Item Number: 11a supp
Meeting Date: July 14, 2026

Port of Seattle
2027 Budget Development Briefing
July 14, 2026

1

Agenda

Environmental Scan
2027 Budget Principles &
Strategies
2027 Budget Approach and
Process
2027 Key Budget Dates

2

Environmental Scan Summary
Unprecedented political and
economic uncertainty

Cuts in federal climate change
programs and funding

Effects of trade, immigration and
other policy actions

Impact of increased inflation
due to tariffs on operating,
capital and environmental costs

Post pandemic growth moderating
Multiple years of rapid expense
growth
Federal funding reductions and
weakening operating revenues

Rapid technological advances
including Artificial Intelligence
and growing sophistication of
cyber threats

3

2027 Budget Guiding Principles
• Align Expense Growth with Forecasted Revenue

- Operating expense growth should track closely with forecasted revenue growth

• Implement a Modified Zero-Based Budget Approach

- Depts should begin from a baseline that recognizes unavoidable contractual or legally
mandated cost increases

• Set an Operating Expense Growth Cap Tied to Forecasted Revenue Growth
- All depts need to meet an overall operating expense growth target tied to forecasted
revenue growth.

• Structural Cost Increases Above the Target Need Operational, Regulatory,
and/or Revenue Justification
- Addition of new position, functions or expenses will be considered extraordinary and
will require extraordinary justification.
4

2027 Budget Strategies
• Review and prioritize operational needs to limit expense growth
• Review the needs to fill all the vacant positions
• Limit new FTEs to roles that support revenue growth, economic
development, or efficiency measures
• Assess affordability of capital plans considering increased
inflation and revenue risks
• Strengthen the focus on sustainability, adaptability and
resiliency in spending and business plans

5

2027 Budget Issues
• Very moderate passenger growth at SEA in the initial estimate
• Inflation remains above long-term average and Fed 2% target
• COLA and Pay increases for both Represented and Non-Represented
employees
• Healthcare costs and some contractual increases
• Unbudgeted and under-budgeted items in the 2026 budget, such as
Organization Continuity Resilience (OCR) and South King & Port
Community Fund (SKPCF)
• Vacant positions review
• Commission Priorities and Community Programs
6

2027 Modified Zero-Based Budget Approach
Review Expense by Categories:
• Backfill and Vacant FTEs, esp. those more than 12 months
• Outside Services (and Contractual Increase)
• TBCD and Promotion Exp
• Equipment and Supplies & Stock Exp
• Travel and Other Employee Exp
• Other Expenses

7

2027 Modified Zero-Based Budget Approach
• Expense Priorities

Expense Service Levels

• Critical (regulatory, must
do/have)
• Necessary (need to do/have)
• Desirable(want to do/have)

• Eliminate
• Reduce
• Maintain
• Enhance/Increase

8

2027 Modified Zero-Based Budgeting Process
• Corp F&B provided Modified ZBB template based on 2026
budget items (and vacant positions) for dept reviews on 4/24
• Depts review each Expense Category and all vacant positions
• Depts prioritize their expenses and identify the potential
service level for 2027
• Depts complete the reviews by May 15
• Corp F&B reviews, follows up, and summarizes the info by
May 29
9

2027 Budget Process Overview
Environmental Scan

Budget Preparation

• Assess business
environment and
needs
• Update operating
and capital
forecasts
• Conduct SWOT
analysis

• 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

10

2027 Budget Calendar
(Commission Items in Blue)

3/12 - Commission Retreat on Resource Conscious & Levy Scenario
5/08 - 2027 Budget Planning Discussion with ELT
6/23- Commission Budget Study Session - Commission Priorities
7/02 - 2027 Budget Guidelines available
7/14 - Commission Budget Retreat - Capital Project
7/14 - 2027 Budget Development Commission Briefing
7/31 - Central Services Department new budget requests due to F&B; Commission Priorities due to ED
8/12 - 08/21: Executive review of Central Services Department Budgets/New Requests
9/09 - Executive review of combined Central Services Budget
9/09 - Executive review of Maritime and EDD Operating & Capital Budgets
9/10 - Executive review of Aviation Operating & Capital Budgets
9/11 - 2027 North Harbor Budget to the NWSA
11

2027 Budget Calendar
(Commission Items in Blue)

09/22 - Central Services Budget and Portwide Budget Overview Commission briefing
10/09 - POS/NWSA ILA Service Directives due to the NWSA
10/13 - Operating Divisions Commission Budget Study Session
10/15 - NWSA Budget study session with Managing Members
10/20 - 2027 Preliminary Budget Document available to Commission
10/22 - 2027 Preliminary Budget Document available to the public
10/27 - Tax Levy & Draft Plan of Finance Commission briefing
11/03 - NWSA Budget adoption by Managing Members
11/10 - Introduction of preliminary 2027 Budget and public hearing
11/17 - Adoption of 2027 Budget
11/25 - File the 2027 Statutory Budget with King county
12/04 - Publish the 2027 Final Budget to the public

12