7a supp
ITEM NO: 7a_Supp_1 DATE OF MEETING: October 10,2017 2018 Preliminary Budget Aviation Division Commission Briefing October 10, 2017 1 Outline for Aviation presentation Overview, drivers, summary FTEs Operating expenses Non-aero business Aero business CPE Capital Budget Financial forecast Appendix: Details of budget requests Will cover operating budget, capital budget and financial forecast 2 Context: Passenger Growth and Capital Program Enplaned passengers: Major projects now under construction: 48.5% growth since 2012 NSAT, IAF, Baggage Optimization CAGR of 6.8% Customer service challenges Anticipate 49.3 million annual passengers Construction reduces gate capacity (MAP) in 2018 vs. 33 MAP in 2012 Organization must prepare to succeed Catching up from passenger growth & preparing for capital program impact budget 3 2018 Budget Drivers Airport Priorities: Safety Security Achieve Century Agenda objectives: International Gateway of Choice Improve customer service Grow international service Support growth of cargo Meet region's air transportation needs at Sea-Tac for next 25 years and encourage cost-effective expansion of domestic and int'l passenger and cargo service: Accommodate increased utilization of existing facilities New facility planning and development Asset management timely renewal and replacement Grow non-aeronautical net operating income Support environmental/sustainability objectives Century Agenda and Airport priorities drive budget 4 Overview Anticipating 5.0% passenger growth in 2018, on top of 3.0% in 2017 Achieving objectives will require additional resources For 2018, FTE growth and cost growth will exceed passenger growth Airport still catching up from extraordinary passenger growth from 2014 16. Added 125 FTEs in 2017 budget. Hired staffing consultant to review all airport departments, benchmark other airports 2018 budget reflects consultant recommendation to add 60 FTEs. If growth continues, more will be needed in 2019-20. Key measures such as O&M per enplanement and Cost per enplanement (CPE) are increasing, but remain competitive compared to peer airports Non-Aero NOI growing 7.0% vs. 2017 budget, 2.0% growth vs. 2017 forecast Proposing 28 capital projects totaling $242 million Passenger growth slowing but still catching up from recent extraordinary growth 5 2017 Update 2017 Activity Passenger growth forecasted at 3%, down from 4% in budget Cargo tons far exceeding expectations (+21% through August) Expenses: Adding 125 FTEs challenged the organization - so many hires were delayed, creating savings. Full costs hit in 2018 SAMP was delayed - so environmental review and some advance planning was delayed. Budgeted again in 2018. Major expense projects managed by CDD continue (ADR support, Flight Corridor Safety, regulated materials). Terminal security enhancements to be capitalized. Non-Aero revenues: Ground transportation and Rental Car businesses changing: rental cars down, TNCs up, taxis down Lump sum ($5.4M) for land development frontage fees recognized in 2017 (Des Moines Creek Business Park) 2018 Budget builds on 2017 Forecast 6 Budget Summary 2016 2017 2017 2018 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Operating Revenues: Aeronautical Revenues 247,811 278,375 269,875 298,897 20,522 7.4% 29,023 10.8% SLOA III Incentive Straight Line Adj (3,576) (3,576) (3,576) - 3,576 -100.0% 3,576 -100.0% Non-Aeronautical Revenues 221,021 226,645 231,672 243,511 16,865 7.4% 11,839 5.1% Total Operating Revenues 465,256 501,444 497,970 542,408 40,964 8.2% 44,438 8.9% Total Operating Expenses 261,226 302,711 300,162 331,474 28,763 9.5% 31,312 10.4% Net Operating Income 204,030 198,733 197,808 210,934 12,200 6.1% 13,125 6.6% CPE 10.10 10.88 10.65 11.27 0.40 3.7% 0.62 5.9% Non-Aero NOI 128,727 118,521 124,248 126,767 8,245 7.0% 2,519 2.0% Enplaned passengers (000s) 22,796 23,929 23,480 24,654 725 3.0% 1,174 5.0% 2018 CPE increasing, reflecting growing aeronautical costs 2018 Non-aero NOI growing 2.0% over 2017 forecast, but 7.0% over 2017 budget One time property development fees recognized in 2017 but not in 2017 budget NOI growing, CPE increasing but remains competitive 7 FTE Changes 2018 Proposed Budget FTEs FTEs % 2017 Approved Budget 1002.16 Security Supervisors 2.00 Construction Support Specialists (CSS) 13.00 College Intern - Fire department 0.25 2017 Adjusted Baseline 1,017.41 1.5% Proposed New FTEs: FTE's for 100% Employee Screening (Phase II) 18.00 1.8% New FTE's for Core Airport functions: 41.00 4.1% Landside 5.00 Commercial Mgmt 2.00 Airport Operations 6.00 Maintenance 16.00 Capital Development/Facilities & Infrastructure 4.00 Environmental/Sustainability 1.00 Customer Service 1.00 Finance & Budget 2.00 Fire Dept 2.00 Airport Innovation 2.00 New Intern FTE's - College/Graduate 1.25 0.1% Proposed Increase in 2018 Budget FTEs 60.25 6.0% 2018 Budget Proposed FTEs 1,077.66 7.5% Note: percent changes compared to 2017 Approved Budget Excluding new Employee Screening function, FTE growth much slower than passenger growth 8 Graph of FTEs 2012 - 2018 85 2012 2018 Compound Growth Rates: Total FTEs: 3.8% Base FTEs: 2.1% Enplaned passengers: 6.8% Excluding employee screening function, FTE growth at 2.1% for 2012 - 2018 9 5 Year Comparison of FTE to Enplanement Growth Enplaned passengers: Aviation Division FTE's: 43.8% growth since 2012 25.6% growth since 2012 Enplanement growth rate much higher than FTE growth rate 10 Aviation Division 2018 Operating Budget Changes Increases (baseline) 11,837 Reductions/Savings (2,665) Removed 2017 one-time (14,507) Proposed 2018 recurring 9,940 Proposed 2018 one-time 15,819 Total Change 20,424 Proposed budget reflects review of 2017 costs and tracking non-recurring cost 11 Summary of Budget Requests # of 2018 Budget Request $000's 2018 Budget Request category Requests FTEs Baseline One-time Total Safety 13 4.00 1,232,112 448,100 1,680,212 Security 5 18.00 1,110,399 27,500 1,137,899 Customer Service 17 7.00 2,496,295 696,342 3,192,637 Grow International Service 7 550,000 1,000,000 1,550,000 Operational Impacts due to Growth 4 7.00 599,873 32,700 632,573 Capacity Planning & Development 23 15.50 1,785,460 8,508,000 10,293,460 Asset Management 21 4.00 1,093,018 654,295 1,747,313 Grow Non-Aero NOI 9 2.00 451,174 3,359,000 3,810,174 Environmental & Sustainability 11 1.00 256,387 955,867 1,212,254 Other Business Needs 14 1.75 365,526 137,300 502,826 2018 Budget Requests - Total Proposed: 124 60.25 9,940,244 15,819,104 25,759,348 2018 Budget Requests - Initial Requests: 173 143.75 37,876,957 Century Agenda and Airport Priorities drive 2018 budget requests 12 Highlights of Budget Requests 2018 Budget Request Highlights: $000's Employee Screening - Phase II 1,110 Curbside services for Rental Car 500 Electric Cart Service - Link Light Rail 336 SAMP/Environmental Review/Planning 5,200 Executive Program Management consulting support 1,200 Air Service Development - primarily continuation of existing routes 1,000 CBP Reimbursable Services Program (RSP) 500 NERA FAA Pilot Program - final year of FAA grant 2,300 Parking Pre-Booking - expense components of capital project 724 Aviation Biofuels Partnership Fund Development Project 175 Renewable Energy Sourcing and Integration Options 180 Disparity Study 90 Details of all 124 requests are included in the appendix 13 Total Airport Expense Summary 2016 2017 2017 2018 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Operating Expenses Payroll 97,808 119,886 117,070 131,920 12,034 10.0% 14,850 12.7% Outside Services 35,716 45,279 43,513 50,096 4,817 10.6% 6,583 15.1% Utilities 14,690 15,187 15,368 16,750 1,563 10.3% 1,383 9.0% Other Airport Expenses 25,059 21,779 29,232 23,788 2,010 9.2% (5,444) -18.6% Total Aviation Expenses 173,272 202,130 205,183 222,555 20,424 10.1% 17,372 8.5% Corporate 56,505 54,673 54,028 58,120 3,447 6.3% 4,092 7.6% Police Costs 18,183 19,173 19,016 22,174 3,001 15.7% 3,159 16.6% Capital Development 9,319 22,378 17,579 23,223 845 3.8% 5,644 32.1% Maritime/Economic Development 3,946 4,356 4,356 5,402 1,046 24.0% 1,046 24.0% Costs from other Divisions 87,954 100,581 94,979 108,920 8,339 8.3% 13,941 14.7% Total Operating Expense 261,226 302,711 300,162 331,474 28,763 9.5% 31,312 10.4% Expenses here include costs from other divisions 14 O&M Per Enplanement - Trend Adjusting for inflation, the 2018 O&M Per Enplanement of $13.45 would be $11.95 in 2012 dollars O&M growing faster than passengers in 2018 15 O&M Per Enplanement vs. Peer Airports - 2016 Most recent O&M per enplanement compares favorably to peer airports 16 Non-Aero Business Parking: Growing market share vs. offsite lots Implement new revenue control system in mid-2018, will allow for implementation of new parking products such as reservations Rental car transaction per O&D enplanement down CFC operating revenue will increase due to less debt service Airport Dining & Retail relatively flat due to unit closures Commercial properties growing revenues from property development (but down from 2017 due to lump sum $5.4 million recognized in 2017) Airport lounges continue to grow Changing patterns of ground transportation business impacting Landside revenues 17 Non-Aero NOI 2016 2017 2017 2018 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Non-Aero Revenues Rental Cars - Operations 37,082 37,815 34,474 35,294 (2,521) -6.7% 820 2.4% Rental Cars - Operating CFC 12,122 12,931 10,533 15,563 2,632 20.4% 5,030 47.8% Public Parking 69,540 73,568 73,275 78,572 5,004 6.8% 5,297 7.2% Ground Transportation 12,803 14,417 14,927 15,609 1,191 8.3% 681 4.6% Airport Dining & Retail & Leased Space 57,253 55,635 57,497 59,087 3,452 6.2% 1,590 2.8% Commercial Properties 9,992 12,141 17,300 14,706 2,565 21.1% (2,594) -15.0% Utilities 7,233 7,118 7,118 7,556 438 6.1% 438 6.1% Employee Parking 9,329 8,482 9,482 9,457 974 11.5% (26) -0.3% Clubs and Lounges 3,028 2,729 4,979 5,630 2,901 106.3% 651 13.1% Other 2,639 1,807 2,085 2,036 229 12.7% (49) -2.3% Total Non-Aero Revenues 221,021 226,645 231,672 243,511 16,865 7.4% 11,839 5.1% Total Non-Aero Expenses 92,294 108,124 107,424 116,744 8,620 8.0% 9,320 8.7% Net Operating Income 128,727 118,521 124,248 126,767 8,245 7.0% 2,519 2.0% Less: CFC Surplus (4,899) (5,561) (3,020) (7,142) 1,580 -22.1% (4,122) 136.5% Adjusted Non-Aero NOI 123,828 112,960 121,228 119,625 6,665 5.9% (1,603) -1.3% Debt Service (45,725) (45,136) (44,933) (45,341) 205 -0.5% (408) 0.9% Net Cash Flow 78,103 67,824 76,294 74,284 6,460 9.5% (2,010) -2.6% 2018 NOI increasing over 2017, but down from 2016 18 Non-Aero Revenue Per Enplanement Trend (2012-2018) $12 2017 Forecast increased $9.87 $9.88 $9.66 $9.70 $9.47 by one-time lump sum $10 $9.22 $9.33 $9.25 payment from DMCBP Phase II in-lieu fees. $8 Non-Aero Revenue per enplanement holds $6 steady in 2018 Budget, keeping pace with $4 expected 5% enplanement growth next year. $2 $0 2012 2013 2014 2015 2016 2017 2017 2018 Actuals Actuals Actuals Actuals Actuals Budget Forecast Budget Non-Aero Revenue per enplanement growth maintained 19 Aeronautical Business Revenues defined by cost recovery formulas in Signatory Lease and Operating Agreement (SLOA) Costs (capital and operating) drive revenues Capital costs (debt service or amortization of cash funded projects) are added to rate base when assets are placed into service 100% of airfield and 77% of terminal costs are recovered through airline rates and charges Employee screening function has added significant costs to airline rate base Most revenues are based on cost recovery formulas 20 Aeronautical NOI 2016 2017 2017 2018 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Revenues: Movement Area 94,725 109,845 108,950 124,583 14,738 13.4% 15,633 14.3% Apron Area 14,028 15,957 16,233 16,225 268 1.7% (9) -0.1% Terminal Rents 155,852 163,565 159,954 169,692 6,127 3.7% 9,738 6.1% Federal Inspection Services (FIS) 11,227 12,437 13,253 13,300 864 6.9% 48 0.4% Total Rate Base Revenues 275,832 301,803 298,389 323,800 21,997 7.3% 25,410 8.5% Commercial Area 9,379 9,665 10,042 10,212 547 5.7% 170 1.7% Subtotal before Revenue Sharing 285,211 311,468 308,431 334,012 22,543 7.2% 25,581 8.3% Revenue Sharing (37,395) (33,093) (38,557) (35,114) (2,021) 6.1% 3,442 -8.9% Other Prior Year Revenues (5) - - - - 0.0% - 0.0% Total Aeronautical Revenues 247,811 278,375 269,875 298,897 20,522 7.4% 29,023 10.8% Total Aeronautical Expenses 169,037 194,587 192,738 214,730 20,143 10.4% 21,993 11.4% Net Operating Income 78,774 83,788 77,137 84,167 379 0.5% 7,030 - 9.1% Debt Service (89,997) (88,740) (87,710) (91,964) (3,223) 3.6% (4,253) 4.8% Net Cash Flow (11,224) (4,953) (10,574) (7,797) (2,844) 57.4% 2,777 -26.3% Revenue growth driven by increased rate base costs 21 Aeronautical Cost Drivers Impact on Aero Impact on Aero Revenues Revenues 2016 2017 2017 2018 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % O&M (1) 165,427 190,645 189,029 208,477 17,832 9.4% 19,448 10.3% Debt Service Gross 118,641 117,336 116,298 119,432 2,096 1.8% 3,134 2.7% Debt Service PFC Offset (32,831) (33,099) (33,086) (33,015) 83 -0.3% 71 -0.2% Amortization 28,215 29,637 29,633 32,552 2,916 9.8% 2,919 9.9% Space Vacancy (2,638) (1,486) (2,219) (2,618) (1,132) 76.2% (400) 18.0% TSA Operating Grant and Other (982) (1,230) (1,267) (1,028) 202 -16.4% 239 -18.8% Rate Base Revenues 275,832 301,803 298,389 323,800 21,997 7.3% 25,410 8.5% Commercial area 9,379 9,665 10,042 10,212 547 5.7% 170 1.7% Total Aero Revenues 285,211 311,468 308,431 334,012 22,543 7.2% 25,581 8.3% O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses O&M costs driven by: 2018 budget reflects consultant recommendation to add 60 FTEs Full employee screening Utilities rates increase Janitorial costs increase CBP Reimbursable program O&M cost increases, many non-recurring, driving up airline costs 22 Cost Per Enplanement Trend (2012-2018) CPE trending up, but remains low compared to recent years 23 Current CPE Comparison CPE is competitive: SEA ranks 13 out of 30 Large Hub Airports 24 Budget Issues, Risks Non-aero Revenues: Budget assumes new parking revenue control system Will update budget for recent taxi/TNC guidance Rental car business - deterioration could increase Potential new costs relating to ILA with city of SeaTac are not in the budget Likely janitorial contract increase not fully in the budget 5% passenger growth Actively monitoring these open items 25 CAPITAL BUDGET 2018 - 2022 26 Capital Budget Summary Cash Flows (Figures in $000s) 2017 2018 - 22 Fcst 2018 2019 2020 2021 2022 Total Four Major Projects International Arrivals Facility 119,159 320,200 213,245 55,999 - - 589,444 NSAT 58,835 148,685 133,401 129,836 123,725 13,527 549,174 Baggage Optimization 17,992 40,000 50,000 50,000 50,000 60,000 250,000 South Satellite Renovation 1,107 1,200 12,000 30,000 79,368 79,368 201,936 Subtotal 197,093 510,085 408,646 265,835 253,093 152,895 1,590,554 Other existing projects 188,357 289,163 240,210 127,142 53,193 11,770 721,478 Proposed New Projects - 3,956 30,356 54,942 69,708 47,163 206,125 Existing Allowance CIPs 2,000 12,500 20,000 25,000 30,000 40,000 127,500 Proposed Allowance Increase - - 25,000 35,000 53,029 60,000 173,029 Total Proposed CIP 387,450 815,704 724,212 507,919 459,023 311,828 2,818,686 Four major projects account for $1.59 billion Proposing 28 projects totaling $206M spending through 2022 Proposing increase to Allowance CIPs (undesignated future spending) of $128M for a total of $301M through 2022 Budget does not include potential projects to be identified by Sustainable Airport Master Plan (SAMP) Undertaking major program before SAMP projects 27 Major Projects Cash Flows (Figures in $000s) 2018 - 2022 Major Projects CIP 2017 2018 2019 2020 2021 2022 Total Authorized International Arrivals Fac-IAF C800583 119,159 320,200 213,245 55,999 - - 589,444 NS NSAT Renov NSTS Lobbies C800556 58,835 148,685 133,401 129,836 123,725 13,527 549,174 Checked Bag Recap/Optimization C800612 17,992 40,000 50,000 50,000 50,000 60,000 250,000 SSAT Renovation Project* C800743 1,107 1,200 12,000 30,000 79,368 79,368 201,936 Restroom Upgrades Conc B, C, D C800697 1,552 4,367 5,639 7,429 9,137 4,603 31,175 Airfield Pavement Program C800483 1,149 14,200 12,300 4,526 - - 31,026 Concourse D Hardstand Holdroom C800769 6,926 30,000 872 - - - 30,872 ASL Conversion at Checkpoints C800920 365 6,471 23,000 163 - - 29,634 NS Main Terminal Improvements* C800545 - 2,000 10,000 10,000 6,833 - 28,833 Service Tunnel Renewal/Replace C102112 7,793 13,000 9,897 5,778 - - 28,675 Highline School Insulation C200007 18 1,982 19,949 3,389 - 977 26,297 Taxiway A,B,L,Q Improvements C800914 953 21,905 517 - - - 22,422 Other (126) 162,940 149,069 76,938 28,903 2,834 390 258,134 Total - Authorized 378,789 753,079 567,758 326,023 271,897 158,865 2,077,622 Pending Authorization C1 Building Floor Expansion* C800845 - 1,500 10,000 21,800 16,700 - 50,000 Condo Sound Insulation C200095 - 700 7,993 7,995 7,993 - 24,681 Elevators Modernization C800789 22 5,682 9,186 8,374 - - 23,242 New Projects Multiple - 3,956 30,356 54,942 69,708 47,163 206,125 Allowance CIPs 2,000 12,500 45,000 60,000 83,029 100,000 300,529 Other (33) 6,639 38,287 53,919 28,785 9,696 5,800 136,487 Total - Pending Authorization 8,661 62,625 156,454 181,896 187,126 152,963 741,064 Grand Total 387,450 815,704 724,212 507,919 459,023 311,828 2,818,686 * Cash flows and budgets are preliminary and may substantially change Much of 2018- 2022 spending for projects already authorized 28 Proposed New Projects Next # of Cost Cash Flows (Figures in $000s) 2018-22 Slide Projects Description Estimate 2018 2019 2020 2021 2022 Total I 8 Asset Management 111,603 2,107 9,524 23,527 24,868 19,757 79,783 II 6 Safety & Security 46,606 1,565 7,900 9,488 6,536 16,936 42,425 III 6 Business Need 41,948 284 5,191 13,389 13,821 9,264 41,949 IV 6 Customer Service 36,437 - 4,151 8,359 23,182 746 36,438 V 2 Grow Non-Aero Revenue 5,530 - 3,590 179 1,301 460 5,530 28 TOTAL 242,124 3,956 30,356 54,942 69,708 47,163 206,125 Major new projects include: Airfield pavement replacement: $72.6 million Main Terminal sprinkler/smoke control: $28.5 million Employee parking bus purchase: $18.1 million Stormwater pond bird deterrent improvements: $11.4 million Utility meter networking: $10.3 million The proposed projects do not include projects that will come out of SAMP. Asset management is a key driver for new projects 29 Capital Capacity and CPE Policy guidance is to maintain competitive CPE (middle third of large hub airports) Allowance CIPs have been depleted due to cost increases and new projects Current Allowance CIPs likely not adequate for: Ongoing renewal and replacement Customer needs Implementation of sustainable airport master plan (SAMP) Proposal: Increase Aeronautical Allowance CIP, while maintaining CPE at $18 through 2022 For 2023 2027, increase Allowance CIP to achieve annual debt service coverage of at least 1.25x Continue to explore public, private partnership (P3) possibilities Need to grow non-aero revenues and manage growth of O&M Increased capital spending drives increase in future CPE 30 Proposed Allowance Increase 2018 - 2022 2023-2027 Allowance Spending Current Proposed r Current Proposed r in $000s 127,500 300,529 173,029 131,477 506,411 374,934 CPE - 2022 & 2027 17.60 18.00 0.40 18.74 20.28 1.54 2018 2022: Maintain maximum $18 CPE Allowance CIPs can increase by $173M CPE increases by $0.40 to $18 2023 - 2027: Achieve debt service coverage of at least 1.25x Allowance CIPs can increase by $375M CPE increases by $1.54 to $20.28 Proposed increase allows for ongoing renewal / replacement costs and future customer service needs Allowance likely still not sufficient to cover early SAMP costs Majority of SAMP projects would hit rate base (and CPE) after 2027 Allowance increase would make for more realistic future capital budget 31 Financial Forecast with Allowance Increase In $000's 2017 Bud 2018 Bud 2019 2020 2021 2022 Airline Revenue 278,375 298,897 360,250 403,123 461,515 483,917 Non-Airline Revenue 226,645 243,511 245,807 248,638 252,882 259,326 Total Revenue 505,020 542,408 606,057 651,762 714,397 743,244 Operating Expense 302,711 331,474 349,201 367,041 385,621 401,199 Net Operating Income 202,309 210,934 256,856 284,721 328,776 342,044 Net Non-Operating Income/Expense 3,691 4,406 4,422 4,644 4,867 5,099 CFC Excess* (5,561) (7,142) (5,117) (4,467) (3,805) (4,052) Available for Debt Service 200,439 208,198 256,161 284,897 329,838 343,091 Net Debt Service 133,876 138,467 184,444 213,984 261,921 271,957 Net Cash Flow 66,562 69,731 71,717 70,913 67,917 71,134 Key Measures Debt Service Coverage 1.50 1.50 1.39 1.33 1.26 1.26 Revenue Sharing 33,093 35,114 25,606 17,418 2,437 3,145 Passenger Airline CPE 10.88 11.27 13.59 15.15 17.28 18.00 Debt per Enplaned Passenger 110.44 115.79 135.20 148.30 158.85 161.27 * CFC collection in excess of CFC debt service/O&M is restricted and cannot be used for other revenue bond debt service Forecasting increase in CPE and reduction in debt service coverage and revenue sharing 32 2018 Preliminary Budget Maritime Division Commission Briefing October 10, 2017 33 2018 Budget Objectives Customer service focus in all the business lines. Increase revenues and meet LRP and Century Agenda goals. Demonstrate outstanding stewardship of assets while contributing to larger Port initiatives. Improve the waterside habitat in the Puget Sound. Ambitious initiatives and financial stewardship 34 Maritime Organizational Structure Departments included Lines of Business in P&L Fishing & Operations Fishing & Operations Cruise Cruise Recreational Boating Recreational Boating Grain Grain Habitat and Parks Habitat and Parks Maritime Marketing Maritime Portfolio Management Maritime Division Management Maritime Security Marine Maintenance Maritime Environmental Maritime Finance Note: Stormwater Utility in separate deck Maritime Division evolving as a matrixed organization 35 2018 Key Budget Assumptions Cruise forecasts 1,080,527 passengers, a 3.1% increase from 2017 due to bigger ship sizes, despite fewer sailings. Grain volume at 4.15 million metric tons per forecast from tenant, 11% increase over 2017 budget. Shilshole Bay occupancy rate average of 95%, Bell Harbor Marina at 81%, and Harbor Island Marina at 94%: consistent with 2017. Fishing and Commercial Operations occupancy rate average of 86%, above 2017 budget of 84%. Commercial building properties target 95% occupancy at year-end 2018 consistent with current results. Maritime businesses to continue strong results 36 Department Revenues By Group Maritime Division Only 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Bulk / Grain 5,358 4,506 5,334 5,161 655 15% (173) -3% Cruise 15,355 16,459 16,558 17,985 1,526 9% 1,428 8% Fishing & Commercial Operations 8,983 9,068 8,884 8,325 (743) -8% (559) -7% Maintenance 1,001 383 399 982 599 156% 583 59% Recreational Boating 10,253 11,077 11,034 11,726 649 6% 693 6% Total Maritime 40,951 41,493 42,208 44,179 2,686 6% 1,972 4% Bulk (Grain Terminal) 2018 budget based on preliminary guidance from Louis Dreyfus. Cruise Operations increase due to estimated 3.1% passenger increase and increase in tariff rates. Fishing and Operations decrease driven by 20% reduction of net sheds and WSDOT lease expiration. Maintenance revenue generated from direct reimbursement of existing tenants. Recreational boating includes a 5% preliminary tariff increase. Cruise business driving 6% Maritime division revenue increase in 2018 37 Department Expenses by Group $ in 000's Budget Forecast Budget $ % $ % Bulk 64 52 74 10 0% 22 -1% Cruise 1,412 869 2,511 1,099 78% 1,642 65% Total Maritime Expenses grow by Fishing & Commercial Operations 4,635 4,487 4,964 329 7% 477 10% Mantenance 17,586 17,594 19,300 1,714 10% 1,707 9% 9% or $3.3M with $2.5M of that Rec Boating 3,181 3,067 3,610 429 13% 542 15% Maritime Admin 524 517 485 (38) -7% (31) -6% attributed to Cruise Port Valet & Maritime Marketing 342 376 363 21 6% (13) -4% Maritime Habitat Initiatives 0 0 0 0 NA (0) Habitat program increases. Parks, Env. Remediation, Other 180 537 147 (32) -18% (389) -264% Maritime Baseline 27,923 27,499 31,454 3,531 13% 3,955 13% Without these two programs Initiatives and One -Time Items expenses grew 2.2%. Cruise 2,248 2,898 3,100 852 202 Fishing & Commercial Operations 41 41 15 (26) (26) Mantenance 3,802 3,802 1,924 (1,878) (1,878) Rec Boating increase driven by full Rec Boating 165 165 312 147 147 Maritime Admin 10 10 30 20 20 year of 2017 2 new FTEs and 3 new Maritime Marketing 142 142 45 (97) (97) Maritime Habitat Initiatives 711 711 711 2018 FTEs. Maritime Initiatives 6,408 7,058 6,137 (271) (921) Total 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Bulk 75 64 52 74 10 16% 22 -1% Cruise 2,584 3,660 3,767 5,611 1,951 53% 1,844 33% Fishing & Commercial Operations 4,209 4,676 4,528 4,979 303 6% 451 9% Mantenance 18,582 21,388 21,396 21,224 (164) -1% (171) -1% Port of Seattle Properties 15,552 17,660 18,175 17,160 (500) -3% (1,015) -6% StormWater Utility 1,032 1,847 1,901 2,708 861 47% 807 30% Northwest Seaport Alliance 1,998 1,881 1,936 1,356 (525) -28% (580) -43% Rec Boating 2,913 3,346 3,232 3,922 576 17% 689 18% Maritime Admin 484 534 527 515 (18) -3% (11) -2% Maritime Marketing 353 484 518 408 (76) -16% (110) -27% Maritime Habitat Initiatives 0 0 0 711 711 100% Parks, Env. Remediation, Other 319 180 537 147 (32) -18% (389) -264% Total Maritime 29,519 34,331 34,557 37,592 3,261 9% 3,034 9% Organic expense growth of 2.2% compared to 2017 38 Cruise Initiatives & One-Time Expenses $ in 000's '18-'17 2017 Budget 2018 Budget Change New Requests / Initiatives Port Valet Program 200 2,000 1,800 Downtown Seattle Shuttle Pilot Program 250 250 1.0 FTE - Cruise Marketing Representative 100 100 One-Time T91 Resurfacing Projects 405 0 (405) Cruise Facility Design Consultant 300 750 450 Best in Class Initiative 300 (300) Destination Awareness Initiative 157 (157) Marketing Study - Feasibility of new Cruise Berth 100 (100) CTA Allowance 180 (180) CHI Guaranteed Income 378 (378) CHI Relocation Costs 0 0 Mitigation Funds for CEC 125 (125) Leaseback of P66 from NCLH 104 (104) CTA Lease Buyout 0 0 Total 2,248 3,100 852 Focus on Pier 66 expansion and Century Agenda 39 Recreational Boating Initiatives & One-Time Expenses $ in 000's '18-'17 2017 Budget 2018 Budget Change New Requests Customer Service Supervisor 90 90 Harbor Asset Coordinator 68 68 Harbor Accountant Business Analyst 75 75 Registration/Seminar Fees 35 35 Contracted Janitorial Service 24 24 Seabins 20 20 Replace dock carts and needed equipment on dock 27 (27) Customer amenities at Shilshole 19 (19) Work process and Workstation improvement 22 (22) Additional overnight sercurity contract service 65 (65) Other 33 (33) Total 165 312 147 Focus on improved security and customer service 40 Marine Maintenance One-Time Expenses $ in 000's 2018 Budget % New Requests - One-Time or Phased Work Recreational Boating 510 26% Facilities P69 425 22% Maritime Portfolio Management 257 13% Portfolio Management 234 12% Cruise Operations 220 11% Fishing and Operations 207 11% Maintenance 41 2% Parks 21 1% NH Lease and Asset Management 10 1% Total 1,924 100% Focus on improving water quality, aging port infrastructure 41 Additional 2018 Initiatives & One-Time Expenses $ in 000's New Requests 2018 Budget Fishing and Operations Tables and Chairs 15 Habitat FTE Transfer (From Env & Sustainability) 186 PORTfolio corrective actions 50 PORTfolio planning services 55 Umbrella mitigation banking agreement 85 Carbon sequestration kelp study (Habitiat) 100 Carbon sequestration kelp study (Maritime) 175 Maritime Marketing Seattle Boat Show @ Bell Harbor Marina 20 Shilshole Bay Marina Customer Outreach 10 Fishermen's Terminal Strategic Plan Outreach & Branding 8 Shilshole Bay Pole banners 7 Maritime Admin Travel for New Managing Director Outreach 30 Total 741 Additional investment in environmental and customer service 42 Maritime Department Expense Budget Maritime Division Expenses Only 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Salaries 5,738 6,484 6,332 7,163 679 11.8% 831 13.1% Benefits 2,073 2,732 2,644 3,051 320 15.4% 407 15.4% Wages & Benefits 10,601 13,289 13,297 12,469 (820) -7.7% (827) -6.2% Other Post Employment Benefits 47 44 46 33 (11) -23.6% (13) -27.6% Salaries & Wages to Cap, Non-op, ERL (491) (407) (407) (523) (116) 23.6% (116) 28.5% Total Payroll Costs 17,968 22,141 21,911 22,193 52 0.3% 282 1.3% Net Payroll Exp (net of to capital,Non-op) 18,459 22,548 22,318 22,716 168 0.9% 398 1.8% Utilities 3,465 3,527 3,583 3,754 227 6.5% 170 4.8% Equipment Expense 1,302 1,320 1,130 1,243 (77) -5.9% 113 10.0% Maint Materials and Vehicle Parts 1,502 1,594 1,584 1,930 336 22.4% 346 21.9% Outside Services 3,104 3,613 3,997 6,263 2,650 85.4% 2,266 56.7% Travel & Other Employee Exp 249 353 354 448 95 38.1% 94 26.7% Promotional Expenses 114 336 232 279 (57) -49.8% 47 20.5% Workers Comp 328 269 269 264 (5) -1.4% (5) -1.9% Other O&M 1,486 1,178 1,497 1,217 39 2.6% (280) -18.7% Total Budget 29,519 34,331 34,557 37,592 3,261 9.5% 3,034 8.8% Increased expense in 2018 from Port Valet program and Habitat initiatives 43 Full-Time Equivalents (FTEs) 2017 Budget 162.3 2017 Changes Transfer FTE Transfer from Env. & Sustainability for Habitat 1.0 Mid-Year Hires Limited Duration Materials and Inventory Specialist 1.0 Adjusted 2017 164.3 2018 Budget Staff Addition/Subtraction: Cruise Marketing Rep 1.0 Harbor Asset Coordinator 1.0 Customer Service Supervisor 1.0 Harbor Accountant Business Analyst 1.0 College Intern for Marketing -0.3 Net Change 3.8 Proposed 2018 Budget 168.1 Note: 2017 budget adjusted up one FTE due change in Marine Maintenance methodology Objective: Grow cruise, create habitat, improve customer service 44 Maritime Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Incr (Decr) Incr (Decr) 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Revenues Operating Revenues 50,810 51,830 52,614 54,622 2,792 5.4% 2,008 3.8% Total Revenues 50,810 51,830 52,614 54,622 2,792 5.4% 2,008 3.8% Expenses Maritime Expenses (Excl. Maintenance) 10,853 12,791 13,162 15,077 2,286 17.9% 1,915 14.5% Maintenance Expenses 9,900 11,439 11,443 11,260 (180) -1.6% (184) -1.6% Envir Services & Planning 1,358 1,701 1,702 2,168 467 27.5% 466 27.4% Econ Dev Expenses 3,787 4,604 4,257 4,551 (53) -1.2% 294 6.9% Capital Development Expenses 1,010 1,177 953 1,077 (100) -8.5% 123 12.9% Police Expenses 3,921 3,867 3,751 4,209 342 8.8% 458 12.2% IT 2,433 2,893 2,865 2,858 (36) -1.2% (7) -0.2% Public Affairs 1,099 1,483 1,439 1,528 45 3.0% 89 6.2% Other Corporate Expenses 5,744 6,355 6,085 6,170 (186) -2.9% 85 1.4% Stormwater Utility (0) 0 1 0 0 NA (1) -100.0% Aviation 177 192 192 192 0 0.2% 0 0.2% NWSA / Joint Venture (16) 0 1 0 0 NA 0 0.0% Operating Expenses 40,268 46,502 45,850 49,088 2,586 5.6% 3,239 7.1% Net Operating Income 10,542 5,327 6,764 5,533 206 3.9% (1,230) -18.2% Maritime improving services and growing NOI 45 Maritime Division Capital Budget 2018-2022 46 Maritime 2018 Capital Budget Capital Budget Summary By Status $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Commission Authorized/Underway 27,318 27,393 11,778 12,295 78,784 Pending 2017/2018 Authorization 23,787 32,559 6,210 62,556 Pending Future Authorization 2,575 9,098 13,930 11,150 23,020 59,773 Small Capital and Other 4,310 3,465 3,127 1,825 1,775 14,502 Total 57,990 72,515 35,045 25,270 24,795 215,615 Overall 2018-2022 dollar amount of projects at ~$216M, funding capacity for future projects not yet determined 47 Maritime 2018 Capital Budget Commission Authorized/Underway $'s in 000's 2018 2019 2020 2021 2022 2018-2022 FT Strategic Plan 1,700 10,000 10,000 12,295 33,995 Restoration 10,100 7,000 1,748 18,848 P66 Exterior Modernization 2,300 10,150 30 12,480 SBM Restrooms/Service Buildings Replacement 6,818 6,818 P91 South End Fender 3,425 3,425 T91 Camel Replacements 926 926 Cruise Terminal Tenant Improvement 900 900 SBM Pad Site Developement 400 400 Marina Mgt Sys Replacement 276 276 FT Net Shed 3,4,5 & 6 Roof Replacement 220 220 Cruise Allowance - CTA Lease 200 243 443 T91 Building C-173 Roof Overlay 53 53 Total 27,318 27,393 11,778 12,295 - 78,784 Note: Includes projects where some portion of the budget is authorized by Commission Approved projects focused on P66 Cruise Terminal, FT, and SBM buildings 48 Maritime 2018 Capital Budget Pending 2017/2018 Authorization $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Maritime Property Acquisition 14,600 17,400 32,000 HIM ABCDE Dock 500 5,870 6,000 12,370 FT Dock 3,4,5 Fixed Pier Improvement 2,380 3,859 6,239 Second Gangway per Berth @ T91 450 4,030 10 4,490 Maritime Video Camera Project 2,000 1,200 3,200 SBM Paving 1,572 1,572 T91 P91W Slope Stabilization 700 700 C15 Building Tunnel Improvement 700 700 FT C15 Window Replacement 675 675 SBM Office Reconfiguration 200 200 200 600 BSCT Imp Staff Oversight 10 10 23,787 32,559 6,210 - - 62,556 Pending projects tied to existing facility improvements 49 Maritime 2018 Capital Budget Pending Future Authorization $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Duwamish Mooring Dolphins 425 1,875 2,300 FT S Wall Wt End Improvements 55 595 1,024 1,674 P66 Cruise Term Roof Fall Prct 50 292 342 C3 West Wall Bldg Roof Replace 25 732 11 768 FT W Wall N Sht Pile Crsn Protection 10 1,754 1,120 2,884 FT W Wall N Fender Replacement 10 1,480 1,560 3,050 BHM Pile Wraps 350 3,000 3,350 FT W Wall S Sht Pile Cor Protection 10 200 1,000 1,000 2,210 FT S Wall Cl Fender Rp & Cor Prt 10 190 4,150 8,950 13,300 SBM Lower A Dock Improvement 825 825 MIC West & Central Piers Resurface 70 70 Contingency Renewal & Replace 2,000 2,000 6,000 6,000 13,000 29,000 2,575 9,098 13,930 11,150 23,020 59,773 Capital pending future authorization 50 Maritime 2018 Capital Budget Small Projects $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Small Projects 2,290 2,005 1,565 500 500 6,860 Fleet Replacement 1,770 1,210 1,312 1,075 1,025 6,392 Technology Projects 250 250 250 250 250 1,250 4,310 3,465 3,127 1,825 1,775 14,502 Future: Both small and major projects 51 Stormwater Utility 2018 Budget Review Commission Review October 10, 2017 Stormwater Utility Budget Summary Department Only 2016 2017 2017 2018 Budget Change $ in 000's Actual Budget Forecast Budget $ % Revenue 4,751 4,955 4,953 5,339 384 7.75% Expenses Administrative Expenses (1 FTE) 22 137 135 134 (3) -2.4% Equipment Expense 19 1 0 1 (0) -9.1% Consultant Services 123 269 219 357 88 32.7% B&O Taxes & City Utilities Taxes 375 644 386 377 (268) -41.5% ERL Risk 267 267 NA Other Expense 1 5 4 24 19 399.0% Total Operating Expenses 540 1,056 745 1,159 103 9.8% Income From Operation 4,211 3,900 4,208 4,180 281 7.2% Port of Seattle SWU rate growth is about half the City of Seattle over past 4 years. 60% revenue from tenant areas of NWSA, Maritime, Economic Development Divisions. 40% revenue from Non-Tenant areas of NWSA, Maritime, Economic Development Divisions. Rate growth based on Steering Committee Recommendation 53 Stormwater Utility Budget Summary 2016 2017 2017 2018 Budget Change $ in 000's Actual Budget Forecast Budget $ % Revenue 4,751 4,955 4,953 5,339 384 8% Operating Expenses Stormwater Utility Expenses 540 1,056 745 1,159 103 9.8% Maintenance Expenses 1,032 2,260 2,260 3,413 1,153 51.0% Environmental & Sustainability 99 168 168 237 69 41.2% EDD Expenses 0 32 32 18 (14) -43.5% CDD Expenses 29 58 58 49 (9) -15.4% Corporate Expenses 2 419 419 724 305 72.8% Total Operating Expenses 1,702 3,993 3,681 5,600 1,608 40.3% Net Operating Income 3,049 963 1,271 (261) (1,224) 2017 was the first year of support / allocation expenses applied to the division. In 2018 support / allocation expenses align more closely with actual time spent. Stormwater Utility fulfilling commitments in 2018 54 Stormwater Utility Capital Budget Summary $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Commission Authorized/Underway - - - - - - Pending 2016/2017 Authorization 1,550 1,500 1,942 500 500 5,992 T18 Stormwater outfalls renew/replace 1,050 1,000 1,442 - - 3,492 Portwide Stormwater Sys Renewal 500 500 500 500 500 2,500 - Pending Future Authorization - - 500 1,500 1,500 3,500 SWU Contingency - - 500 1,500 1,500 3,500 - Small Capital Projects 150 150 150 150 150 750 1,700 1,650 2,592 2,150 2,150 10,242 Stormwater Utility to begin improving system in 2018 55 2018 Preliminary Budget Economic Development Division Commission Briefing October 10, 2017 2018 Budget Objectives Advance real estate development projects that create quality jobs and support key Port clusters. Invest in workforce development partnerships that create a talent pipeline for local employers. Create opportunities for small disadvantaged businesses and companies within key Port industries. Drive tourism opportunities and impacts throughout Washington state. Promoting Equitable Impactful Economic Development 57 EDD Organizational Structure Departments included Lines of Business in P&L Portfolio Management Portfolio Management Maritime Portfolio Management Real Estate Development Real Estate Development Pier 69 Facilities Pier 69 Facilities Tourism Tourism Small Business Small Business Workforce Development Workforce Development Economic Development Division Evolving as an Organization 58 Key Assumptions Commercial Properties target 95% occupancy at year-end 2018. Conference and Event Center revenue up 19% from 2017 budget. Economic Development Partnership Grants continued. Continued funding of Workforce Development. Tourism Grants Continued. Near full occupancy, continued WFD and Grant initiatives 59 Department Revenues By Group Economic Development Division Incr (Decr) Incr (Decr) 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Revenue Portfolio & Asset Management 25,900 26,535 27,066 29,267 2,732 10.3% 2,201 8.1% Central Harbor Mgmt Group 7,743 8,015 8,303 8,647 632 7.9% 344 4.1% Conference & Event Centers 8,000 7,917 8,074 9,495 1,578 19.9% 1,421 17.6% Foreign Trade Zone Program 30 30 30 30 0 0.0% 0 0.0% Marina Office & Retail* 3,904 3,998 3,896 4,115 117 2.9% 219 5.6% Maritime Industrial* 6,222 6,575 6,763 6,980 405 6.2% 217 3.2% Total Revenue 25,900 26,535 27,066 29,267 2,732 10.3% 2,201 8.1% * Subcla s s under Ma ritime Divis ion Near full occupancy and improving Conference & Event revenue 60 Department Expenses By Group Economic Development Division Incr (Decr) Incr (Decr) 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Operating Expenses Portfolio Management 14,079 16,150 15,291 16,147 (4) 0.0% 856 5.6% Central Harbor Mgmt Group 3,410 3,957 3,453 3,347 (609) -15.4% (106) -3.1% Conference & Event Centers 6,932 7,935 7,813 8,465 530 6.7% 653 8.4% Foreign Trade Zone Program 7 9 2 8 (1) -10.8% 6 277.3% Portfolio Mgmt Admin 912 996 975 1,038 41 4.1% 63 6.5% Marina & Office Retail* 937 1,281 1,052 1,354 73 5.7% 302 28.7% Maritime Industrial Properties* 1,880 1,971 1,996 1,934 (37) -1.9% (63) -3.1% Development & Planning 870 1,277 1,004 759 (519) -40.6% (246) -24.5% Small Business 356 708 602 1,273 565 79.9% 671 111.3% Workforce Development 1,483 2,962 1,714 2,917 (45) -1.5% 1,203 70.2% Tourism 1,093 1,285 1,303 1,360 75 5.8% 57 4.4% Facilities 1,567 1,775 1,545 2,033 258 14.5% 487 31.5% Division Admin 640 2,534 1,796 2,253 (281) -11.1% 457 25.5% Envir Remed Exp/Other 67 - 1 - 0 NA (1) -100.0% Total Operating Expenses 20,155 26,691 23,256 26,740 49 0.2% 3,484 15.0% * Subcla s s under Ma ritime Divis ion Expense growth focused on expediting Century Agenda 61 Economic Dev Division Department Expense Budget 2017 2018 Incr (Decr) $ in 000's Budget Budget Change % Explanation Baseline Budget Salaries 3,526 3,453 (74) -2.1% Benefits 1,395 1,374 (21) -1.5% OPEB 21 18 (3) -12.1% Salaries & Wages to Cap, Non-op,ERL 0 0 0 NA Total Payroll Costs 4,942 4,845 (97) -2.0% Net Payroll Exp (Net of to Capital,Non-op,ERL) 4,942 4,845 (97) -2.0% Conf & Event Activity Op Expense 6,953 7,721 768 11.0% Related to higher Revenue Conf & Event Activity Management Fee 320 376 56 17.6% Related to higher Revenue Conf & Event Activity - Furn & Equip Acq 157 283 125 79.6% WTC Seattle refresh in 2017 Travel & Other Employee Expense 301 340 39 13.1% Other O&M 6,562 6,449 (112) -1.7% Total Baseline Budget 19,235 20,014 780 4.1% Initiatives Tenant Improve, Broker Fees,Space Plan 925 610 (315) -34.0% WTC Seattle Interior Refresh 400 0 (400) -100.0% Pier 69 Facilities 200 491 291 145.5% Detail on following slide Small Business 305 440 135 44.3% Detail on following slide Workforce Development 2,620 2,560 (60) -2.3% Detail on following slide Tourism 717 755 38 5.3% Detail on following slide RE Development & Planning 600 250 (350) -58.3% Detail on following slide EDD Division Admin 1,690 1,620 (70) -4.1% Detail on following slide Total 7,457 6,726 (731) -9.8% Total Operating Expenses 26,691 26,740 49 0.2% Envir Remediation Liability 0 0 0 NA Total Expenses 26,691 26,740 49 0.2% Conference and Event Center driving baseline expense growth 62 Pier 69 Facilities 2018 Initiatives $ in 000's 2017 Budget 2018 Budget P69 Lobby Refresh expense portion 200 0 Lobby & Commission Chambers furniture 0 200 Lobby & Commission Chambers Exp Portion 0 150 Interior design 0 50 Reinstate Full Security Coverage 0 91 Total 200 491 ADA furniture, carpeting, and commission chamber refresh 63 Small Business 2018 Initiatives $ in 000's '18-'17 2017 Budget 2018 Budget Change New Requests WMBE Best Practice and Implementation 0 50 50 Champion of Inclusion Recognition Event 0 20 20 Procurement Technical Assistance 0 15 15 Continuing Construction Business Incubator 100 150 50 Business Development Consulting 100 100 0 Small Business Training 75 75 0 Marketing/ Communication/Design Services 15 15 0 OMWBE Certification 15 15 0 Total 305 440 135 Increased efforts to develop and assist in Small Business 64 Workforce Development 2018 Initiatives $ in 000's '18-'17 2017 Budget 2018 Budget Change Continuing Airport Career Pathways Implementation 250 250 0 Maritime Initiative 250 250 0 Construction Trades - Regional Partnership Services, Pre-Ap 710 710 0 Airport Employment Center 450 500 50 Airport Employment Center and Classroom 350 350 0 Employment Continuity Pool Program 150 75 (75) K-12 Career Connected Learning* 200 400 200 Workforce Dev. - General Services 10 25 15 Not Funded in 2018 High School Career Exploration and Intern Program Development* 150 0 (150) Post Initial Budget WFD addition 100 0 (100) * categorized under K-12 Career Connected Learning above Total 2,620 2,560 (60) Increased efforts in Workforce Development 65 Tourism 2018 Initiatives $ in 000's '18-'17 2017 Budget 2018 Budget Change New Requests Fishermen's Terminal Advertising 0 5 5 WeChat Sea-Tac Airport - Pilot 0 20 20 Cruise Coupon Offering - Pilot 0 20 20 Continuing CORE Communication 245 260 15 Visit Seattle 165 150 (15) Tourism Grants 150 150 0 Tourism Development 39 39 0 World Travel Market Trade show - London 25 26 1 Familiarization Tour 43 45 2 Additional Marketing Cruise and Stay 35 25 (10) New Carrier Inaugural Activities 15 15 0 Total 717 755 37 New requests focused on expanding tourism 66 Real Estate Development 2018 Initiatives '18-'17 $ in 000's 2017 Budget 2018 Budget Change Ongoing/Reductions Consulting - Property Acquisitions 100 0 (100) Consulting - Finance 150 0 (150) Consulting - Infrastructure 150 0 (150) Consulting - Property Development 100 0 (100) Appraisals 100 50 (50) Development Advisory Consulting - Aviation 0 80 80 Development Advisory Consulting - Non-Aviation 0 120 120 Total 600 250 (350) Initiatives centered on executing RE Strategic Plan 67 EDD Admin 2018 Initiatives '18-'17 $ in 000's 2017 Budget 2018 Budget Change Ongoing/Reductions ED Partnership Grants 960 960 0 Membership: Economic Dev Council 100 100 0 RE Plan Outreach 50 0 (50) Promotional Hosting/Sponsorships 80 60 (20) Opportunity Fund 500 500 0 Total 1,690 1,620 (70) Continuation of ED Partnership Grants & additional public partnerships 68 Full-Time Equivalents (FTEs) 2017 Budget 36.0 2017 Changes Analyst transferred to Strategic Initiatives (1.0) Adjusted 2017 35.0 2018 Budget Staff Additions: None Net Change 0.0 Proposed 2018 Budget 35.0 Net decrease of 1 FTE 69 Economic Development Budget Summary Inclusive of Direct Charges & Allocations from Corporate, CDD, & Other Divisions Incr (Decr) Incr (Decr) 2016 2017 2017 2018 Budget Change Budget to Forecast $ in 000's Actual Budget Forecast Budget $ % $ % Revenues Operating Revenues 7,880 8,088 8,331 8,985 898 11% 654 8% Conf & Event Ctr Revenue 8,022 7,943 8,074 9,537 1,594 20% 1,462 18% Total Revenues 15,902 16,030 16,405 18,522 2,492 16% 2,117 11% Expenses Econ Dev Exp (excl P69,Conf, SB, WFD, Tour) 4,660 6,837 5,606 6,163 (675) -10% 556 10% Conf & Event Ctr Expense 6,932 7,935 7,813 8,465 530 7% 653 8% Small Business 21 161 161 127 (33) -21% (33) -21% Workforce Development 522 1,999 1,159 1,992 (7) 0% 833 72% Tourism 1,093 1,285 1,303 1,360 75 6% 57 4% Maintenance Expenses 2,783 3,592 3,592 3,054 (538) -15% (538) -15% P69 Facilities 180 234 219 289 54 23% 70 32% Maritime Expenses 31 64 64 344 280 441% 280 441% Environmental & Sustainability 61 451 311 398 (53) -12% 87 28% CDD Expenses 212 439 413 310 (130) -30% (103) -25% Police Expenses 157 173 171 158 (15) -9% (12) -7% Corporate Expenses 4,329 5,899 5,722 5,935 37 1% 214 4% Envir Remediation Liability 0 0 0 0 0 NA 0 NA Operating Expenses 20,982 29,069 26,533 28,595 (474) -2% 2,062 8% Net Operating Income (5,080) (13,039) (10,127) (10,073) 2,966 23% 54 -1% Increased Revenue driving improved NOI 70 Economic Development Division Capital Budget 2018 - 2022 71 Economic Development 2018 Capital Budget Capital Budget Summary By Status $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Commission Authorized/Underway 3,476 4,201 20 7,697 Pending 2017/2018 Authorization 5,575 18,200 25,700 3,000 3,000 55,475 Pending Future Authorization 1,365 3,498 3,000 3,000 3,000 13,863 Small Capital and Other 962 880 1,080 1,080 1,080 5,082 11,378 26,779 29,800 7,080 7,080 82,117 2018 2022 dollar amount of projects at ~$82M, funding capacity for future projects not yet determined 72 Economic Development 2018 Capital Budget Commission Authorized/Underway $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Bell Harbor Conference Center Interior Modernization 2,460 4,201 20 6,681 P66 Elevator 2,3,4 Upgrades 996 996 T102 Bldg Roof HVAC Replacement 20 20 3,476 4,201 20 - - 7,697 Projects approved by Commission and in progress 73 Economic Development 2018 Capital Budget Pending 2017/2018 Authorization $'s in 000's 2018 2019 2020 2021 2022 2018-2022 T91 Uplands Development 1,000 5,000 18,000 3,000 3,000 30,000 P66 HVAC Systems Upgrade 1,000 9,800 7,000 17,800 Central Waterfront Elevator Modernizations 650 1,400 700 2,750 P69 Exterior & Lobby Improvements 1,500 1,000 2,500 P69 Solar Panel System 350 1,000 1,350 P69 West End HVAC Modernization 675 675 T-102 Outdoor Lighting 400 400 5,575 18,200 25,700 3,000 3,000 55,475 Focus on Bell Harbor and T-91 development 74 Economic Development 2018 Capital Budget Pending Future Authorization $'s in 000's 2018 2019 2020 2021 2022 2018-2022 World Trade Center HVAC Replacement 215 1,385 1,600 P66 Anthony's Mechanical Roof 100 650 750 Bell Harbor Conference Center Roof Fall Protection 50 463 513 Contingency Renew & Replace 1,000 1,000 3,000 3,000 3,000 11,000 1,365 3,498 3,000 3,000 3,000 13,863 Held to cover future unknown capital needs 75 Economic Development 2018 Capital Budget Small Projects $'s in 000's 2018 2019 2020 2021 2022 2018-2022 Small Capital Projects 382 300 500 500 500 2,182 Tenant Improvements - Capital 300 300 300 300 300 1,500 Technology Projects 250 250 250 250 250 1,250 Fleet Replacement 30 30 30 30 30 150 962 880 1,080 1,080 1,080 5,082 Projects centered on tenant improvements and building upkeep 76 2018 Preliminary Budget Appendix AVIATION APPENDIX Additional 2018 Budget Materials 78 Table of Contents Details of new FTE requests Cost trends 2015 - 2018 Details for cost reductions and increses 2018 operating budget requests details Capital budget requests - details Details for operating and capital budget requests are in this appendix 79 New FTE Position List 2018 Proposed Budget FTEs FTEs 2018 Proposed Budget FTEs FTEs New FTE's for 100% Employee Screening 18.00 Maintenance FTE's 16.00 Shift Supervisor - Custodial Services 1.00 Landside FTE's 5.00 AVM Small Works Project Coordinator 1.00 Landside Development Manager 1.00 Carpenter 1.00 Landside Supervisors 2.00 Painter 1.00 Employee Parking Bus Drivers 2.00 Electronic Technician 2.00 Commercial Management FTE's 2.00 Wireman - PLB/GSE 2.00 Sr Property Manager, GT 1.00 Wireman - Capital Project Plan Review 2.00 AV Conference Center Assistant 1.00 AVM Mechanical Systems/Boiler staff 6.00 Airport Operations FTE's 6.00 Finance & Budget FTE's 2.00 Certification (AOS) 2.00 Manager, Grants & Capital Program 1.00 Airport Duty Manager - Airfield 1.00 Sr Admin Assistant 1.00 Senior Operations Controller (SOC) 1.00 Fire Department FTE's 2.00 Airport Duty Manager - Terminal 2.00 Fire Protection Engineer 1.00 Capital Development/Facilities & Infrastructure FTE's 4.00 Firefighter - Construction Inspector 1.00 Utility Program Manager 1.00 Airport Innovation 2.00 Sr Admin Assistant 1.00 Airline and Passenger System Specialist 1.00 Manager, Asset Manager 1.00 Indoor Navigation and Innovation Specialist 1.00 Manager, Civil/Structural Infrastructure Systems 1.00 AV Environmental/Sustainability FTE's 1.00 New Intern FTE's - College/Graduate 1.25 Environmental Review and Permitting 1.00 Customer Service FTE's 1.00 Marketing - Customer Service 1.00 2018 Proposed New FTEs: 60.25 New FTEs driven by Security, Operations and Maintenance 80 Cost Trends 2018 2017 2015-2018 2015 2016 2017 2017 2018 Budget Change Budget vs Forecast Change $ in 000's Actual Actual Budget Forecast Budget $ % $ % % AV Operations 44,278 46,316 38,032 38,032 42,076 4,044 10.6% 4,044 10.6% -5.0% AV Maintenance 56,704 63,692 75,960 74,797 81,831 5,871 7.7% 7,035 9.4% 44.3% Security 7,794 8,171 15,810 16,642 17,826 2,016 12.8% 1,183 7.1% 128.7% Fire Department 12,762 14,949 15,043 14,085 15,945 902 6.0% 1,860 13.2% 24.9% Commercial Management 7,508 8,364 11,754 8,880 13,956 2,202 18.7% 5,077 57.2% 85.9% Utilities 14,458 15,299 16,472 16,357 18,490 2,018 12.3% 2,132 13.0% 27.9% Aviation Support departments 23,047 22,889 29,060 36,390 32,431 3,371 11.6% (3,959) -10.9% 40.7% Total Aviation Expenses 166,551 179,679 202,130 205,183 222,555 20,424 10.1% 17,372 8.5% 33.6% Corporate 44,065 56,505 54,673 54,028 58,120 3,447 6.3% 4,092 7.6% 31.9% Police Costs 15,815 18,183 19,173 19,016 22,174 3,001 15.7% 3,159 16.6% 40.2% Capital Development 7,828 9,319 22,378 17,579 23,223 845 3.8% 5,644 32.1% 196.7% Maritime/Economic Development 3,882 3,946 4,356 4,356 5,402 1,046 24.0% 1,046 24.0% 39.2% Costs from other Divisions 71,589 87,954 100,581 94,979 108,920 8,339 8.3% 13,941 14.7% 52.1% Total Operating Expense 238,140 267,632 302,711 300,162 331,474 28,763 9.5% 31,312 10.4% 39.2% Airport cost growth since 2015 coming from aviation division and other divisions 81 Cost Reductions 2018 Baseline Cost Reductions/Savings: $000's Contractual Savings & Formulaic Cost Decreases Higher estimated Charges to Capital (offsets higher payroll) 1,256 Scheidt Bachmann contract ends (replaced by ParkingSoft) 371 Total Contractual & Formulaic Decreases 1,627 Non-Payroll Savings (zero based budgeting) RE development owner liaison costs no longer needed 200 Other non-payroll savings (zero based budgeting) 839 Additional Non-Payroll Savings 1,039 Total 2018 Baseline Cost Reductions 2,665 Savings due to eliminated FTEs, review of baseline 82 Cost Increases 2018 Baseline Cost Increases: $000's Payroll Increases (before new FTE requests) Average payroll & benefits increase (3.6% blended) 4,405 Impact of annualized new FTE's approved in 2017 Budget 776 Impact of annualized new FTE's approved during 2017 1,272 All other increases to baseline payroll 591 Total Baseline Payroll Increases 7,045 Non-Aero costs related to revenue growth Clubs & Lounges - increased operating costs 762 Advertising increase (100% paid by Tenant Mktg fund) 282 Non-Aero B&O tax increase 100 Total Non-Aero Cost Increases 1,145 Total Contractual & Formulaic Cost Increases - detail next page 3,393 Total 2018 Baseline Cost Increases 11,582 Payroll for existing staff is primary driver of increase 83 Continued - Cost Increases 2018 Baseline Cost Increases - continued: $000's Contractual & Formulaic Cost Increases - detail Utility commodity cost increase 1,487 Siemens direct digital control contract 350 Manual Encoder McGee contract 160 SITA/Brock baggage source messaging 31 Schindler elevator service contract 76 ParkingSoft (new contract) 30 All other contract increases 140 Airport to host AMAC conference 150 Aeronautical B&O tax increase 77 Other Non-Payroll Increases (zero based budgeting) 892 Total Contractual & Formulaic Increases 3,393 Total 2018 Baseline Cost Increases 11,582 Payroll for existing staff is primary driver of increase 84 Summary of Budget Requests # of 2018 Budget Request $000's 2018 Budget Request category Requests FTEs Baseline One-time Total Safety 13 4.00 1,232,112 448,100 1,680,212 Security 5 18.00 1,110,399 27,500 1,137,899 Customer Service 17 7.00 2,496,295 696,342 3,192,637 Grow International Service 7 550,000 1,000,000 1,550,000 Operational Impacts due to Growth 4 7.00 599,873 32,700 632,573 Capacity Planning & Development 23 15.50 1,785,460 8,508,000 10,293,460 Asset Management 21 4.00 1,093,018 654,295 1,747,313 Grow Non-Aero NOI 9 2.00 451,174 3,359,000 3,810,174 Environmental & Sustainability 11 1.00 256,387 955,867 1,212,254 Other Business Needs 14 1.75 365,526 137,300 502,826 2018 Budget Requests - Total Proposed: 124 60.25 9,940,244 15,819,104 25,759,348 2018 Budget Requests - Initial Requests: 173 143.75 37,876,957 Century Agenda and Airport Priorities drive 2018 budget requests 85 Budget Requests by Strategic Driver Problem/Need/ Solution 2018 Budget Request $000's Opportunity FTEs Baseline One-time Safety Airfield Safety Certification (AOS) 2 168,934 3,000 Snow Pretreatment Chemicals - runways 200,000 - Flight Corridor Safety Program Site Maintenance 75,000 - Certified Service Provider Program (CSPP) Development - 50,000 Avian Radar upgrade 182,000 - USDA Wildlife Services - increase Outside Services Contract 70,000 - Implement Safety SafetyCircle engagement throughout airport 270,000 - Management System Safety Management System (SMS) OP and Badging training - 80,000 curriculum development program Other Airport Duty Manager - Airfield 1 108,761 12,600 Annual Smoke Control Consultant 50,000 - Arc Flash Consultant - ADR/Terminal/Baggage - 150,000 Fire Department - Bunker Gear Purchase - 150,000 Fire Protection Engineer 1 107,417 2,500 Safety - 2018 Budget Requests 4 1,232,112 448,100 Safety Enhancement Opportunities 86 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Security Opportunity to enhance security - Employee Screening Manager 1 113,204 2,500 Employee Screening Screening Supervisor 5 356,751 12,500 Employee Screener 11 438,785 10,000 Insufficient admin support for Administrative Assistant - Employee Screening 1 69,659 2,500 growing department Rightsizing to reflect current Business training, travel, and employee 132,000 - staffing level equipment for Employee Screening (rightsizing) Security - 2018 Budget Requests 18 1,110,399 27,500 Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Operational Impacts due to Growth Ground Transportation Trip Activity Landside Supervisor 2 181,791 5,000 Growth & Complexity Employee Parking usage increase Employee Parking Bus Driver 2 113,547 - Increasing Volume Senior Operations Controller (SOC) 1 87,013 2,600 Airport Duty Manager - Terminal 2 217,522 25,100 Operational Impacts due to Growth - 2018 Budget Requests 7 599,873 32,700 Security Enhancement & Operational Growth Impacts 87 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Customer Service Facility Cleanliness / Appearance / Estimated increase in budget for the Custodial Service 679,600 - ASQ metrics Contract(s) Shift Supervisor - Custodial Services 1 96,116 - Pathfinders - (8) emergency hires during peak season - 143,742 New Marketing position - Customer Service 1 108,761 2,600 ASQ increased sample size and weekly reporting 13,380 - AVM Small Works Project Coordinator 1 84,862 - Journeyman Carpenter 1 89,824 - Journeyman Painter 1 66,888 - Seasonal painting contractor(s) 146,160 - STS Car Tri-Handle Stanchions - passenger safety in STS - 225,000 cars Trash can standardization plan for Airport terminal and - 175,000 landside Music Initiative Program - Port 50% share 175,000 - Train staff on Customer Service Customer service training and program development - 145,000 Wayfinding/Processing Passengers Curbside services for Rental Car 500,000 - Electric Cart Service - Link Light Rail 336,000 - Indoor Navigation and Innovation Specialist 1 99,852 2,500 Airline and Passenger Systems Specialist 1 99,852 2,500 Customer Service - 2018 Budget Requests 7 2,496,295 696,342 Customer Service 88 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Capacity Planning & Development Complete SAMP Advanced Planning to further define the SAMP program - 2,500,000 SAMP Planning & Transition to Environmental Review - 500,000 SAMP Environmental Review - 1,700,000 Utility Master Planning support due to SAMP - 500,000 Augment Planning Ongoing planning support in all areas not covered through advanced planning - 750,000 On call project planning consultant - 650,000 SR-518 Corridor Study - 400,000 Planning - Graduate Intern 0.5 34,032 - Manage Complex Capital Program Executive Program Management consulting support - 1,200,000 Accela software - Inspection Request Module/App and Bluebeam Revue Program - 24,650 Build capacity for capital program delivery AVM Mechanical Systems - rightsize staffing 6 595,947 - AVM Wireman - Capital Project Plan Review 2 205,480 - Electronic Technician 2 205,480 6,500 Manager, Aviation Finance & Budget 1 131,112 2,500 Consultant to perform additional project plan review for Structural Engineering, 130,000 - Computer and telephone acquisition required for electronic plan review hardware. - 46,850 Civil/Structural Standards Update Consultant - 200,000 Environmental Review and Permitting position 1 104,019 2,500 Sr. Administrative Assistant - Capital Development Program Mgmt 1 76,492 2,500 Permitting office software program annual license fee (Accela) 53,000 - Architectural Standards Update Consultant - 20,000 Landside Development Manager 1 118,233 2,500 Firefighter - Construction Inspector 1 131,664 - Capacity Planning & Development - 2018 Budget Requests 15.5 1,785,460 8,508,000 Capacity Development 89 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Grow International Air Service Air Service Development Incentive Program - Xiamen Airlines - 300,000 Incentive Program - Aeromexico - 200,000 Incentive Program - Volaris - 200,000 Incentive Program - Norwegian - 100,000 Incentive Program - Unnamed Airline - 200,000 Promotional event management service for Air Service 50,000 - Development Increasing Volume CBP Reimbursable Services Program (RSP) 500,000 - Grow International Air Service - 2018 Budget Requests 550,000 1,000,000 Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Grow Non-Aero NOI FAA requirement every 5 yrs - appraisal of Airport appraisal - 275,000 airport properties Grow Non-Aero NOI NERA FAA Pilot Program - final year of FAA grant - 2,300,000 Parking Pre-Booking - expense components of capital project - 724,000 Senior Property Manager, Ground Transportation 1 137,025 - NERA 2 - owner liaison costs (100% reimbursable) - 30,000 NERA 3 - owner liaison costs (100% reimbursable) - 30,000 ADR on-call consultant 200,000 - AV Conference Center Assistant 1 74,149 - Rightsizing to reflect current usage level TNC Holding Lot Honey buckets 40,000 - Grow Non-Aero NOI - 2018 Budget Requests 2 451,174 3,359,000 Grow International Service and Non-Aero NOI 90 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Asset Management Strategic Asset Management Manager, Civil/Structural Infrastructure Systems 1 146,719 2,500 Road Inventory and Pavement Management Assessment - 100,000 Roadway Asset Management Consultant - 100,000 Cathodic Protection Consultant - 50,000 Manager, Asset Manager 1 146,719 2,500 Asset Management System Estimating Consultant 50,000 - Asset Management Building Assessment and develop best practices. - 150,000 Post-Maximo Upgrade Implementation (system improvements) - 25,000 Maintaining Existing Assets AVM Wireman - PLB/GSE 2 205,480 500 Increase to AVM Materials Budget - STS, Electronic, and Electrical systems 215,000 - Increase Radio Budget - incremental & replacement radios 200,000 - Backflow Prevention Software - replace existing software - 15,000 Remediate bird waste and install netting/deterrents - ongoing and one-time 10,000 52,140 Weed Control (goats) on Port property 50,000 - Replacement program for Flight Information and other display monitors 45,000 - STS Parts Washer Equipment 15,000 - CCTV Civil Utility Mgmt consultant for the CCTV investigation for Sanitary - 50,000 Sewer, IWS, and Stormwater Compactor preventative maintenance & asset management plan - 38,000 Industrial Wastewater Treatment Plant (IWTP) Operations and Maintenance - 50,000 Conf Center AV System Maintenance & Service Agreement - 18,655 Scan, digitize, and archive old plan sets per WA State Records Management 9,100 - Asset Management - 2018 Budget Requests 4 1,093,018 654,295 Asset Management 91 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Environmental & Sustainability Century Agenda / Aviation Biofuels Partnership Fund Development Project - 175,000 Environmental Strategies Renewable Energy Sourcing and Integration Options - 180,000 WADOC/UW Air Quality - Port share of WA state study - 75,000 Part 2 of deicer management study - 150,000 Incremental cost for renewable diesel 30,000 - Janitorial support - pilot project to drain and recycle - 95,000 beverage containers from checkpoints Utility Program Manager 1 115,707 3,250 Utilities support for utility metering systems (rightsizing) 110,680 - Environmental Compliance Sanitary Sewer BOD Surcharge investigation - 50,000 NPDES Permit Renewal Testing and Reporting - 5yr permit - 145,000 requirement Rental of Vactor Truck until asset purchase complete - 82,617 Environmental & Sustainability - 2018 Budget Requests 1 256,387 955,867 Environmental & Sustainability 92 Budget Requests by Strategic Driver Problem/Need/Opportunity Solution 2018 Budget Request $000's FTEs Baseline One-time Other Business Needs Century Agenda Disparity Study - 90,000 Absence of admin support for growing Administrative Assistant - AV Finance & Budget 1 79,431 2,500 department Grow Port Intern Program College Interns (3) 0.75 37,740 - Opportunity to enhance employee Leaders meeting speaker funding 12,000 - engagement Safety Communication and Committee Support 5,000 - Upgrade workstations in Industrial Control - 25,000 Systems (ICS) area Opportunity to enhance innovation Innovation Funding - support implementation 100,000 - Innovation Research Funding 50,000 - Honsha Executive Development Mission (Lean) - 11,000 AAAE Innovation Accelerator Program Fee 5,000 - Rightsizing to reflect current staffing level AVM training (rightsizing) 30,000 - Business training, travel, and employee 21,355 - equipment (rightsizing) Business Travel and Training (rightsizing) - 8,800 Rightsizing to reflect current usage level Increase Printer/Copy paper office supplies 25,000 - expense (rightsizing) Other Business Needs - 2018 Budget Requests 1.75 365,526 137,300 Other Business Needs 93 Capital Budget - Major Projects Four major projects account for 56% of spending 94 Proposed New Projects Next # of Cost Cash Flows (Figures in $000s) 2018-22 Slide Projects Description Estimate 2018 2019 2020 2021 2022 Total I 8 Asset Management 111,603 2,107 9,524 23,527 24,868 19,757 79,783 II 6 Safety & Security 46,606 1,565 7,900 9,488 6,536 16,936 42,425 III 6 Business Need 41,948 284 5,191 13,389 13,821 9,264 41,949 IV 6 Customer Service 36,437 - 4,151 8,359 23,182 746 36,438 V 2 Grow Non-Aero Revenue 5,530 - 3,590 179 1,301 460 5,530 28 TOTAL 242,124 3,956 30,356 54,942 69,708 47,163 206,125 Major new projects include: Airfield pavement replacement: $72.6 million Main Terminal sprinkler/smoke control: $28.5 million Employee parking bus purchase: $18.1 million Stormwater pond bird deterrent improvements: $11.4 million Utility meter networking: $10.3 million The proposed projects do not include projects that will come out of SAMP. Asset management is a key driver for new projects 95 Asset Management Cost Cash Flows (Figures in $000s) 2018-22 # CIP Description Estimate 2018 2019 2020 2021 2022 Total 1 C800924 AC4 Av/Maintenance Upgrade 4,566 - 525 2,852 1,189 - 4,566 2 C800930 Airfield Pvmt Repl 2020-2024 72,649 - 225 11,013 13,997 15,594 40,829 3 C800944 Building Controls Upgrade 2018 4,976 - 70 925 3,311 670 4,976 4 C800950 Cargo Buildings Improvements 6,610 - 50 881 2,186 3,493 6,610 5 C800957 NEPL Improvements 6,635 - 1,104 4,959 572 - 6,635 6 C800977 RCF Pavement Remediation 11,417 1,657 7,487 2,273 - - 11,417 7 C800978 VFD Replacement II 4,300 - 63 624 3,613 - 4,300 8 C800983 Sewer/Catch Basin Cleaner 450 450 - - - - 450 TOTAL 111,603 2,107 9,524 23,527 24,868 19,757 79,783 #2 (Airfield Pvmt Repl 2020-2024): This project will replace aging airfield pavement and joint seal as they reach the end of their useful lives (approximately 20 years). 46% of Sea-Tac pavement is over 20 years old. #5 (NEPL Improvements): The North Employee Parking Lot (NEPL) was constructed in 1997 and several areas need to be repaired or upgraded. Major elements include pavement repairs, security camera installations, automatic sliding gate addition, signage replacement, and interior upgrades. #6 (RCF Pavement Remediation): This project will address pavement performance issues at the Rental Car Facility, such as replacing expansion joints, waterproofing membranes, and repairing asphalt approach road. 96 Safety & Security Cost Cash Flows (Figures in $000s) 2018-22 # CIP Description Estimate 2018 2019 2020 2021 2022 Total 1 C800935 Access Controls in Comm Rooms 2,893 - 895 1,998 - - 2,893 2 C800937 Fire Suppression Comm Roooms 712 - 50 170 282 210 712 3 C800969 MT Fire Sprinkler-Smoke Cntrl 28,457 - 300 1,639 5,611 16,726 24,276 4 C800975 RCF Camera Replacement 1,180 - 118 419 643 - 1,180 5 C800979 Fire Engines & RIV 1,980 - 1,980 - - - 1,980 6 C800980 SD Pond Bird Deterrent Improv 11,384 1,565 4,557 5,262 - - 11,384 TOTAL 46,606 1,565 7,900 9,488 6,536 16,936 42,425 #3 (MT Fire Sprinkler - Smoke Cntrl): This project will provide fire sprinklers and smoke control for main terminal ticketing, esplanade and bag claim areas. Total areas involved contain approximately 1,050,000 square feet of space. This is a life safety building code requirement for development of the Main Terminal second floor spaces. #6 (SD Pond Bird Deterrent Improv): The existing bird deterrent system that covers the airport stormwater ponds sustained structural damage from the February 2017 snow event. A damage assessment reported 13 stormwater ponds received structural damage and created openings in the netting system. This project will develop a viable long term solution for all POS stormwater ponds bird deterrent infrastructure. 97 Business Need Cost Cash Flows (Figures in $000s) 2018-22 # CIP Description Estimate 2018 2019 2020 2021 2022 Total 1 C800939 Comm Infrastructure Expansion 1,584 - 35 979 570 - 1,584 2 C800940 Utility Meter Networking 10,367 - 565 1,385 4,799 3,618 10,367 3 C800941 Airport-wide & RCF LED Lights 8,205 - 112 995 1,452 5,646 8,205 4 C800945 South CT Solid Waste Improve 1,876 284 1,592 - - - 1,876 5 C800951 AOB Capacity Upgrades & Carpet 1,835 - 1,464 371 - - 1,835 6 C800956 Employee Parking Bus Purchase 18,081 - 1,423 9,659 7,000 - 18,082 41,948 284 5,191 13,389 13,821 9,264 41,949 #2 (Utility Meter Networking): This project will upgrade the Port's meter system to create a modern, networked, smart meter system with data storage and analytical capabilities. The finished system will provide data collection and analytical capabilities to enable advanced analysis of utility (electric, gas, water, etc.) data for infrastructure planning, billing, cost control, maintenance and sustainability needs. #3 (Airport-wide & RCF LED Lights): This project will improve lighting throughout the airport and at the Rental Car Facility, as well as transition the airport to a driver-based lighting standard. Driver-based lights offer better energy efficiency, longer maintenance cycles, better light quality, and greater controllability compared to old lighting technologies. #6 (Employee Parking Bus Purchase): This project will procure 11 new electric buses for employee transportation between the North Employee Parking Lot (NEPL) and the main parking garage. The employee bus program currently operates Compressed Natural Gas (CNG) buses. The CNG tanks' certification will expire prior to Q2 2022 which requires the buses to be retired. The new electric buses and associated charging stations will be procured in three phases to allow for a gradual transition from CNG to electric buses. 98 Customer Service Cost Cash Flows (Figures in $000s) 2018-22 # CIP Estimate 2018 2019 2020 2021 2022 Total 1 C800922 Baggage Claim Refresh 11,037 - 834 2,023 8,181 - 11,038 2 C800928 Zone 1 Curb-to-Gate Biometric 1,800 - 800 1,000 - - 1,800 3 C800931 Smartphone App - ADA Support 750 - 750 - - - 750 4 C800934 Consolidated Employee Business Office 7,264 - 304 915 6,045 - 7,264 5 C800959 Seating Replacement 13,886 - 663 3,521 8,956 746 13,886 6 C800971 Checkpoint Smart LED Lighting 1,700 - 800 900 - - 1,700 TOTAL 36,437 - 4,151 8,359 23,182 746 36,438 #1 (Baggage Claim Refresh): This project will improve the outdated and dark appearance of baggage claim by continuing improvements that began in 2017 with replacement of all wall panels. The project would bring baggage claim 5 through claim 16 up to the same standard of finishes as found in the Gina Marie Lindsay Hall (GML) through Claim 4. #4 (Consolidated Employee Business Office): This project will create a new Employee Business Office, which will include credentialing, training, employee parking, the key shop (access), CBP office, and other essential employee-related businesses in a "one-stop shop" service center. The current Credential Center can no longer accommodate the volume of customers in an effective manner. #5 (Seating Replacement): This project will replace outdated and worn seating throughout the airport to include all of Concourse A, Concourse D, soft seating in the relaxation area at the west end of the South Satellite, Club at SEA Lounge locations, and soft seating at the three concourse recomposure areas just beyond Checkpoints 2, 3, and 4. 99 Grow Non-Aero Revenue Cost Cash Flows (Figures in $000s) 2018-22 # CIP Description Estimate 2018 2019 2020 2021 2022 Total 1 C800947 South Satellite Mezz Club 2,030 - 90 179 1,301 460 2,030 2 C800949 WSDOT Property Purchase 3,500 - 3,500 - - - 3,500 TOTAL 5,530 - 3,590 179 1,301 460 5,530 #1 (South Satellite Mezz Club): This project will reconfigure Delta's flight attendant office into a second South Satellite Club@SEA lounge, with a reception area, seating, bar and a kitchen area. It is contingent upon Delta's move from the SS mezzanine space to the Central Terminal mezzanine space (2nd floor). #2 (WSDOT Property Purchase): This project will acquire WSDOT property located between the FAA Regional Headquarters and Des Moines Creek Business Park West to enhance the feasibility of the development of these airport properties via land assemblage. This parcel will become part of the Des Moines Creek Business Park West project that will go out to RFP later this year or early 2018. This parcel will increase the value and developmental feasibility to a potential developer that will engage in a long term land lease with the Port. 100
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