Seattle, Washington

2012 Budget and Business Plan
And

Draft Plan of Finance

Prepared by:
Finance and Budget Departments

Distinguished Budget Presentation Award

The Government Finance Officers Association of the United States and Canada (GFOA)
presented a Distinguished Budget Presentation Award to the Port of Seattle for its annual
budget for the fiscal year beginning January 1, 2011.
In order to receive this award, a governmental unit must publish a budget document that
meets pro-gram criteria as a policy document, as an operations guide, as a financial plan
and as a communications device.
This award is valid for a period of one year only. We believe our current budget continues
to conform to programs requirements, and we are submitting it to GFOA to determine its
eligibility for another award.

Port of Seattle

2012 Preliminary Budget

TABLE OF CONTENTS
Organization
Budget Document Organization
I.

II.

Executive Summary
2012 Budget Message

IV.

V.

VI.

I-1

Port View
A.
B.
C.
D.
E.
F.

III.

1

The Port of Seattle
History of the Port of Seattle
Facilities and Services
Strategic Planning
Commissioners and Officers
Organization Chart

II-1
II-1
II-1
II-3
II-4
II-5

Budget Overview
A. Business Plan Overview
B.
Operating Budget Overview
C.
Budget Overview-Staffing
D. Capital Budget Overview
E.
Tax Levy

III-1
III-2
III-7
III-8
III-9

Aviation Division
A. 2012 Budget Summary
B.
Business Plan Forecast
C.
Division Mission Statement
D. Business Plan and Strategies
E.
Operating Budget Summary
F.
Staffing
G. Capital Budget
H. Aviation Division Operating Statistics

IV-1
IV-3
IV-4
IV-4
IV-27
IV-31
IV-32
IV-33

Seaport Division
A. 2012 Budget Summary
B.
Business Plan Forecast
C.
Division Mission Statement
D. 2012 Business Plan
E.
Seaport Operating Budget Summary
F.
Staffing
G. Seaport Capital Budget
H. Seaport Division Operating Statistics

V-1
V-3
V-3
V-4
V-16
V-19
V-20
V-21

Real Estate Division
A. 2012 Budget Summary
B.
Business Plan Forecast
C.
Division Mission Statement
D. Real Estate Operating Budget Summary
E.
Staffing
F.
Real Estate Development Capital Budget

VI-1
VI-3
VI-3
VI-25
VI-28
VI-29
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2012 Preliminary Budget

VII. Capital Development Division
A. 2012 Budget Summary
B.
Mission Statement
C.
Key Responsibilities and Services
D. Capital Development Division Budget Summary
E.
Staffing
F.
Capital Budget
G. Capital Development Division Summary

VII-1
VII-1
VII-2
VII-7
VII-9
VII-9
VII-9

VIII. Corporate
A. 2012 Budget Summary
B.
Mission Statement
C.
Key Responsibilities and Services
D. Corporate Budget Summary
E.
Staffing
F.
Capital Budget
G. Corporate Capital Budget Summary

VIII-1
VIII -1
VIII -1
VIII-13
VIII-16
VIII -17
VIII -17

IX.

Tax Levy
A. Tax at a Glance
B.
Tax Levy Sources
C.
Tax Levy Uses
D. General Obligation Capacity
E.
Taxpayer Effect
F.
County Property Tax Comparison

IX-1
IX-1
IX-3
IX-7
IX-8
IX-8

X.

Capital Budget

X-1

XI.

Draft Plan of Finance

XI-1

XII. Statutory Budget
A. Introduction
B.
Statutory Budget Highlights
C.
Resolution
D. Tax Levy Calculation Sheet
E.
Forecasted Cash Flow Summary

XII-1
XII-1
XII-2
XII-4
XII-5

XIII. Appendixes
A. Budget Policy, Process and Calendar
1. Operating Budget
2. Capital Budget
B.
Financial Management Policies
1. Key Financial Tools
2. Financial Policies and Description of Major Funds
3. Revenue and Expense Assumptions
C.
Business Assessment
D. Bond Amortization Schedules
E.
Aviation Landing Fee Revenues
F.
Other Detailed Expenditures
G. Glossary of Terms Used
H. Acronyms and Abbreviations

XIII-1
XIII-1
XIII-7
XIII-10
XIII-10
XIII-11
XIII-16
XIII-17
XIII-23
XIII-27
XIII-28
XIII-29
XIII-34

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Port of Seattle

2012 Preliminary Budget

LIST OF TABLES
Table I-1
Table I-2

2012 Budget Summary
Cash Flow

I-5
I-6

Table III-1

Port of Seattle Business Plan Forecast

III-1

Table III-2

Revenues, Expenses, and Net Assets

III-4

Table III-3
Table III-4

Revenues and Expenses by Account Category
Port Staffing by Division

III-5
III-7

Table III-5

Capital Budget

III-8

Table IV-1

Aviation Division 2012 Cash Flow Summary

IV-1

Table IV-2
Table IV-3

Aviation Business Plan Forecast
Aviation Key Measures

IV-3
IV-3

Table IV-4

Aviation Revenue by Account

IV-27

Table IV-5

Aviation Operating & Maintenance Expenses by Account

IV-28

Table IV-6
Table IV-7

Aviation Revenue and Expense by Business Group/Department
Aviation Division Staffing

IV-29
IV-31

Table IV-8

Aviation Division Capital Budget Summary

IV-32

Table IV-9

Aviation Division Operating Statistics

IV-33

Table V-1
Table V-2

Seaport Division 2012 Cash Flow Summary
Seaport Business Plan Forecast

V-1
V-3

Table V-3

Lease and Asset Management Business Plan Forecast

V-10

Table V-4

Cruise and Maritime Operations Business Plan Forecast

V-15

Table V-5
Table V-6

Seaport Revenue by Account
Seaport Operating & Maintenance Expenses by Account

V-16
V-17

Table V-7

Seaport Revenue and Expense by Business Group/Department

V-18

Table V-8
Table V-9

Seaport Division Staffing
Seaport Division Capital Budget Summary

V-19
V-20

Table V-10

Seaport Division Operating Statistics

VI-21

Table VI-1

Real Estate Division 2012 Cash Flow Summary

VI-1

Table VI-2

Real Estate Division Business Plan Forecast

VI-3

Table VI-3

Real Estate Harbor Services Business Plan Forecast

VI-10

Table VI-4

Portfolio Management Business Plan Forecast

VI-16

Table VI-5

Eastside Rail Business Plan Forecast

VI-16

iii

Port of Seattle

2012 Preliminary Budget

Table VI-6

Development and Planning Business Plan Forecast

VI-19

Table VI-7

Real Estate Revenue by Account

VI-25

Table VI-8

Real Estate Operating & Maintenance Expenses By Account

VI-26

Table VI-9

Real Estate Revenue and Expenses By Department

VI-27

Table VI-10

Real Estate Division Staffing

VI-28

Table VI-11

Real Estate Division Capital Budget Summary

VI-29

Table VII-1

Capital Development Division 2012 Budget Summary

VII-1

Table VII-2

Capital Development Division Expense by Department

VII-7

Table VII-3

Capital Development Division Revenues and Expenses by Account

VII-8

Table VII-4

Capital Development Division Staffing

VII-9

Table VII-5

Capital Development Division Summary

VII-9

Table VIII-1
Table VIII-2

Corporate 2012 Budget Summary
Administrative Expense by Department

VIII-1
VIII-13

Table VIII-3

Corporate Revenues and Expenses by Account

VIII -15

Table VIII-4

Corporate Division Staffing

VIII -16

Table VIII-5

Corporate Capital Budget

VIII -17

Table VIII-6

Corporate Summary

VIII -17

Table IX-1

Sources and Uses of Tax Levy

IX-4

Table IX-2
Table IX-3

Direct Levy or G.O. Bond Funded Committed Projects
Existing G.O. Bond Debt Service By Projects and Group

IX-5
IX-6

Table X-1

Capital Budget

X-1

Table X-2

Public Expense and Special Item Projects

X-7

Table X-3
Table XII-1

Non-Recurring Capital Budget Impact on the operating Budget
Tax Levy Calculation Sheet

X-8
XII-4

Table XII-2

Forecasted Cash Flow Summary

XII-5

Table C-1

Summary Forecast

XIII-18

Table C-2
Table C-3

State Employment by Industry
Top 10 Public Companies in Washington

XIII-19
XIII-20

Table C-4

North American West Coast Ports' Total Container Volumes

XIII-20

Table D-1

Bond Amortization Schedules for 2011

XIII-23

Table D-2
Table E-1

Bond Amortization Schedules for 2012
Landing Fee Revenue Calculation

XIII-25
XIII-27

Table F-1

Promotional Hosting by Division

XIII-28

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Port of Seattle

2012 Preliminary Budget

LIST OF FIGURES
Figure I-1

Sources of Funds

I-7

Figure I-2

Uses of Funds

I-7

Figure II-1

Facility Map

II-2

Figure II-2

Organization Chart

II-5

Figure III-1

Operating Revenues by Source: 2012

III-6

Figure III-2

Operating Expenses by Usage: 2012

III-6

Figure III-3

Port Staffing by Division

III-7

Figure III-4

2012 Committed Capital Budget

III-8

Figure III-5

Tax Levy vs. Millage Rate 2003-2012

III-9

Figure IV-1

Aviation Division Sources of Cash

IV-2

Figure IV-2
Figure IV-3

Aviation Division Uses of Cash
Aviation Division Revenue by Account

IV-2
IV-27

Figure IV-4

Aviation Division Expense by Account

IV-28

Figure IV-5
Figure V-1

Aviation Division Committed Capital Budget
Seaport Division Sources of Cash

IV-32
V-2

Figure V-2

Seaport Division Uses of Cash

V-2

Figure V-3

Seaport Division Revenue by Account

V-16

Figure V-4

Seaport Division Expense by Account

V-17

Figure V-5

Seaport Division Committed Capital Budget

V-20

Figure VI-1

Real Estate Division Sources of Cash

VI-2

Figure VI-2

Real Estate Division Uses of Cash

VI-2

Figure VI-3
Figure VI-4

Real Estate Division Revenue by Account
Real Estate Division Expense by Account

VI-25
VI-26

Figure VI-5

Real Estate Division Committed Capital Budget

VI-29

Figure VII-1

Capital Development Division Expense by Department

VII-7

Figure VII-2
Figure VIII-1

Capital Development Division Expense by Account
Administrative Expense by Department

VII-8
VIII-14

Figure VIII-2

Administrative Expense by Account

VIII-15

Figure IX-1

Actual Tax Levy vs. Maximum Allowable Levy 1991-2012

IX-2

Figure IX-2
Figure IX-3

Tax Levy vs. Millage Rate 2003-2012
Assessed Valuation vs. Millage Rate 2003-2012

IX-2
IX-8

Figure IX-4

2011 Percentage of Tax Levies By Taxing District

IX-8

Figure XII-1

Sources of Cash

XII-6

Figure XII-2
Figure A-1

Uses of Cash
Operating Budget Process Flow Chart

XII-6
XIII-5

Figure A-2

Capital Budget Process Flow Chart

XIII-8

v

Port of Seattle

2012 Preliminary Budget

BUDGET DOCUMENT ORGANIZATION
This document contains the operating, capital and statutory budgets, business plan and draft plan of finance
for the Port of Seattle and is organized as follows:


Section I has the Budget Message from the Chief Executive Officer depicting the 2012 plans, budget
highlights, a budget summary, which is summarized in Table I-1 and a cash flow summary in Table I-2
and charts depicting sources and uses of funds. Table I-1 depicts the operating revenues, expenses,
capital budget and full-time equivalent positions by division. This table differs from the other tables in
section III in that it shows the portion of the corporate/administrative expense that is not allocated to the
divisions. Otherwise, the division expenses would not add up to the total port expenses.



Section II, the Port View, contains the history of the port, its facilities and services, strategies, its
commissioners and officers and organization chart.



Section III, the Overview of the 2011 business plan and budget contains an executive summary
discussion of the Port's Operating and Non-operating Budget, Capital Budget, and Tax Levy.
o
o
o
o
o

Table III-1 provides a summary of the Port business plan forecast for the period 2011-2016.
Table III-2 summarizes the Port's revenues, expenses, and net assets for the years 2008-2012.
Table III-3 summarizes the Port's operating revenues and expenses by major account, 2010-2012.
Table III-4 summarizes the Port's staffing by division, 2010-2012.
Table III-5 summarizes the Port's Capital Budget, 2012-2016.



The Operating Division summaries for the Aviation, Seaport, and Real Estate Divisions (Sections IV
through VI) present the summary business plans for each business group, operating budget, staffing, and
capital budget for each division. The operating budget is presented by business groups/departments as
well as by major revenue and expense accounts. One thing to note is that the business
groups/departments table in each division (Table IV-6, V-8, VI-9) differs from the other tables in that it
shows the division's controllable costs only and does not reflect the direct charges and corporate
allocations expenses from the corporate and capital development divisions.



Sections VII and VIII present a summary of the Capital Development Division and Corporate,
descriptions of the departments, operating budgets, staffing, and capital budgets.



A detailed presentation and discussion of the Tax Levy is provided in Section IX.



Details of the Capital Budget are provided in Section X. A summary page presents the total capital
budget by business group and by division. Following the summary is a listing of the projects by business
group and division.



The Draft Plan of Finance is provided in Section XI.



The Statutory Budget, which is submitted to King County Council and King County Assessor, is
provided in Section XII.



The Appendices include detailed information regarding the budget and financial policies, business
assessment, bond amortization schedules, landing fee calculation, other detailed expenditures, glossary
of terms used and acronyms, are provided in Section XIII.

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Port of Seattle

2012 Preliminary Budget

PORT OF SEATTLE
MEMORANDUM
DATE:

October 17, 2011

TO:

Port Commission

FROM:

Tay Yoshitani, Chief Executive Officer

SUBJECT:

2012 Budget Message

INTRODUCTION
Managing through the economic uncertainty
As we prepare the Port of Seattle budget for 2012, I am mindful of the hard work and sacrifices you have
made in the past few years so the port's businesses could continue to operate in a strong and solid financial
position. The proactive measures we took were difficult, but they have sustained us through these
challenging times and enabled us to achieve positive results.
We continue to face economic uncertainty. The continued slowdown in the U.S. economy, the high
unemployment rate at both the national and state levels, the federal deficit reduction negotiation, the ongoing cuts to address state and local government budget gaps, and the European sovereign debt crisis all
cast doubt on the strength of recovery.
While we anticipate only modest growth in port operating revenues during 2012, we expect noticeable cost
increases due to several factors including the new rental car facility and related activities, terminal
realignment, deferred maintenance reduction program, and payroll costs. We must continue our prudent
and conservative approach to cost management to ensure the port's long-term economic viability.
Port businesses remain steady
Our core businesses are performing well compared to many of our peers. Sea-Tac Airport has seen strong
passenger growth in the first half of 2011. Through August, domestic enplaned passengers are up 4.2
percent, while international enplanements are up 7.6 percent, for a total increase of 4.5 percent. We don't
expect this rate of growth to continue, but anticipate growth for the year to total 3.5 percent, exceeding our
previous record for enplaned passengers reached in 2008. For 2012, we are forecasting a 1.5 percent
growth rate. Our strategic focus will be to increase facility capacity to accommodate growing international
service and cargo, improve customer service, invest in the renewal and replacement of aging assets, and
grow non-aeronautical revenues.
The Seaport expects an increase in cruise passengers and a new lease at Terminal 106 to increase operating
revenues 2.5 percent relative to the 2011 budget. We welcome the addition of a Disney Cruise Line
homeport ship, expected to increase passenger volumes by about 10 percent. Critical 2012 Seaport goals
include increasing cargo freight and passengers moving through the freight and passenger terminals,
developing a stewardship plan for key division assets, and continued implementation of The Green
Gateway strategy, which gives us a competitive edge among West Coast ports.
Real Estate Division operating revenue is expected to grow by about 2 percent compared to 2011 budget
levels. Third party and lease revenue is expected to increase slightly as the hospitality and real estate
markets continue to recover. However, the risk remains for higher vacancies in commercial properties and
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I-1

Port of Seattle

2012 Preliminary Budget

recreational marinas. Key 2012 focus areas for this division will be cost management, property renewal
and replacement, and management of the Eastside Rail Corridor sections retained by the port.
2012 Budget Approach
Because of the economic uncertainty and some known cost increases, we must take a conservative
approach to budgeting for 2012. Finance & Budget department has provided each division and Corporate
with a preliminary budget target number.
Looking Ahead
As the Port begins its second century, we will have new goals and objectives to guide us for the next 25
years. The Century Agenda strategic planning process has engaged employees and expert panels to create a
visionary look forward to the emerging challenges and opportunities of the 21st century. In addition,
exciting new investments will enable us to serve our customers and the general public better and improve
the environment in our community and region. The new rental car facility will open in spring of 2012; the
terminal realignment at the airport is well underway; and we will continue to implement the award-winning
Northwest Ports Clean Air Strategy.

BUSINESS PLAN/ OPERATING BUDGET
The fiscal management of the budget is the cornerstone of our success as a Port. The 2012 operating
revenues are budgeted at $518.1 million, a $25.3 million or 5.1% increase from 2011 budget. Operating
expenses are budgeted at $309.7 million, a $23.9 million or 8.4% increase compared to 2011 budget. Net
Operating Income before Depreciation is $208.4 million, a $1.4 million or 0.7% increase.
Aviation
The Aviation Division manages Aeronautical and Non-aeronautical sides of its business. On the
Aeronautical side, the Port's goal is to manage cost in terms of cost per enplanement (CPE). The budgeted
2012 CPE is $13.25, compared to $12.76 in the 2011 budget. On the non-aeronautical side, the primary
goal is to increase cash flow as measured by net operating income (NOI).
Operating revenues are budgeted at $387.0 million. Revenues from airlines are $235.6 million, non-airline
revenues are $150.1 million, and other revenues are $1.2 million. Total operating expenses are budgeted at
$225.0 million. Net operating income before depreciation is $162.0 million.
Seaport
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division. Commercial Strategy, which
focuses on marketing container assets, Environmental Services & Planning, and Finance. These businesses
and service groups oversee the development and management of cargo and cruise terminals, moorage
facilities, and industrial properties connected to these businesses.
Seaport operating revenues are budgeted at $98.6 million. Total operating expenses, including corporate
costs, are $46.5 million. Net operating income before depreciation is $52.0 million.
Real Estate
The Real Estate Division includes five functional workgroups: Real Estate Development & Planning,
Harbor Services, Maintenance, Property Management & Leasing and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and
vessel moorage facilities. Financial services, project management, facility planning, and environmental
services are provided by the Seaport Division.
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Port of Seattle

2012 Preliminary Budget

Real Estate operating revenues are budgeted at $32.4 million. Total operating expenses including corporate
costs are $37.2 million. Net operating income before depreciation is minus $4.8 million.
Capital Development
The Capital Development Division (CDD) includes six functional workgroups: Engineering, Port
Construction Services, Aviation Project Management Group, Seaport Project Management Group, Central
Procurement Office, and CDD Administration. The CDD delivers projects and provides technical and
contracting services in support of the business plans and infrastructure needs of the Port of Seattle.
Capital Development operating expenses are budgeted at $15.5 million.
Corporate
The three operating divisions of the Port are supported by a number of functional departments as well as
service groups, including the Port's Police Department. These functional and service groups allocate their
expenses according to the level of service they provide to the divisions. Corporate operating expenses are
budgeted at $76.5 million.
CAPITAL BUDGET
The total capital budget for 2012 is $406.4 million and the five year capital improvement program is $1.5
billion, which reflects the Port's continuing commitment to promoting regional economic activity through
the investment in the development, expansion, and renewal of Port facilities that supports the Port's
Business Plan and Green Initiative.
TAX LEVY
The Port's 2012 Budget assumes a levy amount of $73.5 million, no change from 2011; however, due to
the decline in assessed value, the tax levy rate increased by 4.23% to $0.2329 per $1000 of assessed value
from $0.2160. The Tax Levy, Section IX of this document provides details on the uses of the Port's levy.
SUMMARY
We still face considerable budget challenges in 2012, but with the right tools, resources and our highly
capable employees, we are well positioned to continue the port's strong record of success. The annual
budget is an essential management tool to sustain our businesses. I appreciate your commitment to and
involvement in the 2012 budget.

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Port of Seattle

2012 Preliminary Budget

2012 Budget Highlights

The Port takes a conservative approach for the 2012 Budget and strives to maintain a strong bottom line.
We also continue to invest in business operations that retain and attract customers, create jobs, assure best
value and return on investment, and help position the Port for future growth.


Operating revenues are budgeted at $518.1 million, a $25.3 million or 5.1% increase from 2011
budget. Aeronautical revenues, which are based on cost recovery, are $ 235.6 million, an increase
of $18.4 million or 8.5%. Other operating revenues are $282.5 million, an increase of $6.8 million
or 2.5% compared to 2011 budget.



Total Revenues, which include the $518.1 million operating revenues and $205.1 million nonoperating revenues, are $723.2 million, a $12.2 million or 1.7% increase from 2011 budget.



Operating expenses are $309.7 million for 2012 budget, a $23.9 million or 8.4% increase from
2011 budget. The new Rental Car Facility and the Terminal Realignment account for about half of
the increase ($11.8 million out of the $23.9 million).



Other key drivers for cost increase in 2012 budget are baseline payroll and contractual increases,
deferred maintenance, initiatives tied to strategic goals and Century Agenda, Audit
Committee/Internal Audit initiatives, and other initiatives related to Enterprise Risk Management,
Medical Plan review/design and business process improvement.



To mitigate rising medical costs, the Port will continue the self-funding medical plan in 2012 and
ask employees for more medical cost sharing. These and other measures, including the Spirit and
Wellness Program, help keep the medical cost at a moderate 2.2% increase for 2012.



The average pay increase for non-represented employees is budgeted at 3.0% for 2012, which is in
line with the projected 3.15% average increase in the regional salary planning surveys.



Despite the increased costs, the Port's net operating income is forecasted to remain strong at $208.4
million, $1.4 million or 0.7% higher than 2011 budget.



Operating expenses are $309.7 million and non-operating expenses including depreciation are
$330.6 million for 2012 budget. Total expenses are $640.3 million, a $4.2 million or 0.6%
reduction from 2011 budget.



Net operating income after depreciation is $49.9 million and net non-operating income is $33.0
million, resulting in an $82.9 million increase in Net Assets for 2012 budget. This represents a
$16.3 million or 24.5% increase from 2011 budget.



The Port's capital budget for 2012 is $406.4 million, which includes investments in projects that
create near-term jobs, as well as environmental initiatives and congestion relief projects that ease
the movement of freight throughout the region.



Major capital projects for 2012 include: Rental Car Facility, Terminal Escalator Modernization,
Central Plant Pre-conditioned Air, Aircraft RON Parking, Terminal Realignment, Electrical
Ground Service Equipment (EGSE) Rolling Stock, 8th Floor Garage Weather Proofing, Street
Vacation Related Projects, T25 South Redevelopment Phase 2, Apron Piling, and Cathodic
Protection.

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Port of Seattle

2012 Preliminary Budget

TABLE I-1: 2012 BUDGET SUMMARY
($ in 000's)
OPERATING BUDGET
Airline Revenue
Non-Airline Operating Revenues
Security Reimbursement
Fuel Hydrant Facility
Total Operating Revenues

Notes

Aviation
$ 235,619
150,831
0
514
386,964

Seaport Real Estate

Capital

Corporate

98,579

32,401

98,579

32,401

0

151

157,754
47,145
16,964
3,096
224,959

29,078
17,458
0
0
46,536

30,530
5,344
1,350
0
37,224

0
0

1,006

0

0
1,006

217,361
70,953
18,314
3,096
309,725

Net Operating Income before Depreciation

162,005

52,043

(4,823)

0

(855)

208,370

Depreciation

117,072

31,713

9,694

0

158,479

Net Operating Income after Depreciation

44,934

20,330

(14,517)

0

(855)

49,891

Revenue Bond Interest Expense
Interest Income
Non-Op Environmental Expense
Other Non-Op Income (Expense)
Ad Valorem Tax Levy Revenue
Public Expense
G.O. Bond Interest & Amortization
Passenger Facility Charges
Customer Facility Charges
Fuel Hydrant revenue
PFC Bond Interest & Amortization
Non Capital Grants and Donations
Net Non-operating

(121,075)
4,380
0
(901)
546
(650)
0
63,448
21,333
7,839
(6,826)
1,479
(30,427)

(12,084)
1,306
(5,090)
(2,278)
49,320
(5,004)
(12,887)
0
0
0
0
0
13,283

(2,647)
62
(200)
(397)
23,634
0
(2,039)
0
0
0
0
300
18,712

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

(135,806)
5,748
(5,290)
(3,576)
73,500
(5,654)
(14,926)
63,448
21,333
7,839
(6,826)
1,779
1,568

Capital Contributions

28,982

2,466

0

0

0

31,448

Revenue Over Expense

$ 43,487

$ 36,079

CAPITAL BUDGET
Committed
Business Plan Prospective
Total

Aviation
Seaport Real Estate Capital Corporate
Total
$ 276,926 $ 25,706 $ 10,924 $
398 $ 11,524 $ 325,478
69,908
4,868
3,600
0
2,525
80,901
$ 346,834 $ 30,574 $ 14,524 $
398 $ 14,049 $ 406,379

EMPLOYEES
Total FTE's

Aviation
859.0

Operating and Maintenance Expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expense
Total Operating Expense

3
1

2

4

$

4,195

Seaport Real Estate
59.9
165.8

151

Total
$ 235,619
281,962
0
514
518,095

$

-

$

(855) $ 82,907

Capital Corporate
255.8
452.2

Total
1,792.7

ONEPGSUM.XLS

Notes:
1) 2012 Budget law enforcement costs includes Police costs.
2) See Tax Levy Section IX for detail of tax levy use.
3) Capital Development Division allocates expenses to the Aviation, Seaport and Real Estate divisions.
4) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
filename: _1 Executive Summary
updated: 10/18/2011

I-5

Port of Seattle

2012 Preliminary Budget

TABLE I-2: CASH FLOW SUMMARY

($ in 000s)

2012

Beginning balance of cash & investments

$ 717,812

SOURCES OF CASH
Operating Revenues
Interest Receipts
Proceeds from Bond Issues
Grants and Capital Contributions
Tax Levy
Passenger Facility Charges
Rental Car Customer Facility Charges
Fuel Hydrant Receipts
Other Receipts
Total

518,095
5,748
0
33,227
73,500
63,448
21,333
7,839
754
723,943

Anticipated available funds
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expenditures
Total Operating Expenses

Percent
of Total

71.6%
0.8%
0.0%
4.6%
10.2%
8.8%
2.9%
1.1%
0.1%
100%

1,441,756

309,725

21.4%
7.0%
1.8%
0.3%
30.5%

283,440

15.7%
12.2%
27.9%

Other Expenses
Public Expense
Capital Expenditures
Total

9,619
5,654
406,379
1,014,817

0.9%
0.6%
40.0%
100%

Ending balance of cash & investments

$ 426,938

Increase (decrease) of cash during year

$ (290,873)

Debt Service:
Interest Payments
Bond Redemptions
Total Debt Service

217,361
70,953
18,314
3,096

159,240
124,200

cashflow.xls

Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.
filename: _1 Executive Summary
updated: 10/18/2011

I-6

Port of Seattle

2012 Preliminary Budget

FIGURE I-1: SOURCES OF FUNDS
($ in 000's)

Rental Car Customer
Facility Charges
Fuel Hydrant Receipts
2.9%
Passenger
1.1%
Other Receipts
Facility Charges
0.8%
8.8%

Grants and Capital
Contributions
4.6%

Tax Levy
10.2%
Operating Revenues
71.6%

Interest Receipts
0.1%

Total Sources: $723,943

FIGURE I-2: USES OF FUNDS
($ in 000's)

Operating &
Maintenance Expense
21.4%

Corporate
Administrative Expense
7.0%

Capital Expenditures
40.0%

Bond Redemptions
12.1%

Interest Payments
15.7%

Law Enforcement
Costs
1.8%
Environmental
Expenditures
0.3%

Public Expense
0.6%

Total Uses: $1,014,817

Other Expenses
0.9%

filename: _1 Executive Summary
updated: 10/18/2011

I-7

Port of Seattle

2012 Preliminary Budget

A. THE PORT OF SEATTLE
The Port of Seattle, (the "Port"), is a public enterprise with unique authority operating in an international,
market-driven environment. The Port provides services to its customers in order to return benefits to the
citizens of King County, giving careful consideration to the economic, social, and environmental
implications of its decisions.
The Port is comprised of three operating divisions, namely Aviation, Seaport, and Real Estate, in addition to
the Capital Development Division and Corporate. The Aviation Division manages the Seattle-Tacoma
International Airport, ("Sea-Tac"). The Seaport Division manages (primarily through leases) cargo and
passenger marine terminals as well as industrial property connected with maritime businesses. The Real
Estate Division manages moorage facilities, leases commercial and industrial buildings/properties, and plans
and facilitates the development of selected real estate assets.
The Capital Development Division was established during 2008 and became fully operational during 2009.
It houses existing engineering, project management and construction functions and the Port's new Central
Procurement Office which consolidates contracting and procurement functions.
Corporate Division provides high quality and cost-effective professional and technical services to the
operating divisions and support the overall goals of the Port.

B. HISTORY OF THE PORT OF SEATTLE
The Port was established in 1911 in an effort by citizens to ensure public ownership of the Seattle harbor.
The Port of Seattle was the first autonomous municipal corporation in the United States specifically tasked to
develop harbor and Port facilities to encourage commerce. The Port opened Fishermen's Terminal in 1912,
its first warehouse in 1915 and began working on the creation of Harbor Island. Since then, the Port has
developed numerous properties as well as constructed the Seattle-Tacoma International Airport in 1949.
The Port's task hasn't changed over the years but its scope of services has expanded considerably. The Port
continues to upgrade and modernize its facilities to meet current market demands. The Port has added
container terminals, a grain terminal, cruise terminals, marinas, public parks and viewpoints and contributed
significantly in the development of public amenities along Seattle's waterfront.

C. PORT OF SEATTLE FACILITIES AND SERVICES
Sea-Tac is located on 2,800 acres sixteen miles south of downtown Seattle. The Port has made significant
improvements to the airport including a new terminal expansion, and infrastructure upgrades. The airport
includes 3 runways that are 11,900 feet, 9,425 feet, and 8,500 feet in length and a subway system linking the
concourses. Sea-Tac is the 17th largest U.S. airport as measured by total passengers and compared to other
large airports and has relatively high originations and destinations traffic.
Seaport facilities encompass approximately 1,200 acres of moorage and cargo-related facilities. Over 500
acres are dedicated to container operations at 4 terminals with over12,300 feet of container berth space
and 24 cargo cranes-including 7 Super Post-Panamax cranes. The Seaport also owns a fully automated grain
terminal and general purpose maritime facilities. It is home to the North Pacific factory trawler fishing
fleet. The Seaport also operates 2 cruise vessel terminals with a total of 3 berths. In addition, the Seaport
leases industrial property connected with these cruise, cargo, and factory trawler fishing businesses.
The Real Estate Division manages the Port's holdings in commercial real estate, recreational marinas,
industrial fishing terminals and developable property. This division was formed in 2008 and allows the
Seaport and Aviation Divisions to concentrate on their core businesses.

Filename: _2 Port View
Updated: 12/28/2009

II-1

Port of Seattle

2012 Preliminary Budget

FIGURE II-1: FACILITY MAP

Filename: _2 Port View
Updated: 12/28/2009

II-2

Port of Seattle

2012 Preliminary Budget

D. STRATEGIC PLANNING
Strategic Overview: Creating a Sustainable Port
The Port's five-year strategic plan is driven by several key strategic challenges and opportunities facing the
institution and the region today, with the goal of long-term sustainability. These challenges and opportunities
include:

Increasing competition from other ports, airports, and regions.

Decreasing availability of public funds.

Decreasing profit margins for most port and airport customers.

Complying with new security restrictions and costs to the global transportation system.

Increasing surface traffic congestion.

An emerging new economy based on information-intensive products and services.

A growing community interest in sustainability, to achieve a long-term balance of economic, social
and environmental objectives and values.

Influencing the demographics changes in present and future workforce.
The strategic focus of the organization for 2012 will center on these initiatives:
 Bring environmental leadership to front and center of entire organization.
 Achieve 2012 operating profit goals.
 Keep capital projects on schedule and budget.
 Strengthen the oversight of capital development and management.
 Promote programs for a high performance organization.
 Be proactive in public relations.

Mission
Creating economic vitality HERE

Vision and Values
At the Port of Seattle, we:

Invest in QUALITY services and facilities for our customers and community.

Act with INTEGRITY and OPENNESS.

Take RESPONSIBILITY and make the hard choices.

Treat each other with TRUST AND RESPECT.

Embrace DIVERSITY in our workforce and partnerships.

Promote CONTINUOUS IMPROVEMENT in our organization and in ourselves.

Strategies








Ensure Airport and Seaport vitality.
Develop new business and economic opportunities for the region and the Port.
Enhance public understanding and support of the Port's role in the region.
Be a catalyst for regional transportation solutions.
Be a leader in transportation security.
Exhibit environmental stewardship through our actions.
Be a high performance organization.

Filename: _2 Port View
Updated: 12/28/2009

II-3

Port of Seattle

2012 Preliminary Budget

E. COMMISSIONERS AND OFFICERS
The Port Commission is the legally constituted governing body of the Port of Seattle. As a governing body
of a special purpose municipal corporation, it is charged with the responsibility of fulfilling legislatively
mandated purposes and objectives.
The Port Commission is made up of five elected individuals. They are:
Bill Bryant, Chair and President
Rob Holland, Vice President
John Creighton, Secretary
Tom Albro, Assistant Secretary
Gael Tarleton, Commissioner
The senior officers of the Port are:
Tay Yoshitani, Chief Executive Officer
Kurt Beckett, Chief of Staff
Mark Reis, Managing Director, Aviation
Linda Styrk, Managing Director, Seaport
Dan Thomas, Chief Financial and Administrative Officer
Craig Watson, General Counsel
Ralph Graves, Managing Director, Capital Development
Joe McWilliams, Managing Director, Real Estate
Patricia Akiyama, Director, Public Affairs
Colleen Wilson, Chief, Police Department

Filename: _2 Port View
Updated: 12/28/2009

II-4

Port of Seattle

2012 Preliminary Budget

F. ORGANIZATION CHART
FIGURE II-2: ORGANIZATION CHART

King County Voters

Commission

Executive Office

Aviation

Seaport

Real Estate

859.0 FTEs

59.9 FTEs

165.8 FTEs

Internal Audit

Capital
Development

Corporate *
452.2 FTEs

255.8 FTEs
Airport
Operations

Lease & Asset
Management

Development &
Planning

Aviation Project
Management

Accounting &
Financial
Reporting

Public Affairs

Airport
Properties

Aeronautical

Cruise &
Maritime
Operations

Facilities
Management

Capital
Development
Administration

Finance & Budget

Health & Safety

Business
Development &
Management

Landside

Commercial
Strategy

Harbor Services

Central
Procurement
Office

Human Resources
& Development

Information &
Communications
Technology

Engineering

Legal

Labor Relations

Recreational
Boating

Port Construction
Services

Police
Department

Office of Social
Responsibility

Marine
Maintenance

Seaport Project
Management

Business
Development

Concessions

Community
Development

Aviation
Facilities

Finance &
Budget

Building
Department

Environmental
Management
and Planning

Airport Office
Building
Management

Facilities &
Infrastructure

Security

Fire
Department

Environmental
Planning
Finance &
Budget

Seaport
Administration

Fishing &
Commercial
Vessels

Risk Management

Portfolio
Management

Real Estate
Administration

Utilities

Aviation
Maintenance

*For reporting purposes, Commission Office, Executive Office, and Internal Audit all roll up to Corporate.

Filename: _2 Port View
Updated: 12/28/2009

II-5

Port of Seattle

2012 Preliminary Budget

A. BUSINESS PLAN OVERVIEW
Table III-1 below is a summary of the combined business plan forecasts of the Port's operating divisions,
which can be found in Sections IV, V and VI.
TABLE III-1: PORT OF SEATTLE BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET
Airline Revenue
Non-airline Revenue
Fuel Hydrant Facility
Fuel Hydrant Facility reclass to non-ops revenues
Total Operating Revenues
Operating & Maintenance Expense
Corporate & Capital Development Division Costs
Law Enforcement Costs
Environmental Expense
Total Operating & Maintenance Expenses

Budget
2011

Notes
$
1
2

1

1

Net Operating Income Before Depreciation

Budget
2012

2013

Forecast
2014
2015

2016

Compound
Growth
2011-2016

217,200 $ 235,619 $ 263,093 $ 276,525 $ 289,057 $ 296,224
275,084
281,962
294,429
310,247
318,191
327,358
8,353
514
514
514
514
514
(7,839)
0
0
0
0
0
492,797
518,095
558,036
587,286
607,762
624,096

6.4%
3.5%
-42.7%
-100.0%
4.8%

197,781
68,553
17,739
1,771
285,844

217,361
70,953
18,314
3,096
309,725

232,044
72,522
18,870
3,189
326,626

220,501
75,198
19,443
3,285
318,428

226,066
77,980
20,034
3,384
327,463

232,310
80,871
20,642
3,485
337,308

3.3%
3.4%
3.1%
14.5%
3.4%

206,954

208,370

231,410

268,858

280,300

286,788

6.7%

160,491
46,464 $

158,479
49,891

Total Depreciation Expense
Net Operating Income after Depreciation

$

Committed Capital Budget
Business Plan Prospective
TOTAL CAPITAL BUDGET

Total
2012-2016
$ 288,327 $ 325,478 $ 136,958 $
43,078 $
10,523 $
15,930 $
531,967
90,206
80,901
228,041
215,577
146,063
306,070
976,652
$ 378,533 $ 406,379 $ 364,999 $ 258,655 $ 156,586 $ 322,000 $ 1,508,619

3

POSBPFOR.XLS

Notes:
1) Includes revenue from Corporate & Capital Development departments and corresponding offset to allocated charges from Corporate departments.
2) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
3) See Section X for details of Capital Budget.

filename: Budover.doc
updated: 10/18/2011

III-1

Port of Seattle

2012 Preliminary Budget

B. OPERATING BUDGET OVERVIEW
OVERVIEW
The 2012 budget proposes total operating revenues of $518.1 million and total operating expenses of $309.7
million. Net Operating Income before Depreciation calculates to $208.4 million. Net Operating Income
after Depreciation is budgeted at $49.9 million.
AVIATION DIVISION
The Aviation Division operates the Seattle-Tacoma International Airport, which was the seventeenth largest
US airport as measured by total passengers in 2010. Enplaned passenger traffic at Sea-Tac grew by 1.0% in
2010. For the year through August, enplaned passengers are 4.5% above 2010. The forecast of total
passengers for 2011 is 4.0% above 2010. The 2012 budget assumes growth of 1.5%. For 2013 and beyond,
we assume a long-term growth rate of 2.2%. This is consistent with the Federal Aviation Administration's
(FAA) December 2009 long-term forecast for Sea-Tac Airport. Current and long-term cost management
continues to be a strategic focus of Sea-Tac Airport.
Operating revenues are budgeted to be $387.0 million, a $24.3 million or 6.7% increase from 2011 budget.
Aeronautical revenues are budgeted to increase by $18.4 million or 8.5% while non-airline revenues are
budgeted to increase by $5.9 million or 4.0% compared to 2011 budget.
Total airport operating expenses are budgeted to total $225.0 million. This represents a 11.9% increase
compared to the 2011 budget. For the Aviation Division alone, the 2012 budget is increasing by 15.2%
primarily due to the new consolidated rental car facility and the terminal realignment. Net operating income
before depreciation is $162.0 million.
SEAPORT DIVISION
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division. Commercial Strategy, which focuses
on marketing container assets, Environmental Services & Planning, and Finance. These businesses and
service groups oversee the development and management of cargo and cruise terminals, moorage facilities,
and industrial properties connected to these businesses.
The most critical measure of the Seaport's financial sustainability is a growing, positive Net Operating
Income (NOI). Only with strong financial performance, can the Seaport provide the economic, community
and environmental benefits that are the essence of its mission.
Seaport operating revenues are $98.6 million. Total operating expenses including corporate costs are $46.5
million. Net operating income before depreciation is $52.0 million.
REAL ESTATE DIVISION
The Real Estate Division is committed to increasing the economic vitality of our region and generating new
business opportunities for the Port. This will be accomplished by leveraging the Port's partnerships with
local and regional commercial and industrial businesses and real estate partners. The Real Estate Division
also intends to identify and pursue opportunities that enhance the region's long-term vitality and ultimately
produce new revenue for the Port.

filename: Budover.doc
updated: 10/18/2011

III-2

Port of Seattle

2012 Preliminary Budget

The Real Estate Division integrates the efforts of five functional workgroups: Real Estate Development &
Planning, Harbor Services, Marine Maintenance, Portfolio Management and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and
vessel moorage facilities. Financial services, project management, facility planning, and environmental
services are acquired from the Seaport Division.
Real Estate operating revenues are $32.4 million. Total operating expenses including corporate costs are
$37.2 million. Net operating loss before depreciation is $4.8 million.
CAPITAL DEVELOPMENT DIVISION
The Capital Development Division (CDD) delivers projects and provides technical and contracting services
in support of the business plans and infrastructure needs of the Port. The three operating divisions of the Port
are supported by the CDD based on level of project and contracting services required to support their
operations and capital & expense project needs. The services by the departments within the division are
demand driven.
Operating expenses for Capital Development Division are $15.5 million for 2012.
CORPORATE
The three operating divisions and Capital Development division are supported by a number of functional
departments as well as service groups. These functional and service groups allocate their expenses according
to the level of service they provide to the divisions.
Many of the corporate departments are vital to the success of the operating divisions for providing essential
services such as accounting, legal services, computer support, etc. Their services also benefit the public in
general and play an indirect role in the success of the operating divisions.
Operating expenses for Corporate are $76.5 million for 2012.
NON-OPERATING REVENUE AND EXPENSE
Non-operating revenues are budgeted to be $205.1 million and non-operating expenses are budgeted to be
$172.1 million; net non-operating income is budgeted at $33.0 million. The budget contains a tax levy
amount of $73.5 million. The millage rate is estimated to be $0.2329/1000.
CASH FLOW SUMMARY
Table I-2 from section I, page 6, reveals that operating revenues will make up 71.6% of the Port's budgeted
cash receipts for 2012. The tax levy is projected to be $73.5 million and accounts for 10.2% of total
budgeted receipts in 2012.
Total cash outlays are budgeted to be $1.01 billion for 2012. Of this amount, capital expenditures make up
the largest portion, $406.4 million or 40.0%. By comparison, total operating expenses (including Operating
& Maintenance, Corporate Administrative, Law Enforcement Costs and Environmental Reserve) will make
up 30.5%.

filename: Budover.doc
updated: 10/18/2011

III-3

Port of Seattle

2012 Preliminary Budget

TABLE III-2: REVENUES, EXPENSES, AND NET ASSETS
($ in 000's)
Notes

2008
Actual

2009
Actual

2010
Actual

2011
Budget

2011
Forecast

2012
Budget

OPERATING REVENUES:
Services
Property rentals
Fuel Hydrant facility revenues
Operating grant and contract revenues
Total operating revenue

$ 187,791
286,139
2,926
1,667
478,523

$ 163,983
274,584
7,845
3,023
449,435

$ 174,562
284,898
7,911
3,119
470,490

$ 184,690
303,788
7,839
4,320
500,636

$ 183,458
303,072
7,839
2,995
497,364

$ 206,499
308,838
2,758
518,095

OPERATING EXPENSES BEFORE DEPRECIATION:
Operations and maintenance
Law enforcement
Administration
Environmental
Total operating expenses before depreciation

209,960
20,221
44,438
274,619

182,995
19,136
43,636
245,767

188,678
19,949
44,837
253,464

214,793
22,180
46,600
2,271
285,844

204,118
22,439
51,049
702
278,308

236,788
23,490
46,351
3,096
309,725

NET OPERATING INCOME BEFORE DEPRECIATION

203,904

203,668

217,026

214,792

219,056

208,370

DEPRECIATION

144,208

157,068

160,775

160,491

160,491

158,479

OPERATING INCOME

59,696

46,600

56,251

54,301

58,565

49,891

73,500
61,933
23,275
8,493
13,654
(148,206)
(10,191)
(13,780)
(17,205)
(6,200)
(2,521)
(17,248)

73,500
63,448
21,333
7,839
1,779
5,748
(135,806)
(6,826)
(14,926)
(5,654)
(5,290)
(3,576)
1,568

NON-OPERATING INCOME (EXPENSE):
Ad valorem tax levy revenue
Passenger facility charges revenue
Customer facility charges revenue
Fuel hydrant income
Non Capital Grants and donations
Investment income - net
Revenue and capital appreciation bond interest expense
Passenger facility charges revenue bond interest expense
General obligation bond interest expense
Public Expense
Non-Op Environmental Expense - net
Other (expense) income - net
Total non-operating (expense) income - net

75,680
60,708
22,947

75,587
59,689
21,866

73,125
59,744
23,243

10,473
39,004
(105,517)
(11,412)
(17,059)
(27,494)
(5,659)
848
42,519

7,153
17,251
(121,148)
(10,956)
(15,785)
(20,370)
(14,676)
(10,003)
(11,392)

12,473
13,096
(133,239)
(10,187)
(17,463)
(25,085)
(22,730)
(7,276)
(34,299)

73,500
60,379
22,237
8,493
13,654
(148,206)
(10,191)
(13,780)
(17,205)
(6,200)
(2,521)
(19,839)

INCOME BEFORE CAPITAL CONTRIBUTIONS

102,215

35,208

21,952

34,462

41,317

51,459

CAPITAL CONTRIBUTIONS

52,436

76,781

30,519

32,106

32,106

31,448

INCREASE IN NET ASSETS

$ 154,651

$ 111,989

$ 52,471

$ 66,568

$ 73,423

$ 82,907

1778.4

1779.3

1696.1

1697.2

1711.2

1792.7

EMPLOYMENT (FTES)

Notes: Fuel Hydrant revenue was reclassified from Operating to Non-Operating revenue beginning in 2012.
filename: Budover.doc
updated: 10/18/2011

III-4

BDREVEXP

Port of Seattle

2012 Preliminary Budget

TABLE III-3: REVENUES AND EXPENSES BY ACCOUNT CATEGORY
($ in 000's)
TOTAL PORT
Operating Revenue
Dckg, Whrfg, Serv & Facility, Passenger Fee
Equipment Rental
Berthage & Moorage
Landing Fees
Airport Transportation Fees
Parking Revenue
Revenue from Sale of Utilities
Property Rental Revenue
Other Revenue
Fuel Hydrant non-cash reclass to non-operating
Total Operating Revenue

2010
Actual

Notes

2012
Budget

2,589 $
2,210 $
3,389
10,105
9,827
8,374
11,233
11,083
10,378
56,647
61,200
70,152
4,814
6,876
7,459
52,482
56,086
57,036
11,873
12,185
11,937
287,981
296,912
301,379
32,764
44,258
47,992
(7,912)
(7,839)
0
462,577
492,797
518,095

53.3%
-14.8%
-6.4%
14.6%
8.5%
1.7%
-2.0%
1.5%
8.4%
-100.0%
5.1%

Operating Expense
Salaries, Wages, Benefits & Workers Compensation
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses
Total O&M without Environmental

175,505
6,444
19,259
6,711
41,407
3,461
1,120
23,343
277,249

193,300
6,415
20,696
6,407
56,867
5,036
1,739
26,311
316,770

210,537
5,957
21,180
6,739
62,395
5,524
1,248
24,235
337,819

8.9%
-7.1%
2.3%
5.2%
9.7%
9.7%
-28.2%
-7.9%
6.6%

Environmental Expense
Total O&M with Environmental

4,708
281,957

2,271
319,041

3,096
340,916

36.3%
6.9%

Charges to Capital Projects

(28,493)

(33,197)

(31,191)

-6.0%

$ 253,464

$ 285,844

$ 309,725

8.4%

Expense after Charges to Capital Projects

$

2011
Budget

% Change
2012 Bud 2011 Bud

1

table4.xls

Notes:
1) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.

filename: Budover.doc
updated: 10/18/2011

III-5

Port of Seattle

2012 Preliminary Budget

FIGURE III-1: OPERATING REVENUES BY SOURCE: 2012
($ in 000's)
Dckg, Whrfg, Serv & Equipment Rental
Facility, Passenger Fee
1.6%
0.7%
Fuel Hydrant non-cash
Berthage & Moorage
reclass to non-operating
2.0%
0.0%
Other Revenue
9.3%

Airport Transportation
Fees
1.4%
Parking Revenue
11.0%

Landing Fees
13.5%

Property Rental Revenue
58.2%

Revenue from Sale
of Utilities
2.3%

Total Revenue: $518,095

FIGURE III-2: OPERATING EXPENSES BY USAGE: 2012
($ in 000's)

Promotional Expenses
0.4%

Other Expenses
7.1%

Environmental Expense
0.9%

Travel & Other Employee
Expenses
1.6%
Outside Services
18.3%
Supplies & Stock
2.0%

Utilities
6.2%

Salaries, Wages, Benefits
& Workers Compensation
61.8%

Equipment Expense
1.7%

Total Expense Before Charges to Capital Projects: $340,916
Charges to Capital Projects: $31,191
Total Expense: $309,725

filename: Budover.doc
updated: 10/18/2011

III-6

Port of Seattle

2012 Preliminary Budget

C. BUDGET OVERVIEW - STAFFING
The 2012 budget proposes an increase of 95.5 Full-time Equivalent positions (FTEs) to 1,792.7 FTEs compared to
1,697.2 FTEs in the 2011 budget.
Aviation, Seaport and Real Estate divisions are budgeting 859.0, 59.9, and 165.8 FTEs, respectively for 2012.
The Capital Development Division is budgeting 255.8 FTEs and Corporate is budgeting 452.2 FTEs.
Aviation is increasing 97.1 FTEs from the approved budget mainly due to 59.0 FTEs for the Rental Car and Bus
Maintenance Facilities, 17.0 FTEs for New Facilities & Asset Management and the others for Customer Service,
Employee and Cost Management and various other initiatives.
Seaport is budgeting 59.9 FTE's for 2012, which is .5 lower than 2011 budget since it eliminated 1.7 FTEs and
added a .4 FTE for the Sr. Financial Analyst to become full-time and a .8 FTE for a Limited Duration Real Estate
Specialist.
Real Estate is budgeting 165.8 FTE's, which is 1.0 higher than 2011 budget, which is for the Real Estate
Development and Planning Assistant position; Capital Development is eliminating 9.8 FTEs, and there is an
increase in Corporate of 4.6 FTEs.
More information for each of these categories is provided in the Aviation, Seaport, Real Estate, Capital
Development Division, and Corporate sections of this document (Sections IV to VIII).
TABLE III-4: PORT STAFFING BY DIVISION
PORT STAFFING
(Full-Time Equivalent Positions)
Divison
Aviation
Seaport
Real Estate
Capital Development
Corporate
Total FTE's

Note

2010
Actual
746.4
59.4
164.8
268.0
457.5
1,696.1

2011
Budget
761.9
60.4
164.8
262.5
447.6
1,697.2

2011
Est. Act.
773.0
59.1
164.8
264.5
449.8
1,711.2

2012
Budget
859.0
59.9
165.8
255.8
452.2
1,792.7

% Change
12 Bud- 12 Bud11 Bud
11 Est
12.7%
11.1%
-0.8%
1.4%
0.6%
0.6%
-2.6%
-3.3%
1.0%
0.5%
5.6%
4.8%
FTE.XLS

FIGURE III-3: PORT STAFFING BY DIVISION: 1792.7 FTE's for 2012

Corporate
25.2%
Aviation
47.9%

Capital Development
14.3%

Real Estate
9.2%

filename: Budover.doc
updated: 10/18/2011

Seaport
3.3%

III-7

Port of Seattle

2012 Preliminary Budget

D. CAPITAL BUDGET OVERVIEW
For the Port to meet the waterborne and air transportation needs of the region and to serve its customers, it must
invest in the acquisition, development and maintenance of long-term assets. For an organization as large and
diverse as the Port, this requires comprehensive long-term capital planning which synthesizes the existing and
anticipated business environment, careful estimates of customer demand for facilities, available resources, and the
priorities of the organization.
The 2012 Capital Budget reflects the Port's continuing commitment to promoting regional economic activity
through the investment of $406.4 million in the development, expansion, and renewal of Port facilities. For a
complete discussion of the Port's long-term capital and funding plan, refer to Sections X and XI, Capital Budget
and Draft Plan of Finance.
Table III-5 below summarizes divisional spending in the 2012 Capital Budget:
TABLE III-5: CAPITAL BUDGET
Committed Capital Projects
Aviation Division
Seaport Division
Corporate & CDD Divisions
Real Estate Division
Total Committed

2012
Budget
$276,926
25,706
11,922
10,924
$325,478

Business Plan Prospective Projects

$80,901

$976,652

Total CIP

$406,379

$1,508,619

($ in 000's)

2012-2016 % of 2012 Total
CIP
Committed
$443,723
85.1%
41,744
7.9%
25,175
3.7%
21,325
3.4%
$531,967
100.0%

capsum.xls
Note: Definitions and details of the capital budget can be found in Section X.

FIGURE III-4: 2012 COMMITTED CAPITAL BUDGET
Real Estate Division
3.4%
Seaport Division
7.9%

Corporate & CDD
Divisions
3.7%

Total Spending: $325,478

Aviation Division
85.1%

filename: Budover.doc
updated: 10/18/2011

III-8

Port of Seattle

2012 Preliminary Budget

E. TAX LEVY


The maximum allowable levy for 2012 is $90.1 million.



For 2012 the levy will be $73.5 million.



The millage rate is estimated to be $0.2329.



The 2012 levy will be used for:
o

General Obligation (G.O.) Bond Debt Service

o

Public Asset Expense: Freight Mobility

o

Seaport and Real Estate Environmental Remediation Liability

o

A portion of Real Estate operating expenses

o

Capital Improvements

o

Office of Port Jobs

FIGURE III-5: TAX LEVY VS. MILLAGE RATE 2002-2012
$ Millions
$80

$75.90

$0.70

$75.90
$73.50

$73.50

$68.81

$70

$0.60
$62.78

$60

$73.50

$58.00

$62.79

$59.66
$0.50

$50

$0.40
$40
$0.26

$0.25

$0.30

$0.25
$0.23

$30

$0.23

$0.22

$0.22

$0.22

$0.23

$0.20
$0.20

$20

$0.10

$10

$0

$0.00

2003

2004

2005

2006

2007

2008

2009

Tax Levy (Left Scale)

filename: Budover.doc
updated: 10/18/2011

2010

2011

Millage (Right Scale)

III-9

2012

Port of Seattle

2012 Preliminary Budget

AVIATION DIVISION
A. 2012 BUDGET SUMMARY
TABLE IV-1: 2012 CASH FLOW SUMMARY

2012

Percent
of Total

386,964
4,380
30,461
546
63,448
21,333
7,839
153
515,125

75.1%
0.9%
0.0%
5.9%
0.1%
12.3%
4.1%
1.5%
0.0%
100%

224,959

20.2%
6.0%
2.2%
0.4%
28.8%

208,171

16.5%
10.1%
26.6%

1,054
650
346,834
$ 781,667

0.1%
0.1%
44.4%
100%

($ in 000s)

SOURCES OF CASH
Operating Revenues
Interest Receipts
Proceeds from Bond Issues
Grants and Capital Contributions
Tax Levy
Passenger Facility Charges
Rental Car Customer Facility Charges
Fuel Hydrant Receipts
Other Receipts
Total
USES OF CASH
Expenses from Operations:
Operating & Maintenance expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expenditures
Total Operating Expenses
Debt Service:
Interest Payments
Bond Redemptions
Total Debt Service

$

157,754
47,145
16,964
3,096

129,296
78,875

Other Expenses
Public Expense
Capital Expenditures
Total

cashflow_av.xls

Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.

IV-1

Port of Seattle

2012 Preliminary Budget

FIGURE IV-1: SOURCES OF CASH
($ in 000's)

Fuel Hydrant Receipts
1.5%
Passenger Facility Charges
Rental Car Customer
12.3%
Facility Charges
Other Receipts
4.1%
Grants and Capital
0.0%
Contributions
Tax Levy
5.9%
0.1%
Proceeds from Bond Issues
0.0%

Interest Receipts
0.9%

Operating Revenues
75.1%

Total Sources: $515,125

FIGURE IV-2: USES OF CASH
($ in 000's)

Operating &
Maintenance expense
20.2%
Capital Expenditures
44.4%

Corporate
Administrative Expense
6.0%
Law Enforcement Costs
2.2%

Bond
Redemptions
10.1%

Interest Payments
16.5%

Public Expense
0.1%

Environmental
Expenditures
0%

Total Uses: $781,667
Other Expenses
0.1%

IV-2

Port of Seattle

2012 Preliminary Budget

B. BUSINESS PLAN FORECAST
TABLE IV-2: BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET
Airline Revenue
Non-airline Revenue
Fuel Hydrant Facility
Fuel Hydrant reclass to non-operating revenues
Total Operating Revenues

Budget
2011

Notes

1

Budget
2012

Forecast
2014
2015

2013

2016

$ 217,200 $ 235,619 $ 263,093 $ 276,525 $ 289,057 $ 296,224
144,965
150,831
160,272
166,183
172,804
181,435
8,353
514
514
514
514
514
(7,839)
0
0
0
0
0
362,678
386,964
423,878
443,222
462,374
478,173

Compound
Growth
2011-2016
6.4%
4.6%
-42.7%
-100.0%
5.7%

Operating & Maintenance Expense
Corporate & Capital Development Division Costs 2
Law Enforcement Costs
Environmental Expense
Total Operating Expense

137,804
44,987
16,389
1,771
200,951

157,754
47,145
16,964
3,096
224,959

171,866
48,559
17,473
3,189
241,088

164,351
50,016
17,997
3,285
235,649

166,705
51,517
18,537
3,384
240,142

171,806
53,062
19,093
3,485
247,446

4.5%
3.4%
3.1%
14.5%
4.3%

Net Operating Income Before Depreciation

161,727

162,005

182,791

207,573

222,233

230,727

7.4%

Total Depreciation Expense
Net Operating Income After Depreciation

118,418
43,310

117,072
44,934

Committed Capital Budget
Business Plan Prospective
Total Capital Budget

3

231,408
276,926
117,796
35,973
71,801
69,908
172,446
137,987
$ 303,209 $ 346,834 $ 290,242 $ 173,960 $

Total
2012-2016
3,528
9,500
443,723
58,713
211,721
650,775
62,241 $ 221,221 $ 1,094,498
AVBPFOR.xls

Notes:
1) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
2) Consists of direct charges and allocations. Most costs are allocated using a formula based on Expenses and employees. For some departments
specific allocation methodologies, such as employees for Human Resources & Development, are used.
3) See Section X for details of Capital Budget.

TABLE IV-3: AVIATION KEY MEASURES
Budget
2012

2013

Forecast
2014
2015

2016

Key Measures
Operating Cost Per Enplanement *
Non Airline Revenue Per Enplanement
Passenger Airline CPE
Debt Service Coverage

13.32
9.06
13.25
1.36

13.98
9.42
14.42
1.37

13.36
9.56
14.83
1.33

13.32
9.72
15.19
1.37

13.43
9.99
15.24
1.39

Traffic (in 000's)
Total Landed Weight
Enplanements

20,444
16,650

20,863
17,017

21,305
17,391

21,757
17,774

22,219
18,165

* excluding Environmental Remediation
AVMEASURES.XLS

IV-3

Port of Seattle

2012 Preliminary Budget

C. DIVISION MISSION STATEMENT
MISSION:
Connecting our region to the world through flight. The journey begins here.

VISION:
We envision that Sea-Tac will be a welcoming front door, embodying the spirit of the Northwest - an
economic engine and a source of regional pride.

D. DIVISION BUSINESS PLAN AND STRATEGIES
STRATEGIC GOALS:
1. Operate a world-class international airport by:
 Ensuring safe and secure operations
 Anticipating and meeting the needs of our tenants, passengers and the region's economy
 Managing our assets to minimize the long-term total cost of ownership
2. Become one of the top ten customer service airports in the world by 2015 (measured by the ACI ASQ
index)
3. Lead the airport industry in environmental innovation and minimize the airport's environmental
impacts
4. Reduce airline costs (CPE) as far as possible without compromising operational and capital needs
5. Maximize non-aeronautical net operating income (NOI) consistent with current contracts, appropriate
use of airport properties and market demand
6. Continually invest in a culture of employee development, organizational improvement, and business
agility
7. Develop valued community partnerships based on mutual understanding and socially responsible
practices

ECONOMIC OUTLOOK
As of October 2011, the U.S. economy appears to be in a slow but uncertain economic recovery. Real gross
domestic product growth is low, and unemployment remains high (above 9%). European financial markets are
affected by the poor credit standing of a number of countries (Greece, Portugal, Ireland, and Spain). Since the
strength of the economy is the primary driver behind the demand for air travel, we assume near-term (2012)
growth in passenger levels will be modest (+1.5% in 2012). We are planning for a slow economic recovery
during 2012, with growth picking up by 2013. The threat of a double-dip recession remains a possibility.
While this is not part of our baseline assumptions, it does contribute to our conservative outlook, and thus our
forecast assumptions.

PASSENGER GROWTH ASSUMPTIONS
Sea-Tac Airport has experienced positive year-over-year passenger growth each month since June 2010. For
2010, Sea-Tac realized 1.0% growth in enplaned passengers. Domestic passenger growth was 0.5% and

IV-4

Port of Seattle

2012 Preliminary Budget

international growth was 7.3%. For 2011, Sea-Tac has seen continued strong growth with an increase in yearto-date enplaned passengers of 4.5% through August. International growth (+7.6%) is again outpacing
domestic (+4.2%). The current forecast is for 4.0% growth in 2011, which is significantly above the budget of
1.0%. The demand for air travel has been surprisingly strong in this uncertain economy.
However, in spite of the growth in 2011, we are cautious as we plan for 2012. The 2012 budget assumes
growth of 1.5%. For 2013 and beyond, we assume a long-term growth rate of 2.2%. This is consistent with
the Federal Aviation Administration's (FAA) December 2009 long-term forecast for Sea-Tac Airport. The
December 2010 forecast was more optimistic, but given the continued economic uncertainty, we decided to
retain the more conservative 2009 forecast.
Enplaned passengers in 000s:
19,000

18,000

17,000

16,000

15,000

14,000

13,000

12,000

11,000

10,000
2007

2008

Year

Assumption

2011

4.0%

2012

1.5%

2013

2.2%

2014

2.2%

2015

2.2%

2016

2.2%

2009

2010

2011

2012

2013

2014

2015

2016

Realizing these assumed growth rates means that Sea-Tac would reach the 2008 enplaned passenger level in
2011. This would mean a total drop of 3% during the Great Recession and a three year recovery. This would
represent a smaller drop and a faster recovery than after 2001.

IV-5

Port of Seattle

2012 Preliminary Budget

AIRLINE INDUSTRY ASSESSMENT
After a decade of turmoil, the domestic airline industry recovered to earn a profit of $3.6 billion in 2010. Still,
since 2001, the industry has posted net profit in only three years and has a cumulative net loss of $54.5 billion.
The industry is expected to be near break-even for 2011. Given the state of the economy, and the relatively
high price of oil during most of 2011, the industry has figured out how to earn a profit in difficult times.
Airlines business strategies have focused on:





Profit not market share - eliminate unprofitable routes
Seasonal capacity changes
Consolidation
Ancillary fees

The price of fuel has hurt the economic viability of smaller aircraft. This has caused many airlines to decrease
service to small markets and focus on larger hubs. According to one industry expert, large hub airports with
limited regional competition and international connections are likely to see growth, whereas many medium
and small airports could see service reductions.
According to the U.S. Department of Transportation's Bureau of Transportation Statistics, U.S airlines
passengers increased 2.3% year-to-date through June 2011 compared to 2010. Through June, Sea-Tac realized
growth of 4.9% in enplaned passengers, significantly above the national average.
Consolidation within the industry continues, with United and Continental, and Southwest and Air Tran
merging in 2011. The impacts of these mergers at Sea-Tac were insignificant due to limited overlap in cities
served by the merging airlines.
Alaska Air Group (parent company of Alaska Airlines and Horizon Airlines), Sea-Tac's largest customer, was
profitable in 2010 and reported record earnings for the Second Quarter 2011. For the first six months of 2011,
Alaska had the highest growth rate of enplaned passengers among the top ten domestic airlines.
AIRPORT COMPARISONS
When comparing airport costs, the most common measure is passenger airline cost per enplanement ("CPE").
CPE is an average unit cost measure that permits a reasonable comparison among airports. It is not a "rate"
that is charged to any individual airline. CPE can be an imperfect measure because there are major differences
among airports for the costs that are included in the numerator of the equation. For example, at some airports,
airlines own and operate terminals. Thus, at those airports, the CPE would be artificially low. One of the
major drivers of increases to an airport's CPE is the capital program. When assets are placed in service, the
debt service and the additional operating costs are charged to the airlines through rates designed to recover
costs. Consequently, airport CPEs tend to peak soon after a major capital program, then gradually decline as
passenger volume increases.
Airports that have strong origin and destination ("O&D") traffic are less vulnerable to the financial problems
of any one carrier than a hub airport. The theory is that if one carrier disappears, the underlying demand for
travel will induce existing carriers to expand service or another carrier to enter the market.
SEA-TAC AIRPORT: BUSINESS ASSESSMENT
Sea-Tac was the seventeenth-largest US airport as measured by total passengers in 2010. As indicated above,
demand for air service proved to be very resilient during the Great Recession and the slow economic recovery
that has followed. The overall drop in passengers since 2008 of 3% was much less than expected, and the
anticipated three year recovery is much faster than expected.
Sea-Tac has a relatively low concentration of service by the dominant carriers. The largest airline (Alaska)
accounted for 35.0% of the enplaned passengers in 2009, and the top three airlines (Alaska, Horizon, and
Delta) accounted for 60.9% of the passenger traffic. Compared to other large airports, Sea-Tac has relatively
high O&D traffic - approximately 74% in 2010. This percentage has declined very slightly since 2003.

IV-6

Port of Seattle

2012 Preliminary Budget

Relatively high O&D traffic and relatively low concentration of dominant carriers reduces Sea-Tac's
vulnerability to the effects of any given carrier reducing capacity or suffering financial difficulties. Only
Alaska Airlines uses Sea-Tac as a hub. Alaska's relative financial strength compared to other airlines is a
positive factor for Sea-Tac.
By the end of 2010, Sea-Tac will have invested over $4.0 billion in capital improvements since 1999.
Investments have included rebuilding Concourse A, the Satellite Transit System, the Central Terminal,
constructing the Third Runway, reconstructing Runway 16C, building a remote rental car facility (still under
construction) and rebuilding much of the airport's infrastructure. The costs of these investments are reflected
in higher rates and charges to the airlines as reflected in the CPE.
Current and long-term cost management continues to be a strategic focus of Sea-Tac Airport. For 2010, the
most recent year for which comparable data is available, Sea-Tac's CPE of $11.63 falls in the middle third of
the 26 large hub airports that participated in the ACI Benchmarking Survey. Among western airports
(including medium hubs), Sea-Tac's CPE was below San Francisco, Denver, Sacramento and Portland but
above Los Angeles, Oakland and Salt Lake City.

CHALLENGES AND OPPORTUNITIES
During the development of the business plan, senior staff conducted a SWOT analysis (strengths, weakness,
opportunities, threats). The highlights are presented below:

Key Considerations:











Strong finances: O&D airport; cash flow/reserves; low competition; airline agreement
Anticipate continued growth in international travel, especially Asia
Cargo growth an opportunity
Economic uncertainty: slow recovery, or double dip recessions?
Non-aeronautical NOI increasing, needed for future investments
Major capital requirements: vertical circulation, terminal reallocation, FIS upgrade/replacement
Long-term throughput/efficiency/cost effectiveness of terminal investments
Technology utilization deployments
Long-term planning issues: airport capacity, drives capacity, hotel, south access, cargo development,
off airport property development
Threats to Port control relating to business strategy and investments

STRATEGIC GOALS AND OBJECTIVES FOR 2012-16
For each strategic goal, measurable objectives have been set for the 2012 - 2016 time-frame.
1.1 Operate a world-class international airport by ensuring safe and secure operations.
A. Reduce wildlife strikes from 28 to 20 per 100,000 operations by 2013.
B. Comply with FAA Safety Management Systems requirements by 2014.
C. Reduce runway incursions by 30% by 2015.
D. Increase airfield's three runways' availability during a snow event from 33% to 55% by 2013.
1.2 Operate a world-class international airport by anticipating and meeting the needs of our tenants,
passengers and the region's economy.
A. Meet critical path business planning items to achieve 2020 capacity needs for the airport.
B. Meet critical path business planning items to achieve 2020 capacity needs for the Air Terminal.
C. Meet critical path business planning items to achieve 2020 capacity needs for the International
Facilities.
IV-7

Port of Seattle

2012 Preliminary Budget

D. Meet critical path business planning items to achieve 2020 capacity needs for the Airfield.
E. Meet critical path business planning items to achieve 2020 capacity needs for Landside.
F. Increase total air cargo to 340,000 metric tons and international cargo to 127,000 metric tons by
2016.
G. Develop three new international routes by 2016 as a net gain in international service to Seattle
International Airport. Develop additional service in two existing markets by 2016.
1.3 Operate a world-class international airport by managing our assets to minimize the long-term total cost of
ownership.
A. Develop an airport-wide Asset Management System by 2016 to minimize the total long-term cost
of ownership resulting in equivalent savings of $200,000 per year compared to pre-2010 average
baseline.
B. Achieve "the industry best in class standard" of 80% of maintenance work is proactively planned.
C. Establish aviation industry key system reliability metrics in order to identify improvement.
opportunities and publish system availability results to key stakeholders.
2.0 Become one of the top ten customer service airports in the world by 2015 (measured by the ACI ASQ
index).
A. Complete comprehensive review of static and dynamic signage by 2014.
B. Complete elevator/escalator refurbishment by 2014.
C. Passenger check-in and bag-drop self-service at 80% airport-wide by 2015.
D. Implement integrated cruise service to passengers by 2015.
E. Fully implement TSA Automated Wait Time system and communications systems by Q2 2012.
F. Create single (consortium- or Port-managed) wheelchair service system by Q2 2012.
G. Complete deployment of electric appliance charging system at gates by 2013.
H. Airport-wide restroom upgrades complete by 2015.
I. Implement recorded elements of Seattle Music initiative by Q4 2011.
J. Airport-wide common bag drop and full interline transfers in place by 2015.
K. Complete upgrade of airport architectural standards to STEP/CTE standard by 2013.
L. Use survey results to drive projects and changes in processes and procedures which in turn will
drive better survey results.
M. Reduce Minimum Connecting Times (I to I and I to D) from 90 to 75mins.
3.0 Lead the airport industry in environmental innovation and minimize the airport's environmental impacts.
A. Air Quality and Climate Change: Sea-Tac will reduce airport owned and controlled greenhouse
gas emissions by 15% below 2005 levels by 2020, and work with its business partners to reduce
their emissions through a variety of cost effective emission reduction projects.
B. Energy and Conservation: Implement conservation projects and practices that will enable it to
meet all future electricity load growth (estimated to be 10% through 2015) through conservation
measures and renewable energy; reduce natural gas consumption per square foot of terminal
(initiatives included under Strategic Goal 4.0).
C. Buildings & Infrastructure: Implement asset management program by 2013.
D. Materials Use & Recycling: Expand recycling programs and infrastructure in terminal in
furtherance of goal to increase the solid waste recycling rate to 50% by 2014.
E. Resources: Reduce potable water consumption rate 5% below 2008 levels by 2015.

IV-8

Port of Seattle

2012 Preliminary Budget

F. Education & Integration: Complete terminal environmental education pilot program by 2013 and
assess the effectiveness of the program; By 2013, incorporate best practices /opportunities to
advance environmental goals into lease and operating agreements.
G. Noise: Sea-Tac will complete the Part 150 update including FAA review and approval by the end
of 2012 (Initiatives included under Strategic Goal 7.0)
4.0 Reduce airline costs (CPE) as far as possible without compromising operational and capital needs.
A. CPE below $14.00 through 2016.
B. 2016, achieve $1 million in savings from continuous processes improvements.
C. Implement conservation practices that will enable airport to meet all future electricity load growth
(2010 baseline) through conservation and renewable energy.
D. Implement pilot program for security exits by December, 2012.
5.0 Maximize non-aeronautical net operating income (NOI) consistent with current contracts, appropriate use
of airport properties and market demand.
A. Concessions: Grow concessions sales per enplanement by 3-5% CAGR through 2016.
B. Parking: Grow parking revenues by 5% CAGR through 2016.
C. Real Estate: Grow annual revenues by $1.3 million by 2016.
D. Other revenues: Grow other non-aeronautical revenues by $1.2 million by 2016.
6.0 Continually invest in a culture of employee development, organizational improvement, and business
agility.
A. Increase internal candidate promotion success rate by (TBD)% by 2016.
B. Reduce the average time to hire for Aviation division positions from (TBD) days to (TBD) days
without (1) compromising the validity and integrity of the process or (2) the quality of candidates.
C. Develop and implement system of performance measurement and management to align strategic
goals with division and individual performance objectives by December 2013.
D. Address all of the FEMA exercise improvements by 2014.
7.0 Develop valued community partnerships based on mutual understanding and socially responsible
practices.
A. Staff will implement all Commission and FAA approved FAR Part 150 recommendations by
2016.
B. During the next five years, the Port, local cities and/or businesses will be successful in
implementing solutions to land development and other issues.
C. The Airport will achieve specific Division milestones, a 2012 small business goal of 10% for
goods and services; expansion of the limited-English outreach program beyond the noise program;
and successful implementation of the Concession's Program DBE program.
The following sections highlight the key initiatives organized by strategic goal for the 2012 - 2016 capital
budget and the 2012 operating budget.

Capital Budget Summary
From 1999 to 2010, the Aviation Division has invested approximately $4.0 billion in capital improvements at
the airport. While the comparative average pace of spending will decline (after a rise in 2012), Aviation still
expects to invest $1.1 billion during the five year period from 2012-2016. 2012 will mark a high point due to

IV-9

Port of Seattle

2012 Preliminary Budget

a few major projects that are in-process, including: Rental Car Facility, Escalator Replacement, PreConditioned Air, Electrical Ground Support Equipment infrastructure, charging stations and rolling stock, and
elements of the Terminal Realignment such as the acquisition of passenger loading bridges.
As a result of the 2012 budget process, 17 projects are proposed to be added to the capital program, bringing
the total number of projects to 144. These new projects total $107 million and have achieved Aviation
division approval as "business plan prospective." This means additional design work is required to finalize the
scope, schedule, and budget associated with each project prior to requesting Commission authorization.
The capital projects are at various stages of approval with Port Commission. Projects have been organized in
the following categories:
A.
B.
C.
D.

Commission authorized/underway
Pending 2012 authorization
Pending future authorization
Small projects

($ in 000's) No. of
Total
Project
Category
2012
2013
2014
2015
2016
2012-16
A. Com. Auth/Underway
82 $ 256,475 $ 108,860 $ 34,773 $ 3,240 $
9,500 $ 412,848
B. Pending 2012 Auth
52
72,912
153,899
94,987
11,146
500
333,444
C. Pending Future Auth
9
11,205
20,025
40,000
44,567
208,221
324,018
D. Small Projects
6
6,242
7,458
4,200
3,288
3,000
24,188
Total
149 $ 346,834 $ 290,242 $ 173,960 $ 62,241 $ 221,221 $ 1,094,498



Included in Category A are projects that have been partially but not fully authorized by the Port
Commission.

Capital Program by Strategic Driver:
2011
Total
($ in 000's)
2012
2013
2014
2015
2016
Strategic Driver
2012-16
Safety & Security
$
2,398 $
7,360 $
4,846 $
4,770 $ 2,740 $
$
19,716
Capacity & Customer Needs
121,466
151,202
133,932
54,959
3,288
12,000
355,381
Manage Assets
28,503
83,444
97,833
50,334
12,146
83,721
327,478
Customer Service
4,671
17,546
3,500
1,304
500
500
23,350
Environmental
1,614
500
500
385
1,385
Reduce CPE
21,570
52,715
17,326
3,500
73,541
Non-Aeronautical
2,669
7,252
5,988
242
13,482
Community Partnership
4,782
15,660
6,317
18,966
40,943
Subtotal
187,673
335,679
270,242
134,460
18,674
96,221
855,276
Allowances
Total



1,729
11,155
20,000
39,500
43,567
125,000
239,222
$ 189,402 $ 346,834 $ 290,242 $ 173,960 $ 62,241 $ 221,221 $ 1,094,498

Allowance CIPs are used for purposes of reflecting undesignated future spending in the financial
forecast. As new projects are approved, the budget is deducted from an allowance CIP so that the total
capital program does not change.

IV-10

Port of Seattle

2012 Preliminary Budget

New Projects:
($ in 000's)
AERONAUTICAL PROJECTS:
Safe and Secure Operations
Bollards for Upper & Lower Drive Doors

$

500

Capacity & Customer Needs
Snow Removal Equipment
New Window Wall Kiosks at Ticket Zone 1
Convert Ticket Zone 2 to a "Pushback"
Convert Ticket Zone 3 FlowThru
Cargo 6 Enhancements
South Access Property Acq.
Perm Emergency Back-up Power

2,000
5,566
10,669
32,000
5,550
1,500
30,238

Manage Facility Assets
Fire Station Electrical Service Upgrade
Facility Monitoring System Renewal
Mechanical Controls System Improvements

2,030
5,000
1,800

Customer Service
Security Checkpoint Electronic Wayfinding
Laptop Power Plugs in Concourses

900
3,000

Reduce Airline Costs (CPE)
Lighting Upgrades for Energy Efficiency
Rubber and Paint Removal Equipment
IWS sensors to allow high BOD Segregation

3,000
600
1,000

NON-AERONAUTICAL (NOI) PROJECTS:
Manage Facility Assets
Paving Improvements at Port Surface Parking Lot (D Fox)
Total

1,665
$ 107,018

IV-11

Port of Seattle

2012 Preliminary Budget

The following tables show details of the capital program organized by strategic goal. New projects are
highlighted in yellow.

Safe & Secure Airport
($ in 000's) 2011
Project Description
Estimate
2012
2013
2014
2015
2016
North Satellite Seismic
$
25 $ 450 $ 2,200 $ 4,770 $ 2,740
Lagoon 3 Bird Wires
20
1,611
Access Control Door Additions
230
1,570
ALCMS Upgrades
911
1,189
Additional AF Mitigation at Ty
179
500
119
Emergency Lighting - Parking
150
600
Bollards for U&L Drive Doors
500
Security Checkpoint Cameras
400
100
All Other
483
840
2,527
Total
$ 2,398 $ 7,360 $ 4,846 $ 4,770 $ 2,740 $ -

Total
2012-16
$ 10,160
1,611
1,570
1,189
619
600
500
100
3,367
$ 19,716

New Projects:
 Bollards for upper and lower drive doors - this project will install bollards outside each door to
prevent vehicles from entering.
Existing Projects:
 North Satellite Seismic - seismic improvements to the North Satellite will be done in conjunction with
other improvement projects for the North Satellite.

Capacity and Customer Needs:
2011
Total
Estimate
2012-16
Project Description
2012
2013
2014
2015
2016
Rental Car Facility and Buses
$ 90,399 $ 59,129
$ 59,129
Aircraft RON Parking USPS Site
467
4,750
30,566
3,000
38,316
Convert Ticket Zone 3 FlowThru
1,000
26,000
5,000
32,000
FIS Improvements- Phase 1
119
14,000
17,581
31,581
Perm Emergency Back-up Power
2,000
7,000
21,238
30,238
Terminal Realignment
8,000
11,000
5,027
24,027
Cargo 2 West Cargo Hardstand
100
2,200
11,000
13,300
PLB Replacement-AR
2,441
10,909
1,500
12,409
Convert Ticket Zone 2 Pushback
1,000
8,000
1,669
10,669
New Window Wall Ticket Zone 1
750
4,750
66
5,566
Cargo 6 Enhancements
550
4,900
100
5,550
Snow Removal Equipment - 2013
100
1,900
2,000
South Access Property Acq.
1,500
1,500
Airport Owned Gate Infrastruct
1,443
1,316
1,316
All Other
26,597
46,098
18,535
7,859
3,288
12,000
87,780
Total
$ 121,466 $ 151,202 $ 133,932 $ 54,959 $ 3,288 $ 12,000 $ 355,381
($ in 000's)

IV-12

Port of Seattle

2012 Preliminary Budget

New Projects:






There are three new projects aimed at addressing capacity needs for ticketing at the south end of the
terminal: New Window Wall for Ticketing Zone 1, Convert Ticketing Zone to a pushback, and
Convert Ticketing Zone 3 to flow through.
Permanent Emergency Back-up Power is intended to allow the airport to be fully operational in the
event of a power outage. Sea-Tac is recognized as a valuable regional asset in the event of a major
emergency. Maintaining power is essential for operations.
Cargo 6 Enhancements will expand the concrete area to allow for simultaneous loading, and will
provide ground power and fuel hydrants for environmental benefits and operational efficiency
purposes.
Snow Removal Equipment - This project will add capacity and replace aging equipment.
South Access Property Acquisition - This project will preserve the Airport's ability to develop a south
access roadway to the airport.

Existing Projects:




Aircraft RON Parking - At the USPS site, this project will develop needed overnight parking positions
for aircraft.
FIS Improvements - Phase I - This project will increase capacity in the existing Federal Inspections
Area for international arrivals by adding queuing space, adding baggage claim capacity, and
reconfiguring space.
The new consolidated rental car facility is scheduled to open in the spring of 2012

Manage Assets
2011
Total
Estimate
2012-16
Project Description
2012
2013
2014
2015
2016
Terminal Escalators Modn
$ 7,419 $ 17,000 $ 6,300 $ 6,606
$ 29,906
Airfield Pavement Replacement
4,611
2,100
23,901
26,001
SSAT HVAC,Lights,Ceiling Repl
129
3,000
15,000
9,371
27,371
Vertical Convey Modn Aero Ph2
302
5,000
9,000
5,432
19,432
8th Floor Weather Proofing
2,423
10,482
10,482
Vertical Convey Modn Aero Ph1
200
7,454
2,506
9,960
Facility Monitoring Sys Renewl
1,000
2,500
1,500
5,000
Service Tunnel Renewal/Replace
25
1,000
1,200
2,500
275
4,975
2011-2013 Roof Replacement Pro
200
4,577
4,577
Fire Dept Facility Upgrade
500
3,000
3,500
Fire Station Elec Service Upgr
500
1,530
2,030
Airportwide Mech Controls Sys
250
1,550
1,800
Doug Fox Site Improvements
5
365
1,295
1,660
All Other
13,189
30,216
30,051
24,925
11,871
83,721
180,784
Total
$ 28,503 $ 83,444 $ 97,833 $ 50,334 $ 12,146 $ 83,721 $ 327,478
($ in 000's)

New Projects:



Facility Monitoring System Renewal - This project will replace the system that monitors all baggage
systems and most elevators, escalators, and moving walkways. The system will be expanded to cover
passenger loading bridges.
Fire Station Electrical Service Upgrade - This project is necessary to permit other upgrades to the Fire
Station.

IV-13

Port of Seattle



2012 Preliminary Budget

Airport-wide Mechanical Controls System - The system consists of a large local area network of
conduit and wiring that interconnects mechanical equipment with the Central Mechanical Plant. The
system is in need up replacement and upgrade.

Existing Projects:




Aircraft RON Parking - At the USPS site, this project will develop needed overnight parking positions
for aircraft.
South Satellite HVAC, Lighting and Ceiling Replacement - This project replaces forty-year old,
inefficient and aging heating and air conditioning system to provide increased passenger comfort.
Airfield Pavement Replacement - This project replaces panels and expansion joints for the highest
priority areas each year.

Customer Service
2011
Total
Estimate
Project Description
2012
2013
2014
2015 2016 2012-16
Loading Bridges Utilities
$ 167 $ 10,907
$ 10,907
FIMS Phase II
2,562
4,214
4,214
Laptop Power in Concourses
300
2,200
500
3,000
Security Checkpoint Wayfinding
400
500
900
All Other
1,942
1,725
800
804
500
500
4,329
Total
$ 4,671 $ 17,546 $ 3,500 $ 1,304 $ 500 $ 500 $ 23,350
($ in 000's)

New Projects:



Laptop Power in Concourses - This project will add about 70 electric power recharging stations at
gate hold rooms.
Security Checkpoint Wayfinding - This project, to be done in coordination with TSA, will track and
display the average wait times at the checkpoints, allowing customers to move to checkpoints with
shorter lines.

Reduce Airline Costs
Many of the projects listed below are key elements of the Airport's strategy to achieve its environmental goals.
They are listed here because the projects are justified based on financial measures.

($ in 000's)
Project Description
EGSE Rolling Stock
Cent Plant Preconditioned Air
GSE Electrical Chrg Stations
Airport Owned Gate Infr II
Lighting Upgrades for Energy E
Stage 2 Mech Energy Implement
IWS BOD Segregation Improvement
Rubber and Paint Removal Equip
All Other
Total

2011
Total
Estimate
2012
2013
2014 2015 2016 2012-16
$ 5,059 $ 24,941
$ 24,941
15,077
15,653
5,332
20,985
371
6,000
7,924
13,924
2,000
2,000
2,000
6,000
300
1,200
1,500
3,000
20
2,000
70
2,070
200
800
1,000
600
600
1,043
1,021
1,021
$ 21,570 $ 52,715 $ 17,326 $ 3,500
$ 73,541

IV-14

Port of Seattle

2012 Preliminary Budget

New Projects:





Lighting Upgrades for Energy Efficiency - This project will replace aging, inefficient light fixtures in
order to reduce electrical consumption and save costs.
IWS BOD Segregation Improvements - This project will install flow metering capabilities to enable
improved segregation of high BOD (biochemical oxygen demand) discharges (e.g., glycol) to reduce
the amount of IWS that is required to be directed to sewer lines. Savings will be achieved through
lower sewer bills.
Rubber and Paint Removal Equipment - The Airport currently pays a contractor to perform this work.
By acquiring the equipment and doing the work in-house, annual savings will be realized beginning in
the first year.

Existing Projects:



EGSE Rolling Stock and Electrical Charge Stations - Electrifying ground support equipment will
reduce air emissions and save airlines fuel and maintenance costs.
Central Plant Pre-conditioned Air - this project allows aircraft to "plug-in" to the terminal to get heat
or air conditioning. This allows the jet engine to be turned off to minimize noise, air emissions, and
save fuel.

Non-Aeronautical NOI
2011
Estimate 2012
Project Description
2013
2014
Parking Retrofit
$ 995 $ 1,850 $ 4,755
South Sat Concessions Project
230
1,618
Parking Garage Light Retrofit
25
500
975
Concessions Unit Readiness Pro
641
1,222
GML Arrivals Hall Concessions
25
625
158
Common Use Lounge Remodel
236
735
All Other
517
702
100
242
Total
$ 2,669 $ 7,252 $ 5,988 $ 242
($ in 000's)

2015

2016

Total
2012-16
$ 6,605
1,618
1,475
1,222
783
735
1,044
$ 13,482

Existing Projects:


Parking Retrofit - this project will reconfigure the parking stall arrangement on the first and second
floors of the parking garage after the rental car companies move to the new facility in mid-2012.

IV-15

Port of Seattle

2012 Preliminary Budget

Summary of 2012 - 2016 CIP
$400

$350

Allowance CIPs
New Projects
$300

Rental Car Facility
Existing CIPs
$250

$200

$150

$100

$50

$0
2011





2012

2013

2014

2015

2016

New projects proposed for approval will primarily impact spending in 2013 and 2014.
Reconstruction of Runway 16C is planned for 2016.
Allowance CIPs represent undesignated future spending. When new projects are approved, the budget
is transferred from the allowance CIP, resulting in no net change in the capital budget.

E. 2012 OPERATING BUDGET SUMMARY
Background
The Aviation division responded to the economic crisis facing the airline industry in 2008 and 2009 by
deferring budgeted costs and making significant cuts in 2009 for the 2010 budget. Aviation cut over 10% of
its FTEs. While the state of the overall economy remains a concern, the strong growth in passengers seen so
far in 2011 (+4.5% through August) , and the fact that Sea-Tac will likely surpass the 2008 passenger levels in
2011 means the Airport must cautiously plan for future growth.
From a financial perspective, the Aviation Division has two sides of its business: Aeronautical and Nonaeronautical. On the Aeronautical side, where airline rates are set to recover costs, the Port's goal is to manage
costs. The primary measure of an airport's cost to the airlines is the airline cost per enplanement (CPE). The
"costs" include the operating and maintenance costs attributable to the airfield and the airline share of the
terminal operating and maintenance costs (based on the percentage of revenue producing space split between
airlines and other Port tenants), as well as the corresponding capital costs (either debt service or equity

IV-16

Port of Seattle

2012 Preliminary Budget

amortization). The Port does not charge airlines for the capital costs of any asset funded by Passenger Facility
Charges (PFCs) or grants.
On the Non-aeronautical side of the business, the primary goal is to increase cash flow as measured by net
operating income (NOI). The net cash flow can be used to directly fund capital improvements and build up
cash reserves to meet liquidity targets. Another benefit of increasing NOI is to avoid having to charge the
airlines for debt service coverage above 1.0x for rates and charges purposes. Under the terms of the airline
agreement, if total airport debt service coverage is projected to drop below 1.25x, the airport can charge the
airlines debt service coverage in rates and charges (up to 1.25x) in order to achieve the overall 1.25x debt
service coverage level for the division.
Overview of Major Changes in 2012 Budget
The 2012 budget is largely defined by two major events: the opening of the consolidated rental car facility
(RCF), and the terminal realignment. The rental car facility is scheduled to open in April of 2012. The
Airport will be responsible for all busing operations between the Airport and the RCF. Consequently, the
Aviation division is adding significant staff to operate and maintain the buses, and to operate and maintain the
new Bus Maintenance Facility. The Airport will add 59 FTEs and $6.6 million in operating costs to the 2012
budget. The terminal realignment involves a number of airline moves within the terminal to accommodate
merged airlines (Delta & Northwest; United and Continental; Southwest and Air Tran) and to facilitate the
consolidation of operations for Alaska Air Group (Alaska Airlines and Horizon) at Concourse C and the North
Satellite. The realignment involves both capital and operating costs. The Airport will incur operating costs of
approximately $8.2 million in 2012 for project oversight of tenant projects and to reimburse airlines for
moving costs.
Revenues
Operating revenues are budgeted to increase by $24.2 million or 6.7% compared to the 2011 budget, but
increase by $26.8 million over the 2011 forecast. Compared to the 2011 budget, 2012 airline revenues are
budgeted to increase by $18.4 million (8.5%), while non-airline revenues are budgeted to increase by $5.9
million (4.0%).
Airline revenues, in accordance with the terms of the Signatory Lease and Operating Agreement (SLOA), are
based on cost recovery. Costs in the rate base include both operating costs and capital costs (debt service and
asset amortization). Aeronautical rate base capital costs are increasing $4.8 million due to increased debt
service and asset amortization. Aeronautical rate base operating costs are increasing by $14.5 million, driven
by increases relating to terminal realignment. Total aeronautical revenues are budgeted to increase by $18.5
million.
Non-aeronautical revenues are budgeted to increase by $5.9 million over the 2011 budget due to increased
Customer Facility Charge revenues to pay for the operating costs associated with the RCF and related busing
operations. In 2012 the Airport will see a drop in rental car revenues due to the exchange of space rent in the
garage for land rent at the new RCF. Rental car revenues will be further reduced by a lease incentive to
complete all tenant improvements on-time for opening. These reductions in rental car revenues will offset
solid growth in concessions revenues and modest growth in public parking revenues.
Operating Expense Drivers
Total airport operating expenses (including Corporate costs and environmental remediation costs) are budgeted
to total $224.96 million. This represents an 11.9% increase compared to the 2011 budget. For the Aviation
Division alone, the 2012 budget is increasing by $21.3 million, or15.2%. The following table shows the major
drivers of the increase. The RCF and the Terminal Realignment account for an increase of $11.8 million.
Cost increases for salary, wages and benefits and other contractual increases account for another $5.8 million.
Environmental remediation relating to capital projects accounts for another $1.3 million. These largely nondiscretionary items thus account for $18.6 million, or a 13.3% increase. The other net additions to the 2012
budget amount to $2.7 million, or a 1.9% increase over 2011 budget.

IV-17

Port of Seattle

2012 Preliminary Budget

Aviation 2012 Budget Summary Compared to 2011 Budget:

$000s
139,575

2011 Budget

%

Cost increases (compensation, contractual)
Rental Car Facility & Busing
Increase in Terminal Realignment
Decrease of Grant funded operating costs
Increase in Environmental Remediation Liab
Subtotal

5,837
6,609
5,200
(405)
1,325
18,566

4.2%
4.7%
3.7%
-0.3%
0.9%
13.3%

Budget Requests
Net savings/one-time items
Subtotal

7,796
(5,087)
2,709

1.9%

Total increase

21,276

15.2%

2012 Budget

160,850

Operating & Maintenance Expense
Environmental Remediation
Total Operating Expense

$000s
157,754
3,096
160,850



Each year, one-time expenditures funded by grants are excluded from the baseline budget. The
environmental liability expense relates to asbestos removal costs associated capital projects. Since the
timing and amount is driven by the capital budget, these costs are also excluded from the baseline
budget.



The payroll cost increases represent the costs prior to adding cost associated with new FTEs and prior
to a modification in salary benefits to have staff contribute more to the cost of medical benefits.



Net savings includes FTE reductions and changes to salary benefits rate to have employees contribute
more to health care costs as well as the elimination of one-time items included in the 2011 budget.

The budget requests that total $7.8 million, and which are included in the net increase of $2.7 million will be
presented by strategic driver, first in a summary, then in detail in subsequent tables.

IV-18

Port of Seattle

2012 Preliminary Budget

Summary of Budget Requests

New Requests:
Safe/Secure Airport
Customer needs/capacity
Asset Management:
New Facilities/Assets
Maintenance Resource Alignment
Total

$000s
659
980

FTEs

1,409
1,501
2,910

12
5

Customer service
Airline cost management
Non-Aero revenue development:
Costs offset by new revenues
Future revenue development costs
Total

864
428

2
2

808
802
1,609

Other
Total

347
7,796

3
1

2
27

Safe/Secure Airport

Description
Wildlife Specialist
Painters
Safety Mgmt System Impl & Facilitation
Other
Total



$000s

FTEs

75
171
108
305
659

1
2

3

Wildlife Specialist FTE allows for studies to be done in-house to reduce consulting costs and invasive
species presence to customers/aircraft.
Painter FTEs will update striping to assuage safety concerns on the Airfield.

Capacity and Customer Needs

Description
Master Plan
Terminal development strategy planning
Joint Marketing Expense
Airfield project planning and analysis
Air service development FTE
Other
Total



$000s
230
200
300
100
75
75
980

FTEs

1
1

Master Plan and Terminal Development Strategy planning will integrate all new initiatives to increase
efficiency and meet capacity needs.
Joint marketing expenses and FTE in Air Service Development will contribute to attracting and
incentivizing new international service to Sea-Tac Airport.
IV-19

Port of Seattle

2012 Preliminary Budget

New Facilities

Description
Common Use System support
Airfield lighting photometrics
Airfield crew 3rd runway
Pre-conditioned air system
Landscaping
Other
Total





$000s

FTEs

204
195
193
515
156
146
1,409

2
2
3
5

12

Pre-conditioned air was estimated at $800K annual O&M costs in 2010.
Third runway became operational in late 2008, but staffing for airfield crew was not increased.
Additional workload can't be accomplished with current staffing levels.
Electrical technicians support common use system.
Airfield photo-metrics initiative supports compliance with FAA regulations.

Maintenance Resource Alignment

Description
Mechanical Systems Support
STS Electronic Tech and materials
STS Auto mechanics
Conveyor shop materials
Cargo building mgmt ($500K new revenues)
Outside fence property cleanup
Other
Total




$000s
149
217
88
160
585
100
202
1,501

FTEs

2
2
1

5

The STS cars run approximately 45% more miles compared to 2004, or 150,000 miles annually.
Electronic technicians and auto mechanics will support increasing STS operations.
Mechanical systems support positions restore two of five positions eliminated in 2009.
Cargo building management initiative will bring in $500,000 revenues as cargo pass-through costs.

IV-20

Port of Seattle

2012 Preliminary Budget

Non-aeronautical Revenue Development:

Description
Offset by New 2012 Revenues:
Tenant marketing expense increase
Public parking marketing and promotion
Conference center video equip& advertising
Club International
Subtotal

$000s
100
430
64
214
808

Future Revenue Development Costs:
Concession leasing and planning
Land Development: Brokerage Commission
Land Development Planning
Other
Subtotal

300
234
250
18
802

Total

1,609





Public parking marketing and promotion should drive an additional $1.1 million in 2012 revenue.
An increase to tenant marketing expenses is in proportion to revenue for the tenant marketing fund.
Real estate study and pre-developments activities are necessary to prepare properties in 2012 for
potential revenue generation in future years.

Customer Service

Description
Enhanced elevator/escalator service
Loading bridge and garage lobby flooring
Carpenter
Sign Writer
Other
Total



$000s
500
133
62
65
104
864

FTEs

1
1
2

Escalator replacement project drives need for enhanced service
Additional Sign Writer FTE will cut lead time of sign projects by 50%.

Airline Cost Management

Description
Energy Management
Continuous Process Improvement
Other
Total



$000s
257
110
61
428

FTEs

2

2

Energy management team will perform ongoing dynamic air and water balancing for all HVAC
systems at Sea-Tac which will reduce future electrical consumption and save costs.
Consultant support for Continuous Process Improvement initiative is continued in 2012.

IV-21

Port of Seattle

2012 Preliminary Budget

Other New Initiatives

Description
Maintenance Budget Specialist
Wetland Re-delineation
Part 150
Undergraduate and Graduate Internship
RCF Opening Celebration
Other
Total


$000s

FTEs

50
125
97
40
15
20
347

1

1

2.00

Wetlands Re-delineation is required.

Aeronautical Summary
2009
Actual

2010
Actual

Revenues requirement:
Capital Costs
Operating Costs net Non-Aero
Total Costs
FIS Offset
Other Offsets
Net Revenue Requirement
Other Aero Revenues
Total Aero Revenues

$ 72,013
118,456
190,469
(5,250)
(16,441)
168,778
13,757
182,534

$ 82,083
122,985
205,067
(7,000)
(15,767)
182,300
16,029
198,329

$

Non-passenger Airline Costs
Net Pasenger Airline Costs

12,074
$ 170,460

2009
Actual

$ in 000's

2011
Budget

2011
Forecast

87,111
137,195
224,305
(7,000)
(14,821)
202,485
14,715
217,200

$ 85,554
135,793
221,348
(7,000)
(14,882)
199,466
14,715
214,181

$

14,885
$ 183,444

15,066
$ 202,133

15,566
$ 198,614

2010
Actual

2011
Budget

2011
Forecast

2012
Budget

'12-'11 Bud Change
Var $
Var %

91,876
151,748
243,624
(8,000)
(15,202)
220,422
15,197
235,619

$

4,765
14,553
19,319
(1,000)
(381)
17,937
482
18,419

5.5%
10.6%
8.6%
14.3%
2.6%
8.9%
3.3%
8.5%

14,989
$ 220,630

(78)
$ 18,497

-0.5%
9.2%

2012
Budget

12-'11 Bud Change
Var $
Var %

Aeronautical Key Measures

CPE:
Capital Costs / Enpl
Operating Costs / Enpl
Offsets
Other Aero Revenues
Non-passenger Airline Costs
Passenger Airline CPE

4.61
7.59
(1.39)
0.88
(0.77)
10.92

5.20
7.80
(1.44)
1.02
(0.94)
11.63

5.50
8.66
(1.38)
0.93
(0.95)
12.76

5.22
8.28
(1.33)
0.90
(0.95)
12.11

5.52
9.11
(1.39)
0.91
(0.90)
13.25

0.02
0.46
(0.02)
(0.02)
0.05
0.49

0.4%
5.3%
1.2%
-1.7%
-5.3%
3.9%

Highlights:




Airline revenues are based on cost-recovery formulas.
Major increases to aeronautical operating costs include Terminal Realignment project ($5.2 million),
maintenance FTEs in support of aeronautical business ($2 million), Planning studies for terminal
development/FIS ($150K), Environmental work ($145K).
Increases to debt service is mainly driven by an increase in principal payment for 2005 bonds ($2.4
million aero), funding source for aero projects such as Runway 16L.

IV-22

Port of Seattle



2012 Preliminary Budget

Amortization of new aeronautical assets ($3.3 million) is driven by Runway 16C taxiway panel
($591K), HVAC air ducts ($222K), and allocation of IT/Roadways assets ($811K).

Non-Aeronautical Summary
$ in 000's

2009
Actual

Revenues:
Public Parking
Customer Facility Charge (RCF)
Rental Cars
Concessions
Ground Transportation
Other
Total Non-Airline Revenue

$ 49,689
33,320
33,473
4,737
16,128
137,348

RCF Operating Expense
All Other Operating Expense
Share of terminal O&M
Less utility internal billing
Net Operating & Maint
Net Operating Income

2010
Actual

2011
Budget

2011
Forecast

2012
Budget

'12-'11 Bud Change
Var $
Var %

49,416
30,309
33,765
4,896
17,033
135,418

$ 52,847
1,543
32,290
32,640
6,936
18,707
144,965

$ 51,542
500
31,678
34,366
7,416
19,402
144,904

$ 53,780
9,053
26,580
34,924
7,519
18,975
150,831

$

55,916

54,743

1,546
62,850

1,546
61,479

17,011
(16,738)
56,189
$ 81,159

16,935
(14,464)
57,215
$ 78,203

17,940
(18,370)
63,967
$ 80,997

17,467
(18,370)
62,122
$ 82,782

$

933
7,510
(5,710)
2,283
583
267
5,866

1.8%
486.6%
-17.7%
7.0%
8.4%
1.4%
4.0%

8,150
65,939

6,604
3,088

427.1%
4.9%

18,912
(19,789)
73,212
$ 77,619

972
(1,419)
9,245
$ (3,379)

5.4%
7.7%
14.5%
-4.2%

Highlights:
•
•
•

Customer Facility Charge increase to cover operating costs associated with Rental Car Facility and
related busing operations.
Rental cars revenues decreased in 2012 due to $900K reduction of MAG and $2 million credit
incentive.
Operating expense increased due to maintenance costs of $1M, B&O taxes $215K, Club International
$314K, and corporate and divisional allocations of $2M.
2009
Actual

2010
Actual

2011
Budget

2011
Forecast

2012
Budget

15,610

15,773

15,845

16,404

16,650

805

5.1%

Revenues / Enplanement
Public Parking
Customer Facility Charge (RCF)
Rental Car (net of CFCs)
Concessions
Ground Transportation
Other
Total Revenue

3.18
0.00
2.13
2.14
0.30
1.03
8.80

3.13
0.00
1.92
2.14
0.31
1.08
8.59

3.34
0.10
2.04
2.06
0.44
1.18
9.15

3.14
0.03
1.93
2.09
0.45
1.18
8.83

3.23
0.54
1.60
2.10
0.45
1.14
9.06

(0.11)
0.45
(0.44)
0.04
0.01
(0.04)
(0.09)

-3.2%
458.3%
-21.7%
1.8%
3.2%
-3.5%
-1.0%

Primary Concessions Sales / Enpl
Gross Profit Margin

9.66
59.1%

9.99
57.7%

10.12
55.9%

10.24
57.1%

10.42
51.5%

0.30
(0.04)

3.0%
-7.9%

Enplanements (in 000s)

IV-23

'12-'11 Bud Change
Var $
Var %

Port of Seattle

2012 Preliminary Budget

Highlights:
•
•
•

2009 and 2010 Concession revenues per enplanement would be $2.09 without tenant marketing
expenses of $623K and $807K, respectively. Tenant marketing expenses reside in a new cost center in
2011 and 2012.
Concessions 2011 forecast is higher than 2011 budget due to one-time revenues in 2011, such as
Google promotions.
Primary concessions sales are comprised of Food & Beverages and Retail & Duty Free revenues.
Concession revenues consist of food & beverages, retail & duty-free, advertisement, space rental, and
in-flight kitchen, and other smaller accounts.

Traffic
Passenger traffic measured by enplaned passengers is projected grow 1.5% in 2012 compared to the forecast
for 2011 (up 4.0%), for a total of 16,650 million enplanements. Through August 2011, total enplaned
passengers are up 4.5% compared to 2010. Thus, the 2012 budget for enplaned passengers appears to be
conservative.
Landed weight is budgeted to grow at 1% for 2012 compared to the 2011 forecast.. Since passenger carriers
have been operating with exceptionally high load factors, growth in passenger levels will likely require
increased capacity and landed weight.
Sensitivity of Financial Results to Changes in Enplanements
Based on the assumptions in the 2012 budget, a 1.0% increase or decrease in enplaned passengers will
generate a change in non-aeronautical net operating income of $950K, and a change in debt service coverage
of 0.01x. There will also be a change in CPE of $0.13.

IV-24

Port of Seattle

2012 Preliminary Budget

Full-Time Equivalent Staff Positions (FTEs)
The 2012 budget proposes a net increase of 86.0 FTEs, or 12.7%. Of the 86.0 FTEs added, 59.0 FTEs are for
the Rental Car Facility and 27.0 FTEs are from the new requests driven by expense drivers mentioned from
above. Each new position has been previously presented through the discussion of expense drivers.
FTE's
2011 Budget
Aviation
Rental Car Facility

%

749.9
12.0
761.9

2011 Budget Changes:
Aeronautical & Landside Ops
Aviation Services
Fire Department Funding from Safer Grant
Rental Car Facilitty - Maintenance
2011 Baseline

2.2
3.9
3.0
2.0
773.0

2012 Budget Changes:
Rental Car Facility (RCF) & Bus Maintenance Facility (BMF)
Bus Drivers
BMF Mechanics
BMF Utility Workers
RCF & BMF Subtotal

50.0
5.0
4.0
59.0

Other Aviation Division Initiatives
New Facilities & Assets
Safe & Secure Airport
Customer Needs & Capacity
Asset Management
Customer Service
Airline cost Management
Employee Development
Other New Initiatives
Other Initiatives Subtotal

12.0
3.0
1.0
5.0
2.0
2.0
1.0
1.0
27.0

2012 Budget Proposed FTEs

859.0

IV-25

12.7%

Port of Seattle

2012 Preliminary Budget

The table above shows the trends of FTEs for the Aviation division. The 2012 total FTEs is at a 2009 level
when 90.00 positions were eliminated.

IV-26

Port of Seattle

2012 Preliminary Budget

E. OPERATING BUDGET SUMMARY
TABLE IV-4: REVENUE BY ACCOUNT

2012
Budget

% Change
2012 Bud2011 Bud

$995
$792
$831
56,647
61,200
70,152
4,814
6,876
7,459
52,336
55,936
56,884
6,375
6,883
6,175
200,722
209,078
211,018
20,284
29,752
34,445
(7,912)
(7,839)
0
$334,262 $362,678 $386,964

4.9%
14.6%
8.5%
1.7%
-10.3%
0.9%
15.8%
-100.0%
6.7%

($ in 000's)

Revenue by Account
Operating Revenue
Equipment Rental
Landing Fees
Airport Transportation Fees
Parking Revenue
Revenue from Sale of Utilities
Property Rental Revenue
Other Revenues
Fuel Hydrant non-cash reclass to non-operating
Total Operating Revenue

Notes

1

2010
Actual

2011
Budget

avbud.xls

FIGURE IV-3: AVIATION DIVISION REVENUE BY ACCOUNT
($ in 000's)
Equipment Rental
0.2%

Other Revenues
8.9%

Landing Fees
18.1%

Airport Transportation Fees
1.9%
Parking Revenue
14.7%

Property Rental Revenue
54.5%

Revenue from Sale of
Utilities
1.6%

Total Revenue: $386,964

IV-27

Port of Seattle

2012 Preliminary Budget

TABLE IV-5: OPERATING & MAINTANENCE EXPENSES BY ACCOUNT
(in 000's)
2010
Actual

Expense by Account

2011
Budget

2012
Budget

% Change
2012 Bud2011 Bud

Salaries, Wages, Benefits & Worker's Comp
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses

$76,036
3,347
11,381
4,692
22,519
755
668
6,695

$81,673
3,776
12,576
4,100
29,453
1,429
597
6,965

$93,764
2,471
12,458
4,425
37,404
1,551
726
8,194

14.8%
-34.6%
-0.9%
7.9%
27.0%
8.5%
21.7%
17.6%

Total O&M without Environmental

126,092

140,568

160,993

14.5%

Environmental Remediation Liability
Total O&M with Environmental

3,271
129,363

1,771
142,339

3,096
164,090

74.8%
15.3%

Charges to Capital Projects
Total Budgeted Operating Expense

(2,881)
126,481

(2,765)
139,575

(3,239)
160,851

17.2%
15.2%
avbud.xls

FIGURE IV-4: AVIATION DIVISION EXPENSE BY ACCOUNT
($ in 000's)
Other Expenses
Promotional Expenses
5.0%
0.4%
Travel & Other Employee
Expenses
0.9%

Outside Services
22.8%

Environmental
Remediation Liability
1.9%

Salaries, Wages, Benefits &
Worker's Comp
57.1%

Utilities
7.6%
Supplies &
Stock
2.7%
Equipment Expense
1.5%

Total Before Charges to Capital Projects: $164,090
Charges to Capital Projects: $3,239
Total Expense: $160,851

IV-28

Port of Seattle

2012 Preliminary Budget

TABLE IV-6: REVENUE AND EXPENSE BY BUSINESS GROUP/DEPARTMENT
AVIATION DIVISION
(in 000's)

2010

2011

2012

Notes

Actual

Budget

Budget

% Change
2012 Bud 2011 Bud

OPERATING REVENUES

AIRLINE REVENUES
Landing Fees
Terminal Rents
Other Airline Revenues
Total Airline Revenues

56,647
126,459
15,223
198,329

61,200
141,285
14,715
217,200

70,152
150,270
15,197
235,619

14.6%
6.4%
3.3%
8.5%

NON-AIRLINE REVENUES
Public Parking
Rental Cars
Employee Parking
Ground Transportation
Commercial Properties
Concessions
Utilities
Other
Total Non-Airline Revenues

49,440
30,309
5,211
4,896
4,908
32,960
6,403
1,293
135,419

52,847
33,833
5,301
6,936
4,765
32,640
7,464
1,177
144,965

53,780
35,633
5,211
7,519
4,972
34,924
6,803
1,989
150,831

1.8%
5.3%
-1.7%
8.4%
4.3%
7.0%
-8.9%
69.1%
4.0%

8,426
(7,912)
334,262

8,353
(7,839)
362,678

514
386,964

-93.8%
-100.0%
6.7%

Fuel Hydrant Facilities Revenue
Fuel Hydrant non-cash reclass to non-operating revenues
Total Operating Revenues

1

2

BDAVREEX.xls

Notes:
1) Include new lounge revenue offset by costs in 2010.
2) Fuel Hydrant non-cash reclass to non-operating revenues based on Accounting change.

IV-29

Port of Seattle
AVIATION DIVISION

2012 Preliminary Budget
(in 000's)

2010

2011

2012

Notes

Actual

Budget

Budget

% Change
2012 Bud 2011 Bud

EXPENSES BEFORE CHARGES TO CAPITAL PROJECTS
BUSINESS UNITS
Airport Operations
Business Dev & Management
Utilities
Business Units

32,212
3,646
13,698
49,556

36,832
4,272
15,322
56,427

49,539
5,464
12,923
67,926

34.5%
27.9%
-15.7%
20.4%

1,492
11,184
994
690
1,809
3,397
5,647
25,213

1,931
2,110
11,980
2,373
762
1,909
3,827
6,044
30,935

2,304
2,087
11,926
1,898
864
1,590
3,939
6,136
30,744

19.3%
-1.1%
-0.4%
-20.0%
13.5%
-16.7%
2.9%
1.5%
-0.6%

1,889
356
799
971
47,067
51,081

2,088
500
736
1,093
48,791
53,207

2,334
458
689
1,210
55,837
60,527

11.8%
-8.4%
-6.4%
10.7%
14.4%
13.8%

3,271
241
129,362

1,771
142,339

1,796
3,096
164,090

74.8%
n/a
15.3%

(2,881)

(2,765)

(3,239)

17.2%

BUSINESS UNITS
Airport Operations
Business Dev & Mgmt
Utilities
Business Units

31,726
3,431
13,668
48,825

35,864
4,272
15,322
55,459

48,368
5,464
12,923
66,755

34.9%
27.9%
-15.7%
20.4%

AVIATION SERVICES
Aviation Director's Office
Division Contingency
Fire Department
Aviation Planning
Aviation Finance & Budget
Community Development
Airport Security
Aviation Risks Expense
Aviation Services

1,150
11,143
991
690
1,760
5,636
21,369

1,431
2,110
11,799
2,373
762
1,835
6,044
26,353

1,804
2,087
11,749
1,898
864
1,499
6,136
1,796
27,833

26.1%
-1.1%
-0.4%
-20.0%
13.5%
-18.3%
1.5%

AVIATION FACILITIES
AV Facilities & Infrastructure
Aviation Signage
Airport Building Department
Airport Office Building
AV Environmental Programs Group
Aviation Maintenance
Aviation Facilities

1,524
353
113
956
3,244
46,636
52,827

1,654
500
363
1,093
3,705
48,678
55,992

1,884
458
389
1,210
3,847
55,379
63,166

13.9%
-8.4%
7.3%
10.7%
3.8%
13.8%
12.8%

123,021

137,804

157,754

14.5%

3,271
189
126,481

1,771
139,575

3,096
160,851

0.0%
0.0%
15.2%

AVIATION SERVICES
Aviation Director's Office
Division Contingency
Fire Department
Aviation Planning
Aviation Finance & Budget
Community Development
AV Environmental Programs Group
Airport Security
Aviation Services
AVIATION FACILITIES
AV Facilities & Infrastructure
Aviation Signage
Airport Building Department
Airport Office Building
Aviation Maintenance
Aviation Facilities

1

2

Aviation Risks Expense
Aviation Environmental Remediation Liability
Aviation Capital to Expense
Total Expenses Before Charges to Capital Projects
CHARGES TO CAPITAL PROJECTS
OPERATING & MAINTENANCE EXPENSE

3

Aviation Operating & Maintenance Expense
Aviation Environmental Remediation Liability
Aviation Capital to Expense
Total Operating Expense

4

5.6%

BDAVREEX.xls

Notes:
1) Chief Technology Officer transfers from Corporate.
2) Airport Building department has more expense work projects versus capital projects.
3) Airport building janitorial cost transferred from Operations and more work on expense versus capital projects.
4) Environmental remediation expense driven by capital projects for vertical conveyance,
common use expansion, south satellite concessions, and GSE electrical charge stations.

IV-30

Port of Seattle

2012 Preliminary Budget

F. STAFFING
Table IV-7 outlines the full-time equivalents (FTEs) adjusted for temporary positions, interns and other limited
duration employees for the Aviation division. Aviation is budgeting 859.0, which is 12.7 percent higher than
2011 budget. See previous discussion of FTE changes in the 2012 Budget.
TABLE IV-7: AVIATION DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions)
BUSINESS GROUP/DEPARTMENT
AIRPORT OPERATIONS
Aeronautical Business Group
Landside Business Group
Airport Ope rations
BUSINESS DEVELOPMENT
Aviation Properties
Concession
Business Development
Business Management
Acquisition
Utilities
Busine ss De ve lopme nt
AVIATION SERVICES
Airport Director's Office
Fire Department
Planning
Aviation Finance & Budget
Community Development
Airport Security
Total Aviation Se rvice s
FACILITIES
Facilities & Infrastructure
AV Signage
Airport Building Department
Airport Office Building
Environmental
Maintenance
Total Facilitie s
TOTAL AVIATION DIVISION

Note s

2010
Actual

% Change
2011
2011
2012
2012 Bud Budge t Est. Act. Budge t 2011 Bud

105.7
72.3
178.0

109.0
83.3
192.3

108.0
86.5
194.5

110.0
136.5
246.5

1.0%
63.9%
28.2%

9.0
5.0
3.0
1.0
4.0
0.0
22.0

9.0
6.0
3.0
2.0
0.0
0.0
20.0

9.0
6.0
3.0
2.0
0.0
0.0
20.0

9.5
6.0
3.3
2.0
0.0
1.0
21.8

5.6%
0.0%
8.3%
0.0%
n/a
n/a
8.7%

4
5

8.5
73.0
9.0
5.0
9.0
72.8
177.2

8.5
73.0
9.0
6.0
9.0
71.8
177.3

10.1
76.0
9.0
6.0
10.0
73.0
184.1

10.1
76.0
9.0
6.0
10.0
73.0
184.1

19.8%
4.1%
0.0%
0.0%
11.0%
1.7%
3.9%

6
7

14.0
3.0
5.0
6.0
16.2
325.0
369.2

14.0
3.0
5.0
6.0
15.4
329.0
372.4

14.0
3.0
5.0
6.0
15.4
331.0
374.4

15.0
4.0
5.0
6.0
15.7
361.0
406.7

7.1%
33.3%
0.0%
0.0%
1.6%
9.7%
9.2%

746.4

761.9

773.0

859.0

1

2
2

3

8

12.7%
FTE.XLS

Note s:
1) 2012 Budget includes hiring of 50 FTEs for the Rental Car Facility.
2) 2012 Budget includes 0.8 FTEs Graduate Interns.
3) 2012 Budget includes hiring a new Senior Energy Conservation Engineer FTE.
4) 2011 Est. Actual includes a transfer of Chief Technology Officer from Corporate.
5) 2011 Est. Actual includes 3 Firemen due to SAFER grant funding.
6) 2012 Budget includes an Energy Conservation FTE.
7) 2012 Budget includes a Sign Writer.
8) 2012 Budget includes 11 FTEs for the Rental Car Facility, and 21 FTEs for mainaining the airport terminal
and airfield.

IV-31

Port of Seattle

2012 Preliminary Budget

G. CAPITAL BUDGET
The business plan summaries at the beginning of this section provide the context for the following capital
budget for the Aviation Division.
Table IV-8 provides a Summary of the Aviation Approved Capital Budget for 2012.
TABLE IV-8: AVIATION CAPITAL BUDGET SUMMARY
($ in 000's)

Committed Capital Projects
Airfield
Business Development
Landside
Air Terminal
Infrastructure
Stormwater
Airfield Security
Aviation NOISE
Division-wide Projects
Total Committed

2012
Budget

% of 2012 Total
Committed

2012-2016
CIP

$49,387
4,570
72,273
80,694
34,967
2,752
2,062
15,155
15,066
$276,926

$126,899
7,070
72,273
116,789
53,424
3,637
2,062
40,438
21,131
$443,723

Business Plan Prospective Projects

$69,908

$650,775

Total CIP

$346,834

$1,094,498

17.8%
1.7%
26.1%
29.1%
12.6%
1.0%
0.7%
5.5%
5.4%
100.0%

capsum.xls

FIGURE IV-5: AVIATION DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)

Airfield Security
0.7%
Stormwater
1.0%

Aviation NOISE
5.5%
Division-wide Projects
5.4%

Infrastructure
12.6%
Air Terminal
29.1%

Airfield
17.8%

Business Development
1.7%

Landside
26.1%

Committed CIP Total Spending: $276,926

IV-32

Port of Seattle

2012 Preliminary Budget

H. AVIATION DIVISION OPERATING STATISTICS
TABLE IV-9: AVIATION DIVISION OPERATING STATISTICS

Year

(1)
Enplaned
Passengers
Number Growth

(2)
Total
Landed Weight
Pounds Growth

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 Budget
2011 Forecast
2012 Budget

12,868 22.9%
13,802 7.3%
14,174 2.7%
13,506 -4.7%
13,362 -1.1%
13,356 0.0%
14,364 7.6%
14,632 1.9%
14,982 2.4%
15,661 4.5%
16,085 2.7%
15,610 -3.0%
15,773 1.0%
15,845 0.5%
16,404 4.0%
16,650 1.5%

21,342 15.4%
23,078
8.1%
23,051 -0.12%
22,178 -3.8%
21,658 -2.3%
20,790 -4.01%
20,944
0.7%
20,186 -3.6%
20,362
0.9%
21,014
3.2%
21,519
2.4%
20,388 -5.3%
19,786 -3.0%
20,089
1.5%
20,241
2.3%
20,444
1.0%

1.1%
1.5%

-1.5%
-0.4%

Compound Growth
2000 - 2010
2005 - 2010

(3)
Air Cargo
Metric tons Growth
428,327
444,224
456,920
401,535
374,753
351,418
347,517
338,591
341,981
319,013
290,205
270,142
283,425
296,400
283,425
289,094

4.4%
3.7%
2.9%
-12.1%
-6.7%
-6.2%
-1.1%
-2.6%
1.0%
-6.7%
-9.0%
-6.9%
4.9%
4.6%
0.0%
2.0%
-4.7%
-3.5%

Notes:
1) Passengers in thousands
2) Weight in thousands
3) In Metric Tons
AVSTAT.XLS

IV-33

Port of Seattle

2012 Preliminary Budget

SEAPORT DIVISION
A. 2012 BUDGET SUMMARY
TABLE V-1: 2012 CASH FLOW SUMMARY

2012

Percent
of Total

96,424
1,306
2,466
49,320
579
150,095

64.2%
0.9%
0.0%
1.6%
32.9%
0.4%
100%

46,536

18.5%
11.1%
0.0%
0.0%
29.6%

67,205

15.9%
26.9%
42.7%

7,947
5,004
30,574
$ 157,265

5.1%
3.2%
19.4%
100%

($ in 000s)

SOURCES OF CASH
Operating Revenues
Interest Receipts
Proceeds from Bond Issues
Grants and Capital Contributions
Tax Levy
Other Receipts
Total

$

USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expenditures
Total Operating Expenses

29,078
17,458
-

Debt Service:
Interest Payments
Bond Redemptions
Total Debt Service

24,972
42,233

Other Expenses
Public Expense
Capital Expenditures
Total

Cashflw.xls SP

Note: We built-up a significant cash balance in the past few years due to economic uncertainty, and we
are planning to draw down the cash balance in 2012.

V-1

Port of Seattle

2012 Preliminary Budget

FIGURE V-1: SOURCES OF CASH
($ in 000's)
Other Receipts
0.4%

Tax Levy
32.9%
Operating Revenues
64.2%

Grants and Capital
Contributions
1.6%

Total Sources: $150,095

Interest Receipts
0.9%

FIGURE V-2: USES OF CASH
($ in 000's)

Public Expense
3.2%

Operating &
Maintenance
Expense
18.5%

Capital
Expenditures
19.4%

Other
Expenses
5.1%
Bond
Redemptions
26.9%

Corporate
Administrative
Expense
11.1%

Interest Payments
15.9%

Total Uses: $157,265

V-2

Port of Seattle

2012 Preliminary Budget

B. BUSINESS PLAN FORECAST
TABLE V-2: BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Notes

Operating Revenue
Total Operating Revenues
Operating & Maintenance Expense
Corporate & Capital Development Division Costs
Total Operating & Maintenance Expenses

Budget
2012

2013

Forecast
2014
2015

2016

Compound
Growth
2011-2016

$ 98,387 $ 98,579 $ 101,124 $ 110,304 $ 110,909 $ 110,625
98,387
98,579
101,124
110,304
110,909
110,625

1

Net Operating Income Before Depreciation
Total Depreciation Expense
Net Operating Income After Depreciation
Committed Capital Budget
Business Plan Prospective
TOTAL CAPITAL BUDGET

Budget
2011

2.4%
2.4%

30,542
16,565
47,108

29,078
17,458
46,536

30,253
18,331
48,584

25,824
19,248
45,072

28,293
20,210
48,503

28,818
21,221
50,038

-1.2%
5.1%
1.2%

51,280

52,043

52,540

65,232

62,406

60,587

3.4%

31,898
31,713
$ 19,381 $ 20,330

2

Total
2012-2016
$ 29,490 $ 25,706 $ 5,480 $ 3,533 $ 3,525 $ 3,500 $ 41,744
12,005
4,868
43,970
56,280
72,600
76,678
254,396
$ 41,495 $ 30,574 $ 49,450 $ 59,813 $ 76,125 $ 80,178 $ 296,140
mabpfor.xls

Notes:
1) Consists of remaining Corporate & Capital Development costs to be allocated to Business Groups after direct charges have been
coded to groups and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses
and employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development,
are used.
2) See Section X for details of Capital Budget.

C. DIVISION MISSION STATEMENT
Our mission is to:





Efficiently manage our assets for the benefit of the public and generate sufficient net operating
income to be financially self sustaining;
Provide services and facilities for the transportation of cargo and passengers;
Accommodate the region's fishing industries;
Promote the economic health of our community.

INTRODUCTION
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division including Commercial Strategy,
Environmental Services & Planning, and Finance. These businesses and service groups oversee the marketing,
strategic development, and management of cargo and cruise terminals, moorage facilities, and other industrial
properties connected to these businesses.
Seaport facilities encompass approximately 1,200 acres of moorage and cargo-related facilities. Over 500
acres are dedicated to container operations at four terminals with over12,300 feet of container berth space
and 24 cargo cranesincluding seven Super Post-Panamax cranes. The Seaport also owns a fully automated
grain terminal and general purpose maritime facilities. It is home to the North Pacific factory trawler fishing
fleet. The Seaport also operates two cruise vessel terminals with a total of three berths. In addition, the Seaport
leases industrial property connected with these cruise, cargo, and factory trawler fishing businesses.
V-3

Port of Seattle

2012 Preliminary Budget

D. 2012 BUSINESS PLAN
BUSINESS STRATEGY
Economic Benefits and Financial Sustainability:
While the Seaport is a public agency with a mission to accomplish public goals rather than to make profits, it
must operate like a business, relying on revenues from our customer base for most of its net operating income.
It is a strong financial bottom line that allows the Seaport to invest in projects that benefit the entire
community, both economically and environmentally.
We create economic benefits for the entire region through our business activities. Each vessel docked in
Seattle, each container and passenger that passes through our Port and each of our tenants creates jobs and
brings business income and tax dollars to the region and the state. The most critical measure of the Seaport's
financial sustainability is a growing, positive Net Operating Income (NOI). Only with strong financial
performance, can the Seaport provide the economic, community and environmental benefits that are the
essence of its mission.
Environmental Benefits:
The Seaport is a steward of the environment: We improve the environmental condition of our property through
our redevelopment and capital projects, provide new and/or improved public open spaces, and take steps to
reduce air pollution, conserve energy and water, and recycle to reduce the amount of garbage we produce. In
2007 the Port adopted the goal of becoming the greenest, cleanest most energy efficient port in the United
States.
Community Benefits and Social Responsibility
The Port of Seattle as a major economic engine within the region purchases significant materials from local
vendors and contracts with hundreds of firms for construction and maintenance-related activities. One aspect
of community benefit and social responsibility is adopting policies and programs to insure that much of this
work goes to local small businesses and the communities within which those businesses are located and live.
In 2007, the Port created an Office of Social Responsibility to guide this effort.
In 2011, the Seaport's three Strategic Initiative Teams developed long term Seaport Strategies;




Commercial Business
Asset Stewardship
Green Gateway

For 2012, the Seaport will advance these strategies in alignment with the commission's Century Agenda and
key Corporate initiatives including implementation of SharePoint and metrics.
For 2012, the critical work needed to advance these strategies is:






Retain and attract customers to our gateway
Facilitate efforts to assure freight mobility during road project construction
Complete high priority capital and major expense projects
Perform key asset condition assessments
Develop environmental initiatives to enhance the Port's economic competitiveness

PARTNERSHIPS
We would not be able to fulfill our mission without positive relationships with our partners. We are focused
on:
 Meeting the needs of our customers by:
- Maintaining regular contact with our key customers to stay in touch with their needs and identify
opportunities to increase business through port facilities;
V-4

Port of Seattle

-
-
-
-

2012 Preliminary Budget

Working with stakeholders to constantly improve freight mobility within the seaport;
Facilitating customer relationships with federal inspection agencies;
Developing new business opportunities for our customers; and
Providing market information to support our tenants' interest in expansion.

 Approaching our relationship with labor honestly and with integrity, communicating effectively, and
working together under a fair labor agreement.
 Respecting tribal sovereignty, and tribal religious and cultural values in all consultations with our
tribal neighbors.

V-5

Port of Seattle

2012 Preliminary Budget

EXECUTIVE SUMMARY: 2012 SEAPORT STRATEGIES
WE WILL HAVE ENSURED THE VITALITY OF THE SEAPORT BY:
Achieving our financial objectives:
$52.0 Million Net Operating Income (NOI) reached by 12/31/2012. In 2012, each business unit will
contribute to the total Seaport NOI as budgeted:
 Lease & Asset Management NOI = $48.8 Million
 Cruise & Maritime Operations NOI = $3.2 Million
 Environmental Remediation Liabilities = $0.0 Million
Providing compelling value that will attract and retain customers, and which will further the Port's
financial objectives by:
 Reaching long term agreements with cruise lines that currently utilize Pier 66 as a homeport
 Determine feasibility and investment priority for installation of shore power at Pier 66 Bell Street
Pier Cruise Terminal
 Meeting key milestones in our capital plan
Preserving our assets and increasing their utilization by:
 Conducting condition assessments and/or repairs of our critical capital assets including dock
structures, underwater slopes, and water depth
 Ensure accountabilities for grain terminal improvements are identified and implemented
WE WILL HAVE DEVELOPED NEW BUSINESS AND ECONOMIC OPPORTUNITIES FOR
THE REGION AND THE PORT BY:
 Generate revenue from Terminal 25 South
 Jointly marketing the Port of Seattle with our container terminal tenants and the railroads
 Actively promoting our Foreign Trade Zone (FTZ)
 Increased focus on and promotion of regional exports
 Leveraging our Green Gateway brand to increase awareness of business friendly environmental
initiatives and attract cargo to our gateway
 Leading the U.S. West Coast Collaboration (USWCC) effort to highlight West Coast advantages to
shippers
 Market mid-week and shoulder season cruise itineraries
 Seek out new and/or additional business in commercial vessel moorage for T91
WE WILL HAVE ENHANCED PUBLIC UNDERSTANDING AND SUPPORT OF THE PORT'S
ROLE IN THE REGION BY:
 Seeking speaking engagements in the community
 Striving to purchase at least 15% of all goods and services from qualified small businesses
WE WILL HAVE BEEN A CATALYST FOR REGIONAL TRANSPORTATION SOLUTIONS BY:
 Ensuring that construction and design of the Alaskan Way Viaduct replacement does not adversely
affect operations and drive business to other ports
 Ensuring implementation of the construction mitigation action plan for multiple construction
projects in the Duwamish Maritime Industrial area

V-6

Port of Seattle

2012 Preliminary Budget

WE WILL HAVE BEEN A LEADER IN TRANSPORTATION SECURITY BY:
 Meeting Federal mandates for security measures, training, and training exercises
 Research and identify potential technologies to improve efficiency of operations at Seaport and
tenant facilities
 Collaborate with Aviation Division to develop and implement comprehensive Emergency
Preparedness Program Port-wide.
WE WILL HAVE EXHIBITED ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
BY:
 Achieving/maintaining zero regulatory violations
 Continue implementation of the Northwest Ports Clean Air Strategy (NWPCAS) with our tenants,
customers, business partners and the Puget Sound Clean Air Agency. Work with our partner Ports
and others to update the NWPCAS strategy to include longer term goals (2020) and to continue to
reduce air emissions. Publishing the 2011 update of Puget Sound Maritime Air Emissions Inventory
 Continued succesful implementation of the Green Gateway Partners program
 Building and improving stormwater systems and meeting stormwater management plan
requirements
 Making significant progress on investigation and cleanup of key contamination sites, including the
Lower Duwamish, East Waterway, Terminal 91, and Terminal 117
WE WILL HAVE BEEN A HIGH PERFORMANCE WORKPLACE BY:
 Successful transition of Seaport departments to use of the SharePoint collaboration and document
management system
 Providing our staff with regular feedback on individual and team performance along with the
support and guidance they need to be successful
 Completing PREP plans with training, development, and diversity components
 Achieving a perfect safety score and zero accidents by providing our staff with the necessary tools
and training

V-7

Port of Seattle

2012 Preliminary Budget

SEAPORT LEASE & ASSET MANAGEMENT
MISSION
Negotiate and manage Seaport leases and manage assets to support the Port's overall goals and maintain a
sustainable Seaport.
DESCRIPTION
The major leases managed by this group include the container terminals at Terminal 5, Terminal 18, Terminal
30, Terminal 46 and Terminal 115; the grain facility at Terminal 86; and leases to support the fishing industry
primarily at Terminal 91. The group also manages other industrial leases that support Seaport terminals and
operations.
Besides lease management, this team is also developing and will maintain an asset management system to
track condition and projected investments in all Seaport assets. This team also coordinates Seaport traffic
issues and cooperates with regional transportation planning.
BUSINESS STRATEGY
Lease Management: Manage and lease the container terminals portfolio and enhance the value of the
managed assets by increasing revenue and reducing expenses.
By effectively focusing on our customers, we can better understand how to meet their needs in a competitive
and cost effective manner. Activities such as gathering and disseminating market, industry and community
information, communicating with both customers and influencers, investing in future infrastructure, and
conducting industry forums all serve to support shipping operations in the PNW.
As cargo volumes grow, we are also focused on trying to manage the impacts from that growth and anticipate
future issues to allow for efficient growth to continue. As we move into the future, continued focus on
technology issues at the terminals will help our port continue to be efficient.
Asset Management: Through a number of major capital projects, the Seaport has enhanced its assets over the
years. Now the focus is to develop and maintain a more comprehensive program of managing for the long
term sustainability of the asset portfolio to the benefit of the Port mission and goals.
We partner with our customers to ensure that their facilities, which are Port assets, are properly maintained to
both preserve their value and help our customers to maximize their cargo throughput. We will focus on
providing customer value through building and maintaining relationships with our key customers, and striving
to understand and anticipate their needs.

V-8

Port of Seattle

2012 Preliminary Budget

KEY GOALS AND MEASURES

Key Goals

Major Tasks

Measure

Targets

Goal 1: Asset Stewardship Program
Enhance management of key
port container assets by both
port and tenants.

Develop comprehensive asset
management plan

Complete second phase of
initial review of asset base

Q4

Complete dock structural
surveys

Survey remaining docks

Q4

Complete Pier 91 Building 175
Roof Replacement

Construction complete

Q2

Ensure grain terminal
improvements are
accomplished

Accountabilities identified and
implemented

Q4

Replace ZPMC crane
gearboxes at T46

Replacement complete

Q4

Inspect terminals for tenant
compliance

Complete inspections

Q4

Complete test repair section of
T18 pile caps

Construction complete

Q2

Facilitate a comprehensive
construction traffic
management approach among
City and State projects that
maintains the functionality of
the Port's drayage routes
through:
a. Regular participation in
MOT meetings;
b. Review of and comments
on traffic control plans;
c. Field assessments,
d. Check-ins with Port
stakeholders; and
e. Communication of issues

Partner staff integrates
comments into planning efforts
to the extent possible.

Q1

Implement RFID for truck
program

Implementation complete

Q1

Determine options for
reducing Port related truck
queues in the Spokane Street
corridor

Options identified

Q3

Goal 2: Green Port Initiatives
Support Port's green port
strategy through specific green
initiatives.

V-9

Port of Seattle

2012 Preliminary Budget

Key Goals

Major Tasks

Targets

Measure

Goal 3: Commercial Strategy
Maintain and enhance
revenues and Net Operating
Income by controlling costs,
maintaining existing customers
and leasing vacant properties

Seek revenue opportunities for
T25 South

Revenue generated

Q4

Work with Commercial
Strategy and Cruise staff to
communicate construction
related traffic impacts to Port
stakeholders via:
a. Written materials
b. Regular meetings
c. Ad-hoc briefings

Port stakeholders report that
they get the information they
need

Q4

Complete Terminal 5

Q4

Complete Terminal 30

Q4

Complete street vacation
process and property transfers
related to past expansion
projects

TABLE V-3: LEASE & ASSET MANAGEMENT BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Notes

Operating Revenue
Operating & Maintenance Expense
Corporate Administrative Expense
Total Operating Expense

Budget
2011

Budget
2012

2013

Forecast
2014
2015

Compound
Growth
2011-2016

2016

$ 81,622 $ 81,310 $ 85,375 $ 93,893 $ 93,812 $ 93,237

2.7%

1

19,577
12,433
32,009

19,533
13,001
32,534

22,261
13,651
35,912

17,973
14,334
32,307

20,242
15,051
35,293

20,615
15,803
36,418

1.0%
4.9%
2.6%

Net Operating Income Before Depreciation

49,613

48,776

49,463

61,586

58,519

56,819

2.7%

Total Depreciation Expense
Net Operating Income After Depreciation

COMMITTED CAPITAL BUDGET

2

23,035
22,672
$ 26,577 $ 26,103

$ 20,596

$ 19,981

$ 3,190

$ 1,400

$

-

$

Total
2012-2016
- $ 24,571
mabpfor.xls

Notes:
1) Consists of remaining Corporate costs to be allocated to Business Groups after direct charges have been coded to Groups
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development,
are used.
2) See Section X for details of Capital Budget - does not include business plan prospective projects.

V-10

Port of Seattle

2012 Preliminary Budget

CRUISE & MARITIME OPERATIONS
MISSION
Provide safe, secure and efficient cruise ship terminals and cargo handling maritime facilities which include
large vessel berthing docks for moorage, working apron areas and related equipment, cruise passenger
terminals, utilities and services to encourage current and new customers to move greater amounts of marine
tonnage and cruise passengers through the Port of Seattle. Market and provide cruise ship services and
facilities that maintain and grow the cruise business in the Seattle area. These facilities and services will
enhance the economy of the region, protect jobs and provide a reasonable rate of return to the Port of Seattle
and the citizens of King County.
DESCRIPTION
Cruise & Maritime Operations is made up of multiple deep water commercial moorage facilities in and around
the harbor with over 17,000 lineal feet of large vessel berth moorage and two cruise passenger terminals.
Maritime Facilities include: T91 piers 90 and 91, T46 North; plus vessel berths at P2, P17, 18N, P25, P28,
P34, P69, and other maritime facilities. The two cruise terminals include a single cruise vessel berth facility at
Pier 66, the Bell Street Pier Cruise Terminal, and a two berth facility at Terminal 91, the Smith Cove Cruise
Terminal.
Customers include cruise lines, Cruise Terminals of America, charter and excursion vessels, tug and barge
companies, large fishing and commercial vessels, the United States Navy and other ships of state. Industry
sectors served include cruise, marine transportation, staging and transport, the commercial seafood industry,
bunker and distillate fuels, and tug and barge services.
BUSINESS STRATEGY
Cruise: For the cruise business, our strategy is to market Seattle as a homeport and a port of call to cruise lines
serving Alaska and the Pacific Northwest. Through this, we will maintain our market share, increase cruise
passenger volumes and annual ship calls. We also create value for our customers by making our cruise
terminals efficient and cost effective; working with the Airport and logistic providers to improve the
operations and passenger experience at the Seaport and Airport; and working with the tourism and business
community so that we maximize economic impact from visiting passengers and cruise ships.
Maritime/Dock Operations: For our docks/commercial moorage facilities, we work with the terminal
operators, tugboat, fishing industry, and other dock users to maximize the use of vessel berthing and dock
facilities providing net income to the port. We focus on providing customer value through building and
maintaining relationships with our key customers, and continually strive to better understand and anticipate
their business needs. Retaining our current customers across all maritime sectors continues to be a key focus.
We also invest in strategic capital improvements to maintain and improve facilities, accommodate current
customers' needs, attract new business, and enhance revenue opportunities from our facilities.
Focus for the coming year will be on retaining customers and growing core business, asset stewardshipperforming condition surveys and annual maintenance procedures, advancing capital improvement programs,
completing projects underway and expanding our green gateway strategy. This will include continued pursuit
of establishing cruise ship shore power facilities at P66, expanding recycling program at T91, indentifying
storm water improvements needed at T91 along with seeking energy efficiencies and reducing operating costs
through use of new technology in energy efficient yard lighting and security equipment.
Security: The focus for security will be to maintain compliance with regulations and policy and to enhance
business through identifying potential security technologies to improve the efficiency of operations and to
minimize costs through the effective use of available grants. A priority focus for 2012 will be on further
resolving the issue of discovered old munitions at T91 through the Formerly Used Defense Sites (FUDS)
program. This will require continued close coordination and support of the survey and cleanup work being
done by the U.S. Army Corps of Engineers in collaboration with Port of Seattle Police Department, U.S. Coast
V-11

Port of Seattle

2012 Preliminary Budget

Guard, Environmental Protection Agency and the U.S. Navy. Additional priority for 2012 will be staff
training in security and emergency preparedness related to both the Seaport reorganization and results from
Federal Emergency Management Agency (FEMA) exercise. This will be accomplished through close
collaboration with Airport Division.

KEY GOALS AND MEASURES
Key Goals

Major Tasks

Measure

Targets

Seek additional long term
agreements with other existing
homeport cruise lines

Cruise line commitment made
beyond yearly berth request -
multiyear agreement

Q4

Develop potential short NW
cruise itineraries (3 and 4 day).
Work with other NW and BC
ports on potential interporting
concept. Market concept
proposals to cruise lines.

Marketing package complete.
Shared investment model with
other stakeholders in place for
joint marketing effort.
Presentations made to cruise
line executives and itinerary
planners for consideration

Q4

New agreement in place
between Seaport and Real
Estate Divisions balancing cost
and benefit gained from
revenue generated through use
of Seaport facilities.

Q2

Opportunities identified and
changes made in operations to
increase efficiencies and
reduce cost.

Q1-Q4

Marketing plan developed and
executed for commercial
docks. Dock and moorage
facility utilization increases.
New vessel types using
commercial moorage facilities

Q1-Q4

Commercial Strategy
Enhance regional economic
development by increasing
utilization of Port related
facilities and volume of cruise
passengers moving through the
Port's terminals resulting in
improvement of the Seaport's
Net Operating Income

Develop a revenue sharing
cost model for secondary use
of cruise facilities.

Reduce costs and increase
efficiencies in cruise
operations and Port operations.
Enhance marketing efforts to
gain additional business in
commercial vessel moorage at
T91, P69, and T18 North
mooring dolphins
Monitor emerging markets for
opportunities to increase noncontainer cargos. Explore new
business model of 3rd party
stevedoring and joint
marketing.
V-12

New business activity for port
operated facilities identified
and established.
3rd party stevedoring and joint
marketing pilot program in
place.

Q4

Port of Seattle

Key Goals

2012 Preliminary Budget

Major Tasks

Measure

Targets

Customer marketing call to
cruise lines in seeking
additional Homeport and Port
of Calls.

New business secured for
future years.

Q4

Fender system upgrades at
Smith Cove Cruise Terminal

Phase 2 of Pier 91 cruise
berths fender system upgrades
complete before start of 2012
cruise season.

Q2

Perform all scheduled
maintenance at Port operated
facilities

Required maintenance
performed within schedule and
budget

Q1-Q4

Complete all other 2012
capital projects consistent with
Final Approved Capital
Budget and commission
direction

Design, permits, construction
completed per approved
capital plan and commission
actions for 2012

Completion
targets as
defined in
project
schedules

Continue to pursue shore
power at Pier 66 cruise vessel
berth.

Commission support received
for investment in Pier 66 shore
power.

Q2

Seek commitment from
homeport cruise line served at
Pier 66 to invest and utilize
shore power

Partnership/possible shared
investment with cruise line
included as part of potential
long term berthing agreement
at Pier 66.

Q1-Q4

Asset Stewardship
Understand existing assets,
perform proper maintenance
on current assets and align
asset investment to support
long term market demand.

Green Gateway/Environmental
Maintain compliance with all
local, state, and federal
regulations.
Collaborate with industry to
reduce environmental impacts.
Engage stakeholders and
community to build
understanding and support.

Collaborate with Seattle City
Light in seeking funding
opportunities for Pier 66 shore
power investment.
Support Seaport Green
Gateway Partner program.

V-13

Q1-Q4
2012 program in place by start
of cruise season. Increased
participation in program by
cruise lines and other ocean
going vessels.

Q1-Q4

Port of Seattle

Key Goals

2012 Preliminary Budget

Major Tasks

Further develop recycling
program facilities at Terminal
91.
Seaport Security & Emergency Preparedness

Measure

Targets

Active use of recycling
facilities in place at Seaport
operated facilities

Q1-Q4

No violation notices/penalties.

Q1-Q4

Develop and conduct training
and regular exercises.

Maintain
regular
schedule
throughout
the year

Identify grant opportunities
that align with Seaport
operational needs

Grants secured.

Per grant
application
schedule

Research and identify potential
technologies to improve
efficiency of operations.

Increased operational
efficiencies at facilities.

Q2 ahead
of budget
process

Collaborate with Aviation
Division to develop and
implement comprehensive
Emergency Preparedness
Program (EPP) portwide.

Program features are
acceptable to all divisions and
no operational or policy
conflicts between the
Emergency Operations Plans.

Q1-Q2

Full and active participation in
the U.S. Coast Guard Area
Maritime Committee (AMSC)
and Harbor Safety Committee
(HSC).

Attend scheduled meetings for
both committees. Ensure Port
interests and business
continuity is considered before
security/safety measures are
implemented

Per
meeting
schedules

Maintain compliance with
Federal security mandates for
Seaport facilities and further
enhance Emergency
Preparedness program.
Further develop working
relationship with U.S. Coast
Guard.

Meet federal mandates for
security measures.

Meet federal mandates for
training/exercises

V-14

Port of Seattle

2012 Preliminary Budget

TABLE V-4: CRUISE & MARITIME OPERATIONS BUSINESS PLAN FORECAST
Compound
Growth
2011-2016

($ in 000's)

OPERATING BUDGET

Budget
2011

Notes

Operating Revenue

$

Operating & Maintenance Expense
Corporate Administrative Expense
1
Total Operating Expense
Net Operating Income Before Depreciation
Total Depreciation Expense
Net Operating Income After Depreciation

COMMITTED CAPITAL BUDGET

2

$

$

Budget
2012

2013

Forecast
2014
2015

2016

16,765 $

17,269 $

15,749 $

16,411 $

17,097 $

17,388

0.7%

10,466
4,132
14,598
2,167

9,545
4,457
14,002
3,267

7,992
4,680
12,672
3,077

7,852
4,914
12,766
3,646

8,050
5,160
13,210
3,887

8,203
5,418
13,620
3,768

-4.8%
5.6%
-1.4%
11.7%

8,863
(6,696) $

9,041
(5,773)

6,524

$

3,855

$

-

$

-

$

- $

Total
2012-2016
- $ 3,855
mabpfor.xls

Notes:
1) Consists of remaining Corporate costs to be allocated to Business Groups after direct charges have been coded to Groups and Divisions
or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and employees. For some departments,
specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget - does not include business plan prospective projects.

V-15

Port of Seattle

2012 Preliminary Budget

E. SEAPORT OPERATING BUDGET SUMMARY
TABLE V-5: REVENUE BY ACCOUNT

(in 000's)
REVENUE BY ACCOUNT
Operating Revenue
Dckg, Whrfg, Serv/Facility, Passenger Fee
Equipment Rental
Berthage & Moorage
Revenue From Sale of Utilities
Property Rental Revenue
Other Revenues
Total Operating Revenue

2012
Budget

% Change
2012 Bud 2011 Bud

2,531 $
2,152 $
3,327
9,036
8,956
7,465
1,332
1,202
373
4,341
4,185
4,475
77,878
77,997
80,222
2,161
3,661
2,289
$ 97,279 $ 98,153 $ 98,151

54.6%
-16.6%
-69.0%
6.9%
2.9%
-37.5%
0.0%

2010
Actual

Notes

2011
Budget

$

marbud.xls mardata

FIGURE V-3: SEAPORT DIVISION REVENUE BY ACCOUNT
($ in 000's)

Other Revenues
2.3%

Dckg, Whrfg,
Serv/Facility, Passenger Equipment Rental
Fee
7.6%
3.4%
Berthage & Moorage
0.4%
Revenue From Sale of
Utilities
4.6%

Property Rental Revenue
81.7%

Total Revenue: $98,151

V-16

Port of Seattle

2012 Preliminary Budget

TABLE V-6: OPERATING AND MAINTENANCE EXPENSES BY ACCOUNT

($ in 000's)
2012
Budget

% Change
2012 Bud 2011 Bud

7,581 $
7,730 $
7,848
96
163
176
4,553
4,817
5,014
54
51
37
3,084
5,272
5,141
404
604
749
116
216
205
3,306
5,260
2,757
19,194
24,112
21,929

1.5%
8.0%
4.1%
-27.5%
-2.5%
24.0%
-5.1%
-47.6%
-9.1%

1,439
20,633

21,929

-100.0%
-10.9%

(1,111)
(1,365)
(1,521)
$ 19,522 $ 23,247 $ 20,408

11.4%
-12.2%

2010
Actual

Notes

EXPENSE BY ACCOUNT
Salaries, Wages, Benefits & Workers Comp
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses
Total O&M without Environmental

$

Environmental Expense
Total O&M with Environmental

1

Charges to Capital Projects
Total Budgeted Operating Expense

2011
Budget

500
24,612

marbud.xls mardata

Notes:
1) Seaport operating expenses in 2010 budget were reduced by $13 millions due to reclassification of
environmental expense from Operating to Non-Operating Expense.
FIGURE V-4: SEAPORT DIVISION EXPENSE BY ACCOUNT
($ in 000's)

Travel &
Other Employee
Expenses
3.4%

Promotional
Expenses
0.9%
Other Expenses
12.6%
Salaries, Wages, Benefits
& Workers Comp
35.8%

Outside Services
23.4%
Utilities
22.9%

Equipment Expense
0.8%
Supplies & Stock
0.2%

Total Before Charges to Capital Projects: $21,929
Charges to Capital Projects: $1,521
Total Expense: $20,408

V-17

Port of Seattle

2012 Preliminary Budget

TABLE V-7: SEAPORT REVENUE AND EXPENSE BY BUSINESS GROUP/DEPARTMENT
($ in 000's)
BY BUSINESS GROUP/DEPARTMENT
REVENUE
Lease and Asset Management
Cruise and Maritime Operations
Security Grants
Environmental Grants
Total Operating Revenue

Notes

EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS, & ENV
Business Groups:
Lease and Asset Management
2
Cruise and Maritime Operations
Security Grant Expense
Total Business Group Expense
Service Depts:
Commercial Strategy
Seaport Environmental and Planning
Seaport Finance
Other
Seaport Administration
Seaport Contingency
Seaport Environmental Remediation Liability Expense
Seaport Capital to Expense
Total Services Expense

2010

2011

2012

% Change
2012 Bud -

Actual

Budget

Budget

2011 Bud

$ 80,248 $ 81,474 $ 81,000
15,240
13,263
15,554
1,791
3,415
1,598
97,279
98,153
98,151

-0.6%
17.3%
-53.2%
0.0%

5,837
3,899
1,982
11,717

8,414
3,366
3,451
15,231

8,189
3,985
1,476
13,649

-2.7%
18.4%
-57.2%
-10.4%

1,215
4,607
607

1,874
4,806
1,030

1,841
4,554
1,127

-1.7%
-5.2%
9.3%

1,044
1,439
4
8,916

921
250
500
9,381

758
8,280

-17.7%
-100.0%
-100.0%

Total Expenses Before Charges to Capital, Non-Ops, & Env Remed

20,633

24,612

21,929

-10.9%

CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION

(1,111)

(1,365)

(1,521)

11.4%

5,785
3,890
1,982
11,657

8,331
3,366
3,451
15,149

8,061
3,985
1,476
13,522

-3.2%
18.4%
-57.2%
-10.7%

1,215
3,557
607

1,874
3,657
896

1,841
3,275
1,012

-1.7%
-10.4%
12.9%

1,039
1,439
8
7,865

921
250
500
8,098

758
6,886

-17.7%
-100.0%
-100.0%

$ 19,522

$ 23,247

$ 20,408

-12.2%

OPERATING & MAINTENANCE EXPENSE
Business Groups:
Lease and Asset Management
Cruise and Maritime Operations
Security Grant Expense
Total Business Group Expense
Service Depts:
Commercial Strategy
Seaport Environmental and Planning
Seaport Finance
Other
Seaport Administration
Seaport Contingency
Seaport Environmental Remediation Liability Expense
Seaport Capital to Expense
Total Services Expense

2

Total Operating Expense

1

-11.7%

-15.0%

marbud.xls.marreorg

Notes:
1) The Seaport Division was reorganized in November 2010. Due to staffing transfers, year to year amounts by businesses and
departments are not directly comparable.
2) Terminal 117 was transferred to Real Estate for 2012 Budget.

V-18

Port of Seattle

2012 Preliminary Budget

F. STAFFING
The following TABLE V-8 outlines the Full-Time Equivalents (FTEs) in the Seaport Division. Seaport is
budgeting 59.9 FTE's for 2012, which is .5 FTE less than the 2011 budget.
TABLE V-8: SEAPORT DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions)
BUSINESS GROUP/DEPARTMENT
Business Groups:
Lease & Asset Management
Containers and Support Properties
Cruise & Maritime Operations
Cruise and Industrial Properties
Total Business Groups
Professional and Technical Servcies:
Commercial Strategy
Seaport Enviromental & Planning
Seaport Finance & Budget
Seaport Security
Seaport Planning
Total Professional and Technical Services
Other
Seaport Administration
Asia Business Development
TOTAL SEAPORT DIVISION

Notes
1
1
1
1

2
3

4

2010
Actual

2011
Budget

2011
Est. Act.

2012
Budget

0.0
5.6
0.0
9.3
14.9

9.6
0.0
10.3
0.0
19.9

8.9
0.0
10.3
0.0
19.2

9.7
0.0
10.3
0.0
20.0

4.3
19.3
4.6
5.0
5.3
38.5

9.3
19.6
8.6
0.0
0.0
37.5

9.3
19.6
9.0
0.0
0.0
37.9

9.3
19.6
9.0
0.0
0.0
37.9

4.0
2.0
59.4

3.0
0.0
60.4

2.0
0.0
59.1

2.0
0.0
59.9

% Change
2012 Bud 2011 Bud
1.0%
0.0%
0.5%
0.0%
0.0%
4.7%

1.1%
-33.3%
-0.8%
FTE.XLS

Notes:
The Seaport Division was reorganized in November 2010.
1) Lease & Asset Management and Cruise & Maritime Operations business groups were formed and Containers and Support
Properties and Cruise and Industrial Properties business groups were discontinued.
2) Seaport Security is now part of Cruise & Maritime Operations
3) Seaport Planning is now part of Seaport Enviromental & Planning
4) Asia Business Development is now part of Commercial Strategy

V-19

Port of Seattle

2012 Preliminary Budget

G. SEAPORT CAPITAL BUDGET
TABLE V-9: SEAPORT DIVISION CAPITAL BUDGET SUMMARY
($ in 000's)

Committed Capital Projects
Lease & Asset Management
Cruise & Maritime Operations
Environmental Services
General Seaport
Security
Total Committed

2012
Budget

2012-2016
CIP

$19,981
3,855
470
1,400
0
$25,706

$24,571
3,855
7,360
5,958
0
$41,744

Business Plan Prospective Projects

$4,868

$254,396

Total CIP

$30,574

$296,140

% of 2012 Total
Committed
77.7%
15.0%
1.8%
5.4%
0.0%
100.0%

capsum.xls

FIGURE V-5: SEAPORT DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)

Environmental Services
1.8%

General Seaport
5.4%

Cruise & Maritime
Operations
15.0%
Lease & Asset
Management
77.7%

Committed CIP Total Spending: $25,706

V-20

Port of Seattle

2012 Preliminary Budget

H. SEAPORT DIVISION OPERATING STATISTICS
TABLE V-10: SEAPORT DIVISION OPERATING STATISTICS
International Containerized Trade
Metric Tons
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 Forecast
2012 Budget

(in 1000's)
9,899
8,366
8,407
7,891
9,720
11,975
11,377
12,407
10,556
10,469
14,603
12,482
13,200

Total Int'l & Dom. TEUS

Total TEU's

Growth
10.7%
-15.5%
0.5%
-6.1%
23.2%
23.2%
-5.0%
9.1%
-14.9%
-0.8%
39.5%
-14.5%
5.8%

1,201,841
1,052,789
1,173,248
1,184,698
1,466,251
1,745,798
1,636,261
1,628,494
1,376,496
1,284,541
1,835,575
1,560,240
1,650,000

Growth
0.6%
-12.4%
11.4%
1.0%
23.8%
19.1%
-6.3%
-0.5%
-15.5%
-6.7%
42.9%
-15.0%
5.8%

Port of
Seattle
Total
TEU's
1,346,830
1,163,388
1,291,790
1,397,658
1,687,768
1,968,455
1,858,652
1,848,186
1,575,622
1,466,046
2,008,961
1,773,000
1,875,000

Growth
-0.6%
-13.6%
11.0%
8.2%
20.8%
16.6%
-5.6%
-0.6%
-14.7%
-7.0%
37.0%
-11.7%
5.8%

Other
Total
TEU's
141,437
151,721
147,082
88,724
88,090
119,474
128,708
125,318
128,870
118,550
130,616
127,000
125,000

Seattle
Harbor
Total
TEU's
1,488,267
1,315,109
1,438,872
1,486,382
1,775,858
2,087,929
1,987,360
1,973,504
1,704,492
1,584,596
2,139,577
1,900,000
2,000,000

Growth
-0.1%
-11.6%
9.4%
3.3%
19.5%
17.6%
-4.8%
-0.7%
-13.6%
-7.0%
35.0%
-11.2%
5.3%

Compound Growth
2000-2010
2005-2010

4.0%
4.0%

4.3%
1.0%

4.1%
0.4%

3.7%
0.5%
marstat.xls

Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 Forecast
2012 Budget

Port of Seattle Facilities Total Tonnage
Domestic
International
Total
Metric Tons
Metric Tons
Metric Tons
(in 1000's)
Growth (in 1000's) Growth (in 1000's) Growth
3,405
-4.0%
12,225
10.7% 15,630
7.1%
2,611
-23.3%
11,214
-8.3% 13,825
-11.5%
2,055
-21.3%
10,141
-9.6% 12,196
-11.8%
2,341
13.9%
11,062
9.1% 13,403
9.9%
2,453
4.8%
13,676
23.6% 16,129
20.3%
2,369
-3.4%
17,078
24.9% 19,447
20.6%
2,615
10.4%
17,327
1.5% 19,942
2.5%
2,546
-2.6%
17,777
2.6% 20,323
1.9%
2,266
-11.0%
16,940
-4.7% 19,206
-5.5%
1,947
-14.1%
15,943
-5.9% 17,890
-6.9%
1,907
-2.1%
19,975
25.3% 21,882
22.3%
1,965
3.0%
17,857
-10.6% 19,822
-9.4%
1,924
-2.1%
18,568
4.0% 20,492
3.4%

Compound Growth
2000-2010
2005-2010

-5.6%
-4.2%

5.0%
3.2%

3.4%
2.4%
marstat.xls

Source: Port of Seattle Internal Tonnage Reporting Statistics System.

V-21

Port of Seattle

2012 Preliminary Budget

REAL ESTATE DIVISION
A. 2012 BUDGET SUMMARY
TABLE VI-1: 2012 CASHFLOW SUMMARY

2012

($ in 000s)

SOURCES OF CASH
Operating Revenues
Interest Receipts
Proceeds from Bond Issues
Grants and Capital Contributions
Tax Levy
Other Receipts
Total

$

USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expenditures
Total Operating Expenses

32,401
62
300
23,634
22
56,419

57.4%
0.1%
0.0%
0.5%
41.9%
0.0%
100%

37,224

50.5%
8.8%
2.2%
0.0%
61.6%

8,064

8.2%
5.1%
13.3%

619
14,524
60,431

1.0%
0.0%
24.0%
100%

30,530
5,344
1,350
-

Debt Service:
Interest Payments
Bond Redemptions
Total Debt Service

4,972
3,092

Other Expenses
Public Expense
Capital Expenditures
Total

$

Percent
of Total

Cashflow.xls RE

Note: We built-up a significant cash balance in the past few years due to economic uncertainty, and we
are planning to draw down the cash balance in 2012.

VI-1

Port of Seattle

2012 Preliminary Budget

FIGURE VI-1: SOURCES OF CASH
($ in 000's)
Other Receipts
0.0%

Tax Levy
41.9%

Proceeds from
Bond Issues
0.0%
Interest Receipts
0.1%

Operating
Revenues
57.4%

Total Sources: $56,419
Grants and
Capital
Contributions
0.5%

FIGURE VI-2: USES OF CASH
($ in 000's)

Capital
Expenditures
24.0%

Public Expense
0.0%
Other Expenses
1.0%
Bond
Redemptions
5.1%

Interest
Payments
7%

Environmental
Expenditures
0.0%
Law Enforcement
Corporate
Costs
Administrative
2%
Expense
8%

VI-2

Operating &
Maintenance
Expense
50.5%

Total Uses: $60,431

Port of Seattle

2012 Preliminary Budget

B. BUSINESS PLAN FORECAST
TABLE VI-2: BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Notes

Operating Revenue
Operating & Maintenance Expense
Corporate & Capital Development Division Costs
Law Enforcement Costs
Total Operating Expense

Budget
2011
$

1

Net Operating Income Before Depreciation

Total Depreciation Expense
Net Operating Income After Depreciation

Committed Capital Budget
Business Plan Prospective
TOTAL CAPITAL BUDGET

Budget
2012

2013

Forecast
2014
2015

2016

Compound
Growth
2011-2016

30,707 $

32,401 $

33,033 $

33,760 $

34,478 $

35,298

2.8%

29,434
5,376
1,269
36,079

30,530
5,344
1,350
37,224

29,925
5,632
1,397
36,954

30,326
5,934
1,446
37,706

31,068
6,253
1,497
38,818

31,687
6,588
1,549
39,824

1.5%
4.2%
4.1%
2.0%

(5,372)

(4,823)

(3,921)

(3,948)

(4,340)

(4,526)

-3.4%

1,866 $
3,950
5,816 $

Total
2012-2016
1,870 $ 21,325
6,671
32,706
8,541 $ 54,031
edbpfor.xls

10,166
9,694
$ (15,538) $ (14,517)

$
2

15,357 $ 10,924 $
4,666 $
1,999 $
5,000
3,600
7,825
10,660
$ 20,357 $ 14,524 $ 12,491 $ 12,659 $

Notes:
1) Consists of remaining Corporate & Capital Development costs to be allocated to Real Estate after direct charges have been coded to
Business Groups and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.

C. DIVISION MISSION STATEMENT
Our mission is to:
 Efficiently and cost-effectively manage and develop our assets for the benefit of our customers and
the public;
 Provide services and facilities to our customers, the public and for the commercial activities of local
businesses;
 Maintain Fishermen's Terminal as the homeport to the North Pacific Fishing Fleet by providing
facilities and services that support the commercial fishing and other maritime industries, including
other commercial craft, while maximizing financial performance;
 Promote the economic health of our community;
 Ensure our businesses, facilities, and activities are the most efficient, ―cleanest and greenest‖ in the
country, at a reasonable cost; and
 Maintain the Eastside Rail Corridor for future infrastructure needs and enact an interim management
plan to maximize the performance of the asset.
INTRODUCTION
The Real Estate Division is committed to increasing the economic vitality of our region and generating new
business opportunities for the Port. This will be accomplished by leveraging the Port's partnerships with local
and regional commercial and industrial businesses and real estate partners. The Real Estate Division also
intends to identify and pursue opportunities that enhance the region's long-term vitality and ultimately produce
new revenue for the Port.
VI-3

Port of Seattle

2012 Preliminary Budget

The Real Estate Division (RED) integrates the efforts of five functional workgroups: Real Estate Development
& Planning, Harbor Services, Marine Maintenance, Portfolio Management and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and vessel
moorage facilities. Financial services, project management, facility planning, and environmental services are
acquired from the Seaport Division.
Following are the five business groups and their functions:
Real Estate Development & Planning: Plans and facilitates the development of selected real estate assets
currently within its own portfolio and provides development expertise and support to the Seaport and Aviation
Divisions. The team also identifies and evaluates new opportunities outside the Port's current portfolio and
completes other transactions related to Port assets.
Harbor Services: Operates & leases moorage/storage/yard facilities and provides a variety of services. Its
two commercial fishing moorage facilities, home to the North Pacific Fishing Fleet, provide space for more
than 600 commercial fishing vessels, commercial work vessels as well as recreational vessels. Its three
recreational marinas provide facilities for more than 1,600 recreational, commercial & some commercial
fishing vessels.
Portfolio Management: Leases, markets, and manages the Division's portfolio of conference, office, retail,
commercial, and industrial properties and works to enhance the value of the Division's assets through strategic
asset planning and repositioning. This business unit will also lead the asset management efforts related to the
Eastside Rail Corridor and the enhancement of the Port's Foreign Trade Zone.
Marine Maintenance: Provides comprehensive maintenance, repair and small capital services to properties
and equipment in the Real Estate and Seaport Divisions.
Pier 69 Facilities Management: Provides management services for Port Headquarters, including the Pier 69
Motor Pool, Print Shop, Shipping & Receiving, and Mail/Messenger, the Portside Café and Pier 69
Conference Center.
BUSINESS STRATEGIES




Maximize occupancy rates at all properties to support Port business initiatives;
Maximize vessel moorage occupancy and revenues at our five commercial and recreational facilities;
Improve, maintain and update our facilities to meet new market demands and provide compelling value to
current and future tenants.

TRIPLE BOTTOM LINE
The Real Estate Division, as part of the Port of Seattle, is a public agency with a mission to accomplish public
goals that provide economic benefits to the region as a whole. It must operate its properties like a business,
relying on revenues from our customer base for most of its net operating income & continually finding ways to
reduce expenses by operating efficiently & cost-effectively. Achieving a strong financial bottom line allows
the Real Estate Division to invest in projects that benefit the entire community, both economically and
environmentally. It is this combination of financial performance along with economic, as well as community
and environmental benefits, that serves as the Real Estate Division's Triple Bottom Line:
Economic Benefits:
We create economic benefits for the entire region through our business activities. All of our activities and
each of our tenants create jobs and bring business income and tax dollars to the region and the state.
Community and Environmental Benefits:
While community and environmental benefits are harder to quantify, they are an important part of the Port of
Seattle's mission. The Real Estate Division is a steward of the environment. We improve the environmental
condition of our property through our redevelopment and capital projects, providing new and/or improved
public open spaces, taking steps to reduce air & water pollution, conserving energy and water, and ensuring
facility activities are the cleanest & greenest, including recycling to reduce the amount of garbage we produce.
VI-4

Port of Seattle

2012 Preliminary Budget

The community also benefits from regional transportation projects made possible with our participation and
leadership in both planning and funding as well as the economic benefits produced by our business activities.
Financial Sustainability:
The most critical measure of the Real Estate Division's financial sustainability is a growing, positive Net
Operating Income (NOI). Only with strong financial performance, can it provide the economic, community
and environmental benefits that are the essence of its mission.
PARTNERSHIPS
We would not be able to fulfill our mission without positive relationships with our stakeholders and partners.
We are focused on:


Meeting the needs of our customers by:
− Facilitating customer relationships;
− Strengthening relationships with our stakeholders and partnering with them wherever possible;
− Developing new business opportunities.



Approaching our relationship with labor honestly and with integrity, communicating effectively and
working together under fair labor agreements.



Respecting tribal sovereignty and tribal religious and cultural values in all consultations with our tribal
neighbors.

VI-5

Port of Seattle

2012 Preliminary Budget

2012 REAL ESTATE DIVISION STRATEGIES
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE PORT AND REAL ESTATE DIVISION GROUP VITALITY
KEY OBJECTIVE: Achieve Financial Objectives
($4,823) thousand NOI before Depreciation. Each Business Group will contribute to the total Division NOI
as budgeted:





Real Estate Development & Planning
Harbor Services
Portfolio Management
Eastside Rail

NOI = ($923) Thousand
NOI = ($2,236) Thousand
NOI = ($1,067) Thousand
NOI = ($599) Thousand

KEY OBJECTIVE: Increase Property Utilization
 Maintain 87% occupancy of commercial properties;
 Achieve moorage occupancy of: Recreational Marinas 94%, Fishing & Commercial facilities 84%;
 Complete transition to new management contract for conference and event centers by May 31st;
 Renew Shilshole Bay Marina liveaboard agreement;
 Adopt Fishermen's Terminal 20 Year Re-development Plan and Net Shed Code Compliance Option:
o Finalize 20 Year Re-development and Implementation Plan and gain Commission
approval
o Integrate plan (as defined by 20 Year Plan) into operations, maintenance and capital
planning
o Begin implementation of Net Shed Code Compliance option;
 Complete key 2012 construction projects:
o Fishermen's Terminal C15 Building HVAC improvements
o Fishermen's Terminal C15 Building replace east sewer line
o Pier 69 North Apron Piling Corrosion Protection;
 Continue execution of Deferred Maintenance Reduction Plan by completing projects funded in 2012
Budget;
 Terminal 91 Uplands - Complete development option study and initiate the environmental review
process;
 Des Moines Creek Business Park - Complete new development agreement with City.
STRATEGY: DEVELOP NEW BUSINESS AND ECONOMIC OPPORTUNITIES FOR THE
REGION AND THE PORT
KEY OBJECTIVE: Build Relationships and Partnerships to Develop Business Opportunities for Local
Businesses
 Purchase at least 15% of all goods and services from qualified small businesses.
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
KEY OBJECTIVE: Strive to Integrate Environmental and Business Objectives into our Organization
 Maintain Clean Marina Washington/EnviroStar Certification at Harbor Services facilities;
 Zero tenant environmental regulatory violations;
 Electrical consumption at Pier 69 Facility is within 5% of 2011 level;
 Zero increase in landfill waste from the Marine Maintenance shop.
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
KEY OBJECTIVE: Attract and Retain Valuable Employees and Provide a Culture of Clear
Expectations and Accountability
VI-6

Port of Seattle



2012 Preliminary Budget

Achieve a perfect safety score and zero accidents.

HARBOR SERVICES
MISSION


Provide moorage facilities, equipment and services to fishing, commercial and recreational vessel
operators;



Maintain Fishermen's Terminal as the homeport to the North Pacific Fishing Fleet by providing facilities
and services that support the commercial fishing and other maritime industries while maximizing financial
performance;



Manage cost-effective operations that deliver the best value for our customers' dollars, provide the level of
services that will distinguish us from other moorage facilities, provide a rewarding work environment for
our employees and promote a spirit of partnership within the communities that we serve.

DESCRIPTION
Harbor Services provides and operates moorage facilities in various locations throughout Seattle, including a
full range of services, to meet the needs of a diverse group of vessel operators. The facilities are:


Bell Harbor Marina



Fishermen's Terminal



Harbor Island Marina (Terminal 102)



Maritime Industrial Center



Shilshole Bay Marina

Together these facilities supply over 2,000 moorage slips, and related products, for fishing, recreational, Tribal
and other commercial vessels up to 400' including supporting services. There are approximately 3,000
monthly moorage customers and approximately 13,000 guest moorage visitors annually. Customer service is
our primary focus. Customer types include: commercial and sport fishermen, commercial pleasure and
workboat operators, recreational boaters, Tribal members and the largest live-aboard community in the State of
Washington (approximately 550 people).
There is a strong link between the facilities and the Ballard, Magnolia, Central Seattle Waterfront and West
Seattle communities.
BUSINESS STRATEGY


Retain customers;



Achieve net operating income by maximizing revenues, effectively utilizing vessel moorage, yard &
locker areas and controlling expenses;



Improve & maintain assets & facilities in a manner that provides compelling value to customers;



Minimize risks of loss, both economic and physical, to the public;



Strive to be the cleanest and greenest harbor facilities at a reasonable cost by following Marina Best
Management Practices, continuing our various environmental programs, and educating our customers and
employees.

VI-7

Port of Seattle

2012 Preliminary Budget

KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND HARBOR SERVICES GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure: Achieve Net Operating Income
Performance Objective
Performance Target
Harbor Services Total

($2,236) thousand

Fishing/Commercial

($3,128) thousand

Task/Activity/Program/Initiative



Recreational Boating

$893 thousand

Achieve goals for
occupancy of vessel
moorage areas

Total Fishing:
FT: 84%
MIC: 72%

84%

Advance Fishermen's
Terminal 20 Year
Redevelopment Planning
Process





Implement Net Shed
Buildings Code
Compliance Option





Update Shilshole Site Plan





Same as above.



Fill vacancies in the shortest duration of
time.
Effectively manage derelict vessels,
insurance program & collections process.
Execute and revise marketing plans as
needed to respond to market flucuations
throughout the year.



Total Recreational: 94%
SBM: 95%
HIM: 89%
BHM: 71%

Monthly review of plans and spending to
meet targets (revenues & expenses).
Execute operations & marketing plans;
adjust as necessary throughout the year.



Work with Portfolio
Management to
complete planning
analysis &
recommendation to
Port Commission, and
begin potential
environmental review.
Integrate 20 year FT
Asset Plan into
Maintenance &
Capital planning.





Integrate 20 year Asset Condition
Assessment into operations, maintenance &
capital plans.

Complete analysis of
code compliance
options &
recommendation &
gain approval from
Port Commission.
Complete design
improvements &
permitting (as
needed).



Advance alternative for bringing net locker
buildings into code compliance and gain
Commission approval on design option &
implement.
Complete design & permitting (as needed)
for construction of applicable improvements
required per code.

Complete year end.



VI-8





Portfolio Management will lead and HSG
will support the advancement of a
development alternative for FT landside that
supports the fishing industry and provides
financial return to the Port overall. This will
include the Net Sheds Storage Option.
Gain approval from Port Commission.

Working with Portfolio Management, and
an outside consultant, update existing site
plan. Examine implications of Shoreline

Port of Seattle

2012 Preliminary Budget

regulations.
Renew Shilshole
Liveaboard Agreement





Notification to
liveaboard officers by
February 26, 2012.
Agreement complete
by August 2012.



Complete review of existing Agreement and
work with liveaboards to revise as necessary
& implement agreement.

Key Objective: Minimize risk of loss, both economic & physical
Performance Measure: Achieve Net Operating Income
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Implement actions from
Enterprise Risk
Management priorities







Identify actions & a
budget by end Q3.
Begin implementation
of four actions by end
of year.

Identify four action items, complete action
plans and budget. Begin implementation.

STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy.
Performance Measure: % of HSG operating & capital expenditures
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Utilize small businesses.





15% of direct expense

When feasible, utilize qualified small
businesses.

STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization.
Performance Measure: EnviroStar certification maintained. Zero regulatory violations.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain Clean Marina
Washington/EnviroStar
Certifications.



Certification renewed
at all HSG facilities.



Maintain standards to satisfy regulatory biannual certification requirements.

Enforce Marina Best
Management Practices
(BMP's) & agency
regulations.



Zero regulatory
violations.
Complete update of
BMP's Q2.



Work with Environmental to update BMP's
(annually).
Staff educates customers & enforces BMP's
when on the docks, follows regulatory
requirements and carries out internal
environmental procedures.

Identify Green Port Capital
Projects to be implemented.



Projects analysis
completed by Q2.
Incorporate identified
Green improvements
into planned 2013
capital projects in Q3.







VI-9



Analyze all Green Port capital projects in
conjunction with planned capital
improvement projects, in coordination with
Portfolio Management and Environmental,
and decide ones to be implemented.

Port of Seattle

2012 Preliminary Budget

Key Objective: Provide a culture of clear job expectations and accountabilities & develop employees.
Provide a safe workplace.
Performance Measure: Employee PREP plans completed with accountabilities & development plan. 100%
on safety audit.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain an educated
employee workforce.





100% of PREP plans
include clear
accountabilities, a
training/development
plan & diversity
component.




All employees understand accountabilities
& how their work links to the Harbor
Services Business Plan & the Port
initiatives.
All PREP plans include a
training/development plan.
All staff attends or participates in at least
one diversity activity or event as part of
PREP Plan.

Improve Employee
Survey Results



Implement action plans.



Work with employees to implement
identified focus areas/action plans from
2011 survey results & HSG Workshop.

Maintain a safe
workplace for all
employees.




100% safety score
Zero accidents



100% of employees complete all
requirements and training as identified in
the Facility Safety Plans.

TABLE VI-3: REAL ESTATE HARBOR SERVICES BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Budget
2011

Notes

Operating Revenue

2013

2014

2015

2016

11,456 $

11,641 $

11,804 $

12,012 $

12,181 $

12,457

1.7%

1

9,538
3,833
13,371

9,963
3,913
13,876

9,910
4,109
14,019

10,064
4,314
14,378

10,302
4,530
14,832

10,524
4,757
15,281

2.0%
4.4%
2.7%

Net Operating Income Before Depreciation

(1,915)

(2,236)

(2,215)

(2,367)

(2,651)

(2,823)

8.1%

5,855
(7,770) $

5,292
(7,527)

Operating & Maintenance Expense
Corporate Administrative Expense
Total Operating Expense

$

Compound
Growth
2011-2016

Forecast

Budget
2012

Total Depreciation Expense
Net Operating Income After Depreciation

COMMITTED CAPITAL BUDGET

2

$

$

5,473

$

- $

- $

-

$

-

$

-

Total
2012-2016
$
edbpfor.xls

Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.

VI-10

Port of Seattle

2012 Preliminary Budget

PORTFOLIO MANAGEMENT
MISSION
The mission of the Portfolio Management Department is to strategically position the Division's diverse real
estate portfolio of assets to achieve their maximum value through effective leasing and asset management. We
will accomplish our goals and provide our services with professionalism, integrity, respect for the environment
and in support of the regional economy.
DESCRIPTION
We manage, maintain, market, and lease the Division's portfolio of commercial and industrial properties and
work to enhance the value of our assets by regularly evaluating the overall performance of our portfolio to
determine the best use and configuration and also continually working to increase income and reduce
expenses. We also administer leases and manage utility billing for both the Real Estate and Seaport Divisions.
The Portfolio is comprised of properties that serve office, retail and industrial tenants. Commercial properties
located along the Port's central waterfront include:
 Pier 66 (Bell Harbor International Conference Center and the Maritime Event Center),
 World Trade Center West and World Trade Center, Seattle,
 Bell Street Parking Garage,
 Pier 69.
Other commercial properties are located at:
 T-102 (Harbor Marina Corporate Center),
 Ballard (Fishermen's Terminal, the Maritime Industrial Center and Shilshole Bay Marina),
 West Seattle (CEM and Pier 2),
 Interbay (Tsubota).
Industrial properties include:
 Parts of T-34, T-46, T-86 and T-5 SE,
 Eastside Rail Corridor.
BUSINESS STRATEGY
We will achieve our projected net operating income for 2012 by focusing on tenant retention, new lease
opportunities and expense controls, and selectively evaluating our portfolio to identify new revenue-generating
opportunities. We will create and implement strategic redevelopment plans for our existing assets as required.
We will manage and maintain our assets to meet the needs of our tenants and customers and preserve and
enhance each asset's value by employing appropriate levels of maintenance, repair, and environmental
controls.
MARKET FORECAST
Waterfront/Belltown/Lower Queen Anne Sub-market
Office
Vacancy rates vary by reporting services depending on exactly how the interpret the numbers, most
specifically do they include or exclude owner user buildings and are their numbers true vacancy or available
VI-11

Port of Seattle

2012 Preliminary Budget

space. These differences can create a several percentage point difference. The numbers included below come
from our Kidder Mathews Q1 2011 report.
The vacancy rate through the first quarter of 2011 for the CBD rose slightly to 13%. Significant activity in Q1
2011 has not been reflected in those numbers and vacancy is expected to drop by a full percentage point once
the tenants actually occupy the space from the recently signed leases. Some of the more significant recent
deals were:
Leases:
Amazon at 1918 8th
Dendreon at Russell Investment Center
Zillow at Russell Investment Center
Isilon at 505 1st Ave S
Zulilly at 2200 1st Ave S

460,000 SF
170,000 SF
60,000 SF
140,000 SF
90,000 SF

Sales (vacant buildings to be fully occupied by the new owner or planned tenant):
1100 Eastlake by Fred Hutch
7th & Madison by HAL (Polyclinic)
Much of the recent activity has been specific to the technology and health care sectors. We have not seen
broader market activity across all groups which will be the major indicator of a full recovery. We expect that
even with the early activity in 2011, the balance of the year will remain relatively flat from a pricing
perspective and anticipate a broader market recovery in late 2011 or early 2012 where rates should begin to
climb. Landlord concessions have started to decline, but not significantly and expect greater movement in the
same time frame mentioned above.
There is optimism in the market, but Seattle and San Francisco regions appear to be outperforming the balance
of the country. Should the overall economy experience a ―double dip‖ or more issues develop from Europe,
Seattle will not be able to avoid impacts from a stall in the economic recovery.
Specifically, the World Trade Center West Building is located within a unique niche of the waterfront
submarket. There is limited public transportation and our parking is not easily accessed from Alaskan Way.
The broad awareness of the upcoming seawall replacement and viaduct construction may also impact our
ability to attract new tenants. According to the current listing broker (Kidder Matthews) the projected market
rate for this building will be will not change from the current asking rate and will remain in the range of
$20.00 to $24.00 per rentable square foot for fully-serviced space through the end of 2011 and into the 2012
budget year. Our tenants generally pay increases in operating expenses over a base year.
South Seattle Sub-Market
Industrial
The Industrial market ended the first quarter 2011 with a vacancy rate of 8.1%. The vacancy rate was down
over the previous quarter, with net absorption totaling positive 848,784 square feet in the first quarter. Vacant
sublease space increased in the quarter, ending the quarter at 1,949,089 square feet. Rental rates ended the first
quarter at $7.01, an increase over the previous quarter.
The South Seattle Industrial Market may be less affected by the economy due to the lack of available land to
develop and the fact that a majority of the property owners have held their properties for a number of years
resulting in less distressed sales in the market.
Class B Flex/Office Space
The Office market ended the first quarter 2011 with a vacancy rate of 13.0%. The vacancy rate was up over the
previous quarter, with net absorption totaling positive 325,813 square feet in the first quarter. Flex projects
also reported a vacancy rate of 13.0%, which was up from the previous quarter. The Flex building market
VI-12

Port of Seattle

2012 Preliminary Budget

recorded net absorption of negative (60,464) square feet in the first quarter 2011, compared to negative
(308,678) square feet in the fourth quarter 2010.
The south end office and flex market continues to experience high vacancy rates as tenants moving out of
space are outpacing new tenant activity. Flight to quality is also an issue, as south end tenants are taking
advantage of lower rates in downtown locations, which provide greater amenities and easy access to public
transportation. In order to entice tenants, south end landlords are reducing asking rates and offering significant
lease incentives in order to attract tenants.
Ship Canal/Ballard Submarket
The lingering effects of the recession continue to impact this market throughout 2010 and 2011. Although the
Ship Canal office submarket has a number of forces that have kept vacancy rates low such as the University of
Washington, the Bio-Medical Industry, Seattle Pacific University and the Maritime Industry, we are seeing
some non-maritime tenants being lured away by the low rents and concessions that are being offered by
landlords in the Central Business District. That being said, the attractiveness and popularity of Fremont,
Magnolia, Ballard and Wallingford are factors that have allowed many buildings in the area to retain tenants
and sustain more demand than some of the other office submarkets.
Class B Office
The vacancy rate for office space in the Ship Canal submarket, as a whole is 10.6 %compared to a 13 %
vacancy rate for the Queen Anne Magnolia submarket. The rates quoted in the various reports are for Class A
office space. Market rates for Class B office space have fallen and vary from $16.00 - $18.00/sf/NNN for
nicer well-kept Class B office space but several brokers I spoke to said a landlord would be lucky to get
$16.00/sf/NNN today for ―like new‖ space. Many landlords are offering concessions like free rent and up to
$50.00/sf for TI's. The groups willing to pay market rate are government related, involve cutting edge
technology or are involved in industries like renewable energy. According to most reports and local brokers,
rates should remain flat until consistent leasing and positive absorption ease pressure on landlords.
Industrial
Most of the tenant activity is occurring in the south end industrial market. Average warehouse rates are
around $.55/sf/mo. Land is ranging from $.15-.20/sf/mo. In general the Ship Canal submarket, Ballard in
particular, is an extremely tight market. A lot of buildings are owned and occupied by businesses that have
been there for decades. In addition, the increased development in the submarket in recent years has resulted in
a decline in industrial inventory. This makes it difficult for smaller companies to lease space and in turn keeps
rents a bit higher than what is seen in submarkets like Georgetown. Despite the slow economy, 5-10K
warehouse spaces remain in high demand and lease up quickly. Spaces smaller or larger tend to stay on the
market longer. According to brokers in the area, rates for warehouse space in the 5-10K range are getting
deals done around $.50-$.65 sf/mo with an office add-on of $.70-$.75/sf/mo. Land is ranging from $.15$.20/sf/mo. Although there is no clear broker reporting on Industrial properties in the Ship Canal/Ballard
market, local brokers confirm that warehouse space and vacant land are scarce. In 2010 we had an appraisal
done by McKee & Schalka on the FVO Marine Ways Shipyard at FT. Land came out at $.20/sf/mo and
warehouse ranged between $6.00 - $7.80.

VI-13

Port of Seattle

2012 Preliminary Budget

KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND PORTFOLIO MANAGEMENT GROUP VITALITY
Key Objective: Maximize financial performance.
Performance Measure:
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Administrative expense.

$1,567 thousand
(org basis)

Monthly review and adjustment in spending to
meet target.

Commercial/Industrial
Property NOI.

($5,316) thousand

Monthly review and adjustment in spending to
meet target.

Third Party NOI.

$4,249 thousand

Monthly review and adjustment in spending to
meet target.
Complete transition to new Management
Contract for Conference and Event Centers by
May 31.

Achieve occupancy of
Commercial Buildings at
87% or above in 2012.

Year-end occupancy rate
will be 87% or better.

Real estate managers will work with the
Director to refine the leasing strategy for each
asset to respond to current market conditions.

Advance Fishermen's
Terminal 20 Year
Redevelopment Planning
process.

Completion of planning
analysis and
recommendation to Port
Commission, begin
potential environmental
review

Portfolio Management will lead the 20 year
planning process with the support of Harbor
Services and a consultant to formulate an asset
enhancement strategy, environmental review,
and implementation plan and gain approval of
Port Commission.

STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy.
Performance Measure: 10 % of Total Expenditures for Goods and Services.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Utilize small businesses

10% of total expenditures
for goods and services (in
conjunction with
Maintenance)

The majority of contracts for our group are led
in conjunction with Maintenance and are
reflected in their statistics. When feasible,
utilize qualified small businesses to provide
consulting and real estate services such as
surveys, appraisals, brokerage, and market
studies.

VI-14

Port of Seattle

2012 Preliminary Budget

STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization.
Performance Measure: Zero tenant regulatory violations.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Support Port
Environmental
Department's Tenant
Compliance Program.

Visit at least four properties
per quarter.

Real Estate managers and member(s) of
environmental staff will inspect selected
properties to ensure tenant compliance with
lease environmental requirements.

Identify new ―green‖
initiatives

1 new ―green‖ initiative
identified by end of Q2.

All staff participates to identify new ―green‖
initiative that can be adopted.

STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability.
Performance Measure: Clarify Division and Department Mission and Goals and encourage on-going
education of staff.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain educated
employee workforce.

90 % of staff



90% of staff



100% of staff



Identify one new tool to
improve effectiveness.

Team will work together to identify new work
or technology tools to improve effectiveness (eg
rent rolls, Sharepoint, etc).

Identify work process
improvements.

VI-15

Staff members will attend or participate in
one diversity activity per year.
Staff members will attend at least two real
estate classes, seminars or conferences.
Each employee will include a personal
development plan in PREP.

Port of Seattle

2012 Preliminary Budget

TABLE VI-4: PORTFOLIO MANAGEMENT BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Budget
2011

Notes

Operating Revenue

$

Compound
Growth
2011-2016

Forecast

Budget
2012

2013

2014

2015

2016

18,479 $

19,923 $

20,377 $

20,877 $

21,407 $

21,933

3.5%

1

17,680
2,543
20,223

18,503
2,486
20,989

17,957
2,611
20,568

18,177
2,741
20,918

18,629
2,878
21,507

18,980
3,022
22,002

1.4%
3.5%
1.7%

Net Operating Income Before Depreciation

(1,745)

(1,067)

(190)

(41)

(99)

(69)

-47.6%

4,090
(5,835) $

4,193
(5,262)

Operating & Maintenance Expense
Corporate Administrative Expense
Total Operating Expense

Total Depreciation Expense
Net Operating Income After Depreciation

$

Total
2012-2016
COMMITTED CAPITAL BUDGET

2

$

6,433

$

4,880

$

889

$

432

$

483

$

433

$

7,117
edbpfor.xls

Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.

TABLE VI-5: EASTSIDE RAIL BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Notes

Operating Revenue

Budget
2011

Compound
Growth
2011-2016

Forecast
2013

2014

2015

2016

45 $

22 $

23 $

23 $

24 $

24

-11.5%

Operating & Maintenance Expense
Corporate Administrative Expense
Total Operating Expense

694
0
694

621
0
621

637
0
637

653
0
653

669
0
669

686
0
686

-0.2%
-0.2%

Net Operating Income Before Depreciation

(649)

(599)

(614)

(629)

(644)

(661)

0.4%

0
(649) $

0
(599)

Total Depreciation Expense
Net Operating Income After Depreciation

$

Budget
2012

$

Total
2012-2016
COMMITTED CAPITAL BUDGET

$0

$0

VI-16

$0

$0

$0

$0

$0
edbpfor.xls

Port of Seattle

2012 Preliminary Budget

DEVELOPMENT AND PLANNING
MISSION
The Real Estate Development and Planning team plans and facilitates development of selected real estate
assets currently within the Port's portfolio. The team also identifies and evaluates acquisition opportunities
outside the Port's current portfolio and completes ground leases and sales of Port assets. These activities are
aimed at promoting regional economic vitality, facilitating job creation and retention, creating new revenue for
the Port and the region, and enhancing the built and natural environment.
DESCRIPTION
The team connects the Port's mission of creating regional economic vitality through two real estate-related
initiatives:
Initiative 1 advances planning and development of certain assets the Port currently owns. Past
strategic planning efforts underscored the Port's need to improve utilization of existing assets.
Initiative 2 involves the identification and timely response to new opportunities and projects and,
where appropriate, the completion of these transactions.
BUSINESS STRATEGY
In 2012, the team will continue working on projects that will advance the Port's role in catalyzing regional
economic development through improved asset utilization. The strategy will center on generating near-term
revenue from those sites with such potential and continued progress on those sites that have a longer time
horizon for new revenue and job generation. In addition, the team will continue to assist the Aviation Business
Development group with its land development program in the cities of Des Moines, Burien and SeaTac and the
Seaport Division in its search for off-dock lands.
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND DEVELOPMENT AND PLANNING GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure:
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Terminal 91 Uplands

Advance redevelopment of
the site



Des Moines Creek
Business Park

Advance entitlement of the
site



Complete environmental review process
associated with development options study.
 Potentially begin implementation of
recommended development option.
Finalize and obtain commission approval of a
potential land exchange agreement with Seattle
Parks & Recreation for the West Yard site.




VI-17

Negotiate and execute new development
agreement with the City of Des Moines.
Negotiate and execute potential option
agreement with the City of Des Moines for a
retail component.
Coordinate entitlement work and plan

Port of Seattle

2012 Preliminary Budget



Burien-Northeast
Redevelopment Area

Continue implementation of
NERA redevelopment
strategy recommendations





City SeaTac Sites

Advance redevelopment
planning







Acquisition/Sales/Long
Term Leases

Complete purchase or sale
of key sites



review following execution of a potential
ground lease with PSE.
Negotiate and execute potential ground
lease for the FAA project.
Solicit offers, negotiate and execute
agreements related to potential sale of Lora
Lake apartments site.
Collaborate with the City of Burien on a
possible application for FAA pilot project
funds.
S. 200th Street Site - coordinate entitlement
work and plan review following execution
of a potential ground lease with Harvest
Power.
28th Avenue S. Site - negotiate and execute
potential ground lease for the FAA project.
Doug Fox Site - complete all due diligence
activities. Draft and issue potential RFP.
Hotel Study - complete three-phase
feasibility analysis. Draft and issue
potential RFP.
Complete second land swap with WSDOT
for the Des Moines property.

STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability.
Performance Measure:
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain educated
employee workforce.

90% of staff



90% of staff




100% of staff

Achieve staffing level
needed to implement key
initiatives.

100% of needed staff hired

VI-18



Staff members will attend or participate in
one diversity activity per year.
Staff members will attend at least two real
estate classes, seminars or conferences.
Each employee will include a personal
development plan in PREP.
Assess need to hire project assistant. If
needed, post position and hire project
assistant.

Port of Seattle

2012 Preliminary Budget

TABLE VI-6: DEVELOPMENT AND PLANNING BUSINESS PLAN FORECAST
($ in 000's)
OPERATING BUDGET

Notes

Operating Revenue
Operating & Maintenance Expense
Corporate Administrative Expense
Total Operating Expense

Budget
2011
$

Budget
2012

724 $

812 $

Forecast
2013
829 $

2014
847 $

2015
865 $

2016

Compound
Growth
2011-2016

884

4.1%

1

1,518
268
1,786

1,439
295
1,733

1,421
310
1,731

1,432
325
1,757

1,468
341
1,809

1,497
358
1,855

-0.3%
6.0%
0.8%

Net Operating Income Before Depreciation

(1,062)

(923)

(902)

(910)

(945)

(971)

-1.8%

Total Depreciation Expense
Net Operating Income After Depreciation

COMMITTED CAPITAL BUDGET

221
209
$ (1,284) $ (1,131)

$0

$0

$0

$0

$0

Total
2012-2016
$0
$0
edbpfor.xls

Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human
Resources & Development, are used.

VI-19

Port of Seattle

2012 Preliminary Budget

MARINE MAINTENANCE
MISSION
The mission of the Marine Maintenance Department is to maintain, preserve, upgrade, improve and enhance,
as directed, the assets owned by the Real Estate and Seaport Divisions. We conduct our activities in a manner
that fosters competitive business practices, customer service and benefit to the public and local businesses, as
well as environmental responsibility and conservation.
DESCRIPTION
Maintenance disciplines include automotive, carpentry, marine carpentry, electrical, general labor, custodial
labor, landscape labor, painting, plumbing, sprinkler-fitting (fire protection), sheetmetal, welding, truck
driving sign writing, HVAC maintenance and elevator/escalator maintenance. Most maintenance activities
required by Port assets are available through the Marine Maintenance Shop, as are public works including
small capital construction services and environmental and safety compliance support activities.
BUSINESS STRATEGY
Our business strategy is to fulfill the maintenance needs of our customers while acting as stewards of the assets
in the public trust.


We conduct Preventive Maintenance and Corrective Maintenance to properly safeguard Port assets;



We engage in expense and capital improvements to support customer departments' business strategies;



We fully support the Port's business, community and environmental strategies with programs focused
on Economics, Equity - Social Responsibility, Environment, and Employee Engagement.

KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND MARINE MAINTENANCE GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure: Budget and performance targets met.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Meet Authorized Budget

+/- 2%

Dept. financial health.

Reduce Trouble Calls/
Urgent Maintenance

15%
15%

Increase Preventative Maintenance
Reduce Trouble Calls.

Eliminate Deferred
Maintenance Backlog



Continue Deferred Maintenance reduction plan.



Small Project List
Completed
Commission Actions
Initiated for All 201112 Large Projects

VI-20

Port of Seattle

2012 Preliminary Budget

STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy
Performance Measure: Use resources, such as Office of Social Responsibility, to engage with local, small
and disadvantaged businesses to meet department and Port goals.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Utilize small businesses

15% of operating and
capital expenditures

Utilize qualified small businesses to provide
consulting and contracting services.
Purchase materials from small business vendors
when possible and economically feasible.

STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Integrate environmental and business objectives into our organization
Performance Measure: Compliance with existing programs and initiation of new endeavors related to the
―Cleanest, Greenest, Most Cost-effective‖ Port programs.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Ensure efficient
collection & disposal of
garbage & ensure
recycling

Maintain reduced tonnage
of landfill waste and
increased tonnage of
recyclables.

Zero increase in landfill waste from shop.

Comply with
environmental
regulations in the conduct
of our activities.

100% Compliance

Implement and enforce Storm Water Pollution
Prevention Plan Best Management Practices.
Train 100% of available staff and craftspeople
in annual safety training day.
Communicate regulatory changes during
monthly safety meetings.

Maintain EnviroStar and
Salmon Safe Certification

Certification is renewed at
all facilities

Ensure EnviroStars Compliance.
Ensure Salmon Safe Compliance.

Track and reduce travel
miles by Marine
Maintenance vehicles

10% reduction in travel
miles

Participate in POS initiatives related to clean air
and sustainability.
Measure effectiveness of direct reporting to
north-end office.

VI-21

Port of Seattle

2012 Preliminary Budget

STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability
Performance Measure: Employee participation in diversity events, training and performance planning and
appraisal.
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Comply with safety
regulations.

100% Compliance

Train 100% of available staff and craftspeople
in annual safety training day.
Communicate regulatory changes quarterly
through input to the Health and Safety
Management Report and monthly safety
meetings.
Achieve 90% on Marine Maintenance Safety
Evaluation Status performance measures.

Maintain educated
employee workforce.

90% of staff

Staff members will attend or participate in one
diversity activity per year.
Staff members will attend at least one local
class, seminar or conference each year.
Each non-represented employee will include a
personal development plan in PREP.
All employees will comply with Workplace
Responsibility initiatives and Code of Conduct.

30% of staff
100% of staff
100% of staff

STRATEGY: BE A LEADER IN TRANSPORTATION SECURITY
Key Objective: Reinforce and coordinate security and public safety programs for all port assets
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Report and track boat
work and under dock
work

100% of boat work and
under dock work

Report to site contacts and Coast Guard as
appropriate when workers are working in the
boats, under docks and traveling from one
waterfront location to another.

Tabletop Exercise

One per year

Assist Seaport Emergency Manager with the
planning and execution of the tabletop exercise.

VI-22

Port of Seattle

2012 Preliminary Budget

PIER 69 FACILITIES MANAGEMENT
MISSION
To provide, operate and maintain a safe, secure, comfortable, productive and efficient workplace.
DESCRIPTION
The department provides facilities management services for Pier 69 site including:
 Space management and planning
 Energy management
 Management and operation of print shop
 Management and operation of mailroom, messenger, and shipping/ receiving
 Management and operation of conference center, commission chambers, and atrium meeting spaces
 Management and operation of motor pool
 Management of Portside Café lease
 Representation of Real Estate Division on the Safety & Security Coordination Council
 Administration of Commute Trip Reduction (CTR) program
 Administration of access control and surveillance systems.
SERVICE STRATEGY






Hire, develop, and retain high performing, service oriented personnel;
Operate and maintain headquarter facilities with emphasis on continuous improvement, outstanding
customer service, optimal staffing levels, environmental stewardship, and proactive maintenance;
Partner effectively with Port maintenance departments;
Partner effectively with outsourced service providers, e.g., HVAC maintenance, elevator maintenance,
janitorial services, and building security services;
Effectively represent the interests of the Real Estate Division on the POS Safety & Security
Coordination Council.

KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND PIER 69 FACILITY MANAGEMENT GROUP VITALITY
Key Objective: Maximize financial performance
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Manage within
authorized budget

within 5% of approved
budget

Review performance monthly for variance and
make adjustments to spending if necessary.

Maintain print shop
chargeback percentage

> or = 75%

Maintain optimal staffing level; continue focus
on customer service and quality assurance.

VI-23

Port of Seattle

2012 Preliminary Budget

STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Success of Portside Café

Revenue from rent is >
minimum guarantee

Provide responsive landlord support for tenant
in accord with lease agreement.

Utilize small businesses

10% of operating and
capital expenditures

Where feasible, utilize qualified small
businesses.

STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain or reduce
electrical consumption

Electrical consumption is
within 5% of 2011

Monitor and maintain building systems to
ensure that system components operate as
designed. Continue to look for opportunities to
reduce electrical consumption.

STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability
Performance Objective

Performance Target

Task/Activity/Program/Initiative

All staff participate in
professional development

100% staff participation

Each staff member will identify at least one
development goal in their PREP plan.

All staff participate in all
required training

100% of training is
completed or scheduled

All training as listed in LMS is either completed
or scheduled.

STRATEGY: BE A LEADER IN TRANSPORTATION SECURITY
Key Objective: Reinforce and coordinate security and public safety programs for all port assets
Performance Objective

Performance Target

Task/Activity/Program/Initiative

Maintain and update P69
FM COOP document

annual and periodic updates

Plan is updated annually. Periodic updates
(contact information, etc.) are done throughout
the year.

Participate in the
planning and execution of
communication tests

Set by Safety & Security
Coordination Council

Participate in the planning and execution of
tests.

Participate in tabletop
exercises

Set by Safety & Security
Coordination Council

Participate in the planning and execution of
tabletop exercises.

VI-24

Port of Seattle

2012 Preliminary Budget

D. REAL ESTATE OPERATING BUDGET SUMMARY
TABLE VI-7: REVENUE BY ACCOUNT

($ in 000's)
REVENUE BY ACCOUNT
Operating Revenue
Dckg, Whrfg, Serv/Facility, Passenger Fee
Equipment Rental
Berthage & Moorage
Parking Revenue
Revenue From Sale of Utilities
Property Rental Revenue
Other Revenues
Total Operating Revenue

2012
Budget

% Change
2012 Bud 2011 Bud

58 $
58 $
62
74
79
78
9,901
9,881
10,005
146
150
152
1,157
1,117
1,287
9,381
9,837
10,139
9,674
9,820
11,107
$ 30,391 $ 30,942 $ 32,828

6.9%
-1.3%
1.3%
1.3%
15.2%
3.1%
13.1%
6.1%

2010
Actual

Notes

2011
Budget

$

EDbud.xls REdata

FIGURE VI-3: REAL ESTATE DIVISION REVENUE BY ACCOUNT
($ in 000's)

Dckg, Whrfg, Serv/Facility,
Passenger Fee
0.2%

Other Revenues
33.8%

Equipment Rental
0.2%

Berthage & Moorage
30.5%

Property Rental Revenue
30.9%

Parking
Revenue
0.5%

Revenue From Sale of
Utilities
3.9%

Total Revenue: $32,828

VI-25

Port of Seattle

2012 Preliminary Budget

TABLE VI-8: OPERATING & MAINTENANCE EXPENSES BY ACCOUNT

2012
Budget

% Change
2012 Bud 2011 Bud

($ in 000's)
2010
Actual

Notes

EXPENSE BY ACCOUNT
Salaries, Wages, Benefits & Workers Comp
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses
Total O&M without Environmental

$

Environmental Expense
Total O&M with Environmental
Charges to Capital Projects
Total Operating Expense

$

2011
Budget

16,055 $
999
3,286
1,199
2,366
87
27
8,297
32,316

18,138 $
894
3,237
1,288
3,082
161
43
8,293
35,136

19,594
1,411
3,627
1,336
3,705
197
47
8,543
38,460

8.0%
57.8%
12.0%
3.7%
20.2%
22.4%
9.3%
3.0%
9.5%

(2)
32,314

0
35,136

0
38,460

0.0%
9.5%

(1,579)
30,735 $

(1,400)
33,736 $

(2,044)
36,416

46.0%
7.9%

EDbud.xls REdata

FIGURE VI-4: REAL ESTATE DIVISION EXPENSE BY ACCOUNT
($ in 000's)
Travel & Other Employee
Expenses
0.5%

Promotional Expenses
0.1%

Other Expenses
22.2%
Outside Services
9.6%

Salaries, Wages, Benefits &
Workers Comp
50.9%

Utilities
9%
Supplies & Stock
3.5%

Equipment Expense
2%

Total Before Charges to Capital Projects: $38,460
Charges to Capital Projects: $2,044
Total Expense: $36,416

VI-26

Port of Seattle

2012 Preliminary Budget

TABLE VI-9: REAL ESTATE REVENUE AND EXPENSE BY DEPARTMENT
(in 000's)

BY DEPARTMENT

2010
Actual

Notes

REVENUE
Harbor Services
Portfolio Management
Real Estate Development and Planning
Eastside Rail Corridor
Pier 69 Facilities Management
Marine Maintenance
Total Operating Revenue

2012
Budget

% Change
2012 Bud 2011 Bud

11,533 $
17,150
756
114
76
763
30,391

11,448 $
18,373
724
45
3
349
30,942

11,633
19,820
812
22
1
540
32,828

1.6%
7.9%
12.1%
-50.8%
-66.7%
55%
6.1%

EXPENSES BEFORE CHARGES TO CAPITAL , NON-OPS, & ENV
Business Groups:
Harbor Services
Portfolio Management
1
Real Estate Development and Planning
Eastside Rail Corridor
Total Business Group Expense

4,437
10,985
692
504
16,617

4,454
11,949
759
484
17,645

4,614
12,441
799
203
18,057

3.6%
4.1%
5.3%
-58.1%
2.3%

Service Groups and Other:
Pier 69 Facilities Management
Marine Maintenance
Real Estate Administration
Contingency
Environmental Remediation Liability Expense
Real Estate Capital to Expense
Total Services Group and Other Expense

1,510
13,772
346
(2)
70
15,697

1,453
15,679
358
17,491

1,521
18,503
378
20,403

4.7%
18.0%
5.6%

16.7%

Total Expenses Before Charges to Capital, Non-Ops, & Env Remed

32,314

35,136

38,460

9.5%

CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION

(1,579)

(1,400)

(2,044)

46.0%

4,436
10,985
692
504
16,616

4,454
11,949
759
484
17,645

4,614
12,441
799
203
18,057

3.6%
4.1%
5.3%
-58.1%
2.3%

1,510
12,142
346
(2)
121
14,118

1,453
14,279
358
16,091

1,521
16,459
378
18,359

4.7%
15.3%
5.6%

14.1%

36,416

7.9%

OPERATING & MAINTENANCE EXPENSE
Business Groups:
Harbor Services
Portfolio Management
Real Estate Development and Planning
Eastside Rail Corridor
Total Business Group Expense
Service Groups and Other:
Pier 69 Facilities Management
Marine Maintenance
Real Estate Administration
Contingency
Environmental Remediation Liability Expense
Real Estate Capital to Expense
Total Services Group and Other Expense

$

2011
Budget

1

Total Operating Expense

$

30,735

Notes:
1) Terminal 117 was transferred from Seaport to Real Estate for 2012 Budget.

VI-27

$

33,736

$

Port of Seattle

2012 Preliminary Budget

E. STAFFING
The following table outlines the Full-Time equivalents (FTEs) for both regular and other categories in the Real
Estate Division. The division is budgeting 165.8 FTE's for 2012, one FTE higher than 2011 budget.
TABLE VI-10: REAL ESTATE DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions)
BY DEPARTMENT
Real Estate Administration
Harbor Services
P69 Facilities Management
Development and Planning
Portfolio Management
Marine Maintenance
TOTAL REAL ESTATE DIVISION

Notes

2010
Actual
2.0
31.8
8.0
2.0
13.0
108.0

164.8

2011
2011
Budget
Est. Act.
2.0
2.0
30.8
30.8
8.0
8.0
2.0
2.0
14.0
14.0
108.0
108.0

164.8

164.8

% Change
2012
2012 Bud Budget
2011 Bud
2.0
0.0%
30.8
0.0%
8.0
0.0%
3.0
50.0%
14.0
0.0%
108.0
0.0%

165.8

0.6%
FTE.XLS

VI-28

Port of Seattle

2012 Preliminary Budget

F. REAL ESATE DEVELOPMENT CAPITAL BUDGET
TABLE VI-11: REAL ESTATE DIVISION CAPITAL BUDGET SUMMARY
($ in 000's)

Committed Capital Projects
General Real Estate
Harbor Services
Portfolio Management
Total Committed

2012
Budget

2012-2016
CIP

$6,044
0
4,880
$10,924

$14,208
0
7,117
$21,325

Business Plan Prospective Projects

$3,600

$32,706

Total CIP

$14,524

$54,031

% of 2012 Total
Committed
55.3%
0.0%
44.7%
100.0%

capsum.xls

FIGURE VI-5: REAL ESTATE DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)

Committed CIP Total Spending: $10,924

Portfolio Management
44.7%

General Real Estate
55.3%

VI-29

Port of Seattle

2012 Preliminary Budget

CAPITAL DEVELOPMENT DIVISION
A. 2012 BUDGET SUMMARY
TABLE VII-1: 2012 BUDGET SUMMARY
($ in 000's)
OPERATING RESULTS

Notes

Operating Expense
Total Operating Expense
COMMITTED CAPITAL BUDGET

2010
Actual
$
$

1

EMPLOYMENT (TOTAL FTEs)

2011
Budget

2012
Budget

9,335 $ 14,278 $ 15,516
9,335 $ 14,278 $ 15,516
N/A

$

268.0

523
262.5

$

398

Change
2012 Bud2011 Bud % Change
$
$

1,238
1,238

8.7%
8.7%

$

(125)

-23.9%

(6.8)

-2.6%

255.8

CAPDEVSUM.XLS

Notes:
1) Capital Development Division had no capital budget for 2010. See Section X for details of Capital Budget.

B. DIVISION MISSION STATEMENT
Mission: The Capital Development Division (CDD) delivers projects and provides technical and contracting
services in support of the business plans and infrastructure needs of the Port of Seattle.
Vision: The CDD is a service provider to the business divisions of the Port, attuned to their needs and
priorities. As Port employees we are public servants, conscious of our obligations to policy objectives for
jobs creation, environmental protection and social responsibility and committed to openness and
accountability for all our actions. We strive to employ the best available technology and most efficient
business practices. Our employees are critical to short and long-term success of the organization.
Goals:
 Deliver projects to operating division customers on time, within budget, meeting agreed scope, and
with minimal and mutually-agreed impacts on operations
 Support divisions beyond projects: including budget plan development; business planning; asset
management and reporting; community outreach; negotiations; and technical support and assistance.
 Provide contracting services.
 Provide emergency preparedness.
 Develop the talent, capabilities, motivation and well-being of CDD employees.
 Continue to provide a proactive safety program internally to the Port and externally with the
contracting community.
Strategies & Initiatives:
Objective: Establish Skire Unifier as our Project Delivery System (PDS).
Strategy: Finalize system, conduct training and place designated projects on the new PDS.
filename: CapDevBud.doc
updated: 10/18/2011

VII-1

Port of Seattle

2012 Preliminary Budget

Supported Port-wide Strategy: Be a high performance organization.
Objective: Support the business divisions in implementing sustainable asset management.
Strategy: Provide expertise and suggestions to sustainability initiatives at airport, seaport and real estate.
Improve procedures for consistently identifying sustainability opportunities in new projects. Lead
publication of revised EX-15 procedures.
Supported Port-wide Strategy: Exhibit environmental leadership through our actions.
Objective: Streamline the formation and administration of service agreement contracts.
Strategy: Partner with customers to improve service agreement timeliness. Use LEAN analysis to identify
opportunities for improving efficiency. Revise procedures to reduce time and effort.
Supported Port-wide Strategy: Develop new business and economic opportunities for the region and the
Port.
Objective: Update Port standard specifications for construction projects.
Strategy: Revise contract terms and conditions in cooperation with Legal and Association of General
Contractors. Assign responsibilities and develop a system for continuous update of technical specifications.
Supported Port-wide Strategy: Develop new business and economic opportunities for the region and the
Port.
Objective: Optimize SharePoint in CDD.
Strategy: Enhance consistency, accessibility and staff expertise to improve SharePoint as CDD's system for
team collaboration, document management, work flow and procedure standardization.
Supported Port-wide Strategy: Be a high performance organization.
Objective: Improve Emergency Response readiness.
Strategy: Support Port-wide initiatives flowing from the April 2011 FEMA exercise and strengthen CDD
capabilities such as damage assessment and emergency contracting.
Supported Port-wide Strategy: Ensure airport and seaport vitality.

C. KEY RESPONSIBILITIES & SERVICES
OVERVIEW:
The three operating divisions of the Port are supported by the CDD based on level of project and contracting
services required to support their operations and capital & expense project needs. The services by the
departments within the division are demand driven.
The major responsibilities and goals for the Capital Development departments in 2012 are:
AVIATION PROJECT MANAGEMENT GROUP:


Key Responsibilities & Services:
o Deliver capital & expense projects for Aviation Division on time, within budget, meeting
agreed scope, and with minimal and mutually-agreed impacts on airport operations.
o Ensure that procurement meets requirements of State law, Port policies & procedures,
federal grants, and other controlling regulations.
o Assist Aviation Division in initial project scoping, cost estimation, and development of
project alternatives.

filename: CapDevBud.doc
updated: 10/18/2011

VII-2

Port of Seattle



2012 Preliminary Budget

Key Goals or Key Department's Drivers/Strategy:
o Complete Rental Car Facility and associated projects (main terminal improvements, bus
maintenance facility, offsite roads) for startup in the spring of 2012.
o Design/construct multiple projects in and around terminal while minimizing operational
impact & ensuring high level of project & Aviation Division coordination.
o Maintain progress on midterm solutions to FIS congestion in South Satellite.
o Deliver airline/gate realignment projects.
o Complete design of power supply system for electric ground support equipment for
concourses C & D & North Satellite, purchase rolling stock (assumes airline consortium
agreement executed & critical mass of airlines participate).
o Continue construction of pre-conditioned air project.
o Continue construction of escalator renewal/replacement project.
o Complete construction of 2012 airfield pavement replacement.
o Complete design and begin construction of south satellite HVAC, ceiling and lighting
replacement.
o Complete design and begin construction of replacement elevators.
o Complete construction and installation of parking garage revenue control system
replacement.
o Complete design and begin construction of fire station upgrades.
o Work with Aviation Division and Alaska Airlines on North Satellite and C concourse
terminal and infrastructure improvement plans.
o Complete analysis of airfield pavement "popouts".
o Complete demolition of USPS & former Alaska warehouse buildings.
o Begin construction of CTE freight elevator.
o Begin construction of gate utility improvements.

CENTRAL PROCUREMENT OFFICE:


Key Responsibilities & Services:
o Manage the procurement process for all construction contracts, professional and personal
service contracts over $200,000, and goods and service contracts to ensure compliance with
legal mandates.
o For personal and professional service contracts with a value between $50,000 and $200,000
provide process reviews at key points in the procurement process to ensure compliance.
o For personal and professional service contracts with a value procurements less than $50,000
perform compliance reviews on department's procurement processes to ensure that the
departments are complying with the Port's policies and procedures and legal mandates
related to such procurements.
o Review construction change orders to ensure compliance with contract provisions, adequate
content and procedural compliance; execute change orders.
o Review service agreement amendments and service directives to ensure compliance with
contract provisions. Assist in drafting amendments when appropriate.
o Draft amendments for goods and service contracts.
o Close out construction contracts, ensuring that all closing submittals have been received.
o Close bid escrow documents accounts, returning documents to the bidder.
o Close out personal services and goods and services contracts.
o Provide notification to Commission, with respect to public works contracting, as required to
be in compliance with state law and Resolution 3605.
o Dispose of Personal Property as required under PUR-1 pursuant to the requirements of
RCW 53.08.090 or RCW 39.33.010.
o Provide outreach and work with Office of Social Responsibility in developing appropriate
small business programs and opportunities.
o Provide advice and assistance for the administration of all Port contracts.

filename: CapDevBud.doc
updated: 10/18/2011

VII-3

Port of Seattle



2012 Preliminary Budget

Key Goals or Key Department's Drivers/Strategy:
o Annual report on P-Card use. Identify how the program is functioning, potential changes,
and determine if it is appropriate to increase the single transaction dollar threshold.
o Seek changes to Resolution 3166 to remove unnecessary paperwork and simplify the
procurement process.

ENGINEERING:


Key Responsibilities & Services:
 In-house project Design and technical support.
o Civil/Structural and Mechanical/Electrical design, analysis and CAD drafting.
o Central repository for all project drawings, as-built and soils information.
o Maintain technical master specifications.
o Quality Assurance/Quality Control/Quality review.
 Construction Management for all major construction projects and tenant construction
oversight.
o Field observation/inspection and quality compliance checks.
o Change order management, disputes and claims resolution.
o Constructability reviews.
o Construction coordination with Port operations/tenants.
o Construction document management through LiveLink system.
 Construction safety compliance for all construction projects and provides orientation
training.
 Surveying and Mapping of all Port properties.
o Topographic and hydrographic surveys.
o Legal descriptions and lease line layouts.
o Utility locates/mapping and aerial mapping
o GIS data gathering.
o BIM survey data.
o Administrative Support.
o Purchase of supplies and equipment.
o HCM time management and process of personnel actions.
 Asset Administration of Engineering assets.
o Engineering fleet management, equipment and logistics support.
o Budget preparation, monitoring and reporting.
 Emergency Response and Declaration of Emergency Support.



Key Goals or Key Department's Drivers/Strategy:
o Continue participation and provided leadership in the Capital Projects Advisory Review
Board (CPARB) legislative committee and sub-committees for government agencies
contracting laws and procedures. Bob Maruska is the Chair for CPARB and Janice Zahn
participates with the sub-committee on contracting methods.
o Continue regular meetings with Association of General Contractors (AGC) and contractor
representatives to review and discuss opportunities to provide greater understanding and
efficiency in bidding, award and construction of projects to benefit the Port and reduce
unnecessary claims.
o Continue meetings as required with Association of Consulting Engineers Council for
Washington (ACEC) to review and discuss issues and concerns to provide better
understanding of risks and liabilities for the Port and for the consulting community.

filename: CapDevBud.doc
updated: 10/18/2011

VII-4

Port of Seattle

2012 Preliminary Budget

o
o
o
o
o

Continue expanded training of key CDD staff for better Emergency Response capabilities.
This included training in FEMA courses to better prepare staff to function within the
standard operating procedures of the national emergency response community.
Meet with representatives of the Pilots Association, EOC and NOAA to discuss issues and
concerns with hydrographic surveys and metrics. Garry Ensley is the point of contact for the
Port.
Complete the Rental Car Facility and Bus Maintenance Facility in Spring 2012.
Complete the new escalators per established completion dates in 2012.
Complete construction to provide preconditioned air to select gates per established
completion dates in 2012.

PORT CONSTRUCTION SERVICES:


Key Responsibilities & Services:
o Provide construction and construction management services to the operating divisions in the
most cost effective manner possible.
o The Regulated Materials Management Program (RMM) supports construction by performing
necessary and required regulated building material surveys prior to construction.
o Provide on-call emergency response.



Key Goals or Key Department's Drivers/Strategy:
o Safety First-Provide a safe working environment for all Port of Seattle personnel, consultant
service providers and construction contractors.
o High Performance Organization-PCS will maintain and continue to meet the goals outlined
in the CDD Performance Metrics. PCS will remain compliant with all Workplace
Responsibility and Central Procurement Office policy and procedures.
o Public-Private Partnerships-Working in collaboration with the Office of Social
Responsibility, PCS will support the private contracting community by providing small
works contracting opportunities whenever feasible and cost effective.

SEAPORT PROJECT MANAGEMENT GROUP:


Key Responsibilities & Services:
o Capital project delivery.
o Expense project delivery.
o Provide support to Seaport and Real Estate Divisions.
o Provide support to the Capital Development Division.
o Emergency response preparedness.
o Safety.
o Department administrative functions.



Key Goals or Key Department's Drivers/Strategy:
o Complete Bell Harbor Lighting Control Upgrade design & begin construction.
o T-86 Grain Facility Modernization.
o P-69 North Apron Cathodic Protection.
o P-91 C-175 Roof Replacement.
o Complete T-18 Fender Replacement (Phase II).
o P-69 Built-up Roof Replacement.
o Complete RFID Truck Program.
o Complete T-91 Waterline Replacement.
o Complete T-91 Cruise Fender project.
o Complete design for T-117 Restoration.
o Complete design and prepare bid package for T-117 Clean Up.

filename: CapDevBud.doc
updated: 10/18/2011

VII-5

Port of Seattle

2012 Preliminary Budget

o
o
o
o
o
o
o
o

Complete street vacations at T-105 and T-18 and begin work on T-5 and T-30 Alaskan Way
South.
Begin work on T-5 Maintenance Dredging Phase II.
Award and complete T-18 Pile Cap Pilot Project.
Complete FT Net Shed Code Compliance Improvements.
Complete FT C-15 Building East Sewer Line Replacement.
Complete FT C-15 Building Subsidence Analysis.
Complete FT Net Shed 9 Roof Replacement.
Complete FT West Wall North Fender System Replacement Design.

KEY PERFORMANCE INDICATORS/MEASURES:
1. Construction Project Soft Costs: Limit construction soft costs (design, construction management, project
management, environmental documentation, allocated overhead) to no more than 25% of total capital
and major expense project costs.
2. Cost Growth During Construction: Limit average major construction contract cost growth to 10% of
award amount.
3. Project Schedule: Limit time growth from initial Commission capital or expense project authorization to
construction contract award to no more than 10% of originally scheduled and then from award to
substantially complete to no more than 10% of originally scheduled.
4. Small Business Participation: 60% of small works contracts; 8% of major construction contracts; 5% of
service agreements and 10% of purchases, per SBA size standards.
5. Customer Score Card: 100% of projects surveyed. Average 85% of total possible points on project
customer feedback scorecards returned.
6. Environmental: Incorporate Executive Policy and Procedure 15 (Sustainable Asset Management) and/or
LEED process in every project.
7. Safety: Score an average of 90 out of a possible 100 points on CDD organizational Safety Program
Evaluations. Limit annual contractor workplace injury rates to 6 recordable accidents and 2 time lost
accidents per 200,000 hours worked.
8. Performance Evaluation timeliness: Complete and submit 98% of performance reviews by 30 days after
end of rating period.
9. Procurement Timeliness: Improve average time to award and accomplish contract awards within agreed
timeframes.

filename: CapDevBud.doc
updated: 10/18/2011

VII-6

Port of Seattle

2012 Preliminary Budget

D. CAPITAL DEVELOPMENT DIVISION BUDGET SUMMARY
The following Tables VII-2 & VII-3 and Figures VII-1 & VII-2 illustrate the expenses for Capital
Development Division by department and by account:
TABLE VII-2: CAPITAL DEVELOPMENT EXPENSE BY DEPARTMENT
($ in 000's)

BY DEPARTMENT

2010
Actual

Notes

EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS & ENV
Capital Development Administration
Central Procurement Office
Engineering
Port Construction Services
Project Management Group - Aviation
Project Management Group - Seaport
Total Expenses Before Charges to Capital, Non-Ops & Env

$

CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION
OPERATING & MAINTENANCE EXPENSE
Capital Development Administration
Central Procurement Office
Engineering
Port Construction Services
Project Management Group - Aviation
Project Management Group - Seaport
Total Operating Expenses

$

2011
Budget

2012
Budget

% Change
2012 Bud2011 Bud

380 $
3,287
9,963
7,886
5,134
2,693
29,343

359 $
4,394
15,225
7,554
8,637
2,493
38,662

374
4,481
14,217
6,791
7,731
2,987
36,581

4.4%
2.0%
-6.6%
-10.1%
-10.5%
19.8%
-5.4%

(20,007)

(24,384)

(21,066)

-13.6%

359
3,180
4,333
3,216
2,299
891
14,278 $

374
3,151
4,460
3,479
2,502
1,550
15,516

4.4%
-0.9%
2.9%
8.2%
8.8%
73.9%
8.7%

380
1,780
1,391
3,888
1,143
754
9,335 $

capdevbud.xls

FIGURE VII-1: CAPITAL DEVELOPMENT EXPENSE BY DEPARTMENT
($ in 000's)
Project Management
Group - Seaport
10.0%

Project Management
Group - Aviation
16.1%

Port Construction Services
22.4%

Capital Development
Administration
2.4%

Central Procurement
Office
20.3%

Engineering
28.7%

Total Expense: $15,516

filename: CapDevBud.doc
updated: 10/18/2011

VII-7

Port of Seattle

2012 Preliminary Budget

TABLE VII-3: REVENUES AND EXPENSES BY ACCOUNT
($ in 000's)
BY ACCOUNT

2010
Actual

Notes

Revenue
Other Revenue
Total Revenue

$

2011
Budget

36 $
36

-

2012
Budget
$

% Change
2012 Bud2011 Bud

-

0.0%
0.0%

Expense
Salaries, Wages, Benefits & Workers Compensation
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other
Total O&M

23,171
384
31
191
3,443
230
0
1,892
29,343

28,545
401
56
295
7,768
440
1
1,155
38,662

29,589
680
70
293
5,215
434
2
298
36,581

3.7%
69.6%
25.0%
-0.7%
-32.9%
-1.4%
100.0%
-74.2%
-5.4%

Charges to Capital Projects

(20,007)

(24,384)

(21,066)

-13.6%

$ 9,335

$ 14,278

$ 15,516

8.7%

Total Expense

capdevbud.xls

FIGURE VII-2: CAPITAL DEVELOPMENT EXPENSE BY ACCOUNT
($ in 000's)

Supplies & Stock
0.8%
Utilities
0.2%

Equipment Expense
1.9%

Travel & Other
Employee Expenses
1.2%

Promotional Expenses
0%

Other
0.8%

Outside Services
14.3%

Salaries, Wages, Benefits
& Workers
Compensation
80.9%

Total Before Charges to Capital Projects: $36,581
Charges to Capital Projects: $21,066
Total Expense: $15,516

filename: CapDevBud.doc
updated: 10/18/2011

VII-8

Port of Seattle

2012 Preliminary Budget

E. STAFFING
The following TABLE VII-4 depicts the proposed staffing requirements for 2012 by department for the
Capital Development Division: Capital Development is budgeting 255.8 positions, which is 6.7, lower than
2011 budget.
TABLE VII-4: CAPITAL DEVELOPMENT DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions)
BY DEPARTMENT
Capital Development Administration
Central Procurement Office
Engineering
Port Construction Services
Aviation Project Management
Seaport Project Management
TOTAL CAPITAL DIVISION

2010
Actual
2.0
37.0
110.5
54.0
45.0
19.5
268.0

Notes

2011
2011
Budget
Est. Act.
2.0
2.0
37.0
37.0
110.5
110.5
54.0
54.0
42.0
44.0
17.0
17.0
262.5
264.5

2012
Budget
2.0
37.0
108.8
47.0
44.0
17.0
255.8

% Change
2012 Bud 2011 Bud
0.0%
0.0%
-1.6%
-13.0%
4.8%
0.0%
-2.6%
FTE.XLS

F. CAPITAL BUDGET
Please see Corporate section, VIII - F, for Captial Development Capital Budget information.

G. CAPITAL DEVELOPMENT DIVISION SUMMARY
TABLE VII-5: CAPITAL DEVELOPMENT DIVISION SUMMARY

($ in 000's)
OPERATING BUDGET

2011
Actual
2010

Notes

Operating Revenue

$

Operating Expense
Total Operating Expense

TOTAL FTEs

36 $

$

1

$

Budget
2012

Forecast

-

NA

15,516
15,516

8.7%
8.7%

(9,299) $ (14,278) $ (14,278) $ (15,516)

8.7%

9,335
9,335

Income from Operations

CAPITAL SPENDING

Budget

268.0

-

$

14,278
14,278

$

523
262.5

-

Growth
2012 Bud2011 Bud

$

14,278
14,278

$

523
264.5

$

398

-23.9%

255.8

-2.6%
capdevhist.xls

Notes:
1) Capital Development Division had no capital budget for 2010. See Table VIII-5, Corporate section for
total capital growth for 2012-2016. See Section X for details of Capital Budget.
filename: CapDevBud.doc
updated: 10/18/2011

VII-9

Port of Seattle

2012 Preliminary Budget

CORPORATE
A. 2012 BUDGET SUMMARY
TABLE VIII-1: 2012 BUDGET SUMMARY
($ in 000's)
OPERATING RESULTS

Notes

Other Revenue

Change

% Change

2011

2012

2012 Bud-

2012 Bud-

Budget

Budget

2011 Bud

2011 Bud

$

1,025 $

151 $

(874)

-85.3%

Total Revenue

1,025

151

(874)

-85.3%

Corporate

75,008

76,535

1,527

2.0%

Total Corporate Expense

75,008

76,535

1,527

2.0%

$

(73,983) $

(76,384) $

(2,401)

3.2%

$

11,549

11,524

(25)

-0.2%

4.6

1.0%

Excess of Revenue over Expense
COMMITTED CAPITAL BUDGET

1

EMPLOYMENT (TOTAL FTEs)

447.6

$

452.2

$

admsum.xls

Notes:
1) See Section X for details of Capital Budget.

B. MISSION STATEMENT
Corporate will provide high quality and cost-effective professional and technical services to the operating
divisions and support the overall goals of the Port.

C. KEY RESPONSIBILITIES & SERVICES
OVERVIEW:
The three operating divisions of the Port are supported by a number of functional departments as well as service
groups. These functional and service groups allocate their expenses according to the level of service they
provide to the divisions.
Many of the Corporate departments are vital to the success of the operating divisions for providing essential
services such as accounting, legal services, computer support, etc. Their services also benefit the public in
general and play an indirect role in the success of the operating divisions.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-1

Port of Seattle

2012 Preliminary Budget

The major initiatives and service plans for the Corporate departments in 2012 are:
COMMISSION:
Set and support CEO performance goals and objectives. These include policy goals and objectives related to
achieving the Port"s financial and budgetary annual performance, and aligning budget priorities to the Port"s core
mission; division goals and objectives that demonstrate the CEO is holding his direct reporting managers
accountable for division-level performance; and other goals and objectives related CEO-identified "stretch
goals" for achieving the stated vision of being the "cleanest, greenest, most energy-efficient port in the nation,"
as well as other CEO initiatives that require leadership engagement with the Commission (e.g., Century Agenda
activities and federal legislative efforts).


Key Goals:
o Achieve the stated vision of being the "cleanest, greenest, most energy-efficient port in the
nation."
o Develop key partnerships with customers, regulators and environmental groups.
o Provide administration for Commission meetings and the formal record of Commission actions.

EXECUTIVE:
Achieve 2012 operating and performance goals and objectives set by the Commission. Oversee the achievement
of all divisions" major goals and initiatives. Complete or maintain major infrastructure initiatives for 2011 by
investing in capital projects that facilitate freight mobility and protect the Working Waterfront and support job
creation. Continue to support an ambitious environmental agenda.


Key Goals:
o Oversee the achievement of all divisions" major goals and initiatives.
o Achieve budgeted net operating income before depreciation.
o Complete resale of Eastside Corridor.
o Develop plan for financing POS contribution to Viaduct Replacement and Lower Duwamish
Waterway clean-up
o Continue to develop plan and start implementation of real estate portfolio realignment to achieve
breakeven.
o Continue social responsibility efforts to increase participation by local disadvantaged businesses.
o Complete the Part 150 Noise and Land-Use Compatibility Study and community engagement
process.
o Identify priority projects for each division in the five-year plan.
o Maintain fundamental self-sustainability of the Seaport.
o Continue to build the West Coast Collaborative effort.

LEGAL:
Legal department has three major areas of functions: Attorney Services, Record Management, and Workplace
Responsibility.
ATTORNEY SERVICES
Provide legal analysis, advice, expertise, opinions and similar services, including: drafting, review and
interpretation of contracts, agreements, statutes, regulations, judicial opinions and other legal materials and
documents; prosecution and defense of claims and litigation; assistance with settlements and negotiations;
representation in arbitration, mediations and other forms of dispute resolution; representation before hearings
boards and other administrative or legislative bodies.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-2

Port of Seattle

2012 Preliminary Budget

RECORDS MANAGEMENT
Manage and provide public record administration, including public disclosure. Provide Portwide assistance with
regard to records management issues including retention scheduling, archiving and public disclosure. Manage
Port records in accordance with State restitution requirements.
WORKPLACE RESPONSIBILITY
Provide overall leadership and coordination of the Port"s workplace ethics and compliance activities. Coordinate
policy development and implementation. Provide information, guidance, training, and ethics-related legal
analysis, advice and counsel. Receive and manage reported violations and monitor Code of Conduct
investigations and outcomes.


Key Goals:
o Attorney Services: Support the business needs of the operating divisions.
o Records Management: Provide public record administration.
o Workplace Responsibility: Support the Port"s attainment of business objectives in a manner that
is consistent with our values and the highest standards of business ethics and workplace
behavior. Prevention of, preparation for, detection of and response to violations of the Port"s
Code of Conduct and other legal or policy expectations.

RISK:
Oversee and manage the cost of risk to the Port (measured in risk costs/$1000 of revenue) while minimizing
exposure to catastrophic loss. Provide services in claims management, contractual risk analysis, risk assessment,
risk financing, insurance purchasing and emergency preparedness in 2012. Areas of focus will be self-funding
for employee benefits, enterprise risk management, risk financing, claims management, fleet management,
contractual liability management with the Central Procurement Office, special events risk management,
construction safety, and the driver safety program, including managing the drug testing requirements for
commercial driver license holders (emphasis on the new hires for the rental car facility busing operations at the
airport). Collaborate with Internal Audit to increase visibility and broaden participation with the Divisions with
respect to additional enterprise risk management evaluations for the Port.


Key Goals:
o Maintain cost effective property and liability insurance for the Port.
o Work on special projects in which there is a risk trade off with the project benefits and to
provide insight and analysis.
o Manage ongoing claims in accordance with the Port"s Resolution and Policy EX-7 for claims
made against the Port (and by the Port) to include managing the total cost of claims.
o Maintain the cost of the self-insurance auto liability program at less than 75% of the cost to
commercially insure the Port"s auto liability exposure.
o Manage the Port Driver Safety Program which includes managing drivers with commercial
driver licenses including and oversight of drug testing for these drivers.

HEALTH & SAFETY:
Provide health and safety and Workers Comp services and expertise to enable customers to achieve the Port's
zero-based health and safety goals (zero accidents, injuries, lost workdays, Workers Comp claims and regulatory
citations and fines), and the substantial morale, productivity and financial benefits that accrue from achieving
those goals. Promote employee health improvement through wellness program offerings.


Key Goals:
o Collaborate on safe work practices and promote a healthy work force.
o Continue emphasis on health and safety improvement through our safety evaluation process.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-3

Port of Seattle

o
o
o

2012 Preliminary Budget

Create conditions that foster health behaviors through a spirit and wellness incentive program
and collaborate with human resources on policies and integrated benefit planning to address
escalating health care costs.
Provide system oversight to the Port"s new learning management system.
Ensure compliance to all WAC requirements related to the Port"s self-insured workers comp and
safety program.

PUBLIC AFFAIRS:
Public Affairs includes a number of key functions/programs: community outreach, government relations,
media relations, corporate communications, and international tourism.
INTERNATIONAL TOURISM
 Develop and implement growth strategies and plans in current and emerging markets to increase the
economic impact of tourism and related activities.
 Promote international tourism to Seattle, the region and state from markets in China, the United
Kingdom, France and Japan in partnership with the Seattle Convention & Visitors Bureau. Partner with
statewide hospitality industry to develop long-term international tourism promotional funding and
leverage cruise program for industry access to this potential market.
MEDIA RELATIONS
 Produce proactive, thoughtful communication pieces that demonstrate the port"s leadership in areas such
as trade, environmental initiatives, and business competitiveness.
 Develop media strategies and relationships throughout all areas of contemporary media, produce press
releases and statements, media plans and arranges interviews, opinion editorials, etc. with the ultimate
goal of achieving understanding and support for the Port, its operations and policy positions.
 Enhance public understanding through a variety of targeted media outlets (including social media) about
the port"s mission as a job-generator and environmental leader in the three operating divisions.
 Highlights the port"s role as a leader in social responsibility by informing reporters and media outlets
(through one-on-one interviews, press releases, opinion editorials, press tours) about programs that
promote economic opportunities for all citizens of King County.
 Develops, manages and executes media plans for crisis communications for all operating divisions.
 Develops and maintains strong working relationships with reporters, editors, special publication/blog
writers both proactively and reactively (as appropriate), working to ensure accuracy in stories about the
port.
 On-call 24/7 to respond to media inquiries for breaking news.
COMMUNITY ENGAGEMENT
 Manage the port"s reputation and "license to operate" through proactive and strategic relationship
building with the Port"s "fence line" communities.
 Work collaboratively with Port businesses (airport, seaport, real estate) to develop and execute
community engagement and communications strategies.
 Proactively identify opportunities for Commissioners and senior port staff to interact (through speeches,
attending meetings, participating in discussions, etc.) with key community stakeholders and fence line
neighbors.
 Develop and maintain productive working relationships with key stakeholder groups, and business and
industry leaders.
 Build understanding of the Port"s goals, business strategies and overall importance to the regional
economy through strategic outreach, collateral materials, website information, tours/ information
sessions for international visitors, students, visiting dignitaries, key business partners, customers, and
elected officials and policy staff.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-4

Port of Seattle

2012 Preliminary Budget

GOVERNMENT RELATIONS
 Advance the port"s interests in dealings with local, state and federal governments.
 Provide strategic advice to senior executives and Commission on federal, state and local government
issues
 Assist and support operating departments with projects, plans and permits for critical port projects
 Assist in development of written materials, speeches and other presentations to government panels.
 Support efforts to obtain regional, state and federal funding assistance for port projects
REGIONAL TRANSPORTATION
 Works to help Port businesses achieve their business goals and results by serving as "a catalyst for
transportation solutions."
 Provides project planning, management and funding, transportation policy advocacy, and synthesis of a
focused, Port-wide transportation strategy.


Key Goals:
INTERNATIONAL TOURISM
o Provide leadership to the newly formed WTA (Washington Tourism Alliance) in the development of
an industry funded statewide organization to represent Washington State for tourism development.
o Conduct a statewide symposium on international tourism in order to engage to stakeholders in
programs for European and Asian markets.
o Increase activity in all of the key partnership markets (China, Japan, France, United Kingdom and
Germany) with media and tour operator projects, and assess new markets.
o Increase tour product by 10% average in all markets.
BUSINESS AND CORPORATE COMMUNICATION
o Maintain the port"s brand through management of publications, visual design and voice, integration
across departments and throughout all media
o Integrate consistent messaging through print, website, advertising and promotional products
o Enhance public understanding and engagement with the port through websites, electronic messaging,
and products that support outreach and organizational transparency
COMMUNITY ENGAGEMENT
o Enhance program attendance by attracting new attendees and reaching new audiences.
o Effectively support Commission on speaking engagements, community interactions through use of
new tools and procedures.
o Support Aviation Division events such as opening of Rental Car Facility using cross-functional team
approach.
REGIONAL TRANSPORTATION
o Business goals drive transportation access and freight mobility improvements to accommodate trade,
trade and tourism.
o Other drivers are derived from the CEO"s goals for the Alaskan Way Viaduct and Eastside Rail
Corridor.
CENTURY AGENDA
o Century Agenda Roundtables will complete in 2011, and 2012 public review and dialogue will
strengthen 25 year plan.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-5

Port of Seattle

2012 Preliminary Budget

HUMAN RESOURCES AND DEVELOPMENT:
Human Resources and Development (HRD) engages and equips employees to achieve exceptional results. The
department partners with others to sustain the Port of Seattle as a vital, high performing organization. Key
responsibilities include:
 Legal compliance (including but not limited to Equal Employment Opportunity, immigration,
Consolidated Omnibus Budget Reconciliation Act (COBRA), Fair Labor Standards Act (FLSA),
Family Medical Leave Act (FMLA), Americans with Disabilities Act (ADA) and Washington State
disability law, Health Insurance Portability and Accountability Act (HIPAA), Affirmative Action,
national health care reform, employment/hiring processes).
 Employee relations, including investigation and resolution of employee complaints.
 Coordination with Workplace Responsibility Office on communication, intake and follow-up
regarding employee issues, and continuing education.
 Employment services including strategic recruitment advice and management of selection and hiring
processes.
 Coaching and consulting for managers and non-managers on a wide range of human resource issues
including staffing, performance management, career development, legal compliance, Performance
Review, Evaluation, and Planning (PREP) protocols, pay and best practices, etc.
 HRD Policy Review.
 Diversity strategic planning.
 Organizational development services to wide range of Port clients (analysis, planning, facilitation,
assistance with reorganization, process redesign, measurement, job design, etc.).
 Learning and Leadership oversight for Port; design, implementation of specific classes and programs
related to employee and leader development.
 HCM systems administration and maintenance of accurate employee records within the system
 Employee communication regarding a wide range of human resource issues including policy,
programs, total rewards, class offerings, etc.
 Strategic planning and on-going administration of Port-sponsored total rewards plans and programs.
 Data gathering, analysis and costing to support collective bargaining processes.


Key Goals:
o Communicate a total rewards philosophy to Port employees and review communication materials for
potential employees to ensure they reflect the total rewards philosophy.
o Continue building the Port"s commitment to employee development with the aim of increasing
management skills (and thereby reducing time-consuming employee complaints and conflicts) as
well as providing opportunities for employees to increase their capacity to contribute to the
organization.
o Continue to refine recruitment, hiring, and "on-boarding" strategies so that the Port attracts and
retains a diverse, talented, and committed work force. Connect existing efforts such as the Veterans
Fellowship Program and the intern program to longer-term recruitment efforts. Ensure VFP and
intern strategies align with Port objectives, goals, and mission. Provide targeted recruitment and
outreach. Develop and implement training for hiring managers on hiring processes and interview
techniques.
o Provide strategic recruiting assistance and HR Business Planning to the Rental Car and Bus
Maintenance Facilities. Successfully recruit and on-board over 75 positions necessary to the
opening and ongoing success of the Rental Car Facility.
o Use internal organization development staff to assure that Port-wide efforts such as Continuous
Process Improvement (Lean) (process/quality improvement) are implemented in a manner that can
be replicated (or adjusted as necessary) across the organization.
o Use outcomes of Learning Assessment to create a 3 - 5 year development strategy for the Port.
o Roll out the HRD department"s Mission, Vision, and Strategies and implement processed for
periodically reviewing the strategies to ensure they are aligned with the department"s Mission and
Vision as well as Port goals and objectives.

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updated: 10/18/2011

VIII-6

Port of Seattle

o
o

2012 Preliminary Budget

Research alternatives to market pricing job evaluation tools. Other tools may lead to more
streamlined processes.
Create a current Diversity & Development Strategic Plan.

LABOR RELATIONS:
The Labor Relations department goal is to foster open communication which explores shared interests and values
of, and enhances the cooperation and trust between, the Port, its represented employees and organized labor.
Labor Relations promotes a High Performance Organization among represented employees through continuous
education, employee development and employee recognition programs. Additionally, Labor Relations negotiates
and administers all the Collective Bargaining Agreements for the represented employees.


Key Goals:
o Foster open communication which explores shared interests and values, and enhances the
cooperation and trust between the Port, its represented employees, and organized labor.
o Invite and internally communicating the views of organized labor concerning Port capital
improvements, real estate use, real estate development projects, service changes, and economic
development projects, so as to identify areas for mutual gain.
o Promote a High Performance Organization among represented employees through continuous
education, employee development and employee recognition programs.
o Negotiate and administer contracts, which foster these relationships, maintain the Port as an
economically sustainable agency, maintain internal equity of wages and benefits and establish
the Port as an employer of choice.
o Utilize, where appropriate to the nature and scope of the project, Project Labor Agreements in
Port construction programs in order to provide labor harmony, promote best labor practices,
provide apprenticeship opportunities and provide opportunities to small contractors.
o Encourage and assist Port management to identify areas for mutual gain between the Port and
organized labor when engaged in business planning.
o Research, evaluate and, where appropriate, implement best practices in the field of labor
relations.

INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT):
Provide reliable, high-quality, cost-effective enterprise-wide infrastructure, hardware, applications, and
technology services to support the Divisions and the Port"s strategies. Support information systems for operating
divisions and work closely with them to maximize the use of ICT resources. Extend core applications and
enhance port-wide business processes as approved by the ICT Governance Board. Support, maintain, and work
to consolidate over 180 existing applications for the Port. Provide Port-wide information security and privacy
strategy. Provide policies and procedures to ensure appropriate information confidentiality, integrity, and
availability. Provide enhanced service to support an increasingly mobile workforce. Reduce operating costs by
consolidating data storage and systems where feasible. Provide technology consulting to all divisions as they
consider future technology alternatives and investments.


Key Goals:
ICT"s key responsibilities and services focus on effectively administering and managing the Port"s
enterprise Information Technology systems, services, and resources in the most cost effective manner.
Key strategies include:
o Security management: ensure that Port technology assets are well protected and that security
controls align with all legal and regulatory requirements.
o Enterprise architecture and project delivery: continue to focus on the relevance, performance,
and cost-effectiveness of the Port"s technology architecture.
o Infrastructure management and consolidation: continues to focus on infrastructure consolidation
by leveraging leading edge virtualization and storage technologies.

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VIII-7

Port of Seattle

o
o
o
o

2012 Preliminary Budget

Systems integration and delivery: use a highly disciplined service-oriented architecture to
leverage existing and new enterprise assets to deliver cost effective and high quality business
solutions on time.
Service management: continues to provide enhanced service to support an increasingly mobile
workforce, including expanded wireless capabilities.
Financial management: continue to maintain an intense focus on financial management.
Governance: continue to provide policy, direction, and decision-making on all technology
investments.

FINANCE AND BUDGET:
The overall goal of the Finance & Budget department is to continuously improve the institution"s management of
its assets, resources, budget, and processes.
BUDGET
Manage the Corporate budgeting process and coordinate the port-wide budget preparation and approval process.
Provide training to the Port staff on the budget system and PeopleSoft Financials Management Information
System (MIS). Provide on-going support to corporate departments and the divisions in both the budgeting and
financial performance reporting processes. Prepare and publish the budget document; file statutory budget with
King County. Monitor the operating budget and prepare monthly and quarterly reports to the Port Commission
and Executive Team. Provide on-going operating budget analysis for financial planning and decision makings.
FINANCE & TREASURY
Provide on-going debt management and regulatory compliance. Develop financial tools and policies as needed.
Evaluate opportunities to refund bonds or otherwise reduce borrowing costs. Evaluate need for bond funding of
new capital costs. Execute transactions as appropriate. Manage investment portfolio, cash flow and banking
relationships. Provide capital budget, tax levy and plan of finance information for the budget process and for
long-term funding analysis.


Key Goals:
o Manage cash and investment.
o Manage existing debt.
o Manage new debt issuance.
o Manage relationships with the finance community.
o Provide financial management tools and policies.
o Provide capital budgeting and financial planning.
o Manage the operating budget, capital budget, draft plan of finance, and statutory budget
processes effectively.
o Provide useful, timely, and accurate financial reports and information to the Executive Team and
Commissioners.
o Continue to guide managers and staff and help them fully understand that budget is an important
management tool for business planning, resources allocation, accountabilities, performance, and
control.

ACCOUNTING AND FINANCIAL REPORTING:
The Accounting & Financial Reporting (AFR) department"s key responsibilities are to administer the Port"s
broad accounting and financial reporting and related business processes, and to provide PeopleSoft Financials
& HCM/Payroll systems Port-wide functional administration.
The department"s operations provide the following Port-wide core services: Port accounting policies and
procedures development/enforcement, annual Port financial statements preparation/issuance, industry
prescribed accounting & financial reporting standards compliance assurance, accounts payable disbursements,
payroll administration, billing and lease management, accounts receivable, credit and collection enforcement,
ffilename: Adminbud.doc
updated: 10/18/2011

VIII-8

Port of Seattle

2012 Preliminary Budget

general ledger administration, capital project costing, cash and debt accounting, fixed assets accounting,
grants billing and reporting, corporate credit card and procurement card administration, employee expense
reimbursements, corporate tax administration, external audits facilitation, and recurring fiscal management
reporting.


Key Goals:
o Provide quality and responsive accounting and financial reporting services that meet
evolving Port-wide and divisional business needs.
o Implement business process improvements to increase productivity and operational/systems
efficiencies.
o Leverage use of technology to allow Port operations to conduct accounting and fiscal
management efficiently and in a decentralized environment.
o Improve use of the PeopleSoft Financials and HCM Payroll Administration systems and the
value they bring to the organization.
o Deliver timely and meaningful financial information that facilitates sound decisions by Port
leadership and management.
o Provide essential user knowledge on key accounting processes and systems, and
compliance with related legal and industry prescribed standards.
o Ensure timely policies and protocols that facilitate proper stewardship over public funds
and assets.
o Ensure compliance with evolving and complex accounting and financial reporting
standards.
o Open opportunities, broadly, for AFR team members to initiate and lead key focuses that
result in value-added changes to the way services are provided and business is conducted.

INTERNAL AUDIT:
Provide adequate and sufficient risk-based audit coverage across the Port. Provide the Commission and
Management with reasonable assurance that Port operations are conducted in an effective manner as intended.
Provide functional expertise to management and evaluate the effectiveness of established controls. Test the
design and effectiveness of established management controls that mitigate financial, operational, and compliance
risks throughout the Port. Conduct internal audits to determine whether Port operations or management has
complied with applicable laws and regulations. Conduct third-party arrangements to ensure Port funds/and or
public funds are used and accounted for properly. Conduct lease and concession audits to establish revenue
completeness and compliance with applicable terms and conditions.


Key Goals:
o Provide quality, value-added audit services to the Port.
o Provide competent audit staff that is knowledgeable in auditing, accounting, and performance
audits.
o Train Internal Audit staff and maintain the required continuing professional education (CPE).
o Leverage on technology in order to increase efficiency and effectiveness in our audit process.
o Increase risk awareness and control mitigation throughout the Port.
o Promote accountability and compliance with laws and regulations.
o Provide training and guidance on internal controls, best practices, and risk mitigation.
o Promote and provide guidance on Control Risk Self-Assessment, including importance of
enterprise risk management (ERM).
o Promote and audit for efficiency, effectiveness, and economy.
o Effectively communicate audit results to Audit Committee, to CEO, to Port management, and to
the public.
o Monitor and report all Port losses to the State Auditor"s Office (SAO) in compliance with state
regulations.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-9

Port of Seattle

2012 Preliminary Budget

OFFICE OF SOCIAL RESPONSIBILITY:
OSR"s key responsibilities and services can be categorized into five functions:
PROGRAMS
Include Small Contracting Suppliers (SCS) Program, National Urban Fellows, Clean Trucks Program, Veterans
Fellowship and other veteran-related initiatives, Community Giving Campaign, Pre-Apprenticeship and
workforce development initiatives. In addition we support the apprenticeship programs currently managed by
Labor Relations.
OUTREACH
Act as the key "point of contact" in the community regarding concerns and general issues with small businesses,
extensive participation in community based events, conferences, speaking engagements resource fairs, "meet and
greets" events, Annual Regional Contracting Forum and provide training to small businesses on "How to do
business with Port".
CUSTOMER SERVICE
Provide direct support to Port departments relating to assistance with small business roster, information and
advocacy, troubleshooting, and in-house technical expertise.
PROCUREMENT
Set small business goals and requirements on all applicable Port procurements and construction contracts.
Provide training to Port staff and small businesses and information to community stakeholders as needed.
TRAINING
Provide individual and group training to Port staff on the requirements of the new Small Contracting Suppliers
Program.


Key Goals:
o Continue to develop new format of small business utilization reports in coordination with ICT.
o Set small business goal for individual projects and track compliance accordingly.
o Develop and implement key policies related to the small business or "SCS" program.
o Oversee the workforce development and SeaTac airport employment services contract.
o Provide outreach, education and resource referrals to independent drayage truck drivers
impacted by the Clean Trucks standards adopted by the Port Commission.
o Liaison for National Urban Fellows Program.
o Support HRD"s Veterans Fellowship Program and other veteran related programs, such as Hire
America"s Heroes, where the OSR manager serves on the Board of Directors.
o Manage the Ship to Shelter Program with Public Affairs. Program remains on hold until logistic
concerns by US Customs are addressed.
o Manage the Port pre-apprenticeship and external community workforce development activities.
Support the apprenticeship programs currently managed by Labor Relations.

POLICE:
Maintain individual and organizational commitment to the Port of Seattle mission and values as well as the
International Association of Chiefs of Police, Cannons of Police Ethics.
 Maintain a high performance workplace by providing primary law enforcement and public safety related
services to those who use and/or work at Port of Seattle owned and operated properties.
 Enhance public understanding; implement responsive partnerships with internal and external customers.
 Share Departmental resources with other ports, police, and public safety agencies to reduce the impact of
cross-jurisdictional crime to promote efficiencies and increase effectiveness.
 Provide, manage, and organize the requisite resources to support the Port of Seattle Police Department
operational objectives to remain in the forefront of transportation security.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-10

Port of Seattle



2012 Preliminary Budget

Evaluate both Department and individual contributions as measured by our strategic plan to ensure
competency in performance, supervision, and management.


Key Goals:
o Improve the law enforcement services we provided to our various Port customers and
stakeholders.
o Achieve and maintain state and national accreditation through CALEA.
o Support the collective professional development of the Police Department.
o Improve employee job satisfaction, effectiveness, and resource utilization.
o Enhance the department"s ability to respond to acts of extraordinary violence, disasters, and
unusual occurrences.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-11

Port of Seattle

2012 Preliminary Budget

KEY PERFORMANCE INDICATORS/MEASURES
2010

2011

2012

Actual

Estimates

Estimates

Department

Key Performance Indicators/Measures

AFR

GFOA Financial Reporting Excellence Certification

yes

yes

yes goal

AFR

Clean independent CPA audits involving AFR

yes

yes goal

yes goal

AFR

Timely process disbursement payment requests

4 days

4 days

4 days

AFR

Keep receivables collections aging 90% within 30 days

yes

yes goal

yes goal

F&B

GFOA Distinguished Budget Presentation Award

yes

yes

yes goal

F&B

Investment Portfolio Yield

2.17%

1.86%

1.00%

F&B

MIS and Clarity Training

143 users

90 users

90 users

HR&D

Time to Hire (days)

31.25

25.00

24.25

HR&D

PREPs 60+ days past due (average)

145.75

127.30

123.48

HR&D

3.45%

3.40%

3.45%

H&S

Turnover Rate (%)
Occupational Injury Rate

5.24

5.3

5.25

H&S

Lost Work Day Case Rate

2.40

1.90

1.85

H&S

Total Lost Work Days

778

550

500

H&S

Required Safety Training

96%

97%

96%

ICT

Percent of Commission authorized projects on budget

95%

100%

100%

ICT

Percent of Commission authorized projects on schedule

N/A

40%

50%

ICT

N/A

11 days

10 days

82%

95%

95%

Internal Audit

Average time to close a Service Request
Percent of annual work plan completed each year
Amount of money suggested/ recovered as a result of lease
and concession audits

196K/31K

106K/105K

100K

Internal Audit

Complete one central accounting systems audit every year

yes

yes

yes goal

Internal Audit

Percentage of time spent auditing vs administrative

N/A

75%

75%

40

76

114

Internal Audit

Labor Relations Contract Administration

Labor Relations Contract Negotiations
3
8
12
Assure that Port records are being maintained and managed in
accordance with State law (Other Contracted Services-Iron
20,000 boxes 20,176 boxes 20,176 boxes
Mountain)
in archives in archives in archives
Legal
Legal

Respond to Public Disclosure Requests

281

188 YTD

250

Legal

Requests for Workplace Responsibility Information/Guidance

107

150

200

Legal

Report of Potential Workplace Violations

66

95

125

Police

Customer Service Survey

N/A

89%

N/A

Police

State-Mandated Training

N/A

96%

N/A

Police

National Accreditation Standards completed

56%

100%

N/A

Public Affairs

Increase tourism offering across all markets

Public Affairs

Public Affairs

Increase traffic to the Port"s website
Communicate messages/strategies to general public and
specific target groups by increasing attendance at Port events.

Risk Mgmt

Driver Program Incident Count

Risk Mgmt

Driver Program Liaiblity Costs

Risk Mgmt

Total Cost of Risk Per $1000 Port Revenue

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-12

N/A Up 27.43% Up by 10%
9,797,236
6,211,998
6,522,598
page views page views
Up by 5%
N/A

N/A

Up by 10%

117

100

110

$

13,300 $

25,000 $

50,000

$

10.48 $

10.74 $

11.57

Port of Seattle

2012 Preliminary Budget

D. CORPORATE BUDGET SUMMARY
The following Tables VIII-2 & VIII-3 and Figures VIII-1 & VIII-2 illustrate the administrative expense for
Corporate by department and by account:
TABLE VIII-2: ADMINISTRATIVE EXPENSE BY DEPARTMENT
($ in 000's)

BY DEPARTMENT

2010
Actual

Notes

EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS & ENV
Commission
Executive
Labor Relations
Legal
Risk Services
Health & Safety Services
Public Affairs
Accounting & Financial Reporting
Internal Audit
Finance & Budget
Information & Communications Technology
Human Resources & Development
Office of Social Responsibility
Police
Contingency
Total Expenses Before Charges to Capital, Non-Ops & Env

$

2011
Budget

2012
Budget

% Change
2012 Bud2011 Bud

831 $
1,356
1,110
3,562
2,618
1,010
5,554
5,941
990
1,455
20,577
4,119
1,280
19,273
21
70,306

931 $
1,500
1,239
2,975
2,789
1,129
7,012
6,596
1,215
1,493
22,408
5,285
1,567
21,452
700
78,292

980
1,539
1,267
2,964
2,959
1,060
5,815
6,853
1,496
1,543
23,146
5,484
1,476
22,574
700
79,855

5.3%
2.6%
2.3%
-0.4%
6.1%
-6.1%
-17.1%
3.9%
23.2%
3.3%
3.3%
3.8%
-5.8%
5.2%
0.0%
2.0%

CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION

(2,914)

(3,283)

(3,320)

1.1%

OPERATING & MAINTENANCE EXPENSE
Commission
Executive
Labor Relations
Legal
Risk Services
Health & Safety Services
Public Affairs
Accounting & Financial Reporting
Internal Audit
Finance & Budget
Information & Communications Technology
Human Resources & Development
Office of Social Responsibility
Industrial Development Corporation
Police
Contingency
Total Operating Expenses

831
1,356
675
3,475
2,618
1,001
5,553
5,939
990
1,455
18,765
4,107
1,280
53
19,273
21
67,391 $

931
1,500
922
2,906
2,789
1,129
7,012
6,596
1,215
1,493
19,511
5,285
1,567
21,452
700
75,008 $

980
1,539
961
2,901
2,959
1,060
5,815
6,853
1,496
1,543
20,194
5,484
1,476
22,574
700
76,535

5.3%
2.6%
4.3%
-0.2%
6.1%
-6.1%
-17.1%
3.9%
23.2%
3.3%
3.5%
3.8%
-5.8%
0.0%
5.2%
0.0%
2.0%

1

1

$

adminbud.xls

Notes:
1) Does not include adjustment for charges into Corporate SubClasses from Divisions.

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-13

Port of Seattle

2012 Preliminary Budget

FIGURE VIII-1: ADMINISTRATIVE EXPENSE BY DEPARTMENT
Contingency
0.9%
Risk Services
3.9%

Accounting &
Financial Reporting
9.0%

Commission
1.3%
Executive
2.0%

Public Affairs
7.6%

Police
29.5%

Legal
3.8%

Health & Safety Services
1.4%

Information &
Communications
Technology
26.4%

Human Resources &
Development
7.2%

Internal Audit
2.0%

Office of Social
Responsibility
1.9%
Labor Relations
1.3%

ffilename: Adminbud.doc
updated: 10/18/2011

Finance & Budget
2.0%

Total Expense: $76,535

VIII-14

Port of Seattle

2012 Preliminary Budget

TABLE VIII-3: REVENUES AND EXPENSES BY ACCOUNT

($ in 000's)
2010
Actual

2011
Budget

2012
Budget

% Change
2012 Bud2011 Bud

609
609

1,025
1,025

151
151

-85.3%
-85.3%

Expense
Salaries, Wages, Benefits & Workers Compensation
Equipment Expense
Utilities
Supplies & Stock
Outside Services
Travel & Other Employee Expenses
Promotional Expenses
Other Expenses

52,662
1,618
8
575
9,995
1,985
309
3,153

57,214
1,181
10
673
11,292
2,402
882
4,638

59,742
1,219
11
648
10,930
2,593
268
4,443

4.4%
3.2%
10.0%
-3.7%
-3.2%
8.0%
-69.6%
-4.2%

Total Operating Expenses Before Charges to Capital
Charges to Capital Projects

70,306
(2,914)

78,292
(3,283)

79,855
(3,320)

2.0%
0.0%
1.1%

$ 67,391

$ 75,008

$ 76,535

2.0%

BY ACCOUNT

Notes

Revenue
Other Revenue
Total Administrative Revenue

Total Administrative Expense

1

adminbud.xls

Notes:
1) Does not include adjustment for charges into Corporate SubClasses from Divisions.
FIGURE VIII-2: ADMINISTRATIVE EXPENSE BY ACCOUNT
Promotional Expenses
0.3%
Other Expenses
5.6%

Travel & Other Employee
Expenses
3.2%
Supplies & Stock
0.8%
Outside Services
Utilities
13.7%
0.0%
Equipment Expense
1.5%

Salaries, Wages, Benefits &
Workers Compensation
74.8%

Total Before Charges to Capital Projects: $79.855
Charges to Capital Projects: $3,320
Total Administrative Expense $76,535

ffilename: Adminbud.doc
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VIII-15

Port of Seattle

2012 Preliminary Budget

E. STAFFING
The following TABLE VIII-4 depicts the proposed staffing requirements for 2012 by department for Corporate.
Corporate is budgeting 452.2 FTEs, which is 4.6 higher than the 2011 budget. Please see the notes at the bottom
of table below for further explanations.
TABLE VIII-4: CORPORATE STAFFING
STAFFING
(Full-Time Equivalent Positions)
BY DEPARTMENT
Commission
Executive Office
Legal Counsel
Risk Services
Health & Safety
Public Affairs
Accounting & Financial Reporting
Finance & Budget
Internal Audit
Office of Social Responsibility
Information & Communication Technology
Labor Relations
Human Resources & Development
Police
TOTAL CORPORATE PROFESSIONAL &
TECHNICAL SERVICES DIVISION

Notes

1
2
3
4

5
6
7

2010
Actual
11.0
5.0
14.6
5.0
8.0
27.8
57.4
10.7
9.2
5.0
121.0
9.0
33.8
140.0

457.5

2011
2011
Budget Est. Act.
11.0
11.0
5.0
5.0
14.6
14.6
5.0
5.0
8.0
8.0
27.8
28.5
57.2
58.2
10.0
10.0
9.2
9.2
5.0
5.0
121.0
121.0
9.0
9.0
34.8
35.3
130.0
130.0

447.6

449.8

% Change
2012
2012 Bud Budget
2011 Bud
11.0
0.0%
5.0
0.0%
15.0
2.7%
6.0
20.0%
8.0
0.0%
28.5
2.5%
58.2
1.7%
10.0
0.0%
9.2
0.0%
5.0
0.0%
121.0
0.0%
9.0
0.0%
35.3
1.4%
131.0
0.8%

452.2

1.0%
FTE.XLS PATS

Notes:
1) Legal added .4 FTE to enable WR Intake & Investigation Specialist to expand position from current .6 FTE to 1.0 FTE.
2) Risk Management added a Risk Specialist 1 position.
3) Public Affairs added 0.2 FTE for Program Manager to become full time and a 0.5 FTE for an Intern.
4) AFR was authorized 2 Limited Duration positions through 12/31/2012 and eliminated one position.
5) ICT received a mid-year approval for 911 CAD System Administrator and eliminated the CTO position in 2011.
6) HR&D erroneously deleted a 0.5 Intern for 2011 budget.
7) Police added a Sergeant for the RCF and one Communications Support position.

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VIII-16

Port of Seattle

2012 Preliminary Budget

F. CAPITAL BUDGET
Corporate has a total 2012 capital budget of $12.1 million. For more detail refer to Capital Budget, See
Section X.
TABLE VIII-5 provides a summary of the Corporate 2012 capital budget.
TABLE VIII-5: CORPORATE CAPITAL BUDGET

($ in 000's)

2012
Budget

2012-2016 % of 2012 Total
CIP
Committed

Committed Capital Projects
Capital Development Division
Corporate General
ICT Business Services
Total Committed

$398
522
11,002
$11,922

$4,540
2,483
18,152
$25,175

Business Plan Prospective Projects

$2,525

$38,775

Total CIP

$14,447

$63,950

3.3%
4.4%
92.3%
100.0%

capsum.xls

G. CORPORATE SUMMARY
TABLE VIII-6: CORPORATE SUMMARY

($ in 000's)
OPERATING BUDGET
Operating Revenue

2011
Actual
2010

Notes

53,961
22,574
76,535

0.8%
5.2%
2.0%

Income from Operations

$ (66,782) $ (73,983) $ (72,767) $ (76,384)

3.2%

CAPITAL SPENDING

$ 11,545

$ 11,549

$ 8,417

$ 11,524

-0.2%

457.5

447.6

449.8

452.2

1.0%

48,118
19,273
67,391

1,025 $

Budget
2012

-85.3%

TOTAL FTEs

609 $

Forecast

151

Corporate Expense
Law Enforcement Costs
Total

$

Budget

53,556
21,452
75,008

1,202 $

Growth
2012 Bud2011 Bud

52,526
21,443
73,969

admhist.xls

ffilename: Adminbud.doc
updated: 10/18/2011

VIII-17

Port of Seattle

2012 Preliminary Budget

A. TAX AT A GLANCE


The maximum allowable levy for 2012 is $90.1 million.



For 2012 the levy will be $73.5 million.



The millage rate is estimated to be $0.2329.



The 2012 levy will be used for:
o

General Obligation (G.O.) Bond Debt Service

o

Public Asset Expense: Freight Mobility

o

Seaport and Real Estate Environmental Remediation Liability

o

A portion of Real Estate operating expenses

o

Real Estate Capital Improvements

o

Office of Port Jobs

o

Additions to the Transportation Infrastructure Fund

B. TAX LEVY SOURCES
TYPES AND LIMITS OF LEVIES:
Regular Tax Levy
The County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities.
Taxes are levied annually on January 1 on property value listed as of the prior year. Assessed values are
established by the County Assessor at 100% of fair market value. A re-evaluation of all property is required
annually.
Taxes are due in two equal installments on April 30 and October 31. Collections are distributed to the Port by
the County Treasurer.
The Port is permitted to levy up to $0.45 per $1,000 of Assessed Valuation for general Port purposes under
Washington State law in Revised Code of Washington ("RCW") Chapter 53.36. The levy may go beyond the
$0.45 limit to provide for G.O. Bond debt service. However, the rate may be reduced below the $0.45 limit for
the following reason: RCW Chapter 84.55 limits the annual growth of regular property taxes to the lesser of
1% or the inflation rate, where inflation is measured by the percentage change in the implicit price deflator for
personal consumption expenditures for the United States, after adjustments for new construction. This 1%
limit factor was instituted by Initiative 747 that Washington State voters approved in November 2001. Prior to
the passage of the Initiative, the growth limit was the lesser of 6% or the inflation rate (for levy limit
calculation see Section XII Statutory Budget).

Filename: Levy.doc
Updated: 10/18/11

IX -1

Port of Seattle

2012 Preliminary Budget

FIGURE IX-1 shows the maximum levy permitted by law versus the actual levy levied by the Port from 1991
(the last year the Port levied the maximum) to 2012. In 1989, the law was changed whereby a port could have
a levy at less than the maximum while preserving the ability to tax up to the maximum in the future if the need
was justified. This allows a port to tax at the lower level in the years when the maximum levy is not required,
but return to the maximum level in years of need. Since 1991, on a cumulative basis, the Port has levied a
total of $349 million less than it could have if it had levied the maximum allowable levy each year.
FIGURE IX-1: ACTUAL TAX LEVY VS. MAXIMUM ALLOWABLE LEVY: 1991-2012
Millions
$100

$90

Maximum
Allowable Levy

$80

$70

$60

Cumulative foregone taxes
= $349 million

$50

$40

$30

$20

Actual Tax Levy

$10

$0
1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

FIGURE IX-2 shows the historical millage rate from 2003 to 2012. The Port reduced the tax levy from
$75.9 million in 2009 to $73.5 million in 2010. This amount has been held flat since then.
FIGURE IX-2: TAX LEVY VS. MILLAGE RATE 2003-2012
$ Millions
$80

$75.90

$0.70

$75.90
$73.50

$73.50

$68.81

$70

$0.60
$62.78

$60

$73.50

$58.00

$62.79

$59.66
$0.50

$50

$0.40
$40
$0.26

$0.25

$0.30

$0.25
$0.23

$30

$0.23

$0.22

$0.22

$0.22

$0.23

$0.20
$0.20

$20

$0.10

$10

$0

$0.00

2003

2004

2005

2006

2007

2008

2009

Tax Levy (Left Scale)

Filename: Levy.doc
Updated: 10/18/11

2010

2011

Millage (Right Scale)

IX -2

2012

Port of Seattle

2012 Preliminary Budget

Special Tax Levies
Special levies approved by the voters are not subject to the same limitations as the regular levy.
The Port can levy property taxes for dredging, canal construction, leveling or filling upon approval of the
majority of voters within the Port District, not to exceed $0.45 per $1,000 of Assessed Value of taxable
property within the Port District.
Industrial Development District Tax Levies
The Port may also levy property taxes for Industrial Development Districts (under a comprehensive scheme of
harbor improvements), for twelve years only, not to exceed $0.45 per $1,000 of Assessed Value of taxable
property within the Port District. The Port of Seattle levied the tax for a six-year period between 1963 and
1968 for property acquisition and development of the lower Duwamish River. If the Port intends to levy this
tax for a second six years (or the seventh through twelfth year period), the Port must publish notice of intent to
impose such a levy and if signatures of at least eight percent (8%) of the voters protest the levy, a special
election must be held with majority approval required. The Industrial Development Levy could be imposed at
up to $0.45 per $1,000 in the first year and the lesser of $0.45 per $1,000 or the 1% limit factor described
above in subsequent years. The Port has not levied the seventh through twelfth year period but if the Port were
to Levy under this law, Port may levy up to an estimated $911 million over the six year period.

C. TAX LEVY USES
Each year as part of the budget process, the Commission reviews and approves the use of the tax levy. While
the levy, by statute, may be used broadly for general Port purposes, the Port has used the levy to fund capital
investments in critical Seaport/Real Estate infrastructure and other expenditures providing community benefits
such as environmental mitigation in the Seattle Harbor and the Port's regional freight mobility initiative. The
Port also uses the levy to fund a small annual contribution to PortJobs, a non-profit organization that helps
develop Port and Airport-related career opportunities. The levy has not traditionally been used to fund
improvements at Sea-Tac International Airport, which is exclusively supported by user fees; however, the
Commission approved the use of levy funds for noise mitigation projects for the Highline School District and
improvements at the Aviation High School which are not eligible for Airport funding.
For 2012, the Port plans to use the regular levy for the debt service on G.O. Bonds, Real Estate capital
improvements, FAST Corridor, Seaport and Real Estate environmental costs, Highline Schools projects and
Port JOBS. Similar to 2011, no Seaport capital projects will be funded with the levy, and on an interim basis,
a portion of Real Estate operating expenses will be levy funded. TABLE IX-1 shows how the Port plans to
spend the levy in 2012. Additional details are provided in Tables IX-2 and IX-3.
In 2010, the Port used $13 million of tax levy to fund a Transportation & Infrastructure reserve fund (TIF) to
set aside funds for certain regional transportation projects, including the Port's contribution to the SR99
tunnel. The 2012 budget anticipates, and in 2012 plans to make an additional $25 million contribution to TIF
from the tax levy fund. The Port anticipates making a $2.5 million payment from the TIF toward the South
Park Bridge project in 2012. Expenditures from the TIF are not included in Table IX-1.

Filename: Levy.doc
Updated: 10/18/11

IX -3

Port of Seattle

2012 Preliminary Budget

TABLE IX-1: SOURCES AND USES OF TAX LEVY
TABLE IX-1 shows how the Port plans to spend the levy in 2012.

2012

Notes

(in $ 000's)

SOURCES
Prior Year Levy Fund Balance
Projected Tax Levy Collection
Eastside Rail Corridor Partner Reimbursement
Total Projected Sources

42,118
73,500
5,000
120,618

USES
G.O. Bonds Debt Service - Seaport
G.O. Bonds Debt Service - Real Estate
Total Projected G.O. Debt Service

37,224
3,129
40,353

Committed Capital Expenditures - Real Estate

10,924

Expenses:
Public Expense: Seaport Freight Mobility
1
Transportation & Infrastructure Reserve Fund
Environmental Remediation Liability
2
Portion of Real Estate Operating
Port Jobs & Apprenticeship Program
Aviation High School & Highline & Other Schools NOISE Insulation
Total Expenses

3,954
25,000
14,889
4,922
290
7,160
56,215

Capital Expenditures: BP Prospective - Real Estate

3,600

Total Projected Uses

111,092

Projected Ending Balance
Notes:

$

9,526

1) Net of grant receipts.
2) Net of Seaport Environmental Operating Expense paid from Seaport Revenues.
LevySources&Uses Tables IX-1 and IX-2 and IX-3 prelim doc.xls

Filename: Levy.doc
Updated: 10/18/11

IX -4

Port of Seattle

2012 Preliminary Budget

TABLE IX-2 provides the estimated 2012 project spending that the Port expects to fund with the tax levy. In
addition, any Real Estate Business Plan Prospective projects that are advanced in 2012 may be eligible for levy
funding.
TABLE IX-2: LEVY FUNDED COMMITTED PROJECTS
TABLE IX-2 provides the committed projects that the Port expects to fund with a portion of the tax levy
proceeds.

2012
(in $ 000's)
Real Estate
Pier 69 Renewal Projects
Fishermen's Terminal
Technology, Small and Other Projects
Tenant Improvements
Fleet Replacement
Bell Harbor Lighting Control Upgrade
Total Real Estate Projects

Filename: Levy.doc
Updated: 10/18/11

IX -5

$

$

4,223
3,572
1,315
1,148
506
160
10,924

Port of Seattle

2012 Preliminary Budget

TABLE IX-3: EXISTING G.O. BOND DEBT SERVICE BY PROJECTS AND GROUP
TABLE IX-3 provides the allocation of existing G.O. bond debt service to the projects that were funded by
G.O. bonds issued in 1994, 2000, 2004, 2006 and 2011.

2012
(in $ 000's)
Containers
Stage II Dredge- Phase I
T-5 Expansion & Upgrades
T-46 Expansion Redevelopment
T-18 Expansion & Upgrade
Total Containers

$

922
21,149
4,458
8,359
34,889

Docks and Commercial Properties
T-91 Apron & Infrastructure Improvements
Pier 17 Dock Replacement
T-86 Terminal Upgrades
Total Docks and Commercial Properties

2,119
122
120
2,362

Commercial Properties
World Trade Center Garage

640

Fishing
Fishermen's Terminal Docks & Seawall Renewal

1,657

Special Item
Eastside Trail

805

Total G.O. Bond Debt Service

$

40,353

LevySources&Uses Tables IX-1 and IX-2 and IX-3 prelim doc.xls

Filename: Levy.doc
Updated: 10/18/11

IX -6

Port of Seattle

2012 Preliminary Budget

D. GENERAL OBLIGATION CAPACITY
Non-Voted and Voted General Obligation Debt Limitations
Under Washington State law the Port may incur indebtedness payable from ad valorem taxes in an amount not
exceeding one-fourth of one percent of the value of the taxable property in the District without a vote of the
people. With the assent of three-fifths of the voters voting thereon, the District may incur additional G.O.
indebtedness provided the total indebtedness of the Port at any time shall not exceed three-fourths of one
percent of the value of the taxable property in the District. For the Port, the following estimates the 2012 debt
limit:
Value of Taxable Property

$ 315,588,352,233

Debt Limit, Non-Voted General Obligation Bonds (.25% of Value of Taxable Property)
Less: Outstanding Non-Voted General Obligation Bonds as of 12/31/2011
Less: Capital leases and other general obligations as of 9/30/2011
Remaining Capacity of Non-Voted General Obligation Debt

$
$

Debt Limit, Total General Obligation Debt (.75% of Value of Taxable Property)
Less: Total Outstanding General Obligation as of 12/31/2011
Less: Capital leases and other general obligations as of 9/30/2011
Remaining Capacity of Total General Obligation Debt

$
$

$

$

788,970,881
336,120,000
452,850,881
2,366,912,642
336,120,000
2,030,792,642
LEVY.XLS

The Port may levy property taxes sufficient for the payment of principal of and interest on voted G.O.
indebtedness. The existing limitation provides that unless a higher rate is approved by a majority of the voters
at an election, the increase in regular total property taxes payable in the following year shall not exceed the
lesser of inflation or one percent of the amount of regular property taxes lawfully levied for such district in the
highest of the three most recent years in which such taxes were levied for such district, plus an additional
dollar amount calculated by multiplying the increase in assessed value in that district resulting from new
construction and improvements to property by the regular property tax levy rate of that district for the
preceding year. With a super majority vote, the Port Commission can increase the levy by 1% if inflation is
less than 1%.
Interaction between General Purpose Levy and General Obligation Debt Capacity
Since the 101% levy limitation applies to the total levy for G.O. debt service and for general Port purposes, an
increase in the tax levy for G.O. bonds may result in a decrease in the amount which could be levied for
general Port purposes, unless a higher aggregate tax levy was approved by the voters.
Beginning with the 2001 Budget, the Port established a target to use no more than 75% of the levy for debt
service and retain at least 25% for general purposes.

Filename: Levy.doc
Updated: 10/18/11

IX -7

Port of Seattle

2012 Preliminary Budget

E. TAXPAYER EFFECT
FIGURE IX-3 shows the assessed valuation as compared to the millage rate from 2003 to 2012. The graph
shows that the assessed value has increased from $225 billion in 2003 to an estimated $315 billion in 2012,
while millage (the rate paid per $1,000 Assessed Value) has decreased from $0.2590 in 2003, to the 2012 rate
of $0.2329. Assessed value for 2012 is estimated to be $315,588,352,233.
FIGURE IX-3: KING COUNTY ASSESSED VALUATION VS. PORT MILLAGE RATE 2003-2012
$Billions
420

Rate/$1,000
$1.00

400
380

$0.90

360
340

$0.80

320
300

$0.70

280
$0.60

240
220

$0.50

200
180

$0.40

160
140

$0.30

120
100

$0.20

80
60

$0.10

40
20
0

$0.00
03

04

05

06

07

08

09

Assessed Value (Left Scale)

10

11

Millage (Right Scale)

F. COUNTY PROPERTY TAX COMPARISON
For 2011, the Port accounted for 2.0% of the total property taxes collected by the County.
FIGURE IX-4: 2011 PERCENTAGE OF TAX LEVIES BY TAXING DISTRICT
Port
2%

All Other
14%

State Schools
21%

County
12%

Local Schools
32%

Municipal
18%

Filename: Levy.doc
Updated: 10/18/11

IX -8

12

Millage

Assessed Value

260

Port of Seattle

2012 Preliminary Budget

CAPITAL BUDGET
The following pages provide detail of the projects included in the 2012-2016 capital budget. Additional
information can be found in each of the divisions' business plans and operating budgets, as well as the Draft
Plan of Finance section of this document.
Projects in this year's plan are divided into several categories. Committed Projects are ongoing projects or
projects that are ready to move forward and for which a funding commitment will be secured. Business Plan
Prospective Projects are less certain in timing or scope, but are considered critical for achieving business plan
goals, and the business unit or division has approved them. This category includes projects that are
considered contingent obligations of the Port. Other Prospective Projects are preliminary in nature and are
not ready for full funding commitment. Prospective projects are included in the capital budget section for
informational purposes only.
TABLE X-1: CAPITAL BUDGET
Est. Act. (1)
2011

($ in 000's)

2014

2015

Total
2012-2016

2012

2013

2016

$17,635
1,428
101,583
32,070
10,698
$1,624
2,483
4,584
13,007
185,112

$49,387
4,570
72,273
80,694
34,967
$2,752
2,062
15,155
15,066
276,926

$65,512
758
0
28,585
11,547
500
0
6,317
4,577
117,796

$3,000
742
0
4,770
6,910
385
0
18,966
1,200
35,973

$0
500
0
2,740
0
0
0
0
288
3,528

$9,000
500
0
0
0
0
0
0
0
9,500

$126,899
7,070
72,273
116,789
53,424
3,637
2,062
40,438
21,131
443,723

Committed Projects
Aviation Division
Airfield
Business Development
Landside
Air Terminal
Infrastructure
Stormwater
Airfield Security
Aviation NOISE
Aviation F&B (Division-wide)
Aviation Division
Seaport Division [2]
Lease & Asset Management

[3]

18,234

19,981

3,190

1,400

0

0

24,571

Cruise & Maritime Operations
Environmental Services

[4]

7,860
20

3,855
470

0
1,090

0
800

0
2,500

0
2,500

3,855
7,360

1,939

1,400

1,200

1,333

1,025

1,000

5,958

0
28,053

0
25,706

0
5,480

0
3,533

0
3,525

0
3,500

0
41,744

Real Estate Division
General Real Estate
Harbor Services
Portfolio Management
Real Estate Division

5,149
4,063
3,978
13,190

6,044
0
4,880
10,924

3,777
0
889
4,666

1,567
0
432
1,999

1,383
0
483
1,866

1,437
0
433
1,870

14,208

Professional & Tech. Services
Capital Development Division
Corporate General
ICT Business Services
P&TS

523
300
8,117
8,940

398
522
11,002
11,922

1,539
327
7,150
9,016

1,007
566
0
1,573

970
634
0
1,604

626
434
0
1,060

4,540
2,483
18,152
25,175

$235,295

$325,478

$136,958

$43,078

$10,523

$15,930

$531,967

Aviation Division
Seaport Division
Real Estate
Corp General (ICT Business Services)

$4,290
275
50
200

$69,908
4,868
3,600
2,525

$172,446
43,970
7,825
3,800

$137,987
56,280
10,660
10,650

$58,713
72,600
3,950
10,800

$211,721
76,678
6,671
11,000

$650,775
254,396
32,706
38,775

Total Business Plan Prospective

$4,815

$80,901

$228,041

$215,577

$146,063

$306,070

$976,652

$240,110

$406,379

$364,999

$258,655

$156,586

$322,000

General Seaport
Security
Seaport Division

[5]

Total Committed

7,117
21,325

Business Plan Prospective Projects

Total Port of Seattle

$1,508,619
capsum.xls

[1]

Est imat ed/Act ual 2011 represent s six mont hs of act ual spending and six mont hs of project ed spending.

[2]

Cert ain CIPs moved t o Real Est at e division in 2008.

[3]

Lease & Asset Management previously named Cont ainers & Support Propert ies

[4]

Cruise and Marit ime Operat ions previously named Cruise & Indust rial Propert ies

[5]

Securit y moved int o Cruise & Marit ime Operat ions in 2011

Filename: _10 CapSum
Updated: 10/18/2011

X-1

Port of Seattle

2012 Preliminary Budget

AVIATION DIVISION CAPITAL IMPROVEMENT PROGRAM
General: As presented in Section IV, the Aviation division strategic goals drive the capital program. Most
spending will aim to meet capacity and customer needs, and maintain existing assets through ongoing renewal
and replacement. Completing and opening the Consolidated Rental Car Facility will be a major milestone,
scheduled for April, 2012. Another CIP driver is the Terminal Realignment. As discussed in Section IV, the
Airport is in the process of moving many of the airlines to new locations within the terminal to accommodate
merged airlines consolidating operations in one location and to allow Alaska Air Group to consolidate its
operations on Concourse C and the North Satellite.
Major Committed Capital Projects:
Consolidated Rental Car Facility: The project is nearing completion. Major work elements remaining
include the tenant space build-outs and completion of the bus maintenance building. The project will improve
roadway congestion by removing rental cars from the airport drives and it will create additional public
parking capacity in the main garage. The total budget, including land acquisition, 29 buses, and a bus
maintenance facility is $419 million. The project's opening date is April 2012.
Terminal Escalators Modernization: This project will replace 42 aging escalators and add 2 new escalators
over a seven-year period. The total budget is $55 million. The project is underway.
Noise Remedy Program: The Port's Noise Remedy Program began in 1971 and is designed to mitigate
aircraft noise in neighborhood communities. The program involved the buy-out or insulation of single-family
houses, mobile home parks, multi-family buildings, and institutional buildings. The current program involves
insulation of single-family homes and classrooms at the Highline Community College. This program also
includes future project spending for Highline School District noise mitigation. The cost for the overall noise
remedy program for 2012 - 2016 totals approximately $41 million; however, $35 million of that spending is
for the improvement of the Highline School District buildings and the timing of the spending is dependent
upon the passage of school levies.
Central Plant Pre-conditioned Air: This project will provide pre-conditioned air for heating and cooling of
aircraft while parked at gates. While at a gate, an aircraft's heating and air conditioning is provided by either
the aircraft's onboard auxiliary power unit (APU) or a ground based supply system. Utilization of the
aircraft's APU is expensive and it generates significant carbon dioxide and other air emissions. The total
budget for the project is $43.5 million. The project is underway.
Aircraft Remain Overnight (RON) Parking, U.S. Postal Service (USPS) Site: This project involves buying
out the lease of the USPS Airmail Center, demolition of the building, and the construction of aircraft parking
hardstands. The lease transaction is complete and the USPS has vacated the building. Demolition of the
building is scheduled for 2011 to allow hardstand aircraft parking construction to commence in 2012. The
overnight aircraft parking positions are necessary to facilitate the early morning departures of passenger
flights. The total budget is $43.9 million.
Electrical Ground Service Equipment (EGSE) Electrification: There are two elements to this project that will
greatly improve air quality. First, the Port is investing in infrastructure and charging stations ($14.4 million).
Second, the Port is acquiring the EGSE rolling stock in order to lease to the airlines (through a consortium).
The total cost of the rolling stock is budgeted at $30 million, and includes a U.S. Department of Energy grant
for $5 million. Approximately 600 vehicles may ultimately be converted from fossil fuel to electricity when
all airlines join.
Terminal Realignment: Included within this program are the following projects: Concourse D Common Use
Expansion, Passenger Loading Bridge Acquisition, Baggage System Modifications, Exterior Gate
Improvements, and Airport Signage. These projects total approximately $27 million.
Filename: _10 CapSum
Updated: 10/18/2011

X-2

Port of Seattle

2012 Preliminary Budget

Business Plan Prospective CIP:
The Aviation Business Plan Prospective CIP is composed of project spending for Airfield, Landside,
Terminal, Infrastructure, and other Aviation needs. Seventeen projects have moved to business plan
prospective status for 2012. Prospective projects are, by definition, not yet well scoped, so there is greater
uncertainty with regards to timing and costs than with committed projects. As scoping, design and bidding
occurs, each project moves forward in steps to the Commission to request authorization. See Section IV for a
description of major existing projects and each new project.
SEAPORT DIVISION CAPITAL IMPROVEMENT PROGRAM
General: The Seaport's current five-year capital improvement program continues the Port's emphasis on
supporting investments in facilities and infrastructure for the movement of container and non-container cargo.
Committed Capital Projects:
Lease and Asset Management: Lease and Asset Management encompasses the container terminals, the
Terminal 86 grain facility and leased Seaport industrial properties. The most significant container related
project is the redevelopment of approximately 10 acres at Terminal 25 South for container yard operations.
This project is contingent on a request by a terminal operator to lease the facility under economically feasible
terms. Other container related projects include the replacement of Terminal 5 crane cable reels, replacement
of a damaged fender system at Terminal 18, and various street vacation related projects resulting from
previous terminal expansions at Terminals 5, 18 and 30. Other industrial property projects are primarily
renewal and replacement efforts. These include the replacement of a water main at Terminal 91 and a roof
replacement for a tenant occupied cold storage building on Pier 90.
Cruise and Maritime Operations: The most significant cruise related project is the upgrade of the Pier 91
fender system. Included for Security are funds for capital projects to be largely reimbursed through TSA
Seaport Security Grants Rounds 7 and 7B and a project reimbursed through the American Recovery and
Reinvestment Act.
Environmental: The Seaport Green Initiative is made up of multiple projects primarily related to storm water
improvements.
General Seaport: Additional committed projects include small projects and technology related investments.
Business Plan Prospective CIP:
The Seaport Business Plan Prospective CIP is a combination of revenue/capacity growth,
renewal/enhancement, and environmental projects. The most notable project under revenue capacity growth
are funds for the purchase of land for future expansion of offsite container support yards for handling up to
3.5M TEU's. Renewal/enhancement projects include funds to redevelop berths 6 and 8 on Pier 90 and for
future improvements at Terminal 46. Also included is a general renewal and replacement project to allow for
projects that cannot be determined with certainty as to location, timing and cost. A key environmental project
in Business Plan Prospective status is the plan to bring shore power for cruise ships to Pier 66.

Filename: _10 CapSum
Updated: 10/18/2011

X-3

Port of Seattle

2012 Preliminary Budget

REAL ESTATE DIVISION CAPITAL IMPROVEMENT PROGRAM
General: Projects in the Real Estate Division's current five-year capital improvement program are primarily
projects associated with the renewal and replacement of infrastructure, building components and systems that
are at or beyond the end of their useful lives. Also included is a significant investment in tenant
improvements related to the releasing of space expected to become vacant as existing leases expire.
Committed Capital Projects:
Harbor Services Projects: There are no committed projects under Harbor Services.
Portfolio Management: Key projects include HVAC improvements for the Fishermen's Center Building at
Fishermen's Terminal and a lighting control upgrade at Bell Harbor International Conference Center. Other
projects are for tenant improvements and for renewal and replacement of building components and systems
that are at or beyond the end of their useful lives.
Real Estate Development and Planning: There are no committed projects under Real Estate Development and
Planning.
General Real Estate: Committed projects include fleet replacement, technology related investments, and small
projects. Another project is installation of a corrosion protection system for the existing steel pilings under
the north apron of Pier 69 and replacement of the built-up roof on the Pier 69 Port headquarters' building.
Business Plan Prospective CIP:
The Real Estate Business Plan Prospective CIP is primarily renewal and replacement projects. Renewal and
replacement projects include various projects at Fishermen's Terminal and Shilshole Bay Marina. Also
included is a general renewal and replacement project to allow for projects that cannot be determined with
certainty as to location, timing, and cost.
COPORATE CAPITAL IMPROVEMENT PROGRAM
The Corporate Division's current five-year capital improvement program is predominantly technology
improvements and upgrades. Approximately 28% of 2012 technology capital improvement projects are
refresh of critical infrastructure and network security enhancements required to maintain compliance with
established industry standards. The remaining technology capital improvement projects are mostly for system
upgrades, replacements or consolidation of existing systems that require refresh. These technology projects
are all driven by business unit demand, with system upgrades being required to maintain system operations
and ongoing vendor support. For example, the largest corporate capital improvement project is an upgrade to
the Port's financial system. This upgrade is required to maintain system support from Oracle and was
recommended in the Moss Adams audit. Police fleet replacement and a small portion for small capital is also
included in the Corporate CIP.
CAPITAL DEVELOPMENT DIVISION CAPITAL IMPROVEMENT PROGRAM
The Capital Development Division (CDD) delivers projects and provides technical and contracting services in
support of the business plans and infrastructure needs of the Port's operating divisions. CDD includes the
following departments: Aviation Project Management Group, Central Procurement Office, Engineering, Port
Construction Services, and Seaport Management Group. The Capital Development Division's current fiveyear capital improvement program is primarily for the replacement of equipment and vehicles that are at or
beyond the end of their useful lives. For example, the largest fleet project is to replace a 1996 F-Super Duty
truck for Port Construction Services. The lesser portion of the CIP is for Engineering equipment purchases
(survey equipment, plotter, copiers, large-format printer).

Filename: _10 CapSum
Updated: 10/18/2011

X-4

Port of Seattle

2012 Preliminary Budget

In addition to the Committed, Business Plan Prospective and Other Prospective project categories described
above, the Port may also invest in Public Expense projects. These include authorized Public Expense projects
(projects that meet the criteria of Committed or Business Plan Prospective projects but the expenditures are
expensed instead of capitalized). This can occur when projects' improvements are created on non-Port
properties; they are generally a required component of other Committed projects or they are the Port's
contribution to regional transportation needs. In addition to the Public Expense projects, the Port anticipates
expenditures for a Special Item for its contribution toward the replacement of the Alaskan Way Viaduct
(SR99) of up to $300 million.
TABLE X-2: PUBLIC EXPENSE AND SPECIAL ITEM PROJECTS

($ in 000's)
Division

CIP Description

Aviation

Aviation High School

Special Item

2012

2014

2015

650
650

-

-

Fast Corridor I (1)
Fast Corridor II
North Argo Express Access
Puget Sound Clean Air Agency
Subtotal for Seaport

2,763
991
200
1,050
5,004

2,116
1,200
1,250
4,566

600
1,250
1,850

Total - Public Expense

5,654

5,216

2,500
2,500
$ 8,154

South Park Bridge
Total - Special Item
Grand Total - Public Expense and Special Item Projects

(2012 - 2016)

2016

650 $

SR99 Tunnel Replacement (2)

$

2013

650

Subtotal for Aviation
Seaport

5 Year Total

$

1,300

-

1,300

1,319
1,319

-

2,763
4,426
2,000
3,550
12,739

1,850

1,319

-

14,039

2,500
2,500

-

-

281,000
281,000

281,000
5,000
286,000

$ 7,716

$ 1,850

$ 1,319

$ 281,000

$

300,039

_5YrCapBud&ProspectiveProj.xlsx

Notes:
(1)

Net of grant receipts.

(2)

Payment toward the Port's contribution of up to $300 million per the Memorandum of Agreement No. GCA 4444, dated 02/09/2010.

Filename: _10 CapSum
Updated: 10/18/2011

X-5

Port of Seattle

2012 Preliminary Budget

TABLE X-3: NON-RECURRING CAPITAL BUDGET IMPACT ON THE OPERATING BUDGET
Non- Recurring Capital Projects Budget Impact On The Operating Budget
2012 Preliminary Budget
Criteria:
1. Spending is included in the Port's Committed CIP
2. Capital spending on projects that add significant new capacity
3. Facility is not yet in use
4. Does not include improvements or upgrades to existing facilities unless the project provides additional capacity
Total
($ in 000's)
Aviation Division:
Escalators Modernization
Capital Spending
Change in Operating Revenues
Change in Operating Expenses
Aircraft RON Parking
Capital Spending
Change in Operating Revenues
Change in Operating Expenses

Capital Budget Recurring (R) or NonNotes
Impact
Recurring (NR)

Yes

2012

$ 17,000 $
-

Total Aviation Division
Capital Spending
Change in Operating Revenues
Change in Operating Expenses
No

Real Estate Division:

No

Professional & Tech. Services:

No

2015

2016

2012-2016

6,300 $ 6,606 $
- $
- $ 29,906
2,754
2,754
2,754
8,261
-

NR

2

Seaport Division:

2014

NR

1

Yes

2013

4,750
-

30,566
-

3,000
3,949
-

3,949
-

3,949
-

38,316
11,848
-

21,750
-

36,866
-

9,606
6,703
-

6,703
-

6,703
-

68,222
20,109
-

Port-wide Total

21,750
36,866
9,606
68,222
6,703
6,703
6,703
20,109
$
- $
- $
- $
- $
- $
$0
$0
$0
$0
$0
$0

Capital Spending
Change in Operating Revenues
Change in Operating Expenses

Table X-3...xls

Notes:
1) The estimated debt service for this project will be incorporated into the terminal rental cost recovery formula and thus increase revenues.
2) The estimated debt service for this project will be incorporated into the landing fee cost recovery formula and thus increase revenues.
Port of Seattle Year 2012 Preliminary Budget

Filename: _10 CapSum
Updated: 10/18/2011

X-6

Port of Seattle

2012 Budget And Business Plan

2012-2016 Draft Plan of Finance

The Draft Plan of Finance will be available in the Final Budget Document.

filename: _11 PlanFin_20111017
updated:10/18/2011

XI-1

Port of Seattle

2012 Preliminary Budget

PORT OF SEATTLE
2012 STATUTORY BUDGET
A. INTRODUCTION
The "statutory" budget as defined in RCW 53.35.010 is to portray "the estimated expenditures and the
anticipated available funds from which all expenditures are to be paid." As a cash budget, the Statutory
Budget establishes the need for the tax levy and sets upper limits on expenditures, and is not used as an
operating budget. The function of controlling and managing the operations of the Port is accomplished with
the Operating Budget, which is provided in Sections IV through VIII.
The Preliminary 2012 Statutory Budget is provided to the Port Commissioners and made available to the
general public as required by law (RCW 53.35.010 and RCW 53.35.045). Notice of the Public Hearing, with
an announcement that copies of the preliminary budget are available for distribution to any interested persons,
will be published on October 24th, 2011, and October 31st, 2011, in the DAILY JOURNAL OF COMMERCE,
as required by law (RCW 53.35.020 and RCW 53.35.045). The final statutory budget will be filed with the
King County Council on December 1st, 2011, as allowed by RCW 53.35.045. The intent for filing on this date
is primarily to enable us to obtain public input and certified assessed valuations from the King County
Assessor prior to filing the final budget.

B. STATUTORY BUDGET HIGHLIGHTS
1. Tax Levy
For 2012, the tax levy amount is assumed to be $73,500,000. The following is a comparison of the tax levy
detail between 2011 and 2012:

For General Obligation Bonds
For General Purposes
Total levy

Budget 2011
Levy
Levy
Rate
Amount
$ 0.1229
$ 40,438,435

Budget 2012
Levy
Levy
Rate
Amount
$ 0.1279
$ 40,352,885

0.1004

33,061,565

0.1050

33,147,115

$ 0.2235

$ 73,500,000

$ 0.2329

$ 73,500,000
LEVY.XLS

2. Tax Levy Rate
The tax levy rate is a product of dividing the tax levy dollars by the assessed valuation of personal and real
properties within the Port District. Therefore, if assessed valuation increases at a greater amount than the
dollars the Port would be allowed under the 101% lid law, the tax millage rate would go down even though
the Port's levy dollars may have increased. The exact levy rate is determined by the County Assessor after all
taxing agencies have requested their levy dollars, and the assessed valuation dollars are certified. The 2011
final assessed valuation is $315,588,352,233 after omitted assessments, which are not included in the Port's
levy calculation. (The 2011 assessed valuation is used for 2012 tax collection.) This is a decrease from the
2010 assessed valuation, which was $328,927,984,810 after omitted assessment - See Section IX, Tax Levy.

Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 1

Port of Seattle

2012 Preliminary Budget

C. RESOLUTIONS
RESOLUTION NO. 3654

A RESOLUTION

of the Port Commission of the Port of Seattle adopting the final
budget of the Port of Seattle for the year 2012; making,
determining, and deciding the amount of taxes to be levied upon the
current assessment roll; providing payment of bond redemptions
and interest, cost of future capital improvements and acquisitions,
and for such general purposes allowed by law which the Port deems
necessary; and directing the King County Council as to the specific
sums to be levied on all of the assessed property of the Port of
Seattle District in the Year 2012.

WHEREAS, the Port of Seattle Commission, on the 8th day of November, 2011, prepared the
preliminary budget of the Port of Seattle for the year 2012 and provided for the publication of Notice of Final
Budget Hearing on the adoption of said budget, to be heard on the 22nd day of November, 2011, when
taxpayers might appear and present objections to said preliminary budget; and

WHEREAS, a public hearing on said preliminary budget was held in the office of the Port
Commission, pursuant to notice duly given, in the City of Seattle, County of King, State of Washington, on the
8th of November 2011, at 1 p.m. and 22nd day of November 2011, at 1:00 p.m.; and

WHEREAS, all parties present were afforded a full opportunity to present objections to the
preliminary budget, and the Port Commission being duly advised in the premises; and

WHEREAS, the King County Assessor has notified the Commissioners of the Port of Seattle that the
final assessed valuation of the property lying within the boundaries of said district for the year 2011 is
$315,588,352,233 (after omitted assessments).

NOW, THEREFORE, BE IT RESOLVED, by the Port Commission of the Port of Seattle that the
preliminary budget of the Port of Seattle for the year 2012, as presented at the aforementioned hearing, is
hereby adopted as the final budget of the Port of Seattle for the Year 2012; and

BE IT FURTHER RESOLVED, that the amount of taxes to be levied by the Port of Seattle on the
current assessment rolls to provide for payment of bond redemption and interest on the Port of Seattle General

Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 2

Port of Seattle

2012 Preliminary Budget

Obligation Bonds, for future expenditures for acquisitions and capital improvements and for such general
purposes allowed by law which the Port deems necessary be set and deposited is $73,500,000; and

BE IT FURTHER RESOLVED, that the King County Council, State of Washington, be notified that
the specific sum herein mentioned being a total of $73,500,000 is necessary to be raised by taxation to meet
the payment of bond redemption and interest on Port of Seattle General Obligation Bonds, of future
expenditures for acquisitions and capital improvements, and of costs for such general purposes allowed by law
which the Port deems necessary, as set forth for the period January 1, 2012 and thereafter; that said King
County Council be respectfully requested to make a levy in said amount for the aforesaid purposes; and

BE IT FURTHER RESOLVED, that the above is a true and complete listing of levies for said
District for collection in the year 2012 and they are within the maximums established by law.

ADOPTED by the Port Commission of the Port of Seattle at a regular meeting held this ____ day of
________________________, 2011, and duly authenticated in open session by the signatures of the
Commissioners voting in favor thereof and the seal of the Commission.

Port Commission

Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 3

Port of Seattle

2012 Preliminary Budget

D. TAX LEVY CALCULATION SHEET
TABLE XII-1: TAX LEVY CALCULATION SHEET
TAXING DISTRICT PORT OF SEATTLE
The following calculations are offered as an aid in the determination of the dollar limitation imposed by statute on the 2012 regular property levy for the
district and are based on figures from the King County Department of Assessments as of 10/10/2011.

2006 Regular Levy
2007 Regular Levy
2008 Regular Levy
2009 Regular Levy
2010 Regular Levy
2011 Regular Levy
2012 Regular Levy
2012 Regular Levy Rate

Actual Levy
62,748,329
68,813,857
75,899,369
75,899,369
73,500,000
73,500,000
73,500,000

Allowable Levy
78,064,389
80,414,188
82,628,783
85,363,322
87,243,250
88,727,622
90,121,375

0.23290

0.28557

LIMITATION CALCULATION (RCW 84.55.010):

x

+
x

+
-

÷

101%
88,727,622
(324,029)
88,403,593
1.01
89,287,629

1.0276% IPD
88,727,622
(324,029)
88,403,593
1.0276
90,839,112

1,705,295,167
0
1,705,295,167
0.22366
381,398

1,705,295,167
0
1,705,295,167
0.22366
381,398

89,287,629
381,398
0
89,669,027
452,348
0
90,121,375

90,839,112
381,398
0
91,220,510
452,348
0
91,672,858

315,588,352,233

315,588,352,233

0.28557

0.29048

(IPD = Implicit Price Deflator)
Maximum lawful regular levy since 1986 including lid lifts
Less refund fund levy
Maximum Statutory 2011 Levy, basis for calculation (1)
Levy Limit Factor
Levy
Local New Construction
Increase in state-assessed public utility value (2)
Total New Construction
2011 Regular Levy Rate
New Construction Levy
Levy
New Construction Levy
Omitted Assessment Levy (3)
Total RCW 84.55 Levy
Refund Fund Levy (Relevy for prior year refunds) (4)
Levy Correction: Year of Error YYYY
Maximum 2012 Levy Based on Limit plus Refund Fund (5)
Regular levy assessed value less annexations (6)
Levy rate based on allowable levy

STATUTORY LEVY CALCULATION (RCW 84.52.043): Limits only general purpose levy.
315,588,352,233
Regular levy assessed value (6)
x
0.450000
Maximum Statutory Rate
=
142,014,759
Maximum 2012 Levy (Excluding Omitted Assessment Levy)
+
0
Omitted Assessment Levy (3)
=
142,014,759
Maximum 2012 General Purpose Levy Based on Statutory Levy
All years indicated above are the year the tax is payable
Since 1991, the Port Commission has levied less than the maximum amount allowed by law. T he calculation above shows the maximum allowable 2012 levy pursuant
1.
to RCW 84.55.092, which allows Port districts to "set the levy at the amount which would be allowed otherwise under" the chapter of State Law (RCW 84.55) which
provides taxing authority.
2.

Any increase in value in state-assessed property is considered to be new construction value for purposes of calculating the respective limits. State-assessed property is
property belonging to inter-county utility and transportation companies (telephone, railroad, airline companies and the like).

3.

An omitted assessment is property value that should have been included on a prior year's tax roll but will be included on the current (2012) tax roll. Omits are assessed
and taxed at the rate in effect for the year omitted (RCW 84.40.080 - 84.40.085). Omitted assessments tax is deducted from the levy maximum before calculating
the levy rate for current assessments and added back in as current year's receivable.

4.
5.

Administrative refunds under RCW 84.69.020 were removed from the levy lid by the 1981 legislative session.
District is entitled to the lesser of maximum levies determined by application of the limit under RCW 84.55 and the statutory rate limit. Levies may be subject to
further proration if aggregate rate limits set in Article VII of the state constitution and in RCW 84.52.043 are exceeded.

6.

Assessed valuations shown are subject to change from error corrections and appeal board decisions recorded between the date of this worksheet and final levy rate
determination.

Statlevy.xls

Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 4

Port of Seattle

2012 Preliminary Budget

E. FORECASTED CASH FLOW SUMMARY
TABLE XII-2: FORECASTED CASH FLOW SUMMARY

($ in 000s)

2012

Beginning balance of cash & investments

$ 717,812

SOURCES OF CASH
Operating Revenues
Interest Receipts
Proceeds from Bond Issues
Grants and Capital Contributions
Tax Levy
Passenger Facility Charges
Rental Car Customer Facility Charges
Fuel Hydrant Receipts
Other Receipts
Total

518,095
5,748
0
33,227
73,500
63,448
21,333
7,839
754
723,943

Anticipated available funds
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense
Corporate Administrative Expense
Law Enforcement Costs
Environmental Expenditures
Total Operating Expenses

Percent
of Total

71.6%
0.8%
0.0%
4.6%
10.2%
8.8%
2.9%
1.1%
0.1%
100%

1,441,756

309,725

21.4%
7.0%
1.8%
0.3%
30.5%

283,440

15.7%
12.2%
27.9%

Other Expenses
Public Expense
Capital Expenditures
Total

9,619
5,654
406,379
1,014,817

0.9%
0.6%
40.0%
100%

Ending balance of cash & investments

$ 426,938

Increase (decrease) of cash during year

$ (290,873)

Debt Service:
Interest Payments
Bond Redemptions
Total Debt Service

217,361
70,953
18,314
3,096

159,240
124,200

cashflow.xls

Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.
Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 5

Port of Seattle

2012 Preliminary Budget

FIGURE XII-1: SOURCES OF CASH
($ in 000's)
Rental Car Customer
Facility Charges
Fuel Hydrant Receipts
2.9%
Passenger
1.1%
Other Receipts
Facility Charges
0.8%
8.8%
Tax Levy
10.2%

Grants and Capital
Contributions
4.6%

Operating Revenues
71.6%

Interest Receipts
0.1%

Total Sources: $723,943

FIGURE XII-2: USES OF CASH
($ in 000's)

Operating &
Maintenance Expense
21.4%

Corporate
Administrative Expense
7.0%

Capital Expenditures
40.0%

Bond Redemptions
12.1%

Interest Payments
15.7%

Law Enforcement
Costs
1.8%
Environmental
Expenditures
0.3%

Public Expense
0.6%

Total Uses: $1,014,817

Other Expenses
0.9%

Filename: Stat_bud.doc
Updated: 10/18/2011

XII - 6

Port of Seattle

2012 Preliminary Budget

APPENDIX A: BUDGET POLICY, PROCESS AND CALENDAR
1. OPERATING BUDGET
a. Budget Policy:
The Port establishes a budget policy to provide systematic planning as part of the management performance
and control. The purpose of this policy is to allow the capability to forecast realizable financial results over
definite periods of time. This is accomplished through planning and coordination of the various complex
operations and functions of the Port, through systematic communication and the use of the Port's financial
control and management information system.
The operating performance budget is viewed as year one of the business plans and as such, it is an essential
component of the management planning and control process. It quantifies business groups and departmental
plans for future periods in strategic, operational and monetary terms. This facilitates coordination of plans
between divisions/departments and provides a basis for control once the plan is in effect.
Various inputs to the budget planning process are required for it to be meaningful, including forecast of
economic trends and business activity levels. Above all, goals, objectives, programs, action plans and
performance measures are defined and reviewed annually for consistency and support of the Port's overall
mission.
The budget plan is based on assumptions about the success of marketing efforts, demand for services, and the
cost, availability and need for people and materials. The budget process provides continual feedback which
compares not only actual performance to the plan but also the validity of the assumptions on which the plan
was based.
The Operating Performance Budget is a management tool for controlling and analyzing each area of
responsibility. Budgeting as well as the recording of actual costs is done on an Org basis (formerly cost
center). An Org is a distinct functional and physical unit. Its performance responsibility can be assigned to
one person. There are over 200 Orgs at the Port. Each Org has a budget. The person assigned to each of
these Org budget is responsible for the operating costs of that Org. Budgeting is done on a line-item basis for
Revenues and Operating & Maintenance Expenses.
Allocated and/or indirect expenses are not budgeted for by the recipient Org. These are costs that are
allocated to business groups/unit from service providers based on the Port's standard allocation formula or
using an alternative allocation methodology. Allocated costs are general support costs that cannot be directly
attributed to a business unit, but instead support the entire Port. Costs can come from within the division
(intra-division allocation) or from outside the division (inter-department allocation).
Department Directors are responsible for preparing the operating budget for their areas of responsibility,
subject to review and approval by several levels within the organization. Orgs can be combined to analyze
and report on budgets by functional or business units. Port management needs current, timely and accurate
information to make informed decisions in a timely manner. The objective of the budget process is to
provide responsibility performance, financial and statistical information, to enhance effective management.
In addition to providing the business plan for the organization, this process results in a method of comparing
actual financial results with the approved budget plan. The appropriateness of the pricing structure or the
effects of changes in costs or activity can be observed. This approach gives management the flexibility to
evaluate the performance of a particular activity. The Budget Report (compares the proposed budget to the
current year's budget and last year's actual) and the Responsibility Report (compares actual results to budget)
can advise a manager if things are not going as expected, whether strategies are being accomplished, and also
give him/her clues as to what might be wrong. The function of controlling and managing the operations of
the Port is accomplished with the Operating Performance Budget.

Filename: _13 Appendixes
Updated: 12/28/2009

XIII-1

Port of Seattle

2012 Preliminary Budget

The 2012 budget process included several Commission briefings with the operating divisions and corporate
departments during the year to update the Commission on key issues facing the business groups and to solicit
input into overall strategies and objectives. The divisions updated the Commission on each business unit
with background information, discussing capital and operating plans and dialogue on major policy issues.
Divisions fine-tuned their business plans based on Commission input and put together budgets based on
revised business plans.
Key events included budget planning meetings by the Executive Management team, the issuance of the
budget guidelines/instructions and budget calendar to divisions, training of budgeteers on usage of the budget
system, actual preparation of the budget by divisions and departments, internal budget reviews, which
includes in-depth discussion of revenue and expense assumptions, new programs, initiatives, or other
proposed increases in revenue, expenses as well as operational needs, review and agreement by the
Commissioners and Executive Management, and release of the updated proposed budget to the Port
Commission and public stakeholders.
Budget staff responded to inquiries of commission and interested stakeholders during commission budget
workshops, first and second reading and adoption of the budget following public hearings.
In addition to the Operating Performance Budget as stated above, the budget staff prepares the Statutory
Budget as defined in RCW 53.35.010 to show ―estimated expenditures and the anticipated available funds
from which all expenditures are paid.‖ Being a cash budget, the Statutory Budget establishes the level of the
Port's property tax levy and sets upper limits of expenditures, and is not used as an Operating Performance
Budget.
b. Budget Adoption:
The budget is provided to the Port Commission and must be made available to the general public as required
by law - RCW 53.35.010 and RCW 53.35.045. Two Public Hearings - First Reading and Second Reading
and Final Passage and Adoption of Budget are held, at which time the Port Commission will make final
recommendations and adopt the budget at a regular commission meeting and duly authenticated in open
session with an announcement of the public hearings be made in the DAILY JOURNAL OF COMMERCE
newspaper and copies of the preliminary budget be made available for distribution to any interested persons
by a specified date as required by law - RCW 53.35.020 and RCW 53.35.045.
Subsequent to the public hearing and Commission adoption of a final plan, the statutory budget and
resolution is then filed with the King County Council and King County Assessor as required by law, by a
specified date as allowed by RCW 53.35.045.
c. Monitoring of Budget:
Once an annual budget is in place, the Responsibility Report (comparing actual results to budget) is
generated monthly and variances from budget are analyzed and reported on a monthly basis, and more
extensively each quarter, to determine if corrective action is needed. Divisions and departments prepare a
quarterly year-end forecast, which is incorporated into the quarterly Performance/Variance Report. The
Performance/Variance Report is a report in narrative form explaining the reason or causes of variances
between actual revenues and expenses versus budgeted amounts on a quarterly basis. A good and accurate
monthly and quarterly performance/variance report is a very important tool for management. This report
provides explanation of variances from the approved plan and presented quarterly to Executive Management
and the Commission in public meetings. This allows Executive Management and the Commission to make
timely and well-informed decisions.

Filename: _13 Appendixes
Updated: 12/28/2009

XIII-2

Port of Seattle

2012 Preliminary Budget

d. Amending the Operating and Capital Budgets:
The Chief Executive Officer of the Port of Seattle is authorized ―Within Budget Limits‖ to transfer budgeted
amounts between departments; however, any revisions that alter the total expenses Port-wide that are not
within the Chief Executive Officer Authorized Budget Limits require authorization from the Port
Commission.
As per Resolution 3605 as amended, whereas the Port Commission has adopted policy directives delegating
administrative authority to the Chief Executive Officer for the purpose of day-to-day management and
administration of the Port and as stated in sections 20.2.1 and 20.2.2 of said resolution:
20.2.1 ―Within Authorized Budget Limits‖ means with respect to capital projects, improvements or
acquisitions, the term ―Within Authorized Budget Limits‖ means that the project, improvement or
acquisition:
(i) Is included in the Port's Annually Approved Capital Budget, or
(ii) Is included in the Port's Annually Reviewed Capital Improvement Plan
(iii) Will not cause the Port to exceed the total approved dollar limit of the current Annually Approved
Capital Budget.
20.2.2 ―Within Authorized Budget Limits‖ means with respect to non-capital expenditures, that the
expenditure:
(i) Is included in the total approved dollar limit of the Port's current Annual Operating Budget.
(ii) Will not cause the Port to exceed the total approved dollar limit of the Port's current Annual
Operating Budget.
e. Operating Performance Budget Process:
The steps in the 2012 operating budget process are as follows:

Budget planning meetings of Executive Management to set 2012 operating targets.

Commission strategic and business planning briefing/workshop.

Training of Budgeteers from the various divisions on the use of the budget system.

Commission briefing on 2012 budget process, key assumptions & targets.

Issuance of budget guidelines/instructions and budget calendar on the Port's intranet.

For the operating divisions, targets are developed based on the divisions' business plan forecast.

For Capital Development Division and Corporate, initial targets are based on a bottom-up assessment of
needed resources to accomplish strategy/actions plans.

Several Commission briefings with the operating divisions and corporate departments are held during the
year to update the Commission on key issues facing the business groups/departments and to solicit input
into any changes in strategy.

Budget system available for input.

Actual preparation of the budget by divisions/departments.

Corporate Finance and Budget generates budget comparison report, which compares the proposed budget
to the current year's budget and last year's actual, and also produces the current year's Forecast Report.

Divisions/departments complete their detailed budgets and are reviewed internally by their senior
managers and finance and budget staff, which include in-depth discussion of revenue and expense
assumptions, new programs, initiatives, or other proposed increases in revenue, expenses as well as
operational needs.

Divisions/departments budgets are submitted to Corporate Finance and Budget and then reviewed against
targets by Executive Management.

Executive Management makes recommendations and changes, which are incorporated into
divisions/departments budgets.

Several Commission and public budget workshops are held on divisions/departments budget and
business plans.
Filename: _13 Appendixes
Updated: 12/28/2009

XIII-3

Port of Seattle









2012 Preliminary Budget

All budget issues are resolved and changes are entered and made into the budget system.
Corporate Finance and Budget staff generates various reports in a timely manner and ascertains that all
approved changes are incorporated into the budget and reports are accurate.
Corporate Finance and Budget prepares preliminary budget document and releases proposed budget to
the Port Commission and stakeholders on October 27, 2011.
The First Reading of the budget on November 8, 2011.
Budget Staff answer inquiries of Commission and interested stakeholders during Commission budget
public hearing.
The Second Reading, Final Passage and Adoption of the 2012 budget on November 22, 2011 at which
time the Port Commission makes final recommendations and adopts the budget.
Filing the Statutory Budget with King County Council and King County Assessor as required by law on
December 1, 2011.
Corporate Finance and Budget staff prepares and releases the final budget document to reflect
Commission recommendations.

Filename: _13 Appendixes
Updated: 12/28/2009

XIII-4

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2012 Preliminary Budget

FIGURE A-1: OPERATING BUDGET PROCESS FLOW CHART

OPERATING BUDGET PROCESS FLOW
CHART
Strategic Planning
Meetings of Executive
Management to set
Targets

Commission Strategic
Planning Workshops and
Briefing on Budget
Process

Issuance of Budget
Guidelines/Instructions
and Calendar on the
Port's Intranet

Divisions/Departments
Submit Budgets

Divisions/Departments
Internal Budget Reviews

Budget Comparison
Reports are made
Available

Proposed Budget Made
Available for First &
Second Reading

Commission
Reviews Budget

Executive Management
Reviews
Divisions/Departments
Budget and Makes
Recommendations and
Changes

Training of Budget Staff
and Preparation of
Budget by
Divisions/Departments

Several Commission
Briefings with
Divisions/Departments
are held to update
Commission on Key
Issues

Commission Adopts
Budget

Budget Filed with King
County Council and
Assessor

Filename: _13 Appendixes
Updated: 9/21/2010

XIII-5

Port of Seattle

f.

2012 Preliminary Budget

Operating Performance Budget Planning Calendar:
Date

7/08/11
8/02 - 8/11/11
8/05/11
8/05/11
8/08/11
8/08 - 10/07/11
8/16/11
8/16/11
8/16/11
8/17 - 9/01/11
9/02/11
9/08/11
9/06 -9/23/11
9/19/11
9/19/11
9/20/11
9/21/11
9/27/11
10/03-10/14/11
10/04/11
10/05/11
10/07/11
10/10-10/14/11
10/18/11
10/25/11
10/27/11
11/08/11
11/22/11
12/01/11
12/14/11

Activity

Executive Management Budget Planning meeting
Budget User Training
Budget Guidelines/Instructions and calendar available on the Port's Intranet
Allocation templates available for review
Budget System Available for Input
Preparation of budget by divisions/departments
Commission Briefing on 2012 Budget Process, Key Assumptions & Targets
Seaport & Real Estate Strategy/Business Plan Commission Presentation
Aviation Strategy/Business Plan Commission Presentation
Budget Staff conducts Budget Workshops to assist budgeteers with budget
Corporate Departments and Capital Development Division final budget entry
Corporate Departments and Capital Development Budget Support Documentation and
Non-Operating Budgets due to Corporate Finance and Budget
Aviation, Seaport and Real Estate Internal Budget Reviews
Executive Management review of Corporate and Capital Development Budgets (both
Operating & Capital Budgets)
All Corporate Budget Issues resolved
Executive Management review of Seaport & Real Estate Budgets (both Operating &
Capital Budgets)
Executive Management review of Aviation's Budget (both Operating and Capital
Budgets)
Commission Meeting to review Divisions and Corporate Capital Budgets
Capacity Funding Analysis
Commission Meeting to review Divisions and Corporate Operating Budgets
All Outstanding Budgets Issues resolved
All Divisions Budgets and documents due to Corporate Finance & Budget
Corporate Finance and Budget Staff prepares 2012 preliminary budget document
Preliminary Budget Document available to Commission
Operating Budget Update and Draft Plan of Finance Commission Briefings
2012 Preliminary Budget & Business Plan document is released and available to
Commission and Public
First Reading and Public Hearing of 2012 Preliminary Budget & Business Plan -
Commission Public Hearing
Second Reading, Final Passage and Adoption of the 2012 Budget & Business Plan -
Commission Public Hearing
Filing of Budget with King County Council & King County Assessor as required by law
Final 2012 Budget and Business Plan and Draft Plan of Finance document is published

Filename: _13 Appendixes
Updated: 9/21/2010

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2. CAPITAL BUDGET
a. Capital Budget Policy:
As part of the Strategic Budgeting process, Corporate Finance and Budget (F&B) produces the
Capital Budget and Plan of Finance. The Capital Budget consists of all divisions' capital plans or
Capital Improvement Programs (CIP). The Plan of Finance is a five year funding plan of the CIP
that the Port publishes on an annual basis.
The divisions review and revise their CIP in conjunction with the review of their existing
business plans and strategies. The CIP is comprised of at least Committed projects from the 2011
CIP, less any that have been deleted, plus any Prospective projects that meet the criteria to move
forward to Committed status. The CIP may include Business Plan Prospective projects if
coverage targets are met. Divisions are encouraged to review CIP cash flows with respect to
timing and reasonableness to ensure effective use of capital capacity.
b. Capital Budget Process:






A preliminary capacity/funding analysis will be performed once the 2nd quarter update is
completed, but no later than by the end of August.
At the end of September, divisions will submit to Corporate Finance & Budget (F&B) the
CIP based on their updated business plans and 2011 forecasted actual (which includes actual
through second quarter). The funding implications of these capital plans will be reviewed
with the divisions and business units.
Following F&B funding analysis and Executive review of preliminary plans, business units
and divisions will finalize their business plans including their CIP for 2012 -2016.
This information will then be reviewed with Executive, presented to the Commission,
included in the 2012 Budget and Business Plan document.

After the close of the 2011 fourth quarter in January 2012, the Approved 2012 Capital Budget
will be determined based on the 2011 fourth quarter CIP update. Revised spending estimates will
be used to establish the 2012 approved funding amount for each Committed Project and for
divisions as a whole. However, only the original list of Committed Projects identified in the Plan
of Finance will be included in the approved funding amount at this time. The Approved 2012
Capital Budget will become the standard for quarterly variance reporting during the year.
Note: Even though the Commission reviews the Capital Budget in November, each individual
CIP project, with total costs in excess of $300,000, is presented and approved by the Commission
in public meeting for spending authority.

Filename: _13 Appendixes
Updated: 9/21/2010

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Port of Seattle

2012 Preliminary Budget

FIGURE A-2: CAPITAL BUDGET PROCESS FLOW CHART

CAPITAL BUDGET PROCESS FLOW CHART

Preliminary
Capacity/Funding Analysis
Performed

Proposed Capital Budget
Made Available
Simultaneously with the

Divisions Submit to F&B CIP
based on updated Business
Plans & 2011 Forecasted
Actual

All Final Documents due to
F&B

Operating Budget for 1st &
2nd Reading

Commission
Reviews Capital
Budget & Plan
of Finance

Filename:_13 Appendixes
Updated: 12/28/2009

Commission Adopts Budget

XIII-8

Funding Implications are
Reviewed with Divisions &
Business Units

Business Units and Divisions
Finalize Business Plans
including CIP for 2012-2016

Commission Workshops are
Held

Information is reviewed with
Executive Management and
Makes Recommendations

Port of Seattle

2012 Preliminary Budget

c. Capital Budget Planning Calendar:
Following is the proposed 2012 capital budget planning calendar:
Date

Activity

7/29/11

CIP 2nd Quarter Update completed (including CIP Funding)

8/16/11

Commission Special Session on Business and Capital Plans

8/26/11

Preliminary Seaport and Real Estate Forecast Models due to F&B

8/29-9/2/11

Preliminary Non-Aviation capital capacity analysis by F&B

9/19-9/21/11

Executive Review of Aviation, Seaport, Real Estate, Corp, and CDD Capital Budgets

9/23/11

Preliminary Aviation Forecast Model due to F&B

9/27/11

Aviation, Seaport, Real Estate & Corp. Capital Budgets Commission Workshop

9/30/11

Aviation, Seaport and Real Estate Forecast Model due to F&B
(CIP must match PSFS)

10/3-10/7/11

Capacity/Funding Analysis (Port-wide preliminary) by F&B

10/5/11

F&B creates ―CAPBUD‖ database from Projects before Q3-2011 update
(This is a target date, actual date may change)

10/7/11

All divisional budget final documents due to F&B

10/10-10/14/11

F&B Finalize Capacity/Funding Analysis

10/18/11
10/25/11

Preliminary Budget Document available to Commission
Commission Draft Plan of Finance Workshop

10/27/11
11/8/11

Release of 2012-2016 Capital Budget and Draft Plan of Finance as part of the
Preliminary 2012 Budget and Business Plan document
First Reading and public hearing of the 2012 Budget

11/22/11

Second Reading and Final Passage of the 2012 Budget

12/14/11

Release of Final Budget and Draft Plan of Finance Document

Filename: _appendix.doc
Updated: 10/18/2011

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APPENDIX B: FINANCIAL MANAGEMENT POLICIES
The primary purpose of the Port is to broaden and strengthen the economic base of the port district. The Port
uses key criteria in various combinations as it pursues its capital and operating programs and projects. Clearly,
national and international economic strengths or weaknesses have a direct bearing upon the Port's financial
viability and role as an economic engine for the region.

1.

KEY FINANCIAL TOOLS

The Port uses several tools to monitor its financial performance and these are described below
a. Long-term Target: The Port's long-term targets provide high-level policy guidance. These targets
provide guidance to the business plans created by each division.
b. Business Plans: The business plans set the strategic direction and priorities for each division. The
business plans are a planning tool, which link operations, capital investments, and the interests of the
Port's customers and the community.
c. Operating Performance Budget: The Operating Budget is a one-year slice of the business plans. It is an
essential component of the Port's management planning and control process. It quantifies line of business
and departmental plans for the next year in both operational and monetary terms. Throughout the year, the
Responsibility Reports (which compare actual results to budget) are generated monthly and variances from
budget are analyzed on a monthly basis, and more extensively each quarter, to determine if corrective
action is needed. Divisions and departments prepare a quarterly forecast, which is incorporated into the
quarterly Performance Report, which provides explanation of variances from the approved plan and is
presented quarterly to Executive Management and Commission in public meetings.
d. Balanced Budget: The Port prepares an annual budget and supports, encourages and commits to a
balanced budget in which revenues exceed expenses. In so doing, the practice is to pay for all current
operating expenses with current revenues and not postpone current year operating expenses to future years
or accrue future year's revenues to the current year. The Port's policy further requires that budgeted
operating expenses do not exceed budgeted revenues, and on-going expenses do not exceed on-going
revenues.
e. Operating Forecasts: Included in the budget document are five-year forecasts or projections of the
divisions operating revenues and expenses. The first year of this forecast is the Operating Performance
Budget.
f.

Capital Budget: A detailed plan of proposed outlays or capital expenditures arising from the acquisition
or improvement of the Port's fixed assets and the means of financing them through bond proceeds, grants
and operating revenues. This document serves as an operational and planning tool and it is directly tied to
the business plans. The document identifies proposed capital projects at the airport and on the waterfront
and prioritizes those projects.

g. Capital Expenditures: Expenditures that arise from the acquisition or improvement of the Port's fixed
assets. Port assets are given a useful life of more than three years when they become active. The
expenditures reflected in the capital budget cover projects anticipated to provide modernized Seaport,
Airport and Real Estate facilities for sustained growth of the Port.
h. Capital Budget Impact on the Operating Budget: Its impact on the Operating Budget is through
Capitalized Labor or Charges to Capital Projects, which include the salaries and benefits costs associated
with capital projects. These costs are subtracted out of the operating budget and then budgeted in the
capital budget as part of the cost of the project(s). It is also impacted in the form of increased operating,
maintenance and depreciation expenses because of the new assets. Depreciation is a non-cash item that
represents the use of long-term assets. Port assets are given a useful life of more than three years when
Filename: _appendix.doc
Updated: 10/18/2011

XIII-10

Port of Seattle

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they become active and each year some of that useful life is used up, worn or depreciated. The capitalized
labor or charges to capital projects is displayed in table III-3 and the depreciation is displayed in table III2. The capitalized labor is also displayed in similar tables in section IV thru VIII.
i.

Plan of Finance: The Five-year Capital Budget is the basis of the Plan of Finance. This document
provides a funding plan of the capital program developed within the financial targets and forecasts
described within the Draft Plan of Finance section. The Draft Plan of Finance is prepared and presented to
the Port Commission concurrently with the Operating Budget. See further discussion in the Draft Plan of
Finance, section XI.

j.

Capital Investment Matrix: The matrix provides an analytical framework for capital projects. The
results of the analysis provide financial and non-financial information for the Port Commission as a guide
for capital investment decisions.

k. Financial and Operating Indicators Report: The Port uses financial and operating indicators to monitor
its financial performance and budget. The reports are produced and distributed monthly to the Port
Commission and Executive Management.
l.

Treasury Management: Using its internal Treasury since July 2002, the Port has experienced increased
investment earnings, faster mobilization of funds, on-line banking capabilities, reconciliation and full
control of its cash and investments.

m. General Coverage Ratios and Cash Flow Margins: As part of its financial modeling, the Port targets
that Airport cash flow equals 1.25 times all Airport related revenue debt and that Seaport cash flow equals
1.5 times all Seaport related revenue debt. In addition, the Port targets general obligation bond debt service
use no more than seventy-five percent of the annual tax levy.
n. Bond Coverage Ratios: The Port, through financial modeling, runs projections for its revenue bond debt
service coverage ratio. Although the Port has an obligation under First Lien Revenue Bond covenants to
maintain a ratio of 1.35, as a matter of practice a ratio of at least 1.8 is maintained. Debt service coverage
may fall below this target level during periods of construction borrowing prior to the time that revenue
producing assets come on-line.
o. Fund Balances: Working capital fund balances are maintained in the General Fund and the Airport
Development Fund at a targeted level of approximately nine months of operating and maintenance
expenses. The Port maintains $5 million in the Renewal and Replacement Fund as required by bond
documents.
p. Performance/Variance Report: A report in narrative form explaining the reason or causes of variances
between actual revenues and expenses versus budgeted amounts on a quarterly basis. A good and
accurate monthly and quarterly performance/variance report is a very important tool for management.
Divisions and departments prepare a quarterly year-end forecast, which is incorporated into this report and
it is presented quarterly to Executive Management and the Commission in public meetings.
q. Commitment Control: The Port has in place a commitment control ledger that monitors department
budgets which prevents departments from exceeding their total budget without approval.

2. FINANCIAL POLICIES AND DESCRIPTION OF MAJOR FUNDS
This section, pages XIII-11 through 15 presents a summary of the Port's major financial policies and
description of its major funds.
a. Organization: The Port of Seattle (the "Port") is a municipal corporation of the State of Washington,
organized on September 5, 1911, through enabling legislation by consent of the voters within the Port
district. In 1942, the local governments in King County selected the Port to operate the Seattle-Tacoma
International Airport (the "Airport"). The Port is considered a special purpose government with a
separately elected commission of five members and is legally separate and fiscally independent of other
State or local governments. The Port has no stockholders or equity holders. All revenues or other receipts
Filename: _appendix.doc
Updated: 10/18/2011

XIII-11

Port of Seattle

2012 Preliminary Budget

must be disbursed in accordance with provisions of various statutes, applicable grants, and agreements
with the holders of its bonds.
b. Reporting Entity: The Port reports the following fund: the Enterprise Fund accounts for all activities and
operations of the Port.
The Enterprise fund is used to account for operations and activities that are financed at least in part by fees
or charges to external users for Airport Facilities, Seaport and Real Estate properties. Therefore, the Port of
Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the Port's major business
activities, which are comprised of three operating divisions - Aviation, Seaport, Real Estate; a new Capital
Development division and a Corporate division. The Aviation Division ("Aviation") serves the
predominant air travel needs of a five-county area. The Airport has 19 U.S.-flag passenger air carriers
(including regional and commuter air carriers) and ten foreign-flag passenger air carriers providing daily
nonstop service from the Airport to 97 cities, including 19 foreign cities. The Seaport Division's
("Seaport") primary focus is on facilities that serve large vessels including containerized and noncontainerized cargo ships and cruise ships. The Seaport is a landlord port with major tenants including
shipping companies, terminal operators and other maritime related businesses. The Seaport's container
business involves the leasing of property and equipment used primarily for the transfer of international
containerized cargo arriving by ship to various modes of land transportation destined for the Pacific
Northwest and for other regions of the country and the reverse transfer of domestic goods and empty
containers arriving by rail or truck to outbound ships for distribution to other countries around the world.
The Real Estate Division incorporates projects, functions and resources from the Seaport, the Airport and
the former Economic Development group. The Real Estate Division manages the Port's holdings in
commercial real estate, recreational marinas, industrial fishing terminals and developable property.
The divisions have labor workforces subject to various collective bargaining agreements. These
workforces support the operations and maintenance of the divisions.
The new Capital Development Division was established during 2008 and became fully operational during
2009. It houses existing engineering, project management and construction functions and the Port's new
Central Procurement Office, which consolidates contracting and procurement functions.
The Corporate division provides various support services to the operating divisions and its expenses are
allocated and charged to the operating divisions.
Within the Enterprise Fund, the Port segregates non-operating expenses made to public entities which are
funded by the ad valorem tax levy. This includes expenses for district schools and infrastructure
improvements to the state and region in conjunction with other agencies. These projects are controlled by
other governmental entities and are not reflected in the Port's financial statements.
c. Basis of Accounting and Budgeting: The Port does not distinguish between the Basis of Accounting and
the Basis of Budgeting since the principles set forth as the Basis of Accounting are observed in the
budgeting process. The Port is accounted for on a flow of economic resources measurement focus. The
financial statements and the budget are prepared in accordance with accounting principles generally
accepted in the United States of America as applied to governmental units using the accrual basis of
accounting under which revenue transactions are recognized when earned and expenses are recognized
when incurred regardless of the time the cash is received or disbursed. The Government Accounting
Standard Board ("GASB") is the accepted standard-setting body for establishing governmental accounting
and financial reporting principles. GASB Statement No. 20, Accounting and Financial Reporting for
Proprietary Funds and Other Governmental Entities that Use Proprietary Fund Accounting, requires that
governments' proprietary activities apply all GASB pronouncements as well as the pronouncements of the
Financial Accounting Standards Board ("FASB") and its predecessors issued on or before November 30,
1989, unless those pronouncements conflict with or contradict GASB pronouncements. As allowed by
GASB Statement No. 20, the Port has elected to implement FASB Statements and Interpretations issued
after November 30, 1989.

Filename: _appendix.doc
Updated: 10/18/2011

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Port of Seattle

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d. Use of Estimates: The preparation of the Port's budget in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions in
reporting of revenues and expenses in certain instances. Thus actual amounts could differ from those
estimates.
e. Operating Revenues: Fees for services, rents and charges for the use of Port Facilities such as:
Dockage, Wharfage, Berthage and Moorage, Airport Transportation Fees, Airport Landing Fees,
Equipment, Property Rentals and other revenues generated from port's operations are reported as operating
revenue.
f.

Non-Operating Revenues: Revenues that do not result from the normal operation of Port's business such
as: Ad Valorem Tax Levy, Interest Income, Non-operating Grants, Passenger Facilities Charges and
Customer Facilities Charges and other revenues generated from non-operating sources are classified as
non-operating.

g. Operating & Maintenance Expenses: Cost or charges that arise from the normal operation of Port's
business. These are costs or services required for a department/division to function. These include Salaries
and Benefits, Equipment expense, Supplies and Stock, Travel and Other Employee expenses and all Direct
Charges, even those from Corporate and from other Divisions.
h. Non-Operating Expenses: Cost or charges that do not arise from the normal operation of the Port's
business. An example is interest expense.
i.

Capital Policy: The Port's policy is to capitalize all asset additions - Tangible Assets [Property, Plant
and Equipment] and Intangible Assets, if they exceed $20,000, whether it is a single payment or an
accumulation of related costs and with an estimated useful life of more than three years. Any asset costing
less than $20,000 will be expensed. Land, facilities and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed on a straight-line basis. Buildings and improvements are assigned
lives of 30 to 50 years, equipment 3 to 20 years, and furniture and fixtures 5 to 10 years.

j.

Debt Policy: The Port's debt policy is designed to ensure appropriate use and management of debt
including compliance with various laws, regulations and agreements and effective management of risk.
The policy requires use of an independent financial advisor and describes the roles of Commission and
staff. The policy describes the type and structure of debt and sets forth limitations on new debt. Key
limitations include minimum debt service coverage requirements for revenue bond debt of 1.25x for the
Airport and 1.50x for the Seaport and for Real Estate and that General Obligation bond debt service cannot
exceed 75% of the annual tax levy. The policy establishes savings targets for refundings ranging from 3%
for a current refunding with a short-term maturity/call date to 9% for a LIBOR based swap refunding with
a long-term maturity/call date. The policy also provides guidelines for the sale of bonds.

k. Description of Major Funds: There are dozens of funds that are summarized into the Enterprise Fund.
The Enterprise Fund accounts for all activities and operations of the Port. The Enterprise fund is connected
to the functional units in that it is used to account for operations and activities that are financed at least in
part by fees or charges to external users for Airport Facilities, Seaport and Real Estate properties.
Therefore, the Port of Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the
Port's major business activities, which are comprised of three operating divisions - Aviation, Seaport, Real
Estate; a Capital Development division and a Corporate division. Some of the descriptions of the major
funds are:
Types of Funds
Fund Name
1. Operating General Fund

Filename: _appendix.doc
Updated: 10/18/2011

Fund #
00010

Fund Description
The general fund is the operating and capital fund for all
Port-owned properties and businesses with the exception
of the Seattle-Tacoma International Airport (Aviation).
Transfers are made from this fund to the revenue bond
fund for debt service and reserve requirements stemming
from revenue bonds issued for non-Airport improvements.
All Port payrolls, all purchases of materials, supplies and

XIII-13

Port of Seattle

2012 Preliminary Budget

Types of Funds

2. Special
Facility

Fund Name

Fund #

Fund Description
services, and all non-Airport capital acquisition
expenditures which are not otherwise funded are made
from this fund. Periodic reports are generated indicating
what general fund monies have been expended for payrolls
or accounts payable that should be reimbursed by the other
funds. These amounts will then be transferred from such
other funds to the general funds as reimbursements.

Airport
Development Fund
(ADF)

03040

This fund is used as a depository for all Airport receipts,
and to fund operating and maintenance expenses related to
the Airport (Aviation). Transfers are made from this fund
to reimburse the general fund for operating and
maintenance expenses. Transfers are made from this fund
to the revenue bond fund for debt service and reserve
requirements stemming from revenue bonds issued strictly
for Airport improvements. Capital acquisition expenditures
which are not otherwise funded are also made from this
fund.

Tax Levy

00020

The Tax Levy fund was established in 2002 and is used to
receive the ad valorem tax levy by the Port. (These tax
levy proceeds were previously deposited in the General
Fund). Proceeds are used for General Obligation (G.O.)
bonds debt service. Projects that meet criteria established
by the Port may use Tax Levy as a source of funding.

Signatory Lease
and Operating
Agreement (SLOA)
Deposit Surety
Fund

03042

Established in 2006, the SLOA fund is the ―Security Fund‖
as defined in the Aviation's 2006 Signatory Lease and
Operating Agreement, section 19.2, Security Fund. Cash
is held in this fund in lieu of lease performance sureties for
the Airlines.

Customer Deposits
Fund

06010

This fund has been established as a depository of lease
deposits and other monies held by the Port as surety, but
belonging to Port of Seattle customers.

Passenger Facilities
Charges (PFC) :
 Revenue
 Capital

Customer Facility
Charge (CFC)

Filename: _appendix.doc
Updated: 10/18/2011

06054
03060

CFC01

The funds accruing to the PFC Revenue fund are derived
from passenger facilities charges levied on embarking
passengers at Seattle-Tacoma International Airport. Funds
are to be used to pay PFC debt service and for specificallydesignated airport facility improvement projects. All
PFC's revenues are deposited to the Revenue fund
(06054). From the Revenue fund, there is a required
monthly transfer of monies to the Debt Service fund equal
to 1/6th of semi-annual debt service payment by the 25th of
each month. The remaining balance of the Revenue fund,
which includes interest earnings, is then transferred to
Capital fund (03060).
Established in 2006, the CFC Fund holds revenue derived
from charges imposed upon customers of rental car
companies accessing the Airport. Funds are to be used to
pay CFC debt service, for specifically-designated Rent-AXIII-14

Port of Seattle

2012 Preliminary Budget

Types of Funds

3. Debt
Related

4. Other
Operating

Fund Name

Fund #

Fund Description
Car (RAC) facility projects and their improvements, and
specified RAC operating expenses.

Fuel Hydrant Fund
 Revenue
 Debt Service
 Project
 Reserve

Held in
Trust

The funds accruing to the Fuel Hydrant Revenue Fund are
derived from Pledged Lease Revenue and Other Revenue
as defined in Resolution No. 3504, as amended. Funds are
to be used to pay Fuel Hydrant bonds debt service.

Bond Funds

Various

The Port of Seattle issues bonds pursuant to bond
resolutions to fund its Capital Improvement Program.
Proceeds from bond issues are used to fund construction,
capitalized interest and reserves, see below.

Construction Fund
(CF)

Various

Proceeds from bond issues are used for the Port's facilities
expansions and improvements, land acquisition, and/or pay
interest during construction. Separate funds are set up for
each bond issue to allow for the tracking and reconciliation
of bond proceeds expenditures.

Reserve Fund

Various

Established at the time of bond issuance for the purposes
of securing the payment of principal and interest on related
outstanding bonds. Terms set forth in the bond covenants
dictate how much the Port is required to maintain in the
Reserve fund. Not all bond issues have a cash funded
Reserve fund; the Port may instead choose to maintain
qualified surety and/or a qualified letter of credit.

Debt Service Fund
(DSF)

Various

Established as per the bond resolution to facilitate fund
flow related to debt service

Repair and
Renewal Fund

03150

Established pursuant to Master Resolution 3577, Section 4.
(b), the proceeds of the fund may be used by the Port to
pay extraordinary operating and maintenance expenses,
make capital replacements, additions, expansions, repairs
and renewals of the Facilities of the Port.

Filename: _appendix.doc
Updated: 10/18/2011

All Fuel Hydrant revenues are deposited to the Revenue
account. From the Revenue account, there is a required
monthly transfer of monies to the Debt Service account
equal to 1/12th of the annual debt service payment.
Established at the time of bond issuance, the Reserve fund
is intended to be used for debt service in the event the Port
cannot repay.

XIII-15

Port of Seattle

2012 Preliminary Budget

3. REVENUE AND EXPENSE ASSUMPTIONS
Operating revenues are developed based on the terms of various lease agreements and on forecasted activity
levels. Operating expenses are developed based on historical experience, forecasted activity levels and
inflation.
Aeronautical revenues are based on cost recovery. Non-airline revenues at the Airport are projected to
increase by $5.9 million or 4.0% versus the 2011 budget. Seaport revenues are projected to grow by 2.1%,
excluding the Security Grant revenue, and Real Estate revenues are anticipated to increase by 6.1% over the
2011 budget. The key business activities forecast for the Airport, Seaport and Real Estate divisions are as
follows:







Enplaned passengers: 1.5% increased from 2011 budget
TEU's volume: 11% increase from 2011 budget
Cruise passengers: 11% increase from 2011 budget
Grain volume: No change from 2011 budget
Marina occupancy rate: 94% compared to 93% in 2011 budget
Commercial Properties occupancy rate: 87% compared to 90% in 2011 budget

Port wide salaries for exempt and non-exempt employees are budgeted to increase by an average of 3.0% for
2012 and benefit costs are budgeted in two parts for employees in non-union jobs:


The first part represents the costs that are not salary based. This includes medical and dental benefits,
401(a) contributions, and Flexible Spending Account fees. This amount totals $1279.2 per benefit
eligible employee per month.



The second part represents costs that are salary based. This includes FICA, PERS, life and disability
insurance as well as PTO and EI amounts. These items total 16.61% of pay.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-16

Port of Seattle

2012 Preliminary Budget

APPENDIX C: BUSINESS ASSESSMENT
a. Local Economy and Outlook
The U.S. economic outlook remains extremely uncertain as of October 2011. Real gross domestic product
growth is low and unemployment remains over 9%. The political dysfunction at the federal level has dashed
any hope that fiscal policy will be able to lend monetary policy a hand in stabilizing the economy. Europe is
doddering on the brink of recession and its financial markets are affected by the poor credit standing of some
of its number countries. In Asia, China and India are slowing as their governments move to cool overheating
economies.
The Washington economy is not immune to the uncertainty plaguing the global economy. According to the
Washington State Economic and Revenue Forecast Council, the state is likely to outperform the U.S. but this
will not save us from a downturn if the national economy falters. While manufacturing continues to expand
and the exports section continues to grow for the state, construction remains weak and has a disproportionately
negative impact on revenue. Single-family housing construction remains in the doldrums. Single-family
permits in the first two months of the third quarter averaged 13,300 at a seasonally adjusted annual rate
(SAAR). While this is a bit better than the second quarter of 2011, it is still lower than any other quarter since
the second quarter of 2009.
The manufacturing sector, which has been the bright spot in the employment recovery, added 4,200 jobs, of
which 3,500 were in the aerospace sector. Private service-providing industries, which account for two out of
three jobs in Washington, have been weak adding just 3,800 jobs of which 1,800 were in the software sector. It
has been more than two years since the recession ended but there are still more than 140,000 fewer jobs in the
state than there were at the start of the recession.
The state's farming and export sectors are also doing well. Washington State exports rose 31.5% in the second
quarter of 2011 compared to the second quarter of 2010. Exports of transportation equipment (mostly Boeing
planes) were up 17.8% compared to the previous year. Transportation equipment exports normally account for
about 50% of our exports. Excluding transportation equipment, exports were up 44.2% over the year.
Overall, the state's economy is likely to outperform the U.S. in the near term.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-17

Port of Seattle

2012 Preliminary Budget

TABLE C-1: SUMMARY FORECAST
SUMMARY FORECAST
(Annual Percent Change)

2009

2010

2011

2012

2013

-4.6
9.3
-2.9
0.6
-41.2
6668.2
1.2

-1.4
9.6
0.8
0.3
21.6
6733.3
1.0

1.1
9.3
2.5
2.2
-0.5
6801.4
1.0

1.4
9.2
1.9
0.9
3.3
6878.0
1.1

2.1
8.6
3.1
1.5
29.6
6968.6
1.3

Age 17 and Under
% of Total

1581.9
23.7

1585.2
23.5

1585.5
23.3

1595.9
23.2

1612.3
23.1

Age 6 - 18
% of Total

1152.3
17.3

1147.2
17.0

1144.1
16.8

1144.1
16.6

1154.1
16.6

Age 18 and Over
% of Total

5086.3
76.3

5151.0
76.5

5216.0
76.7

5216.0
76.7

5356.2
76.9

Age 21 and Over
% of Total

4798.5
72.0

4861.3
72.2

4928.7
72.5

4928.7
72.5

5078.1
72.9

Age 20 - 34
% of Total

1389.8
20.8

4808.1
20.9

1429.9
21.0

1429.9
21.0

1476.4
21.2

Age 18 - 64
% of Total

4288.5
64.3

4327.6
64.3

4368.7
64.2

4368.7
64.2

4425.1
63.5

Age 65 and Over
% of Total

797.7
12.0

823.4
12.2

847.3
12.5

847.3
12.5

931.1
13.4

Washington State Economic Forecast
Employment
Unemployment Rate
Real Personal Income
Consumer Price Index
Housing Permits
Total Population (in 000's)
% Change

Source: Washington State Economic and Revenue Forecast Council, September 2011
www.erfc.wa.gov

Filename: _appendix.doc
Updated: 10/18/2011

XIII-18

Port of Seattle

2012 Preliminary Budget

TABLE C-2: STATE EMPLOYMENT BY INDUSTRY

Washington State 2010 Average Employment Classified by Industry
Average

Average

Average

Industry Description

Firms

Employment

Annual Wage

Agriculture, Forestry, Fishing, and Hunting
Mining
Ultilities
Construction
Manufacturing
Wholesale Trade
Retaill Trade
Transportation & Warehousing
Information
Finance and Insurance
Real Estate, Rental and Leasing
Professional, Scientific, and Technical Services
Management of Companies and Enterprises
Administrative, Support, Waste Management and Remediation Services
Educational Services
Health Care and Social Assistance
Arts, Entertainment, and Recreation
Accommodation and Food Services
Other Services (Except Public Administration)
Government
Total

7,249
166
232
21,674
6,895
12,988
14,093
3,956
2,418
5,629
6,313
18,470
604
9,441
2,400
14,242
2,427
12,781
64,938
2,092
209,003

87,721
2,148
4,815
130,719
254,831
118,241
303,051
78,683
102,203
88,151
43,857
157,196
31,767
130,261
33,752
322,265
44,598
218,144
130,597
525,473
2,808,470

$24,027
$55,663
$77,591
$51,120
$64,927
$63,344
$30,026
$47,731
$109,766
$70,132
$38,362
$75,367
$95,770
$41,467
$35,162
$44,668
$25,122
$17,638
$24,229
$51,389
$48,519

Source: Washington State Employment Security Department Labor Market and Economic
Analysis, Quarterly Census of Employment and Wages,Annual Averages 2010 QCEW Annual Data

Filename: _appendix.doc
Updated: 10/18/2011

XIII-19

Port of Seattle

2012 Preliminary Budget

TABLE C-3: TOP 10 PUBLIC COMPANIES IN WASHINGTON
Washington State top 10 Companies
(ranked by 2010 total Sales)

# of
Employees

2010 Operating
Income
2010 Sales

Company

Industry

Costco Wholesale

Retail

147,000

$2,085,000

$77,946 www.costco.com

Microsoft

Computer software

89,000

$24,157,000

$62,484 www.microsoft.com

Amazon.com

Retail

33,700

$1,406,000

$34,204 www.amazon.com

Starbucks

Retail

137,000

$1,324,300

$10,707 www.starbucks.com

Paccar

Transportation

17,700

$648,500

$10,293 www.paccar.com

Nordstrom

Retail

54,000

$1,118,000

$9,700 www.nordstrom.com

Weyerhaeuser

Forest products

14,250

$617,000

$6,552 www.weyerhaeuser.com

Expeditors International

Transportation

12,880

$547,230

$5,968 www.expd.com

Alaska Air Group

Transportation

12,039

$484,800

$3,832 www.alaskaair.com

Expedia

Retail

8,900

$737,457

$3,348 www.expediainc.com

(in thousands)

Website

(in millions)

Source: Data extracted from the Seattle Times 2010 Best of the Northwest database
http://seattletimes.nwsource.com/flatpages/businesstechnology/2010nwcompaniesfinancials.html

b. North American West Coast Port s' Container Volume Comparison
TABLE C-4: NOR TH AMERICAN WEST COAST PORTS' TOTAL CONTAINER VOLUMES
COMPARISON
North American West Coast Ports' Total Container Volumes
2000- 2010
Total container volume measured in TEUs (= domestic + international full and empty TEUs)
'00 - '10
avg.
annual

'10 vs. '09

PORT

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

% +/-

% +/-

Long Beach

4,600,787

4,462,967

4,526,365

4,658,124

5,779,852

6,709,818

7,290,365

7,312,465

6,487,816

5,067,597

6,263,499

3.1%

23.6%

Los Angeles

4,879,429

5,183,520

6,105,863

7,178,940

7,321,440

7,484,624

8,469,853

8,355,039

7,849,985

6,748,995

7,831,902

4.8%

16.0%

Oakland

1,776,922

1,643,585

1,707,827

1,923,104

2,047,504

2,273,990

2,391,745

2,387,911

2,233,533

2,045,211

2,330,202

2.7%

13.9%

Portland

290,943

278,491

255,745

339,571

274,609

160,479

214,484

262,246

245,459

174,203

181,100

-4.6%

4.0%

-

-

-

-

-

-

-

16,686

182,242

265,223

343,366

-

29.5%

-

Prince Rupert
San Francisco

50,147

34,618

23,682

20,633

32,045

-100.0%

-

Seattle

1,488,268

1,315,109

1,438,872

1,486,382

1,775,858

2,087,929

1,987,360

1,973,504

1,704,492

1,584,596

2,139,577

3.7%

35.0%

Tacoma

1,376,377

1,320,274

1,470,834

1,738,068

1,797,560

2,066,447

2,067,186

1,924,934

1,861,352

1,545,855

1,455,467

0.6%

-5.8%

Vancouver

1,167,489

1,146,577

1,465,292

1,547,371

1,664,906

1,767,379

2,207,748

2,307,291

2,492,107

2,152,462

2,514,309

8.0%

16.8%

15,630,362 15,385,141 16,994,480 18,892,193 20,693,774 22,550,666 24,628,741 24,540,076 23,056,986 19,584,141 23,059,422

4.0%

17.7%

Total:

-

2008 Vancouver volumes first year of VFPA
Data source: Port Authorities

Filename: _appendix.doc
Updated: 10/18/2011

XIII-20

-

-

-

-

Port of Seattle

2012 Preliminary Budget

c. Economic Impact
The Port of Seattle retained Martin Associates to evaluate the economic impacts generated by the Seattle
seaport, Seattle-Tacoma International Airport and the Port's non-maritime and non-aviation tenants, based on
business activity data collected in 2007-2008. The firm has conducted similar studies at more than 250
seaports and most major airports in North America.
For the seaport, the study measures the impacts of five distinct types of waterborne activity:






Marine cargo activity
Fishing activity at marine terminals (and related services)
Waterborne passenger activity (cruise and shoreside operations)
Marina activity (recreational and transient boating)
Non-marine cargo and non-aviation Port of Seattle real estate tenants (restaurant, retail, and industryrelated services.

For the airport, the study measures the impacts of five business sectors:






Airline/airport service sector
Freight transportation sector
Passenger ground transportation sector
Contract construction/consulting services sector
Visitors' industry sector

The study includes interviews with 929 firms doing business with the Port, plus surveys with 950 aviation
passengers and 600 cruise passengers and ship crew. The analysis of real estate tenants is based on a survey of
291 tenants not included in other seaport operations.
The results provide a snapshot of the economic impact of Port of Seattle in 2007-2008, and impact models for
each business unit operated by the Port of Seattle. The study provides models to assess the economic impacts
of specific Port of Seattle capital development projects.
By air, land and sea, the Port of Seattle connects passengers and cargo to destinations around the globe. From
tourism and international trade to fishing, boating and imported products, the Port affects nearly every person
in the Northwest region-generating nearly 194,000 jobs-and affects many others throughout the world.
Successful trade and travel generate substantial-and dependable-revenue, including $17 billion in business
revenue in 2007. The Port of Seattle's airport, seaport and real estate activities contribute to the local and
regional economy on multiple levels through the reinvestment and re-spending of Port-generated revenue and
income.
Results demonstrate the Port is a strong driving force for sustainable economic vitality. When combined with
its tenants, Port of Seattle is responsible for the direct employment of 111,317 individuals, ranking among the
top job-producers in the region including Microsoft (35,510 in Seattle and Washington state), Boeing (74,517),
and the University of Washington (28,188)¹.
Port of Seattle seaport and airport facilities, as well as non-maritime and non-aviation related Port real estate
tenants, generate the following economic impacts for the local and regional economy in 2007:


111,317 direct jobs are generated by Port-owned transportation facilities.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-21

Port of Seattle

2012 Preliminary Budget



As the result of local and regional purchases by those individuals, an additional 62,128 induced jobs are
supported in the region.



20,540 indirect jobs were supported by $1.4 billion of local purchases by businesses supplying services at
the Port-owned facilities.



$3.8 billion of direct wages and salaries were received by those 111,317 directly employed by the Port's
transportation infrastructure. As the result of re-spending this income, an additional $5.1 billion of income
and consumption expenditures were created in the Seattle region, primarily King County.



Businesses providing services at Port-owned marine terminals and Sea-Tac Airport, as well as real estate
tenants, received $17.6 billion of revenue, excluding the value of cargo shipped through the airport and
marine facilities, and the landed value of the seafood caught by the fleet using Fishermen's Terminal,
Terminal 91 and the Maritime Industrial Center.



$867.0 million of state and local taxes were generated by activity at the Port of Seattle marine terminals,
real estate tenants, and Sea-Tac International Airport. Of the $867.0 million of state and local taxes, the
State of Washington receives about $561.1 million, and the balance, $305.9 million, was received by local
and county governments within the State. In addition, $439.4 million of federal aviation-specific taxes
were generated by activity at Sea-Tac International Airport.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-22

Port of Seattle

2012 Preliminary Budget

APPENDIX D:

BOND AMORTIZATION SCHEDULES

TABLE D-1: BOND AMORTIZATION SCHEDULE FOR 2011
Bond Type
Series

Original Issue
Amount

Issue
Date

Outstanding
Jan. 1, 2010

2010 Principal Payments
Due Date
Amount

Outstanding
Dec. 31, 2010

Interest Payments [1]
Due Date
Amount

GENERAL OBLIGATION BONDS
Limited Tax G.O., Series 2000A
$9,840,000 [16]
Limited Tax G.O., Series 2000B
$107,305,000
Limited Tax G.O., Series 2004A
$107,305,000
Limited Tax G.O., Series 2004B
$32,510,000
Limited Tax G.O., Series 2004C Ref.
$32,510,000 [3]
Limited Tax G.O., Series 2006 Ref.
$61,630,000 [15]
TOTAL GENERAL OBLIGATION BONDS

04/06/00
04/06/00
01/27/04
01/27/04
01/27/04
01/05/06

310,000
84,120,000
32,510,000
99,155,000
79,590,000
61,630,000
357,315,000

12/01/10
12/01/10

05/07/98
07/27/00
07/27/00
10/05/01
10/05/01
10/05/01
08/07/02
07/30/03
07/30/03
06/15/04
03/06/07
03/06/07
07/16/09
07/16/09
07/16/09

27,350,000
183,015,000
6,765,000
176,105,000
217,785,000
12,205,000
45,445,000
188,190,000
146,900,000
17,500,000
27,880,000
193,115,000
20,705,000
274,255,000
$22,748,866
1,559,963,866

08/10/10
08/10/10
02/01/10

252,190,000
8,310,000
31,035,000
99,440,000
35,730,000
124,625,000
551,330,000

03/01/10
03/01/10

108,830,000
14,150,000
121,840,000
66,515,000
62,925,000
200,715,000
574,975,000
2,686,268,866

09/01/10
08/01/10

11/01/10
11/01/10

310,000
3,305,000
6,675,000
11,525,000
21,815,000

80,815,000
32,510,000
92,480,000
68,065,000
61,630,000
335,500,000

06/01, 12/01
06/01, 12/01
05/01, 11/01
05/01, 11/01
05/01, 11/01
06/01, 12/01

15,810
4,913,298
1,562,400
4,939,225
4,114,388
3,065,725
18,610,845

27,350,000
136,060,000
3,290,000
9,620,000
4,575,000
7,360,000
2,330,000
5,345,000
-

06/01
02/01, 08/01
02/01, 08/01
04/01, 10/01
04/01, 10/01
06/01, 12/01
05/01, 11/01
01/01, 07/01
01/01, 07/01
06/01, 12/01
04/01, 10/01
04/01, 10/01
05/01, 11/01
05/01, 11/01

972,720
10,620,268
298,975
8,805,250
11,378,055
681,713
2,613,088
9,661,213
7,563,354
875,460
1,383,975
9,645,965
1,087,013
18,960,907

195,930,000

46,955,000
3,475,000
176,105,000
208,165,000
12,205,000
40,870,000
180,830,000
146,900,000
15,170,000
27,880,000
187,770,000
20,705,000
274,255,000
24,463,499
1,365,748,499

930,000
4,045,000
5,525,000
4,050,000
14,550,000

251,260,000
4,265,000
31,035,000
93,915,000
31,680,000
124,625,000
25,200,000
157,880,000
63,435,000
128,140,000
911,435,000

03/01, 09/01
03/01, 09/01
03/01, 09/01
03/01, 09/01
03/01, 09/01
02/01, 08/01
12/01
12/01
12/01

12,601,325
314,375
1,551,750
4,850,900
1,786,500
6,172,675
318,923
2,530,568
1,024,258
31,151,273

- [2]
1,475,000
8,420,000
62,925,000
72,820,000
283,300,000

108,830,000
12,675,000
121,840,000
58,095,000
200,715,000
502,155,000
2,779,338,499

Various [2]
02/01, 08/01
03/01, 09/01
03/01, 09/01
Various [2]
Various [2]

3,809,050
718,838
6,426,113
3,658,325
2,202,375
7,025,025
23,839,725
139,538,952

REVENUE BONDS
First Lien Bonds
Series 1998A Refunding
Series 2000B
Series 2000D Refunding
Series 2001A
Series 2001B
Series 2001C Refunding
Series 2001D Refunding
Series 2003A
Series 2003B
Series 2004 Refunding
Series 2007A
Series 2007B
Series 2009A
Series 2009B-1
Series 2009B-2
Total First Lien Bonds

$73,180,000
$221,590,000
$28,085,000
$176,105,000
$251,380,000
$12,205,000
$68,580,000
$190,470,000
$164,900,000
$24,710,000
$27,880,000
$200,115,000
$20,705,000
$274,255,000
$22,000,326

Intermediate Lien Bonds
Series 2005A New $
Series 2005A - Ref. 1994A
Series 2005A - Ref. 1996A
Series 2005A - Ref. 1997A
Series 2005C - Ref. 1996B
Series 2006A - Ref. 2000A
Series 2010A Ref. 1998A
Series 2010B New Money
Series 2010B Ref. 2000B
Series 2010C Ref. 2005D
Total Intermediate Lien Bonds

$252,190,000
$12,030,000
$31,475,000
$108,900,000
$40,120,000
$124,625,000
$25,200,000
$157,880,000
$63,435,000
$128,140,000

Subordinate Lien Bonds
Series 1997
Series 1998 Refunding
Series 1999A
Series 1999B
Series 2005D
Series 2008
Total Subordinate Lien Bonds
TOTAL REVENUE BONDS

Filename: _appendix.doc
Updated: 10/18/2011

[5,19]
[20]
[6]

[7]
[8]

[4, 5]

[18]

[20]
[21]

07/20/05
07/20/05
07/20/05
07/20/05
06/06/06
06/08/06
07/15/10
07/15/10
07/15/10
07/15/10

$108,830,000
$27,930,000 [4, 5]
$127,140,000
$116,815,000
$62,925,000 [21]
$200,715,000 [17]

03/26/97
05/07/98
11/14/02
11/14/02
08/16/05
06/11/08

[12]
[13]
[14]
[11]
[16]
[19]

[8]

[11]

04/01/10
11/01/10
07/01/10
06/01/10
10/01/10

03/01/10
09/01/10

09/01/10
08/10/10

XIII-23

84,547,954

Port of Seattle

2012 Preliminary Budget

SPECIAL REVENUE BONDS
PFC Rev. Bonds Series 1998A
PFC Rev. Bonds Series 1998B
TOTAL SPECIAL REVENUE BONDS

$118,490,000 [9]
$144,010,000 [9]

07/16/98
07/16/98

118,490,000
81,665,000
200,155,000

12/01/10
12/01/10

10,030,000
10,030,000

118,490,000
71,635,000
190,125,000

06/01, 12/01
06/01, 12/01

6,079,600
4,315,003
10,394,603

05/01/03

107,950,000
107,950,000

06/01/10

2,485,000
2,485,000

105,465,000
$105,465,000

06/01, 12/01

5,462,075
5,462,075

SPECIAL FACILITY REVENUE BONDS
Fuel Facilities Series 2003
$121,140,000 [10]
TOTAL SPECIAL FACILITY REVENUE BONDS
Notes:
[1] - Interest Payments shown in this schedule are gross amounts before use of any Capitalized Interest.
[2] - Estimated annual total. Interest paid monthly or at maturity. Principal paid annual or at maturity.
[3] - Series 2004C G. O. Ref. bonds refunded a portion of the Port's 1994B Revenue bonds, and refunded a portion of the 1994 G. O. bonds.
[4] - Series 2004 refunded a portion of the Port's existing series 1992A, 1994A, 1996B and 1998 revenue bonds.
[5] - Series 1998 (First Lien & Sub-Lien) refunded a portion of the Port's 1990 and 1992 bonds.
[6] - Series 2000D refunded a portion of the Port's 1990B bonds.
[7] - Series 2001C refunded a portion of the Port's 1990B bonds.
[8] - Series 2001D refunded a portion of the Port's 1992B bonds. It had a delayed delivery date of 8/7/02.
[9] - Debt services for PFC Bonds will be paid directly out of receipts from PFCs, not out of operating cash flow.
[10]-Debt services for Fuel Facilities is paid directly from Fuel Hydrant Facility income, not out of general operating cash flow.
[11] - Series 2005C refunded a portion of the Port's 1996B bonds. It had a delayed delivery date of 6/6/2006.
[12] - Series 2005A-Ref. 1994A refunded a portion of the Port's 1994A bonds.
[13] - Series 2005A-Ref. 1996A refunded a portion of the Port's 1996A bonds.
[14] - Series 2005A-Ref. 1997A refunded a portion of the Port's 1997A bonds.
[15] - Series 2006 G. O. Ref. Bonds refunded a portion of the Port's 1999A Special Facility bonds, and refunded a portion of the 2000A G. O. bonds.
[16] - Series 2006A Intermediate Lien refunded the outstanding 2000A First Lien series bonds.
[17] - Series 2008 Subordinate Lien refunded the 2003C bonds.
[18] - Series 2009B-2 First Lien Capital Appreciation Bonds were issued at $22,000,326 par. The outstanding principle balance at 12/31/2010 includes $2,463,000.00 of accumulated accreted interest.
[19] - Series 2010A Ref. 1998A Intermediate Lien refunded the outstanding 1998A First Lien series bonds.
[20] - Series 2010B Ref. 2000B Intermediate lien refunded a portion of the Port's 2000B Bonds.
[21] - Series 2010C Ref. 2005D Intermediate Lien refunded the 2005D Subordinate Lien Series Bonds.

The Port has authority to issue up to $250 million in Commercial Paper, as of 09/30/2010 the Port had $110.455 million outstanding.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-24

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Port of Seattle

2012 Preliminary Budget

TABLE D-2: BOND AMORTIZATION SCHEDULE FOR 2012
Bond Type
Series

Original Issue
Amount

Issue
Date

Outstanding
Jan. 1, 2011

2011 Principal Payments
Due Date
Amount

Outstanding
Dec. 31, 2011

Interest Payments [1]
Due Date
Amount

GENERAL OBLIGATION BONDS
Limited Tax G.O., Series 2000A
$9,840,000 [15]
Limited Tax G.O., Series 2000B
$107,305,000
Limited Tax G.O., Series 2004A
$107,305,000
Limited Tax G.O., Series 2004B
$32,510,000
Limited Tax G.O., Series 2004C Ref.
$32,510,000 [3]
Limited Tax G.O., Series 2006 Ref.
$61,630,000 [15]
TOTAL GENERAL OBLIGATION BONDS

04/06/00
04/06/00
01/27/04
01/27/04
01/27/04
01/05/06

80,815,000
32,510,000
92,480,000
68,065,000
61,630,000
335,500,000

3,495,000
7,005,000
12,100,000
350,000
22,950,000

77,320,000
32,510,000
85,475,000
55,965,000
61,280,000
312,550,000

06/01, 12/01
06/01, 12/01
05/01, 11/01
05/01, 11/01
05/01, 11/01
06/01, 12/01

4,723,260
1,562,400
4,605,475
3,538,138
3,059,163
17,488,435

07/27/00
07/27/00
10/05/01
10/05/01
10/05/01
08/07/02
07/30/03
07/30/03
06/15/04
03/20/07
03/20/07
07/16/09
07/16/09
07/16/09

46,955,000
3,475,000
176,105,000
208,165,000
12,205,000
40,870,000
180,830,000
146,900,000
15,170,000
27,880,000
187,770,000
20,705,000
274,255,000
24,463,499
1,365,748,499

02/01/11
02/01/11

8,300,000
3,475,000

04/01/11

10,165,000

11/01/11
07/01/11

4,890,000
7,745,000

06/01/11

2,430,000

10/01/11

5,610,000

02/01, 08/01
02/01
04/01, 10/01
04/01, 10/01
06/01, 12/01
05/01, 11/01
01/01, 07/01
01/01, 07/01
06/01, 12/01
04/01, 10/01
04/01, 10/01
05/01, 11/01
05/01, 11/01

2,568,300
104,250
8,805,250
10,833,967
681,713
2,350,025
9,274,813
7,563,354
756,410
1,383,975
9,380,090
1,087,013
18,960,907

42,615,000

38,655,000
176,105,000
198,000,000
12,205,000
35,980,000
173,085,000
146,900,000
12,740,000
27,880,000
182,160,000
20,705,000
274,255,000
26,307,325
1,324,977,325

251,260,000
4,265,000
31,035,000
93,915,000
31,680,000
124,625,000
25,200,000
157,880,000
63,435,000
128,140,000
911,435,000

03/01/10
03/01/10

915,000
4,265,000
5,855,000
4,255,000
2,170,000
320,000
17,780,000

250,345,000
31,035,000
88,060,000
27,425,000
124,625,000
23,030,000
157,880,000
63,435,000
127,820,000
893,655,000

03/01, 09/01
03/01, 09/01
03/01, 09/01
03/01, 09/01
03/01, 09/01
02/01, 08/01
6/01,12/01
6/01,12/01
6/01,12/01
02/01,08/01

12,555,200
106,625
1,551,750
4,566,400
1,584,000
6,172,675
948,750
7,786,363
3,151,563
6,328,231
44,751,556

108,830,000
12,675,000
121,840,000
58,095,000
200,715,000
502,155,000
2,779,338,499

09/01/11
08/01/11

101,165,000
11,125,000
121,840,000
49,215,000
200,715,000
484,060,000
2,702,692,325

Various [2]
02/01, 08/01
03/01, 09/01
03/01, 09/01
Various [2]

1,741,280
646,931
6,426,113
3,195,225
3,211,440
15,220,989
133,722,611

12/01/11
11/01/11
11/01/11
06/01/11

REVENUE BONDS
First Lien Bonds
Series 2000B
Series 2000D Refunding
Series 2001A
Series 2001B
Series 2001C Refunding
Series 2001D Refunding
Series 2003A
Series 2003B
Series 2004 Refunding
Series 2007A
Series 2007B
Series 2009A
Series 2009B-1
Series 2009B-2
Total First Lien Bonds

$221,590,000
$28,085,000
$176,105,000
$251,380,000
$12,205,000
$68,580,000
$190,470,000
$164,900,000
$24,710,000
$27,880,000
$200,115,000
$20,705,000
$274,255,000
$22,000,326

Intermediate Lien Bonds
Series 2005A New $
Series 2005A - Ref. 1994A
Series 2005A - Ref. 1996A
Series 2005A - Ref. 1997A
Series 2005C - Ref. 1996B
Series 2006A - Ref. 2000A
Series 2010A Ref. 1998A
Series 2010B New Money
Series 2010B Ref. 2000B
Series 2010C Ref. 2005D
Total Intermediate Lien Bonds

$252,190,000
$12,030,000
$31,475,000
$108,900,000
$40,120,000
$124,625,000
$25,200,000
$157,880,000
$63,435,000
$128,140,000

Subordinate Lien Bonds
Series 1997
Series 1998 Refunding
Series 1999A
Series 1999B
Series 2008
Total Subordinate Lien Bonds
TOTAL REVENUE BONDS

Filename: _appendix.doc
Updated: 10/18/2011

[20]
[6]

[7]
[8]

[4, 5]

[18]

[20]
[21]

07/20/05
07/20/05
07/20/05
07/20/05
06/06/06
06/08/06
07/15/10
07/15/10
07/15/10
07/15/10

$108,830,000
$27,930,000 [4, 5]
$127,140,000
$116,815,000
$200,715,000 [17]

03/26/97
05/07/98
11/14/02
11/14/02
06/11/08

[12]
[13]
[14]
[11]
[16]
[19]

[8]

[11]

03/01/10
09/01/11
06/01/11

02/01/11

09/01/11

XIII-25

7,665,000 [2]
1,550,000
8,880,000
18,095,000
78,490,000

73,750,066

Port of Seattle

2012 Preliminary Budget

SPECIAL REVENUE BONDS
PFC Rev. Bonds Series 1998A
PFC Rev. Bonds Series 1998B
TOTAL SPECIAL REVENUE BONDS

$118,490,000 [9]
$144,010,000 [9]

07/16/98
07/16/98

118,490,000
71,635,000
190,125,000

05/01/03

105,465,000
105,465,000

12/01/10

10,555,000
10,555,000

118,490,000
61,080,000
179,570,000

06/01, 12/01
06/01, 12/01

6,079,600
3,788,428
9,868,028

2,580,000
2,580,000

102,885,000
$102,885,000

06/01, 12/01

5,347,875
5,347,875

SPECIAL FACILITY REVENUE BONDS
Fuel Facilities Series 2003
$121,140,000 [10]
TOTAL SPECIAL FACILITY REVENUE BONDS

06/01/10

Notes:
[1] - Interest Payments shown in this schedule are gross amounts before use of any Capitalized Interest.
[2] - Estimated annual total. Interest paid monthly or at maturity. Principal paid annual or at maturity.
[3] - Series 2004C G. O. Ref. bonds refunded a portion of the Port's 1994B Revenue bonds, and refunded a portion of the 1994 G. O. bonds.
[4] - Series 2004 refunded a portion of the Port's series 1992A, 1994A, 1996B and 1998 revenue bonds.
[5] - Series 1998 (First Lien & Sub-Lien) refunded a portion of the Port's 1990 and 1992 bonds.
[6] - Series 2000D refunded a portion of the Port's 1990B bonds.
[7] - Series 2001C refunded a portion of the Port's 1990B bonds.
[8] - Series 2001D refunded a portion of the Port's 1992B bonds. It had a delayed delivery date of 8/7/02.
[9] - Debt services for PFC Bonds will be paid directly out of receipts from PFCs, not out of operating cash flow.
[10]-Debt services for Fuel Facilities is paid directly from Fuel Hydrant Facility income, not out of general operating cash flow.
[11] - Series 2005C refunded a portion of the Port's 1996B bonds. It had a delayed delivery date of 6/6/2006.
[12] - Series 2005A-Ref. 1994A refunded a portion of the Port's 1994A bonds.
[13] - Series 2005A-Ref. 1996A refunded a portion of the Port's 1996A bonds.
[14] - Series 2005A-Ref. 1997A refunded a portion of the Port's 1997A bonds.
[15] - Series 2006 G. O. Ref. Bonds refunded a portion of the Port's 1999A Special Facility bonds, and refunded a portion of the 2000A G. O. bonds.
[16] - Series 2006A Intermediate Lien refunded the outstanding 2000A First Lien series bonds.
[17] - Series 2008 Subordinate Lien refunded the 2003C bonds.
[18] - Series 2009B-2 First Lien Capital Appreciation Bonds were issued at $22,000,326 par. The outstanding principle balance at 12/31/2011 includes $4,306,999 of accumulated accreted interest.
[19] - Series 2010A Ref. 1998A Intermediate Lien refunded the outstanding 1998A First Lien series bonds.
[20] - Series 2010B Ref. 2000B Intermediate lien refunded a portion of the Port's 2000B Bonds.
[21] - Series 2010C Ref. 2005D Intermediate Lien refunded the 2005D Subordinate Lien Series Bonds.

The Port has authority to issue up to $250 million in Commercial Paper, as of 9/30/10 the Port had $110.455 million outstanding.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-26

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2012 Preliminary Budget

APPENDIX E: AVIATION LANDING FEE REVENUES
The landing fee rate and resulting landing fee revenue are based on the contractual agreement between the
Port's Aviation Division and the airlines. This contractual agreement permits the airlines to land and operate at
Sea-Tac International Airport.
The landing fee rate is established during the budget period for the following calendar year. The rate is subject
to revision during the calendar year and the landing fee dollars are adjusted to the actual airport costs at the
end of the calendar year in accordance with a formula outlined in the Basic Airline Lease. The airlines are
then billed or reimbursed accordingly for any differences.
The landing fee calculation provides that the airlines pay for the operating cost of the airport. The landing fee
formula is as follows:
To the total Airport Operating and Maintenance Costs
Add
Add

+
+

Add
Subtract

+
-

Add
Equals

+
=

Operating and Maintenance Expenses
Capital Costs
(debt services, interim financing costs, etc.)
Allocable Terminal Costs
Other Airfield Revenues
(airfield properties, ID badging, gate parking, fuel flowage)
Change in Security Deposit
Landing Fees required to support the airport

The landing fee rate is determined at the beginning of the year by dividing the landing fee revenues required,
based on the budgeted costs, by the estimated landed weights as provided by the airlines and reviewed for
reasonableness by Airport management.
TABLE E-1: LANDING FEE REVENUE CALCULATION

Seattle-Tacoma International Airport
Landing Fee Revenue Calculation
($ in 000's)

2012
Budget

Landing Fee Cost
Total Operating Costs
Capital Costs
Allocable Terminal Costs
Offset Other Airfield Revenues
Change in Security Deposit
Landing Fee Revenues

Filename: _appendix.doc
Updated: 10/18/2011

$55,907
29,499
1,123
(16,932)
555
$70,152

XIII-27

Port of Seattle

2012 Preliminary Budget

APPENDIX F: OTHER DETAILED EXPENDITURES
A. Promotional Hosting
Promotional hosting consists of expenses incurred by officials and employees of the Port in connection with
hosting others for the purpose of promoting the increased use of Port facilities and services.
TABLE F-1: PROMOTIONAL HOSTING BY DIVISION

($ in 000's)
DIVISION
Aviation
Seaport
Real Estate
Capital Development
Corporate
Total

2010
Actual

Notes
$

$

2010
Budget

138,618 $
43,000
9,307
132
159,762
350,818 $

234,606 $
72,885
11,475
1,900
167,450
488,316 $

2011
Budget
229,138 $
81,785
21,000
700
656,230
988,853 $

2012
Budget
226,020
71,455
20,213
1,700
89,670
409,057
P R OM O.XLS

B. Memberships
The 2012 Budget for the Port of Seattle includes monies sufficient for memberships amounting to a total of
$1,168,045.
In addition, the Chief Executive Officer may approve additional memberships and dues increases for 2012,
which may arise and which could not be foreseen at this time, provided these increases do not exceed 10% of
the total membership's budget.
Memberships are for associations for the purpose of participating on a cooperative basis with other port
districts, airports and with operators of terminal and transportation facilities, associations providing specialized
information and services, associations to better qualify certain employees in the performance of specified
duties which are assigned to such employees, and associations which are considered to be of particular and
special value in connection with the carrying out of the Port's promotion and advertising activities.
Membership is an effective way to leverage scarce resources to accomplish objectives that might otherwise be
omitted.

Filename: _appendix.doc
Updated: 10/18/2011

XIII-28

Port of Seattle

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APPENDIX G: GLOSSARY OF TERMS USED
Account: Recording of an activity as revenue or expense, such as fees for services, rents, or as salaries,
equipment, supplies, travel, etc.
Accrual: Represents an outstanding obligation for goods and services received or performed but for which
payment has not been made.
Accrual Basis of Accounting: It is the basis of accounting under which revenue transactions are recognized
when earned and expenses are recognized when incurred, regardless of the time the cash is received or
disbursed.
Actual: Earned revenue or incurred expense during the stated fiscal year.
Allocated Expense: These are costs allocated to business groups from service providers. Allocated costs are
general support costs that cannot be directly attributed to a business unit, but instead support the entire Port
and all its Business Groups. Costs can come from within the division or from outside the division.
Amortization: The gradual reduction in the book value of Fixed or Intangible Assets having a limited life by
allocating the original cost over the life of the asset. (See Depreciation.)
Assessed Valuation: An official government valuation set upon real estate and personal property by the King
County Assessor as a basis for levying property taxes.
Balanced Budget: The Port prepares an annual budget and supports, encourages and commits to a balanced
budget in which revenues exceed expenses. In so doing, the practice is to pay for all current operating
expenses with current revenues and not postpone current year operating expenses to future years or accrue
future year's revenues to the current year. The Port policy further requires that budgeted operating expenses
do not exceed budgeted revenues, and on-going expenses do not exceed on-going revenues.
Budget: A financial plan, forecast or projection of the Port's revenues and expenses expected during the
stated budget year.
Budget Calendar: A schedule of key dates that the Port follows in the preparation, review and adoption of its
annual budget.
Budget Document: The Port's official written approved budget in document format, prepared by the Port's
Budget Office and supporting staff.
Budget Message: A general discussion of the proposed budget presented in written format by the Chief
Executive Officer of the Port to the Port Commission and Public.
Capital Budget and Draft Plan of Finance: A detailed five year plan of proposed capital expenditures
arising from the acquisition or improvement of the Port's fixed assets and the means of financing them through
bond proceeds, grants and operating revenues. This document serves as an operational and planning tool and
it is directly tied to the business plans. The document identifies proposed capital projects at the airport and on
the waterfront and prioritizes those projects.
Capital Capacity: An estimated calculation of the maximum amount available to spend on capital projects,
given assumptions about future revenues and expenses and the ability to cover future interest payments per
bond covenants and Port policies. See further discussion in the Draft Plan of Finance section.

Filename: _appendix.doc
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Port of Seattle

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Capital Expenditures: Expenditures that arise from the acquisition or improvement of the Port's fixed assets.
Port assets are given a useful life of more than three years when they become active. The expenditures
reflected in the capital budget cover projects anticipated to provide modernized Seaport, Airport and Real
Estate facilities for sustained growth of the Port.
Capitalized Labor or Charges to Capital Projects: Include the salaries and benefits costs associated with
capital projects. These costs are subtracted out of the operating budget and then budgeted in the capital budget
as part of the cost of the project(s).
Cash Disbursements: The disbursement or payment of cash for cost incurred in the operation of the Port's
business.
Cash Receipts: The collection of cash from services and from Port facilities and equipment leased or
operated.
Cost Per Enplanement (CPE): Airline cost per enplanement reflects the overall cost to the airlines for each
passenger enplaned. The CPE measures the total costs borne by the passenger airlines operating at the airport
divided by the number of enplaned passengers (roughly half of the total passengers). CPE is a key indicator
used by the airlines to measure the relative costs of airports.
Customer Facility Charges: As determined by applicable State legislation, customer facility charges
(―CFC‖) generate revenue to be expended by the Port for eligible capital projects and the payment of principal
and interest on specific revenue bonds. CFC revenues received from the rental car companies are recorded as
non-operating income in the statements of revenues, expenses, and changes in net assets.
Department/Org: An organizational unit within the Port which is part of a division.
Depreciation: This is a non-cash item that represents the use of long-term assets. Port assets are given a
useful life of more than three years when they become active and each year some of that useful life is used up,
worn or depreciated. (See Amortization.)
Direct Charge: The ability to direct charged for services instead of allocating them, which is charging
against another division's/department's subclass to represent where resources were used and dollars spent for
the work that was actually done.
Draft Plan of Finance: A funding plan for the Capital Budget that identifies the types and amounts of funding
sources that are expected to be available in the five year planning period.
Enterprise Fund: There are dozens of funds that are summarized into the Enterprise Fund. The Enterprise
Fund accounts for all activities and operations of the Port. The Enterprise fund is connected to the functional
units in that it is used to account for operations and activities that are financed at least in part by fees or
charges to external users for Airport Facilities, Seaport and Real Estate properties. Therefore, the Port of
Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the Port's major business
activities, which are comprised of three operating divisions - Aviation, Seaport, Real Estate; a Capital
Development division and a Corporate Professional and Technical Services division.
Environmental Remediation Liability: The Port's policy requires accrual of pollution remediation
obligation amounts when (a) one of the following specific obligating events is met and (b) the amount can be
reasonably estimated. Obligating events include: imminent endangerment to the public; permit violation;
named as party responsible for sharing costs; named in a lawsuit to compel participation in pollution
remediation; or commenced or legally obligated to commence pollution remediation. Potential cost recoveries
such as insurance proceeds, if any, are evaluated separately from the Port's pollution remediation obligation.
Costs incurred for pollution remediation obligation are recorded as environmental expenses unless the
expenditures meet specific criteria that allow them to be capitalized. Capitalization criteria include: preparation
Filename: _appendix.doc
Updated: 10/18/2011

XIII-30

Port of Seattle

2012 Preliminary Budget

of property in anticipation of a sale; preparation of property for use if the property was acquired with known or
suspected pollution that was expected to be remediated; performance of pollution remediation that restores a
pollution-caused decline in service utility that was recognized as an asset impairment; or acquisition of
property, plant, and equipment that have a future alternative use not associated with pollution remediation
efforts.
Equity: The excess of assets over liabilities.
Estimates: Prediction of revenues and expenditures.
Fiscal Year: The Port's annual accounting period for recording financial transactions begins January 1 and
ends December 31, which is the same as the calendar year. It is also called budget year.
Forecast: An estimate, projection or prediction of revenues and expenses.
Full Time Equivalent: Full Time Equivalent (FTE) employee, where ―full-time‖ equals 100% of a full-time
schedule. A full-time employee is represented as a ―1.0 FTE‖ where 1.0 = 100% of a full-time schedule.
FTEs represented by less than 1.0, such as 0.8, represent less than a full-time schedule. For example, ―0.8
FTE‖ represents 80% of a full-time schedule.
Fund: The establishment of a fund is to account for money set aside for some specific purpose.
Generally Accepted Accounting Principles (GAAP): Standards and guidelines by which Accounting and
Financial Reporting are governed.
General Obligation (G.O.) Bonds and Interest: The Port can borrow money which is intended to be paid
back through its taxing authority. The tax levy (See Section IX) funds the repayment of the principal and
interest of these bonds. Port financial policies dictate that G.O. bonds be used for projects that have a long lag
between project costs and revenues or are insufficient to support revenue bond financing, the project generates
significant economic benefits for taxpayers, and the project is critical to the Port's core business.
Goals: Written statements that declare what the port/division/department plan to achieve to fulfill its mission.
Governmental Accounting Standards Board (GASB): It is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles.
Government Finance Officers Association (of USA and Canada): The purpose of the Government Finance
Officers Association is to enhance and promote the professional management of governments for the public
benefit by identifying and developing financial policies and practices and promoting them through education,
training and leadership.
Inter-Division Allocation (Charges): Allocation or Charges from one division to another.
Intra-Division Allocation (Charges): Allocation or Charges from within the division.
Landing Fee: The landing fee rate and resulting landing fee revenues are based on the contractual agreement
between the Port's Aviation Division and the airlines. This contractual agreement permits the airlines to land
and operate at Sea-Tac International Airport. See the discussion of landing fees in Appendix E.
Majority in Interest (MII): Under the terms of the current agreement between the airlines and the airport, the
airlines are entitled to vote their approval for particular capital projects that affect the airline rate base.
Millage: A tax rate on property, expressed in mills per dollar of value of the property.
Mission: States the reason why the port/division/department exists and what it is trying to achieve.
Filename: _appendix.doc
Updated: 10/18/2011

XIII-31

Port of Seattle

2012 Preliminary Budget

Net Assets: As required by GASB Statement No. 34, Basic Financial Statements - and Management's
Discussion and Analysis for State and Local Governments, net assets (equity) have been classified on the
statement of net assets into the following categories:


Invested in capital assets - net of related debt: Capital assets, net of accumulated depreciation and
outstanding principal balances of debt attributable to the acquisition, construction, or improvement of
those assets.



Restricted: Net Assets subject to externally imposed stipulations on their use.



Unrestricted: All remaining net assets that do not meet the definition of ―invested in capital assets - net of
related debt‖ or ―restricted.‖

When both restricted and unrestricted resources are available for the same purpose, restricted assets are
considered to be used first over unrestricted assets.
Net Operating Income before Depreciation (NOI): Income from operations after all direct expenses and
allocated expenses, but before depreciation, non-operating revenues and expenses have been included.
Non-Airline Revenues: Include concession, parking and other fees not charged directly to the airlines. These
revenues help offset the residual landing fee requirement.
Non-Operating Expenses: Cost or charges that do not arise from the normal operation of the Port's business.
An example is interest expense.
Non-Operating Revenues: Revenues that do not result from the normal operation of the Port's business such
as: Ad Valorem Tax Levy, Interest Income, Non-operating Grants, Passenger Facilities Charges, Customer
Facilities Charges and other revenues generated from non-operating sources are classified as non-operating.
Operating Income before Allocations & Depreciation: Direct operating revenues minus direct operating
expenses. This does not include any allocated expenses.
Operating & Maintenance Expenses: Cost or charges that arise from the normal operation of Port's
business. These are cost or services required for a department/division to function. These include Salaries and
Benefits, Equipment expense, Supplies and Stock, Travel and Other Employee expenses and all Direct
Charges, even those from Corporate and from other Divisions.
Operating Revenues: Fees for services, rents, and charges for the use of Port facilities such as: Dockage,
Wharfage, Berthage and Moorage, Airport Transportation Fees, Airport Landing Fees, Equipment, Property
Rentals and other revenues generated from port's operations are reported as operating revenue.
Other Post Employment Benefits (OPEB): According to the Governmental Accounting Standard Board
(GASB) statement 45, government agencies are required to record post employment benefit costs other than
pensions as a liability based on actuarial costs.
Passenger Facilities Charges (PFCs): As determined by applicable federal legislation, passenger facility
charges ("PFC") generate revenue to be expended by the Port for eligible capital projects and the payment of
principal and interest on specific revenue bonds. PFC revenues received from the airlines are recorded as nonoperating income in the statements of revenues, expenses, and changes in net assets upon passenger
enplanement.
Passenger Facilities Charges (PFCs) Bonds: Bonds backed by Passenger Facility Charges.
Passenger Traffic: Enplanements, deplanements and connecting passenger activity.
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2012 Preliminary Budget

Performance Indicators or Measures: Metrics used by Port management to determine whether a program is
achieving or accomplishing its mission efficiently and effectively.
Performance or Operating Budget: A financial plan that incorporates an estimate of proposed revenues and
expenses for a given period. A department's budget includes only those revenues and expenditures for which it
has control.
Plan of Finance: The Five-year Capital Budget is the basis of the Plan of Finance. This document provides a
funding plan of the capital program developed within the financial targets and forecasts described within the
Draft Plan of Finance section. The Draft Plan of Finance is prepared and presented to the Port Commission
concurrently with the Operating Budget. See further discussion in the Draft Plan of Finance section.
Port Commission: It is the governing body of the Port of Seattle, which is comprised of five commissioners
elected at large by the voters of King County to serve four-year terms and to establish Port policy.
Repairs and Maintenance: Expenditures for routine maintenance and repairs to structure and minor
improvements to property, which do not increase the value of the capital assets.
Resolution: A formal expression of opinion or determination adopted by the Port Commission.
Revenue Bonds: A type of borrowing that is repaid through the dedication of revenues intended to be
generated by the investment being funded by the bonds.
Revenue over Expense: The excess or deficit of revenues (operating and non-operating) over expenses
(operating and non-operating). The excess of revenues over expenses increases equity, whereas the deficit,
expenses over revenues, decrease equity.
Statutory Budget: A plan that depicts the cash flows of the Port. It shows the beginning balance, cash
receipts and cash disbursements and the balance at the end of the year. This budget must be filed with the
King County Council and the King County Assessor as required by law by a specific date. See Section XII.
Tax Levy: The amount of money to be raised by imposing of property taxes. See Section IX.
Twenty-foot Equivalent Unit (TEU): Is an international standard of measurement for the container volume
that moves through the Port. One forty-foot container is equivalent to two TEUs.
Variances: The difference between ―actual‖ and ―budget‖ amounts for revenues and for expenses, which
could be either favorable or unfavorable.
Favorable Variance: This is a positive variance and it exists when, in a given period:



Revenues: Actual revenues are higher than budgeted revenues
Expenses: Actual expenses are lower than budgeted expenses

Unfavorable Variance: This is a negative variance and it exists when, in a given period:



Filename: _appendix.doc
Updated: 10/18/2011

Revenues: Actual revenues are lower than budgeted revenues
Expenses: Actual expenses are higher than budgeted expenses

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Port of Seattle

2012 Preliminary Budget

APPENDIX H: ACRONYMS and ABBREVIATIONS
AAPA
AAAE
ACI
AEC
AIR 21
AODB
APM
ARFF
ATC
B&OT
BALA
BHICC
BHM
BHS
BLS
BY
CAFR
CDD
CDP
CEO
CERT
CFC
CFO
CIP
CMMS
CPE
CPI
CPO
CPR
CTDP
CTE
CY
CY
DHS
DNR
DOT
EIS
EPA
ETDD
ESGR
FAA

American Association of Port Authorities
American Association of Airport Executives
Airports Council International
Airport Employment Center
Aviation Investment & Reform Act for the 21st Century
Airport Operations Database
Automated People Mover
Aviation Regional Fire Fighting
Air Traffic Control
Business and Occupation Tax
Basic Airline Lease Agreement
Bell Harbor International Conference Center
Bell Harbor Marina
Baggage Handling System
Bureau of Labor Statistics
Budget Year
Comprehensive Annual Financial Report
Capital Development Division, a Port Division
Comprehensive Development Plan
Chief Executive Officer
Community Emergency Response Team
Customer Facility Charge
Chief Financial Officer
Capital Improvement Program
Computerized Maintenance Management System
Cost per Enplanement
Consumer Price Index
Central Procurement Office
Cardio Pulmonary Resuscitation
Container Terminal Development Plan
Central Terminal Expansion
Calendar Year
Container Yard
Department of Homeland Security
Department of Natural Resources
Department of Transportation
Environmental Impact Statement
Environmental Protection Agency
Economic and Trade Development Department
Employer Support of the Guard Reserve
Federal Aviation Administration

Filename: _appendix.doc
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Port of Seattle

FAR
FASB
FAST
FEMA
FIS
FMC
FTE
FTPP
FY
GAAP
GASB
GFOA
GIS
G.O.
GT
HCM
HDS
IDC
IFO
ILA
IMC
ICT
KPI
LOI
LRT
MAP
MBE/WBE
MIC
MIS
MOBI
MPT
MT
NAMF
NAC
NEPA
NEST
NMA
NOI
NTSB
NWMTA
O&D
O&M
OPEB

2012 Preliminary Budget

Federal Aviation Regulations
Financial Accounting Standard Board
Freight Action Strategy Corridor
Federal Emergency Management Agency
Federal Inspection Area
Federal Maritime Commission
Full-time Equivalent Employee
Fishermen's Terminal Piers and Properties
Fiscal Year
Generally Accepted Accounting Principles
Governmental Accounting Standards Board
Government Finance Officers Association (of USA and Canada)
Geographical Information System
General Obligation (Bond)
Ground Transportation
Human Capital Management
Harbor Development Strategy
Industrial Development Corporation
Income From Operations
Interlocal Agreement
Intermodal Center
Information and Communications Technology, a Port department
Key Performance Indicators
Letter of Intent
Light Rail Transit
Million Annual Passengers
Minority & Women Owned Business Enterprise
Marine Industrial Center
Management Information System
Marina Operation Boating Inventory System
Main Passenger Terminal
Main Terminal
North Area Maintenance Facility
Neighborhood Advisory Committee
National Environmental Policy Act
New Economic Strategy Triangle
National Management Association
Net Operating Income
National Transportation Safety Board
Northwest Marine Terminal Association
Origin and Destination
Operating and Maintenance Expense
Other Post Employment Benefits

Filename: _appendix.doc
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Port of Seattle

P&TS
PCC
PCS
PFC
PLA
PM
PMA
PMG
PNWA
POS
PPE
PPM
PREP
PSA
PSCAA
PSRC
RCF
RCW
RE
RFP
RMM
SBM
SDS
SSA
STEP
STIA
STITA
STS
USCG
USDA
TEU
TSA
WSDOT
WPPA

2012 Preliminary Budget

Professional and Technical Services
Pacific Coast Congress
Port Construction Services, a Port department
Passenger Facility Charges
Project Labor Agreement
Project Manager
Pacific Maritime Association
Project Management Group
Pacific North West Waterways Association
Port of Seattle
Personal Protective Equipment
Post Panamax
Performance Review, Evaluation & Planning
Professional Service Agreement
Puget Sound Clean Air Agency
Puget Sound Regional Council
Rental Car Facility
Revised Code of Washington
Real Estate, a Port Division
Request For Proposal
Regulated Materials Management
Shilshole Bay Marina
Storm water Drainage System
Stevedoring Services of America
South Terminal Expansion Project
Seattle-Tacoma International Airport
Seattle-Tacoma International Taxi Association
Satellite Transit System
United States Coast Guard
United States Department of Agriculture
Twenty-foot Equivalent Unit
Transportation Security Administration
Washington State Department of Transportation
Washington Public Ports Association

Filename: _appendix.doc
Updated: 10/18/2011

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