Audio and video recordings of the meeting proceedings and meeting materials are available on the
Port of Seattle web site - www.portseattle.org. The approximate point in the video recording for each
agenda item is identified by hours, minutes, and seconds; example: 00:01:30.
APPROVED MINUTES
COMMISSION REGULAR MEETING NOVEMBER 22, 2011
The Port of Seattle Commission met in a regular meeting Tuesday, November 22, 2011, in the
International Auditorium at Seattle-Tacoma International Airport, Seattle, Washington.
Commissioners Albro, Bryant, Creighton, Holland, and Tarleton were present. Commissioner
Holland was absent after 2:27 p.m.
1. CALL TO ORDER
The regular meeting was called to order at 1:07 p.m. by Bill Bryant, Commission President.
2. EXECUTIVE SESSION pursuant to RCW 42.30.110
None.
PLEDGE OF ALLEGIANCE
3. (00:01:20) APPROVAL OF MINUTES
Special meeting of September 12, 2011, and regular meeting of September 27, 2011.
Motion for approval of minutes for the September 12, 2011, special meeting and
September 27, 2011, regular meeting – Tarleton
Second – Holland
Motion carried by the following vote:
In Favor: Albro, Bryant, Creighton, Holland, Tarleton (5)
4. SPECIAL ORDER OF BUSINESS
None.
Commissioners
Bill Bryant
Commission President
Tom Albro
John Creighton
Rob Holland
Gael Tarleton
P.O. Box 1209
Seattle, Washington 98111
www.portseattle.org
206.787.3000
Tay Yoshitani
Chief Executive Officer
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TUESDAY, NOVEMBER 22, 2011
5. (00:01:53) UNANIMOUS CONSENT CALENDAR
a. Approval of Claims and Obligations for the period of October 1 through October 31,
2011, in the amount of $44,076,300.63.
Motion for approval of consent item 5a – Creighton
Second – Albro
Motion carried by the following vote:
In Favor: Albro, Bryant, Creighton, Holland, Tarleton (5)
6. DIVISION, CORPORATE, AND COMMISSION ACTION ITEMS
a. (00:02:28) Second Reading and Final Passage of 2012 Budget Resolution No. 3654, as
amended: 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.
Request document(s): Commission agenda memorandum dated November 4, 2011, Resolution
No. 3654, as amended, and computer slide presentation provided by Dan Thomas, Chief Financial
and Administrative Officer, and Michael Tong, Corporate Budget Manager.
Presenter(s): Mr. Thomas; Mr. Tong; Elizabeth Morrison, Senior Manager, Corporate Finance; and
Borgan Anderson, Senior Manager, Aviation Finance and Budget.
Mr. Thomas presented the resolution, noting changes since first reading were mostly modifications
to the Aviation capital plan. Mr. Tong outlined the process and timeline for adoption of the 2012
budget. He noted an upward revision of aeronautical revenues by $37,000 to $235.7 million and
summarized that total operating expenses are up 8.4 percent or $24 million compared to the 2011
budget. Mr. Tong presented a summary of the 2012 operating budget by division, noting terminal
realignment and the rental car facility as key budget drivers in Aviation operating expenses. In
highlighting the bottom line, Mr. Tong noted that net operating income in 2012 is projected to be
$207 million, slightly higher than the 2011 budget. He stated total revenues will increase
approximately $11 million to $722 million versus the 2011 budget and total operating expenses are
$642 million, which represents a decrease of about $2 million from the 2011 budget. Finally, Mr.
Tong reported an increase in net assets compared to the 2011 budget of $12.9 million.
Mr. Tong reported the Port’s total proposed full-time-equivalent (FTE) positions for 2012 is 1,793.7.
Mr. Anderson reported on Aviation division capital budget changes since first reading of the
resolution. He commented on projects removed from the 2012 Aviation capital budget, including
the electrified ground support equipment (EGSE) project for which the airlines were not able to
organize the expected equipment-purchasing consortium; a lighting upgrade project that has been
reconceptualized to leverage existing operating expenses; and an emergency power surge project
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TUESDAY, NOVEMBER 22, 2011
that will be performed instead by the Transportation Security Administration. He stated these cuts
represent $28 million in savings and that an additional $15 million in savings will come from the
rescoping of a baggage handling system project. He commented on ongoing cash-flow revisions,
including possible savings from the terminal realignment project.
In response to Commissioner Creighton, Mr. Anderson commented on the status of grant funding
previously earmarked for the EGSE project and confirmed for Commissioner Bryant that if the
airlines are not able to take advantage of the grant opportunities, they will pay for the equipment
upgrades themselves.
Mr. Tong provided a capital budget summary and capital spending history for the past 10 years.
He presented an overview of the tax levy showing the amount for 2012 at $73.5 million and listing
the sources and uses of the levy funds. He noted that the maximum statutory amount of property
tax available to be levied by the Port in 2012 is approximately $90 million and that there would be
an additional $13 million balance in the Transportation and Infrastructure Fund.
In response to Commissioner Bryant, Mr. Thomas reported that the maximum available levy amount
would increase by one percent in 2012, which would not require special Commission action.
Motion for second reading and final passage of Resolution No. 3654, as amended – Tarleton
Second – Holland
PUBLIC HEARING on Resolution No. 3654, as amended
Commissioner Bryant declared the public hearing for Resolution No. 3654, as amended, open.
Public comment was received from the following individuals:
Heather Worthley, Executive Director of Port Jobs. Ms. Worthley commented on funds
she said were deleted from the Port Jobs 2012 operating budget. She noted the
consequences of removal of the funds and requested their restoration. She stated that
without the funding, Port Jobs would be unable to complete their commitments under
their three-year contract with the Port of Seattle, noting various services and deliverable
objectives that would not be able to be provided.
Following conclusion of public comment, the public hearing on Resolution No. 3654, as amended,
was closed.
In response to Commissioner Bryant, Mr. Yoshitani explained that it is important that Port funding
for the Port Jobs program meets legal requirements and also addresses legitimate interests of the
Port. He stated at issue is clarification of services to be provided in exchange for the Port’s
funding. He said that, pending that clarification, $100,000 in funding would be made available from
the Port’s contingency funds, rather than as a budget line item.
Mr. Yoshitani explained that the timing of determining appropriate deliverables as a component of
the Port Jobs contract lagged behind establishing the 2012 operating budget, which he said the
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TUESDAY, NOVEMBER 22, 2011
proposal to use contingency funds for 2012 would resolve without the need for last-minute
reallocations to the 2012 operating budget. He noted that he expects the State Auditor’s Office to
audit the Port Jobs program and stated that he fully supports Port Jobs and will make the
arrangements work.
Commissioner Tarleton commented on the proposal to fund Port Jobs from 2012 contingency
funds as compliant with the Commission’s three-year contract with Port Jobs and noted the
importance of clear deliverables for auditing purposes. She said she felt it is the Commission’s
intention to fund Port Jobs and to work out next year’s funding as part of the budget process rather
than use contingency funds.
Commissioner Holland stated that the $100,000 should be restored and going forward the Port
should be clear about what it is asking the organization to do to prevent inserting uncertainty into
the process.
Commissioner Creighton stated his support for fully funding the Port Jobs contract and categorized
the current funding arrangement for 2012 as a learning experience. He noted that the State
Auditor’s Office requires the Port to document the value it receives for contractual payments. The
Port’s needs may change so there should be flexibility built into the contract. Commissioner Albro
agreed and said one of the Commission’s Century Agenda strategic objectives is a meaningful
workforce development program to provide industrial opportunities for the available talent pool.
AMENDMENT
Commissioner Albro commented on the success of the Port of Seattle as represented in the 2012
budget in increases in net assets, staff positions, and adjusted salary ranges. In light of what he
described as a positive tax-levy fund balance after five years of $3.2 million, Commissioner Albro
offered an amendment to Resolution No. 3654 as follows:
Motion to modify the budget resolution to reduce the Port’s property tax levy to $73 million
from the proposed $73.5 million – Albro
Second – Creighton
Commissioner Albro stated that the proposed tax levy reduction in 2012 was appropriate given the
conservative nature of the Port’s revenue expectations from real-estate holdings and insurance
recoveries related to environmental remediation, his opinion that bond requirements in the 2016
time frame would likely be less than anticipated, and the tendency to underestimate the ending
balance of the tax-levy fund. He stated that the Port has a responsibility to set the levy at an
amount that reflects the agency’s need and that at this time the need was for less than $73.5
million but in the future might be higher than $73.5 million.
Commissioner Creighton commented that he was interested in hearing the other Commissioner’s
views on the amendment. He noted the value of reassessing the appropriate amount of the tax
levy each year based on need as well as the value of having a consistent levy amount over time.
He noted that several years ago the Commission had committed to keeping the levy flat over a
five-year period.
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TUESDAY, NOVEMBER 22, 2011
Commissioner Holland stated that although he was open to reducing the tax levy at some point, he
was not convinced this was the right time to do so. He commented on investment in infrastructure,
jobs, and environmental remediation and said we have taken a shortcut in recent years by not
investing, which has produced infrastructure that is falling apart, inadequate schools, and
workforce development needs. To create 100,000 jobs over the next 25 years, the Port needs
money to make investments and some of that money comes from the tax levy. He stated that
rather than reduce the levy, a two-percent increase would be appropriate to cover future needs.
Commissioner Tarleton commented on the wise use of public funds as an investment in the
economic future of the region and stated that setting an appropriate levy amount includes
considering short- and long-term needs of the Port. She remarked on various future uncertainties
associated with long-term Port obligations, including the costs associated with environmental
remediation in the Lower Duwamish Waterway and the amount of potential insurance recoveries.
She stated the Commission has provided predictability and a steady course by setting the tax levy
at $73.5 million since 2009 and that she preferred to maintain the levy assessment at $73.5 million
rather than the Commission’s having to increase the assessment dramatically later.
Commissioner Albro stated that he was confident that reducing the levy by $500,000 a year would
not compromise anything the Port aspires to do or affect any work plans in 2012 or over the next
five years because of the positive balance projected in the tax levy fund. He stated the real
question was whether the surplus should be held by the Port or by the taxpayers. He added that
the projected balance was based on very conservative expectations and opined that if there is
money left over in the tax levy fund, it should remain with King County taxpayers. Commissioner
Albro clarified that he supports increasing the annual one-percent raise in the statutory maximum
amount available to be levied, despite wanting to reduce the actual levied amount at this time.
Commissioner Creighton commented that reducing the tax levy by $500,000 over the next five
years was an important gesture of fiscal responsibility to King County taxpayers.
The question recurred on the motion by Commissioner Albro, seconded by Commissioner
Creighton, to reduce the Port’s property tax levy to $73 million from the proposed $73.5 million.
Motion carried by the following vote:
In Favor: Albro, Bryant, Creighton, (3)
Opposed: Holland, Tarleton (2)
The question recurred on the motion by Commissioner Tarleton, seconded by Commissioner
Holland, for second reading and final passage of Resolution No. 3654, as further amended.
Motion carried by the following vote:
In Favor: Albro, Bryant, Creighton, Holland, Tarleton (5)
b. (01:00:23) Second Reading and Final Passage of 2012 Salary and Benefit Resolution
No. 3655: A Resolution of the Commission of the Port of Seattle establishing jobs, pay
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TUESDAY, NOVEMBER 22, 2011
grades, salaries, allowances and adjustments for Port employees not represented by a
labor union; authorizing and establishing conditions in connection with the following
benefits: social security; industrial insurance; unemployment compensation; military
leave; retirement; compensated leave, including civic duty, bereavement leave,
holidays, paid time off/extended illness leave, shared leave, and awarded time;
insurance benefits, including medical, dental, life and long-term disability; and
authorizing this Resolution to be effective on January 1, 2012, and repealing all prior
resolutions dealing with the same subject, including Resolution No. 3647.
Request document(s): Commission agenda memorandum dated November 15, 2011, Resolution
No. 3655, redline version of Resolution No. 3655, and schedule of salary ranges provided by
Tammy Woodard, Total Compensation Senior Manager; David Leon, Benefits Manager; and Ann
McClellan, Compensation Supervisor.
Presenter(s): Ms. Woodard.
Ms. Woodard reported that there had been no changes to the resolution since its first reading on
November 8, 2011, and requested Commission approval.
Motion for Second Reading and Final Passage of Resolution No. 3655 – Creighton
Second – Tarleton
Motion carried by the following vote:
In Favor: Albro, Bryant, Creighton, Holland, Tarleton (5)
7. STAFF BRIEFINGS
a. (01:02:25) Century Agenda Committee: Discussion of Real Estate Goals.
Presentation document(s): Commission agenda memorandum dated November 15, 2011, and
computer slide presentation provided by Tom Barnard, Research and Policy Analyst, and Geri
Poor, Regional Transportation Manager.
Presenter(s): Ms. Poor and Mr. Barnard.
Mr. Barnard outlined the three guiding principles related to real estate adopted in 2008 and
presented in the meeting materials. He summarized the real estate roundtable held October 11,
2011, with participation by representatives of the real estate development, maritime, industrial, and
public sectors, and presented the following questions for consideration by the Commission:
Should the Century Agenda include real estate goals at all, or are policy decisions in this
area a means to achieve other goals?
Given the dynamic nature of the real estate market, is it possible to state goals that are
as concrete as those involving the Seaport and the Airport?
How does the Port decide between multiple goals that may conflict with one another?
For instance, should the Port proceed to develop a property that may have economic
development benefits, but not pencil-out on the Port’s bottom line or vice versa?
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TUESDAY, NOVEMBER 22, 2011
Commissioner Albro commented on real estate as a means to an end for the Port and the difficulty
in developing specific goals for real estate.
Commissioner Creighton stated that the Port should not support assets that are not beneficial to
the Port’s basic objectives and core mission.
Commissioner Tarleton remarked on the importance of considering the proximity of the Port’s real
estate to land, air, and water corridors for movement of people and goods. She stated that it is
important to measure how the Port’s real estate contributes to job creation and commented on the
need to work collaboratively with jurisdictions that control zoning and land-use decisions that affect
the Port’s real estate.
Commissioner Holland encouraged the use of public-private partnerships in achieving the Port’s
real estate objectives.
Commissioner Albro stated that portfolio performance of the Port’s real estate holdings is less
important than the value of the real estate in creating jobs. He commented on the interrelationship
of real estate with transportation access, long-term vacancy of property, temporary uses such as
parks, and use of Port property for air cargo logistics and support for the maritime sector.
Commissioner Holland was absent after 2:27 p.m.
Commissioner Creighton commented on the importance to the public of the Port’s developing a
plan for unused real estate.
In response to Commissioner Tarleton, Mr. Yoshitani described the difficulty in developing a 25-
year plan for the Port’s diverse portfolio of real estate, which he said the Port has to utilize in an
opportunistic fashion to serve its purposes. He described collaborative efforts by the Port of
Oakland to develop real estate as an eco-industrial park and cautioned that development to attract
jobs would have little immediate return.
(01:30:25) Preliminary Briefing on Upcoming Airport Realignment Authorization Requests.
Presentation document(s): Computer slide presentation provided by David Soike, Aviation
Facilities and Capital Program Director.
Presenter(s): Mr. Soike.
Commissioner Bryant noted that several items with large request amounts on the consent agenda
for December 6, 2011, relate to previously approved projects. Mr. Soike reported that the Aviation
division would be requesting several authorizations related to the airline realignment project on
December 6, 2011. He summarized the projects, which contribute to the rearrangement of eight or
nine airlines at the Airport, and categorized them as capital, expense, and AAG Airport Services
remodel projects. Mr. Soike presented a graphic showing the location of work to be undertaken for
the various projects. A copy of the graphic is, by reference, made a part of these minutes, is
marked Exhibit A, and is available for inspection in Port offices.
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TUESDAY, NOVEMBER 22, 2011
8. NEW BUSINESS
None.
9. POLICY ROUNDTABLE
None.
10. ADJOURNMENT
There being no further business, the regular meeting was adjourned at 2:55 p.m.
Tom Albro
Secretary
Minutes approved: February 7, 2012.
