Commission Meeting Portal

Regular Meeting on Nov 03, 2009 1:00PM

Minutes for the Port Of Seattle Commission meeting, held on Nov 03, 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 
             (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 NOVEMBER 3, 2009 
            The Port of Seattle Commission met in a regular meeting at 1:00 p.m., Tuesday, 
            November 3, 2009 in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle,
        WA. Commissioners Bryant, Creighton, Davis, Hara and Tarleton were present. 
               1.     CALL TO ORDER 
             The regular meeting was called to order at 1:05 p.m. by Bill Bryant, Chair and President. 
               2.     EXECUTIVE SESSION pursuant to RCW 42.30.110 
           None. 
           PLEDGE OF ALLEGIANCE 
               3.     APPROVAL OF MINUTES 
           Motion for approval of the minutes of the October 6, 2009 regular meeting  Hara 
           Second  Tarleton 
            Motion carried by the following vote: 
            In favor: Bryant, Davis, Hara, Tarleton (4) 
            Commissioner Creighton was absent from the subject meeting. 

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               4.    SPECIAL ORDER OF BUSINESS 
           None. 
               5.    (00:01:38) UNANIMOUS CONSENT CALENDAR 
               a.  Authorization for the Chief Executive Officer to execute Change Order No. 005
              for the Transportation Security Administration's (TSA) C-1 Building Tenant
              Improvements Project to add an additional 302 days to complete the project.
              There are no additional project funds requested with the change order. 
           Request document: Commission agenda memorandum dated October 22, 2009 from
            Ralph Graves, Managing Director, Capital Development Division. 
              b.  Authorization for the Chief Executive Officer to execute Change Order No. 005
             for the Duwamish Trail Link  West Marginal Way SW Project to add an
               additional 196 days to complete the project. There are no additional project
              funds requested with the change order. 
           Request document: Commission agenda memorandum dated October 22, 2009 from
            Ralph Graves, Managing Director, Capital Development Division. 
                c.  Authorization for the Chief Executive Officer to select a consultant and execute
              an Indefinite Quantity/Indefinite Delivery (IDIQ) Service Agreement to support
             the Engineering Department in performing Airfield Pavement Management
              Services at the Airport for a not-to-exceed amount of $500,000 and a duration of
              three years for pavement management analysis and evaluation, pavement
               ratings and airfield pavement design. 
           Request document: Commission agenda memorandum dated Bob Maruska, Assistant
            Director, Engineering. 
           Motion for approval of Consent Calendar Items 5a-5c  Tarleton 
           Second  Creighton 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
               6.   DIVISION, CORPORATE AND COMMISSION ACTION ITEMS 
               a.  (00:02:47) Resolution No. 3628, Second Reading and Final Passage. Amending
              Resolution No. 3605, as amended; the Master Policy Directive 


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           Request documents: Commission agenda memorandum dated October 28, 2009 from
            Tom Barnard, Research and Policy Analyst and Ralph Graves, Managing Director,
            Capital Development Division. Also provided was a computer slide presentation and a
            matrix of language being incorporated into the Resolution. 
             Presenters: Mr. Barnard and Mr. Graves 
            Mr. Barnard reviewed changes to the Resolution which have been incorporated since
            First Reading. He noted that drafts had been sent out to a number of stakeholders for
             review as well as posting it on the internet for public review. Following review and
            input, some of the suggested revisions were incorporated and Mr. Barnard reviewed those
            specific changes. Mr. Graves noted that one of the major revisions was raising the
            threshold for requiring Commission approval of contract actions and projects from
            $200,000 to $300,000. He stated that in addition, also being set at the $300,000
             authorization threshold is that for goods and purchased services 
            Mr. Graves clarified, in response to comments by Commissioner Hara, that under
            emergency conditions the CEO can act without Commission approval and could then
             come back to the Commission, and in a critical situation, would have a limit of $500,000. 
            in an emergency situation the CEO would not have a limit but would need to be
             financially prudent. 
           Motion for approval of Resolution No. 3628, Second Reading and Final Passage,
           amending Resolution No. 3605, as amended; the Master Policy Directive (Delegation
            of Authority)  Davis 
           Second  Hara 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
            Following the vote, Commissioner Hara asked for confirmation that the additional
            information provided to the Commission regarding resolution sections 4.2.3.5 and 4.2.3.8
             would be included in the final Resolution. Staff verified that this language would be
             included in the Resolution. Mr. Barnard stated the language referred to which was
             included in the matrix presented at this meeting would be a part of the proposed final
            Resolution. 
              b.  (00:33:53) Authorization for the Chief Executive Officer to execute up to five 
              Indefinite Quantity/Indefinite Quality (IDIQ) on-call consulting services
             contracts for Environmental Compliance and Management to be used to assist
              the Seaport to access, plan, perform and monitor environmental compliance for
              Port-owned Seaport or Real Estate properties or projects. This request is only
              for contracting authority; funding will be authorized separately under the

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              regular environmental reserves authorization process or through projectspecific
               authorizations. The value of the contracts will not exceed $3,750,000. 
           Request document: Commission agenda memorandum dated October 7, 2009 from
            Stephanie Jones Stebbins, Senior Manager, Seaport Environmental Programs and Paul
           Meyer, Environmental Program Supervisor, Seaport Environmental Programs 
             Presenter: Mr. Meyer 
             Mr. Meyer stated that this request was to replace a contract that expires at the end of
             2009, and that the intent was to divide the contract into a number of separate contracts for 
             the duration of three years. He noted that by doing so it would give small businesses a
             chance to apply for these contracts. 
           Motion for approval of Item 6b  Tarleton 
           Second  Creighton 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
                c.  (00:37:36) Authorization for the Chief Executive Officer to complete the sound
             mitigation work on Building 9 at Highline Community College at an estimated
              cost of $2,017,377, including administrative expenses. This authorization
               request is for $1,261,332 and will bring the total authorization for this CIP to
              $6,254,930. 
           Request document: Commission agenda memorandum dated October 23, 2009 from Stan
            Shepherd, Manager, Airport Noise Programs 
             Presenter: Mr. Shepherd 
            Mr. Shepherd stated that the sound mitigation work at Highline Community College is
            one of the most important programs in the Port's sound mitigation plan which has been
            ongoing since 1994. He noted that the program has historically been funded by Airport
             funds, but within the past year that fund has been transferred to FAA Airport
            Improvement Grant funds and that there is about an 80% available match of funds and
             that the Port will pay the additional 20%. 
            Responding to a question from Commissioner Bryant regarding an end date for the
            project, Mr. Shepherd stated that there is not an end date within the Memorandum of
            Understanding with the college. 
            Motion for approval of Item 6c  Davis 

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           Second  Tarleton 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
              d.  (00:47:50) Authorization for the Chief Executive Officer to complete the
              relocation of residents of parcel numbers 344500-0110; 344500-0141; 344500-
            0145; 344500-0155, commonly known as Town and Country Mobile Home Parks 
              located in the City of SeaTac, Washington, which are located within the 1998 70
              Day Night Noise Level noise contour, at an estimated cost of $2.6 million,
              including legal and administrative expenses. The request will bring the total
              authorization for the CIP Project C2000037 to $52,306,110. Eighty percent of
              the costs are reimbursed by the Federal Aviation Administration (FAA). 
           Request document: Commission agenda memorandum dated October 14, 2009 from
            James R. Schone, Director, Aviation Business Development; Jude Barrett, Manager,
            Aviation Property Acquisition and Relocation; and Luis Navarro, Manager, Aviation
             Properties 
             Presenter: Mr. Barrett 
            Mr. Barrett stated that the Town & Country Mobile Home Parks is the last in a series of
            mobile home parks scheduled for acquisition within a noise-impacted area south of the
             Airport. He noted that staff is on schedule to have all of the residents relocated by early
             2010 and that this authorization would allow those final relocations as well as the
            complete demolition of the remaining manufactured homes by contract or Port crews. 
            Commissioner Creighton asked whether there were any possible ideas for the use of the
            property going forward. Mr. Shepherd responded that it is tentatively scheduled for a
            freeway extension by the Department of Transportation, but is not currently funded. 
           Motion for approval of Item 6d  Creighton 
           Second  Davis 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
                e.  (00:52:42) Authorization for the Chief Executive Officer to execute a 5-year sole
             source Technical Assistance Agreement to support the Underground Train
              System at the Airport with Bombardier Transportation, Inc., in the total amount
               of $1,535, 803. Justification for entering into the sole source contract has been
             reviewed and approved by the Central Procurement Office (CPO) 

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           Request document: Commission agenda memorandum dated October 7, 2009 from John
            R. Christianson, General Manager, Aviation Maintenance 
             Presenter: Gary Richer, Manager, Aviation Maintenance 
            Mr. Richer provided background information on the underground train system at the
            Airport, which has been in service since 1973. He stated that the Port has always had the
             same service, with an on-site representative for 28 years, and the most recent
             representative has been on-site since 2004. He noted that for a major system such as this,
            a vendor has proprietary systems and sub-systems that only they can support. In order to
             maintain the continuity and reliability of supporting the underground train system, staff
            recommended extending the contract with Bombardier. 
            Motion for approval of Item 6e  Tarleton 
           Second  Creighton 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 
                 f.  (00:58:48) Authorization for the Chief Executive Officer to execute an
             amendment to the Lease and Concession Agreement of SmartCarte, Inc.,
              provided of airport luggage carts and other passenger services at Seattle-
              Tacoma International Airport (Airport), that would extend the term for an
              additional five-year period as provided for in the current Agreement, under new
              negotiated terms. 
           Request document: Commission agenda memorandum dated September 29, 2009 from
            James R. Schone, Director, Aviation Business Development and Deanna Zachrisson,
            Manager, Concessions Business. Also provided were copies of the proposed Amendment 
             and the current Lease. 
             Presenters: Mr. Schone and Ms. Zachrisson 
             Ms. Zachrisson stated that the luggage cart concession at the Airport is one of the many
            businesses which have suffered severe impacts resulting from the recent economic
            conditions. She noted that the proposal being made today would provide the best
             possible financial returns for the Airport while assuring a continuity of reliable service
             for the travelling public. As for going out to bid for these services, Ms. Zachrisson stated
            that the two other businesses which bid against SmartCarte in 2004 are no longer in the
             luggage cart business, and also noted that of the top 50 airports, 45 use SmartCarte. 
            Commissioner Creighton raised the question of airports which might have free luggage
            service and Ms. Zachrisson responded that Vancouver (Canada) has such a service, but in
             general airports have not been willing to shoulder that kind of an investment cost. 

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            Commissioner Hara asked about the possibility of advertising on the luggage carts in
             order to provide additional revenue. Ms. Zachrisson replied that although it is, and
             always has been a possibility in the contract, SmartCarte has had some difficulty in
              finding advertisers for their carts. 
            Commissioner Tarleton stated her concern over this being a proposal for a 5-year rather
             than a 3-year contract extension and noted that she would prefer to look at a 3-year option
             in order to see what the impact of the upcoming light rail station might be on luggage
              service. 
           Motion for approval of Item 6f  Hara 
           Second  Davis 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara (4) 
          Opposed: Tarleton (1) 
               g.  (01:16:41) Authorization for the Chief Executive Officer to execute a Collective
             Bargaining Agreement between the International Union of Operating Engineers
             Local 286, representing Operating Engineers in Aviation Maintenance and the
               Port of Seattle. 
           Request document: Commission agenda memorandum dated October 27, 2009 from Lisa
            Hornfeck, Labor Relations Director. Also provided was a copy of the Agreement. 
             Presenter: Ms. Hornfeck 
            Ms. Hornfeck provided brief background of which employees at the Port would be
             covered by this agreement and stated that this is a two-year agreement. She stated that a
            shorter term agreement than in the past was agreed to largely due to concerns about
             uncertainty in the market. 
            Motion for approval of Item 6g  Davis 
          Second: Tarleton 
            Motion carried by the following vote: 
           In Favor: Bryant, Creighton, Davis, Hara, Tarleton (5) 


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               7.   STAFF BRIEFINGS 
               a.   (01:19:26) Briefing on the 2010 Salary and Benefit Resolution 
            Presentation documents: Commission agenda memorandum dated November 3, 2009
           from Tammy Woodard, Senior Manager, Total Compensation. Also provided were a
            computer slide presentation and a draft copy of the proposed Resolution. 
             Presenter: Ms. Woodard 
            Ms. Woodard stated that changes to the 2010 Resolution would be minimal and noted
            that benefit program changes will impact employees and retirees more significantly than
            will the Resolution changes. She also noted that all changes will reflect a conservative
            approach to pay and benefits for 2010.
            Ms. Woodard reviewed what the Salary and Benefit is and does, stating that it delegates
            authority from the Commission to the Chief Executive Officer to direct administration of
            pay and benefits to non-represented employees, approximately 53% of Port employees.
            Ms. Woodard also reviewed differences between Port pay ranges and typical public
            employer pay ranges, and noted that Port employees do not receive automatic pay
             increases.
            It was noted by Ms. Woodard that employees are paying an increasing share of their
             medical costs, and that in 2010 additional costs will shift from the Port to employees.
             She said that this will more closely align the Port's medical benefits with those of other
            employers. 
           Ms. Woodard summarized the recommended changes for the 2010 Salary and Benefit
             Resolution as follows: 
              A few minor wording changes 
              An updated holiday schedule 
               A reduction to paid time off (PTO) accumulation levels 
                A new section specifying eligibility of retiring employees for medical and life
                 insurance following retirement 
                Salary levels to be held at the 2009 level for 2010 
              b.  (01:42:09) Briefing on 2009 Third Quarter and Year-End Financial
          Performance 
            Presentation documents: Commission agenda memorandum dated October 27, 2009
            from Dan Thomas, Chief Financial Officer and Michael Tong, Corporate Budget
            Manager; computer slide presentation; and quarterly performance report. 


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             Presenters: Mr. Thomas; Mr. Tong; Borgan Anderson, Senior Manager, Aviation
            Finance and Budget; Boni Buringrud, Senior Manager, Seaport Manager, Seaport
            Finance and Budget 
            As introduction to the presentation, Mr. Thomas provided a brief background on issues
             addressed by staff at CEO Yoshitani's direction in response to financial challenges faced
             by the organization. He commented on the cost-savings measure of staff furloughs and
            also noted that the combination of the Voluntary Separation Program (VSP) and the
            reduction in force would have associated costs which would be accrued to the 2009
            budget. He also mentioned a medical cost reversal related to Other Post-Employment
             Benefits (OPEB), resulting from a change in medical costs for retirees. 
             Mr. Tong provided an overview of operating budget results for the first three quarters of
            2009, which he noted were quite good. He also reviewed the total Port 2009 Capital
             spending, including an estimate for 4th Quarter of 2009.
            (01:56:18) Mr. Anderson reviewed Aviation Business Highlights including: 
               Airline activity 
                  o  Year-to-date enplanements down 4.2% from 2008 
              Operating budget 
                  o  2009 forecast $3.2M over targeted expense reductions due to emergency
                       generators, snow event costs and elevator/escalator repairs 
                  o  Reversal of Other Post-Employment Benefits (OPEB) offset by the
                     Voluntary Separation Program (VSP) costs and the HR-10 costs, which
                      when netted together will save the Airport approximately $2.6M. 
                  o  Implementation of Expense Savings Plan 
              Non-airline revenues 
              Capital budget 
            Also reviewed by Mr. Anderson were: 
               Q3 Activity  Enplanements and Landed weight vs. prior year 
               Q3 year-to date operating revenues 
               Q3 year-to-date operating expenses 
               Overall aeronautical summary and key indicators 
               Overall non-aeronautical summary and key indicators 
               Summary of financial results 
            (02:01:57) For the Seaport Division, Ms. Buringrud stated that year-to-date, TEU
            volume was down 14% from 2008, but that that compares favorably to consolidated
            results for the West coast ports, which are down about 17%. She also noted that TEU
            volume for 3rd quarter 2009 was up 2% from 3rd quarter 2008. She also spoke about grain
            volume which was down 18% from 2008, partially due to temporary closures for grain

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            spout upgrades. Also noted was the record number of calls during the cruise season in
            2009. 
            Ms. Buringrud also briefly reviewed: 
              2009 Seaport expense budget reductions 
               Q3 year-to-date operating results 
               Division key variances  revenue and expense 
               Seaport full year operating forecast 
            Responding to a question from Commissioner Bryant regarding the budget variance of 
             the Security department, Ms. Buringrud clarified that they are related to security grants
             and for financial statements, there are security grant revenues with off-setting security
             grant expenses and that it is a timing issue more than anything else.
            (02:05:34) Ms. Buringrud then reviewed information for the Real Estate Division, noting
            that despite a tough market, commercial properties were at 94% occupancy at the end of
            the quarter. She also noted that Fishermen's Terminal has exceeded their Q3 year-to-date
            occupancy target. 
            Also briefly reviewed by Ms. Buringrud were: 
               2009 Real Estate reductions 
               Real Estate Division operating results 
               Real Estate Division key variances (revenue and expense) 
               Year-to-date variances by business groups 
               Real Estate Division full year forecast 
            (02:10:30) Mr. Graves provided background of the Capital Development Division Q3
            report, noting that the department's operating was down about 20% due to a combination
             of hire deferrals and furloughs. He also spoke about Capital Development business
            events, an indicator of the department's performance.
            Also reviewed by Mr. Graves were divisional key indicators as well as operating results
             and the year-end forecast for the division. 
            (02:14:23) Mr. Tong reviewed the Corporate Division operating budget results, noting
             that at the end of 3rd quarter, the division's budget was nearly $8.3M below budget. He
             noted that looking ahead for the year, the forecast for the total expenses is to be $5.7M
            below the approved 2009 budget. 
               8.   NEW BUSINESS 
            Public comment regarding the Eastside Rail corridor was received from the following
             individual: 

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              Robert Scheuerman, Eastside Rail Now. Mr. Scheuerman spoke in support of the
                   Port's purchase of the BNSF Eastside rail line, stating his belief that it is of vital
                 importance. A written copy of Mr. Scheuerman's remarks was provided as well
                 as a copy of Sound Transit's summary of its report to the Puget Sound Regional
                 Council (PSRC); a copy of Federal Railroad Administration (FRA) description of
                  rail loans; and a copy of a loan application. These documents are, by reference,
                  made a part of these minutes; are collectively marked Exhibit 'A'; and are on file
                   in Port offices.
               9.   POLICY ROUNDTABLE 
           None. 
        10. ADJOURNMENT 
            There being no further business, the meeting was adjourned at 3:35 p.m. 
             (A digital recording of the meeting is available on the Port's website.) 

             Bill Bryant 
             President 










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