The Audit Meeting meeting scheduled for 2024-06-20 at Pier 69

Transcript

The Audit Meeting meeting scheduled for 2024-06-20 at Pier 69

GOOD MORNING
THIS IS COMMISSIONED VICE PRESIDENT TOSHIKO HASEGAWA CALLING TO ORDER THE PORT OF SEATTLE AUDIT COMMITTEE SPECIAL MEETING TODAY'S THURSDAY, JUNE 20, 2024, AND THE TIME IS EXACTLY 10:00 A.M
WE'RE MEETING TODAY HEADQUARTERS, COMMISSION CHAMBERS AND VIRTUALLY VIA MICROSOFT TEAMS PRESENT WITH ME TODAY IS COMMISSIONER RYAN CALKINS AS OUR PUBLIC SERVING MEMBER SARAH HOLMSTROM TO MAKE THIS MEETING MORE ACCESSIBLE TO THE PUBLIC
THE MEETING IS BEING LIVE STREAMED AND DIGITALLY RECORDED AND MAY BE VIEWED OR HEARD AT ANY TIME ON THE PORT'S WEBSITE
A CALL AND TELEPHONE NUMBER IS ALSO PROVIDED FOR ANYONE WHO WOULD LIKE TO LISTEN TO THE MEETING
NOW, OUR FIRST ITEM OF BUSINESS IS APPROVAL OF OUR LAST MEETING, MINUTES FROM MARCH 28, 2024
AS A REMINDER TO THE VIEWING AUDIENCE, THE PUBLIC MEMBER OF THE AUDIT COMMITTEE IS NOT A VOTING MEMBER FOR THE PURPOSES OF CASTING VOTES ON MOTIONS MADE PER THE COMMITTEE'S RULES
SO ARE THERE ANY CORRECTIONS TO THE MINUTES? SEEING NONE
ARE THERE ANY OBJECTIONS TO APPROVAL OF THE MINUTES AS PRESENTED? HEARING NONE
THE MINUTES ARE APPROVED AND WE CAN GO STRAIGHT INTO OUR FIRST PRESENTATION
WE HAVE THE OFFICE OF THE WASHINGTON STATE AUDITORIUM PRESENTING ON PERFORMANCE AUDIT RESULTS ON CIVIL ASSET FORFEITURE
WE HAVE TANYA FLEMING, THE PRINCIPAL PERFORMANCE AUDITOR, AS WELL AS SAHARA MONAHAN, SENIOR PERFORMANCE AUDITOR
SO IF YOU'D LIKE TO COME AND JOIN US, THANK YOU FOR BEING WITH US TODAY
YOU HAVE THE FLOOR
GOOD MORNING, MADAM CHAIR AND MEMBERS OF THE COMMITTEE
THANK YOU FOR THE OPPORTUNITY TO PRESENT OUR AUDIT REPORT
I AM SOHARA MONAHAN, SENIOR PERFORMANCE AUDITOR WITH THE OFFICE OF THE WASHINGTON STATE AUDITOR, AND WITH ME TODAY IS TANIA FLEMINGS, PRINCIPAL PERFORMANCE AUDITOR
BEFORE I MOVE FORWARD, I WOULD LIKE TO THANK ONCE AGAIN TO STAFF AND MANAGEMENT AT THE PORT OF SEATTLE FOR THEIR FULL COOPERATIONS AND ASSISTANCE THROUGHOUT THE COURSE OF THIS AUDIT
THIS PERFORMANCE AUDIT EXAMINED THE CHARACTERISTICS OF CIVIL ASSET FORFEITURES CONDUCTED IN WASHINGTON
IT ALSO IDENTIFIED OPPORTUNITIES TO ADDRESS DUE PROCESS CONCERNS FOR PEOPLE FACING CIVIL ASSET FORFEITURE
NEXT, THE AUDIT INCLUDED EIGHT AGENCIES, AS YOU CAN SEE ON THE SLIDE, FOUR POLICE DEPARTMENTS, THE BOARD OF SEATTLE PDV IN ONE OF THEM, TWO SHERIFF OFFICES, AND ONE STATE AGENCY IN ONE TASK FORCE
NEXT, A LITTLE BIT OF BACKGROUND BEFORE GETTING INTO THE DETAILS
CIVIL ASSET FORFEITURE IS A LEGAL TOOL THAT ALLOWS THE POLICE TO SEIZE AND FORFEIT PROPERTY THAT THEY BELIEVE HAS BEEN INVOLVED IN OR IS THE PROCEEDS OF A CRIME
BACK IN THE 1980S, THIS TOOL WAS INTENDED TO DETER CRIMINAL ORGANIZATIONS SUCH AS DRUG CARTELS AND LARGE SCALE DRUG DISTRIBUTORS
BUT THE USE OF THE TOOL HAS EVOLVED OVER TIME TO DETER ANY LEVEL OF CRIMINAL ACTIVITY EXAMPLES OF PROPERTY THAT POLICE CAN SEIZE AND FORFEIT WITH THIS TOOL INCLUDE CASH, EQUIPMENT, VEHICLES, HOMES AND PERSONAL ITEMS UNDER WASHINGTON DRUG FORFEITURE STATUTE, WHICH IS THE ONE POLICE AGENCIES MOST FREQUENTLY USED, AND THE EMPHASIS FOR THIS AUDIT, THE POLICE CAN SEIZE AND FORFEIT PROPERTY WITHOUT SECURING AN ARREST, CHARGE OR CRIMINAL CONVICTION OF THE PROPERTY OWNER
DURING THE REVIEW PERIOD, POLICE AGENCIES ACROSS THE STATE RECEIVED NEARLY 40 MILLION IN REVENUE FROM CIVIL ASSET FORFEITURES
NEXT, SEVERAL STATES HAVE EXAMINED THE USE OF CIVIL ASSET FORFEITURES AND RAISED SIGNIFICANT CONCERNS THAT HAVE LED TO LEGISLATIVE REFORMS ABOUT HOW THAT TOOL IS USED
WE WILL TALK ABOUT SOME OF THOSE REFORMS LATER IN THE PRESENTATION, BUT A FEW EXAMPLES OF THOSE KEY CONCERNS INCLUDE THE LACK OF A CRIMINAL CONVICTION REQUIREMENT TO DEPRIVE PEOPLE OF THEIR PROPERTY, THE INHERENT CONFLICT OF INTEREST THAT EXISTS WHEN THE SAME POLICE AGENCY THAT SEES THIS PROPERTY IS ALSO ALLOWED TO MAKE THE DECISION THAT THEY HAVE SUFFICIENT EVIDENCE TO RETAIN THAT PROPERTY, AND THE DISPROPORTIONATE EFFECT CIVIL ASSET FORFEITURE HAS ON SOME RACIAL AND ETHNIC GROUPS
NEXT SO WE EXAMINED THE USE OF CIVIL ASSET FORFEITURE IN WASHINGTON TO BETTER UNDERSTAND THE CHARACTERISTICS OF CIVIL ASSET FORFEITURE LAW ENFORCEMENT AGENCIES CONDUCT AND TO IDENTIFY OPPORTUNITIES TO ADDRESS DUE PROCESS CONCERNS WITH WASHINGTON CIVIL ASSET FORFEITURE SYSTEM
NEXT THIS SLIDE HAS HIGH LEVEL SUMMARY OF OUR KEY RESULTS
WE FOUND THAT THE POLICE AGENCIES ON THIS AUDIT PRIMARILY USE CIVIL ASSET FORFEITURE TO SEIZE CASH IN OTHER PROPERTY OF LOW MONETARY VALUE AND SOME COMMUNITIES CIVIL ASSET FORFEITURES DISPROPORTIONATELY AFFECTED SOME RACIAL AND ETHNIC GROUPS
THE STATE CIVIL ASSET FORFEITURE LAWS GIVE THE POLICE BROAD AUTHORITY TO CEASE AND FORFEIT PROPERTY AND FEW PROTECTIONS TO PROPERTY OWNERS
THE POLICE AGENCIES IN THIS AUDIT FOLLOW DUE PROCESS REQUIREMENTS IN STATE LAW, BUT WE FIND THEY CAN DO MORE TO HELP ENSURE THAT PEOPLE RECEIVE NOTICE OF THE POLICE INTENT TO FORFEIT PROPERTY AND TO HELP PEOPLE BETTER UNDERSTAND WHAT THEY NEED TO DO TO RECLAIM THEIR PROPERTY
AND LAST, STATE LAW DOES NOT REQUIRE POLICE AGENCIES TO COLLECT KEY DATA ON CIVIL ASSET FORFEITURES NOR MAKE THE DATA THEY DO COLLECT AVAILABLE ONLINE, BOTH STEPS THAT ARE NECESSARY TO IMPROVE TRANSPARENCY
IN THE NEXT FEW SLIDES, I'M GOING TO PROVIDE A HIGH LEVEL OVERVIEW OF THE TYPE OF PROPERTY POLICE AGENCIES SEIZE, THE VALUE OF THAT PROPERTY AND FROM WHOM POLICE AGENCIES ARE SEIZING PROPERTY
WE FOUND THAT CASH IS THE MOST COMMON TYPE OF PROPERTY POLICE AGENCIES SEIZED FROM PROPERTY OWNERS
IT ACCOUNTED FOR NEARLY THREE FOUR OF ALL PROPERTY SEIZED DURING THE REVIEW PERIOD
AGENCY OFFICIALS SAID THAT OFFICERS PRIMARILY SEIZE CASH BECAUSE IT'S THE MOST COMMON TYPE OF EVIDENCE OF SUSPECTED ILLEGAL ACTIVITY THEY FIND AT THE SCENE THE PORT OF SEATTLE IS A LITTLE BIT DIFFERENT THAN THE OTHER AGENCIES ON THIS AUDIT REGARDING THAT TYPE OF PROPERTY SEIZED IN THAT THE PORT OF SEATTLE ONLY SEES CATCH DURING THE REVIEW PERIOD, WHILE THE OTHER AGENCIES, AS YOU CAN SEE ON THIS GRAPHIC, SEES A VARIETY OF ITEMS NEXT WHEN EXAMINING THE VALUE OF PROPERTY SEIZED, WE FOUND THAT MORE THAN HALF OF ALL CIVILIZED FORFEITURE CASES INVOLVE PROPERTY WORTH LESS THAN $2,000
WHILE SOME HIGH DOLLAR VALUE CASES DID OCCUR, ONE AGENCY, THE PORT OF CLPD, ACCOUNTED FOR MOST OF THE HIGH DOLLAR VALUE CASES PRIMARILY DUE TO ITS JURISDICTION AT THE SEATTLE TACOMA INTERNATIONAL AIRPORT
98% OF THE CIVIL ASSET FORFEITURE CASES FOR THE PORT OF SEATTLE PDE INVOLVED CASH VALUED AT $8,000 OR MORE
NEXT
SO VARIOUS FACTORS CONTRIBUTE TO THAT TREND WHEN NOTED FOR MOST OF THE AGENCIES IN THIS AUDIT OF LOW VALUE PROPERTY SEIZURES, INCLUDING THE NATURE OF COMMON CIRCUMSTANCES WHERE SEIZURES HAPPEN, SUCH AS AT A TRAFFIC STOP WHEN THE POLICE PULL SOMEONE OVER FOR A TRAFFIC INFRACTION, OR DURING A POLICE ENCOUNTER WITH SOMEONE THAT IS SUSPECTED OF SELLING DRUGS ON THE STREET, OR THROUGH A POLICE INVESTIGATION OF SOMEBODY THAT IS SUSPECTED OF GROWING CANNABIS ON THEIR HOME
SOME AGENCY OFFICIALS SAID THAT THEY FIND LOW VALUE PROPERTY SEIZURES WITH CLEAR OWNERSHIP EASIER TO PROVE COMPARED TO LIKE LARGE SCALE CASES THAT INVOLVE TRAFFICKERS THAT ARE SKILL ELEVATING DETECTIONS
AND LAST, LOW VALUE PROPERTY SEIZURES MAY BE MORE COMMON BECAUSE NEITHER A STATE LAW NOR INTERNAL AGENCY POLICIES FORBID THEM
NEXT, THE POLICE AGENCIES ON THIS AUDIT DO NOT COLLECT DATA ON THE RACE AND ETHNICITY OF PEOPLE THAT HAVE HAD THEIR PROPERTY SEIZED
SO TO IDENTIFY WHO IS AFFECTED BY CIVILIZED FORFEITURES, WE USE A METHOD THAT ANALYZES US CENSUS DATA ON SURNAMES AND RACIAL AND ETHNIC MAKEUP OF GEOGRAPHIC LOCATIONS WHERE PEOPLE LEAVE TO PREDICT SOMEONE'S PROBABLE RACE AND ETHNICITY
THIS METHOD HAS BEEN USED BY RESEARCH INSTITUTIONS AND GOVERNMENT AGENCIES, INCLUDING THE CONSUMER FINANCIAL PROTECTION BUDDHA, WHEN DATA ON PEOPLE'S RACE AND ETHNICITY IS NOT AVAILABLE, IT'S THE SAME METHOD THE STATE AUDITOR USED TO ESTIMATE THE RACE AND ETHNICITY OF VOTERS IN THE REJECTED BALLOTS PERFORMANCE AUDIT
NEXT, WE FOUND THAT IN SOME COMMUNITIES, CERTAIN RACIAL AND ETHNIC GROUPS EXPERIENCE CIVIL ASSET FORFEITURES AT SIGNIFICANTLY HIGHER RATES WHEN COMPARED TO THEIR PRESENCE IN THE LOCAL POPULATION
FOR EXAMPLE, WITH FIVE OF THE AUDITED AGENCIES, WHICH INCLUDE THE PART OF SEATTLE, THE SHARE OF CIVIL ASSET FORFEITURES THAT INCLUDED PEOPLE WHO WERE BLACK, HISPANIC, OR OF ASIAN AND PACIFIC ISLANDER DESCENT SURPASSED THEIR REPRESENTATION IN THE LOCAL POPULATION BY MORE THAN TEN PERCENTAGE POINTS
WITH TWO OF THE AUDITED AGENCIES, THE SHARE OF CIVIL ASSET FORFEITURES INVOLVING PEOPLE WHO WERE WHITE SURPASSED THEIR REPRESENTATION IN THE LOCAL POPULATION BY NINE PERCENTAGE POINTS
NEXT, ALL OF THE AGENCIES IN THIS AUDIT HAD AT LEAST ONE RACIAL OR ETHNIC GROUP THAT WAS OVERREPRESENTED IN THEIR CIVIL ASSET FORFEITURE CASES, BUT THAT DEGREE OF OVER REPRESENTATION VARIED BY AGENCY AND BY GROUP
FOR EXAMPLE, FOR THE PORT OF SEATTLE PD, PEOPLE OF ASIAN AND PACIFIC ISLANDER DESCENT WERE OVERREPRESENTED BY JUST ONE PERCENTAGE POINT COMPARED TO BLACK PEOPLE, WHO WERE OVERREPRESENTED BY 17 PERCENTAGE POINTS
NEXT, AS PREVIOUSLY MENTIONED, A KEY CONCERN ABOUT CIVIL ASSET FORFEITURES IS THE LACK OF A CRIMINAL CONVICTION REQUIREMENT TO DEPRIVE PEOPLE OF THEIR PROPERTY
WE FOUND THAT OF THE NEARLY 1000 PEOPLE THAT FACED CIVILIZED FORFEITURES WITH THE AUDITED AGENCIES, ONLY 25% OF THEM WERE CONVICTED OF A CRIME RELATED TO THAT FORFEITURE
NEXT, THE CONVICTION RATE DID VARY SIGNIFICANTLY BY AGENCIES
FOR EXAMPLE, THE GRAYS HARBOR COUNTY DRUG TASK FORCE AND THE CENTRALIA POLICE DEPARTMENT HAD THE HIGHEST CONVICTION RATE, AS YOU CAN SEE ON THIS GRAPHIC
IN CONTRAST, THE PORT OF SEATTLE PD HAD NOW CONVICTIONS RELATED TO FORFEITURES
DURING THE REVIEW PERIOD, AGENCY OFFICIALS SAID THAT THIS IS BECAUSE PEOPLE TRANSPORT MONEY AND DRUGS SEPARATE THROUGH THE AIRPORT AND CONVICTIONS USUALLY HAPPEN WHEN DRUGS ARE FOUND
I'M GOING TO PASS THE PRESENTATION TO TANIA, WHO IS GOING TO PROVIDE AN OVERVIEW OF ASPECTS OF STATE LAW AND AGENCY'S PROCESSES WHERE WE IDENTIFIED OPPORTUNITIES TO STRENGTHEN PROTECTIONS FOR PROPERTY OWNERSHIP
THANK YOU
THERE ARE THREE STRUCTURAL ASPECTS OF STATE LAW THAT I'LL FOCUS ON TODAY
THE FIRST IS A LOW STANDARD OF EVIDENCE
THE SECOND IS HOW, IN MOST CASES, FORFEITURE DECISIONS ARE MADE BY THE POLICE AGENCY
AND LAST, HOW PROCEEDS FROM FORFEITURE CASES CAN CREATE A FINANCIAL INCENTIVE
STATE LAW STATE LAW GIVES POLICE BROAD AUTHORITY BY HAVING A RELATIVELY LOW STANDARD OF EVIDENCE, KNOWN AS A PREPONDERANCE OF EVIDENCE
THIS MEANS THAT EVIDENCE MUST ONLY SHOW THAT IT IS MORE LIKELY THAN NOT THAT PROPERTY WAS USED FOR OR WAS BOUGHT WITH PROCEEDS FROM A CRIMINAL ACTIVITY
29 STATES AND THE DISTRICT OF COLUMBIA REQUIRE A HIGHER STANDARD OF EVIDENCE THAN WASHINGTON
AS SEEN IN THE NEXT SLIDE, THEY REQUIRE UP TO A CRIMINAL CONVICTION BEFORE FORFEITING PROPERTY
THESE HIGHER STANDARDS OF EVIDENCE ARE MEANT TO PROVIDE GREATER PROTECTIONS FOR PROPERTY OWNERS
NEXT, SLIDE
ONE ESSENTIAL ELEMENT OF DUE PROCESS
I THINK I'VE GOT THE WRONG SLIDE UP HERE
CAN YOU GO TO SLIDE 17? OH, THAT IS SLIDE 17
OKAY
WELL, ONE ESSENTIAL ELEMENT OF DUE PROCESS IS TO ENSURE THAT CASES ARE HEARD BY AN IMPARTIAL DECISION MAKER
HOWEVER, STATE LAW GIVES BROAD AUTHORITY TO POLICE AGENCIES BY ALLOWING THE SAME AGENCY THAT SEIZES PROPERTY TO ALSO DECIDE IF THEY HAVE ENOUGH EVIDENCE TO KEEP IT
WE REVIEWED 40 FORFEITURE CASES DURING OUR REVIEW PERIOD, AND IN ALMOST ALL, SOMEONE EMPLOYED BY OR CONTRACTED BY THE AGENCY MADE THE DECISION THAT THEY HAD ENOUGH EVIDENCE TO KEEP THE PROPERTY FOR THE PORT
SPECIFICALLY, THE CHIEF OF POLICE OR DESIGNEE DECIDED CASES THAT WERE NOT CONTESTED
CONTRACTED HEARING EXAMINER DECIDED CASES WHEN THE CLAIMANT REQUESTED A HEARING
STATE LAW ALSO ALLOWS POLICE TO FORFEIT OR DISPOSE OF SEIZED PROPERTY BY DEFAULT
THIS TYPICALLY HAPPENS IF A PROPERTY OWNER DOES NOT FILE A CLAIM OR IF THEY FILE A CLAIM LATE
FOR MANY OF THE CASES THAT WE REVIEWED, AGENCIES RETAINED PROPERTY BY DEFAULT BECAUSE AN OWNER DID NOT FILE A CLAIM
STATUTE ALSO ALLOWS THESE CASES TO BE DECIDED JUDICIALLY BY A COURT, BUT THIS ONLY HAPPENS IF A PROPERTY KNOWS THAT THIS IS AN OPTION AND THEY USE THAT OPTION AND THEY REQUEST THAT OPTION
EXCUSE ME
IN THE CASES WE REVIEWED, NO PROPERTY OWNERS HAD THEIR CASE REVIEWED BY COURT
NEXT SLIDE
SOME STATES HAVE ADDRESSED CONFLICT OF INTEREST CONCERNS BY REQUIRING THAT AGENCIES INDEPENDENT OF LAW ENFORCEMENT MAKE FORFEITURE DECISIONS
THEY REQUIRE THAT THESE CASES GO THROUGH THE COURT SYSTEM OR ANOTHER ADMINISTRATIVE PROCESS INSTEAD OF THE POLICE AGENCY
HERE IN WASHINGTON, JUST ONE STATE AGENCY, THE STATE PATROL, FOLLOWS A HYBRID APPROACH THAT PARTIALLY ADDRESSES THESE CONCERNS BY HAVING A SEPARATE STATE AGENCY, THE OFFICE OF ADMINISTRATION
ADMINISTRATIVE HEARINGS, DECIDE SOME OF THE CASES IF AN OWNER FILES A CLAIM AND REQUESTS A HEARING
IN ALL OTHER CASES, STATE PATROL MAKES THOSE DECISIONS
NO OTHER AGENCY THAT WE AUDITED USES THAT HYBRID APPROACH
NEXT SLIDE
THIS THIRD AND LAST AREA OF LAW THAT I'LL TALK ABOUT PROVIDES POLICE BROAD AUTHORITY AND CREATES CONCERNS ABOUT FINANCIAL INCENTIVES
STATE LAW ALLOWS AGENCIES TO KEEP KEEP 90% OF THE PROCEEDS FROM FORFEITURES
THE REMAINING 10% GOES TO THE STATE TREASURER'S OFFICE
COMBINED, THE EIGHT AGENCIES REPORTED RECEIVING MORE THAN $13 MILLION FROM CIVIL ASSET FORFEITURES DURING THE REVIEW PERIOD
TO BE CLEAR, THIS WAS NOT A PARTICULARLY LARGE SHARE OF THEIR REVENUE
FOR MOST OF THESE AGENCIES, THIS REPRESENTED A FAIRLY SMALL AMOUNT, TYPICALLY LESS THAN 1% OF THE AGENCY'S TOTAL SPENDING
IN THE CASE OF THE PORT OF SEATTLE, THIS REPRESENTED ABOUT 7% OF THEIR TOTAL EXPENDITURES
MOST AGENCIES SAID THEY USE THOSE PROCEEDS TO BUY ADDITIONAL EQUIPMENT FOR SALARIES AND OTHER OPERATING COSTS
FOR THE PORT OF SEATTLE, THEY REPORTED USING THESE FUNDS FOR DETECTIVE WAGES, NARCOTICS INVESTIGATIONS AND TRAINING, HEARING EXAMINER FEES, AND ALSO LIFESAVING TOOLS
SOME STATES AND THE DISTRICT OF COLUMBIA HAVE TRIED TO ADDRESS THESE CONCERNS BY REQUIRING THAT ALL OR A SIGNIFICANT PORTION OF THOSE FUNDS ARE DEPOSITED INTO NEUTRAL ACCOUNTS THAT AREN'T MANAGED BY POLICE
THESE MIGHT INCLUDE THINGS LIKE A SUBSTANCE USE CONTROL PROGRAM, VICTIM COMPENSATION FUNDS, OR EVEN THE EDUCATION OR GENERAL FUND
NEXT SLIDE
NOW I'LL WALK THROUGH HOW AGENCIES MEASURE UP AGAINST STATE REQUIREMENTS AROUND DUE PROCESS
AS A QUICK SUMMARY, WE DIDN'T SEE ANY SIGNIFICANT ISSUES WHERE AGENCIES WEREN'T FOLLOWING THE LAW
POLICE AGENCIES ESSENTIALLY NEED TO DO TWO THINGS BEFORE THEY CAN FORFEIT PROPERTY
TWO MAJOR THINGS AT LEAST
FIRST IS TO SEND A NOTICE TO THE PROPERTY OWNER AND THEN SECOND, INFORM THE OWNER THAT THEY HAVE A RIGHT TO A HEARING
IN THE 40 CASES THAT WE LOOKED AT ACROSS ALL OF THE AGENCIES WE REVIEWED, THEY GENERALLY FOLLOWED THESE AND OTHER REQUIREMENTS
NEXT SLIDE SO WE KNOW THAT AGENCIES FOLLOWED STATE LAWS, BUT EXPERTS RECOMMEND ADDITIONAL PRACTICES TO HELP PROVIDE CIVIL PROTECTIONS TO PROPERTY OWNERS
THESE AREN'T REQUIRED BY ANY MEANS, BUT THEY WOULD PROVIDE MORE PROTECTIONS TO OWNERS
THEY SUGGEST, FIRST, MAKING SURE THAT NOTICES ARE DELIVERED
SECOND, MAKING SURE THAT NOTICES ARE UNDERSTANDABLE SO THAT OWNERS KNOW HOW TO RECLAIM THEIR PROPERTY
WE FOUND SOME STRONG INDICATIONS THAT SOME PEOPLE DID NOT RECEIVE THIS NOTICE
OF THE 40 CASES WE REVIEWED, FIBER RETURNED AND NEARLY 10% HAD MISSING ITEMS LIKE ZIP CODES OR BUILDING NUMBERS, GIVING SOME INDICATIONS THAT THEY WERE NOT DELIVERED OR RECEIVED
IN OTHER CASES, TO IMPROVE THE CHANCES OF SUCCESSFUL DELIVERY, WE FOUND THAT SOME AGENCIES, INCLUDING THE PORT, DELIVERED NOTICES IN PERSON OR SENT CERTIFIED LETTERS, WHICH IS IN LINE WITH LEADING PRACTICES
ONLY A FEW AGENCIES HAD PRACTICES TO MAKE THEIR NOTICES UNDERSTANDABLE, INCLUDING MAKING IT STANDARD PRACTICE TO PROVIDE NOTICES IN LANGUAGES OTHER THAN ENGLISH AND ALSO USING PLAIN TALK STANDARDS
NONE MENTION RIGHTS LIKE THE POSSIBILITY OF GETTING ATTORNEY'S FEES REIMBURSED IF THE PROPERTY OWNER PREVAILS
NEXT SLIDE AGENCIES ARE REQUIRED TO SEND REPORTS TO THE STATE TREASURER EVERY QUARTER WITH LIMITED INFORMATION LIKE BASIC DESCRIPTIONS OF PROPERTY FORFEITED AND THE AMOUNT OF MONEY RECEIVED
LEADING PRACTICES, HOWEVER, SUGGEST THAT THEY ALSO INCLUDE TRACKING DETAILED DATA AND TRACKING HOW PROCEEDS ARE SPENT, AND ALSO MAKING SURE THAT THOSE STATEWIDE REPORTS ARE PUBLICLY AVAILABLE ONLINE
ASIDE FROM THE LIMITED DATA THAT AGENCIES REPORT, WASHINGTON DOES NOT REQUIRE COLLECTING OR REPORTING ANY OF THESE OTHER ITEMS NEXT SLIDE WE MADE A SERIES OF RECOMMENDATIONS FOR THE LEGISLATURE AND POLICE AGENCIES, MORE DETAILS OF WHICH ARE AVAILABLE IN OUR REPORT, BUT AS A SUMMARY, WE RECOMMEND THE LEGISLATURE CONVENE A WORKGROUP TO ADDRESS ISSUES SUCH AS PRACTICES AROUND CONFLICT OF INTEREST CONCERNS AND WHO MAKES FORFEITURE DECISIONS, POTENTIAL FINANCIAL INCENTIVES AND PRACTICES AROUND DELIVERING NOTICES AND MAKING THEM UNDERSTANDABLE
IN ADDITION TO THAT WORK GROUP, WE RECOMMEND THAT AGENCIES DEVELOP WRITTEN GUIDANCE FOR DELIVERING NOTICES, SEND NOTICES IN PLAIN TALK AND PROVIDE INFORMATION TO OWNERS ABOUT ESSENTIAL RIGHTS
ONE NOTE THAT I LIKE TO OFFER ABOUT THESE RECOMMENDATIONS, WE CONSIDERED THEM BROAD ENOUGH THAT WE RECOMMEND
WE ESSENTIALLY RECOMMEND THAT ALL AGENCIES ACROSS THE STATE CONSIDER THE PRACTICES THAT WE PROVIDE THROUGHOUT THE REPORT
WITH THAT THAT ENDS OUR PREPARED COMMENTS AND ARE HAPPY TO SEE THE REST OF ANY TIME THAT WE HAVE TO
BACK TO YOU
WELL, THANK YOU BOTH VERY MUCH
I THINK AT THIS TIME, WE CAN GO AHEAD AND TAKE SOME QUESTIONS AND COMMENTS FROM THE DAIS
BEGIN WITH MISS HOLMSTROM
NO QUESTIONS
COMMISSIONER HOBBITS
OKAY, I'VE GOT A FEW
IT SEEMS LIKE I REALLY HAD WRITTEN NOTES ABOUT
SORT OF FEELS LIKE WE'VE GOT TWO AREAS WE NEED TO FOCUS ON
ONE IS RECOMMENDATIONS TO THE LEGISLATURE AND RECOMMENDATIONS FOR US INDIVIDUALLY AT THE PORT OF SEATTLE AND OUR POLICE AGENCY
AND SINCE YOUR WRAP UP WAS REALLY HELPFUL, ANSWERED SOME OF MY QUESTIONS
I AM CURIOUS ABOUT OUR PARTICULAR SAMPLE SET OF FORFEITURES
SO, WHEN WE LOOK AT THE DATA THAT YOU PROVIDED, KIND OF IN AGGREGATE, IS THAT THE PROPORTIONS THAT YOU SHOWED, IS THAT LET'S SAY, A POLICE AGENCY REPRESENTING, LET'S SAY IT'S THE KING COUNTY SHERIFF'S OFFICE
SO THEIR SAMPLE SET WOULD BE EVERYONE
ALL FORFEITURES THAT THEY TOOK WITHIN A LARGER POPULATION, AND THE POPULATION BREAKDOWN BY DEMOGRAPHIC GROUP IN KING COUNTY
LET'S SEE IF I AM FOLLOWING YOU
I THINK IT'S SLIDE TWELVE
I THINK IF THAT'S THE DEMOGRAPHIC RESULTS
KEEP GOING BACK A COUPLE MORE
LET ME FIND IT
OH, MAYBE THAT WAS THE ONE I WAS LOOKING AT
YEAH, I THINK MY
TO GET TO THE HEART OF MY QUESTION
OKAY
SO FOR MOST OF OUR ANALYSIS, WE ASKED AGENCIES TO PROVIDE US WITH ALL CIVIL ASSET FORFEITURES THEY CONDUCTED DURING THE THREE YEAR REVIEW PERIOD OF 2020 TO 2022
SO IT WOULD HAVE INCLUDED ALL OF THEIR FORFEITURES
ONLY THE CASE FILE REVIEW LATER ON, TO EXAMINE IF THE AGENCIES WERE FOLLOWING, LIKE DUE PROCESS REQUIREMENTS, WAS BASED ON A SAMPLE OF A FEW CASES PER AGENCY
BUT THE REST OF THE ANALYSIS ARE BASED ON THE ENTIRE POPULATION OF FORFEITURES THEY HAD DURING THAT REVIEW PERIOD
SO, MY QUESTION, LOOKING AT THIS SLIDE, THE PERCENTAGE OF LOCAL POPULATION
LET'S LOOK AT THE ONE THAT'S MOST GLARING
13% OF THE LOCAL POPULATION IS BLACK
HOWEVER, I IMAGINE ALMOST ALL OF OUR FORFEITURES ARE AMONG FOLKS TRAVELING THROUGH SEA, CORRECT? YEAH
SO FOR THE
I KNOW IT SAYS LOCAL POPULATION RIGHT THERE, BUT FOR THE PORT OF SEATTLE, WE DID ADJUSTED OUR METHODOLOGY TO CREATE A COMPARISON POPULATION THAT BETTER REFLECT THE DEMOGRAPHICS OF THE PLACES WHERE THE PEOPLE THAT FACE FORFEITURES WITH THE PORT OF SEATTLE LEAVE
SO WE CREATED A WEIGHTED AVERAGE OF THE DEMOGRAPHICS OF THE STATES WHERE THE PEOPLE THAT HAD FORFEITURES WITH THE PORT OF SEATTLE LEAVE TO COME UP WITH, LIKE, A COMPARISON POPULATION
AND ARE
MAYBE THIS IS A MISCONCEPTION ON MY PART, BUT I
I THOUGHT THAT MANY OF THESE ARE PROMPTED BY CBP FINDING CASH IN LUGGAGE, WHICH WOULD INDICATE THAT IT WOULD BE A LOT OF FOLKS TRAVELING INTERNATIONALLY
CORRECT
I THINK THE POOR IS BETTER
OFFICIALS ARE BETTER FITTED TO TALK ABOUT THEIR SPECIFIC METHODS
I'D LIKE TO WELCOME CHIEF VILLA TO THE STAND, ALSO TO BE ABLE TO TAKE QUESTIONS
AND THEN I'D ALSO LIKE TO SEE IF OUR REPRESENTATIVES FROM PORT OF SEATTLE POLICE HAVE ANY RESPONSE THAT THEY'D LIKE TO PROVIDE
AND CAN YOU PLEASE STATE YOUR NAME FOR THE RECORD? YES
GOOD MORNING, MADAM CHAIR
DO I HAVE TO TURN THIS ON? GOOD MORNING, MADAM CHAIR AND COMMITTEE MEMBERS
I'M MIKE VILLA, PORT OF SEATTLE CHIEF OF POLICE
AND HERE WITH ME TODAY IS KYLE YOSHIMIRA, COMMANDER FOR OUR CRIMINAL INVESTIGATIONS DIVISION
I'D LIKE TO THANK THE COMMITTEE FOR GIVING US AN OPPORTUNITY TO MAKE SOME BRIEF COMMENTS AND THEN ALSO TO RESPOND TO QUESTIONS
AND I BELIEVE THAT WE CAN ALL AGREE THAT THE ILLEGAL DRUG TRADE IS HARMING OUR COMMUNITIES
AND EVEN IN 2023, OVER 1300 PEOPLE IN KING COUNTY ALONE DIED OF DRUG OVERDOSE DURING THAT TIME
AND ALL OF US HAVE PROBABLY SEEN THE DEVASTATING EFFECTS OF DRUGS IN OUR COMMUNITIES, AND MAYBE SOME OF US EVEN MORE CLOSER TO HOME, WITH FAMILY OR WITH FRIENDS
FIRST, JUST
I'D LIKE TO PROVIDE SOME INFORMATION JUST REGARDING OUR CRIMINAL INVESTIGATIONS THAT WE DO, OR OUR TEAM, OUR INTERDICTION TEAM
IT WAS IN 2018 THAT THE PORT OF SEATTLE CREATED A DRUG INTERDICTION TEAM OVERSEEN BY OUR CRIMINAL INVESTIGATIONS DIVISION, AND THAT CONSISTED OF TWO NARCOTIC DETECTIVES AND THEIR PARTNER, CANINES
THE TEAM HAS ACCOMPLISHED SIGNIFICANT RESULTS BETWEEN THE YEARS OF 2019 AND 2022, LEADING TO 76 CRIMINAL ARREST FOR DRUG TRAFFICKING
THEY SEIZED OVER 2090 3 GRAMS OF COCAINE, 300 DOSAGE UNITS OF OXYCODONE, 795 GRAMS OF HEROIN, 2375 POUNDS OF MARIJUANA, 23 METHAMPHETAMINE, AND 253,868 FENTANYL PILLS DURING THAT PERIOD, AND THE STREET VALUE OF THESE ILLICIT SUBSTANCES IS MORE THAN $9 MILLION DOLLARS
REMOVING THESE ILLICIT NARCOTICS STOP THEM FROM ENTERING INTO THE PUBLIC AND FURTHER HARMING OUR COMMUNITIES
OUR INTERDICTION UNIT, ALSO BETWEEN THOSE YEARS OF 2019 AND 2022, THEY SEIZED OVER $7.42 MILLION OF CASH THAT WAS FUELING THE ILLICIT DRUG TRADE
SECOND, MOVING FROM THAT, I'D LIKE TO JUST TALK ABOUT, ABOUT THE UNIQUE OPERATING ENVIRONMENT IN WHICH THE PORT OF SEATTLE AND OUR DETECTIVES WORK
OUR DEPARTMENT REALLY IS UNLIKE ANY OTHER JURISDICTION THAT WAS AUDITED OR THAT IS IN OR CITY OR COUNTY IN WASHINGTON STATE
YOU KNOW, WE PROVIDE LAW ENFORCEMENT SERVICES TO ONE OF THE BUSIEST AIRPORTS IN NORTH AMERICA AND A MAJOR GATEWAY FOR DOMESTIC AND INTERNATIONAL TRAVEL
THERE WERE OVER 50 MILLION PASSENGERS THAT TRAVELED THROUGH SEA IN 2023
SIMILARLY, OUR ASSET FORFEITURES ARE UNIQUE COMPARED TO OTHER POLICING AGENCIES IN THE STATE, AND WE BELIEVE THAT IT WOULD BE INCORRECT TO COMPARE OUR DEPARTMENT WITH OTHER POLICING AGENCIES
WE PREVIOUSLY ADDRESSED THIS UNIQUENESS IN OUR RESPONSE TO THE STATE AUDITOR'S OFFICE OR RESPONSES, AND WE CAN DISCUSS THAT MORE WITH THE PORT OF SEATTLE AUDIT COMMITTEE, IF YOU WOULD LIKE US TO DO SO
THIRD, AND FINALLY, PER THE AUDITOR'S RECOMMENDATION THAT THEY SHOW IT, I THINK IT WAS IN OUR LAST SLIDE OR CLOSER LAST SLIDE, THE PORT OF SEATTLE
WE ARE READY AND WILLING TO ACTIVELY PARTICIPATE IN ANY WORK GROUP THAT THE LEGISLATURE WOULD CONVENE TO CONSIDER POTENTIAL IMPROVEMENTS TO THE CIVIL ASSET FORFEITURE PROCESS IN THE STATE
AND THEN WE'LL GET BACK, WE'LL ANSWER THAT QUESTION THAT YOU HAD, COMMISSIONER CALKINS, BUT THEN WE'RE HAPPY TO TAKE ANY OTHER QUESTIONS THAT YOU MIGHT HAVE
AND SO
AND I'M GOING TO TURN SOME OF THE TECHNICAL QUESTIONS OVER TO COMMANDER YOSHIMIRA
I THINK I CAN ANSWER THAT QUESTION YOU HAD ABOUT CBP IN THAT MOST OF OUR DRUG INTERDICTION, IT'S NOT NECESSARILY CBP COMING FROM INTERNATIONAL TRAVELERS, BUT IT'S REALLY THE WORK OF THE TWO
THE WORK OF THE TWO DETECTIVES AND THOSE TEAMS THAT ARE RECEIVING TIPS FROM VARIOUS PERSONS
SOME OF THOSE COULD BE FROM CBP, BUT I THINK A LARGE PORTION OF THOSE ARE DOMESTIC TRAVEL
IS THAT CORRECT IN SAYING THAT, COMMANDER? YES
GOOD MORNING, MADAM COMMISSIONER, MADAM CHAIR, COMMISSIONERS AND MEMBERS OF THE COMMITTEE
YES
SO, AGAIN, MY NAME IS COMMANDER KYLIE OSHIMURA
AS CHIEF EO WAS SAYING, MOST OF OUR CASES ARE GENERATED DOMESTICALLY, AND ALTHOUGH WE DO RECEIVE TIPS FROM CBP, WE RECEIVE VARIOUS TIPS FROM OTHER LAW ENFORCEMENT AGENCIES ACROSS THE STATE
SO IT'S NOT JUST LIMITED TO CBP
SO I WANT TO BE CLEAR
THIS IS OUR GOAL TODAY IS NOT TO INHIBIT GOOD LAW ENFORCEMENT ACTIONS THAT HELP TO SLOW OR STOP THE TRADE OF ILLICIT DRUGS
NOR DO I HAVE ANY CONCERN ABOUT FORFEITURES OF ILLICIT GAINS
WHAT I WANT TO TRY TO FIGURE OUT IS HOW DO WE ENSURE THAT WE'RE NOT CASTING TOO BROAD A NET IN THE WAY WE DO THAT, AND THAT WHEN WE DO RETAIN FUNDS FROM SOMEBODY WHO WAS NOT ENGAGED IN ANY SORT OF LEGAL ACTIVITY, THAT THERE IS A SIMPLE AND RELATIVELY PAINLESS WAY FOR THEM TO MAKE A CLAIM AND GET THAT BACK
AND I THINK YOUR RECOMMENDATIONS ARE EXCELLENT ON THAT
PART OF WHAT I'M TRYING TO UNDERSTAND IS THE DISPROPORTIONALITY THAT WE SEE IN THAT FIGURE, AN ACCURATE REPRESENTATION OF OUR UNIQUE POLICE DEPARTMENT OR POLICE JURISDICTION
OR IT MIGHT ACTUALLY BE WORSE, EVEN MORE SKEWED, THAT, YOU KNOW, OUR TRAVELING PUBLIC MIGHT THE NUMBERS THAT WE'RE USING THERE BASED ON LOCAL POPULATION
AND IT SOUNDS LIKE YOU DID WAIT THAT
AND SO I APPRECIATE KNOWING THAT
BUT SO IN TERMS OF ADDITIONAL RECOMMENDATIONS, I WOULD HOPE THAT THERE IS SOME EFFORT, WHETHER IT'S BY US AS A PORT OR IN COLLABORATION WITH THE COMMERCIAL AVIATION INDUSTRY, TO HELP PEOPLE UNDERSTAND THAT MOVING THESE QUANTITIES OF MONEY, PARTICULARLY INTERNATIONALLY, IS PROHIBITED AND SO THAT SOMEONE DOESN'T INADVERTENTLY
IS THAT NOT TRUE? I SEE SOMEBODY SHAKING THEIR HEAD
I MEAN, INTERNATIONALLY, IT SAYS, YOU HAVE TO DECLARE IF YOU'RE GOING TO BRING THAT MONEY
AND SO NOW, THANKFULLY, ENGLISH IS THE LINGUA FRANCA
SO I CAN READ ALL THE SIGNS THAT, WHETHER IT'S HERE OR IN OTHER COUNTRIES
BUT I WONDER ABOUT SOMEONE WHO IS MIGRATING TO THE UNITED STATES
HAS THEIR LIFE SAVINGS GRABBED AT THE AIRPORT BECAUSE THEY TRIPPED A THRESHOLD THAT THEY WERE UNAWARE OF? AND THOSE TYPES OF
THAT'S WHERE MY CONCERN IS TODAY, IS US PUTTING SOMEBODY INTO INDIGENCY BECAUSE WE SEIZED FUNDING AND THEY HAD NOT DONE ANYTHING WRONG OTHER THAN TO TRANSPORT THAT
CHIEF VIA, WOULD YOU LIKE TO RESPOND? YEAH, I THINK WE CAN RESPOND A LITTLE BIT OR TALK A LITTLE BIT ABOUT OUR, WHEN WE DO THESE SEIZURES, KIND OF HOW WE, NOT TO GET INTO TOO MANY DETAILS, BUT ESSENTIALLY HOW DO WE RECEIVE THE TIP? WHEN DO OUR OFFICERS RESPOND OR DETECTIVES RESPOND AND INITIATE AN INVESTIGATION? IT MIGHT ADDRESS SOME OF THE CONCERNS THAT YOU, THAT YOU HAVE
AND THEN YOU ALSO DID TOUCH ON NOTICES AND APPEAL PROCESS
SO IF WE HAVE TIME, I'D LIKE COMMANDER YOSHIMIRA TO KIND OF TOUCH ON THAT, TOO
AND I COULD SPEAK TO COMMANDER YOSHIMIRA, BUT YOU'RE MUCH MORE DIALED INTO THIS PARTICULAR TOPIC
SO IF YOU DON'T MIND, COMMANDER, PLEASE
SURE
SO IF WE WANTED TO ADDRESS THE FIRST CONCERN ABOUT HOW DO WE RECEIVE THESE TIPS? SO OUR DETECTIVES OPERATE OFF OF PROBABLE CAUSE STANDARD, AND SO THEY ARE LOOKING FOR MORE THAN JUST THE FAMILY THAT IS COMING IN WITH THEIR LIFE SAVINGS
THERE'S A LOT OF OTHER FACTORS THAT THEY'RE LOOKING AT TO DETERMINE WHERE THIS MONEY IS COMING FROM
YOU KNOW, AGAIN, WITHOUT GOING INTO ALL OF THE DETAILS, THE COURTS HAVE ALREADY ACCEPTED, THERE ARE CERTAIN FACTORS, SUCH AS PURCHASING TICKET AT THE LAST MINUTE, DOING IT AS A CASH TRANSACTION, A LAST MINUTE PURCHASE
THAT'S ONLY ONE WAY
SO THESE FACTORS ARE KEY FACTORS THAT PLAY INTO THE MONEY
AND WE, AGAIN, SOME OF THE TIPS THAT WE RECEIVE, THEY'RE NOT JUST, HEY, THIS PERSON COULD BE CARRYING MONEY OR THEY ARE CARRYING MONEY
IT'S JUST TIPS THAT THIS PERSON COULD BE COMING WITH DRUGS OR MONEY
SO WE'RE NOT JUST LOOKING FOR THE MONEY
AND HOPEFULLY THAT ANSWERS YOUR QUESTION
PARTLY THAT, YEAH, IT DOES
AND AGAIN, IT SOUNDS LIKE THE VAST MAJORITY OF THESE ARE UNCONTROVERSIAL SEIZURE OF FUNDS THAT WERE SOMEHOW INVOLVED IN ILLICIT ACTIVITIES
NOT CONCERNED ABOUT THOSE
AND I DON'T WANT YOU TO DIVULGE WHAT METHODS YOU'RE USING TO DISCOVER THE ILLICIT TRANSFER OF MONEY THROUGH THE AIRPORT
I THINK THAT'S GREAT
AND I WANT TO CONTINUE TO DRILL DOWN INTO WHAT WE CAN DO TO ENSURE THOSE WHO ARE IN GOOD FAITH SIMPLY TRYING TO, AND MAYBE THEY'RE UNBANKED FROM WHERE THEY'RE TRAVELING FROM OR JUST SIMPLY UNAWARE OF THAT KIND OF REGULATION THAT EITHER REQUIRES YOU REPORT IT OR FIND A DIFFERENT WAY TO MOVE IT OTHER THAN IN YOUR LUGGAGE
SO IT SOUNDS LIKE THAT'S A RELATIVELY SMALL NUMBER OF THE TOTAL POTENTIAL CASES, BUT WE WANT TO PREVENT THAT FROM HAPPENING WHEN POSSIBLE AND HAVE AN OUTLET FOR THOSE FOLKS WHO SHOULD BE ABLE TO LAWFULLY CLAIM THEIR MONEY
THAT'S AS SIMPLE AS POSSIBLE
AND IT SOUNDS LIKE WE'RE AMONG THE BETTER INSTANCES OF POLICE AGENCIES
AND SO MOVING FORWARD, WHAT I WANT TO FIGURE OUT IS WHAT CAN WE DO TO GO FROM BETTER TO BEST, AND WHAT CAN WE DO TO ADVOCATE AT THIS STATE LEVEL FOR THESE LEGISLATIVE RECOMMENDATIONS? AND MAYBE THAT'S JUST ADDING IT TO OUR LEGISLATIVE AGENDA
COMMISSIONER HASEGAWA
THANK YOU, COMMISSIONER CALKINS, MISS HOLMSTROM, ANY QUESTIONS OR COMMENTS? NOW? THAT'S JUST FINE
I HAVE A FEW OF MY OWN THEN
THANK YOU SO MUCH FOR THE PRESENTATION
AN INTERESTING THING ABOUT A STATEWIDE AUDIT IS IT WILL COME WITH SOME HIGH LEVEL, I THINK, OVERARCHING THEMES AND RECOMMENDATIONS
AND SO I APPRECIATE THAT INFORMATION
FOR ME, AS AN AUDIT COMMITTEE MEMBER WITH THE PORT OF SEATTLE, I'M INTERESTED AT SOME OF THOSE SUBGROUPS THAT WERE PARTICIPATING IN THE AUDIT
AND SO, CHIEF VILLA, COMMANDER YOSHIMIRA, I REALLY APPRECIATE YOUR BEING HERE TO TALK A LITTLE BIT MORE ABOUT HOW WE'RE SORT OF AN OUTLIER, I THINK, IN TERMS OF VOLUME, IN TERMS OF PRACTICES, IN TERMS OF JURISDICTION
SO IF WE COULD TURN TO SLIDE SIX, I JUST WANT TO TALK ABOUT THE DATA, IF WE COULD
WHEN YOU TALK ABOUT THAT, THEY DON'T COLLECT KEY DATA
I HEARD YOU PULL OUT RACE AND ETHNICITY
ARE THERE ANY OTHER CATEGORIES THAT YOU WERE RECOMMENDING THAT LAW ENFORCEMENT AGENCIES DO COLLECT? SURE
SOME OF THE LEADING PRACTICES, IN ADDITION TO RACE AND ETHNICITY, SUGGEST THAT AGENCIES SHOULD COLLECT CRIMINAL CONVICTION INFORMATION, WHETHER OR NOT A PERSON WAS CONVICTED OF A CRIME AND AT WHAT STAGE THEY, I GUESS, WENT UP TO ASSOCIATED WITH THE SPECIFIC INCIDENT
CORRECT
AM I MISSING ANY? SAHARA? YEAH, THERE'S A HOST OF DATA THAT LEADING PRACTICES RECOMMEND
LIKE, WHAT WAS THE CIVIL OUTCOME OF THE CASE? WAS THE PROPERTY FORFEITED BY DEFAULT OR AFTER A HEARING? THEY ALSO RECOMMEND TO COLLECT DATA ON WHO MADE THE DECISION
WAS THAT MADE ON AN ADMINISTRATIVE HEARING OR WAS IT MADE BY THE COURT IN A JUDICIAL WAY? SO, AND I THINK THE REPORT PAGE, WHERE WE HAVE THE RECOMMENDATIONS, KIND OF LISTS SOME OF THOSE KEY DATA POINTS THAT LEADING PRACTICES RECOMMEND AGENCIES COLLECT TO STRENGTHEN TRANSPARENCY ABOUT CIVIL ASSET FORFEITURE
AND THEN IN TERMS OF THE PARTICIPATING POLICE DEPARTMENTS THAT WERE AUDITED, WAS IT A RANDOM SELECTION? I MEAN, THERE ARE HUNDREDS OF POLICE DEPARTMENTS IN THE STATE OF WASHINGTON
WE SELECTED AGENCIES BASED ON A VARIETY OF FACTORS, SUCH AS THEIR LEVEL OF CIVIL ASSET FORFEITURE ACTIVITY DURING THAT THREE YEAR PERIOD, THE AMOUNT OF REVENUE THEY WERE RECEIVING FROM CIVIL ASSET FORFEITURE
AND WE ALSO WANTED VARIOUS TYPES OF AGENCIES
WE WANTED, LIKE POLICE
DON'T MIND THE TRAIN
OKAY
SORRY
WE WANTED TO
IN ORDER TO COME UP WITH, LIKE, OVERALL RECOMMENDATIONS, WE WANTED, LIKE, TO INCLUDE A MIX DEPARTMENTS, SHERIFF'S OFFICES, STATE AGENCY, LIKE THE STATE PATROL, AND LIKE, A DRUG TASK FORCE
BECAUSE THERE ARE SEVERAL DRUG TASK FORCES THAT CONDUCT CIVIL ASSET FORFEITURE IN THE STATE
SO THOSE THREE FACTORS WERE PRIMARILY DRIVING OUR SELECTION
AND THEN I KNOW MULTIPLE OF THESE POLICE DEPARTMENTS IN THEIR JURISDICTION ALSO HAVE AN OPERATING PORT IN SOME CAPACITY
SO DO YOU KNOW, FOR EXAMPLE, IF SPOKANE SHERIFF'S OFFICE ALSO RESPONDS TO THE AIRPORT THERE OF YAKIMA PD? I'M SORRY, NOT YAKIMA
SPOKANE THAT HAS AN AIRPORT DOES
SO DOES SPOKANE SHERIFF'S OFFICE RESPOND TO THE AIRPORT THERE? I'M NOT SURE
WHAT I KNOW FROM THE DATA IS THAT IT'S VERY CLEAR IF
IF THE AGENCY WAS JUST THE POLICE DEPARTMENT OR A TASK FORCE MADE OF THAT POLICE DEPARTMENT AND SOME OTHER AGENCIES, LIKE, FOR EXAMPLE, WITH THE CENTRALIA POLICE DEPARTMENT, YOU GOT THE CIVIL ASSET FORFEITURES CONDUCTED BY THE CENTRALIA POLICE DEPARTMENT
BUT THERE IS ALSO A TASK FORCE IN THAT AREA THAT THOSE FORFEITURES THAT INCLUDE THE CENTRALIA POLICE DEPARTMENT AND OTHER AGENCIES
I DON'T RECALL FROM THE DATA SEEING, LIKE, OTHER PORTS
OKAY
YEAH, BUT I CAN'T ANSWER WITH 100% CERTAINTY ON THAT
COMMANDER, DO YOU HAVE SOMETHING TO ADD? YES, MADAM CHAIR
SO JUST TO ANSWER YOUR QUESTION, SPOKANE AIRPORT DOES HAVE THEIR OWN POLICE DEPARTMENT THAT IS SEPARATE FROM THE SHERIFF'S OFFICE AND THEN THE CITY POLICE DEPARTMENT
THANK YOU
AND THEN IF WE CAN GO TO SLIDE TWELVE, PLEASE
I'M LOOKING AT RACE AND ETHNIC DATA
SO I'M WONDERING IF YOU'VE CAPTURED INFORMATION FOR WESTERN, ASIAN OR ARAB POPULATIONS
AND IF SO, HOW THEY'RE GROUPED
I KNOW HISTORICALLY, PERHAPS ERRONEOUSLY, THEY'VE BEEN CATEGORIZED ON A RACIAL BASIS BY THE CENSUS AS CAUCASIAN
PROPERLY
THEY'RE FROM THE ASIAN CONTINENT
AND I ASK BECAUSE IF WE'RE RAISING POTENTIAL ISSUES OF DISPARATE PRACTICES, PARTICULARLY ON A RACE OR ETHNIC BASIS, THERE ARE ONGOING REPERCUSSIONS FROM 911 AND, AND DISCRIMINATORY PRACTICES AGAINST ARAB AND MUSLIM PEOPLE WITH RELIGIOUS, WHO BEAR RELIGIOUS INDICATORS
AND SO I'M WONDERING IF THAT THEIR DATA IS CAPTURED HERE
IT COULD BE, BUT IT'S HARD TO TELL
IT LENDS ITSELF TOWARDS THE QUESTION OF IMPORTANCE OF GOOD DATA
RIGHT? IT COULD BE, BUT WE, YOU KNOW, WE HAD TO USE THESE, THIS MORE LIKE CLEARLY DEFINED RACE AND ETHNIC GROUPS BY THE US CENSUS
AND ALSO LIKE THE METHODOLOGY THAT WE USED TO, LIKE, ESTIMATE PEOPLE'S PROBABLE RACE AND ETHNICITY ALSO USES THESE SAME KIND OF, LIKE, CATEGORIES
SO IT'S POSSIBLE THAT IT INCLUDES PEOPLE OF THOSE RACES AND ETHNICITIES, BUT HARD TO TELL
MADAM CHAIR, CAN I MAKE A COMMENT JUST ON
NOT NECESSARILY SPECIFIC TO THAT, BUT TWO COMMENTS
ONE IS, IN GOING BACK TO COMMISSIONER CALKINS COMMENT PREVIOUSLY, IS THAT OUR INVESTIGATIONS DON'T START WITH SOMEBODY DECLARING FUNDS
SO WE DO HAVE PEOPLE COMING THROUGH THE AIRPORT OR INTO THE AIRPORT, AND THEY DECLARE THAT THEY HAVE X AMOUNT OF DOLLARS AND THEY'RE COMING IN
OUR INVESTIGATIONS REALLY START FROM TIPS THAT WE RECEIVE, AND WE INITIATE AN INVESTIGATION BASED ON TRAVELER CHARACTERISTICS AND ABOUT, I THINK I CAN SAFELY SAY 100% OF THE TIME, WE DON'T KNOW WHAT ETHNICITY OR NATIONALITY OR RACE SOMEBODY IS
WE'RE LOOKING AT, AS COMMITTED COMMANDER YOSHIMIRA MENTIONED, SOME OF THOSE CHARACTERISTICS
WE'RE LOOKING AT DRUG TRADE ROUTES AND THINGS OF THOSE NATURES AS WELL
AND THEN WE INITIATE, MAKE A DETERMINATION IF WE'RE GOING TO INITIATE AN INVESTIGATION, AND THEN WE'LL MAKE CONTACT WITH THE PERSON TRAVELING THROUGH AND CONTINUE THAT INVESTIGATION THROUGH INTERVIEW, AND POTENTIALLY BRING IN ONE OF OUR CANINE DOGS, DRUG DOGS AND AYE
GETTING ON THE MONEY OR A SUITCASE THAT MIGHT HAVE DRUGS IN IT AND THINGS OF THAT NATURE
AND SO WHILE CERTAINLY WE WANT TO DO EVERYTHING WE CAN NOT TO DISPROPORTIONATELY IMPACT ANY GROUP, REALLY, OUR INVESTIGATIONS ARE A LOT DIFFERENT FROM, AND VERY UNIQUE FROM WHAT YOU MIGHT FIND IN A CITY OR A COUNTY WHERE THEY'RE STOPPING PEOPLE FINDING DRUGS ON THEM, OR THEY'RE TARGETING A PARTICULAR LOCATION WHERE DRUGS MIGHT, THEY SUSPECT DRUGS MAY BE KILLED COMING OUT OF OR PARTICULAR NEIGHBORHOODS AND THINGS OF THAT SORT
SO I CAN'T SPEAK FOR THOSE OTHER AGENCIES, BUT JUST MAKE, JUST WANTED TO MAKE SURE IT WAS CLEAR THAT IT IS REALLY UNIQUE HOW WE CONDUCT THESE INVESTIGATIONS
THAT'S HELPFUL
THANK YOU
CHIEF DIAS
SLIDE SEVEN, IS THERE A REASON WHY DRUGS WERE NOT ONE OF THE CATEGORIES THAT YOU SCREENED FOR? WERE AUDITING SOUGHT TO IDENTIFY, LIKE THE TYPE OF PROPERTY THAT IS BEING SEIZED? BECAUSE THIS IS THE KIND OF PROPERTY THAT PEOPLE CAN, LIKE, RECLAIM BACK
IF THE PROPERTY WAS NOT INVOLVED OR ASSOCIATED WITH CRIME WHEN IT COMES TO DRUGS, I BELIEVE THAT THEY HAVE TO BE DISPOSED, BUT I'LL LET THE OFFICER SPEAK BETTER ABOUT THAT
SO DRUGS IS NOT SOMETHING THAT PEOPLE CAN RECLAIM BACK, AM I? THAT'S CORRECT
YOU CAN'T CLAIM BACK YOUR DRUGS? YEAH
JUST WONDERING IF WE'RE TAKING A LOOK AT THE FULL PICTURE OF THE OPERATION OF STOPPING SEIZING AND THEN HOW THAT'S HANDLED ALSO, I THINK, BECOMES A LEGAL QUESTION, INCLUDING THE WAY IT'S DICTATED THROUGH RCW
AND THAT'S SOMETHING THAT WE'VE TAKEN A LOOK AT AND HAD SOME PRETTY THOROUGH CONVERSATIONS ABOUT HERE AT THE PORT OF SEATTLE IS WHAT HAPPENS ONCE, INCLUDING WITH GUNS AS WELL
I MEAN, YOU HAVE WEAPONS LISTED HERE
SO THAT'S HELPFUL FOR ME TO UNDERSTAND THE SCOPE AND THE PURPOSE
AND, MADAM CHAIR, JUST TO BE CLEAR, THE PERSON DOESN'T GET THEIR DRUGS BACK, BUT WE DON'T JUST DISPOSE OF THEM
THEY HAVE TO GO THROUGH THE LEGAL PROCEEDINGS OF GOING THROUGH COURT AND HAVING THE CASE ADJUDICATED AND FINALIZED
AND THEN ONCE THAT'S CLEAR, I SIGN OFF ON THE DESTRUCTION METHOD
BUT, YES, WE HOLD ON TO IT UNTIL IT'S SEATED
THERE'S A DIFFERENCE BETWEEN SOMEBODY DECLARING A WEAPON, HAVING IT SEIZED, AND THEN SEEKING TO BE ABLE TO RECUPERATE THAT VERSUS GETTING A TIP FROM SOMEBODY SAYING THAT SOMEBODY'S PROBABLY CARRYING WEAPONS AND THEN INTERCEPTING THAT AND THEN SEIZING THEM
AND THEN WHAT HAPPENED SUBSEQUENTLY TO THOSE, TO THE ARMS THAT WERE SEIZED THAT WERE PLAUSIBLY BEING PROLIFERATED INTO OUR SOCIETY FOR NEFARIOUS OR UNDERGROUND PURPOSES
SO I JUST ASKED THE SAME QUESTIONS ABOUT DRUGS, NARCOTICS, BECAUSE SO MUCH OF THE PROBLEM IS THROUGH LEGALLY PRESCRIPTIONS AS WELL
MOVING FORWARD
SLIDE 22, SCREENING FOR PLAIN TALK AND TRANSLATION
WHO ARE, HOW DOES THE PORT OF SEATTLE DO, CHIEF? DO WE USE PLAIN TALK? AND DO WE HAVE TRANSLATED MATERIALS THAT CAN POINT PEOPLE TOWARDS RECOVERING THEIR PROPERTY? YEAH, AND YOU CAN EXPAND ON THIS, COMMANDER, BUT BECAUSE WE'RE MAKING CONTACT WITH THE PERSON WHO HAS THE CASH AND THAT'S ALL WE'RE SEIZING, WE, ALMOST ALL OF OURS ARE IN PERSON NOTICES
AND IF THERE IS A LANGUAGE BARRIER, THEN WE HAVE HAD SOME OF THOSE, BUT WE'VE HAD STAFF THAT CAN SPEAK THOSE PARTICULAR LANGUAGES
AND SO WE'VE UTILIZED STAFF OR OTHER PARTNERS THAT WE WORK WITH
IF WE NEEDED TO
WE COULD CALL THE LANGUAGE LINE AND WORK THROUGH THEM TO DO THAT
AS FAR AS OUR NOTICES GO, THAT IS AN AREA THAT WE CERTAINLY COULD IMPROVE IN, IS THAT
I WOULD SAY IT IS PLAIN TALK LOOKING THROUGH THAT NOTICE FORM, BUT WE DON'T HAVE IT IN ADDITIONAL LANGUAGES AT THIS TIME
AND THAT ALIGNS WITH OUR FINDINGS ON THE REVIEW OF THE PORT OF SEATTLE NOTICES
THEY ARE ONLY IN ENGLISH AND THEY ARE NOT WRITTEN IN PLAIN TALK
BASED ON THE TEST THAT WE DID, THERE WAS ONLY ONE AGENCY THAT HAD A LETTER THAT GOT CLOSER TO THAT PLAIN TALK STANDARD OF WRITING LETTERS TO AN 8TH GRADE READING LEVEL
SO WHAT'S NEXT FOR THE STATE AUDITOR'S OFFICE? YOU GO, YOU PUBLISH YOUR REPORT, YOU MAKE SURE THE STAKEHOLDERS HAD A CHANCE TO BE ABLE TO SEE IT AS WELL
IS THIS THE FINAL REPORT? IS THIS A DRAFT REPORT THAT WE'RE PROVIDING INPUT ON? THE REPORT IS ALREADY FINAL, HAS ALREADY BEEN PUBLISHED, AND WE ALREADY ALSO PRESENTED IT TO A LEGISLATIVE COMMITTEE, THE JOINT LEGISLATIVE AUDIT AND REVIEW COMMITTEE
SO AS FAR AS THE WORK OF THE STATE AUDITOR WITH THIS AUDIT, WE'RE DONE
BUT ARE YOU MAKING LEGISLATIVE RECOMMENDATIONS AS WELL? WE MADE A RECOMMENDATION FOR THE LEGISLATURE TO CONVENE A WORKGROUP TO DELIBERATE ON WHETHER THE SYSTEM IS WORKING AS INTENDED AND TO CONSIDER POTENTIAL RECOMMENDATIONS THAT WE HAVE ON THE REPORT TO ADDRESS ISSUES WITH THE CIVIL ASSET FORFEITURE ISSUES OF CONCERNS WITH THE CIVIL ASSET FORFEITURE SYSTEM
SO THERE IS VARIOUS RECOMMENDATIONS, POTENTIAL RECOMMENDATIONS ON THAT REPORT FOR THE LEGISLATIVE WORKGROUP TO CONSIDER AS THEY DELIBERATE ANY CHANGES TO THE SYSTEM
OKAY, SO WE MAY
YOU MADE THAT RECOMMENDATION AND THEN HOW'S THAT? HOW IS THAT MOVING THROUGH THE LEGISLATION? HAS IT BEEN INTRODUCED IN THE LAST SESSION OR IS THAT COMING UP? WE PRESENTED THIS REPORT AFTER THE LEGISLATIVE SESSION WAS COMPLETED
SO IF THERE IS ANY
DOES IT NAME MEMBERSHIP? ARE YOU RECOMMENDING MEMBERSHIP? PERHAPS THE PARTICIPATING POLICE DEPARTMENTS THAT WERE SUBJECT TO THIS AUDIT? WE DIDN'T SPECIFY WHO SHOULD BE PART OF THE WORKGROUP, BUT WE DID MENTION DURING OUR LEGISLATIVE HEARING THAT WE WOULD EXPECT THAT LAW ENFORCEMENT AGENCIES WOULD BE A KEY MEMBER ON THAT WORK GROUP
BUT IT'S GOING TO BE UP TO THE LEGISLATURE WHO THEY INVOLVE IN THE WORK GROUP
OKAY, WELL, THAT CONCLUDES MY QUESTIONS
DOES ANYBODY ELSE HAVE ANYTHING TO ADD? GIVES US A LOT TO THINK ABOUT
THANK YOU SO MUCH
APPRECIATE YOUR PRESENTATION
THANK YOU
THANK YOU
ALL RIGHT, SO WE'RE GOING TO MOVE FORWARD
OUR NEXT EXTERNAL AUDIT IS FROM MOSS ADAMS REGARDING THE RESULTS OF THE 2023 FINANCIAL STATEMENTS AUDIT
MR FERNANDEZ, PLEASE INTRODUCE OUR SPEAKERS
THANK YOU, COMMISSIONERS
TODAY WE HAVE OLGA DARLINGTON AND ANNA WALDRON FROM MOSS ADAMS, AND THEY'LL BE TALKING NOT ONLY ABOUT OUR FINANCIAL STATEMENT AUDIT, BUT WHAT THEY DID, THE WORK THAT THEY DID, AND WHAT'S COMING DOWN THE PIPELINE
SO WITH THAT, I'LL PASS IT ON TO OLGA AND ANNA TO INTRODUCE YOURSELVES AND MOVE FORWARD
THANK YOU, GLENN
GOOD MORNING, MEMBERS OF THE AUDIT COMMITTEE
IT IS GREAT TO BE WITH YOU HERE TODAY
WE COMPLETED THE 2023 AUDIT IN APRIL AND ISSUED OUR REPORT
SO TODAY IS JUST OUR BRIEF SUMMARY OF THE AUDIT RESULTS FOR YOU
IF WE JUMP TO THE SLIDE THAT'S TITLED AUDITOR REPORTS ISSUED
THIS IS A HIGHLIGHT OF OUR PRESENTATION, ALL THE REPORTS THAT WE HAVE ISSUED AS A RESULT OF OUR WORK SUMMARIZED HERE
FIRST IS THE AUDITOR REPORT ON THE FINANCIAL STATEMENTS PROVIDING AN UNMODIFIED OPINION, WHICH MEANS IT'S A CLEAN OPINION ON THE FINANCIAL STATEMENTS
THE FINANCIAL STATEMENTS ARE MATERIALLY ACCURATE AND THE FOOTNOTE DISCLOSURES ARE IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
THE SECOND REPORT WAS ISSUED AS A REQUIREMENT OF THE GOVERNMENTAL AUDITING STANDARDS UNDER WHICH WE PERFORM THE AUDIT
THAT IS A REPORT ON INTERNAL CONTROLS AND COMPLIANCE AND OTHER MATTERS
WE DID NOT IDENTIFY ANY MATERIAL WEAKNESSES OR ANY FINDINGS THAT NEEDED TO BE INCLUDED IN THAT REPORT
SO ALL IN ALL, ONCE AGAIN, CLEAN REPORT THERE
THE THIRD REPORT IS REPORT ON COMPLIANCE OVER MAJOR FEDERAL PROGRAMS AND INTERNAL CONTROLS AND COMPLIANCE, MORE COMMONLY KNOWN AS A REPORT ON FEDERAL GRANTS THAT WERE EXPANDED DURING 2023 BY THE PORT
THERE WERE SEVERAL PROGRAMS THAT GRANTS THAT ARE INCLUDED IN THAT REPORT
WE DID NOT IDENTIFY ANY ISSUES, ANY COMPLIANCE FINDINGS OR INTERNAL CONTROL FINDINGS IN THAT REPORT AS WELL
SO ONCE AGAIN, CLEAN REPORT THERE
COUPLE OF MORE REPORTS ON THE NEXT SLIDE
WE ALSO AUDITED THE PFC PROGRAM, WHICH IS A PASSENGER FACILITY CHARGE THAT'S COLLECTED THROUGH TICKET PURCHASES BY THE TRAVELING PUBLIC
THAT'S A FEDERAL PROGRAM
THERE'S A SPECIAL FEDERAL AUDIT GUIDE THAT WE FOLLOW IN PERFORMING THAT AUDIT
ONCE AGAIN, NO FINDINGS UNDER THAT PROGRAM EITHER
THAT REPORT DOES GO TO THE FEDERAL AGENCIES AND THE FAA
SO NO FINDINGS THERE
CLEAN REPORT THE FINAL REPORT ON THAT SLIDE IS A REPORT ON SCHEDULE OF NET REVENUES AVAILABLE FOR BOND DEBT SERVICE
SO AS PART OF OUR AUDIT, ONE OF THE THINGS WE'LL LOOK AT IS MAKING SURE THAT DEBT COVENANTS ARE MET BY THE PORT FOR ALL OF ITS OUTSTANDING DEBT BONDS AND SO FORTH
THIS PARTICULAR REPORT GOES INTO A LITTLE BIT MORE DETAIL OVER THE SCHEDULE THAT CALCULATES THAT COMPLIANCE FOR BOND AND AVAILABLE FUNDING
SO CLEAN REPORT THERE AS WELL
NEXT SLIDE
COUPLE MORE REPORTS ON AGREED UPON PROCEDURES
THESE ARE TWO VERY SPECIFIC REPORTS THAT GO TO THE AGENCIES, THE DEPARTMENT OF ECOLOGY WITH WASHINGTON STATE AND THE ENVIRONMENTAL PROTECTION AGENCY, SPECIFIC MORE TO THE ENVIRONMENTAL OBLIGATIONS THAT THE PORT HAS AND SOME OF THE FUNDING THAT'S REQUIRED TO BE REPORTED ON TO THOSE AGENCIES
ONCE AGAIN, NO ISSUES IN THOSE REPORTS
SO ALL IN ALL, IN ALL OF THE REPORTS THAT I ISSUED OR THAT WE ISSUED AND I SUMMARIZED, ALL CLEAN REPORTS, NO SIGNIFICANT FINDINGS, NO MATERIAL WEAKNESSES AND INTERNAL CONTROL
SO ONCE AGAIN, A CLEAN REPORT CARD FOR THE PORT ON 2023 FINANCIAL RESULTS
AND THEN ANNA WILL HELP ME SUMMARIZE THE OVERVIEW OF SOME OF THE SIGNIFICANT AREAS OF FOCUS THAT WE COVERED DURING OUR AUDIT
GREAT, WE CAN
YEAH, MOVE TO THE NEXT SLIDE
SO, JUST TO KIND OF FURTHER ELABORATE ON WHAT THE SCOPE OF OUR AUDIT ENTAILS, WE DO OUTLINE JUST WHAT OF THE AREAS OF FOCUS ARE FOR YOUR BENEFIT
SO WE DO START OUR WORK IN THE FALL
WE CALL IT OUR INTERIM FIELD WORK
DURING THAT TIME, WE'RE FOCUSED ON TESTING THE PORT'S INTERNAL CONTROL ENVIRONMENT
THIS IS THE BASIS FOR THEN US DESIGNING OUR TESTING PROCEDURES FOR FINAL FIELD WORK
WE SPEND TIME LOOKING AT THE PORT'S IT COMPUTER, GENERAL CONTROLS FOR ANY IT SYSTEMS THAT ARE IMPORTANT FOR THE FINANCIAL REPORTING PROCESS, LOOKING AT CONTROLS AROUND CAPITAL ASSETS AS WELL AS PROJECT MANAGEMENT CONTROLS OVER BOTH CASH RECEIPTS AND CASH DISBURSEMENTS, PAYROLL, AND THEN ALSO SOME EXTRA TIME SPENT ON THE CONTROLS AROUND THE ADMINISTRATION OF FEDERAL AWARDS AS PART OF THAT SINGLE AUDIT THAT WE ALSO PERFORM
ANOTHER AREA OF EMPHASIS FOR US IS AREAS WHERE THERE IS MANAGEMENT ESTIMATED, AS THIS CAN HAVE SOME INHERENT RISKS FOR MANAGEMENT BIAS FOR THE PORT OF SEATTLE, SOME OF THE LARGER AREAS OF ESTIMATION WOULD BE AROUND THE ALLOWANCE FOR DOUBTFUL ACCOUNTS FOR RECEIVABLES, THE PORT'S ENVIRONMENTAL REMEDIATION LIABILITIES, LEGAL CONTINGENCIES, AND THEN INPUTS FOR THE PENSION AND POST EMPLOYMENT BENEFITS
NEXT SLIDE, PLEASE
PLEASE
WE DO ALSO SPEND SOME TIME EACH YEAR JUST AUDITING THE BALANCE THAT'S REPORTED AS THE JOINT VENTURE WITH THE NORTHWEST SEAPORT ALLIANCE
THE NWSA DOES HAVE A SEPARATE AUDIT, SO WE'RE ABLE TO LOOK AT THOSE AUDITED FINANCIAL STATEMENTS AND ENSURE THAT THE PORT OF SEATTLE IS PROPERLY CLAIMED, THEIR PORTION UNDER THE JOINT VENTURE
AND THEN CAPITAL ASSETS IS GENERALLY ONE OF THE LARGEST AREAS OF FOCUS FOR US
EVERY YEAR, JUST GIVEN THE AMOUNT OF ONGOING PROJECTS THAT THE AIRPORT HAS, WE DO LOOK AT THE CAPITALIZATION POLICIES, ENSURING THAT THOSE ARE BEING CONSISTENT YEAR OVER YEAR AND ARE IN ALIGNMENT WITH AUDITING STANDARD ACCOUNTING STANDARDS, AND THEN DO LOOK AT ADDITIONS TO CAPITAL ASSETS FOR THE YEAR, ANY SIGNIFICANT RETIREMENTS, ENSURING THAT PROJECTS THAT ARE IN PROCESS PROCESS THAT HAVE BEEN COMPLETED ARE BEING CLOSED TIMELY INTO ACTUAL IN SERVICE ASSETS
NEXT SLIDE
BOND ACTIVITY CAN BE ANOTHER AREA OF EMPHASIS THIS YEAR, A LITTLE BIT LIGHTER
THERE WERE NO SIGNIFICANT NEW DEBT ISSUANCES SO OUR PROCEDURES MOSTLY FOCUS AROUND CONFIRMING DIRECTLY WITH THE FINANCIAL INSTITUTIONS THE AMOUNT OF LIABILITIES THAT ARE HELD ON BEHALF OF THE PORT OF SEATTLE AND THEN THE ENVIRONMENTAL REMEDIATION LIABILITY
THIS IS AN AREA OF EMPHASIS, ESPECIALLY AS I MENTIONED, IT IS AN AREA OF MANAGEMENT ESTIMATION
SO WE SPEND TIME TALKING WITH THE INDIVIDUALS WHO ARE INVOLVED IN ESTIMATING THE COST EXPECTED FOR SIGNIFICANT PROJECTS, LOOKING AT WHAT'S CHANGED YEAR OVER YEAR, AND MAKING SURE THAT WE'RE REACHING OUT TO ATTORNEYS AND OTHER THIRD PARTIES THAT MAY BE AWARE OF ONGOING ENVIRONMENTAL REMEDIATION LIABILITIES THAT ARE OUTSIDE NEXT SLIDE REVENUE RECOGNITION AGAIN, THIS IS AN AREA OF SOME INHERENT RISK FOR INFLATING REVENUES
WE DO A COMBINATION OF BOTH ANALYTICAL TREND ANALYSIS AS WELL AS DETAILED TESTING OF INVOICES AND CONFIRMATIONS FOR THE AIRLINE REVENUE
SPECIFICALLY, WE DO SEND CONFIRMATIONS DIRECTLY TO THE AIRLINES TO TO CONFIRM THE AMOUNT OF REVENUE REPORTED
WE GET SOMETHING LIKE 90% COVERAGE FROM THAT AND THEN DO SOME ANALYTICAL PROCEDURES AS WELL, JUST LOOKING AT THE RATES AND CHARGES AND HOW THOSE ARE DISTRIBUTED
NEXT SLIDE
GASB 87 WAS A BIG HOT TOPIC LAST YEAR
IF YOU RECALL, IT WAS ADOPTED IN THE PRIOR YEAR
SO THIS WAS THE SECOND YEAR
NOW THAT THE PORT OF SEATTLE HAS BEEN REPORTING ITS LEASES ON ITS FINANCIAL STATEMENTS
JUST CONTINUED LOOKING AT NEW LEASES THAT ARE COMING ON DURING 2023, ENSURING THAT MANAGEMENT IS PROPERLY APPLYING THE GASB 87 GUIDANCE AND IDENTIFYING THOSE NEW LEASES AND PROPERLY CALCULATING THE ASSETS TO BE PLACED ON THE FINANCIAL STATEMENTS
AND THEN ON THE NEXT SLIDE, WE DID HAVE ANOTHER SIGNIFICANT ADOPTION FOR FOR THE CURRENT YEAR, WHICH WAS GASB 96, WHICH IS REFERRED TO AS SPEEDA OR SOFTWARE BASED SUBSCRIPTION ASSETS
SO VERY SIMILAR TO GASB 87, BUT SPECIFICALLY FOCUSED ON IT ARRANGEMENTS AND SO AGAIN, LOOKING FOR IT CONTRACTS, IDENTIFYING IF THEY MEET THE CRITERIA FOR GASB 96, IN WHICH CASE THERE IS AN ASSET AND A LIABILITY RECORDED ON THE FINANCIAL STATEMENTS
MANAGEMENT, AS USUAL, WAS VERY MUCH THINKING ABOUT THIS IN ADVANCE
WE WERE ABLE TO GET SOME TESTING DONE BEFORE OUR YEAR END FIELD WORK AND REALLY APPRECIATED THE HARD WORK THAT MANAGEMENT PUT INTO THAT ADOPTION
IT WENT VERY SMOOTHLY
NEXT SLIDE
LAST COUPLE OF THINGS
SO FIDUCIARY ACTIVITIES AS PART OF OUR AUDIT PROCEDURES, WE DO AUDIT THE WAREHOUSEMAN PENSION TRUST FUND
NOT A TON OF ACTIVITY GOING INTO THAT NOW, BUT WE DO CONFIRM INVESTMENT BALANCES THAT THE PLAN HOLDS, LOOK AT CONTRIBUTIONS AND DISTRIBUTIONS FOR THE YEAR
AND THEN ON THE SINGLE AUDIT SIDE, AS OLGA MENTIONED, WE DO ISSUE SOME REPORTS RELATED TO THE PORT'S EXPENDITURE OF FEDERAL AWARDS
THE PRIMARY FEDERAL AWARD THAT THE PORT GETS IS THE AIRPORT IMPROVEMENT PROGRAM, WHICH COMES FROM THE FAA
THAT DOES MAKE UP ABOUT ALMOST 100% OF THEIR FEDERAL AWARDS
SO THAT WAS THE MAJOR PROGRAM WE SELECTED FOR TESTING AND HAVE TESTED THAT FOR A NUMBER OF YEARS NOW AND DID NOT BECOME AWARE OF ANY FINDINGS OR REPORTABLE INSTANCES
ALL RIGHT, THANK YOU, ANNA
OKAY, ON THE NEXT SLIDE OR NEXT SECTION, I SHOULD SAY WE HAVE SOME REQUIRED COMMUNICATIONS
AND WHEN I SAY REQUIRED, THESE ARE REQUIRED OF US TO BE COMMUNICATED TO YOU AS THOSE CHARGED WITH GOVERNANCE, BECAUSE WE CONSIDER THESE TO BE IMPORTANT FOR YOU TO BE CARRYING OUT YOUR FIDUCIARY RESPONSIBILITIES
OUR RESPONSIBILITIES AS AN AUDITOR TO AUDIT THE FINANCIAL STATEMENTS
MANAGEMENT ACTUALLY TAKES RESPONSIBILITY FOR THOSE FINANCIAL STATEMENTS AND FOR ESTABLISHING A SYSTEM OF INTERNAL CONTROLS TO ENSURE THAT THE NUMBERS IN THE FINANCIAL STATEMENTS ARE ACCURATE
AND I DO HAVE TO SAY THAT MANAGEMENT TAKES THAT RESPONSIBILITY VERY, VERY SERIOUSLY
WE, AS A RESULT OF OUR AUDIT, ACTUALLY, I'M JUMPING AHEAD A LITTLE BIT, BUT WE DID NOT HAVE ANY SIGNIFICANT AUDIT ADJUSTMENTS OR PROPOSED AUDIT ADJUSTMENTS, WHICH MEANS THE INFORMATION WE WERE PRESENTED FOR THE AUDIT WAS ACCURATE, CLEAR AND CONCISE AND SUPPORTABLE
SO IT SOUNDS UNEVENTFUL, BUT IT IS REALLY BIG UNDERTAKING FOR AN ORGANIZATION OF THE PORT SIZE AND THE NUMBER OF TRANSACTIONS THAT IT PROCESSES TO MAKE SURE THAT THINGS ARE ACCURATELY REPORTED
SO ON THE NEXT SLIDE, A COUPLE OF MORE THINGS
WE PERFORMED OUR AUDIT IN ACCORDANCE WITH PLAN, SCOPE AND TIMING AS WE PLANNED
AS ANNA MENTIONED, WE START OUR AUDIT PLANNING IN THE FALL, BEFORE THE END OF THE FISCAL YEAR
WHAT THAT MEANS IS THAT NO SURPRISES CAME CAME UP IN THE MIDDLE OF THE AUDIT
SO THAT MEANS MANAGEMENT WAS VERY PROACTIVE IN SHARING INFORMATION WITH US
WE WERE ABLE TO ORGANIZE AND PLAN THE AUDIT AND DID NOT HAVE ANY OUT OF SCOPE ADJUSTMENTS TO OUR PLAN
THE FINANCIAL STATEMENT DISCLOSURES ARE CONSISTENT, CLEAR, UNDERSTANDABLE, NOT A LOT OF CHANGES FROM PRIOR YEARS OTHER THAN IMPLEMENTATION OF NEW STANDARD THAT ANNA MENTIONED EARLIER ON SUBSCRIPTION BASED INFORMATION TECHNOLOGY ARRANGEMENTS
WE'RE REQUIRED TO LET YOU KNOW IF WE HAVE ANY DISAGREEMENTS WITH MANAGEMENT WITH RESPECT TO APPLICATION OF ACCOUNTING STANDARDS OR ANY POLICIES AND PROCEDURES WITH RESPECT TO FINANCIAL MANAGEMENT AND FINANCIAL REPORTING
AND I'M PLEASED TO REPORT WE DID NOT HAVE ANY DISAGREEMENTS
AS A MATTER OF FACT, THE WORK THAT WE HAVE WITH THE PORT OF SEATTLE FINANCE AND ACCOUNTING TEAM IS VERY CLOSE AND VERY DOESN'T JUST COVER THE AUDIT PERIOD, BUT WE COMMUNICATE THROUGHOUT THE YEAR, SO IT REALLY HELPS US FOR THE YEAR IN PLANNING NEXT SLIDE
AS FAR AS WE KNOW, MANAGEMENT DOES NOT CONSULT WITH ANY OTHER ACCOUNTANTS OR AUDITORS THROUGHOUT THE YEAR
THIS WOULD BE A CONCERN IF WE KNEW OF ANOTHER COMMUNICATION WAS AN AUDITOR WITH RESPECT TO APPLICATION OF ACCOUNTING STANDARDS, FOR EXAMPLE, SUCH AS OPINION SHOPPING
AND IF THEY'RE NOT, THEY'RE ALLOWED TO DO THAT
JUST WE NEED TO MAKE SURE THAT THE FACTS AND CIRCUMSTANCES THAT PRESENTED TO ANOTHER ACCOUNTANT ARE SIMILAR TO WHAT WE'RE FAMILIAR WITH AS PART OF OUR AUDIT
BUT ONCE AGAIN, THAT WAS NOT AN ISSUE TO OUR KNOWLEDGE
ALSO, WE DID NOT DISCOVER IN THE COURSE OF OUR AUDIT ANY MATTERS THAT WE WOULD CONSIDER ILLEGAL ACTS OR INSTANCES OF NONCOMPLIANCE WITH LAWS AND REGULATIONS THAT NEED TO BE BROUGHT TO YOU TODAY
WE DON'T DESIGN OUR AUDIT TO FIND THOSE KINDS OF ISSUES, BUT WE DO DESIGN SOME PROCEDURES TO SEE IF THERE'S ANY INDICATION OF THOSE ACTIVITIES THAT WE WOULD BE ABLE TO REPORT TO YOU
SO, NOTHING THERE TO REPORT
NEXT SLIDE
AS I MENTIONED EARLIER, WE DID NOT HAVE ANY UNCORRECTED AUDIT ADJUSTMENTS
THESE ARE, YOU KNOW, AUDIT OR ANY ERRORS IN THE FINANCIAL STATEMENTS THAT NEEDED TO BE CORRECTED OR THAT MANAGEMENT DID NOT WANT TO CORRECT
SO NOTHING IN THAT
THERE IS OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
SO IT HAS MANY, SEVERAL PARTS
IT'S A QUITE LENGTHY REPORT
IT DOES INCLUDE THE FINANCIAL STATEMENTS, MANAGEMENT, DISCUSSION, ANALYSIS
IT HAS OTHER REPORTS, REPORTS OR OTHER INFORMATION AS WELL, SUCH AS SUPPLEMENTARY INFORMATION, THE INTRODUCTORY SECTION, AS WELL AS SOME STATISTICAL SECTIONS THAT ARE NOT COVERED BY OUR AUDIT REPORT
BUT WE DO LOOK AT IT TO MAKE SURE IT'S CONSISTENT WITH THE INFORMATION THAT WE DID COVER IN THE AUDIT
NEXT SLIDE, JUST A FEW MORE ACCOUNTING AUDITING THINGS
ON THIS SLIDE, WE HAVE A LIST OF ACCOUNTING PRONOUNCEMENTS THAT WERE APPLICABLE FOR IMPLEMENTATION IN 2023
OF THAT LIST, JUST REALLY, JUST THE SECOND ONE DOWN THERE IS THE ONE THAT WAS IMPLEMENTED AND HAD AN IMPACT ON THE FINANCIAL STATEMENTS
THE OTHERS WERE QUITE UNEVENTFUL, SO NOT A LOT OF CHANGES THERE
AND ON THE NEXT SLIDE, WE HAVE A LIST OF A FEW UPCOMING ACCOUNTING STANDARDS IN THE NEXT TWO TO THREE YEARS
PLEASED TO REPORT THAT THESE ARE NOT GOING TO BE AS SIGNIFICANT, AS BIG OF AN UNDERTAKING AS WE'VE HAD WITH LEASING STANDARD AND THE SPEEDA STANDARD
SO HOPEFULLY A LITTLE BIT OF A CHANCE FOR THE TEAM HERE TO CATCH THEIR BREATH AND IMPLEMENTING NEW ACCOUNTING STANDARDS AND JUST CONTINUE WITH THEIR REGULAR REPORTING
AND THAT COMPLETES OUR PRESENTATION
OH, JUST ONE LAST FINAL NOTE
A HUGE THANK YOU TO THE TEAM HERE
AS I SAID, JUST GREAT PLEASURE WORKING WITH THE ACCOUNTING AND FINANCIAL REPORTING TEAM
WE DO TALK WITH THE INDIVIDUALS THROUGHOUT THE ORGANIZATIONS, PARTICULARLY THE EXECUTIVE TEAM, DIFFERENT DEPARTMENT MANAGERS, AND EVERYBODY HAS BEEN VERY COOPERATIVE AND HELPFUL IN RESPONSES TO OUR QUESTIONS
WE DO HAVE TWO, TWO SUBCONTRACTOR FIRMS THAT WE EMPLOY AS PART OF OUR AUDIT TEAM
ONE OF THEM IS THE WOMAN OWNED ENTERPRISE, AND THAT'S RYLAND CONSULTING
THE OTHER ONE IS BRANCH RICHARDS IS A LONG TERM PARTNER WITH OUR FIRM
THEY USED TO BE A MINORITY OWNED AND A SMALL FIRM
THEY HAVE OUTGROWN THAT STATUS
HOWEVER, WE STILL CONTINUE OUR WORK WITH THEM JUST BECAUSE WE'VE HAD SUCH A GREAT RELATIONSHIP
PEOPLE THAT WERE ON THAT TEAM CONTINUE WORKING ON THE PORT OF SEATTLE AUDIT JUST BECAUSE THEY HAVE THE EXPERTISE AND THEY HAVE GROWN INTO MANAGEMENT POSITIONS AND IN OUR AUDITS
SO ALL IN ALL, ABOUT 16% OF OUR TOTAL CONTRACT VALUE GOES TO THOSE TWO FIRMS GREAT
THANK YOU
I'LL TURN TO MY COLLEAGUES FOR QUESTIONS AND COMMENTS
BUT FIRST, JUST A MATTER OF PERSONAL PRIVILEGE
I FIND PAGE NUMBERS TO BE INCREDIBLY HELPFUL, BUT WHEN THEY'RE ON THE BOTTOM LEFT, YOU CAN'T SEE THEM ON PRESENTATION MODE
SO CAN YOU PUT YOUR PAGE NUMBERS ON THE BOTTOM RIGHT MOVING FORWARD? STRANGELY NICHE AND OBNOXIOUS
REQUEST
I KNOW
WILL DO
THANK YOU
ALL RIGHT
TO MY COLLEAGUES
GO AHEAD, COMMISSIONER, CAUCUS
TWO QUESTIONS, MOSTLY OUT OF CURIOSITY
ON SLIDE TEN, THE ENVIRONMENTAL REMEDIATION LIABILITY
THAT IS ONE OF THE MOST CLOAKED TOPICS
I WOULD SAY, THAT I'VE EXPERIENCED THE PORT OF SEATTLE BECAUSE OF HOW LITIGIOUS IT IS AND HOW IMPORTANT IT IS FOR THE PORT TO BE ABLE TO MAINTAIN PRIVACY AROUND CERTAIN INFORMATION
IN OUR NEGOTIATIONS WITH OTHER PARTIES, DOES THAT LIMIT YOUR ABILITY TO REALLY DIG DEEP, OR ARE YOU ABLE TO GET INTO ALL THAT INFORMATION THAT YOU NEED EITHER WITH OUR ATTORNEYS, OUR PORT ATTORNEYS, OR WITHOUT SIDE COUNSEL? IS THERE
DO YOU FEEL LIKE THERE'S ANY LACK OF INFORMATION BECAUSE OF HOW SECRET THAT AREA IS? I WOULD SAY NO
WE ARE ABLE TO ACCESS SENSITIVE INFORMATION AS PART OF THE KIND OF CLIENT PRIVILEGE THAT WE HAVE
AND SO WE DO TALK TO INTERNAL COUNSEL
WE DO GET INFORMATION FROM EXTERNAL COUNSEL
CERTAINLY THERE'S EXTRA CARE IN HAND HANDLING SOME OF THE DATA THAT WE'RE GIVEN THAT MAY BE IN PERSON CONVERSATIONS OR MAKING SURE STEPH'S GETTING ON THE SECURE PORTAL VERSUS EMAIL
BUT WE'VE NOT BEEN LIMITED IN ANY OF OUR REQUESTS, AND THEY'VE BEEN ABLE TO FIND WAYS TO GET US THE INFORMATION WE NEED, EVEN IF IT'S SENSITIVE
OKAY, THANKS
YEAH, THAT IS A
IT IS A BIG LINE ITEM, SO I THINK IT'S REALLY IMPORTANT THAT WE HAVE GOOD, ACCURATE ACCOUNTING FOR THAT
THE SECOND ONE IS GASB 96
I GUESS I JUST
THIS IS MORE OUT OF CURIOSITY, BUT SO IS IT THAT WHEN WE SIGN UP, WHEN WE TAKE ON A LONG TERM LIABILITY, OR WE SUBSCRIBE TO AN ASSET OVER THE LONG TERM, THEY'RE NOW SAYING THAT YOU HAVE TO TREAT THAT AS IF IT WERE A PHYSICAL ASSET RATHER THAN AN EXPENSE THAT COMES ALONG MONTHLY OR YEARLY
IS THAT THE IDEA? CORRECT
WHAT THE STANDARD DRIVES TO IS WHEN YOU SIGN AN AGREEMENT THAT COVERS SEVERAL YEARS, YOU HAVE THE RIGHT TO USE THAT ASSET
AND NOT ONLY THE ASSET SIDE, BUT YOU ALSO HAVE AN OBLIGATION TO PAY FOR THAT
SO HISTORICALLY THOSE TYPES OF ACTIVITIES WERE JUST ON PAY AS YOU GO BASIS
SO IT COUNTED AS A PERIOD EXPENSE
BUT IF YOU HAVE A FIVE YEAR AGREEMENT THAT'S OFTEN NON CANCELABLE, IT'S ESSENTIALLY TREATED THE SAME AS LEASE IN TERMS OF ACCOUNTING
SO THE ENTIRE AMOUNT OF THE LIABILITY GETS GROSSED UP, DISCOUNTED FOR THAT PERIOD AND RECORDED AS AN OBLIGATION
AND IS THERE AN OBVIOUS REASON WHY IT WOULD CHANGE THE NET POSITION ONCE THAT WHAT CAUSES THAT INCREASE IN THAT POSITION? WHEN YOU SHIFT IT FROM AN EXPENSE TO A LONG TERM LIABILITY, IT'S THE DISCOUNT APPLIED TO THE FUTURE PAYMENTS
THANKS MISS HOLMSTROM, AND NOTHING FROM ME
THANK YOU SO MUCH FOR YOUR PRESENTATION TODAY
THANK YOU
APPRECIATE IT
THANK YOU FOR YOUR WORK
SO I GUESS WE CAN GO AHEAD AND MOVE ON TO THE NEXT TOPIC
MR FERNANDEZ, WOULD YOU LIKE TO MOVE US THROUGH ITEMS FIVE THROUGH SEVEN? ABSOLUTELY, COMMISSIONER
SO ITEMS FIVE THROUGH SEVEN ESSENTIALLY FOR YOUR BENEFIT, TALK ABOUT WHO WE ARE, WHAT ARE WE SEEING OUT THERE AND WHAT ARE WE DOING
AND MICHELLE, IF YOU CAN MOVE FORWARD TO THE NEXT SLIDE, ESSENTIALLY IS WHO WE ARE
COMMISSIONER FOR TRANSPARENCY FOR YOU AND FOR THE PUBLIC
WE LOOK INTERNAL AUDIT HERE
WE REPORT FUNCTIONALLY TO THE COMMITTEE HERE TO YOU AND ADMINISTRATIVELY TO STEVE METRUCK, WHO'S THE EXECUTIVE DIRECTOR OF THE PORT
WE HAVE PERFORMANCE AUDITS THAT ARE MANAGED BY DAN CHASE
WE HAVE CAPITAL AUDITS THAT ARE MANAGED BY SPENCER BRIGHT AND IT AUDITS THAT ARE MANAGED BY RIDICULE MARWAHA TECHNOLOGY AUDITS
NEXT SLIDE PLEASE
AND THERE'S THREE PACKETS
ONE OF THE THINGS WE DO IS NOT ONLY DO WE DO AUDITS, BUT THERE ARE MANAGEMENT COMMITMENTS IN THEIR ACTION PLANS FOR THE FINDINGS
WHAT ARE THEY DOING TO ADDRESS THE FINDINGS? AND HISTORICALLY WE'VE HAD QUITE A LARGE LIST
THEY TEND TO, THERE'S QUITE A FEW IN INFORMATION TECHNOLOGY, BUT THEY'RE SECURITY SENSITIVE
SO THOSE ARE ONLY DISCUSSED IN NON PUBLIC SESSION, WHICH THE NEXT NON PUBLIC SESSION IS GOING TO BE IN SUPPORT
THE PUBLIC SESSION ON PERFORMANCE AUDITS AND THE FINDINGS THAT ARE PUBLIC ARE BEING, YOU KNOW, THIS SLIDE ESSENTIALLY TELLS YOU THAT THEY ARE BEING ADDRESSED
AND OF ALL THE FINDINGS THAT HAVE BEEN OUT THERE, WE HAD QUITE A BACKLOG AFTER COVID AND MANAGEMENT HAS ADDRESSED THEM OR MITIGATED THE RISK IN SOME MANNER
SO MUCH SO THAT WE'VE KIND OF REDUCED THE
BASICALLY THERE ARE NO OPEN FINDINGS ANYMORE
THEY'RE JUST NOT DUE BECAUSE THE COMMITMENT DATE IS IN THE FUTURE
SO THAT'S ESSENTIALLY WHAT YOU SEE IN THIS CHART
I WILL MOVE TO THE NEXT SLIDE AND I'LL TAKE QUESTIONS AT THE END
SO, COMMISSIONER HASEGAWA, COMMISSIONER CALKINS, AND SARAH, IN DECEMBER, WE WILL PRESENT AN AUDIT PLAN TO YOU FOR YOU TO APPROVE
THIS IS WHAT WAS APPROVED IN DECEMBER OF 2023 AS OUR 2024 AUDIT PLAN
WE ALSO, ON THE FAR LEFT, WE'VE GOT LIMITED CONTRACT COMPLIANCE AUDITS, AND THOSE ARE ESSENTIALLY CONCESSIONAIRES AT THE AIRPORT THAT PAY US A PERCENTAGE OF THEIR RENT
AND IT'S FOR THE MOST PART, THROUGH AN HONOR SYSTEM
SO WHAT WE DO IS WE CYCLE THROUGH THOSE AND MAKE SURE THAT THEY TRULY ARE PAYING US WHAT THEY'RE SUPPOSED TO BE PAYING US PER THE CONTRACT
IN THE MIDDLE, YOU'VE GOT PERFORMANCE AUDITS, AND THERE'S TWO TYPES OF PERFORMANCE AUDITS, THE TRADITIONAL PERFORMANCE AUDITS
AND BECAUSE OF THE SCALE OF CAPITAL AT THE PORT, WE DO QUITE A FEW CAPITAL AUDITS
AND YOU'LL SEE THOSE THERE
AND THEN THERE'S MORE THAT WE OUTSOURCE AS WELL
SO WE'LL TALK ABOUT THOSE IN A LITTLE BIT
AND THEN FINALLY, OUR INFORMATION TECHNOLOGY AUDITS
INFORMATION TECHNOLOGY IS HUGE JUST BECAUSE OF THE BACKBONE THAT RUNS THE AIRPORT AND RUNS EVERYTHING WE DO HERE, FROM THE BAGGAGE SYSTEMS TO THE RUNWAY LIGHTS, THOSE ARE ALL RUN AND THE TRAINS ARE ALL RUNNING IT SYSTEMS SO THE IMPORTANCE OF THOSE ARE CRITICAL
WE ALSO AM HAPPY TO SAY WE'RE ON TRACK ON OUR PLAN AS OF THIS POINT IN THE YEAR
AND WE'LL PROBABLY BE ABLE TO, WE HAVE A FEW CONTINGENCY AUDITS THAT WERE APPROVED BY THE COMMISSION
SO WE'LL ESPECIALLY ON THE LIMITED CONTRACT COMPLIANCE SIDE, WE'LL LIKELY MOVE A FEW OF THOSE UP AND GET A FEW MORE DONE THAN WE'VE ORIGINALLY PLANNED
NEXT SLIDE, PLEASE
MICHELLE
SO THIS SLIDE, COMMISSIONERS AND MISS HOLMSTROM ARE ESSENTIALLY THE GCCM AUDITS THAT ARE REQUIRED BY STATE LAW
WHEN WE DO HAVE A CONSTRUCTION PROJECT THAT'S MANAGED THROUGH THE GCCM OR GENERAL CONTRACTOR CONSTRUCTION MANAGEMENT TYPE PROCESS, RCW 3910.385 REQUIRES AN INDEPENDENT AUDIT TO BE DONE ON THESE TYPES OF CONSTRUCTION PROJECTS
SO THE CHART OVER HERE THAT YOU SEE, WE'VE GOT QUITE A FEW IN PROCESS AND WE'VE GOT OUTSIDE CONTRACTORS THAT WORK ON THESE
BUT WE SELECT THE CONTRACTOR AND WE WORK VERY CLOSELY WITH THEM THROUGH THE COURSE WHEN THEY LOOK AT THE DETAILED INVOICES THAT SUBCONTRACTORS ARE SUBMITTING UP TO GENERAL CONTRACTORS AND THEREFORE TO THE PORT EVENTUALLY FOR PAYMENT
SO THE RCW JUST SAYS YOU HAVE TO LOOK AT THOSE TO MAKE SURE THAT THEY'RE ACCURATE BEFORE YOU PAY THEM
SO WE'RE LOOKING AT THOSE
AND
AND SOME OF THESE PROJECTS ARE MULTI YEAR
THEY GO ON FOR SUCH AS THE SOUTH CONCOURSE
EVOLUTION WILL GO ON FOR TEN YEARS, PLUS
WE'LL BE LOOKING AT THAT DURING THAT TIMEFRAME AND ADDING MORE AS THEY COME
SO IT'S A CONTINUOUS PROCESS OF MAKING SURE WE HAVE INDEPENDENTLY GONE OUT AND THROUGH BIDDING METHODS THAT WE WORK WITH CPO ON, SELECT A FIRM THAT'S THE BEST VALUE TO THE PORT AND MONITOR THEIR WORK
AND THEN AT THE END OF THE YEAR, USUALLY IN DECEMBER, WE HAVE THOSE FIRMS COME IN AND PRESENT TO YOU THE RESULTS IN THE FINDINGS
THEIR FINDINGS
NEXT SLIDE, PLEASE, MICHELLE
AND MY LAST SLIDE IS JUST A GANTT CHART, WHICH REALLY SHOWS WHERE WE ARE IN OUR AUDIT PLAN, THE ONE I JUST SHARED WITH YOU
AND ARE WE ON TRACK TO FINISH IT? AND EVERYTHING IN GREEN COMPLETED
EVERYTHING IN YELLOW IS IN PROCESS
AND THE PINKISH BEIGE ISH COLOR IS THINGS THAT WILL BE DONE IN THE THIRD AND FOURTH QUARTER
SO WE ARE ON TRACK, I'M HAPPY TO SAY, TO FINISH THE PLAN
WITH THAT
I'LL TAKE QUESTIONS IN THIS SECTION
MISS HOLMSTROM, JUST A QUICK QUESTION
ON THE STRUCTURE VACANT, SENIOR INTERNAL AUDITOR
IS THAT UNDER IT OR WHAT? IS THAT? SO, YOU KNOW, IT'S, HISTORICALLY, IT'S BEEN A PERFORMANCE AUDIT POSITION THAT WE'VE HAD OPENED
AND IF YOU REMEMBER, RUMI OKUMA, WHO WAS OUR SENIOR INTERNAL AUDITOR, DID A LOT OF, BESIDES DOING AUDITS, COMPLIANCE WITH STANDARDS, AND ALSO A VARIETY OF OTHER THINGS
SHE RECENTLY RETIRED, SO HER POSITION IS OPENED, AND AS WE FILL, THAT WILL DETERMINE WHERE WE BEST NEED THE RESOURCES AND PUT THAT PERSON APPROPRIATELY
BUT RUMI WAS A PERFORMANCE AUDITOR, SO BY DEFAULT, IT WOULD BE PERFORMANCE AUDITING
OKAY
AND THEN ONE OTHER THING I NOTICED ON THE AGING REPORT, AS YOU MENTIONED, WE'VE SEPARATED OUT IT
THAT'S HELPFUL BECAUSE IT HELPS ME KNOW THAT, LIKE, THE CONCENTRATION OF ADDRESSED SEEM TO BE CONCENTRATED THERE
SO OUTSIDE OF THAT, WE SEEM TO BE DOING REALLY WELL
SO THAT'S REALLY GOOD TO SEE
THANK YOU
THANK YOU, COMMISSIONER CALKINS
AND NONE FOR ME EITHER
THANK YOU SO MUCH, GLENN
SO WE'LL MOVE ON TO UPDATES AND APPROVALS
ITEMS NUMBER FIVE THROUGH SEVEN ON THE AGENDA, THE INTERNAL AUDIT ORGANIZATIONAL STRUCTURE
OH, WE JUST WENT THROUGH THAT
WE WENT THROUGH THAT
WE'RE MOVING FASTER THAN I CAN KEEP UP WITH
ALL RIGHT
AND THEN TIME APPROVAL CONTROLS
WONDERFUL
GO FOR IT
THAT IS NEXT
SO THE NEXT AUDIT IS TIME APPROVALS, CONTROLS
TIME, APPROVALS, CONTROLS
THIS IS A PERFORMANCE AUDIT
DAN CHASE AND MY TEAM, WHO'S THE MANAGER OF PERFORMANCE AUDIT, COMPLETED THE WORK WITH NICOLE YU, WHO'S THE SENIOR INTERNAL AUDITOR
DAN'S GOING TO PRESENT
DAN, HAVE A SEAT AND INTRODUCE YOURSELF
BUT BEFORE DAN GETS STARTED, I ALSO WANT TO JUST PROVIDE A LITTLE BACKGROUND AND CONTEXT
YOU KNOW, THE PORT IS VERY COMPLICATED WITH A LOT OF BARGAINING AGREEMENTS AND DIFFERENT WAYS OF DOING THINGS THROUGHOUT THE ORGANIZATION
AND THAT ALL FUNNELS UP TO A PAYROLL DEPARTMENT AFR THAT HAS TO MANAGE ALL OF THIS
AND WHEN THERE ARE A LOT OF MANUAL ADJUSTMENTS EVERY TWO WEEKS, IT'S A MAD SCRAMBLE TO GET THINGS DONE AND MAKE SURE PEOPLE HAVE THEIR TIME IN
SO, YOU KNOW, THE AUDIT LOOKED AT OUR, WHAT CAN WE DO? WE LOOKED AT ONE OF THE LARGEST DEPARTMENTS, AND WHAT CAN WE DO TO BREAK THIS DOWN TO BITE SIZED CHUNKS AND TRY TO FIX THE PROCESS AND HELP THE BOARD OUT IN THE PROCESS
SO WITH THAT, DAN, THE FLOOR IS YOURS
GOOD MORNING OR GOOD NAME IS DAN CHASE
I'M AN INTERNAL AUDIT MANAGER WITH THE GROUP
THANKS, GLENN
AND SO THE PORT OF SEATTLE HAS APPROXIMATELY 2500 EMPLOYEES, BOTH REPRESENTED AND NON REPRESENTED, AS YOU PROBABLY KNOW
AND OUR AUDIT FOCUSED PRIMARILY ON AVIATION MAINTENANCE AND THE THREE HIGHEST, FROM A HEADCOUNT STANDPOINT
SO THE THREE HIGHEST DEPARTMENTS, THE ELECTRICAL AND ELECTRONIC ELECTRONICS SYSTEMS GROUP, MECHANICAL SYSTEMS AND FACILITIES, FLEET SYSTEMS AND GROUNDS
AND COLLECTIVELY, IT'S ABOUT 375 EMPLOYEES
NEXT SLIDE
SO THE EMPLOYEES ARE SUPPOSED TO ENTER THEIR TIME INTO MAXIMO, AND THAT'S A SUBSYSTEM, AND THEY HAVE TO ACCOUNT FOR 40 HOURS, REGARDLESS IF THEY ACTUALLY WORK 40 HOURS
SO IF THERE'S OVERTIME, VACATION, SICK LEAVE, IT HAS TO EQUAL AT LEAST 40 HOURS
IDEALLY, THE SUPERVISORS WILL REVIEW THEIR TIME, THEIR PEOPLE'S TIME, ON A WEEKLY BASIS, AND THEN AT THE END OF TWO WEEKS, IT'S SUBMITTED FROM MAXIMO AND UPLOADED INTO PEOPLESOFT
THERE'S AN AV TIME ADMINISTRATOR THAT'S
AND I'LL EXPLAIN THAT A LITTLE BIT
IT'S KIND OF AN INTERMEDIARY STEP WHERE BETWEEN THE EMPLOYEE THAT'S SUBMITTING THE TIME AND THE ACTUAL MANAGER WHO'S REVIEWING THAT TIME, AND THAT TIME ADMINISTRATOR LOOKS FOR, YOU KNOW, ERRORS OR ADJUSTMENTS THAT NEED TO OCCUR, AND THEN THEY WILL EMAIL THE EMPLOYEE AND THE SUPERVISOR FOR THEM TO REMEDIATE, YOU KNOW, WHATEVER NEEDS TO BE DONE
NEXT SLIDE
AND SO SOME OF THE ERRORS OR THE ADJUSTMENTS THAT ARE CAUGHT, THERE HAS TO BE 40 HOURS OF TIME ACCOUNTED FOR
AND SO SOMETIMES EMPLOYEES WILL ENTER 20 HOURS, AND SO THEY'LL NEED TO TRACK THAT DOWN
THERE'S ALL EMPLOYEES ARE SUPPOSED TO ENTER AT LEAST EIGHT OR 10 HOURS PER DAY, DEPENDING ON THEIR SCHEDULE
AND THEN, AS I SAID, THE ADJUSTMENTS ARE EMAILED BACK TO THE EMPLOYEE AND THE MANAGER TO RESOLVE TO GIVE YOU SOME IDEA OF THE NUMBER OF ADJUSTMENTS THAT WERE REQUIRED
IN 2023, THERE WERE 3400 ADJUSTMENTS
AND SO THAT MEANS THAT IT GOES TO PEOPLESOFT, AND THEN THERE'S A NEED TO GO BACK AND CHANGE AND READJUST AND CORRECT WHAT HAD BEEN PREVIOUSLY SUBMITTED
THERE'S BEEN SOME WORK DONE BY OUR PROCESS IMPROVEMENT TEAM, AND SO I THINK IT'S TRENDING DOWN
THERE WERE 430 ADJUSTMENTS NEEDED THROUGH APRIL OF 2024
SO THAT'S AN IMPROVEMENT
NEXT SLIDE
SO WE DID HAVE A COUPLE HIGH RATED ISSUES THAT I'LL GO OVER NOW, AND I BELIEVE WE HAVE BRENDA LYNN, WHO'S OUR SENIOR MANAGER WITHIN THE AVM GROUP, AND THEN MIKE TASKER, THE DIRECTOR OVER AVM, ARE ON THE LINE AS WELL
SO WHY DON'T I GO THROUGH THE ISSUE AND THEN PAUSE FOR MANAGEMENT TO RESPOND? SO REALLY, THERE'S NO REALLY FORMAL, SUSTAINABLE PROCESS THAT EXISTS RIGHT NOW
IT'S A BIT DISJOINTED AND FRAGMENTED
SOME, WHEN YOU ASK, YOU KNOW, WHEN THE FOREMEN ARE REVIEWING TIME, SOME SAY THEY DO IT DAILY, OTHERS SAY THEY DO IT WEEKLY
SOME SAY THEY DON'T
THEY WAIT FOR THE AV ADMINISTRATOR TO PERFORM THAT REVIEW BEFORE THEY
BEFORE THEY'LL GO IN AND APPROVE PAYROLL
AND SO THERE IS KIND OF INCONVENIENCE, CONSISTENCY WITH, FROM PERIOD TO PERIOD HOW MANY ERRORS ARE OCCURRING
WE REALLY WANT TO ESTABLISH, YOU KNOW, A SUSTAINABLE AND REPEATABLE PROCESS THAT EVERYBODY UNDERSTANDS AND FOLLOWS
THAT'S KIND OF WHAT THIS GETS TO
SO NEXT SLIDE, PLEASE
SO THE RECOMMENDATIONS THAT WE HAVE IS, ONE OF THE THINGS THAT WE HEARD IS, YOU KNOW, IF WE HAD A TIME, A PUNCH TIME SYSTEM FOR THIS TYPE OF WORK, IT WOULD BE VERY HELPFUL
AND I THINK IT'S PRETTY COMMON IN THE INDUSTRY FOR THAT TYPE OF SYSTEM TO BE IN PLACE
FORMAL TRAINING IS ALWAYS A GOOD THING TO REMIND HOW IMPORTANT IT IS FOR EMPLOYEES TO ENTER THEIR TIME CORRECTLY
ONE OF THE THINGS WE HEARD IS IF THERE COULD BE SOME CONSEQUENCES, NOT NECESSARILY PEOPLE PUNITIVE, BUT, YOU KNOW, IF THERE'S SOME MECHANISM THAT WE COULD USE TO, YOU KNOW, ENCOURAGE, YOU KNOW, PEOPLE THAT ARE FREQUENTLY MAKING ERRORS, THAT THAT WOULD BE HELPFUL AS WELL
SO WE HAVE BRENDA LYNN AND MIKE
I DON'T KNOW WHO WANTS TO TAKE THAT, BUT I SEE MIKE UP THERE
MIKE, I'LL START AGAIN
MIKE TASKER, DIRECTOR OF MAINTENANCE
THANKS, GLENN AND DAN
GLENN SPOKE ABOUT SOME OF THE CHALLENGES EARLIER WITH CONSISTENCY, WITH EVERY UNION, LABOR UNION HAVING DIFFERENT REQUIREMENTS ON HOW THINGS GET DONE
AND I SAY, I JUST WANT TO, YOU KNOW, THANK THE GROUP WHO'S WENT THROUGH THIS, AND WE AGREE THAT WE'VE GOT TO HAVE, YOU KNOW, ACCOUNTABILITY FOR EVERYBODY'S TIME
WE'RE PAYING PEOPLE FROM, YOU KNOW, THIS, THIS FUND THAT PAYS FOR STAFF, THAT WE GOT TO HAVE GOOD SYSTEMS IN PLACE
SO WE, YOU KNOW, WE ARE IN AGREEMENT
WE'VE GOT TO DO SOME THINGS AND WE GOT TO WORK THROUGH SOME THINGS
I SAID I WANT TO BEGIN WITH THE REQUIREMENTS
AS SOON AS WE DEFINE WHAT THE REQUIREMENTS ARE, WE WILL LOOK TO, YOU KNOW, MAKE PROCESS IMPROVEMENTS
SO THEN WE DEFINE WHAT THOSE REQUIREMENTS ARE
THEN IT BECOMES JUST MATH
THE EXISTING PROCESS, AS DAN AND GLENN HAVE MENTIONED, IS, YOU KNOW, WITH MAXIMO, YOU KNOW, ONE EMPLOYEE MAY HAVE, YOU KNOW, 50 LINE ITEMS THAT THEY'RE PUTTING IN OVER A COURSE OF TWO WEEKS
AND IT'S JUST, THAT'S BACK TO THE 3000 CORRECTIONS
IF YOU MISS SOMETHING AND YOU DON'T ACTUALLY COME UP WITH YOUR 80 HOURS IN TWO WEEKS, IT'S AN ERROR, IT'S A FINDING
AND, YOU KNOW, AS A MANAGER, IF THE MANAGER HAS 65 PEOPLE TO DO THAT, THAT BECOMES TOO MUCH FOR A MANAGER
THEN THAT BECOMES A CHALLENGE FOR THE TIMEKEEPER BECAUSE THERE'S NO WAY ONE TIMEKEEPER CAN LOOK AT 460 PEOPLE'S TIME AND ACCURATELY VALIDATE THAT
SO HE SAID, WE'LL BEGIN WITH THE REQUIREMENT AND THEN WE'LL LOOK TO RESOURCE REQUIREMENTS
SO WE'RE LOOKING TO HAVE THE PERSON, PERSON CLOSEST TO THE WORK DO THE VALIDATION, WHICH IS MOST LIKELY THE FOREMAN
BUT WE'VE GOT TO DO, YOU KNOW, PROCESS
THEN WE GOT TO TRAIN
THE TIME CLOCK THING IS A GREAT IDEA THAT WE'RE LOOKING INTO
THERE MAY BE SOME BARGAINING REQUIREMENTS THAT WE HAVE TO DO TO IMPLEMENT THAT
BUT I THINK THAT COULD SIMPLIFY IF WE WERE USING A TIME CLOCK FOR PAY
YOU KNOW, SOMEONE DID 8 HOURS, THAT WOULD BE GREAT
BUT A KEY THING, THING FOR US, FOR OUR ASSET MANAGEMENT PROGRAM IS KNOWING HOW MUCH TIME EACH ASSET IS TAKING TO DO AND MANAGING THAT
SO USING MAXIMO AND HOW MUCH TIME WE SPEND ON THOSE COMPONENTS OF THOSE SYSTEMS IS VERY IMPORTANT FOR US AS WELL
SO I DON'T WANT TO COMPLETELY MOVE AWAY FROM THAT
BUT WE AGREE WITH THE RECOMMENDATIONS
SO FURTHER QUESTIONS THAT, YOU KNOW, BRENDOLIN CAN ADD OR COMMENTARY IF THERE'S ANY QUESTIONS
YEAH, DAN, YOU CAN CONTINUE WITH THE NEXT ISSUE BEFORE WE GO BACK
SO WE FINISHED THE WHOLE LINE
OKAY
COULD WE GO TO THE NEXT COUPLE SLIDES? I THINK, MICHELLE
PERFECT
YEAH
SO THIS IS AROUND THE AMOUNT OF OVERTIME THAT EMPLOYEES CAN WORK AND THERE'S NO LIMIT OR THERE'S NO CAP FOR, YOU KNOW, LIMITED LIMITING HOW MUCH OVERTIME CAN BE WORKING
THESE ARE TYPE OF JOBS WHERE THEY'RE WORKING AT HEIGHTS
THEY'RE WORKING IN CONFINED SPACES AROUND MACHINERY
THERE'S NO ACTUAL
WE TALKED WITH OUR HEALTH AND SAFETY DIRECTOR
THERE'S NO STATE OR FEDERAL LAW LIMITING THE NUMBERS, BUT IT WOULD BE A GOOD PRACTICE TO PUT THIS IN PLACE
AND SO I'LL GO THROUGH SOME OF THE EXAMPLES THAT WE IDENTIFIED
THERE WAS ABOUT 74,000 OVERTIME HOURS WORKED
AND THAT'S IN 2023
THAT'S PRIMARILY IN THE SUMMER AND THE WINTER
WE HAD FIVE EMPLOYEES THAT YOU CAN LOOK AT THE NUMBER OF HOURS
YOU KNOW, ONE EMPLOYEE HAD 1000 HOURS OF OVERTIME, A COUPLE IN THE, IT LOOKS LIKE 800S FOR A COUPLE OTHERS
SO THERE'S QUITE A BIT OF OVERTIME THAT'S BEING WORKED BY, YOU KNOW, INDIVIDUAL EMPLOYEES
NEXT SLIDE
OH, NO, THIS IS GOOD
YEAH
SO JUST SOME MORE EXAMPLES
ONE EMPLOYEE WORKED 34 HOURS SHIFT
ANOTHER EMPLOYEE WORKED A 90 HOURS WORKWEEK
YOU KNOW, THERE'S OTHER EXAMPLES THAT I WON'T GO THROUGH ALL OF THEM, BUT THE PORT PAID $8 MILLION IN OVERTIME
LABOR COSTS BUDGET AT ABOUT 3.3 MILLION
SO IT IS SIZABLE
SO OUR RECOMMENDATION IS LET'S PUT IN A CAP AND DEVELOP A POLICY SO THAT WE CAN ENFORCE IT
AND I KNOW THAT THE COLLECTIVE BARGAINING AGREEMENT, THAT CAN BE A NUANCED AND KIND OF AN INVOLVED PROCESS, BUT I THINK, AND THESE ARE REPRESENTED EMPLOYEES THAT WORK UNDER CBAS
SO I DON'T KNOW HOW EASY IT IS TO GET THAT DONE, BUT THAT WOULD BE A GOOD THING TO GET IN PLACE
AND SO IF MIKE WANTS TO
YEAH, MIKE, IF YOU WANT
IF YOU CAN RESPOND, AND THEN I DON'T KNOW
THANK YOU AGAIN
EXCUSE ME, MIKE
MIKE
WE ALSO MIGHT HAVE SOMEONE FROM LABOR RELATIONS ON THE LINE
SO AFTER YOU'VE PRESENTED, IF THEY WANT TO MAKE ANY COMMENTS, OTHERWISE, THE FLOOR IS YOURS
MY TED
YEAH, WE DO
YEAH, WE DO
THIS IS SOMETHING THAT I'VE SEEN IS VERY IMPORTANT TO ME FROM A SAFETY PERSPECTIVE
34 HOURS DAY, ALL OVERTIME IS CURRENTLY APPROVED BY A MANAGER
BUT IT SAYS, HEY, WE NEED YOU TO GET SOMETHING DONE
YOU APPROVE IT, AND THEY SEEM TO WORK UNTIL THE JOB IS DONE
WE'VE GOT TO ADD BETTER CONTROLS
SO WE'RE WORKING ON WORK RULES THAT CAN BE FORMALIZED WITH OUR MAINTENANCE GROUPS THAT SAY, THIS IS ABOUT TIME
AND BEYOND THAT, YOU'RE GOING TO NEED TO ASK AGAIN
WE'RE CAUTIOUS ABOUT DOING FORMAL CAPS BECAUSE THE AIRPORT HAS TO
WE KEEP THE AIRPORT RUNNING, BUT AS A MANAGER, WE WANT TO ENSURE THE SAFETY OF ALL OF OUR EMPLOYEES
SO IF WE NEED SOME ADDITIONAL TIME, WHATEVER THAT TIME IS, IT'S DISCUSSED WITH THE MANAGER, IT'S DISCUSSED WITH THE EMPLOYEE, AND IF THE EMPLOYEE WORKS ADDITIONAL HOURS
MAYBE WE PROVIDE A HOTEL FOR THOSE EMPLOYEES TO STAY AND KIND OF LIKE WE DO ON SNOW SO THAT THEY DON'T TRAVEL HOME AFTER THEY'VE WORKED 34 HOURS IN A ROW
AND AGAIN, THAT'S NOT SAFE
SO WE'RE STARTING WITH WORK RULES, AND WE AGREE WITH THE RECOMMENDATION FOR A PORTWIDE POLICY
WE JUST GOTTA BE CAUTIOUS WITH FORMAL CAPS AND LIMITS BECAUSE WE'RE WORKING TO KEEP THE AIRPORT OPEN
BUT, YEAH, I DON'T KNOW IF GREG'S ON IF HE WANTS TO ADD ANY COMMENTARY TO THAT AS WELL
GOOD AFTERNOON AND GOOD MORNING, AND THANK YOU FOR THE OPPORTUNITY TO WEIGH IN ON THIS AND SUCH IMPORTANT WORK, AND THANK YOU, EVERYONE
FIRST AND FOREMOST, THE COLLECTIVE BARGAINING AGREEMENT
GREG, CAN YOU INTRODUCE YOURSELF FOR THE RECORD? OH, SORRY
I APOLOGIZE
I'M GREG GOTHE
I'M A LABOR RELATIONS MANAGER HERE AT THE PORT OF SEATTLE, ASSIGNED TO SOME OF OUR AVIATION MAINTENANCE WORKGROUPS, AND WE HAVE GREAT PARTNERSHIPS WITH OUR FRIENDS ON THE LABOR SIDE
SO NONE OF THEM, IN MY OPINION, WOULD BE SHOCKED IF WE REACHED OUT TO THEM AND SAID, HEY, WE'RE LOOKING AT IMPLEMENTING SOME ADDITIONAL SAFETY ANALYSIS AND AMENDING OUR WORK RULES TO INCLUDE SOME LEVEL OF OVERSIGHT RELATIVE TO OVERTIME, WHICH MOST OF THEM WOULD PROBABLY AGREE ALREADY EXISTED, EXISTS IN TERMS OF OUR MANAGEMENT RIGHTS
AND SO WE'RE LOOKING FORWARD TO THAT OPPORTUNITY JUST TO NOTIFY THEM AND PARTNER WITH THEM
SO IN TERMS OF OBSTACLES, I DON'T THINK IT'S AN OBSTACLE
IT'S GOING TO BE A HUGE CHALLENGE, BECAUSE, LIKE I SAID, OUR PARTNERS ARE ALSO VERY CONCERNED ABOUT SAFETY AND THE SAFETY OF THEIR UNION MEMBERS
MIKE IS RIGHT RELATIVE TO SORT OF PUTTING A BLANKET APPROACH ON THE NUMBER OF HOURS, BECAUSE IN THE AIRPORT ENVIRONMENT, YOU DO HAVE REGULATORY REQUIREMENTS THAT WE HAVE TO ACHIEVE
AND THOUGH WE WANT TO MAKE SURE WE HAVE ENOUGH STAFFING TO MEET THOSE REGULATORY REQUIREMENTS REQUIREMENTS, THERE MAY BE A RARE CASE IN WHICH WE DO HAVE TO HAVE SOMEONE WORK THAT'S ABLE AND SAFELY CAN ACHIEVE THE OBJECTIVES BEYOND A CERTAIN PARAMETER, AND THAT'S TRUE WITH OUR SECURITY APPARATUS AS WELL
SO WE DEFINITELY ARE PARTNERS IN ACHIEVING THESE VERY IMPORTANT OBJECTIVES
AND I JUST DON'T THINK THE HEADWINDS ARE GOING TO BE THAT STRONG
AS LONG AS WE COMMUNICATE OFTEN WITH OUR PARTNERS, WE WANT THEM TO BUY IN, AND THEY'RE VERY GOOD ABOUT BUYING IN WHEN WE TIE INTO A VERY CLEAR OBJECTIVE THAT'S LINKED TO THE PORT'S MISSION STATEMENT
AND SO WE'RE PROUD TO BE A PART OF THE SOLUTION IN ANY WHICH WAY WE CAN
OKAY, COMMISSIONERS, WE HAVE ONE MORE LOW RISK ISSUE THAT DAN'S GONNA
I'LL JUST GO THROUGH IT REAL QUICKLY
YEAH, IT'S
NEXT SLIDE
IT'S, YOU KNOW, THERE WAS MISSING DOCUMENTATION TO SUBSTANTIATE, YOU KNOW, WHEN SOMEBODY WAS ON SICK LEAVE OR LEAVE WITHOUT PAY OR FMLA, ETCETERA
SO IT'S JUST A GOOD PRACTICE TO BE ABLE TO SUBSTANTIATE EVIDENCE WHY SOMEBODY'S OUT OF THE OFFICE WHEN IT'S REQUESTED
SO A LOW RATED ISSUE
AND OUR RECOMMENDATION IS JUST SIMPLY, YOU KNOW, MAKE SURE YOU RETAIN THE DOCUMENTATION
AND THAT'S
YEAH, THAT'S PRETTY MUCH IT
WELL, I WOULD SAY THE EMPLOYEE WOULD BE NUMBER ONE, BUT ALSO, YOU KNOW, THE SUPERVISOR, BECAUSE THEY'RE ULTIMATELY APPROVING IT AND PROBABLY RESPONSIBLE FOR IT, OR SHOULD BE
ANYWAY, IF THAT CONCLUDES YOUR PRESENTATION, THEN I'LL TURN TO MY COLLEAGUES FOR QUESTIONS OR COMMENTS
GO FOR IT
MISS HOLMSTROM, I HAVE A COUPLE OF THINGS HERE
ONE I WANT TO UNDERSTAND
SO IT SOUNDS LIKE CURRENTLY, THE TIMEKEEPING SYSTEM IS NOT A CALKINS, CLOCK OUT
IS IT, LIKE ONLINE, YOU JUST FILL OUT YOUR HOURS SYSTEM? IS THAT WHAT IT IS? THERE'S A SYSTEM CALLED MAXIMO THAT THEY PUT IN WHATEVER JOB THEY'RE WORKING ON THE NUMBER OF HOURS IN A DAY, AND AT THE END OF THE DAY, IT SHOULD BE 8 HOURS, 10 HOURS
AND YOU CAN DO THAT FROM ANYWHERE AT THE PORT IF THEY'VE GOT THEIR SYSTEMS BUT I'M GUESSING YOU CAN DO IT REMOTELY AS WELL
I IMAGINE YOU CAN
I DON'T KNOW
COULD ENTER MY HOURS FROM YESTERDAY, TODAY? YEAH
YEAH, YOU COULD
YOU COULD DO IT
YOU COULD DO IT DAILY
YOU COULD DO IT WEEKLY
I THINK SOME EMPLOYEES, YOU KNOW, I MEAN, THAT'S PART OF THE CHALLENGE, IS THAT PEOPLE ARE DOING IT AFTER THE FACT
SO IT SOUNDS LIKE THE
IT SOUNDS LIKE MANAGEMENT AGREED, LIKE THE CALKINS, CLOCK OUT SYSTEM WOULD
I'M NOT SAYING WE WOULD HAVE TO GET RID OF THE OTHER THERE'S SOME REALLY IMPORTANT RECORD KEEPING OF WHAT JOB THEY'RE ON, SO YOU CAN ACCURATELY TRACK COSTS AND STUFF
BUT A CALKINS, CLOCK OUT SYSTEM THAT IS LIMITED TO ACCESS AT THE PORT AT THE TIME THEY'RE HERE WOULD BE REALLY IMPORTANT, ESPECIALLY COMPOUNDING THAT WITH THE AMOUNT OF OVERTIME WE'RE SEEING
AND THE OTHER THING THAT'S ALARMING TO ME
ME, IS, LIKE, WHEN WE'RE AUDITING, IT'S NOT LIKE WE'RE LOOKING AT EVERY EMPLOYEE
LIKE, WE PICK A SMALL SUBSET OF PEOPLE
SO WHEN YOU SEE THESE KIND OF EXAMPLES OF, LIKE, MASSIVE OVERTIME, THAT'S REALLY CONCERNING TO ME, BECAUSE, AGAIN, IT'S NOT LIKE WE'RE LOOKING AT EVERYBODY
SO I'M CONCERNED OF THE ACCURACY OF THAT
AND THEN COUPLE THAT WITH LIKE, THE FACT THAT WE'RE SAYING THERE ISN'T CONSISTENT REVIEW AND APPROVAL AND DOCUMENTATION OF THAT FOR THIS
OVER TIME
IT SEEMS LIKE PERVASIVELY THROUGH THE PROCESS, WE HAVE SOME HOLES THAT SOMEONE COULD, IF THEY WANTED TO MANIPULATE THE SYSTEM PRETTY EASILY
AND THAT'S PRETTY CONCERNING TO THE TUNE OF, YOU KNOW, $8 MILLION OF WHAT WE'RE LOOKING AT HERE
THE OTHER THING I WONDER, THAT SEEMS LIKE WE HAVE THIS WHOLE TIME ADMINISTRATOR PROCESS THAT SEEMS TO MANAGE THE LOWER END OF LIKE, MAKING SURE THEY HAVE 80 HOURS
WHY DON'T WE LIKE, FLAG THE UPPER END? WHY DON'T WE JUST ADD LIKE ALSO SOME AUTO IT
OBVIOUSLY THE SYSTEM CAN AUTO HIGHLIGHT, HEY, THIS PERSON ONLY HAS 76 HOURS
WE NEED TO CORRECT IT
I'M NOT SURE WHY IT CAN'T SAY THIS PERSON HAS OVER 120
THAT SHOULD FLAG AS WELL SO THAT WE CAN HAVE BOTH SIDES BECAUSE IT SEEMS LIKE THE OTHER SIDE IS WHERE THERE'S SOME ISSUES
YEAH, WELL, I MEAN, I THINK THAT'D BE GOOD
THERE'S NOTHING THAT PROHIBITS ANY EMPLOYEE FROM WORKING, YOU KNOW, 120 HOURS PER, YOU KNOW
RIGHT
YEAH, I MEAN, BUT IT WOULD BE A GOOD REPORTING TOOL TO KIND OF MONITOR THAT
I MEAN, I THINK EVEN JUST HIGHLIGHTING IT UP OF LIKE, EVEN, AGAIN, LIKE A REPORT OR SOMETHING GENERATED, LIKE, I DON'T KNOW IF IT WOULD BE MAYBE WITHIN THIS TEAM OR IT COMES ALL THE WAY UP TO THE COMMISSION OR WHAT THAT LOOKS LIKE OF LIKE, HEY, THESE ARE THE NUMBER OF EMPLOYEES THAT WORKED OVER 120 HOURS A WEEK CONSISTENTLY OR SOMETHING THAT JUST LIKE HIGH LEVEL, AGAIN, YOU'RE NOT GOING TO GET INTO PEOPLE'S NAMES OR ANYTHING LIKE THAT, BUT JUST HIGH LEVEL TO HIGH HIGHLIGHT TO, AGAIN, JUST SHOW THAT SOMEBODY'S LOOKING AND THAT WE'RE TRACKING
LIKE, GENERALLY WHEN THERE'S LIKE EXCESSIVE PROBLEMS WITH LIKE OVERTIME AND LIKE, I MEAN, THERE'S THE SAFETY THING, THERE'S THE ACCURACY PIECE
AND AGAIN, ALL THESE THINGS KIND OF TIE TOGETHER IN MY MIND TO JUST KIND OF HIGHLIGHT THAT SOMEONE'S LOOKING
BECAUSE AT THE END OF THE DAY, FROM EVERYTHING I'M HEARING HERE, IT SOUNDS LIKE FROM AN EMPLOYEE'S PERSPECTIVE, IT VERY MUCH WOULD FEEL LIKE NOBODY IS LOOKING, LIKE THIS ISN'T BEING REGULARLY MANAGED OR
YEAH, I MEAN, I, I THINK THOSE ARE REALLY GOOD COMMENTS
AS WE WERE TALKING WITH PEOPLE, ONE OF THE QUESTIONS WE WOULD ASK IS WHO'S ULTIMATELY RESPONSIBLE? WHO'S RESPONSIBLE FOR THE ACCURACY OF WHAT'S SUBMITTED? AND WE WOULD GET DIFFERENT RESPONSES
WELL, IT'S SUPERVISOR
WELL, NO, IT'S ACTUALLY THE MANAGER, IT'S THE TIME ADMINISTRATOR
SO THERE'S KIND OF, IT'S NOT REAL DEFINED AND IT'S NOT REAL CLEAR, LIKE WHO'S REALLY RESPONSIBLE FOR THE PAYROLL
I MEAN, I THINK IT'S A SHARED RESPONSIBILITY
THE EMPLOYEE HAS TO MAKE SURE THAT THEY'RE ENTERING THEIR TIME CORRECTLY, BUT THEY CAN'T REVIEW THEIR OWN TIME
IT NEEDS TO BE SOMEBODY ELSE
RIGHT
SO, YEAH
AND, SARAH, TO ADD ONE MORE THING, I BELIEVE THE TIME ADMINISTRATOR IS JUST SWAMPED WITH JUST MAKING SURE THAT THE 80 HOURS, 80 MINUTES, HOURS A DAY IS IN TRACKING DOWN PEOPLE THAT DON'T HAVE THEIR TIME IN AND GETTING THAT CLEANED UP
SO THE OVERSIGHT THAT YOU'RE SUGGESTING IS A GREAT IDEA, GREAT RECOMMENDATION
AND I GOT, I'M SURE MIKE IS LISTENING
AND MIKE, YOU CAN FEEL FREE TO ANSWER AS WELL
I'M GOING TO DEFER TO BRENDOLIN BECAUSE SHE'S GOT HER HAND UP
SO I THINK SHE CAN ANSWER SOME OF THAT
CAN YOU PLEASE INTRODUCE YOURSELF FOR THE RECORD? YES, ABSOLUTELY
BRENDA LANTELLA MAY, SENIOR MANAGER OF ASSET MANAGEMENT AND LOGISTICS FOR AVIATION MAINTENANCE
THANK YOU
GO AHEAD
I JUST WANTED TO RESPOND TO SOME OF THE COMMENTARY THAT WAS MADE AND TO CLARIFY THAT OVERSIGHT PIECE
SO WHEN WE'RE TALKING ABOUT THE OVERSIGHT, WE'RE REALLY TALKING ABOUT THE CONTROLS PIECE
ON TIME APPROVAL FROM WEEK TO WEEK FOR PAYROLL
THE ACTUAL OVERTIME PROCESS, IT'S WELL DOCUMENTED
AND WE DO HAVE REPORTS REPORTING ON OVERTIME NOT ONLY WITHIN OUR DEPARTMENT, BUT ALSO, I KNOW OUR AVIATION FINANCE AND BUDGET FOLKS ALSO LOOK AT OUR OVERTIME
SO THAT IS WELL DOCUMENTED
AND I JUST WANT TO MAKE SURE THAT IT'S UNDERSTOOD
WE'RE NOT TALKING ABOUT THE OVERTIME PROCESS HERE
THAT WAS ALREADY ESTABLISHED IN A PREVIOUS AUDIT
AND WE'VE GOT CONTROLS IN PLACE FOR PRE APPROVAL, OVERTIME TO APPROVAL TO WIN ITS WORK AND DOCUMENT IT
AND THAT IS WELL UNDERWAY
I THINK WHAT WE'RE TALKING ABOUT HERE IS THE TIME APPROVAL PIECE AND THE CONTROLS PIECE
AND I THINK WE ARE RECOGNIZING AS A DEPARTMENT THAT OUR SUPERVISORS IN THE FIELD DO NEED TO TAKE RESPONSIBILITY FOR TIME BEING WORKED FROM EMPLOYEES AND THE ACCURACY OF THAT TIME REPORTING
SO I WANTED TO ADD THAT IN THERE BECAUSE I THINK WE'RE THE COMMENTARY, I'M SORRY, I DON'T SEE YOUR NAME, BUT BASICALLY IT'S NOT THE OVERTIME
I JUST WANT TO BE CLEAR ABOUT THAT
THERE IS OVERSIGHT ON THE OVERTIME
AND WHAT WE'RE TALKING ABOUT HERE IS MASSIVE HOURS OF OVERTIME
AND BECAUSE WE'RE NOT, WE HAVEN'T IMPOSED A CAP OR WE HAVEN'T, YOU, YOU KNOW, SPECIFICALLY STATED IN OUR, IN OUR DEPARTMENT WORK ROLES ABOUT OVERTIME
THOSE ARE SOME OF THE OPPORTUNITIES THAT WE'RE MOVING FORWARD WITH AS A RESULT OF THIS AUDIT
THANK YOU VERY MUCH
ALL RIGHT, BACK TO MISS HOLMSTROM FOR ADDITIONAL COMMENTS OR QUESTIONS
I GUESS I JUST WANT TO CLARIFY WITH THE AUDIT TEAM HERE
THEN, LIKE, WHEN YOU'RE THIS NUMBER, THIS FIRST RECOMMENDATION OF THERE'S NO FORMAL REVIEW PROCESS OF THE EMPLOYEE'S TIMESHEETS
SO ARE YOU SPECIFICALLY JUST IN RESPONSE TO THE COMMENTS JUST MADE? SO IT SOUNDS LIKE SHE'S NOTING THERE IS ADEQUATE CONTROLS AND APPROVALS AND DOCUMENTATION OF OVERTIME, JUST NOT OF TIMESHEETS
DID YOU GUYS LOOK AT THAT, OR WAS THAT OUT OF SCOPE FOR THIS AUDIT? THAT'S AN IMPORTANT DISTINCTION
WELL, SO WE DIDN'T LOOK AT THE OVERTIME PROCESS
RIGHT
WE JUST LOOKED AT THE PROCESS TO APPROVE PAYROLL
RIGHT
AND THEN IF THAT INCLUDED OVERTIME, THEN THAT WAS, THAT WAS INCLUDED AS WELL
BUT WE DIDN'T SPECIFICALLY, YOU KNOW, SEPARATE OVERTIME FROM THAT
SO IF WE'RE SAYING THAT THERE WAS LACK OF DOCUMENTATION AROUND IT, THAT WOULD ALSO INCLUDE OVERTIME, THEN
RIGHT
RIGHT
IF THERE WAS SUPPOSED TO BE OVERTIME DOCUMENTATION IN THERE AND THERE WASN'T, THEN THAT WOULD INCLUDE BEING INCLUDED IN THIS RECOMMENDATION
NOTE OF DISJOINTED APPROVAL AND INCONSISTENT APPROVAL PROCESS
OKAY, GO AHEAD, DAN
CAN I RESPOND TO THAT SPECIFIC COMMENT? SO WHAT WAS CALLED OUT IN THE AUDIT REPORT IN TERMS OF DOCUMENTATION HAD TO DO WITH LEAVE? APPROVAL OF LEAVE? WE'VE GOT TWO EMPLOYEE GROUPS WHO STILL USE A PAPER LEAVE CALL
RIGHT
AND SO IN THE AUDIT REPORT, WHAT YOU ALL CALLED OUT WAS YOU COULD NOT FIND DOCUMENTATION FOR THAT LEAVE APPROVAL TIME
IT WAS NOT RELATED TO OVERTIME, AND IT WAS NOT RELATED TO THE EMPLOYEES TIME
IT WAS WHEN AN EMPLOYEE REQUESTED LEAVE
YOU WERE NOT ABLE TO FIND DOCUMENTATION ON WHEN THE MANAGER APPROVED THAT LEAVE
AND THE SHOPS THAT WERE CALLED OUT SPECIFICALLY ARE THE ONES THAT USE A PAPER COPY
THE FORM
THE REST OF THE DEPARTMENT IS ON AN ELECTRONIC FORM, SO JUST WANT TO CLARIFY THAT UNLESS THERE'S SOMETHING ELSE, DAN
BUT FROM WHAT WE READ IN THE AUDIT AND RESPONDED TO, IT WAS RELATED TO THE LEAVE REQUEST AND IT WAS RELATED TO THE FMLA DOCUMENTATION
YEAH
I THINK YOU'RE REFERRING TO THE DOCUMENTATION
LOW RATED ISSUE THAT WE HAVE AT THE END
YEAH
SO I THINK
YEAH
AND SARAH, YOU WERE TALKING ABOUT THE FIRST ISSUE ABOUT THE OVERALL APPROVAL PROCESS OF PAYROLL, WHICH INCLUDES OVERTIME
OKAY
CORRECT
THANKS
THANK YOU FOR THAT CLARIFICATION
THAT'S HELPFUL, EVERYBODY
AND ARE THERE ANY ADDITIONAL QUESTIONS OR COMMENTS? THANK YOU VERY MUCH, MISS HOLMSTROM
COMMISSIONER CALKINS
WHAT I HAVEN'T HEARD TODAY IS A DISCUSSION OF WHETHER THIS AMOUNT OF OVERTIME INDICATES THAT WE'RE UNDERSTAFFED
AND SO I WOULD LOVE TO HEAR
DID WE EXPLORE WHETHER WE'RE CHRONICALLY UNDERSTAFFED AND HAVE FAILED TO FILL POSITIONS OR
YEAH, SO I GUESS MAYBE WE COULD ADDRESS THAT FIRST
YEAH, SO WE DID ASK THAT QUESTION, AND WHAT WE HEARD IS, AND MIKE, YOU CAN CHIME IN IF YOU HEARD OTHERWISE, BUT WE'VE BEEN UNDERSTAFFED IN CERTAIN AREAS AT ABOUT, I THINK IT'S ABOUT, WE'RE STAFFED AT ABOUT 70%
SO IT WAS ABOUT, IF I REMEMBER CORRECTLY, IT WAS ABOUT 30% THAT WERE
AND IT'S BEEN CONSISTENT FOR SOME TIME
SO THAT WAS PART OF THE NEED FOR THE OVERTIME
WE SPECIFICALLY ASK THAT QUESTION
THANK YOU FOR THAT, DAN
YES
AND COMMISSIONER, I GOT TO SAY NOW, MAINTENANCE, THE BEST WE CAN HOPE FOR IS MINIMUM STAFFING, BECAUSE WE USE DATA TO BASICALLY TRY TO DEFINE OUR STAFFING NUMBERS
SO WITH ROUTINE MAINTENANCE, PREVENTATIVE MAINTENANCE, WE SAY YOU BUILD A NEW ASSET
THIS WORK TAKES THIS MUCH TIME
SO WE BUILD NEW, WE FIGURE OUT HOW MUCH TIME IT TAKES, THEN WE PROVE THAT IT TAKES THIS MUCH TIME
THEN WE USE THE DATA TO HIRE A STAFF MEMBER
SO THEN WE FIGURE OUT HOW MUCH TIME THAT EMPLOYEE IS AVAILABLE WITH REQUIREMENTS FOR TRAINING, ET CETERA, ET CETERA
AND THAT KIND OF DETERMINES OUR STAFFING LEVELS
AND THEN WE HAVE THE CHALLENGE OF FMLA PTO RETIREMENTS AND THE TIME IT TAKES TO GET PEOPLE HIRED
SO THE AIRPORT IS A DYNAMIC ENVIRONMENT, AND WE GOT TO KEEP THE AIRPORT RUNNING SO IT DOES LEND ITSELF TO OVERTIME
AND THOSE, THOSE LARGE NUMBER OF EMPLOYEES THERE, I THINK THOSE WERE ON THE FIELD SIDE
SO THERE RESPONSE
AND DURING SNOW THAT THESE TEAMS GO TO TWELVE HOUR DAYS, AND THEY WILL STAY ON TWELVE HOUR DAYS UNTIL THE SNOW EVENT IS OVER
AND I DON'T KNOW WHICH EMPLOYEES SPECIFICALLY, BUT CHEER POINT COMMISSIONER CALKINS, IS SOME OF IT STAFFING? DEFINITELY
BUT WE TRY TO MAINTAIN A STAFFING WHERE WE'RE LEAN
WE DON'T WANT TO HAVE PEOPLE SITTING AROUND
SO SOMETIMES IT'S BETTER TO DO A LITTLE BIT OF OVERTIME VERSUS HAVING PEOPLE SITTING AROUND WHEN IT'S SLOW
AND, MIKE, JUST TO ADD TO THAT, THE EXCEPTIONS THAT WE SAW WERE CENTERED AROUND THE OCTOBER TIMEFRAME
SO THERE MIGHT BE SNOW RELATED ONES, BUT THEY WERE ALSO HAPPENING IN OCTOBER WHEN WE DON'T HAVE SNOW
ALL RIGHT, THANKS
SECOND, MY SECOND QUESTION IS IN REGARD TO THE FIRST FINDING AROUND TIMESHEETS AND APPROVALS, DID WE FIND THESE SAME, I MEAN, I KNOW WE HAVEN'T DONE A COMPREHENSIVE AUDIT OF ALL DEPARTMENTS PORT OF SEATTLE, BUT WHAT I'M HOPING IS WE MIGHT BE ABLE TO FIND SOME POSITIVE DEVIATION FROM THIS, THAT WE COULD MODEL CORRECTIVE ACTION ON FOR DEPARTMENTS WHERE WE ARE SEEING THESE ISSUES
SO IN OTHER WORDS, IS THERE A DEPARTMENT WHERE WE'RE SEEING PEOPLE CONSISTENTLY TURN IN THEIR TIME CARDS ACCURATELY AND ON TIME WHERE, YOU KNOW, THERE'S A GOOD PROCESS? AND I SAY THIS, LET ME BE JUST SORT OF DIVULGE THAT WHEN I STARTED A NEW JOB IN JANUARY, 1 OF THE ADJUSTMENTS THAT I HAD TO MAKE WAS NOW I'M NEEDING TO PUT IN PROJECT BILLING AND KEEP TRACK OF LOTS OF DIFFERENT CODES FOR LOTS OF DIFFERENT PROJECTS THAT I'M WORKING ON
AND IT IS A PAIN IN THE BUTT
I AGREE
AND I MAKE MISTAKES AND I FORGET TO TURN IT IN ON FRIDAY EVENING
AND SO I CAN ABSOLUTELY RELATE TO PORT STAFF WHO FORGET AT TIMES
AND SO I'M JUST, I'M TRYING TO THINK OF WAYS WHERE, WHERE ARE PLACES YOU GUYS DOING SO WELL THAT YOU'RE GETTING THIS IN? AND CAN WE ADOPT THAT IN OTHER DEPARTMENTS WHERE WE NEED TO BRING THAT UP, WHETHER IT'S A PIZZA PARTY WHEN WE ALL GET IT DONE OR I DON'T KNOW HOW WE GAMIFY IT, BUT WHETHER THAT'S PHYSICAL PUNCH CLOCKS, JUST SOMETHING TO BRING THIS UP
SO
YEAH
AND THAT'S SOMETHING THAT WE TALKED ABOUT IS WHEN I APPROVE PAYROLL SALARIED EMPLOYEES, WE'RE NOT TRACKING OUR TIME BY HOUR
RIGHT
AND SO IT'S VERY STRAIGHTFORWARD
THIS IS DIFFERENT BECAUSE THERE'S HOURLY AND THERE'S DIFFERENT TIME CODES AND THERE'S MORE PEOPLE
OUR CONTINUOUS PROCESS IMPROVEMENT TEAM HAS DONE SOME WORK IN OTHER AREAS AND THEY'VE IMPROVED THEIR PAYROLL PROCESS
I THINK THERE WILL ALWAYS BE, YOU KNOW, EXCEPTIONS THAT YOU HAVE TO WORK THROUGH
BUT I, BUT ONE OF THE, I THINK MIKE TASKER AND, AND BRENDA LYNN HAVE ACTUALLY REACHED OUT TO OUR PROCESS IMPROVEMENT TEAM TO HELP THEM WITH IT
GREAT
AND THERE IS A TEAM THAT'S LOOKING AT IT PORT WIDE
SO HOPEFULLY EVERYTHING WE'VE DONE CAN BE INTEGRATED INTO THEIR WORK AS WELL
BUT, COMMISSIONER, IT STARTS WITH, IF AN EMPLOYEE DOESN'T ENTER AYE
OR HER TIME, THEN IT JUST BECOMES HARDER AND SNOWBALLS FROM THERE
SO YOU GOT TO START WITH PUTTING YOUR TIME IN ON A STRUCTURED BASIS AND BUILDS FROM THERE
WE'RE 15 MINUTES MORE
SO BACK TO YOU FOR ASKING
THAT WAS ALL MY QUESTIONS
WONDERFUL
WELL, THAT CONCLUDES THIS PORTION
THANK YOU SO VERY MUCH FOR THE PRESENTATION
THANK YOU TO EVERYBODY ONLINE WHO LENDED THEIR EXPERTISE
WE'RE AT THE LIMITED CONTRACT COMPLIANCE AUDIT SECTION OF OUR AGENDA
ITEMS 1011 ARE AUDIT REPORT ON 1915 CASEY HOUSE
OH, COMMISSIONER, WE SKIPPED AN AUDIT
SO WE SKIPPED
WE'VE GOT TO GO THROUGH THE PARK AND GARAGE ELEVATOR MODERNIZATION, ITEM NINE
ITEM NINE
PLEASE TAKE US THROUGH, GLENN
THANK YOU, COMMISSIONER
ITEM NINE IS PARK AND GARAGE ELEVATOR MODERNIZATION PROJECT
IT'S CAPITAL AUDIT, AND I'M GOING TO INVITE SPENCER BRIGHT FROM MY TEAM, CAPITAL AUDIT MANAGER, AND KEREM ONAUT, WHO'S THE SENIOR INTERNAL AUDITOR THAT DID THE AUDIT, AND I'M GOING TO GIVE THEM GUIDANCE TO FLY THROUGH IT BECAUSE THEY HAVE 15 MINUTES TO GET THROUGH THIS
SPENCER, THE FLOOR IS YOURS
GOOD MORNING, COMMISSIONERS AND MISS HOLMSTROM
I'M SPENCER BRIGHT, CAPITAL PROJECTS AUDIT MANAGER
AND WITH ME TODAY IS KARIM ONAT
HE'S SENIOR AUDITOR AND WAS THE LEAD AUDITOR ON THIS PROJECT
GIVEN OUR TIME, I THINK I WILL SKIP THE HISTORY OF THE PARKING GARAGE ELEVATOR PROJECT AND GO TO THE NEXT SLIDE
SO ONE BACK, PLEASE
THE ORIGINAL CONTRACT FOR THIS PROJECT WAS $8.5 MILLION WITH AN ESTIMATED COMPLETION DATE AROUND JANUARY OF 2024
THERE HAVE BEEN APPROXIMATELY 800 APPROVED DAYS ADDED TO THE SCHEDULE, AND THIS WAS PRIMARILY BECAUSE OF A PORT ADDENDA ERROR MADE DURING THE PROCUREMENT PROCUREMENT PHASE
AND NOW THE ESTIMATED COMPLETION DATE IS MARCH OF 2026
THE CURRENT PROJECTED FINAL CONTRACT IS APPROXIMATELY $12.8 MILLION, AND THIS INCLUDES $4 MILLION IN APPROVED CHANGE ORDERS AND $300,000 IN POTENTIAL COST RISKS THAT HAVE NOT YET BEEN FORMALLY APPROVED OR FINALIZED, AND I'LL HAND IT OVER TO KARIM TO GO OVER OUR FINDING AND RECOMMENDATIONS NEXT
DURING THE PROCUREMENT STEP, AN IMPORTANT SPECIFICATION SECTION FROM THE ADDENDUM WAS REMOVED, SPECIFICALLY ABOUT THE CABIN TERRIERS, WHICH LED TO THE SUSPENSION OF THE PROJECT AND EVENTUALLY ADDING 166 DAYS TO THE CHANGE ORDERS, WHICH INCREASED THE TOTAL CONTRACT BY ABOUT 47% OF THE ORIGINAL CONTRACT VALUE
THIS ERROR WAS IDENTIFIED DURING THE CONSTRUCTION PHASE
WE WERE NOT ABLE TO PINPOINT EXACTLY WHEN THIS HAPPENED BECAUSE THERE WERE A LOT OF STAFF TURNOVER AT THE PORT AT THE TIME AND ALSO SOME DOCUMENTATION, LACK OF DOCUMENTATION ON WHO APPROVED WHAT AND HOW AND WHEN
SO I WAS ABLE TO GET CLOSE AS MARCH 4 MARCH 5, 2021
BUT THE CURRENT CPO PROCESS REQUIRES THE INVOLVEMENT OF CONSTRUCTION MANAGERS, PROJECT MANAGERS, AND THE RESIDENT ENGINEERS TO APPROVE ANY ADDENDUM
HOWEVER, THE PROCESS DOES NOT REQUIRE MAINTAINING THE DOCUMENTATION ON WHO APPROVED IT AND WHY IT WAS APPROVED
SO THAT'S WHAT THE FINDING IS ABOUT FOR THIS ONE
ADDITIONALLY, ONE SMALL PORTION, THE CHANGE ORDER ONE, DID NOT HAVE THE REQUIRING ESTIMATES, INDEPENDENT ESTIMATES FROM THE PORT
ANY CHANGES TO THE CONTRACT THAT IS OVER $50,000 REQUIRES A PORT ESTIMATE FOR CHANGE ORDER ONE
THERE WAS NONE
SO WE ARE RECOMMENDING THAT THE PORT PERFORMS THAT ESTIMATE
I AM SPEAKING A LITTLE FAST BECAUSE WE'RE RUNNING OUT OF TIME, AND I WANTED TO MAKE SURE MANAGEMENT ALSO HAS TIME TO RESPOND
SO NEXT SLIDE, PLEASE, MICHELLE
AND THAT'S A RECOMMENDATION THAT KAREN'S GOT, BUT HE'S PRETTY MUCH STATED THAT ALREADY THAT WE NEED TO IMPROVE AND WE NEED TO MAKE SURE WE FIX OUR PROCESS, ESPECIALLY AS OUR CAPITAL PLAN, CAPITAL DEPLOYMENT GROWS AND WE BECOME LARGER
THESE ARE THINGS THAT WE SHOULDN'T BE MAKING, AND WE RECOGNIZE THAT
SO WITH THAT, I'LL ASK ANGELA PETERSON AND BRIAN SLEET TO COME UP AND PROVIDE A MANAGEMENT RESPONSE
ANGELA PETERSON, PLEASE INTRODUCE YOURSELF
ANGELA PETERSON, INTERIM ASSISTANT DIRECTOR OF CPO
THANK YOU
NEW TITLES
SO I HAD TO REMEMBER THAT ONE
GOOD MORNING
I'M BRIAN SWEET, THE DIRECTOR OF ENGINEERING FOR CONSTRUCTION MANAGEMENT
THANK YOU
WELCOME
SO I'LL SPEAK FIRST
SO, YEAH, A MISTAKE WAS MADE BACK IN 2021
THE PEOPLE ARE NO LONGER HERE TO TRY TO TRACK DOWN WHAT HAPPENED
SO WE DID REVIEW OUR STANDARD OPERATING PROCEDURES, AND WE DID GO AHEAD AND GET MORE DETAILED ON THAT
THAT REVIEW FROM THE PROJECT TEAM, WHEN ANY ADDENDUMS ARE MADE, WILL BE FORMALLY SAVED
THAT CORRESPONDENCE WILL BE SAVED TO THE FILE
SO THAT WILL HELP US TO ENSURE THAT ALL PEOPLE ON THE TEAM WILL REVIEW ALL THE ADDENDA
AND IF SOMETHING GETS DELETED OUT BY ACCIDENT, SOMEONE WILL CATCH IT
AND AS PART OF THAT PROCESS, TOO, THAT WILL ALSO INCLUDE CONSTRUCTION MANAGEMENT, WHERE THE CONSTRUCTION PROGRAM LEADERS, AS WE'RE NOW CALLING THEM, SOME OTHER TITLE CHANGE THAT TOOK PLACE ON MONDAY
THEY'LL ALSO SIGN OFF ON THE ADDENDUM BEFORE IT IS ISSUED TO CONTRACTORS TO BID ON
SO THAT WAY, BOTH THE PROCUREMENT OFFICE AND THE CONSTRUCTION MANAGERS AND WILL HAVE HAD A LOOK AT IT AND MAKE SURE THAT THIS TYPE OF ERROR DOESN'T OCCUR AGAIN
ANYTHING ELSE? BACK TO YOU FOR QUESTIONS
MY COLLEAGUES, COMMISSIONER CALKINS
SO, AS I WAS READING THROUGH THIS AND IN A QUICK CONVERSATION WITH GLENN BEFORE THE MEETING, ONE QUESTION I DIDN'T ASK
SO THERE WAS A MISTAKE THAT LEFT SOMETHING OUT THAT THEN HAD TO BE CHANGED IN THE CONTRACT LATER
BUT IT'S NOT CLEAR TO ME THAT THE MISTAKE ITSELF CAUSED THE ADDITIONAL COST OR IF WE JUST FAILED TO ACCOUNT FOR THE FULL COST OF WHAT THE PROJECT WOULD ACTUALLY OCCUR
AND THEREFORE, THE CHANGE ORDERS, LIKE THE MATERIAL SPECIFICATIONS THAT WERE REMOVED ABOUT THE INTERIORS OF THE CABS
AND BECAUSE THE SPECIFICATIONS WERE NOT IN THE CONTRACT, IN THE BIDDING DOCUMENTS, THE BIDDERS USED SOME GENERIC MATERIAL
SO WE WANTED SOMETHING NICER
WE WANTED SOMETHING NICER
FINGERPRINT RESISTANT MAINTENANCE
YEAH
SO, I MEAN, I FEEL BAD FOR WHOEVER MADE THE MISTAKE BECAUSE IT LOOKS LIKE SUCH A HUGE AMOUNT, BUT IT'S THAT WE SAID, WE DIDN'T SAY WE WANT THIS PARTICULAR THING
AND SO THEY BID A LOWER AMOUNT
AS SOON AS UNDERSTOOD THAT WE NEEDED SOMETHING NICER, THE BID WENT UP
AND THERE WAS A LOT OF, LIKE
I MEAN, THERE WAS SOME FRICTION THERE THAT COST SOME REAL MONEY, BUT IT WASN'T A $3.5 MILLION CLERICAL ERROR
SOME MUCH SMALLER AMOUNT CLERICAL ERROR TO ACCOUNT FOR THE FACT THAT WE NEEDED TO SPEND $3.5 MILLION TO GET A NICER THING
YES, BUT PARTIALLY ALSO, IT COINCIDED WITH THE WAR IN UKRAINE AND COVID, PERIOD
SO WE DID LOOK INTO THE NICKEL PRICES AND SILVER
IT'S NOT SILVER
SORRY
STEEL
STEEL PRICES
SO IF WE HAD ORDERED IT EARLIER, IT WOULD HAVE BEEN CHEAP? IT COULD HAVE BEEN
AT THIS POINT, IT'S A SPECIFIC SPECULATION, BUT YES
OKAY
THAT'S AN IMPORTANT CLARIFICATION, AND I APPRECIATE BOTH THE RECOMMENDATIONS AND THE MANAGEMENT RESPONSE TO ENSURE THAT THIS KIND OF ERROR DOESN'T HAPPEN IN THE FUTURE, BUT APPRECIATE IT
THANK YOU, COMMISSIONER
ALL RIGHT, THANK YOU ALL FOR THE PRESENTATION AND MOVING FORWARD
REGARDING LIMITED CONTRACT COMPLIANCE AUDITS, THEY'RE ONLY DISCUSSED
ISSUES ARE IDENTIFIED
MR FERNANDEZ, RELATED TO 1915, CASEY HOUSE CONCEPTS, SEATAC LLC, AND STELLAR BAMBUSA CLLC
ARE THERE ANY ISSUES FROM THESE TWO AUDITS THAT YOU'D LIKE TO DISCUSS WITH? NONE TODAY, COMMISSIONER
VERY GOOD
WELL, THANK YOU SO MUCH TO EVERYONE FOR YOUR BODY OF WORK, FOR PRESENTING IT TO US TODAY
THANK YOU SO MUCH TO OUR COLLEAGUES, PARTICULARLY OUR PUBLIC MEMBER, MISS HOLMSTROM, FOR JOINING US TODAY
THAT CONCLUDES TODAY'S MEETING
THANK YOU.

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