Item No. 6a_reso 
Meeting Date: May 24, 2016 
RESOLUTION NO. 3720 
A RESOLUTION   of the Port Commission of the Port of Seattle
amending Resolution No. 3712, as amended, the
2016 Salary and Benefit Resolution, to modify the
Pay for Performance Program to add an Incentive
Pay Plan component. 
WHEREAS, the 2016 Salary and Benefit Resolution exercises the Commission's
statutory responsibility and authority to fill positions, fix wages, salaries, and establish other
benefits of employment including retirement, insurance and similar benefits; and 
WHEREAS, this Incentive Pay Plancomponent of the Pay for Performance Program 
will provide incentives for Port employees to deliver exceptional performance toward the 
publicly oriented and Commission established Century Agenda goals of job creation, economic
development, and environment and sustainability improvements; and 
WHEREAS, the proposed Incentive Pay Plan will support the Port's efforts to attract and
retain the most capable employees; and 
WHEREAS, the goals identified in this Resolution are results oriented, strategically
important, values driven, and Century Agenda focused and must be met before any incentive pay
is paid out; and 
WHEREAS, the 2016 Incentive Pay Plan non-financial goals will focus on increasing
small business contracting, and certified minority and women's business enterprise participation;
and improving customer satisfaction; and measuring and reducing our environmental footprint; 
and 
WHEREAS, the Incentive Pay Plan will be funded by exceptional financial performance
with a share of the financial returns dedicated to the tax levy fund to the benefit of taxpayers; and 
WHEREAS, the Incentive Pay Plan will be self-funding and will not add to fixed salary
costs; and 
WHEREAS, the Incentive Pay Plan will include all non-represented Port employees and
pay from the bottom up, paying employees first, followed by Executives; and 
NOW, THEREFORE, BE IT RESOLVED by the Port Commission of the Port of
Seattle as follows: 
Section I    The Commission amends Resolution 3712, as amended, to edit the current
section I, Definitions, to add the following definitions related to Incentive Pay Program: 

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a.  Incentive Pay Plan: A component of the Pay for Performance program that provides a
lump sum payment to employees based on the size of the Adjusted Total Positive Budget
Variance and individual employees' performance ratings identified in the Guided Rating
Distribution, when the Port meets the Incentive Pay Plan goals and the Port's adjusted 
total positive budget variance is sufficient to fund at least the minimum plan payout. 
b.  Incentive Pay Plan Goals: The goals that must be met for the Incentive Pay Plan to pay
an award to eligible employees. There are two types of goals, financial and nonfinancial.
The financial goal is to produce an Adjusted Total Positive Budget Variance
sufficient to fund at least the minimum incentive pay plan payout. There are three nonfinancial
goals established for each plan term, at least two of which must be met along
with the financial goal for the plan to produce a payout. The Incentive Pay Plan goals are 
established by Commission resolution. 
c.  Guided  Rating  Distribution:  The  guideline  for  the  distribution  of  employee
performance review ratings across the Port. The guided distribution is not a forced
ranking or distribution, rather a guideline to support consistent application of the various
performance ratings, based on rating definitions, across the Port.
d.  Adjusted Total Positive Budget Variance: The value used to determine whether or not
the financial goal for the Incentive Pay Plan has been met. The Adjusted Total Positive
Budget Variance is determined by calculating the difference between actual and budgeted
total non-aeronautical revenues and adding this difference to the difference between
actual and budgeted total Port expenses. The total of these differences is then adjusted to
account for any pre-identified adjustments included in the Incentive Pay Plan. 
e.  Budget Variance Adjustments: A small number of expenditure and revenue categories
that may be excluded from the incentive pay plan variance calculation. These include
unpredictable and non-controllable expenses such as reserves established for lawsuits and
environmental remediation,  non-cash expensing of prior year costs that had been
capitalized if projects are cancelled  and major variances due to accounting rule
changes.  Similarly, significant cost savings due to major budgeted initiatives being
cancelled or deferred and unpredictable and non-controllable revenues, such as grants,
may be excluded when calculating the budget variance. Items subject to exclusion will
be identified and noted during the annual budget development process. 

Section II    The Commission amends Resolution 3712, as amended, to edit the current
section II.D.4, Pay for Performance, to reaffirm that the previous program referred to
performance based increases to employees' base pay and to add authorization for the Incentive 
Pay Plan as follows: 
a.  Administration of Pay for Performance Program 
i.    The Pay for Performance Program shall be administered in accordance with
Commission resolutions and Port Policy HR-21  Pay Administration. The Pay

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for Performance Program shall be comprised of two components, a base pay
increase component and a lump sum incentive pay component. 
b.  Base Pay Component 
i.    The base pay component of the Pay for Performance Program permits eligible
non-represented employees to earn increases to their base pay that are based on
performance ratings earned during the previous performance review period. The
amount of the base pay increases shall be approved by Commission Resolution as
part of the Port budget process and administered according to a plan approved by
the Chief Executive Officer and implemented by Human Resources. 
c.  Incentive Pay Plan Component 
i.    The Incentive Pay Plan component of the Pay for Performance Program awards
lump sum payments to eligible non-represented employees when the Port's results
are sufficient to fund payouts and Commission established non-financial goals are
met. This feature ensures that the Incentive Pay Plan component is self-funding
while incenting achievement of non-financial goals.
ii.    The Incentive Pay Plan is funded by an adjusted total positive budget variance,
based on the Commission approved budget. Half the total positive variance is
available to fund the Incentive Pay Plan payout pool. Once funding required for
the earned payout is identified, any remaining funds not required to pay the
Incentive Pay Plan payouts together with the other half of the positive budget
variance is retained by the Port. The positive variance must be sufficient to fund
the minimum level payout before incentive pay is awarded. The portion of the
positive budget variance retained by the Port shall be applied to the tax levy fund,
the airport development fund and general fund. 
iii.    This Resolution identifies three non-financial goals, two of which must be met for
Incentive Pay Plan awards to be paid. The non-financial goals for the 2016 term
shall be: 
1.Small Business and WMBE Participation 
a.  Increase small business contracting participation Port-wide, as defined
by the U.S. Small Business Administration guidelines to 35%,
including the sub-goal of a 50% increase (over 2015) of certified
Washington State Office of Minority and Woman's Business
Enterprises to 5.1%. 
b.  By November 1, 2016, assess all Port efforts geared to promoting
small and WMBE business participation and provide a report to the
Commission rating the effectiveness of each and providing specific
recommendations for improvements for Commission consideration. 
2.Customer Satisfaction and Public Engagement
a.  Quantitatively and qualitatively assess customer satisfaction of all
segments of non-aviation customers to measure satisfaction with Port
services and facilities; and identify specific areas for improvement.
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b.  Improve aviation customer overall satisfaction, as measured by the
Airport Service Quality (ASQ), from 4.07 to 4.13. 
c.  Assess within our jurisdiction public and other local government
understanding of the Port and our role in the regional and local
economy. 
d.  By November 1, 2016, provide a report to the Commission that
includes: 
i.  Benchmarks for future goal setting to improve satisfaction with
Port services and facilities. 
ii.  Strategies to improve the ASQ. 
iii.  High impact actions and programs to improve public and other
local government understanding of the Port and our role in the
regional and local economy 
3.Environmental Stewardship 
a.  Develop and ensure Port-wide implementation of an environmental
scorecard that measures the Port's environmental footprint and that
will serve to guide and monitor reduction efforts in all Port operating
and non-operating divisions. 
b.  By November 1, 2016, assess potential opportunities for increasing the
use of renewable energy and reducing greenhouse gas emissions at
Port owned facilities and report findings and recommendations to the
Commission for consideration. 
iv.   Consistent with the General Delegation of Authority and the employment
agreement with the CEO, the Commission shall review and evaluate the
performance of the CEO. Such evaluation shall set the participation of CEO in the
incentive pay program.
v.   Consistent with the General Delegation of Authority, the Commission shall
provide input to the CEO regarding performance of those employees that report
directly to the CEO for the CEO's benefit in rating the performance of the CEO's
direct reports. Such input shall be provided in executive session no later than the
first Commission meeting in February 2017. 





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vi.   For the 2016 performance term, the total incentive pay plan payout to all eligible
employees shall not exceed $5,000,000. 
vii.    Additional details regarding eligibility, funding, payout calculations and other
aspects of the Incentive Pay Plan are described in Port policy, HR-21  Pay
Administration and the Incentive Pay Plan Document. These documents shall be 
available to employees before the plan term begins so employees are fully aware
of the Incentive Pay Plan and potential awards before the commencement of the
plan term. 
viii.    The Port's financial results, performance relative to the Incentive Pay Plan goals,
plan funding, total estimated incentive pay awards, and actual distribution of
employee performance ratings relative to the guided rating distribution shall be
reported to the Port Commission before any earned awards are paid to eligible
employees. 
ix.   The CEO shall report to Port Commission the progress toward incentive pay plan
goals in August. 
x.   This amendment is effective immediately upon passage and the Incentive Pay
Plan will become effective June 1, 2016. 
ADOPTED by the Port Commission of the Port of Seattle at a duly noticed meeting
thereof, 
held this         day of                 , 2016, and duly authenticated in open session
by the signatures of the Commissioners voting in favor thereof and the seal of the Commission. 

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Port Commission 


















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