The Study Session meeting scheduled for 2021-10-12 at Remote

Transcript

The Study Session meeting scheduled for 2021-10-12 at Remote

THIS IS COMMISSION PRESIDENT FRED FELLEMAN CALLING TO ORDER THE SPECIAL MEETING OF OCTOBER 12, 2021
THE TIME NOW IS 832, AND WE'RE MEETING REMOTELY TODAY VIA TEAMS TO COMPLY WITH SENATE CONCURRENT RESOLUTION 8402 AND IN ACCORDANCE WITH GOVERNOR INSLEE PROCLAMATION 2028
THIS IS A STUDY SESSION OF THE COMMISSION REGARDING THE 2022 AVIATION DIVISION OPERATING IN CAPITAL BUDGETS
PRESENT WITH ME TODAY ARE COMMISSIONERS BOWMAN, CALKINS CHO, AND STEINBRUECK
I'LL ASK THAT WE DO A ROLL CALL OF ALL COMMISSIONERS TO ASSURE EVERYONE IS ONLINE
CLERK HART, PLEASE CALL THE ROLL
THANK YOU
BEGINNING WITH COMMISSIONER BOWMAN PRESENT
THANK YOU, COMMISSIONER CALKINS HERE
THANK YOU, COMMISSIONER CHO PRESENT THANK YOU, COMMISSIONER STEINBRUECK
THANK YOU, COMMISSIONER FELLEMAN, PRESENT
THANK YOU
YOU HAVE ALL COMMISSIONERS AND ATTENDANCE THIS MORNING
WELL, THANK YOU, CLERK HART, AND THANK YOU MEMBERS OF THE COMMISSION STAFF AND OUR LISTENING PUBLIC ON TEAMS FOR JOINING US ALL TODAY
I'LL ASK ALL PARTICIPANTS TO REMAIN MUTED WHEN NOT SPEAKING TO HELP ALLEVIATE ANY BACKGROUND NOISE DURING THE MEETING
WE HAVE A FULL AGENDA THIS MORNING AND HAVE TIME FOR QUESTIONS
SO I ASKED THAT WE ALL STAY MINDFUL OF OUR ADJOURNMENT TIME OF 1015
WE'LL HAVE ANOTHER MEETING BEGINNING PROMPTLY AT 1030
WE CERTAINLY ARE PACKING IT IN FOR ALL OF US AS WE APPROACH THE END OF THE YEAR AND BUDGET DISCUSSIONS ARE CRITICAL
COMMISSIONERS ARE ENCOURAGED TO USE THE TEAM'S TOOL FOR HAND RAISING OR THE CHAT BOX WHEN NEEDED
ALSO, THIS IS A STUDY SESSION TODAY'S FORMAT DOES NOT PROVIDE FOR PUBLIC COMMENT DURING THE MEETING, HOWEVER, WILL ALWAYS WELCOME WRITTEN COMMENTS AND OF COURSE, MEMBERS OF THE PUBLIC MAY SIGN IN TO ADDRESS THE COMMISSION UNDER THE PUBLIC COMMENT SECTION OF ANY REGULAR MEETING WHICH WILL FOLLOW THIS AT NOON
THIS MEETING IS BEING BROADCAST LIVE AND WE'LL BE AVAILABLE AFTER THE MEETING ON DEMAND ON THE PORT WEBSITE
OUR PRESENTATION TODAY IS PART OF THE 2022 BUDGET PROCESS BRIEFING
OUR TOPIC IS THE AVIATION DIVISION OPERATING AND CAPITAL BUDGETS
LET'S HEAR FROM EXECUTIVE DIRECTOR METRUCK TO OPEN OUR DAY AND INTRODUCE OUR PRESENTERS
EXECUTIVE METRUCK THANK YOU, PRESIDENT FELLEMAN
GOOD MORNING, COMMISSIONERS
THANK YOU FOR THIS TIME TODAY FOR A COMPREHENSIVE BRIEFING ON THE PROPOSED 2022 BUDGET FOR SEATTLE TACOMA INTERNATIONAL AIRPORT
IN OUR LONG RANGE CAPITAL IMPROVEMENT PLAN FOR AVIATION, SEA IS EMERGING FROM ONE OF THE MOST CHALLENGING EPISODES IN ITS HISTORY
THE COVID PANDEMIC WITH ARE EMERGING FROM THE COVID PANDEMIC, WITH A RELATIVELY HEALTHY FINANCIALS ENHANCED BY FEDERAL ASSISTANCE AND POSITIVE FORECASTS FOR TRAVEL GROWTH IN THE COMING YEAR
WE CAN CONGRATULATE LANCE LITTLE, MANAGING DIRECTOR OF AVIATION AND EVERYONE AT THE AIRPORT FOR WEATHERING THIS CRISIS AND LOOKING AHEAD TO DELIVERING ITS KEY PRIORITIES FOR THIS CRITICAL GATEWAY
YOU WILL HEAR FROM LANCE AND BORGAN ANDERSON, DIRECTOR OF AVIATION FINANCE AND BUDGET, THAT THE REBOUND AND TRAFFIC CAME MORE QUICKLY THAN ANTICIPATED
WHERE THIS YEAR WE EXPECT PASSENGER VOLUME TO BE 26% BELOW THE RECORD YEAR OF 2019
NEXT YEAR WILL BE JUST 5% BELOW, NOT TO ROB THE PRESENTATION, WE ARE MAKING SOME STRONG PROGRESS ON CAPITAL PROJECTS UNDER CONSTRUCTION DESPITE COVID RELATED DELAYS AND INCREASE COST WILL ALSO BE PLEASED TO HEAR THE AIRPORT IS MAKING PROGRESS TOWARDS ITS COMMUNITY EQUITY AND ENVIRONMENTAL STEWARDSHIP GOALS, INCLUDING REDUCING SKILL ONE AND TWO GREENHOUSE GAS EMISSIONS FREE REPLACEMENT PARTNERED WITH KING COUNTY ON A STUDY LOOKING AT THE CONVERSION OF MUNICIPAL SOLID WASTE TO AIRCRAFT FUELS IN IMPLEMENTING SUSTAINABLE PROJECT FRAMEWORK
ALL THIS WORK DOES NOT COME
INEXPENSIVELY
COSTS ARE GROWING AND YOU'LL SEE MANY OF THE PLAN NEW HIRES WILL BE CONCENTRATED IN SUPPORTING OUR CAPITAL IMPROVEMENT PROJECTS
THE NEED TO UPGRADE, MODERNIZED, AND EXPAND SEA TO HANDLE THE CURRENT AND FORECASTED GROWTH IS SIGNIFICANT
NEXT YEAR WE'LL FORECAST A HALF A BILLION DOLLARS IN CAPITAL SPENDING OVER THE NEXT FIVE YEARS
OUR CAPITAL PLAN WILL TOTAL NEARLY $4 BILLION AND THIS DOES NOT INCLUDE ANY SAMP NEARTERM PROJECT RELATED CONSTRUCTION
I'LL NOW TURN IT OVER THE PRESENTATION TO LANCE TO KICK US OFF
LANCE, GOOD MORNING
THANK YOU
EXECUTIVE DIRECTOR, METRUCK AND GOOD MORNING, COMMISSIONERS
THANK YOU FOR HAVING US HERE TODAY
I THINK SOMEONE IS GOING TO RUN THE SLIDES FOR US TODAY
OKAY
YES
THANKS
AS STEVE JUST SAID, THE BUDGET FOR 2021 OR FOR 2022 IS GOING TO LOOK SIGNIFICANTLY DIFFERENT THAN THE ONE FOR 2021 BECAUSE WE'RE EXPECTING TO BE BACK AT ABOUT 95% OF THE WORK PRIOR TO THE TO THE PANDEMIC
SO THIS MORNING, COMMISSIONERS AND SEE, WE HAVE A LOT OF MATERIAL TO COVER
HOWEVER, WE WANT TO MAKE SURE WE COVER THE INMATE THAT WORKS
I WANT TO MAKE SURE WE COVER THE INFORMATION THAT YOU WANT
SO WE'LL KIND OF TAKE YOUR QUEUE
THERE ARE AREAS THAT WE'RE GOING TO TOUCH ON ON EACH OF THE SLIDES, BUT THEY'LL TAKE YOUR QUEUE IN TERMS OF IF YOU NEED ADDITIONAL DETAILS ON ANY OF THE AREAS, FEEL FREE
MORGAN AND I WILL TRY TO ANSWER AS MANY QUESTIONS AS POSSIBLE, BUT I THINK WE HAVE SOME FOLKS ONLINE THAT MAY BE ABLE TO GET INTO SOME OF THE DETAILS I WILL FOCUS MAINLY ON LIKE CABLE WIFE
WE'RE GOING TO BE ASKING FOR ALL THESE RESOURCES AS PART OF FOR OPERATING AND CAPITAL BUDGET AND THEN ORGAN, WE'LL GET INTO MORE THAN WHAT WHAT WE'RE ASKING FOR
SO NEXT SLIDE, PLEASE
SO JUST REAL QUICKLY IN THE PRESENTATION OUTLINE AND COMMISSIONER OF HOME AND I'LL TRY TO MAKE SURE WE KEEP IT IN THE TIME FRAME TO YOU AND THE OTHER COMMISSIONERS HAVE ENOUGH TIME TO ASK SOME QUESTIONS
WE'LL JUST TALK AGAIN ABOUT THE PROCESS THAT WE GO THROUGH TO GET TO OUR BUDGET
MOST OF YOU HAVE SEEN THIS ALREADY
I THINK IT'S ALSO IMPORTANT THAT WE REITERATE HOW EVERYTHING THAT THE ORGANIZATION IS ALIGNED WITH THE OBJECTIVES THAT HAVE BEEN OUTLINED IN THE SAME AGENDA BY THE COMMISSIONERS
THING WE DO ON A YEAR TO YOUR BASIS IS ALIGNED WITH THE COMMISSIONERS DIRECTIVE THAT WE'VE BEEN GIVEN
OF COURSE, WE DO NOT OPERATE IN A VACUUM
THERE IS INTERNAL EXTERNAL FACTORS THAT WE HAVE TO CONSIDER TO LEVERAGE OR EVEN MITIGATE TO GET A STORE GOALS
AND WE'LL ALSO JUST REITERATE THE TEN STRATEGIC PRIORITY AREAS THAT WE FOCUS ON
AND AS I SAID, AFTER THAT BORGAN, WE'LL GET INTO THE DETAILS OF THE OPERATING ON THE CAPITAL BUDGET
THAT'S ALL THE RESOURCES THAT WE'RE ASKING FOR TO GET TO THESE RESOURCES OR TO GET TO THESE OUTCOMES
ARE THESE OBJECTIVES NEXT SLIDE, PLEASE
SO AGAIN, THIS PYRAMID BASICALLY SHOWS HOW WE ALIGN WITH THE GOALS AND OBJECTIVE THAT THE COMMISSIONERS HAVE ESTABLISHED
WE'RE JUST GOING TO FOCUS MAYBE ON JUST GIVE TWO EXAMPLES IN THE TWO OF THEIR GOALS THAT HAVE BEEN ESTABLISHED
ONE IS TO ADVANCE THIS REGION AS A LEADING TOWARDS AND DESTINATION AND BUSINESS ENGAGEMENT OF THE OTHER ONE IS TO BE A HIGHLY EFFECTIVE PUBLIC AGENCY
WE'RE GOING TO SHOW THE THINGS THAT WE'RE ASKING FOR IN OUR BUDGET ALIGNED WITH AT LEAST TWO OF THESE COURSE THAT'S ESTABLISHING THIS INTERACT AND THE NEXT ONE, SO MANY OF YOU HAVE SEEN THIS
THIS IS A PROCESS THAT WE GO THROUGH TO GET TO THE BUDGET
ONE OF THE THINGS I'VE ALREADY SAID IS THAT THE BUDGET IS NOT THE END
IT'S A MEANS TO AN END, AND THE END IS TO GET US TO THOSE LONG TERM GOALS, TO GET US TO THE CENTRAL AND THE GOALS THAT HAVE BEEN ESTABLISHED BY THE COMMISSION
EVERY THREE OR SO A YEAR, WE DO A FULL BLOWN STRATEGIC PLAN
BUT EVERY YEAR WE ACTUALLY REVIEW OUR LONG TERM GOALS TO ENSURE THAT WE ARE STILL IN ALIGNMENT
AND THOSE ARE THE GOALS WE'RE TRYING TO STILL ESTABLISH
WE'RE GOING TO TALK A LITTLE BIT ABOUT THE RESULTS OF OUR SWAT ANALYSIS
ONCE WE HAVE DONE AN ESTABLISH THE GOALS, WE DO WHAT'S CALLED A GAP ANALYSIS
WE LOOK AT WHERE WE ARE NOW RELATIVE TO WHERE WE'RE TRYING TO GET TO
AND THEN WE COME UP WITH STRATEGIC OBJECTIVES IN ORDER TO CLOSE THAT GAP, TO GET US TO THOSE GOALS
AND WE WILL HAVE KEY PERFORMANCE INDICATORS THAT WE USE AS OUR MEASURE TO GET US THERE
AND YOU'LL SEE SOME OF THESE AS WELL
SO ONCE WE HAVE DONE THAT, THAT'S KIND OF A STRATEGIC PLANNING PART OF THE PROCESS TO THE IMPLEMENTATION PART
THIS IS WHERE THE RUBBER MEETS THE ROAD
WE DEVELOP OUR ANNUAL BUSINESS PLAN
THESE ARE THE SPECIFIC THINGS THAT WE DO EVERY YEAR IN ORDER TO GET US TO THE LONG TERM GOALS
AND THEN IN ORDER TO EXECUTE THE THINGS IN OUR BUSINESS PLAN, WE ASK FOR RESOURCES
WE ASK FOR PEOPLE
WE ASK FOR MONEY, WE ASK FOR EQUIPMENT, AND THAT BASED STILL FORMS THE BUDGET
AND THAT'S WHAT WE'RE GOING TO BE
THAT'S THE DETAILS OF WHAT YOU'RE GOING TO BE SEEING TODAY, AND WE ACTUALLY TRICKLE THIS ALL THE WAY DOWN TO THE PERFORMANCE PLANS OF EACH OF THE INDIVIDUALS WITHIN THE AIRPORTS, EVERYTHING THAT EVERYBODY DOES AS PART OF THEIR PERFORMANCE PLAN
WELL, ALMOST EVERYTHING, ANYWAY IS ALIGNED SOME WAY SOMEHOW BACK ALL THE WAY UP TO THE CENTER AGENDA
SO THAT'S THE PROCESS THAT WE GO THROUGH NEXT SLIDE
I SO SORRY
THIS SLIDE IS KIND OF BUSY, BUT THIS SHOWS JUST SOME EXAMPLE OF HOW THE SPECIFIC THINGS THAT WE'RE DOING IN THE CENTER
AND IT ALSO GIVES AN OUTLINE OF WHERE WE ARE
WE HAVE LONG TERM GOALS
SO THIS KIND OF SHOWS US A STATUS OF WHERE WE ARE AND SOME OF THEM, AS YOU MAY RECALL, COMMISSIONERS, ONE OF THE GOALS THAT WE'RE TRYING TO GET THE LONG TERM OVER THE NEXT TEN TO 20 YEARS IS TO BECOME WHAT WE CALL A FIVE STAR RATED AIRPORT
SKYTRACKS FIVE STAR RATED AIRPORT
THERE'S NO FIVE STAR SKYTRACKS, FIVE STAR RATED AIRPORT IN THE USA OR IN NORTH AMERICA, I THINK RIGHT NOW AND THERE ARE VERY FEW FOUR STARS
SO OUR OBJECTIVE IS TO GET TO FOUR STAR BY 2025, AND THEN AFTER THAT, MAYBE WITHIN THE NEXT FIVE OR SO YEARS GET TO A FIVE STAR AIRPORT
SO WE ARE RIGHT NOW WE'RE AT A THREE
WE HAVE, LIKE, 50 AREAS THAT WE'RE MEASURING, AND EVERY YEAR IT'S GOING TO TRY TO GET TEN UP GOES TO FOUR STARS
SO RIGHT NOW WE'RE STILL ON TRACK TO BE A FOUR STAR SKYTRACK AIRPORT BY 2025
ANOTHER OBJECTIVE THAT WE HAVE JUST REAL QUICK IS TO HAVE 30 YEAR ON INTERNATIONAL SERVICES OVER 2000 MILES BY 2025
WE'RE ALSO TRACK IN THAT AREA
WE HAD ELEVEN SERVICES COMING BACK TO US AFTER THE PANDEMIC, AND WE HAVE TWO NEW SERVICES ALREADY THIS YEAR, AND WE HAVE WESTJET, ANOTHER NEW SERVICE TO START LATER THIS YEAR AS WELL
SO WE'RE ON TRACK THERE AS WELL
AND THE LEVEL OF SERVICE YOU GUYS HAVE HEARD ME SAY WE NEVER AGAIN TRY TO GET UP TO A LEVEL OF SERVICE FOR THE ENTIRE AIRPORT DURING PEAK
THAT'S THE LONG TERM GOAL
OUR GOAL FOR 2025 IS TO GET THE IF, ALL OUR GATES, CHECKPOINT, RESTROOMS, ETCETERA
UP TO LEVEL OF SERVICE OPTIMAL BY 2025
AND WE'RE ON TRACK IN DEPTH HERE AS WELL
NEXT SLIDE ON THE CAPITAL DEVELOPMENT SIDE, AND WE'RE GOING TO BE ASKING FOR A LOT OF RESOURCES IN THIS AREA
ORGAN IS GOING TO SPEAK MORE ABOUT THAT
WE HAVE SET A GOAL THAT AGAIN, IS ALIGNED WITH THE CENTURY AGENDA TO COMPLETE 75% OF LARGE AVIATION PROJECTS WITHIN BUDGET AND WITHIN SCHEDULE LARGE DEFINED AS PROJECT OVER 50 MILLION
WE ARE DELAYED
WE'RE NOT ON TRACK IN THAT AREA
WE HAVE TWO PROJECTS, THE IF AND THE PACKAGE OPTIMIZATION THAT'S BEHIND SCHEDULE RIGHT NOW
SO WE'RE WORKING TO TRY TO GET THOSE DONE
ANOTHER OBJECTIVE THAT WE HAVE IS TO HAVE 75% OF THE SCHEDULED MY PHONE
WELL, IT'S NOT A LARGE PROJECT
IT SAYS LARGER, BUT IT'S ACTUALLY FOR ALL OUR PROJECTS TO HAVE FIVE OF THE GOALS EACH YEAR
RIGHT NOW WE'RE ON TRACK
WE'RE AT AND THEN WE HAVE OUR CASH FLOWS THAT WE ALSO ATTRACT AND OUR OBJECTIVE YEAR, WHERE YOUR STATE 75% OF PLANNED CASH FLOW
SO WE'RE ABOUT 93%
SO WE'RE ON TRACK IN THAT AREA AS WELL
NEXT SLIDE, AS I SAID, WE DON'T OFFER IT IN A VACUUM, THEIR INTERNAL AND EXTERNAL FACTORS THAT WE HAVE TO CONTEMPLATE
WE HAVE TO MITIGATE THE WEAKNESSES AND THE THREATS AND WE HAVE TO TAKE ADVANTAGE OF OUR STRENGTHS AND OPPORTUNITIES
OUR RECOVERY IS REALLY UNCERTAIN
BERGEN IS PROBABLY GOING TO TALK A LITTLE BIT MORE ABOUT THAT
WE WERE ON THIS REALLY NICE PATH TO RECOVERY, BUT THEN THE DATA VARIANT JUST CAME OUT OF NOWHERE AND THAT'S BECOME A CONCERN
BUT WE'RE STILL ON TRACK TO COME BACK
WE HAVE TWO VERY STRONG HUB AIRLINES HERE AT THE AIRPORT AT THAT FAVORS VERY WELL FOR US
WE HAVE BRAND NEW FACILITIES, THE NORTH SATELLITE
WE THE IF THAT'S GOING TO BE OPEN IN SOON AND WE HAVE A MAJOR CAPITAL DEVELOPMENT PROGRAM THAT'S UNDERWAY THAT YOU'RE GOING TO HEAR ABOUT
WE DID NOT REALLY SLOW DOWN DURING THE PANDEMIC, AND WE'RE GOING TO BE NEEDING A LOT OF RESOURCES TO SUPPORT THE PROGRAMS GOING FORWARD
YOU'RE GOING TO SEE THAT IN OUR BUDGET REQUESTS
WE'RE ALSO FORTUNATE TO GET A LOT OF SUPPORT FROM FEDERAL RELIEF
THE INDUSTRY GOT 20 BILLION
WE GOT ALMOST 400 MILLION
WE'RE REALLY ADVOCATING FOR THE INFRASTRUCTURE PACKAGE WHO ARE HOPING WILL BE PASSES 20 BILLION IN THERE FOR AIRPORTS AGAIN WHEN WE'RE HOPING TO GET ABOUT 400 MILLION OVER FIVE YEAR PERIOD
NEXT SLIDE, THESE ARE THE SAME AREAS THAT WE HAD LAST ERAS OF FOCUS
THEY REMAIN THE SAME
JUST REALLY WANT TO HIGHLIGHT ALL THE THINGS THAT WE ARE ASKING FOR AS PART OF THE CAPITAL AND THE OPERATING BUDGET IS ACTUALLY IN ALIGNMENT OR IN SUPPORT OF THESE TOP TEN STRATEGIC AREAS
NEXT SLIDE WE HAVE GONE THROUGH
WE HAVE UPDATED OUR GOALS AND OBJECTIVES
AS I SAID, WE REVISE AND REVIEWED WHAT WE'RE TRYING TO GET TO BY 2025 STILL REMAINS PRETTY MUCH INTACT
YOU'RE GOING TO SEE WHAT WE'RE TRYING TO ACHIEVE FOR 22 NOW WHAT WE'VE DONE, WE HAVE A LOT OF STUFF THAT WE'RE TRYING TO GET DONE ON THIS BUDGET
AS THE THING STEVE MENTIONED EARLIER IS VERY DIFFERENT THAN THE BUDGET BEFORE, BECAUSE WE EXPECT TO GET BACK TO ABOUT 90 95% OF WHERE PIER TO THE PANDEMIC
SO WE EXPECT TO GET EVERYTHING DONE BECAUSE WE WERE ASKING FOR RESOURCES
HOWEVER, WE HAVE PRIORITIZED THE LIST OF REQUESTS THAT WE HAVE JUST IN CASE, FOR WHATEVER REASON, WE CAN'T GET EVERYTHING DONE
THEN WHAT'S THE PRIORITY? DO WE TRY TO FIGURE IT OUT IN THE MIDDLE OF NEXT YEAR WHEN SOMETHING MIGHT BE HAPPENING? OR DO WE TRY TO FIGURE IT OUT FROM NOW? AND SO WE HAVE THREE PRIMARY CATEGORIES, THE THINGS THAT WE MUST GET DONE, THE THINGS THAT OUR REGULATORY, THE THING THAT COMMISSIONERS HAVE DIRECTED US TO DO
SO THAT'S ONE CATEGORY
THEN WE HAVE WHAT'S CALLED OUR WILDLY IMPORTANT
BUT THESE ARE THE TOP FIVE THINGS THAT WE MUST DO NO MATTER WHAT
AND THEN WE HAVE WHAT WE CALL THE PRETTY IMPORTANT COST ACRONYM PEAKS FOR THOSE THINGS
SO THOSE ARE THE THREE CATEGORIES THAT WE HAVE TO PRIORITIZE THE WORK THAT WE'RE DOING
BUT THE OBJECTIVE IS TO GET EVERYTHING DONE
WE TAKES AND OF COURSE, THE MOST DOES AND THE REGULAR TOURIST STUFF
NEXT SLIDE IT'S A COUPLE OF EXAMPLES OF THE MOST DOES
FOR EXAMPLE, WE HAVE TO MAINTAIN OUR OPERATING CERTIFICATE, SO WE HAVE TO DO A PART 139 INSPECTION EVERY YEAR BY THE FAA
FOR THE LAST THREE YEARS, WE HAVE HAD ZERO DISCREPANCIES, AND WE WANT TO MAINTAIN THAT TSA AUDIT
FOR THE LAST FOUR YEARS, WE HAVE HAD ZERO DISCREPANCIES
AGAIN, WE'D LIKE TO CONTINUE THAT AND WE HAVE OTHER AREAS IN TERMS OF OUR TO RESPOND TO NON COMPLIANT ISSUES WITHIN FIVE DAYS
AS AN EXAMPLE, I WANT TO MAKE SURE WE MAINTAIN WE MAINTAIN THOSE
SO THESE ARE EXAMPLES OF SOME OF THE THINGS THAT WE ACTUALLY MUST DO, SOME OF THE THINGS THAT ARE REGULATORY
NEXT SLIDE AGAIN, THESE ARE OTHER EXAMPLES OF THINGS THAT OUR REGULATORY AND THAT WE MUST DO DIRECTIVE THAT WE HAVE GOTTEN FROM COMMISSIONERS RESILIENCY
WE'RE GOING TO BE DOING AN EXERCISE EACH YEAR
THAT EXERCISE COULD RANGE FROM HOW WE RESPOND TO A CLEAN CRASH
IT COULD BE HOW WE RESPOND TO AN ACTIVE SHOOTER
IT COULD BE AN EARTHQUAKE, ET CETERA
BUT WE'RE GOING TO BE DOING THAT EVERY YEAR
WE HAVE MONEY IN THE BUDGET NEXT YEAR ALSO TO CONTINUE AND EXPAND THE TRAIN AND FOR HUMAN TRAFFIC EXTRA
THESE, AGAIN, ARE SOME OF THE EXAMPLES IN THE MOSCOW CATEGORY
NEXT SLIDE AND COMMISSION DIRECTED CATEGORY AS WELL
AND THESE ARE EXAMPLES OF WEEKS ACHIEVE A 5% REDUCTION IN MAJOR INCIDENT RATES THAT THE AIRPORT SAFETY IS EXTREMELY IMPORTANT TO US
DISCOVER CHALLENGING ONE FOR US BECAUSE IT DOES NOT ONLY DEPEND ON US, WE HAVE TO DEPEND ON PRETTY MUCH EVERY TENANT WITHIN THE AIRPORT TO ACTUALLY MEET THESE GOALS
AND MAJOR INCIDENTS COULD INCLUDE DAMAGE TO AN AIRPLANE, SOMEBODY GETS INJURED, AN INCIDENT THAT COST OVER $1,000, ET CETERA
SO OUR GOAL IS TO GET A 5% REDUCTION
I MENTIONED THE SKY TRACK GOALS THAT WE HAVE AND OF COURSE, FINANCIAL SUSTAINABILITY
AS WE DO ALL OF THIS, WE HAVE TO MAKE SURE WE MAINTAIN A DEBT SERVICE COVERAGE AT 1.4
BUT BORGAN IS GOING TO TALK ABOUT THAT, AND WE'RE TRYING TO GET TO A 14 MONTH OFF ON CASH ON HAND BY 2022
OUR LONG TERM GOAL IS TO GET TO 18 MONTHS OF CASH IN HAND
NEXT SLIDE THESE ARE EXAMPLES OF SOME OF WHAT WE CALL PIGS, AS YOU SAW, COMMUNITY WITH A PRIORITY UNDER THE WEEKS
WE ALSO HAVE COMMUNITY AS A PRIORITY AND THE PRETTY IMPORTANT GOALS AS WELL
WE HAVE SEVERAL OBJECTIVES AND TARGETS THAT WE HAVE AS PART OF A NOISE WORKING GROUP AND THE FEDERAL POLICY WORKING GROUP OUR GOAL IS TO ACTUALLY ACHIEVE ALL OF THOSE IN 2022 FOR CUSTOMER SOME EXPERIENCE GOALS
YOU CAN SEE SOME OF THOSE GET EVERYBODY THROUGH THE SECURITY CHECKPOINT WITHIN 22 MINUTES OR LESS
THE CAPITAL DEVELOPMENT PART COMPLETE THE SAM ESTIMATE THAT'S WHAT SAM IS GOING TO BE PASSED IN US
WE PLAN TO COMPLETE THAT BY Q ONE
NEXT SLIDE, PLEASE
I ANOTHER EXAMPLE OF PEAKS
COMMISSIONERS
WE HAVE BEEN AGAIN WORKING VERY HARD WITH THE ENVIRONMENTAL GROUP TO TRY TO ENSURE THAT WE MEET THE GOALS AND OBJECTIVES AS ESTABLISHED BY THE COMMISSIONERS TO REDUCE GREENHOUSE GAS EMISSIONS AT THE AIRPORT, NOT JUST SCOPE ON SCOPE TO BUT ALSO SCOPE THREE
SO THESE ARE JUST SOME OF THE EXAMPLES OF WHAT WE'RE TRYING TO MEET
NEXT SLIDE
AND I THINK THIS IS MY FINAL SLIDE, THE SUSTAINABILITY PROJECT FRAMEWORK
WE REALLY GOT A CHANCE TO RUN IT THROUGH THE FIRST MAJOR PROJECT, WHICH IS THE C ONE OR WHAT WE'RE INTO A CLOUD IN THE CONCOURSE EXPANSION PROJECT
IS THERE LOTS OF LESSONS LEARNED
SO THE ENVIRONMENTAL TEAM AND OUR TEAM, THE ARRAIN TEAM, IS GOING TO ACTUALLY GO THROUGH AND TWEAK AND FINALIZE THAT SUSTAINABLE PROJECT FRAMEWORK
WE'RE REALLY LEARNED A LOT FROM THAT
JUST SOME OF THE HOW WE'RE DOING STUFF AND TRY TO ESTABLISH THE FRAMEWORK FOR BUDGETING PROCESS
I'M GOING TO NOW HAND OVER TO OREGON AND OREGON IS GOING TO GET INTO A LOT MORE OF THE DETAILS
IF COMMISSIONERS HAVE ANY QUESTIONS AT THIS POINT, WE CAN OR WE CAN WAIT UNTIL BORGAN IS FINISHED TO ANSWER ANY QUESTIONS AND OVER TO BORGAN? WELL, I THINK, LANCE, THAT WAS GREAT AND EXACTLY ON TIME
COULD WE JUST TAKE A QUICK MINUTE TO MAKE SURE THAT THERE'S A SEE WHAT THE COMMISSION THINKS OF ANY CLARIFYING OR QUESTIONS AS A RESULT OF THAT VERY ARTICULATE AND EXPEDITED PRESENTATION? GO AHEAD AND RUN THROUGH THE RULE BEGINNING WITH COMMISSIONER BOMAN
WELL, COMMISSIONER
BOWMAN
OH, SORRY
I'M TRYING TO TURN MY CAMERA ON HERE
IT'S NOT WORKING
I DON'T HAVE ANY QUESTIONS RIGHT AT THE MOMENT, LANCE, I PREFER IF YOU JUST KEPT GOING
THANK YOU
I CAN NONE FOR ME EITHER
THANK YOU, COMMISSIONER CHO I'M GOING AS WELL
THANKS TO THIS IS GREAT COMMISSIONERS STEINBRUECK? HOW WAS THE 400 MILLION DIVID UP FROM THE FEDERAL RELIEF PACKAGE? WHERE DID IT GO? OH, IT WAS A I CAN GIVE THE DETAIL, BUT IT WAS PRIMARILY FOR OPERATING EXPENSE AND DEBT SERVICE PAYMENT
RIGHT AGAIN
CORRECT
I'LL COVER THAT A LITTLE BIT LATER
SO NO DIRECT RELIEF TO TENANTS OR YES, AS PART AS THE SECOND PACKAGE
THE CHRIS AND THE ARPA HAD ONE SPECIFICALLY ALLOCATED FOR THE CONCESSIONAIRES AND RENTAL CAR COMPANIES, ETC
SO ORGAN IS GOING TO GET INTO SOME
ALL RIGHT
OKAY
I CAN WAIT
THANK YOU
THANK YOU, COMMISSIONER
FOLLOW ME
THANK YOU
I GUESS NOT NECESSARILY THE ANSWER AT THIS MOMENT, BUT A COUPLE OF THINGS THAT DID JUMP OUT AT ME AND I KNOW I SAW ON THE LATER THAT WE DON'T HAVE A SAM CONTINGENCY BUILT IN ALL OF THE NUMBERS WE HAVE OUR NOT INCLUDING SAM, AND OBVIOUSLY THERE'S SOME UNCERTAINTY, OF COURSE, BUT I DON'T
PERHAPS YOU CAN TELL ME WHETHER MAY OR MAY NOT BE A CONTINGENCY IN THERE
I ALSO NOTE THAT SPECIFICALLY WE HAVE A SLOWER GOAL WITHIN THE SUSTAINABLE AVIATION FUEL GOAL
AND IT JUST SEEMS TO ME IS A VERY SPECIFIC POINT THAT WE'D LIKE TO SEE ADDRESSED AND THEN ALSO THE WHAT DO YOU CALL IT THE PART 50 NOISE
SO THE GOAL IS OF THE 14, 150 NOISE
AND I JUST WOULD LIKE AT SOME POINT FOR US TO HAVE A REMIND US ABOUT HOW THAT NUMBER GOT PICKED IS THAT I THINK IT WAS A FEASIBILITY QUESTION, BUT WE CAN GO ON
I JUST WANT TO PUT THOSE QUESTIONS OUT THERE UNLESS THERE'S A REAL FAST ANSWER TO ANY OF THOSE
WELL, THE SAM, AS I SAID IN ONE OF THE SLIDES, WE'RE GOING TO BE DOING THE ESTIMATE BY Q ONE OF NEXT YEAR
ACTUALLY, IT WAS YESTERDAY WORKING
WE JUST MET WE WENT THROUGH ACTUALLY VARIOUS DIFFERENT SCENARIO FOR CIP, WHICH INCLUDES AND DOES NOT INCLUDE SAM OR VARIOUS DIFFERENT VERSION OF THE SAM, SO WE CAN MAYBE TALK ABOUT THAT ELITE WHAT WE WE DO NOW ALL AT OUR WORK AND THERE IS ACTUALLY A HUGE INGENIUS ASSOCIATED WITH IT, DEPENDING ON WHICH ONE OF THE SCENARIOS WE ACTUALLY END UP CHOOSING
BUT I DON'T THINK IT'S PART OF TODAY'S PRESENTATION, IS IT? NO, IT'S NOT
ALRIGHT
SO I MEAN, IT OBVIOUSLY IS A MAJOR BUDGET IMPLICATION
SO MAYBE YOU CAN JUST GIVE US AN ORDER OF MAGNITUDE WHEN YOU GO INTO FURTHER DISCUSSION
OKAY
VERY GOOD
ALRIGHT, LET US PROCEED
YES, I WILL GET READY
TURN TO THE QUESTION RELATED TO THE 550, NOT LATER IN THE PRESENTATION
I'LL TRY TO GET A RESPONSE TOGETHER FOR THAT
THANK YOU
OKAY
TURNING TO SLIDE 16 HERE BEFORE I GET INTO THE NUMBERS
I'D LIKE TO JUST GO OVER A LITTLE BIT OF THE DRIVERS, AND I THINK BOTH STEVE AND LANCE HIT ON THE FIRST TWO POINTS AND THEY'RE EXTREMELY IMPORTANT FOR OUR BUDGET FOR 2022
ANOTHER FACTOR IS JUST TO REMIND EVERYBODY THAT WE REALLY DID CUT OUR BUDGET SIGNIFICANTLY IN 2000 AND 22,021
AND SOMETIMES THERE ARE COSTS THAT YOU CAN PUT OFF FOR A YEAR, SOMETIMES TWO YEARS
BUT WE'RE FINDING THAT A THIRD YEAR IS ALMOST IMPOSSIBLE
SO WE'VE GOT A LOT OF THINGS THAT ARE JUST COMING BACK TO OUR BUDGET AND 2022, AND IT'S ALL COVERED LATER
THERE'S ELEMENTS OF CAPITAL PROJECTS THAT HAVE EXPENSE PIECES, AND WE'VE GOT TO INCUR THOSE AS WELL
AND ON A POSITIVE SIDE, HAVING THE FULL OPENING OF THE INTERNATIONAL ARRIVALS FACILITY AND PHASE TWO OF THE NORTH SATELLITE
IT'S GREAT FROM A CUSTOMER SERVICE STANDPOINT, BUT FROM A BUDGET STANDPOINT, WE HAVE THE COSTS OF OPERATING AND MAINTAINING THOSE FACILITIES IN 2022
AND WHILE WE WE ARE SEEING COSTS GO UP IN MANY AREAS
THE GOOD NEWS IS WE DID RESERVE SOME OF THE FEDERAL RELIEF MONEY FOR 2022, SO THAT WILL GO A LONG WAY TO HELP US OFFSET AIRLINE RATE INCREASES
AND ANOTHER POINT I WANT TO MAKE IS THAT THE AVIATION DIVISION TOOK THE 2021 BUDGET AS THE STARTING POINT FOR BUILDING OUR 2022 BUDGET
AND BECAUSE THAT 2021 BUDGET WAS REALLY CUT TO THE BONE, WE DESCRIBED IT A LITTLE BIT AS A ZERO BASED BUDGET IN THE SENSE THAT WE WANTED TO BE VERY THOUGHTFUL AND DELIBERATE ABOUT EACH ITEM
WE ADDED BACK
WE DIDN'T WANT TO JUST AUTOMATICALLY BRING BACK THINGS BECAUSE THEY WERE IN THE 2020 BUDGET, FOR EXAMPLE
SO THAT'S AN IMPORTANT CONSIDERATION
NEXT SLIDE, PLEASE
SO THIS IS THE VISUAL VIEW OF OUR PASSENGER RECOVERY
AND THE GREEN BAR IS OUR ESTIMATE FOR 2022
AND IS LANCE INDICATED WE'RE EXPECTING TO BE DOWN 5% FROM 2019, BUT IT'S STILL IT'S A 35% GROWTH OVER WHERE WE ARE THIS YEAR
SO SIGNIFICANT GROWTH GOING INTO NEXT YEAR
THE STORY IS REALLY THE SAME
THE RECOVERY IS BEING DRIVEN BY THE DOMESTIC LEISURE MARKET
BUSINESS AND INTERNATIONAL ARE LAGGING
WE DO EXPECT BUSINESS TRAVEL TO COME BACK NEXT YEAR AND AT LEAST THE EUROPEAN SIDE OF THE INTERNATIONAL TRAFFIC
A LOT OF EXPERTS THINK THE ASIAN SIDE MAYBE LAGGING FURTHER
STILL
NEXT SLIDE, PLEASE
AND THE VIEW OF OUR CAPITAL PROGRAM, CERTAINLY THE LAST FOUR YEARS WE HAVE SPENT LITERALLY THE HIGHEST LEVEL WE'VE EVER SPENT FOR THE AVIATION DIVISION
AND WHAT WE'RE BUILDING TO IS SOMETHING THAT IS SIGNIFICANTLY ABOVE THAT
AND WE'LL TALK ABOUT SOME OF THE PROJECTS THAT ARE DRIVING THAT WOULD CARRY
STEVEN STARTS TO GET INTO THE DETAILS OF THE CAPITAL PROGRAM, BUT TO YOUR POINT, COMMISSIONER FELLEMAN, THIS FORECAST, AS HIGH AS IT IS, DOES NOT INCLUDE SAM
AND WHEN WE START TO LAYER IN THOSE PROJECTS OVER THE NEXT FIVE TO TEN PLUS YEARS, WE'LL LIKELY SEE A CONTINUED VERY HIGH LEVEL OF SPENDING GOING OUT
NEXT SLIDE, PLEASE
SO WHAT I WANT TO START WITH HERE IS JUST HOW WE BUILD THE BUDGET
AND THIS IS JUST THE AVIATION SPECIFIC BUDGET
LATER ON, I'LL SHOW THE TOTAL AIRPORT COST, INCLUDING THE COST FROM CENTRAL SERVICES
WHAT WE START WITH IS OUR 2021 BUDGET
EVERYTHING IN GREEN IS A COST REDUCTION
EVERYTHING IN RED IS A COST ADDITION
SO THE FIRST THING WE DO IS WE PULL OUT EVERYTHING THAT WAS A NON RECURRING ITEM THAT WAS IN THE 2021 BUDGET, AND THEN WE LOOK FOR SAVINGS AND THE MOST SIGNIFICANT SAVINGS
THE COST REDUCTION COLUMN THERE IS THAT WE ELECTED TO INCREASE THE PAYROLL VACANCY FACTOR TO 5%
IT WAS ONE AND A HALF PERCENT IN 2021
AND THIS AVIATION HERE ACCOUNTS FOR A LITTLE OVER SIX AND A HALF MILLION DOLLARS OF SAVINGS
WE THINK IT'S A REASONABLE ASSUMPTION, BUT IT DOES REPRESENT A SIGNIFICANT RISK IN OUR BUDGET WHEN IT COMES TO COST INCREASES IN THIS LINE ITEM THAT'S CHARGES TO CAPITAL
THERE'S SOME OFFSETS BUILT IN THERE
WE'RE ADDING A LOT OF RESOURCES CONSULTANTS TO SUPPORT OUR CAPITAL PROGRAM, BUT MOST OF THOSE ARE BEING CHARGED TO CAPITAL
SO THE REAL DRIVERS HERE IN OUR COST INCREASES ARE JUST OUR PAYROLL COSTS
AND I THINK AS DAN THOMAS TALKED ABOUT TWO WEEKS AGO, IT INCLUDES THE COST OF OUR REPRESENTED WORKERS FOLLOWING THE TERMS OF THEIR CONTRACTS, AS WELL AS AN ESTIMATED 6% INCREASE FOR THE PAY FOR PERFORMANCE FOR THE NON REPRESENTED FOLKS
IN ADDITION, WE HAVE A NUMBER OF COSTS THAT ARE TIED TO OUR REVENUES AND SOME OTHER COST INCREASES BELOW THAT LINE
WHAT WE CALL THE BASELINE ARE REALLY WHAT THE REST OF THE PRESENTATION IS GOING TO TALK ABOUT IS ALL THE NEW ADDITIONS THAT WE'RE REQUESTING, AND THE TOTAL ABOUT $39 MILLION
SOME OF THEM ARE PROPOSED TO BE ADDED TO THE BASELINE, AND SOME ARE ALSO NON RECURRING ITEMS BUT GOING FROM 242,000,000 TO 286 IS WHAT THE NEXT SLIDE WILL ILLUMINATE
NEXT SLIDE, PLEASE
SO I'M GOING TO GIVE YOU THREE SLIDES IN A ROW THAT SLICE OUR BUDGET REQUESTS IN DIFFERENT WAYS TO HELP YOU UNDERSTAND WHAT WE'RE DOING
GIVEN THE QUANTITY OF THE PROPOSED ITEMS 203, I WILL NOT BE GOING THROUGH EACH ONE INDIVIDUALLY, BUT I'LL TRY TO GIVE THE HIGHLIGHTS, BUT I WOULD WANT TO SAY UP FRONT THAT IN THE APPENDIX, WE HAVE LISTED EVERY SINGLE ONE OF THESE ITEMS SO LET ME START ON THE LEFT SIDE AND LOOKING AT OUR OVERALL NUMBERS
WE HAD BUDGET REQUESTS TOTALING ALMOST 49 MILLION, AND WE'RE PROPOSING FOR APPROVAL 39 MILLION
OF THOSE LOOKING AT THE FTES AGAIN, 106 WERE PROPOSED, AND WE ARE PROPOSING FOR APPROVAL 81.6 AND THEN ON THE RIGHT SIDE, TYING BACK TO THE CATEGORIES THAT LANCE DISCUSSED WITH YOU A MOMENT AGO
YOU CAN SEE HOW THOSE SAME BUDGET REQUESTS ARE ORGANIZED BY THE MUST, THE WIGS AND THE PIGS
AND THEN WHAT I'VE ALSO DONE IS BREAK OUT TWO MORE CATEGORIES BECAUSE I THINK THEY'RE HELPFUL AND THAT'S THE EXPENSE TIED TO CAPITAL PROJECTS
AND REALLY THOSE ARE THOSE ARE MUTED, TOO
UNLESS YOU WANT TO CANCEL THE CAPITAL PROJECT AND THEN THE NEW FACILITY COSTS
WHEN WE BRING ON A LOT OF NEW SPACE, WE HAVE TO MAINTAIN THAT SPACE
WE HAVE TO CLEAN THE SPACE, WE HAVE TO CLEAN THE WINDOWS
AND SO THERE'S A LOT OF COSTS TIED TO NEW FACILITIES
AND THEN, OF COURSE, WE HAVE OTHER ITEMS AS WELL, WHICH WILL TOUCH ON NEXT SLIDE, PLEASE
SO WHAT I'M DOING ON THIS SLIDE IS HIGHLIGHTING THE BIGGEST INDIVIDUAL DOLLAR ITEMS AND SO YOU CAN SEE AT THE TOP OF THE LIST
AIRLINE REALIGNMENT
THIS IS THE PROJECT TO REALLY OPTIMIZE OUR USE OF THE INTERNATIONAL ACCESSIBLE GATES ON CONCOURSE, AND IT REQUIRES MOVING UNITED OFF OF CONCOURSE OVER TO CONCOURSE B, MOVING DELTA OVER TO CONCOURSE AND MOVING THEIR RELATED FACILITIES AND SPACES
SO IT'S ACTUALLY QUITE A COMPLEX PROJECT, AND THERE WILL BE EXPENSE ELEMENTS OF IT
THE SECOND ITEM IS 81 FTES AND THE COST TO OUR BUDGET
NOW, MANY OF THEM ARE BEING CAPITALIZED BECAUSE THEY SUPPORT THE CAPITAL PROGRAM, BUT THERE STILL IS A SIGNIFICANT COST
THE NEXT ITEM IS THE CONSOLIDATED SERVICES CONTRACT, AND THIS IS THE CONTRACT WE USE TO PROVIDE SUPPORT FOR THE CHECKPOINT QUEUING
WE USE IT OUT IN THE GARAGE FOR THE GROUND TRANSPORTATION OPERATIONS
THEY'RE THE SERVICE PROVIDERS THAT REALLY HELP PASSENGERS AND HELP US THROUGH OUR BUSY TIMES
WE'RE BRINGING THIS BACK AS A REQUEST THIS YEAR
IT'S AN EXISTING CONTRACT, BUT WE FEEL WE FINALLY RIGHT SIZED IT
WE CUT IT BACK DRAMATICALLY FOR THIS YEAR, AND NOW WE'RE BRINGING UP BACK TO A LEVEL THAT WE THINK IS PROBABLY THE RIGHT LEVEL GOING FORWARD
SO IN THE FUTURE, WE EXPECT THIS WILL BE PART OF THE BASELINE BUDGET
NEXT ITEM IS PLANNING
WE HAVE A NUMBER OF PLANNING STUDIES
THE MOST SIGNIFICANT ITEM WITHIN THIS ONE, 7 MILLION IS A PLAN TO STUDY THE ULTIMATE REPLACEMENT FOR THE SATELLITE TRANSIT SYSTEM THAT CONNECTS TO THE NORTH AND SOUTH SATELLITE TO THE MAIN TERMINAL, AND THAT SYSTEM WILL BE REACHING THE END OF ITS LIFE IN ABOUT TEN YEARS OR SO, AND BEING ABLE TO START THE PLANNING PROCESS FOR WHAT COMES NEXT IS CRITICAL
THE NEXT ITEM IS, OF COURSE, COMPLETING THE SUSTAINABLE AIRPORT MASTER PLAN, ENVIRONMENTAL REVIEW THAT'S OBVIOUSLY GONE ON A LITTLE BIT LONGER THAN WE ORIGINALLY ANTICIPATED, BUT WE DO EXPECT TO COMPLETE THAT NEXT YEAR
THE OTHER ITEMS, I THINK MANY OF THEM ARE SELF EXPLANATORY, AND YOU'VE SEEN THEM BEFORE
I DID WANT TO CALL OUT STOCK, FURNITURE AND EQUIPMENT
THIS IS THE OFFICE BUILDING ACROSS THE STREET FROM THE AIRPORT, AND THIS IS THE SPACE THAT IS BEING OCCUPIED BY THE INTERNATIONAL ARRIVALS FACILITY CONTRACTOR
WHEN THEY MOVE OUT, WE WILL BE TAKING OVER THAT SPACE AND WE NEED TO FURNISH IT
THE OTHER THING I WANTED TO MENTION WAS THE AE CONFERENCE SPONSORSHIP
WE'RE EXCITED TO HAVE THAT CONFERENCE COMING TO SEATTLE NEXT YEAR, AND THAT'LL BE AN OPPORTUNITY TO SHOWCASE SOME OF THE NEW AIRPORT FACILITIES AS WELL
SO WITH THAT, LET'S MOVE ON TO THE NEXT SLIDE, PLEASE
SO THIS IS THE LAST SLIDE THAT SLICES AND DICES THOSE 203 BUDGET REQUESTS
AND HERE AGAIN BY THE SAME STRATEGIC CATEGORIES THAT LANCE HIGHLIGHTED EARLIER
AND YOU CAN SEE WHERE THE SIGNIFICANT DOLLARS AND FTES ARE GOING
AND I'LL JUST SAY NOW IN THE NEXT TWO SLIDES AFTER THIS, I'LL BE HIGHLIGHTING FURTHER WHAT'S INSIDE THESE
BUT RIGHT NOW, I JUST WANTED TO HAVE YOU FOCUSED THAT IT'S REALLY HEALTH AND SAFETY
IT'S CUSTOMER EXPERIENCE, ITS ENVIRONMENT AND SUSTAINABILITY
AND THEN FINALLY, THE MOST RESOURCES ARE GOING TO ASSET MANAGEMENT, CAPITAL PLANNING AND CAPITAL DELIVERY
THAT'S WHERE WE SEE 44 FTES AND ALMOST $20 MILLION
NEXT SLIDE, PLEASE
SO HERE ARE WHAT I'LL CALL THE HIGHLIGHTS INSIDE EACH OF THOSE CATEGORIES, AND I'M NOT GOING TO TOUCH ON EACH ONE OF THESE
BUT AS LAND SYNDICATED AT THE OUTSET UNDER HEALTH AND SAFETY, WE DO HAVE THE RESILIENCY EXERCISE, WHICH WE EXPECT TO BE AN ANNUAL EXERCISE UNDER COMMUNITY
YOU CAN SEE THE A CONFERENCE SPONSORSHIP THAT I MENTIONED IN LO AGO AND AT THE TOP RIGHT UNDER SOCIAL RESPONSIBILITY, YOU CAN SEE THE HUMAN TRAFFICKING TRAINING AND THAT'S THE FIRST OF WHAT'S EXPECTED TO BE THE PROGRAM
OTHER THINGS WORTH CALLING OUT UNDER CUSTOMER EXPERIENCE
WE ARE GOING TO IMPLEMENT A QUALITY ASSURANCE PROGRAM NEXT YEAR, AND THAT'LL BE REALLY IMPORTANT TO HELPING US MAKE SURE WE CAN IDENTIFY AREAS FOR IMPROVEMENT SO WE CAN MOVE THE RATINGS UP TOWARDS THE FOUR STAR
NEXT SLIDE, PLEASE
UNDER ENVIRONMENT SUSTAINABILITY
I WANTED TO CALL OUT THE BUILDING ENERGY EFFICIENCY AUDIT
THIS WILL BE STARTING THIS PROGRAM
THIS IS A NEW REQUIREMENT AND WE WANT TO GET OUT IN FRONT OF THAT
AND THEN WE ALSO HAVE WHAT IS THE PASSENGER MODE CHOICE STUDY, WHICH IS GOING TO BE AN IMPORTANT PART OF THE GROUND TRANSPORTATION ACCESS PLAN AND THEN SUPPORT FOR THE TRANSPORTATION MANAGEMENT ASSOCIATION PROGRAM THAT'S STARTING UP ACTUALLY THIS YEAR
NOW THE BIG DOLLARS ON THE RIGHT
AGAIN, I'VE TALKED ABOUT THE EXPENSE ELEMENTS OF THE CAPITAL PROJECTS
THAT'S OBVIOUSLY A BIG PIECE OF THIS
BUT HERE'S WHERE WE SEE JUST BUILDING BACK TO 95% OF OUR OPERATIONS, WE GOT TO MAINTAIN OUR EXISTING FACILITIES
SO THIS IS SIGNIFICANT DOLLARS AND TEN FTES
WE SEE SUPPORT OF THE CAPITAL PROGRAM IS 25 FTES, AND THESE ARE MOSTLY IN THE PROJECT MANAGEMENT GROUP, BUT SOME OF THEM ARE IN OUR OPERATIONS READINESS TEAM, AND SOME ARE IN FACILITIES AND INFRASTRUCTURE TO SUPPORT THE CAPITAL PROGRAM AS WELL
AND THEN WE HAVE COSTS ASSOCIATED WITH MAINTAINING OUR NEW FACILITIES
AND THESE WOULD BE MOSTLY MAINTENANCE FTES
I INDICATED THE PLANNING STUDIES AND THE STAFF ENVIRONMENTAL REVIEW ALREADY
NEXT SLIDE, PLEASE
OKAY
FROM AN FTE STANDPOINT, I THINK THE KEY HERE IS TO WHEN WE LOOK AT WHERE WE WERE IN 2020 AND WHERE WE'RE PROPOSING TO BE IN 2022
FROM AN FTE STANDPOINT, WE'RE PROPOSING TO BE IN EXACTLY THE SAME PLACE
BUT WHAT I'D LIKE TO CALL OUT IS THAT WE ARE GETTING THERE IN A VERY DIFFERENT WAY
AT THE BOTTOM OF THE SLIDE ON THE RIGHT
YOU CAN SEE THAT WE ACTUALLY HAD STEVE APPROVED 20 OF 21 FTE MID YEAR THIS YEAR AS WE STARTED TO GET OUR TRAFFIC COMING BACK
AND WITH THE 81 THAT WE'RE PROPOSING, THAT IS THE 102 FTES THAT WE HAD BASICALLY FROZEN LAST YEAR
BUT AT THE BOTTOM, IF YOU PUT THOSE TWO CATEGORIES TOGETHER, WE ARE ASKING FOR 51 NEW POSITIONS AND MAINTAIN AND ONLY UNFREEZING 51 OF THE FROZEN POSITION
SO AGAIN, JUST REINFORCING WHAT I SAID EARLIER
WE'RE BEING VERY THOUGHTFUL ABOUT THE POSITIONS WE ASKED FOR, AND IN MANY CASES, WHAT OUR NEEDS ARE NOW ARE ACTUALLY DIFFERENT FROM WHAT WE SAW BACK IN 2020
NEXT SLIDE, PLEASE
SO HERE IS THE ROLL UP OF ALL OF OUR EXPENSES
THIS INCLUDES THE COST FROM CENTRAL SERVICES
AND I'VE TRIED TO HIGHLIGHT SOME OF THE DRIVERS OF OUR PAYROLL COSTS AND SOME OF THE OTHERS
BUT THE BOTTOM LINE IS OUR COSTS COMPARED TO 2020 BUDGET ARE UP 5.4%
AND I HOPE THE EXPLANATIONS I'VE GIVEN FOR SOME OF THE DRIVERS OF OUR BUDGET HELP YOU UNDERSTAND HOW WE GOT THERE
NEXT SLIDE, PLEASE
IS THAT JUST A SEC HERE? YES
WELL, WHAT IS THE COMPARISON WITH 2019, WHICH WOULD BE A MORE TYPICAL YEAR THAN 2020 IN TERMS OF COST INCREASE? LET'S GO BACK THERE, PLEASE
OKAY
SO WHERE ARE WE? WE ARE PROPOSING A BOTTOM LINE OPERATING EXPENSE OF 397,000,000, AND THE 2019 ACTUAL WAS 355
I THINK THAT WHENEVER WE COMPARE TO A PRIOR YEAR, WE HAVE TO REMEMBER THAT THERE WAS A SIGNIFICANT PENSION CREDIT IN 20 AND 19, AND I BELIEVE IT WAS ABOUT FOR THE AIRPORT, IT WAS ABOUT $14 MILLION
SO LET'S JUST SAY THAT'S ABOUT 370,000,000
AND THAT COMPARES TO THE 397
THAT'S STILL AN INCREASE
BUT I THINK WHAT I'VE TALKED ABOUT HERE OVER THE LAST FEW SLIDES IS WE HAVE SOME SIGNIFICANT NEW FACILITIES
WE HAVE SOME SIGNIFICANT NON RECURRING COST DRIVERS LIKE THE AIRLINE REALIGNMENT
OUR BUDGET FOR 2022 IS WHAT WE FEEL WE NEED IN 2022
AND YES, IT IS HIGHER THAN 2019
NEXT SLIDE, PLEASE
OKAY
SO NOW WE'RE LOOKING AT A SUMMARY INCOME STATEMENT
SO WE SEE THE REVENUES ON THE TOP
AND I THINK WHAT WE'VE DONE HERE IS TO ADD IN SOME LINE ITEMS FOR THE FEDERAL RELIEF MONEY SO THAT WE CAN GIVE YOU A MORE COMPREHENSIVE VIEW OF OUR BOTTOM LINE AND WHERE THAT NI IS AFTER FEDERAL RELIEF, YOU CAN SEE THAT WE'RE ACTUALLY GOING UP SIGNIFICANTLY FROM 2020 BUDGET AND FROM PRIOR YEARS AND JUST TO A LARGE EXTENT IS DRIVEN BY THESE FEDERAL GRANTS, BUT IT'S STILL A VERY POSITIVE STORY ON OUR BOTTOM LINE
BUT COMMISSIONER STEINBRUECK, YOU CAN SEE THE FEDERAL RELIEF THERE
AND I'LL SHOW LATER EXACTLY HOW WE'VE USED IT
BUT YOU CAN SEE ALREADY HERE THE AMOUNTS THAT ARE EARMARKED OR EXCUSE ME, DESIGNATED FOR CONCESSIONS RELIEF
THE FIVE 3 MILLION IS THE CARISSA PROGRAM THAT WILL USE THIS YEAR AND THE ARPA MONEY THAT'S 21 MILLION WILL BE FOR NEXT YEAR
I THINK THE OTHER KEY POINT IS OUR KEY MEASURES THE DEBT SERVICE COVERAGE AND OUR CASH BALANCE
AND YOU CAN SEE FOR 2022 DEBT SERVICE COVERAGE 1.9 AS WELL ABOVE WHERE WE FEEL WE NEED TO BE, WHICH WOULD BE TARGETING SORT OF THE 135 TO ONE FOUR RANGE AND OUR CASH BALANCE
WE'RE RIGHT ON TARGET GETTING UP TO 14 MONTHS OF ONM COST
NEXT SLIDE, PLEASE
SO NOW I'M LOOKING AT OUR NON EAR NAUTICAL REVENUES COMPARED TO 2019, BECAUSE IT IS A GOOD THING
I THINK WHEN WE'RE LOOKING AT REVENUES TO COMPARE TO OUR LAST ACTUAL YEAR, AND IN THIS CASE, I'VE ADJUSTED FOR THE CONCESSIONS GRANT
SO I'VE IN EFFECT, ADDED THAT MONEY BACK IN
SO YOU CAN SEE THE TRUE PERFORMANCE OF THE BUSINESS UNIT
BUT NO SURPRISE IN 2020, ALL OF THESE BUSINESSES DROP SIGNIFICANTLY, AS DID THE PASSENGER LEVEL, WHICH IS IN BLACK
AND THEN IN 2021, WE'RE SEEING A VERY VARIED RECOVERY
SOME BUSINESSES LIKE PARKING ARE DOING QUITE WELL AND OTHERS ARE REALLY LAGGING
WHAT I'D LIKE TO HIGHLIGHT THOSE BY NEXT YEAR, WE EXPECT THAT PARKING, RENTAL, CAR AND DINING AND RETAIL WILL ALL BE VERY CLOSE TO THE 2019 LEVEL, AND THAT'S AN IMPORTANT PART OF OUR RECOVERY
SOME BUSINESSES LIKE GROUND TRANSPORTATION ARE STILL LAGGING
NEXT SLIDE, PLEASE
AND THIS IS THE NUMBERS OF OUR NON AEROAUTICAL BUSINESSES, AND YOU CAN SEE THE ACTUAL REVENUES REALLY HERE THAT WHILE THE CHART IS STRUCTURED TO COMPARE TO 2020, AND WE STILL SEE WE'RE DOWN FROM A REVENUE STANDPOINT 20 MILLION DOWN, BUT WE ARE AT NINE OF 19
SO OUR REVENUES REALLY ARE RECOVERING SLIGHTLY FASTER THAN THE PASSENGER LEVEL
AND I THINK THAT'S A KEY POINT, BUT THE BOTTOM BOTTOM LINE, WE'RE STILL DOING REASONABLY WELL, BUT WE WANT TO OBVIOUSLY INCREASE THAT
NEXT SLIDE, PLEASE
EXCUSE ME, BURIEN, I SEE YOU'RE GOING TO BE SPEAKING AGAIN AS THE LAST SPEAKER, AND I'M JUST NOTING THAT WHERE THREE MINUTES PASSED TIME AND I SEE YOU STILL HAVE QUITE A BIT MORE TO GO
I'M GOING TO SPEED UP HERE
I JUST WANTED TO NOTE, GIVE A TIME CHECK
THANK YOU
SO AERONAUTICAL COSTS, OUR AERONAUTICAL REVENUES ARE DRIVEN BY COST
AND I THINK THE STORY HERE IS LOOKING AT HOW WE'VE USED THE FEDERAL RELIEF GRANTS TO OFFSET THE OPERATING COSTS AND HOW WE'VE USED GRANTS AND PFCS TO OFFSET THE DEBT SERVICE
SO YOU CAN SEE THE BIG MESSAGE THERE IS WE'VE OFFSET WHAT WOULD OTHERWISE BE A $60 MILLION INCREASE IN DEBT SERVICE IN THE RATE BASE TO THE POINT WHERE IT'S ACTUALLY LOWER THAN 2020
AND SO THE OVERALL AERONAUTICAL REVENUES ARE UP 3%, WHEREAS NORMALLY THEY WOULD BE UP MUCH, MUCH HIGHER
NEXT SLIDE, PLEASE
THIS IS SOMEWHAT THE SAME VIEW
JUST LOOKING AT THE SPECIFIC COST CENTERS
AND WE DO SEE SOME BIG INCREASES FOR THE FIS OR FEDERAL INSPECTION SERVICES AREA, WHERE WE HAVE A NEW FACILITY COMING ON BOARD AND ALSO WITH THE TERMINAL
BUT THE AIRFIELD MOVEMENT AREA WHERE WE HAVE LANDING FEES WHERE WE CHARGE LANDING FEES IS ACTUALLY LOWER
NEXT SLIDE, PLEASE
SO I THINK WE'VE COVERED THIS ALREADY
I THINK THE KEY RISKS ARE THE RECOVERY AND THE FACT THAT WE HAVE THE PAYROLL VACANCY
AND OTHER THAN THAT, THERE IS NO CONTINGENCY IN THE OPERATING BUDGET
SO A SNOW EVENT IS SOMETHING THAT WE DO NOT BUDGET FOR
NEXT SLIDE, PLEASE
THIS IS THE BREAKOUT OF THE GRANTS, AND YOU CAN SEE HOW WE'VE SPENT THE MONEY BASED ON THE INDIVIDUAL PROGRAMS AND WHAT WE ARE EXPECTING FOR 2022
THE ORANGE IS THE AMOUNTS DESIGNATED FOR THE CONCESSIONNAIRES
NEXT SLIDE, PLEASE
THIS IS OUR ROAD TO RECOVERY, ON BUILDING OUR CASH BALANCE AND WE'RE RIGHT ON TRACK TO GET TO 18 MONTHS OF M BY 2024
NEXT SLIDE, PLEASE
AND OUR DEBT SERVICE COVERAGE
AGAIN, THE MESSAGE HERE IS HOW WE'VE USED THE FEDERAL RELIEF GRANTS TO REALLY IMPROVE OUR DEBT SERVICE COVERAGE
SO WE'RE AT A VERY STRONG LEVEL RIGHT NOW
NEXT SLIDE, PLEASE
AND THIS IS JUST THE VISUAL, A LITTLE ADDITIONAL LAYERS OF OUR FUTURE CAPITAL PROGRAM IN OUR EXISTING CAPITAL PROGRAM AND HOW WE BUILT UP AND THE PROJECTS THAT ARE DRIVING IT
AND AT THIS POINT, I'D LIKE TO TURN IT OVER TO KERI STEVENS TO TALK A LITTLE BIT MORE ABOUT THE SPECIFIC PROJECTS FOR NEXT YEAR
OKAY
THANKS, BORGAN
BORGAN, THANK YOU SO MUCH FOR PULLING THIS TOGETHER AND FOR PULLING US THROUGH THE LAST YEAR PART OF THIS FANTASTIC PLANNING
BUT I DO NEED TO QUICKLY ASK MY COLLEAGUES TO GO THROUGH
IF YOU HAVE ANY QUESTIONS FROM YOUR PRESENTATION, CLERK HART, COULD YOU GO THROUGH ONCE? THANK YOU
WE'LL BEGIN WITH COMMISSIONER BOWMAN
SORRY
I KEEP TRYING TO UNMUTE MYSELF
YEAH, I HAVE ACTUALLY THREE QUESTIONS IF I MIGHT BORGAN
I KNOW THAT WE'RE RUNNING SHORT ON TIME
SO IF YOU WANTED TO GET BACK TO ME LATER, THE FIRST ONE WAS ABOUT THE LONGER TERM GROWTH OF EMPLOYEES
I UNDERSTAND, OBVIOUSLY, WHEN WE'RE DOING THE 2019 BUDGET THAT THIS WAS SOMETHING THAT I HAD A GAP YEAR FOR LACK OF A BETTER TERM IN 2020
YOU GIVE US JUST SOME SORT OF INDICATION ABOUT WHAT YOU SEE THE GROWTH IN EMPLOYEES BEING OVER THE NEXT COUPLE OF YEARS
AND THEN THE SAME QUESTION FOR THE CPE
CERTAINLY, IT APPEARS IF I'M READING THIS CORRECTLY AND THAT FOR THE PUBLIC IS COST PER EMPLOYMENT, THAT THE FEDERAL GRANTS HAVE HELPED KEEP THE CPE AT A FAIRLY STEADY LEVEL
BUT I KNOW THAT LONGER TERM THAT WE WERE EXPECTING IT TO GET AS HIGH AS 18
$19
IS THAT CORRECT? YES
IN FACT, I WILL
AFTER CARRY PRESENTS ON THE CAPITAL PROGRAM, I'M GOING TO COME BACK AND HIGHLIGHT SOME OF OUR FORECAST INFORMATION, INCLUDING THE COST FOR EMPLOYMENT
BUT THE QUICK ANSWER IS BY 2026, WE EXPECT TO BE OVER $21
OKAY
AND THEN ON THE EMPLOYEES, THE EMPLOYEES
I'LL JUST SAY WE DON'T HAVE A SPECIFIC FORECAST AT THIS POINT
YEARS PAST, WE HAD A STAFFING STUDY, AND WE, IN ESSENCE, COMPLETED FULFILLING THAT
AND UNLESS LANCE WANTS TO OFFER ANY INSIGHTS, I THINK THAT THAT IS REALLY TO FOLLOW
I WILL SAY THAT WE HAD 19 FTES THAT WE HAVE RETAINED AS BEING FROZEN, THAT WE WILL LIKELY WANT TO FILL IN FUTURE YEARS
AND WE HAD 31 FTES THAT WE'VE COMPLETELY ELIMINATED
OF THOSE 51 FROZEN THAT WE RETAINED FROZEN, I CAN'T GIVE YOU A SPECIFIC NUMBER FOR A STAFFING FORECAST AT THE PORT IS VERY QUICK MARK ON THE STAFF IN STUDY, ESSENTIALLY TO COST 2022
SO WE HAVE TO DO ANOTHER STAFF INSTEAD OF 2023 AND BEYOND
OKAY
MAYBE THAT'S SOMETHING
I DON'T KNOW IF THERE'S MONEY FOR THAT, BUT I THINK WE SHOULD ALL BE INTERESTED IN THAT JUST IN TERMS OF OBVIOUSLY, AS YOU POINTED OUT THE COST FOR EMPLOYMENT IS THE SECOND HIGHEST OF OUR BUDGET ITEMS AND I GUESS WITHOUT GOING INTO A LOT OF DETAIL RIGHT NOW, UNDERSTANDING OR ALL OF THESE POSITIONS POSITIONS THAT YOU EXPECT THAT WE'RE GOING TO NEED OVER THE NEXT 15 YEARS
ARE THEY PERMANENT POSITIONS? AND THEN AGAIN WITH STAMP COMING ONLINE, WHAT YOU EXPECT TO SEE AND THEN MY LAST QUESTION, YOU DON'T HAVE TO ANSWER IT NOW UNLESS YOU CAN
WHY ARE WE NOT BUDGETING FOR SNOW? WELL, THE SIMPLE ANSWER ON SNOW IS HISTORICALLY IT WAS NOT A VERY COMMON OCCURRENCE, AND WE'VE GONE BACK OVER TEN TO 15 YEARS
AND IF IT WHEN WE BUDGET FOR IT, IT GOES INTO THE AIRLINE RATE BASE
AND SO WE DON'T LIKE TO CHARGE FOR SOMETHING THAT MAY NOT HAPPEN
AND SO WHAT WE'VE OPTED FOR IS TO NOT BUDGET FOR A MAJOR SNOW EVENT
IF A MAJOR SNOW EVENT HAPPENS, WE RECOGNIZE THAT WE'RE GOING TO HAVE TO TRY TO ABSORB IT
AND THAT'S WHAT WE'VE DONE THE LAST FEW YEARS
WE LIKE TO BLAME LANCE FOR THE REGULAR SNOW
WE'VE BEEN HAPPY AND RECENTLY BECAUSE IT NEVER HAPPENED BEFORE 2016
I WAS JUST GOING TO SAY WHEN I FIRST MOVED TO SEATTLE BACK IN 1991
YOU'RE RIGHT
IT WAS VERY RARE
BUT THAT HASN'T BEEN THE CASE IN THE LAST FIVE YEARS
THAT'S WHAT I WAS TOLD IN MY INTERVIEWS
I THINK MY TWO CENT IS WE SHOULD PERHAPS START BUDGETING FOR THAT
ALRIGHT, I'M DONE
THANK YOU VERY MUCH
THANK YOU, COMMISSIONER, ABOUT MY COMMISSIONER CALKINS FOR QUESTION
SO MY QUESTION IS SORT OF GENERALLY SPEAKING, I THINK WE HAVE KIND OF STEP INCREASES IN MANY OF OUR REVENUE AGREEMENT
SO I BELIEVE THAT'S THE CASE IN THINGS LIKE LEASES, WITH CONCESSIONNAIRES AND OTHER THINGS
I'M WONDERING WITH PARKING, HOW DO WE DETERMINE PARKING RATES? IS IT KIND OF DONE ON A YEARLY ADHOC BASIS? IS IT DONE AS A AN EXAMINATION OF MARKET CONDITIONS AND BASED ON WHAT I CAN BEAR? IS IT BASED ON HOW I'M SHOWING WE'RE GOING TO HIT HERE AND RELATIVE TO 19
SO I'M JUST WONDERING, DOES THIS BUDGET ALREADY ACCOUNT FOR SOME INCREASE IN THE PARKING RATES? ARE WE CONTEMPLATING THAT AND HAVEN'T BOOKED YET? WHAT ARE WE THINKING FOR THAT? AND ARE THERE OTHER AREAS WHERE WE DON'T HAVE STEPPED INCREASES TO SORT OF REFLECT THE JUST INFLATION GENERALLY
SO LET ME TRY TO ANSWER THAT IN A COUPLE OF WAYS
LET'S START WITH THE CONCESSION SIDE OF IT THERE
WE'RE REALLY LOOKING AT A PERCENTAGE
SO THEN WE GET A PERCENTAGE OF THE CONCESSION REVENUES
AND SO THAT IS REALLY DRIVEN BY THE PASSENGER LEVEL AND THE SPENDING THAT DRIVES OUR REVENUES
SO THAT WOULD BE TRUE FOR THE AIRPORT, DINING AND RETAIL
IT'S TRUE FOR THE RENTAL CARS
AND THEN YOU HAVE GROUND TRANSPORTATION, WHICH IS PIER TRIP FEES OFTEN
SO THOSE GO UP WITH PASSENGER LEVELS AS WELL
PARKING IS A LITTLE DIFFERENT BECAUSE WE RUN AND MANAGE THAT
AND ONE OF THE PROGRAMS THAT WE'VE HAD IS THE RESERVE PARKING
AND THAT IS A WAY OF TRYING TO STIMULATE DEMAND, TO GET PEOPLE TO BUY IN ADVANCE
AND ONE OF THE POSITIONS THAT WE HAVE FOR THIS COMING BUDGET IS A REVENUE ANALYST TO SUPPORT OUR PARKING PROGRAM
AND THAT'S REALLY TO LOOK AT SORT OF MANAGEMENT CONCEPTS AND TRYING TO LOOK TO OPTIMIZE WHAT WE CAN DO WITH THE GARAGE AND MAKE SURE WE ARE ABLE TO FILL IT IN THE ON PEAK TIMES AND AND REALLY DRIVE THE REVENUE ON THAT SIDE BECAUSE THAT'S REALLY UP TO US
BUT THERE'S NO, I'M NOT AWARE OF A PLANNED PRICE INCREASE ACROSS THE BOARD PER SE, BUT IT'S ONE OF THOSE THINGS THAT WE LOOK AT THE SUPPLY AND DEMAND AND HOW FULL THE GARAGE IS, AND CERTAINLY PRICES IS A TOOL
WE HAVE TO MANAGE THE GARAGE CAPACITY THAT CAN ALSO RESULT IN INCREASED REVENUES SO WORN
I BELIEVE THEY'VE GOT TO ADD TO THAT MISSION IN TERMS OF THE AGENTS
I THINK WE'VE ONLY HAD ONE SINCE I'VE BEEN RNM ALMOST SIX YEARS NOW THAT I'VE BEEN HERE
SO WE WERE ACTUALLY LOOKING AT A PRICE INCREASE JUST PIER TO THE PANDEMIC
BUT THEN THE PANDEMIC HAPPENS, SO WE DIDN'T THINK IT WOULD BE APPROPRIATE TO DO A PRICE INCREASE DOING THAT
AND ALSO WHAT WE TRY TO DO WHEN WE'RE DOING A PRICE INCREASE FOR PARKING IS WE TRY TO DO IT, FOR EXAMPLE, IN A NEW SERVICE COMES ON BOARD
SO FOR EXAMPLE, WHEN WE PUT THE PARKING GUIDANCE SYSTEM IN PLACE, THAT PROBABLY WOULD BE AN APPROPRIATE TIME TO LOOK AT HAVING A PRICING IS BECAUSE WE'RE GOING TO HAVE FAR NEW LEVEL OF SERVICE IN THE PARKING GARAGE AT THAT POINT AND WE'LL BE ACTUALLY TAKING ON ADDITIONAL EXPENSES OF A PARKING AT THAT POINT
SOME CHANCES ARE THAT'S WHEN WE'RE GOING TO LOOK AT IT AND WE'LL BE SOMEWHAT OVER THE PANTS, HOPEFULLY OVER THE PENDING MAKE UP THAT TO ME
THANK YOU
I THANK YOU
COMMISSIONER CALKINS MOVING TO COMMISSIONER CHO YEAH, JUST A FEW QUESTIONS fOR YOU
THANKS FOR THE PRESENTATION
FIRST, I WANTED TO GET SOME CLARITY ON THIS PAYROLL VACANCY FACTOR OF 5%
CAN YOU JUST REAL QUICKLY FOR MY EDUCATION EXPLAINING WHAT EXACTLY THAT MEANS AND WHY WE'VE TAKEN WE'VE INCREASED THAT
DOES THAT MEAN WE'RE NOT WE'RE NOT EXPECTING AS MUCH
SO WHAT IT IS IS BASICALLY IF WE BUDGET FOR OUR STAFF FOR 2022 AND IF WE ASSUME WE WILL BE AT FULL FULL STAFFING IN THE ENTIRE YEAR, WE WOULD HAVE A VACANCY
ALRIGHT, BECAUSE WE'RE PAYING EVERYBODY AND OUR BUDGET HAS TO REFLECT WHAT WE'RE GOING TO PAY
BUT WHAT WE'VE DISCOVERED OVER MANY YEARS IS THAT THERE'S ALWAYS A CERTAIN AMOUNT OF ATTRITION PEOPLE LEAVE THE ORGANIZATION AND IT TAKES TIME TO FILL THOSE POSITIONS
SO WE HAVE GAPS AND THOSE GAPS OR THE TIME FRAME
WE ACHIEVE SOME SAVINGS BECAUSE WE ACTUALLY ARE BELOW OUR STAFFING LEVEL FOR A VARIETY OF REASONS
AND SO IF WE WENT BACK A FEW YEARS, I THINK WE WERE AT THREE TO THREE AND A HALF PERCENT WAS WHAT WE WERE USING
AND THEN WE DROPPED IT SIGNIFICANTLY FOR 2021 BECAUSE WE DIDN'T EXPECT MUCH TURNOVER BECAUSE WE CUT SO MANY POSITIONS
AND IT WAS SUCH A WE THOUGHT A TIGHT JOB MARKET
BUT WE'VE ACTUALLY SEEN A FAIR AMOUNT OF ATTRITION THIS YEAR AND JUST THE DEMOGRAPHICS OF THE ORGANIZATION
THERE ARE A LOT OF PEOPLE THAT ARE NEAR OR AT RETIREMENT LEVEL
AND YOU'VE PROBABLY READ ABOUT THE GREAT RESIGNATION THAT A LOT OF COMPANIES ARE SEEING
AND SO THERE IS A LOT OF TURNOVER, AND IT CAN BE VERY CHALLENGING TO FILL THOSE POSITIONS
SO RIGHT NOW, THE 5% VACANCY FACTOR IS BEING IMPLEMENTED PORT WIDE
I THINK DAN THOMAS EXPLAINED THAT A COUPLE OF WEEKS AGO AND WE THINK IT'S REASONABLE FOR THE WORLD AND THE ECONOMIC ENVIRONMENT WE'RE IN
SO THAT PART OF THE CALCULATION MAKES SENSE TO ME
I THINK THE STATISTIC THAT CAME OUT THIS MORNING WAS IN AUGUST 3% OF AMERICA'S WORKFORCE RESIGN, WHICH IS EXTREMELY SIGNIFICANT
SO THAT MAKES SENSE TO ME
BUT THE PART THAT THAT I DON'T SEE FACTOR IN THIS IS THAT WITH ATTRITION ALSO COMES THE COST OF ONBOARDING NEW PEOPLE
SO HOW DO WE ACCOUNT FOR THAT COST? WELL, THAT IS A CHALLENGE
I MEAN, THE COST OF ON BOARDING IS REALLY THE TIME THAT TAKES TO HIRE AND TRAIN SOMEBODY NEW
AND WHAT THE COST, IF YOU WILL, IS USUALLY IN WHAT'S NOT GETTING DONE
TO BE HONEST, BECAUSE THERE IS A FINANCIAL SAVINGS
BUT IT JUST MEANS THAT WHAT WE WERE HOPING THAT INDIVIDUAL WOULD DO, THAT INDIVIDUAL IS NOT AVAILABLE TO DO
SO THAT I THINK IS THE COST OKAY
AND THEN THIS IS NOT A BUNCH OF QUESTIONS, MORE LIKE AN HR QUESTION AND MAYBE FOR STEVE, BUT IT WOULD BE GREAT IF WE CAN GET A SENSE OF WHAT THE NUTRITION HAS BEEN LIKE FOR US TO THE PORT AND WHETHER THAT TRACKS WITH WHAT'S HAPPENING IN THE BROADER LABOR MARKET
I THINK MY HYPOTHESIS WOULD BE THAT THERE'S A LITTLE MORE STICKINESS AT AIRPORTS BECAUSE THERE AREN'T A LOT OF OPTIONS OUTSIDE OF D
SO IT LOOKS LIKE STEVE WAS 91 TO RESPOND REAL QUICKLY
YEAH
MY MIND JUST COMMISSIONER
I WAS JUST BASED ON THE OTHER QUESTIONS FROM COMMISSIONER BOWMAN AS WELL
I THINK WE CAN TALK ABOUT KIND OF THE OVERALL VIEW OF OUR WORKFORCE AND SOME OF THOSE FACTORS AND DRIVERS
AND REALLY, FOR US, IT'S A BIG FOCUS OF US BECAUSE OF THE DIFFERENT FACTORS ABOUT THAT
BUT ALSO COMING OUT OF THESE LAST COUPLE OF YEARS, THE CHALLENGES THAT ARE LAYERED UPON THAT AND ABOUT BRINGING PEOPLE ON SO NOT TO DO IT, NOT TO DIVE INTO IT NOW
BUT I CAN TALK MORE ABOUT THAT IN MORE INFORMATION ABOUT OUR APPROACH TO THAT AND OUR FORECAST GOING FORWARD
YEAH
I THINK FOR MOST JOBS AND ASSOCIATED COSTS, I'M SORRY TO STEP IN THERE
RIGHT
I WOULD ARGUE THAT MOST JOBS PEOPLE CAN TRANSITION PRETTY SIMILARLY
BUT RUNNING OUR AIRPORT IS PRETTY NICHE
I WOULD SAY EVERY AIRPORT IS DIFFERENT
AND SO I WOULD IMAGINE THERE'S A HUGE COST TO GETTING FOLKS ON BOARDED
THE OTHER QUESTION I HAD BROKEN JUST FOR MY EDUCATION IS IS THE DEBT SERVICE COVERAGE RATIO? YES
IT'S SIMPLY IF WE LOOK AT THE AMOUNT OF DEBT SERVICE THAT WE HAVE TO PIER THE COVERAGE IS THE PERCENTAGE ABOVE THAT
SO IF IF THE DEBT SERVICE IS 100 MILLION AND WE CAN DEMONSTRATE THAT WE HAVE 150,000,000 OF CASH AVAILABLE, THAT WOULD BE THAT WOULD BE 1.5 COVERAGE OR ONE OF OUR REQUIREMENT
SO WHAT WE'RE SHOWING IS 1.9 THAT IS ALMOST DOUBLE THE AMOUNT THAT WE NEED TO PAY THE DEBT SERVICE
THAT'S A VERY STRONG RATIO
BUT IF YOU GO BACK AND LOOK AT THE CALCULATION, IT IS HIGHLY DRIVEN BY THE FACT THAT WE ARE USING GRANTS AND PFCS TO PAY THE DEBT SERVICE DIRECTLY TO BRING DOWN THE NET AMOUNT
AND THIS IS A COVERAGE CALCULATION THAT IS REALLY USED FOR OUR AIRLINE AGREEMENT
AND THAT COVERAGE CALCULATION
IT'S A SLIGHTLY DIFFERENT CALCULATION THAT IS DONE ON A PORT WIDE BASIS JUST BECAUSE OF THE WAY THE GRANTS AND THE PFC ARE TREATED AS REVENUE AS OPPOSED TO AN OFFSET TO DEBT SERVICE
SO THIS IS 1.91 DEBT COVERAGE
DO YOU KNOW OFF THE TOP OF YOUR HEAD HOW MUCH OF THAT IS FEDERAL GRANTS? WHERE WOULD WE BE IF WE DIDN'T RECEIVE FEDERAL GRANTS? I WILL SHOW YOU THAT CALCULATION
I'LL SHOW YOU THE NUMBERS IF WE GO BACK A COUPLE OF SLIDES AND I THINK IT WILL BECOME A PARENT RIGHT HERE
YEAH
NEXT SLIDE, PLEASE
ALRIGHT
SO IF YOU LOOK IN THE 2022 COLUMN AND YOU SEE NEAR THE VERY BOTTOM, IT SAYS FEDERAL RELIEF GRANTS USED TO PAY DEBT SERVICE THE 66 MILLION
SO IF WE TOOK THAT OUT AND REDID THE CALCULATION, WHICH I WON'T DO RIGHT NOW, BUT YOU'D SEE WHERE WE END UP, WE STILL END UP IN A PRETTY GOOD PLACE, BUT NOWHERE NEAR 1.9, IT LOOKS LIKE AROUND ONE POINT 35, WHICH IS KIND OF OUR TARGET ANYWAY, RIGHT? YEAH
OKAY
ALRIGHT
THAT'S IT FOR ME
THANK YOU
THANK YOU
COMMISSIONER CHO COMMISSIONER STEINBRUECK YEAH
THANK YOU VERY MUCH
BORGAN FOR GETTING US THROUGH INCREDIBLY DIFFICULT YEAR FINANCIALLY AND OTHERWISE
IT'S REMARKABLE WHAT YOU'VE ACHIEVED AND STAFF AT THE AIRPORT
I THINK IT'S A BIT OF WORK OF MAGIC, BUT OF COURSE, WHAT WOULD I KNOW AND THE FEDERAL RELIEF CERTAINLY WAS OF GREAT HELP
I CAN SEE THAT I WANTED TO ASK YOU WITH REGARDS SPECIFICALLY TO THE CAPITAL PROGRAM GROWTH INJECTION
HOW ARE WE ACCOMMODATING THAT GROWTH WITH REGARD TO ADMINISTRATIVE SERVICES OF THE ARCHITECTS OFFICE OF THE AIRPORT, INCLUDING DESIGN REVIEW, QUALITY CONTROL, PROJECT OVERSIGHT COORDINATION, ETC
AND WHAT DO YOU PROJECT IN TERMS OF ANY ADDITIONAL STAFF SUPPORT IN THAT AREA? OKAY
BIG QUESTION
I'LL START BY SAYING WE HAVE AND ARE ADDING RESOURCES THROUGHOUT THE ORGANIZATION TO SUPPORT THE CAPITAL PROGRAM
I WILL HAVE TO GET BACK TO YOU ON THE SPECIFICS AS IT RELATES TO THE THE ARCHITECTURAL PROGRAM
I BELIEVE WE ARE ADDING AN FTE, BUT I HAVE TO GO BACK AND LOOK, DO I SEE A HAND UP THERE? IS THAT PERHAPS, JEFFREY? YEAH
GO AHEAD, PLEASE
YOU'RE RIGHT
HAVING SOME POSITIONS FOR ADMINS ON POSITIONS IN THOSE AREAS
COMMISSION STEINBRUECK, BUT WE HAVE TO BALANCE OUR FTE NEEDS ACROSS THE BOARD
I MEAN, WE CAN GIVE ALL THE FTES TO ONE DEPARTMENT
WE HAVE TO BALANCE OPERATIONAL THE CAPITAL GROWTH
SO WE ARE RIVER STRATEGIC AND MATCHING UP OUR NEEDS AND ARCHITECTURAL OFFICE DESIGN REVIEW
WE HAVE DONE SOME WORK AROUND IMPROVEMENTS WORKING WITH ARE TEAM AROUND IMPROVEMENTS IN DESIGN REVIEW, AND WE HAVE STARTED TO IMPLEMENT THAT
SO WE'RE ADJUSTING THOSE NEEDS
NOT PROBABLY TOTALLY THAT YOU OR OTHER PEOPLE TO EXPECT, BUT WE HAVE TO BALANCE OUR NEEDS
SURE, I UNDERSTAND THAT
BUT THIS IS NOT TO ME AN ISSUE OF EQUITABLE DISTRIBUTION OF FTES
IT'S AN ISSUE OF WHAT AREAS OF PLAN FUTURE DEVELOPMENT REQUIRE ADDITIONAL SUPPORT THAT SHOULD BE VIEWED INDEPENDENTLY OF OTHER FTE NEEDS IN TERMS OF HOW WE CAN BEST ACCOMMODATE THE NECESSARY SERVICE REQUIREMENTS THAT ARE CALLED FOR WITH THE GROWTH IN CAPITAL, THE PERMISSION
WE'RE BALANCING THAT WITH FTE AND CONSULTANT REQUEST, WE MIGHT WANT TO TALK A LITTLE BIT OF OKAY, WE CAN FOLLOW UP WITH THAT
THANK YOU
OKAY
THANK YOU
COMMISSIONER STEINBRUECK
COMMISSIONER FELLEMAN
THANK YOU
AGAIN, I SAW THERE WAS, LIKE, 975,000,000 FOR AIR SERVICE INCENTIVES
WHAT DOES THAT ENTAIL? WE HAVE A AIR SERVICE DEVELOPMENT PROGRAM, AND WHEN A CARRIER IMPLEMENT A NEW SERVICE, THEY CAN QUALIFY FOR AN INCENTIVE
AND SO WE PROVIDE SOME MARKETING AND SUPPORT COSTS TO THE AIRLINE
SO IT'S A COST TO THE AIRPORT
AND IT'S HELPING A CARRIER PRIMARILY INTERNATIONAL
ALTHOUGH A DOMESTIC CAN QUALIFY AS WELL
AND IT ALLOWS THEM TO MARKET THAT NEW SERVICE TO HELP GET IT ESTABLISHED
AND THAT'S SOMETHING THAT WE'VE HAD THIS PROGRAM IN PLACE FOR MANY YEARS
AND CASO SATA AND HER TEAM WOULD SAY THAT THIS IS A REALLY IMPORTANT PART OF ATTRACTING NEW INTERNATIONAL SERVICE
AND SO BECAUSE WE'VE BEEN SUCCESSFUL IN ATTRACTING NEW SERVICE IN RECENT YEARS, THAT'S WHY THE MONEY IS INCLUDED IN THE BUDGET
IT'S REALLY A REQUIREMENT TO FULFILL OUR CONTRACTUAL OBLIGATIONS
SO YOU REALLY THINK THAT THAT'S GOING TO MAKE THE DIFFERENCE BETWEEN AN AIRLINE? I MEAN, I COULD SEE WHY IT'S BENEFICIAL, BUT DO YOU REALLY THINK THAT THAT'S WHAT'S GOING TO MAKE A DECISION FOR AN AIRLINE TO START A NEW SERVICE HERE? I DON'T KNOW
LAST WOULD YOU LIKE TO I COULD JUMP IN HERE FOR SOME OF THE AIRLINES
IT PROBABLY WON'T BECAUSE THEY'VE DONE THEIR CALCULATION AND THEY'LL DETERMINE WITH US THEY'RE GOING TO MAKE A PROFIT OR ONE AIRLINE RECENTLY TOLD US THEY CHOSE VANCOVER OVER US BECAUSE THEY HAD A BETTER INCENTIVES PACKET
I DON'T KNOW HOW TRUE THAT IS
BUT IT'S AN EXPECTATION FROM THE AIRLINES EVERY YEAR FOR EVERY AIRPORT HAS THIS INCENTIVE PROGRAM IS NOT JUST US, AND IT REALLY HELPS THEM TO GET OVER THE INITIAL HOME, BECAUSE WHEN AN AIRLINE THE SIDE, FOR EXAMPLE, THEY'RE GOING TO DO A LONG, HARD ROAD
YOU'RE TALKING A MAJOR INVESTMENT FOR THEM TO DO IT
AND IT'S A SIGNIFICANT BENEFIT NOT TO WHATEVER REGION OR CITY THAT THEY'RE CHOPPING TO
SO IT'S REALLY KIND OF EXPECTED
WHAT ABOUT IT WILL MAKE THE DIFFERENCE? I DON'T KNOW WHAT IT'S EXPECTED FROM THE AIRLINES ANYWAY
IT'S A COMMON PRACTICE ACROSS AIRPORTS
YES
ALRIGHT
THAT'S FINE
I TAKE SOME QUESTION ABOUT HOW THESE DIFFERENT COST CENTERS ARE ALLOCATED
LIKE WE HAVE THE A CONFERENCE ASSOCIATED WITH A COMMUNITY COMMUNITY COST
I'M NOT SURE IS THAT BUSINESS DEVELOPMENT RATHER THAN A COMMUNITY ASSET
SO THE MONEY IS THE SAME
BUT THE FACT THAT IT'S ALLOCATED TO COMMUNITY SEEMS TO BE A LITTLE ODD, AT LEAST AS I UNDERSTAND OUR COMMUNITY PROGRAMS IS THERE ANY THOUGHTS ON THAT? WELL, I THINK HOW WE CATEGORIZE IT
YOU'RE RIGHT
WE COULD HAVE PUT IT IN A COUPLE OF DIFFERENT PLACES, BUT I THINK THAT IT'S CERTAINLY SOMETHING THAT IS BRINGING A BIG CONFERENCE TO SEATTLE
IT'S HIGHLIGHTING THE IMPORTANCE OF THE AIRPORT, AND I THINK IT'S A STRONG ECONOMIC DEVELOPMENT CONTRIBUTION TO THE REGION
SO, BORGAN, I COULD ADD TO THAT
AND WE COULD REWRITE COMMISSIONER, WE COULD PUT IT IN SEVERAL OTHER CATEGORIES WHERE YOU'RE LOOKING AT ABOUT 2500 PEOPLE COME INTO THIS CONFERENCE IS GOING TO BE MAJOR BENEFITS FOR ALL THE RESTAURANTS THAT'S GOING TO BE IN THE VICINITY OF THAT CONFERENCE
THE GROUND TRANSPORTATION, WHERE THE TAXI, UBER
THERE'S GOING TO BE HUGE BENEFITS TO THE COMMUNITY
BUT WE COULD PUT IT IN OTHER CATEGORIES AS WELL
YEAH, I UNDERSTAND
I APPRECIATE THAT EXPLANATION
IT'S JUST, YOU KNOW, THERE'S I GUESS MAYBE WHAT WE SHOULD DO IS HAVE, LIKE, SORT OF LITTLE DEFINITIONS OF WHAT THESE CATEGORIES MEAN
BECAUSE WHEN WE THINK ABOUT IN MY MIND, OUR COMMUNITY PROGRAMS ARE OFTEN THINGS THAT ARE, WELL, THESE ARE SPECIFICALLY THINGS THAT ARE NOT PAID FOR BY THE TAX LEVY
RIGHT
JUST EVEN DEFINING THAT AS THESE ARE NON LEVY COMMUNITY PROGRAMS, WHICH WOULD BE MORE OF THIS ECONOMIC DEVELOPMENT BENEFITS
SO I MEAN, I GUESS JUST THE CLARITY OF THE DEFINITION OF THOSE CATEGORIES MIGHT BE HELPFUL FOR CERTAINLY FOR ME
YEAH
COMMERCIAL
I THINK NORMALLY UNDER THE COMMUNITY CATEGORY, WE LOOK AT THE STUFF THAT WE DO TO MITIGATE THE IMPACT AT THE AIRPORT
THERE'S NOISE POLLUTION, ET CETERA
BUT WE ALSO MUST REMEMBER THAT THERE ARE BENEFITS TO THE PORT, THE COMMUNITY AS WELL FROM THE AIRPORT
AND THIS IS ONE OF THE BENEFITS
AND CLEARLY AND THOSE OTHER PROGRAMS YOU JUST DEFINED WOULD NOT BE IN THIS BUDGET
THAT WOULD BE IN THE TAX LEVY BUDGET
IS THAT TRUE? CORRECT
WOULD THEY BE REFLECTED IN HERE AS WELL, THE MITIGATION EFFORTS? YEAH
A LOT OF THE MITIGATION EFFORT WOULD BE REFLECTED OR IS REFLECTED IN THIS BUDGET
THE NOISE PROGRAM INVESTMENTS ARE TYPICALLY CAPITAL PROJECTS WHEN WE GO AND INSULATE POEMS OR CONDOMINIUMS OR THE LIKE
WE GET AN EASEMENT FOR THOSE
AND SO WE BOOK IT AS AN ASSET
AND SO THE MAJOR ELEMENTS OF OUR NOISE PROGRAM OR CAPITAL AND ALL THE EFFORTS THAT WE'RE DOING AS PART OF START IS THE NOISE FROM THE NOISE OR WORKING GROUP ARE THE POLICY WORKING GROUP THAT'S REFLECTED IN OUR OPERATING
PUT IT WELL, THE OPERATES IN RELATED STUFF IN THE THANK YOU FOR THAT CLARIFICATION
THEN I KIND OF THINK THAT THAT CATEGORY IS PERHAPS TOO BROAD
YOU KNOW, THEY ALL HAVE TO MAKE COMMUNITY BENEFITS, BUT THEY'RE VERY DIFFERENT
MAYBE THEY SHOULD COULD BE ECONOMIC BENEFITS VERSUS, YOU KNOW, MITIGATION BENEFITS
SO WE CAN RELOOK AT HOW WE CATEGORIZE UP OR
OKAY
THANK YOU
I JUST ALSO NOTE THAT WE'RE TALKING ABOUT A REDUCTION IN ENVIRONMENTAL LIABILITY
HOW DID THAT HAPPEN? SO THE ENVIRONMENTAL REMEDIATION LIABILITY AT THE AIRPORT IS VERY DRIVEN BY SPECIFIC CAPITAL PROJECTS, AND IT'S A CALCULATION THAT WE DO BASED ON WHAT WE ANTICIPATE TO BE THE TRIGGERING EVENTS
AND IT'S USUALLY ASBESTOS
IF WE'RE GOING INTO AN OLD FACILITY AND SOME YEARS WE HAVE A PROJECT THAT TRIGGERS SOME VERY SIGNIFICANT COSTS IN OTHER YEARS, LIKE NEXT YEAR, WE ACTUALLY DON'T ANTICIPATE ANYTHING REALLY BIG HAPPENING
WE'VE ALWAYS GOT SOME ONGOING ASBESTOS PROGRAM COSTS, BUT WE DON'T SEE ANY MAJOR TRIGGERING EVENTS NEXT YEAR
SO THAT'S WHY IT'S LOWER
SOUTH SATELLITE WOULDN'T HAVE IT'S NOT OF THAT VINTAGE
WELL, WE HAVE HAD SOME SOUTH SATELLITE REMEDIATION ALREADY GOING FORWARD
WHEN WE GET TO A POINT WHERE WE HAVE A TRIGGERING EVENT AND A TRIGGERING EVENT IS WHEN YOU OPEN UP A LAW AND THERE'S ASBESTOS BACK THERE
NOW YOU HAVE TO REMEDIATE IT
SO THAT TRIGGERS THE LIABILITY
THE FACT THAT WE'RE PLANNING TO DO IT DOESN'T TRIGGER THE LIABILITY
OKAY
SO THEN IT BECOMES A SURPRISE
WELL, IT BECOMES A FUTURE
EACH YEAR WE BUDGET FOR WHAT WE KNOW AT THE TIME
IN THE FUTURE, THERE WILL BE MORE ENVIRONMENTAL REMEDIATION LIABILITY
IT'S JUST THAT FOR 2022 BASED ON WHAT WE KNOW RIGHT NOW IT'S LOWER, BUT THAT'S A NUMBER THAT I I HATE TO SAY IT SORT OF IS WHAT IT IS BASED ON WHAT THE PROJECTS ARE DOING
THE BORG, I'M ABLE TO CLARIFY FOR THE OUTSET AS AN EXAMPLE, IF WE'RE GOING INTO CONSTRUCTION NEXT YEAR, THAT NUMBER WOULD BE HIGHER, BUT WE'RE NOT GOING TO GO INTO CONSTRUCTION NEXT YEAR
WE'RE STILL GOING TO BE IN PLANNING ON DESIGN, CORRECT
THAT'S THE BEST EXPLANATION
YES
ALRIGHT
SO THANK YOU
AND I STILL JUST LOOKING AT TRYING TO SEE IF THERE'S I DON'T SEE ANYTHING BUDGETED AGAIN FOR STAFF OR OTHER KIND OF IN THE ENVIRONMENTAL CATEGORY
SO I STILL FEEL THAT WE ARE LACKING IN OUR IMPLEMENTATION OF THE SLOW MOU
SO I'M HOPING TO SEE AN ONGOING A SOURCE OF SOME INVESTMENT THERE MAYBE BECAUSE I RAN OVER THAT SLIDE TOO FAST
WE'RE GOING TO CONTINUE, I THINK, TO ADVOCATE FOR A AND WE PROBABLY MISSED ON A COUPLE OF SITES, BUT I SEE A HAND UP SOMEONE
AND IF IT'S ONE OF THE ENVIRONMENT PEOPLE LEFT ON THE CALL
NO, IT'S COMMISSIONER BOWMAN
I WAS JUST GOING TO POINT OUT THAT IF I'M READING MY CALENDAR RIGHT, WE HAVE A HALF AN HOUR AND WE HAVE TWO MORE BUDGETS TO GET THROUGH
THAT'S CORRECT
YEAH
AND THAT'S CLEARLY THE CASE, SO WE CAN MOVE FORWARD
BUT WE ALL HAD QUESTIONS TO ASK, INCLUDING YOU, STEPHANIE
SO THANK YOU
LET'S MOVE FORWARD
OKAY
TURNING IT OVER TO KERI STEVENS
OKAY
THANKS, BORGAN
GOOD MORNING, COMMISSIONERS
I'M CARRY STEVENS WITH THE AVIATION CAPITAL PROGRAM MANAGEMENT TEAM
NEXT SLIDE, PLEASE
SO LAST YEAR, AROUND THIS TIME, WE PROVIDED A PREVIEW OF SOME OF THE LARGER PROJECTS FOR INCLUSION INTO THE CAPITAL PLAN
WE'D LIKE TO DO THAT AGAIN THIS YEAR
BUT FIRST, WE WANT TO GIVE A BRIEF UPDATE OF SOME OF THE PROJECTS THAT WE DISCUSSED LAST YEAR AND LET YOU KNOW HOW THEY PROGRESSED
I'M GOING TO ZOOM THROUGH THESE NEXT SLIDE PRETTY QUICKLY BECAUSE I THINK WE'RE KIND OF TIME LIMITED AND AND I THINK YOU GUYS ARE PRETTY WELL EDUCATED ON THIS
BUT C ONE BUILDING, OF COURSE, THIS IS THE FOUR STORY EXPANSION OF THE C ONE BUILDING
DESIGN IS MOVING ALONG VERY WELL RIGHT NOW
WE'RE EXPECTING 30% BY THE END OF THE YEAR
THIS IS LANCE HAD SAID EARLIER
THIS IS OUR FIRST MAJOR PROJECT THAT HAS GONE THROUGH THE SUSTAINABILITY FRAMEWORK, AND THE TEAM WILL BE PRESENTING THAT THE SUSTAINABILITY ELEMENTS IN DETAIL AT THE NEXT SUSTAINABILITY COMMITTEE MEETING
I THINK IT'S ACTUALLY NEXT WEEK
AND ALSO THIS IS A GCC DELIVERY METHOD
WE'VE GOT BOTH THE DESIGNER AND THE CONTRACTOR ON BOARD NOW AND PROVIDING CONSTRUCTIBILITY REVIEWS IN REAL TIME ESTIMATES AS THE DESIGN DEVELOPS
OKAY
NEXT SLIDE, PLEASE
NORTH MAIN TERMINAL PROJECT
YOU GUYS KNOW THIS ONE, TOO? THIS ONE IS ALASKA AIRLINES HAS BEEN DEVELOPING THIS
THIS ONE'S BEEN MOVING ALONG VERY FAST
WE'RE EXPECTING 30% DESIGN AT THE END OF THIS WEEK AGAIN, JUST TO GIVE YOU A LITTLE BIT OF INFORMATION ON THE SCOPE
THIS INCLUDES NEW PROMENADE, BUILDOUTS, ADA COMPLIANT RAMPS ON THE BACK CLAIM LEVEL, EXPANSION OF THE PASSENGER SCREENING CHECKPOINT, AND THEN JUST REALLY MUCH MORE GRAND HALL
LOOK FOR ALASKA'S TICKETING AREA
WE EXPECT IN THE NEXT COUPLE OF COMMISSION MEETINGS TO HAVE A REQUEST FOR 100 DESIGN COMING THROUGH
AND THEN WE'RE EXPECTING THAT THIS WOULD BE COMPLETE IN THE 220 AND 25 RANGE
NEXT SLIDE, PLEASE
SO CONCOURSE A BUILDING EXPANSION FOR LOUNGES
THIS WAS SOMETHING THAT WE TALKED ABOUT LAST YEAR AS WELL
DELTA, OUR ALLIANCE IS DEVELOPING THIS PROJECT, BASICALLY EXPANDING THE BUILDING OFF OF THE BACKSIDE OF THE CONCOURSE
THAT EXPANSION ALLOWS FOR THE CLUB AT A CLUB AT SEA TO BUILD OUT AS WELL AS A NEW DELTA LOUNGE
DELTA CURRENTLY IS CLOSING IN ON AROUND 60% DESIGN AND THEY WILL BE OR WE WILL BE COMING FOR AUTHORIZATION
REQUEST FOR CONSTRUCTION AT THE END OF THE YEAR AND THIS IS ANTICIPATED TO BE COMPLETE BY 2023
NEXT SLIDE, PLEASE
SO SOUTH SATELLITE RENOVATION PROJECT
WE'RE REALLY DEEP INTO THE PROJECT DEFINITION DOCUMENT
THE PDD PHASE
WE ARE STARTING TO DEVELOP OUR PROJECT PHASING AND AS WELL AS GOING DEEPER INTO OUR PROJECT ESTIMATES, IT'S A COMPLEX PROJECT THAT WILL COMPLETELY UPGRADE THE FACILITY STRUCTURE AND UTILITIES AS WELL AS THE LOWER FLOORS WHERE THE FIS CURRENTLY IS
UNLIKE THE NORTH SATELLITE, WILL NOT HAVE THE ABILITY TO MOVE INTO AN EXPANDED SPACE WHILE WE RECONSTRUCT THE MAIN BODY OF THE FACILITY
WE'RE GOING TO BE BASICALLY BUILDING IN THE FACILITY AS EVERYBODY IS UTILIZING THAT
SO THIS WILL MAKE THE PHASING MORE CHALLENGING AND LEAD TO MOST LIKELY SOME LONGER TIME FRAMES FOR CONSTRUCTION
RIGHT NOW THE PROJECT IS ANTICIPATED COMPLETION INTO 29
NEXT SLIDE, PLEASE
I SO THE A CONQUERS DUTY FREE
WE DISCUSSED THIS LAST YEAR AS WELL
WE'RE REALLY EXCITED ABOUT GETTING THIS PROJECT OFF THE GROUND
WE'VE CURRENTLY COMPLETED OUR PHASE ONE PDD AND WE'RE GOING TO BE REQUESTING ACTUALLY AT THE NEXT COMMISSION MEETING, WE'RE GOING TO BE REQUESTING AUTHORIZATION TO GO INTO OUR PHASE TWO PDD
THIS PROJECT WILL PROVIDE A MUCH MORE IMMERSIVE DUTY FREE EXPERIENCE AND ASSIST US WITHIN INCREASING OUR DUTY FREE REVENUE
CURRENTLY, WE'RE ANTICIPATING COMPLETION IN 2026
OKAY
NEXT SLIDE, PLEASE
OKAY
SO THAT WAS THE PROJECT FROM LAST YEAR
NOW I WANT TO SHIFT TO THE PROJECTS THAT WE PUT INTO THIS YEAR'S CAPITAL PLAN
NEXT SLIDE, PLEASE
SO AS YOU KNOW, THE MAIN TERMINAL IS DATED AND COMING ON AROUND 50 YEARS WITHOUT A MAJOR RENEWAL REPLACEMENT
WE'VE HAD QUITE A FEW INDIVIDUAL RENEWAL PROJECTS ALREADY IN THE CAPITAL PLAN, BUT WE SAW THE NEED TO TAKE A MORE PROGRAMMED APPROACH TO PROVIDE FOR ALL THE WORK IN A MORE EFFICIENT AND COMPREHENSIVE MANNER
WE ALSO TOOK A LOOK AT OUR RENEWAL ELEMENTS THAT WERE NOT YET IN THE CAPITAL PLAN BUT WOULD BE SOON COMBINING ALL OF OUR CODE AND RENEWAL WORK TOGETHER INTO A COHESIVE PROGRAM AND TAKING INTO ACCOUNT HOW NORTH MAIN TERMINAL RENOVATION WILL CHANGE THE AESTHETIC AND INFRASTRUCTURE ON THE NORTH END
WE DEVELOPED OUR MAIN TERMINAL IMPROVEMENT PROGRAM
THIS PROGRAM IS BUILT ON SPECIFIC SCOPE THAT WAS ALREADY IN THE CAPITAL PLAN, PRIMARILY THE SPRINKLER AND SMOKE CONTROL WORK, WHICH FORMS THE MAJORITY OF THE SCOPE
OUR PLAN IS TO REQUEST DEVELOPMENT OF THE PROJECT DEFINITION DOCUMENT AT THE NEXT COMMISSION MEETING USING THE PLANNING BUDGET WE CURRENTLY HAVE AUTHORIZED FOR THE SPRINKLER AND SMOKE CONTROL WORK AS WELL AS OUR PRE ENGINEERING AND PREDESIGNED TASK
THIS PDD WILL LAST PROVIDE A SEQUENCE APPROACH OF HOW TO IMPLEMENT THE WORK, PROVIDING A COMPREHENSIVE OPERATIONAL IMPACT AVOIDANCE PLAN
NEXT SLIDE, PLEASE
SIMILAR TO THE MAIN TERMINAL PROGRAM, OUR CONCOURSE MODERNIZATION PROGRAM HAS ALSO BEEN IN DEVELOPMENT
CONCOURSE IS BC AND LAST A MAJOR IMPROVEMENT IN THE 90S
AT THIS POINT, MUCH OF OUR INFRASTRUCTURE IS RUNNING OUT OF CAPACITY AND LIFESPAN
SPECIFICALLY, WE ARE SEEING ISSUES WITH OUR HVAC SYSTEMS AS WE DEVELOP OUR NEEDS FOR THE CONCOURSE
WE BROKE THIS INTO TWO SUB PROGRAMS HANDLING THE SEALING AND ABOVE WORK AND THE WORK BELOW THE CEILING DO THE MORE CRITICAL NATURE OF THE WORK
WE HAVE INITIALLY FOCUSED ON CEILING AND ABOVE, AND WE CALL THIS CHIRRP, WHICH STANDS FOR CONCOURSE HPC INFRASTRUCTURE RENEWAL REPLACEMENT PROGRAM
THIS WORK WILL INCLUDE UPGRADING THE HPC, BUT ALSO NEW CEILING, LIGHTING AND SIGNAGE AND THE COMMON COURSES
WE ARE PROJECTING A $255,000,000 BUDGET FOR THIS WORK, BUT WE'LL REFINE THAT NUMBER AS WELL AS THE PHASING AND SCHEDULE AS WE DEVELOP PDD
NEXT SLIDE, PLEASE
THE UTILITY MASTER PLAN STUDY HAS BEEN PROGRESSING FOR A WHILE
ONE OF THE ELEMENTS WAS TO LOOK AT THE CONDITION AND CAPACITY OF OUR SYSTEMS FEEDING OUR EXISTING FACILITIES
WE ARE NOW AT A POINT WHERE WE CAN PROVIDE HIGH LEVEL ESTIMATES FOR THE RENEWAL REPLACEMENT OF THESE REQUIRED UTILITIES AND FOR OVERALL CAPITAL PLAN TRANSPARENCY PURPOSES
WE ARE INCLUDING THIS $250,000,000 AS A BUDGET THAT WE WILL MAINLY ALL DOWN TO TRANSFER INTO PROJECTS THAT ARE IN THE AREA OR PROVIDE SIMILAR WORK
SO A GOOD EXAMPLE OF HOW THIS BUDGET WILL BE DRAWN DOWN IS OUR AIRFIELD PAVEMENT WORK
AS WE REPLACE PANELS ON OUR RAMP AREAS, WE MOST LIKELY WILL ALSO HAVE UTILITIES THAT ARE IN NEED OF RENEWAL REPLACEMENT UNDERNEATH
AND SO WE'LL DO THAT ALL AS ONE WILL COMBINE THE WORK TOGETHER TO BOTH SAVE TIME AND BUDGET OVERALL
AND USING THIS BUDGET, WE'LL BE ABLE TO TRANSFER THIS BUDGET INTO THAT PAYMENT WORK PROJECT
NEXT SLIDE, PLEASE
OKAY, SO THE LAST TWO EXAMPLES ARE SOME OF THE LARGER INDIVIDUAL PROJECTS THAT WE PUT INTO THE CAPITAL PLANS HERE
THE UTILITY METER NETWORKING IS A REPLACEMENT OF AROUND 700 INTO LIFE ELECTRICAL METERS WITH NETWORK CAPABLE METERS, AS WELL AS CREATING A NETWORK OF A NETWORK TO MONITOR AND MANAGE OUR ELECTRICAL LOADS
THIS WILL HELP US REVIEW HOW WELL WE ARE MEETING OUR ELECTRICAL TARGETS AND COMPLY WITH THE WASHINGTON CLEAN BUILDINGS ACT FOR PERFORMANCE BASED ENERGY TARGET REPORTING
NEXT SLIDE, PLEASE
OKAY
LAST ONE, KING COUNTY RECENTLY CHANGED THEIR PERMIT REQUIREMENTS FOR WHAT THEY WILL ACCEPT FOR FLUID LIMITS FROM OUR INDUSTRIAL WASTEWATER SYSTEM
THIS LIMIT IS REALLY AROUND OUR DEICING, SO IT REALLY COMES IN THE WINTER WHEN WE'RE DOING DEICING ACTIVITIES
THE NEW PERMIT REQUIREMENTS ARE LOW ENOUGH THAT STORAGE AND SLOW RELEASE, AS WE CURRENTLY HAVE BEEN OPERATING UNDER, IS REALLY NOT AN ACHIEVABLE OPTION ANYMORE
SO ALTHOUGH OUR ENVIRONMENTAL GROUP IS EVALUATING REGIONAL AND ALTERNATIVE SOLUTIONS, THE KING COUNTY PERMIT 2022 DELIVERABLE REQUIREMENTS REQUIRED US TO MOVE FORWARD WITH AN ONSITE PRETREATMENT FACILITY DEVELOPMENT
WHILE REGIONAL SOLUTIONS ARE REVIEWED, OUR PLAN WILL BE TO COME BACK TO COMMISSION AROUND THE BEGINNING OF THE YEAR TO REQUEST AUTHORIZATION FOR DEVELOPMENT OF A PDD AND ENGINEERING ANALYSIS TO MEET THE KING COUNTY ENGINEERING REQUIREMENTS BY THE END OF 2022 AND THAT COMPLETES JUST THE UPDATE OF OUR CAPITAL WORK
I THINK BORGAN IS NOW GOING TO GIVE YOU A LITTLE BIT MORE DETAIL INTO THE THE FULL CAPITAL PROGRAM FROM A FROM A CASH FLOW PERSPECTIVE, A 20 MINUTES LEFT FOR THE OVERALL PROGRAM
CAN WE TAKE FIVE MINUTES TO ONCE AROUND ON THAT PRESENTATION? CLARK FORWARD
THANK YOU
I'LL BEGIN WITH COMMISSION BOWMAN
COMMISSIONER BOWMAN SORRY
NO, YOU'RE FINE
SORRY ABOUT THAT
NO, I AM FINE
THANK YOU
THANK YOU, COMMISSIONER CALKINS
NO QUESTIONS RIGHT NOW
THANK YOU, COMMISSIONER CHO
I'M GOOD AS WELL
THANK YOU
THANK YOU, COMMISSIONERS STEINBRUECK
I'M FINE
THANKS
THANK YOU
COMMISSIONER FELLEMAN
I HAD TWO QUICK QUESTIONS
ONE IS I HAVEN'T SEEN A BUDGET ITEM FOR INCREASED ELECTRICAL CAPACITY FOR ELECTRICAL TUGS PLUGGED IN ANYWHERE
AND I KNOW THAT OUR REPEATEDLY I'M TOLD THAT OUR ABILITY TO PHASE OUT DIESEL TUGS IS CONTINGENT ON OUR INCREASED CAPACITY FOR TO HAVE THE ELECTRICAL STUB OUT
AND I WAS JUST CONFUSED BY WHAT A REGIONAL SOLUTION MEANS WHEN WE'RE DEALING WITH ON SITE INDUSTRIAL WASTE TREATMENT
DO WE HAVE ANY THOUGHTS ON THAT EITHER? ON THE ESC, WE DO HAVE AN EXISTING PROJECT IN THE CAPITAL PLAN THAT IS WORKING TO PUT IN THE ESC CHARGING STATIONS ON OUR CONCOURSES A AND B
CURRENTLY, I DON'T KNOW THE EXACT TIME FRAME FOR WHEN THAT PROJECT WILL BE COMPLETE, BUT WE CURRENTLY HAVE CHARGING STATIONS ON CONTACT COURSES, CD AND YOUR SATELLITE
MR TECHNICIAN
PRESIDENT, I SEE SANDY KILROY WITH HER HAND UP
YES, THANK YOU
JUST ON THE REGIONAL SOLUTION, WE ARE IN A COUPLE OF CONVERSATIONS WITH KING COUNTY AROUND HOW TO ADDRESS THE WASTEWATER TREATMENT FLOWS AND STORM WATER COMING OFF THE AIRPORT
AND WE'RE LOOKING AT BOTH OPERATIONAL ISSUES THAT BOTH WE CAN MAKE AND THE WAY OR TREATMENT SYSTEM CAN MAKE AT RENTING
BUT AS PART OF THAT, THE COUNTY IS LOOKING AT ALL THEIR FLOWS AND WHAT GOES TO WHAT TREATMENT PLANT AND WHETHER REGIONAL CHANGES LIKE THAT CAN HELP ADDRESS THE AMOUNT OF SLOW WE HAVE DURING THOSE BIG RAIN AND SNOW EVENTS
ALRIGHT, THANK YOU
CAN I GET A TIMELINE ON OUR ESG IMPLEMENTATION NUMBERS AND HOW WE'RE PROJECTED TO GO INTO THE FUTURE? YEAH, I THINK WE CAN PROVIDE YOU WITH THAT
ALRIGHT
THANK YOU
SO BORGAN, TAKE IT AWAY
OKAY, LET'S GO TO THE NEXT SLIDE, PLEASE
I'M GOING TO SPEND JUST ABOUT FIVE MINUTES GOING THROUGH SOME OVERVIEW SLIDES RATHER QUICKLY AND THEN I'LL SHOW OUR FORECAST
SO THAT'S REALLY WHAT'S LEFT
AND THIS FIRST SLIDE JUST SHOWS THE NUMBERS, THE ACTUAL CASH FLOWS OF OUR MAJOR PROGRAMS AND SOME OF THE OTHER SUMMARY VERSIONS
BUT WHAT WE'RE LOOKING AT HERE IS ALMOST $4 BILLION OVER THE NEXT FIVE YEARS
SO THIS IS A VERY SIGNIFICANT INCREASE IN OUR LEVEL OF CAPITAL SPENDING
AND I THINK THE DESCRIPTIONS THAT KERI HAS JUST PROVIDED OF SOME OF THE MAJOR NEW PROGRAMS ARE REALLY WHAT'S DRIVING THAT
IN ADDITION, WE HAVE THE ONGOING BAGGAGE OPTIMIZATION PROGRAM THAT WILL CONTINUE NOW FOR THE NEXT FIVE YEARS AT SPENDING AT A VERY HIGH LEVEL
SO LET'S GO ON TO THE NEXT SLIDE, PLEASE
AND THIS IS JUST A SUMMARY IN ORDER OF THE BIGGEST PROJECTS, INCLUDING THOSE THAT ARE WELL UNDERWAY AND ALMOST COMPLETE, LIKE THE INTERNATIONAL ARRIVALS FACILITY
BUT IT JUST PUT SOME OF THE NUMBERS TO SOME OF THE PROJECTS THAT KERI WAS JUST DESCRIBING
AND I THINK THAT THESE MAJOR PROGRAMS TAKE UP A BIG PART OF OUR CAPITAL CAPITAL PLAN IN THE NEXT FIVE YEARS
NEXT SLIDE, PLEASE
AND WHILE YOU MAY NEED A MAGNIFYING GLASS HERE, HERE IS THE DETAILED LIST OF ALL OF THE NEW PROJECTS THAT ARE COMING INTO OUR CAPITAL PROGRAM AND KERI'S HIGHLIGHT AT ALL THE BIG ONES
BUT THERE ARE OTHER ONES AS WELL
AND JUST TO REITERATE, EACH OF THESE PROJECTS WILL COME TO YOU FOR AUTHORIZATION FOR DESIGN, PROBABLY SOMETIME NEXT YEAR OR SHORTLY FOLLOWING
NEXT SLIDE, PLEASE
AND THIS IS A VIEW OF OUR CAPITAL PROGRAM THAT I'LL JUST SUMMARIZE VERY QUICKLY THAT THE TOP SECTION IS THOSE PROJECTS THAT ARE AUTHORIZED FOR CONSTRUCTION OR HAVE SOME AUTHORIZATION FOR CONSTRUCTION
AND YOU CAN SEE THAT THAT TOTALS OVER A BILLION DOLLARS OR 27% OF THE CASH FLOWS
THE NEXT SECTION IS THE PROJECTS THAT HAVE DESIGN AUTHORIZATION, AND THAT ACCOUNTS FOR ONE 2 BILLION, OR 31%
AND THEN FINALLY, WHAT'S LEFT IS THOSE THAT ARE PENDING AUTHORIZATION, AND THAT'S 42% OR ONE 7 BILLION
SO THAT'S JUST A DIFFERENT WAY OF SLICING OUR CAPITAL PROGRAM
SO THERE WILL BE A LOT OF PROJECTS COMING FORWARD IN THE NEXT FEW YEARS FOR DESIGN FOR CONSTRUCTION AUTHORIZATION
AND THAT TO A LARGE EXTENT, IS WHAT'S DRIVING THE INCREASED RESOURCES THAT I DESCRIBED EARLIER IN THE PROJECT MANAGEMENT GROUP AND IN SOME OF THE OTHER AREAS, BECAUSE AS AN ORGANIZATION, WE HAVE TO REALLY BE PREPARED TO DELIVER A CAPITAL PROGRAM LIKE THIS
AND IT'S NOT JUST IN PROGRAM MANAGEMENT, IT'S THROUGHOUT THE ORGANIZATION
NEXT SLIDE, PLEASE
THIS IS THE FUNDING PLAN
AND JUST TO BE REALLY SIMPLE HERE, THE LIGHT BLUE IN 2022 IS OUR EXISTING BOND PROCEEDS FROM OUR 2021 BOND ISSUE
AND SO YOU'D SAY THAT OUR SPENDING FOR NEXT YEAR IS PRETTY WELL COVERED
BUT AS WE GET OUT TO 2023 AND BEYOND, WE ARE LOOKING AT THE NEED TO ISSUE A LOT OF BONDS TO PAY FOR THE AIRPORT CAPITAL PROGRAM
THE GREEN IS ADF THAT'S OUR CASH
AND THE REASON THAT'S SO SMALL GOING FORWARD IS THAT MUCH OF THE CASH THAT WE GENERATE, WE'RE SAVING BECAUSE WE'RE BUILDING UP OUR CASH BALANCE FOR RESILIENCY PURPOSES
BUT WE WILL HAVE MORE CASH ONCE WE GET BEYOND 2024, THEN WE CAN START SPENDING SOME MORE MONEY
I BUT BOND FUNDING IS PRIMARILY HOW WE WILL BE PAYING FOR THIS CAPITAL PROGRAM
IF THE INFRASTRUCTURE BILL GOES THROUGH
WE ARE EXPECTING A LITTLE OVER 400 MILLION, SO THAT WOULD OBVIOUSLY HELP
BUT THAT IS STILL A RELATIVELY SMALL PART OF OUR TOTAL CAPITAL NEEDS FOR THE NEXT FIVE YEARS
NEXT SLIDE, PLEASE
AND THIS IS NOW I'LL TALK ABOUT THE FORECAST AND HERE IS A LOOK AT OUR CURRENT THINKING ON THE PASSENGER FORECAST AND JUST PICKING UP AFTER 2022, THERE'D BE A 4% GROWTH IN 2023 AND THEN A RELATIVELY MODEST GROWTH AFTER THAT, ACHIEVING 2019 LEVELS AND EITHER 2023 OR 2024 IN THAT TIME FRAME
THAT'S THE CURRENT THINKING
NEXT SLIDE, PLEASE
SO IT SAYS PASSENGER FORECAST THAT GO A LONG WAY TO DRIVING OUR OUR FINANCIAL FORECAST HERE
THE AIRLINE REVENUES WILL BE GROWING LARGELY BECAUSE WE'RE BRINGING ON NEW ASSETS AND NEW FACILITIES, AND THEN WE HAVE TO PAY FOR THOSE THROUGH DEBT SERVICE OR OPERATING AND MAINTENANCE COSTS, THE NON AERONAUTICAL REVENUES
WE'RE STRIVING TO INCREASE THOSE REVENUES AS BEST WE CAN, BECAUSE THAT'S WHAT WE NEED TO PAY FOR OUR CAPITAL PROGRAM
OUR OPERATING COSTS ARE GROWING, TOO, AS WE JUST HAVE ANNUAL COST INCREASES
AND YES, THERE WILL BE SOME NEW FTES, BUT THE AMOUNT WILL BE DETERMINED
LET'S JUMP FORWARD TO THE KEY METRICS THAT ARE ON THE NEXT SLIDE, PLEASE
SO HERE WE SEE THE DEBT SERVICE COVERAGE ONCE WE GET BEYOND THE BENEFIT OF THE GRANTS THAT WILL START TO DECLINE
BUT WE'RE STILL AT A HEALTHY LEVEL BY 2026 OF ONE POINT 43 CASH BALANCE
WE'RE GOING TO HIT THE 18 MONTHS BY 2024
AND HERE TO RESPOND TO THE QUESTION EARLIER, IS OUR COST FOR EMPLOYMENT GROWING FROM A LITTLE OVER $15 NEXT YEAR TO ALMOST $22 BY 2026, AND THAT'S TO BE EXPECTED WITH THE CAPITAL PROGRAM OF THE SIZE
AND I THINK WE'VE BEEN SIGNALING THAT OUR CP WOULD BE GOING UP AND IT ACTUALLY IS GOING UP
SO THE OTHER KEY MEASURES HERE, THE PORT AT THE BOTTOM, THE DEBT PIER ORIGINATING PASSENGER
THIS GOES TO SHOW THAT OUR OUR DEBT LEVELS WILL BE GROWING AS WE ISSUE MORE DEBT TO PAY FOR THIS CAPITAL PROGRAM
AND WITH THAT, I WILL STOP AND ASK FOR ANY ADDITIONAL QUESTIONS
BUT THAT COMPLETES THE PRESENTATION
THERE IS A SIGNIFICANT AMOUNT OF INFORMATION IN THE APPENDIX, BUT I DON'T PLAN ON COVERING THAT HERE TODAY
WELL, THANK YOU, BORGAN
AND THANK YOU ALL SPEAKERS FOR BEING QUITE CONCISE IN YOUR PRESENTATIONS AND HAVING ALLOWED FOR US TO PEPPER YOU WITH SOME QUESTIONS WITH TEN MINUTES LEFT
CLERK HART, WOULD YOU GO AROUND THE TABLE ONCE MORE? THANK YOU, MR COMMISSION PRESIDENT
I'M GOING TO LEAVE THE PRESENTATION AT JUST IN CASE WE HAVE TO REFERENCE ANY SLIDES FROM THIS LAST SEGMENT OF QUESTIONS BEGINNING WITH COMMISSIONER BOWMAN
I DON'T HAVE ANY QUESTIONS
I MEAN, THERE'S JUST SO MUCH HERE, IT'S IMPOSSIBLE TO COVER IT IN THE NEXT COUPLE OF MINUTES
SO I'LL HOLD MY QUESTIONS ORGAN AND I CAN EMAIL THEM TO YOU LATER
THANK YOU
VERY GOOD
THANK YOU, COMMISSIONER FELLEMAN, COMMISSIONER CALKINS
THANK YOU, BORGAN
I KNOW BEFORE DAYS WE WERE SETTING BUDGETS AND CREATING FORECAST
WE SPENT A LOT OF TIME THINKING ABOUT THE COST PER EMPLOYMENT NUMBER AND I'M WONDERING IF YOU COULD TAKE A LITTLE BIT OF TIME TO EXPLAIN IT AND ALSO TELL US WHERE WE'RE GOING TO SIT BASED ON THIS FINANCIAL FORECAST RELATIVE TO PIER AIRPORTS AROUND THE COUNTRY
SINCE THE COST FOR EMPLOYMENT IN, I THINK, IS ONE OF THOSE FACTORS THAT GOES INTO DETERMINING WHETHER CARRIERS BRING NEW SERVICE HERE
AND, OF COURSE, THE BOTTOM LINE FOR PASSENGERS HOW MUCH THEIR PLANE TICKET COSTS
SO COST FOR EMPLOYMENT THE LAST COUPLE OF YEARS WITH SUCH A DECREASE IN THE PASSENGER LEVEL HAS BECOME A LITTLE BIT OF A MEANINGLESS MEASURE
AND AIRPORTS HAVE BEEN ALL OVER THE PLACE, BUT PRETTY PANDEMIC AND FORECASTS ARE STARTING TO MAKE SENSE GOING FORWARD
BUT WE SAW THAT THERE WOULD BE KEY AIRPORTS LIKE LA, SAN FRANCISCO WOULD BE IN THE MID TWENTIES, POSSIBLY HIGHER, AND WE NOW SORT OF BASED ON WHAT I'VE SEEN, I STILL EXPECT SOME OF THE BIG WEST COAST GATEWAY HUBS WILL BE IN PROBABLY IN THE HIGH 20S, SOME MAY BE IN THE LOW 30S
I THINK AS WE GO FORWARD, OUR GOAL WILL BE TO BE SLIGHTLY LESS THAN THOSE OTHER LARGE AIRPORTS
BUT THERE'S ABSOLUTELY NO QUESTION IN MY MIND THAT OUR COST PER EMPLOYMENT WILL CONTINUE TO GROW AS WE LAYER IN
THE CAPITAL PROGRAM PARTICULARLY RELATES TO THE SUSTAINABLE AIRPORT MASTER PLAN
WE'RE GOING TO BE MOSTLY DEBT FUNDING THIS
SO THE COST OF DEBT SERVICE GO INTO THE RATE BASE, AND THAT'S WHAT WE'LL BE INCREASING THE AIRLINE REVENUES AND THEREFORE THE CPE
OUR GOAL IS TO STAY COMPETITIVE
BUT WE'RE REALLY FOCUSING ON THE WEST COAST GATEWAY HUBS BEING COMPETITIVE IN THAT GROUP, AS OPPOSED TO TRYING TO BE COMPETITIVE NATIONWIDE
WHERE REALISTICALLY, THE KIND OF FACILITIES THAT WE ARE GOING TO NEED TO BRING ON OVER THE NEXT TEN PLUS YEARS ARE GOING TO PUT A LOT OF PRESSURE ON OUR COST STRUCTURE, AN ORGAN
IF I COULD ADD TO THAT COMMISSION ACCOUNTING, WE HAVE TO BE VERY CAREFUL WHEN WE COMPARE CPE OF OUR AIRPORT VERSUS ANY OTHER AIRPORT, BECAUSE MANY TIMES IT'S NOT AN APPLES TO APPLES COMPARISON
YOU MIGHT HAVE AN AIRPORT THAT HAS A VERY LOW CPE BUTTONS BECAUSE THEY HAVEN'T DONE ANY MAJOR CAPITAL DEVELOPMENT PROGRAM
SO DEPENDING ON WHERE YOU ARE IN YOUR CAPITAL DEVELOPMENT PROGRAM, YOUR CPE CAN VARY SIGNIFICANTLY
ALSO, MANY AIRPORTS, THE AIRLINES, FOR EXAMPLE, MANAGE CERTAIN TERMINAL THE CAUSE OF UNIT TERMINAL GRID
THEY OBSERVE ALL THE COSTS OF SOCIAL WITH THOSE NOT THAT MAY NOT FACTOR INTO THE COST PER EMPLACEMENT SO MANY TIMES THAT WE'RE COMPARING AIRPORTS CPE, IT'S REALLY NOT AN APPLES TO APPLES, SO WE NEED TO BE VERY CAREFUL WHEN WE COMPARE CP
YOU CAN HAVE AN AIRPORT A VERY LOW CPU
THE AIRPORT IS FALLING APART
THEY HAVEN'T DONE ANYTHING IN A LONG TIME TO UPGRADE THEIR FACILITIES, SO WE JUST NEED TO BE CAUTIOUS
THAT'S REALLY HELPFUL
I DIDN'T REALIZE THAT ABOUT THE UNIT TERMINAL WHERE THEY CAN KIND OF ARTIFICIALLY REDUCE THEIR NEW ARE COMING FROM SOME OF THE ENTIRE TERMINAL ACTUALLY MANAGED BY THE AIRLINES
IT DOESN'T FACTOR IN THE CPE, BUT WE DO IT
BUT WE'D BE DOING A COMPARISON WITH FOR EXAMPLE, JARVER SHOULD SEND OCCIDENTAL AIRPORT
IT'S NOT AN APPLES APPLES COMPARISON BECAUSE WE MAINTAIN MORE SUPPORT FACILITIES HERE
ALRIGHT
THANK YOU, LANCE
CAN WE MOVE TO THE NEXT ONE? THANK YOU, COMMISSIONER CALKINS
COMMISSIONER CHO
YEAH
BORGAN
WHAT IS THE AVERAGE TERM OR MATURATION RATE TERM FOR OUR BOND? HOW LONG DO WE ISSUE OUR BONDS? TYPICALLY THERE'S A 25 YEAR TERM
OKAY
AND IN A SCENARIO LIKE IF WHERE WE HAVE HUGE COST OVERRUNS, HOW DO WE MAKE UP FOR OUR ACCOUNT FOR THAT? DO WE ISSUE MORE BONDS OR DO WE RAISE PS? I GUESS WE CAN'T REALLY GET THESE
HOW DO WE ACCOUNT FOR THAT? YEAH
AT THE MARGIN TO PAY FOR THINGS
WE USE REVENUE BONDS
AND IN THE CASE OF THE IF WE'RE USING A SIGNIFICANT AMOUNT OF PFCS TO PAY THE DEBT SERVICE SO THAT THE COSTS DON'T GO IN THE RATE BASE BECAUSE WE ARE TRYING TO MANAGE THE GROWTH OF THE COST TO THE INTERNATIONAL ARRIVALS
AND IS THE BAGGAGE OPTIMIZATION ENTIRELY PAID FOR BY PSE, OR IS IT ALSO TO BE ISSUE BONDS FOR THAT PROJECT, PRIMARILY BONDS? ALTHOUGH WE ALSO HAD A SIGNIFICANT FEDERAL CONTRIBUTION FROM A TSE TO TSA, EFFECTIVELY A GRANT, IT WAS ALL RIGHT
THANK YOU
THAT'S IT
THANK YOU, COMMISSIONER CHO, COMMISSIONERS
TIME BRO
THANK YOU
COMMISSIONERS STEINBRUECK
COMMISSIONER FELLEMAN
OKAY, I DIDN'T HEAR THAT, BUT I JUST WAS HOPING TO GET A SENSE OF WHAT IT WOULD MEAN IN THIS NEXT YEAR
WE HAVE A MILLION AND A HALF FOR SAM PLANNING, BUT THERE IS NOT ANTICIPATED TO BE THE POTENTIAL FOR SAM CONSTRUCTION PROJECTS
AND AND I DIDN'T SEE PERHAPS IT'S NOT A BIG ITEM, BUT THE POTENTIAL FOR AIRPORT DRIVES EXPANSION
HOW WOULD OUR DEBT SERVICE OR OTHER EXPENSES BE FOR NEXT YEAR OR WOULD NOT PLAY A LARGE ROLE FOR JUST NEXT YEAR? SO FOR NEXT YEAR, THE COSTS THAT ARE IN THE BUDGET ARE IN THE OPERATING BUDGET WAS THE 1.5 MILLION TO COMPLETE THE ENVIRONMENTAL REVIEW WE HAVE HAD IN OUR BUDGET, 300 MILLION THAT WAS APPROVED BY THE AIRLINES AS PART OF OUR CURRENT LEASE AGREEMENT TO SPEND ON PLANNING AND PRE CONSTRUCTION WORK FOR SAM PROJECTS
AND OBVIOUSLY I THINK NOTHING GOES BEYOND 30% DESIGN
AND THERE'S A NUMBER OF THE ENABLING PROJECTS THAT ARE IN VARIOUS STAGES OF EARLY DESIGN
SO THOSE ARE IN THE BUDGET WE'VE TYPICALLY BEEN PAYING FOR THOSE WITH COUCH
OKAY, SO YOU DON'T EXPECT SIGNIFICANT ADDITIONAL STAMP EXPENSES OTHER THAN THE MILLION AND A HALF FOR ENVIRONMENTAL REVIEW FOR 2022
I'LL GET BACK TO YOU ON THE SPECIFIC CASH FLOWS FOR THOSE CIPS THAT WE HAVE RELATING TO SAM
I THINK THEY'RE ACTUALLY LISTED IN THE PRESENTATION, BUT NOW THAT'S DOWN
SO I CAN'T REMEMBER THE NUMBER, BUT IT SHOULD BE LISTED THERE ANYWAY
IT'S ALREADY BUILT INTO THE BUDGET THAT WE'RE TALKING ABOUT
YES
ALRIGHT, GREAT
I SEE ONE MORE HAND UP AND THEN WE CAN TAKE A 15 MINUTES BREAK BEFORE OUR EXECUTIVE SESSION
YES, WE HAVE MR JEFFREY BROWN TAN
AND IT'S FINE IF YOU'RE A SON
I WAS GOING TO ADD TO THE STOP THIS QUESTION
BUT IF YOU'RE SET TO WALK IN THAT PAST, JEFFREY, WE HAVE A COUPLE OF MINUTES
YOU WANT TO ADD ANYTHING
SO JUST REMEMBER, COMMISSIONERS, WE HAD FIVE IN PROJECTS THAT WE HAD APPROVAL FOR $10 MILLION BACK
I THINK IT WAS LAST YEAR OR MAYBE THE YEAR BEFORE TO DO DESIGN OF THOSE EVEN PROJECTS THAT WORK IS CONTINUING
WHAT WE'RE CURRENTLY DOING IS ALIGNING OUR CAPITAL DESIGN NEEDS WITH SOME ENVIRONMENTAL FOR NEXT YEAR, I THINK WILL BE PROGRESS IN THE SUB
ENVIRONMENTAL DEPENDS ON OUTCOME OF THAT
THEN WE'RE GOING TO THE ADDITIONAL DESIGN
THAT'S THE CONTINGENCY
VERY GOOD
AND COMMISSIONER STEINBRUECK YOU JUST GAVE IT A PASS
YOU NOTICE? OH, THERE YOU GO
ALRIGHT, THEN I'M FINISHED
THANK YOU
VERY GOOD THEN
WELL, THANK YOU VERY MUCH AGAIN
AND VERY ILLUMINATING CONVERSATION
WE WILL CALL THE STUDY SESSION CLOSED AT 1014 AND SEE YOU ALL BACK FOR THE EXECUTIVE SESSION AT 1030
THANK YOU
SO THANK YOU, BORGAN
AND THANK YOU, KERI.

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