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Regular Meeting on Mar 14, 2017 1:00pm

Minutes for the Port Of Seattle Commission meeting, held on Mar 14, 2017 1:00pm

                                                                              P.O. Box 1209 
                                                                Seattle, Washington 98111 
                                                                   www.portseattle.org 
                                                                      206.787.3000 
                                         APPROVED MINUTES 
                               COMMISSION REGULAR MEETING MARCH 14, 2017 
                   The Port of Seattle Commission met in a regular meeting Tuesday, March 14, 2017, at Port of
                     Seattle  Headquarters,  Commission  Chambers,  2711  Alaskan  Way,  Seattle,  Washington. 
                  Commissioners  Albro and Felleman  were present.  Commissioner Bowman participated by
                   telephone. Commissioners Creighton and Gregoire were absent. 
                      1.    CALL TO ORDER 
                    The meeting was called to order at 1:00 p.m. by Commission President Tom Albro, who led the flag
                       salute. 
                      2.    EXECUTIVE SESSION pursuant to RCW 42.30.110  None. 
                      3.    SPECIAL ORDERS OF BUSINESS 
                      3a.  March 14, 2017, CEO Report. 
                    Dave Soike, Interim Chief Executive Officer, previewed several items on the day's agenda and
                   made announcements concerning the latest Executive Order banning travel to the United States
                    from certain countries, increases to parking rates at the Airport parking garage, and the March 13
                      blessing of the fishing fleet at Fishermen's Terminal. 
                     A recording of this part of the meeting has been made available online. 
                    Without objection, the Commission advanced to consideration of  
                      5.    PUBLIC TESTIMONY 
                     Public comment was received from the following individual(s): 
                             Mark Hennon, Seattle resident, regarding improved fire fighting equipment at the Airport. 
                     Further public testimony was offered later under the order of Additional New Business. 
                     A recording of this part of the meeting has been made available online. 



                               Digital recordings of the meeting proceedings and meeting materials are available online  www.portseattle.org.

              PORT COMMISSION MEETING MINUTES                             Page 2 of 6 
                TUESDAY, MARCH 14, 2017 

                     Following consideration of public testimony, the Commission returned to consideration of  
                      4.    UNANIMOUS CONSENT CALENDAR 
                   [Clerk's Note: Items on the Unanimous Consent Calendar are considered routine and are not
                     individually discussed. Port Commissioners receive the request documents prior to the meeting
                   and may remove items from the Consent Calendar for separate discussion and vote in accordance
                   with Commission bylaws.] 
                   At the request of Commissioner Albro, agenda item 4b was removed from the Unanimous Consent
                    Calendar for separate discussion and vote. 
                      4a.  Approval of the minutes of the special meetings of February 2 and 28, and the regular
                        meeting of February 28, 2017. 
                   The motion for approval of consent item 4a carried by the following vote: 
                   In favor: Albro, Bowman, Felleman (3) 
                   Absent for the vote: Creighton, Gregoire 
                     A recording of this part of the meeting has been made available online. 
                    The Commission advanced to consideration of  
              ITEMS REMOVED FROM CONSENT 
                     4b.  Authorization for the Chief Executive Officer to execute a procurement for two 3,000-
                       gallon Aircraft Rescue Firefighting (ARFF) Vehicles at a cost of $2,200,000 including
                       equipment and taxes (CIP #C800878). 
                  Request document(s) included a Commission agenda memorandum. 
                    Presenter(s): Randy Krause, Fire Chief. 
                    Chief Krause summarized the request and described the readiness of the Airport fire fighting team
                   and equipment, which includes another 3,000-gallon vehicle and a 4,500-gallon vehicle able to
                     extend to reach 65 feet that was procured in 2016. He explained that following closure of Taxiway J
                    in 2015, the Fire Department immediately established an interim station to comply with Federal
                    Aviation Administration requirements for minimum airfield response times, which were never
                    compromised. Commissioners asked about disposal and surplusing options for older equipment. 
                   The motion for approval of agenda item 4b carried by the following vote: 
                   In favor: Albro, Bowman, Felleman, (3) 
                   Absent for the vote: Creighton, Gregoire 
                     A recording of this part of the meeting has been made available online. 

                      Minutes of March 14, 2017, submitted for review on April 6, 2017, and proposed for approval on April 11, 2017.

              PORT COMMISSION MEETING MINUTES                             Page 3 of 6 
                TUESDAY, MARCH 14, 2017 
                    Public testimony was considered previously, and the Commission advanced to consideration of  
                      6.    DIVISION, CORPORATE, AND COMMISSION ACTION ITEMS 
                      6a.  Authorization for the Chief Executive Officer to prepare design documents for Airport
                      Signage and Wayfinding Short-Term Improvements and to advertise and execute major
                      construction contracts and utilize Port crews to complete immediate and short-term
                    improvements at Seattle-Tacoma International Airport for an estimated cost of
                        $2,000,000 (CIP #C800898). 
                   Request document(s) included a Commission agenda memorandum and presentation slides. 
                     Presenter(s): Jeffrey Brown, Director, Aviation Facilities and Capital Programs; Heather Karch,
                     Architect, Aviation Facilities and Infrastructure; and Joseph Labozan, Principal, Labozan and
                    Associates. 
                   Commissioners received a presentation that summarized the methodology and considerations,
                 such as scale, height, illumination, and number of signs, involved in proposing short-term
                   improvements to signage and wayfinding at the Airport. Current conditions were presented and
                    factors affecting potential improvements were explained. Commissioners requested a protocol be
                   developed to inform the trade-offs between informational and advertising signage, which often
                   compete for passengers' attention in the Airport terminal. Commissioners commented on the
                     readability of the departure and arrival information in the flight information display system signs and
                     confusion inherent in signs pointing to the Airport's internal transit system connecting the North and
                      South Satellites versus Sound Transit's light rail system. 
                   The motion for approval of agenda item 6a carried by the following vote: 
                   In favor: Albro, Bowman, Felleman (3) 
                   Absent for the vote: Creighton, Gregoire 
                     A recording of this part of the meeting has been made available online. 
                     6b.  Authorization for the Chief Executive Officer to: (1) design and prepare construction
                        documents for the relocation of Taxiway L and mitigation of safety concerns at Taxiway
                        Q at Seattle-Tacoma International Airport; (2) transfer $3,045,000 previously authorized
                      budget from the NorthSTAR program (North Satellite Taxiway A/B Reconfiguration) to
                       combined Taxiway A/B/L/Q capital improvement project; and (3) execute a project labor
                        agreement for these projects (CIP #C800914). 
                   Request document(s) included a Commission agenda memorandum and presentation slides. 
                    Presenter(s): Mark Coates, Senior Manager, Airport Operations. 
                   The request, including combining work on taxiways A and B with work on taxiways L and Q and
                    execution of a project labor agreement, was summarized. 

                      Minutes of March 14, 2017, submitted for review on April 6, 2017, and proposed for approval on April 11, 2017.

              PORT COMMISSION MEETING MINUTES                             Page 4 of 6 
                TUESDAY, MARCH 14, 2017 
                   The motion for approval of agenda item 6b carried by the following vote: 
                   In favor: Albro, Bowman, Felleman (3) 
                   Absent for the vote: Creighton, Gregoire 
                     A recording of this part of the meeting has been made available online. 
                      6c.  Industrial  Development  Corporation  (IDC)    Approval  of  minutes,  designation  of
                         officers, and annual report. 
                   Request document(s) included IDC agenda memorandums regarding approval of minutes, election
                      of officers, and 2016 annual report. 
                    IDC meeting minutes of March 14, 2017, will be made available for public review upon approval. 
              RECESSED AND RECONVENED 
                    The regular meeting of the Port of Seattle Commission was recessed at 1:54 p.m. to hold the annual
                     meeting of the Industrial Development Corporation of the Port of Seattle. The regular meeting of the
                    Port of Seattle Commission reconvened at 2:06 p.m., chaired by Commissioner Albro. 
                     A recording of this part of the meeting has been made available online. 
                      7.    STAFF BRIEFINGS 
                      7a.  2016 Fourth Quarter Capital Improvement Projects Report. 
                   Presentation document(s) included a Commission agenda memorandum, presentation slides, and
                     capital improvement project report. 
                    Presenter(s): Ralph Graves, Senior Director, Capital Development. 
                    Mr. Graves provided an update on the status of projects in the Port's capital improvement program,
                     including new variances to budget and schedule and notable achievements. Regarding bid
                    irregularities and potential combination of the C3 Holdroom Expansion and CTE HVAC (Central
                    Terminal Expansion Heating, Ventilation, and Air Conditioning) Projects, Commissioners inquired
                    about the benefits of combining the projects and the factors involved in bids exceeding engineer's
                     estimates. Commissioners asked for better insight when projects have bid irregularities but are not
                    yet definitively behind schedule or over budget. Commissioners asked for an estimate of projects
                   expected to run over budget, especially at the Airport, and the related eligibility for federal grant
                     funding represented by those projects. 
                    Commissioners requested clarification about the drivers of schedule variances, which appear to be
                    more common than budget variances. There was a discussion of the budget benchmarks established
                    during project design and potentially reset upon construction funding authorization versus change
                     orders, including scope changes, that arise during construction and are reported as variances. 
                     A recording of this part of the meeting has been made available online. 

                      Minutes of March 14, 2017, submitted for review on April 6, 2017, and proposed for approval on April 11, 2017.

              PORT COMMISSION MEETING MINUTES                             Page 5 of 6 
                TUESDAY, MARCH 14, 2017 
                     7b.  2016 Financial Performance Briefing. 
                   Presentation document(s) included a Commission agenda memorandum, presentation slides, and
                     financial performance report. 
                     Presenter(s): Michael Tong, Assistant Finance Director  Budget; Kelly Zupan, Director, Maritime
                   Finance & Budget; and Hanh Nguyen, Manager, Aviation Finance & Budget. 
                 Portwide Summary 
                    Overall financial performance for 2016 was presented, including record performance in operating
                  revenues and net operating income. Total operating revenue in 2016 of $598.5 million was
                    $13.9 million above the 2016 budget forecast and $39.5 million above actual 2015 performance.
                    Net operating income before depreciation in 2016 of $273.2 million was $24.5 million above the
                    2016 budget forecast and $32.1 million above actual 2015 performance. 
                    Aviation Division 
                     Aviation Division 2016 financial performance highlights were reported to include record passenger
                 volume of 22.6 million passengers, an eight percent increase over 2015 performance. Seattle-
                     Tacoma International Airport is now the ninth busiest airport in North America by passenger volume,
                    up from thirteenth busiest in 2015. It was reported that nonaeronautical revenue was $12.7 million
                    higher  than  budget  forecast  owing  to  passenger  growth  and  strong  performance  in  ground
                     transportation, parking, and dining and retail revenue. Operating expenses in the Aviation Division
                    were also lower than expected in 2016. The Airport's 2016 cost per enplanement was $10.10, the
                   lowest it has been since 2003. Commissioners asked for more detail regarding increased ground
                    transportation revenue and projected 2017 forecasts. Commissioners asked about the effectiveness
                     of computer tracking of transportation network company vehicles, such as Uber and Lyft. 
                   Maritime Division 
                   Maritime Division 2016 business highlights were presented, including recovery of more than
                      $4 million  in  insurance  payments  for  environmental  remediation.  Net  operating  income  of
                     $3.7 million in 2016 was $1.5 million higher than budget forecast, although $3.3 million lower than
                    actual 2015 performance. Net operating income for the Port's stormwater utility was $1.2 million
                   higher than budget forecast for 2016. Commissioners inquired about the drop in net operating
                    income attributed to the recreational boating line of business compared with 2015 performance,
                     which was attributed to staffing challenges and inability to manage moorage turnover optimally. 
                 Economic Development Division 
                   Economic Development Division 2016 business highlights were presented, including a 97-percent
                   occupancy rate for leased properties compared to the target rate of 95 percent. Net operating
                   income in 2016 was $4.5 million higher than budget forecast and $4.2 million lower than 2015
                    actual  performance,  which  was  attributed  to  business  disruption  at  Pier  66  resulting  from
                   construction on improvements at that facility. Commissioners asked about a noticeable drop in
                     marina office and retail occupancy in the third quarter of 2016 

                      Minutes of March 14, 2017, submitted for review on April 6, 2017, and proposed for approval on April 11, 2017.

              PORT COMMISSION MEETING MINUTES                             Page 6 of 6 
                TUESDAY, MARCH 14, 2017 
                   Corporate Division 
                     Business highlights of the Corporate Division in 2016 were presented, including contribution to the
                  SR-99 Alaskan Way Viaduct Replacement Project and implementation of paid parental leave.
                    Corporate operating expenses in 2016 of $113.3 million were 10.7 million lower than budget. This
                    was attributed to payroll savings from delayed hiring and savings in outside services, such as for
                     the Sustainable Airport Master Plan, and capital development project savings. 
                    Commissioners commented on savings in the Port's capital program and requested a report of the
                     historic trends in how much of planned capital spending is actually used annually and the amount of the
                    Airport Development Fund actually retained to cover Airport operations versus the targeted reserve
                      amount with consideration given to the effect on reserving cash or accelerating bond issuance. 
                     A recording of this part of the meeting has been made available online. 
                      8.    ADDITIONAL NEW BUSINESS 
                   Interim CEO Dave Soike previewed several items on upcoming Commission agendas. 
                      5.    PUBLIC TESTIMONY 
                     Public comment was received from the following individual(s): 
                             Brian Martin, owner of animation and marketing company BrandAnimate, regarding
                               wayfinding and signage at the Airport. Mr. Martin submitted written materials, which are
                                included here as minutes Exhibit B and are available for public review. 
                     A recording of this part of the meeting has been made available online. 
                      9.    ADJOURNMENT 
                    There was no further business, and the meeting adjourned at 3:05 p.m. 
                   Fred Felleman 
                     Assistant Secretary 
                    Minutes approved: April 11, 2017. 





                      Minutes of March 14, 2017, submitted for review on April 6, 2017, and proposed for approval on April 11, 2017.