Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM Item No. 10b
ACTION ITEM Date of Meeting November 11, 2025
DATE: October 17, 2025
TO: Stephen P. Metruck, Executive Director
FROM: Stephanie Jones Stebbins, Maritime Managing Director; Director Marine Stormwater
Utility
Sandra Kilroy, Sr. Director Environment and Sustainability
Sarah Ogier, Director, Maritime Environment & Sustainability
Jane Dewell, Sr. Manager Environmental Programs/Marine Stormwater Utility
SUBJECT: Adoption of 2026 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 2026 Marine Stormwater
Utility rates with a 10.0% increase from 2025.
EXECUTIVE SUMMARY
The requested authorization will provide a 2026 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 a 10.0% increase from 2025
as recommended by the Utility Rate Advisory Committee. This rate increase will help ensure the
Utility is able to fund regulatory requirements and asset rehabilitation projects including
projected limited 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 local, state, and federal
stormwater regulations. Cost for these services continues to increase with regional inflation and
the increasing complexity in Washington State stormwater regulations. A rate increase at the
proposed level of 10.0% 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 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
3. Maintaining significant level of investment to rehabilitate, expand and support 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,
including innovative stormwater treatment systems and aligning investments with sustainability
and equity goals. 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 limited capital improvements. In addition to
funding current operations, maintenance and capital projects, the Utility is also obligated to
maintain a reserve fund equivalent to six months of operating expenses.
The City’s utility rates, reflected in the City 2025-2030 Strategic Plan Update (approved
September 3, 2024), continue to be on average 15% 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. A 10.0% increase is recommended in 2026. This would ensure the
Utility budget is sufficient to address stormwater regulatory obligations, some asset
improvement projects and contribute towards the Utility’s reserve fund.
The 2025 Utility rates and proposed 2026 rates with 10.0% increase are shown in the table below.
Utility Rate Category 2025 Proposed 2026
(based on % impervious surface) ($ per 1,000 square feet)
Undeveloped (0-15%)
Regular $50.31 $55.34
Low Impact $29.45 $32.40
Light (16-35%)
Regular $77.79 $85.57
COMMISSION AGENDA – Action Item No. 10b Page 3 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
Impact on Rate Payers
The forecasted Utility revenue for 2025 is approximately $8.26 million, and therefore every 1%
rate change is about $82,600. The added revenue generated from a 10.0% increase is
approximately $826,000, providing for an estimated total collection of $9.09 million for
2026. With a 10.0% rate increase, the impact on two hypothetical tenants is provided below:
• A small commercial tenant with a lease area of 834 square feet would have a $1.25
monthly increase on a $12.50 bill, for a total of $13.75 per month ($150.00 increases to
$165.00 per year).
• A large industrial tenant with a lease area of 392,465 square feet (9+ acres) has a $587.00
monthly increase on a $5,864.00 bill, for a total of $6,451.00 per month ($70,368.00
increases to $77,412.00 per year).
Revenue Collection Distribution
Revenue is collected from all Port properties including leased areas, non-tenant areas used by
Port business units and areas licensed to NWSA. Approximately 70% of Utility revenue is from
NWSA-licensed properties and the remaining 30% is collected from Port and Port tenants.
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-2025, over 85 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 finalizing an updated
strategic plan for the next five years, with a focus on resiliency, exceptional value, sustainability,
and equity, diversity and inclusion. Other accomplishments in 2025 include the following:
1) Utility Marine Maintenance team typically completes 1,400 Maximo work orders each
year, and in 2025, this included:
a) Regular street sweeping, pipe cleaning, and storm drainage system inspections across
Maritime properties.
Utility Rate Category 2025 Proposed 2026
Low Impact $61.19 $67.30
Medium (36-65%)
Regular $112.98 $124.28
Low Impact $90.89 $99.97
Heavy (66-85%) $151.59 $166.75
Very Heavy (86-100%) $179.31 $197.24
COMMISSION AGENDA – Action Item No. 10b Page 4 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
b) Significant pipe repairs at Terminal 25 and 30, including coordination with NWSA and
SSA Marine to account for operational constraints.
c) Design and planning for pipe replacement at Terminal 46.
2) Utility funded and completed Capital Projects:
a) Maritime Industrial Center Storm Drainage Improvements – completed 2025.
b) Terminal 91 Berths 6&8 Water Quality Improvements – completed 2025.
c) 100% design for the Terminal 106 Storm Drainage Improvement project, slated for
construction in 2026.
3) Submitted comments on draft Stormwater Manual updates to City of Seattle that will be
adopted in 2026. This manual is re-issued every five years and regulatory changes can
have significant impacts on the Port and SWU.
4) Shortlisted in International Association of Ports and Harbors 2025 Sustainability Awards
competition. The awards celebrate the highest quality port-sustainability projects from
around the globe.
5) Completed work related to the 2024 cyber-attack by re-establishing the stormwater GIS
mapping capability and tenant billing for stormwater fees.
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
pipe types, ownership, and infrastructure ages concurrent with adding new infrastructure
and addressing data gaps.
8) Collaborated with the Port’s climate change and resilience planning and research to
provide expertise on stormwater infrastructure and forecasted impacts.
9) Continued strong partnerships with Waterfront Project Management, Port Construction
Services, Environmental Permitting, Engineering and Marine Maintenance to support
comprehensive capital project review and asset rehabilitation, including detailed
Bluebeam construction plan reviews and targeted training on stormwater regulations and
assets.
Stormwater Utility funds can only be used toward the Port’s maritime stormwater infrastructure
and regulatory programs. This year, the Utility fell short of maintaining the target six-month
reserve fund balance The Utility cash balance as of September 23, 2025, was $3.95M with a
projected end-of-year fund balance of $2.30M. The 2025 operating expenses exceeded revenue
by $0.386M and the resulting shortfall will be covered by the reserve fund balance. The 2026
estimated budget of $11.15M, will be allocated as follows: $5.18M for maintenance and expense
work, $4.29M in administration and operating expenses, and $1.68M in capital. The projected
2026 revenue with 10.0% rate change is approximately $9.09M. With this rate, the Utility will
need to tap into reserve funds to cover expenses and we anticipate dropping below six-month
reserve fund target (about $4.54M in 2025 dollars) through 2029.
The 2026 projected expense and capital budget will be necessary to:
COMMISSION AGENDA – Action Item No. 10b Page 5 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
1) Perform system assessments to monitor known conditions and be proactive in asset
management.
2) Support capital projects including completing Terminal 106/South Nevada Street drainage
improvements, green stormwater infrastructure improvements at Shilshole Bay Marina,
and purchasing a new sweeper truck to replace one that is no longer reliable.
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 one of the updated 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 2026 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.
There is recognition that economic pressures have forced a greater Utility rate increase for 2026
than anticipated in 2024, when 8.0% annual increase was proposed through 2029. The Utility
fund balance recently dropped below the six-month fund reserve due to economic pressures,
which conflicts with the rate criteria the Utility has followed since 2016. These pressures, listed
below, were accounted for when developing the rate proposal alternatives:
1) During the COVID-19 pandemic (2021-2023), the Utility adopted lower rates than planned
to reduce the financial burden to tenants, NWSA, and Port business units, which resulted
in reduced revenue and rates below inflation.
2) As of June 2025, the consumer price index for the Seattle area increased by 2.7% (12-
month period), and the Mortenson Construction index, a measure that tracks
construction costs in Seattle, increased by 5.05% for 2025.
COMMISSION AGENDA – Action Item No. 10b Page 6 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
3) The City of Seattle Business & Occupation tax increased from 1.8% to 2.1% in 2025. The
Utility pays this tax to the City of Seattle.
4) City of Seattle Use tax is 12.0% per the Utility interlocal agreement between the Port and
City signed in November 2016 exclusive tax.
5) Rising labor costs and cost-of-living adjustment for Port employees in 2024 was 5.7% and
in 2025 it was 3.6%. As part of the Port’s Work History Compensation project, salaries for
approximately 50% of non-represented staff positions increased by an average of 9.6%.
6) Tariffs on imports from the new Federal Administration have been increasing costs for
construction materials.
Reductions to Marine Maintenance budget and Capital Program plans, including postponing a
recommended decant facility, were made to meet Port Central Services Budget Guidelines and
reflect other internal and external pressures on the Utility, and even considering these
reductions, continuing with an 8.0% rate increase for 2026 was not fiscally nor operationally
prudent.
Schedule
The Utility Rate Advisory Committee reviewed and validated the rate recommendation in
September 2025. 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
the Seattle City Council approval process for municipal utilities. If approved by the Commission,
the 2026 rates will be adopted by the Utility effective January 1, 2026. 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 will be made within 60 days of receipt of the dispute.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Increase rates by 8.0%
Cost Implications: Projected revenue in 2026 will be $8.92M
Pros:
1) Lower financial impact on tenants, NWSA and Port business units than the other
alternatives.
Cons:
1) Funds fall below the six-month reserve balance through 2030.
2) To rectify low fund balance, a higher rate increase in future may be necessary to fund
critical capital investments to meet Century Agenda goals and exceed regulatory
requirements.
3) It has potential to constrain essential maintenance functions and urgent repairs.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. 10b Page 7 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 2 – Increase rates by 11.0%
Cost Implications: Projected revenue in 2026 will be $9.17M
Pros:
1) Builds a 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) Funds fall below the six-month reserve balance through 2029.
This is not the recommended alternative.
Alternative 3 – Increase rates by 10.0%
Cost Implications: Projected revenue in 2026 will be $9.09M
Pros:
1) Lower financial impact on tenants, NWSA and Port business units than alternative 2.
2) Funds limited 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 2.
2) Higher fees for customers than proposed under alternative 1.
3) Funds fall below the six-month reserve balance through 2029.
4) A few recommended capital investments are put on hold.
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 by 2029 as sound fiscal policy consistent with standard
Port procedure, and
3) Reduce operating costs funded by Port business units and tenants by funding stormwater-
related maintenance activities.
COMMISSION AGENDA – Action Item No. 10b Page 8 of 8
Meeting Date: November 11, 2025
Template revised June 27, 2019 (Diversity in Contracting).
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 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 12, 2024 – The Commission approved Marine Stormwater Utility Rates for 2025
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
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
