10a. Attachment
08 Delegation of Responsibility and Authority
Agenda Item No. 10a_attach_8 Meeting Date: January 24, 2023 December 13, 2022 Delegations of Responsibility and Authority Table below is from 2020 Port Audit Team Report: Management Response to Audit Suggestion - Comparator Agencies AGENCY DELEGATION 5 YEAR CAPITAL BUDGET King County No limit – within bi-annual budget $5 B City Seattle No limit – within bi-annual budget $5.2 B UW 15,000,000 $3.7 B Sound Transit 5,000,000 $14 B* Port of Seattle 300,000 $4.4 B^ plus SAMP in 10 -year horizon NWSA 300,000 $440 M *Per Sound Transit Development Plan (2020-2025) from 2019 Annual Report, adopted by the Board of Directors on September 24, 2020 ^ Per 2022 Port Plan of Finance. From this scan it is clear the Port delegations are outdated . 2 Delegations – Audit Team, 18 Month Scan Results • Earlier test of a 1-1/2 years period demonstrates the delegation system is performing well and as designed. • While delegations can be complex in nature, audit testing demonstrates guidance documents are clearly laid out and are being followed by staff • An efficiency opportunity was identified. Port Staff Survey – Business Intelligence / Delegations Team • Aviation, Maritime, Econ. Dev., Corporate Services - over 200 responses, achieved statistical reliability, 80-page report echoed efficiency need. • Report Summary indicated important Commission items bureaucratically overwhelmed by operational and functional items. 2 Inflation Erosion upon Delegation Threshold The delegation was last updated 13 years ago in 2009 from $200k to $300k Port Delegations 2009 2021 – Purchasing Power Percentage Decrease All Delegations $300,000 $213,772 28.7% Capital Delegations $300,000 $158,242 47.3% Port Budgets 2009 Value 2022 Value Percentage Increase Operating Revenue $486.4 million $766.9 million 36.6% Expense Budget $277.9 million $499.1 million 44.3% 74.6% (not including Capital 5-year forecast $1.123 billion $4.435 billion SAMP) Delegation buying power is down, while Port and its budgets are up. Situation is out of balance. Creates inefficiency and robs Commission and Leaders of valuable policy and strategy time. Our proposal creates efficiency and maintains transparency 4 3 YEAR SCAN – Commission Efficiency Opportunity 332 monetary items of 664 items over 65 meetings $4,500 100 Efficiency Opportunity: $4,000 80/20 Rule: Focus on the 90 94 Vital 20% for Commission Action 80 $3,500 83 $ 3,700 70 $3,000 72 60 $2,500 50 $2,000 47 47 40 $1,500 30 2525 25 2323 $1,000 23 24 20 $500 19 17 8 8 12 9 9 10 5 6 $230 0 $42 $149 $95 $108 0 0-1M 1M-2.5M 2.5M-5M 5M-7.5M 7.5M-10M >10M Commission Approval Actions $ Value of actions Efficiency Opportunity Delegations in ED Remarks Public Session Necessary Raising ED Delegation Level from $300k to $ 5 - 10 mil increases efficiency for Port operations, while allowing more commission time to focus on policy, community impact, and high - cost programs $4,500 100 $4,000 90 94 80 $3,500 83 $ 3,700 70 $3,000 72 60 $2,500 Recommend $5, $7.5, or $10 mil 50 $2,000 Delegation 47 47 40 $1,500 30 $1,000 24 20 12 $500 10 0 $42 $149 $230 $95 $108 0 0-1M 1M-2.5M 2.5M-5M 5M-7.5M 7.5M-10M >10M Commission Approval Actions $ Value of actions Benefits for Commission to Raising Delegation Level • Eliminates clogging calendar by low priority Commission Action Items. • Allows added time for the many competing pressures upon Commissioners. • Allows more focus time for Commissioners on high priority issues such as: policy, strategy, business, community related items, workforce development, apprenticeship, WMBE and small business, transportation, community and social issues, etc. • Increases time for Commissioner Committee work and areas of interest. • Allows time for more in-depth check-in briefings for ongoing initiatives. Benefits for ED and Port Staff • Allows ED’s budgeted priorities to receive more time and effort. • Enables the ED, Executive Leaders, and Port employees to focus on the most vital issues. • Century Agenda Goal to be Efficient Agency - Saves Time and Money • Equivalent to cost savings of 6-8 FTE’s that could be redeployed to greater value work during this era of FTE losses and hiring shortages Benefits to Business Partners and Community • Saves up to 8 weeks of processing for certain small and large businesses partnerships 7 Estimated Financial and Time Savings • Total estimated savings is approximately 16,600 hours per year which is conservatively equivalent to a range of 6-8 FTEs. Current Model - New Model - estimate estimate Commission Actions – Based on average from 249 83 2018-2021 Estimated Staff hrs. per transaction 81 43 Average employee staff hour cost $134 $110 • Key Factors – Raising the delegation from 300k to 10M reduces the number of actions per year – Meeting time is reduced 55% in the new model and drafting time is reduced 30% • The new process lends itself to shorter meetings • The new drafting process requires less detailed preparation and public quality documents – The shorter meetings of the new process change the mix of staff hours resulting in an overall lower per hour cost. 8 Illustrative Split of Future Actions up to Delegation ED Delegation: ED Report: Highlight Policy and Strategy votes in Public Session: Applications software in Commission Joint Tourism Marketing Buy Deicer Meeting: ILA with City of Seattle, partner cities, WA State, Tribes IDIQ solicitations Train and Escalator FAA Sound Insulation Program maintenance contracts Purchase trash cans in SeaTac and Des Moines 5-year trash Settlement agreements Initiate Design & Sign compacting agreement Workforce, WMBE, etc. Construction Land, major leases, ADR, contracts PSE Utility Agreement Community Engagement, EDI, Proclamations, etc. Tenant utility work Accept shore-power Annual Budget grant Huge Aviation Projects 9 Illustrative View of Current ED $300k Delegation Current Equivalent Time the ED Can Run the Port Current Buying Power Average Spend per of 2009 $300k Average Time ED Budget 2021 Value Business Days/ Year Business Hour Delegation Can Run the Port Expense $423.4M 261 $202,778 $213,772 63 Minutes Capital $536.6M 261 $256,992 $158,242 37 Minutes What Would Current Delegation be if ED Could Run the Port for a Whole Day? Delegation Level Budget 8 Hour Day Divide By Increase Factor Buying Power to Run 1 Day Expense 480 Minutes 63 7.6x $213,772 $1.6M Capital 480 Minutes 37 13x $158,242 $2.1M Should ED have Enough Delegation to Run the Port for 1 Day or 1 Week? Yes – we recommended $10 million option, Governance Committee concurred Legal changes to the General Delegations and general updates throughout the document • Removed outdated references and language not necessary to the delegation that may be updated separately in the future • Updated language related to permits, mitigation credits, non-disclosure agreements, restrictive covenants and hold harmless agreements • Added back insurance and surplus delegations from previous delegations • Updated Definitions, including Interlocal Agreements and Projects, while removing definitions that are no longer referenced in the delegation • Added delegation for agreements that are not covered by any other specific delegation that promote operational or logistical efficiency, and do not meet the definition of Interlocal Agreements, such as reimbursement agreements with TSA, CBP or other public or private entities • Updated Monetary Limits to align with other public entities and inflation since 2009 Updates to Monetary Limits Monetary limits 2009 2022 Capital Projects and Contracts $300,000 $10,000,000 Airport Tenant Reimbursement $200,000 $10,000,000 Utilization of Port Crews $300,000 $10,000,000 Street Vacations $300,000 $10,000,000 Budget Transfers $300,000 $10,000,000 Preliminary Work $300,000 $2,000,000 Critical Work $500,000 $15,000,000 Claims and Settlements $300,000 $1,000,000 Real Estate Agreements $300,000 $1,000,000 12 Transparency in Public Session in 2023 Proposed Agenda Public Agenda Item 8c 1 Call to Order Category of Reference Description Category 2 Executive Session Approval Numbers Amount 3 Approval of the Agenda 4 Special Orders of the Day Real Property O013 4-year lease to XYZ company $670,985 Agreements 5 Executive Director’s Report, including highlights of delegation use above 6 Committee Reports Projects 0008 PCS project - install airline $4,000,000 7 Public Comment ticket kiosks 8 Consent Agenda 0012 Maritime project - improve 8a Approval of Minutes 8b Approval of Claims & Obligations T91 dock $6,904,380 8c Listing of monthly delegation use >$2.5 mil, Contract and 0009 Aviation signage for new $1,000,000 two months in arrears Procurement passenger flow 9 Unfinished Business Administration 0011 Tourism agreement with City $2,245,672 10 New Business Items of Seattle 11 Presentations & Staff Reports Legal 0010 Settlement Agreement $380,000 12 Questions on Referral to Committee & Closing Administration Comments 13 Adjournment Other 0014 Non-profit Agreement $452,340 (Commission briefed) Suggest Audit process within 18 months, and when Grand Total $17,653,377 working well, then sunset the public monthly report Work Flow: Requests for ED Signature Approval APPROVAL FLOW OF REQUESTS: APPROVAL QUESTIONS AND CHECKS for ELT and COO: 1. Subject Matter Experts Pull Template from Executive SharePoint Site Is this request of high Commissioner interest ? Yes, No, NA Is this of high community interest ? Yes, No, NA 2. Select Approval Type from drop-down Is this a potential Commission Policy Item ? Yes, No, NA 3. Yes or No clicks through delegation Is this a potential Commission or Ed Strategic Item ? Yes, No, NA 4. Fill out approval form with fewer attachments than Comm. process External Relations check Yes, No, NA 5. Send through Manager to ELT Member Finance check Yes, No, NA Legal check Yes, No, NA for Approval Procurement check Yes, No, NA 6. ELT Sends to COO and Exec. Office OEDI check Yes, No, NA 7. COO Review, Checks, and Phone Calls Executive COS check Yes, No, NA 8. Recommendation to ED Commission COS check Yes, No, NA 9. ED Decision Decision Record Notes from Discussions: Saves XXX – YYY FTE’s Recommendation to Executive Director: Approve Request Yes, No, NA Move Request to Commission Public Session Yes, No, NA Add Commission & Public Notification in ED Remarks Yes, No, NA Suggest Audit Team check process within 24 months, and then sunset Add to ED 2:2:1 discussion list Yes, No, NA 14 Infrastructure Regulatory Ecosystem Provides Boundaries and Guidance 15 . APPENDIX 16 Updates to the Real Estate Delegations Existing: Revised: • For leases and other use agreements, $300,000 limit for • $1,000,000 limit for specific, noncontingent monetary lease reimbursement or payments, and five years or less. payments or reimbursements, and five years or less. • For amendments over five years, delegation included a • Amendments for leases over five years only delegated if term, $300,000 limit and “substantive” provisions remain rental rates, environmental provisions are unchanged, any unchanged. square footage changes are less than 10%, security deposit is not decreased, and cumulative noncontingent monetary • Easements or use agreements of Port property were obligations do not exceed $1,000,000. delegated if they related to or benefit the Port’s • Easements are delegated if they do not deprive the Port of operations and didn’t require any new financial substantial use of the property or are less than 1000 square obligation. feet, and monetary obligations do not exceed $1,000,000. • Leasing, easements or otherwise using the property of • Leasing, easements or otherwise using the property of others others was limited to five years and less than $300,000. is delegated so long as payments are less than $1,000,000, with no duration limit. Updates to Legal Delegations Legal 2009 2022 Claims and Settlements <$300,000 <$1,000,000 Reporting requirements Quarterly/As issues arise/None Annually Updated and clarified language throughout the section, including the supervision of legal services; the retention of counsel and experts, including an update to the definition of “litigation” to limit the delegated authority to retain an attorney to represent an individual employee or commissioner to litigation matters, but not allow such retention for responding to a Port inquiry about workplace conduct or ethics; and the standards for settling litigation and claims. Updates to Project Delegations Added delegation for agreements that are not covered by any other specific delegation but are less than $10 Million dollars and promote operational or logistical efficiency – Covers exchange of goods/services with any public or private entity, such as reimbursement agreements with entities like TSA/CBP, and MOAs and MOUs with other public and private entities that do not meet the definition of Interlocal Agreements – All Interlocal Agreements will continue to require Commission approval Capital 2009 2022 Delegation $300,000 $10,000,000 Airport Tenant Reimbursement $200,000 $10,000,000 Utilization of Port Crews $300,000 $10,000,000 19 Updates to Project Delegations – Continued – Project is now a defined term including more than public works. – Preliminary work on projects over $10 Million is allowable up to $2M with an expanded definition – Expand Project Changes section • Generally, changes are allowed if within approved project budget • Remove 10% memos and 60-day memos – Remove Bid irregularities section, Alternative Public Works contract delivery methods, Reporting – Updated threshold for Critical Work from $500k to $15 Million for work requiring immediate action to avoid significant adverse consequences to public health, safety or property Boundaries and Guidelines US: WA: Region: • NEPA • SEPA • PSRC • Labor - Davis Bacon • L&I Prevailing Wage • Tribal and agency • Uniform Bldg. • RCW’s & CPARB input to permits Codes • FAA • Seismic Standards • AIA, ASTM, ASCE • Round Tables 21 Boundaries and Guidelines MUNICIPAL: PORT POLICIES: PORT ADMINISTRATION: • Land Use Codes • Century Agenda • Procurement, Contract • Zoning Codes • Policy Committees type to best fit project • Building Codes • Initiatives: E&S, Art, • Tenant Guidelines • Fire Codes Workforce, W/MBE, • Monthly Cost Roll-ups etc. • Delegation of Authority • Internal Audit 22 Boundaries and Guidelines, Port Capital Administration Controls ENGINEERING: SAFETY & SURVEY: CONSTRUCTION: • Master Specifications • Port Datums and Controls • Notify of CO’s with large dollar or time • Design independent checks • 4 crews know AV & MD • Change orders by type • PE encouraged • Understand FAA needs • Nexus System • Involve maintenance • GIS for new • CAF’s for operational • Asset work with F&I & MD • Data ranks for old interface & shutdowns • Lessons Learned with PMs • OSHA to L&I-WISHA • CM’s, RE’s, Daily Inspectors • PPE requirements • PLA, Apprenticeship, PH • Safety specs and manual • Notifications 23 Boundaries and Guidelines, Port Capital Administration Controls MD PROJECT MANAGEMENT AV PROJECT MANAGEMENT • All PM's use standard tools for • Two estimates for mega projects by budget tracking & updates 30% • Baselines set at 30% and at • 2020 lessons learned improvement contract award for monitoring • Investment Committee (IC) changes • Partnership with finance • 15% project definition before IC regarding what costs goes into plan of finance in October approval • Discretionary changes pre-approval 24 Management Response - Values and Objectives for Staff Approach Values: • Generate more Commissioner time for policy, strategies, and mission priorities, while delegating lesser risk and operational items to ED. • Find transparent means to assure Commission awareness and involvement commensurate with delegation: quarterly briefs, commission committee work, public action items and briefings, monthly reports, dashboards, 1:1’s, ED briefs, and other means. Objectives: • Find best balance for efficient delegation level(s) while ensuring transparency and governance that best matches the Port’s Business. • Efficiency for Commission, staff and business/community partners. 25 The Choice – Comparing Efficiency of Alternatives About ½ (334 of 664) of all items that reach public session involve financial authorizations Delegation Who Approves Commission Dollar Commission Efficiency Benefit Level Reviews Dollar Percent Reviews Value Policy Items If $300,000 Commission Action $4.4 B 100% 100% Baseline – Status Quo – Zero (baseline) Executive Director 0% If $5 mil Commission Action $3.9 B 90% 100% Improved Commission time for policy, strategy, committees Executive Director 10% Improved Staff Efficiency If $7.5 mil Commission Action $3.8 B 88% 100% More Commission time for policy, strategy, committees Executive Director 12% More Staff Efficiency If $10 mil Commission Action $3.7 B 85.6% 100% Most Commission time for policy, strategy, committees Executive Director 14.4 % Most Staff Efficiency NOTE: The percentage difference between delegation levels is minor (approximately 2% of spend). In addition, the Commission approves the annual budget, and then re-approves items through the year. 26 Port Staff Survey and 3-Year Public Action Study Facts • Survey widely agreed with Audit Team’s suggestion about efficiency. • High survey response produced statistically significant results. • Study indicated %’s by category over 3 years of public session: – Policy Items – 23% (less than one-quarter of all public session items) – Real Estate, Leasing, Concession Agreements – 6% – Briefings - 11% – Purchases for operational and capital – 13% – Consulting Agreements & amendments – 18% – Design – 11% – Various Capital Improvement items – 20% – Other – 10%+ (21 categories that overlap, thus add up beyond 100%) 27 Port Delegation’s History • 1994 – Resolution 3181 passed setting Delegation value to $200k • 2009 – Resolution 3628 passed increasing Delegation value to $300k • 2016 – NWSA formation on August 4th • 2017 – Study conducted on Commission Memo processing time • 2018 – Staffing Process improvement study conducted by KMPG • 2020 – Delegation of Authority internal audit • 2021 – Project Team Formed • 2021 – Port Delegation Survey distributed Port-Wide, statistically significant response level, and results identified. 28 Efficiency Opportunity – 2017 Internal Study re: Commission Memos $6 million project to modernize HVAC required 41 revisions by 15 persons Instead focus on Higher Value Policy Work in Public Session Ensuring Memos & PowerPoints are thorough and accurate for public session requires extensive staff hours 29 . EndEnd 30
Limitations of Translatable Documents
PDF files are created with text and images are placed at an exact position on a page of a fixed size.
Web pages are fluid in nature, and the exact positioning of PDF text creates presentation problems.
PDFs that are full page graphics, or scanned pages are generally unable to be made accessible, In these cases, viewing whatever plain text could be extracted is the only alternative.