Item No. 10a_supp
Meeting Date: November 10, 2020
Port of Seattle
Introduction & Public Hearing of the
Preliminary 2021 Budget
Commission Meeting
November 10, 2020

1

Outline
2021 Budget Process Recap
2021 Key Business Activity Forecasts and Key Initiatives
2021 Operating Budget
2021 Comprehensive Operating & Non-Operating Budget
2021-2025 Capital Plan
2021 Sources and Uses of Funds
2021 Proposed Tax Levy
Remaining 2021 Budget Schedule

2

2021 Budget Process Recap
Jun. 4         2021 Budget Retreat with the Commission
Jul. 14         2021 Budget Development Briefing
Jul. 29         Commission Budget Retreat: Industry Analysis and SWOT
Aug. 6        Commission Budget Retreat: CIP and Levy Discussion
Sept. 22       Aviation Division CIP Study Session
Sept. 22       2021 Central Services Operating and Capital Budgets Briefing
Oct. 8         Virtual Open House for the preliminary 2021 Aviation Budget and 5-Year CIP
Oct. 13        2021 Aviation Division Operating and Capital Budgets Briefing
Oct. 13        2021 Maritime and EDD Operating and Capital Budgets and Portwide Rollup Briefing
Oct. 20        Preliminary 2021 Budget Document provided to the Commission
Oct. 20        Preliminary 2021 Budget Document released to the public
Oct. 22        Virtual Open House for the preliminary 2021 Maritime and EDD Budgets and 5-Year CIP
Oct. 27        Tax Levy & Draft Plan of Finance Commission Briefing
Nov. 10       Introduction & Public Hearing of the Preliminary 2021 Budget
Nov. 17       Adoption of the 2021 Budget
Nov. 30       File the 2021 Statutory Budget with King County
Dec. 15       Release the 2021 Final Budget and Draft Plan of Finance

3

2021 Business Activity Forecasts
Aviation Division:
Forecast 61% reduction in passengers in 2020 and 30% drop in passengers for 2021 compared to
2019
Take a long-term view on capital planning and projects
Maritime Division:
Forecast 25% of cruise passengers in 2021 compared to 2019 actuals
Expect Grain volume increases by 40% reduction from the 2020 budget
Recreational Marina occupancy rate of 95%, same as 2020
Fishing and Commercial Operations occupancy rate average of 86%, same as 2020
Economic Development Division:
Commercial Properties target 95% occupancy rate at the end of 2021


4

2021 Key Budget Drivers
Implement FlyHealthy@SEA strategies.
Open the International Arrivals Facility and Phase 2 of North Satellite Renovation.
Complete the Sustainable Airport Master Plan (SAMP) environmental review.
Complete the Utility Master Plan.
Implement a consolidated service contract for checkpoint queue management,
international arrivals support, and ground transportation support services.
Support maritime innovation initiatives to discover, promote and help advance
promising maritime ventures and startups.
Complete design work on Terminal 91 Uplands light industrial buildings.
Continue to invest in Community Programs.
Help Port small business tenants and partners recover from COVID pandemic.
Continue to build internal capabilities through innovation, employee training and
development, and process improvements.

5

2021 Community Initiatives
Create equitable opportunities throughout the region and invest in healthy communities
and environment.



Diversity in Contracting        Workforce Development         Airport Community Ecology    Promote economic
and WMBE              Internship program           grants                    development for the region
Equity, Diversity and          Maritime Secondary             South King County Fund        Expand tourism opportunities
Inclusion                        Education                        Duwamish Valley Community   Continue local Community
Continue stakeholders        Youth Maritime Initiative         Equity Program (DVCEP)         Advertising Program
engagement               Career Advancement Center    Low Carbon Fuel Policy

6

2021 Budget Highlights


Operating revenues down 16.2% to $680.4M from 2020 Approved Budget
Operating expenses down 10.0% to $422.7M from 2020 Approved Budget
Net Operating Income down 24.6% to $257.8M from 2020 Approved Budget
The 2021 capital budget is $508.5M and the 5 - year capital spending plan is over $3.7B
The proposed tax levy for 2021 is $78.7M, a 3% increase over the 2020 levy of $76.4M

7

Changes after the Preliminary Budget Published
Aviation Division
Aeronautical revenues decreased by $2,675K due to a combination of changes in cost allocation to Aero
cost centers and more allocated CARES grant to Airfield cost center.
Operating Expenses from the Airport increased by a net of $1.4M due to:
o Airfield Surface Area Management System $1.1M increase
o New Luggage Carts and Cart Service in IAF of $542K
o Existing Software Licensing Contracts transferred to AV of $521K
o Membership adjustments of $6K increase
o Additional Non-Payroll savings of ($444.5K)
o CBP Reimbursables reduced by ($150K)
o AV Planning (STS) reduction of ($100K)
o Free Bag Tag Printing reduced by ($58.5K)
o Additional Payroll savings of ($31.2K)
Non-Operating Revenue decreased a net of $618K
o Non-Capital Grant decreased by $300K (a net of $5.0M reduction adjustment and $4.7M increase in
CARES grant for 2021 budget)
o Airport Spotlight Program reduced by $318K

8

Changes after the Preliminary Budget Published
Maritime Division
Added the Orca Recovery Program of $50K.
NWSA Joint Venture
Reduced Contra JV Revenue by $38K.
Economic Development Division
Added Diversity in Contracting new Memberships of $8K.
Central Services
External Relations increased Commission video streaming contract by $50K
Added Leadership Training for Police Department of $20K
Reallocation of SeaTac Office Center Lease expense of $4.3K (portion of IAF
previously capitalized)

9

2021 Operating Budget for Aviation



10

2021 Operating Budget for Non-Aviation



11

Community Programs Summary
2020     2020     2021    Funded  Percent of
2019   Approved  Revised  Proposed   by the    the 2021    Added the Orca Recovery
Program ($ in 000's)                                    Actual    Budget    Budget    Budget   Tax Levy   Budget       program for 2021.
1) Airport Community Ecology (ACE) Fund *                  260        522      522       212       212      100%   Extended the one-time Low
2) Duwamish Valley Community Equity Program                 -        292      292       275       275      100%     Carbon Fuel Standard Support
3) South King County Support Program *                         -       1,500     1,500      1,500      1,500      100%     for another year.
4) EDD Partnership Grants                                    763         960       960        910        910      100%
Adjusted the Airport Spotlight
5) City of SeaTac Community Relief *1                       1,400       1,400     1,400      1,400      1,400      100%
6) Airport Spotlight Ad Program 1 & 2
program to reflect the current
934      1,148    1,148       382      382     100%
7) Energy & Sustainability Fund *                              283         250       150        373        373      100%     Fair Market Value of the ad
8) Maritime Blue (formerly Maritime Innovation Center)            -         150       150        150        150      100%     space.
9) Tourism Marketing Support Program                      1,338       1,536     2,842      2,481      1,400       56%   ACE/Forterra Fund is nearing
10) Workforce Development                               1,771      3,119     4,403      2,682     1,261       47%     project completion for Green
11) Diversity in Contracting                                      883       1,520     1,331      1,510        190        13%      Cities partnership and Small-
12) High School Internship Program                             529         657       632        500           -         0%
matching grants.
13) Equity, Diversity & Inclusion                                565       1,346       925      1,062           -         0%
14) Sustainable Aviation Fuels & Air Emissions Program           -          40        40          -          -         0%   Increased the E&S Fund 2021
15) Low Carbon Fuel Standard Support                           -        150       105         75          -        0%     budget to include the National
16) Orca Recovery Program                                    -           -         -        50        50      100%     Renewable Energy Laboratory
TOTAL                              8,726   14,590  16,401   13,381    7,923    59%   (NREL) collaboration project.
Notes:
1) Budgeted as Non-ops Expense.
2) Free advertising space provided at the Airport. FAA requires that lost revenue be reimbursed to the Airport.
* Program with total designated funding limit.

12

2021 Comprehensive Budget



13

Capital Plan Summary
Capital Plan Summary by Division
$ in 000's                        2020 Fcst    2021       2022       2023       2024       2025     2021-2025
Aviation                        501,720    464,234    686,580    673,831    791,875    692,070   3,308,590
Maritime                        21,875     26,383     52,663     41,955     49,650     67,675      238,326
Economic Development          10,167      5,874    26,812    31,089      6,711      3,585     74,071 
Stormwater Utility                    321      1,400      1,520        500        500        500        4,420
Central Services and Other          9,604     10,636      9,082     21,102     26,931     10,490      78,241 
Total                         543,687   508,527   776,657   768,477   875,667   774,320   3,703,648



14

2021 Sources of Funds
42.9% of the funding
sources comes from
bond proceeds.
Over a third of funding
sources comes from
operating revenues.
The tax levy makes up
4.5% of total funding
sources in 2020.



15

2021 Uses of Funds

Plan to spend about
35.8% of the funds on
capital projects in 2020.
29.8% of total
expenditures on
operating expenses.
28.8% of the total
spending on debt
service.


16

2021 FTE Summary
A total of 167.6 FTEs
Central
have either been frozen or
Aviation   Maritime  Econ Dev.   Services      Total
deferred until 2022.
2020 Approved FTE's                1,250.5            259.9             35.6            834.3     2,380.2 
Mid Year Approval                      2.0           5.0             -            6.6        13.6          College/Graduate
Eliminated                                 -            -             -            (0.2)              (0.2)             Internship program will be
Net Transfers                               -            -             -                           -           centrally managed in HR
Adjusted 2020 FTE's 1                    1,252.5              264.9              35.6             840.7      2,393.7                starting in 2021.
2021 Budget                                                                                      Center of Expertise (COE)
Eliminated                                 -          (3.0)             (0.6)              (6.9)            (10.5)              departments have been
Transferred                               (7.8)            (2.9)               -            10.7           -           moved from Central
Conversion of Emergency Hires             -                        -             -             -           Services to Aviation and
New FTE's                           2.0          3.5            1.0             1.0         7.5 
Maritime divisions for
Total 2021 Changes 2                         (5.8)            (2.4)              0.4               4.8          (3.0) 
financial reporting.
Proposed 2021 FTE's                 1,246.8            262.4             36.0            845.5     2,390.7            Minimal number of new
Notes:                                                                                                                             FTEs proposed for 2021
1) Includes 3.0 FTE for Stormwater Utility in Maritime Division.                                                                                 budget.
2) Total has been adjusted to reflect current financial reporting structure with F&B and ENV COEs transferred to Aviation and Maritime
Divisions.

17

Tax Levy Strategy
Catch-up on purchasing power: Over the prior decade, inflation significantly reduced the purchasing value of
the levy
Last year CPI = 2.2%, construction inflation = 5.5%
Adopted for 2019: Five-years 2019-2023, annual 3% inflationary levy increase to support investments in the
Waterfront Strategy
Reviewed annually
2021 represents the third year of the plan; proposed levy of $78.7M in 2021





18

Taxpayer Impact


Preliminary estimate indicates that the median homeowner will see an annual
increased Port levy payment of $1.58 in 2021.

19

Remaining 2021 Budget Schedule

Adoption of 2021 Budget                     Nov. 17, 2020
File the Statutory Budget with King County     Nov. 30, 2020
Release the 2021 Final Budget Document       Dec. 15, 2020


20