Item No. 9d_supp
Meeting Date: October 9,2018

2019 Operating Division
Preliminary Budgets
Commission Briefing
October 9, 2018

1

2019 Operating Divisions' Budget Timeline
2019 Business
Plan and CIP
Development

Budget
Development
Briefing

(May/June)

(June)

Briefing

First Reading &
Public Hearing
for 2019 Budget

2nd Reading &
Final Passage of
2019 Budget

(October 9th)

(Mid-November)

(Late November)

Budget

Will cover operating budget and capital budget
2

Aviation Division
2019 Preliminary Budget
October 9, 2018

3

Outline for Aviation presentation
•
•
•
•
•
•
•
•
•

Overview, drivers, summary
Activity forecast: passengers
FTEs
Operating expenses
Non-aeronautical business
Aeronautical business, CPE
Capital Budget
Financial Forecast
Appendix
Will cover operating budget and capital budget
4

Context: Passenger Growth and Capital
Program
Capital Spending ($M)

Total Passengers (000s)
Total Passengers

60,000

2015

Growth Rate

50,000

45,737

46,935

49,308

50,787

42,341

40,000

34,827

37,498
7.7%

$618

3.0%

2.6%

10,000

$515

0

$200

0%

•

$165

$154

2015

2016

$0

2019 BUD

Passenger Growth:

•

Anticipate 50.8 million annual passengers
(MAP) in 2019 vs. 34.8 MAP in 2013

•

- Up 46% since 2013
- CAGR of 6.5%

$294

4%

2%

2018 FCST

$577

$600

$400

•

2021

6%

20,000

2017

2020

$800

8%

2016

2019 BUD

$935

8.0%

2015

2018 FCST

$1,000

10%

5.1%

2014

2017

12%

30,000

2013

2016

14%

12.9%

2017

2018 FCST

2019 BUD

2020

2021

Major projects now under construction:
NSAT, IAF, Baggage Optimization
• Customer service challenges
• Construction reduces gate capacity
Need to plan for next phase

Catching up from passenger growth; Peak spending on capital program
5

Century Agenda Drives Airport Priorities
AV Priorities
Employees

Customer Service
Facilities/Capacity
Financial
Safety
Security
Community
Diversity
Sustainability
Partners

Century Agenda - High Performance Organization
HPO 2: Eliminate workplace injuries
HPO 3: Act as one Port
HPO 4: Foster employee development and leverage talent
HPO 1: Increase customer satisfaction
CA 2 Obj 6: Make Sea-Tac "Gateway of Choice"
CA 2 Obj 8: Meet the regions air transportation needs
CA 2 Obj 8: Meet the regions air transportation needs
HPO 2: Eliminate workplace injuries
HPO 3: Public safety and Security
HPO 3: Public safety and Security
HPO 1: Customer Service and Public Engagement
CA 3: Promote small business
HPO 4: Model for Workplace Equity, Diversity and Inclusion
CA 4: Be the greenest and most energy efficient Port
HPO 1: Improve customer service and public engagement

Customer Service &
Facility Efficiency Goals:
• Airport roadway entry
through security check
point: 45 min.
• Maximum wait time at
security checkpoints:
20 min.
• Minimum connect
time: 75 min.

2019 budget reflects Century Agenda objectives and Aviation Priorities
6

Key Priorities Drive 2019 Budget
New Department in 2018

SAMP Environmental,
Advanced Planning,
Airspace study
Increase non-aero NOI:
grow parking revenues

CUSTOMER
SERVICE

Additional Pathfinders,
seasonal on-call support

FACILITIES/CAPACITY

Utility Master Plan,
Asset management

FINANCIAL
EMPLOYEES

Implement staffing plan to
add necessary resources

Employees are the foundation of success
7

2018 Update
•
•

•

2018 Activity
 2018 Passenger growth forecasted at 5%, YTD activity currently outpacing forecast
Expenses:
 Completed SAMP, moved to Environmental Review
 Expenses overall tracking close to budget, many unplanned items are being
accommodated in budget through savings/deferrals
Non-Aero revenues:
 Airport Dining & Retail lease transitions continue on schedule, gross sales from
majority of new units are outperforming initial lease projections
 Growth in parking
 Continuing deterioration in rental car transactions
 Ground transportation: TNCs continue to grow
 Expect to exceed NOI target

2019 Budget builds on 2018 Forecast
8

Budget Summary
2016
Actual

2017
Actual

2018
Budget

2018
Forecast

2019
Budget

Budget Change
$
%

Operating Revenues:
Aeronautical Revenues
Non-Aeronautical Revenues
Total Operating Revenues

244,235
221,021
465,256

264,114
236,803
500,916

301,082
244,786
545,867

305,005
250,728
555,733

366,862
257,461
624,323

65,780
12,675
78,455

21.8%
5.2%
14.4%

61,857
6,733
68,590

20.3%
2.7%
12.3%

Total Operating Expenses

261,226

299,114

334,856

333,374

367,092

32,236

9.6%

33,719

10.1%

Net Operating Income

204,030

201,802

211,011

222,359

257,231

46,219

21.9%

34,872

15.7%

CPE
Non-Aero NOI
Enplaned passengers (000s)

10.10
128,727
22,796

10.52
133,101
23,416

11.35
126,861
24,654

11.52
134,164
24,654

13.43
134,178
25,394

2.08
7,317
740

18.3%
5.8%
3.0%

1.92
14
740

16.6%
0.0%
3.0%

$ in 000's

•

•

Budget vs Forecast
$
%

Expense increase driven by new requests of $28.6 million ($6.5M baseline, $22.1M non-recurring) and $14M
for Environmental Remediation Liability expense.
Non-aero NOI impacted by significant non-recurring expenses

Strong growth in Net Operating Income; CPE growing as expected
9

Airport Activity: Passengers
Passengers
Domestic

Growth rate

14%

7.7%

46,935

Int'l

12%

10%

Int'l

Int'l

37,498

50,787

8%

8.0%

30,000
6%
5.1%

20,000

5.1%
4%
3.0%

Domestic

Domestic

Domestic

Domestic

Domestic

Domestic

2.6%

Domestic

10,000

2014

2015

2016

2017

2018 BUD

2018 FCST

2019 BUD

2%

0

0%

Growth rate declining, but passenger growth continues
10

Growth Rate %

Passengers (000s)

40,000

Int'l

45,737
42,341

49,308

Int'l

50,000

49,308
Int'l

12.9%

Int'l

60,000

Implementing 2017 ICF Staffing Study Recommendations
FTE Budget
Aviation Division Only
Beginning Balance

FTE's
FTE's
ICF
ICF
Approved Proposed Recomm. Recomm.
2018
2019
2020
2021

Total
2018-2021

983.16

1,048.41

1102.28

1149.16

56.00

40.12

46.88

0.00

143.00

0.00
0.00
1.25
57.25

5.00
8.00
0.75
53.87

0.00
0.00
0.00
46.88

0.00
0.00
0.00
0.00

5.00
8.00
2.00
158.00

Total Budget FTE's

1,040.41

1,102.28

1,149.16

1,149.16

Mid-Year Adds:
Permanent FTE
Limited Duration Hires
Total Adjusted Baseline

1.00
7.00
1,048.41

1,102.28

1,149.16

1,149.16

59.00
-57.00
2.00
2.00

42.00
-40.12
1.88
3.88

43.00
-46.88
-3.88
0.00

0.00
0.00
0.00
0.00

New Additions:
Permanent FTE's
Temporary FTE's to Address Specific Areas:
Limited Duration Hires
Emergency Hires
Interns

Total New Additions

ICF Recommended Adds:
Added Permanent FTE's
Under/(Over) ICF Recommendations
Cummulative Under/(Over)

144.00
-144.00
0.00
0.00

2019 Budget reflects fewer permanent FTEs than recommended
11

New FTE - Position List
2019 Proposed Budget FTEs
Limited Duration FTE's
ORAT positions (LTD)
Rodent Control Specialist (LTD)

4.00
1.00

Emergency Hire FTE's
Pathfinders (EH)

8.00

Landside FTE's
Landside Supervisor
Employee Parking Bus Driver
Public Parking Cashier

1.00
1.00
1.00

FTEs

2019 Proposed Budget FTEs (cont'd)

5.00

Facilities & Infrastructure FTE's
Senior Engineer, Civil
Signage Graphics Specialist

1.00
1.00

Customer Service FTE's
Volunteer Coordinator
Pathfinders
Customer Communications Specialist

1.00
4.00
1.00

Maintenance FTE's
AVM Asset Management Analyst
Bus-Automotive Mechanic
Field Crew Garage
Electronic Technicans
Wireman for Utility Metering
Boiler Room Position
Boiler Room Capital Position
Conveyor
Passenger Loading Bridge Position
Custodial Shift Supervisor/QA Technican

1.00
1.00
1.00
2.00
2.00
1.00
1.00
1.00
2.00
1.00

Fire Department FTE's
Firefighters
Admin Assistant

8.00
1.00

8.00
3.00

Commercial Management FTE's
3.12
Property Manager
1.00
ADR Business Manager-Small Business Initiative
1.00
Public Parking Yield Management Analyst
1.00
On-call Mail Messenger
0.12
Airport Operations FTE's
Airport Duty Manager - Airfield

1.00

Terminal Operations FTE's
SMS Specialist
Airline Scheduling Coordinator
Terminal Development Project Manager

1.00
1.00
1.00

(continued)

1.00
3.00

FTEs
2.00

6.00

13.00

9.00

New Intern FTE's - College/Graduate

0.75

2019 Proposed New FTEs:

53.87

Strategic use of limited duration and seasonal FTEs to supplement ICF staffing recommendations
12

FTE Growth Relative to Enplanement Growth
FTEs

FTEs per Million Enplanements

1,400

52
1,200

49

46

Includes AV FTEs for AV Environmental,
Noise and AV Finance & Budget

1,000

FTEs

800

43
39

1,085

1,140
40

1,017
858

849

863

881

50

889
30

600
20
400
10

200
0

0
2012

2013

2014

2015

2016

2017

2018 FCST

2019 BUD

2019 FTE Growth Rate is slightly higher than Enplanement Growth Rate
13

FTEs per Million Enplanements

42

45

44

Aviation Operating Expenses
2018 Aviation O&M Budget

$226,088

Remove non-recurring items

$15,816

Remove regulated materials (ERL)

$4,030

Transfer to Central Services

$29

Cost reductions/savings

AV Operating
Cost
($000s)

$1,289
$12,566

Cost increases

2019 Baseline before additions

$217,490

Proposed baseline additions

$6,465

Proposed non-recurring additions

$0

$50,000

$22,115

Proposed exceptions (ERL)

$14,259

2019 Proposed Budget

$260,329

$100,000

$150,000

$200,000

$250,000

Baseline expense increase targets core operations, Non-recurring expenses driven by strategic initiatives
14

Cost Reductions
2019 Baseline Cost Reductions/Savings:

$000's

Contractual Savings & Formulaic Cost Decreases
Higher estimated Charges to Capital (offsets higher payroll)

362

Total Contractual & Formulaic Decreases

362

Non-Payroll Savings (zero based budgeting)
ACDBE Disparity Study (non-recurring activity in 2018)

300

Eastside Remote Bag Checking feasibility study

200

AMAC conference - hosted in Seattle in 2018

200

Other non-payroll savings (zero based budgeting)

227

Additional Non-Payroll Savings

927

Total 2019 Baseline Cost Reductions

1,289

Cost reductions identified during thorough review of baseline costs
15

Cost Increases
2019 Baseline Cost Increases:

$000's

Payroll Increases (before new FTE requests)
Non-Represented payroll & benefits increase (3.8% average)

1,518

Represented pay & benefits increase (per labor agreements)

2,181

Annualized new FTE's approved in 2018 Budget

1,613

Annualized new FTE's approved during 2018

715

All other increases to baseline payroll

317

Total Baseline Payroll Increases

6,345

Non-Aero costs related to revenue growth
Clubs & Lounges - higher demand/increased volume

1,012

Advertising increase (100% paid by Tenant Mktg fund)

67

Non-Aero B&O tax increase

132

Total Non-Aero Cost Increases

1,211

Total Contractual & Formulaic Cost Increases - detail next page

5,010

Total 2019 Baseline Cost Increases

12,566

Payroll for existing staff is largest component of Baseline increase
16

Continued - Cost Increases
2019 Baseline Cost Increases - continued:

$000's

Contractual & Formulaic Cost Increases - detail
Utility rate & commodity cost increase

2,572

Taxi curbside management contract now paid by Port (SP+)

1,261

Increase in Worker's Compensation expense

583

All other contract increases

413

Aeronautical B&O tax increase

144

Other Non-Payroll Increases (zero based budgeting)

37

Total Contractual & Formulaic Increases
Total 2019 Baseline Cost Increases

5,010
12,566

Utility costs and taxi curbside management are primary drivers for contractual increases
17

Summary of Budget Requests
Budget Request Category

# of
Requests

FTEs

2019 Budget Requests
NonBaseline
Reoccurring

Total

Employees
Customer Service
Facilities/Capacity
Financial
Safety
Community
Diversity
Sustainability
Partners
2019 Budget Requests - Total Proposed

11
37
51
8
10
2
3
13
12
147

2.4 $
18.0
19.0
2.0
10.0
1.0
2.0
54.4 $

123,624 $
1,227,680
1,989,615
842,195
1,513,261
77,000
77,346
110,000
503,959
6,464,681 $

67,458 $
4,007,816
14,580,629
165,000
732,800
202,500
985,000
1,373,459
22,114,662 $

191,082
5,235,496
16,570,244
1,007,195
2,246,061
77,000
279,846
1,095,000
1,877,419
28,579,343

2019 Budget Requests - Initial Requests

194

54.4 $

17,257,937 $

25,549,151 $

42,807,088

Century Agenda and Airport Priorities drive 2019 Budget Requests
18

Highlights of Budget Requests
2019 Budget Request Highlights:

$000's

Advance Planning/On-call Planning support

4,650

Seasonal Customer Service Staff

2,500

Master Planning - Infrastructure Systems

2,000

Executive Program Management consulting support

1,620

SAMP/Environmental Review/Planning

1,600

Additional Firefighter (8) FTEs - staffing 2nd Care Car

1,307

Air Service Development - existing routes and anticipated new service

1,100

Airfield-Airspace study

1,000

Asset Management program
Integrated Pest Management scope increase

1,000
800

ORAT (4) limited duration FTEs & other new department costs

284
2,524

All other new staffing - (42.37) FTEs
Subtotal - 2019 Budget Request Highlights:

These requests
account for
71% of $28.6
million of total
requests

20,385

Most budget requests are for non-recurring expenditures
19

Environmental Remediation Liability Expense
Environmental Remediation
Liability Expense (ERL)
Org Basis (in 000's)
North Satellite
Asbestos
Contaminated Soils
NSAT - ERL Expense

Lora Lake (lake parcel)
All other RMM expense
Total ERL Expense

Budget Change
$
%

1,341
1,935
3,276

-

1,029

5,630
2,917
8,546

5,630
2,917
8,546

n/a
n/a
n/a

4,601
2,917
7,517

447.1%
n/a
730.6%

-

-

1,290
1,290

-

4,323
4,323

3,033
3,033

235.1%
235.1%

4,323
4,323

n/a
n/a

800

452
1,535
1,987

885
885

85
-

-

63
5,201
5,264

10.6%
n/a
10.6%

433
95.8%
(1,535) -100.0%
(1,102) -55.5%

n/a
(1,435) -74.0%
10,229 253.8%

n/a
(1,330) -72.5%
9,408 193.9%

2015
Actual

2016
Actual

419

266

419

266

SSAT - HVAC Infrastructure Upgrade
Asbestos
SSAT - ERL Expense
International Arrivals Facility
Asbestos
Contaminated Soils
IAF - ERL Expense

2017
2018
2018
2019
Actual Budget Forecast Budget

Budget vs.
Forecast
$
%

1,726
2,077
4,222

4,197
4,463

271
8,812

1,029

800
1,940
4,030

1,835
4,851

505
14,259

85

Expense increase driven by NSAT and SSAT projects
20

Total Airport Expense Summary
2016
Actual

2017
Actual

2018
Budget

2018
Forecast

2019
Budget

Budget Change
$
%

101,879
37,863
14,690
20,655
175,087

114,463
41,055
16,374
28,292
200,184

132,156
52,532
17,320
19,776
221,784

130,809
55,002
17,927
21,940
225,677

142,926
60,950
19,994
22,482
246,352

10,770
8,417
2,674
2,707
24,568

8.1%
16.0%
15.4%
13.7%
11.1%

12,117
5,948
2,067
542
20,674

4,463
129
4,592

8,812
2,856
11,668

4,030
4,030

4,851
367
5,218

14,259
14,259

10,229
10,229

253.8%
NA
253.8%

9,408
193.9%
(367) -100.0%
9,041 173.3%

Total Airport Expenses

179,679

211,852

225,814

230,896

260,611

34,797

15.4%

29,716

12.9%

Police Costs
Capital Development
Other Central Services
Maritime/Economic Development
Total Charges from Other Divisions

18,183
9,319
50,099
3,946
81,547

17,652
14,701
51,004
3,904
87,262

22,174
23,092
58,265
5,511
109,042

22,174
17,936
57,032
5,336
102,478

25,137
16,242
59,956
5,145
106,481

2,963
(6,850)
1,692
(366)
(2,561)

13.4%
-29.7%
2.9%
-6.6%
-2.3%

2,963
(1,694)
2,924
(191)
4,003

13.4%
-9.4%
5.1%
-3.6%
3.9%

Total Operating Expense

261,226

299,114

334,856

333,374

367,092

32,236

9.6%

33,719

10.1%

$ in 000's
Operating Expenses:
Payroll
Outside Services
Utilities
Other Airport Expenses
Total Airport Direct Charges
Environmental Remediation Liability
Capital to Expense
Total Exceptions

Budget vs Forecast
$
%

2019 costs include significant non-recurring costs
21

9.3%
10.8%
11.5%
2.5%
9.2%

Total Operating Expenses
Total O&M Expense ($000s)

O&M Expense per Enplanement

$16

$14.46
$13.58

$400,000

$299,114

$300,000
$261,226
$228,172

$334,856

$333,374

Forecast

$11.46

$14
$12
$10

$238,140

$8

$200,000
$6

YTD

YTD

$4

$100,000

$2

$0

$0
2014

2015

2016

2017

2018 BUD

2018 FCST

2019 BUD

2018 savings/deferrals covering unplanned expenditures
22

O&M Expense per Enplanement

$11.28

$367,092

Budget

$12.19

O&M Expense (000s)

$13.52

$12.74

2016 O&M Per Enplanement vs. Peer Airports
$26.08

$25

$24.09

2019 Budget: O&M per
Enplanement is $14.46

O&M Expense per Enplanement

$21.01 $20.89
$20

$19.32

$18.73 $18.63

$18.13
$17.10
$16.12 $16.08

$15

$15.05 $14.90

$14.35 $14.02

$13.87$13.82
$12.74 $12.68$12.67 $12.59
$11.00
$9.89 $9.82

$10

$7.98
$5.61 $5.27
$5

$0

Airport

Most recent O&M per enplanement compares favorably to peer airports
23

Non-Aero Business
•
•
•
•
•
•
•

Parking:
 Anticipate growth consistent with passenger growth
Rental Car:
 Transaction per O&D enplanement continuing to decline
 CFC operating revenue decreasing due to more debt service
Airport Dining & Retail - growth consistent with passenger growth. Anthony's closure
scheduled for Q1 2019
Ground Transportation - continued growth of TNCs. Added taxi curbside contract costs.
Commercial properties - base revenues growing but 2018 included one-time grant so
year over year decline
Airport lounges continue to grow - increased volume drives extended hours of operation
Non-aero cost growth impacted by share of division wide initiatives, mostly nonrecurring
Changing patterns of ground transportation business impacting Landside revenues
24

Non-Aero NOI
$ in 000's

2016
Actual

2017
Actual

2018
Budget

2018
Forecast

2019
Budget

Budget Change
$
%

Budget vs Forecast
$
%

Non-Aero Revenues
Rental Cars - Operations
Rental Cars - Operating CFC
Public Parking
Ground Transportation
Airport Dining & Retail & Leased Space
Commercial Properties
Utilities
Employee Parking
Clubs and Lounges
Other
Total Non-Aero Revenues
Total Non-Aero Expenses

37,082
12,122
69,540
12,803
58,405
9,992
7,233
9,329
3,028
1,487
221,021
92,294

35,051
10,641
75,106
15,684
58,980
18,042
7,018
9,617
5,041
1,624
236,803
103,702

35,294
15,563
78,572
16,884
59,087
14,706
7,556
9,457
5,630
2,036
244,786
117,925

35,084
14,653
80,046
18,401
61,980
15,236
7,317
10,214
5,830
1,966
250,728
116,564

34,779
12,830
82,350
20,584
63,909
14,219
8,086
10,134
8,520
2,049
257,461
123,282

(515)
(2,733)
3,778
3,700
4,822
(487)
530
677
2,890
12
12,675

-1.5%
-17.6%
4.8%
21.9%
8.2%
-3.3%
7.0%
7.2%
51.3%
0.6%
5.2%

(306)
(1,823)
2,305
2,183
1,929
(1,016)
769
(80)
2,690
82
6,733

-0.9%
-12.4%
2.9%
11.9%
3.1%
-6.7%
10.5%
-0.8%
46.1%
4.2%
2.7%

5,357

4.5%

6,719

5.8%

Net Operating Income

128,727

133,101

126,861

134,164

134,178

Less: CFC Surplus
Adjusted Non-Aero NOI
Debt Service
Net Cash Flow

(4,899)
123,828
(43,984)
79,844

(2,750)
130,351
(44,495)
85,856

(7,142)
119,719
(45,752)
73,967

(6,182)
(3,199)
127,982 130,979
(45,752)
(49,417)
82,230
81,562

7,317
(3,943)
11,260
3,665
7,595

5.8%
-55.2%
9.4%
8.0%
10.3%

14
(2,983)
2,997
3,665
(668)

0.0%
-48.2%
2.3%
8.0%
-0.8%

Overall 2019 Non-Aero Revenue growth includes significant shifts by revenue type
25

Non-Aeronautical Performance
Non-Aero NOI ($000s)

Non-Aero Revenue per Enplanement

$180,000

$12

$160,000

$9.66

$9.33

$9.70

$140,000

$128,727

$10.17

$10.14
$10

$134,164

$133,101

$134,178

$126,861
$8

Budget

$100,386

$80,000

Forecast

$112,618

$6

$4

$40,000
$20,000

YTD

$60,000

YTD

NOI (000s)

$100,000

$9.93

$2

$0

$0
2014

2015

2016

2017

2018 BUD

2018 FCST

2019 BUD

NOI impacted by division costs. Most additions are non-recurring.
26

Rev Per Enplanement

$120,000

$10.09

Adjusted Non-Aero NOI
Non-Aero NOI - adjusted for ERL impact
$ in 000's
Revenues
Expenses
Net Operating Income
Less: ERL - Non-Aero Share of Terminal Building
Non-Aero NOI w/o Major Non-Recurring

2018
2018
Budget Forecast
244,786
250,728
117,925
116,564
126,861
134,164
(293)
(233)
127,153
134,397

2019
Budget
257,461
123,282
134,178
(2,923)
137,101

Budget Change
Budget vs Forecast
$
%
$
%
12,675
5.2%
6,733
2.8%
5,357
4.5%
6,719
5.7%
7,317
5.8%
14
0.0%
2,630
-899%
2,689
-919%
9,948
7.8%
2,704
2.1%

Removing Non-Aero share of non-recurring ERL expense shows real growth of NOI
27

Aeronautical Business
• Revenues defined by cost recovery formulas in Signatory
Lease and Operating Agreement (SLOA IV)
- O&M and capital costs included in airline rate bases

• Revenues and CPE increasing in 2019 as expected
• Reduction in revenue sharing (per SLOA IV) increases CPE
but also increases Port cash flow

Most revenues are based on cost recovery formulas
28

Aeronautical NOI
2016

2017

2018

2018

2019

Budget Change Budget vs Forecast

$ in 000's

Actual

Actual

Budget

Forecast

Budget

$

%

$

%

Revenues:
Movement Area
Apron Area
Terminal Rents
Federal Inspection Services (FIS)
Total Rate Base Revenues

94,725
14,028
155,852
11,227
275,832

108,638
16,771
155,431
18,612
299,452

125,422
15,979
171,854
13,413
326,668

125,275
16,023
171,260
14,143
326,701

132,201
19,426
203,221
14,583
369,432

6,779
3,447
31,367
1,170
42,764

5.4%
21.6%
18.3%
8.7%
13.1%

6,926
3,403
31,961
440
42,731

5.5%
21.2%
18.7%
3.1%
13.1%

Commercial Area
Subtotal before Revenue Sharing

9,379
285,211

10,574
310,026

10,212
336,880

10,212
336,913

12,859
382,291

2,647
45,411

25.9%
13.5%

2,647
45,378

25.9%
13.5%

Revenue Sharing

(37,395)

(42,311)

(35,799)

(31,908)

(15,429)

(20,369)

-56.9%

(16,479)

-51.6%

Other Prior Year Revenues
Total Aeronautical Revenues

(5)
247,811

(26)
267,690

301,082

305,005

366,862

65,780

NA
21.8%

61,857

NA
20.3%

Total Aeronautical Expenses

168,932

195,414

216,931

216,810

243,810

26,879

12.4%

27,000

12.5%

Net Operating Income

78,879

72,276

84,151

88,195

123,052

38,902

46.2%

34,857

39.5%

Debt Service
Net Cash Flow

(89,130)
(10,251)

(86,564)
(14,288)

(90,323)
(6,173)

(92,425)
(4,230)

(109,259)
13,794

18,935
19,966

21.0%
323.5%

16,834
18,024

18.2%
426.1%

Net cash flow is positive in 2019 due to reduction in revenue sharing
29

Aeronautical Cost Drivers
$ in 000's
(1)

O&M
Debt Service Gross
Debt Service PFC Offset
Amortization
Space Vacancy
TSA Operating Grant and Other
Rate Base Revenues
Commercial area
Total Aero Revenues

2017

2018

2018

2019

Actual

Budget

Forecast

Budget

192,188
113,832
(33,057)
29,654
(2,264)
(901)
299,452
10,574
310,026

210,433
120,555
(33,015)
32,373
(2,650)
(1,028)
326,668
10,212
336,880

210,685
120,555
(33,015)
32,373
(2,638)
(1,259)
326,701
10,212
336,913

237,960
136,477
(33,045)
30,121
(1,304)
(776)
369,432
12,859
382,291

Impact on Aero
Revenues
Budget Change
$

%

27,527
13.1%
15,922
13.2%
(30)
0.1%
(2,252) -7.0%
1,345 -50.8%
253 -24.6%
42,764 13.1%
(2,647) -25.9%
40,117 11.9%

Impact on Aero
Revenues
Budget vs Forecast
$

%

27,275
15,922
(30)
(2,252)
1,334
483
42,731
(362)
42,369

12.9%
13.2%
0.1%
-7.0%
-50.6%
-38.4%
13.1%
-3.5%
12.6%

(1) O&M , Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses

•

•

O&M costs driven by:
- Environmental remediation liability expenses tied to NSAT and SSAT
- Added division initiatives, most of which are non-recurring and primarily allocated to aero businesses
Capital costs driven by debt service on new facilities: Phase I NSAT, Concourse D Terminal

O&M cost increases, many non-recurring, driving up airline costs
30

Airline Cost Management (CPE)
CPE

$14
$12

Revenue Sharing ($000s)
$13.43

$42,310

$11.48

$11.35
$10.12

$10.52

$11.52
$40,000

$35,799
$31,908

$37,413

$30,000

$8

CPE

$29,453

$6
$15,429
$4

2019 Budget:
• Adjusted for
SLOA IV 20%
revenue
sharing (was
50% in 2017
and 40% in
2018)

$20,000

$17,031

Revenue Sharing (000s)

$10

$10.10

$50,000

2019 CPE:
•
Lower than
2018 budget
forecast for
2019 ($13.57)

$10,000
$2
$0

$0
2014

2015

2016

2017

2018 BUD 2018 FCST 2019 BUD

2018 and 2019 revenue sharing has decreased to 40% and 20% with SLOA IV provision
31

2017 CPE Comparison
$26.77

O&M Expense per Enplanement

$25

CPE is an imperfect
comparison. At some
airports, airlines or private
entities operate and pay for
certain facilities making
comparisons difficult

SEA 2019 CPE of $13.43
likely still in Middle Third

$26.14

$20
$19.61
$18.87 $18.84

Targeted Middle Third
$17.00

$15

$16.46
$15.59

$15.02
$13.98

$10

$13.44
$11.59 $11.28

$11.10 $11.03

$10.71 $10.57 $10.52
$9.83 $9.81 $9.79

$9.34

$6.41 $6.13

$5

$5.69
$5.02 $4.89

$4.51
$3.53
$1.23

$0

Airport

CPE is competitive: SEA ranks 13 out of 30 Large Hub Airports
32

CAPITAL BUDGET 2019 - 2023
33

Capital Spending
$935,454
$815,704

$617,544

Forecast

Forecast

$600,000

$400,000

$200,000

$155,970

$164,931

$153,887

2014

2015

2016

YTD

$293,785
YTD

Capital Spend ($000s)

$800,000

2018 BUD

2018 FCST

$0
2017

2019 BUD

2019 will be peak year of spending with IAF and NSAT
34

Capital Budget Summary
Cash Flows (Figures in $000s)

Four Major Projects
International Arrivals Facility
NSAT
Baggage Optimization
Subtotal - Major Projects
Other Existing Projects
Proposed New Projects
SAMP Preliminary Planning / Design
Allowance CIPs
Total Proposed CIP

•
•
•
•

2018
FCST

2019

2020

2021

2022

2023

2019 - 23
TOTAL

239,277
131,716
38,009
409,002
206,552
2,000
617,554

410,752
129,034
50,000
589,786
326,895
1,773
2,000
15,000
935,454

123,104
123,514
50,000
296,618
211,104
19,354
9,500
40,000
576,576

5,217
105,470
50,000
160,687
173,786
44,087
76,500
60,000
515,060

61,520
55,000
116,520
96,447
6,391
94,750
80,000
394,108

55,000
55,000
55,658
210
68,000
100,000
278,868

539,073
419,538
260,000
1,218,611
863,890
71,815
250,750
295,000
2,700,066

Three major projects account for $1.22 billion
Proposing 7 projects totaling $72M spending through 2023
Proposing SAMP preliminary planning/design spending of $251M through 2023 ($300M total)
Besides preliminary planning/design funds, budget does not include potential projects to be
identified by Sustainable Airport Master Plan (SAMP)

Undertaking major program before SAMP projects
35

Major Projects
Cash Flows (Figures in $000s)
Major Projects
Authorized
International Arrivals Fac-IAF
NS NSAT Renov NSTS Lobbies
Checked Bag Recap/Optimization
MT Low Voltage Sys Upgrade
SSAT Infrastructure HVAC
Restroom Upgrades Conc B, C, D
Safedock Upgrade & Expansion
Other (105)
Total - Authorized
Pending Authorization
Airfield Pvmt Repl 2020-2024
C1 Building Floor Expansion*
Proposed New Projects
SAMP Preliminary Planning / Design
Allowance CIPs
Other (50)
Total - Pending Authorization
Grand Total

2018
FCST

2019

2020

2021

2022

2023

2019 - 23
TOTAL

C800583
C800556
C800612
C800061
C800798
C800697
C800779

239,277
131,716
38,009
153
1,218
2,982
949
189,988
604,292

410,752
129,034
50,000
4,000
22,800
12,000
24,825
207,455
860,866

123,104
123,514
50,000
5,000
12,700
13,500
2,137
81,967
411,922

5,216
105,470
50,000
14,500
7,600
2,636
24,476
209,898

61,520
55,000
18,100
2,954
794
9,049
147,417

55,000
19,200
6,000
80,200

539,072
419,538
260,000
60,800
46,054
28,930
26,962
328,947
1,710,303

C800930
C800845
Multiple
Multiple
Multiple

50
600
2,000
10,612
13,262

175
1,000
1,773
2,000
15,000
54,640
74,588

11,013
10,000
19,354
9,500
40,000
74,787
164,654

13,997
20,000
44,087
76,500
60,000
90,577
305,161

15,594
10,000
6,391
94,750
80,000
39,956
246,691

12,977
8,400
210
68,000
100,000
9,081
198,668

53,756
49,400
71,815
250,750
295,000
269,041
989,762

617,554

935,454

576,576

515,059

394,108

278,868

2,700,065

CIP

* Cash flows and budgets are preliminary and may substantially change

Much of 2019-2023 spending for projects already authorized
36

Proposed New Projects
# of
Projects
3
2
1
1
7

Description
Asset Management
Capacity / Facility Challenges
Cargo
Grow Non-Aero Revenue
TOTAL

Cost
Estimate
63,600
4,800
900
2,515
71,815

2019
1,311
239
73
150
1,773

Cash Flows (Figures in $000s)
2020
2021
2022
18,570
39,963
3,546
388
2,291
1,882
206
621
190
1,212
963
19,354 44,087
6,391

2023
210
210

Projects include:
•
Upgrades to STS Train Control: $57.0 million
•
Elevator/Escalator Communication Cards: $6.0M
•
Consolidated Deicing Storage: $3.1M
•
Main Terminal Space Conversion: $2.5M
•
Compactor Capacity: $1.7M
•
BT Properties AOA Connection: $900k
•
Departure Drive Drainage: $600k

Asset management is a key driver for new projects
37

2019 - 23
TOTAL
63,600
4,800
900
2,515
71,815

Capital Budget - Major Projects in $000s

Three major projects account for majority of near term spending
38

FINANCIAL FORECAST
2019 - 2023
39

Key Assumptions/Risks
• Passenger growth: consistent with SAMP
• Expense growth:

- Baseline growth of 4%
- FTE growth in 2020 per ICF Staffing Study
- New facilities add incremental costs (IAF, NSAT)

• Non-airline revenues:

- Continuing recent changes:

• Fewer rental car transactions per O&D
• Growth in TNCs

- Aiming to grow parking revenues, while supporting mode shift to public
transportation
- ADR revenue growth: consistent with implementation of ADR Master Plan
Forecast reflects planned response to closely monitored risks & opportunities
40

Financial Forecast: 2019 - 2023
In $000's
2018 BUD
301,204
244,786
545,989

2019 BUD
366,862
257,461
624,323

2020
422,642
262,735
685,377

2021
486,338
266,917
753,255

2022
516,584
272,732
789,316

2023
545,373
278,669
824,042

Operating Expense
Net Operating Income
Net Non-Operating Income/Expense
CFC Excess*
Available for Debt Service
Net Debt Service
Net Cash Flow

334,856
211,133
4,406
(7,142)
208,398
138,177
70,221

367,092
257,231
6,069
(3,199)
260,101
158,676
101,426

372,132
313,245
6,329
(3,148)
316,425
195,540
120,885

392,677
360,578
6,540
(3,157)
363,961
250,445
113,516

410,587
378,729
6,916
(3,201)
382,445
269,108
113,337

428,970
395,071
7,245
(3,673)
398,643
283,347
115,296

Key Measures
Debt Service Coverage
Revenue Sharing
Passenger Airline CPE
Debt per Enplaned Passenger

1.51
35,677
11.36
115.90

1.64
15,429
13.43
125.78

1.62
15.35
137.77

1.45
17.51
147.57

1.42
18.37
150.97

1.41
19.13
148.43

Airline Revenue
Non-Airline Revenue
Total Revenue

* CFC collection in excess of CFC debt service/O&M is restricted and cannot be used for other
revenue bond debt service

Forecasting increase in CPE and reduction in debt service coverage
41

Future CPE
Future CPE
$30.00

$27.42

$25.82

$25.00

$19.13

$20.00

$14.69

$15.00
$10.00
$5.00
$0.00

SFO (FY24)

LAX (FY24)

SEA (FY23)

PDX (FY22)

Source of future CPEs: WJ Advisors, Ph2 Consulting and AIRMAC LLC

• SEA future CPE driven by
completion of major projects
• Will likely not be within
middle third of 30 large hub
airports (22nd , see appendix)
• Will be competitive compared
to west coast international
gateway hubs (SFO and LAX)
• SAMP projects would drive
CPE higher

Through 2023 forecasting competitive CPE vs. selected west coast airports
42

Maritime Division
2019 Preliminary Budget
October 9, 2018

43

Strategy to Budget Process
Century Agenda

Implementation

Strategic
Planning

Vision
Cross Functional
Evaluation

5- 10
Years

Gap
Strategies and Objectives
(Long Range Plans)

3-5
Years

2019 Business Plan
2019 Budget
2019 Performance Plans

Annual

• Century Agenda and LRP
underway: focus on creating jobs
of the Future in the Ocean
Economy.
• Strong Demand of facilities in all
business lines: Vessel size
growing.
• Matrix organization requires
cross-functional work and close
collaboration
• Developing strategies and
actions to position Maritime
Division and Industry for the
future.

2019 Budget will reflect resources needed to move toward CA Objectives
44

2019 Maritime Priorities

Foundation of Success
45

Maritime Priorities
Maritime Priorities

Century Agenda/LRP

Financial Stability

CA/LRP (S1-Obj 2) Making prudent infrastructure investments.

Customer Service

CA/LRP (S2-Obj 9, PA2) Improving convenience and efficiency for cruise passengers.
LRP/HPO (S1-Obj 1, PA1,2,3) Making the NWSA an attractive West Coast gateway.

Economic Impact

CA/LRP (S1-Obj 5 PA 1,2,4); (S2-Obj 9 PA 1,3,4); (S3-Obj 10 PA1,3); (Obj 12, PA1,2). Fostering family
wage jobs and workforce development.

Safety, Security, Preparedness

LRP/HPO S2-Obj 3 PA1,2,3); (Obj 4, PA1,2,3); (Obj 6, PA2) Continuous improvement in safety,
security, and preparedness.

Sustainability

CA/LRP (S4-Obj 13, PA1,2,3,4); (Obj 14, PA1,2,3); (Obj 15, PA2,3,4); (Obj 16, PA1,2,3); (Obj 17,
PA1,2,3,4) Becoming North America's Greenest, Most Energy Efficient Port.

Innovation, Process
Improvement

CA/LRP (S1-Obj 5, PA3);
LRP/HPO (S1-Obj 2, PA 1,2,3); (Obj 6, PA1) Innovating in the maritime cluster as well in our own
organization.

Equity, Inclusion

LRP/HPO (S4-Obj 7, PA1); (Obj 8, PA1); (Obj 9, PA1) Demonstrate our leadership in equity, equity,
and inclusion.

Asset Management

CA/LRP (S1-Obj 5, PA 1, 2); (Obj 8, PA3)
LRP/HPO (S1-Obj 1, PA2,3); (Obj 2, PA 1) Building a framework for maintaining our maritime assets.
46

2019 Budget Objective
Financial Goal: Maritime Division positive Net
Income including depreciation by 2024.
• How to get there:
- Leverage assets in the cruise business and the grain
terminal to help support the regional fishing fleet,
environment, and local maritime small businesses.
Do well to do good
47

Budget Preview
• 2010-2017 expenses grew faster than revenue
- Revenue grew 3.6%
- Expenses grew 4.5%

• Historically actual expenses significantly under and revenue
over budget. This trend continued with 2018 budget process.
- Scrubbed expenses in 2019 similar to "Zero Based" approach

• 2019 Budget focus: Increase revenue more than expenses
- Revenue up 12.7%
- Expenses up 2.4%

Steps to improve financial sustainability
48

Maritime Division Financial Trends

• Pricing services to market
• Limiting operating expense growth, scaling overhead with growth

Bending the revenue and cost curves in the right direction
49

2010-2017 Line of Business Trends
Compound annual growth rates
Revenue
•
•
•
•
•
•

Cruise - 5.8%
Recreational Boating - 3.4%
Grain Terminal (Bulk) - (1.5%)
Fishing & Operations - 5.6%
Maritime Portfolio Mgmt - 5.2%
Total Maritime - 3.6%

Expenses
•
•
•
•
•
•

Cruise - 9.4%
Recreational Boating - 5.1%
Grain Terminal (Bulk) - 3.7%
Fishing & Operations - 1.5%
Maritime Portfolio Management - 16.1%
Total Maritime - 4.5%

From 2010 to 2017 expenses growing 25% faster than revenue
50

2018-2019 Line of Business Budget Overview
Budget Growth rates
Revenue
•
•
•
•
•
•

Cruise - 36.1%
Recreational Boating - 12.4%
Grain Terminal (Bulk) - (17.6%)
Fishing & Operations - 8.2%
Maritime Portfolio Mgmt - (7.5%)
Total Maritime - 12.7%

Expenses
•
•
•
•
•
•

Cruise - (6.3%)
Recreational Boating - 7.3%
Grain Terminal (Bulk) - (1.7%)
Fishing & Operations - 0.4%
Maritime Portfolio Management - 9.9%
Total Maritime - 2.4%

From 2018 to 2019 budget: Revenues far outpacing expenses led by Cruise
51

2019 Revenue
$ in 000's
Grain
Cruise Operations
Fishing & Operations
Maritime Portfolio Mgmt
Rec Boating
All Other
Total Maritime

2017
Actual
5,427
17,596
9,297
10,787
11,086
(9)
54,183

2018
Budget
5,163
18,150
8,388
11,169
12,166
17
55,053

2018
Forecast
5,163
18,150
8,748
10,769
12,446
17
55,293

2019
Budget
4,254
24,707
9,071
10,328
13,671
0
62,031

Budget Change
Budget to Forecast
$
%
$
%
(909)
-18%
(909)
-18%
6,558
36%
6,558
36%
684
8%
324
4%
(841)
-8%
(441)
-4%
1,504
12%
1,224
10%
(17)
-100%
(17)
-100%
6,978
13%
6,738
12%

Variance to 2018 Budget
•
•
•
•
•

Grain down from "the current political climate and tariffs that have been put in place."
Cruise 36% favorable - 20% tariff increase, CCCL moving to tariff, bigger ships.
Fishing 8% favorable - Salmon Bay Marina acquisition, increased tariff.
Maritime Portfolio Management 8% unfavorable - WSDOT lease expiration at Terminal 106.
Recreational Boating 12% favorable - higher guest moorage and proposed 7% tariff increase.

13% increase in Maritime revenues
52

2019 Maritime Budget Summary

Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions
Incr (Decr)

$ in 000's
Total Revenues

2017
Actual
54,183

Incr (Decr)

2018
2018
Budget Forecast
55,053
55,293

2019
Budget
62,031

Budget Change Budget to Forecast
$
%
$
%
6,978
12.7% 6,738
12.2%

15,383
2,168
11,261
4,583
1,212
4,209
2,858
1,528
6,184
194
49,578

Expenses
Maritime Expenses (Excl. Maint)
Envir Services & Planning
Maintenance Expenses
Econ Dev Expenses
CDD Expenses
Police Expenses
IT
Public Affairs
Other Corporate Expenses
AV
Operating Expenses

12,051
1,125
10,502
4,172
748
3,756
2,711
1,346
5,769
203
42,381

14,610
2,659
11,982
4,996
821
4,473
2,788
1,646
6,631
182
50,788

(773)
491
721
414
(390)
264
(70)
118
447
(12)
1,210

-5.0%
22.7%
6.4%
9.0%
-32.2%
6.3%
-2.4%
7.7%
7.2%
-6.4%
2.4%

(773)
665
721
614
(209)
264
(70)
118
660
(12)
1,978

-5.0%
33.3%
6.4%
14.0%
-20.3%
6.3%
-2.4%
7.7%
11.1%
-6.4%
4.1%

Net Operating Income before Depeciation
Depreciation
NOI after Depreciation

11,802
5,475
6,483 11,243
17,410
17,868
17,868 17,612
(5,608) (12,394) (11,386) (6,370)

5,768
(256)
6,024

105.4%
-1.4%
48.6%

4,760
(256)
5,016

73.4%
-1.4%
44.1%

15,383
1,994
11,261
4,383
1,030
4,209
2,858
1,528
5,971
194
48,810

Increasing profit while absorbing initiative expenses
53

Cruise Financial Goal:
Profitability while driving regional tourism
Revenue up $6.6M/36%
Expenses down $806K/6.3%
Opportunities:
• Increase in demand for
Alaskan cruises
• Growth in vessel sizes and
passenger counts
Risks:
• Shortage of capacity to
house large cruise vessels
• Expensive capital
replacement cost

Raising tariff and managing cost
54

Cruise - Key Strategies and Initiatives
LRP Objective: Double the economic value of
cruise traffic to Washington State.

Initiatives:
• Port Valet $1M ($600K to Cruise, $400K to Aviation).
Budget decreased from 2018.
• Consulting for future planning $750K
• Advertising $250K
Leveraging cruise demand to support regional tourism
55

Recreational Boating Goal: Positive NOI
including Depreciation by 2024
Revenue up $1.5M/12.4%
Expenses up $848K/7.3%
Opportunities:
• Guest moorage
• Lean efforts to increase
revenue
Risks:
• Aging Docks
• Economic Conditions
• Weather
• Security Issues

Incremental steps to profit goal
56

Recreational Boating -
Key Strategies and Initiatives
•
•
•
•

Driving Demand
Destination Awareness
Completing Restroom Project
Restaurant Completion
Attracting New Boaters
- Driving youth participation
- Increasing diversity
- Superyachts

Maintaining high demand for facilities
57

Fishing & Operations Goal:
Positive NOI before Depreciation by 2024
Revenue up $684K/8.2%
Expenses Flat
Opportunities:
• Tug & barge market
• Big fishing moorage
Risks:
• Aging docks
• Environmental constraints
• First full year of Salmon
Bay Marina ownership

Incremental steps to profit goal
58

Fishing & Commercial Operations -
Key Strategies and Initiatives
LRP Objective: Double the economic value of Fishing
and Maritime Cluster.
Initiatives:
• Terminal 91 Berth 6&8 Repair ($35M Capital)
• Terminal 5 North Mooring Dolphins ($3.6M Capital)
• Maritime Innovation Center / Fishermen's Terminal Redevelopment
($34M Capital)
• T-91 North Fender Pile Repair Berth K,L, & M ($200K Expense)

Capital intensive business
59

Maritime Portfolio Management:
Positive NOI including Depreciation by 2024
Revenue down $841K/7.5%
Expenses up $1,230K/9.9%

Opportunities:
• T106 development
• FT redevelopment
• Bigger step increases on tenant
renewals
• Better maintenance management
Risks:
• Long vacancy turnaround times
• Softening real estate market
• Aging facilities expensive to
maintain

Vacancies and Redevelopment: Vacant now -> Upside later

60

Grain Terminal Goal: Net Income Maximized
Revenue down $909K/17.6%
Expenses down $32K/1.7%
Opportunities:
• Recent trend of outperforming
budget
Risks:
• Impact of tariffs and current
political climate
• Port carries upside and
downside risk in contract with
Louis Dreyfus

Net Operating Income supporting other businesses
61

Environmental Initiatives
$ in 000's
Habitat Initiatives
Smith Cover Blue Carbon Pilot Project
PORTfolio Site Maintenance/Enhancements
Umbrella Mitigation Bank

2019 Budget
200
60
68

Customer Service Supervisor

125

On-Call Technical Support for PORTfolio

75

Other Environmental Initiatives
Funding for Federal, State, and Local agencies

50

Programmatic Shoreline Permit

20

Waste Management Program Continuation
Total

55
653

Focus on improving water quality, improving habitat
62

Full-Time Equivalents (FTEs)
2018 Budget

168.0

2018 Changes
Transfer
Transfer in Maritime Security Manager from Corporate
FTE Transfer from Maintenance to Finance
Adjusted 2018

1.0
-1.0
168.0

2019 Budget
Staff Addition/Subraction:
Limited Duration Purchasing Rep
Marine Maint PMG Project Specialist
Retired Facility Mgr - Move to outside services
Admin Intern
College Intern for Marketing
Net Change

1.0
1.0
-0.5
-0.3
-0.3
1.0

Proposed 2018 Budget

169.0

One net new FTE
63

Stormwater Utility
2018 Budget Review
Commission Review
October 9, 2018

64

Stormwater Utility Operating Budget
Incr (Decr)
2017
Actual

$ in 000's
Revenue

2018
Budget

2018
Forecast

2019
Budget

Budget Change
$
%

4,985

5,333

5,333

5,795

461

8.6%

Stormwater Utility Expenses
Maintenance Expenses

945
2,380

1,159
3,413

1,159
3,413

1,052
2,933

(107)
(480)

-9.2%
-14.1%

Environmental & Sustainability
EDD Expenses

375
20

237
18

237
18

268
50

30
32

12.8%
177.6%

CDD Expenses
Corporate Expenses

41
389

51
723

51
723

70
785

19
62

36.7%
8.6%

4,150

5,601

5,601

5,158

(443)

-7.9%

835

(268)

(268)

636

904

NA

Operating Expenses

Total Operating Expenses
Net Operating Income

• Rate increase to 8.2%, additional increase related to Salmon Bay Marina Acquisition.
• FTE to grow from 1 to 2 offset with reduced consulting cost.

Moving into a fully operational utility
65

Stormwater Utility Capital Budget Summary
$'s in 000's
Commission Authorized/Underway
T18 Stormwater outfalls renew/replace
Portwide Stormwater Sys Renewal
Pending Future Authorization
SWU Contingency
Portwide Stormwater Sys Renewal
Small Capital Projects

2019
1,650
1,150
500

2020
1,900
1,400
500

2021
669
169
500

2022
500
500

2023
500
500

-

500
500

1,500
1,500

1,500
1,500

1,500
1,500

150
2,150

150
750
2,150 10,969

150
1,800

150
2,550

150
2,319

Total
5,219
2,719
2,500
5,000
5,000

66

Economic Development Division
2019 Preliminary Budget
October 9, 2018

67

Division Priorities Driven by Century Agenda
Century Agenda

Implementation

Strategic
Planning

Vision
Cross Functional
Evaluation

5- 10
Years

Gap
Strategies and Objectives
(Long Range Plans)

3-5
Years

2019 Business Plan
2019 Budget
2019 Performance Plans

Annual

Division Priorities
• Promote international travel
and cruise adventures
• Promote women and minority
business enterprise (WMBE)
and small business growth
• Advance equitable workforce
training within key Port
industries
• Develop port properties to
support aviation, fishing and
maritime industries
68

Key Budget Assumptions
•
•
•
•
•
•

Maintain zero base budgets for nonrevenue
generating departments
Commercial Properties target 95% occupancy
at year-end 2019.
Conference and Event Center revenue up 13%
from 2018 budget*.
Economic Development Partnership Grants
continued.
Continued funding of Workforce Development.
Tourism initiatives continued.

*Based on draft 2019 budget from Columbia Hospitality Inc.

Near full occupancy, continued Workforce Development and Grant initiatives
69

EDD P&L Summary
$ in 000's
Revenue
Conf & Event Centers
Total Revenue
Expenses
Portfolio Management
Conf & Event Centers
P69 Facilities Expenses
RE Dev & Planning
EconDev Expenses Other
Maintenance Expenses
Maritime Expenses (Excl Maint)
Total EDD & Maritime Expenses
Small Business
Workforce Development
Tourism
EDD Grants
*Total EDD Initiatives
Environmental & Sustainability
CDD Expenses
Police Expenses
Other Central Services
Aviation Division
Total Central Services & Aviation
Envir Remed Liability
Total Expense
NOI Before Depreciation
Depreciation
NOI After Depreciation

2017
Actual
8,658
9,133
17,791

2018
Budget
8,985
9,537
18,522

2018
Forecast
9,097
9,949
19,046

2019
Budget
8,930
10,795
19,725

Incr (Decr)
Budget Variance
$
%
(55)
-1%
1,258
13%
1,203
6%

Incr (Decr)
Budget to Forecast
$
%
(167)
-2%
846
9%
679
4%

3,875
7,639
206
214
763
3,657
52
16,406
64
850
1,234
751
2,900
260
387
51
5,269
113
6,080
0
25,387
(7,596)
3,863
(11,459)

3,778
8,465
289
211
1,227
3,055
344
17,370
140
1,992
1,460
960
4,552
398
329
158
5,816
127
6,829
0
28,751
(10,229)
4,156
(14,385)

3,778
8,465
289
211
1,227
3,055
344
17,370
140
1,292
1,460
960
3,852
363
264
156
5,700
127
6,611
0
27,833
(8,787)
4,156
(12,943)

4,128
9,374
225
216
1,262
4,071
389
19,664
199
2,010
1,463
960
4,632
395
235
228
5,533
155
6,547
0
30,844
(11,119)
3,819
(14,937)

350
908
(65)
5
35
1,017
45
2,294
59
18
3
0
80
(2)
(94)
70
(283)
28
(281)
0
2,093
(890)
(337)
(553)

350
908
(65)
5
35
1,017
45
2,294
59
718
3
0
780
33
(29)
72
(167)
28
(63)
0
3,011
(2,332)
(337)
(1,994)

9%
11%
-22%
2%
3%
33%
13%
13%
42%
1%
0%
0%
2%
-1%
-29%
44%
-5%
22%
-4%
NA
7%
9%
-8%
4%

9%
11%
-22%
2%
3%
33%
13%
13%
42%
56%
0%
NA
20%
9%
-11%
46%
-3%
22%
-1%
NA
11%
27%
-8%
15%

*Portion of 2019 EDD initiatives
assigned to tax levy:
• Small Business - $88K
• Workforce Dev. - $1,624K
• EDD Grants - $960K

Near full occupancy, continued Workforce Development and Grant initiatives
70

Portfolio Management Financial Trend
Revenue up $1.2M/6.5%
Expenses up $2.0M/8.3%
Opportunities:
• T91 Development
• Pier 2 and CEM ground
leases
Risks/Challenges:
• Allocation Structure
• Aging facilities -
expensive to maintain
• Takes years to generate
higher revenues from
existing leases

Conference and Events Center growing revenues and associated costs
71

Portfolio Management- Key Strategies and Initiatives
• Grow and promote Conference and Event Center facilities
while working to increase gross margin
• Migrate tenant billing system for NWSA
• Maximize Parking Revenues
• Negotiate Step up leases across for both Maritime &
Economic Development Divisions

Focus on improved security and customer service
72

Diversity in Contracting/Small Business Assistance
 Implement Diversity in
Contracting Policy/Program

 Provide greater access to Port
opportunities through
education, events, and
assistance
 Expand supplier diversity
 Develop tools and conduct
assessments to measure and
monitor inclusion in contracting

 Support construction business
incubator in partnership with
other public and private
stakeholders

Promoting opportunity for Disadvantaged Businesses
73

Small Business 2019 Initiatives
$ in 000's
2018 Budget
Technical Assistance/Outreach
Construction Business Incubator
Port Gen/Mentoring/Contractor Assistance
Procurement Technical Assistance Center Support
Marketing/ Communication/Design Services
Champion of Inclusion Recognition Event
Supplier Diversity and Program Evaluation
OMWBE Certification
WMBE Best Practice and Implementation

Total

2019 Budget

'19-'18
Change

150
75
15
15
20

60
75
15
5
10

(90)
0
0
(10)
(10)

15
50

15
50

0
0

340

230

(110)

Balanced efforts in Small Business
74

Workforce Development
 Manage airport employment
office in partnership with
PortJobs
 Implement and Strengthen
Regional Construction Trades
Partnership
 Advance aviation career
pathway training initiative
 Invest in regional Career
Connected Learning initiative

Pedro Reynaga, Harbor Operations Intern

Advancing Workforce Development with an equity lens
75

Workforce Development 2019 Initiatives
$ in 000's

'19-'18
Change

2018 Budget

2019 Budget

500
350
75
710
1,635

500
350
60
710
1,620

0
0
(15)
0
(15)

Developing Initiatives
Airport Career Pathways Implementation
Maritime Career Exploration Initiative
K-12 Career Connected Learning
Total Developing Initiatives

250
250
400
900

250
250
400
900

0
0
0
0

Workforce Development Support

25

28

3

Total Workforce Development

2,560

2,548

(13)

Contracted Initiatives
Airport Employment Center (contracted)
Airport Employment Center and Classroom
Employment Continuity Pool Program
Construction Trades - Regional Partnership Services, Pre-Ap
Total Contracted Initiatives

Continued efforts in Workforce Development
76

Tourism
 Promote the cruise industry through
outreach to travel influencers (trade
and media) both domestically and in
priority international markets (UK,
Germany, China & Australia).
 Increase the value of tourism
throughout Washington
•
•
•

Increase reach of Tourism Marketing
Support Program
Enhance Airport Spotlight program
Use WeChat airport site to serve as portal
for destinations in Washington.

Norwegian Bliss Marks Arrival of Larger Cruise Ships

Promoting Cruise, Extended Stays & Use of our Maritime and Aviation Facilities
77

Tourism 2019 Initiatives
$ in 000's
2018 Budget
New Requests
Int. Representation & Work (Australia/China)
Continuing
Adv/Marketing (WeChat, FT, Cruise)
Europe Representation & VS Sponsorship
Tourism Grants
London Trvl Show / Tourism Development
Fam Tours / New Service Inaugural Activity
Total

2019 Budget

'19-'18
Change

98

98

142
410
200
65
62

133
275
200
39
83

(9)
(135)
0
(26)
21

879

828

(51)

Focused on Increasing International and US Tourists to Region & State
78

Real Estate Management and Development







Ground lease Des Moines Creek West property
Initiate Bell Harbor Conference Center
Modernization
Manage real estate portfolio to generate positive
NOI after depreciation and corporate allocations by
year-end 2024.

Complete design work on Gateway and Seattle
Ship Supply buildings and get projects through
the entitlement process
Complete design work on Terminal 91 Uplands
light industrial buildings and get projects started
through entitlement process
Develop a "second 25 years" renewal,
replacement, and modernization strategy for the
HQ facility.
Pier Two

Using our Real Estate & Capital Assets to Advance the Century Agenda
79

Real Estate Development 2019 Initiatives
$ in 000's

'19-'18
Change

2018 Budget

2019 Budget

Appraisals
Development Advisory Consulting

50
250

50
250

0
0

Total

300

300

0

Ongoing

Initiatives centered on executing Real Estate Strategic Plan
80

EDD Admin 2019 Initiatives
$ in 000's

2018 Budget

2019 Budget

960
100
0
60
500
1,620

960
100
93
60
500
1,713

'19-'18
Change

Ongoing
ED Partnership Grants
Membership: Economic Dev Council
Membership: Trade Dev Alliance
Promotional Hosting/Sponsorships
Opportunity Fund
Total

0
0
93
0
0
93

Continuation of ED Partnership Grants & additional public partnerships
81

Pier 69 Facilities 2019 Initiatives
$ in 000's

P69 Lobby Refresh expense portion
P69 Shuttle
Total

'19-'18
Change

2018 Budget

2019 Budget

200
0

0
200

(200)
200

200

200

-

Managing changes in congestion
82

Full-Time Equivalents (FTEs)
2018 Budget

36.0

2018 Changes

Addition of Sr Administrative Assistant, Small Business

(1.0)
(1.0)
1.0

Adjusted 2018

35.0

Elimination of Business Analyst, Small Business
Elimination of Manager, Small Business

2019 Budget
Staff Additions:
WMBE Manager

1.0

Net Change 2019

1.0

Proposed 2019 Budget

36.0

No Change in FTE
83

2019 Operating Divisions' Budget Timeline
2019 Business
Plan and CIP
Development

Budget
Development
Briefing

(May/June)

(June)

Briefing

First Reading &
Public Hearing
for 2019 Budget

2nd Reading &
Final Passage of
2019 Budget

(October 9th)

(Mid-November)

(Late November)

Budget

Will cover operating budget and capital budget
84

2019 Operating Division Budgets
Appendix

85

AVIATION APPENDIX
Additional 2019 Budget Materials
86

Table of Contents
• 2019 FTE reconciliation
• O&M expense budget request details
• Details of budget request for planning
• Revenue budgets for Non-aeronautical business
units
• Future CPE Comparison for 30 large hub airports
Details for operating and capital budget requests are in this appendix
87

2019 FTE Reconciliation
2019 Proposed Budget FTEs

FTEs

2018 Approved Budget
Lost & Found Staffing (LTD)
Senior Art Program Manager (LTD)
Customer Service Admin Assistant
2018 Adjusted Baseline

1040.41
6.00
1.00
1.00
1,048.41

0.8%

5.00

0.5%

8.00

0.8%

40.12

3.9%

0.75
53.87

0.1%
5.2%

1,102.28

5.9%

%

Proposed New FTEs:
Limited Duration FTE's
ORAT positions (LTD)
Rodent Control Specialist (LTD)
Emergency Hire FTE's
Pathfinders (EH)
New FTE's for Core Airport functions:
Landside FTE's
Commercial Management FTE's
Airport Operations FTE's
Terminal Operations FTE's
Capital Development/Facilities & Infrastructure FTE's
Customer Service FTE's
Maintenance FTE's
Fire Department FTE's
New Intern FTE's - College/Graduate
Proposed Increase in 2019 Budget FTEs
2019 Budget Proposed FTEs
plus: Central S ervices FTE's direct charged 100% to airport
2019 Budget FTE's - in Aviation division budget

4.00
1.00
8.00
3.00
3.12
1.00
3.00
2.00
6.00
13.00
9.00

• Chart shows total FTEs
included in airport staffing
study by ICF in 2017,
including Central Services
departments (Av F&B, AV
Environmental Services,
and Noise)

37.75
1,140.03

88

Summary of Budget Requests
Budget Request Category

# of
Requests

FTEs

2019 Budget Requests
NonBaseline
Reoccurring

Total

Employees
Customer Service
Facilities/Capacity
Financial
Safety
Community
Diversity
Sustainability
Partners
2019 Budget Requests - Total Proposed

11
37
51
8
10
2
3
13
12
147

2.4 $
18.0
19.0
2.0
10.0
1.0
2.0
54.4 $

123,624 $
1,227,680
1,989,615
842,195
1,513,261
77,000
77,346
110,000
503,959
6,464,681 $

67,458 $
4,007,816
14,580,629
165,000
732,800
202,500
985,000
1,373,459
22,114,662 $

191,082
5,235,496
16,570,244
1,007,195
2,246,061
77,000
279,846
1,095,000
1,877,419
28,579,343

2019 Budget Requests - Initial Requests

194

54.4 $

17,257,937 $

25,549,151 $

42,807,088

Century Agenda and Airport Priorities drive 2019 Budget Requests
89

Budget Requests: Employees
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Solution

Employees

Absence of admin support for
growing department

Fire Department - Admin Staff Assistant
Hire an On-call Mail Messenger
Package Tracking System
Airport Innovation Travel Budget Right-sizing
AV Finance & Budget Additional Staff Training

Foster Employee Development
and Leverage Talent

Host the 2019 AAAE Geospatial Conference
Art Collection College Intern
AV Finance & Budget Graduate Intern
Civil Engineering College Intern
Graduate Intern in Museology Studies
Reduce Occupational Injury Rate Workstation Ergonomics
(OIR) and Days Away Severity
Rate ( DASR)
Grow Port Intern Program

Employees Total

FTEs

Baseline

NonReoccurring

Total

1.0 $
0.1
-

40,320 $
4,004
10,404
4,000
-

2,500 $
28,666

42,820
4,004
10,404
4,000
28,666

0.3
0.5
0.3
0.3
-

33,322
15,568
16,006
-

7,500
14,697
2,500
2,500
1,000
8,095

7,500
14,697
35,822
18,068
17,006
8,095

2.4 $

123,624 $

67,458 $

191,082

Budget requests driven by strategic priorities
90

Budget Requests: Customer Service
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Customer Service Anticipate, Influence and
Respond to Landside Mobility
Shifts
Expand and Upgrade Wireless
Network Coverage and Indoor
Facilities Cleanliness and
Appearance

Improve Customer
Understanding at Security
Checkpoints
Make Sea-Tac "Gateway Of
Choice"

Solution

FTEs

Baseline

NonReoccurring
-

Total

Hire a Parking Services Representative

1.0 $

66,451 $

$

66,451

Aira Annual Subscription
Conduct Wireless Spectrum Analysis
AOB Lobby Furniture - Refurb
Art Handler Budget Increase
Custodial Services in Transit Areas, Garage,
and NE Cruise Lot
Escalator Cleaning
Hire a Custodial Shift Supervisor/Quality
Assurance Technician
Restroom Ambient Scent System
Hire four (4) Pathfinders to interact with TSA,
Airlines and other tenants

-

15,000
9,550
85,500

25,000
25,000
-

15,000
25,000
25,000
9,550
85,500

1.0

99,000
63,329

3,500

99,000
66,829

4.0

182,616

16,426
13,200

16,426
195,816

Customer Service Start-Up Contract Year
Three
Sea-Tac Branding

-

-

68,000

68,000

-

-

350,000

350,000

Budget requests driven by strategic priorities
91

Budget Requests: Customer Service
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Customer Service Provide Real-Time AirportRelated Information to
Customers Seven Days Per
Week

Rightsizing to Reflect Current
Staffing Level

Solution
Acquire New Features and Capabilities in the
Map SDK (Smartphone App)
Aviation Telephone Call Center
Customer Communications real-time
messaging, printed material production and
language translations
Expand Indoor Navigation Infrastructure
Phone Tree Enhancements
STS Info System Graphic Support
Customer Care Department Right-Sizing
Customer Experience & Communication
Department Right-Sizing
Customer Service Department Right-Sizing
Non-Payroll Standard FTE Package for existing
vacant position (Cust Comm Splst)
Right-size Sr. Art Manager Non-Payroll

FTEs

Baseline

NonReoccurring

-

-

100,000

100,000

-

65,000
50,000

-

65,000
50,000

-

24,000
30,000
50,000
5,365
12,000

56,000
-

80,000
30,000
50,000
5,365
12,000

-

47,340
6,550

-

47,340
6,550

-

-

6,855

6,855

Total

Budget requests driven by strategic priorities
92

Budget Requests: Customer Service
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Customer Service Wayfinding/Processing
Passengers

Solution

Hire a Landside Supervisor
Hire a Signing Graphics Specialist
Hire eight (8) emergency pathfinders
Portable Induction Loop Hearing Aid System
Rental Car Facility Curbside Assistance
Seasonal Customer Service Staff
Signage and Wayfinding Master Plan
Wheelchair Services Right-Sizing
Equip Employees with The Skills Airport-wide Mystery Shopper Program
and Knowledge to Deliver
Planning & Benchmark Study
Exceptional Customer Service
Continue Customer Service contract funding
to support training and program
development
Contract training for AV SEA frontline staff
Customer Service course (WE ARE) training
materials
Hire a Customer Communications Specialist
Hire a Volunteer Coordinator
Customer Service Total

FTEs

Baseline

NonReoccurring

Total

1.0
1.0
8.0
-

52,905
55,246
120,000
23,000
-

3,300
3,000
245,235
15,000
2,500,000
400,000
100,000

56,205
58,246
245,235
15,000
120,000
2,500,000
400,000
23,000
100,000

-

-

74,000

74,000

-

25,000
20,000

-

25,000
20,000

1.0
61,549
3,300
64,849
1.0
58,280
58,280
18.0 $ 1,227,680 $ 4,007,816 $ 5,235,496

Budget requests driven by strategic priorities
93

Budget Requests: Facilities/Capacity
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Facilities/Capacity Meet the Maintenance Needs
and Standards of the Existing
Facilities Under Increasing
Demand

Solution
Add to Grease Interceptor - Sewer Clearing
Budget
Alternative Utility Facilities - Cummins Service
Agreement
Cleaning and Protection of Cellantano
Painting
Compactor Maintenance and Repair
Conference Center AV System Maintenance
Elevator & Escalator Repairs Expense Budget
Increase
Hire a AVM Asset Management Analyst
Hire a Boiler Room (BLRM)
Hire a Boiler Room Capital (BLRM)
Hire a Bus-Automotive Mechanic
Hire a Civil Engineer
Hire a Conveyor (CONV)
Hire a Field Crew Garage
Hire two (2) Electronic Technicians
Hire two (2) Passenger Loading Bridge FTEs
Hire two (2) wireman for Utility Metering

FTEs
-

Baseline
$

NonReoccurring

Total

90,000 $

-

$

90,000

-

75,000

-

75,000

-

-

60,000

60,000

-

58,000
19,102
150,000

-

58,000
19,102
150,000

1.0
1.0
1.0
1.0
1.0
1.0
1.0
2.0
2.0
2.0

63,329
65,687
65,687
76,396
83,055
64,047
42,626
126,882
130,006
147,979

3,500
3,000
3,000
3,000
3,460
3,000
3,000
11,000
6,000
11,000

66,829
68,687
68,687
79,396
86,515
67,047
45,626
137,882
136,006
158,979

Budget requests driven by strategic priorities
94

Budget Requests: Facilities/Capacity
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Facilities/Capacity Meet the Maintenance Needs
and Standards of the Existing
Facilities Under Increasing
Demand

Rightsizing to Reflect Current
Staffing Level

Solution

FTEs

Baseline

NonReoccurring

Total

Maint & Repair Expense Budget Increase - RCF

-

68,000

-

68,000

Maintenance Materials Expense Budget
Increase - Baggage Systems
Parking Garage Concrete Distress Repairs
Purchase 2018 ICC Books for the Building
Department
Quality Assurance (Q&A) Inspection Software
for Operations and ADR
Upgrade/Replacement
Small Works Expense Budget Increase
State Building Code Council Payment
Telecommunications Delivery System Upgrade

-

80,000

-

80,000

-

-

50,000
11,252

50,000
11,252

-

-

120,000

120,000

-

130,000
3,500
-

200,000

130,000
3,500
200,000

Used Cooking Oil Tank Maint and Repair
Watermain Labeling & Leak Detection
Fuel Expense Budget Increase
Phone Purchases and cell service - Right-sizing
budget

-

13,000
50,000
180,000
7,500

-

13,000
50,000
180,000
7,500

Budget requests driven by strategic priorities
95

Budget Requests: Facilities/Capacity
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Facilities/Capacity Strategic Asset Management

Pest Control & Waste
Management

Planning for Future Facilities
Needs

Solution
Asset Management Gap Assessment
Implementation
Completion of Asset Management Gap
Assessment
Critical Asset Monitoring - IoT (Internet of
Things)
Hire a Rodent Control Specialist (2 year
limited duration)
Integrated Pest Management
Ongoing Solid Waste System Improvements
Waste Receptacle Replacement
Airfield-Airspace Study
Executive Program Management
Hire a Project Development Manager
Infrastructure Systems Master Planning
Long-Term Aviation Office Facility Plans
On Call project planning providing project
planning definition with conceptual design
On-Call Planning
SR 518 Corridor Study

FTEs

Baseline

NonReoccurring

Total

-

-

1,000,000

1,000,000

-

-

50,000

50,000

-

-

90,000

90,000

1.0

-

97,875

97,875

1.0
-

90,000
78,820
-

800,000
175,000
1,000,000
1,620,000
3,300
2,000,000
100,000
650,000

800,000
90,000
175,000
1,000,000
1,620,000
82,120
2,000,000
100,000
650,000

-

-

1,500,000
350,000

1,500,000
350,000

Budget requests driven by strategic priorities
96

Budget Requests: Facilities/Capacity
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Facilities/Capacity Complete the Sustainable
Airport Master Plan

Implement Operational
Readiness and Airport
Transition (ORAT)

Facilities/Capacity Total

FTEs

Baseline

NonReoccurring

Total

Follow On Planning/Project definition for
SAMP near-term projects
SAMP Environmental
Sustainable Airport Master Plan (SAMP)
Environmental Review and Permitting
Hire a limited duration ORAT employee for
Public Affairs
Hire a limited duration ORAT
Specialist/Admin
Hire two (2) limited duration ORAT specialists

-

-

2,500,000

2,500,000

-

-

300,000
1,600,000

300,000
1,600,000

1.0

-

64,987

64,987

1.0

-

58,280

58,280

2.0

-

129,974

129,974

ORAT Promotional Hosting
Right-sizing Travel Budget for Operational
Readiness and Activation Department (New)

-

10,000
21,000

-

10,000
21,000

19.0

1,989,615

Solution

14,580,629

16,570,244

Budget requests driven by strategic priorities
97

Budget Requests: Safety
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Safety

Continuously Improve Safety of Certified Service Provider Program (CSPP)
Airport Operations Area
implementation
Fire Department - Bunker Gear Purchase
Hire an Airfield ADM
Hire eight (8) fire fighters
Facility Life-Safety
Airport Exit Sign Evaluation
Enhancements
Perform Smoke Control Testing
Implement Safety Management Hire a Safety Management System (SMS)
System
Specialist
SMS E-learning & VR training program
development
Other
Arc Flash Ongoing Work
Arc Flash Study

Safety Total

Solution

FTEs
1.0
8.0
1.0

Baseline
$

-

NonReoccurring

Total

$

200,000

76,461
1,244,313
50,000
67,487

-

-

75,000
10.0 $ 1,513,261 $

200,000 $
79,700
2,500
62,300
160,000
3,300

79,700
78,961
1,306,613
160,000
50,000
70,787

150,000

150,000

75,000
75,000
75,000
732,800 $ 2,246,061

Budget requests driven by strategic priorities
98

Budget Requests: Financial, Community, Diversity
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Solution

Financial

Keep Airline Costs Competitive
Through Increasing NonAeronautical Revenue

Consultant Duty Free Expansion Planning
Hire a Property Manager
Hire a Yield Management Analyst
Parking Pre Booking Expenses
Parking Ticket Stock
Additional Garbage Disposal expenses at
transit operations center
Garage Architectural Maintenance
New Recycling Surcharge

Rightsizing to reflect current
usage level

Financial Total
Community

Airport Noise Mitigation and
Community Outreach

Community Total
Diversity
Promote Small Business

Diversity Total

Noise Consulting Services
PlaneNoise Complaint Handling System
Annual Subscription
ACDBE Disparity Study
ADR Business Manager-Small Business
Initiative
Consulting Services for FAA ACDBE TriAnnuals Goals and Reporting

FTEs

Baseline

NonReoccurring

Total

$
1.0
1.0
-

$
64,282
69,913
390,000
15,000
8,000

100,000 $
2,500
2,500
60,000
-

2.0 $
$
-

200,000
95,000
842,195 $
51,000 $
26,000

200,000
95,000
165,000 $ 1,007,195
$
51,000
26,000

$
$
1.0

77,000 $
$
77,346

$
125,000 $
2,500

77,000
125,000
79,846

-

75,000

75,000

77,346 $

202,500 $

279,846

1.0 $

100,000
66,782
72,413
450,000
15,000
8,000

Budget requests driven by strategic priorities
99

Budget Requests: Sustainability
2019 Budget Requests

FTEs

AV Priority

Problem/Need/Opportunity

Solution

Sustainability

Be the Greenest and Most
Energy-Efficient Port in North
America

Complete renewable energy source study
started 2018
Digital Lighting Standards
Energy Conservation Assessment
Ground Transportation Alternatives Program
Implantation
Implement Sustainable Aviation Fuels (SAF)
workplan
LED Lighting Upgrades
Water Conservation Assessment
Complete 2018 BOD Study
Complete Airport's 5-year NPDES Permit
Renewal Application
Flight Corridor Safety Program Habitat
Management
Sanitary Sewer BOD Monitoring
Contaminated Site Management - PFAS

-

Technical Support for IWS Deicing
Management Study

Environmental Compliance

Implement Clean-Up Projects
Across the Port
Meet or Exceed Requirements
for Stormwater Leaving PortOwned or Operated Facilities
Sustainability Total

Baseline
$

-

NonReoccurring
$

Total

30,000 $

30,000

-

-

200,000
150,000
75,000

200,000
150,000
75,000

-

-

125,000

125,000

-

20,000
-

150,000
15,000
100,000

20,000
150,000
15,000
100,000

-

60,000

-

60,000

-

30,000
-

65,000

30,000
65,000

-

-

75,000

75,000

-

$

110,000 $

985,000 $ 1,095,000

Budget requests driven by strategic priorities
100

Budget Requests: Partners
2019 Budget Requests
AV Priority

Problem/Need/Opportunity

Partners

Air Service Development
New Air Service Incentives
Assure Airport Operational
Hire an Airline Scheduling Coordinator
Continuity and Interoperability
Via 24/7/365 Situational
Awareness
Increasing Volume
Airline Forum Registration Costs
Custodial Waste Collection Pilot
Employee-wide Sanitation Training; Human
Factor Trainging, SMS Awareness/Driver
Training
Hire a temporary Load Dock Coordinator
Hire an Employee Operations Bus Driver
Portable Restooms
Partners' Employee Services
Cell Charges GPS Employee Parking
Cell Charges GPS Rental Cars
Complete Circadian Lighting Study Starting
2018
External airport Learning Management
System (AAAE IET Training Platform
Enhancement)

Partners Total

Solution

FTEs

Baseline

NonReoccurring

Total

$
1.0

$ 1,100,000 $ 1,100,000
67,487
3,300
70,787

-

13,000
-

100,000
100,000

13,000
100,000
100,000

1.0
-

44,472
320,000
16,000
25,000
-

60,159
10,000

60,159
44,472
320,000
16,000
25,000
10,000

-

18,000

-

18,000

2.0 $

503,959 $ 1,373,459 $ 1,877,419

Budget requests driven by strategic priorities
101

2019 Planning Budget Details
2019 Proposed Advanced Planning and On-Call Planning ($000)

2019 Proposed On-call Planning Detail ($000)

Advanced Planning Detail
Project Management Team
Main Terminal Optimization Plan
T2 - North Gates, bridge & tunnel connections,
processor refinements, etc.
Implementation Plan - schedule/phasing, cost estimates
North Airfield & Grading Plan
North East GT Lot

Aviation Planning
GTAP Follow-on Support
Express Bus Study
Landscape Master Plan
Airfield
Terminal
Landside
Off-Airport Properties

600
400
100
80
120
80
120

Capital Program Management
Airline Realignment - 2021 Planning
Concourse B/C/D HVAC Upgrades, Smoke Control Planning
P3 Feasibility Assessment
Pop-up On-call

150
150
300
50

On-call Planning (detail in next box)

Total Advanced Planning and On-call Planning

2,500
337
385
577
481
433
288
2,150

4,650

1,500

Total On-Call Planning

650

2,150

2019 Budget Request detail for $4.65M Advance Planning
102

Public Parking
Public Parking - Revenue Detail
$ in 000's
Parking Garage Revenue to Port
Gross Sales - Parking Garage
less - WA Sales Tax
less - SeaTac Parking Tax
Revenue to Port - General Parking
Other Garage Revenue Programs
Corporate Premier Parking Program
Passport Parking Program
Revenue to Port - Parking Programs
Total Parking Garage Revenue
Other Parking Revenue
Concession Rent - Doug Fox off-site parking
Space Rent and Other Parking Revenue

2016
Actual

2017
Actual

2018
Budget

2018
Forecast

2019
Budget

73,707
(6,081)
(4,212)
63,414

81,404
(6,818)
(6,563)
68,024

87,112
(7,102)
(7,196)
71,022

87,015
(7,358)
(7,274)
72,383

89,569
(7,455)
(7,560)
74,554

2,457
(353)
(364)
3,532

594
2,749
3,344
66,758

958
2,977
3,934
71,958

976
3,356
4,331
75,353

1,211
3,233
4,444
76,827

1,247
3,330
4,578
79,132

2,751
32

3,109
25

3,200
19

3,200
19

Total Parking Revenue

69,540

75,093

78,572

80,046

Enplanements
in 000's
Total Enplanements
O&D %
O&D Enplanements
Garage Revenue per O&D Enplanement

Budget Change

$

%

Budget vs Forecast

$

%

3%
5%
5%
5%

2,554
(97)
(286)
2,171

2.9%
1.3%
3.9%
3.0%

271
(25)
246
3,778

28%
-1%
6%
5%

36
97
133
2,304

3.0%
3.0%
3.0%
3.0%

3,200
19

0

0%
0%

0

0.0%
0.0%

82,350

3,778

4.8%

2,304

2.9%

2016
2017
2018
2018
2019
Budget Change
Actual
Actual
Budget
Forecast
Budget
#
%
22,796
23,416
24,654
24,654
25,394
740 3.0%
69.4%
70.3%
69.2%
70.3%
70.3%
0 1.6%
15,821
16,461
17,061
17,332
17,852
791 4.6%
$ 4.22 $ 4.37 $ 4.42 $ 4.43 $ 4.43 $ 0.02 0.4%

Budget vs Forecast

#
740
520
$ (0.00)

%
3.0%
0.0%
3.0%
0.0%

Parking growth consistent with enplanement growth
103

Rental Cars
Rental Car - Revenue Detail
# and $ in 000's

2015
Actual
30,662

2016
Actual
33,465

2017
Actual
31,352

2018
2018
Budget Forecast
31,508
31,299

2019
Budget
30,991

Budget Change

RCF Concession Revenue to Port

2014
Actual
28,955

$
(518)

%
-1.6%

$
(308)

%
-1.0%

Total Enplanements
O&D %
O&D Enplanements

18,717
73.8%
13,813

21,109
69.8%
14,734

22,796
69.4%
15,821

23,416
70.3%
16,461

24,654
69.2%
17,061

24,654
70.3%
17,332

25,394
70.3%
17,852

740
1.1%
791

3.0%
1.6%
4.6%

740
520

3.0%
0.0%
3.0%

Gross Sales by Operators
Total Transactions
Average Ticket
Average Length of Stay
Transactions/O&D Enplanements

281,884
1,289
$218.64
4.31
8.15%

302,372
1,390
$217.51
4.34
9.44%

310,987
1,411
$220.42
4.34
8.92%

313,654
1,388
$226.03
4.37
8.43%

315,083
1,437
$219.22
4.37
8.42%

312,987
1,395
$224.33
4.38
8.05%

309,906
1,384
$224.00
4.37
7.75%

(5,178)
(54)
0
(0)

-1.6%
-3.7%
2.2%
0.0%
-8.0%

(3,081)
(12)
($0.33)
(0.00)
-0.30%

-1.0%
-0.8%
-0.1%
-0.1%
-3.7%

CFC Revenue Summary
Total Transaction Days
5,554
6,039
6,129
6,067
6,287
6,109
6,052
CFC Rate per Transaction Day
$6.00
$6.00
$6.00
$6.00
$6.00
$6.00
$6.00
Total CFC Revenue Earned
33,554
36,206
36,830
36,261
37,723
36,655
36,311
Reserve for debt service and CP interest: (19,946) (20,543) (21,708) (22,621) (22,161) (22,003) (23,481)
Reserve for CP principal payment:
(3,000)
(3,000)
(3,000)
Debt Service Reserve Requirement (19,946) (23,543) (24,708) (25,621) (22,161) (22,003) (23,481)
Residual - CFC Operating Revenue: 13,608
12,663
12,122
10,641
15,563
14,653
12,830

(235)
(1,412)
1,321
1,321
(2,733)

-3.7%
0.0%
-3.7%
6.0%
NA
6.0%
-17.6%

(57)
$0.00
(344)
1,479
1,479
(1,823)

-0.9%
0.0%
-0.9%
6.7%
NA
6.7%
-12.4%

Rental Car - Revenue Summary
2016
# and $ in 000's
Actual
RCF Concession Revenue to Port
28,955
Residual - CFC Operating Revenue:
13,608
Land Rent/Space Rent/Other
3,541
Total Rental Cars Operating Revenue 46,104

2016
Actual
30,662
12,663
3,189
46,515

2016
Actual
33,465
12,122
3,617
49,203

2017
Actual
31,352
10,641
3,699
45,691

2018
2018
Budget Forecast
31,508
31,299
15,563
14,653
3,786
3,786
50,857
49,737

2019
Budget
30,991
12,830
3,788
47,609

Budget vs Forecast

Budget Change

Budget vs Forecast

$
(518)
(2,733)
3
(3,248)

$
(308)
(1,823)
3
(2,128)

%
-1.6%
-17.6%
0.1%
-6.4%

%
-1.0%
-12.4%
0.1%
-4.3%

Transactions per O&D enplanement continue to decline, higher debt service puts additional downward pressure on CFC
104

Ground Transportation
Revenue to Port
$ in 000's
Ground Transportation Revenues
Transportation Network Companies
On Demand Taxis
On Demand Limos
Belled In Taxis (Annual Permit)
Pre-Arranged Limos (Annual Permit)
Courtesy Cars (cost recovery)
All other Operators (cost recovery)
Other Misc Revenues
Total GT Revenue

2016

2017

2018

Actual

Actual

Budget Forecast Budget

3,222
5,045
869
159
496
2,039
669
305
12,803

6,940
5,199
858
45
626
1,319
360
337
15,684

8,122
4,591
855
108
603
1,909
433
264
16,884

2018

10,080
4,307
849
35
628
1,763
361
378
18,401

2019

11,574
4,176
842
43
815
2,477
393
264
20,584

Budget Change

$

Budget vs Forecast

%

$

3,452 42.5%
(415) -9.0%
(13) -1.5%
(65) -60.2%
212 35.1%
568 29.8%
(40) -9.3%
(0) 0.0%
3,700 21.9%

%

1,494 14.8%
(131) -3.0%
(7) -0.8%
8 24.0%
187 29.8%
714 40.5%
32
8.8%
(114) -30.2%
2,183 11.9%

Trip Activity
in 000's
Ground Transportation Trips
Transportation Network Companies
On Demand Taxis
On Demand Limos
Belled In Taxis (Annual Permit)
Pre-Arranged Limos (Annual Permit)
Courtesy Cars (cost recovery)
All other Operators (cost recovery)
Total GT Trip Activity

2016
Actual
602
827
74
195
369
1,197
95
3,454

2017
Actual
1,277
750
72
56
337
1,175
79
3,825

2018
2018
2019
Budget Forecast Budget
1,354
765
71
52
325
1,211
78
3,934

1,678
718
69
18
345
1,174
57
4,116

1,929
696
67
18
344
1,160
57
4,328

Budget Change

#

Budget vs Forecast

%

575 42.5%
(69) -9.0%
(3) -4.7%
(34) -65.9%
19
5.9%
(51) -4.2%
(22) -27.6%
394 10.0%

#

%

251
(22)
(2)
(0)
(1)
(14)
(0)
212

14.9%
-3.0%
-2.9%
-1.9%
-0.2%
-1.2%
-0.7%
5.1%

Strong growth in TNC volume continues into 2019
105

Airport Dining & Retail and Terminal Leased Space
Airport Dining & Retail and Terminal
Leased Space
Org Basis (in 000's)
ADR Revenue

2014
Actual

2015
Actual

2016
Actual

2017
Actual

2018
2018
2019
Budget Forecast Budget

Food & Beverage 1

15,223

17,427

21,314

21,579

21,700

21,700

Retail 1

11,213

12,127

13,496

13,989

14,344

16,044

Duty Free 1

6,664

6,769

6,265

6,912

7,251

Personal Services 1

3,201

3,548

3,657

3,728

3,809

Advertising

5,815

6,460

6,725

6,662

Space Rental - Terminal

3,483

4,629

5,190

5,641

476
46,076

477
51,437

605
57,252

1,862
44,214

2,569
48,868

Sales per Enplanement
SPE - Food & Beverage
SPE - Retail Sales
SPE - Duty Free
SPE - Personal Services
SPE - Airport Dining & Retail

$6.46
$4.10
$1.12
$1.17
$12.84

Concession Revenue 1
per Enplanement

$1.94

All other revenue
Total ADR & Terminal Lease Revenue
Expenses
ADR & Terminal Leased Space
Income from Operations

Budget Change

Budget vs. Forecast

$

%

$

%

23,780

2,081

9.6%

2,081

9.6%

15,445

1,101

7.7%

(599)

-3.7%

7,251

7,497

246

3.4%

246

3.4%

3,809

3,785

(24)

-0.6%

(24)

-0.6%

6,021

6,680

6,896

874

14.5%

216

3.2%

5,664

6,121

6,026

362

6.4%

(95)

-1.5%

469
58,980

300
59,087

377
61,980

481
63,909

181
4,822

60.4%
104
8.2% 1,929

27.6%
3.1%

2,241
55,010

1,962
57,018

2,163
56,924

2,508
59,472

2,561
61,348

398
4,423

18.4%
54
7.8% 1,876

2.1%
3.2%

$6.48
$3.92
$0.96
$1.08
$12.45

$7.23
$3.86
$0.89
$1.00
$12.98

$7.18
$4.07
$0.91
$0.95
$13.12

$6.93
$4.03
$0.90
$0.90
$12.76

$6.93
$4.16
$0.90
$0.90
$12.89

$7.46
$3.87
$0.91
$0.89
$13.12

$0.53
($0.17)
$0.01
($0.01)
$0.35

7.6% $0.53
-4.2% ($0.30)
0.9% $0.01
-1.4% ($0.01)
2.8% $0.22

7.6%
-7.2%
0.9%
-1.4%
1.7%

$1.89

$1.96

$1.97

$1.91

$1.98

$2.03

$0.12

6.3% $0.05

2.6%

Strong Revenue Growth continues in 2019 with the opening of 20 new full and quick service dining units
106

Non Aero Commercial Properties

Non-Aero Commercial Properties
Org Basis (in 000's)

2016
Actual

2017
Actual

2018
Budget

2018
Forecast

2019
Budget

Revenue Source
NEW DEVELOPMENT PARCELS
DMCBP Land Rents - all (3) phases
DMCBP In Lieu - 7yr repayment schedule (Phase I & III)
DMCBP In Lieu - lump sum payment (Phase II)
Subtotal DMCBP:
NERA 2 Land Rent
NERA 3 Land Rent
DMC-North Land Rent
DMC-West Land Rent
Owner Liaison Reimbursement - various properties
Subtotal New Development revenue:

471
318
789
789

1,079
445
5,434
6,958
15
42
7,015

1,203
482
1,685
248
678
61
60
2,732

1,542
482
2,024
248
678
63
85
3,098

1,573
522
2,095
268
734
593
25
3,715

In-Flight Kitchen Revenue
Burien NERA 3 FAA Pilot Program grant
All Other Commercial Properties Revenue
TOTAL - ORG 3630 Revenue

7,025
908
1,271
9,992

7,827
1,402
1,798
18,042

8,054
2,070
1,850
14,706

8,554
1,734
1,850
15,236

8,664
1,841
14,219

Operating Expenses
DMCBP frontage fee amort - 7yr pymt (Phase I & III)
DMCBP frontage fee amort. - lump sum (Phase II)
Owner Liaison expense - various properties
Subtotal New Development expense:

271
271

346
3,578
3,924

346
60
406

346
85
431

346
25
371

Burien NERA 3 FAA Pilot - grant eligible expenses
All Other Commercial Properties expenses
TOTAL - ORG 3630 Expense

987
434
1,692

1,598
406
5,928

2,300
554
3,260

1,927
554
2,912

308
679

Income from Operations

8,300

12,114

11,446

12,324

13,541

Budget Change
$
%

370
40
410
20
56
531
(35)
982

30.7%
8.3%
n/a
24.3%
8.3%
8.3%
868.7%
n/a
-58.3%
36.0%

610
7.6%
(2,070) -100.0%
(10) -0.5%
(487) -3.3%

0
(35)
(35)

0.0%
n/a
-58.3%
-8.6%

Forecast Change
$
%

31
40
71
20
56
530
(60)
617

2.0%
8.3%
n/a
3.5%
8.3%
8.3%
844.1%
n/a
-70.6%
19.9%

110
1.3%
(1,734) -100.0%
(10) -0.5%
(1,016) -6.7%

(2,300) -100.0%
(247) -44.5%
(2,582) -79.2%

0
0.0%
n/a
(60) -70.6%
(60) -13.9%
n/a
(1,927) -100.0%
(247) -44.5%
(2,233) -76.7%

2,095

1,217

18.3%

9.9%

NERA FAA grant ended in 2018; New RE development primary driver of revenue growth
107

Clubs and Lounges
Clubs & Lounges
Org Basis (in 000's)
Revenue

2014
Actual

2015
Actual

2016
Actual

2017
Actual

2018
2018
2019
Budget Forecast Budget

Clubs & Lounges Operating Revenue
Total Revenue

1,518
1,518

2,392
2,392

3,028
3,028

5,041
5,041

5,630
5,630

5,830
5,830

Expenses
Clubs & Lounges Operating Expense
Base Management Fee
Incentive Management Fee
All other expense
Total Expense

614
88
73
32
806

927
159
26
30
1,142

1,079
182
83
73
1,418

1,598
182
103
76
1,959

1,866
182
174
84
2,307

Income from Operations

711

1,250

1,609

3,081

3,323

Budget Change

Forecast Change

$

%

$

%

8,520
8,520

2,890
2,890

51.3%
51.3%

2,690
2,690

46.1%
46.1%

1,866
182
174
84
2,307

2,780
182
229
128
3,319

913
55
43
1,012

48.9%
0.0%
31.8%
51.3%
43.9%

913
55
43
1,012

48.9%
0.0%
31.8%
51.3%
43.9%

3,523

5,201

1,878

56.5%

1,678

47.6%

Airport lounges continue to grow - increased volume drives extended hours of operation
108

Future CPE Comparison: 30 Large Hub Airports
$30.00
$27.47
$27.42

$26.77

Projected Increase
Current CPE

Future CPE Outlook - 30 Large Hub Airports
Prepared by WJ Advisors, PH2 Consulting

$26.14$25.93$25.82

$25.00
$23.40

$19.75

$20.00

$19.13

$18.56
$16.63$16.57
$15.04$14.69

$15.00

$14.46

$14.07$13.77
$12.02
$11.10

$10.00

$10.66

$10.27

$9.85 $9.58 $9.53

$9.34
$7.89
$6.99
$6.25
$4.51

$5.00

$2.78

$0.00
ORD SFO EWR
(FY25) (FY24)

JFK

LGA LAX MIA IAD SEA PHL BOS DEN MDW PDX SAN DCA DFW HNL IAH LAS MCO DTW SLC FLL BWI PHX MSP TPA ATL CLT
(FY23) (FY24) (FY23) (FY23) (FY23) (FY23) (FY21) (FY25) (FY25) (FY22) (FY23) (FY23) (FY18) (FY22) (FY19) (FY20) (FY23) (FY25) (FY24) (FY27) (FY19) (FY23) (FY22) (FY24)
(FY22)

Many airports anticipate rising CPEs
109

MARITIME APPENDIX
Additional 2019 Budget Materials

110

Marine Maintenance
$ in 000s
Project Expense
Operating Expense
Total Maintenance

2017
Actual
1,323
18,873
20,196
Project

2018
Budget
1,924
18,304
20,228

2018
Forecast
1,539
20,454
21,993

2019
Budget
3,286
19,171
22,457

Budget to Budget
$
%
1,362
71%
867
5%
2,228
11%

Budget to Forecast
$
%
1,746
113.5%
(1,283)
-6.3%
464
2.1%

OpExp

10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

•
•
•

Assumes 4% increase in
labor cost
Materials also increasing
Goal to improve project
tracking for more
accurate cost allocation

17A 18B 19B 17A 18B 19B 17A 18B 19B 17A 18B 19B 17A 18B 19B 17A 18B 19B
Corporate

EDD

Maintenance

Maritime

NWSA

SWU

Improvement in identifying project work
111

Marine Maintenance
$ in 000's
2019 Budget

%

New Requests - One-Time or Phased Work

Total

EDD Portfolio Management

722

22%

Fishing & Operations

655

20%

Rec Boating

504

15%

P69 Facilities

305

9%

Cruise

294

9%

MD Portfolio Management

257

8%

Maintenance

227

7%

MD Admin

130

4%

Parks
NWSA Container
NWSA Non-Container

113
40
38
3,286

3%
1%
1%
100%

One-Time expense focus
112