COMMISSION 
AGENDA MEMORANDUM                Item No.       7a 
BRIEFING ITEM                   Date of Meeting    October 24, 2017 
DATE:    October 17, 2017 
TO:     Dave Soike, Interim Executive Director 
FROM:   Dave Soike, Interim Executive Director 
SUBJECT:  Follow-up Discussion of Operating Division Budget Requests 
EXECUTIVE SUMMARY 
This memorandum provides responses and additional information to various Commissioners' 
questions raised at the October 10, 2017 budget briefing discussions by each of the three
operating divisions of the Port: Aviation, Maritime, and Economic Development. This additional
information is being provided for a faster turn-around and discussion opportunity as the Port
continues preparing its final annual budget which is due to be submitted to King County on
December 4.
BUDGET TIMETABLE 
Completed: 
June 13: Budget process briefing for Commissioners 
September 26: Central Services (Corporate) budget briefing for Commissioners 
October 10: Operational Divisions Budget briefing for Commissioners 
Upcoming: 
October 24: Plan of Finance/Tax Levy briefing, and responses to questions from October
10 briefing 
October 24:  Publish draft Port budget book to allow three weeks review prior to first
reading and five weeks prior to second reading 
November 14: First reading 
November 28: Second reading 
December 4: Statutory deadline for filing budget with King County 
- A supplemental budget can be passed subsequently, and is not required to be filed
with King County.
- Staff will strive to complete the annual budget to include all items added or
modified by the Commission in order to meet the December 4 deadline; however
if necessary due to additional or modified  items from Commission, certain

Template revised September 22, 2016.

supplemental items could be considered in December provided public notice
requirements are met.
ADDITIONAL INFORMATION 
Several questions arose during staff presentations of the operational budget plans.  The
following categorizes the questions and provides available information to enable
Commissioners to further discuss as necessary. Questions and responses are outlined below. 
Economic Development:
Q:  Provide more information regarding the $750,000 project item within the "Business Plan
Perspective" category. 
A:  This item is for replacement of the aging flat roofing atop the building that Anthony's
restaurant occupies on Pier 66. This roof is approximately 25 years old and is at the end of
its service life. The sloped metal roofing portion of the building is not yet at its service life.
The Port as owner of the building has responsibility to maintain the exterior envelope of
the building including its roof. R eplacement is warranted per maintenance evaluation
reports ( 
Aviation: 
Enplaned passengers growth, compared to landing and landed weight 
Q:  How does the growth in enplaned passengers compare to the growth in landings and
landed weight? 
A:  Here is the percentage growth for each area: 
Enplaned Passengers     Landings    Landed Weight 
2018 Budget         5.0%          5.0%         4.3% 
2017 Forecast         3.0%           1.9%         2.5% 
2016           8.0%          8.3%        10.1% 
2015           12.8%          12.3%        9.9% 
2014           7.7%          7.2%         7.5% 
2013           4.7%          2.1%         4.8% 
Actual percentage changes from year to year diverge due to load factors (percentage of
seats filled by passengers), fleet mix (gauge of aircraft), and to some extent the relative
growth of cargo freighters (no connection to passengers growth, but still reflected in
landings and landed weight figures). 

Here are the raw numbers: 
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Enplaned Passengers    Landings     Landed Weight 
2018 Budget        24,654         216,527      28,995,400 
2017 Forecast        23,480         206,216      27,805,778 
2016           22,796         202,345      27,120,850 
2015           21,109         186,869      24,641,923 
2014           18,717         166,448      22,421,004 
2013           17,376         155,262      20,848,624 
Growth in cargo operations 
Q:  Please provide additional information about 2017 cargo growth. 
A:  Through September 2017, total cargo is up 51,760 metric tons (+19.3%) year-to-date over
the same 9 months of 2016.
Of this, freight is up 49,660 MT (+21.8%), and mail is up 2,100 MT (+5.1%) 
Within the freight category, domestic freight is up 40,500 MT (+29.1%), and
international freight is up 9,160 MT (+10.4%) 
See Page 11 (Supplement 1) for further details 
Street Pricing by Dining and Retail Tenants: 
Q:  Provide more information regarding street pricing at Sea-Tac. In November 2015 the Port
approved street pricing flexibility for Airport Dining and Retail (ADR) tenants to provide
relief regarding costs related to complying with City of SeaTac's increased minimum wage 
and benefits law. Several Commissioners asked about the monitoring of and compliance
with street pricing, what other airports do and charge related to street pricing and how
Sea-Tac compares. 
A:  The Port requires all ADR tenants to submit pricing for their products/services as well as
pricing for comparable street-side locations for approval by Port staff by December 31st of
each calendar year. Once the pricing is submitted, Port staff verifies the data and then
either approves or disapproves the proposed pricing based on the guidelines set forth in
the Street Pricing Policy. 
Earlier this year, Port staff submitted to Commission a report detailing the background and
findings of the 2017 ADR Tenant Street Pricing Audit. At that time, staff found that of the
58 ADR tenants surveyed, 45 were in compliance and 13 were not in compliance with the
airport's policy. We contacted non-compliant companies, giving them 10 business days to
correct the pricing. A second round of Street Pricing Audits was scheduled in phases to
confirm compliance and complete the audit. Phase 1 was scheduled for April through May
2017, while phase 2 was scheduled for June through August. Due to changes in Port
staffing, these secondary audits have not yet been completed. 

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The ADR Team is in the process of procuring temporary staff to complete the 2017 Street
Pricing Audit. This work will include verifying that pricing from appropriate comparable
locations was accurate as well as that pricing within the tenant's airport units matches the
approved pricing. Random checks of ADR units will be conducted to ascertain on-going
compliance. ADR staff is in the process of developing a Quality Assurance Program which
includes a mechanism to track all contractual obligations including compliance with the
Street Pricing Policy.
As of January 1, 2018, pricing will be limited to up to 5% above street prices, down from
2017's 7.5% limit. In 2019 the limit drops to 2.5% and in 2020 we return to regular street
pricing. 
See Page 12 (Supplement 2) for additional details. 
Sound Transit Ridership at Sea-Tac 
Q:  What is the ridership for Sound Transit at the airport? Do we have a rough estimate of
ridership growth or decline of airport light rail  is it knowable earlier than results from a
full transportation study? 
A: The Port's quarterly survey of enplaning passengers, started in 2014 indicates the light rail
share of air travelers consistently hovers around 5-6%. Accordingly, in 2016 about 1.1 to
1.3 million travelers used light rail. 
A historic comparison of Sound Transit data is difficult because they have not reported the
data in a consistent format over the years. We can, however, get a rough idea of the
ridership trend by looking at Sound Transit's "Summer boardings" data from pre-2015 and
pairing it with Q3 data from the more recent average daily boardings: 
2011: 4,974 
2012: 5,222 
2013: 5,753 
2014: 6,764 
2015: 7,287 
2016: 7,450 
Note that Sound Transit data includes airport passengers, employees, locally generated
trips, and transfers from bus routes; airport travelers data is not separated out. 




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Cart service from Sound Transit Light Rail station 
Q:  Provide information regarding the potential for Sound Transit to consider funding the
electric cart delivery service for customers from the SeaTac light rail station through the
garage and to the closest sky bridge.
A:  Aviation staff has contacted Sound Transit staff to discuss this possibility. 
Transfer of Airport property to the Economic Development Division 
Q:  Provide information about possible intra-divisional transfers of Airport property to the
Economic Development Division? 
A:  Airport property could be sold to the Port's Economic Development division.  However it
would have to be purchased at fair market value, which is subject to review and approval
by the FAA. The federal requirements have not changed since the last commission inquiry.
Note that a 2014 federal audit (unrelated to POS) did not question an airport's legal
authority to undertake intra-agency sales. In August 2014 at Commission request the Port
identified the conceptual steps necessary for selling airport property to the Port's Real
Estate division, which staff could provide to Commissioners. 
See Attachment 3 for additional details. 
Purchase of electric buses for Sea-Tac 
Q:  Provide information regarding upcoming electric bus purchases. 
A:  Converting the bus fleet to electric is a key strategy in the Port's Green Fleet Plan to reduce
the Port's carbon emissions. Aviation staff will brief Commission on November 28 on the
results of an initial evaluation of the potential environmental benefits and financial costs of
replacing and supplementing Sea-Tac's natural gas bus fleet with electric buses. The
briefing will recommend to the Commission whether to continue with natural gas-powered
buses or move to electric.
Airport staff forecasts the need to add five or six buses by 2020 to the Rental Car Facility
bus fleet of 34 to meet current and projected customer demand and customer service
standards. Staff also forecasts the need to replace all 11 buses currently serving the North
Employee Parking Lot within the next four years as they reach the end of their service life. 
Non-airline Revenue Comparison 
Q:  Provide information on the non-airline revenue per enplaned passenger at peer airports. 
A:  See chart below for 2016 data collected through the Airports Council International (ACI)
data base. Every airport is different, and staff will need to investigate reasons for why
other airports do comparatively better than Sea-Tac. 


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Non-Aero Revenue Per Enplanement
$25                                                                                $24.38


$20
$18.60

$16.85

$14.93
$15                                                                    $14.72
$13.80
$13.38
$12.73 $12.74 $12.84 $12.96
$12.11 $12.26
$10.75 $10.78 $10.85 $11.00 $11.06
$9.90
$10                       $9.70
$9.18
$7.63
$7.40
$6.95
$6.62
$6.13
$5.20
$5


$0
CLT  LGA ATL  IAH BWI  SLC  PHL  SEA MSP FLL  SAN PHX DTW JFK DFW DCA PDX LAX DEN EWR MIA MCO SFO TPA BOS IAD ORD
Airport

Taxi per trip fees 
Q:  Provide information on taxi per trip fees at other airports. 
A:  An Airport Cooperative Research Program study from 2015/16 referenced average per trip
fees of $1.00 - $5.00. Another study from AGTA from 2014 references a range of $0.96 to
$5.44. The same study notes that some airports charge annual fees, and other airports
charge concession fees.
Central Services (Corporate): 
Onboarding Capacity 
Q:  Provide information verifying whether we can hire fast enough to support the total number
of FTE's proposed for the 2018 budget.
A:  The HR team does not have concerns about filling the additional 84.9 FTE positions in 2018. 
We have filled 494 positions in 2017 so far; some of the volume of hiring in 2017
will not be repeated at the same level in 2018. For example, 76 of 146 new FTEs
filled in 2017 were airport screeners.
The HR team has requested one additional FTE in 2018 to handle the level of
hiring.
See page 13 (Supplement 3) for a summary of Port-wide FTEs. 
Long Range Plan objectives and Century Agenda goals 

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Q: Provide information regarding changes to Long Range Plan (LRP) in order to clarify LRP
objectives that carry out Century Agenda goals. 
A1: Century Agenda Objective 1, regarding TEUs: The Century Agenda goal of 3.5 million 
Twenty-Feet Equivalent Units (TEU) container throughput was set before the NorthWest
SeaPort Alliance (NWSA) joint venture was formed. Objective 1 now states that the NWSA
container goal for both north and south harbors is 6.0 million TEU.
A2: Foreign Trade Zones: The following 2018 milestone has been added to LRP Objective 1: 
"Explore opportunities to expand utilization of Foreign Trade Zone #5 in partnership with
NWSA and other public/private stakeholders."
A3: Update LRP to reflect number of WMBE businesses:  This metric was in our 1st draft LRP,
but was mistakenly left out of the final draft. The metric has been restored. 
A4: Century Agenda should address WMBE and Veteran businesses:  The Commission
discussed updating the Century Agenda and agreed to review this. 
A5: Facilitate the support of Industrial Lands: The LRP Objective 15 addresses support of
industrial lands through three Priority Actions and four 2018 milestones. 
Disparity Study 
Q: Provide information regarding updating disparity study(s) from a port-wide perspective. 
A: 2018 Preliminary budget includes $90,000 for participation in FAA/WSDOT disparity study
for Washington airports. Focus is on federally assisted construction and construction
related projects. 
EDD budget includes spending up to $50,000 to work with same consultant to broaden the
scope to Port-wide.  Under separate contract this study includes all non-federal
construction and consulting contracts greater than $200,000. 
Airport plans to propose at first reading an additional disparity study focused on airport
dining and retail. Cost estimate is being refined, but likely about $300,000.
Capital Development Costs 
Q: What percentage of the Capital Development Division costs in the operating budget is 
capitalized? 
A: See chart below,  in 2017 and 2018 CDD has budgeted for some significant expense
projects in support of the Aviation Division, including the air corridor safety program and
support for renovations to airport dinning and retail units, as well as ongoing regulated
materials management. 
2016         2017         2018 
Actual         Budget         Budget 
Total O&M expense     39,949,342     64,192,913     67,259,629 
Charged to capital     (27,731,054)     (38,658,053)     (40,970,266) 
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Net O&M       12,218,288     25,534,860     26,289,363 
Percent capitalized       69.4%          60.2%          60.9% 

Maritime 
Maritime Storm Water Utility 
Q:  Provide more information about (1), the benefits to Puget Sound, (2), the cost recovery
model, (3), reasons for the rate increase and (4), the intersection with NWSA in south
harbor. 
A1: Benefits to Puget Sound: The utility was created in 2014 to enable the Port to improve the
cleanliness of storm water entering Puget Sound from Port properties. The Utility collects
stormwater fees from Port tenants and reinvests the funds into maintaining and upgrading
the stormwater infrastructure. Prior to creating the utility, all of the stormwater fees paid
by the Port and its tenants were diverted from the properties of the Port and its tenants. 
Initial efforts focus on installing a rain garden (bio-retention pond) along the Centennial
Park trail to better treat stormwater entering Elliott Bay; installing tide gates to further
protect marine wildlife, and assessing the pipe system to identify and prioritize necessary
repairs. 
A2: Rate increase:  The proposed 7.75% rate increase allows for our infrastructure
improvements, assessments and maintenance program to move forward as desired. With
this rate increase our rate structure remains 12 to 15% lower than the City's rate structure
for 2018. 
The Stormwater Utility team is presenting at the November 14 Commission Meeting and
will provide additional details on the reasons for the rate increase. 
A3: Cost recovery: Yes, this is cost recovery; all funds collected by the Utility must be spent on
stormwater. To date, $1.7 million has been spent on, or committed to, capital for
equipment to get the Utility up and running. Additionally, approximately $7.4 million has
been spent on expense activities, primarily performing the assessments to obtain the
baseline system condition data; urgent repairs and administrative costs in operating the
Utility. There is an additional $3.6 million committed for capital works through 2020, and
about $6 million projected to complete the assessments by 2019 as well as additional
administrative costs. 
A4: Intersection with the NWSA: Tenants, including the NWSA, pay stormwater fees based on
the area of their leaseholds and the category of the property (e.g., high proportion of
impervious cover, undeveloped such as parks). The stormwater fees for the remaining
unleased land in a facility are paid by the operating business. The operating business is
either the NWSA or the specific Port business (EDD, Maritime Ops, Cruise, etc.) that
oversees the unleased property.

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The NWSA and NWSA tenants pay a significant portion of the total fees collected, due to
the large amount of land comprised by the licensed properties. They do not pay for other
stormwater costs from the Port of Seattle related to maintaining the Port's overarching
municipal permit or related to maintaining infrastructure. 
A5: NWSA North and South Harbors: Marine Terminal Operators are responsible
for compliance with industrial stormwater permits required by their operations. In the
case of terminals 46 and 18, the Port of Seattle agreed during lease negotiations to share in
those costs. Similar agreements have occurred in the South Harbor at the Log Yard (permit
and O&M costs are now transferred to the operator) and West Sitcum Terminal due to
activities of previous tenant. 
In the South Harbor, the Port of Tacoma has worked with the City of Tacoma to negotiate 
(via an Inter-local Agreement), a lower fee structure and has not formed a stormwater
utility. Port of Tacoma Facilities Maintenance performs maintenance and repair activities in
the South Harbor. 
Cruise and Tourism marketing 
Q:  What is the difference between what Cruise staff and the Tourism staff do? 
A:  First, staff from the two departments collaborate routinely on cruise and tourism
promotions. Additionally Cruise staff focuses more on marketing to cruise lines, and
retaining current Cruise lines and attracting new cruise business. EDD Tourism staff focuses
more on promoting King County and Washington State tourism options for both cruise and
airport passengers. 
ATTACHMENTS TO THIS BRIEFING 
(1) Sea-Tac Cargo Growth 
(2) Sea-Tac Tenant Street Pricing 
(3) Port wide FTEs 
(4) Transfer of Airport Property to EDD 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
October 10, 2017 - Operational Divisions budget briefing
September 26, 2017 - Central Services (Corporate) budget briefing 
June 13, 2017 - Budget process briefing 



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