PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      7a 
Date of Meeting    January 11, 2011 

DATE:    January 5, 2011 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Dan Thomas, Chief Financial & Administrative Officer 
Rudy Caluza, Director, Accounting & Financial Reporting 
SUBJECT: SAO's Performance Audit of the Port's Real Estate Management 

PURPOSE OF BRIEFING:
The Port Commission will hold a public hearing to consider the findings of and receive
public comment on the State Auditor's Office (SAO) Performance Audit of the Port's Real
Estate Management and Selected Programs issued on December 13, 2010, pursuant to RCW
43.09.470.
SYNOPSIS: 
The SAO is mandated to conduct periodic performance audits to review and analyze the
economy, efficiency, and effectiveness of the policies, management, fiscal affairs, and
operations of state and local governments, agencies, programs and accounts. The SAO 
issued an audit of the Port of Seattle's Real Estate Management and other selected programs 
on December 13, 2010. The audit centered on the Port's real estate management and leasing
operations, as well as focusing on past sales and purchases of Port property.
All SAO performance audit reports are submitted to the corresponding legislative body and
made available to the public on or before thirty days after the completion of each audit.
Subsequently, within the following thirty day period, the corresponding legislative body is
required hold at least one public hearing to consider the findings of the audit and receive
comments from the public. 
The Joint Legislative Audit Review Committee (JLARC) also holds hearings on performance
audit. That hearing was held on January 5, 2011. Port staff members, including Chief
Finance and Administrative Officer Dan Thomas and Managing Director, Real Estate
Division, Joe McWilliams traveled to Olympia to testify before the committee. SAO staff
members were complimentary toward the Port's response to audit recommendations and
noted the significant reforms implemented throughout the organization during the last few
years.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
January 5, 2011 
Page 2 of 2 
The Port of Seattle Commission is the elected body ultimately responsible for establishing
policy for the Port of Seattle. Therefore, the procedure for officially responding to the SAO
performance audit requires taking public testimony and having a discussion at a public
hearing within thirty days of the release of the audit. After public testimony is heard and the
audit is discussed by the Commission, it will publicly approve the Port's final response to the
audit in matters involving policy or recommendations suggesting Commission action. 
The SAO released its performance audit report publicly on December 13, 2010. Port staff
members prepared a thorough initial response to the recommendations made in the report, 
which was contained in the SAO audit report. However, any response by the Commission 
itself during the preparation of this audit would have had to take place in public, as required
by the Open Public Meetings Act. Current SAO procedures prevented such discussion to
occur by requiring responses to drafts of the audit be submitted privately to the SAO prior to
publication of the audit report.
Given that the Commission must both determine responses to policy recommendations made
by the SAO to the Commission and finalize the Port's response in public session, a number
of issues may be taken up at this meeting, including: 
Commission oversight over Real Estate transactions. 
Progress on the comprehensive strategic plan known as the "Century Agenda." 
Commission discussion of the purchase of the East Side Corridor. 
Commission input prior to the publication of the Audit Report. 
STRATEGIC OBJECTIVES: 
Be a high performance organization: The Port makes it a high priority to be 
transparent and accountable to the taxpayers of King County, as stewards of
public funds and resources. The Port embraces the responsibility to ensure that its
operations and programs continuously improve in quality, efficiency, and
effectiveness in order to instill public trust and provide ongoing benefit to the
residents of King County and the region. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
SAO's Performance Audit Report on Real Estate Management and Selected
Programs released December 13, 2010. 
PREVIOUS COMMISSION ACTION OR BRIEFING: 
No previous commission action.