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INTERNAL AUDIT

To: Ryan Calkins, Commissioner

Stephanie Bowman, Commissioner

Chris Gehrke, Public Member

From: Glenn Fernandes, Director, Internal Audit

Date: May 7, 2020

Subject: Interlocal Agreement (ILA) Mapping and Risk Ranking

Background

At the December 9, 2019, Audit Committee, Commissioner Calkins requested a listing of Port ILA’s to

obtain a high-level understanding of how the deliverables are tracked and whether they are met. An

interlocal agreement is a written contract between local government agencies such as a city, a county, a

school board or a constitutional office. Any time a public service involves the joint operations and budgets

of two or more local government agencies, an ILA must be created and approved by all sides.

The Revised Code of Washington 39.34.040 states: “Prior to its entry into force, an agreement made

pursuant to this chapter shall be filed with the county auditor or, alternatively, listed by subject on a

public agency’s web site or other electronically retrievable public source.” Commissioner Calkins request

was made to lay the ground work for perhaps an audit in 2021 and included the following deliverables:

1) A mapping of the responsible department to each ILA, and

2) A ranking by risk

Approach

Internal Audit (IA) obtained the listing of current ILA’s from the Port’s publicly facing source. The listing

contained 36 agreements. The Central Procurement Office provided hard copies of each agreement and

assisted IA in determining the responsible department. Risk was assessed using three criteria:

1) Financial (weighted at 50%): A rating of one was assigned if the Port liability was less than

$1,000,000; a rating of two between $1,000,000 and $4,999,999; a rating of three greater than

$5,0000,000.

2) Legal (weighted at 30%): A rating of one for an agency to agency agreements; a rating of two if

the agreement was binding by state issued court order; a rating of three if the agreement was

binding by a federal court order.

3) Complexity (weighted at 20%): A rating of one was given if the ILA was advisory in nature or

required a study; a rating of two for construction related; a rating of three for environmental

cleanup of hazardous waste.

Results

Appendix A (below) lists the 36 ILA’s, ranked from highest to lowest risk. We intend to incorporate this

analysis into our annual risk assessment when developing our 2021 audit plan. We will then select a

sample of ILA’s which we will audit to assure compliance to stated deliverables.

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INTERNAL AUDIT

Appendix A

ILA

Number

Agency Name & Purpose

Port Department

Initial Agreement

Financial Liability ($)

Financial

Risk

(50%)

Legal

Rating

(30%)

Compl

exity

Rating

(20%)

Weighted

Overall

Risk Score

I-00319477

US Environmental Protection

Agency - T108 Preliminary

Assessment

Sea-Port

Environmental

Port to settle the cost of

the assessment.

Penalty Clause;

$ 1,000 per day for 1-14

days

$ 2,500 per day for 15-30

days

$ 5,000 per day 31st day

and beyond

2

3

2.5

I-00318335

City of SeaTac – Des Moines Creek

Restoration Projects

Aviation Project

Management

Group

$12,713,548

3

1

3

2.4

I-00318544

WA State Department of Ecology -

Decree for Lora Lake Apartments

Clean Up

Aviation

Environmental

Reimbursement of actual

costs

2

3

2.2

I-00316917

WA State Department of Ecology -

Agreed Order for North T117

Maritime

Environmental

Not specified. Port to

reimburse actual costs

2

3

2.2

I-00319353

City of SeaTac – Surface Water

Management, Quality Assurance

and Community Relief

Aviation

$29,000,000 for 10 years

3

1

2

2.2

I-00319798

City of SeaTac - Safe & Swift

Corridor Program focused on

External Relations

$15,000,000

3

1

2

2.2

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INTERNAL AUDIT

moving cargo, cars, transit and

cyclists safely and swiftly on city

streets

I-00319797

City of SeaTac - S Lander St Grade

Separation Project - Construction

of a bridge on S Lander St

External Relations

$5,000,000

3

1

2

2.2

I-00318935

City of SeaTac - Heavy Haul with

City of Seattle - Legislation of

heavy haul network

External Relations

$10,000,000 –

$20,000,000

3

1

2

2.2

I-00317352

US Environmental Protection

Agency - 117 EAA NTCRA

Implementation

Maritime

Environmental

All future response costs

Penalty Clause;

$ 1,000 per day for 1-7

days

$ 2,000 per day for 8-14

days

$ 3,500 per day 15-30

days

$ 7,500 per day 31-90

days

2

3

1

2.1

I-00320124

The Northwest Seaport Alliance -

Usage of Portion of Terminal 46

SeaPort Economic

Development/Rea

l Estate

$ 3,826,498 annually

(Contract Value =

$88,000,000 for the 23

years)

3

1

2

I-00317744

King County - Jail Service

Police Department

$1,700,000

3

1

2

I-00319841

City of Des Moines - Construct

transportation improvements to

South 216th Street

Aviation Project

Management

Group

$1,500,000

2

1

2

1.7

I-00319799

City of Kent - 228th St Grade

Separation

External Relations

$1,190,000

2

1

2

1.7

I-00318903

City of Seattle - Storm Water Utility

Operations

SeaPort

Environmental

$3,993,000

2

1

2

1.7

4

INTERNAL AUDIT

I-00319556

Seattle Community College- Video

Services

External Relations

$1,200,000

2

1

1.5

I-00318139

Us Army Corp of Engineers Seattle

District - Harbor Navigation

Improvement Study

Maritime

Environmental

$1,500,000

2

1

1.5

I-00317509

King County Emergency Med

Service - Advanced Life Support

Ems

Fire Department

$535,600

1

2

1.2

I-00320147

King County Dept of Natural

Resources - Conduct services to

support the Port in conducting

activities for the Des Moines Creek

Basin Restoration project

Aviation

Environmental

$42,000

1

I-00320038

USDA APHIS FSO ACCTG SVCS -

conduct wildlife damage

management to minimize wildlife

strike hazards to aircraft, threat to

human health and safety &

property damage

Aviation

Operations -

Wildlife

Goods or services on a

cost recovery basis

1

I-00319680

King County Finance Division -

2019 ORCA Program

Human Resources

$380,642

1

I-00320064

Washington State Dept of

Transportation - traffic study to

evaluate practical solutions to

address traffic on SR 516

Aviation Project

Management

Group

$400,000

1

I-00319557

Vancouver Fraser Port Authority -

Clean Air Strategy Review &

Update

Maritime

Environmental

$16,845

1

I-00319554

U S Dept of Homeland Security -

Support the joint reimbursable

program at SEATAC as agreed in

the Reimbursable Services

Agreement

Aviation

Operations

As billed by CBP

1

5

INTERNAL AUDIT

I-00319300

City of Tukwila - Commute Trip

Reduction Program with Tukwila by

implementation of Transportation

Demand Management strategies

Aviation

Environmental

$12,500

1

I-00319655

The Northwest Seaport Alliance -

development of an information

database & report concerning

maritime sources of air emissions

throughout Puget Sound area

Maritime

Environmental

$50,000

1

I-00318619

Puget Sound Regional Fire

Authority - Fire Vehicle

Maintenance Services

Fire Department

Labor rate of $101 per

hour subject to a limit of

$300,000 annually

1

I-00318695

City of Seattle - Project Facilitation

Services

Maritime

Environmental

$230,000

1

I-00318730

The Northwest Seaport Alliance -

POS/NSWA Staff Support Services

2016

Maritime

Environmental

The cost is as defined in

the Exhibits (exhibits are

not available)

1

I-00318338

WA State Dept Of Ecology - WCC

Natural Resources Projects

Aviation

Environmental

$700,000

1

I-00317613

Highline Community College -

Small Business Development

Center and Business Development

Services

Economic

Development

$30,000

1

I-00316732

King County Dept of Natural

Resources - Surface Water

Management Related Technical

Services

Aviation

Environmental

Port to reimburse actual

costs

1

I-00317973

US Federal Aviation Admin -

Reimbursement of Runway

Reconstruction 16c/34c

Aviation

$30,000

1

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INTERNAL AUDIT

I-00317767

WA State Dept Of Ecology - Water

Quality Program Municipal

Stormwater Permits

Maritime

Environmental

$641 per year

1

I-00317038

King County Finance Division Small

Business Contractors and Suppliers

(SCS) Certification

Economic

Development

$12,900 per year

1

I-00316675

Port of Tacoma - Staffing

Resources

Maritime

Environmental

Labor Rate of $109 per

hour

1

I-00318052

King County Finance Division

Maritime

Environmental

$75,000

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