Item No. 3 Morning Study Session Meeting Date: October 8, 2019 Aviation Division 2020 Preliminary Budget Commission Briefing October 8, 2019 Outline for Aviation presentation • Strategic priorities • Operating budget summary • Expense changes and budget requests • Revenues and NOI: aeronautical and non-aeronautical • Key measures and trends • Capital Budget 2020 - 2024 • Proposed new capital projects • Financial Forecast for 2020 - 2024 • Funding plan highlights, use of PFCs • Appendix with budget details and reports 2 Strategy To Budget Process Implementation Strategic Planning Century Agenda Vision/Goals 5- 10 Years SWOT Gap Objectives & Strategies (Long Range Plans) 3 - 5 Years 2020 Business Plan 2020 Budget Annual 2020 Performance Plans 3 Strategic Priorities: Vision/Goals AV Priorities Safety Security Employees Innovation & Efficiencies Community & Social Responsibility Customer Service Environment & Sustainability Financial Performance Facility Planning & Capital Projects Vision/Long-term Goals Airfield Composite Safety Score = 35 100% of employees go home safely Zero discrepancies on TSA audit Zero breaches Zero incidents of intentional harm Be a high performance organization 100% of staff understands how their work contributes to success of Airport and Port Lean process improvements and innovation ingrained in Port's culture Sustainable share of Port economic opportunities go to disadvantaged businesses Skytrax 5-Star ranking ASQ index score in top 5 of large hub airports All Part 150 noise study commitments met, innovative noise reduction techniques explored Achieve Port goals for GHG emission for 2030 and 2050 Port can operate, maintain and upgrade facilities to accommodate regional demand while maintaining competitive CPE, manageable debt levels, and adequate debt service coverage Provide facilities to meet demand for passenger and cargo service. Provide optimum level of service (at peak times). 4 Budget Summary 2017 Actual 2018 Budget 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change $ % Operating Revenues: Aeronautical Revenues Non-Aeronautical Revenues Total Operating Revenues 267,690 236,803 504,492 301,082 244,786 545,867 291,268 257,707 548,975 365,604 259,537 625,140 364,106 268,431 632,537 401,817 283,169 684,986 36,213 23,632 59,846 9.9% 9.1% 9.6% Operating Expenses: Airport Direct Charges Environmental Remediation Liability Exp Total Charges from Other Divisions Total Operating Expenses 210,406 8,812 79,896 299,114 233,278 4,030 97,548 334,856 228,638 6,233 83,979 318,849 251,985 14,259 99,860 366,105 252,881 12,793 97,429 363,104 266,552 2,648 109,132 378,332 14,567 (11,612) 9,272 12,227 5.8% -81.4% 9.3% 3.3% Net Operating Income 205,378 211,011 230,126 257,231 269,434 306,654 49,424 19.2% CPE Non-Aero NOI Enplaned passengers (000s) 10.52 133,101 23,416 11.63 126,607 24,654 10.79 149,959 24,894 13.39 136,534 25,394 13.07 147,148 25,890 13.93 154,159 26,667 0.54 17,626 1,273 4.1% 12.9% 5.0% Capital Expenditures 293,785 796,200 579,135 767,732 659,591 570,138 $ in 000's (197,593) -25.7% 5 Aviation Operating Budget Changes Budget process required cuts to absorb new costs and initiatives 6 Summary of Budget Requests 2020 Budget Requests (in $000's) Budget Request Category # of Requests Community and Social Responsibility Customer Service Employees Environment and Sustainability Facility Planning and Capital Projects Financial Performance Innovation and Efficiencies Safety Security 2020 Budget Requests - Total Proposed 6 25 10 8 78 9 6 16 6 164 1.50 34.25 3.00 1.00 2.00 8.00 56.50 2020 Budget Requests - Initial 198 119.50 Baseline FTEs 1.00 5.75 $ 175 536 83 1,616 4,097 197 186 613 400 7,904 $ 18,558 Non-Recurring Total $ 432 4,627 48 444 15,216 1,530 353 626 60 23,335 $ 607 5,163 131 2,060 19,313 1,727 538 1,239 460 31,239 $ 29,417 $ 47,975 7 Highlights of New FTE Requests AV Priority Community and Social Responsibility Customer Service Environment and Sustainability Facility Planning and Capital Projects Financial Performance Innovation and Efficiencies Safety Security Total Purpose/Outcome Increase capacity to implement Part 150 Noise insultation programs Enhance capacity to implement customer service programs and training to improve ASQ scores Improve customer experience and wayfinding Implement environmental sustainability framework for new Aviation projects Increase capacity to plan, manage and implement capital projects Enhance baggage system oversight and maintenance Maintain new facilities and equipment, deferred maintenance on existing facilities Increase custodial quality assurance Adequately maintain civil infrastructure utilities, stormwater system and solid waste utilities Increase capacity for financial analysis and reporting for non-aero business and capital project funding Extend hours of operation for load dock for ADR deliveries Increase capacity to implement shark tank innovation ideas Enhance ramp safety Increase Port-wide emergency preparedness capacity Implement random employee screening Increase capacity to process background checks for badges Increase capacity for security monitoring and dispatch FTEs 1.00 Changes in FTES 1.50 Approved 2019 FTEs Transfers Eliminated positions Added positions Net change (42.75) 27.25 (15.50) 8.25 Proposed new FTEs 56.50 4.00 Net increase 41.00 1.75 4.00 9.00 1.00 12.00 2.00 1.00 1.00 1.00 1.00 6.00 1.00 1.00 56.50 Proposed 2020 FTEs 1,143.53 64.00 41.00 1,248.53 • Scrutinized existing FTEs before adding new • Net increase of 41 consistent with multi-year plan to address needs 8 Highlights of Other Budget Requests AV Priority Community and Social Responsibility Purpose/Outcome Maintain public art - increase art conservation budget Enhance facility cleanliness and appearance - window cleaning Increase customer service for arriving international passengers Customer Service increase contracted staff support Reduce passenger wait times at checkpoints - queue management staffing contract Environment and Sustainability Reduce carbon foot print - utilize renewable natural gas Complete Sustainable Airport Master Plan Preserve critical asset - repair spalling in garage Maintain increased spending on pest control Advanced and on-call planning for existing and future facilities to define projects and better understand emerging challenges Initiate utilities master plan to enhance understanding of Facilities, Planning and Capital Projects investments needed to support existing and future facilities Complete and implement asset management program to plan and prioritize future renewal and replacement investments New janitorial contract for International Arrivals Facility Downsize but continue with Executive Program Management contract to support capital program oversight Financial Performance Attract and retain new air service - incentive payments Total Non-FTE Highlights 2020 Requests Budget Highlights Cost of new FTEs 3,436 Non-FTEs Highlights 19,830 667 Total Budget Highlights 23,267 2,500 Total Budget Requests 31,239 305 600 1,474 1,800 500 784 4,200 2,000 Highlight % of total 74% See Appendix for details of all 2020 budget requests 2,000 1,300 750 950 19,830 9 Non-Aero NOI $ in 000's Non-Aero Revenues Public Parking Airport Dining & Retail Rental Cars Ground Transportation Commercial Properties Port Common Use Lounges Other Non-Aero Revenue Total Non-Aero Revenues 2017 Actual 2018 Budget 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change $ % 75,106 54,611 45,691 15,684 18,042 5,041 22,627 236,803 78,572 54,759 50,857 16,884 14,706 5,630 23,378 244,786 80,212 59,021 53,569 18,772 15,434 6,802 23,896 257,707 82,350 59,484 50,079 19,734 14,219 8,520 25,150 259,537 84,072 59,962 51,703 20,706 15,471 10,329 26,188 268,431 89,485 66,145 51,149 22,299 16,660 10,536 26,894 283,169 7,135 6,661 1,071 2,565 2,441 2,015 1,745 23,632 8.7% 11.2% 2.1% 13.0% 17.2% 23.7% 6.9% 9.1% Total Non-Aero Expenses 103,702 117,925 107,748 123,003 121,283 129,010 6,007 4.9% Net Operating Income Less: CFC Surplus Adjusted Non-Aero NOI 133,101 (2,750) 130,351 126,861 (7,142) 119,719 149,959 (6,157) 143,802 136,534 (3,993) 132,540 147,148 154,159 (4,769) (4,128) 142,379 150,031 17,626 135 17,491 12.9% 3.4% 13.2% Debt Service Net Cash Flow (44,495) (45,752) 73,967 (44,545) (49,352) 83,188 (49,093) 93,287 712 1.4% 16,779 20.2% 85,856 99,257 (50,064) 99,967 10 Aeronautical NOI 2017 2018 2018 2019 2019 2020 $ in 000's Actual Budget Actual Budget Forecast Budget $ % Revenues: Airfield Movement Area Airfield Apron Area Terminal Rents Federal Inspection Services (FIS) Total Rate Base Revenues 108,638 16,771 155,431 18,612 299,452 125,422 15,979 171,854 13,413 326,668 116,703 15,627 169,318 16,226 317,874 130,873 19,714 203,319 14,521 368,426 129,230 12,295 211,805 14,297 367,627 132,389 22,027 213,108 18,197 385,720 1,516 2,312 9,789 3,676 17,293 1.2% 11.7% 4.8% 25.3% 4.7% Airfield Commercial Area Subtotal before Revenue Sharing 10,574 310,026 10,212 336,880 10,257 328,131 12,859 381,286 13,116 380,743 16,097 401,817 3,238 20,531 25.2% 5.4% Revenue Sharing Other Prior Year Revenues Total Aeronautical Revenues (42,311) (26) 267,690 (35,799) 301,082 (36,863) 291,268 (15,682) 365,604 (16,637) 364,106 401,817 (15,682) -100.0% NA 36,213 9.9% Total Aeronautical Expenses 195,414 216,931 211,101 243,102 241,821 249,322 6,220 2.6% Net Operating Income 72,276 84,151 80,167 122,502 122,286 152,495 29,993 24.5% Debt Service Net Cash Flow (86,564) (14,288) (90,323) (6,173) (91,673) (11,506) (109,343) 13,159 (113,820) 8,466 (121,410) 31,085 12,066 17,926 11.0% 136.2% Budget Change 11 Airport Activity: Passengers Total Passengers (000s) Total Passengers (000) Growth Rate 60,000 14% 12.9% 53,334 51,780 46,935 50,000 49,850 12% 45,737 42,341 10% 40,000 8.0% 8% 30,000 6.2% 6% 4.0% 20,000 3.0% 2.6% 10,000 4% 2% 0 0% 2015 2016 2017 2018 2019 FCST 2020 BUD Growth rate declining, but passenger growth continues 12 Total Operating Expenses Total O&M Expense ($000s) O&M Expense per Enplanement $16 $14.02 $400,000 $12.77 $11.28 $11.46 $363,104 $378,332 Forecast $10 $238,140 $8 $200,000 YTD $6 $100,000 O&M Expense per Enplanement $261,226 $14 $12 $318,849 $299,114 $300,000 O&M Expense (000s) $12.81 $14.19 $4 $2 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 2020: 1.2% growth in O&M expense per enplaned passenger 13 FTE Growth Relative to Enplanement Growth FTEs AVPMG FTEs Per Million Enplanements 1,400 100 90 1,200 61.8 62.0 62.0 1,000 FTEs 80 1,144 1,089 70 1,017 65.8 62.0 881 889 60 46.1 44.8 46.2 46.6 46.8 50 41.7 600 40 30 400 FTEs per Million Enplanements 800 1,249 20 200 10 0 0 2015 2016 2017 2018 2019 BUD 2020 BUD FTE growth consistent with passenger growth 14 Non-Aeronautical Performance Non-Aero NOI ($000s) Non-Aero Revenue per Enplanement $180,000 $12 $160,000 $9.33 $9.70 $10.11 $10.35 $10.37 $10.63 $10 $140,000 $8 $100,000 $6 $80,000 $149,959 $60,000 $128,727 $147,148 $154,159 $133,101 Rev Per Enplanement NOI (000s) $120,000 $4 $112,618 $40,000 $2 $20,000 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 15 Airline Cost Management (CPE) CPE Revenue Sharing ($000s) $16 $50,000 $42,310 $14 $37,413 $13.93 $36,932 $13.07 $40,000 $12 $10.10 $10.52 $10.79 $10 $30,000 CPE $29,453 $8 $20,000 $6 Revenue Sharing (000s) $10.12 $16,637 $4 $10,000 $2 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 16 2020 Operating Budget Risks/Issues • Aiming to achieve more accurate budget: - Incorporated payroll vacancy of 3.0% - Budgeted for new FTEs to start July 1 (6 months vacancy) - Reduced spend requests in multiple areas • Timing/scope of airline realignment (move UA off of Concourse A) and impact on expense & capital budget not currently in budget • IAF opening and new costs • Potential for Sea-Tac Airline Consortium to take over employee busing function and Airline Technical Representative function • Open item: Port Accessibility Coordinator FTE - not yet in budget 17 Capital Budget 2020 - 2024 Cash Flows (Figures in $000s) 2019 FCST 2020 2021 2022 2023 2024 Three Major Projects International Arrivals Facility NSAT Baggage Optimization Subtotal - Three Major Projects 338,500 133,086 25,565 497,151 207,000 134,800 44,300 386,100 9,133 105,470 55,000 169,603 9,988 55,000 64,988 55,000 55,000 55,000 55,000 216,133 250,258 264,300 730,692 Other Capital Projects SAMP Preliminary Planning / Design Proposed New Projects CIPs Reserves Subtotal 154,977 5,600 1,863 659,591 250,291 16,000 3,813 656,204 309,456 76,500 21,755 577,314 192,527 94,750 38,877 80,000 471,142 141,294 68,000 82,746 200,000 547,039 94,066 36,200 85,996 400,000 671,262 987,633 291,450 233,188 680,000 2,922,962 - (86,066) 50,000 36,066 659,591 570,138 627,314 507,208 547,039 671,262 2,922,962 CIP Cashflow Adj Reserve Total Proposed CIP • • • 2020 - 24 TOTAL Proposing 34 projects totaling $233M spending through 2024 CIP Reserve CIPs represent 23% of five-year capital budget Implementing CIP cash flow adjustment reserve to adjust 2020 cash flows 18 Summary of Proposed New Projects # of Projects Description 11 Asset Management 3 Safety & Security 10 Business Need 7 Customer Service 3 Grow Non-Aero Revenues 34 TOTAL • • Cost Cash Flows (Figures in $000s) Estimate 2020 2021 2022 169,150 1,563 10,572 21,703 14,800 672 2,169 3,330 91,200 933 5,364 8,010 48,350 74 1,070 3,011 39,100 571 2,579 2,823 362,600 3,813 21,755 38,877 2023 50,482 2,803 21,519 4,109 3,833 82,746 2024 57,986 2,353 19,121 4,632 1,905 85,996 2020 - 24 TOTAL 142,305 11,328 54,948 12,896 11,711 233,188 Asset management drives majority of the new projects Projects include: • Baggage Claim Device Renewal: $71 million • Mezzanine security Glass: $12.9 million • IWTP Improvements: $27 million • New Leasable Space: $28.6 million • Restroom Renewal: $21 million 19 Capital Projects- Summary Cash Flows (Figures in $000s) 2019 FCST 2020 2021 2022 2023 2024 2020 - 24 TOTAL 133,086 338,500 25,565 1,022 6,185 139,117 636,268 134,800 207,000 44,300 24,039 21,000 174,025 560,125 105,470 9,133 55,000 2,440 11,000 78,038 247,642 9,988 55,000 8,267 22,504 87,492 55,000 1,636 56,636 55,000 8,134 63,134 250,258 216,133 264,300 26,479 40,267 284,337 1,015,029 Design Authorized (Status 4) C800061 MT Low Voltage Sys Upgrade C800845 C1 Building Floor Expansion C800866 Widen Arrivals Roadway C801035 Remote Aircraft Deicing Other Design Authorized Capital Projects Multiple Total - Design Authorized 699 581 708 521 6,476 8,286 5,050 4,000 2,056 1,810 28,773 41,689 9,000 10,000 5,600 20,649 55,298 100,547 18,500 20,000 10,500 1,320 24,395 74,715 20,000 10,000 30,300 11,617 71,917 16,350 5,194 297 6,571 28,412 68,900 49,194 48,753 23,779 126,654 317,280 Pending Authorization (Status 2-3) Airfield Pvmt Repl 2021-2024 MT Fire Sprinkler-Smoke Cntrl Upgrades STS Train Control Baggage Claim Device R&R Prog Other Pending Capital Projects Total - Pending Authorization 46 150 91 14,750 15,036 5,049 1,125 48,217 54,391 42,600 13,000 4,925 2,935 165,665 229,125 34,000 9,963 20,000 6,058 238,914 308,935 23,500 9,963 16,000 24,597 344,426 418,486 36,700 9,963 14,859 32,850 485,344 579,716 136,800 47,938 56,909 66,440 1,282,566 1,590,653 659,591 - 656,204 (86,066) 577,314 50,000 471,142 36,066 547,039 - 671,262 - 2,922,962 (0) 659,591 570,138 627,314 507,208 547,039 671,262 2,922,962 Capital Projects Construction Authorized (Status 5-6) NS NSAT Renov NSTS Lobbies International Arrivals Fac-IAF Checked Bag Recap/Optimization Safedock Upgrade & Expansion SSAT Infrastructure HVAC Other Authorized Capital Projects Total - Construction Authorized Subtotal CIP Cashflow Adj Reserve Grand Total CIP C800556 C800583 C800612 C800779 C800798 Multiple C800930 C800969 C801043 C801127 Multiple C801141 20 Capital Budget Risks • Significant potential projects not yet in plan: - SSAT seismic, repurpose space, renovate - C-1 Building Expansion scope and cost increase - Airline realignment - Completion of 2014 Part 150 noise remediation plan - Projects coming out of Main Terminal Optimization Plan (MTOP) - Projects coming out of asset management program - SAMP projects (beyond $300M planning and design) • Strategic challenge: balancing needs of existing facilities with need to build new capacity 21 Financial Forecast 2020 - 2024 In $000's 2019 FCST 364,106 268,431 632,537 2020 401,817 283,437 685,254 2021 441,795 294,088 735,882 2022 483,500 303,706 787,206 2023 509,159 315,037 824,196 2024 528,401 324,281 852,682 Operating Expense Net Operating Income Net Non-Operating Income/Expense CFC Excess* Available for Debt Service Net Debt Service Net Cash Flow 363,104 269,433 6,352 (4,769) 271,016 162,913 108,103 378,314 306,940 5,156 (4,128) 307,968 171,474 136,494 404,152 331,730 5,796 (2,501) 335,026 189,711 145,314 422,221 364,986 6,036 (2,173) 368,848 217,514 151,335 435,802 388,393 6,093 (2,136) 392,350 226,858 165,493 455,541 397,141 6,194 (2,010) 401,325 230,802 170,524 Key Measures Debt Service Coverage Revenue Sharing Passenger Airline CPE Debt per Enplaned Passenger 1.67 16,637 13.07 121.00 1.80 0 13.93 118.96 1.77 0 15.14 126.40 1.70 0 16.42 132.37 1.73 0 17.08 139.73 1.74 0 17.47 151.92 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 22 Funding Plan and Use of PFCs • Capital costs paid by PFCs are excluded from airline rate base • Commission motion of May, 2015 established funding plan for IAF and directed staff to establish competitive rates to the extent possible • Allocation of PFCs among cost centers is primary tool to manage rates. • In order to maintain competitive FIS rate, funding plan proposes to prioritize allocation of PFCs to IAF as needed to decrease FIS rate to top of peer group IAF Funding Sources Cash/ADF Revenue bonds PFCs (paygo) Total $000s 200,000 631,445 100,000 931,445 FIS Rates: Impact of PFC Offset $35.00 $30.00 $29.10 $28.85 $28.45 $12.00 $12.00 $12.00 2022 2023 2024 $25.87 $25.00 $20.00 $16.35 $15.00 $10.00 $5.00 $12.00 $8.65 $2020 2021 PFC Offset Without PFS Offset 23 APPENDIX - AVIATION DIVISION 24 Aviation Appendix Contents • Operating Budget - Budget management: baseline budget changes - Budget Requests - FTE reports and details - Expense summary and comparisons - Non-aeronautical revenue budgets by business unit - Aeronautical cost drivers • Capital budget - new capital projects • CPE Comparisons • CIP funding plan and use of PFCs 25 BUDGET MANAGEMENT: BASELINE BUDGET CHANGES 26 Budget Transfers to Aviation 2020 Baseline Transfers to Aviation from Central Services: $000's IAF project (2) FTEs transferred to AVM 254 AVPMG department transferred to AV division 6,794 Total Transfers Total 2020 Baseline Transfers in from Central Services 7,047 7,047 27 Change in Charges to Capital 2020 Charges to Capital Increase: $000's Higher estimated Charges to Capital AVPMG increased Charges to Capital 5,080 All other Aviation increases in Charges to Capital 807 Total Increase in Charges to Capital 5,887 28 Cost Reductions 2020 Baseline Cost Reductions/Savings: $000's Payroll Savings (before new FTE requests) Vacant positions eliminated in 2020 Budget 1,805 Payroll Vacancy (3.0% assumption) in 2020 Budget 4,300 Payroll hiring differences 90 Total Payroll Decreases 6,195 Non-Payroll Savings (zero based budgeting) EPM remove prior year capitalized portion 1,080 New Air Incentives (removed 2019 Budget late additions) 200 CBP reimbursable (rightsize expected payments) 200 Other non-payroll savings (zero based budgeting) 1,671 Additional Non-Payroll Savings 3,151 Total 2020 Baseline Cost Reductions 9,346 29 Cost Increases 2020 Baseline Cost Increases: $000's Payroll Increases (before new FTE requests) Non-Represented payroll & benefits increase (3.9% average) 1,740 Represented pay & benefits increase (per labor agreements) 4,943 Annualized new FTE's approved in 2019 Budget 2,418 Annualized new FTE's approved during 2019 2,838 All other increases to baseline payroll - Total Baseline Payroll Increases 12,632 Non-Aero costs related to revenue growth Clubs & Lounges - higher demand/increased volume 1,174 Advertising increase (100% paid by Tenant Mktg fund) 290 Non-Aero B&O tax increase 147 Total Non-Aero Cost Increases 1,655 Total Contractual & Formulaic Cost Increases - detail next page 6,137 Total 2020 Baseline Cost Increases 20,423 30 Cost Increases - continued: 2020 Baseline Cost Increases - continued: $000's Contractual & Formulaic Cost Increases - detail AVPMG Outside Svc (right-sized for 2020 expense projects) 3,239 Taxi curbside management contract (full year estimate) 739 AVM - Janitorial contract increase 807 AVM - Baggage System data reporting (BROCK) contract 140 All other AV Maintenance contracts 83 Lost & Found ( new contract in 2019) 404 Aeronautical B&O tax increase 53 Other Non-Payroll Increases (zero based budgeting) 672 Total Contractual & Formulaic Increases Total 2020 Baseline Cost Increases 6,137 20,423 31 Environmental Remediation Liability Expense ERL Expense 2017 2018 2019 Org Basis (in 000's) North Satellite Asbestos Contaminated Soils NSAT - ERL Expense Actual Actual Budget Forecast Budget 1,341 1,935 3,276 1,029 70 1,099 5,630 2,917 8,546 5,595 2,365 7,960 SSAT - HVAC Infrastructure Asbestos SSAT - ERL Expense - - 4,323 4,323 International Arrivals Facility Asbestos Contaminated Soils IAF - ERL Expense 63 5,201 5,264 1,337 2,465 3,802 885 885 Airport Employee Services Ctr Phase 2 eGSE charging stations All other RMM expense Total ERL Expense 271 8,812 1,332 6,233 505 14,259 2019 2020 Budget Change Budget vs. Forecast $ % $ - (5,630) (2,917) (8,546) n/a n/a n/a (5,595) -100.0% (2,365) -100.0% (7,960) -100.0% 4,323 4,323 - (4,323) (4,323) n/a n/a (4,323) -100.0% (4,323) -100.0% 37 - (885) (885) n/a n/a n/a (37) -100.0% n/a (37) -100.0% 37 474 12,793 1,067 477 1,104 2,648 1,067 n/a 477 n/a 599 118.5% (11,612) -81.4% % 1,067 n/a 477 n/a 630 132.9% (10,146) -79.3% 32 BUDGET REQUESTS 33 Summary of Budget Requests 2020 Budget Requests Budget Request Category # of Requests Community and Social Responsibility Customer Service Employees Environment and Sustainability Facility Planning and Capital Projects Financial Performance Innovation and Efficiencies Safety Security 2020 Budget Requests - Total Proposed 6 25 10 8 78 9 6 16 6 164 2020 Budget Requests - Initial Requested 198 Baseline FTEs 1.00 5.75 1.50 34.25 3.00 1.00 2.00 8.00 56.50 $ 175,218 535,934 82,800 1,616,035 4,097,309 197,356 185,892 613,427 399,889 7,903,860 119.50 $ 18,558,345 Non-Recurring Total $ 431,700 4,626,740 48,300 444,000 15,215,538 1,530,000 352,590 625,800 60,000 23,334,668 $ 606,918 5,162,674 131,100 2,060,035 19,312,847 1,727,356 538,482 1,239,227 459,889 31,238,528 $ 29,416,613 $ 47,974,958 34 Budget Requests: Community & Social Responsibility AV Priority Community and Social Responsibility Problem/Need/Opportunity Solution Ground Noise Study Hire a Noise Programs Coordinator Noise analysis (per litigation) Promote Small Business and Small Business, ACDBE Community Engagement Community Outreach Red Tail Hawks' Event Support Maintain Airport Art Public Art Collection Conservation Community and Social Responsibility Total FTEs Airport Noise Mitigation 1.0 1.0 2020 Budget Requests NonBaseline Total Reoccurring 100,000 100,000 70,218 1,700 71,918 25,000 25,000 100,000 100,000 5,000 5,000 305,000 305,000 $ 175,218 $ 431,700 $ 606,918 35 Budget Requests: Customer Service AV Priority Problem/Need/Opportunity Customer Service Facilities Cleanliness and Appearance Increase the Level of Visibility to the Frontline Strategic Customer Experience Improvements Solution Airport-Wide Window Cleaning Service Removal of Obsolete Analog Clocks Pathfinder Uniforms Refresh Volunteer Uniforms Refresh Promotional Hosting Volunteer Recognition Skytrax Terminal Assessment Website Accessibility Evaluation - Open Doors Organization Report Hire a Coordinated Airport Communications Strategy Consultant Hire a consultant for SEA Customer Experience QA Program College Intern - Customer Communications Hire a Customer Experience Manager Continued on next slide FTEs 0.5 1.0 2020 Budget Requests NonBaseline Reoccurring 600,000 30,000 8,140 19,200 800 6,700 30,000 Total 600,000 30,000 8,140 19,200 7,500 30,000 - 75,000 75,000 - 200,000 200,000 50,000 29,264 67,794 2,500 3,300 50,000 31,764 71,094 36 Budget Requests: Customer Service Continued: AV Priority Problem/Need/Opportunity Customer Service Reduce Passenger Wait Times at Checkpoints Wayfinding/Processing Passengers Host Targeted Training to Deliver Exceptional Customer Service Customer Service Total Solution Security Checkpoint Queue Management Contract Customer Experience Initiatives CISS/VIP Hospitality Scope Increase Signage and Wayfinding Masterplan and STIA Terminal Signage Modifications for Concourses B and D STS Info System Graphic Support Hire a Journeyman Sign Writer Hire Additional Pathfinders Hire an Airport Employee Experience Consultant Managing Challenging Customer Interactions Skills Training WE ARE Training College Intern - Customer Service Training Online Customer Service Basic Skills Courses Customer Service Learning Brown Bag Speakers FTEs 1.00 3.00 0.25 5.75 2020 Budget Requests NonBaseline Reoccurring 2,500,000 50,000 667,200 250,000 180,000 50,000 54,571 126,056 20,000 3,300 11,400 40,000 - 36,000 13,449 30,000 8,000 $ 535,934 $ 4,626,740 $ Total 2,500,000 50,000 667,200 250,000 180,000 50,000 57,871 137,456 40,000 20,000 36,000 13,449 30,000 8,000 5,162,674 37 Budget Requests: Employees AV Priority Employees Employees Total Problem/Need/Opportunity Solution Foster Employee Development and Leverage Talent Bluebeam Software Training ORAT World Summit Conference Mental Health First Aid Course ORAT Staff Retreat & AAAE Memberships Quarterly Employee Engagement Activities Fleet Maintenance Staff Training and Conference Attendance ACI Airports@Work Conference Support - Airport Tour and Welcome Gifts Plan Reading Course on Construction Plans and Blueprints Travel Budget Right-sizing- Air Services Development Software License Right-Sizing - Fire Department FTEs - 2020 Budget Requests NonBaseline Reoccurring 10,000 13,500 6,000 4,650 2,000 9,800 Total 10,000 13,500 6,000 4,650 2,000 9,800 - - 25,000 25,000 - 10,000 - 10,000 - 28,150 22,000 82,800 $ 48,300 $ 28,150 22,000 131,100 $ 38 Budget Requests: Environment & Sustainability AV Priority Environment and Sustainability Problem/Need/Opportunity Solution Be the Greenest and Most Hire an Environmental Program Manager Energy-Efficient Port in North College Intern - Recycling America Support Costs for Transportation Management Association Purchase of Renewable Natural Gas Purchase of Renewable Diesel Environment Compliance Flight Corridor Safety Program Habitat Management Complete Airport's 5-year NPDES Permit Renewal Application Implement Clean-Up Contaminated Site Management - Per- and Projects Across the Port polyfluoroalkyl substances (PFAS) Environment and Sustainability Total - 2020 Budget Requests NonBaseline Reoccurring 90,133 2,000 32,635 2,000 50,000 - 1,474,267 19,000 - 60,000 75,000 1,474,267 19,000 60,000 75,000 - - 255,000 255,000 FTEs 1.0 0.5 1.5 $ 1,616,035 $ 444,000 $ Total 92,133 34,635 50,000 2,060,035 39 Budget Requests: Facility Planning & Capital Projects AV Priority Problem/Need/Opportunity Facility Planning Airport Office Building and Capital Projects Requirement Complete the Sustainable Airport Master Plan Implement Operational Readiness and Airport Transition (ORAT) Solution FTEs 2020 Budget Requests NonBaseline Reoccurring 50,000 295,000 53,000 12,219 1,400 100,000 1,500,000 Total AOB Conference Center Chair Replacement AOB Cubicle Densification AOB Furniture Inventory Management Service AOB Kitchen Supplies AOB Paper Shredding Service AOB Conference Room Surface Hubs Installation SAMP Environmental Review - AV Environmental - SAMP Environmental Support - AV Planning ORAT Software and Licenses Hire an ORAT Consultant - 6,000 150,000 300,000 75,000 - 300,000 81,000 150,000 - - 50,000 50,000 - 70,205 25,000 - 25,000 70,205 Meet or Exceed IWS Lagoon Liner Condition Assessment and Requirements for Repair Light Rail Stormwater Vault Treatment Cleaning Stormwater Leaving PortHire an Operating Engineer for Industrial Waste Owned or Operated Facilities Treatment Plant (IWTP) Continued on next slide 1.0 50,000 295,000 53,000 12,219 1,400 100,000 1,500,000 40 Budget Requests: Facility Planning & Capital Projects Continued: AV Priority Problem/Need/Opportunity Facility Planning Meet the Maintenance and Capital Projects Needs and Standards of the Existing Facilities Under Increasing Demand Solution Escalator Hand Rail Upgrade North Cargo Properties-Mechanical Systems Passenger Loading Bridges (PLB) Pre-Conditioned Air (PCA) Units Purchase Laser Alignment Tool and Replacement of Tools RCF Small Operator Improvements - Required Reallocation (fully reimbursable) Repair eGSE Charger Billable Data Reporting Secondary Containment for Transformer STS Signage Technical Support Terminal LED Lighting Upgrades Hire a Carpenter Hire an Operating Engineer Boiler Room Hire Additional Operating Engineers - Conveyor Shopan Inventory Specialist for AV Maintenance Hire Hire Additional Baggage System Supervisors Hire Additional Electronic Technicians Continued on next slide FTEs - 1.0 1.0 2.0 1.0 2.0 2.0 2020 Budget Requests NonBaseline Reoccurring 80,000 78,000 15,000 Total 80,000 78,000 15,000 - - 10,000 10,000 - - 50,000 50,000 - 30,000 61,628 70,015 135,833 49,557 117,836 134,496 45,000 20,000 27,500 4,000 4,000 3,500 4,000 7,000 45,000 20,000 27,500 30,000 61,628 74,015 139,833 53,057 121,836 141,496 41 Budget Requests: Facility Planning & Capital Projects Continued: AV Priority Problem/Need/Opportunity Facility Planning Meet the Maintenance and Capital Projects Needs and Standards of the Existing Facilities Under Increasing Demand Pest Control and Waste Management Coordinate Capital Program Development and and Implement Capital Program Solution Civil Infrastructure Program Support STAC Budget Right-Sizing to Implement Increased Volume and Additional Services Hire Additional Field Crews Hire an Operating Engineer Boiler Room - VAV (HVAC/Utilities for Terminal) Garage Spall Repairs Travel and Training Budget Right-Sizing - AV Maintenance Standard Waste Receptacle Replacement Compactor Repairs and Increased Preventive Maintenance Unified Pest Management Contract Funding EPM Consulting for Capital Program Hire an AV Capital Programs Development Hire a Systems Administrator for AVPMG Hire a Capital Project Manager III (ADR tenant projects) Hire an AV Project Controls Analyst Continued on next slide FTEs - 11.0 1.0 2020 Budget Requests NonBaseline Reoccurring 300,000 72,720 10,000 Total 300,000 82,720 466,334 70,015 33,000 4,000 499,334 74,015 - 500,000 12,000 500,000 12,000 - 300,000 50,000 300,000 50,000 1.0 1.0 1.0 76,164 98,888 122,950 784,000 750,000 3,300 784,000 750,000 79,464 98,888 122,950 1.0 84,000 84,000 42 Budget Requests: Facility Planning & Capital Projects Continued: AV Priority Problem/Need/Opportunity Solution FTEs Facility Planning Planning for Future Facilities Airfield/Airspace Study and Capital Projects Needs Building Dept - Consultant Design Review & Field Inspection Services Controls service for new systems installed for Baggage Optimization Deep Well Injection Geotechnical Study IAF Simulation Support Utilities Master Planning Hire an Associate Planner Hire a Fire Protection Engineer On Call Capital Programs Planning - SSAT, Roadmaps and Business Case Development Advanced Planning on Facilities, The Main Terminal Optimization Plan (MTOP), Sustainable Airport Master Plan(SAMP) and Ground Transportation Access Plan (GTAP) Landscape Master Plan Rehab Projects On-call Planning on Emerging Issues Continued on next slide - 2020 Budget Requests NonBaseline Reoccurring 250,000 Total 250,000 - - 220,000 220,000 - - 50,000 50,000 - - 67,442 74,893 - 300,000 99,000 2,000,000 3,300 3,000 700,000 300,000 99,000 2,000,000 70,742 77,893 700,000 - - 2,300,000 2,300,000 - - 291,438 950,000 291,438 950,000 1.0 1.0 43 Budget Requests: Facility Planning & Capital Projects Continued: AV Priority Problem/Need/Opportunity Solution Facility Planning Enhance Facility Cleanliness Hire a Custodial Quality Assurance Specialist Pressure Washing of Lower and Upper Drives and Capital Projects Concrete Structures Zone 5 (IAF) Custodial Service Contract Maintain New Facilities Hire a Painter (IAF) Hire a Painter (Cargo) Hire a Carpenter(Cargo) Hire an Operating Engineer Boiler Room - Cargo Connectivity/Software Licenses for CBP in IAF Cargo Facility Maintenance (Outside Svcs) Strategic Asset Management Infrastructure Nomenclature System Implications Landside Pavement Management Program Neighborhood Field Office Training Room Upgrade STS Tunnel Integrity Study College Intern - Architecture Hire an Architect - Facilities and Infrastructure Asset Management Program Implementation Continuous Commissioning for Testing and Balancing services Asset Management System for Fire Department Facility Planning and Capital Projects Total FTEs 1.0 - Total 61,746 50,000 - 1,300,000 48,703 48,703 61,628 70,015 220,471 14,063 72,886 100,000 4,000 250,000 20,000 100,000 50,000 125,000 3,000 4,000 2,000,000 - 1,300,000 48,703 48,703 61,628 74,015 220,471 250,000 20,000 100,000 50,000 125,000 17,063 76,886 2,000,000 100,000 - 27,000 - 27,000 1.0 1.0 1.0 1.0 0.25 1.0 34.25 2020 Budget Requests NonBaseline Reoccurring 58,246 3,500 50,000 - $ 4,097,309 $ 15,215,538 $ 19,312,847 44 Budget Requests: Financial Performance AV Priority Problem/Need/Opportunity Solution Keep Airline Costs ADR - Kiosk Program Upkeep and Repair Competitive Through SEA Visitor Pass Program E Secure Fee Increase Non-Aeronautical Hire a Temporary Staffing for Pre-Book Parking Revenue and Improve Capital Hire a Financial Analyst II - Grants and Capital Business Process Hire a Sr. Financial Systems & Business Analyst Financial Report Efficiency Hire a Load Dock Coordinator - Volume Increase and Extended Hours Hire a Consultant to Develop Business Case for New Non-Aero Revenue (Tenant Broadband Hire a Consultant to Implement Driver Outreach Added Taxi Pilot Program Air Service Development New Air Service Incentive Program - Joint Promotional Funds Financial Performance Total FTEs Financial Performance 1.0 1.0 1.0 3.0 2020 Budget Requests NonBaseline Reoccurring 150,000 40,000 225,000 70,095 2,000 82,197 2,000 Total 150,000 40,000 225,000 72,095 84,197 45,064 - 45,064 - - 75,000 75,000 - - 86,000 86,000 - - 950,000 950,000 $ 197,356 $ 1,530,000 $ 1,727,356 45 Budget Requests: Innovation and Efficiencies AV Priority Problem/Need/Opportunity Solution Critical Asset (CAM) IoT Pilot Project Keep Up the Pace with the Telematics forMonitoring Aviation Fleet Vehicles and Rapid Growth of the Airport Equipment Leverage Employee Crowdsourced Innovation Software Innovation to Solve Business Innovation Consulting Funding Challenges Hire an Innovation Program Manager Hire a Consultant for STIA Key Access System Evaluation Innovation and Efficiencies Total FTEs - Innovation and Efficiencies 1.0 1.0 2020 Budget Requests NonBaseline Reoccurring 199,090 50,000 50,000 100,000 85,892 3,500 50,000 $ 185,892 $ 352,590 $ Total 199,090 50,000 50,000 100,000 89,392 50,000 538,482 46 Budget Requests: Safety AV Priority Safety Safety Total Problem/Need/Opportunity Solution Continuously Improve Safety GSE Inspection Auditing Services of Airport Operations Area Certified Service Provide Program(CSPP) Implementation Consultation Services Hire a Certified Service Provide Program(CSPP) Manager Ramp Tower Contract Staffing Increase for Air Traffic Demand Fire Department - Bunker Gear Replacement Completion of Tow/Taxi Virtual Reality for E-Learning Development Targeted Safety Subject Matter Expertise Training Safety Act Certification Horizon Air - Follow Up Items After Action Report Facility Life-Safety Firearm Tracking Software Enhancements Origami Software Licensing and Integration Plug-Ins Smoke Control Systems Testing Public Access AEDs Replacement Reduce Wildlife Strikes Increase for Consolidated Wildlife Contracts Prepare for Emergencies Hire an Emergency Preparedness Coordinator FAA Regulatory Triennial Exercise FTEs 1.0 Total 50,000 50,000 76,631 3,300 79,931 - 220,000 - 220,000 - - 45,000 75,000 45,000 75,000 - 2,800 10,000 50,000 100,000 25,000 5,000 50,000 100,000 25,000 2,800 15,000 - 190,000 63,996 $ 613,427 $ 35,000 100,000 2,500 135,000 625,800 $ 190,000 35,000 100,000 66,496 135,000 1,239,227 1.0 2.0 2020 Budget Requests NonBaseline Reoccurring 50,000 50,000 47 Budget Requests: Security AV Priority Security Security Total Problem/Need/Opportunity Solution Enhance Overall Security at the Airport by Staffing Increase, Training and Equipment Maintenance Airport Security Awareness Training Employee Screening Equipment Maintenance Hire a Sr. Operations Controller for Airport Communications Center Hire a Consultant to Evaluate Physical Security of Airport Substations Hire a Background Checking Specialist - Increased Volume and Requests Hire Additional Employee Screeners - Implement Random Unpredictable Screening FTEs 1.0 - 2020 Budget Requests NonBaseline Reoccurring 25,000 51,000 49,287 3,300 Total 25,000 51,000 52,587 - 53,000 53,000 1.0 50,889 3,700 54,589 6.0 223,713 - 223,713 8.0 $ 399,889 $ 60,000 $ 459,889 48 FTE REPORTS AND DETAILED REQUESTS 49 2020 FTE Reconciliation 2020 Proposed Budget FTEs FTEs 2019 Approved Budget Aviation division FTEs Central Services FTE's direct charged 100% to airport 2019 Approved Budget in AV presentation 1,105.78 37.75 1,143.53 2019 FTE Transfers between divisions (net zero impact) 2019 FTE transfers IN from Central Services 2019 FTE Transfers between divisions 64.00 64.00 2019 Adjusted Baseline after Transfers between divisions 1,207.53 2019 Changes in FTEs during the year 2019 mid-year FTE additions - AV division Vacant FTEs eliminated during 2019 2019 Mid-year Changes in FTEs FTEs in 2020 Baseline Budget BEFORE Budget Requests Proposed New FTEs in 2020 Budget: New FTEs for Core Airport Functions New Intern FTEs - College/Graduate Proposed Increase in 2020 Budget FTEs FTEs in Proposed Aviation 2020 Budget 27.25 (42.75) (15.50) % -1.3% 1,192.03 55.00 1.50 56.50 4.6% 0.1% 1,248.53 3.4% Note: percent changes compared to 2019 Approved Budget after internal FTE transfers 50 Change in FTEs during 2019 FTE Changes During 2019 FTEs FTE Changes During 2019 - continued: FTEs 2019 Approved Budget FTEs 1,143.53 2019 Approved Budget FTEs 1,143.53 2019 transfers IN from Central Services Electronic Technicians (from Engineering for IAF project) AVPMG department transferred to AV Division 2019 transfers IN from Central Services 2.00 62.00 64.00 2019 mid-year FTE Additions Landside Billing Specialist (taxi pilot) Property Manager I (taxi pilot) Pathfinder (IAF support) LTD Airport Duty Manager (IAF support) Firefighter E (early hire to cover LT disability) AV Environ Program Mgr - Transportation Mgmt Assoc AV Chief Operating Officer (AV re-org) Admin Assistant - ADO (AV re-org) AV Director - Properties, Airline Affairs, Air Svc Dev (AV re-org) Admin Assistant - new Director (AV re-org) Airline Affairs Manager (AV re-org) Construction Support Specialist (right-size existing staff hours) Senior Access Controllers (labor requirement - exit lane monitoring) College intern - Airport Dining & Retail program 2019 mid-year FTE Additions: 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 10.00 6.00 0.25 27.25 Subtotal - FTEs added during 2019 91.25 2019 transfers IN from Central Services 2019 mid-year FTE Additions 64.00 27.25 2019 mid-year FTE eliminations Lost & Found Staffing (LTD) - not needed after new contract signed Admin Assist for F&I (LTD position expired) College intern - Art program (1yr only, candidate not found) 2019 mid-year FTE eliminations (6.00) (1.00) (0.25) (7.25) Vacant FTE positions eliminated in the 2020 Budget Phase I - Full Employee Screening (vacant FTEs removed) Phase II - Full Employee Screening (not funded in 2019 Budget) AVM - ORG 4593 (EH - funded in 2019 Budget, not needed in 2020) Pathfinders (EH - funded in 2019 Budget, not needed in 2020) Property Manager I (re-purposed for AV re-org use) College intern - Emergency Preparedness Vacant FTE positions eliminated in the 2020 Budget (6.00) (16.00) (4.00) (8.00) (1.00) (0.50) (35.50) Subtotal - Vacant FTEs eliminated in the 2020 Baseline Budget: Net 2019 FTE Change EXCLUDING Transfers FTEs in 2020 Baseline Budget BEFORE Budget Requests (42.75) (15.50) 1,192.03 51 New FTEs for 2020 - Position List 2020 Proposed Budget FTEs Aviation Project Management Group Systems Administrator for AVPMG project tracking Capital Project Manager III (ADR tenant projects) AV Project Controls Analyst FTEs 3.0 1.0 1.0 1.0 Terminal Operations FTE's Senior Operations Controller (C4) Certified Service Provider Program (CSPP) Manager 1.0 1.0 Landside FTE's Load Dock Coordinator 1.0 2020 Proposed Budget FTEs (cont'd) AV Facilities and Capital Programs FTE's AV Capital Programs Development Manager Architect - AV F&I Associate Planner - AV Planning Journeyman Sign Writer 1.0 1.0 1.0 1.0 2.0 1.0 Fire Department FTE's Fire Protection Engineer 1.0 AV Innovation FTE's Innovation Program Manager 1.0 1.0 1.0 AV Environmental & Noise Programs [Central Services] Environmental Program Manager (Sustainability) 1.0 Noise Program Coordinator 1.0 2.0 Aviation Finance & Budget [Central Services] Sr. Financial System & Business Analyst Financial Analyst (Grants & Capital Programs) 2.0 1.0 1.0 Maintenance FTE's AVM Inventory Specialist Baggage System Supervisors Operating Engineer - Conveyor Shop Operating Engineer - Boiler Room (Cargo/Terminal) Operating Engineer - Industrial Waste Treatment Plant Electronic Technicians Field Crew (coverage details pending) Carpenters (coverage details pending) Painters (IAF/Cargo) Custodial Quality Assurance Specialist 1.0 2.0 2.0 3.0 1.0 2.0 11.0 2.0 2.0 1.0 Security FTE's Employee Screeners (random screening) Background Checking Specialist (badging) Emergency Preparedness Coordinator 6.0 1.0 1.0 Customer Service FTE's Customer Experience Manager Pathfinders 1.0 3.0 New Intern FTE's - College/Graduate (continued) FTEs 4.0 2020 Proposed New FTEs: 27.0 8.0 4.0 1.5 56.5 52 EXPENSE SUMMARY AND COMPARISONS 53 Total Airport Expense Summary $ in 000's Operating Expenses: Payroll Outside Services Utilities Other Airport Expenses Total Airport Direct Charges 2017 Actual 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change $ % 112,183 41,989 16,189 30,249 200,610 119,331 53,003 17,811 26,726 216,871 141,316 60,950 20,235 22,692 245,192 141,226 61,590 19,229 26,061 248,106 149,993 66,167 21,127 23,839 261,126 8,677 5,218 892 1,147 15,934 6.1% 8.6% 4.4% 5.1% 6.5% 8,767 4,577 1,898 (2,222) 13,019 6.2% 7.4% 9.9% -8.5% 5.2% Environmental Remediation Liability Capital to Expense Total Exceptions 8,812 2,856 11,668 6,233 6,891 13,124 14,259 14,259 12,793 12,793 2,648 2,648 (11,612) (11,612) -81.4% NA -81.4% (10,146) (10,146) -79.3% NA -79.3% Subtotal Airport Expenses before AVPMG 212,278 229,995 259,451 260,900 263,773 4,322 1.7% 2,873 1.1% Aviation Project Mgmt Group (AVPMG) 6,941 4,875 6,794 4,775 5,426 (1,367) -20.1% 652 13.7% 219,218 234,870 266,245 265,674 269,200 2,955 1.1% 3,525 1.3% Corporate (excluding Police and AVPMG) 58,339 60,301 69,577 68,253 76,810 7,233 10.4% 8,557 12.5% Police Costs 17,652 19,231 25,137 24,595 26,756 1,619 6.4% 2,161 8.8% Maritime/Economic Development Total Charges from Other Divisions 3,904 79,896 4,446 83,979 5,145 99,860 4,581 97,429 5,566 109,132 421 9,272 8.2% 9.3% 985 11,703 21.5% 12.0% Total Operating Expense 299,114 318,849 366,105 363,104 378,332 12,227 3.3% 15,228 4.2% Total Airport Expenses Budget vs Forecast $ % 54 2018 O&M Per Enplanement vs. Peer Airports 2020 Budget: O&M per Enplanement is $14.19 55 AERONAUTICAL BUSINESS 56 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 • New costs (capital and operating) associated with IAF hit rate base in second half of 2020. - New debt service in 2020 offset by PFCs, minimizing impact on FIS rate • Revenues and CPE increasing in 2020 as expected - Reduction in revenue sharing (eliminated in 2020 per SLOA IV) increases CPE but also increases Port cash flow 57 Aeronautical NOI 2017 2018 2019 2019 2020 $ in 000's Actual Actual Budget Forecast Budget $ % $ Revenues: Airfield Movement Area Airfield Apron Area Terminal Rents Federal Inspection Services (FIS) Total Rate Base Revenues 108,638 16,771 155,431 18,612 299,452 116,703 15,627 169,318 16,226 317,874 130,873 19,714 203,319 14,521 368,426 129,230 12,295 211,805 14,297 367,627 132,389 22,027 213,108 18,197 385,720 1,516 2,312 9,789 3,676 17,293 1.2% 11.7% 4.8% 25.3% 4.7% 3,159 9,732 1,302 3,900 18,093 2.4% 79.2% 0.6% 27.3% 4.9% Airfield Commercial Area Subtotal before Revenue Sharing 10,574 310,026 10,257 328,131 12,859 381,286 13,116 380,743 16,097 401,817 3,238 20,531 25.2% 5.4% 2,981 21,074 22.7% 5.5% Revenue Sharing Other Prior Year Revenues Total Aeronautical Revenues (42,311) (26) 267,690 (36,863) 291,268 (15,682) 365,604 (16,637) 364,106 401,817 (15,682) -100.0% NA 36,213 9.9% (16,637) 37,711 -100.0% NA 10.4% Total Aeronautical Expenses 195,414 211,101 243,102 241,821 249,322 6,220 2.6% 7,501 3.1% Net Operating Income 72,276 80,167 122,502 122,286 152,495 29,993 24.5% 30,209 24.7% Debt Service Net Cash Flow (86,564) (14,288) (91,673) (11,506) (109,343) 13,159 (113,820) 8,466 (121,410) 31,085 12,066 17,926 11.0% 136.2% 7,590 22,619 6.7% 267.2% Budget Change Budget vs Forecast % 58 Aeronautical Cost Drivers 2018 2019 2019 2020 $ in 000's Actual Budget Forecast Budget O&M (1) Debt Service Gross Debt Service PFC Offset Net Debt Service Amortization Space Vacancy TSA Operating Grant and Other Rate Base Revenues Commercial area Total Aero Revenues 206,076 115,419 (32,987) 82,432 32,371 (2,132) (873) 317,874 10,257 328,131 237,387 136,513 (33,045) 103,468 30,121 (1,521) (1,028) 368,426 12,859 381,286 235,076 137,696 (33,060) 104,636 30,583 (1,609) (1,059) 367,627 13,116 380,743 243,458 174,455 (62,998) 111,457 32,326 (493) (1,028) 385,720 16,097 401,817 Impact on Aero Revenues Budget Change $ % 6,071 2.6% 37,942 27.8% (29,953) 90.6% 7,989 7.7% 2,206 7.3% 1,029 -67.6% 0 0.0% 17,294 4.7% 3,238 25.2% 20,531 5.4% Impact on Aero Revenues Budget vs Forecast $ % 8,382 36,759 (29,938) 6,821 1,743 1,116 30 18,093 2,981 21,074 3.6% 26.7% 90.6% 6.5% 5.7% -69.4% -2.9% 4.9% 22.7% 5.5% (1) O&M , Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses • • O&M costs driven by largest increases in : - FIS from Janitorial Expansion and increased Outside Service Contracts for new facility - Terminal Building Janitorial increase Capital costs driven by debt service on new facilities: Phase I NSAT, IAF, Perimeter Intrusion Detection System, Baggage Optimization, Arc Flash Mitigation project, Airfield Pavement Program (2019). Increase in PFC Offset which mainly applied to NSAT & IAF. 59 NON-AERONAUTICAL BUSINESS 60 Non-Aero Business Non-Aero Revenue • Airport Dining & Retail ➢ Food & Beverage growth reflects new restaurant openings and continued passenger growth ➢ Retail growth relatively flat as enplanement growth offset by decline in "grab-n-go" food sales as new restaurant offerings open ➢ Duty Free sales expected to be relatively flat to 2018 Actuals which is an increase from the 2019 Forecast. Duty Free sales have been impacted by tariff restrictions and limited store size which prevents SEA from offering the most desired luxury brands . These challenges are partially offset by the growth in international enplanements. ➢ Advertising - strong demand and increased FMV for ad space • Parking ➢ Continued passenger growth and mid-2019 tariff increase drives revenue growth ➢ Partially offset by decline in short-term (<1 day) parking transactions likely related to changing customer preference toward emerging transportation alternatives • Rental Car: ➢ Transaction per O&D enplanement continuing to decline, primarily in short-term (<1 day) rental transactions again related to changing customer preference toward emerging transportation alternatives • Ground Transportation - continued growth of TNCs. Added taxi curbside contract costs. • Commercial properties - base property revenues continue to grow, strong demand for In-flight Kitchen • Airport lounges continue to grow - demand exceeds capacity during peak hours Non-Aero Expense • Non-aero cost growth impacted by share of division wide initiatives, mostly non-recurring 61 Non-Aero NOI Budget vs Forecast % $ $ in 000's Non-Aero Revenues Rental Cars - Operations Rental Cars - Operating CFC Public Parking Ground Transportation Airport Dining & Retail Non-Airline Terminal Leased Space Commercial Properties Utilities Employee Parking Clubs and Lounges Other Non-Aero Revenue Total Non-Aero Revenues Total Non-Aero Expenses 2017 Actual 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change % $ 35,051 10,641 75,106 15,684 54,611 4,369 18,042 7,018 9,617 5,041 1,624 236,803 103,702 37,306 16,263 80,212 18,772 59,021 5,302 15,434 7,206 10,269 6,802 1,119 257,707 107,748 36,455 13,624 82,350 19,734 59,484 4,909 14,219 8,058 10,134 8,520 2,049 259,537 123,003 37,088 14,615 84,072 20,706 59,962 5,879 15,471 8,026 10,134 10,329 2,150 268,431 121,283 37,363 13,786 89,485 22,299 66,145 5,700 16,660 8,833 10,137 10,536 2,225 283,169 129,010 908 162 7,135 2,565 6,661 791 2,441 775 3 2,015 176 23,632 2.5% 1.2% 8.7% 13.0% 11.2% 16.1% 17.2% 9.6% 0.0% 23.7% 8.6% 9.1% 275 (829) 5,413 1,593 6,183 (179) 1,190 807 3 207 75 14,738 0.7% -5.7% 6.4% 7.7% 10.3% -3.0% 7.7% 10.1% 0.0% 2.0% 3.5% 5.5% 6,007 4.9% 7,727 6.4% Net Operating Income 133,101 149,959 136,534 147,148 154,159 Less: CFC Surplus Adjusted Non-Aero NOI Debt Service Net Cash Flow (2,750) 130,351 (44,495) 85,856 (6,157) 143,802 (44,545) 99,257 (3,993) 132,540 (49,352) 83,188 (4,128) (4,769) 142,379 150,031 (50,064) (49,093) 99,967 93,287 17,626 135 17,491 712 16,779 12.9% 3.4% 13.2% 1.4% 20.2% 7,011 (641) 7,652 971 6,680 4.8% -13.4% 5.4% 2.0% 7.2% 62 Public Parking Public Parking - Revenue Detail $ in 000's Parking Garage Revenue to Port Revenue to Port - General Parking Other Garage Revenue Programs Premier Corporate Parking 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 Total Parking Revenue Total Enplanements O&D % O&D Enplanements Revenue per O&D Enplanement Metrics Public Parking Premier Corporate Parking Passport Parking Program Total Garage Revenue per O&D Enplanement Incr / (Decr) 2017 Actual 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change $ % $ % 68,024 72,473 74,554 76,022 81,300 6,746 9.0% 5,278 6.9% 958 2,990 3,947 71,971 1,225 3,219 4,444 76,917 1,247 3,330 4,578 79,132 1,323 3,472 4,795 80,817 1,360 3,570 4,930 86,230 113 240 352 7,098 9.1% 7.2% 7.7% 9.0% 37 98 135 5,413 2.8% 2.8% 2.8% 6.7% 3,109 25 75,106 23,416 70.4% 16,485 3,238 56 80,212 24,894 71.2% 17,725 3,200 19 82,350 25,394 70.3% 17,852 3,200 55 84,072 25,890 71.1% 18,408 3,200 55 89,485 26,667 71.0% 18,933 36 7,135 1,273 0.7% 1,082 0.0% 190.1% 8.7% 5.0% 1.0% 6.1% 5,413 777 -0.1% 526 0.0% 0.0% 6.4% 3.0% -0.1% 2.9% 0.12 0.00 0.00 0.12 2.8% $ 2.8% $ 1.1% $ 2.7% $ 0.16 (0.00) (0.00) 0.16 4.0% -0.1% 0.0% 3.7% $ $ $ $ 4.13 0.06 0.18 4.37 $ $ $ $ 4.09 0.07 0.18 4.34 $ $ $ $ 4.18 0.07 0.19 4.43 $ $ $ $ 4.13 $4.29 $ 0.07 $0.07 $ 0.19 $0.19 $ 4.39 $ 4.55 $ Budget vs Forecast 63 Rental Cars Rental Car - Revenue Detail Incr / (Decr) Incr / (Decr) Budget vs Forecast 2018 Actual 33,474 2019 2019 2020 Budget Forecast Budget 32,666 33,300 33,500 Budget Change RCF Concession Revenue to Port 2017 Actual 31,352 $ 834 % 2.6% $ 200 % 0.6% Total Enplanements O&D % O&D Enplanements 23,416 70.4% 16,485 24,894 71.2% 17,725 25,394 70.3% 17,852 26,667 71.0% 18,933 1,273 0.7% 1,082 5.0% 1.0% 6.1% 777 -0.1% 526 3.0% -0.1% 2.9% Gross Sales by Operators Total Transactions Average Ticket Average Length of Stay Transactions/O&D Enplanements 313,654 334,355 326,665 333,405 335,000 1,388 1,416 1,396 1,395 1,369 $226.03 $236.08 $234.00 $239.00 $245.00 4.37 4.44 4.43 4.54 4.59 8.42% 7.99% 7.82% 7.58% 7.23% 8,335 (27) $11.00 0.16 -0.59% 2.6% 1,595 -1.9% (26) 4.7% $6.00 3.6% 0.05 -7.5% -0.35% 0.5% -1.9% 2.5% 1.1% -4.6% CFC Revenue Summary Total Transaction Days CFC Rate per Transaction Day CFC Revenue Earned Other CFC Collections Total CFC Revenue Earned Reserve for debt service and CP interest: Reserve for CP principal payment: Debt Service Reserve Requirement Residual - CFC Operating Revenue: 6,070 6,286 6,184 6,333 6,284 $6.00 $6.00 $6.00 $6.00 $6.00 36,421 37,716 37,106 37,998 37,700 (160) 349 36,261 38,065 37,106 37,998 37,700 (22,621) (21,802) (23,482) (23,383) (23,914) (3,000) (25,621) (21,802) (23,482) (23,383) (23,914) 10,641 16,263 13,624 14,615 13,786 100 $0.00 594 594 (138) (138) 456 1.6% 0.0% 1.6% NA 1.6% 0.6% NA 0.6% 3.3% -0.8% 0.0% -0.8% NA -0.8% 1.0% NA 1.0% -3.7% Incr / (Decr) Incr / (Decr) 2017 Actual 31,352 10,641 3,699 45,691 Budget Change Budget vs Forecast $ $ 200 (535) 102 (233) # and $ in 000's 25,890 71.1% 18,408 Rental Car - Revenue Summary # and $ in 000's RCF Concession Revenue to Port Residual - CFC Operating Revenue: Land Rent/Space Rent/Other Total Rental Cars Oper Revenue 2018 Actual 33,474 16,263 3,833 53,569 2019 2019 2020 Budget Forecast Budget 32,666 33,300 33,500 13,624 14,615 13,786 3,788 3,788 3,863 50,079 51,703 51,149 834 456 102 1,391 % 2.6% 3.3% 2.7% 2.8% (49) $0.00 (298) (298) (237) (237) (535) % 0.6% -3.7% 2.7% -0.5% 64 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 Incr / (Decr) Budget vs Forecast 2017 Actual 2018 Actual 2019 2019 2020 Budget Forecast Budget Budget Change 6,940 5,199 858 45 626 1,319 394 303 15,684 10,349 4,475 853 35 635 1,660 340 424 18,772 11,574 4,176 842 33 588 1,919 388 214 19,734 3,220 27.8% (855) -20.5% (5) -0.6% (9) -27.3% (8) -1.3% 65 3.4% 0.0% 80 37.4% 2,565 13.0% 12,864 3,690 842 29 588 2,020 459 214 20,706 14,794 3,321 837 24 581 1,984 388 294 22,299 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 Incr / (Decr) 2017 Actual 2018 Actual 1,277 750 72 56 337 1,175 79 3,746 1,715 723 69 18 347 1,209 63 4,145 2019 2019 2020 Budget Forecast Budget 1,929 696 67 18 344 1,160 57 4,271 2,144 615 67 14 344 1,224 76 4,484 2,466 554 66 14 340 1,240 57 4,753 $ % $ % 1,930 15.0% (369) -10.0% (5) -0.6% (5) -17.2% (8) -1.3% (36) -1.8% (71) -15.5% 80 37.4% 1,593 7.7% Incr / (Decr) Incr / (Decr) Budget Change Budget vs Forecast # % 537 27.8% (143) -20.5% (1) -2.0% (4) -22.5% (4) -1.2% 80 6.9% 0.0% 483 11.3% # % 322 15.0% (62) -10.0% (1) -2.0% 0.0% (4) -1.2% 16 1.3% (19) -25.2% 269 6.0% 65 Airport Dining & Retail Airport Dining & Retail Org Basis (in 000's) ADR Revenue (Rent to the Port) Food & Beverage Retail Duty Free Personal Services Advertising Space Rental - office & storage All other revenue Total ADR Revenue 2017 Actual 2018 Actual 2019 Budget 2019 Forecast 2020 Budget Budget Change $ % 21,579 13,989 6,912 3,728 6,662 1,292 449 54,611 23,132 17,005 7,026 3,951 6,432 1,351 125 59,022 23,780 15,445 7,497 3,785 6,896 1,385 697 59,484 23,917 17,268 6,290 3,744 6,896 1,320 528 59,962 28,077 17,398 6,709 3,966 8,103 1,371 520 66,145 ADR Gross Sales Food & Beverage Retail Duty Free Personal Services Total ADR Gross Sales 168,219 95,398 21,254 22,348 307,220 182,781 109,125 20,774 23,502 336,182 185,341 98,639 22,828 23,151 329,959 189,625 103,947 19,529 22,745 335,846 212,988 110,778 20,701 22,935 367,401 4,297 1,954 (787) 181 1,208 (14) (177) 6,661 27,646 12,139 (2,128) (216) 37,442 Sales per Enplanement SPE - Food & Beverage SPE - Retail Sales SPE - Duty Free SPE - Personal Services SPE - Airport Dining & Retail 7.18 4.07 0.91 0.95 $13.12 7.34 4.38 0.83 0.94 $13.50 7.30 3.88 0.90 0.89 $12.97 7.32 4.01 0.75 0.88 $12.97 7.99 4.15 0.78 0.86 $13.78 18.1% 12.6% -10.5% 4.8% 17.5% -1.0% -25.4% 11.2% Budget v. Forecast $ % 17.4% 0.8% 6.7% 5.9% 17.5% 3.8% -1.3% 10.3% 14.9% 12.3% -9.3% -0.9% 10.2% 4,159 130 420 223 1,208 50 (7) 6,183 23,363 6,831 1,172 190 31,555 0.69 9.4% 0.27 6.9% (0.12) -13.7% (0.03) -3.0% $0.81 6.2% 0.66 0.14 0.02 (0.02) $0.81 9.0% 3.5% 2.9% -2.1% 6.2% 12.3% 6.6% 6.0% 0.8% 9.4% 66 Non-Airline Terminal Leased Space Non-Airline Terminal Leased Space 2017 2018 2019 2019 2020 Budget Change Org Basis (in 000's) Actual Actual Budget Forecast Budget $ Maintenance Service Fees 20 238 268 268 266 (2) -0.6% (2) -0.6% Space Rental - Terminal 4,364 5,063 4,641 5,611 5,434 793 17.1% (177) -3.2% All other ORG 3645 revenue Total ORG 3645 Revenue (15) 4,369 0 5,302 0 4,909 (0) 5,879 5,700 791 0.0% 16.1% 0 (179) 0.0% -3.0% Significant Revenue Changes (in 000's): AlClear 432 TSA/GSA 2,017 967 2,010 875 1,701 1,533 2,089 1,625 1,735 750 33 85.7% 2.0% 92 (354) 6.0% -16.9% % Budget vs Forecast $ % 67 Non Aero Commercial Properties Non-Aero Commercial Properties Revenue 2017 Actual 2018 Actual 1,079 445 5,434 6,958 1,556 482 2,038 1,573 522 2,095 1,573 522 2,095 1,617 522 2,139 44 44 2.8% 0.0% 15 42 57 248 687 90 1,025 268 734 593 1,595 268 734 593 1,595 268 734 847 1,850 Subtotal - New Development revenue: 7,015 3,063 3,690 3,690 In-Flight Kitchen Revenue Burien NERA 3 FAA Pilot Program grant All Other Commercial Properties Revenue Non-Aero Commercial Properties Revenue: 7,827 1,402 1,798 18,042 8,705 1,807 1,859 15,433 8,634 1,896 14,219 9,709 2,072 15,471 Subclass Basis (in 000's) 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) DesMoines Creek Business Park: NERA 2 Land Rent NERA 3 Land Rent Des Moines Creek North Land Rent Other New Development Revenue: - 2019 2019 2020 Budget Forecast Budget Budget Change $ % Budget vs Forecast $ % 44 2.8% 0.0% 2.1% 44 2.1% 0 255 255 0.0% 0.0% 43.0% 16.0% 0 255 255 0.0% 0.0% 43.0% 16.0% 3,988 299 8.1% 299 8.1% 9,974 2,698 16,660 1,340 802 2,441 15.5% 265 626 1,190 2.7% 42.3% 17.2% - 30.2% 7.7% 68 Port-owned Common Use Clubs and Lounges Budget Changes Budget vs Forecast $ $ % Airport Clubs & Lounges 2017 2018 2019 Org Basis (in 000's) Actual Actual Budget Forecast Budget Clubs & Lounges Revenue 5,041 6,802 8,520 10,329 10,536 2,015 23.7% 207 2.0% Operating Expenses 3rd Party Operating Expenses Base Management Fee Incentive Management Fee Management Fee B&O taxes Other expenses Clubs & Lounges Expenses 1,598 182 103 285 76 0 1,959 2,144 182 173 356 102 7 2,609 2,780 182 229 412 128 (0) 3,319 3,287 182 242 425 128 0 3,840 3,917 182 266 448 158 0 4,523 1,137 40.9% 0.0% 36 15.9% 36 8.8% 30 23.7% 0 0.0% 1,204 36.3% 630 23 23 30 683 19.2% 0.0% 9.7% 5.5% 23.7% Income from Operations 3,081 4,193 5,201 6,489 6,013 811 15.6% (477) (0) 2019 2020 % 17.8% 69 CAPITAL BUDGET 70 Summary of Proposed New Projects # of Projects Description 11 Asset Management 3 Safety & Security 10 Business Need 7 Customer Service 3 Grow Non-Aero Revenues 34 TOTAL • Cost Cash Flows (Figures in $000s) Estimate 2020 2021 2022 169,150 1,563 10,572 21,703 14,800 672 2,169 3,330 91,200 933 5,364 8,010 48,350 74 1,070 3,011 39,100 571 2,579 2,823 362,600 3,813 21,755 38,877 2023 50,482 2,803 21,519 4,109 3,833 82,746 2024 57,986 2,353 19,121 4,632 1,905 85,996 2020 - 24 TOTAL 142,305 11,328 54,948 12,896 11,711 233,188 Following slides list each new proposed project by category 71 Proposed Capital Projects - Safety & Security # 1 2 3 CIP C801119 C801125 C801126 Description Load Dock Employee Screening Mezzanine Security Glass North cargo area cameras TOTAL Cost Cash Flows (Figures in $000s) 2020 - 24 TOTAL Estimate 2020 2021 2022 2023 2024 1,500 118 451 466 408 16 1,459 12,900 491 1,657 2,743 2,286 2,292 9,468 400 64 61 121 109 45 400 14,800 672 2,169 3,330 2,803 2,353 11,328 1. Load Dock Employee Screening: As part of the Airport's plan to ensure safe and secure operations, the Airport is striving for 100% employee screening. Currently, there is access control to the secure side of the terminal on the load dock, but no employee screening. Employee screening on the load dock would be collocated with inspections for deliveries in order to provide screening for employees, vendors, contractors, and their personal items. This project would provide an AIT and x-ray. 2. Mezzanine Security Glass: This project will replace the currently installed glass railing on the mezzanine level, GML hall and other areas that provide unfettered elevated access over publicly occupied space with a 7-8 ft. high glass wall. 3. North cargo area cameras: The north cargo area, comprised of Cargo 1, 2, 3 and 4, hosted more than 6,300 live cargo operations in 2018. This operational total excludes passenger RON activity. In addition, the Cargo 1 ramp area was the location where the Horizon Air aircraft theft incident occurred in August 2018, is out of existing range of consistent camera surveillance. At present the cargo areas north of Cargo 6 area is monitored by only 3 cameras on the existing Genetec security system. 72 Proposed Capital Projects - Asset Management # 1 2 3 4 5 6 CIP C801127 C801045 C801038 C801042 C801037 C801034 7 8 9 10 C801046 C801047 C801123 C801044 Description Baggage Claim Device R&R Prog Common Use System Replacement Domestic Water Piping Phase 2 Landside Pavement Program1 C4 Generator Control Digital Signage: Ticketing, Baggage Claim and Drives2 Concourse D Electrical Upgrade Cooling Tower Upgrades IWTP Improvements Carpet Renewal/Replacement - Concourse D 11 C801122 IWTP Controls Conversion TOTAL Cost Cash Flows (Figures in $000s) 2020 - 24 TOTAL Estimate 2020 2021 2022 2023 2024 71,000 2,935 6,058 24,597 32,850 66,440 3,750 178 619 1,303 1,191 459 3,750 11,500 564 1,079 3,642 4,001 9,285 20,000 40 1,517 2,555 8,097 12,209 6,800 142 1,071 3,069 2,462 55 6,800 5,000 371 1,209 1,143 1,143 1,044 4,910 8,400 3,800 27,000 1,300 636 93 - 1,320 1,827 - 2,909 1,813 99 3,055 6,937 252 481 252 8,207 430 8,400 252 18,878 781 10,600 143 987 2,712 4,648 2,109 10,600 169,150 1,563 10,572 21,703 50,482 57,986 142,305 73 Proposed Capital Projects - Business Need # 1 2 3 4 5 6 7 CIP C801134 C801131 C801135 C801124 C801041 C801120 C200096 Description AvOps Wildlife Storage Building North End Airport Support Equipment Area North Cargo Area Improvements Air Cargo Truck Staging Yard HVAC Upgrade Concourses C & D PCS Yard Trailer Replacement Apartment Sound Insulation (Pilot Project) 8 C200097 ATZ Residential Acquisition Places of Worship Sound Insulation (Pilot Project) Fire Department Apparatus Renewal Replacement 9 10 C200098 C801040 TOTAL Cost Cash Flows (Figures in $000s) 2020 - 24 TOTAL Estimate 2020 2021 2022 2023 2024 800 84 84 10,000 470 470 5,500 286 286 3,500 187 321 1,929 1,063 3,500 50,000 629 3,342 3,316 11,497 12,164 30,948 1,500 118 451 466 408 16 1,459 2,300 2,300 2,300 11,500 6,500 5,000 11,500 1,100 - - - - 1,100 1,100 5,000 - 1,250 - 2,050 - 3,300 91,200 933 5,364 8,010 21,519 19,121 54,948 74 Proposed Capital Projects - Customer Service # 1 2 3 CIP C801054 C801053 C801129 4 5 6 C801050 C801133 C801132 7 C801049 Description Smoking Shelters Terminal Information Hubs Play Area Renovation Restroom Renewal/Replacement Main Terminal, Mezz & Bag Claim SSAT Meditation Room Pre-Security Tenant Offices Restroom Renewal/Replacement Concourse A, CTE TOTAL Cost Cash Flows (Figures in $000s) 2020 - 24 TOTAL Estimate 2020 2021 2022 2023 2024 550 77 77 700 74 111 227 206 82 700 1,100 93 192 371 353 1,008 21,000 866 2,592 3,532 2,921 9,911 1,100 7,900 16,000 - 48,350 74 - - - 96 382 722 96 382 722 1,070 3,011 4,109 4,632 12,896 75 Proposed Capital Projects - Grow Non-Aero Revenues # 1 2 3 CIP C801121 C801128 C801056 Description Port shared lounge Conc A exp2 3rd FL GT Booth Enhancements New Leasable Space TOTAL Cost Cash Flows (Figures in $000s) 2020 - 24 TOTAL Estimate 2020 2021 2022 2023 2024 7,700 566 2,375 2,475 2,159 84 7,659 2,800 5 204 348 1,674 570 2,800 28,600 1,251 1,251 39,100 571 2,579 2,823 3,833 1,905 11,711 1. Port shared lounge Conc A exp: This project will expand the Port Common Use Lounge on A Concourse (Club at SEA) by 1,500 sq. ft. in to an unused & unfinished storage space to the east of the existing lounge. This work will require a sprinkler renovation and HVAC update to the entire space. During this expansion the lounge will be renovated to include an internal first-class lounge area, two shower suites and a reconfiguration/expansion of the kitchen and bar/food service area. This project will also refresh other FFE (furniture, fixtures and equipment) in the lounge that is past its useful life. 2. 3rd FL GT Booth Enhancements: This project will expand and renovate the Ground Transportation Offices on the 3rd floor of the parking garage. This project will also explore the addition of internal employee restrooms, increase cell coverage and WIFI, update an upstairs breakroom and relocate a data center in the adjacent booth. 3. New Leasable Space: This project will convert several vacant and/or undeveloped spaces in the airport into occupiable spaces. The spaces can then be used for Port functions, contractor offices/break rooms or can be leased to airport tenants for a variety of uses. 76 CPE COMPARISONS TO PEER AIRPORTS 77 2018 CPE Comparison SEA 2020 CPE of $13.93 likely still in Middle Third CPE is an imperfect comparison. At some airports, airlines or private entities operate and pay for certain facilities making comparisons difficult 78 Comparison of Future CPEs 79 CIP FUNDING PLAN AND USE OF PFCS 80 Sources and Uses of PFCs $000s SOURCES Beginning balance Collections & interest Total Avialable Balance 2019 Fcst 2020 BUD 2021 2022 2023 2024 2025 2026 2027 2028 Total Uses 89,636 96,055 185,691 10,651 99,467 110,117 19,002 101,104 120,106 10,077 102,462 112,539 10,229 104,000 114,229 10,382 105,563 115,945 10,538 107,148 117,686 10,696 108,757 119,454 10,857 110,391 121,248 11,020 111,496 122,516 PFC Backed Bonds #1 Third Runway 20,128 18,768 18,766 18,770 18,769 - - - - - 75,072 Revenue Bonds #2 IAF #3 Third Runway #4 Conc A, STS, Existing Baggage #5 NSAT 26,449 7,351 - 17,626 26,412 12,800 10,510 31,342 26,067 13,354 15,501 38,942 20,695 14,776 4,127 39,242 16,949 14,777 14,110 39,021 16,950 14,715 23,628 38,849 35,163 7,038 23,629 39,850 35,164 7,036 23,627 40,234 35,162 7,035 23,629 41,940 35,161 7,034 23,403 327,047 274,170 105,917 162,164 116,112 15,000 24,338 1,099,820 USES - Debt Service USES - PAY GO IAF NSAT Airfield/Noise MT 100% Baggage Screening Baggage Optimization C800612 Other Terminal Total Uses 116,112 170,040 5,000 91,115 5,000 110,029 5,000 102,310 103,847 11,092 105,407 2,310 106,990 2,921 108,597 4,167 110,228 3,847 111,385 Ending balance 15,651 19,002 10,077 10,229 10,382 10,538 10,696 10,857 11,020 11,130 32% 95% 95% 95% 100% 89% 98% 97% 96% 97% Used for debt service 81 Funding Plan for International Arrivals Facility (IAF) Funding Sources $000s Capital Rate Base 2020 Cash/ADF Revenue Bonds PFCs (paygo) 200,000 631,445 100,000 Amortization Debt Service DS paid w/PFCs 17,626 (17,626) (39,021) Total (b) 931,445 Net capital costs 0 5,296 78.5% 70.4% (a) Effective percent of PFCs to fund project costs: 2024 44,318 (a) $200M amortization would be excluded from Rate base. (b) Figure does not include CIP 800836 IAF Baggage $18.5M + $5.5M and Public Expense Facial Recognition equipments of $13M 82 Funding Plan for North Satellite Building (NSAT) Funding Sources Cash/ADF Revenue Bonds PFCs Total $000s 537 532,920 126,368 659,825 Capital Rate Base Amortization Debt Service DS paid w/PFCs Net capital costs Effective percent of PFCs to fund project costs: 2020 36 16,951 (10,510) 6,477 2024 36 38,110 (23,628) 14,517 69.2% 69.2% • Use of PFCs on NSAT will increase as PFC backed bonds are fully amortized in 2023 83 Uses of PFCs by Cost Center 2019 -2028 29% 33% Airfield Terminal 38% Balanced use of PFCs to moderate rates FIS 84