Item Number:      6e_motion 
Meeting Date:      September 11, 2018 


1                                                   MOTION 2018-10: 
2                                 A MOTION OF THE PORT OF SEATTLE COMMISSION 
3 
4                           modifying the executive director employment agreement
5                           with  Stephen  Metruck  to  increase  the  amount  of
6                           relocation reimbursement due to changes in federal tax
7                           law to account for taxes withheld from reimbursement
8                           payments; providing an effective date. 
9 
10                                                   PROPOSED 
11                                              SEPTEMBER 11, 2018 
12 
13                                              TEXT OF THE MOTION 
14 
15    The  Port  Commission  hereby  modifies  the  employment  agreement  approved  by  the
16    Commission on December 19, 2017, appointing Stephen Metruck as Executive Director of the
17    Port of Seattle, to increase the amount of relocation reimbursements to account for taxes
18    withheld from payments, and to increase the maximum amount of relocation reimbursement
19    from $100,000 to $133,000, in consideration of changes in federal tax law. 
20 
21    This motion shall be applied retroactively to the effective date of the employment agreement.
22 
23                                     STATEMENT IN SUPPORT OF THE MOTION 
24 
25    The  Port's  employment  agreement  with  Executive  Director  Stephen  Metruck  approved
26    December 19, 2017, provides for relocation expense reimbursement to assist him in moving his
27    residence from outside the state of Washington to the Seattle area. The maximum amount of
28    all relocation reimbursement was set at $100,000, subject to the terms of Attachment B of the
29    employment agreement (attached). 
30 
31    Federal tax law in effect at the time the agreement was approved allowed individuals to claim a
32    deduction for moving expenses paid in commencement of work at a new principal place of
33    work. The port anticipated Executive Director Metruck would be able to deduct federal income
34    taxes on the reimbursements. 
35 
36    The federal Tax Cuts and Jobs Act, signed into law on December 22, 2017, made several
37    changes to the taxability and deductibility of relocation reimbursements.  Effective December
38    31, 2017, an employee can no longer deduct moving expenses, nor can an employer pay or
39    reimburse an employee's moving expenses on a tax-free basis. 
40 

Motion 2018-10  Executive Director Relocation Reimbursement                                      Page 1 of 2

41    Due to these changes in the tax law, Executive Director Metruck would be required to pay taxes
42    on his relocation reimbursements, and thus the relocation benefit would be reduced below the
43    amount authorized by the commission prior to enactment of the tax law. 
44 
45    This action would increase Executive Director Metruck's relocation reimbursement and would 
46    increase the maximum total amount of the relocation reimbursement to reflect anticipated
47    taxes on the approved relocation benefit. The action would be applied retroactively to
48    reimbursements previously approved. He has previously submitted reimbursement receipts for
49    some expenses and it is assumed he will request reimbursement to the maximum originally
50    anticipated amount of $100,000. 
51 
52    Adoption of this revision will honor the intent of the employment agreement. All other terms
53    and conditions of the employment agreement shall remain the same. 
54 
55    ADDITIONAL INFORMATION ATTACHED 
56    Employment agreement executed December 19, 2017 













Motion 2018-10  Executive Director Relocation Reimbursement                                      Page 2 of 2