Commission Meeting Portal

Regular Meeting on Oct 06, 2009 1:00PM

Minutes for the Port Of Seattle Commission meeting, held on Oct 06, 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                              206.787.3000 

             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 
                   Please note that the October 6, 2009 meeting has 2 separate audios 
             (The approximate point in the audio recording for the specific item is identified by
            minutes and seconds; example: 01:30.) 
                     APPROVED MINUTES 
              COMMISSION REGULAR MEETING OCTOBER 6, 2009 
            The Port of Seattle Commission met in a regular meeting at 1:00 p.m., Tuesday, 
            September 1, 2009 in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle,
        WA. Commissioners Bryant, Davis, Hara and Tarleton were present. Commissioner
            Creighton was absent. 
               1.     CALL TO ORDER 
            The regular meeting was called to order at 12:03 p.m. by Bill Bryant, Chair and
             President. 
               2.     EXECUTIVE SESSION pursuant to RCW 42.30.110 
            The meeting was immediately recessed to an Executive Session for approximately one
            hour to discuss Real Estate and Legal Risk matters (RCW 42.30.110 (1)(i)(c)) and
            reconvened to open public session. 
           PLEDGE OF ALLEGIANCE 
               3.     APPROVAL OF MINUTES 
            (Audio part 1 -00:01:02) Motion for approv al of the minutes of the August 11 
            regular meeting - Davis 
           Second  Hara 

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            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
            Motion for approval of the minutes of the August 18 special meeting  Hara 
           Second  Davis 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara (3) 
            Commissioner Tarleton was absent from the subject meeting 
            Commissioner Creighton was absent for the vote 
           Motion for approval of the minutes of the August 24 special meeting and the August
            25 regular meeting  Tarleton 
           Second  Hara 
            Motion carried by the following vote: 
           In Favor: Davis, Hara, Tarleton (3) 
            Commissioner Bryant was absent from the subject meetings 
            Commissioner Creighton was absent for the vote 
               4.    SPECIAL ORDER OF BUSINESS 
           None. 
               5.    (00:03:13) UNANIMOUS CONSENT CALENDAR 
               a.  Authorization for the Chief Executive Officer to issue Change Order No. 0102
              for the Consolidated Rental Car Facility (RCF) in the amount of $302,885. 
           Request document: Commission agenda memorandum dated September 28, 2009 from
            Ralph Graves, Managing Director, Capital Development Division 
              b.  Authorization for the Chief Executive Officer to issue Changer Order No. 0105
              for the Consolidated Rental Car Facility (RCF) in the amount of $583,570. 

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           Request document: Commission agenda memorandum dated September 25, 2009 from
            Ralph Graves, Managing Director, Capital Development Division 
                c.  Authorization for the Chief Executive Officer to execute a Letter of
              Understanding (LOA) between the Port of Seattle and the International Union
              of Operating Engineers Local No. 286 representing Operating Engineers in
              Aviation Maintenance. 
           Request document: Commission agenda memorandum dated September 25, 2009 from
            Gary Schmitt, Labor Relations Manager 
           Motion for approval of Consent Calendar Items 5a-5c  Tarleton 
          Second: Davis 
            Motion carried by the following vote: 
            In favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
               6.   DIVISION, CORPORATE AND COMMISSION ACTION ITEMS 
               a.  (00:04:01) Resolution No. 3629, First Reading. 1) Declaring real property
             known as the 3-acre parcel (King County Parcel 322304-9332) surplus and no
              longer needed for Port district purposes, and; 2) Authorization for the Chief
              Executive Officer to execute all necessary documents for the sale of the real
               property interests to the Highline School District. 
           Request document: Commission agenda memorandum dated September 2, 2009 from
            James R. Schone, Director, Aviation Business Development and W. Allan Royal,
            Manager, Port Real Estate Development. Also provided were a map of the property and
            a copy of the purchase and sale agreement. 
             Presenter: Mr. Royal 
            Mr. Royal provided background information on the related piece of property to be, noting
             that it had been in possession of the Airport since 1942, and that since the construction of
             SR 509, there had not been any use identified for Port purposes. He stated that Highline
             School District has had a desire to obtain this property for a long time, and that they are
             currently in the position to do so. 
            Public comment regarding Item 6a was received from the following: 
               Peter Folkins, Consultant to Highline School District. Mr. Folkins read into the
                  record a statement on behalf of the Highline School District supporting the sale of

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                  this property to the school district. A written copy of Mr. Folkins' remarks is, by
                  reference, made a part of these minutes, is marked as Exhibit 'A,' and is on file in
                   Port offices. 
            Commissioner Bryant then declared the meeting to be an open public hearing, and seeing
            no further comment, the public hearing was closed and returned to the Port Commission
            meeting. 
            Motion for Resolution No. 3629, First Reading; and Authorization for the Chief
            Executive Officer to execute all necessary documents for the sale of the real
            property interests to the Highline School District - Hara 
           Second  Davis 
            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote. 
              b.   Resolution No. 3630, First Reading. Providing acquisition by purchase and/or
             condemnation of certain real property located at 14431 Des Moines Memorial
             Drive South (King County Tax ID Number 202304-9177), in the City of Burien,
             Washington. 
           Request document: Commission agenda memorandum dated September 1, 2009 an map 
            from James R. Schone, Director, Aviation Business Development and Jude P. Barrett,
            Manager, Acquisitions and Relocation 
             Presenter: Luis Navarro, Manager, Aviation Properties 
             Mr. Navarro provided background on the location of the property, stating that it is located
            within the Day Night Limit noise contour at the Airport, which necessitates the proposed
             acquisition. He stated that the property had been appraised, but an agreement on the
            price had not been reached with the owner. Responding to Commissioner Tarleton's
            question about the nature of the disagreement, Mr. Navarro replied that there was a
             significant difference in the appraisal amounts arrived at by the Port and the one provided
            by the owner, and that a mutual agreement of the price was needed. 
           Motion for Resolution No. 3630, First Reading. Providing acquisition by purchase
           and/or condemnation of certain real property located at 14431 Des Moines
           Memorial Drive South (King County Tax ID Number 202304-9177), in the City of
           Burien, Washington  Tarleton 
           Second  Davis 

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            Motion carried by the following vote: 
           In Favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent for the vote 
               7.   STAFF BRIEFINGS 
            (00:17:08) Prior to remaining scheduled agenda items, Dave Soike, Deputy Director,
            Aviation Division, provided a pre-brief on several items which would be coming forward
            to the Commission over the next month.
            Upcoming requests which were briefly reviewed by Mr. Soike included: 
                Extensions to leases with rental car companies which are due to expire at the end
                   of this year. Lease extensions would allow these companies to operate in the
                  Airport garage until the Rental Car Facility is completed. 
               Extension of a contract approved approximately 18 months ago for environmental
                   field support services at the Airport. 
                Shuttle bus procurement related to the Rental Car Facility. 
               Authorization for stormwater facility improvements at the Airport to meet
               NPDES requirements. 
               8.   NEW BUSINESS 
            (00:22:59) Before moving on to the Budget Workshop, public comment was received
            from Tom Albro regarding potential flooding of the Green River Valley and the possible
             short-term rental of vacant port properties to businesses in that area. Mr. Albro provided
            written comments, a copy of which is, by reference, made a part of these minutes, is
             marked Exhibit 'B,' and is on file in Port offices.
            A brief recess was called for by Commissioner Bryant at 1:42 and the meeting was
            reconvened at 1:54 p.m. 
               9.   POLICY ROUNDTABLE 
               a.  (Audio part 2  00:00:14) Discussion of Aviation Seaport and Real Estate
             Operating and Capital Budgets 
            Presentation documents: Commission agenda memorandum dated September 30, 2009
           from Borgan Anderson, Finance and Budget Manager, Aviation Division and Boni
            Buringrud, Finance & Budget Manager, Seaport Division. Also provided were computer
             slide presentations from the Aviation Division, the Seaport Division and the Real Estate 
             Division. 

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             Presenters: Mark Reis, Managing Director, Aviation and Mr. Anderson (Aviation); Joe
           McWilliams, Managing Director, Real Estate and Property Management and Ms.
            Buringrud (Real Estate); and Charlie Sheldon, Managing Director, Seaport and Ms.
            Buringrud (Seaport) 
            Aviation Division 
             Mr. Reis referenced the two lines of business at the Airport  the airline side and the nonairline
             side, and that the focus of each of them for 2010 is to try to address the following
             objectives: On the airline side, the focus continues to be ways to reduce the cost per
            enplanement (CPE) and on the non-airline side, the focus is to grow the net operating
             income (NOI). He also noted that at the division -wide level, there is the effort to
            maintain at least 10 months of operating and maintenance (O&M) on the balance sheet in
             unrestricted cash and investments as a cushion. 
             Mr. Reis stated that no increase to enplanements is anticipated.  He also noted that nonairline
            revenues are projected to be down 8.3% from the budget which was approved last
            fall but are only down .7% from the 2009 projected actuals. Also, the airline revenues
             are projected to be up 4.5% due to increases capital costs. 
            Regarding expenses, Mr. Reis noted that the targeted 5% reduction had been achieved
            (over the 2009 approved budget) with only two exceptions. 
            Mr. Anderson provided background information on how the division had achieved the
            5% reduction over the 2009 budget numbers and significant budget cuts which had been
             necessary in order to meet that goal. He noted that few costs are directly tied to
            enplanements, and that most revenues are driven by the economic climate. He
            commented on cuts needed to be made to reach the budget target, which impacted a
             number of departments, including operations, utilities, facilities and infrastructure, and
            maintenance. 
            Responding to Commission Tarleton's question as to the number of people who might
             come to the Airport by use of light rail, Mr. Reis stated that predictions by Sound Transit
             indicate that 60% of those who use light rail will be employees. 
            Commissioner Hara commented on the possibility of increasing advertising to bump up
            revenues and Mr. Reis responded that the demand for advertising has actually gone
           down. 
            Mr. Anderson reviewed the division budget summary vs. the divisional financial goals,
            and also provided an overview of the capital budget through 2014. 
            Risks were discussed, which included the fact that economic conditions remain uncertain
             which may result in airlines adjusting their schedules further. On the other hand as an
            opportunity, it was noted that should the economy improve, a result could be an increase
             in enplanements as well as non-airline revenues. 

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            Another topic discussed was possible impacts to the Airport should there be flooding this
            winter due to issues with the Howard Hanson Dam. Mr. Anderson noted that it was
             believed the Airport would be able to function fully as far as the aspect of receiving fuel,
             but it could be extremely serious should there be power lost to the Airport. He talked
            about the need for some provision of backup power in case this occurs. 
            Real Estate Division 
            Ms. Buringrud began the presentation by reviewing 2010 Key Assumptions for the Real
            Estate Division, which include decreases in occupancy of several Port properties. She
            then reviewed the division revenues, broken out by group. 
             On the expense side, it was noted that payroll costs will be going up as well as electric
              rates. Also addressed was the budget increase for implementing a deferred maintenance
             plan. Ms. Buringrud also stated that there is expected to be an increase in environmental
             reserves due to an obligating event occurring in 2010. 
            Ms. Buringrud and Mr. McWilliams addressed the need for adjustments to Full-Time
             Equivalent (FTE's) positions in order to prepare for the 2010 budget, noting that some 
            staff was transferred, some took advantage of the Voluntary Separation Program (VSP),
             and some were affected as a result of layoffs. 
            Ms. Buringrud noted that the Maintenance Staff supports both the Real Estate and
             Seaport Divisions, so those dollars are split in the budgeting process. 
            While reviewing the Real Estate budget summary, Ms. Buringrud noted that overall, in
            looking at the Net Operating Income (excluding environmental grants and reserve), that
             relative to the 2009 budget, Real Estate Division is within $146,000 of that budget. 
            Ms. Buringrud reviewed possible upcoming risks, which included the current economic
            downturn and how that could impact vacancies and tenants' ability to pay; unknowns
            with the Eastside Rail Corridor; unexpected maintenance work; an electrical rate
            increase; and performance audit implications. 
            The Real Estate Capital Budget was then discussed for 2010-2014 and also 2015-2019.
            Projects within various categories were reviewed, such as Under Contract, Commission
            Authorized; Division Pending, and Business Plan Prospective (both Revenue/Capacity
           Growth and Renewal/Enhancement). 
            Responding to Commissioner Hara's question about when it is expected that this division
            will become profitable, Mr. McWilliams answered the expectation is 5 to 6 years, partly
             due to the fact that the economy needs to begin to recover first. Commissioner Hara
            commented on the importance of maximizing the utilization of Port assets. 


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            Seaport Division 
             Mr. Sheldon noted the three Seaport strategies for 2010: 
               Protect our current business 
               Position ourselves for recovery and change in the container shipping market 
                Collaborate with others to advance our key initiatives 
             He also spoke of critical work for 2010: 
               Maintain high performance levels for critical functions 
              Deliver on commitments: 
                   o NW Ports Clean Air Strategy 
                   o Clean Truck Plan 
                   o Container Terminal Customer Support Plan 
               Continue transition and development of T-91 into a multi-use facility 
               Adjust and align resources to meet business strategies 
            Mr. Sheldon reviewed Key Assumptions for 2010 used in creating the budget, as well as
            some of the upcoming expense issues, which include asset evaluation and repairs &
           improvements. 
            Ms. Buringrud reviewed Revenues, broken out by groups, which include containers &
             support properties and cruise and industrial properties. In addressing the expense budget,
             she noted that there have been staffing reductions, which results in a flat payroll cost
            despite upcoming salary increases. She also stated that in 2009 there were some large
            recurring expenses which would not be taking place in 2010, or have been reclassified.
            Ms. Buringrud reviewed the budget summaries for containers & support properties;
             cruise; and industrial docks & properties as well as potential upcoming risks. 
            A review of the Seaport Division's 2010 preliminary capital budget was provided and
            included information on projects; committed; under contract; Commission authorized;
            division pending; and business plan prospective, for revenue/capacity growth;
            renewal/enhancement, and environmental/safety. 
            Following regular business on the agenda, Commissioner Bryant announced that the next
           Commission meeting would be held on Thursday, October 8 in Commission Chambers
            and would take place from 9:00-11:00 a.m. 
            Commissioner Davis reported that recently, following her trip to Asia with CEO
            Yoshitani, a group of people from China who had been involved with the eco-partnership
             event there, had visited the Port of Seattle last week. 


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        10. ADJOURNMENT 
            There being no further business, the meeting was adjourned at 3:57 p.m. 
             (A digital recording of the meeting is available on the Port's website.) 

           Lloyd Hara 
            Secretary 















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