The Regular meeting scheduled for 2020-03-10 at Pier 69

Transcript

The Regular meeting scheduled for 2020-03-10 at Pier 69

This is Commission President here for the regular meeting of March 27th
[Microphone malfunctioning ] [The Pledge of Allegiance is given] We are now at the approval of the agenda
Any changes? [Microphone malfunctioning] Let's see, I think we have
Ok
There's been a request for Item A to be laid on the table by staff
So as I mentioned, there's a motion to lay that on the table
Agenda 7A
It's been moved, is there a second? Without objection
Let 7A be laid on the table, which means we're tabling it
So
So please show the agenda approved as revised
Is there was there a reason for that? I just wondered
I think they're just not ready to make the presentation
Commissioners
Uh, yeah
The outside presenter as well as staff presenter felt more comfortable not coming to the meeting today and to postpone the item
Good, because I definitely want to hear from a member of the public when we hear that, right? Probably should be said that we are
[Microphone malfunctioning] Yes, of course, we're working on many other areas where we're working to protect health and safety and the Port Director will respond to some of those areas
[Microphone malfunctioning] Loss of several lives recently, I would say we're in a crisis situation
Every day is a new day
We hope for the best
I'd like to announce that the Port Commission convened an emergency special meeting Saturday, March 1st 2020 at 4:30 to discuss emergent developments related to COVID-19 and the urgent action being taken by the Port to address health risk associated with the virus
No notice of this emergency special meeting was issued as allowed under RCW 42.3.080
It is our practice and commitment to be fully transparent to the public
The first death from COVID-19, had just been reported
In this emergency situation, we felt it critical to hear from our staff about Port response
Commissioners were updated on the status of the COVID-19 illness and the actions being taken by local, state and federal agents as well as the actions taken and planned by the Port of Seattle
Commission discussions include the steps that are being taken to reduce, continue with aviation and maritime operations
Coordination with government agencies and other stakeholders, applicable personnel policies, personnel policies and emergency powers and the ports communications plan to the Port employees, external stakeholders and the public
All commissioners participated and no votes were taken during the meeting
Now item four with the Executive Director
Thank you, President Steinbrueck
A lot has happened since we last met
And I'd like to share an update for you
I hope you indulge me for a minute about our response to address the COVID-19 outbreak
Ensuring the safety, health and well-being of our employees, customers, tenants and the traveling public is job number one for the Port of Seattle
We're coordinating closely with the city of Seattle, King County and Washington state, as well as with federal agencies and public health authorities
We share your commitment to doing everything we can to address this serious problem
The reality is that we can probably expect many more cases to emerge as testing reaches more people
As we work to maintain the essential functions of the Port of Seattle, we are following the best advice of local and federal public health officers
Let me reiterate some of the steps we have taken since the beginning of the outbreak
Here at the Port, we have no confirmed cases of illness or any cases under observation at this time
At SeaTac Airport, the CDC is screening passengers arriving from China and now Iran for the disease
No incoming passengers from those areas have shown symptoms so far, none have required state quarantine
I am proud of our Port staff and our cleaning teams, including our contract workers
They are regularly and thoroughly disinfecting high touch areas and cleaning airport public spaces, including passenger and employee buses
We are setting up hands on hand sanitizer stations throughout the airport and expanding public information messaging for travelers regarding the virus
As a matter of fact, just today, under my authority, I've signed a restocking of three hundred thousand dollars worth of sanitizer for stations throughout the Port
At pier 69 and other port facilities, we have stepped up cleaning and are distributing hand sanitizers and wipes
Katie Jerod, our head of Human Resources, and Tim Mitchell, our State Health and Safety Program Manager, conducted nine information sessions for employees at our facilities to pass information about our actions and actions that are being taken
As you would expect, our employees are reacting calmly and professionally
Turning to our employee actions, following the guidance of Seattle King County Health, we are advising all employees to telework where possible
We're leaning into this
Supervisors will meet with their teams to make remote working the first priority
I'm reviewing changes in our leave policies with Katie Jerod
We want our employees to make the right choices about protecting their own health and reducing risk for the workplace and the community by doing that as well
We're discouraging large internal meetings where possible, and postponing large public events until April or later
Travel plans are being reviewed and are being curtailed to essential trips
I want to emphasize that the current guidance is, is that the risk of travel remains low, but individuals with health risk should consult the Center for Disease Control Prevention for guidance before they go
Port of Seattle leaders are continuing their planning to ensure the continuity of critical operations as the impact of the COVID-19 infections widens in our community
Regarding the upcoming cruise season scheduled to start April 1st, this is, as I stated, the safety of our passengers, employees, community, public and health professionals and first responders always comes first
And we are actively considering all options about the launch of the 2020 cruise season
We are in regular contact with cruise operators, U.S
Coast Guard, public health officials and local leaders
We're using the time before the cruise season starts to get lessons learned from other cruise situation locations and incidents, including COVID-19 infections
This is a dynamic situation and we'll stay in coordination with our partners
As you know, the most recent guidance from CDC recommends travelers, particularly those with underlying health issues, defer cruise travel
We know cruise travel has high interest at the national level and further guidance may be forthcoming
We will report back to the Commission and the public soon with further information about our plans for the season
As I said earlier, this is a challenge that will be with us for the foreseeable future
Beyond short term measures to deal with the outbreak
I've directed our staff to consider potential long term impacts on our workforce and Port operations
We're developing emergency response plans to ensure that we can continue to deliver our critical core services to our customers and the public
Under your delegation of authority to me, I can take actions to shorten and streamline our procurement and contracting processes in this emergency, which I just told you about, the the hand sanitizers
I'll report to you, of course, all my emergency actions that I take
Regarding our capital development, our plan is high on my list of priorities
We are one of the largest public sector builders in the region with a planned capital investment of three billion dollars over the next five years
We're assessing the status of our capital projects to determine where we should prioritize activity during the COVID-19 response
We're reviewing our own activity forecast to assess our financial strategy for the next few weeks, months, and in fact, the rest of the year
The most important thing that we can do for the economic recovery our community is to keep our airport and seaport running while we keep our employees, our other partners and the public as safe as possible
As you know, travel to China and other countries in Asia has been severely curtailed
Those restrictions are necessary to limit the spread of the disease
We're also seeing a decline in travel generally
Clearly, our revenues will be affected depending on how long the situation continues
But I'm extremely concerned about the effects on the economy of the region and all the families and small businesses that depend upon Port activity for their livelihoods
We are thinking about some ways to address those economic impacts on employees of the Port and our business partners and I look forward to your ideas on this as well
This is a rapidly evolving situation and we are faced with many unknowns
My message to you is that we have an outstanding team of professionals who are dedicated to carrying out the mission of the Port in these difficult times
We'll continue to keep you and the public updated as we move forward
I have some additional remarks, but I thought I would pause there to see if there's anything that be on topic
Yeah
Just let me just make some additional comments and then I'd open it up to any Commissioner comments on this topic that we're dealing with
So Director Metrick, on behalf of the Commission, we want to commend you and your leadership team and your management response and continuing response and management to the rapidly changing situation we have at hand
Our number one priority is keeping travelers and King County residents safe
We are assured that you are doing everything in your power to keep our employees safe and the traveling public and keeping our airport and seaports safe and operational, and I think it's remarkable that under the circumstances we've managed to do just that and to maintain operational functionality at both the seaport and at the airport
We want to especially thank our essential staff who do not have the option to tela-work and are showing up every day to ensure continuity of operations
In addition, we want to thank all of the Port staff who are taking precautions at home, at work and by telecommuting
Telaworking, I should say
I affirm that the commission is prepared to take the necessary steps to keep the Port functioning successfully and keep the economic engine running
It's critical to our region and the state
Over the next few weeks we will look to the Port staff to prepare appropriate options which may include crews for the time for the Commission to consider as we continue to monitor the situation and prepare for whatever responses are called for and actions necessary
With that, I'd like to invite any commissioners to comment further
I'd like to concur that the efforts have been quite transparent as well as thorough
Although we do still have tremendous amount of unknowns to respond to
So it's a moving target that none of us are fully cognizant of how-- other than it's growing
I guess I would like to see amongst the issues that the Port staff are exploring a variety of things-- for the folks that don't have a choice of not coming to work, we have to be sure that there's extra janitorial activities that of people that are going to be exposing themselves, including the janitors, that we provide as clean a workplace for people to come with confidence to the facility
And this might include additional janitorial staffing
We went through some great efforts to pass the Senate bill, 6217 that the Governor is expected to sign shortly to improve the flight safety workers minimum wage
It gives us the discretion to do so
I would like us to assert that we're going to do so as soon as possible which would be 90 days from the close of the session, while at the same time being cognizant of the potential unanticipated consequences associated with potential additional layoffs
However, I would expect that we would assert the importance of taking care of these people and sending a clear message to the airlines of the same
While there are great impacts on the airlines at the same time, with the price of gas dropping rapidly, they are being similarly compensated without any of us doing anything otherwise
So and then obviously those places that we have direct control, and this is one of our challenges, many of the workers are not our direct employees, but to the degree that we have ability to address some of the cab fees or uber fees
Obviously, their rates, their frequency of pickups are down
And I'm glad to have just learned and would like to know more that there is built into the ADR contracts, opportunities to provide some relief from the mags
We just want to make sure that those-- relief is transferred to the people who are actually working and not just the owners of those facilities, but anyway, these are just a pallet of ideas that have come to my mind
Obviously it's for staff to vet and bring back to us to show me all the things I wasn't thinking about
You know, obviously, first, I want to echo the tremendous work that the Port staff have been doing in response to the coronavirus
But I also want to call attention to, you know, what this means for many of our concessionaires, but also all the businesses in the supply chain and within our ecosystem
And there's been some serious efforts between different private sector companies and also between government entities to see how we can respond as a community to some of the damage that the economy will face as a result
And so, you know, I commend your works thus far
But I also encourage you to continue to look into some relief efforts and stimulation that we can provide to the community as a fall out of this
And, you know, I'm happy to be engaged as much as I can on this as well
Just, um
Just two quick comments
You know, I think we're unlike any other Port in the United States where we run both the airport and a marine cargo facility and a cruise business
And so we have a heightened responsibility for protecting our community and the gateways that we manage on behalf of the residents of King County and the state of Washington
So I also want to, Steve, commend the work of the staff
I think that most people don't understand the enormous amount of time that the staff is put in, particularly starting at the airport as the virus first appeared there
We don't talk much about the seaport, but we're having the similar issues of the seaport with our marine cargo
And now all of the work that our cruise staff is putting in trying to work with the cruise partners
As Commissioner Steinbrueck said, the number one concern is the safety of the community
Absolutely
The single number one concern
There is going to be a large economic fallout
But the safety of our public is the single most important thing that we should be concerned about
Again, our staff has just done a tremendous job and I just want to thank them for the long, long hours that they're putting in
You have all of our support
You have our full support with whatever you need
Commissioner Felleman, great ideas to put on the table as Commissioner Cho
But I think we need to take this one step at a time
We're gonna be hit really hard with this and the community is going to need our support, whether it's protecting the Gateway's thinking about what we can do for the homeless residents that are suffering
I know that you're working with the county in the city to look at different options, but appreciate that you're at the table
The Port Seattle's at the table with the state of Washington
King County and the city of Seattle and trying to address this
Thank you
Thank you
Well, we'll move on to item sorry you have some more--
Yes Commissioner
I was in a trance there for a second
No, no, I appreciate the feedback and I appreciate all your leadership on this as well as we're going going forward
I think that we're all venturing into unknown territory at least in our lifetime
So I think we're all working together to address the issues of ensuring number one is the safety, health and well-being of everyone of King County
So thank you again for your leadership
Commissioners just a few other things that I would mentioned in the order and I'll try to keep this short as well
I'd like to begin by noting that March is also Women's History Month, that we honor the contributions of women in and to the Port of Seattle
As part of observing Women's History Month, our Equity Diversity Inclusion Office is highlighting some untold stories of remarkable women
We're taking on roles that historically have been held by men, showcasing how Port funded programs are supporting efforts to advance women's careers and continuing to make pathways to equal economic opportunity more equitable
Another way the Port is accomplishing this work is through our employee resource group, the Women's Initiative Network
In 2009 when created, the Pat Davis Women's Legacy of Leadership Award, named after the Port of Seattle's first woman commissioner Pat Davis
This award is presented annually to-- well not actually
It's not presented annually only on occasion to pioneers in advancing possibilities for women who embody Port values through their daily contributions and actions
And in fact, this year two retirees Manette Moses and Tracy Goodwin, which you're both well aware of, were honored and received the Pat Davis Women's Legacy of Leadership Award on February twenty seventh by Pat Davis herself
We've made some progress along the way
We still have more work to do
Thus, as a leading economic engine for the region and the state of Washington, the Port of Seattle is continually committed to be a source of opportunity for all
Regarding today's meeting, I want to highlight a couple of items on our agenda
Action Item 8 A is a request to authorize an RFP for up to 30 biometric air exit gates for departing international flights, leaving Seattle-Tacoma International Airport
If you provide the direction to move forward, I will then execute the proposed biometric air exit policies as administrative policies under my executive authority
More discussion to follow on that
As you know, on December 10th you passed a motion directing staff to develop policies to make your seven biometric principles tangible and enforceable
I believe that the staff completed that work for biometric exit, the first of five use cases for potential biometric implementation at port facilities
Therefore, we are comfortable requesting that you approve this RFP as the best path to ensuring biometric air exit implementation at SeaTac meets our standards for protecting travelers rights and upholding our customer service values
I look forward to sharing additional thoughts on this topic during that discussion
And finally, item 8 B is a motion about using the Port's influence and experience to promote workforce development in our region
You were briefed on this in the last meeting
We're excited to be moving forward with this work
And with that, I complete my report Commissioners
Thank you, Director Metruck
With that, we'll move on to Item 5, which is public comment
The commission will now accept public comment
Any written materials can be given to the Clerk for inclusion in the meeting record if you wish to speak, please sign in and identify the specific item which you are addressing
Comment time will be limited to one minute because we have over 40 people who've signed up
We will limit the overall comment, time to approximately 45 minutes
So with that, we're going to start first with those who are using that teleconference system to provide their public comment
The first person is Michael Foster Second person is Nathan Shared
Do we have them on the line? Yes
Commissioner
So all of our teleconference participants are on the line and we'll call on them one at a time
They will unmute themselves and begin their comment
So our first teleconference speaker is Michael Foster
Excuse me, but could you talk about-- I'm sorry, you're out of order
We have callers who have signed up to speak
Again, I'll ask for Michael Foster
Okay we'll hold Michael unless we hear from him again
The second speaker signed up is Nathan shared
Is Nathan on the line? Ok
I am
Hello, Merritt
Thank you for allowing me to speak on behalf of the Electronic Frontier Foundation and our 30,000 members
There's perhaps no technology more invasive to our privacy and more threatening to our individual safety than face recognition
CBP would have you believe that your assistance in their collection of biometric data from passengers leaving the country is one of civic duty
To the contrary, this seems more like a problem looking to be a solution to a largely non-existent problem
There is no evidence of a large scale epidemic of people leaving the country under false identities
More importantly, there is also no explicit legal authorization giving CBP the power to track U.S
citizens in this way
As members of the Port of Seattle Commission, you have been empowered with broad authority to establish policies that govern the activities of Port staff and you support resources
As is noted in the Port of Seattle biometric air exit recommendations, airports and airlines are not mandated to participate in CBP biometric air exit program
But ultimately this may not stop CBP from utilizing their own resources to conduct these invasive searches
Your mandate is to responsibly, injudiciously protect the Seattle Port Authority resources and the rights and safety of thousands of residents and visitors that pass through its facilities
With these considerations in mind, we respectfully ask that you reject any plans calling for Port participation in CBP biometric entry, exit and boarding program
Thank you
Thank you
Elaine Perez, followed by Cynthia Speice
I mentioned and once again, Alaina Perez online
Cynthia Speice
Phil Mosaddeq
Hi, I'm Cynthia Speice, an independent security researcher and Seattle resident
My comments are regarding agenda item 8
There are a number of ongoing problems with the process used by the Port to review the use of biometric technology, such as a lack of public transparency
The Port website doesn't have information about the biometric special committee, such as who is on the committee, how often they have met, or what the meeting agendas minutes
The same is true for the Biometrics Internal Advisory Group
While the Biometrics External Advisory Group does at least have some details published online, there's no published dates for their future meetings
The Biometric air exit recommendations document from the Port names supporting CBP documents, but Port staff is still unresponsive to our requests sent on February 25th for those
Port staff are also being dishonest in their engagement with this process, considering the agenda item requesting procurement of biometric technology, was posted on Thursday but as of Friday, the Biometrics External Advisory Group was still discussing the air exit recommendations
And their meeting minutes were only just posted this morning
Moreover, the commission itself has not signed off on the draft recommendations document, so approving any procurement is running afoul of the spirit of the process and it's unnecessarily rushed
At the Commission meeting on February 25th, Port staff repeatedly inaccurately referred to CBP TVS as 1 to 1 when it is not and is instead one to many, the technical implementation and security privacy risks are vastly different for one to one versus one the many systeMS The deep of an error implies either ineptitude or malintent by the Port staff
The Commission and the public are being steamrolled by CBP
Port of Seattle funds should not be used to procure biometric technology, especially since nothing has been documented by the Port regarding what specifically will be improved to support operates the systeMS Additionally, if the Port procures the system, the Port will be contractually bound to CBP, including only being allowed to install CBP approved signage even if the signage is inadequate or incorrect because the Port would actually have more power to follow the principles by forcing CBP to procure the systeMS I encourage commissioners to vote no on agenda Item 8A
Thank you
Thank you
I just
When we get into discussion, I would like to have our legal counsel addressed that last question about our autonomy with signage
Noted
Thank you
Can I just ask as well that the information about the biometrics committee should absolutely be on the website
So can we please get that on there? It is now
Okay
Okay
Thank you
The next speaker signed up as Phil Mosaic, followed by Adam Showstack
These are online speakers
This is Phil Mosaic
I live in Tacoma and I normally work in Seattle
During your December meeting on this topic, I took a vacation day to come and participate and it's been very difficult to participate since
I think even engaged members of the public will have a hard time keeping up with what's going on
I left that meeting feeling like we were about to do something historic in Seattle and that Port Commissioners were going to consider regulating facial recognition at the airport
I feared that Port commissioners would face great pressure from CBP and from airlines, and it already appeared that Port staff were undermining their efforts
But since I've seen nothing to the contrary, it appears that plans to move full steam ahead on purchasing equipment, despite any process for regulating such have been implemented
And in short, I urge you to put the brakes on all of this
You should not be approving this contract and you should put things on hold until there's been some real meaningful public process
And until you have regulations in place
Thank you
Thank you, Adam Schostak, followed by Alper Sarkaiya
I'll mention again, Adam Schostak, followed by Alper Sarkaiya
Savanah Sligh
If any of you are still on the line, speak up and we'll take them as they come
Can you hear me now? Yes
What's your name? This is Adam Shostak
OK
You're on Adam
Great
Thank you
And thank you for allowing me to speak today after I figured out how to unmute myself
OK.[Laughter] My comments refer to agenda item 8A
This vote involves the Port spending millions of dollars to deploy biometric systems with an assumption that the Port will be able to add controls that improve privacy or security to the system
But the analysis I've seen does not crisply [inaudible] model the idea that CBP runs biometrics versus that of the Port running biometrics
Rather, they're analyzed together
My experience in building and deploying large complex systems teaches me that it's important in a situation like this to create a threat model of each possible architecture and to compare those analysis
Let me explain what a threat model is
It's a structured and systematic analysis of a system that seeks to answer some basic questions
What are we working on? What can go wrong and what could we do about those? Some of the analytic documents I've seen assess how a proposed end state will address the principals
And those come close to what I'd like to see and what I encourage the Port to produce
But I have not seen any comparative analysis
Nothing says if the Port makes this purchase, we gain control X or if CBP makes this purchase, we lose our ability to comply with principal Z
So it's very difficult to say what the privacy gain from this investment of $5 million will be until--- Please finish your---
Lawyers perform and document analysis of each of these possibilities of who will operate the biometrics and then to document the advantages and disadvantages of each
As such, I respectfully ask the Port to produce these analysis before making a $5 million commitment by voting on item 8A
Thank you
Thank you
followed by Savanah Sluy
Hi, my name is Alper Sarkaiya
I am a resident of the city of Seattle
My comments today regarding item 8B on the agenda
Authorization to allow the Executive Director to award execute the contract for a biometric
It is commendable that the court has convened both a working group and external advisory group to address the challenges for biometric exit program consistent with federal mandate
However, advertising a contract that does not have explicit language codifying the findings of its groups is premature
This should be a cycle to allow the public to comment on the language of outgoing contract to ensure the working group's derived principles are taken into account
I make the following points to urge the Commissioners to delay authorization of this contract
There is no standard operating procedure that describes how mismatches within the CBP system will be addressed
No facial detection algorithm will achieve better than 90 percent accuracy in real work conditions, meaning that at least one in 10 travelers will be subject to alternative measure
Ethical issues have been raised in Olympia while discussing Senate bill 6281 concerning the management of personal data
The communication of rights of individuals, whether U.S
citizens or not, should be [inaudible]
Point two, the privacy policy linked by the CBP's response to the Port draft recommendations in Appendix D is eight years old and has clear privacy violations that conflict with the Port committee's recommendations
As an example, the IDENT system is noted as being a permanent data store for biometric data with many data users such as local law enforcement
No clear provision is given that restricts the use of traveler's data to federal agencies only for the purposes of traffic
Last point, there is very little public information given on the timeline of the CBP' implementation of the biometric air exit system other than rapid
To clarify the timeline to the public, the ramifications of alternative one in the agenda item, postponed projects must be clarified for the public
Please finish up
--- which CBP will execute a contract of their own superceding the Port's authority
Given a whole host of issues that are not being explicitly resolved, I urge the Port Commissioner to delay advertizing the contract until firm requirements are explicitly defined Thank you
Thank you
Savannah Sluy
I'll go back to Michael Foster
OK
Not hearing any voices there, we'll move on to those who are here in the meeting room
So Edward Hasbrouck, followed by Jennifer Lee
My name's Edward Hasbrouck
I'm with the Identity Project
Papersplease.org
I came here from San Francisco in person because of the importance, critical importance of this debate as a national precedent
We've explained in detailed written submissions to your February meeting and to this meeting exactly how the proposal that is before you violates multiple federal laws, the principles of fair information practices, and the principles professed by both the Port Commission and CBP
There's plenty of reasons to delay a decision until the policies, most of which we don't even know if they exist, are made public
But there's already ample evidence to support a decision that this proposal is directly contrary to the principles you purported to adopt in December
It would reflect a repudiation of those purported principles
I won't go into details, but I want to note a couple of points
One, with respect to the arguing about whether you should make CBP do its own dirty work or whether you should collaborate in front for them
First, one of the violations of federal law is the violation of the requirement of the Privacy Act of federal law
That if a federal agency is going to use personal information for decisions about people's rights, as CBP will in this case, it is required by federal law to collect the information directly
It's not just that you'd be collaborating in a violation, it's that the very fact of outsourcing it to you
The point of this proposal would violate the Federal Privacy Act
Second, the CBP business requirements, which were only disclosed to the public over the weekend and which are incorporated by reference in both the RFP and this proposal, explicitly require that the Port post all CBP directed notices and not post any non CBP approved notices
Contrary to the claim that this would enable the Port to exercise more control, this proposal contains an explicit gag order that would prohibit the Port from exercising control over signage
Reject the proposal and the RFP, withdraw the RFP and then allow the policy development process to continue
Thank you
Jennifer Lee
This is Savannah Fly
Pardon me, I've been able to unmute myself
All right
We'll take Savannah and then Jennifer Lee
Thank you
My name is Savannah and I'm a resident of Burien
I'm testifying today to express my concern over the prospect of Seattle Port Commission collaborating with CBP to conduct facial recognition operations at SeaTac air exit terminals or anywhere else at the airport
I would also like to express my concern over the prospect of airlines being granted permission to collaborate with CBP on facial recognition, data gathering and sharing
I believe it is the duty of CBP to undertake and execute the activities associated with a federal mandate for the air exit requirement, not the Seattle Port Commission
Numerous techniques have been utilized over the years to verify passenger identity
Facial recognition is just one such tool as an emerging technologies such as facial recognition has been found to be racially biased and at times inaccurate
To collaborate with CBP on this issue would legitimize the use of facial recognition technology, which is a source of tremendous public concern
On February 14, 2020, a coalition of organizations sent a joint letter to the Washington House of Representatives supporting a bill that would place a moratorium on the government's use of facial recognition tools
This bill is HB 2856
This letter was signed by numerous groups, including 18 local community organizations representing the interests of communities of color and immigrants
These groups include but are not limited to the Asian Counseling and Referral Service
Asian Pacific Islander Coalition of Washington
The Council on American-Islamic Relations
Andre Karmanos, the Japanese American Citizens League of Seattle, Puget Sound Sage, Urban League of Metropolitan Seattle and more
I urge this commission to listen to the concerns of communities here in King County and to not advance the use of facial recognition at SeaTac
Beyond this request, I urge the commission to strongly require clear opt-in procedures to ensure that the rights and privacy of all passengers not required to undergo verification are preserved
Thank you
Thank you
Jennifer Lee
Good afternoon Commissioners
My name is Jennifer Lee and I'm with the ACLU of Washington
As a member of the Biometrics External Advisory Group that was formed to provide feedback on how the Port should allow use of biometrics at SeaTac International Airport, we strongly oppose the Port staff's recommendations for the Port to collaborate with CBP in implementing its biometric air exit program
At the last public hearing on February 25th, Port Commissioner stated a false belief that they have no choice but to collaborate with CBP in rolling out their face surveillance program
We object to this inaccurate message
The Port absolutely has a choice and it must make the choice that protects people's constitutionally protected rights and civil liberties
To be very clear, Congress has never authorized a biometric collection of U.S
citizen's data
While Congress has ordered the collection of biometrics from foreign nationals at the border, it has never authorized the use of facial recognition collect biometrics from Americans
Without explicit authorization, DHS should not be scanning the faces of Americans as they depart on international flights, and the Port should not be facilitating this unauthorized scanning
At the last biometric external advisory group meeting, we asked CBP and Delta if a strong opt-out facial recognition system where many people opt out would eliminate any efficiencies gain from using facial recognition
We heard a strong yes that with many people opting out, it would eliminate any efficiencies gained from using facial recognition
So if the Port staff and Port commissioners are good, all agree that it is very important for there to be a meaningful opt-out or opt-in system for travelers to exercise their rights, and having such a strong opt out or opt in system would eliminate facial recognition efficiencies, then why is the Port contemplating paying companies over five million dollars to implement a facial recognition system at Seatac? We must not accept the message pushed by industry that widespread deployment of face surveillance technology is inevitable
Again, the Port has the choice to reject collaborating with CBP and we urge you to do so
Thank you
OK
Bernard Kunz
Followed by Joshua Welter
Good afternoon, Port Commissioners
I'm with Highline Public Schools and Bernard Kunz
I'm an executive director there working with their secondary prograMS And I'm just here to express our continued enthusiasm and excitement about moving forward with the Maritime High School project that you're voting on today
We continue to look forward to the opportunities and really appreciate you taking this up today during a very busy time
So we look forward to the continued collaboration
Thank you
I appreciate your good news in the middle of some tough public comment
Joshua Welter
President Steinbrueck, members of the Commission
I'm here with some of the driver union shop stewards in the OnDemand fleet to draw your attention to two things really quickly
First, you all received a letter yesterday from the union outlining recommendations for emergency measures to support the taxi and for-hire drivers, including the suspension of per-trip fees during the state of emergency
I know each one of you cares deeply about the hardworking immigrant drivers serving the airport who are at the front lines both of the public health, but also the economic impacts of the current crisis
They don't have paid sick days
They don't have the luxury of telecommuting
Income has been cut in half and drivers report waiting four to five hours for a single trip
And so speaking of waiting first of all, thanks for doing everything in your power to help
But speaking of waiting, I just want to draw your attention to a second issue
We're 20 percent of the way through the two year taxi pilot program and drivers are still waiting to realize the vision that the Commission wisely adopted to ensure driver voice
I regret to inform you that this process has been marked by delays and cancelations
We notified the Port of a supermajority support for advancing this process back in June of last year
And yet, following a certification process, that itself was filled with delays, I'll wrap up, the Port staff that's only met with elected driver leaders once for one hour since that process began
We do have a meeting next Monday
We sincerely hope that the Port engages with the proposals drivers have brought forward in good faith
Thank you for your attention
Thank you
Pardon me if I misstate this, but the person signed up his Warku Bellone
Hello all your Commissioner
Today I'm here to deliver a driver voice
Would you please give your name for the record? Ok, my name is Warku
There we go
I drive Twenty nine Forty
So today I'm here for to raise up the drivers affected by this crisis
We stand all day
We are not making any money
So we need your attention
And at the same time, 160 lots, we are not getting any sanitiser or enough soap to wash our hands
So we need that
That's a serious problem
So the last I like to thank you Commissioners to give me a chance to speak today
Thank you
I think I heard the comment to the effect that there was no where for washing hands at the pickup zone
I think we should follow up with that and check into that right away
Yeah
Thank you
Jeffrey--
We'll be adding some stations immediately at the taxi and TNZ areas for passengers coming up We'll follow up
Thank you
Jeff Payne
Jeff Payne, no? J.C
Harris
Good afternoon, commissioners
So I am following up on a letter that I originally sent to Commissioner Bowman and then to Director Metric yesterday requesting a meeting to discuss the implementation of your new Port package program
Now that HB 2315 is passed, it is time to figure out how to actually do it
And my organization SeaTac Noise Dot Info has identified the people that you will want to talk to and how to do it
I will just tell you that it is in the Port's interest to do so strictly in terms of community outrage, outreach
Outrage, Freudian slip.[Laughter] The last four years, the Port's attempts to work with the community have been uniformly, let's face it, not been great from SAMP meetings to the start and the ACE grants and so forth
This is a chance for you to put some serious wins on the board in terms of community relationships and building a better path forward with the SAMP
So I encourage you to schedule that meeting as soon as possible and let's do it
Thank you
I hadn't heard about that
Alex Zimmerman
Not here
Moving on
Katie Wilson
Hi commissioners
So the next chunk of public comment that we have was submitted to be read into the record
So I will be doing that today
You are
And my name is Lauren Smith, acting deputy Commission clerk
So, Katie Wilson, I am writing to urge you that you not take action on plans to authorize biometrics at SeaTac Airport at your upcoming March 10th meeting
The public has not had adequate notice and time to engage
Delaying consideration is especially important in light of the escalating concerns around COVID-19, which will prevent many interested people from attending Tuesday's meeting
Next is Elena Perez
I am writing on behalf of Puget Sound Sage to express our continued opposition to the implementation of facial recognition at SeaTac Airport
Facial recognition technology has been found to be racially biased, inaccurate and unnecessary
We have gone on record repeatedly to urge that Commission conduct a thorough investigation of the impacts of this technology
Despite repeated requests for ample opportunity by civil liberties and immigrant rights activists, data privacy experts, Port unions, social justice organizations and concerned travelers and residents to weigh in
This has yet to occur
Therefore, we urge you on March 10th to vote no on any action authorizing the Port executive to award and execute contracts for biometrics at the Port to procure hardware, software or services related to biometrics, or to use Port staff and construction toward this purpose
We also asked that Commission take the following actions to ensure we are not participating in a program that could undermine civil liberties or privacy
One, do not collaborate with CBP to roll out the use of facial recognition at SeaTac Airport exit terminals
Two, disallow airlines from collaborating with CBP on the use of facial recognition at SeaTac exit terminals, and three, communicate to CBP that we expect they operate with a strong and clear opt-in on facial recognition for anyone not mandated to undergo facial recognition as opposed to opt-out
The public needs more time and opportunity to learn about and weigh in on the issue of biometrics use at SeaTac
We ask you to center first and foremost the rights of travelers and impacted communities in your deliberations and decision making
The next speaker, Derek Lumb
Yes
On behalf of Interim CDA, I am messaging you to ask that tomorrow's hearing be postponed, today's hearing, until a later date when there is not a public health emergency happening
This Commission pledged to a transparent process in earlier meetings and holding a meeting on an issue such as authorization of biometrics during a public health crisis would be a violation, especially since this crisis stipulates that large numbers of people should not gather in one place
We ask that you cancel and reschedule for a later date
Thank you
Rhetta Rubinstein
Rhetta Rubinstein
I am writing to express concern about the implementation of face surveillance at SeaTac
I urge the Port Commission to postpone the public hearing on this issue until there is time for the required public consideration
There are serious issues with this technology that make it biased and unreliable
Given the COVID-19 public health crisis and the lack of adequate public outreach about biometrics used at the Port, I encourage this meeting be rescheduled so the public can engage and weigh in
As elected officials, the Port commissioners must listen to the public's concern before making a decision
Thank you
Next speaker's Tina
Excuse me
Commentor
Tina
The proposed extensive use of facial biometric technology at SeaTac is too controversial in Seattle to have the public meeting while we're in the throes of a public health crisis and being told to stay home
Allowing e-mail comments is an inadequate substitute for being part of an important discussion concerning personal privacy, racial bias, and to what extent we want to be complicit with CBP and ICE
I strongly oppose the proposed use of this technology that I do not think is worth the compromise of our values
I ask that you permit public debate when people can attend a meeting without violating public health advice and when they are not understandably distracted by an emergency that threatens their livelihood and health
Mary Anne Baulch Speigel
There is sufficient scientific data to stress the importance of placing limits on air traffic
One public health study indicated the increase in heart disease in seniors over 65 related to airline noise
I'm a Mount Baker resident for 12 years and the level of noise has increased dramatically
One morning last week, a plane was flying so low that I wondered about an explosion
My husband had to build a soundproof booth to be able to make audio recordings due to an airline noise caught on tape
I've previously lived for 16 years on Mercer Island and the difference is huge
I believe another major airport is the only answer
I understand that you must consider the business needs of Boeing and the airlines, but please consider your constituents health needs as well
In lieu of another airport, please do not add additional runways too, and insist that the air traffic is shared equally
South Seattle carries way too much burden, insist on reduced plane speeds and heights
And I recently read that our air pollution is equal to Los Angeles
We voters are observing
Thank you for your concern and efforts
Laura Gibbons followed by John Burnell
This is Laura Gibbons, a member of Climate Justice Group 350, Seattle and Seattle resident
I am pleased to hear all of the Port is doing to make SeaTac ground operations more environmentally sustainable
But ground operations are only a small part of the environment impact of flying
SeaTac related carbon emissions rose 40 percent from 2008 to 2016 and the Port forecasts double the travel in 2034
There is no way we can meet climate change goals with this sort of growth in aircraft emissions
Only a trivial amount of flying can be powered by biofuels
The only viable option is less air travel, not more
That should be the focus of your planning
Thank you
And Bernadine Lund, John Burnell is who I have next
Excuse me, John Burnell Bernadi
Yes, I live in Seattle and I'm a member of the climate justice group 350 Seattle
I am impressed with all the Port is doing
So this is actually the exact same comment as the previous commenter
Okay
Noted
Emphasized by John Burnell
Thank you
Bernadine Lund
Bernadine Lund is a resident of Federal Way
A member of Quiet Skies Puget Sound and 350 Seattle
Thank you for reading the submitted public comments
My comments continue from those I made about SAMP at the last public meeting on the 25th
At that meeting I know that saying you could consider holding the number of flights steady or even reducing them surprised some of you
I was thinking of recent articles that ask something like what if seeing the world is causing its destruction? Challenge ourselves and staff to look at transportation in different ways
Alternative transportation is being developed and built in other countries and even in the US in the Midwest, including high speed trains and hyper loops
The facilities at the airport could be used to move large numbers of people with trains during one downturn in aviation, even Boeing engineers started looking at Hyperloop trains
Another possibility is to use more electronic communication, even for business meetings
Again, the airport facilities could be used for connecting people from around the world without having to fly
To get a broader view of possibilities, watch or read The Ascent of Man by Jacob Bronowski
It describes how industries come and go
[Timer beeps]
James Hudson
[Timer beeps again] It's just trying to wake us up
[Laughter] James Hudson, how to get drug free zone on Port property
Somebody is going to get hurt real bad
That was the threat in my face from the biggest drug dealer in the homeless camp who walked up to me while I was sitting in the security shed at camp
Then he just walked away glaring at me
It did happen
Five weeks later to the day the camp organizer died very unexpectedly under unexplained circumstances
And over 10 weeks since the death, derelict contractor is nowhere to be found
A derelict contractor has materially abandoned its own contract
This is Inner Bay, homeless camp cast adrift, threatened and ruined by drug people
City of Seattle hired the wrong contractor, which during 2018, 2019, knowingly and willfully set this camp up as a drug trafficking hideout with reckless disregard for well-being, life, property and the law
And all of this is on Port of Seattle Property
Drug rumors always fly around camp, but they all summarized as follows: Inter Bay is a scheduled one scheduled two illegal drug production facility that has been monetized using stolen property
[Timer Beeps] Can I ask that we look into that, please? I've been down to Inter Bay several times and I think there are some issues down there
Thank you
Yes Commissioner
I'll look into that
We have 16 additional, clerk
Do we need to extend the public comment period? They did not
So, yes, he will extend for another fifteen minutes, approximately 15 minutes, 15, sixteen speakers
Okay
Laura Sullivan I am writing to ask that the Port Authority work with Vashon Islands Fair Skies Group to install two noise monitors on the island as agreed last year
A great deal of time has passed with no action and no information
Vashon Island Park District has approved the use of public land for placement in one of the monitors
Perhaps the PA does not understand the impact that steady stream of low overhead traffic has on Vashon residents
One of the planes flew solo over my home last week that I could read the number on the plane
The noise is devastating
Additionally, I request that the summarization of data is not adequate
It gives the appearance of a few skating information from the public
I am also, again, applying for a property tax reduction due to the noise from overhead planes, so it has a huge economic impact on Washington economy
Sheila Doina
Excuse me executive
We've heard this
We've spent a lot of time to get these monitors approved
We understand that they were purchased
Last meeting when this was asked, we were told that they are available and being calibrated
I ask that we have some sort of at least ad hoc community group so the folks know what's going on between these gaps in time
It's just, you know, we've done the hard part
Whatever the reason for what it's going to take to get them installed, these folks have been waiting patiently and they should just be kept informed
We have 15 more on the same subject
So, Sheila
Based on recent updates from Vashon Island Fair Skies, I understand the raw data collected from the two temporary noise monitors destined for Vashon and Murray Island will be destroyed and only the summary results retained
I asked the Port commissioners to reconsider and record its record retention policy as having the raw data is critical in documenting and analyzing the acute noise disruption in our community is now experiencing
Averages don't necessarily paint an accurate picture and the cost associated with storage of the raw data is minimal
In addition, I asked Port commissioners to take David Gobal, president of Vashon Island Fair skies up on his offer to assist the Port's Noise Office and identifying ideal locations on Vashon and Murray Island to locate the temporary noise monitors, as well as help facilitate discussions with stewards of public lands of the islands
Ok
I think we're on to Dorna Baxter
In regard to noise monitors on Vashon, I asked that SeaTac work directly with Vashon Island Fair Skies on the noise monitors
They have potential solution for locating the monitor also destroying the raw data is not OK
The very modest time history flies must be retained
There is no technical problem retaining the data
It's purely a procedural and policy issue
Finally, I request the noise office regularly post the complaint box chart on the port's web site
The public shouldn't have to make records requests to get this information
Thank you for your time and attention to this matter
Susan Nebhacker
My husband and I live on Murray Island, which is part of Vashon Island
We have lived here for over thirty eight years
For most of our time here, we lived a very quiet, peaceful life
That is no longer the case
We can no longer entertain on our deck
We no longer sleep through the night
And often the noise of planes are so loud we think we are going to they are going to crash into our house
There are several low flying planes through the night that are so loud it wakes us up
That is with a noise canceling machine and older people's hearing probleMS Of course, the planes fly low all day long as well
We have never minded sharing all the neighborhoods
But I am very clear, judging by friends comments, that this is quite extraordinary and off-putting
I know we are getting more than our fair share
I would like to ask that the Port be cognizant of arbitrary discussions that are being made that have very serious long term impacts to the citizens
To the end, I would like to ask for more transparency
I think it is reasonable for me to ask the following: Please have SeaTac noise officers work directly with Vashon Island Fair Skies as it relates to the noise monitor
Take another 10 seconds or--
Very similar
All right
Joanne Herbert followed by Alex Shavira
Joanne Herbert
We asked that SeaTac Noise Office work directly with us at Vashon Fair Skies to proceed with putting in place noise monitors
The expense and time involved to obtain the data is worth it
Achieving the data to M.B
slashed is minuscule
We would like to be a part of the policy decision
Also the for the noise office, please regularly post the complaint box chart on the web site for easy public access
I think you would agree that a person shouldn't have to make a records request for this data
Alex Shavira
My wife and I retired on Vashon due to its rural feeling, small town feeling and quiet environment
Two of those things are gone now due to constant noise we have from the flyovers
The next gen flyovers are abusive and discriminatory and have destroyed the natural environment of our community
Vashon does not have a city council to give us a voice against these flyovers
The only collective voice we have is a local group, Vashon Island Fair Skies
To help us fight this abusive program, I am asking you to work closely with them on all matters relating to the noise we constantly must endure due to these flyovers
Vashon has a very low ambient noise level, and when a plane flies over, it is incredibly noticeable
It drowns out everything since there isn't any other noise for it to blend in with
This is why the noise monitors are essential for us to help you understand what we are dealing with
You must keep all raw sound level data for an accurate assessment
Time history flies must be saved
Preserving the type of data is Vashon's evidence and public record
I have made many complaints about the noise, but it's starting to feel like a useless action
There are far more planes now than last year
Chris Balwant
Nexgen is an operational practice that unfairly singles out places to suffer more than their fair share of negative consequences of air air traffic, excessive noise from overflights on Vashon is more than simply a nuisance
It is a serious cause of social harm
In the 30 years I have lived on Vashon, I find it its people engaged and civic minded
Since NexGen with its anxiety making overflights, things are frantic
Dogs barking
People grumbling, erratic traffic
Wildlife scattering, people staying more indoors, turning up their TVs and radios and yelling at each other just to be heard over the lineup
Relationships are stressed by the constant interruption
I no longer open windows for fresh air because of the noise
I am awoken too early in the morning with the dread of incoming aircraft
Evenings in my yard are dominated by the roar of jet engines, noise deprivation of sleep, powerlessness in the face of interruption are techniques of torture
Once treasured houses under the flight path are systematically put on the market as longtime residents give up on the place
Property tax assessments will have to consider the loss of value for the entire swath of the island
Karen Lamplugh
I am an eight year resident of Vashon Island that lives on the north end of the island
The planes fly directly over my house and I can see them easily through my skylights
The noise is nonstop and especially active from 9 p.m
to twelve a.m., starting back up at 4:30 a.m
With my windows closed, still loud
Like many residents that moved here, I have high sensitivity to noise
My neighbor has late stage Parkinson's disease
We moved here for the quality of life that is now being destroyed
It is within your capacity to help your constituents
Please do not hide behind the FAA, but stand up for us
You are elected by us
You are our voice
Thank you
Richard Rodrigue
Yes
I spoke to you on October 22nd 2019 regarding the significant negative noise impacts to our island of concentrated flight paths created by the FAA's NexGen arrival procedures
At that meeting I requested your help along with many other islanders we asked for two permanent noise monitors, one located on the north end of Vashon Island to monitor the impacts of the south flow at SeaTac and one located on the south end of Murray Island to monitor the impacts of the north flow of SeaTac
Noise monitors are critical to gathering data to take to the FAA to ask them to change the flight patterns associated with NexGen
At your meeting on November 19th, 2019, you approved a portion of this request
Your noise office will install one portable noise monitor for one year on Vashon Island
Although we were disappointed in this very limited monitoring, we need this one temporary monitor to be installed as soon as possible
Your noise office is not being transparent on their plans to install this monitor
I feel that our issues are not a priority
Please direct your noise office to be transparent and responsive to our request
The next speaker is Katherine Payne
I have developed heart palpitations and anxiety due to the relentlessness of noise of commercial aircraft over my home
Yes, I live under the red line on the north end of Vashon Island
At first I thought I would get used to it, but there is no way to get used to it
No matter the tricks I play, the roars, whistles, and wind harmonics penetrate my brain and every single room of my house, even the basement
Summer will soon be here
And if it is anything like last summer, open windows that once let in the night sounds will give way to sleepless nights
Gardening, once a healthy and joyous activity, has turned into something I just want to get done
Damaging my psyche, making me want to move far away, which is just not possible
Nearly every day I check the wind direction
Please be a north wind, I say to myself, because that means a day of relief from life under the red line
Here is a concrete example of how I no longer enjoy parts of my life
Every season for the last 10 years, I have hosted music concerts at my house, in part because I have a gorgeous grand piano and the sound of commercial aircraft over my home often every two minutes
One after the other has taken away my ability to host my musician friends
Daniel Roberts
Daniel Roberts
I live on Vashion and I'm concerned about the huge increase in the number of planes flying over my house, mostly from the south to the north, but also from the east to the west
Today, I'm making three requests of the Port of Seattle
Ask the Noise office to work with Vashon fair skies
Tell the Commission that destroying the raw data is not OK
The very modest time history flies must be retained and ask that the noise office regularly posts the complaint box chart on the port's web site
David Oldham
Oldham's asking the same three things: have Vashon Island Fair Skies work with the noise office, Post time history flies and retain it, and post the complaint box chart
Susan Powell
Same three requests
Noted
Kerry Huffman
I would like to address the noise monitor sitting process on Vashon Island
I'm requesting to put the monitor under the location with the most overflights at the lowest altitude
I understand the Port Commission has required that they be placed on public land, which precludes the optimal site
However, I understand that the Vashon Park district has agreed to allow the noise monitor to be placed on its public property and has even suggested an upper section of Wing Haven Park
As my home is located at the western edge of the park, I can tell you that the plain noise above my house is incredibly disruptive and that I feel this is the best location to give Port commissions requirement that it be on public lands
One of the primary reasons I bought my house on Vashon was the peace and quiet of my property
Stepping outside yielded no noise other than the wind through the trees or a birdsong
Now, with the altered flight paths and lower altitude of planes crossing directly above my property on an almost consistent, continuous basis, I hear the loud shriek of jet plane engines instead
Please make the process of locating the noise monitors more open and transparent so that we can begin to collect data
David Gobel
David Gobal, president of Vashon Island Fair Skies
I have several requests to directly participate with the noise office on the very delayed Vashon Island Noise Monitor site selection and design, that the time history file on the Larssen Davis 8 3 1 C noise monitor that the Port will be using regularly be downloaded and retained by the Port before Harris purges the data from the monitor
The Port licensed and not insignificant expense the Complaint Box Software from the Plane Noise Inc
Last summer
It generates the very useful charts such as the one submitted for the record
It'll be attached
If the noise office won't publish these on their web site
I would ask that the Commission do so on their web site
Stephen Soulsbacher
Yes
Last one
Last one
Please
Record
Record
My strong support of this motion to continue the Port's work with Highline School District to develop a Marine and Ocean Sciences High School
I have been encouraging members of the Seattle School Board to join this conservatorium
Sorry, I am an Emeritus UW professor and hope to generate support from the university for this endeavor
Thank you for your patience
This is the first time I'm reading these
Lauren, you did an excellent job
Thank you very much
Yeah
Just a minute
Is there are there any more speakers wishing to-- anyone else signed up? No
I'm sorry
We run out of time for a second rounds
Hearing no more speakers, we'll close public comment
And I want to thank all of the commenters and speakers today
And submitters with written comments
And we'll end the conference call
And we hope you'll continue to follow today's meeting via the livestream on the port's Web site, which would be www.port .org and we will now take comment from commissioners
I just wanna thank staff for accommodating the ability for the community to participate without having to be here
And I appreciate the public taking the opportunity to do that
Excellent work
Thank you
OK, with that, we'll move on to item number 6, which is the unanimous consent calendar
Items on the consent calendar are considered routine and will be adopted by one motion
Items already removed from the consent calendar will be considered separately as special orders of business
I don't believe we have any items removed from the consent calendar
Hearing that, is there a motion to approve the consent calendar
I motion to approve Item 6A/ Ok
And is there a second? Second
It's been moved and seconded
All those in favor, please say Aye, opposed say Nay
Aye
The motion carries the consent calendar is approved
MR President, if I may, just briefly
We appreciate that adoption of the bylaws was laid on the table, postponed today to a future meeting
We want you to know that meetings of standing committees will continue to be noticed publicly and will be electronically recorded
In keeping with current bylaws, unless you would like to entertain a motion during this session to waive those particular rules
Is there a motion? To wave? No
There has been no motion to wave, so
[Commissioners mumbling] Let me just see where we are
OK
So we are on to item number 7B, which is under special order, real estate strategic plan presenting by--
Commissioners, staff is updating the port's real estate strategic plan, which was created in 2016
This briefing will review the results from our previous plan as well as the 2020 plan goals and timelines
The team discusses the Port plan properties to be evaluated and the non-Port properties throughout King County to be analyzed that could be acquired or controlled by the Port to support the century agenda, our key lines of business and other top Port priorities
Presenters are Dave McFadden, Carol Leese, and Irwin Park
OK
Good afternoon Commissioners, Executive Director Metruck, yes
With today's update and breaking on real estate strategic plan, we want to cover several things with you today
Want to just briefly recap what happened in the 2016 plan and the resulting work that flowed out from that planning effort, highlight the goals and outcomes for the new real estate strategic plan we're going into development with
And I'll hand it off to Carol Leese to do that
And she'll also orient the Commission around key dates and project milestones
We'll also hear from Erwin Park with Madison Bay Commercial Real Estate
He's also helping us with this real estate strategic plan by doing an industrial real estate market assessment
And here to share some insights from that effort as well
So with that, we get right into it
Ok
I thought I'd just start by level setting
You know, real estate is important to Port of Seattle for a number of different reasons
Really to circle down at the bottom
It's the means to several important ends
When we leverage our real estate and real estate development initiatives to support the century agenda, more specifically, to help us sustain fishing crews, maritime industries, to drive regional economic development opportunities
But also I think we can advance diversity, equity, inclusion
And if we do this, while we can certainly generate good jobs and revenue a long way
So real estate is really a good means to cement our triple bottom line here across the Port, especially when we are doing it strategically in a focused manner
So really, to recap on what we did four years ago, we completed research on Port properties to get a better context, what's the zoning, the value, the environmental history, what are these properties made of? And then based on that, identified their highest and best use for future development, really developing property specific plans, whether it's down at the airport or on our waterfront
And finally, importantly, also in evaluated, non-Port property acquisition opportunities and tried to prioritize them as well
So with that, we've gotten a lot done since then
I'll start with the airport
Three notable developments
The plan was getting done right as we were in the midst of construction at Des Moines Creek Business Park
Subsequently developed NERA, the properties in Burien
And finally, we just finished partnering with Trammell, Crow and IAC to develop new facilities at the Des Moines Creek North Property in SeaTac
All told, about 2.3 million square feet of new facilities developed around the airport over the last five years
If I might
Dave I just wanted to encourage other commissioners
Commissioner Calkins and I went down and did a tour
When was it, Ryan? It was a couple months ago
We were down in Burien and did a tour of the properties
And it's much different when you look at a map like that
And when you're actually driving by and seeing all of the businesses that are in this development
So I just hope that we can kind of highlight that
It's much different on the ground
It's done an enormous amount for economic development
It's been a great project
Thank you
And I don't think this map even really does justice
It just provides you some physical relief with, you know, the green showing what we've accomplished
The stuff that's noted for our future development, the one that's next, Des Moines Creek West, but also properties that are currently under the SAMP review
So I do appreciate the comment, because when you really get close to these facilities, you really realize how big development these projects represent
You move on to them
Maritime side making progress there
We've got pending developments that we're working on right now
Terminal 1 0 6 and Pier 2, we're negotiating with partners around the development of those facilities
Really completed, I think a pivotal infrastructure assessment for Terminal 91 uplands that showed us the path forward for developing light industrial facilities on the up in there
And finally, we purchased Salmon Bay Marina
I'll turn it over to Kiera now to talk about what we'd planned to do this time around
Thank you, Dave and Director Metric, President Steinbrueck, and Commissioners
Thank you for giving us the opportunity to discuss the 2020 Real Estate Strategic Plan update that will hopefully build on the success of the previous effort that Dave just described and allow us to move forward on a strategy that prepares us to develop our land in a way that supports the Port's overall mission and prepares us to make budget requests for this activity that will be part of our economic development CIP requests down the road
This update allows us to consider our real estate development and job creation that comes along with it, as Commissioner Bowman pointed out, in the context of our current market environment
A lot of development pressures in the market affect our existing assets and deserved to be considered as we contemplate our future development goals and proposals
This plan is in process
To bring it about is intended to take about six months and enable staff and leadership to fully consider our priorities in order to make good decisions about real estate development efforts in the current market context
Market analysis that we're embarking on and Irwin will explore a bit with us reflects on the delivery of competitive space for light industrial and maritime logistics and aviation business line support
There are five parts of the real estate strategic plan, roughly mirroring some components of our 2016 plan, but then building from that some additional efforts that we didn't see in that plan
Looking at the three, the five parts, the current market trends will be assessed
Lessons learned from the 2016 effort, to look at the highest and best use in accordance with the existing zoning characteristics of the land that we have, identify development objectives, recommendations on the sale of properties of our existing assets is just a prudent forecasting technique that we will do so you'll see that in here
As Dave suggested, look at strategic land acquisitions to support our mission and evaluate, finally, funding options and opportunities
Typically, we have self-funded all of our real estate development efforts
We're going to be, in this plan, working with some folks in the market that look at other ways that we might be able to fund our capital projects and allow us finally to provide leadership implementations and recommendations as we move forward over the next three to five years
With that, just to give a bit of market context, I'd like to turn this presentation for a moment over to Irwin Park
Irwin is the managing partner of Madison Bay Commercial, a Seattle based real estate advisory and brokerage firm with 13 years of commercial real estate experience
He's worked with us in previous market studies and throughout the industry as a broker and consultant
Everything from working with local boutique real estate firms to international corporations
Irwin's a Seattle Local went to UW and a longtime volunteer for Seattle's Community Youth Program, and I was going to turn it over to him for his comments
Thank You
Good afternoon
So we'll start with the regional Puget Sound industrial market
So anything around roughly 5 percent or less than vacancy within the market is considered a very strong commercial real estate market
So currently it's about at the end of 2019, it's about 4.7 percent, which kind of says a lot about our local economy here
Rents have increased
We have one of the largest increase of rent over the last five years globally in terms of industrial rates and then industrial leasing demand is still roughly estimated at about 8 million square feet locally in this area
Still, the driving force is just distribution type of logistical uses that are in the market today
Out of all the groups that we went out to and we discussed, if they did identify what their uses and their demand and their leasing requirements for 64 percent of those industrial demand uses were actually from e-commerce or distribution related logistical companies
May I ask a question? How do you define the Puget Sound industrial market? So is that King, Pierce, Snohomish? What's the--
Yup it goes King, Pierce, Snohomish
Primarily it's concentrated within King and Pierce, which is sort of the industrial centers of this region, but it also includes Skagit as well
Okay
Thank you
So we looked at all the rental rates within each county just to break it down
As you can see, King County, of course, currently is much higher in rental rate than than the other counties out there
The x-axis is each county
The y axis is square foot per month rental rate that's in the market today
Within that King County market, if we look at the Ballard, Inner Bay, North End, Manufacturing Industrial Center, it's actually a little higher around a dollar fifty a square foot per month
And then if we combine with Pierce and King, it actually averages out to roughly ninety five cents per square foot per month
So the majority of the industrial apartments are still concentrated within King and Pierce County
Actually, yeah
So then we look at the Ballard Inter Bay market
The BINMIC area, the BINMIC area is still very well located within Seattle, but within that area there are some logistical challenges in terms of a large 18 wheeler truck access that comes into the area
So with that in mind, the rental rates are still much higher because traditionally the vacancy rates within that area has been very, very low
Sub two, actually sub 1 percent, which says within that market that there is still a need for some kind of vacancy
But the requirements that are looking in that market are looking elsewhere because there isn't a large amount of development happening
So within the next twelve months, there is no industrial flex product that's being delivered within that market
With the marine uses that are currently there, they're renewing in place rather than looking for other facilities within that market
And they enjoy being close to fisherman's terminal
And the approximate requirement or demand of square footage is two hundred twenty five thousand square feet in that market
Well, two hundred twenty five thousand square feet of vacant space in that market
But there's still conceivably more square footage demand in that market itself
So we predict rates to continue to go up
The next side is the BINMIC vacancy and rental rate
We just want to show just the rough trends over multiple years in terms of when, as vacancy rates, have gone down, rental rates have climbed
And there's just a visual analysis that we want to just present with the x-axis being the years and the Y- axis just being percentage growth per year
Hasn't the increase in rates made the-- folks looking elsewhere? Right
And in terms of the-- So for future growth
Right
As long as-- if we're not making real estate in a cost effective way
Right
Then folks are going to still look elsewhere, even though there's a demand
Yes
So there's few different avenues that will be looked at
Is the square footage available of the size that is needed
And then on top of that comes rate
And then on top of that comes access
So all these things
There isn't really one right answer
But all those things are looked at at the same time
Specifically to the BINMIC market itself
There hasn't been a development
So if you're looking for anything that's 20, 30, 50 thousand or a hundred thousand or half a million square feet, you can't
They're just-- it's not available in the market itself
So
Yeah, I think this helps build a case for why we need to perform on Port property to provide that space, because really it's an absence of real estate opportunity
We don't sell our land
So we're not going to come up in these requirements
We're going to self perform much of the development we're going to discuss with the Commission this year
Well, clearly that's what T-91 up wind is all about
Right
And so it's exciting that we have the asset to develop
And so I'm just saying that in order for us to do this, we have to build to develop it at a rate that still would make it competitive
Even though the demand is there
Absolutely
And you are giving us some feedback in terms of types of companies that are actually showing interest for this
Right? Quick question
Is your assessment that the reason more supply hasn't come on while demand is so high and rates are increasing is because people are putting what is available into alternate uses that are even more lucrative, such as like commercial or residential? So a quick answer is no, because in terms of the BINMIC area, specifically, it's zoned industrial, so it's staying as industrial
So even if there was other uses, it's very specific to that
It's a lack of land opportunity
Yes
It's just everything that is--
Everything can be built is built
Yeah
There's limited industrial land in the city
Exactly
Well, the one thing that most of the Ballard land is going to think is to breweries
[Laughter] I mean, I think Ballard's industrial on it would be, you know, condos
It would be land conversions if it wasn't for breweries
Right
So when we looked at all the demand that's out there currently, there was a lot of demand actually in breweries and distilleries within that market that are looking
So the size range of those uses were roughly three to ten thousand square feet
And they're still out there looking and they usually will pay higher rates than traditional manufacturing or warehouse uses
The distributors will pay a lower rate than then mostly breweries
Then the hybrid retail uses
So we have seen that distinction
When we look back at just a quick chart that we kind of created in terms of the BINMIC and the rest of the market itself
Is the number of development that's happening as a region compared to BINMIC
So you want to compare those two
So the chart that we have up right now is actually-- just shows the difference of supply and how much supply has changed compared the entire market, compared to BINMIC itself
So not only is there the demand for ten thousand square feet, the majority of the groups that are looking in that market are looking ten thousand square feet or less because there hasn't been anything built or there hasn't been any other requirements or size ranges that those groups really need
But if you look at the rest of the market, they're providing that
So thanks a lot, Erwin, and we're going to be hearing more from Erwin on a number of our projects as he's providing some of the market intelligence that support our overall real estate development efforts
And that was just a taste of that
Inside of the real estate strategic plan, there's really, in our property evaluation, you can conceive of it in sort of three buckets
We've got the airport properties, a handful of them that are not being addressed in the SAMP at the top of this list here
Those two particularly have a lot of environmental and cite restrictions that may prevent meaningful development from going on
But we want to take a look at them as they were evaluated in the last real estate strategic plan as well
Picking up from our recent acquisition of Salmon Bay Marina
There was a master development plan associated with that purchase for the uplands
We're going to be taking that out and looking at how meaningful that is for us
In addition, the maritime properties of Fisherman's Terminal, T-91 that was mentioned already in the uplands there, that will be part of our evaluation during this strategic plan effort
And again, looking at the purpose of this property, what investments we should be me making for what mission purposes
Those projects are currently in design and you'll be seeing those periodically as we move forward on the design and initiatives associated with them
And then, of course, looking at our existing built, fully loaded assets where we live here at Pier 69 and the Harbor Marine Corporate Center, World Trade Center
Prudent Asset Manager will evaluate these fully loaded projects on a routine basis and just figure out if they're still strategic
And so that will be part of our planning effort as well
And then there are the properties that will not be evaluated inside the plan and the reasons why
So to look at this slide here on your upper left, the SAMP impacted properties will not be evaluated
So though we took a look at them from a development perspective in the last plan, we will not be further looking at these respecting the SAMP process
And when they come out of the SAMP so to say, that's when it will be again part of our strategic conversation
In the middle, the fully developed properties that Dave ran over in his reflection on the 2016 plan and properties that we have assigned to be managed through the Northwest Sea Port Alliance in our partnership with them
Those properties will also not be evaluated in this plan
The current and pending RFPs
These are properties that were considered as part of our implementation strategy for 2016
They are currently underway either part of an RFP process that's already underway or with the Des Moines Creek West
We're in the sea and properties
We're going to be releasing RFPs to the market later this spring
So those properties will not be part of the strategic plan
To look at our overall calendar
Just to give you an orientation to this slide, this looks at the duration of our strategic plan period this year
As I said, running roughly six months starting with today
You'll see that this project will be before the Commission three opportunities today
Later in July, in the interim portion, we'll come with our initial evaluations to give you kind of an interim look at what's been going on inside of our strategy
And then in October will deliver a final product just in time for your beginning to consider the budget implications of what we intend to implement
The plan will be supported not only by our contractor Heartland, a real estate advisor that worked with us on the 2016 plan, and of course, Erwin's input into that as well
But we will have an internal real estate team that is made up of staff and potentially, hopefully, a Commissioner or two that will advise us and get periodic updates on a routine basis, on a monthly basis
We will have a team of external advisors, people that are involved in the real estate business, financing real estate, and folks that are in the development communities that can give us a good lead on how the market will be present inside of our plans
And of course, you
So we intend to kick this off
We're already under contract
This was a briefing for your input in the early stage of this process
And we're eager to hear your questions and concerns
Kiera
You might
And thank you
Consider in July early progress reporting on potential budget related topics that-- October may be too late at that point since we start the budget process quite a bit before October, we're mostly wrapping up then
So any budget implications for 2021 would be best shared in July
Thank you Commissioner Steinbrueck
We will be paying attention to this capital process, planning process and budgeting process and start putting some of the plans and initiatives in that so you'll see them warm up as the budget season unfolds
I just have two things, Kiera since you're new, I've been talking about this for a number of years
I represent the Port on the sound transit three elected leaders group
And so I hope that as you were evaluating these properties that we're reaching out to sound transit and talking to them about lay down yards for
As you know, we are on the alignment in many different segments
And so I don't want to lose that opportunity
They're going to need space
And then my second question that hopefully you can get back to and maybe I'd welcome any other commissioners, I'd really like to understand more of the financing on the terminal ninety-one development
I've been asking about this for a while
Commissioner Felleman just alluded to the fact of I'm still trying to wrap my mind around how much we're spending and the ROI based on the rates that we're looking at
So you don't have to go into too much detail now, but at least at some point
Just to orient you and thank you for the questions to where we are in that process
We're just right now hiring a designer to work with us on those buildings so that financial projections, looking at the performance, that will all be material to our evaluation inside the design process
But I'm happy to keep the Commission informed as we're moving forward on that
That would be great
I mean, just back of the envelope, that looks like a really long time to get a payback at even a dollar 83 per square foot
So
All right
Thank you
Commissioner Felleman
Then I have one also
Right
Just a couple of thoughts
First is that I'd be happy to sit in on meetings where you'd mentioned having a Commissioner there would be helpful
Yes
For a long time I was on the other side of this as an industrial land tenant
And so--
You may have some insights for us
Yeah
It'd be nice to be the hard negotiator on the other side
I suspect that we are going to see a pretty significant impact of coronavirus on the economy and therefore, of course, real estate
And so I think that at a strategic level may have a real impact on whether it's an appropriate time to develop or possibly an appropriate time to acquire
So I think possibly before July
And obviously, that kind of sensitive issue is probably needed to be addressed in executive session
But it would be nice to get a briefing on whether we've conducted a survey of properties in and around significant Port properties to be considered for acquisition
And, you know, whether it's the appropriate time in a market to make some acquisitions or not
Yeah
And then finally, as we are recognizing that we look at the return on investment in more than just financial terms, that we are you know, we very explicitly say, as a part of our century agenda that these lands are used to advance not just financial goals for the Port, but also larger community goals related to maintaining maritime and industrial lands for the creation of jobs in and around the airport and the equivalent sense
So I appreciate the presentation
I look forward to continuing here more
We look forward to working with you
Thanks for volunteering
So the fact that there seems to be this latent demand, it would strike me that in the course of going out and starting your evaluation of costs to just, you know, to to bring some potential tenants to get their input upfront
Like how much of a facility would you want in terms of it? Also sort of like, you know, testing their interest in terms of design
You know, if they start, you know, getting some investment in the concept, maybe that will be helpful in actually doing the development on spec or, you know, in collaboration
And obviously, you know, these are huge chunks of property that kind of would be expensive to just do it completely on spec
And I know they've been out there and been getting a sense of interest
And so let's go into it a little bit hand-in-hand if possible
Fred, thanks for raising that
We've had many prospective tenants contact us
And the beautiful thing is Erwin's also been profiling some of those needs very specifically for us
And one of the things that's on his deliverables is really to zero in on Ballard Inter Bay and more expressly give us what what are we looking at for ceiling heights, you know, truck doors, roll up doors
What's what should these buildings be made of? And so we've been hearing from our tenants
But I think we're gonna get complementary evidence from a real drill down from Erwin
Yeah, that'll help us guide to the market
And I just one other thing is the connectivity between Uplands and fisherman's terminal
And I know when we were all excited about the Maritime Blue Innovation Center and Executive Metruck's as well, we should have, you know, an innovation district
And, you know, the idea that that, you know, the adjacency is very valuable
And whether even if it was a brewery, you can have like the Redhook model where they had like the brewery and the distribution centers co-located
You know, you could certainly see a space allocation having that proximity and road access
I would just think of them as somewhat in tandem
So we looked at, when we looked at the different tenant mix and some of our recommendations were very specific to flexibility to be able to allow flex office uses as well as warehouse users
And that includes some of the stuff that was mentioned in terms of ceiling height
And how some of these demands are needed to maximize uses that accommodate those
So when we looked at all the users we looked at, we looked at warehouse ceiling height and based upon what percentage of the building, retail or office user will look at
And some of the findings were to leave that flexible so that when new tenants come in, you can look at the building envelope in terms you can look at the warehouse portion, but also create the flexibility to build office retail
So we took that into consideration when we looked at when we spoke with many other tenants in the market
And just to build that out a little bit
So part of the reason that we did this market evaluation early is so that it could influence the design
So for building on spec, you know, what we were telling our designers is build to these specs, to the maximum flexibility, to what the program requirements are for the people that are in our market
So that's, you know, I think that's just being intelligent about how we produce our designs for these projects with that leasing strategy and leasing component in mind
With regard to Ballard Inter Bay Manufacturing Industrial Center, our second largest twenty five hundred acres, I believe, next to the Duwammish MIC
There are perceptions out there publicly
I read an article recently by a social media outlet that claimed that Ballard Inter Bay was dead
The Ballard Inter Bay Manufacturer Industrial Center was dead and they they called out, the number of moving and storage facilities there, car washes, et cetera
I think we have a challenge here
And given particularly the numbers that you just presented us with with regard to rather low vacancies, rising rents, attractiveness of this area and the dearth of large manufacturing centers elsewhere in our region, I think we need to combat that misguided, ill informed viewpoint, particularly with regard to the Ballard Inter Bay Center, because it's serving a very critical infrastructure function with regard to fisherman's terminal, maritime sector, both north and south
And so I hope that through your strategic planning work that you will be able to do the necessary analysis to demonstrate the enormous value to industry, to businesses, small businesses, jobs in these sectors
Now, that being said, there is a reasonable purpose to be served in looking at changing uses within the context of MNI of manufacturing industrial
That there are new types of businesses, hybrids that need different configurations, that the different size properties that need verticality as opposed to horizontal structures
The zoning there is pretty old and has been in place for a long time without, with fewer changes with regard to development standards such as floor area ratios, building heights, floor to ceiling, etc
As you mentioned, and I think as the city is undertaking a process of evaluating for potential land use changes and zoning changes, both Ballard, Inter Bay and the Duwammish and other areas that are zoned manufacturer industrial in the city
Mostly they're contained in those two areas
Commissioner Bowman is working hard on these topics with the task force that the mayor set up
I think we have an opportunity to inform the city about the intrinsic value of these lands and also maybe with some recommendations about some updates so that the zoning has the kind of flexibility but while still retaining the important key functions that we need here, but allowing for some perhaps changes to the development standards, floor area ratio, heights, et cetera, a lot coverage, etc., those kinds of things that I think could make the land even more purposeful for the future and for retention as industrial centers
So I really am interested in that
Encourage that work, look forward to it
But we really have a job to do to better inform the city and the region as to how important these lands are to our local economy and regional economy
The other thing I want to ask about, I think you are looking at properties, not necessarily for the public purview that may be of strategic interest that are not within the Port's assets are
We are looking at acquisitions--
And I want to encourage that
Land as is going fast around here
And we've got it
We absolutely have to protect and preserve lands that have a strategic value for the mission of the Port and our industrial centers
So in particular, I don't know if you're doing any evaluation of the armory site at twenty five acres in the harp part of BINMIC
Regardless of what else is occurring external to our purview, it seems to me that we should be looking at that from a very strategic standpoint for and in the long term as well, not just the short term
This is going to be pressure for changes of use to non-industrial
We know that
You're hearing that
So I just want to put that out there as well
Hopefully some follow up
Yeah, just said just a brief response, President Steinbrueck
So we did evaluate the armory site in our last strategic plan update
As to the purported rumors of BIN mixed purpose being dead
Just to quote Mark Twain from his evaluation of his own obituary, "The rumors of my death are much exaggerated." [Laughter] I think what Erwin doing is talking about, we've got a lot of activity and a lot of the kinds of design requirements and characteristics in the current zoning in the BINMIC are allowed
So we don't need to get into floor area ratios that would accommodate large scale office buildings, which I think is what a lot of the real estate development enterprises would like to see
We want to hold the line there
And that's part of the discussion that Commissioner Bowman is leading on our behalf at the industrial lands table
Being ably supported by you
Thank You
Commissioner Felleman
So it seems to me, especially in light of economic downturn situations where our capital might be seen somewhat constrained as well as potential other buyer's
I'm familiar with the property, you know, just going north on the Ballard bridge off to the east, there's a lot of, like with the grey tsunami, a lot of, you know, first generation fishing interest and others who are just getting out of the business, they see there's a better job, a better opportunity to sell off
They see this narrative of, you know, it's this isn't going to be around for long so I might as well get the maximum return on my investment
My kid doesn't want to do this anymore
And those sort of situations where properties are available or opening up
And but obviously when we have property we already want to spend money to develop to then take on another monkey, is, I'm sure it's kind of a challenging thought
But I've been saying this for a while just to be in the real estate flipping business, that we could lock something down and just sell it to somebody that will use it for purposes that we prefer
Right
And so preserving the property, but not intending to keep it
So conditioning use and that sort of stuff
So I'm just, you know, in the course of looking at it, I'm thinking about acquisition as being sort of more like the trust for public lands approach to industrial land with just being a transitory owner
I said one less
I just noticed the Seboda about a property wasn't on the list of evaluation for-- Is that just a Probably just a little technical glitch
It's tied up, I believe for a few more months until next October, November
I'm not advocating for a change, but I do think it's appropriate, as you just said, to evaluate all of our property
Right
Thank you, sir
Thank you
One fine point here in referencing Duwammish Manufacturing Center, I would much prefer that we called it that rather than Sodo
That is something of a misnomer and was a real estate term to attract non-industrial businesses to south downtown
And that's happened to some extent, but it does no way describes the four thousand acre characteristics of the designated manufacturing industrial center
I would prefer we use those terMS Duwammish MIC, if you will
Duly noted
Thank you
Thank you all
Commissioner
I'm sorry
Just before we go on, I do want to note
Appreciate Kiera's addition to the team and the real estate team, though, I really appreciate you coming on board and the work that you're doing
[Laughter] Dave, most of all
Let me see where we are
We're about to the next item, which is item 8A authorization for the executive director to one, award and execute a contract for a biometric air access system for up to 30 international boarding gates at Seattle-Tacoma International Airport and two, implement executive policies for regulating the use of biometric air exit systems at Port facilities
Contract authorization includes one, procuring hardware, software, vendor implementation services and recurring maintenance fees for up to 10 years and two, using Port staff for construction and implementation
Total project cost per authorization five million seven hundred fifteen thousand is comprised of project costs of two million seven hundred fifteen thousand and recurring maintenance costs for up to 10 years estimated at 3 million budgeted in annual operating budgets
Commissioners
We now turn to action item 8 A which is a request for a Commission authorization to reward and execute a contract for a biometric exit system for up to 30 international boarding gates at Seattle-Tacoma International Airport and to implement executive policies for regulating the biometric exit implementations
As I mentioned earlier, we are exactly three months to the day since you passed the motion directing staff to develop biometrics policies that implement your biometric principles
I want to thank the Port staff for the countless hours of work in developing a comprehensive set of recommendations for biometric air exit, which is the first of the ultimately five biometric policy recommendations
I also want to thank the external advisory group for their input, which will result in substantive improvements to the biometric exit policy recommendations and for the biometric committee, which has reviewed and worked on this effort as well
The topic of biometrics is difficult and complex
However, I want to make sure that we acknowledge that while there are absolutely concerns to be addressed, this is also a technology that has both the potential to significantly improve traveler experience and both streamline and improve national security
More than two dozen airports have already implemented biometric air exit and travelers there have generally embraced this technology as a convenience and a benefit
Biometric air exit is going to happen at SeaTac, whether by CBP or airport and its airlines
By approving the Port taking a proactive role in this implementation, I believe strongly that we will have the best chance to ensure that biometric air exit meets our standards and values
We will also be the leading airport in the entire country in terms of the extent of the comprehensive, detailed approach we have taken to develop and implement policy on this issue for all of our uses of biometrics
Your approval of biometric air exit implantation does in no way obligate you to support the implementation of biometric systems at the port facilities from here forward
We'll return to brief you on the other uses, policy recommendations as they are finalized and vetted by our external stakeholders, we now turn things over to the presenters for this item Erik Shoenfeld, David Wilson, and Crystal Sadler
Just a minute
So, Felleman
You know, one of the things that, in reading the materials that people have said, the principles and all this stuff
I understand the rationale for the Port's investment in this
What I'm hearing that I'm not familiar with is what the RFP says and how, if anything, what we put in the RFP constrains what our goals are
And I was specifically concerned, because I know the one place where we are most, my belief was we had most authority was in the signage
And in fact, last time we met, I was told that we have signage in development
And I was kind of hoping to see a draft sign to show the public that, in fact, we are taking that responsibility seriously
So I want to make sure that nothing in that RFP in any way gets in our way to at least inform the public
And if there are any other places where it could be interpreted by the public, that something about that RFP in any way gets in the way of what we think we have control over
I'd like to make that as clear as possible
We will address all of that in the presentation, Commissioner
Okay
All right
Commissioners
My name is Erik Schoenfeld, senior manager of Federal and International Government Relations here at the Port of Seattle, joined by Dave Wilson and Crystal Sadler
We are here to present on both the proposed biometric air exit policy recommendations as well as the RFP for up to 30 biometric exit gates
And I want to start by talking about the transparency and public process we've gone through
As I presented last time at your meeting on February 25th, that is the thing that we have taken most seriously as part of this process
Today is the fifth public meeting that the Port Commission has held on this topic
In addition to three external advisory group meetings and all of the materials of the external advisory group being posted on the Port Web site
We have taken this very seriously
We have engaged individuals throughout the region on this topic because we fully understand that it is difficult, it is complex, it is controversial
And we believe that we have incorporated, to the best of our abilities, all of the feedback that we've received from both the external advisory group as well as many others throughout the region
So that transparency, that accountability, that opportunity for public process is something we've taken very seriously
I struggle to remember many other topics where I've spent that much time in Commission session and otherwise trying to engage the public on this topic
Like Executive Director, Metruck said, this is the first of five use cases that we are developing through our work with both the internal advisory group and the external advisory group
And the reason that I want to highlight that is because, again, as Executive Director Metruck said, if you approve the biometric air exit policies, that does not obligate you in any other way to approve any other policies, to approve any other implementation
We're talking about a very specific implementation that I want to be really clear about that
We will come back to you and brief you on the work that we're doing on everything from how police may or may not use biometrics to how cruise partners may or may not use biometrics and on down the line
So what is biometric exit? We've talked about this multiple times
Biometric air exit is the use of biometrics for departing international passengers at the gate
And I think one of the things as we've talked about-- is this something new? Is this something unprecedented? Over two dozen airports have already done this
And what we're really proud of here at the Port of Seattle is while those other airports just did it because they saw it as an operational benefit, it was something they worked to implement in partnership with CBP
And they said, oh, customers like this, they this is a fine thing
We did not take that approach
We took the approach to say this is something that CBP is congressionally mandated to do
We do not have to make the choice to work with them on that
Should we? What are the pros and cons of doing that? And so that is why on December 10th, you passed a motion outlining the seven principles that you wanted to see and then directed us to translate those seven principles into tangible, enforceable policies that we believe that we have delivered to you here today
This is a program where clearly as you've heard from the public, people have concerns about
And one of the most important messages that we believe about this program is if you do not feel comfortable taking advantage of this program or participating in this program, don't
This is a fully voluntary program for both U.S
residents and foreign nationals
And one of the things that we will be really emphasizing as part of our communications plan, both signage and otherwise, is this idea that you do not need to participate in this program if you are uncomfortable
We will make it clear what this program is, what happens with the information, why it's happening, what your rights are
And just as important if you feel your rights have been violated, what your recourse is
And then finally, just to make one more note about what is biometric air exit and how does it work? U.S
Customs and Border Protection, CBP, already has your photo
You've given it to them by getting a passport or through your visa application
They already have your photo
The airlines, by law, already are providing information about you from the flight manifest, from your ticket purchasing to CBP through the APUS system
So CBP has that information from your passport photo, from your visa application photo from the airlines
This program, if you choose to participate in this program, is a verification using your face of whether or not you are the person that your travel documents say you are
And then for U.S
residents, that information is deleted within twelve hours
That information is not your photo
That information is a string of numbers that is sent to CBP
And what they send back is a match or no match
And so I, obviously, we fully appreciate the privacy concerns and the civil liberty concerns
This program does not really add a significant amount of new information to what CBP already has, both from their collection and from the airlines
And then finally, before we talk about the RFP, let me talk about the policies
These are the principles that you passed on December 10th
And we have outlined in great detail in the 30 pages of the biometric air exit policy recommendations, how we think we can implement in a tangible, enforceable way the policies that you put forward to us
But more important than what the policies are, is do the policies comply with your guidance, with your motion that we must meet these principles? And we believe that it does
We do believe that it does
In particular, if we are able to have control over the process to make sure that all of these guidelines are followed, to make sure that your rights are followed
There's a lot of conversation about just let CBP do it
And certainly we could wash our hands of that
But we have some concerns, as staff, about the customer service ethic of federal law enforcement officers in our terminal scanning passengers boarding the gate
And certainly we believe that it will be easier for people to choose not to participate in this program if it is Port and airline staff rather than armed federal law enforcement officers
Besides the fact that those armed federal law enforcement officers need to be in international arrivals processing international arriving passengers
And so
I just want tp point out, one of the issues that were raised that I thought was compelling was that while that, I'm going to make your case that it shouldn't be intimidating, but having somebody uniformed and that it's distinguishable between this is where you can do it, and this way you don't have to do it, in some way that Port employee to have that distinguishing feature
That was one compelling reason why you might want to have an officer type
The other thing just for clarification was brought up that the Congress says that you have to have this facility for international travelers
It doesn't require it for domestic
Is that the case? So to clarify a couple of points there
So any airport that has arriving international passengers, passengers coming from somewhere else and coming into United States has something called a federal inspection service, an FIS
And that is because those individuals need to clear customs before they're allowed into the country
We have an FIS
It is currently in the basement of the South Satellite at SeaTac
We are building a new FIS called the International Arrivals Facility
That has nothing to do with departing international passengers
Departing international passengers can depart from any gate
They do not have to go
They go through TSA
They go to any gate
They board that plane
Currently, CBP confirms their identity using that APUS data, using the data they already have
This is an automation of that process using facial recognition technology
Does the Congress, the direction right now does it require facial recognition for exits for--
Congress has mandated CBP to implement biometrics for arriving and departing international passengers both
They cannot mandate us to implement biometrics
And so that is why the choice before you is whether or not it makes sense for the Port to own this or to continue to allow CBP to own that process
I think there is an ethical question
When you say international passenger, it is somebody that is traveling internationally, regardless of their--
That's just somebody who is getting on a departing international flight
I think that is distinguished from what was thought
So let let me just let me close and turn things over to Dave and Crystal unless you want me answering more questions about the policies themselves
Two last things here
First of all, on the question of signage
Any airport or airline that participates in the biometric air exit program, chooses to participate, has to comply with the CBP biometric business requirements
And those are business requirements that ensure some of the things that we care very much about, around privacy protection, around making sure that the data is not shared, around really strict encryption and data transmission requirements
It does say that we need to show our signage to CBP and the reason for that, of course, is accuracy
They want to make sure that we are accurately representing the facts about the program
The reason that we want to do our own signage and beyond signage, our own communications campaign, which will include, of course, web content, social media content, overhead announcements, other abilities that we have to communicate is not because we think that CBP is not communicating the right information
It's that we believe that we can communicate in a more concise, in a more clear, in a better understandable way, and in multiple languages, which is our commitment to our diverse traveling public, particularly on international flight
So we will show them our signs as long as they are factual, we have no reason to expect they will not be approved and we will go above and beyond their minimum standards
I will let Dave talk to the issues around the RFP and Crystal as we transition here
But my final point, you did hear a few comments about opt-in and community members do believe that opt-in is an easier way, a better way to make sure this program is voluntary
And so I did hand out to you just now, or Paul handed out to you, we have copies on the entry desk there of a slightly updated version of the biometric air exit policy recommendations
The really only substantive change besides sort of clarifying a number of things is that we said it is our belief that opt- out is the requirement from CBP
However, it is our full commitment to our external advisory group and to the public to continue to pursue that point
And if opt-in is truly an option, both in a regulatory manner and logistically feasible, we will pursue that
We will do opt-in if it is allowed, if it works
If not, we will do opt-out and we will continue to really focus a lot of our communications around making sure people know that
I don't mean this in any humorous way whatsoever
But the the hashtag we are looking at is "when in doubt, opt out"
It is something we really want to make sure people understand
Their rights to this program
If you are not comfortable, do not participate
You do not have to
So does this is an area of some current confusion I think and the definition and application of those two terMS And in practice, operationally, just to be-- if I'm correct here, an opt-in approach would be to ask a traveler do they want to have their I.D
verified by a biometric technology or the alternative, the analog system of photographs, comparisons? Is that correct? That is correct
Given the choice, rather than have the default be biometrics
So the opt-out is-- you wouldn't put them both up before the traveling public
You would put one or the other up as the choice opt-in/ opt-out
Just to be clear here and the prevailing position has been opt-out and everything up until recently that I've seen
And now we have a newly introduced concept of opting-in, which changes the game plan in the sense that it potentially causes a backup if every passenger is asked in advance whether or not they agree to biometric technology versus the opposite opting-out
And we know that a large majority have accepted, as much as 90 percent or more, the the choice of not opting out, basically
Is that correct? So that I just want to be sure that we're absolutely clear about these terms and how they would influence or impact the processing of exiting international passengers
The processing aspects operationally and time so that we know that there is a difference
There is a material difference between the two
And I think that's why the issue has been raised recently
Yes, we will look at opt-out and opt-in
We are committed a hundred percent to voluntary
When we look at opt-in, we will look at regulatorily, whether it is allowed
And then, of course, the impact on operational efficiency and effectiveness, whether it works
We will look at all of that in a fair and balanced way and we will determine what we have the power to do and what works best
All right
Just a point of clarification and partially a question is that I think this is largely semantics
But whether you have opt-in or opt-out implies that there is a default
Right
That's why you're opting-out or opting-in
Right
So that's the difference
Yes
Now, have we discussed just options? Right
So not an opt-in, not an opt-out
You just have options
So you can either go through the biometric lines or you can go through the non biometrics line
It's not an opt-in or opt-out
You just have two options
I think the word optional is the word that is worthwhile using today
We are going to continue to do to work the work as we figure out how to implement this program, if you approve implementing this program, to figure out what works best for optional
And by works best, I mean both operational efficiency, what is right for the traveler, what we're allowed to do regulatorily, and we will answer that question
But that's an implementation question that we can answer as we learn more about this process and start to look at what implementation might look like
Commissioner Calkins
Before we turn to the RFP
I want to go to the first principle, which is justified
Why are we doing this? And let me contextualize that by saying my understanding is we need to do this identity verification in some way
We've done it for decades
There has been a database of travelers created
You know, when somebody purchases a ticket and submits their information, that database is created
At the point of getting onto the airplane, every passenger needs to be verified against that passenger manifest
There is not data collection at that moment per se, it is simply verifying against the database if this is the person presenting themself at the gate to get on the plane
So currently you approach, you give them your passport, an employee looks at the passport, and what happens? What are they looking at on that screen? Are they looking at a picture of you to see that is the person that I see on the passport
They are not
They are looking at a list of passengers and passenger information
And so I don't want to shill for the biometrics program
I'm not here to do that
I will tell you that CBP, fundamentally, in terms of justification, believes that this is an automation of an existing system
And sort of like you describe Commissioner
It is something that already happens on a manual basis
They want to automate it
What CBP might argue and again, not to speak for them, is that it is probably more accurate to confirm your identity by matching your picture to the database that they have on file than an airline employee looking at your passport and just generally assuming you sort of look like that person
So there might be more accuracy there
But it is again, it's happening one way or the other
And CBP is automating that process
Which speaks to the question of bias, which has been a principal concern for us from the onset of this
If the no match comes back on the biometrics, what happens? So let me-- Kicked off the plane? Absolutely you do not get kicked off the plane
You default to a manual verification process
What happens if you're no match in the manual verification? That can happen any time
That can happen at any time
It can happen today
If an airline employee does not believe you're the person who has your travel documents, they will not let you on the plane
[Cross talk] You mentioned in the last meeting data about the system that CBP uses as being the best or ranked as one of the best in terms of performance on the algorithm Is that better or worse than studies done on human matching of passport to a person? I have not seen any studies on the accuracy rate of human matching of looking at a person's face and verifying that that is the person whose travel identity there is
The issue of accuracy-- I have seen that results in that, I have seen results that do indicate this is much more accurate than the average human to identify
It was something that Commissioner Cho brought up last meeting that, you know, this is a human design system and therefore will incorporate human bias, presumably
And so my concern is, is it better or worse? And I can say why they want to go-- And let me just add to this
The discussion of why this is law, why Congress passed this is they want to be more accurate on this for national security purposes
Which goes to another question on the justified principle
We mentioned this in the last meeting, but at the root of all of this is an interest by Congress to secure air travel, correct? Yes
Is there any other stated purpose besides security of
It is a recommendation that first originated with the 9/11 Commission as a way to improve national security
And finally, in the communications we've had with constituents and and staff and others, there is this question over authority
And so I just want to ask very plainly, do we, the commission, have the authority to stop biometric air exit at SeaTac? We do not
CBP has the authority under their federal jurisdiction to implement biometric air exit
They have already done so on many departing international flights at Seattle-Tacoma International Airport
Was there disagreement around the answer to that question within the external advisory group? Were there members of the external advisory group who disagree with that assessment? No
And how about within our legal team? Is that a fairly black and white
If I can get a lawyer to answer that question? Because I'm operating under the assumption that I do not have the ability to make a decision to that effect, but I have--
I have no person tell us that we can deny CBP the right to do their federal Customs and Border Protection function in our airport
I think at the end of the day, we could go through the messy nations of trying to stop CBP from conducting their business at the airport
We're looking at concepts of trespassing someone who we don't think has authority to do what we want them to do
And I think ultimately under concepts of preemption and their statutory federal law mission to do this, we'd have a hard time ultimately stopping it
Ok
Thanks
All right
I will move on to Dave and Crystal to talk about the RFP specifically
Good afternoon Executive Director Metruck and Commissioners
I'm David Wilson
I'm the Director of Airport Innovation for SeaTac Airport
Today we're requesting Commission authorization to purchase a biometric air exit system to be used at 80 international departure gates at SeaTac Airport
Jumping right to the RFP question
The RFP does not address signage or communication
I'm sorry, did I just hear 80? Thirty, right? Thirty, apologies
I'm sorry, 30 international departure gates
And the RFP does not address signage or communication specifically addressing the device to capture the image and communicate with TVS
That's all it addresses
Within the RFP, though, we did make sure that the system must be fully compliant with the section of the biometric air exit policies that regard to cameras and capture of data, retention of data, security and things like that
So your authorization will include the procurement of hardware, software and vendor services for the system, Port staff for construction design, implementation of the system, a contract for up to 10 years for the maintenance, and for software licenses, software services and maintenance for the system
The total projected cost is five million seven fifteen thousand
The project costs is two million seven hundred fifteen thousand
The 10 year maintenance fees are roughly three million dollars
Next slide
So the solution we select must be fully compliant again with the biometric principles as well as the biometric air exit policies
Within the RFP, we're looking at specific things that, for example, the U.S
Customs Border Protection's biometric air exit requirements document and two other documents that are critical of the verification services
These documents dictate how the appliance communicates securely with TVS to come back with a match or not against the gallery that's already been established by CBP
We also make sure that the system we procure conforms to the Port of Seattle's technology and cybersecurity policies, as well as our solution for doing software as a service, which is a cloud based service security requirement
TVS is cloud based
So how we communicate with the cloud is governed by our own requirements
This is a very high level diagram that really depicts our schedule, which is, if given authorization, we'll go through an evaluation process of the RFPs which I believe they're due on the 13th
The team will evaluate those RFPs, we'll select a small group of vendors, we'll do site surveys, vendor visits
We'll then select the product
We'll then begin the design because depending on what kind of product we purchase will dictate the design
What kind of network requires, the power requirements, things like that
So our design will take place sometime in Q3
We'll also be training airline personnel on how to use the system correctly and we'll then begin installation in Q4 of this year and completing in Q2 to 2021
And that really concludes questions, I think, at this point
I have a question regarding the RFP and the dollar figure, which you listed as project cost
Is that an estimate done? This is Crystal Sauder, Director Technology Delivery for Information and Communication Technology
Yes, it's an estimate
So we're putting that estimate out in advance of the RFP
And that's usually how we do it
So
I know
You're absolutely right
There's always a toss up to tell people how much it's going to cost before you-- Ok
And why is it up? Why is this listed as up to 10 years as opposed to a 10 year contract? Well, usually we build into the contracts an exit option in case products change or our business operation changes
So is there a a pool of contractor expertise out there in this area that we can expect some competitive bidding on this? Yes
With experience? I think just working with the vendors that are out there
I think we identified 16 potential vendors that are doing this type-- Are airline carriers allowed to propose as well? I doubt that will happen
All right
Thanks
Do we have to be delegated authority to do this? I mean, it was asserted that this is CBP's responsibility and that we wouldn't have the authority unless can we be delegated
So CBP has setup a partnership program
That is what the twenty five airports and the airlines as well who have done this program have voluntarily agreed to do
It is all laid out the program in these CBP business requirements
And that business requirements document says if you want to do this work and own this process, which is really again, owning the process is the part where people walk up and get their image captured
The rest of it still takes place within CBP servers and CBP database
So airports and airlines that want to own this process agree to a set of operating principles and business requirements
A lot of that, again, has to do with data security, encryption, not using data for third party uses, commercial purposes, et cetera
So we would, if you authorize us to do that, we would sign up along with those business requirements, comply with those business requirements
And again, what we are really proud of here and the staff is all of those airports have signed up to the business requirements and said good enough
What our policy recommendations do is take those business requirements and then build on top of them, build a robust public engagement, transparency, education, communication, and particularly make sure that we are protecting traveler privacy, traveler rights, educating travelers to the best of our ability
And you'd have no reason to believe that they could preempt our additional signage that what they would call minimum requirements? We could post one of their signs and then do whatever
They can't-- So we have had discussions with CBP
They've been part of our biometric external advisory group
And again, their focus on our signage is to ensure accuracy about the system, not to stop us from saying things that are true
They they are fine with us enhancing their efforts to be transparent
And it's something that's very important
In fact, in one of the conversations they mentioned that they actually are willing to change their business requirements to accommodate some of the things we're asking that--
We're able to do more? There is a there is no doubt
We will go well above and beyond the minimum business requirements that CBP has laid out i f this is approved
One of the last things with regard to semantics, Commissioner Cho brought up this point about options
Right? Like you can opt out of going through a scanner
Right
You can ask for a manual wand
It's not the common thing to do
Some people that are metallic have that metallic inclination
And so but that
The terminology I think is kind of important
And but would CBP have the say in terms of what we call it? That that is something we will continue to investigate
It is our belief currently that they do and that they mandate opt out
But we have committed to our external advisory group and to our external stakeholders that we will continue to make sure we are really clear on that point
And if opt-in is an option, we will absolutely pursue and evaluate that
I would assume if there are two lines, one is short, one is long, and it's clear that the two lines are, that would be one of the ways to make that
That would be a a vision of opt in or optional, that if that's allowed we would look at
Commissioner Bowman
Thank you
Just a couple of questions
So again, back to Commissioner Cho's point about choice
I understand
So if I understand you correctly, we're gonna ask CBP, if we have the opt-in or are we assuming that we don't? We are going to not only ask CBP, but also consult other federal law experts to see what the fact is about that
They, obviously, CBP regulates the program, but we will not just take their word at face value
We will continue to investigate a broad range of experts
Have we considered actually just leaning into that option as well and then letting this--
That is part of--
I would say, is I am not committed to leaning towards the opt in option
I'm just gonna be honest right here is on that
Is that this discussion of looking at it, I'm on board with that, but I can't commit to committing to lean into the opt-in option
I have to look at this information and look to see where we are with the CBP and the other outcomes of this
You know, we were focusing a lot here on this
You know, just to be balanced in the presentation here, is that-- So I'm just gonna say that is that ninety three percent of the people that participate in some of these systems, that the other 25 airports have no problem
Ninety three percent, only two percent opt out and 72 percent actually prefer this method of boarding because this is sold
I've seen announcements across the nation
This is sold as a benefit for an airport to have this capacity, not to say that we don't have these concerns and we're taking all the proper things on this
But to say that the preferred option is not to have this among the traveling public in general is not a correct statement
And I'm not saying--
No, no, I'm not saying that
I'm just saying it
And I'm sorry Commissioner on that
But I just want to say on that, because this is something that we have not discussed that at length about the the opt in, opt out
I am open to looking at that
But to say that I would lean into the opt in, as the Executive Director
I can't say that I would lean into it
I'd just like to at least explore it
Absolutely
Yes
Yes
to Commissioner Cho's point of choice for the traveling public
And then the second thing, I really-- this RFP doesn't address it, but I'm wondering that if we were to adopt the RFP and move forward, if CBP then down the road does not allow us to put up our own signs or doesn't agree with the signs that we put up, at what point can we back out? Because I have to say, from what I saw at the other airports traveling, the signs were really important to me in terms of letting people know they do have the option to opt out
The signs at CBP currently has at other airports are just government bureaucracy
You can barely read them
They're hidden in the corner
It's not clear that people have options
So for me, this is a big part of making this successful and making it, when I say successful, meaning making passengers comfortable and aware of their choice
So what I don't want us to see as we go down this road, we purchase this technology
We put it up and CBP says, sorry, you can't use our signs, tough luck
And we go, oh, we tried
So I want us to at least have it
Bring it back to us, if that's the answer
Absolutely
So in our conversations, initial conversations, that has never been something that we've heard from them
But if these policies are implemented, they mandate that we meet these policies
And so if we are not allowed to have our own signage, we would be in violation of our own policies and we would have to cease operations of this program
And Commissioner, just to talk about the signage I've seen, you know, when I saw some of those, I was not impressed with those signs, but I have taken pictures and brought those back and shared with staff signs of better signage
And I've seen both signages both labeled with an airline and Customs and Border Protection and larger
And we forward those, you know, to look at those signage as of examples of much better signage than the ones you and I saw initially over a year ago now
We will bring to you as Commissioners all of our proposed visual signage even before it's approved by CBP, so that you make sure it meets your standards for transparency and clear, concise communication about these issues
Before we
I'm sorry do you want to speak? On the RFP in particular
It seems to me that because this technology is evolving so rapidly, we want to be careful not to put a timeline on it that requires us to use a system that becomes obsolete within a year or two, particularly when some of that obsolescence has to do with an algorithm that's maybe now superseded by one that's better in terms of the bias question or, you know, an issue that we'd seen in earlier systems where there is the incidental capture of people standing behind the person who is intended to be captured
So I would want to make sure that we're agile in our ability to update these systems, either through the existing system or saying know we need to invest to change over to ensure that we are still hitting these goals, particularly around voluntary with the incidental capture private in terms of greater and greater forms of encryption and prevention of breaches
And and then, of course, the equitable question, too
Right
And one of the things that we also evaluate during the RFP process, we've specifically asked questions about their product roadmap
And historically, how long they've been in the business and things like that
But they do give us some idea
Are they in it for the long haul? Will they continue to invest in perfecting their product? And granted, lots of things happen that we can't control, but it is something that we do evaluate when we're selecting a product
And this was a question I asked Eric in a in a meeting earlier
But I believe it's important that we also vet the organizations that put in bids
There have been-- there is a whole range of corporate histories that may or may not contribute to a belief that we can trust them as a good faith actor in this space or not
When we're paying 3 million dollars a year for maintenance, I assume that's like software updates Are they obligated to be using the most current algorithms? Yeah
And we don't know exactly what the costs will be
It'll differ between whether it's a cloud based system vs
not
Traditionally, cloud based systems are more expensive
But yes, that's actually--
That should be part of the requirement that this has to be the state of the art
I mean, it doesn't make any sense
As Commissioner Calkins said, we're not buying an old car
So if I could add
The TVS system basically is the algorithm for doing the face matching
It's held by CBP
So as they make improvements that we automatically take advantage of those improvements they make
So it's not obsolete because TVS will continue to be improved and we take advantage of that basically by default by using their system
Are we able to either mandate or preclude airlines
Like one of the options could have been we just tell the airlines you do it
Right? Now, but do we really have the authority to do that? Because that's not option 3
So we have, as one of the policies in the policy recommendations, that if we implement our own system, what's called a common use system, airlines will not be allowed to use their system
And there are policy benefits to that in terms of making sure that airlines are not taking this data and using it for other purposes
And of course, there are also logistical benefits to make sure there aren't 10 different cameras at any single international departure gate
So we will mandate that under the policies
So
I'm just asking
So we can preempt
Yes
And we have the authority to--
The uniformity makes good sense
one would hope that the airlines see that value
Under our lease agreement, we have the ability
Would it have been possible for us to direct the airlines to do this rather than, as an alternative? Because it's not one of the alternatives
I mean, obviously, the airlines have been doing this for a while
Could we just say that you shall provide this at each gate? I'm not-- Well, I think that
Well, that's a good question, but I think they-- we see airports where they do both
We've seen airports were Dallas is a common new system
We've seen that airport there
And I think that other places it would be it would be a deployment
You have the you know, the airlines would sign up to do it there
And that's what they've done it
Right
I'm not familiar with us ever forcing an airline to buy and use a technology for their own purposes
Well, anyway, I just I would assume some airlines would prefer to do that
I didn't know whether or not I would
It wasn't the The policies consider both options
The policies would give airlines the options to implement if we approve or us do it
But we believe that us doing it is the best option
Again, because this is not just about the technology
It's about our control to make sure it's done right and protect passengers
Mean, I guess I just would have liked to have seen that as one of the alternatives before us and for you to dismiss it for the very reasons
Commissioner
Felleman
If you remember when we started this whole conversation over a year ago, it was Delta did come to us and want to implement their own system, which is why we took a step back and said, wait a minute, it's better to have one system rather than--
I am fully cognizant of that
My point is when presented an alternative one, two, alternative three was presented to us and we should have vetted that for its relative merits
And we're, you know, suggesting that it's not preferable, but to ignore that it was an option I think was an omission
Ok
Well, it's hindsight, I guess
I wanted to ask back to the issue of opt in, opt out not to beat a dead horse
I don't think it is a dead horse and I don't think it's semantic
It is material and it is operational and it will have implications
And I don't know to what extent that has been analyzed with any reliable experiential data
So I'd like to ask if the RFP references those options, opting in or out in any way or indicates any preference? The RFP is just for the technology
Opt- in Opt-out is an operational decision
Ok
So the issue is not dead then
It remains since there is public interest and airline interests on both sides of the question here, it seems to me that before proceeding I think first of all, even discussing it, it ought to be evaluated in terms of the seven principles
If there's any material difference and if the answer is no, then we go on to the next question
How does it influence the operational intentions of this so-called automation technology before moving in any particular direction
But I just wanted to understand, the RFP did not provide any bias toward one or the other
It's just that-- We're not answering that issue today
No
If if you approve the policy recommendations today or rather directly Executive Director to implement the policy recommendations, one of the policy recommendations is look at this fairly, look at all the options and figure out what is best to ensure optional
It certainly should be considered in the context of the seven principals
Yes
Since they're two different approaches to managing the throughput
Any other questions from commissioners at this point or comments? I have one last question
OK
So I wanted to offer MR Ingram
I'm sorry
Hasbrouck a couple of minutes if you'd like to respond
You flew up here from San Francisco specifically for this meeting
Perhaps you have some insights to share on what you've heard
Well, thank you very much for the additional opportunity
A couple of points
First, MR Schonfeld referred to compliance with the CBP business requirements as though that was a proxy for compliance with the law
But the Port staff assessment completely ignores any review of the specific laws, particularly the Privacy Act and the Paperwork Reduction Act
Did laws that from the start we and others have called out were just the ones that CBP is already violating
So there has not yet been any assessment of whether this is really lawful by the Port
It clearly is not
There is no plausible good-faith reading of the Privacy Act or the Paperwork Reduction Act, according to which the current deployments or those proposed in this RFP would comply with either of those federal laws
As far as the trust that CBP would of course, approve any factually accurate Port signage, given that the DHS has lying statements falsely claiming that I.D
is required at SeaTac and every other airport today when they're consistent position in court has been that no law requires this
Why should we trust or expect them to approve accurate statements? If you want to put up the statements they've not put up in any other airport saying you have the right not to respond to a federal collection of information if it doesn't display a valid OMB control number
Why would you expect that they're going to approve that? This is a trust us proposal with respect to an organization that has a rogue lawless organization flagrantly violating federal laws that has demonstrated that it should not be trusted
So I think there are clear reasons here why you've got enough information already
If you actually look at the laws that the Port staff has declined to actually analyze, and if you look at the policies which may or may not even exist, we don't think they've looked them up
Does the Port itself has a policy that will apply to these biometric images that the Port will be collecting? We don't know
Finally, one other point in response to Commissioner Caulkins
If you go, what what difference does this make? If a customs inspector compares your image yourself in front of them with the picture in your passport and says, yeah, you're that person and you go on, no additional data is collected
If you go through this process and you're not a U.S
citizen, CBP collects an additional photo, which it adds to the gallery of photos that it has about you, which improves their ability not to recognize you one to one, but having that additional and continuously growing gallery of pictures of you in more candid situations improves their ability to use this database for one to many recognition in other kinds of surveillance situations, the cameras that they have in border regions and other kinds of things
So it is in fact, getting them information that they wouldn't get in the passport inspection context that can and will be used later on because they're going to retain it for non-U.S
citizens in other kinds of mass surveillance usage of facial recognition
That's what's wrong with this
They tell us that that image will be or that string of numbers will be deleted--
For U.S
citizens
For foreigners it will be collected so that they will have a growing gallery the better to recognize you in mass surveillance situations in the future
This is an immigrant surveillance program
Thank you
Thank you, MR Hasbrouck
Commissioner Cho
Well, first of all, thank you for being here, and I appreciate your comments
I would just want to remind everyone that we're not a judicial branch of government
So as far as the legality of what CBP is doing, that's for the courts decide not for us to decide
And so if there is a court judgment says that this is unlawful, then obviously we would follow that court order
But, you know, I do want to make, I guess, a final point on this, because I did mention a lot of concerns that I had at the last Commission meeting
And I appreciate my colleagues taking into consideration some of the points that I made last week as well as today on the opt in/ opt out options
You know, in a prior life, I was a staffer on Capitol Hill and I worked for a member of Congress who sat on the Science and Tech Committee
And so one of the benefits of that is that I was able to tap into that network and ask for some data on some of the questions that my colleagues have had on what how accurate this system really is
And so I wanted to share some of that information with you
In 2018 an M.I.T
Media Lab study found that computer systems using facial images to recognize skin color and gender could correctly classify light skinned men ninety nine percent of the time, but could only correctly classify dark skinned women sixty five percent of the time
ACLU also conducted a study in which the software incorrectly matched twenty eight members of Congress with mug shots, disproportionately misclassified members who are people of color
The National Institute of Standards and Technology also published a similar report showing racial bias in these systeMS Now, why am I pointing this out? I point this out because it's clear that this technology has a long ways to go before becoming a reliable and equitable source of verifying identity
And I've talked to many people, you know, within my circles about what I should do on this
And they've all said that any proposal to implement these systems should be highly scrutinized
And I think my colleagues here would agree with me and our commentator here would agree with me
So why are we doing this as a Port? Because any proposal to implement biometrics should be highly scrutinized
And in this case, if we as a Port do not take this on, it will be done without us and we will have zero control over it
And my job, our job as a Commission, is to protect our citizens and their rights
And I can't do that if I have no control over this system
And given the racial biases that I just cited, I just can't let it happen under our nose
If someone in my community gets wrongly profiled or experienced a false positive, I want to be able to do something as a Commissioner
I want to be able to call our state and say, shut that system down right now
But if we do not take this on as a Commission, I have no power to do that
And to me, as a policymaker, that is worse than the alternative
I think as a Commission and as a Port, we need to step up on this issue
The current RFP and please correct me if I'm wrong, requires that each proposer addresses each of the seven principles
In other words, when they submit the proposal or respond to the RFP, they have to tell us how they are going to specifically adhere to those seven principles
But let me just say that it's just a first step and that as long as I'm sitting at this seat in this position, that I'll be working to ensure that the principles are adhered to then that we're protecting our people's rights
And I know that this seems extremely counterintuitive
This is very counter-intuitive to me as well
In fact, I think that if I wasn't sitting in this seat today, I'd probably sitting in that seat, you know, over there
But let me just point out one more time that we are a Port
That is we're the first port the nation to have this substantial conversation on these use of not just biometrics, but artificial intelligence, what have you
And my promise is that this is just the beginning of that conversation
So that's all I want to say
Well said
Well, if there are no more questions or comments, I'll call for a vote for a motion
One quick addendum
That perspective is exactly what we're gonna take to the vast majority of the work around biometrics at the Port of Seattle
We're today discussing biometric air exit, which is one sliver of a larger question
What we have already determined, the reason this is being singled out, is because it's an area where as Commissioner Cho so eloquently stated it is outside of our control unless we wrest control away and take ownership of it
In the other areas, as we've discussed at the last meeting, we have significantly greater authorities
And so being able to take the learnings from this experience and expand or we really are just beginning this question of looking at biometrics policy across the Port writ large
So I'm deeply appreciative for all of the public support for this work that we've had input and really look forward to continuing to expand the analysis into the other areas where I think there is much greater concern for a breach or misuse or public harm
Good
I would like to call for a vote
But first I'd like to extend a big thank you to Veronica Valdez, our Commission specialist for her hard work on this and due diligence and attention
And to all the other Port staff and airport staff who've been engaged and to the members of we're not finished yet
But I just want to take this opportunity to thank all the people who have brought this to this point, at least to before the Commission for an actionable item
There will be more to say, there will be more to evaluate and other considerations will be forthcoming
But I I just wanted to extend a big thanks on behalf of the Commission to all of you participated in the work here
So that definitely includes the community engagement
Of Course I just want to point out because I've served on my share of community engagement groups and I've left them saying, well, look, if you're gonna do what you're going to do anyway, Why did you waste our time? And I fear that that was sort of like the sentiment that we're getting from a lot of these comments
And I believe, as you've heard, that in those places where we have more control, we're going to exert more control
And that it sounds to me also in talking to our staff that we have actually moved CBP to places where they wouldn't have gone otherwise
And there is a matter of faith here
And I am of, you know, trust but verify
I think we've stuck our pick on the water
I mean, you can I encourage you to continue to write hard on us to make sure that we that we do assert this authority, this influence on CBP
And I don't want you to think that your efforts have been in vain
So thank you
Absolutely
And we certainly have elevated these issues around the use of this technology both here and nationally
We've identified key operating principles to go forward on
I think it has been enormous value and hopefully we will, that this effort will set a better example for the future throughout the country
So, yes, Commissioner
Excuse me
Executive Director Metruck
Commissioner
I know, I don't want to prolong this discussion, but I do want to say is that obviously I did take away here that on the opt in, opt out issue, I need, as I develop and finalize these executive policies to let you know what that policy will be regarding that before that's implemented
I just want to make that clear for transparency purposes, you know, for this, as far as going forward
Is there a motion now to approve the authorization? So moved
And second, is there a second? Second
It's been moved and seconded, all those in favor, please say Aye oppose Nay
Aye
Motion carries
The action is approved
Thank you
And we are on to the next item, 8B, and I think Commissioner Hawkins has something to say about this one
[Crosstalk]
Item eight B
Motion 2020-05: A Motion of the Port of Seattle Commission supporting the recommendations in a changing tide that align with the Port century agenda goal to use our influence as an institution to promote workforce development
Commissioners, adoption of this motion will provide formal approval to support the work moving forward with regard to the maritime secondary education
The presenter is Aaron Pritchard
Good Afternoon Commissioners and Executive Director Metruck
On February 10th, the commission was presented with "A changing tide the case statement for Maritime and Ocean Sciences High School." As was mentioned in that presentation, the case statement was informed by a policy summit which was attended by nearly 80 stakeholders representing educators, the maritime industry, community and government, also supported by to study tours one in New York and one in Port Townsend, and the dedicated work of the Maritime Secondary Advisory Group
I'm here today to ask for your consideration to pass a motion supporting the recommendations because of a changing tide, because their recommendations align with the Port century agenda goal to use our influence as an institution to promote workforce development
I'd like clarify a few points and address some of the questions that were raised in the February 11th Commission meeting
The primary questions surrounded decisions related to the administration, the programing and specific educational pathways around this project
I wanted to reiterate that these decisions are yet to be made and do fall clearly within the school district jurisdiction
We heard from Highline School District today and they intend to carry this initiative forward to look at administration programing educational pathways with support of other South King County school districts including Tukwila, Seattle and Federal Way
And the Highline School District has already taken the lead to coordinate the MOU discussions amongst the interested school districts to help inform these decisions
Questions were also raised about Port partnership
At this point, the Port partnership heading forward means supporting particular statewide initiatives and the Highline Public Schools leadership and caring for these recommendations
For example, as a key partner supporting the Maritime Blue Initiative, which aims to bolster innovations in the maritime sector and protect the environment to ensure sustainability for the Maritime Industry, supporting Washington STEM another statewide initiative
The Port will also in particular continue to work with the community to make sure that their voice is heard as part of this process
And we'll continue to connect school districts with community and community with the industry so that collectively the Port can identify how to equip students ,well, how the partners can equip students who are furthest from the economic opportunity and social justice for the climate adaptive new economy, jobs in the region
That's what we intend to use that-- That's what Commission Calkins and the one hundred thousand dollars of Port funding allocated is to continue this community outreach and use our influence as an institution to promote workforce development
Any partnership beyond what we've described here regarding community outreach in particular connecting school districts with community industry would need additional Commission consideration or consideration of the executive director as authorized within the delegation of authority
Commissioners did receive a memo back on February 25th that outlined some of the more specific partnerships for other schools, the New York School and Razorback, and also talked about some of the funding that helped those get started
If there's any questions I can answer them for you
Turn it over to Commissioner, MR Calkins
So after our last meeting, I took good notes and followed up with each of you to try to address some of the concerns that were expressed
And I want to run through a few of those concerns
And by and large, the intent in the last meeting was to present a synopsis of the work that had been done the previous six months
And I think I was sort of trying to figure out the right balance between, you know, do I present a Ken Burns documentary over 10 episodes or a Tick-Tock video and 15 seconds? And I think I aired too far on the side of the short Tick-Tock video
And so what I've tried to do both in beefing up the motion and also providing-- I've got a packet of documents here
These are three of the documents that were pretty foundational in helping us not only as the advisory group that came together in the fall to essentially draft the changing tide document that you all received
These documents were pretty key in understanding how that advisory group came to the recommendation that they did
And so I'll just quickly I'm going to put these into the record
The first is the Maritime Employment Resource Guide
Now it's a little bit dated, but it's from spring of 2015
But not a whole lot is has changed in the last five years in terms of the overall maritime ecosystem and the employment opportunities
So this was the sort of determination that, yes, indeed, there is a really robust maritime employment sector we anticipate it sticking around
It's not as susceptible to outsourcing or automation as other areas are
And so that's the sort of basis of why we need to be training the next generation
The second document is this year's report for this last year's report from Career Connect Washington, which is referenced in the motion
It is a state initiative to improve the ways in which secondary students are channeled into careers for the next generation
And they basically break up the pathway into three periods: career awareness and exploration, career preparation and career launch
And they are looking at various sectors, various industries
They have begun a process in maritime that we are working with them as the Port of Seattle on through the Youth Maritime Collaborative, through our partnership with Maritime Blue through staff level contacts
But essentially the conversation identified is that that career launch piece is missing a gap between the programs that employers are doing for post-secondary and what's available in terms of the career awareness and exploration and the career preparation which typically happens in elementary and middle school
There's that that donut hole of the the secondary education piece that we wanted to fill
And then the final piece is the Urban Assembly is a nonprofit in New York City that it describes itself as a school support organization
And this document is their blueprint when they come alongside a school and they want to stand up a braided pathway for high school students into careers, including the New York Harbor School, which they support
They use this as their blueprint for how they come alongside an existing school, district or school and say, how do we connect you to a robust industry that's looking for the next generation of workers? And how do we do it in a way that engages the community, the parents, the students
So I'm going to provide each of you with that
These were instrumental in helping us understand or come to the conclusion that we should be building a small maritime high school here in the Duwammish Valley in particular
And I also want to just give you an update on a few things that have happened in the interim just in the last two meetings
The first is the leadership committee met, which is the superintendent of Highline Public Schools, Susan Enfield
It is Jake Beatty, who's the executive director of the Northwest Maritime Center
It's Paulina Lopez, the executive director of the Duwammish River Cleanup Coalition in the Duwammish Valley Youth Corps
And we got together to really advance the work of taking this initiative that that started at the Port and move it into the next phase, which is as a separate entity supported principally by the Highline public schools
And out of that meeting at a follow up meeting with Jake in particular to discuss the standing up of a school support organization, akin to Urban Assembly, to support the aspects of a small regional magnet school like this that are-- you don't see in a traditional school the industry partnerships that make this unique
And so we're advancing that work as well, which will enable us to, as the Port, support that separate standalone entity that will advance the work of the high school
There are plans in place, although probably it's going to be postponed for an April 4th open house in Southpark
It's probably gonna move back to the early summer at this point to be the first of many open houses throughout communities to engage them on school design, and that's going to be led by Paulina Lopez
And finally, I think we have been getting news that we managed to find an extraordinary partner in the school system, not just because Highline Public Schools has historically, they have had some of the most experience running these small schools, but also because of the particular leadership
DR Enfield just, on February 19th was named as, by the-- I'm gonna get that
I want to make sure I get it exactly right here, by the women in school leadership named her the school leader of the year, and that's an American Association of School Administrators styles that honor on one person a year and she received it
Back in the fall she was named the Systems Change Maker of the Year by Teach for America
So she's sort of like, if you're familiar with the EGOT the Emmy, Grammy, Oscar, Tony
She's like the EGOT winner of school administrators
So she's an extraordinary person to lead this effort moving forward
And I think we have found a great leadership team overall to to lead this
So I appreciate your support and all of the work that you all have done to take a very raw idea and input your wisdom and experience and have the result be, I think, a much better proposal moving moving forward
Are there comments, questions? OK
Well, if I--
I'll just make a quick comment, I just wanted to I wanted to thank Commissioner Calkins for being willing to listen to some of our feedback
You've been really gracious about it
Really appreciate it
I think it's an exciting opportunity
I mean, I have expressed concerns about what the Port of Seattle's role is, but I'm glad to see the concept in general has been vetted and look forward to more vetting moving forward
Thank you for your leadership on this
Please
I would like to also thank Commissioner Calkin's work on this
And I would ask that maybe we get a presentation from Jake Beatty on the example of what's going on in Port Townsend
So it's sort of makes it more real
You know, it gets us
You know, that and the discussion that we had about funneling
And the idea that that for the success of this, that we are bringing kids that awareness before they get into high school or while they're in high school
So they would know that these opportunities exist
And one of the
And you mentioned the Youth Maritime Co-operative
One of the reasons that I've just continued to harp on this is because they, too, need to be identified as in need of resources that that we put in $100,000 towards creating a coordinator for youth maritime co-operative
But unless they have something to coordinate, there is no youth maritime co-operative
And I keep my saying this, but as a boat owner and as previously as a big boat owner, it takes a lot of resources to keep a big boat going
And we have several big boat people doing our work for us
And so I just don't want to neglect the fact that-- we want to elevate the value to make what you're envisioning successful
So I just don't want it to make it sound like that we can just come in from the top and pop it down
So it's a great destination
I look forward to creating the pathway to make it successful
Ok, well, I'd like to add a couple of comments
And I having followed this process and participated to some extent with Commissioner Calkin's leadership and an incredible passion and interest here to develop something from nothing basically, which is a potential maritime academy for use for high school age young people
And I'm thinking of my own sons who had the benefit in their early teens to experience gill netting in Alaska in Bristol Bay, because they had an uncle who happened to be a fisherman
And that opportunity is an extremely rare thing for most young people
They had that opportunity
And one of my sons, now they're both in their adulthood now, young adults, has said to me recently that he intends to continue to work and fishing and the fishing industry in Alaska, whether it be crabbing, seafood, other types of fish
But I don't want him doing that
Believe me, I know
And I know he has no idea I don't think
But any rate
So the experience led to something that he's considering more of a long term career after eight years of gill netting up there
And this will be the ninth year, I think, for him
So that said, I think this is a terrific idea
I think it's very exciting
I have not seen very often the kind of interest and enthusiasm that was generated relatively quickly, almost overnight, it seemed like, for when the summit was organized here back in about six months, September, where I think over 300 people participated
And they were from all walks of, you know, maritime industry and educators and advocates and other organizations
And I thought, wow, there's something really valuable here that we need to tap into
Well, that's exactly what Commissioner Calkins did
He tapped into it with, I would say, minimal resources for what has been accomplished over these many months
I don't ever I never felt like he was pre committing the Port to funding the operation of a maritime high school or even offering or suggesting that
So that was never my concern
But nevertheless, Commissioner Calkins has answered two questions and had really stood up to a lot of scrutiny and a lot of questions that have flown his way as to where we're going with this
What's the future role of the Port? I think we can decide that later what our future role might be, if any, or whether it's handed off to a nonprofit
This urban assembly is something I would die for to see here in the northwest
It's such an incredible support to public education that they have in New York
Harbor School would never have been possible without that nonprofit organization, as well as the One Million Oysters organization, which was pretty darn cool, too
So I'm really excited about this
I want to thank you for your efforts
I think we didn't have to have this motion
It wasn't necessary
But you were determined to see it through and be responsive to your colleagues and to questions that have been raised
There are lots of uncertainties going forward
There always are with something like this
I know that
But again, you've done a great job thus far, and I hope it continues to sail onward
May I just make one last comment? And I just wanted to also emphasize, I think Commissioner Felleman started to say it that
And you referenced it as well
Commissioner Calkins that this is one of many efforts to draw kids into the maritime industry
And so I want to make sure that we as a Commission and the staff are still supporting those other efforts, like the Youth Maritime Collaborative, because a high school is not going to be successful if there's not that pipeline earlier
And then I also wanted to mention that I look forward to all of your support and continuing our internship program, because while this school has been we've been working on this, we've had already had over 600 students come through our internship program and already learning about the Port
So it's a continuum and it's a great end on that continuum
So I thank you
Education in the Maritimes is part of our mission to at least support pathways
And that's very central to our workforce development goals as well
So this is entirely and as is the internship program, which has demonstrated incredible results and continues
This is an important part of the mission of the Port I see to continue to provide to support programs such as this and the intern program and the Maritime Academy and other areas that we support pipelines to careers in maritime industry
So with that, I'll entertain a motion
So moved
Is there? Second
And it's been moved and seconded all those in favor
Please say Aye
Aye
Opposed say nay
The motion carries
It's unanimous
Can I just ask one question, please? When you mentioned the Maritime Academy, who supports that? Is that just a community college program? And that's completely funded by the community college? It actually also houses this the Maritime Skills Center for Seattle Public Schools
So the public schools and a dozen or so kids per semester, I think to Seattle Maritime Academy, you get training in vessel operations for high school students
It's open all SPS kids
All right
That brings us to Item 8C: Authorization for the executive director to increase the North Satellite Modernization Project budget by 40 million, 32 million capital, an 8 million expense for a total project authorization of 712 million one hundred twenty five thousand two hundred thirty two dollars
Commissioners, you received a briefing on the item at our last meeting
The briefing went into detail on how and why the current North Satellite Modernization Project cost estimate's completion is forecast to be greater than the budget authorized by the Commission
Scope changes, additional soft costs, unforeseen conditions and remediation or just a few of the cost drivers
This action authorizes the additional costs for this project
And the presenter is Ken Warren
Can I just ask, is there anything new from the last time that you presented? No
Okay
Just checking
Because what I'm saying is a lot of questions last time you were here
And so I just--
It was a great presentation here
So I think that I guess Ken is here
I don't if he had a presentation, Ken, or if you were just here to answer questions
Is the mic working? Yeah
Well, I'm here to request an additional 40 million
You say that so lightly
How much? 40 million
Additional funds to complete the construction of the North Satellite Modernization Project
We forecasted the completion in 2017 and our estimate to complete our projections have grown
Our request is a five point nine percent increase
Our project does continue to track his schedule
We set that schedule in 2017
Other new information I do have to provide is that we have been in conversation with our partner, Alaska Airlines, and they do continue to express their support for our project
As of this moment
Throughout all the conditions that are going on today, they do continue to support our project
We do expect to deliver on time
With this, I invite any further questions
I don't-- I again, I asked all my questions in the last presentation
You made a convincing case, and we-- I don't think-- you've answered all of our questions
So
And you've done a really good job and just managing the job all along
Absolutely
And it is so important that we be transparent and that we be honest with ourselves as a project team in order to develop the team, to complete the project
What we're doing at SeaTac Airport doesn't just go into physical construction, but it really cultivates where we're going to in the future as an airport
This project will be a great anchor into the future as SeaTac Airport does continue to fly people in and out every day
All right
Hearing no further questions or comments
I'd be happy to move item 8c
There's a motion to approve
Is there a second? I'll second
Are there any-- all those in favor say aye
Aye
All those opposed, nay, the motion carries
Thank you very much
Thank you
All right
And that brings us to Item 9A: briefing on the C1 building expansion at Seattle-Tacoma International Airport
Commissioners this briefing will review plans for the new C1 building at the airport, which will provide additional dining and retail options, office space for tenants, lounge space, and additional seating for travelers and a post- security meditations and sensory room, a nursing mothers room, and all gender restrooMS This is also a Tier 3 project under our new Sustainable Project Framework, which we'll discuss during the presentation
Our presenters are James Jenning, Chris Casselman and Lance will kick us off and then Leslie Stanton is available to answer questions as well
Thank you, Steve
Good afternoon, commissioners
A few, if you might recall, a few months ago, we had a luncheon for our new brand here at Seattle-Tacoma International Airport
And amongst other things, apart from changing the logo and the colors in, we made this a brand promise and we promised that in the future, anyone coming to the airport should expect a certain level of service, level of service optimal
We have made a promise that we treat them a certain way
The brand promise that we've made, there's a huge gap between where we are now and what we need to do to actually fulfill that gap
There is going to be multiple projects that's going to come before you, multiple initiatives that the airport is going to undertake in order for us to fulfill that promise
One such very significant project is the C1 project and the C3 expansion And as Steve alluded, this project is extremely important because it addresses multiple gaps that we have, multiple deficits that we have
It doesn't fill the entire thing, but it puts a dent into it
Airport dining and retail space, hold room space or the lack thereof
Office space, meditation room, sensory room, mothers nursing station or mother's nursing station suite is what we're going to be building, all gender restrooms and lounge spaces
So this one facility addresses all of those issues to a certain extent
No, it will also be one of the very first major projects that will go through the sustainability framework that we have
So as we build, we are going to build in a responsible manner
Again, this is a very important strategic project for us
It moves us closer to us meeting that level of service optimal that we have promised for our customers
It gets us closer to fulfilling our brand promise
And again, as I said, it allows us to meet the need of our tenants and also for us to build in a very sustainable manner
Without any further ado, I'm going to hand over to Jim Standards and Chris Casselman, who will provide a little more detail on the C1 building project
Lance, I'll just say, if you had a dog hotel, I'm in
[Laughter] All right
Thank you, Lance
So I'm sorry
The project drivers I mean, I know that Lance said this was the first project that will go through the sustainability review
I just want to you know, there's like one, two, three, four, five, six project drivers
That's not one of them
So, yeah, let's get in the presentation
I guess what I would respond to that Commissioner Felleman is that the sustainability framework was something that has come recently and is an opportunity for this project
No doubt part of our DNA is environmental sustainability
What the project driver slide was really to respond to is I would say we're not doing this project to have a project to do sustainability
We are doing the project and in so doing we'll embody sustainability
So I wouldn't call it a driver
I'd say it's an-- It's the how we're going to do that
It's the how
It's not the why
It's the how
Yeah
Well thank you
So thank you Lance
Appreciate that
So
James Jennings, I'm the director of aviation business and properties at SeaTac International Airport
And as Lynn said, with me today is Chris Casselman in our capital development group
So here today to really brief Commission on the C1 building project, we actually came back in June of 2018 and asked for some advance planning money
And so we're here to give you a little bit of a report
The overall message is we've essentially successfully validated both the need and the scope in the feasibility of this project, and we would intend to move forward with this as a real project going forward
So our hope is that we will come back in March of this year March 24th to request design authorization and then soon thereafter in April for a general contractor construction manager request and to do early preliminary design work
I think we all need to recognize today with the Corona virus lens that we're looking at things a little bit differently
But I'd like to make sure that we think long term here
The focus is really meeting existing passenger demand
No, no doubt, our region continues to grow in that this is a level of service project, not for the future, but to meet the demand that exists today
going to push back a second
So we need to meet growing demand while reducing our greenhouse gas footprint
This is a ridiculous challenge, right? It's a challenge
So so all development has to be done in a sustainable way
So there is a project driver that we have to grow responsibly
Sure
So I'm still not convinced that it's not one of the project drivers
Fair enough
I think that's part of our need is to do this
I agree
It's a how, but it is a overall organizational requirement to be reducing our greenhouse gas footprint
When you do new projects, that is a tall order
So I think this has to be embedded in our demands
So Commissioner, we were looking at at the sustainability component as an obligation
But if it's very important that you make it that driver, we can do that
I'm happy to change our terminology, so to speak, to align with that
I think that for new big projects, this should be-- I don't question you're not going to do
Yeah
I'm just saying, putting it up there, if indeed it's one of our big projects--
Make it visible
To that point
You know, this really is potentially one of the next big projects that the airport is embarking on
This has been in the incubator process for probably four years
And we're finally at the point where we're ready to pull the trigger on this
And it really is important that our growth over the last, you know, several years has outpaced the space that we have in the airport
And as Lance indicated, this is really to meet the demand that we have seen customer service as well as for our tenants
It is important to note, though, this is not a SAMP project
This is not creating new growth and new capacity
This is really meeting the customer service demand that exists today
You know, an example of that before maybe pre corona virus walking down the C concourse, you would see long lines at the coffee shop and people walking away because they have to get to their airplane or not being able to access their preferred lounge
We're not finding a seat in the Horizon regional area
It's a very congested area
So with that, go ahead and go to the next slide
Where is the C1 project and what is it? So the existing C1 building is between the C concourse and D concourse it's reflected on the slide in red
You can see the existing footprint in the bottom left hand corner
It's a three story building
The lower two floors are essentially baggage systems that support Alaska Airlines and American Airlines called the C1 system
And then the upper floor, the concourse level floor is currently a small amount of airport dining and retail, but it's mostly office space
Behind the scenes, largely with the TSA
And so the genesis of this project was, hey, we're out of space
Let's make better use of the space that exists today and make that concourse level space public facing and have some more space for the traveling public
And as we went through our demand and determined what our needs were, we realized just converting that floor plate because it's so large, we would have to create a more volume of space in order to make better use of it
And ultimately over the past four years, we've come up with the C1 building project
So you see on the right hand side the Marsing concept is there
And Chris is going to talk a little bit more about the specifics of what we're talking about in terms of the floors
Go on to the next slide
So project drivers, again, highest and best use
Currently that top floor, as I said, is not public facing
At least the majority of it
And then really it's a rare opportunity for us in our limited footprint to build up instead of taking out additional aircraft gates because we really don't have the real estate to do things
Keep meeting current customer demand
Again, airport dining and retail efficiencies, pent up demand for lounges and then office space for our tenants
We have tenants that have for years asked to lease more office space at the airport and we've had to tell them we have nothing to offer
Increased non aeronautical revenue again
As we build more public facing space, it's very critical for us to continue to maximize our ability to generate cash, especially in light of the paradigm shifts on the land side with TNC's and parking and rental cars as those paradigms shift in our ability to collect money decrease
It's important for us to invest in our ability to collect non-canonical aeronautical revenue, and this is a great opportunity for us to not only meet that customer demand, but really increase that opportunity to collect revenue
And so we've done some financial analysis and we don't have a lot of detail in this presentation
We'll talk a little bit more when we come back for the design
But the project has a positive net present value from a non aeronautical standpoint
We'll have a relatively modest impact on CPE
And it's important to note that this is a fairly significant long project, any cost pressures that we feel in the short term
The reality is the costs for this project will not hit until it's in place
And at this point we're anticipating occupancy out in 2027
So it's just important to note
This is also going to be an opportunity for us to have more small business, airport dining retail kiosks and then during the design and construction process
Go ahead
And then we talked about customer service improvements in the reference to really creating a new facility that can reflect our brand promise, as Lance indicated
There's some operational components
We talked about the seating congestion
There's some low dock involved in some baggage connections
And then kind of the icing on the cake is an opportunity to embrace our new standard for the flexibility to have an all gender restroom or post security meditation room and then mother nursing suites
And with that, we can talk a little bit more about the project scope
Good afternoon
I'm Chris Casselman
The project plans to redevelop the existing C1 building
We're going to add four more floors going up, which is going to include ADR office lounge space as well
As you heard JJ mentioned, the key here is that there are going to be no new gates and no new additional airplane operations
This is this is very important as we go forward
The work also includes, as JJ said, the see through hold room and loading dock
There are currently going to be added about 70000 square feet of office and lounge space
That's going to be broken out to about 30 in office and two decks of lounge at 15 each with additional ADR space of twenty five thousand square feet, as JJ mentioned
You can see there specifically 670 square feet of nursing mother and 722 currently of meditation
I'm just wondering why does the mechanical get the penthouse? [Laughter] Yeah
Lucky
Getting that fresh air If it makes you feel better, we didn't give them any windows
[Laughter] The airport dining and retail deficiency
This is based on the 2016 study that shows Concourse C and D
There's about 30000 square feet that this study came back with as supportable that we are currently short on
So this project is going to try to get as close as we can to that number
And with that, I'm going to hand this to Leslie
Good afternoon Commissioners, Leslie Stanton, environmental sustainability manager at the airport
As you know, and have been discussing, this as our first pilot project to run through that project framework
We conducted a Spark event with a number of internal folks and identified the key areas we wanted to look at
Those are listed for you in the memo and also have couple of slides here
Essentially, we took the categories that we had and asked to the different groups to consider what they would like to see
The purpose of this was to develop a set of questions, not to answer those questions, but to ask the designers to evaluate it in concert with the airport staff sustainability staff
Then we would take those results and bring them to the Energy and Sustainability Committee at 30 percent design or prior to that
The next
So these are the different categories that are included in the framework policy
As you can see, energy and carbon are one of our top priorities because of our century agenda goal, which as you know, is very aggressive
And as Commissioner Felleman pointed out, it's gonna be tough to think about growth in this scenario when we're trying to reduce emissions
So we'll be thinking about what is the actual increase in potential natural gas use, thinking about what would be our RNG benefits of that, and then looking at opportunities to reduce that, not only in natural gas, which is heating the space, but also in our electricity, which we use to cool and also operate the different facilities
So we'd want to look at the total cost of ownership of each of those different alternatives
I mean, opportunities to reduce and conserve energy
Question? Well, there is an important point to be expressed here that I think Commissioner Felleman touched on, which is and since I've been at the Port, I've sort of been interested in how the Port treats issues of green building design, sustainability
There hasn't, up until more recently, been a very consistent policy
I think this one offers just that
The sustainable design approach is a sustainable framework, of course, expands beyond green building
All of the technologies that are available to improve efficiency
But Commissioner Felleman point also
While, we are working aggressively to accommodate the rapid expansion of the airport and the demands that come with it, we're also working to reduce the growth in our environmental footprint where we have opportunity and every new building like this, and every new big project is an opportunity to do that
So I do think it's integral
I don't think we're trying to make a showpiece of the world's greatest, you know, most efficient office power on Earth
But we have a duty and an obligation
And I think it is embedded in our policies to advance the most efficient and green building technologies that we can through this
So I think this is responsive in that regard
It's just that it's complicated when you're dealing with airports and an existing infrastructure that we have
So that's correct
Yes
And I think when we finish the analysis, we'll get a sense of what is the increase in emissions and what is the cost of reducing it? What does that look like? And we can make those decisions in a more transparent way
And that's what I really appreciated, that, you know, that the design analysis is looking at a 5, 10 and 20 percent reduction below state energy code
So that will come back to us
And depending on how much of it is
Yeah, how much we can show on that
And but that the
But you're talking like total cost of ownership
So the efficiencies gained from that
That's right
That's exactly right
And we'll also have the results from the AC 3 tool that we've been talking about so we can look at the embodied carbon associated with the materials that we'll be using to build the facility
Take a look at that
Will reduce it as much as possible
But obviously, since there will be carbon created, when we when those materials are produced, we can compare that
How does that look with the other emissions? What do we want to do about that? Let's go
Next slide
So just finishing it up again
These are just the remaining categories that we looked at
We've asked the designers to look at water conservation, looking at existing guidelines
At the same time, this pilot project as all of the pilot projects this year, we can look at how that compares with our current standards and think about is this a good opportunity to change those standards if there's something better out there for us? The transportation piece was an area where the Spark Committee struggled a bit to think about how could we build in something in this project that would help folks use different forms of transportation
So we've asked them to explore ideas like locker rooms or lunch rooms for employees, those kinds of things that might make it easier for them
And then, of course, we'd look at the total cost of ownership for that
And then lastly, the innovation
We've asked the designers to come up with some innovative ideas
We don't have staff right now
We do have the position on the street
My vision to have that FTE, that person be actively looking for innovative ways and sharing that with designers and vetting it with experts to bring more forward to you
But again, we don't have that person on board yet
We will have them on at least-- the position's on the streets
We'll have someone on board in a couple of months and then they'd be able to address that innovation in a more thorough approach
One way to really flip this around as opposed to just looking at the cost of ownership
Of course, we need to look at the lifecycle costs and the cost of ownership
But we should also be looking at the benefits and measuring those as well
And I think what you're listing here are sort of potential benefits that actually represent change practice for sustainable building design that can make it healthier and reduce carbon emissions, et cetera, and clean water, healthy materials, all of those things
Great
Thank you
Happier employees
So
Hoping for the best
The other side of that also is the market demand for these type of materials? That's right
That you know, other people to do it as well
That's the example to be set
I think setting-- the Port has said it wants to lead in this area and this is a way we can do that
And I think you're both the Commission is correct
That we look to send market signals
That there are demands for lower carbon materials
When we send those market signals to the market, the market responds
We would like to see those become more of an easier option for us to purchase
I think we have a lot of agreement there right now
Diversity in contracting
We have diversity in contract as an aspirational goal for C-1 of design 9 to 15 percent and construction 8 to 15 percent
A final goal will be established as we get closer to advertising, of course
We had a Port-Gen C1 product informational meeting on the twenty sixth of February
It was very successful, had 120 guests
So we're looking forward to these getting out on the street
Can I just, um, you know
I like the fact that you present these ranges and I still don't understand when we do cost estimates of cost of construction, we say five billion, seven hundred thirty three dollars
I mean, why isn't there a range from, you know, 3 million to 7 million or, you know, something like that? And so
So the fact that we these goals or ranges here
I just really have a problem when we put estimated costs like to the penny
You know, it's it's got to be a range because we always know there are things that are happening, right? Absolutely
And to that point, we'll get to this
We'll get back to that in just a moment here
The design approach on this, we use the project definition document
Traditionally, the project management team uses notebooks, sometimes project definitions
But in this case, we did use a project efficient document
It was a very robust document, 250 pages
It went out to, we had invited about 50 stakeholders to it
We've got we got comments over 250
We incorporated all of them
And it was very robust, very thoughtful
We had a lot of engineering teams working on this, putting this together
And that document was signed off by the directors of the airport at the end of the year
MR Little signed off on it in January
And that kind of that kind of commitment from our our senior team members here at the Port is going to be really, really important going forward
This project definition document
I'm always kind of careful encourage people to kind of understand that it refers to project definition
It's not design
So we want to be very careful about that
When people say, oh, well, what's the level of design? You know that, to say that is to say that all the components are complete
But this is like we say, definition of a project
Can I add something right there?
So
So we're actually gonna show you a little bit of a walk through video and to that point
It's basically we have spent a lot of time to develop it so we can get good cost estimates and create a real feel
But the reality is we're gonna hire a designer and hopefully tap into some of the creative juices
And it might look much different than what we're going to show
Absolutely
Design success, design success is going to really be contingent upon designing to budget on this
And as we see, one of the kind of key things that we learned, at least from our satellite is getting light down into-- because we're going up so high, getting light down to the concession area is going to be really key and capture what Seattle sunlight we have, get it down there, have our passengers enjoy it
So even though we're going to see an atrium configuration, that doesn't necessarily mean it's the final one
So but the point is an open and well-lit environment
And so just to add one more thought on that, if you've been into the concourses we all know that they have fairly low ceilings and so we're creating a space with some volume
And so it's going to be really, really a design challenge to draw people in
And so that daylighting is really a critical component for us to attract people into this space
You'll see as we show the 3D rendering kind of an idea of of how that might look
I have to say, just having flown into the Newark, I mean, the really the overwhelming expensive from most airports I go to is that ceiling height
That ability to just not feel constrained like that
And it's one of the real limitations that SeaTac and I think north satellite does a beautiful job of bringing that up
But that is something
So I'm really glad you're -- That was just immediately apparent to-- it's a 1960s-70s building
But it's got all this headroom
It just makes it feel much more modern and comfortable
Certainly
The project delivery will be general contractor, construction manager, the GCCM
And this is, as you probably know, a kind of a two step delivery method and set in that the contractors brought on first as a consultant to advise us on phasing, advise us on schedule, really help us work a lot of stuff out
And then we turn around, say, OK, the second part of that is hiring that person to deliver on the good advice they've been giving them all this time
It's going to be key to having them on because the phasing on this is going to be pretty complex
So having someone in there to kind of really help us is going to be important to the success of this
Project status
This, you'll notice my red arrow up there
I would have probably preferred to push this a little further to the left
It's getting a little busy up there, but you can see the degree of uncertainty in the passage of time
Where we are
We just had the PDD signed off with the managing director still pending
We have an MII approval, which if you have questions about that, J.J
can feild those, certainly
But we're still, you know, we are still proceeding with having to track down and run down a lot of information, a lot of details, still a lot of work ahead of us
So we're heading on with this
But to that point, project estimate, what you see there is a table from the association of the advancement of cost engineering
And this is just kind of a general way to help kind of get people get their arms around where they are with the numbers and the value
So our level of project definition is between 1 and 15 percent
That's very easy to kind of validate
The accuracy range of the cost is from the low side 15 to 30 to the high side 20 to 50
So as you say, there's still a range that we're talking about in terms of percentages
Yeah
If I can talk about that for a second, Chris
Just I mean, this is one of the things we talk about
But a lot of times when we put out a number, then we start from that point in these discussions and we talk about those all kinds of uncertainty here
I think there's been a lot of good efforts going into here before we get to the numbers
But I think I've asked, as we look at our whole capital delivery
I'm asking Dave Swanky and the team and some of the representives from the executive review panel to look at the great process that they've done to do this, to kind of give us another look at this point to see if we-- just so we can get lessons learned from the way that you've done this on this project, because this is the first
I think we're incorporating lots of lessons learned to be accurate in those things, because a lot of times that we talk about that the public perception could be anchored on those numbers
So when we come back with more, as we get more uncertainties out of there, just so we can do as good as we can on those ranges as we talk about them as well
Absolutely
So the program estimate stands at 340 million dollars
The project definition document had a hard estimate with it that came in at one hundred eighty nine
And the actual kind of nice good news about this is that PMG went out, got a second independent estimate that came in at 2 0 7
And that's actually that's very good news because two very different sets of estimates looked at our PBT document and saw 91 percent of the same thing
So, you know, that's that's a tribute to the team and all the hard work that the stakeholders did, making sure that we figured everything out
We got all those details identified in
Yeah
And just just to clarify, the two numbers on the right are not additive
So there they are, Blinken's hard construction component of the program estimates
That's right
But the nuts and bolts of the work, whereas the program estimate includes know taxes, design costs
Yes, exactly
So if we were to combine these two slides from a low estimate of 30 percent below that so roughly two hundred and fifty all the way up to 50 percent above
So 510, that's what the range is 250-500
Yes, that's right
But that's the point
That's the point
That's exactly the point
Folks should know they have to sharpen their pencils
Right
Because it's we expect it to be somewhere in there
Right
Not three forty or one eighty nine two
Right
It's like
To me that's why
Right
So you build in the range but you got to present it in its form
So
This is and with all of our projects, we have the same challenge
And I mean now that we have to estimate, that's great
Did they really say one eighty nine two or do they know a range
They didn't give us a range
They have-- they were actual estimates that came in but I
Yeah
Those are those are obviously a little longer than that
But I just stopped them at the nearest decimal point
I mean I'm just wondering whether we should ask
We can ask the
This is all public disposable
We should ask them to give us a range
Yeah
And I just again, back to the cone that you saw
We're still in the in the planning stages
Right
So whatever estimate has been done, it's a planning level order of magnitude estimate
Again, we spent a lot of time in the planning stage, multiple years to try and figure out what it is we actually want to build it
So right now we've just determined, okay
We think it's this box and we think it's about this much money
Nothing's been designed
Well, at least, you know, we've got some preliminary designs, as you'll see
But until we put this out on the market, that's really going to be the truth
And so we really need to get through the design process
But your point is absolutely valid, which is why we are showing the ranges
And I think we can we can present it a little bit better
I think to your point in future presentations to really Instead of showing a number, showing a range of numbers
We'll take that note and share that with our project management team
And I think what we're trying to avoid is in a few years when this project is moved along in then we're looking at a, you know, a final number of 4 10
Yeah
Somebody says, why are you over budget? Well, this was never a budget
Right
Yeah, anchoring sort of a range
All right
It's important for folks to recognize that
You bet
Thank you
Look how much under budget
[Laughter] Right
Exactly
They'll look ahead
OK
So here we are briefing and introducing the project
The authorization to advertise for design is March 24th
PMG Group will be back in front of you then and then the Commission Authorization for GCSE and program management is slated currently for Q2 2020
April, is our call
So your questions
[Crosstalk.] Okay
Just funding source? So good question
So Borgen's here, we anticipate
Go ahead
Borgen
You wanna come up and-- you'll get a more precise answer from him
[Laughter] So we anticipate issuing revenue bonds to fund this
Obviously, we're gonna be building this over the course of a few years, so there's nothing imminent
The initial funding source will be the airport development fund
Okay
And then the timeline
I think I heard you say 2027 for completion
Yes
Is estimated at this? Yes
And I'll just say in that
The reason we want the GCCM, the contractor involved in this early process is because we believe that we can shave some time off that
And we really need to do a good job in phasing this and so if we can do a good job in phasing this, then we can, you know, move the date to the left and we could actually save the project money in that regard as well
So that's the the currently posted schedule
Okay
Commissioner Felleman
Is this building going to be operational during this time? Well, we are planning on keeping certain elements
We're gonna have to move the TSA down
So they are going to be, as far as I know, they are currently going to be down there to be working
So we'll have to make, sure that we obviously offer a safe and everything's around
We're going gonna we're looking at also trying to move them off, move them out
So we've got kind of a couple of things going
The ADR stuff, we're still thinking through it
There's a possibility that we're gonna actually maybe close it off and then move stuff out into the into the concourse area to still serve people
We don't want to give up revenue if we don't have to
So, you know, we're still how this is actually going to be kind of phase and-- it's still is kind of forming
So since well, I mean, we're talking about kind of building a frame on the outside with its own foundation, are we actually trying to build right on top of the-- We're gonna be beefing up the footings
We're gonna be going pretty much right on top of it
The building was originally constructed to be expanded
So when it was originally put, I think, was it you know, I thought 2006 had some foresight back in 2008
Thank you
That's that's not to say, though, that, you know, there aren't gonna be some obviously some sizable modifications of code changes and all
But certainly there's gonna be some--
Seems to make it that much harder to coexist, though
Yeah
Commissioner Cho
You know, I have a question because with regards to including the GCCM, do we not need to go through an RFP process to designate the GCCM? So how are they involved with the design? There's a two step process
The GCCM processes is a two, I call it contract, it may be handled by amendment, but they're brought on and they consult first
So the whole, as I understand it, the contract element and then the amendment is what hires them for the second part of the work
So we will go through a whole process
It will be a procurement process
So part of the advertise for design would include the GCCM? Two separate processes First we're coming for design on March 24th and then we're actually gonna come back in April or at least in Q2 for a separate request to authorize hiring the GCCM
The design starts, it precedes, the GCCM comes on, they catch up on the design, they get smart on it, and then as the design evolves, as we start hitting milestones, design deliverables, they're checking it with estimate checks, kind of helping us with constructability, phasing, etc.
I think I need a briefing on this because I'm not sure I don't understand how we can help without the Commission authorizing an RFP
How can you guys go out and designate the GCCM? We're coming back to Commission twice to request authorization for both
Yes, that's correct
The authorization is to designate the GCM, right? That's the design first on the 24th April
Twenty eighth comes back for the GCCM ask and program management
But what are we voting on? I think the question is how you select the designer and how you select the general contractor
Use an RFP process or what? Oh, yes, yes
We'll do qualifications and then proposals
And then they will come in
We'll have interviews and then we'll make selections
All right
All right
We'll follow up
Of course
Maybe when you're doing that, as opposed to design, build in other options, I think is where-- I know where you're going
OK
All right
So before we move on, other commissioners questions? I would like to make a bold statement about the importance of design excellence
I get this question brought to me within the architectural community as an architect often about SeaTac
What are we building out there? What in the world is going on? It's a lot of construction activity, a lot of different parts, much more to come
Three billion plus over the next five years or so
I hope we're not building a collection of warehouses and transfer stations there
Right now, there's no reference to good design here and design excellence
The experience that we're creating
And I'm going beyond the goals for sustainability and green building
We're building for another generation
And the airport is pretty tired in many of its older parts and drab
And it's not supporting the branding experience that we want right now
And it's got to be more than colors and signage and labels and things like that
It's got to be an architectural excellence
I have never heard any mention of any design guidelines to help guide the design process
I know we have an airport architect who is incredibly busy and has to monitor all the things that are going on
I'm talking materials, lighting, architectural space
Beyond the functionality and the exterior as well, because this component at this point, it could be a Lego monster added to what we already have, or it could be something that is additive to the qualitative experience and we don't have the opportunity to rebuild from scratch
And some of the greatest airports in the world have had that benefit that are beautiful, memorable
We want the memory to be a good one, not one of I never want to go back there again
And it's everything
Everything we do
So I would like to ask at this point and I don't expect an answer now, but how do we ensure project by project, not just the sustainability aspects, but the design excellence? And I maintain that design does not have to cost more either
But we should be building good, durable, handsome public buildings with some identity and some eye to how each new piece supports the whole of the creation that will eventually be the future air source
So I'm looking for a vision for the future of SeaTac Airport
And I'll end my speech there because that's probably more than you want to hear right now
But I really want to put that out there
And I would like to have some follow up about how we can institutionally ensure that we are going down the right path with each of these new projects, different architects, different contractors, etc
additions, new buildings
They're all adding up to something
And I know our our airport director cares greatly about the quality of the customer experience
And it has to be the architectural qualities as well that we're creating
So if you don't mind
So just a couple of things
No doubt
Jeffrey Brown and his team
Heather Clark is doing a design visioning for the terminal, which is intended to create some integration of these projects as we go forward
And I'll agree with you
We've got a bit of a patchwork from the 40s
You know, each generation of space
But one of the things as we select our designer, we plan to put in the RFP some of the key challenges like daylighting we talked about
And I think adding to that, the integration from the exterior in the interior is is perfectly aligned with that
We're looking for them to come to us with their proposals and bring their creative ideas and have that be part of the selection process
So that's that's fantastic
All right
Absolutely
So Commissioner, I was going to say is that you can always have a tour of architecture through the ages
[Laughter] Well, that's very true, right? I have seen some of the 30s elements
All right
OK
So we have a we have a walk through here
We're going to show you
We do have the three walk through
[Crosstalk] All right
So here we are walking up Concourse D
[Cross talk]
That's certainly a condition we're going to have to address or work
Was this done before or after the COVID outbreak? [Laughter] This was done well before it
Over on your right
You see the checkpoint turning left
You see that area opens into what will be the C-1 project
Currently, there is a restaurant there, so we can't do that
But here we go through here
You can see just kind of naturally drawn to the sunlight
So we should add some music
You'll note we've got escalators and elevators
Now, this is not their final location
It's important to note, though, that there needs to be some sort of visual connection between the concourse level and the mezzanine level so that people traveling with, you know, an armful of kids and luggage can quickly look, see how to get up there, how to get back down, how to get to where they need to go
It's a great opportunity for some artwork in that atrium
Absolutely
Absolutely
It could bring the eye up now
So
Absolutely
That's that's a good point
We've been talking to our co-ordinator about that
Here we are turning left and then you're back out onto C and you're turning back down, heading back toward back towards here
So one point, just to note, again, the majority of access is going to be along the C concourse, but having that entry point off Concourse D, especially as we have the increased activity of the annex just having that sightline and that ability right through checkpoint four is something that we feel is important
And looking up, as I mentioned, you know, earlier, we have an atrium configuration, but the point is just to get like down into the lower areas doesn't necessarily mean that that's gonna be the final condition
So most helpful
Yeah
OK
Thank you
Sure
What's the breakdown of a time line? You've got a seven year timeline to-- where is the breakdown of the design versus construction? Well, we've got--
I mean, this isn't you know--
Well, you know, the seven years we have to
Yeah
There's there's obviously there's time in there for procurement
There's all that
We want to be careful too, because like we say, we're going to really we're trying hard to really kind of bring that back
Currently our design
My last note on design, excuse me, is we were looking at the 30 percent complete approximately Q2 2021, the 90 percent complete Q1 2022 bid documents around Q2 2020
And then work starting shortly thereafter
Like we say, it's-- we really believe, we like to believe that the contractor's really going to help us work that and shorten that
So
And Commissioner Steinbrueck, just want you to know that we're actually putting together a, we call it have a vision video and it's a video which shows what the airport is going to look like over the next 10, 20 years, the entire airport, including driving and the landscape
And it includes a C-1 building, what D's gonna eventually look like with higher ceilings, and C, etc
We're actually working on that
We did a kind of a preview just recently, but we need some more time to actually finish that
So we've basically thought through what the entire airport is going to look like and we're going to put that in a visual form in the form of a video
And so you can see over the next 10 years 20 years of the entire Port is going to look like
That's fantastic
That's great
Thank you for sharing that
Yeah
You know, one of the things dealing with the low ceilings that we have given, I was just thinking about the way the Boeing dealt with the 787s
You know, they create that illusion of sky by, you know, just sort of lighting on the side and having a blue arch of sorts, just wondering to the degree we can fabricate ceiling height, it might be a-- to see what kind of tricks they did to do something like that would be-- because it is a great illusion at least
Yeah, I think that's one of the challenges
Again, we're going to challenge the architects to come with their creative ideas
We can't raise the ceiling, but we could do some potential treatment
And I think we showed a little bit of that in the rendering as well
But yeah, no doubt that'll be one of the key challenges
Great
All right
Thank you
Thank you so much for support
Thank you
Okay
I think we have one additional item
Financial update number 9B
Yes
Item nine
B, 2019 Financial performance briefing
Commissioners this briefing will provide details about last year's financial performance of the Port
Key highlights include operating revenues and net operating income above budget and operating expenses below budget
Presenting for the Port is Dan Thomas
We also have, Dan Thomas, Michael Tong, Borgen Anderson, Stephanie, Joan Stebbins, Dave McFadden and Kelly Scoopon
I have to say is of course, as we look at this, we always struggle with what level of information to provide in this and try to get it at the right level
[Laughter]
Whatever level, we'll critique you
It doesn't really matter what you want
[Laughter] Well, thank you, Steve
And good after commissioners
As Steve mentioned, we're looking at the fourth quarter, which is really our full, full year 2019 report operational financial performance
Overall performance was pretty strong
So we'll be going through the various divisions and then we'll do a Port wide roll up at the very end
We have quite a few slides in the whole deck, but in the interest of time, we only have a few that we're gonna cover
And then most of the detailed slides we put it in an appendix in the back
So if you do have more detailed questions, feel free to ask when we can move back and forth
If you have specific questions that are in the appendix
So with that, I'll turn over Borgen Anderson, to go through the airport results
Okay
Thank you, Dan
2019 was a very good year for the airport
I'm just going to highlight a few of the key things that happened on the revenue and the expense side to help you understand how we got there
I'd like to emphasize that we did achieve both of our financial goals for the year
I'd like to pause on that note, because I'm not sure I'm going to be able to say that very often in 2020
All right
So first of all, the context
Passenger growth, we grew 4 percent last year
We had budgeted to grow at 3 percent
Our mid-year forecast adjusted up to 4 percent
We are basically right on with that
But so a little more activity than planned
On the aeronautical revenue side
You can see we're coming in under budget
And I just wanted to emphasize that that's actually good news from a airline perspective, because that means our costs are coming in lower than planned and we're essentially on a cost recovery basis with the airlines
So that is in fact, good news
On the non aeronautical side, we were over budget and that was driven by a number of things
In particular, the Port Lounge businesses continue to be very strong this year
ADR airport dining and retail was strong
And then on the cost side, we were under budget by 9.5 million
This is a little more complicated
The Port did have a very significant retirement system pension credit and the airport received thirteen point four million of that
So what that means is that we would have actually been over budget had it not been for that pension credit
And the reasons we would have been over budget was the snow events of early 2019 where we were about 3 million in unbudgeted costs and then we had more environmental remediation liability costs, mostly associated with the North satellite project
So those two items were what would have driven us over budget, but we're quite a bit under budget because of the pension credit
And so when you add those things together, the non aeronautical net operating income is significantly above budget $150 million and our airline cost per employment was under budget
So those are our two key measures
On the non aeronautical revenue side, I wanted to take this opportunity to pause on some of the trends that we saw that are somewhat troubling
First of all, rental car revenues were actually down in 2019 compared to 2018
That was not a surprise
We were kind of expecting that
But that's notable
Secondly, public parking revenue
Can I just jump in? We built a-- pardon my tongue, a hell of a garage there
Right
That was a pretty big feat of nature that created that garage
And I'm just wondering, the trend has been continuing to decline in that realm
Right, for that purpose
And it is one thing for our clever design people
Are we thinking about potential uses, alternative revenue ideas for that otherwise very expensive structure? I just put that out there because the decline in those revenues has been true for the past several years
Right
It's a modest decline
And I think that, you know, our sense, at least for the foreseeable future, is that there is a demand
What the long term prospects are, I'm not in a position to say, but I think that we're-- I think we're in pretty good shape having a facility that accommodates a lot of cars
How's that? Yeah
I mean, a lot
I'm just wondering whether that's at a certain point that will be some space for other uses and whether we're thinking about that
And it's currently leased to the rental car companies, so they actually have a lease on a facility
For some duration? Right
Ok
So the other thing I was going to highlight was public parking revenue, and while parking revenue grew by 2.4 percent for the year, the revenue per O and D passenger, which is origin and destination passenger, which is the relevant metric, actually declined for the year
So that's somewhat troubling and continuing with another trend that we've seen
Taxi transactions or trips were down by 15 percent
So that's continuing a trend, but that's a pretty significant fall
So I just wanted to highlight that we did quite well in the on aeronautical revenue side
There were some pluses and I just highlighted a few of them
It's not computing with me why the decline in arrow revenue? And it says reduced cost
So what happens is we compute our aeronautical revenues based on a cost recovery
We calculate a revenue requirement
And because our operating and maintenance costs were below budget, the amount that we would recover from the airlines is lower
OK, so we ended up the year with a surplus
We actually owe them money
Oh
So that's the way it works
So this is actually good news
But from an airline perspective, it's actually a timing issue
It's a principle that is not well-known
Yes
How we actually have to give money back to the airlines
Correct
It's good for them
They're supposed to be paying us, right? Well, they did pay us quite a bit, as you can see there
But there will be a credit going back later this year
Can you go back to the
So the
O and D Revenue decreased from 18 and 19 is that we said? For parking revenue increased at a gross level
But the revenue per origin and destination passenger actually declined 19 compared to 28, even though we had to-- How do we explain that? Well, it just means that we're not collecting our revenue is not growing as fast as our passenger level
So we're spending less in ADR? Our parking transactions and not growing as fast as-- And it's parking that's the real lever there
It's not other-- So I was just highlighting it was just the public parking
And you can see all the details on slides 47, 48 and 49 relating to parking, rental car and ground transportation
And so the limitations of our time here, I wasn't gonna go into the detail of every one, but I just wanted to highlight some of the what I see is some of the important trends that are playing out in 2019 here
OK, now moving on to some of our overall performance
We listed all of our objectives and the status of our performance on those on slides 29 through 33
But what I've highlighted here is just some of the major accomplishments and customer service was an area where we have focused a tremendous amount of effort this year
And we we had a goal of exceeding our five year average for two out of the five ASQ scores
And we actually exceeded it for three
So it was a good year there
Some of the other accomplishments from an airport standpoint is that 100 percent of the frontline staff completed the "We Are SEA" training
We launched the Visitor Pass program
The online parking pre booking program was launched at the end of last year
And that's going to be really important to turning around the revenue side of the parking business that I mentioned before, launched the on demand taxi system and completed the ADR masterplan selection process
And this is positioning us to to grow those revenues in the future
So these were important accomplishments
On the capital budget side, we spent over five hundred and seventy million dollars last year and that was 75 percent of our budget
Obviously, that's not the level we'd like to be at
But you can see on the box in the right a number of projects were contributing to that the the largest of which was the international arrivals facility that was about $65 million dollars under what we anticipated spending in the year
And that's purely a timing issue
That is not a project savings
So that's really how we did on the capital budget
With that, I'll turn it over to the maritime division unless there's some questions Kelly Zupan up to cover maritime and economic development
Good afternoon, commissioners
We'll now go over the maritime division results from twenty nineteen
And net operating income exceeded budget by 1.7 million, mainly driven by a 1.9 million pension adjustment
Year over year, we had a reduction in NOI, mostly driven by a two million dollar increase in onetime expenses, along with unfavorable change on how we allocate maintenance at shared facilities and additionally increased environmental costs
We did have a 3.5 million dollar increase in cruise revenue, but this was offset by the departure of WASHDOT at T106 Uplands and the north birth of T-46 having a $2 million impact as well as lower grain volumes
That is correct
Due to tariff issues
Has there been any
Is that trend continuing to decline? I mean, is there room for our grain exports? I think where we've leveled out at it kind of the current level for now
But we're looking at it
We're looking at it
Our budget for next year is similar to where we are right now
And so far we're trending at or just slightly better than we did in twenty nineteen
But we're going to again where we keep our eyes on that
Going forward, excluding, of course, the Corona virus, we expect our revenues to exceed expenses on a go forward basis after this year of the onetime experience
We spend 44 percent of capital budget in 2019 with many both small and large projects spending getting pushed or deferred to 2020
Details are available in page 66
Our stormwater revenue and expenses are in line with budget and any questions
Stephanie, will walk you through the business events
I think I'll just hit on a couple of the highlights
So as Kelly said, cruise revenues were up 3.5 million, which is 19 percent so that was a pretty significant increase last year with both aggressive rate increases as well as the increases in volume
On our fishing and maritime side, we did actually lose the Ocean Phenix
But we have new vessels coming online as well that start to take that place in order to fully support the North Pacific fishing fleet, we're looking for both a couple of capital projects that'll more fully support them
On the recreational boating side, I'd like to highlight the racial equity pilot program that the team out there at Shoshaul implemented
We had over 100 kids from Upward Bound and an Urban League spend a day out at Shoshaul learning about the maritime industry as well as spending some time out on the adventurous
So I think that's a great-- it shows the kind of interest that we have that-- I really listened with interest to the earlier presentation on Maritime High School
So thank you
But really the highlight of the racial equity pilot program was that we had two high school interns there for the summer from Rainier Vista Boys and Girls Club
So that I think really starts to get kids who haven't been exposed to the maritime industry with opportunities
Next slide
Just a couple on environment and sustainability
We did complete our very first ever remediation project at Terminal 30
It's now completed after many years
Something I'm really excited about is that we signed a credits agreement with NOAA with that essentially means is we'll be able to build habitat and then sell it
So I'm very interested in creating a line of business out of creating habitat, although it won't really create fund or stock options
It's really intended to keep feeding more habitat
Can I ask a question about that? You said this doesn't include sub-tidal, right
This is above land
Well, it's mostly intertidal, but I think it depends on what we can get credits for
Right
But it is in the shoreline
Yeah
Our environmental finance team works really hard to bring money back in for the work we do
So we brought in nearly six million dollars
That's work that goes unrecognized
So I think it's worth just giving them a shout out
Stormwater utility was in its fourth year and we have completed assessing the entire system of 78 miles of pipe
So that is really a noteworthy accomplishment
We put in five tide gates, a rain garden at Terminal 86, completed repair work at 91
So there's some really significant work that the stormwater utility is doing to to protect the waters of Puget Sound
And in fact, this work was recognized by an award from the American Association of Port Authority
We really want to shout out to the team, not only here in our environmental division, but the marine maintenance folks who are out there and all kinds of weather doing doing the work
And this is all funded through the revenues we're generating from--
The stormwater utility
That is correct
We don't have to tap into anything other than that? That is correct
One other quick question? Yes
Where were the Excellence and the Phoenix Where were those vessels before? I'd have to look into that for you
At least one of them was new
But I will look into that for you
So it's not like we just moved them from one dock to the other? We got one from the Phoenix that was renamed from the Glacier Fish and that came across and Glacier Bay had that it a different I believe a different location, but the Excellence is a new breed
Okay
Thank you
If I could just jump in here real quickly
So we've decided to start incorporating more information about the Sea Port Alliance financial performance in our reports
We know you do get it as part of the manage members when you meet with the alliance, but it's a significant part of our business
So we feel that greater transparency is probably warranted during our financial reports
So we've started to put more information just to keep you more updated in real time on what's going on with the alliance
Ok
So here you have a summary slide of the Sea Port alliance
As you can see, operating income is better than budget
But down from twenty eighteen with flat revenue and one time expenses in the north arbor such as the T-18 crane removal and terminal five public expenses
The alliance will actually be briefing you on April 7th and they'll be able to provide any further details you have
It's hard to see how, not to be pessimistic, but how we can rebound from what happened last year with regard to imports and exports to Asia in particular, which is 80 percent of our volume, I think
But yeah, they're trying to diversify at this point, you know
But I think John will have a better
January doesn't look so good either
January volumes are down about 21 percent
All right
Next, we'll go into the economic development division
Net operating income was over four point eight million favorable to budget and up 6 percent from 2018 due to a slight revenue increase and flat expense growth
Revenue was helped by the loumaz light show at the Smith Cove cruise terminal this year
Expenses benefited from a $700,000 pension adjustment along with favorable maintenance initiative spanned and central services expenses
The division spent about 55 percent of the approved capital budget with expedited spend at the Belle Harbor Conference Center modernization offset by less tenant improvements and small and contingent projects
Any questions or Dave will walk you through the business events? Ok
Wondering about the Belle Harbor
So did we change our rates at all? We're investing
We're keeping that
It's a great asset
But does our-- do we get a greater return when-- I don't know what the lease term on that is? My understanding on it is that our margins do go up as the business gets bigger because of the management fee is just a little bit more
Well it's also a management agreement if I'm correct, it's not a lease
OK
So we share revenue
And so when they refurbish that and have more success because it's a better venue, we will share in that upside
The income accrues to us
But some share of the income
Yeah, they get it
They get a portion of it
Yeah
I'm just wondering
So we don't get more return because we put more into it
It's not like if it was a 50/50 split, we don't get 60/40 until we amortize the cost of that improvement
That's not really part of the management agreement
It's our facility that they manage
And they get a cut of the revenue in return for managing our operations over there
And just, I'm also interested in the trends on convention center use
Obviously, it's a very niche one
But overall, are we seeing that holding strong? Performance we put together showed it has performed well and we expect to continue to perform well as a niche event center and we've done a fair amount of analysis of the competition before we asked you guys to authorize the renovations
Right
But we haven't seen the same demand for ninety one
No it's a very apples to orange comparison
I know
But just in terms of convention asset that one's not performing as we would have hoped
Ninety one
I think it's just a different facility with more limited options for upside
Am I correct? Yes
I don't think we ever expected that to be a huge moneymaker from a convention center basis
There's just niche opportunities like this loumaz thing
I was going to say the Loumaz thing seemed
This was a first time, right
You know what this was? No but we had a concert there? It's a light show
It was a holiday lights show
Yeah
Whoops
All right
But it's also not year round
It's seasonal
Okay
Thanks for the question
I have to be corrected
[Laughter] In terms of the business events
Diversity in contracting, I saw a good increase in the number of firms that attended our events
More notably, though, the dust is now settled and I can now state that we met our Port wide goal for women minority business enterprise utilization
We set a goal for twenty nineteen
We met it and in a couple of weeks we'll share more of the details around that
So congratulations on that achievement
I think it really deserves to be trumpeted and shared widely in terms of where the Port has come over the last several years in this regard
Yeah
Thanks, Commissioner
And that's on the overall
I mean, we have the long range goal, but we're actually, we had a five year goal in the first year of the program
It's remark
It's remarkable turnaround
Yeah
to your point that this is the news story for worth
You know, we should put that out
Yeah
I mean, that's that's really what-- we're always looking for
Why is the story a--
We'll follow up on that
We're coming to Commission in a couple of weeks, so we'll make sure we talk with Cathie and external relations on that level
In terms of real estate, we did start the renovations at Bell Harbor International Commerce Center
We saw the successful completion of our project at Des Moine Creek North
That's our airport property
That's where the IAC Commerce Center building is
It's four hundred and sixty thousand
It's fully leased now
So that's a good success story
On innovation front, we organized and kicked off our first ever maritime accelerator program with Maritime Blue
We helped secure five million in capital from Washington State for the Maritime Innovation Center
Tip the hat to Eric Fitch and Joshua Berghofer for the heavy lift there
And finally, Steve and I were able to visit the Ocean House Maritime Innovation Center in Iceland, just to learn more about how they run that operation
They go the next slide
In terms of headquarters facilities here we've finished modernizing your Commission chambers
We started the lobby renovations that we're in the midst of and we installed quite a few solar panels on the roof
And so a good year for the headquarters
In terms of tourism, we were pleased to sponsor a U.S
China tourism summit
But even more pleasing was the amount of positive coverage we generated about Washington and Seattle, Alaska Cruise generating about 1.2 million dollars of favorable publicity through staff efforts there
On the workforce front, very, very happy that we were able to sustain the Youth Maritime Collaborative in a partnership with Maritime Blue and Goodwill Industries that will carry that program forward for two years
We also launched an Aviation Career Pathways Project focused on airport maintenance technicians in a partnership with South Seattle College and Port jobs
Can I ask that we get a status check on the on the youth maritime co-operative? I Mean we put in the hundred thousand bucks to that and I'd just like to see how goodwill-- seems like a perfect partnership
I would like to see how they're doing and give them an "at a boy" or see what they might need for further support
I also was interested in the facility's beautiful entry, all that good stuff
I'm told we're also going to put up some sort of big screen TV, provide some information about Port assets or something
We're going to look at that
We're evaluating that right now
And I think when we presented that idea to you as we were talking about the lobby improvements
We were asked to do a little more homework about where else that might be strategic
Well, that's at our cruise terminal, Bell Harbor Conference Center
So we need to do a little more homework before we bring back that idea to do that
Okay
So the one thing that I've been a little frustrated by is that we're not getting any display of the energy we're generating from our two solar rays and we're about to put in our third solar ray at Shoshaul
And part of the reason besides the energy gain is to show the public that, you know, you can do it, too
And so I was envisioning like at the Seattle Aquarium, you have like a little meter running, you know, how many cars are off the road or whatever, like that
So we have no public facing display
And I was thinking there was going to be one at Fisherman's Terminal and that there was gonna be one here
The two places where we have it, I understand now there's some what seems like a relatively small but there is a technological problem that we have been told
But one of the ways I was told we can get around this problem with somehow some sort of like monthly summary graphic
And I was just looking for it
I want to see some vehicle by which we can see-- something that shows that, you know, this is part of our sustainability achievements
I wrote that down
I will follow up and do homework
Yeah
Where are the display is going to be? And I thought it was going to be on this wall thing
That's news to me right at this moment
I'll get with Stephanie and we'll do our homework
Thank you
Okay
I'd like to invite Michael Tong and he'll work through our central services departments, which are support functions
And then a little bit of highlights on the Port wide roll up that just pulls us all together and then I'll finish it up with a few more slides
Good afternoon
For essential services like we accomplish a lot in 2019
Here's a list of the business highlights I would like to point out just a few items for you
First one is we completed the number of I.C.T
projects to keep project in cool
Our project delivery system automated check point wait time, SeaTac visitor pass and tax system
And then on the environmental front, the Port sponsored Queen City Days in the airport community
We also announced collective partnership
If is something pretty litas lead us to develop the import body that carbon in construction calculator tools
And also hosted about 20 excuse me-- 200 guests on the first ever multi-lingual boat tour the Duwammish River Any questions before I move on to the financial? So here's a financial highlights
The twenty nineteen operating expenses will put forty million favorable to the budget, mainly due to their position to offer credit, but that pocket national lead by early fall, all the corporate departments got a nine point nine million credit
And so if we exclude that we were actually 4.2 million or 2.9 percent favorable to the budget
So still, you know, could be small, but, you know, it's pretty close to what we budgeted
And then the main reason is because somebody can see, you know, from a number departments as far as some delay spending O in D into some key initiative programs as far as some contract spending
So this is the highlight for 2019
Any question? I just want to clarify, too, that, you know, the color coding here
So we do break this into services down because there's different kinds of functions
So this might for the benefit of Commissioner Cho, what we call core central services
These would be our traditional administrative support functions: legal, accounting, H.R.
The typical administrative supports functions
Of course, we have a police department which is included in central services
They have different cost drivers than many of the other support departments
Capital Development includes the engineering and PCS functions that are involved a lot in the construction activities and expense projects
Again, they have different expense drivers, largely driven by capital projects and needs for that
And then finally, we have environmental and sustainability, which a number of years ago was moved into the central services after a reorg
So that's a lot of the programs under who is overseeing environmental programs and remediation, but a lot of those programs that I know are near and dear to your heart
So different kinds of functions that comprise central services
Well, when we get recoveries, they're revenue, but it shows up at a different place typically
But yeah, they do a lot actually in bringing in new revenue and recoveries in insurance recoveries
So just want to give that overview
Ok
Move on to the Port way of numbers
I would like to keep to a very high level here
And then again, you know, all the details in the appendix and other slides that we'll cover in a minute
So compared to the budget, we were almost eleven million favorable and the overall total operating expenses and then on the operating revenues side on the expenses side, we are nineteen point eleven point nine billion favorable to the budget
So we saw the net operating income before depreciation twenty two point eight million favorable to budget
On the capital spending side, we spent almost six hundred million or seventy three percent of the budget last year and then compared to the prior year actual 2019 to 2018, actual, operating revenues are 75 million higher than 2018 and then operating expenses also higher of forty five million high as well
But overall in IP 40 position
Twenty nine billion higher than twenty eighteen
So pretty good result
So then just to wrap it up, I want to spend all the time just looking at some trend information because we think that's useful and sort of track where we've been and where we're headed
This first slide shows the total Port operating income performance
The bars actually reflect revenues and expenses over time
And then the blue line actually reflects net operating income
So that's income after operating expenses after revenues less expenses
And I think really the main point here is that you can see there's an upward trend in overall net operating income
It's actually grown about five and a half percent per year over this three year period
So modest, but upward growth in overall net income for the Port as a whole
But we don't have non airport expenses
Well, they're embedded with the green bars
That's all expenses
But so we're showing a total revenues and total expenses
We have broken out the non aeronautical revenues and the aeronautical revenues
Right
We have a slide that--
I think what you're looking for is going to be on the next slide
So I think we should just treat the airport separately from the seaport or with the other
Right
Just to be able to show the airport independently
Because I think the story is and we can do that in the future, the airport for performance has been better
So if we move to the next slide, which then takes the airport out of the picture and then rolls together, all of our non airport businesses, which would include the seaport alliance and then maritime and economic development
And as you can see here, that story's a little bit different
You notice that the net income line, that dark blue line, is actually on a little bit more of a downward trend
But I wanted to caution you, because it is influenced by the impact of the Sea Port Alliance, which, as you know, is a little bit of a stranger beast because most of these other numbers are all operating numbers, their operating revenues, operating expenses before depreciation and before non ops
And as you know, the way our accounting rules require us to book the alliance, what we call alliance revenue is actually the bottom line of the alliance
So it's a little bit of a mixing because embedded in those alliance numbers, which have been decreasing over this time period, but that includes things like depreciation and non-cash expense
It includes non-op expenses related, for example, to the Terminal 5 project
There's some expense work that's really part of that project, but it's doesn't qualify for capital, but it's part of expense
So it's a little bit of a distortion
And I think you've got to, managing members got a little bit of a financial trend presentation late last year from David Morrison because you have to really kind of peel this back to understand it better
So while we're showing actually if you look at the numbers, the alliance, what we're calling revenue here has decreased over this time period by about $13 million, 11 million of that is just new depreciation
Okay
So we're really trying to be more mindful and trying to be more transparent
Put it
Wouldn't you say it's actually because I mean, it's relatively new and it's kind of lumpy right on the
Oh, yeah, there's a lot of one time excluding--
You Couldn't extract those thing
There's trends within the line
Yeah
We'd really like to try to figure out what's the sort of ongoing just core operations of the alliance because we have so many projects like crane removals and things like that, lease cancelations that sometimes bring in additional revenue
So there's some more work to be done
But I think the key part is when you think about what matters from the alliance for us is actually what we call the distributable cash, because that's the cash flow from operations that comes accrues to the home Port
We split it 50/50
Over this three year period, the distributable cash has been relatively constant
So it averages about fifty six point six million dollars per year to the Port of Seattle and it's been relatively stable
So while the accounting numbers may look like they're declining, the measure that matters to us in the short term is the actual cash and that's been somewhat stable
So we still want to try to find more ways to to better tell this story because it can be a little bit misleading
But again, we do want to start showing you information that includes performance of the alliance
But that's not net revenues, is it? We shoulder half the expenses, right? Yeah, we share the revenues and expenses
So
We have the total operating expenses, which is everything non airport
Right
Only showing
The alliance revenue? Well, the alliance, what we call revenues is actually the bottom line of the alliance
It's the net income of the alliance
It is the net? It's the net of the alliance
But then we include that as revenue
If you look at that, so there's a mismatch because normally all the rest of our depreciation and non ops are below this line
Right
So that makes sense
But that is we don't need a separate break out for alliance expenses
Right, because we showed you in an earlier earlier slide that showed the alliance performance, we're also trying to provide some transparency around how the alliance itself is performing
So it's an ongoing process to try to figure out how best to tell the story, because there's a lot of nuances in how the alliance does their books and how it flows into the port of Seattle
Right now, we're in the building phase--
When you're going to get a lot of depreciation
Hopefully the revenues will come later on
All right
Well, just like always catch up
Yeah, but I would want to highlight some of the growth and expenses
So we have had about over this three year period, about $22 million of growth in expense
And this is our expense
This is not the alliance expense
So it is something that we want to continue to monitor and watch to make sure that our expense growth remains in line with our with our revenue growth
This next slide is when we started adding this a few years ago
We call it the comprehensive financial summary
And what we do here is we actually change the way we normally present our financials
Normally, if you would look at our published financial statements, you would see all the operating items first
You'd see operating revenue, operating expense, net income, and then you would have depreciation and non-operating revenues and expenses
And that's the way we normally show our books, but we think it's important to actually rearrange it a little bit differently
So the top section is, is all revenues, including the operating and not operating, just to give you a better sense about the total inflows of resources into the Port
And similarly, at the bottom, we combine all the operating and non operating expenses to give you a better sense of the total disbursements
So I would call to your attention, for example, to the 2019 actual call for for revenue over a billion dollars when you look at it in total inflows and this was when you include things like PFC, tax levy, CFCs, grants as opposed to, you know, our operating revenues are only 764 million
So gives you a sense of the the order of magnitude of the total amount of resources coming in that we have at our disposal
And similarly on expense, much more than our operating expenses, we have seven hundred and seventy four million dollars of total expenses, which include things like depreciation, interest on bonds and so forth
So it's a more comprehensive picture
But then again, this aggregates into this sort of inflow and outflow
And then most importantly, I want to highlight the very bottom number under the 2019 column, which we call change in net assets
This would be comparable to corporations bottom line profit
This is the bottom line after everything
So as you can see, it's pretty healthy
$267 million in 2019
That was $28 million better than budget or 11 percent
And then more than in prior years
So it is growing
So that's really the full picture that the full economic performance of the Port of Seattle comparable to a corporation's net income
So we think that tells a good story
But the difference is our ability to reinvest is separated by the airport revenue and the other
That's correct
We do have to isolate airport revenues from this
It just seems to be comprehensive analysis
It would be great to have this same exact thing broken up for-- because we have to make decisions about whether to do above and beyond projects that the airport vs
the seaport and or where we're going to do strategic real estate investments
So I'll just be really good
I mean, the total number is great for the overall performance of the organization, but it doesn't really help from a policy directed guidance
So that's a fair point
And frankly, you know, for our internal planning, we do that bifurcation
You know, we separate out, you know, because we know we could only spend airport revenues on airport projects and vise versa
So for internal planning and analysis, we do that
We think this might be a little helpful for the public, good for an enterprise level
I think we need both
I mean, I think this is very valuable
But like when we're looking at implementing a strategic real estate plan, that's got inordinate numbers to be confronted with and what kind of power do we have and what resources right there
Good question
Yeah
And we'll we'll try to provide more of that during the fall and the budgeting and planning finance process
Next slide is just again, recap of the Port wide capital spending
You've seen this for the individual division
Just this just rolls it all together
In twenty nineteen we spent just under six hundred million dollars for the year and that was about seventy three percent of the budget and we are working on trying to improve that performance over time
And then the next slide, I also wanted to give you an update on where we're looking at in terms of spending for this year for 2020
So if I can just orient you on this slide, the column to left, which says Draft Plan of finance, that these were the forecasts of 2020 spending that we had presented to you last fall when we completed the budget and did our funding plan as part of the draft plan of finance
We are always revising those numbers because as you can imagine, projects are always dynamic and especially the quarterly and annual cash flows can change, even though the project itself may still be within budget
So what we do typically is we update those forecasts at the beginning of the year
So we just completed that update looking at the same exact projects, but saying, well, now what do we expect to spend in 2020? And as you can see, the number has come down somewhat
We're expecting to spend a little bit less in 2020 compared to what we had forecast last year
I would point out that the forecasts of last year was actually based on numbers that we had calculated in June
That gives you a sense of how old they are as we go through the budget process
The largest difference, the largest decrease here are at the airport and primarily related
The two big projects there would be the baggage optimization, as you know
For good reasons that project has been delayed
And the other one is the safe dock project is forecasted to spend less than 2020 and some of that spending is shifted out
But we wanted to be more transparent because as we go through the year now, in 2020, we're going to be tracking against that right number
The number that's the revised cash flows
That's what we're gonna report against through the year because we think it's a better more accurate number
And then this has a ripple effect through the CIP for those out years
Right
Some of that money will shift out
And this is part of that being transparent, because in the past we haven't really brought this number before and showed you of what this number was going into 2020
So when we come back, we can say when you see, if you were tracking, you could see like the number varies
And then it's then it resets
What we're gonna spend in actually the CIP resets based on this number and the projects that we need to reset
But this does not take into consideration anything that's happened in the last three months
As far as--
That's correct
These numbers were updated basically in January and February
So these were a little bit February
So these are not
Obviously things may change now and maybe there may be discretionary changes that we want to implement to revise schedules
So then last but not least, the final slide is really, Steve wanted to have just a little bit of a takeaway here
So as we said, 2019 looked pretty good
We continue to have strong growth in most of our business operations with the exception of the Northwest Seaport Alliance
As you know, cargo was down initially because of the tariffs
We're starting to see a little bit of reduction due to the virus impacts
And then, as you know, grain also was down affected by the
Tariffs at a wide performers was pretty good relative to budget in twenty nineteen, although you heard
As the divisions talked about this so-called pension credit
Just a quick aside on that
So a number of years ago, which as you know, we have pension plans in the state pension that purrs that
I don't know that
Pension
We have the state public employees retirement system
And then there's the left, there's the law enforcement officers and firefighters
These are pension plans
These are not all government
Many governments contribute to those
And number of years ago, we simply booked as our expense the actual contributions that we made during the year to those plans
And that runs order of magnitude
That's about 14 million dollars a year
Currently
The actual contributions
And that's what we budget for because that's what we do
The best thing we know at the beginning of the year
Years ago, the Government Accounting Standards Board changed the accounting rules for pensions for government agencies that was falling on something they did for private companies
And it completely changed the rules for how this is done
So no longer do we expense just what we contribute the cash
They actually go through a fairly complicated calculations
The state at year end has to do an actuarial evaluation
They look at changes, know they look at new credits earned, they look at the performance of the stock market
There's a whole lot of factors that go in and then they derive what they determine the state's actual annual pension expense is for the year and then they apportion that out to the various participants, the governments that participate in Persian life
And at the end of the year they give us our number
And in fact this this past year there they gave us a sixteen million dollar credit
So $16 million better than what we had forecast based on our known contributions
It's something we have no control over
In some years that could reverse
If the pension plan does worse, we could wind up with a debit year
Yeah
I mean, right now the stock market has been doing well
So there you know, they've been doing well
But you know, but for that that that had a big impact on our performance for the year
And in terms of our expense, our expenses would have been much higher absent that, which is what leads up to the third bullet is, you know, we're watching this because we are seeing some trends of increased expenses
We think we need to be mindful of even before Corona virus came around
We want to make sure we're sustainable going forward, that our expense growth is in line with our revenue growth so we can continue to generate cash for investments
So given that, what can we do midstream to reduce expenses, knowing or expecting that revenues are likely to? Well, and that's what prompted this last bullet and this was actually was done a few weeks ago before, you know, as you know, things change week to week
So we believe we will be experiencing revenue reductions as--
Some business is going to be tied to that
But some are not
I suppose that where we have some ability to control or--
We think it's time to start looking at this, at least initially discretionary expense reductions
And I think Steve and I, we're working together to come up with some ideas that will be forthcoming where, you know, that the easiest things first, discretionary, maybe freezing hiring on new positions Yeah, we just we we think it's time to be proactive to implement
Let's not wait until the third quarter to figure out that
And we've been through these we've been through downturns before
So we've got a lot of things in our tool book that we can toolkit that we can look at
But we've never had the perfect storm situation like this
Right, to this extent
So I should mention that I know in the past, and Dan, I'm the one Dan has developed
Dan and Michael have developed a budget in brief, which is more public friendly, public facing document
And I've been
I keep wanting to put my final cuts on it
Dan's been waiting patiently now for a month, but I keep I'm just getting time to concentrate and getting the right message on it because I keep getting overcome with things from Corona virus
So so but I'll try to
I mean, I guess I'm just admitting that because Dan's stuff is in there
So I know perfect is the enemy of the good, but I'd like to make this a good document
So
So in light of that, the message we just got from from Dave regarding our achievement and in small manary on business attainment to a five year goal in one year
And I think that's the kind of thing in your budget and [CrossTalk] It's not just what we did, we how we did it
And that's a great accomplishment
Ok
Great report
Thank you
Yeah, good stuff
Go ahead
Anything? Yes
I've got to run out the door
I know but we've by-laws next! We're going to go through it! [Laughter] I just want for Commissioner comment
And I wanted to mention to everyone in the room everyone listening for the record
Yeah
Thursday, March 12th begins Census 2020 and everyone here can go online and fill out their own
And remind all your friends, neighbors and loved ones to do the same
The more of us who do it online, the more the resource we can put to those hard to count areas
We know this year is going to be particularly hard because who wants to go out Door to door in the middle of a pandemic
So it's really important that we all take advantage of every opportunity to get those things in and so that we can put those resources to those folks who may not otherwise know that this is an every decade thing that we need to get done
And as a federal grantee organization, it is absolutely critical that every citizen and resident of King County gets counted so that we get the full slice of the pie that we deserve
The the website is Census 2020 dot org
And the King County Complete Count Committee is doing a great job of doing outreach
I would suggest that I don't have that Web site link, but maybe we can get it included or sent out in our notes
But there are also instructions in I think it's the nine most commonly spoken languages in King County available as well through that
If you just go to King County, they've got on their Web site
Thank you
Are there any other comments? And Thursday is also Thursday is also the close of the legislative session
And the clean fuel standard hasn't passed yet
Not quite finished yet
I just want to pass
Things change so rapidly
But this is kind of important information
The county put a press release out this afternoon
There's 74 new COVID-19 cases reported in King County, bringing the total number to one hundred and ninety
We are on the taxi building
We did soap has been provided to that just one
You know, we're following up, but not for about the other recommendations on that
And you'll see also there's media things all in regarding Cruise
Other cities around the world are looking at this
And so news is coming about that just want to let you know
We'll continue to focus on that in relationship to cruise as well
Thank you
Thank you, MR Metruck
Any referrals to the calendar? Referrals? No other comment
All right
We're adjourned
Thank you
Thank you
You bet.

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