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[01:00:00] So unless they're up gauge or add

[01:00:03] additional flights, we're not

[01:00:04] anticipating huge increase in passenger

[01:00:07] numbers from the existing operation.

[01:00:08] Like in terms of the fleet mix and

[01:00:25] flights and everything. But whoever does

[01:00:28] come here, we want to maximize the

[01:00:30] experience that they achieve. And also

[01:00:32] we want to see if they can do more spend

[01:00:34] at the airport to bring in extra revenue

[01:00:37] for us. And just quickly going back to

[01:00:39] the advertising sponsorship, you know,

[01:00:41] you've all traveled all over the world.

[01:00:43] I think you and I coming from Europe

[01:00:45] myself, the first thing I noticed in the

[01:01:00] experience. But I think there's room for

[01:01:02] us to engage more in that area, bring in

[01:01:04] additional revenue. So we're working

[01:01:06] with the teams on coming up with

[01:01:07] creative ideas. And then just the last

[01:01:10] question, can beginning the nud that

[01:01:11] over time can't be of another CC ship on

[01:01:15] slide 23, those on budget requests,

[01:01:19] they're coming from the different

[01:01:20] departments. Is that where they're

[01:01:40] very much. Thank you, Commissioner. If I

[01:01:44] can just tie up President, if I can just

[01:01:47] tie up with this is saying lots. We are

[01:01:49] aiming towards coming back to you in

[01:01:50] early next year, probably February, to

[01:01:53] talk about, you know, brainstorming on

[01:01:55] additional sources of revenue as we go

[01:01:57] into 26. So we'll report back to you on

[01:01:59] that. Appreciate all your thoughts on

[01:02:01] those. Those are, those are great ideas

[01:02:24] through this kind of very quickly.

[01:02:26] Commissioner. So I

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[01:02:30] wanted to end this session. Thank you,

[01:02:33] Commissioners. I want to end this we

[01:02:35] talked about started, you know, saying

[01:02:37] is that our capital we were going to be

[01:02:39] discussing that on the 28th. We saw the

[01:02:41] 26th capital program for the airport and

[01:02:56] Economic Development Division and then

[01:02:59] for our capital briefings coming on the

[01:03:02] on the 28th. You know, we used

[01:03:06] to you probably recall that prior to the

[01:03:08] pandemic, we bring commissioners a

[01:03:10] quarterly update on our capital plan

[01:03:12] with highlights each on each of the mega

[01:03:14] projects and a process on those. We kind

[01:03:16] of during the pandemic, we kind of lost

[01:03:19] that rhythm of doing that. We're looking

[01:03:33] forward. We'll think of this today as

[01:03:36] really as a kickoff for those future

[01:03:37] conversations about capital and its

[01:03:39] importance to us. So next slide,

[01:03:42] please. And just want to

[01:03:45] mention this, this is my Elements for

[01:03:49] the Port of the Future vision that I

[01:03:50] presented at the February retreat. In

[01:03:53] each of these, you see that they're all

[01:03:54] tied into one way or another into

[01:04:11] our ability to be ready for the Future

[01:04:13] Next slide please. Why capital

[01:04:17] matters today. And it matters because

[01:04:19] our facilities that we're building are

[01:04:21] the foundation for our regional economy

[01:04:23] and its impact on jobs.

[01:04:26] Across our facilities, the port supports

[01:04:29] more than 100,000 direct jobs for

[01:04:32] construction. People can only work when

[01:04:35] our facilities are in good condition,

[01:04:50] airport and more than 160 million in

[01:04:53] capital projects at our seaport. And

[01:04:55] those investments equal jobs. So our

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[01:04:57] analysis shows that 2000 hours of labor

[01:05:00] hours is equivalent to one full time

[01:05:01] employee for 2024 last year. We have

[01:05:05] complete data poor construction project

[01:05:07] supported 800 full time jobs in

[01:05:10] construction. Next slide please.

[01:05:29] future revenue and future economic

[01:05:31] development of the region. When you look

[01:05:33] back at our very recent history, the

[01:05:35] expanded central terminal at north

[01:05:37] concourse to add two stories,

[01:05:39] modernized Terminal 5, and we're working

[01:05:42] on Terminal 91, burst 6 and 8, you can

[01:05:45] see that the jobs and activity there are

[01:05:47] for the long run and they did not exist

[01:05:49] before. So that's our goal is to build,

[01:06:03] about this. The theme of affordability

[01:06:04] comes up and you can see some of the

[01:06:07] factors here. I'm not going to walk

[01:06:08] through all of these, but you can see

[01:06:09] these factors are the ones that are

[01:06:11] pressurizing our capital, our capital

[01:06:14] budget and our capital delivery. And for

[01:06:17] one thing, I do want to point out,

[01:06:18] you've heard for us say for years that

[01:06:19] our environmental remediation is

[01:06:34] is a rising cost. The estimates I just

[01:06:36] heard for the Duwamish waterway

[01:06:41] cleanup is 600 million is the most

[01:06:43] recent, the most recent estimates.

[01:06:46] And finally, we have to, if we see these

[01:06:49] opportunities to build, we have to do

[01:06:50] them. Because as I said, we need to be

[01:06:52] building the port for the future. Next

[01:06:55] slide please. Many of these factors are

[01:06:58] not new and they've been working to

[01:07:12] was bringing capital planning and

[01:07:15] capital programs into the maritime

[01:07:17] division and put project manager

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[01:07:19] controls into the operating division.

[01:07:21] So that became very important for us

[01:07:23] because you wanted to have control over

[01:07:24] operations. They needed to come

[01:07:26] together. And this was a great change.

[01:07:28] It put accountability within the

[01:07:42] is utilizing lean strategies and

[01:07:45] continuous process improvement to gain

[01:07:47] efficiencies in the contracting process.

[01:07:49] And this is the average procurement time

[01:07:51] for personal services valued $200,000 or

[01:07:54] more is now three months down from six

[01:07:56] months. So we reduced it by 50%. And the

[01:07:59] average procurement time for

[01:08:00] professional service is now more.

[01:08:04] Is now four and a half months valued at

[01:08:22] they've really improved these processes

[01:08:24] for us moving forward, making things

[01:08:25] more streamlined in that process. Our

[01:08:29] maritime team worked with an external

[01:08:31] review panel which helped inform some of

[01:08:33] the CPO improvements and is now leading

[01:08:35] to collaborative work with the Northwest

[01:08:37] Seaport alliance to improve joint

[01:08:39] delivery of projects. Matter of fact,

[01:08:41] coming forward is going to deliver some

[01:09:00] our. These improvements are making a

[01:09:02] difference in our increasing the

[01:09:04] effectiveness and efficiency our capital

[01:09:06] delivery program. One, this is just one

[01:09:08] measurement, which is we use as capital

[01:09:11] execution. I'm pleased to say that in

[01:09:13] the last two years we're able to spend

[01:09:15] substantially more and stay on target

[01:09:18] with our plans as well as you'll see in

[01:09:20] these bar graphs here, of saying where

[01:09:34] Next slide, please. And each division

[01:09:37] tracks its performance based on its own

[01:09:40] metrics. And while divisions have

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[01:09:42] flexibility to determine how they want

[01:09:44] to benchmark progress and report out to

[01:09:46] their leaders, we have some universal

[01:09:48] themes throughout our program. And one

[01:09:50] of those themes is staying on budget.

[01:09:52] Staying on budget is easier than staying

[01:10:10] budget increase requires investment

[01:10:12] committee approval to go forward. The

[01:10:15] data here is into the third quarter, so

[01:10:17] we expect to see more improvements on

[01:10:19] schedule before the end of the year.

[01:10:20] Next slide, please. We also look at the

[01:10:24] port's performance on hard costs versus

[01:10:25] soft costs. While there's no official

[01:10:27] range defined in any academia or

[01:10:30] industry literature, it is generally

[01:10:44] cycle. And this is something we always

[01:10:46] brings up and something that I've

[01:10:48] examined very closely. So next slide.

[01:10:51] I wanted to share these performance

[01:10:52] metrics so you can see that we're

[01:10:55] already hitting the mark on many of our

[01:10:56] delivery benchmarks. This means we'll

[01:10:58] continue to stress improvements to

[01:11:00] reduce costs and schedule. And we need

[01:11:02] additional strategies to meaningly

[01:11:17] gates or whether it be adr, are

[01:11:19] important to do that. And we have to

[01:11:20] consider this and all put this together

[01:11:22] in a complex system. And we're ready to

[01:11:25] do these, ready to look at other

[01:11:27] innovative ways, including looking at

[01:11:29] partnerships such as ground leases

[01:11:32] around the airport and seaport and other

[01:11:35] capital delivery approaches which could

[01:11:39] have be successful for us.

[01:11:56] cost of building throughout the region.

[01:11:58] And so, you know,

[01:12:02] when we can't execute capital, we are

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[01:12:04] leaving jobs on the table or jobs that

[01:12:08] we can't provide for those within the

[01:12:11] trades. And finally, we know that

[01:12:13] technology will continue to be part of

[01:12:15] our strategy to model outcomes, improve

[01:12:17] delivery. There's a lot of promise with

[01:12:32] our, in everything that we do in our

[01:12:35] capital delivery programs so that even

[01:12:38] as we ask to approve the budget in

[01:12:39] November, we have more work to do to

[01:12:41] increase our capital capacity for the

[01:12:43] future. We have some of those ideas

[01:12:45] we're talking about today. Want to note

[01:12:47] that we do have a new chief of financial

[01:12:48] officers starting on October 27th. And I

[01:12:51] look forward to Chris Wimstead joining

[01:13:05] And as I was saying is we'll bring these

[01:13:07] to our planning retreat in the first

[01:13:09] quarter of next year to talk about that

[01:13:11] farther. So that was just the overview

[01:13:12] and I wanted to set the stage for our,

[01:13:14] you know, our further discussions for

[01:13:16] the rest of the rest of this year and

[01:13:18] into next year. Thank you,

[01:13:19] commissioners. Well done, sir. Thank you

[01:13:22] very much. One request. Is it possible

[01:13:36] my colleagues, starting with

[01:13:38] Commissioner Muhammad. Thank you,

[01:13:41] Executive Director Metruck, for the

[01:13:43] presentation. I really appreciate your

[01:13:45] thinking and strategy around this. I did

[01:13:49] have a couple of questions. You

[01:13:51] mentioned on slide 5, the environmental

[01:13:55] projects and cleanups that we're working

[01:13:57] on. You said 600 million. Is that the

[01:14:01] amount projected for the Port of

[01:14:17] design phase of that. So we're moving

[01:14:19] into the design phase of that right now.

[01:14:21] And so those are the current estimates

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[01:14:23] right now. So. Okay. Commissioner

[01:14:26] Felleman. Yeah. The East Waterway. I'm

[01:14:29] sorry I said the Lord Dwam was the East

[01:14:31] Waterway. Sorry, my button's acting

[01:14:33] funny. Commissioner Mohamed and then

[01:14:34] Commissioner Felleman and then I Also on

[01:14:57] about construction. So what's the

[01:14:58] strategy with some of those changes that

[01:15:01] are coming about and how that will

[01:15:04] impact timelines? Well, we'll have to.

[01:15:06] I mean, one thing's for us, you know,

[01:15:08] there are impacts we don't know exactly

[01:15:09] because there was tariffs on aluminum

[01:15:11] and steel, you know, and some products

[01:15:13] coming from Canada. A lot of Wood

[01:15:15] products come from Canada. Those are

[01:15:31] what the market bears for those things

[01:15:32] when we order those materials. So. And

[01:15:34] then are you doing that with team by

[01:15:36] team? How is that? Well, we have to go

[01:15:38] project by project by what we need for

[01:15:40] those. But there are some materials,

[01:15:42] let me just say this, on electrical

[01:15:44] equipment that becomes a limiting factor

[01:15:46] sometime because a lot of that is, is,

[01:15:48] is produced, is not produced in the US

[01:16:04] we can and what things that we can on

[01:16:05] projects that are approved, you know,

[01:16:07] as we do that. So we may come forward

[01:16:08] with requests for long, long lead time

[01:16:11] materials and I imagine at times that

[01:16:14] you might lock into a price and the

[01:16:16] political climate might change and those

[01:16:18] prices might be reduced at a later time

[01:16:21] too. And so it obviously sounds like

[01:16:24] it's going to be a balancing act. It'll

[01:16:42] we have to maintain our assets in order

[01:16:44] to continue one of the,

[01:16:48] you know, huge mitigations

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[01:16:52] for the environmental costs or

[01:16:56] insurance capacity. And I know that's a

[01:16:59] challenge and it would be good to be

[01:17:01] kept apprised of a $600 million

[01:17:04] liability. Obviously that's not all

[01:17:06] included in. There's like $20 million I

[01:17:24] because sometimes they like we want to

[01:17:26] get the project done and then we do the

[01:17:28] recovery. And matter of fact there's

[01:17:29] like such a recovery is on our agenda

[01:17:32] today in the consent agenda. Right. And

[01:17:34] then there's also always the question

[01:17:36] about, you know, how much we could do in

[01:17:39] house versus consultants. And I mean

[01:17:43] I just see here that we have items AG

[01:17:46] and 8H which is about $18 million in

[01:18:06] And you know, I'd be glad to talk about

[01:18:09] our strategy, Commissioner, because

[01:18:10] there is a strategy of like what, what

[01:18:13] do you, how much do you use for

[01:18:14] consultants and how much you use for,

[01:18:15] for actual workforce and, and then just

[01:18:18] to have the capacity to do internal

[01:18:20] work. On page five, I, I always take

[01:18:23] some amusement when I'm sitting in my

[01:18:26] office and seeing our one workboat,

[01:18:45] out there, though, just. I couldn't get

[01:18:48] to say it before, but with sponsorship

[01:18:50] at the airport, obviously there's going

[01:18:52] to be. There's also like Spotlight

[01:18:54] advertising that's got some capacity or

[01:18:57] capital capacity. And I know how much

[01:18:59] space we allocate to that is a question.

[01:19:01] And I know the tourism folks are looking

[01:19:04] at taking some of that in house to have

[01:19:07] control over what we want to say. So

[01:19:26] great. But you know, to see one company,

[01:19:29] obviously they provide our aviation

[01:19:31] fuel, so it's a company that's important

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[01:19:33] to us. But to see any one commercial

[01:19:36] entity take over a public entity is not

[01:19:39] okay, even if they'll spend a lot of

[01:19:41] money. But that was many years ago. I

[01:19:43] haven't seen anything like that since.

[01:19:45] But I just throw that out there as

[01:20:05] United States right now that I'm

[01:20:08] certainly among the folks who think we

[01:20:11] have sort of, we're airing too much on

[01:20:14] the side of caution now. And we're in a

[01:20:16] period where that's actually creating

[01:20:18] greater harm than expediting some of

[01:20:20] these projects that are sorely needed,

[01:20:22] either for safety or environmental

[01:20:23] considerations or for community impacts.

[01:20:26] And particularly when we keep in mind

[01:20:44] internal processing of these projects

[01:20:47] and also more closely matching budget to

[01:20:52] reality to actual spend, I think

[01:20:54] indicates, you know, we're looking at

[01:20:56] our own house. But we really do need to

[01:20:58] participate in a state and federal

[01:20:59] conversation around permit streamlining,

[01:21:02] permitting. The second question that I

[01:21:05] think we should take really seriously is

[01:21:06] the ability of our partners to undertake

[01:21:25] The Gateway where we partnered with

[01:21:28] Alaska in an approach we hadn't taken

[01:21:31] very often, but that allowed someone

[01:21:36] else to. To undertake some, use some of

[01:21:39] their expertise to quite honestly

[01:21:42] expedite the project and from the port's

[01:21:45] perspective, to take on some of the risk

[01:21:47] associated with that project. And so I

[01:21:49] do think in some of these major capital

[01:21:51] construction, whether on the aviation or

[01:22:07] have any closing comments for our

[01:22:08] special session? No, I don't. Madam

[01:22:12] President. Thank you. For you. Thank you

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