Item Number: 11a supp Meeting Date: July 8, 2025 Port of Seattle 2026 Budget Development Briefing July 8, 2025 1 Agenda Environmental Scan 2026 Budget Principles & Strategies 2026 Budget Approach and Process 2026 Key Budget Dates 2 Environmental Scan • Unprecedented political and economic uncertainty • Effects of trade, immigration and other policy actions • Post pandemic growth moderating • Multiple years of rapid expense growth • Risk of federal funding reductions and reduced operating revenues • Cuts in federal climate change programs and funding • Impact of increased inflation due to tariffs on operating, capital and environmental costs • Rapid technological advances including Artificial Intelligence and growing sophistication of cyber threats 3 Actions Now Determine Future Success 4 2026 Budget Guiding Principles • Take an extremely conservative approach to budgeting due to economic and political uncertainties and need to build capital • Safeguard the efficient operation of mission critical business functions to maintain regional economic activity • Assess geopolitical, political and regulatory risks on an ongoing basis • Identify, protect and enhance operating and capital investments focused on asset preservation and long-term growth and revenue production • Focus on retaining key talent and developing staff through training and upskilling • Prioritize implementation of current programs and initiatives 5 2026 Budget Strategies • Develop a very conservative budget and create contingency and scenario planning to address revenue risks • Focus on increasing Net Operating Income by limiting expense growth • Limit new FTEs and outside services • Assess affordability of capital plans considering increased inflation and revenue risks • Strengthen the focus on sustainability, adaptability and resiliency in spending and business plans • Monitor early warning indicators that may trigger budget recalibration and take actions as necessary 6 2026 Budget Approach • Support a culture of resilient budgeting with a multi-year mindset • Support staff and provide for reasonable increases in payroll and benefits • No plan on reduction of current workforce • Limit new FTE growth o Review positions that are vacant and unfilled for a year o Consider repurpose some existing positions • Limited growth on non-payroll operating expenses • New FTEs and initiatives will be rigorous evaluated o Focus on prioritizing and absorbing within existing budget 7 2026 Budget Process Overview Environmental Assessment • • • Assess business environment and needs Update operating and capital forecasts Conduct SWOT analysis Budget Preparation • • • • Develop budget assumptions and drivers Identify key financial metrics and budget targets Issue budget calendar and departmental guidelines Prepare operating and capital budgets in accordance with principles and guidelines Budget Reviews and Approvals • • • Conduct internal department and division budget reviews Publish the preliminary budget document to the public Commission review and approval of budgets/capital plans Final Steps • • File the Statutory Budget with King county Publish the final budget document to the public 8 2026 Budget Calendar (Commission Items in Blue) 5/09 - 2026 Budget Planning Discussion with ELT 6/17- Commission Retreat - Part I 7/03 - 2026 Budget Guidelines available 7/22 - 2026 Budget Process and Schedule Commission Briefing 7/XX - Commission Budget Retreat -Part II?? 8/01 - Central Services Department new budget requests due to F&B; Commission Priorities due to ED 8/13 - 08/22: Executive review of Central Services Department Budgets/New Requests 9/08 - Executive review of combined Central Services Budget 9/10 - Executive review of Maritime and EDD Operating & Capital Budgets 9/11 - Executive review of Aviation Operating & Capital Budgets 9/12 - 2026 North Harbor Budget to the NWSA 9/23 - Central Services Budget and Port wide Budget Overview Commission briefing 9 2026 Budget Calendar (Commission Items in Blue) 10/10 - POS/NWSA ILA Service Directives due to the NWSA 10/14 - Operating Divisions Commission Budget Study Session 10/21 - 2026 Preliminary Budget Document available to Commission 10/23 - 2026 Preliminary Budget Document available to the public 10/24 - NWSA Budget study session with Managing Members 10/28 - Tax Levy & Draft Plan of Finance Commission briefing 11/04 - NWSA Budget adoption by Managing Members 11/11 - Introduction of preliminary 2026 Budget and public hearing 11/18 - Adoption of 2026 Budget 11/28 - File the 2026 Statutory Budget with King county 12/05 - Publish the 2026 Final Budget to the public 10