Commission Meeting Portal

Special Meeting on Mar 05, 2009 1:00PM

Minutes for the Port Of Seattle Commission meeting, held on Mar 05, 2009 1:00PM

        Commissioners                                               Tay Yoshitani 
                                                                                              Chief Executive Officer 
                      Bill Bryant 
                      Chair and President 
                   John Creighton                           P.O. Box 1209 
                     Patricia Davis                           Seattle, Washington 98111 
                   Lloyd Hara                             www. portseattle.org 
                   Gael Tarleton                              206.728.3000 

             An audio of the meeting proceedings and meeting materials are available on the Port of
                                        Seattle web site - 
                http://www.portseattle.org/about/organization/commission/commission.shtml 
             (The approximate point in the audio recording for the specific item is identified by
            minutes and seconds; example: 01:30.) 
                     APPROVED MINUTES 
               COMMISSION SPECIAL MEETING MARCH 5, 2009 
            The Port of Seattle Commission met in a regular meeting at 12:00 p.m., Thursday, March
            5, 2009 in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, WA.
            Commissioners Bryant, Davis, and Hara and Tarleton were present. Commissioner
            Creighton was absent. 
               1.     CALL TO ORDER 
            The regular meeting was called to order at 12:05 p.m. by Bill Bryant, Commission
             President. 
               2.     EXECUTIVE SESSION pursuant to RCW 42.30.110 
            The special meeting was immediately recessed to an executive session to discuss real
             estate and litigation matters and reconvened to open public session. 
           PLEDGE OF ALLEGIANCE 
               3.     APPROVAL OF MINUTES 
           (00:01:00) Motion for approval of minutes of the January 27, 2009 special meeting 
            Hara 
            Motion carried by the following vote: 
            In favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 2 
               4.     SPECIAL ORDER OF BUSINESS 
           None. 
               5.     UNANIMOUS CONSENT CALENDAR 
           None. 
            General Business items were advanced on the agenda as follows: 
             11.    GENERAL BUSINESS 
               a.  (00:02:02) Request for authorization to execute a new collecti ve bargaining
             agreement with International Brotherhood of Teamsters, Local 117,
               representing Police Specialists. 
           Request document: Commission agenda memorandum dated January 20, 2009 from
            Gary Schmitt, Labor Relations Director 
             Presenters: Colleen Wilson, Chief of Port Police Department and Jim Smith, Labor
            Relations Manager 
            Staff provided background on the three bargaining agreements to be voted on. 
           Motion for approval of Item 11a  Davis 
            Public comment was received regarding Items 11a, 11b, and 11c from the following: 
                Tracy Thompson, Teamsters Local 117. Ms Thompson spoke in favor of the
                   three collective bargaining agreements, commenting on the good work done
                   between the Port and Teamsters, and urged Commission approval of the
                   agreements. 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
              b.  Request for authorization to execute a new collective bargaining agreement with
              International Brotherhood of Teamsters, Local 117, representing Police Officers. 
           Request document: Commission agenda memorandum dated February 4, 2009 from
            Gary Schmitt, Labor Relations Director 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 3 
             Presenters: Colleen Wilson, Chief of Port Police Department and Jim Smith, Labor
            Relations Manager 
           Motion for approval of Item 11b  Tarleton 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
                c.  Request for authorization to execute a new collective bargaining agreement with
              International Brotherhood of Teamsters, Local 117, representing Police
              Sergeants. 
           Request document: Commission agenda memorandum dated February 4, 2009 from
            Gary Schmitt, Labor Relations Director 
             Presenters: Colleen Wilson, Chief of Port Police Department and Jim Smith, Labor
            Relations Manager 
           Motion for approval of Item 11c  Hara 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
             Due to technical difficulties with the audio, a brief recess was called by Commissioner
            Bryant, and the meeting was reconvened. 
            Agenda Action Items were advanced as follows: 
               7.     MARINE ITEMS 
           None. 
               8.     AVIATION ITEMS 
               a.  (00:23:18) Request for authorization to execute amendment to Lease and
              Concessions Agreements of Prime Concessionaires Host International (Host),
              Seattle Restaurant Associates (SRA), Concessions International (CI), and
             Airport Management Services, LLC (dba Hudson News). 


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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 4 
           Request document: Commission agenda memorandum dated February 26, 2009 from
            James R. Schone, Director, Aviation Business Development and Deanna Zachrisson,
            Manager, Aviation Concessions Business 
             Presenters: Mr. Schone and Ms. Zachrisson 
             Mr. Schone reiterated the fact that today's request is being made due to moves in Airline
             tenants at the Airport, and not due to the current economic situation. 
            Ms. Zachrisson gave an update on changes since last week's briefing to the Commission
            on the planned relief measures. She expressed the importance of being careful to not
             create any unintended inequities to concessionaires. She commented that most tenants,
            both primes as well as sub-primes, are in support of the proposal; however, some would
             like to see even more relief. 
            Commissioner Tarleton asked to receive updated information regularly to stay apprised
             of the situation as it unfolds, specifically regarding the number of jobs being affected and
            whether or not there are any disproportionate impacts to Minority and Women-Owned
             businesses. 
            Commissioner Hara stated concern over meeting goals of FAA standards as well as
           working with the WMBE (Women and Minority Business Enterprise) program. 
            Mr. Schone noted that information addressing Commissioner Hara's concerns could be
            incorporated into the update reports requested by Commissioner Tarleton. 
            Motion for approval of Item 8a  Davis 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Tarleton (3) 
          Opposed: Hara (1) 
            Commissioner Creighton was absent for the vote. 
              b.  (00:48:16) Request for authorization to procure and execute service agreements
              with consultants to perform design, prepare contract documents, and perform
             contract administration for South Air Operations Area (AOA) Fence
              Replacement Project at Seattle-Tacoma International Airport in the amount of
              $375,000. 
           Request document: Commission agenda memorandum dated February 18, 2009 from
            Dave Soike, Deputy Managing Director, Aviation Division and Mike Ehl, Director,
            Airport Operations 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 5 
            Presenters: Tina Soike, Senior Manager, Airport Operations and Steve Osmek, Wildlife
             Biologist, Airport Operations 
             Staff explained the need for this request, which is due to dangers caused to aircraft by
             coyote presence on airfield at the airport and noted that the presence of coyotes is
            happening at an increased frequency. 
            Mr. Osmek noted three points of importance regarding the request: 
                  A substantial increase of the number of coyote sightings on the airfield 
                  Current state regulations which make coyote trappings difficult 
                  Lethal removal by shooting being the only current effective of removal of
                     coyotes on the airfield 
           Motion for approval of Item 8b  Davis 
             Staff clarified that the source of funds for the project would be the Airport Development
            Fund. 
            Comments were made by Commissioners appreciating the use of recycled materials
             within the project. 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
                c.  (00:57:56) Resolution No. 3612, Second Reading and Final Passage. Declaring
              surplus and no longer needed for Port District purposes certain property,
              including eight x-ray machines; seven explosive trace detection machines; and 17
              walk-through metal detectors; authorizing transfer of the property to the
              Transportation Security Administration (TSA), including payment of one dollar
              per unit of equipment and the assumption of costs and liabilities associated with
              maintaining and disposing of the property. 
           Request document: Commission agenda memorandum dated February 25, 2009 from
            Michael Ehl, Director, Airport Operations and Nick Harrison, Senior Manager, Airport
            Operations 
             Presenter: Mr. Harrison 
           Motion for Second Reading and Final Passage of Resolution No. 3612  Hara 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 6 

            Commissioner Creighton was absent for the vote 
              d.  (00:58:55) Request for authorization to execute a Lease for Multifunction
              Document Devices for the Airport Office Building at an estimated cost of
              $463,251. 
           Request document: Commission agenda memorandum dated February 13, 2009 from
            Tony Baca, Manager, Airport Buildings and Facilities Services and Michele Fideler,
            Airport Facilities Manager 
             Presenters: Mr. Baca and Ms. Fideler 
           Motion for approval of Item 8d  Tarleton 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
               9.     CAPITAL DEVELOPMENT 
           None. 
             10.    REAL ESTATE 
               a.  (01:04:32) Request for authorization to execute Fourth Amendment to
             Management Agreement for operation of Bell Harbor International Conference
              Center between Port of Seattle and Columbia Hospitality, Inc. to include the
             "Maritime Event Center at Bell Harbor" premises (former Odyssey space), as
              exclusive premises, and use those premises for events, meetings, and catering. 
           Request document: Commission agenda memorandum dated February 18, 2009 from Joe
            McWilliams, Managing Director, Real Estate Division and Pat Spangler, Real Estate
           Manager 
             Presenter: Mr. McWilliams 
           Motion for approval of Item 10a  Hara 
            Commissioner Tarleton commented that substantial public discussion had been held
            regarding this item, both at Commission meetings and Audit Committee Meetings, which
            assured ample transparency. Commissioner Davis noted the importance of keeping
            educational programs and non-profit community activities. 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 7 
            A copy of a letter regarding Item 10a to CEO Yoshitani, dated March 2, 2009, from Gary
            Stauffer, Youth Maritime Training Association was submitted for the record. A copy is,
             by reference, made a part of these minutes; is marked Exhibit 'A;' and is on file in Port
              offices. 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
            The agenda was returned to Policy and Staff Briefings as follows: 
               6.     POLICY AND STAFF BRIEFINGS 
               a.  (01:10:19) Briefing on Consolidated Rental Car Facility (CRCF) Finance Status 
            Presentation documents: Commission agenda memorandum dated February 19, 2009 and
            computer slide presentation from Dan Thomas, Chief Financial Officer; Mark Reis,
            Managing Director, Aviation Division; and Elizabeth Morrison, Senior Manager,
            Corporate Finance 
             Presenters: Mr. Thomas, Mr. Reis, and Ms. Morrison 
            Mr. Reis provided background of the suspension of the CRCF Project, which was
            implemented in December, 2008 and commented on changes since then, which included: 
               A thawing in financial markets 
                Availability of additional financing tools 
               A change in Airport passenger traffic forecast 
            Mr. Reis noted that staff is continuing to work understanding what is happening with
            projected enplanements possible scenarios and will work closely with the rental car
            companies to understand related implications. He stated that staff would likely return to
            the Commission in May or June with a firm financing plan. 
            Commissioner Tarleton requested that staff provide information  perhaps quarterly  
             showing indicators of those who are using rental cars. 
            Mr. Thomas stated that he believes staff now has a sound, reasonable and prudent
            financing strategy, which would give significant flexibility to manage the plan and would
             fully fund the construction of the project. 
            Dick Schober, Seattle Northwest Securities, was introduced by staff and gave an update
             on current market function and liquidity, noting several recent significant transactions. 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                          P. 8 

            Ms. Morrison spoke provided information on possible financing tools that appear to be
            available, noting that any of the tools would need Commission approval. They included: 
               Short-term bank lines of credit 
              Long-term, fixed-rate bonds 
               Ability to use cash from the Airport Development Fund 
               Total resources available are between $500 - $700 million 
            Ms Morrison stated that the tools could be combined in the most appropriate manner and
             that combinations can help balance certainty, flexibility, and cost. 
             Mr. Thomas clarified that staff intends to have several tiers of 'backstops' available in the
            plan for funding, depending on market situations. 
            Responding to Commissioner Bryant's question regarding CFC (Customer Facility
            Charge) funds, Mr. Thomas agreed that ultimately the CFC's would have to pay,
             regardless of how it is backed up. 
            Staff clarified answers to questions questions from Commission Tarleton referring to the
            Commission meeting minutes of January 27, 2009, where questions were asked about the
            possibility of opening the CRCF later than 2010 and about the amount of money spent. 
            Ms. Morrison spoke about two possible scenarios: 
           Scenario 1: Impacts: Base Case 
            2009 
                  o  $200 million, 10-year fixed-rate bonds 
                  o  $200 million, bank lines of credit 
             2010 - 2011 
                  o  Repay one bank line with $100 million 10-30 year fixed-rate bonds 
                  o  Convert one bank line to long-term variable rate bonds 
               By 2012 the finance structure will be: 
                  o  $300 million fixed-rate bonds, 10-30 years 
                  o  $100 million variable-rate bonds 
               By 2019, the 10-year bonds will be refinanced 
            Impacts of Scenario 1: 
              Estimated opening CFC: $6.50 - $7.00 
               Major projects are typically funded with multiple bond issues 
             Advantages 
                  o  Debt issued on Intermediate Lien designed to accommodate CFC-funded
                       debt 

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                  o  10-year maturities  lower interest rates than long-term and provide more
                          flexibility 
                  o  Variable rate debt  lower interest rates and flexibility to refund or pay off
                      without penalty 
               Disadvantages 
                  o  Refinancing risk when bonds mature 
                  o  Rate fluctuations of variable rate debt 
           Scenario 2: Maximize Certainty 
               $425 million fixed rate 
                  o  30-year debt 
                  o  First Lien 
                  o  Negative carry of 100% fixed rate debt issued in 2009 requires greater use
                       of capitalized interest; therefore more bond proceeds 
            Impacts of Scenario 2: 
              Estimated opening CFC - $6.75 - $7.25 
             Advantages 
                  o  Certainty of debut service over 30 years 
             Disadvantages 
                  o  Uses first lien capacity for long term 
                  o  Negative carry on full amount of debt 
                  o  No flexibility to restructure or take advantage of future market
                       opportunities 
            Public comment regarding Item 6a was received by the following individuals: 
               Lorie Tallarico, Avis/Budget Rental Car Group. Ms Tallarico commented on her
                 support of the schedule, but expressed the need to scrutinize enplanements and the
                  demand for rental cars. 
              Lee Newgent, Seattle Building Trades. Mr. Newgent commented on the close
                 work of Building Trades with the Port and others, including Turner Construction,
                  and expressed support of the recent legislation to find a solution. 
            Commissioners expressed their support of moving forward with the project, noting the
            need to focus on jobs; the need to scrutinize enplanement data and CFC projections, and
             the need to keep costs as low as possible. 
            Commissioner Bryant commented that it would be helpful to know what some of our
             major airline partners feel about the possible scenarios for moving forward with the 
              project. 
            A brief recess was called by Commissioner Bryant and the meeting was reconvened at
             3:50. 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                         P. 10 

              b.  (02:35:32) Annual Treasury and Investment Portfolio Report for 2008 
            Presentation documents: Commission agenda memorandum dated February 19, 2009 and
            computer slide presentation from Craig J. Kerr, Treasury Manager 
             Presenter: Mr. Kerr 
            Commission was briefed on the following: 
              Background of Port Treasurer 
                Port's Investment Strategy 
              Portfolio Composition 
               Interest Rate Trends 
             2008 Rates 
              Treasure Yield Curve 
              Current Financial Environment 
             2008 Yield Comparison 
              Portfolio Yield, 2004-2008 
              Portfolio Value, 2004-2008 
            Commissioner Hara noted that he would like the Audit Committee to receive a copy of
             the status of the Port's portfolio. Mr. Kerr noted that a summary of the portfolio had
             been added to the regular quarterly financial report. 
                c.  (02:52:59) Briefing on 2008 Year-end Financial Status 
            Presentation documents: Commission agenda memorandum dated February 18, 2009,
            computer slide presentation, and report from Michael Tong, Corporate Budget Manager 
             Presenters: Mr. Tong, Borgan Anderson, Manager, Aviation Finance and Budget, and
            Boni Buringrud, Manager, Seaport Finance and Budget 
            Mr. Tong provided an overview of the Portwide financial status, including: 
              Total Port Income 
              Net Operating Income 
             Non-Ops Income 
              2008 Capital Spending by Division 
               Total Port 2008 Capital Spending 
            Mr. Anderson reported on the 2008 Aviation Division financial performance, including: 
              Business Highlights 
                  o  Airline Activity 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                         P. 11 
                  o  Non-aeronautical Net Operating Income 
                  o  Operating and Maintenance Costs 
                  o  Airline Cost Per Enplanement (CPE) 
                  o  Major Project Milestones 
              Air Traffic 
                  o  Enplanements vs. Prior Year 
                  o  Landed Weight vs. Prior Year 
            Revenues 
              Operating Expenses 
              Expense Variance Explanations 
              Key Indicators 
              Capital Spending 2004-2008 and Major Variances 
            Ms. Buringrud reported on both the Seaport and Real Estate Divisions regarding: 
            Seaport 
              Organizational Goals 
              Operating Results 
             Key Variances 
              Operating Expenses Year to Year Change 
              Net Operating Income (NOI) Before Depreciation 
              2008 Capital 
             Real Estate 
             2008 Key Events 
              Business Goals 
              Organizational Goals 
              Operating Results 
             Key Variances 
              NOI Before Depreciation 
              2008 Capital 
            Mr. Tong reported on the 2008 Financial Performance of Corporate Professional and
             Technical Services, including: 
             Key Events 
              Business Goals 
              Corporate Indicators 
              Major Awards Received in 2008 
              Operating Results 
              d.  (03:27:22) Briefing on proposed Audit Committee Charter Revisions 

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        PORT COMMISSION MINUTES OF THE SPECIAL MEETING 
         THURSDAY, MARCH 5, 2009                         P. 12 
            Presentation documents: Commission agenda memorandum dated March 5, 2009 and
            computer slide presentation from Tom Barnard, Research and Policy Analyst 
             Presenter: Mr. Barnard 
            Mr. Barnard presented background information on the creation of the Audit Committee,
            noting that the Committee had taken on a greater amount of work over the past year, and
             decided it would be appropriate to amend their current charter. 
             After describing the major changes anticipated to the charter, it was noted that a
            resolution would come to the Commission for First Reading on March 10, 2009. 
            Commissioner Davis requested that the Commission receive copies of both the proposed
             new charter as well as the current charter prior to First Reading. 
            The agenda was returned to General Business as follows: 
             11.    GENERAL BUSINESS 
              d.     (03:37:31) The Commission special meeting was recessed to a special annual
            meeting of the Industrial Development Corporation of the Port of Seattle. Following its
            adjournment, the special meeting of the Port Commission was reconvened. 
             12.    NEW BUSINESS 
            Commissioner Davis stated that she would like to see an acknowledgement of recently
             received awards to the Port at a meeting in the near future. 
            Commissioner Bryant commented that he would like to have Commission trip reports at
             the next meeting. 
             13.    ADJOURNMENT 
            There being no further business, the meeting was adjourned at 5:03 p.m. 
             (A digital recording of the meeting is available on the Port's website.) 

           Lloyd Hara 
            Secretary 



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