10a. Presentation
Delegation of Responsibility and Authority
January 24, 2023 Agenda Item No. 10a_supp Meeting Date: January 24, 2023 Delegations of Responsibility and Authority Port Audit Team Earlier Reviewed Port Delegation System • 1.5 year scan of test data demonstrated the Port delegation system performed well and as designed with clear guidance documents being followed by staff. • Audit also identified an efficiency opportunity in comparison to regional 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. 2 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 8 3 $ 3,700 70 $3,000 72 60 $2,500 50 $2,000 47 47 40 $1,500 2525 30 25 2323 23 24 $1,000 20 12 $500 19 17 8 8 9 9 10 5 6 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 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 $3,500 $5 Million Level $3.7 Bil 80 83 70 $3,000 72 60 $2,500 Recommend Options $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 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. • The new delegation provides: 1) efficiency, 2) transparency, 3) benefits for Commission, Executive Director, and Business Partners 5 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 $5 million Delegation will Allow Greater Effectiveness and Benefits for Commission and ED Summary of Package of Amendments (1) To strike ‘$10M’ and to insert ‘$5M’ in its place. (2) To insert intent language into the Policy Directive – stating that in all areas where the Commission has spoken through Resolution, Policy Directive, or Order, and has expressed the clear intent to have specific subject matter brought before them in public session for action – those items will come to a Commission meeting regardless of dollar amount associated with the item. (3) Adding a new Section 3 to the Resolution providing for Executive Director review of the processes and procedures at one year after implementation; AND Internal Audit Review of adherence to the delegation process within 4 years of passage of the resolution. (4) Providing for Policy Directive Review by the Commission on a periodic regular basis. 7 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 • 14,500 staff hours cost savings, or equivalent to 5-7 FTE’s that can be redeployed to higher value work Benefits to Business Partners and Community • Saves up to 8-10 weeks of processing to get work out to the marketplace for certain small and large businesses and consultant partnerships 8 . Discussion 9
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