Commissioners                                                                   Tay Yoshitani
Bill Bryant
Chief Executive Officer
Chair and President
John Creighton                                   P.O. Box 1209 
Patricia Davis                               Seattle, Washington 98111
Lloyd Hara                                    www. portseattle.org
Gael Tarleton                                     206.787.3000

An audio of the meeting proceedings and meeting materials are available on the Port of
Seattle web site -
http://www.portseattle.org/about/organization/commission/commission.shtml

(The approximate point in the audio recording for the specific item is identified by
minutes and seconds; example: 01:30.)
PROPOSED MINUTES
COMMISSION SPECIAL MEETING OCTOBER 8, 2009 
The Port of Seattle Commission met in a special meeting at 9:00 a.m., Thursday, October
8, 2009 in the Commission Chambers at Pier 69, 2711 Alaskan Way, Seattle, WA.
Commissioners Bryant, Creighton, Davis, Hara and Tarleton were present.
1.       CALL TO ORDER 
The regular meeting was called to order at 9:10 a.m. by Bill Bryant, Chair and President.
2.       EXECUTIVE SESSION pursuant to RCW 42.30.110 
None.
PLEDGE OF ALLEGIANCE 
3.       APPROVAL OF MINUTES 
None.
4.      SPECIAL ORDER OF BUSINESS 
None.
5.      UNANIMOUS CONSENT CALENDAR 
None.

October 8 SM Min

PORT COMMISSION MINUTES OF THE SPECIAL MEETING
THURSDAY, OCTOBER 8, 2009                                   P. 2
6.   DIVISION, CORPORATE AND COMMISSION ACTION ITEMS 
None.
7.   STAFF BRIEFINGS 
None.
8.   NEW BUSINESS 
9.   POLICY ROUNDTABLE 
a.  (________) Budget Workshop: Briefing on 2010 Corporate and Capital
Development Division Budgets
Presentation documents: Commission agenda memorandum dated September 30, 2009
and computer slide presentations titled, "Port of Seattle 2010 Preliminary Budget: and
Capital Development Division 2010 Preliminary Budget" from Dan Thomas, Chief
Financial Officer; Ralph Graves, Managing Director, Capital Development Division; and
Michael Tong, Corporate Budget Manager.
Presenters: Mr. Thomas, Mr. Tong and Dakota Chamberlain, Director, Seaport Project
Management Group
Mr. Thomas noted that over the past few weeks, Commissioners had been provided
briefings on the preliminary budgets for individual divisions of the Port, and that today's
information would provide more of a summary of how the preliminary budget is looking
from a total Port-wide basis. He stated that one of the issues the Port is facing is a
significant increase to the Environmental Reserves, which runs through the income
statement as an environmental reserve expense. He reminded the Commission that this is
where reserves are set up for future liabilities for future cleanup actions, and noted that it
is anticipated that there will be some large ones beginning in 2010, particularly in the
Seaport and Real Estate divisions. He also stated that those costs are funded by the tax
levy and not out of operating revenues, but under accounting rules, they are booked under
operating expense against operating revenues.
Mr. Thomas stated that staff plans to return in early November with a fuller picture of
what is happening with the 2009 budget and the impacts resulting from the Voluntary
Separation Program (VSP).
Responding to a comment by Commissioner Tarleton, Mr. Thomas clarified that without
counting environmental expenses, the preliminary 2010 budget has gone down
substantially from the 2009 budget (4.4%).
Mr. Thomas also called to attention an additional booking of reserves, that being Other
Post Employment Benefits (OPEB), which are non-pension related benefits (typically

Oct 8 SM Min

PORT COMMISSION MINUTES OF THE SPECIAL MEETING
THURSDAY, OCTOBER 8, 2009                                   P. 3
health care) that are provided for retirees, noting that the booking of these costs began in
2007. He noted that the largest portion of those reserves relate to the fact that the Port's
retirees are able to join the Port's medical plans and pay their own premiums. He stated
that in the past, those premiums did not reflect the full cost of the benefits being achieved
by the retirees. As a result, as part of overall cost-cutting measures, the decision was
made to charge retirees the full cost of their health care benefits beginning in 2010. As a
result of doing so, staff expects to achieve significant savings by reversing and writing
off those reserves.
Mr. Thomas provided a comparison of operating revenues and expenses from 2009
budget through the 2010 budget, noting that the numbers provided included the
environmental expenses for 2010. Commissioner Bryant stated that it would be helpful
to have an additional column of numbers which reflected the environmental unfunded
mandate costs.
Mr. Thomas then provided a summary of Port FTE's (full-time equivalent employees),
noting that there has been a reduction across the board, both through the VSP program as
well as the elimination of some positions.
Mr. Tong then addressed items within the 2010 Preliminary Budget for Corporate
Professional and Technical Services, first providing a brief overview of how the
preliminary budget target for 2010 was achieved. He reviewed budget cuts and noted
that cuts were made across the board, and stated that since most of the corporate costs are
payroll-related, significant cuts had been achieved due to FTE reductions.
Mr. Tong commented on additions which had been made to the 2010 budget, which
included:
Port Centennial Planning
Workplace Responsibility Program
2 FTE's in Human Resources and Development (HR&D) for Human Capital
Management (HCM)
Payment Card Industry (PCI) Compliance Mandatory Audit
Self-Funding Benefits Broker
Deferred Compensation Third Party Administrator
Commissioner Hara asked about the approximate cost of the Port Centennial. Mr.
Thomas responded that there is not a sure amount at this point, that there is a significant
amount of work to be done, and there will be more funding in 2011.
Commissioner Tarleton stated that there is hope that much of the funding will be
underwritten by sponsors, and that she would be reluctant to speculate about what the
impact on the 2011 budget could be on the Port until there is a chance to review a draft
budget from the team. She also commented that she believes the total will be in the
$500,000 to $1,000,000 range, but would not be principally funded by us.

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Mr. Tong noted that one of the savings measures was the elimination of the Economic &
Trade Development Department. Commissioner Tarleton clarified that although the
department had been eliminated, the functions and responsibilities of that department
would reside in other Divisions.
Commissioner Bryant asked to see breakouts, prior to the October 13 meeting, of line
items for Risk Services; Human Resources and Development (HR&D); Information &
Communications Technology (ICT); Office of Social Responsibility (OSR); and
Regional Transportation.
Mr. Tong then reviewed a summary of the Corporate FTE count and also elements of risk
for 2010, which included:
Uncertainty of economic conditions
SAO Performance Audit
Renewal of insurance premiums
Unexpected litigation or claims
Unanticipated events or Transportation Security Administration (TSA) mandates
During the discussion of proposed Capital Projects, Commissioner Tarleton stated that it
would be helpful to see a breakout between Airport and Seaport Divisions of the ICT
projects. Peter Garlock, Chief Information Officer, responded to the issue, noting that the
amount presented in this presentation ($14,645,000) was only for Corporate Capital
projects and that the total amount of the ICT budget was closer to $25,000,000. Mr.
Garlock also stated that perhaps it would be helpful for staff to provide a detailed
breakout of the individual projects that are proposed, as well as who will benefit from
each project. Commissioner Bryant asked staff to consider where cuts could be made if it
was necessary to reduce the proposed amount by $5,000,000.
Mr. Tong reviewed the remaining schedule for the 2010, noting that the preliminary
budget document would be available to the Commission on October 20; First Reading of
the budget would take place on November 10; Second Reading and Final Passage would
take place on November 24; and the Final Budget would be filed with the county by
December 1.
(________) As introduction to Mr. Chamberlain's presentation on the Capital
Development Division's 2010 Preliminary Budget, he reviewed the Division's Mission,
which is "The Capital Development Division (CDD) delivers projects and provides
technical and contracting services in support of the business plans and infrastructure
needs of the Port of Seattle." He also reviewed CDD's priorities for 2010, which include:
Continue the full implementation of the changes resulting from recent audits and
new Port Policies, anticipating a return visit from the State Audit Office (SAO) in
2011.
Begin operation of the new Enterprise-wide Project Delivery (EPDS) system.

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Prioritize accomplishment of critical Capital Improvement Program (CIP)
projects.
Measure department performance according to the CDD performance metrics.
Complete the high priority Capital Development Division Initiatives.
Mr. Chamberlain noted that the CDD budget is driven by the workload defined by the
Seaport, Aviation and Real Estate divisions. He stated that an increase has been seen in
the amount of expense work being done, partly due to changes to accounting rules.
Mr. Chamberlain noted that positions held by consultants in the past are continuing to be
converted to Port staff positions, thereby reducing the number of consultants and
reducing some costs. It was also noted that vacancies within Central Procurement would
be filled.
Mr. Chamberlain provided and organizational chart of the CDD, noting that the Division
is made up of five separate departments and that budgeting is done at the department
level. Mr. Chamberlain stated that CDD's expense target for 2010 was a 5% savings
compared to what was approved for the 2009 budget.
Staffing FTE's by department were reviewed and he also provided a look at what the
make-up of the Procurement Office staff prior to the SAO audit as well as how that staff
has changed since that time and currently exists.
Nora Huey, Director, Central Procurement Office, noted that in the restructuring of the
department, the main focus had been to bring staff into compliance and going forward the
department will be looking at how to gain better efficiencies.
Mr. Chamberlain identified upcoming risks, which included:
Financing difficulties disrupt capital programs.
Operating income declines interrupt expense-funded programs.
Personnel and process transitions disrupt project performance.
Renewed audit scrutiny disrupts response and performance.
Resource shortages constrain process improvements.
Opportunities were also identified, including:
Depressed market generates low bids for construction.
Slowed design and construction employment provides quality candidates for CDD
vacancies.
Sustainable asset management can inform project decisions.
Building information management can aid project visualization and construction.


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10. ADJOURNMENT 
There being no further business, the meeting was adjourned at 10:40 a.m.
(A digital recording of the meeting is available on the Port's website)

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Oct 8 SM Min