335,233 267,033,506 1%

GRANTS/INTEREST INCOME/OTHER 79,962,789 61,862,361 55,315,200 (31%)

TAXES 8,178,250 8,178,250 8,615,578 5%

BOND SALE / SWAP PROCEEDS 100,000,000 145,000,000 72,800,000 (27%)

SUBTOTAL $ 757,119,235 $ 846,616,814 $ 665,508,687 (12%)

TRANSFERS 194,440,991 225,705,015 205,889,455 6%

TOTAL RESOURCES $ 951,560,226 $ 1,072,321,829 $ 871,398,141 (8%)

SUMMARY OF REQUIREMENTS - ALL FUNDS

EXPENDITURES

GENERAL FUND $ 111,242,497 $ 103,302,616 $ 111,393,650 0%

AIRPORT REVENUE FUND 76,002,169 76,435,484 79,746,340 5%

BOND CONSTRUCTION FUND 79,306,698 79,878,020 40,030,338 (50%)

AIRPORT CONSTRUCTION FUND 119,108,143 124,673,067 237,112,342 99%

SUBTOTAL $ 385,659,507 $ 384,289,187 $ 468,282,670 21%

TRANSFERS $ 194,440,991 $ 225,705,015 $ 205,889,455 6%

SYSTEM DEVEL CHARGES / OTHER 10,000 0 10,000 0%

OTHER ENVIRONMENTAL 4,965,421 4,728,740 1,461,054 (71%)

DEBT SERVICE PAYMENTS 55,434,115 189,929,115 55,882,275 1%

LONG - TERM DEBT PAYMENTS 5,925,369 5,925,369 6,130,970 3%

CONTINGENCY 294,348,848 245,968,428 117,965,743 (60%)

UNAPPROPRIATED BALANCE 10,775,975 15,775,975 15,775,975 46%

TOTAL REQUIREMENTS $ 951,560,226 $ 1,072,321,829 $ 871,398,141 (8%)

PERCENT CHANGE compares PROPOSED BUDGET 2008-09 to ADOPTED BUDGET 2007-08

FY 2008-09 SUMMARY OF OPERATING AND CAPITAL REQUIREMENTS BY FUND: OPERATING CAPITAL

EXPENDITURES EXPENDITURES TOTAL

GENERAL FUND $ 111,393,650 $ 0 $ 111,393,650

AIRPORT REVENUE FUND 79,746,340 0 79,746,340

BOND CONSTRUCTION FUND 0 40,030,338 40,030,338

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SUMMARY HIGHLIGHTS (BUDGET BASIS)

ADOPTED

OPERATING CONTRIBUTIONS ACTUAL ACTUAL BUDGET PROJECTED

BY DIVISION 2005-06 2006-07 2007-08 2007-08

MARINE & INDUSTRIAL DEVELOPMENT * $ 7,313,945 $ 14,594,982 $ 12,808,395 $ 23,218,430

NAVIGATION DIVISION 1,194,413 3,187,975 1,510,913 1,657,221 ADMINISTRATIVE DIVISIONS 244,090 280,388 230,000 153,083 COMMERCIAL AVIATION 97,735,466 97,974,278 98,236,536 98,832,580 GENERAL AVIATION 1,162,487 1,370,592 1,022,234 1,047,735 ADMINISTRATION (28,783,773) (30,556,434) (35,361,065) (36,311,916) TOTAL $ 78,866,627 $ 86,851,782 $ 78,447,013 $ 88,597,133 ADOPTED

ADMINISTRATIVE OPERATING EXPENDITURES ACTUAL ACTUAL BUDGET PROJECTED

BY DIVISION 2005-06 2006-07 2007-08 2007-08

ENGINEERING $ 8,200,790 $ 8,397,837 $ 9,040,828 $ 9,045,323 CORPORATE ADMINISTRATION * 20,582,984 22,158,597 26,320,237 27,266,593

TOTAL ADMINISTRATIVE $ 28,783,773 $ 30,556,434 $ 35,361,065 $ 36,311,916

* IN FY 2006-2007, BUSINESS DEVELOPMENT AND PROPERTY & DEVELOPMENT SERVICES TRANSFERRED FROM CORPORATE ADMINISTRATION TO THE MARINE & INDUSTRIAL DEVELOPMENT DIVISION. THE FY 2005-2006 FINANCIAL HISTORY HAS BEEN RESTATED TO REFLECT THIS ORGANIZATIONAL CHANGE.

PROPOSED BUDGET 2008-09 11,548,303 $ 2,307,966 299,750 101,970,319 1,242,824 (41,475,646) 75,893,516 $ PROPOSED BUDGET 2008-09 10,028,791 $ 31,446,855 41,475,646 $

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Statutory Budget FY 2008-09

($s in Millions)

Budget Resources $871.4

Chart Title ($s in Millions)

GRANTS/INTEREST INCOME/OTHEGrants/Interest Income/Other $ 55.3

BEGINNING BALANCE Beginning Balance $ 261.7

TAXES Taxes $ 8.6

OPERATING REVENUE Operating Revenue $ 267.0

BOND ISSUES Bond Issues $ 72.8

TRANSFER FROM OTHER FUNDS Transfers $ 205.9

$ 871.4

TOTAL RESOURCES $ 871.4

Budget Requirements $871.4

OTHER ENVIRONMENTAL Other Environmental $ 1.5

OTHER+CONTINGENCY+UNAPPROContingency/ Unappropriated & Other $ 133.8 SUBTOTAL-OPERATING EXPENDITOperating Expenditures $ 191.1 SUBTOTAL-CAPITAL EXPENDITURECapital Expenditures $ 277.1

DEBT SERVICE PAYMENTS Debt Service $ 62.0

TRANSFER TO OTHER FUNDS Transfers $ 205.9

$ 871.4 TOTAL REQUIREMENTS $ 871.4 Beginning Balance $ 261.7 30% Taxes $ 8.6 1% Operating Revenue $ 267.0 31% Bond Issues $ 72.8 8% Grants/Interest Income/Other $ 55.3 6% Transfers $ 205.9 24% Operating Expenditures $ 191.1 22% Capital Expenditures $ 277.1 32% Debt Service $ 62.0 7% Other Environmental $ 1.5 0% Contingency/ Unappropriated & Other $ 133.8 15% Transfers $ 205.9 24%

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Operating Budget FY 2008-09

($s in Millions)

Sources of Operating Revenue $267.0

TOTAL NAVIGATION Navigation $ 12.4

TOTAL MARINE & INDUMarine & Industrial Development $ 69.2 TOTAL GENERAL AVIATION

TOTAL ADMINISTRATION General Aviation & Other $ 3.7

TOTAL OPERATING REVENUE PDX $ 181.7

$ 267.0

OPERATING REVENUE $ 267.0

Uses of Operating Revenue $267.0

TOTAL EXPENDITURESTOTAL EXPENDITURESTOTAL

EXPENDITURES Operating Expenses $ 174.7

Cost of Property Sold $ 5.1

Depreciation $ 77.9 Operating Income $ 9.2 $ 267.0 SUBTOTAL-OPERATING EXPENDITURES $ 191.1 Marine & Industrial Development $ 69.2 26% PDX $ 181.7 68% Navigation $ 12.4 5% General Aviation & Other

$ 3.7 1% Depreciation $ 77.9 29% Operating Income $ 9.2 3% Cost of Property Sold $ 5.1 2% Operating Expenses $ 174.7 66%

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FUND APPROPRIATIONS

ADOPTED

ACTUAL ACTUAL BUDGET PROJECTED

RESOURCES & REQUIREMENTS 2005-06 2006-07 2007-08 2007-08

OPERATING FUNDS

GENERAL FUND $ 243,275,293248,137,820 $ 240,175,544$ 269,340,119$ AIRPORT REVENUE FUND 167,754,210 195,870,251 192,840,189 203,679,993

SUBTOTAL OPERATING FUNDS $ 439,145,544415,892,030 $ 433,015,733$ 473,020,113$

CONSTRUCTION FUNDS

BOND CONSTRUCTION FUND $ 37,304,489 $ 48,082,757 $ 96,862,810 $ 97,424,072 PFC FUND 37,163,056 38,263,679 39,636,002 43,279,296 AIRPORT CONSTRUCTION FUND 194,686,483 214,672,256 315,835,591 252,893,258

SUBTOTAL CONSTRUCTION FUNDS $ 301,018,693269,154,028 $ 452,334,403$ 393,596,627$

PORT DEBT SERVICE FUNDS

AIRPORT REVENUE BOND FUND $ 49,172,400 $ 47,713,381 $ 44,669,115 $ 184,164,115 PFC BOND FUND 21,774,697 21,546,600 21,540,975 21,540,975

SUBTOTAL DEBT SERVICE FUNDS $ 70,947,097 $ 69,259,982 $ 66,210,090 $ 205,705,090

TOTAL* $ 809,424,219755,993,155 $ 951,560,226$ 1,072,321,829$

* RESOURCES = REQUIREMENTS

FOR ACCOUNTING PURPOSES, ALL PORT FUNDS ARE ACCOUNTED FOR ON AN ACCRUAL BASIS. FOR BUDGETARY PURPOSES, ALL PORT FUNDS ARE BUDGETED ON AN ACCRUAL BASIS, EXCEPT SOME ENVIRONMENTAL EXPENSES. PROPOSED BUDGET 2008-09 219,611,602 $ 200,415,098 420,026,700 $ 58,457,859 $ 48,504,554 272,750,778 379,713,191 $ 50,118,275 $ 21,539,975 71,658,250 $ 871,398,141 $

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TOTAL PORT CAPITAL (LND) (LIM) (BDA) (MEQ)

LAND LAND BUILDINGS MACHINERY

IMPROVE & EQUIP & EQUIP TOTAL

(O) BOND CONSTRUCTION FUND - OPEN PROJECTS $0 $35,216,717 $6,488,000 $6,208,142 $47,912,859

(C) BOND CONSTRUCTION FUND - CANDIDATE PROJECTS 0 0 0 545,000 545,000

TOTAL BOND CONSTRUCTION FUND $0 $35,216,717 $6,488,000 $6,753,142 $48,457,859

(O) AIRPORT CONSTRUCTION FUND - OPEN PROJECTS $500,000 $46,419,045 $121,142,000 $75,692,357 $243,753,402

(C) AIRPORT CONSTRUCTION FUND - CANDIDATE PROJECTS 0 897,500 987,800 215,000 2,100,300

TOTAL AIRPORT CONSTRUCTION FUND $500,000 $47,316,545 $122,129,800 $75,907,357 $245,853,702

(O) TOTAL ALL FUNDS - OPEN PROJECTS $500,000 $81,635,762 $127,630,000 $81,900,499 $291,666,261

(C) TOTAL ALL FUNDS - CANDIDATE PROJECTS 0 897,500 987,800 760,000 2,645,300

TOTAL ALL PORT $500,000 $82,533,262 $128,617,800 $82,660,499 $294,311,561

Budgeted Capital by TSCC Code

(LND) (LIM) (BDA) (MEQ)

OPEN PROJECTS $500,000 $81,635,762 $127,630,000 $81,900,499

CANDIDATE PROJECTS $0 $897,500 $987,800 $760,000

Budgeted Capital by Fund

OPEN PROJECTS $47,912,859 $243,753,402

CANDIDATE PROJECTS $545,000 $2,100,300

FUND FUND

BUDGETED CAPITAL SUMMARY

BOND CONSTRUCTION AIRPORT CONSTRUCTION

$500,000 $82,533,262 $128,617,800 $82,660,499 $0 $50,000,000 $100,000,000 $150,000,000

(LND) (LIM) (BDA) (MEQ)

CANDIDATE PROJECTS OPEN PROJECTS $245,853,702 $48,457,859 $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 BOND AIRPORT CANDIDATE PROJECTS OPEN PROJECTS

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Proposed* Projected Budget Forecast Forecast Forecast Forecast 2008 2009 2010 2011 2012 2013 Total 11,832,366 $ 6,398,300 $ 7,261,000 $ 9,200,000 $ 5,699,000 $ 13,982,000 $ 54,372,666 $ 500,000 1,380,000 1,048,000 1,251,000 4,179,000 t 1,229,562 2,586,000 7,671,476 5,251,127 715,193 5,304,751 22,758,109 13,561,928 10,364,300 15,980,476 15,702,127 6,414,193 19,286,751 81,309,775 262,000 515,000 777,000 251,010 251,010 110,000 355,000 465,000 700,000 6,000,000 2,700,000 5,300,000 14,700,000 23,224,099 18,974,000 55,960,000 76,786,000 52,588,000 20,747,000 248,279,099 1,152,540 1,280,000 75,000 390,000 1,010,000 1,320,000 5,227,540 4,343,519 9,835,945 3,950,194 9,636,552 13,398,061 5,722,655 46,886,926 95,000 65,000 65,000 20,000 65,000 65,000 375,000 426,214 1,015,000 280,000 850,000 410,000 2,981,214 510,350 600,000 3,400,000 4,510,350 2,108,303 406,000 150,000 1,365,000 3,482,210 750,000 8,261,513 1,121,170 950,000 500,000 2,500,000 2,500,000 2,500,000 10,071,170 11,428 60,000 60,000 60,000 191,428 35,976,357 120,848,700 82,820,000 1,684,400 9,885,000 64,314,597 315,529,054 372,620 61,000 686,000 173,000 65,000 1,357,620 636,300 213,300 670,000 1,519,600 16,694,143 60,659,357 50,731,674 10,657,977 35,000 1,330,000 140,108,151 1,020,000 2,919,000 100,000 1,900,000 500,000 6,439,000 50,000 500,000 3,950,000 3,500,000 7,000,000 15,000,000 1,733,814 875,000 450,000 650,000 550,000 3,675,000 7,933,814 2,530,587 135,000 4,000,000 5,700,000 9,580,000 9,000,000 30,945,587 19,828,350 11,749,837 21,623,161 46,405,292 55,111,500 154,718,140 26,415,209 20,303,900 3,600,000 14,900,000 62,500,000 7,208,000 134,927,109 138,826,713 257,274,039 206,955,168 157,079,090 218,951,563 172,368,752 1,151,455,325 152,388,641 $ 267,638,339 $ 222,935,644 $ 172,781,217 $ 225,365,756 $ 191,655,503 $ 1,232,765,100 $

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Proposed* Projected Budget Forecast Forecast Forecast Forecast 2008 2009 2010 2011 2012 2013 Total 3,040,991 $ 1,554,000 $ 1,400,000 $ 2,383,000 $ 400,000 $ 1,000,000 $ 9,777,991 $ 81,529 700,000 850,000 1,631,529 18,270,524 4,159,892 5,193,077 2,658,682 5,088,424 3,263,255 38,633,854 2,000,000 6,010,000 -8,010,000 3,589,135 11,815,000 5,990,000 3,400,000 100,000 100,000 24,994,135 2,773,755 13,611,500 15,597,780 1,497,363 1,531,785 3,007,238 38,019,421 16,922,819 2,076,600 2,790,000 4,550,000 4,000,000 30,339,419 44,678,753 35,916,992 37,830,857 14,489,045 11,120,209 7,370,493 151,406,349 17,701,696 12,367,522 6,736,151 8,546,914 9,145,199 54,497,482 335,927 4,746,050 417,645 5,499,622 18,037,623 17,113,572 7,153,796 8,546,914 9,145,199 59,997,104 -1,000,000 9,000,000 10,000,000 3,886,415 1,150,000 2,650,000 3,850,000 1,150,000 750,000 13,436,415 3,886,415 1,150,000 2,650,000 3,850,000 2,150,000 9,750,000 23,436,415 10,629,486 8,488,610 5,575,000 1,825,000 2,625,000 1,075,000 30,218,096 77,232,277 $ 62,669,174 $ 53,209,653 $ 28,710,959 $ 25,040,408 $ 18,195,493 $ 265,057,964 $ 229,620,918 $ 330,307,513 $ 276,145,297 $ 201,492,176 $ 250,406,164 $ 209,850,996 $ 1,497,823,064 $ de candidate no projects.

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n

Operating Revenues Personal Services

Longshore

Labor

Contracts & Prof. Svcs. Materials & Supplies

Utilities

Equip Rents, Repair & Fuel

Insurance

Management

& Travel

Other

Total Operating Expenditures

181,716,659 $ 36,826,267 $ 0 $ 28,900,438 $ 2,699,606 $ 5,812,487 $ 1,768,734 $ 1,647,572 $ 1,346,417 $ 744,819 $ 79,746,340 $ 3,443,347 772,817 0 641,406 69,450 339,300 164,750 57,518 33,780 121,502 2,200,523 69,155,990 12,827,586 27,788,943 9,370,548 1,375,507 2,310,635 1,099,880 847,649 1,043,459 943,480 57,607,687 12,417,760 4,431,406 0 630,109 1,048,660 38,214 3,499,505 398,400 27,500 36,000 10,109,794 s 266,733,756 $ 54,858,076 $ 27,788,943 $ 39,542,501 $ 5,193,223 $ 8,500,636 $ 6,532,869 $ 2,951,139 $ 2,451,156 $ 1,845,801 $ 149,664,344 $ 0 641,855 0 14,500 800 1,500 0 416,262 142,000 450 1,217,367 0 4,046,852 0 1,224,605 9,915 1,800 7,800 0 333,036 15,740 5,639,748 0 1,813,727 0 863,673 8,000 0 0 5,000 304,186 588,040 3,582,626 0 1,905,084 0 162,000 5,600 5,100 250 0 81,500 1,100 2,160,634 299,750 11,466,769 0 2,619,519 268,709 516,100 535,690 20,602 411,042 3,008,049 18,846,480 n 299,750 $ 19,874,287 $ 0 $ 4,884,297 $ 293,024 $ 524,500 $ 543,740 $ 441,864 $ 1,271,764 $ 3,613,379 $ 31,446,855 $ 0 0 0 1,461,054 0000 00 1,461,054 9,542,874 0 123,597 55,900 2,700 32,500 0 208,650 62,570 10,028,791 s 0 $ 9,542,874 $ 0 $ 1,584,651 $ 55,900 $ 2,700 $ 32,500 $ 0 $ 208,650 $ 62,570 $ 11,489,845 $ 267,033,506 $ 84,275,237 $ 27,788,943 $ 46,011,449 $ 5,542,147 $ 9,027,836 $ 7,109,109 $ 3,393,003 $ 3,931,570 $ 5,521,750 $ 192,601,044 $ roperty sold.

ntal and contributions from other local governments participating

continued operations.

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GENERAL PORT OPERATIONS

From a financial perspective, the Budget document has two primary divisions, General Port Operations and Aviation. The distinction is a financial one rather than operational, but it serves to help explain the Port’s Budget and financial information.

General Port Operations include the following: Marine & Industrial Development, Navigation, Engineering, and the Administrative Divisions. The primary resources for General Port Operations are from Marine & Industrial Development operating revenues, property sales and leases, and the Port’s property tax levy.

Aviation is comprised of Portland International Airport (PDX) and three General Aviation reliever airports located at Hillsboro, Troutdale, and Mulino. The General Aviation reliever system is included in the Port’s General Fund.

PDX resources cannot be commingled with any other resources of the Port, and are restricted for use at Aviation facilities in accordance with FAA regulations and Airport Revenue Bond Ordinances. PDX resources can be used to fund the General Aviation reliever system in certain circumstances and a transfer of resources is made from the Airport Revenue Fund to the Port’s Bond Construction Fund for that purpose.

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GENERAL FUND

The General Fund is used to account for the general operations of the Port. Subject to the restrictions of local budget law, its assets may be transferred to another fund for any authorized Port purpose.

The following summary shows the principal resources and requirements for the General Fund. It also includes information on specific Port operations as well as a property tax levy used for Port improvements. The Port manages all General Fund activities as a portfolio designed to fulfill the mission while balancing financial resources and requirements.

While the Port’s General Aviation airports are part of the General Fund, from a financial perspective, the Airport Revenue Fund subsidizes General Aviation activities that are not funded through General Aviation operations or FAA grants. This funding is accomplished by a transfer from the Airport Revenue Fund to the Bond Construction Fund.

The General Fund summary is followed by specific information on Marine & Industrial Development, General Aviation, Engineering, Navigation, and Corporate Administration. Capital requirements for these areas are shown in the Bond Construction Fund.

General Fund Revenues are primarily generated in the Marine & Industrial Development Division. The forecast for General Fund operating revenue is based on assumptions of transactions closing as well as the timing of those transactions; changes in either set of assumptions can have a material impact on the actual financial results accomplished.

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GENERAL FUND

ADOPTED

RESOURCES

BEGINNING WORKING CAPITAL $ 130,803,197 $ 124,336,995 $ 100,183,757 $ 127,677,066

OPERATING REVENUE GENERAL AVIATION

OPERATING REVENUE $ 989,202 $ 1,027,976 $ 1,058,740 $ 1,086,739

SERVICE REVENUE 27,756 24,681 25,329 25,329

RENTAL & CONCESSIONS/OTHER REVENUE 2,195,971 2,349,379 2,260,116 2,262,116

TOTAL GENERAL AVIATION $ 3,212,929 $ 3,402,035 $ 3,344,185 $ 3,374,184 MARINE & INDUSTRIAL DEVELOPMENT *

OPERATING REVENUE $ 8,438,984 $ 10,106,228 $ 9,812,383 $ 9,812,383

SERVICE REVENUE 2,308,451 3,736,841 3,067,004 3,067,004

CONTAINER REVENUE 24,245,424 35,199,199 37,432,739 37,432,738

RENTAL & CONCESSIONS 13,108,402 12,357,333 12,094,174 12,094,174

LAND SALE PROCEEDS 1,000 1,340,435 16,335,000 16,335,000

OTHER REVENUE 246,539 206,392 394,698 394,698 48,348,799 $ $ 62,946,428 $ 79,135,998 $ 79,135,997 NAVIGATION OPERATING REVENUE 5,020,166 9,406,603 8,742,791 $ 10,403,905 OTHER REVENUE (45,704) 1,170,312 0 0 TOTAL NAVIGATION $ 4,974,462 $ 10,576,915 $ 8,742,791 $ 10,403,905 CORPORATE ADMINISTRATION * RENTAL INCOME $ 0 $ 27,204 $ 25,000 $ 14,583

REVENUE BOND FEES 0 0 0 0

OTHER REVENUE 244,090 253,185 205,000 138,500

TOTAL ADMINISTRATION $ 244,090 $ 280,388 $ 230,000 $ 153,083

TOTAL OPERATING REVENUE $ 56,780,280 $ 77,205,766 $ 91,452,974 $ 93,067,169 * IN FY 2006-2007, BUSINESS DEVELOPMENT AND PROPERTY & DEVELOPMENT SERVICES TRANSFERRED

FROM CORPORATE ADMINISTRATION TO THE MARINE & INDUSTRIAL DEVELOPMENT DIVISION.

THE FY 2005-2006 FINANCIAL HISTORY HAS BEEN RESTATED TO REFLECT THIS ORGANIZATIONAL CHANGE. TOTAL MARINE &

INDUSTRIAL DEVELOPMENT PROPOSED BUDGET 2008-09 83,757,804 $ 1,047,004 $ 34,332 2,362,011 3,443,347 $ 11,161,780 $ 2,735,883 37,065,565 12,564,306 5,096,459 531,997 69,155,990 $ 12,417,760 $ 0 12,417,760 $ 0 $ 0 299,750 299,750 $ 85,316,847 $

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GENERAL FUND

ADOPTED

RESOURCES (CONTINUED) OTHER RESOURCES

FIXED ASSET SALES/OTHER $ 824,653 $ (2,886,475) $ 1,606,783 $ 0

INTEREST ON INVESTMENTS 5,819,373 8,724,078 6,732,000 7,315,300

BOND SALE PROCEEDS 0 0 0 0

FEDERAL/STATE GRANTS/OTHER 0 0 0 0

TOTAL OTHER $ 6,644,026 $ 5,837,604 $ 8,338,783 $ 7,315,300 INTERFUND REIMBURSEMENTS-FROM

AIRPORT REVENUE FUND $ 13,299,582 $ 13,312,426 $ 15,691,172 $ 16,758,670

BOND CONSTRUCTION FUND 4,665,129 5,343,153 7,465,112 7,433,052

AIRPORT CONSTRUCTION FUND 6,400,576 6,324,836 6,467,155 6,512,271

TOTAL INTERFUND REIMBURSEMENTS $ 24,365,287 $ 24,980,415 $ 29,623,439 $ 30,703,993

CASH TRANSFERS FROM OTHER FUNDS:

AIRPORT REVENUE FUND $ 2,009,173 $ 2,966,569 $ 2,398,341 $ 2,398,341

TOTAL CASH TRANSFERS FROM OTHER FUNDS $ 2,009,173 $ 2,966,569 $ 2,398,341 $ 2,398,341 LIMITED TAX PENSION BONDS $ 20,012,029 $ 0 $ 0 $ 0 TAXES

TAXES WITHIN PERMANENT RATE LIMIT $ 0 $ 0 $ 8,178,250 $ 8,178,250

PROPERTY TAXES 7,501,470 7,921,846 0 0 INTEREST ON TAXES 22,359 26,099 0 0 TOTAL TAXES $ 7,523,829 $ 7,947,945 $ 8,178,250 $ 8,178,250 TOTAL RESOURCES $ 248,137,820 $ 243,275,293 $ 240,175,544 $ 269,340,119 PROPOSED BUDGET 2008-09 0 $ 5,028,000 0 0 5,028,000 $ 18,700,748 $ 8,318,321 7,370,810 34,389,879 $ 2,503,495 $ 2,503,495 $ 0 $ 8,615,578 $ 0 0 8,615,578 $ 219,611,602 $

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GENERAL FUND

ADOPTED PROPOSED

ACTUAL ACTUAL BUDGET PROJECTED BUDGET

2005-06 2006-07 2007-08 2007-08 2008-09

REQUIREMENTS EXPENDITURES BY DIVISION

MARINE & INDUSTRIAL DEVELOPMENT * $ 41,034,854 $ 48,351,447 $ 66,327,603 $ 55,917,567 $ 57,607,687 NAVIGATION 3,780,049 7,388,940 7,231,878 8,746,684 10,109,794 GENERAL AVIATION 2,050,442 2,031,443 2,321,951 2,326,449 2,200,523 ENGINEERING 8,200,790 8,397,837 9,040,828 9,045,323 10,028,791 CORPORATE ADMINISTRATION * 20,582,984 22,158,597 26,320,237 27,266,593 31,446,855 TOTAL EXPENDITURES $ 75,649,119 $ 88,328,263 $ 111,242,497 $ 103,302,616 $ 111,393,650 INTERFUND REIMBURSEMENTS-TO

AIRPORT REVENUE FUND $ 101,223 $ 208,536 $ 71,017 $ 105,829 $ 54,689

TOTAL INTERFUND REIMBURSEMENTS $ 101,223 $ 208,536 $ 71,017 $ 105,829 $ 54,689

TOTAL EXPENDITURES & REIMBURSEMENTS $ 75,750,342 $ 88,536,798 $ 111,313,514 $ 103,408,445 $ 111,448,339

OTHER REQUIREMENTS

OTHER ENVIRONMENTAL 5,276,354 5,545,058 4,965,421 4,728,740 1,461,054 LONG-TERM DEBT PAYMENTS (1) 5,243,182 5,711,212 5,925,369 5,925,369 6,130,970

ADVANCED PAYMENTS TO PERS 20,012,029 0 0 0 0

SYSTEM DEVEL CHARGES / OTHER 139,005 0 5,000 0 5,000

TOTAL OTHER REQUIREMENTS $ 30,670,570 $ 11,256,270 $ 10,895,790 $ 10,654,109 $ 7,597,024 CASH TRANSFERS TO OTHER FUNDS

BOND CONSTRUCTION FUND $ 17,000,000 $ 15,000,000 $ 49,177,589 $ 71,344,762 $ 40,156,859

AIRPORT REVENUE FUND 379,914 805,158 0 175,000 460,000

TOTAL CASH TRANSFERS TO OTHER FUNDS $ 17,379,914 $ 15,805,158 $ 49,177,589 $ 71,519,762 $ 40,616,859

TOTAL OTHER REQ & CASH TRANSFERS $ 48,050,484 $ 27,061,428 $ 60,073,379 $ 82,173,871 $ 48,213,883

CONTINGENCY $ 0 $ 0 $ 68,788,651 $ 83,757,804 $ 59,949,380

ENDING FUND BALANCE 124,336,995 127,677,066

TOTAL REQUIREMENTS $ 248,137,820 $ 243,275,293 $ 240,175,544 $ 269,340,119 $ 219,611,602

(1) LONG -TERM DEBT PAYMENTS

CITY OF PORTLAND L.I.D. $ 846,555 $ 847,744 $ 850,000 $ 850,000 $ 828,702 LIMITED TAX PENSION BONDS 4,396,627 4,863,468 5,075,369 5,075,369 5,302,268 TOTAL LONG-TERM DEBT PAYMENTS $ 5,243,182 $ 5,711,212 $ 5,925,369 $ 5,925,369 $ 6,130,970

* IN FY 2006-2007, BUSINESS DEVELOPMENT AND PROPERTY & DEVELOPMENT SERVICES TRANSFERRED FROM CORPORATE ADMINISTRATION TO THE MARINE & INDUSTRIAL DEVELOPMENT DIVISION.

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MARINE AND INDUSTRIAL DEVELOPMENT

The Port owns four marine terminals which handle a diverse mix of cargo, including grain, mineral bulk, breakbulk, liquid bulk, automobiles, project cargo, and containers. All four terminals lay in close proximity to major rail, highway, and inland barge

connections, offering world-class intermodal transportation flexibility.

The Port is the largest developer of industrial and business parks in the Portland metropolitan area. Within its 10,000 acres of property holdings, the Port oversees five business and industrial parks: Rivergate Industrial Park, Portland International Center, Swan Island Industrial Park including Mocks Landing and Port Center, Troutdale Reynolds Industrial Park, and Brookwood Corporate Park.

Business Plan Initiatives

Container Business Line

• Increase Terminal 6 container throughput by expanding service by current direct-call Portland carriers and by attracting service by new carriers.

• Establish a long-term operating model for Terminal 6 that improves and sustains international market access for local and regional shippers, increases intermodal volumes, secures private capital investment, and stabilizes Port financial performance.

• Improve the operational and financial performance of the Terminal 6 through the implementation of new technology.

Non-Container Marine Business Line

• Develop new business at Terminal 2 and Terminal 4, including project cargos, liquid bulks, and dry bulks.

• Work with tenants to improve the utilization of the Port's three automobile terminals and develop areas for terminal expansion where needed.

• Rehabilitate and extend the life of the Berth 503, which is used for the export of potash.

Real Estate

• Market Port properties to potential import cargo warehousing and distribution accounts in support of Terminal 6 container operations.

• Market Lots 1 and 3 in the Troutdale Reynolds Industrial Park.

• Assess real estate marketing opportunities and schedule for Troutdale Reynolds Industrial Park Phase 2 development.

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Infrastructure Development

• Deepen the Columbia River channel to 43 feet to allow the passage of deeper-draft bulk and container ships.

• Work with the U.S. Army Corps of Engineers to complete an updated dredged material management plan for the Willamette River.

• Expand the South Rivergate Yard to improve the efficiency of rail service to Rivergate Industrial District marine terminals and shippers.

• Construct a second lead and a new yard to facilitate dual unit train movement between North and South Rivergate and to increase efficient manifest and auto train movement for Rivergate area and Terminal 4 businesses.

• Widen North Lombard Street in Rivergate to accommodate vehicle traffic generated through the build-out of the Rivergate Industrial District.

• Design and construct an overcrossing extension of the current Leadbetter Road cul-de-sac in Rivergate to provide 24-hour access to Columbia Sportswear, Oregon Transfer, and other Leadbetter Road businesses.

• Begin Phase I development of the Troutdale Reynolds Industrial Park. Development activities include grading, utilities, streets, and traffic improvements.

Facility and Land Use Planning

• Complete permitting and approval processes for Troutdale Reynolds Industrial Park Phase I development. Begin analysis of development alternatives for subsequent phases of TRIP development.

• As part of the City of Portland's planning for Hayden Island and the Columbia Crossing project, work to annex and designate the west side of Hayden Island for marine industrial uses and natural resource lands.

• Complete a facility plan for the Pier 1 area of Terminal 4.

• Continue work with the City of Portland to develop a new Greenway code and overall river plan which addresses industrial operations and development, trail locations, and mitigation opportunities.

Security

• Prepare for and implement the federal Transportation Worker Identification Credential (TWIC) program.

• Deploy an 800MHz security communication system and continue implementation of the ISO 28000 Security Management System.

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Marine Business Assumptions 2008-09 Budget

Business Line 2007-08 Budget 2007-08 Projected 2008-09 Forecast Containers (Boxes) 149,500 149,500 144,100 Automobiles 460,000 460,000 410,000

Bulk Minerals (Short Tons) 5,087,000 5,087,000 5,951,000

Bulk Grain (Short Tons) 3,705,000 3,705,000 4,188,000

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MARINE & INDUSTRIAL DEVELOPMENT DIVISION *

ADOPTED

FUND: GENERAL ACTUAL ACTUAL BUDGET PROJECTED

2005-06 2006-07 2007-08 2007-08

REQUIREMENTS SUMMARY:

PERSONAL SERVICES $ 11,670,61110,881,844 $ 12,282,277$ 12,263,121$ MATERIALS AND SERVICES 30,153,010 36,680,836 54,045,326 43,654,446

TOTAL EXPENDITURES $ 48,351,44741,034,854 $ 66,327,603$ 55,917,567$

INTERFUND REIMBURSEMENTS $ 8,203 $ 77,635 $ 0 $ 37,163

TOTAL EXPENDITURES & REIMBURSEMENTS $ 48,429,08141,043,057 $ 66,327,603$ 55,954,730$ * IN FY 2006-2007, BUSINESS DEVELOPMENT AND PROPERTY & DEVELOPMENT SERVICES TRANSFERRED

THE FY 2005-2006 FINANCIAL HISTORY HAS BEEN RESTATED TO REFLECT THIS ORGANIZATIONAL CHANGE.

PROPOSED BUDGET 2008-09 12,827,586 $ 44,780,101 57,607,687 $ 0 $ 57,607,687 $

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PERSONAL SERVICES

FULL TIME FULL TIME

EQUIV ADOPTED EQUIV PROPOSED

POSITION ACTUAL ACTUAL POSITIONS BUDGET POSITIONS BUDGET

GRADE TITLE 2005-06 2006-07 2007-08 2007-08 2008-09 2008-09

MARINE

80-82 ADMINISTRATION $ 75-79 ADMIN PROFESSIONAL/TECH 71-74 ADMIN SUPPORT STAFF -- INTERNS 22,652 -- BOILERMAKERS/MACHINIST -- CARPENTERS 116,908 -- ELECTRICAL FOREMAN -- ELECTRICIANS -- LABORERS 330,120 -- OPERATING ENGINEERS -- PAINTERS 125,668 -- PLUMBERS 230,829 -- SECURITY 825,240 SUBTOTAL MARINE $ TOTAL OVERTIME ACCRUED LABOR FRINGE BENEFITS TOTAL MARINE $ INDUSTRIAL DEVELOPMENT 80-82 ADMINISTRATION $ 75-79 ADMIN PROFESSIONAL/TECH 71-74 ADMIN SUPPORT STAFF 1,325,615 $ 1,610,900 19.5 $ 1,853,979 15.0 $ 1,511,216 1,112,411 1,100,363 16.0 1,186,472 22.0 1,718,037 149,664 160,129 4.0 169,897 3.0 125,533 19,179 -- 39,815 -- 6,036 174,663 174,285 3.0 191,793 3.0 198,365 115,474 3.0 183,701 2.5 158,833 130,329 135,378 1.0 75,111 2.0 155,101 527,819 789,293 13.0 907,556 13.0 936,774 326,293 6.5 370,862 6.0 354,527 105,277 100,816 2.0 116,983 2.0 121,096 130,490 2.3 136,207 2.3 140,559 233,113 4.0 261,608 4.0 270,660 979,882 23.0 1,108,922 27.0 1,196,963 5,177,194 $ 5,875,595 97.3 $ 6,602,906 101.8 $ 6,893,699 731,128 730,592 -- 642,330 -- 734,614 50,686 37,648 -- 29,936 -- 68,963 2,188,083 2,480,952 -- 2,673,125 -- 2,865,478 8,147,091 $ 9,124,787 97.3 $ 9,948,297 101.8 $ 10,562,754 229,352 $ 237,156 3.0 $ 341,140 4.0 $ 413,571 606,561 608,412 8.7 637,814 6.5 435,404 39,744 38,136 1.0 42,895 --

--- LANDSCAPE GARDENERS 266,082 279,932 6.0 289,272 7.0 342,777

SUBTOTAL INDUSTRIAL DEVELOPMENT $ 1,141,738 $ 1,163,636 18.7 $ 1,311,121 17.5 $ 1,191,752

TOTAL OVERTIME 68 105 -- 300 -- 300

ACCRUED LABOR 10,636 (11,459) -- 5,705 -- 10,894

FRINGE BENEFITS 409,991 389,343 -- 423,431 -- 442,954

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GRADE TITLE 2005-06 2006-07 2007-08 2007-08 2008-09 2008-09

LAND USE PLANNING

80-82 ADMINISTRATION $ 271,961 $ 224,385 1.0 $ 117,757 1.0 $ 87,901 75-79 ADMIN PROFESSIONAL/TECH 196,191 246,147 5.0 330,763 5.0 355,241 71-74 ADMIN SUPPORT STAFF 32,864 4,649 -- - --

--- INTERNS 8,713 - -- - -- 2,769

SUBTOTAL LAND USE PLANNING $ 509,728 $ 475,181 6.0 $ 448,520 6.0 $ 445,911

TOTAL OVERTIME - - -- - --

-ACCRUED LABOR 5,487 (7,152) -- 1,919 -- 4,129

FRINGE BENEFITS 185,756 137,532 -- 142,984 -- 168,868

TOTAL LAND USE PLANNING $ 700,971 $ 605,561 6.0 $ 593,423 6.0 $ 618,907

BUSINESS DEVELOPMENT Eliminated in FY 2006/07 - Included in Corporate Administration in Previous Budgets

80-82 ADMINISTRATION $ 161,316 $ 164,570 -- $ - -- $ -75-79 ADMIN PROFESSIONAL/TECH 187,944 194,535 -- - -- -71-74 ADMIN SUPPORT STAFF 32,864 41,494 -- - --

-SUBTOTAL BUSINESS DEVELOPMENT $ 382,124 $ 400,599 0.0 $ - 0.0 $

-TOTAL OVERTIME - - -- - --

-ACCRUED LABOR 3,009 1,996 -- - --

-FRINGE BENEFITS 119,233 123,372 -- - --

-TOTAL BUSINESS DEVELOPMENT $ 504,366 $ 525,967 0.0 $ - 0.0 $

-SUBTOTAL MARINE & INDUSTRIAL DEV. $ 7,210,785 $ 7,915,011 122.0 $ 8,362,547 125.2 $ 8,531,362

TOTAL OVERTIME 731,196 730,697 -- 642,630 -- 734,914

ACCRUED LABOR 69,818 21,033 -- 37,560 -- 83,986

FRINGE BENEFITS 2,870,044 3,003,870 -- 3,239,540 -- 3,477,324

TOTAL MARINE & INDUSTRIAL DEV.* $ 10,881,843 $ 11,670,611 122.0 $ 12,282,277 125.2 $ 12,827,586

* In FY 2006/07 Business Development and Property & Development Services transferred from Corporate Administration to the

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MARINE & INDUSTRIAL DEVELOPMENT DIVISION *

ADOPTED

FUND: GENERAL ACTUAL ACTUAL BUDGET PROJECTED

2005-06 2006-07 2007-08 2007-08

MATERIALS AND SERVICES REQUIREMENTS

LONGSHORE LABOR $ 25,933,38819,090,084 $ 28,837,540$ 28,881,035$ CONTRACT & CONSULTING SERVICES 5,118,987 3,844,337 17,852,195 7,418,195 MATERIALS AND SUPPLIES 999,992 1,122,675 1,459,855 1,459,855

UTILITIES 1,864,584 2,006,067 2,120,111 2,120,111

EQUIPMENT, FUEL AND LUBRICANTS 710,084 926,234 855,350 859,675

INSURANCE 1,296,598 1,197,894 999,069 999,129

MANAGEMENT & TRAVEL EXPENSES 816,344 832,276 939,601 935,141 MISCELLANEOUS EXPENSES** 256,338 817,966 981,605 981,305

TOTAL MATERIALS & SERVICES $ 36,680,83630,153,010 $ 54,045,326$ 43,654,446$

INTERFUND REIMBURSEMENTS

AIRPORT REVENUE FUND $ 8,203 $ 77,635 $ 0 $ 37,163

TOTAL INTERFUND REIMBURSEMENTS $ 8,203 $ 77,635 $ 0 $ 37,163 * IN FY 2006-2007, BUSINESS DEVELOPMENT AND PROPERTY & DEVELOPMENT SERVICES TRANSFERRED

THE FY 2005-2006 FINANCIAL HISTORY HAS BEEN RESTATED TO REFLECT THIS ORGANIZATIONAL CHANGE. ** INCLUDES: RENT, EQUIPMENT REPAIRS, PROPERTY TAXES, DRAINAGE ASSESSMENTS, SOFTWARE EXPENSE, POSTAGE, BAD DEBTS, DISCOUNTS, ETC.

PROPOSED BUDGET 2008-09 27,788,943 $ 9,370,548 1,375,507 2,310,635 1,099,880 847,649 1,043,459 943,480 44,780,101 $ 0 $ 0 $

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GENERAL AVIATION

The role of the General Aviation airports is to function as a reliever system to the Portland International Airport (PDX). By serving the needs of private aircraft, the airports help preserve capacity for commercial operations at PDX. There are three airports owned by the Port of Portland: Hillsboro (HIO), Troutdale (TTD), and Mulino (4S9). Through a management agreement, Mulino (4S9) is operated by the Oregon Department of Aviation.

Capital requirements shown in the Bond Construction Fund for the General Aviation airports are funded through a combination of earnings from General Aviation operations, FAA grants and transfers from the Airport Revenue Fund.

Business Plan Initiatives

Safety & Security

Provide a safe and secure environment for airport users, employees, and tenants while ensuring that all federal and state mandates are met or exceeded.

Initiatives include:

- Participate in regional emergency response planning and exercises, including the TOPOFF Exercise.

Environmental

Ensure General Aviation meets or exceeds all applicable federal, state, and local environmental regulations and carries forward its commitment to operate in an environmentally responsible and sustainable manner.

- Develop an action plan for and begin implementation of recommendations from the 2005 Airport Compatibility Study Update for HIO working with the HAIR Committee and airport management, addressing measures for both operations and surrounding land use.

- Initiate the federal National Environmental Protection Act (NEPA) process for the Hillsboro Airport 3rd Runway (HIO).

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Facilities

General Aviation will develop and maintain high quality airport facilities with a capacity for projected growth and quality of service levels. Facility development programs will be based on the established master plans and will incorporate capacity preservation techniques, adopted environmental policies, and sustainability goals as a guide for growth.

- Reconstruct and relocate Taxiway B at the TTD, in accordance with the Troutdale Airport Master Plan.

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GENERAL AVIATION DEPARTMENT

ADOPTED

FUND: GENERAL ACTUAL ACTUAL BUDGET PROJECTED

2005-06 2006-07 2007-08 2007-08

REQUIREMENTS SUMMARY:

PERSONAL SERVICES $ 681,862 $ 606,332 $ 731,003 $ 731,003 MATERIALS AND SERVICES 1,368,580 1,425,111 1,590,948 1,595,446

TOTAL EXPENDITURES $ 2,050,442 $ 2,031,443 $ 2,321,951 $ 2,326,449

INTERFUND REIMBURSEMENTS $ 83,715 $ 129,355 $ 71,017 $ 68,666

TOTAL EXPENDITURES & REIMBURSEMENTS $ 2,134,158 $ 2,160,798 $ 2,392,968 $ 2,395,115

PROPOSED BUDGET 2008-09 772,817 $ 1,427,706 2,200,523 $ 54,689 $ 2,255,212 $

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GRADE TITLE 2005-06 2006-07 2007-08 2007-08 2008-09 2008-09

GENERAL AVIATION

80-82 ADMINISTRATION $ 52,740 $ 81,306 1.0 $ 84,090 1.0 $ 87,252 75-79 ADMIN PROFESSIONAL/TECH 133,487 101,023 3.0 156,397 3.0 169,540 71-74 ADMIN SUPPORT STAFF 33,957 7,854 -- - --

--- INTERNS 22,633 19,335 -- 29,224 -- 29,224 -- MAINTENANCE 218,761 196,679 4.0 231,960 4.0 237,366

SUBTOTAL GENERAL AVIATION $ 461,578 $ 406,197 8.0 $ 501,671 8.0 $ 523,382

TOTAL OVERTIME 18,013 22,855 -- 23,700 -- 23,700

ACCRUED LABOR 3,013 1,069 -- 2,193 -- 5,386

FRINGE BENEFITS 199,258 170,454 -- 203,439 -- 220,349

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GENERAL AVIATION DEPARTMENT

ADOPTED

FUND: GENERAL ACTUAL ACTUAL BUDGET PROJECTED

2005-06 2006-07 2007-08 2007-08

MATERIALS AND SERVICES REQUIREMENTS

CONTRACT & CONSULTING SERVICES $ 640,515 $ 580,274 $ 670,887 $ 670,887

MATERIALS AND SUPPLIES 52,980 64,867 72,300 72,300

UTILITIES 367,070 367,640 326,250 326,250

EQUIPMENT, FUEL AND LUBRICANTS 93,894 106,874 297,000 301,500

INSURANCE 103,367 153,891 63,249 63,247

MANAGEMENT & TRAVEL EXPENSES 14,817 29,894 34,580 34,580 MISCELLANEOUS EXPENSES* 95,936 121,669 126,682 126,682

TOTAL MATERIALS & SERVICES $ 1,368,580 $ 1,425,111 $ 1,590,948 $ 1,595,446

INTERFUND REIMBURSEMENTS

AIRPORT REVENUE FUND $ 83,715 $ 129,355 $ 71,017 $ 68,666

TOTAL INTERFUND REIMBURSEMENTS $ 83,715 $ 129,355 $ 71,017 $ 68,666 * INCLUDES: RENT, EQUIPMENT REPAIRS, PROPERTY TAXES, DRAINAGE ASSESSMENTS, SOFTWARE EXPENSE,

POSTAGE, BAD DEBTS, DISCOUNTS, ETC.

PROPOSED BUDGET 2008-09 641,406 $ 69,450 339,300 164,750 57,518 33,780 121,502 1,427,706 $ 54,689 $ 54,689 $

PROPOSED BUDGET

2008-09 P

ROPOSED

B

UDGET

PORT OF PORTLAND

2008-2009 BUDGET

TABLE OF CONTENTS

B

UDGET

S

UMMARY

EXECUTIVE DIRECTOR’S MESSAGE

BUDGET OVERVIEW

PORT OF PORTLAND COMMISSION

PORT OF PORTLAND SENIOR MANAGEMENT

A LOOK AT THE PORT OF PORTLAND

HOW TO TRACE PORT DOLLARS

SUMMARY OF RESOURCES AND REQUIREMENTS BY FUND

BUDGET 2008-09 *

SUMMARY OF RESOURCES AND REQUIREMENTS BY FUND (CONTINUED)

SUMMARY HIGHLIGHTS (BUDGET BASIS)

Statutory Budget FY 2008-09

Operating Budget FY 2008-09

GENERAL PORT OPERATIONS

GENERAL FUND

MARINE AND INDUSTRIAL DEVELOPMENT

Business Plan Initiatives

Marine Business Assumptions 2008-09 Budget

GENERAL AVIATION

Business Plan Initiatives