Aviation Division 2020 Budget Presentation
Item No. 3 Morning Study Session Meeting Date: October 8, 2019 Aviation Division 2020 Preliminary Budget Commission Briefing October 8, 2019 Outline for Aviation presentation Strategic priorities Operating budget summary Expense changes and budget requests Revenues and NOI: aeronautical and non-aeronautical Key measures and trends Capital Budget 2020 2024 Proposed new capital projects Financial Forecast for 2020 2024 Funding plan highlights, use of PFCs Appendix with budget details and reports 2 Strategy To Budget Process Century Agenda g Vision/Goals 5- 10 Years in n SWOT gic Plan Gap Strate Objectives & Strategies 3 5 Years (Long Range Plans) n tatio 2020 Business Plan n e 2020 Budget Annual lem p 2020 Performance Plans Im 3 Strategic Priorities: Vision/Goals AV Priorities Vision/Long-term Goals Safety Airfield Composite Safety Score = 35 100% of employees go home safely Zero discrepancies on TSA audit Security Zero breaches Zero incidents of intentional harm Be a high performance organization Employees 100% of staff understands how their work contributes to success of Airport and Port Innovation & Lean process improvements and innovation ingrained in Port's culture Efficiencies Community & Sustainable share of Port economic opportunities go to disadvantaged businesses Social Responsibility Customer Skytrax 5-Star ranking Service ASQ index score in top 5 of large hub airports Environment & All Part 150 noise study commitments met, innovative noise reduction techniques explored Sustainability Achieve Port goals for GHG emission for 2030 and 2050 Financial Port can operate, maintain and upgrade facilities to accommodate regional demand while Performance maintaining competitive CPE, manageable debt levels, and adequate debt service coverage Facility Planning & Provide facilities to meet demand for passenger and cargo service. Capital Projects Provide optimum level of service (at peak times). 4 Budget Summary 2017 2018 2018 2019 2019 2020 Budget Change $ in 000's Actual Budget Actual Budget Forecast Budget $ % Operating Revenues: Aeronautical Revenues 267,690 301,082 291,268 365,604 364,106 401,817 36,213 9.9% Non-Aeronautical Revenues 236,803 244,786 257,707 259,537 268,431 283,169 23,632 9.1% Total Operating Revenues 504,492 545,867 548,975 625,140 632,537 684,986 59,846 9.6% Operating Expenses: Airport Direct Charges 210,406 233,278 228,638 251,985 252,881 266,552 14,567 5.8% Environmental Remediation Liability Exp 8,812 4,030 6,233 14,259 12,793 2,648 (11,612) -81.4% Total Charges from Other Divisions 79,896 97,548 83,979 99,860 97,429 109,132 9,272 9.3% Total Operating Expenses 299,114 334,856 318,849 366,105 363,104 378,332 12,227 3.3% Net Operating Income 205,378 211,011 230,126 257,231 269,434 306,654 49,424 19.2% CPE 10.52 11.63 10.79 13.39 13.07 13.93 0.54 4.1% Non-Aero NOI 133,101 126,607 149,959 136,534 147,148 154,159 17,626 12.9% Enplaned passengers (000s) 23,416 24,654 24,894 25,394 25,890 26,667 1,273 5.0% Capital Expenditures 293,785 796,200 579,135 767,732 659,591 570,138 (197,593) -25.7% 5 Aviation Operating Budget Changes Budget process required cuts to absorb new costs and initiatives 6 Summary of Budget Requests 2020 Budget Requests (in $000's) # of Budget Request Category Requests FTEs Baseline Non-Recurring Total Community and Social Responsibility 6 1.00 175 432 607 Customer Service 25 5.75 536 4,627 5,163 Employees 10 83 48 131 Environment and Sustainability 8 1.50 1,616 444 2,060 Facility Planning and Capital Projects 78 34.25 4,097 15,216 19,313 Financial Performance 9 3.00 197 1,530 1,727 Innovation and Efficiencies 6 1.00 186 353 538 Safety 16 2.00 613 626 1,239 Security 6 8.00 400 60 460 2020 Budget Requests - Total Proposed 164 56.50 $ 7,904 $ 23,335 $ 31,239 2020 Budget Requests - Initial 198 119.50 $ 18,558 $ 29,417 $ 47,975 7 Highlights of New FTE Requests AV Priority Purpose/Outcome FTEs Changes in FTES Increase capacity to implement Part 150 Noise insultation Community and Social Responsibility 1.00 programs Approved 2019 FTEs 1,143.53 Enhance capacity to implement customer service programs Transfers 64.00 1.75 Customer Service and training to improve ASQ scores Eliminated positions (42.75) Improve customer experience and wayfinding 4.00 Added positions 27.25 Implement environmental sustainability framework for Environment and Sustainability 1.50 new Aviation projects Net change (15.50) Increase capacity to plan, manage and implement capital 8.25 projects Proposed new FTEs 56.50 Enhance baggage system oversight and maintenance 4.00 Net increase 41.00 41.00 Maintain new facilities and equipment, deferred Facility Planning and Capital Projects 9.00 maintenance on existing facilities Proposed 2020 FTEs 1,248.53 Increase custodial quality assurance 1.00 Adequately maintain civil infrastructure utilities, 12.00 stormwater system and solid waste utilities Increase capacity for financial analysis and reporting for Scrutinized existing FTEs before 2.00 Financial Performance non-aero business and capital project funding adding new Extend hours of operation for load dock for ADR deliveries 1.00 Net increase of 41 consistent Innovation and Efficiencies Increase capacity to implement shark tank innovation ideas 1.00 Enhance ramp safety 1.00 with multi-year plan to address Safety Increase Port-wide emergency preparedness capacity 1.00 needs Implement random employee screening 6.00 Security Increase capacity to process background checks for badges 1.00 Increase capacity for security monitoring and dispatch 1.00 Total 56.50 8 Highlights of Other Budget Requests 2020 AV Priority Purpose/Outcome Budget Highlights Requests Cost of new FTEs 3,436 Community and Social Responsibility Maintain public art - increase art conservation budget 305 Enhance facility cleanliness and appearance - window cleaning 600 Non-FTEs Highlights 19,830 Increase customer service for arriving international passengers - 667 Total Budget Highlights 23,267 Customer Service increase contracted staff support Reduce passenger wait times at checkpoints - queue 2,500 Total Budget Requests 31,239 management staffing contract Environment and Sustainability Reduce carbon foot print - utilize renewable natural gas 1,474 Highlight % of total 74% Complete Sustainable Airport Master Plan 1,800 Preserve critical asset - repair spalling in garage 500 Maintain increased spending on pest control 784 Advanced and on-call planning for existing and future facilities See Appendix for details 4,200 to define projects and better understand emerging challenges of all 2020 budget Initiate utilities master plan to enhance understanding of Facilities, Planning and Capital Projects 2,000 investments needed to support existing and future facilities requests Complete and implement asset management program to plan 2,000 and prioritize future renewal and replacement investments New janitorial contract for International Arrivals Facility 1,300 Downsize but continue with Executive Program Management 750 contract to support capital program oversight Financial Performance Attract and retain new air service - incentive payments 950 Total Non-FTE Highlights 19,830 9 Non-Aero NOI 2017 2018 2018 2019 2019 2020 Budget Change $ in 000's Actual Budget Actual Budget Forecast Budget $ % Non-Aero Revenues Public Parking 75,106 78,572 80,212 82,350 84,072 89,485 7,135 8.7% Airport Dining & Retail 54,611 54,759 59,021 59,484 59,962 66,145 6,661 11.2% Rental Cars 45,691 50,857 53,569 50,079 51,703 51,149 1,071 2.1% Ground Transportation 15,684 16,884 18,772 19,734 20,706 22,299 2,565 13.0% Commercial Properties 18,042 14,706 15,434 14,219 15,471 16,660 2,441 17.2% Port Common Use Lounges 5,041 5,630 6,802 8,520 10,329 10,536 2,015 23.7% Other Non-Aero Revenue 22,627 23,378 23,896 25,150 26,188 26,894 1,745 6.9% Total Non-Aero Revenues 236,803 244,786 257,707 259,537 268,431 283,169 23,632 9.1% Total Non-Aero Expenses 103,702 117,925 107,748 123,003 121,283 129,010 6,007 4.9% Net Operating Income 133,101 126,861 149,959 136,534 147,148 154,159 17,626 12.9% Less: CFC Surplus (2,750) (7,142) (6,157) (3,993) (4,769) (4,128) 135 3.4% Adjusted Non-Aero NOI 130,351 119,719 143,802 132,540 142,379 150,031 17,491 13.2% Debt Service (44,495) (45,752) (44,545) (49,352) (49,093) (50,064) 712 1.4% Net Cash Flow 85,856 73,967 99,257 83,188 93,287 99,967 16,779 20.2% 10 Aeronautical NOI 2017 2018 2018 2019 2019 2020 Budget Change $ in 000's Actual Budget Actual Budget Forecast Budget $ % Revenues: Airfield Movement Area 108,638 125,422 116,703 130,873 129,230 132,389 1,516 1.2% Airfield Apron Area 16,771 15,979 15,627 19,714 12,295 22,027 2,312 11.7% Terminal Rents 155,431 171,854 169,318 203,319 211,805 213,108 9,789 4.8% Federal Inspection Services (FIS) 18,612 13,413 16,226 14,521 14,297 18,197 3,676 25.3% Total Rate Base Revenues 299,452 326,668 317,874 368,426 367,627 385,720 17,293 4.7% Airfield Commercial Area 10,574 10,212 10,257 12,859 13,116 16,097 3,238 25.2% Subtotal before Revenue Sharing 310,026 336,880 328,131 381,286 380,743 401,817 20,531 5.4% Revenue Sharing (42,311) (35,799) (36,863) (15,682) (16,637) - (15,682) -100.0% Other Prior Year Revenues (26) - - - - - - NA Total Aeronautical Revenues 267,690 301,082 291,268 365,604 364,106 401,817 36,213 9.9% Total Aeronautical Expenses 195,414 216,931 211,101 243,102 241,821 249,322 6,220 2.6% Net Operating Income 72,276 84,151 80,167 122,502 122,286 152,495 29,993 24.5% Debt Service (86,564) (90,323) (91,673) (109,343) (113,820) (121,410) 12,066 11.0% Net Cash Flow (14,288) (6,173) (11,506) 13,159 8,466 31,085 17,926 136.2% 11 Airport Activity: Passengers Total Passengers (000s) Total Passengers (000) Growth Rate 60,000 14% 12.9% 53,334 51,780 49,850 12% 50,000 46,935 45,737 42, 341 10% 40,000 8.0% 8% 30,000 6.2% 6% 20,000 4.0% 3.0% 4% 2.6% 10,000 2% 0 0% 2015 2016 2017 2018 2019 FCST 2020 BUD Growth rate declining, but passenger growth continues 12 Total Operating Expenses Total O&M Expense ($000s) O&M Expense per Enplanement $16 $14.02 $14.19 $400,000 $14 $378,3 32 $12.77 $12.81 $363,104 $11 .28 $11.46 $12 $318,849 $299,114 $300,000 O&M Expense (000s) $10 $261,226 Forecast $238,140 $8 $200,000 $6 YTD O&M Expense per Enplanement $4 $100,000 $2 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 2020: 1.2% growth in O&M expense per enplaned passenger 13 FTE Growth Relative to Enplanement Growth FTEs AVPMG FTEs Per Million Enplanements 1,400 100 90 1,200 1,249 61.8 62.0 80 1,144 62.0 1,089 1,000 1,017 70 65.8 62.0 881 889 60 800 FTEs 46.1 46.2 46.6 46.8 44.8 50 41.7 600 40 FTEs per Million Enplanements 400 30 20 200 10 0 0 2015 2016 2017 2018 2019 BUD 2020 BUD FTE growth consistent with passenger growth 14 Non-Aeronautical Performance Non-Aero NOI ($000s) Non-Aero Revenue per Enplanement $180,000 $12 $10.63 $160,000 $10.35 $10.37 $10.11 $9.70 $10 $9. 33 $140,000 $120,000 $8 NOI (000s) $100,000 $6 $80,000 $149,959 $147,148 $154,159 $128,727 $133,101 Rev Per Enplanement $60,000 $4 $112,618 $40,000 $2 $20,000 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 15 Airline Cost Management (CPE) CPE Revenue Sharing ($000s) $16 $50,000 $42,310 $13.93 $14 $13.07 $37,413 $36,932 $40,000 $12 $10.52 $10.79 $10.12 $10.10 $10 $30,000 $29,453 CPE $8 $20,000 $6 $16,637 Revenue Sharing (000s) $4 $10,000 $2 $0 $0 2015 2016 2017 2018 2019 FCST 2020 BUD 16 2020 Operating Budget Risks/Issues Aiming to achieve more accurate budget: Incorporated payroll vacancy of 3.0% Budgeted for new FTEs to start July 1 (6 months vacancy) Reduced spend requests in multiple areas Timing/scope of airline realignment (move UA off of Concourse A) and impact on expense & capital budget not currently in budget IAF opening and new costs Potential for Sea-Tac Airline Consortium to take over employee busing function and Airline Technical Representative function Open item: Port Accessibility Coordinator FTE not yet in budget 17 Capital Budget 2020 - 2024 Cash Flows (Figures in $000s) 2019 2020 - 24 FCST 2020 2021 2022 2023 2024 TOTAL Three Major Projects International Arrivals Facility 338,500 207,000 9,133 - - - 216,133 NSAT 133,086 134,800 105,470 9,988 - - 250,258 Baggage Optimization 25,565 44,300 55,000 55,000 55,000 55,000 264,300 Subtotal - Three Major Projects 497,151 386,100 169,603 64,988 55,000 55,000 730,692 Other Capital Projects 154,977 250,291 309,456 192,527 141,294 94,066 987,633 SAMP Preliminary Planning / Design 5,600 16,000 76,500 94,750 68,000 36,200 291,450 Proposed New Projects 1,863 3,813 21,755 38,877 82,746 85,996 233,188 CIPs Reserves - - - 80,000 200,000 400,000 680,000 Subtotal 659,591 656,204 577,314 471,142 547,039 671,262 2,922,962 CIP Cashflow Adj Reserve - (86,066) 50,000 36,066 Total Proposed CIP 659,591 570,138 627,314 507,208 547,039 671,262 2,922,962 Proposing 34 projects totaling $233M spending through 2024 CIP Reserve CIPs represent 23% of five-year capital budget Implementing CIP cash flow adjustment reserve to adjust 2020 cash flows 18 Summary of Proposed New Projects # of Cost Cash Flows (Figures in $000s) 2020 - 24 Projects Description Estimate 2020 2021 2022 2023 2024 TOTAL 11 Asset Management 169,150 1,563 10,572 21,703 50,482 57,986 142,305 3 Safety & Security 14,800 672 2,169 3,330 2,803 2,353 11,328 10 Business Need 91,200 933 5,364 8,010 21,519 19,121 54,948 7 Customer Service 48,350 74 1,070 3,011 4,109 4,632 12,896 3 Grow Non-Aero Revenues 39,100 571 2,579 2,823 3,833 1,905 11,711 34 TOTAL 362,600 3,813 21,755 38,877 82,746 85,996 233,188 Asset management drives majority of the new projects Projects include: Baggage Claim Device Renewal: $71 million Mezzanine security Glass: $12.9 million IWTP Improvements: $27 million New Leasable Space: $28.6 million Restroom Renewal: $21 million 19 Capital Projects- Summary Cash Flows (Figures in $000s) 2019 2020 - 24 Capital Projects CIP FCST 2020 2021 2022 2023 2024 TOTAL Construction Authorized (Status 5-6) NS NSAT Renov NSTS Lobbies C800556 133,086 134,800 105,470 9,988 - - 250,258 International Arrivals Fac-IAF C800583 338,500 207,000 9,133 - - - 216,133 Checked Bag Recap/Optimization C800612 25,565 44,300 55,000 55,000 55,000 55,000 264,300 Safedock Upgrade & Expansion C800779 1,022 24,039 2,440 - - - 26,479 SSAT Infrastructure HVAC C800798 6,185 21,000 11,000 8,267 - - 40,267 Other Authorized Capital Projects Multiple 139,117 174,025 78,038 22,504 1,636 8,134 284,337 Total - Construction Authorized 636,268 560,125 247,642 87,492 56,636 63,134 1,015,029 Design Authorized (Status 4) MT Low Voltage Sys Upgrade C800061 699 5,050 9,000 18,500 20,000 16,350 68,900 C1 Building Floor Expansion C800845 581 4,000 10,000 20,000 10,000 5,194 49,194 Widen Arrivals Roadway C800866 708 2,056 5,600 10,500 30,300 297 48,753 Remote Aircraft Deicing C801035 521 1,810 20,649 1,320 - - 23,779 Other Design Authorized Capital Projects Multiple 6,476 28,773 55,298 24,395 11,617 6,571 126,654 Total - Design Authorized 8,286 41,689 100,547 74,715 71,917 28,412 317,280 Pending Authorization (Status 2-3) Airfield Pvmt Repl 2021-2024 C800930 46 - 42,600 34,000 23,500 36,700 136,800 MT Fire Sprinkler-Smoke Cntrl C800969 150 5,049 13,000 9,963 9,963 9,963 47,938 Upgrades STS Train Control C801043 91 1,125 4,925 20,000 16,000 14,859 56,909 Baggage Claim Device R&R Prog C801127 - - 2,935 6,058 24,597 32,850 66,440 Other Pending Capital Projects Multiple 14,750 48,217 165,665 238,914 344,426 485,344 1,282,566 Total - Pending Authorization 15,036 54,391 229,125 308,935 418,486 579,716 1,590,653 Subtotal 659,591 656,204 577,314 471,142 547,039 671,262 2,922,962 CIP Cashflow Adj Reserve C801141 - (86,066) 50,000 36,066 - - (0) Grand Total 659,591 570,138 627,314 507,208 547,039 671,262 2,922,962 20 Capital Budget Risks Significant potential projects not yet in plan: SSAT seismic, repurpose space, renovate C-1 Building Expansion scope and cost increase Airline realignment Completion of 2014 Part 150 noise remediation plan Projects coming out of Main Terminal Optimization Plan (MTOP) Projects coming out of asset management program SAMP projects (beyond $300M planning and design) Strategic challenge: balancing needs of existing facilities with need to build new capacity 21 Financial Forecast 2020 - 2024 In $000's 2019 FCST 2020 2021 2022 2023 2024 Airline Revenue 364,106 401,817 441,795 483,500 509,159 528,401 Non-Airline Revenue 268,431 283,437 294,088 303,706 315,037 324,281 Total Revenue 632,537 685,254 735,882 787,206 824,196 852,682 Operating Expense 363,104 378,314 404,152 422,221 435,802 455,541 Net Operating Income 269,433 306,940 331,730 364,986 388,393 397,141 Net Non-Operating Income/Expense 6,352 5,156 5,796 6,036 6,093 6,194 CFC Excess* (4,769) (4,128) (2,501) (2,173) (2,136) (2,010) Available for Debt Service 271,016 307,968 335,026 368,848 392,350 401,325 Net Debt Service 162,913 171,474 189,711 217,514 226,858 230,802 Net Cash Flow 108,103 136,494 145,314 151,335 165,493 170,524 Key Measures Debt Service Coverage 1.67 1.80 1.77 1.70 1.73 1.74 Revenue Sharing 16,637 0 0 0 0 0 Passenger Airline CPE 13.07 13.93 15.14 16.42 17.08 17.47 Debt per Enplaned Passenger 121.00 118.96 126.40 132.37 139.73 151.92 * CFC collection in excess of CFC debt service/O&M is restricted and cannot be used for other revenue bond debt service 22 Funding Plan and Use of PFCs Capital costs paid by PFCs are excluded IAF Funding Sources $000s from airline rate base Cash/ADF 200,000 Commission motion of May, 2015 Revenue bonds 631,445 established funding plan for IAF and PFCs (paygo) 100,000 directed staff to establish competitive Total 931,445 rates to the extent possible Allocation of PFCs among cost centers FIS Rates: Impact of PFC Offset is primary tool to manage rates. $35.00 $29.10 $28.85 $30.00 $28.45 In order to maintain competitive FIS $25.87 $25.00 rate, funding plan proposes to $20.00 $16.35 prioritize allocation of PFCs to IAF as $15.00 needed to decrease FIS rate to top of $10.00 $12.00 $12.00 $12.00 $12.00 peer group $5.00 $8.65 $- 2020 2021 2022 2023 2024 PFC Offset Without PFS Offset 23 APPENDIX AVIATION DIVISION 24 Aviation Appendix Contents Operating Budget Budget management: baseline budget changes Budget Requests FTE reports and details Expense summary and comparisons Non-aeronautical revenue budgets by business unit Aeronautical cost drivers Capital budget - new capital projects CPE Comparisons CIP funding plan and use of PFCs 25 BUDGET MANAGEMENT: BASELINE BUDGET CHANGES 26 Budget Transfers to Aviation 2020 Baseline Transfers to Aviation from Central Services: $000's IAF project (2) FTEs transferred to AVM 254 AVPMG department transferred to AV division 6,794 Total Transfers 7,047 Total 2020 Baseline Transfers in from Central Services 7,047 27 Change in Charges to Capital 2020 Charges to Capital Increase: $000's Higher estimated Charges to Capital AVPMG increased Charges to Capital 5,080 All other Aviation increases in Charges to Capital 807 Total Increase in Charges to Capital 5,887 28 Cost Reductions 2020 Baseline Cost Reductions/Savings: $000's Payroll Savings (before new FTE requests) Vacant positions eliminated in 2020 Budget 1,805 Payroll Vacancy (3.0% assumption) in 2020 Budget 4,300 Payroll hiring differences 90 Total Payroll Decreases 6,195 Non-Payroll Savings (zero based budgeting) EPM remove prior year capitalized portion 1,080 New Air Incentives (removed 2019 Budget late additions) 200 CBP reimbursable (rightsize expected payments) 200 Other non-payroll savings (zero based budgeting) 1,671 Additional Non-Payroll Savings 3,151 Total 2020 Baseline Cost Reductions 9,346 29 Cost Increases 2020 Baseline Cost Increases: $000's Payroll Increases (before new FTE requests) Non-Represented payroll & benefits increase (3.9% average) 1,740 Represented pay & benefits increase (per labor agreements) 4,943 Annualized new FTE's approved in 2019 Budget 2,418 Annualized new FTE's approved during 2019 2,838 All other increases to baseline payroll - Total Baseline Payroll Increases 12,632 Non-Aero costs related to revenue growth Clubs & Lounges - higher demand/increased volume 1,174 Advertising increase (100% paid by Tenant Mktg fund) 290 Non-Aero B&O tax increase 147 Total Non-Aero Cost Increases 1,655 Total Contractual & Formulaic Cost Increases - detail next page 6,137 Total 2020 Baseline Cost Increases 20,423 30 Cost Increases continued: 2020 Baseline Cost Increases - continued: $000's Contractual & Formulaic Cost Increases - detail AVPMG Outside Svc (right-sized for 2020 expense projects) 3,239 Taxi curbside management contract (full year estimate) 739 AVM - Janitorial contract increase 807 AVM - Baggage System data reporting (BROCK) contract 140 All other AV Maintenance contracts 83 Lost & Found ( new contract in 2019) 404 Aeronautical B&O tax increase 53 Other Non-Payroll Increases (zero based budgeting) 672 Total Contractual & Formulaic Increases 6,137 Total 2020 Baseline Cost Increases 20,423 31 Environmental Remediation Liability Expense ERL Expense 2017 2018 2019 2019 2020 Budget Change Budget vs. Forecast Org Basis (in 000's) Actual Actual Budget Forecast Budget $ % $ % North Satellite Asbestos 1,341 1,029 5,630 5,595 - (5,630) n/a (5,595) -100.0% Contaminated Soils 1,935 70 2,917 2,365 - (2,917) n/a (2,365) -100.0% NSAT - ERL Expense 3,276 1,099 8,546 7,960 - (8,546) n/a (7,960) -100.0% SSAT - HVAC Infrastructure Asbestos 4,323 4,323 - (4,323) n/a (4,323) -100.0% SSAT - ERL Expense - - 4,323 4,323 - (4,323) n/a (4,323) -100.0% International Arrivals Facility Asbestos 63 1,337 885 37 - (885) n/a (37) -100.0% Contaminated Soils 5,201 2,465 - - - - n/a - n/a IAF - ERL Expense 5,264 3,802 885 37 - (885) n/a (37) -100.0% Airport Employee Services Ctr 1,067 1,067 n/a 1,067 n/a Phase 2 eGSE charging stations 477 477 n/a 477 n/a All other RMM expense 271 1,332 505 474 1,104 599 118.5% 630 132.9% Total ERL Expense 8,812 6,233 14,259 12,793 2,648 (11,612) -81.4% (10,146) -79.3% 32 BUDGET REQUESTS 33 Summary of Budget Requests 2020 Budget Requests # of Budget Request Category Requests FTEs Baseline Non-Recurring Total Community and Social Responsibility 6 1.00 175,218 431,700 606,918 Customer Service 25 5.75 535,934 4,626,740 5,162,674 Employees 10 82,800 48,300 131,100 Environment and Sustainability 8 1.50 1,616,035 444,000 2,060,035 Facility Planning and Capital Projects 78 34.25 4,097,309 15,215,538 19,312,847 Financial Performance 9 3.00 197,356 1,530,000 1,727,356 Innovation and Efficiencies 6 1.00 185,892 352,590 538,482 Safety 16 2.00 613,427 625,800 1,239,227 Security 6 8.00 399,889 60,000 459,889 2020 Budget Requests - Total Proposed 164 56.50 $ 7,903,860 $ 23,334,668 $ 31,238,528 2020 Budget Requests - Initial Requested 198 119.50 $ 18,558,345 $ 29,416,613 $ 47,974,958 34 Budget Requests: Community & Social Responsibility 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Community and Airport Noise Mitigation Ground Noise Study - - 100,000 100,000 Social Hire a Noise Programs Coordinator 1.0 70,218 1,700 71,918 Responsibility Noise analysis (per litigation) - - 25,000 25,000 Promote Small Business and Small Business, ACDBE Community Engagement - 100,000 - 100,000 Community Outreach Red Tail Hawks' Event Support - 5,000 - 5,000 Maintain Airport Art Public Art Collection Conservation - - 305,000 305,000 Community and Social Responsibility Total 1.0 $ 175,218 $ 431,700 $ 606,918 35 Budget Requests: Customer Service 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Customer Service Facilities Cleanliness and Airport-Wide Window Cleaning Service - 600,000 600,000 Appearance Removal of Obsolete Analog Clocks - 30,000 30,000 Increase the Level of Pathfinder Uniforms Refresh - 8,140 8,140 Visibility to the Frontline Volunteer Uniforms Refresh - 19,200 19,200 Strategic Customer Promotional Hosting Volunteer Recognition 800 6,700 7,500 Experience Improvements Skytrax Terminal Assessment - 30,000 30,000 Website Accessibility Evaluation Open Doors Organization Report - 75,000 75,000 Hire a Coordinated Airport Communications Strategy Consultant - 200,000 200,000 Hire a consultant for SEA Customer Experience QA Program 50,000 - 50,000 College Intern - Customer Communications 0.5 29,264 2,500 31,764 Hire a Customer Experience Manager 1.0 67,794 3,300 71,094 Continued on next slide 36 Budget Requests: Customer Service Continued: 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Customer Service Reduce Passenger Wait Security Checkpoint Queue Management Contract - 2,500,000 2,500,000 Times at Checkpoints Customer Experience Initiatives 50,000 - 50,000 CISS/VIP Hospitality Scope Increase - 667,200 667,200 Wayfinding/Processing Signage and Wayfinding Masterplan and - 250,000 250,000 Passengers STIA Terminal Signage Modifications for - 180,000 180,000 Concourses B and D STS Info System Graphic Support 50,000 - 50,000 Hire a Journeyman Sign Writer 1.00 54,571 3,300 57,871 Hire Additional Pathfinders 3.00 126,056 11,400 137,456 Host Targeted Training to Hire an Airport Employee Experience Consultant - 40,000 40,000 Deliver Exceptional Managing Challenging Customer Interactions 20,000 - 20,000 Customer Service Skills Training WE ARE Training 36,000 - 36,000 College Intern - Customer Service Training 0.25 13,449 - 13,449 Online Customer Service Basic Skills Courses 30,000 - 30,000 Customer Service Learning Brown Bag Speakers 8,000 - 8,000 Customer Service Total 5.75 $ 535,934 $ 4,626,740 $ 5,162,674 37 Budget Requests: Employees 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Employees Foster Employee Bluebeam Software Training - 10,000 - 10,000 Development and Leverage ORAT World Summit Conference - - 13,500 13,500 Talent Mental Health First Aid Course - 6,000 - 6,000 ORAT Staff Retreat & AAAE Memberships - 4,650 - 4,650 Quarterly Employee Engagement Activities - 2,000 - 2,000 Fleet Maintenance Staff Training and Conference - - 9,800 9,800 Attendance ACI Airports@Work Conference Support - Airport - - 25,000 25,000 Tour and Welcome Gifts Plan Reading Course on Construction Plans and - 10,000 - 10,000 Blueprints Travel Budget Right-sizing- Air Services - 28,150 - 28,150 DevelopmentSoftware License Right-Sizing - Fire Department - 22,000 - 22,000 Employees Total - $ 82,800 $ 48,300 $ 131,100 38 Budget Requests: Environment & Sustainability 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Environment and Be the Greenest and Most Hire an Environmental Program Manager 1.0 90,133 2,000 92,133 Sustainability Energy-Efficient Port in North College Intern - Recycling 0.5 32,635 2,000 34,635 America Support Costs for Transportation Management - - 50,000 50,000 Association Purchase of Renewable Natural Gas - 1,474,267 - 1,474,267 Purchase of Renewable Diesel - 19,000 - 19,000 Environment Compliance Flight Corridor Safety Program Habitat - - 60,000 60,000 Complete Airport's 5-year NPDES Permit RenewalManagement - - 75,000 75,000 Application Implement Clean-Up Contaminated Site Management - Per- and - - 255,000 255,000 Projects Across the Port polyfluoroalkyl substances (PFAS) Environment and Sustainability Total 1.5 $ 1,616,035 $ 444,000 $ 2,060,035 39 Budget Requests: Facility Planning & Capital Projects 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Facility Planning Airport Office Building AOB Conference Center Chair Replacement - - 50,000 50,000 and Capital Projects Requirement AOB Cubicle Densification - - 295,000 295,000 AOB Furniture Inventory Management Service - 53,000 - 53,000 AOB Kitchen Supplies - 12,219 - 12,219 AOB Paper Shredding Service - 1,400 - 1,400 AOB Conference Room Surface Hubs Installation - - 100,000 100,000 Complete the Sustainable SAMP Environmental Review - AV Environmental - - 1,500,000 1,500,000 Airport Master Plan SAMP Environmental Support - AV Planning - - 300,000 300,000 Implement Operational ORAT Software and Licenses - 6,000 75,000 81,000 Readiness and Airport Hire an ORAT Consultant - 150,000 - 150,000 Transition (ORAT) Meet or Exceed IWS Lagoon Liner Condition Assessment and - - 50,000 50,000 Requirements for RepairLight Rail Stormwater Vault Treatment Cleaning - - 25,000 25,000 Stormwater Leaving Port- Hire an Operating Engineer for Industrial Waste 1.0 70,205 - 70,205 Owned or Operated Facilities Treatment Plant (IWTP) Continued on next slide 40 Budget Requests: Facility Planning & Capital Projects Continued: 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Facility Planning Meet the Maintenance Escalator Hand Rail Upgrade - - 80,000 80,000 and Capital Projects Needs and Standards of the North Cargo Properties-Mechanical Systems - - 78,000 78,000 Existing Facilities Under Passenger Loading Bridges (PLB) Pre-Conditioned - - 15,000 15,000 Increasing Demand Air (PCA) Units Purchase Laser Alignment Tool and Replacement - - 10,000 10,000 of Tools RCF Small Operator Improvements - Required - - 50,000 50,000 Reallocation (fully reimbursable) Repair eGSE Charger Billable Data Reporting - - 45,000 45,000 Secondary Containment for Transformer - - 20,000 20,000 STS Signage Technical Support - - 27,500 27,500 Terminal LED Lighting Upgrades - 30,000 - 30,000 Hire a Carpenter 1.0 61,628 - 61,628 Hire an Operating Engineer Boiler Room 1.0 70,015 4,000 74,015 Hire Additional Operating Engineers Conveyor 2.0 135,833 4,000 139,833 Hire an Inventory Specialist for AV MaintenanceShop 1.0 49,557 3,500 53,057 Hire Additional Baggage System Supervisors 2.0 117,836 4,000 121,836 Hire Additional Electronic Technicians 2.0 134,496 7,000 141,496 Continued on next slide 41 Budget Requests: Facility Planning & Capital Projects Continued: 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Facility Planning Meet the Maintenance Civil Infrastructure Program Support - - 300,000 300,000 and Capital Projects Needs and Standards of the STAC Budget Right-Sizing to Implement Increased 72,720 10,000 82,720 Existing Facilities Under Volume and Additional Services Increasing Demand Hire Additional Field Crews 11.0 466,334 33,000 499,334 Hire an Operating Engineer Boiler Room - VAV 1.0 70,015 4,000 74,015 (HVAC/Utilities for Terminal) Garage Spall Repairs - 500,000 500,000 Travel and Training Budget Right-Sizing - AV - 12,000 12,000 Maintenance Pest Control and Waste Standard Waste Receptacle Replacement - 300,000 300,000 Management Compactor Repairs and Increased Preventive - 50,000 50,000 Maintenance Unified Pest Management Contract Funding - 784,000 784,000 Coordinate Capital Program EPM Consulting for Capital Program - 750,000 750,000 Development and and Hire an AV Capital Programs Development 1.0 76,164 3,300 79,464 Implement Capital Program Hire a Systems Administrator for AVPMG 1.0 98,888 98,888 Hire a Capital Project Manager III (ADR tenant 1.0 122,950 122,950 projects) Hire an AV Project Controls Analyst 1.0 84,000 84,000 Continued on next slide 42 Budget Requests: Facility Planning & Capital Projects Continued: 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Facility Planning Planning for Future Facilities Airfield/Airspace Study - - 250,000 250,000 and Capital Projects Needs Building Dept - Consultant Design Review & Field - - 220,000 220,000 Inspection Services Controls service for new systems installed for - - 50,000 50,000 Baggage Optimization Deep Well Injection Geotechnical Study - - 300,000 300,000 IAF Simulation Support - - 99,000 99,000 Utilities Master Planning - - 2,000,000 2,000,000 Hire an Associate Planner 1.0 67,442 3,300 70,742 Hire a Fire Protection Engineer 1.0 74,893 3,000 77,893 On Call Capital Programs Planning - SSAT, - - 700,000 700,000 Roadmaps and Business Case Development Advanced Planning on Facilities, The Main - - 2,300,000 2,300,000 Terminal Optimization Plan (MTOP), Sustainable Airport Master Plan(SAMP) and Ground Transportation Access Plan (GTAP) Landscape Master Plan Rehab Projects - - 291,438 291,438 On-call Planning on Emerging Issues - - 950,000 950,000 Continued on next slide 43 Budget Requests: Facility Planning & Capital Projects Continued: 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Facility Planning Enhance Facility Cleanliness Hire a Custodial Quality Assurance Specialist 1.0 58,246 3,500 61,746 and Capital Projects Pressure Washing of Lower and Upper Drives - 50,000 - 50,000 Concrete Structures Zone 5 (IAF) Custodial Service Contract - 1,300,000 - 1,300,000 Maintain New Facilities Hire a Painter (IAF) 1.0 48,703 - 48,703 Hire a Painter (Cargo) 1.0 48,703 - 48,703 Hire a Carpenter(Cargo) 1.0 61,628 - 61,628 Hire an Operating Engineer Boiler Room - Cargo 1.0 70,015 4,000 74,015 Connectivity/Software Licenses for CBP in IAF - 220,471 - 220,471 Cargo Facility Maintenance (Outside Svcs) - - 250,000 250,000 Strategic Asset Management Infrastructure Nomenclature System Implications - - 20,000 20,000 Landside Pavement Management Program - - 100,000 100,000 Neighborhood Field Office Training Room - - 50,000 50,000 UpgradeSTS Tunnel Integrity Study - - 125,000 125,000 College Intern - Architecture 0.25 14,063 3,000 17,063 Hire an Architect - Facilities and Infrastructure 1.0 72,886 4,000 76,886 Asset Management Program Implementation - - 2,000,000 2,000,000 Continuous Commissioning for Testing and - 100,000 - 100,000 Balancing services Asset Management System for Fire Department - 27,000 - 27,000 Facility Planning and Capital Projects Total 34.25 $ 4,097,309 $ 15,215,538 $ 19,312,847 44 Budget Requests: Financial Performance 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Financial Keep Airline Costs ADR - Kiosk Program Upkeep and Repair - - 150,000 150,000 Performance Competitive Through SEA Visitor Pass Program E Secure Fee - - 40,000 40,000 Increase Non-Aeronautical Hire a Temporary Staffing for Pre-Book Parking - - 225,000 225,000 Revenue and Improve Capital Hire a Financial Analyst II - Grants and Capital 1.0 70,095 2,000 72,095 Business Process Hire a Sr. Financial Systems & Business Analyst - 1.0 82,197 2,000 84,197 Financial Report Efficiency Hire a Load Dock Coordinator - Volume Increase 1.0 45,064 - 45,064 and Extended Hours Hire a Consultant to Develop Business Case for - - 75,000 75,000 New Non-Aero Revenue (Tenant Broadband Hire a Consultant to Implement Driver Outreach - - 86,000 86,000 Added Taxi Pilot Program Air Service Development New Air Service Incentive Program - Joint - - 950,000 950,000 Promotional Funds Financial Performance Total 3.0 $ 197,356 $ 1,530,000 $ 1,727,356 45 Budget Requests: Innovation and Efficiencies 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Innovation and Keep Up the Pace with the Telematics for Aviation Fleet Vehicles andCritical Asset Monitoring (CAM) IoT Pilot Project - - 199,090 199,090 Efficiencies Rapid Growth of the Airport Equipment - 50,000 - 50,000 Leverage Employee Crowdsourced Innovation Software - 50,000 - 50,000 Innovation to Solve Business Innovation Consulting Funding - - 100,000 100,000 Challenges Hire an Innovation Program Manager 1.0 85,892 3,500 89,392 Hire a Consultant for STIA Key Access System - - 50,000 50,000 Evaluation Innovation and Efficiencies Total 1.0 $ 185,892 $ 352,590 $ 538,482 46 Budget Requests: Safety 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Safety Continuously Improve Safety GSE Inspection Auditing Services - 50,000 - 50,000 of Airport Operations Area Certified Service Provide Program(CSPP) - - 50,000 50,000 Implementation Consultation Services Hire a Certified Service Provide Program(CSPP) 1.0 76,631 3,300 79,931 Manager Ramp Tower Contract Staffing Increase for Air - 220,000 - 220,000 Traffic Demand Fire Department - Bunker Gear Replacement - - 45,000 45,000 Completion of Tow/Taxi Virtual Reality for - - 75,000 75,000 E-Learning Development Targeted Safety Subject Matter Expertise Training - - 50,000 50,000 Safety Act Certification - - 100,000 100,000 Horizon Air - Follow Up Items After Action Report - - 25,000 25,000 Facility Life-Safety Firearm Tracking Software - 2,800 - 2,800 Enhancements Origami Software Licensing and Integration - 10,000 5,000 15,000 Plug-Ins Smoke Control Systems Testing - 190,000 - 190,000 Public Access AEDs Replacement - - 35,000 35,000 Reduce Wildlife Strikes Increase for Consolidated Wildlife Contracts - - 100,000 100,000 Prepare for Emergencies Hire an Emergency Preparedness Coordinator 1.0 63,996 2,500 66,496 FAA Regulatory Triennial Exercise - - 135,000 135,000 Safety Total 2.0 $ 613,427 $ 625,800 $ 1,239,227 47 Budget Requests: Security 2020 Budget Requests AV Priority Problem/Need/Opportunity Solution Non- FTEs Baseline Total Reoccurring Security Enhance Overall Security at Airport Security Awareness Training - 25,000 - 25,000 the Airport by Staffing Employee Screening Equipment Maintenance - 51,000 - 51,000 Increase, Training and Hire a Sr. Operations Controller for Airport 1.0 49,287 3,300 52,587 Equipment Maintenance Communications Center Hire a Consultant to Evaluate Physical Security of - - 53,000 53,000 Airport Substations Hire a Background Checking Specialist - Increased 1.0 50,889 3,700 54,589 Volume and Requests Hire Additional Employee Screeners - Implement 6.0 223,713 - 223,713 Random Unpredictable Screening Security Total 8.0 $ 399,889 $ 60,000 $ 459,889 48 FTE REPORTS AND DETAILED REQUESTS 49 2020 FTE Reconciliation 2020 Proposed Budget FTEs FTEs % 2019 Approved Budget Aviation division FTEs 1,105.78 Central Services FTE's direct charged 100% to airport 37.75 2019 Approved Budget in AV presentation 1,143.53 2019 FTE Transfers between divisions (net zero impact) 2019 FTE transfers IN from Central Services 64.00 2019 FTE Transfers between divisions 64.00 2019 Adjusted Baseline after Transfers between divisions 1,207.53 2019 Changes in FTEs during the year 2019 mid-year FTE additions - AV division 27.25 Vacant FTEs eliminated during 2019 (42.75) 2019 Mid-year Changes in FTEs (15.50) -1.3% FTEs in 2020 Baseline Budget BEFORE Budget Requests 1,192.03 Proposed New FTEs in 2020 Budget: New FTEs for Core Airport Functions 55.00 4.6% New Intern FTEs - College/Graduate 1.50 0.1% Proposed Increase in 2020 Budget FTEs 56.50 FTEs in Proposed Aviation 2020 Budget 1,248.53 3.4% Note: percent changes compared to 2019 Approved Budget after internal FTE transfers 50 Change in FTEs during 2019 FTE Changes During 2019 FTEs FTE Changes During 2019 - continued: FTEs 2019 Approved Budget FTEs 1,143.53 2019 Approved Budget FTEs 1,143.53 2019 transfers IN from Central Services 2019 transfers IN from Central Services 64.00 Electronic Technicians (from Engineering for IAF project) 2.00 2019 mid-year FTE Additions 27.25 AVPMG department transferred to AV Division 62.00 2019 transfers IN from Central Services 64.00 2019 mid-year FTE eliminations Lost & Found Staffing (LTD) - not needed after new contract signed (6.00) 2019 mid-year FTE Additions Admin Assist for F&I (LTD position expired) (1.00) Landside Billing Specialist (taxi pilot) 1.00 College intern - Art program (1yr only, candidate not found) (0.25) Property Manager I (taxi pilot) 1.00 2019 mid-year FTE eliminations (7.25) Pathfinder (IAF support) 1.00 LTD Airport Duty Manager (IAF support) 1.00 Vacant FTE positions eliminated in the 2020 Budget Firefighter E (early hire to cover LT disability) 1.00 Phase I - Full Employee Screening (vacant FTEs removed) (6.00) AV Environ Program Mgr - Transportation Mgmt Assoc 1.00 Phase II - Full Employee Screening (not funded in 2019 Budget) (16.00) AV Chief Operating Officer (AV re-org) 1.00 AVM - ORG 4593 (EH - funded in 2019 Budget, not needed in 2020) (4.00) Admin Assistant - ADO (AV re-org) 1.00 Pathfinders (EH - funded in 2019 Budget, not needed in 2020) (8.00) AV Director - Properties, Airline Affairs, Air Svc Dev (AV re-org) 1.00 Property Manager I (re-purposed for AV re-org use) (1.00) Admin Assistant - new Director (AV re-org) 1.00 College intern - Emergency Preparedness (0.50) Airline Affairs Manager (AV re-org) 1.00 Vacant FTE positions eliminated in the 2020 Budget (35.50) Construction Support Specialist (right-size existing staff hours) 10.00 Senior Access Controllers (labor requirement - exit lane monitoring) 6.00 Subtotal - Vacant FTEs eliminated in the 2020 Baseline Budget: (42.75) College intern - Airport Dining & Retail program 0.25 2019 mid-year FTE Additions: 27.25 Net 2019 FTE Change EXCLUDING Transfers (15.50) Subtotal - FTEs added during 2019 91.25 FTEs in 2020 Baseline Budget BEFORE Budget Requests 1,192.03 51 New FTEs for 2020 Position List 2020 Proposed Budget FTEs FTEs 2020 Proposed Budget FTEs (cont'd) FTEs Aviation Project Management Group 3.0 AV Facilities and Capital Programs FTE's 4.0 Systems Administrator for AVPMG project tracking 1.0 AV Capital Programs Development Manager 1.0 Capital Project Manager III (ADR tenant projects) 1.0 Architect - AV F&I 1.0 AV Project Controls Analyst 1.0 Associate Planner - AV Planning 1.0 Journeyman Sign Writer 1.0 Terminal Operations FTE's 2.0 Senior Operations Controller (C4) 1.0 Maintenance FTE's 27.0 Certified Service Provider Program (CSPP) Manager 1.0 AVM Inventory Specialist 1.0 Baggage System Supervisors 2.0 Landside FTE's 1.0 Operating Engineer - Conveyor Shop 2.0 Load Dock Coordinator 1.0 Operating Engineer - Boiler Room (Cargo/Terminal) 3.0 Operating Engineer - Industrial Waste Treatment Plant 1.0 Fire Department FTE's 1.0 Electronic Technicians 2.0 Fire Protection Engineer 1.0 Field Crew (coverage details pending) 11.0 Carpenters (coverage details pending) 2.0 AV Innovation FTE's 1.0 Painters (IAF/Cargo) 2.0 Innovation Program Manager 1.0 Custodial Quality Assurance Specialist 1.0 AV Environmental & Noise Programs [Central Services] 2.0 Security FTE's 8.0 Environmental Program Manager (Sustainability) 1.0 Employee Screeners (random screening) 6.0 Noise Program Coordinator 1.0 Background Checking Specialist (badging) 1.0 Emergency Preparedness Coordinator 1.0 Aviation Finance & Budget [Central Services] 2.0 Sr. Financial System & Business Analyst 1.0 Customer Service FTE's 4.0 Financial Analyst (Grants & Capital Programs) 1.0 Customer Experience Manager 1.0 Pathfinders 3.0 New Intern FTE's - College/Graduate 1.5 (continued) 2020 Proposed New FTEs: 56.5 52 EXPENSE SUMMARY AND COMPARISONS 53 Total Airport Expense Summary 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Actual Budget Forecast Budget $ % $ % Operating Expenses: Payroll 112,183 119,331 141,316 141,226 149,993 8,677 6.1% 8,767 6.2% Outside Services 41,989 53,003 60,950 61,590 66,167 5,218 8.6% 4,577 7.4% Utilities 16,189 17,811 20,235 19,229 21,127 892 4.4% 1,898 9.9% Other Airport Expenses 30,249 26,726 22,692 26,061 23,839 1,147 5.1% (2,222) -8.5% Total Airport Direct Charges 200,610 216,871 245,192 248,106 261,126 15,934 6.5% 13,019 5.2% Environmental Remediation Liability 8,812 6,233 14,259 12,793 2,648 (11,612) -81.4% (10,146) -79.3% Capital to Expense 2,856 6,891 - - - - NA - NA Total Exceptions 11,668 13,124 14,259 12,793 2,648 (11,612) -81.4% (10,146) -79.3% Subtotal Airport Expenses before AVPMG 212,278 229,995 259,451 260,900 263,773 4,322 1.7% 2,873 1.1% Aviation Project Mgmt Group (AVPMG) 6,941 4,875 6,794 4,775 5,426 (1,367) -20.1% 652 13.7% Total Airport Expenses 219,218 234,870 266,245 265,674 269,200 2,955 1.1% 3,525 1.3% Corporate (excluding Police and AVPMG) 58,339 60,301 69,577 68,253 76,810 7,233 10.4% 8,557 12.5% Police Costs 17,652 19,231 25,137 24,595 26,756 1,619 6.4% 2,161 8.8% Maritime/Economic Development 3,904 4,446 5,145 4,581 5,566 421 8.2% 985 21.5% Total Charges from Other Divisions 79,896 83,979 99,860 97,429 109,132 9,272 9.3% 11,703 12.0% Total Operating Expense 299,114 318,849 366,105 363,104 378,332 12,227 3.3% 15,228 4.2% 54 2018 O&M Per Enplanement vs. Peer Airports 2020 Budget: O&M per Enplanement is $14.19 55 AERONAUTICAL BUSINESS 56 Aeronautical Business Revenues defined by cost recovery formulas in Signatory Lease and Operating Agreement (SLOA IV) O&M and capital costs included in airline rate bases New costs (capital and operating) associated with IAF hit rate base in second half of 2020. New debt service in 2020 offset by PFCs, minimizing impact on FIS rate Revenues and CPE increasing in 2020 as expected Reduction in revenue sharing (eliminated in 2020 per SLOA IV) increases CPE but also increases Port cash flow 57 Aeronautical NOI 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Actual Budget Forecast Budget $ % $ % Revenues: Airfield Movement Area 108,638 116,703 130,873 129,230 132,389 1,516 1.2% 3,159 2.4% Airfield Apron Area 16,771 15,627 19,714 12,295 22,027 2,312 11.7% 9,732 79.2% Terminal Rents 155,431 169,318 203,319 211,805 213,108 9,789 4.8% 1,302 0.6% Federal Inspection Services (FIS) 18,612 16,226 14,521 14,297 18,197 3,676 25.3% 3,900 27.3% Total Rate Base Revenues 299,452 317,874 368,426 367,627 385,720 17,293 4.7% 18,093 4.9% Airfield Commercial Area 10,574 10,257 12,859 13,116 16,097 3,238 25.2% 2,981 22.7% Subtotal before Revenue Sharing 310,026 328,131 381,286 380,743 401,817 20,531 5.4% 21,074 5.5% Revenue Sharing (42,311) (36,863) (15,682) (16,637) - (15,682) -100.0% (16,637) -100.0% Other Prior Year Revenues (26) - - - - - NA - NA Total Aeronautical Revenues 267,690 291,268 365,604 364,106 401,817 36,213 9.9% 37,711 10.4% Total Aeronautical Expenses 195,414 211,101 243,102 241,821 249,322 6,220 2.6% 7,501 3.1% Net Operating Income 72,276 80,167 122,502 122,286 152,495 29,993 24.5% 30,209 24.7% Debt Service (86,564) (91,673) (109,343) (113,820) (121,410) 12,066 11.0% 7,590 6.7% Net Cash Flow (14,288) (11,506) 13,159 8,466 31,085 17,926 136.2% 22,619 267.2% 58 Aeronautical Cost Drivers Impact on Aero Impact on Aero Revenues Revenues 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Budget Forecast Budget $ % $ % O&M (1) 206,076 237,387 235,076 243,458 6,071 2.6% 8,382 3.6% Debt Service Gross 115,419 136,513 137,696 174,455 37,942 27.8% 36,759 26.7% Debt Service PFC Offset (32,987) (33,045) (33,060) (62,998) (29,953) 90.6% (29,938) 90.6% Net Debt Service 82,432 103,468 104,636 111,457 7,989 7.7% 6,821 6.5% Amortization 32,371 30,121 30,583 32,326 2,206 7.3% 1,743 5.7% Space Vacancy (2,132) (1,521) (1,609) (493) 1,029 -67.6% 1,116 -69.4% TSA Operating Grant and Other (873) (1,028) (1,059) (1,028) 0 0.0% 30 -2.9% Rate Base Revenues 317,874 368,426 367,627 385,720 17,294 4.7% 18,093 4.9% Commercial area 10,257 12,859 13,116 16,097 3,238 25.2% 2,981 22.7% Total Aero Revenues 328,131 381,286 380,743 401,817 20,531 5.4% 21,074 5.5% (1) O&M, Debt Service Gross, and Amortization do not include commercial area costs or the international incentive expenses O&M costs driven by largest increases in : FIS from Janitorial Expansion and increased Outside Service Contracts for new facility Terminal Building Janitorial increase Capital costs driven by debt service on new facilities: Phase I NSAT, IAF, Perimeter Intrusion Detection System, Baggage Optimization, Arc Flash Mitigation project, Airfield Pavement Program (2019). Increase in PFC Offset which mainly applied to NSAT & IAF. 59 NON-AERONAUTICAL BUSINESS 60 Non-Aero Business Non-Aero Revenue Airport Dining & Retail Food & Beverage growth reflects new restaurant openings and continued passenger growth Retail growth relatively flat as enplanement growth offset by decline in "grab-n-go" food sales as new restaurant offerings open Duty Free sales expected to be relatively flat to 2018 Actuals which is an increase from the 2019 Forecast. Duty Free sales have been impacted by tariff restrictions and limited store size which prevents SEA from offering the most desired luxury brands . These challenges are partially offset by the growth in international enplanements. Advertising strong demand and increased FMV for ad space Parking Continued passenger growth and mid-2019 tariff increase drives revenue growth Partially offset by decline in short-term (<1 day) parking transactions likely related to changing customer preference toward emerging transportation alternatives Rental Car: Transaction per O&D enplanement continuing to decline, primarily in short-term (<1 day) rental transactions again related to changing customer preference toward emerging transportation alternatives Ground Transportation continued growth of TNCs. Added taxi curbside contract costs. Commercial properties base property revenues continue to grow, strong demand for In-flight Kitchen Airport lounges continue to grow demand exceeds capacity during peak hours Non-Aero Expense Non-aero cost growth impacted by share of division wide initiatives, mostly non-recurring 61 Non-Aero NOI 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Actual Budget Forecast Budget $ % $ % Non-Aero Revenues Rental Cars - Operations 35,051 37,306 36,455 37,088 37,363 908 2.5% 275 0.7% Rental Cars - Operating CFC 10,641 16,263 13,624 14,615 13,786 162 1.2% (829) -5.7% Public Parking 75,106 80,212 82,350 84,072 89,485 7,135 8.7% 5,413 6.4% Ground Transportation 15,684 18,772 19,734 20,706 22,299 2,565 13.0% 1,593 7.7% Airport Dining & Retail 54,611 59,021 59,484 59,962 66,145 6,661 11.2% 6,183 10.3% Non-Airline Terminal Leased Space 4,369 5,302 4,909 5,879 5,700 791 16.1% (179) -3.0% Commercial Properties 18,042 15,434 14,219 15,471 16,660 2,441 17.2% 1,190 7.7% Utilities 7,018 7,206 8,058 8,026 8,833 775 9.6% 807 10.1% Employee Parking 9,617 10,269 10,134 10,134 10,137 3 0.0% 3 0.0% Clubs and Lounges 5,041 6,802 8,520 10,329 10,536 2,015 23.7% 207 2.0% Other Non-Aero Revenue 1,624 1,119 2,049 2,150 2,225 176 8.6% 75 3.5% Total Non-Aero Revenues 236,803 257,707 259,537 268,431 283,169 23,632 9.1% 14,738 5.5% Total Non-Aero Expenses 103,702 107,748 123,003 121,283 129,010 6,007 4.9% 7,727 6.4% Net Operating Income 133,101 149,959 136,534 147,148 154,159 17,626 12.9% 7,011 4.8% Less: CFC Surplus (2,750) (6,157) (3,993) (4,769) (4,128) 135 3.4% (641) -13.4% Adjusted Non-Aero NOI 130,351 143,802 132,540 142,379 150,031 17,491 13.2% 7,652 5.4% Debt Service (44,495) (44,545) (49,352) (49,093) (50,064) 712 1.4% 971 2.0% Net Cash Flow 85,856 99,257 83,188 93,287 99,967 16,779 20.2% 6,680 7.2% 62 Public Parking Public Parking - Revenue Detail Incr / (Decr) 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Actual Budget Forecast Budget $ % $ % Parking Garage Revenue to Port Revenue to Port - General Parking 68,024 72,473 74,554 76,022 81,300 6,746 9.0% 5,278 6.9% Other Garage Revenue Programs Premier Corporate Parking 958 1,225 1,247 1,323 1,360 113 9.1% 37 2.8% Passport Parking Program 2,990 3,219 3,330 3,472 3,570 240 7.2% 98 2.8% Revenue to Port - Parking Programs 3,947 4,444 4,578 4,795 4,930 352 7.7% 135 2.8% Total Parking Garage Revenue 71,971 76,917 79,132 80,817 86,230 7,098 9.0% 5,413 6.7% Other Parking Revenue Concession Rent - Doug Fox off-site parking 3,109 3,238 3,200 3,200 3,200 - 0.0% - 0.0% Space Rent and Other Parking Revenue 25 56 19 55 55 36 190.1% - 0.0% Total Parking Revenue 75,106 80,212 82,350 84,072 89,485 7,135 8.7% 5,413 6.4% Total Enplanements 23,416 24,894 25,394 25,890 26,667 1,273 5.0% 777 3.0% O&D % 70.4% 71.2% 70.3% 71.1% 71.0% 0.7% 1.0% -0.1% -0.1% O&D Enplanements 16,485 17,725 17,852 18,408 18,933 1,082 6.1% 526 2.9% Revenue per O&D Enplanement Metrics Public Parking $ 4.13 $ 4.09 $ 4.18 $ 4.13 $4.29 $ 0.12 2.8% $ 0.16 4.0% Premier Corporate Parking $ 0.06 $ 0.07 $ 0.07 $ 0.07 $0.07 $ 0.00 2.8% $ (0.00) -0.1% Passport Parking Program $ 0.18 $ 0.18 $ 0.19 $ 0.19 $0.19 $ 0.00 1.1% $ (0.00) 0.0% Total Garage Revenue per O&D Enplanement $ 4.37 $ 4.34 $ 4.43 $ 4.39 $ 4.55 $ 0.12 2.7% $ 0.16 3.7% 63 Rental Cars Rental Car - Revenue Detail Incr / (Decr) Incr / (Decr) 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast # and $ in 000's Actual Actual Budget Forecast Budget $ % $ % RCF Concession Revenue to Port 31,352 33,474 32,666 33,300 33,500 834 2.6% 200 0.6% Total Enplanements 23,416 24,894 25,394 25,890 26,667 1,273 5.0% 777 3.0% O&D % 70.4% 71.2% 70.3% 71.1% 71.0% 0.7% 1.0% -0.1% -0.1% O&D Enplanements 16,485 17,725 17,852 18,408 18,933 1,082 6.1% 526 2.9% Gross Sales by Operators 313,654 334,355 326,665 333,405 335,000 8,335 2.6% 1,595 0.5% Total Transactions 1,388 1,416 1,396 1,395 1,369 (27) -1.9% (26) -1.9% Average Ticket $226.03 $236.08 $234.00 $239.00 $245.00 $11.00 4.7% $6.00 2.5% Average Length of Stay 4.37 4.44 4.43 4.54 4.59 0.16 3.6% 0.05 1.1% Transactions/O&D Enplanements 8.42% 7.99% 7.82% 7.58% 7.23% -0.59% -7.5% -0.35% -4.6% CFC Revenue Summary Total Transaction Days 6,070 6,286 6,184 6,333 6,284 100 1.6% (49) -0.8% CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0% CFC Revenue Earned 36,421 37,716 37,106 37,998 37,700 594 1.6% (298) -0.8% Other CFC Collections (160) 349 - - - NA - NA Total CFC Revenue Earned 36,261 38,065 37,106 37,998 37,700 594 1.6% (298) -0.8% Reserve for debt service and CP interest: (22,621) (21,802) (23,482) (23,383) (23,914) (138) 0.6% (237) 1.0% Reserve for CP principal payment: (3,000) - - - - - NA - NA Debt Service Reserve Requirement (25,621) (21,802) (23,482) (23,383) (23,914) (138) 0.6% (237) 1.0% Residual - CFC Operating Revenue: 10,641 16,263 13,624 14,615 13,786 456 3.3% (535) -3.7% Rental Car - Revenue Summary Incr / (Decr) Incr / (Decr) 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast # and $ in 000's Actual Actual Budget Forecast Budget $ % $ % RCF Concession Revenue to Port 31,352 33,474 32,666 33,300 33,500 834 2.6% 200 0.6% Residual - CFC Operating Revenue: 10,641 16,263 13,624 14,615 13,786 456 3.3% (535) -3.7% Land Rent/Space Rent/Other 3,699 3,833 3,788 3,788 3,863 102 2.7% 102 2.7% Total Rental Cars Oper Revenue 45,691 53,569 50,079 51,703 51,149 1,391 2.8% (233) -0.5% 64 Ground Transportation Revenue to Port Incr / (Decr) Incr / (Decr) 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast $ in 000's Actual Actual Budget Forecast Budget $ % $ % Ground Transportation Revenues Transportation Network Companies 6,940 10,349 11,574 12,864 14,794 3,220 27.8% 1,930 15.0% On Demand Taxis 5,199 4,475 4,176 3,690 3,321 (855) -20.5% (369) -10.0% On Demand Limos 858 853 842 842 837 (5) -0.6% (5) -0.6% Belled In Taxis (Annual Permit) 45 35 33 29 24 (9) -27.3% (5) -17.2% Pre-Arranged Limos (Annual Permit) 626 635 588 588 581 (8) -1.3% (8) -1.3% Courtesy Cars (cost recovery) 1,319 1,660 1,919 2,020 1,984 65 3.4% (36) -1.8% All other Operators (cost recovery) 394 340 388 459 388 - 0.0% (71) -15.5% Other Misc Revenues 303 424 214 214 294 80 37.4% 80 37.4% Total GT Revenue 15,684 18,772 19,734 20,706 22,299 2,565 13.0% 1,593 7.7% Trip Activity Incr / (Decr) Incr / (Decr) 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast in 000's Actual Actual Budget Forecast Budget # % # % Ground Transportation Trips Transportation Network Companies 1,277 1,715 1,929 2,144 2,466 537 27.8% 322 15.0% On Demand Taxis 750 723 696 615 554 (143) -20.5% (62) -10.0% On Demand Limos 72 69 67 67 66 (1) -2.0% (1) -2.0% Belled In Taxis (Annual Permit) 56 18 18 14 14 (4) -22.5% - 0.0% Pre-Arranged Limos (Annual Permit) 337 347 344 344 340 (4) -1.2% (4) -1.2% Courtesy Cars (cost recovery) 1,175 1,209 1,160 1,224 1,240 80 6.9% 16 1.3% All other Operators (cost recovery) 79 63 57 76 57 - 0.0% (19) -25.2% Total GT Trip Activity 3,746 4,145 4,271 4,484 4,753 483 11.3% 269 6.0% 65 Airport Dining & Retail Budget v. Airport Dining & Retail 2017 2018 2019 2019 2020 Budget Change Forecast Org Basis (in 000's) Actual Actual Budget Forecast Budget $ % $ % ADR Revenue (Rent to the Port) Food & Beverage 21,579 23,132 23,780 23,917 28,077 4,297 18.1% 4,159 17.4% Retail 13,989 17,005 15,445 17,268 17,398 1,954 12.6% 130 0.8% Duty Free 6,912 7,026 7,497 6,290 6,709 (787) -10.5% 420 6.7% Personal Services 3,728 3,951 3,785 3,744 3,966 181 4.8% 223 5.9% Advertising 6,662 6,432 6,896 6,896 8,103 1,208 17.5% 1,208 17.5% Space Rental - office & storage 1,292 1,351 1,385 1,320 1,371 (14) -1.0% 50 3.8% All other revenue 449 125 697 528 520 (177) -25.4% (7) -1.3% Total ADR Revenue 54,611 59,022 59,484 59,962 66,145 6,661 11.2% 6,183 10.3% - - ADR Gross Sales - - Food & Beverage 168,219 182,781 185,341 189,625 212,988 27,646 14.9% 23,363 12.3% Retail 95,398 109,125 98,639 103,947 110,778 12,139 12.3% 6,831 6.6% Duty Free 21,254 20,774 22,828 19,529 20,701 (2,128) -9.3% 1,172 6.0% Personal Services 22,348 23,502 23,151 22,745 22,935 (216) -0.9% 190 0.8% Total ADR Gross Sales 307,220 336,182 329,959 335,846 367,401 37,442 10.2% 31,555 9.4% Sales per Enplanement SPE - Food & Beverage 7.18 7.34 7.30 7.32 7.99 0.69 9.4% 0.66 9.0% SPE - Retail Sales 4.07 4.38 3.88 4.01 4.15 0.27 6.9% 0.14 3.5% SPE - Duty Free 0.91 0.83 0.90 0.75 0.78 (0.12) -13.7% 0.02 2.9% SPE - Personal Services 0.95 0.94 0.89 0.88 0.86 (0.03) -3.0% (0.02) -2.1% SPE - Airport Dining & Retail $13.12 $13.50 $12.97 $12.97 $13.78 $0.81 6.2% $0.81 6.2% 66 Non-Airline Terminal Leased Space Non-Airline Terminal Leased Space 2017 2018 2019 2019 2020 Budget Change Budget vs Forecast Org Basis (in 000's) Actual Actual Budget Forecast Budget $ % $ % Maintenance Service Fees 20 238 268 268 266 (2) -0.6% (2) -0.6% Space Rental - Terminal 4,364 5,063 4,641 5,611 5,434 793 17.1% (177) -3.2% All other ORG 3645 revenue (15) 0 0 (0) - - 0.0% 0 0.0% Total ORG 3645 Revenue 4,369 5,302 4,909 5,879 5,700 791 16.1% (179) -3.0% Significant Revenue Changes (in 000's): AlClear 432 967 875 1,533 1,625 750 85.7% 92 6.0% TSA/GSA 2,017 2,010 1,701 2,089 1,735 33 2.0% (354) -16.9% 67 Non Aero Commercial Properties Non-Aero Commercial Properties Revenue Budget vs 2017 2018 2019 2019 2020 Budget Change Forecast Subclass Basis (in 000's) Actual Actual Budget Forecast Budget $ % $ % Revenue Source NEW DEVELOPMENT PARCELS DMCBP Land Rents - all (3) phases 1,079 1,556 1,573 1,573 1,617 44 2.8% 44 2.8% DMCBP In Lieu - 7yr repayment schedule (Phase I & III ) 445 482 522 522 522 - 0.0% - 0.0% DMCBP In Lieu - lump sum payment (Phase II) 5,434 - - - - - - DesMoines Creek Business Park: 6,958 2,038 2,095 2,095 2,139 44 2.1% 44 2.1% NERA 2 Land Rent 15 248 268 268 268 0 0.0% 0 0.0% NERA 3 Land Rent 42 687 734 734 734 - 0.0% - 0.0% Des Moines Creek North Land Rent - 90 593 593 847 255 43.0% 255 43.0% Other New Development Revenue: 57 1,025 1,595 1,595 1,850 255 16.0% 255 16.0% Subtotal - New Development revenue: 7,015 3,063 3,690 3,690 3,988 299 8.1% 299 8.1% In-Flight Kitchen Revenue 7,827 8,705 8,634 9,709 9,974 1,340 15.5% 265 2.7% Burien NERA 3 FAA Pilot Program grant 1,402 1,807 - - - - - All Other Commercial Properties Revenue 1,798 1,859 1,896 2,072 2,698 802 42.3% 626 30.2% Non-Aero Commercial Properties Revenue: 18,042 15,433 14,219 15,471 16,660 2,441 17.2% 1,190 7.7% 68 Port-owned Common Use Clubs and Lounges Budget Budget vs Airport Clubs & Lounges 2017 2018 2019 2019 2020 Changes Forecast Org Basis (in 000's) Actual Actual Budget Forecast Budget $ % $ % Clubs & Lounges Revenue 5,041 6,802 8,520 10,329 10,536 2,015 23.7% 207 2.0% Operating Expenses 3rd Party Operating Expenses 1,598 2,144 2,780 3,287 3,917 1,137 40.9% 630 19.2% Base Management Fee 182 182 182 182 182 - 0.0% - 0.0% Incentive Management Fee 103 173 229 242 266 36 15.9% 23 9.7% Management Fee 285 356 412 425 448 36 8.8% 23 5.5% B&O taxes 76 102 128 128 158 30 23.7% 30 23.7% Other expenses 0 7 (0) 0 0 0 0.0% - Clubs & Lounges Expenses 1,959 2,609 3,319 3,840 4,523 1,204 36.3% 683 17.8% Income from Operations 3,081 4,193 5,201 6,489 6,013 811 15.6% (477) (0) 69 CAPITAL BUDGET 70 Summary of Proposed New Projects # of Cost Cash Flows (Figures in $000s) 2020 - 24 Projects Description Estimate 2020 2021 2022 2023 2024 TOTAL 11 Asset Management 169,150 1,563 10,572 21,703 50,482 57,986 142,305 3 Safety & Security 14,800 672 2,169 3,330 2,803 2,353 11,328 10 Business Need 91,200 933 5,364 8,010 21,519 19,121 54,948 7 Customer Service 48,350 74 1,070 3,011 4,109 4,632 12,896 3 Grow Non-Aero Revenues 39,100 571 2,579 2,823 3,833 1,905 11,711 34 TOTAL 362,600 3,813 21,755 38,877 82,746 85,996 233,188 Following slides list each new proposed project by category 71 Proposed Capital Projects Safety & Security Cost Cash Flows (Figures in $000s) 2020 - 24 # CIP Description Estimate 2020 2021 2022 2023 2024 TOTAL 1 C801119 Load Dock Employee Screening 1,500 118 451 466 408 16 1,459 2 C801125 Mezzanine Security Glass 12,900 491 1,657 2,743 2,286 2,292 9,468 3 C801126 North cargo area cameras 400 64 61 121 109 45 400 TOTAL 14,800 672 2,169 3,330 2,803 2,353 11,328 1. Load Dock Employee Screening: As part of the Airport's plan to ensure safe and secure operations, the Airport is striving for 100% employee screening. Currently, there is access control to the secure side of the terminal on the load dock, but no employee screening. Employee screening on the load dock would be collocated with inspections for deliveries in order to provide screening for employees, vendors, contractors, and their personal items. This project would provide an AIT and x-ray. 2. Mezzanine Security Glass: This project will replace the currently installed glass railing on the mezzanine level, GML hall and other areas that provide unfettered elevated access over publicly occupied space with a 7-8 ft. high glass wall. 3. North cargo area cameras: The north cargo area, comprised of Cargo 1, 2, 3 and 4, hosted more than 6,300 live cargo operations in 2018. This operational total excludes passenger RON activity. In addition, the Cargo 1 ramp area was the location where the Horizon Air aircraft theft incident occurred in August 2018, is out of existing range of consistent camera surveillance. At present the cargo areas north of Cargo 6 area is monitored by only 3 cameras on the existing Genetec security system. 72 Proposed Capital Projects Asset Management Cost Cash Flows (Figures in $000s) 2020 - 24 # CIP Description Estimate 2020 2021 2022 2023 2024 TOTAL 1 C801127 Baggage Claim Device R&R Prog 71,000 - 2,935 6,058 24,597 32,850 66,440 2 C801045 Common Use System Replacement 3,750 178 619 1,303 1,191 459 3,750 3 C801038 Domestic Water Piping Phase 2 11,500 - 564 1,079 3,642 4,001 9,285 4 C801042 Landside Pavement Program1 20,000 - 40 1,517 2,555 8,097 12,209 5 C801037 C4 Generator Control 6,800 142 1,071 3,069 2,462 55 6,800 6 C801034 Digital Signage: Ticketing, Baggage Claim 5,000 371 1,209 1,143 1,143 1,044 4,910 and Drives2 7 C801046 Concourse D Electrical Upgrade 8,400 636 1,320 2,909 3,055 481 8,400 8 C801047 Cooling Tower Upgrades 3,800 - - - - 252 252 9 C801123 IWTP Improvements 27,000 93 1,827 1,813 6,937 8,207 18,878 10 C801044 Carpet Renewal/Replacement - Concourse D 1,300 - - 99 252 430 781 11 C801122 IWTP Controls Conversion 10,600 143 987 2,712 4,648 2,109 10,600 TOTAL 169,150 1,563 10,572 21,703 50,482 57,986 142,305 73 Proposed Capital Projects Business Need Cost Cash Flows (Figures in $000s) 2020 - 24 # CIP Description Estimate 2020 2021 2022 2023 2024 TOTAL 1 C801134 AvOps Wildlife Storage Building 800 - - - - 84 84 2 C801131 North End Airport Support Equipment Area 10,000 - - - - 470 470 3 C801135 North Cargo Area Improvements 5,500 - - - - 286 286 4 C801124 Air Cargo Truck Staging Yard 3,500 187 321 1,929 1,063 - 3,500 5 C801041 HVAC Upgrade Concourses C & D 50,000 629 3,342 3,316 11,497 12,164 30,948 6 C801120 PCS Yard Trailer Replacement 1,500 118 451 466 408 16 1,459 7 C200096 Apartment Sound Insulation (Pilot Project) 2,300 - - 2,300 - - 2,300 8 C200097 ATZ Residential Acquisition 11,500 - - - 6,500 5,000 11,500 Places of Worship Sound Insulation (Pilot 1,100 - - - - 1,100 1,100 9 C200098 Project) Fire Department Apparatus Renewal 5,000 - 1,250 - 2,050 - 3,300 10 C801040 Replacement - - - - - - - TOTAL 91,200 933 5,364 8,010 21,519 19,121 54,948 74 Proposed Capital Projects Customer Service Cost Cash Flows (Figures in $000s) 2020 - 24 # CIP Description Estimate 2020 2021 2022 2023 2024 TOTAL 1 C801054 Smoking Shelters 550 - - - - 77 77 2 C801053 Terminal Information Hubs 700 74 111 227 206 82 700 3 C801129 Play Area Renovation 1,100 - 93 192 371 353 1,008 Restroom Renewal/Replacement Main 21,000 - 866 2,592 3,532 2,921 9,911 4 C801050 Terminal, Mezz & Bag Claim 5 C801133 SSAT Meditation Room 1,100 - - - - 96 96 6 C801132 Pre-Security Tenant Offices 7,900 - - - - 382 382 Restroom Renewal/Replacement Concourse 16,000 - - - - 722 722 7 C801049 A, CTE TOTAL 48,350 74 1,070 3,011 4,109 4,632 12,896 75 Proposed Capital Projects Grow Non-Aero Revenues Cost Cash Flows (Figures in $000s) 2020 - 24 # CIP Description Estimate 2020 2021 2022 2023 2024 TOTAL 1 C801121 Port shared lounge Conc A exp2 7,700 566 2,375 2,475 2,159 84 7,659 2 C801128 3rd FL GT Booth Enhancements 2,800 5 204 348 1,674 570 2,800 3 C801056 New Leasable Space 28,600 - - - - 1,251 1,251 TOTAL 39,100 571 2,579 2,823 3,833 1,905 11,711 1. Port shared lounge Conc A exp: This project will expand the Port Common Use Lounge on A Concourse (Club at SEA) by 1,500 sq. ft. in to an unused & unfinished storage space to the east of the existing lounge. This work will require a sprinkler renovation and HVAC update to the entire space. During this expansion the lounge will be renovated to include an internal first-class lounge area, two shower suites and a reconfiguration/expansion of the kitchen and bar/food service area. This project will also refresh other FFE (furniture, fixtures and equipment) in the lounge that is past its useful life. 2. 3rd FL GT Booth Enhancements: This project will expand and renovate the Ground Transportation Offices on the 3rd floor of the parking garage. This project will also explore the addition of internal employee restrooms, increase cell coverage and WIFI, update an upstairs breakroom and relocate a data center in the adjacent booth. 3. New Leasable Space: This project will convert several vacant and/or undeveloped spaces in the airport into occupiable spaces. The spaces can then be used for Port functions, contractor offices/break rooms or can be leased to airport tenants for a variety of uses. 76 CPE COMPARISONS TO PEER AIRPORTS 77 2018 CPE Comparison SEA 2020 CPE of $13.93 likely still in Middle Third CPE is an imperfect comparison. At some airports, airlines or private entities operate and pay for certain facilities making comparisons difficult 78 Comparison of Future CPEs 79 CIP FUNDING PLAN AND USE OF PFCS 80 Sources and Uses of PFCs $000s 2019 Fcst 2020 BUD 2021 2022 2023 2024 2025 2026 2027 2028 Total Uses SOURCES Beginning balance 89,636 10,651 19,002 10,077 10,229 10,382 10,538 10,696 10,857 11,020 Collections & interest 96,055 99,467 101,104 102,462 104,000 105,563 107,148 108,757 110,391 111,496 Total Avialable Balance 185,691 110,117 120,106 112,539 114,229 115,945 117,686 119,454 121,248 122,516 USES - Debt Service PFC Backed Bonds #1 Third Runway 20,128 18,768 18,766 18,770 18,769 - - - - - 75,072 Revenue Bonds #2 IAF - 17,626 31,342 38,942 39,242 39,021 38,849 39,850 40,234 41,940 327,047 #3 Third Runway 26,449 26,412 26,067 20,695 16,949 16,950 35,163 35,164 35,162 35,161 274,170 #4 Conc A, STS, Existing Baggage 7,351 12,800 13,354 14,776 14,777 14,715 7,038 7,036 7,035 7,034 105,917 #5 NSAT - 10,510 15,501 4,127 14,110 23,628 23,629 23,627 23,629 23,403 162,164 USES - PAY GO - IAF - - - - - - - - - - - NSAT 116,112 - - - - - - - - - 116,112 Airfield/Noise - - - - - - - - - - - MT 100% Baggage Screening - 5,000 5,000 5,000 - - - - - - 15,000 Baggage Optimization C800612 - - - - - - - - - - - Other Terminal - - - - - 11,092 2,310 2,921 4,167 3,847 24,338 Total Uses 170,040 91,115 110,029 102,310 103,847 105,407 106,990 108,597 110,228 111,385 1,099,820 Ending balance 15,651 19,002 10,077 10,229 10,382 10,538 10,696 10,857 11,020 11,130 Used for debt service 32% 95% 95% 95% 100% 89% 98% 97% 96% 97% 81 Funding Plan for International Arrivals Facility (IAF) Funding Sources $000s Capital Rate Base 2020 2024 Cash/ADF (a) 200,000 Amortization - - Revenue Bonds 631,445 Debt Service 17,626 44,318 PFCs (paygo) 100,000 DS paid w/PFCs (17,626) (39,021) Total (b) 931,445 Net capital costs 0 5,296 Effective percent of PFCs to fund project costs: 78.5% 70.4% (a) $200M amortization would be excluded from Rate base. (b) Figure does not include CIP 800836 IAF Baggage $18.5M + $5.5M and Public Expense Facial Recognition equipments of $13M 82 Funding Plan for North Satellite Building (NSAT) Funding Sources $000s Capital Rate Base 2020 2024 Cash/ADF 537 Amortization 36 36 Revenue Bonds 532,920 Debt Service 16,951 38,110 PFCs 126,368 DS paid w/PFCs (10,510) (23,628) Total 659,825 Net capital costs 6,477 14,517 Effective percent of PFCs to fund project costs: 69.2% 69.2% Use of PFCs on NSAT will increase as PFC backed bonds are fully amortized in 2023 83 Uses of PFCs by Cost Center 2019 -2028 29% 33% Airfield Terminal 38% FIS Balanced use of PFCs to moderate rates 84
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