e) Utility Expenses
Forecasts of utility expenses were prepared for each year of the forecast period. Electricity costs are based on the total size of the facility, and are forecast to increase at a rate of 3 percent per year. Other utilities include water, sewer, natural gas, and solid waste disposal. The costs of other utilities are based on the size and type of facility and are projected to increase at a rate of 3 percent per year.
f) Container Maintenance Expenses
In providing container maintenance and repair, the operator incurs additional costs. Such expenses are estimated to amount to approximately $4,250,000 per year ( 1999 dollars) and are projected to increase at a rate of 3 percent per year. The primary expense associated with providing this service is labor, with a small amount spent on materials.
2. Annual Maintenance Costs
Annual maintenance costs include upkeep of pavement throughout the terminal (concrete and asphalt), buildings (office, shops, warehouses, and yard buildings), the utilities (electricity, water, gas, storm drains, and sanitary sewers), and the rail system (rail track, switches, and ties in the rail yards). Annual maintenance costs were forecast based on a percentage of the construction costs for components of these systems that could wear out over time. Annual maintenance costs do not include replacement costs at the end of the system's design life .
Equipment maintenance costs are also included in this category; however, these costs are estimated based on the size of the equipment fleet required to handle the projected volumes at T18. The following equipment is estimated to be required at T18: 3 reach stackers, 25 top picks, and 60 yard tractors. Therefore, the annual maintenance cost of this equipment is included in the forecast. The equipment operating and maintenance costs listed in Exhibit 3 include labor, fuel, parts, and shop expenses associated with both preventive and repair-type maintenance.
Maintenance expenses are projected to increase at a rate of 3 percent per year. Total maintenance expenses are forecast to increase from $1,993,000 in 1999 to $3,457,000 in 2005.
3. Non-Operating Expenses
The operator will incur the following non-operating expenses: liability insurance, permit and license fees, leasehold excise tax, equipment replacement, and business taxes. Total non-operating expenses are forecast to increase from $1,663,000 in 1999 to $5,569,000 in 2005.
a) Liability Insurance
An allocation of $205,000 ( 1999 dollars) has been assumed for annual liability insurance premiums. The annual allocation has been escalated at an assumed annual inflation rate of 3 percent.
b) Permit and License Fees
An allocation of $100,000( 1999 dollars), increasing at an assumed annual inflation rate of 3 percent has been forecast to cover the cost of permits and license fees.
c) Leasehold Excise Tax
A leasehold excise tax of 12.84 percent applies to all portions of the T18 for which the operator has exclusive use under the lease. Estimated leasehold excise tax payments have been calculated for each year of the Forecast Period.
d) Equipment Replacement
Equipment replacement costs have been estimated based on the size of the equipment fleet each year as well as on the estimated average age of the fleet. Equipment replacement costs are assumed to increase from $306,000 in 1999 to $2,646,000 in the year 2005.
e) Business Taxes
Annual business taxes are estimated to equal 1.2 percent of gross revenues, based on information from the Washington State Department of Revenue. Business taxes are forecast to increase from $614,000 in 1999 to $1,201,000 in 2005.
