Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
10b
ACTION ITEM
Date of Meeting
November 12, 2024
DATE: October 21, 2024
TO: Stephen P. Metruck, Executive Director
FROM: Stephanie Jones Stebbins, Maritime Managing Director; Director, Marine Stormwater
Utility
Sarah Ogier, Director, Maritime Environment & Sustainability
Jane Dewell, Sr. Manager Environmental Programs/Marine Stormwater Utility
SUBJECT: Adoption of 2025 Marine Stormwater Utility Rate Increase
Amount of this request:
$0
Total estimated project cost:
$0
ACTION REQUESTED
Request Commission authorization for the Executive Director to set 2025 Marine Stormwater
Utility rates with an 8.0% increase from 2024.
EXECUTIVE SUMMARY
The requested authorization will provide a 2025 rate structure to be adopted by the Marine
Stormwater Utility (Utility), in support of Utility obligations to protect water quality, rehabilitate
Port of Seattle (Port) stormwater assets, and support property managers and tenants in
compliance with stormwater permit conditions. The proposed rate is an 8.0% increase from 2024
as recommended by the Utility staff and concurred by the Rate Advisory Committee and is
consistent with the financial plan provided last year. This rate increase will help ensure the Utility
is able to fund regulatory requirements and rehabilitation projects, including projected capital
improvement over the next five years.
JUSTIFICATION
The Stormwater Utility is a self-funded program responsible for maintaining Port Maritime
property stormwater assets and supporting compliance with relevant stormwater regulations.
Cost for these services continues to increase with regional inflation and the increasing complexity
in Washington State stormwater regulations. Additionally, substantial capital improvements are
on the immediate horizon increasing demand on this limited Utility revenue stream. A rate
increase at the proposed level of 8.0% allows the Utility to improve stormwater conveyance and
water quality to meet the Port’s Century Agenda environmental goals by:
1. Meeting or exceeding stormwater regulatory requirements.
2. Investing in streamlining processes to improve efficiency and reduce costs of meeting
regulatory obligations.
COMMISSION AGENDA – Action Item No. 10b Page 2 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
3. Maintaining significant level of investment to rehabilitate, expand and increase the
performance of the stormwater system to protect water quality in the Puget Sound.
DETAILS
The Utility was formed in 2014 to enable the Port to provide services, facilities, systems, and
programs for surface water and stormwater management and pollution control. The Utility
collects stormwater fees from the Port of Seattle, Northwest Seaport Alliance (NWSA), and
tenants, and reinvests that income into maintaining and upgrading the stormwater
infrastructure. Prior to creating the Utility, the stormwater fees paid by the Port and its tenants
to the City of Seattle (City) were used to address City priorities and not necessarily the priority
stormwater needs at Port facilities. With the establishment of a Port Utility, we have realized an
increased investment and attention to Port property stormwater assets and management.
Benefits of Utility work include water quality protection in the Puget Sound as well as stormwater
infrastructure that better supports Port tenants’ stormwater investments.
The Utility rates apply to all Port-owned maritime (non-aviation) property, which includes land
managed by the NWSA. Tenants pay stormwater fees based on the area of their leaseholds and
what percent of their area is hardscape (impervious) surface. The stormwater fees for the
remaining unleased land at a facility are paid by the operating business. The operating business
is either the NWSA or the specific Port business (Real Estate Portfolio, Maritime Operations,
Cruise, etc.) that oversees the unleased property. Rates are set to recover the cost of Utility
operation and maintenance and support future capital improvements.
The City’s utility rates, reflected in the 2025-2030 Strategic Plan Update (approved September 3,
2024), continue to be on average 17% higher than the Port’s stormwater rates.
The Port’s Stormwater Utility rates are approved annually by the Commission. The Utility’s
internal Rate Advisory Committee reviews and validates rate recommendations for Commission
consideration and approval. An 8.0% increase is recommended in 2025. This would ensure the
Utility budget is sufficient to address stormwater regulatory obligations and asset improvement
projects.
The 2024 stormwater utility rates and proposed 2025 rates with 8.0% increase are shown in the
table, below.
Utility Rate Category
2024
(based on % impervious surface)
($ per 1,000 square feet)
Undeveloped (0-15%)
Regular
$46.58
Low Impact
$27.27
Light (16-35%)
Regular
$72.03
Low Impact
$56.65
COMMISSION AGENDA – Action Item No. 10b Page 3 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
Scope of Work
The Utility completed a full system assessment to obtain baseline conditions of the existing
stormwater infrastructure at the end of 2019. As of mid-2024, over 80 urgent repairs of
stormwater infrastructure have been completed since 2016, reducing hazards and allowing the
conveyance system to function properly, which benefits overall water quality. Twenty-eight tide
gates have been installed, preventing the flow of tidal waters into the conveyance system, which
is both a safety and an infrastructure improvement.
In 2021, the Utility completed its first five-year strategic plan, which included feedback from Port,
NWSA, and external tenant stakeholders. Staff are in the process of updating the plan for the
next five years, which is intended to better serve customers and ensure a resilient Utility while
supporting the Maritime industry. Other accomplishments in 2024 include the following:
1. The Utility Marine Maintenance team typically completes 1,300 work orders each year,
and this year completed the following:
a) Significant pipe repairs at Terminal 46 and Terminal 18, including coordination with
NWSA and SSA Marine to account for operational constraints.
b) A pipe repair at Fishermen’s Terminal ahead of construction for the Maritime
Innovation Center, a critical asset that will be connected to the building renovation.
2. Finalized a Stormwater Decant Feasibility Study that evaluates the siting and financial
modeling of a proposed Utility-owned decant facility at three potential locations.
3. Finalized masterplans for green stormwater infrastructure at Shilshole Bay Marina and
Fishermen’s Terminal and coordinated with operations and property managers to identify
optimal schedules for construction phasing.
4. In coordination with NWSA and other ports, submitted comments to the Department of
Ecology on draft Industrial Stormwater General Permit. This permit is re-issued every five
years and regulatory changes can have significant impact to the Port and Utility.
5. Translated stormwater information materials for non-English speakers to enhance
community outreach and education in disadvantaged communities and share benefits of
stormwater improvements.
6. Supported a busy cruise season with updated best management practices, vendor
training, and cruise observer oversight to ensure compliance with legal agreements and
stormwater requirements.
7. Updated asset tracking system to calculate progress of stormwater system rehabilitation.
Tracking the progress of system rehabilitation is a complex task with a wide variety of
Utility Rate Category
2024
Medium (36-65%)
Regular
$104.61
Low Impact
$84.15
Heavy (66-85%)
$140.37
Very Heavy (86-100%)
$166.03
COMMISSION AGENDA – Action Item No. 10b Page 4 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
pipe types, ownership, and infrastructure ages to keep accurate concurrent with adding
new infrastructure and addressing data gaps.
The projected expense and capital budgets in 2025 total approximately $9.8M, which will be
necessary to:
1) Perform system assessments to monitor known conditions and be proactive in asset
management.
2) Support capital projects including Maritime Industrial Center stormwater asset
rehabilitation and Pier 90 Berth 6 and 8 water quality treatment.
3) Repair damaged stormwater pipes and infrastructure.
4) Perform required regulatory stormwater management activities such as catch basin
inspections and sweeping.
5) Perform additional stormwater management activities that enhance water quality
protection, such as dock cleaning and plaza washing.
6) Evaluate and implement green and innovative stormwater treatment systems.
7) Apply scoring matrix including equity, diversity and inclusion considerations to prioritize
infrastructure work.
8) Implement year five of the strategic plan and develop the next five-year strategic plan.
9) Participate in Port-wide planning and research for in-depth climate change/resilience
study that includes stormwater infrastructure.
10) Complete the current capital program portfolio including pipe rehabilitation and drainage
improvements.
11) Cover operational and administrative expenses including staff costs, utility taxes and Port
allocations.
Rate Criteria: The following criteria were used in considering the proposed 2025 rate:
1) Maintain adequate budget to meet or exceed stormwater regulatory requirements, the
Port’s Environmental Long-Range Plan, and Utility Charter responsibilities including
rehabilitation of stormwater infrastructure.
2) Continue adequate funding to maintain and improve a high-functioning stormwater
system to benefit the water quality of the Puget Sound.
3) Maintain a six-month fund reserve for operating expenses for financial prudence
consistent with Port policy and best practices.
4) Maintain a consistent rate increase over the five-year projection, striving for a smooth
rate profile to avoid future steep rate hikes and maintain stable funding for the program.
Schedule
The Utility Rate Advisory Committee reviewed and validated the rate recommendation in
October 2024. This committee consists of Port and NWSA operations, real estate, property
management and finance leaders. The Utility does not explicitly seek external input, consistent
with other public drainage utilities, but relies on the committee’s expertise to reflect customer
needs and priorities. The public notice for Commission approval allows for public input similar to
COMMISSION AGENDA – Action Item No. 10b Page 5 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
the Seattle City Council approval process for municipal utilities. If approved by the Commission,
the 2025 rates will be adopted by the Utility effective January 1, 2025. The Utility notifies tenants
in December of the upcoming rate change following adoption. Tenants can dispute billing fees by
contacting Utility staff, and a decision would be made within 60 days of receipt of the dispute.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Increase rates by 9.5%
Cost Implications: Projected revenue in 2025 will be $8.4M
Pros:
1) Builds greater fund balance to support unexpected repairs and future planned capital
projects in next five years as compared to the recommended alternative.
2) Funds critical capital investments to meet Century Agenda goals and exceed regulatory
requirements.
Cons:
1) Higher financial impact on tenants, NWSA and Port business units than the other
alternatives.
2) Higher fee increases for customers in 2025 than were enacted during the COVID-19
pandemic (2021-2023) or proposed under alternative 2.
3) Falls below the six-month reserve balance for less than a week in 2025.
This is not the recommended alternative.
Alternative 2 – Increase rates by 6.0%
Cost Implications: Projected revenue in 2025 will be $8.1M
Pros:
1) Lower financial impact on tenants, NWSA and Port business units than the other
alternatives.
Cons:
1) Results in a negative fund balance for the Utility, including falling below the six-month
reserve balance, beginning in 2025.
2) To rectify negative fund balance, a higher rate increase in future will be necessary to fund
critical capital investments to meet Century Agenda goals and exceed regulatory
requirements.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. 10b Page 6 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 3 – Increase rates by 8.0%
Cost Implications: Projected revenue in 2025 will be $8.3M
Pros:
1) Lower rate change over the next five years, projecting an average of 8.0% through 2028
to conduct project stormwater work and maintain recommended fund reserve balance.
2) Lower financial impact on tenants, NWSA and Port business units than alternative 1.
3) Funds critical capital investments to meet Century Agenda goals and exceed regulatory
requirements.
Cons:
1) Builds a lower fund balance for future planned capital projects than alternative 1.
2) Higher fees for customers than were enacted during the COVID-19 pandemic (2021-2023)
or proposed under alternative 2.
3) Falls below the six-month reserve balance for less than a week in 2025.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
All revenue collected by the Utility is separate from the Port’s general funds and must be spent
on or for the benefit of the Port stormwater program. The proposed rate increase has several
positive implications including:
1) Maintain funding for critical stormwater infrastructure improvements,
2) Support a six-month fund reserve as sound fiscal policy consistent with standard Port
procedure (except for a short period in 2025), and
3) Reduce operating costs funded by Port business units and tenants by funding stormwater-
related maintenance activities.
ADDITIONAL BACKGROUND
The Utility maintains a separate accounting fund, known as the stormwater utility fund, to
conduct all business. This fund is separate from the Port general funds and cannot be used for
any purpose other than administering, operating, maintaining, and improving the Port’s
stormwater system. The Utility may borrow money from the Port funds as needed, provided that
such funds are paid back in full to the originating funds.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
November 14, 2023 – The Commission approved Marine Stormwater Utility Rates for 2024
October 25, 2022 – The Commission approved Marine Stormwater Utility Rates for 2023
September 14, 2021 – The Commission approved Marine Stormwater Utility Rates for 2022
COMMISSION AGENDA – Action Item No. 10b Page 7 of 7
Meeting Date: November 12, 2024
Template revised June 27, 2019 (Diversity in Contracting).
October 27, 2020 – The Commission approved Marine Stormwater Utility Rates for 2021
October 8, 2019 – The Commission approved Marine Stormwater Utility Rates for 2020
October 9, 2018 – The Commission approved Marine Stormwater Utility Rates for 2019
November 14, 2017 – The Commission approved Marine Stormwater Utility Rates for 2018
November 18, 2014 – Commission approved Resolution No. 3696, as amended, Authorizing
Stormwater Utility Formation, included utility rates for 2015 through 2017