APPROVED DECEMBER 10, 2002 PROPOSED MINUTES OF THE REGULAR MEETING OF THE PORT COMMISSION OF THE PORT OF SEATTLE The Port of Seattle Commission met in a regular meeting at 12:00 p.m., Tuesday, December 10, 2002 in the Commission Chambers, Pier 69, 2711 Alaskan Way, Seattle WA. Commissioners Davis, Edwards, Miller, Molloy and *Nordquist were present. 1. CALL TO ORDER The regular meeting was called to order at 12:00 p.m. by Bob Edwards, Chair and President. 2. EXECUTIVE SESSION The meeting was immediately recessed to an executive session for approximately one hour and fifteen minutes to discuss real estate and p ublic contract matters. 3. APPROVAL OF MINUTES Commissioner Nordquist moved approval of the minutes of the special meeting of November 26, 2002, without reading into the record. Motion unanimously carried. 4. SPECIAL ORDER OF BUSINESS a. SALMON DERBY BRIEFING FOR THE NORTHWEST BURN FOUNDATION Charles Starks and Greg Baruso, Firefighters, Port of Seattle Fire Department, thanked the Port Commission for their support of the Fire Department's annual salmon derby to benefit the Northwest Burn Foundation (Foundation). Firefighter Baruso advised the Port of Seattle Fire Department sponsored its first salmon derby six years ago and noted the first derby raised $8,800 for the Foundation. He reported there has been a steady increase in the fundraising amount over the last six years and announced the sixth annual salmon derby raised $42,000. Connie Blumenthal, Board Member, Northwest Burn Foundation, expressed her thanks, on behalf of the Foundation Board and staff, to the Port Commission and the Port Fire Department for their fundraising efforts. Ms. Blumenthal presented a plaque expressing thanks and appreciation to Commission Chair and President, Bob Edwards. Charles Stark acknowledged former Port Commissioner, Jack Block, who was in attendance at today's meeting, for his support of the derby since its beginning and presented him a plaque expressing the Fire Department's thanks and appreciation. Jack Block thanked the Port Commission and the Port Fire Department for their continued support of the Northwest Burn Foundation and expressed his wishes for a long term 'stream' of funds to the Foundation. Commissioner Edwards noted that former Commissioner Block is still active in his support of this annual event. Dec10reg.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 2 5. UNANIMOUS CONSENT CALENDAR a. Commissioner Davis moved approval of the Unanimous Consent Calendar Item 5a, as follows: Document for signature authorizing payment of outstanding obligations of salaries and claims against the Port of Seattle for the period November 1 through November 30, 2002. Commissioner Davis moved that the Port Auditor be authorized to pay the outstanding obligations of salaries and claims against the Port of Seattle for the period as evidenced by vouchers on the following funds: CHECKS ISSUED DURING THE PERIOD NOVEMBER 1, 2002 THROUGH NOVEMBER 30, 2002: *GENERAL FUND TOTAL $65,018,131.95 AP Checks: 606796 – 609069 $59,779,865.90 Payroll Checks: P-0103869 – P-0105020 5,238,266.05 & 105022 * Includes Promotional Hosting Expense of Commissioners in the amount of 724.95 and to cancel warrants outstanding one year or more to date of Commission meeting per Resolution No. 2601: 083623 300.55 522307 6,000.00 522107 7,263.00 523102 193.87 Appropriate and effective internal controls are in place to ensure that the above– numbered vouchers payable have been processed in accordance with Port procurement/payment policies and delegation of authority. Motion unanimously carried. 6. POLICY AND STAFF BRIEFING a. CITY OF SEATTLE BRIEFING - MAGNOLIA BRIDGE REPLACEMENT PROJEC STUDY Presenter: Dakota Chamberlain, Manager Facility Planning and Project Management. Presentation Documents: Mr. Chamberlain's Commission Agenda Memorandum dated December 4, 2002; computer slide presentation entitled, "Magnolia Bridge Project, Seattle Port Commission, December 10, 2002"; and documents entitled, "Magnolia Bridge Project Area Streets, Seattle Department of Transportation" and "Magnolia Bridge Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 3 Project Alternatives - Comments, Evaluations, Results, Seattle Department of Transportation". Mr. Chamberlain advised that today's briefing is the second briefing for Commissioners, by the City, on this project. (The first briefing was on June 11, 2002). He introduced Kirk Jones, City of Seattle; Lee Holloway, HNTB, and Brad Huff, Enviro Issues, who were in attendance and would be briefing the Commission on this project. As reported in the presentation document, the Magnolia Bridge is an 81-span structure that connects 15th Avenue West to West Galer Street. It was originally constructed in the early 1930’s as the West Garfield Street Bridge. It is one of three primary structures that provide access to the Magnolia Neighborhood, the other two being the Dravus Street and Emerson Street bridges. In 1957, the bridge was widened and lengthened with the construction of the Magnolia Bridge Extension, a 17-span structure that provides access over 15 th Avenue West. Related structural improvements since the original construction have included: adding ramps, structural reinforcing, resurfacing, slab stiffening, replacement of bridge railing, recent replacement of structural members damaged in last year’s Nisqually Earthquake and seismic retrofit of the Magnolia Bridge Extension over 15 th Avenue West. In 1999, a retaining wall was constructed west of the bridge as a result of a significant landslide. One of the outcomes of last year’s Nisqually Earthquake was the City’s decision to undertake a Type, Size, and Location (TS&L) study for replacement o f the Magnolia Bridge. The study will investigate various options, including repair of the existing bridge, and make recommendations regarding a preferred alternative. The bridge is located over Terminal 91 and railroad lines operated by Burlington Northern Santa Fe. The Magnolia Bridge is not within a City Street right-of-way; rather it is constructed within an easement granted by the Port of Seattle. The City has secured $9 million in Federal funding to complete preliminary studies and design. Construction costs have not been developed at this time; however a funding package for construction of the bridge replacement will be developed, as cost estimates are prepared during design. As part of the TS&L study, the City has created the Magnolia Bridge Project Design Advisory Group. The Design Advisory Group includes the Port and the following groups and organizations: Ballard Interbay Northend Manufacturing and Industrial Center (BINMIC) Bicycle Alliance of America Friday Group Friends of Queen Anne Magnolia Community Club Magnolia and Queen Anne Chambers Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 4 Queen Anne/Magnolia District Council Seattle Marine Business Coalition Uptown Alliance Washington State Department of Transportation The role of the Design Advisory Group is to advise and provide input to the Seattle Department of Transportation and its consultant team during the project’s design development. The Design Advisory Group will have considerable influence on final decisions, but not ultimate decision- making authority, which is vested in the Mayor and City Council. The Design Advisory Group’s role is to review, comment on, question, affirm or reject information presented by the design team. While advising on the design direction, the Design Advisory Group will alert the design team to ensure that all issues have been considered and thoroughly evaluated. In addition to the individual expertise brought to the table, each member of the Design Advisory Group represents an organization or constituency which has had, and will continue to have, an influence on developments occurring in the Magnolia, Queen Anne, and Interbay areas. Each member is expected to bring to the table issues and concerns of their organization as well as accurately communicate information back to their constituents. The Design Advisory Group is scheduled to meet monthly from October 2002 through July 2003. In addition the City has scheduled Open Houses with the broader public in October, December, and February. During the December Open House the City will present six to eight project alternatives from the initial list of twenty- five. These six to eight alternatives will be reviewed and screened to a final list of three that will be presented during the February Open House. The current schedule shows completion of the TS&L study in July 2003. The City has selected HNTB Architects Engineers and Planners as their design consultant. In addition to HNTB the design team includes: Weinstein Copeland Architects EnviroIssues Shapiro and Associates KPFF Consulting Engineers Mirai Associates Seattle Department of Transportation The first phase of the project is completion of a TS&L study. The TS&L study is being conducted to identify a location for replacing the bridge and will include identification of connections to the arterial street system. The design phase will follow the TS&L study. Construction is anticipated to start mid to late 2005 and is dependent on securing funding. The Port of Seattle has several major initiatives underway at Terminal 91. They include an uplands development plan and reconstruction of various Terminal 91 assets and facilities. The Port also has long-term agreements with several existing tenants, including Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 5 City Ice and Trident Seafoods. The future location of the Magnolia Bridge will have significant implications on how the Port might develop and use Terminal 91 in the future. In addition to serving the needs of the surrounding communities, the bridge is also an important access point to Terminal 91. Any future decisions regarding replacement of the bridge will need to include consideration for current and future access to Terminal 91. Replacement of the bridge provides an opportunity to consider transportation alternatives in conjunction with the Port's Terminal 91 planning activities. FINANCIAL IMPLICATIONS The Port of Seattle has no financial obligations in relation to the TS&L study. However, funding to actually construct a replacement structure has not been identified or secured. There may be indirect financial implications to the Port re lated to the impacts a replacement structure may have on our existing businesses and tenants, as well the way in which we undertake future development at Terminal 91. It is quite likely that any solution will include use of Port property. Port staff will continue to support the City’s study and will provide resources as required. FUTURE BRIEFINGS It is anticipated that City staff will provide additional briefings to the Commission, including a presentation of the preferred alternative at the conclusion of the Type, Size, and Location Study. PROJECT TIMELINE The Type, Size and Location Study will be completed in July 2003. At the completion of this study the City will begin environmental studies and development of design documents. Construction of the new structure is expected to begin in mid to late 2005. A more complete schedule will be developed during the initial study. A summary of the topics reviewed by Messrs. Jones, Holloway and Buff and Commission/presenters/staff discussion is as follows: MAGNOLIA BRIDGE HISTORY WHY DO THE PROJECT? WHAT WILL THIS COST? WHAT'S THE PROCESS? WHO HAVE WE TALKED TO? WHAT HAVE WE HEARD? COMMUNITY VALUES HOW DID WE USE THAT INFO? ALIGNMENT A Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 6 ALIGNMENT B Commissioner Miller referenced the 1987 settlement agreement, that was mentioned by Mr. Jones in his comments, among the City of Seattle, Department of Ecology, Shoreline Hearings Board, and other parties with respect to 32 nd Street and West Galer Street. Ms. Miller urged the study team to further explore what that agreement means to the proposed alignment, suggesting there are consequences, particularly financial, given the other goals. Commissioner Davis noted the affects of this project on what the Port can do on the Terminal 91 upland property, suggesting it would either maximize or limit uses, which in turn impacts the City's tax base. ALIGNMENT C Commissioner Molloy suggested his preference for a roadway at the base of the green space and access for the public versus a four- lane highway through the flat interbay property. ALIGNMENT D ALIGNMENT E ALIGNMENT F ALIGNMENT G ALIGNMENT H ALIGNMENT I MORE INFORMATION Mr. Jones reported the design team will review the comments, evaluating and rating them against the four criteria; i.e., urban design, environmental, transportation, and cost. He noted an outcome of that work would be three preferred alignments to move into team analysis of traffic modeling at the bridge and into the neighborhoods, environmental and the permits that would be necessary, etc. Mr. Jones stated that by the end of February 2003 the team would be close to looking at which of the three alignments is rising to the top. He advised they would then report back to the Commission. Mr. Jones stated the analysis would eventually screen the alignments to one. Commissioner Nordquist and Mr. Holloway discussed the seismic stability for a new bridge. Commissioner Molloy and Mr. Jones discussed the timing for having an estimated cost and potential funding sources. In response to Commissioner Mollo y, Mr. Jones advised that discussion with Metro regarding level of service is a part of the evaluation criteria. Commissioner Davis expressed her view that with respect to the Port, areas of most concern are Port customers on the waterfront, which, she noted, are valuable to the economy and the Seattle waterfront. Ms. Davis also noted the Port's concern for this Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 7 project as it relates to the planning effort for Terminal 91redevelopment, which is still being discussed. She stated her preference that to the extent possible the City have options despite of the 1987 settlement agreement, which, she suggested, could be changed given current times and more access that might take a higher level of importance with respect to how this planning goes forward. Mr. Jones reported City staff have met with current tenant operations and advised keeping those operations is also a high priority for the City. b. SEATTLE ART MUSEUM SCULPTURE PARK PROJECT Presenter: Tom Tierney, Deputy Chief Executive Officer. Presentation Documents: Mr. Tierney's Commission Agenda Memorandum dated December 4, 2002; computer slide document entitled, "Seattle Art Museum, Seattle Asian Art Museum, Olympic Sculpture Park"; and Seattle Art Museum packet entitled, "Art Needs Room to Breathe, Olympic Sculpture Park". As reported in the presentation document, representatives from the Seattle Art Museum (SAM) will present plans for their third and newest venue, the Olympic Sculpture Park. The park will be an 8.5-acre green space for art and people in downtown Seattle, at a site between Western Avenue and the waterfront, at Broad Street. The Olympic Sculpture Park evolved out of a mutual commitment of the Seattle Art Museum and the Trust for Public Land (TPL) to preserve Seattle's last undeveloped waterfront property. In 1999, with the help of TPL, the museum purchased property on Seattle's central waterfront from Union Oil of California (UNOCAL) with private and public funding. To make the future park complete and accessible to the waterfront, SAM later acquired an additional property (10 Broad St.) with the support of the City of Seattle and King County. The Port had a role in the inception of the Sculpture Park, in that it gave up an option to purchase the UNOCAL property to allow for the purchase by SAM and TPL. Mr. Tierney introduced Mimi Gates, Director, Chris Rogers, Director, Capital Projects, and Cara Egan, Public Relations Manager, Seattle Art Museum; and, Marion Weiss and Michael Manfredi, Weiss Manfredi Architects, who were in attendance at today's meeting and who briefed the Commission on the Sculpture Park Project. Seattle Art Museum and architect representatives reviewed aerial photographs of the site as it is now and with architect model of the Sculpture Park and planning drawings of the project. Commissioner Davis and Ms. Gates and Mr. Rogers discussed proposed plantings, vegetation. Ms. Davis referenced the work of Seaport Maintenance with respect to landscaping and their use of drought resistant plantings and lack of pesticide use. She Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 8 suggested Seaport Maintenance as a resource for the project team. Mr. Rogers advised they intend to use native plantings. In response to Commissioner Molloy, Mr. Rogers advised the planning effort is not yet at the point of determining the specific art sculptures that would be in the park but will include the pedestrian, bicycle, rail and vehicle flow in its planning. Mr. Rogers advised that Sculpture Park project team representatives do attend the meetings of the viaduct replacement project committee and have met with regulatory agencies. Commissioner Edwards referenced the need for the relocation of the trolley barn facility that is currently at the north end of the trolley service, which is a part of this project. Mr. Edwards suggested that Sculpture Park project team discussions with the trolley service include the potential for extending the trolley south to the South Downtown Area, noting the larger system would better serve the public. He expressed his view the proposed park would make the surrounding area more desirable, better defined, and congratulated the team for their work towards building the Seattle Art Museum Olympic Sculpture Park. c. LONG TERM AIRPORT PARKING STRATEGY Presenters: Rod Hilden, General Manager, Landside Line of Business; Kottayam Natarajan, General Manager, and John Faulkner, Business Analyst, Aviation Business Development. Presentation Documents: Messrs. Hilden and Natarajan's Commission Agenda Memorandum dated November 20, 2002 and computer slide presentation packet entitled, "Long-Term Auto Parking Review, Findings and Recommendation Summary, Aviation Business Development and Management and Landside Line of Business, December 10, 2002". As reported in the presentation document, revenue at the Seattle-Tacoma International Airport (Airport) parking garage has dropped substantially since September 11, 2001. This decrease is having an impact on the net income of the Airport. Staff has been analyzing options for increasing garage revenues, but reasons for the decrease are fairly complicated and require some detailed analysis. The purpose of the briefing is to review the current state of long-term parking at the Airport. Staff will update the Commission on market factors affecting supply and demand for spaces in the Airport garage and in private sector parking facilities. Staff will also share information on the typical customer of the Airport garage. There are many options for changing pricing policies and staff wants to ensure that any changes have the desired effect of increasing revenue while maintaining high levels of customer service. To this end staff will be updating the Commission on current thinking at this briefing and then incorporate Commission input into our further analysis. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 9 A summary of the topics reviewed by staff and Commission/staff discussion is as follows: OUTLINE TOTAL PORT PARKING REVENUE HAS RETURNED TO 1998 LEVELS 2002 HAS LOWEST REVENUE PER ENPLANEMENT IN SIX YEARS TRANSACTIONS AND REVENUE DETERIORATION MUCH STEEPER THAN ENPLANEMENTS SINCE 2000 TOTAL PARKING TRANSACTIONS HAVE DECLINED SIGNIFICANTLY AS PERCENTAGE OF ENPLANEMENTS SINCE 1993 CURRENT SITUATION Mr. Hilden, in response to Commissioner Nordquist, discussed the focus on long term rate adjustments, etc. to address lost revenue. ENPLANEMENTS ARE DOWN LONG TERM PARKING TRANSACTIONS PER ENPLANEMENT REVENUE PER TRANSACTION FOR LONG TERM PARKERS CHANGING LOCAL MARKET CHARACTERISTICS PARKING MARKET HAS CHANGED PRIVATE MARKET IS DYNAMIC Commissioner Molloy and Mr. Hilden discussed private market discounts, specials, etc. CONCLUSIONS RECOMMENDED NEXT STEPS Conduct passenger survey to identify point-of-decision for marketing efforts, market perception and price sensitivity In response to Commissioner Davis, Mr. Hilden advised the passenger survey would include both personal and business passengers, though the primary focus will be business customers as they arrive at the Airport. Commissioner Davis suggested that a part of the reason for declining parking revenues is because businesses are cutting back; i.e., parking no longer being paid for, discretionary costs being cut from budgets, etc. Ms. Davis expressed her view she is unsure what the Port does with respect to parking rates can change that. She suggested also s urveying large businesses. Commissioner Nordquist suggested that it is the past customer that has a known change of behavior and that interviewing and getting trends may be beneficial. Mark Reis, Deputy Managing Director, Aviation Division, advised that the Aviation Marketing Department could augment this part of the work. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 10 Commissioner Nordquist referenced the lack of success of the short-term parking program that Denver Airport is using. Mr. Nordquist suggested the current strategy needs to find a way for getting meeters/greeters to use the garage; i.e., easy for them to know where go to park, easy way for them to find their party, etc. Responding to Commissioner Molloy, Mr. Hilden advised it is difficult to replicate the incentives that private companies offer. He noted that one idea is a weekly special rate, as opposed to a daily rate special, with the hope of earning back that market share once that number is known. He advised analysis of the data needs to be done before any decision is made. Mr. Hilden also reported staff is looking at rate structure or schedule and time intervals. 7. MARINE ITEMS a. None. Aviation Ite m 8g was advanced on the agenda as follows: 8. AVIATION ITEMS g. Request for authorization to award American Building Ma intenance Company the contract for janitorial service delivery to Seattle- Tacoma International Airport, effective January 1, 2003 through December 31, 2005, for a contract amount of $16,001,725. Presenter: Michael Ehl, General Manager, Aeronautical Line of Business. Request Document: Commission Agenda Memorandum dated December 3, 2002 from Mr. Ehl and Arthur Harness, Manager, Aeronautical Line of Business. As reported in the request document, the current Seattle-Tacoma International Airport (Airport) janitorial contract expires on December 31, 2002. Due to timing of the current contract expiration, consideration was given to extend the current contract for a period of two or three years in order to fully understand the impact of housekeeping costs for capital assets currently under construction, namely, the South Terminal Expansion Program (STEP) and the Central Terminal Expansion (CTE). After examining current costs for housekeeping services and weighing the potential risks, the decision was made to solicit bids for a new three-year term with two one-year extensions. On October 1, 2002, the Port officially advertised for bids/proposals for housekeeping services at the Airport. On November 7, 2002, the bid/proposal closing date, five contractors presented bids/proposals. Evaluators from Aviation Maintenance, Landside Line of Business, Engineering, Aeronautical Line of Business and the Seattle-Tacoma Airline Managers Association participated in the evaluation process. The grading criteria for contract award included: company qualifications/personnel experience, contractor’s Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 11 motorized floor care equipment, contractor’s recycling and waste reduction plans, cost, and financial capability SCOPE OF WORK The furnishing of all labor, equipment, supplies and materials required to provide complete janitorial services for the Main Terminal, North and South Satellites and associated facilities with a total area of over 2,000,000 square feet at present, increasing to approximately 3,000,000 square feet by 2005. FINANCIAL IMPLICATIONS Since the last award of this contract, increased customer demand, introduction of capital improvements, and enhanced customer service initiatives spurred a rise in housekeeping service delivery. This service delivery was reduced after the events of September 11, 2001 and the resultant decrease in demand for air travel. This reduced service delivery proved unsustainable; hence a graduated increase in service delivery was approved for the Airport in 2003. The proposal/bid pricing submitted by American Building Maintenance Company for 2003–2005 is $16,001,725. This pricing is in full acknowledgement of the contract specifications requirement for increased frequencies in restroom cleaning, terrazzo/carpet care, seating area cleaning, and window washing expectations exceeding those achieved in 2001. PROJECT SCHEDULE The new janitorial services contract will take effect on January 1, 2003 for a period of three years. There is provision for two one-year extensions. Prior to staff presentation of Item 8g, Mr. Ehl advised that staff has received a bid protest from A.M.E. Facility Services, Inc., one of the bid proposers. He requested the Commission defer action on this item until the protest is reviewed. Mr. Ehl advised staff would return to the Commission with appropriate recommendation at a later meeting. Public testimony on Item 8g was received from the following individuals: 1. Kenneth Sheppard, Simburg, Ketter, Sheppard and Purdy, LLP. Mr. Sheppard distributed to Commissioners a copy of a letter dated December 10, 2002 from A.M.E. Facility Services, Inc. to the Port of Seattle Commission. A copy of this letter is, by reference, made a part of these minutes; is marked Exhibit "A"; and is on file in Port offices. 2. Jerry Brooks, Service Employees International Union, Local 6. A copy of Mr. Brooks statement is, by reference, made a part of these minutes; is marked Exhibit "B"; and is on file in Port offices. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 12 An audiotape of the public testimony is on file in Port offices. (Audiotapes are retained in Port files for a three- year retention period and are then transferred to the State Archives.) There was a consensus of the Commission to defer action on Item 8g to a future meeting. General Business Item 9c was advanced on the agenda, as follows: c. Commission Chair and President Report and Commission Action on Chief Executive Officer's Annual Performance Review. Commissioner Edwards advised it is the responsibility of the Port Commission to annually evaluate the performance of the Chief Executive Officer (CEO) Mr. Edwards reported the Commission has completed its review of M. R. Dinsmore's performance for the period ending August 1, 2002. He referenced challenges the Port faced during the last review period, including the slowing regional and national economy, as well as airline and seaport customer setbacks. Commissioner Edwards reported that under Mr. Dinsmore's leadership the Port responded to the challenges. Mr. Edwards stated in evaluating Mr. Dinsmore, a review of the progress on the 2002 goals and objectives was accomplished. He noted the goals included: leadership role in both airport and seaport security, obtaining the Army Corps of Engineers 404 permit for construction of the third runway, agreement on noise improvements in Highline School District schools near the airport, emphasis on workforce diversity, new agreement with the Port's airline customers, financial performance, and regional transportation. Commissioner Edwards stated for the next year the Port will be building on many of the same goals and also adding some new goals. Mr. Edwards advised these goals include: second cruise terminal opening on time, continued leadership in safety and security, efficient use of cargo facilities, implementing a new strategic plan, focus on financial performance, support for high performance workforce focusing on diversity, expanding Port outreach, and continued role as an environmental steward. Mr. Edwards suggested many of the goals would take five years to accomp lish. Commissioner Edwards noted this is Mr. Dinsmore's 10 th anniversary as the Port's Chief Executive Officer and expressed his view that is a credit to Mr. Dinsmore and his relationship with the Commission. Mr. Edwards advised the Commission and Mr. Dinsmore have discussed extending his commitment at the Port and noted the existing deferred compensation plan with the CEO runs through 2005. He reported that after discussions with Mr. Dinsmore, the Commission is now proposing to extend the arrangement for an additional two years to 2007. Commissioner Nordquist then moved that, based on the Port's performance under Mr. Dinsmore's management August 2001 to August 2002, Mr. Dinsmore's salary be increased by three percent (3%), which is the same percenta ge increase as all other salaried Port employees received this year, effective August 1, 2002, for a new annual Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 13 salary of $251,597, and to extend the Port's deferred compensation contributions for Mr. Dinsmore for two years through 2007 with mutually agreed goals and objectives to be established in 2003 for that time period. Commissioner Molloy, speaking to the motion, reflected that as a Port Commissioner beginning his term in January 2001, the past year was, in his word, "fascinating" both in terms of what the organization went through and in watching how the organization responded to and worked through the various challenges. Mr. Molloy expressed his view that the success in the ability for the Port to have responded to the challenges of the past year came through staff and its leadership, which, he noted, Mr. Dinsmore put into place. He noted that while he is comfortable with Mr. Dinsmore's performance, he could not support the motion, primarily in the area of extending Mr. Dinsmore's contract to 15 years. Mr. Molloy advised his reason for not supporting the contract extension is because of his personal belief that in governance and business the top executive should not be in that position for 15 years. He noted his preference for moving people through an institution to thrive and grow. Commissioner Molloy stated for that reason, he would vote "no". Commissioner Davis stated that she would vote "yes" on the motion for an increase in salary and the two-year contract extension for the CEO. Ms. Davis advised that reasons for her voting for extending the contract are based on the reality of the times, and not philosophy. She referenced the challenges for the Port during the past year, including uncertain worldwide conditions, the global economic downturn, and the difficult decisions that were made in response. Commissioner Davis suggested that much of the same uncertainty still remains. Ms. Davis expressed her view the reality of what the Port is facing in the next five year period is total uncertainty with respect to its business base, global conditions, security uncertainties, etc. She stated that stability at the top of the Port organization would take it out beyond settling down or dealing with the various uncertainties. Commissioner Davis stated her view that it is important to retain Mr. Dinsmore's leadership and to develop all employees within the organization. Commissioner Nordquist stated that establishing mutually agreed goals and objectives in 2003 is included in his motion, noting that process began two years ago. Mr. Nordquist also referenced the work that has been done and is currently underway towards developing a strategic plan and performance-based organization. On call for the question, Commissioner Nordquist's motion carried; Commissione rs Davis, Edwards, Miller and Nordquist voting, "yes"; Commissioner Molloy voting, "no". Mr. Dinsmore referenced the challenges the Port faced in 2001 including the February Nisqually Earthquake, regional and national economic downturn, and the eve nts of September 11. He referenced what was done with respect to redirecting Port focus and strategic activities in response to the challenges. Mr. Dinsmore stated the decisions that were made were both as a public institution and a public enterprise. He noted the Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 14 commitment and capital investment that was made for the future of the region during this time period. Mr. Dinsmore noted that decisions made in 2001 were put into place in 2002. He reflected on the organization's emphasis on treating employees with fairness and dignity and referenced the difficult decisions that were made that translated into approximately 220 less employees now at the Port. Mr. Dinsmore advised the Port is still struggling with challenges with respect to safety and security, a decrease in revenue, and decrease in airport activities. He referenced the $20 million decrease in the Seaport budget and the work that is underway towards reducing costs and looking for revenue enhancements. Mr. Dinsmore stated that with the continued support of the Port Commission and employees, the organization would work through future challenges towards a future that is better than what the organization has gone through the past two years. He referenced the Port's capital investment in infrastructure of approximately a half billion dollars that was made during the difficult economic times, which, he noted, provided jobs and contributed to the local and state economy. Mr. Dinsmore advised the investment of capital in infrastructure would continue during this next year. Mr. Dinsmore stated that with Commission direction and support, the Port is committed to the traditional activities of the Seaport and Aviation Divisions. He advised, however, that he has heard over the last few years to look at things differently and reshape the focus and direction of where the Port is going; that is, real estate utilization, raising the commitment and role the Port plays in regional transportation. Mr. Dinsmore announced that effective today a third division to be named Economic Development has been created that has equal status to the Seaport and Aviation Divisions and would be led by Tom Tierney, Deputy Chief Executive Officer. He advised Mr. Tierney would retain the responsibilities of his current position but would also now have accountability for Economic and Trade Development, real estate portfolio, and a leadership role, with staff and in concert with the Chief Executive Officer and the Commission, on regional transportation. He stated that outside that role and the correlation to the CEO, Mr. Tierney would retain accountability for the Labor Relations and Police Departments. Mr. Dinsmore also announced that concurrently the organization would now have a new Chief Administrative Officer who will have accountability for Engineering Services, People Programs, Government Relations, Public Affairs, Port Construction Services, and Facilities Department. He introduced John Okamoto who was in attendance at today's meeting and who will fill that position January 13, 2003. Mr. Dinsmore reported that Mr. Okamoto is currently the Assistant Secretary of the Washington State Department of Transportation. He further announced that also effective today, the Information Technology Department would report to the Chief Financial Officer, Dan Thomas. Mr. Dinsmore stated that the restructure directly correlates to what was discussed and learned from both the Harbor Development Strategy 21 and the McKinsey and Associates work. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 15 (*Commissioner Nordquist was not in attendance for the remainder of the meeting.) The agenda was returned to Aviation Ite m 8a, as follows : a. Resolution No. 3498, " A RESOLUTION of the Port Commission of the Port of Seattle declaring certain residentially improved real property located in the Transaction Assistance Area of the Noise Remedy Program surplus and no longer needed for Port purposes and authorizing its sale (11839 Glendale Way South, Seattle, Washington 98168)”, was introduced. Request Document: Commission Agenda Memorandum dated October 28, 2002 from Jazzi Richardson, Manager Noise Remedy. Commissioner Davis moved second reading and final passage of Resolution No. 3498. Motion carried. (Commissioner Nordquist was absent for the vote.) Thereupon Resolution No. 3498 was declared passed and the same then duly authenticated in open public session by the signatures of the Commissioners voting in favor thereof and the seal of the Commission. b. Request was presented for project-wide authorization for the Managing Director, Aviation Division; Deputy Managing Director, Aviation Facilities; Director, Aviation Capital Improvement Program; General Manager, Facilities and Infrastructure; Director, Engineering Services; General Manager, Port Construction Services; Manager, Procurement Services; and Aviation Project Manager to authorize work, including: prepare drawings, specifications, schedules, cost estimates, and contract documents; perform construction services; execute and award outside professional services agreements and amendments; advertise and award major and small works contracts; pre- purchase materials and equipment including contract award and execution; and perform contract administration and execution for Seattle-Tacoma International Airport (Airport) Electrical Infrastructure Program Projects for an estimated cost of $15,054,000. Presenters: Mike Feldman, Deputy Managing Director, and Richard Ottele, General Manager, Aviation Facilities and Infrastructure, Aviation Division. Request Document: Commission Agenda Memorandum dated October 21, 2002 from Mr. Ottele and Mike Evans, Program Leader, Aviation Project Management Group. PROJECT DESCRIPTION/SCOPE OF WORK As part of the ongoing effort to upgrade the Airport’s electrical systems to improve capacity, and renew, replace and improve reliability; these projects start the capacity enhancement and renewal and replacement of power centers, cables, low- voltage equipment and installation of a power monitoring system. Replacement of the North Satellite 400Hz power system is also part of the scope. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 16 Satellite and Concourse Emergency Transformer Replace ment This project replaces the 30-year old transformers in the emergency system power centers. This project is part of the on-going renewal and replacement program to replace equipment as it reaches the end of its normal service life, before failures occur. Schedule: Design 1st Quarter 2003 Construction 4th Quarter 2003 Completion 3rd Quarter 2004 Budget: $2,209,000 CIP: 102034 North Satellite 400Hz Powe r System Replace ment The existing 400Hz aircraft power system at the North Satellite is obsolete and in disrepair. Currently, only ten gates are served and there is insufficient power to accommodate large airplanes on all gates. The system is currently owned and operated by United Airlines. The North Satellite gates will become common- use gates with United having preferential - but no longer exclusive -use which will allow for other airline use. It is appropriate that the Port assume ownership for this system at this time. This project will replace the existing system with a new system that will provide power for all twelve gates at the North Satellite. A tariff will be developed to fully recover the cost of this installation. Schedule: Design 1st Quarter 2003 Construction 4th Quarter 2003 Completion 3rd Quarter 2004 Budget: $2,614,000 CIP: 102102 North Terminal No. 2 Powe r Center Capacity Upgrade This project will increase the capacity of this power center and renew and replace old and obsolete equipment before failures occur. The increased capacity will provide the ability to add future loads to accommodate future facility needs. The new power center will consist of two 2,500 kVA transformers, each feeding one end of a double-ended switchboard with two main breakers and a tiebreaker. This will allow major components to be taken out of service for maintenance without interrupting service to the tenants. Schedule: Design 1st Quarter 2003 Construction 4th Quarter 2003 Completion 3rd Quarter 2004 Budget: $2,135,000 CIP: 102103 Electrical Power System Monitoring Phase 2 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 17 This project will provide real-time monitoring of the power distribution system at a central control station. This system allows for real-time management of the power system and is an essential capability and tool for normal operations and during power failures. The computer based system monitors voltages, currents, power consumption, system configuration status, etc., in real time at various critical points throughout the system. This information is provided to the System Manager for evaluating, monitoring and controlling the system. The system configuration can change when isolating problems, during maintenance and construction. Having a real-time display of the system configuration is a necessity from a safety and operating perspective. Revenue quality meters will be used for remote revenue metering. The system will also audit energy usage billings. The system will also provide power factor, voltage drop, power quality and demand monitoring as well as historical data logging. Schedule: Design 1st Quarter 2003 Construction 1st Quarter 2004 Completion 4th Quarter 2004 Budget: $3,375,000 CIP: 102104 South Satellite Powe r Center Capacity Upgrade This project will increase the capacity of this power center and renew and replace old and obsolete equipment before failures occur. The increased capacity will provide the ability to add future loads to accommodate future facility needs. The new power center will consist of two 2,500 kVA transformers, each feeding one end of a double-ended switchboard with two main breakers and a tiebreaker. This will allow major components to be taken out of service for maintenance without interrupting service to the tenants. Schedule: Design 2nd Quarter 2003 Construction 2nd Quarter 2004 Completion 1st Quarter 2005 Budget: $3,248,000 CIP: 102045 Concourse B Power Center Capacity Upgrade The single-ended power center for Concourse B was recently upgraded with a new transformer and switchboard, forming a double-ended configuration. The new transformer and switchboard bus are of greater capacity than the original single-ended transformer and switchboard bus. This project renews and replaces the existing original single-ended transformer and switchboard bus and brings them to the same capacity as the recently added transformer and switchboard. Schedule: Design 2nd Quarter 2003 Construction 2nd Quarter 2004 Completion 1st Quarter 2005 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 18 Budget: $1,473,000 CIP: 102106 Main Terminal Powe r System Upgrade This project is the first stage of replacing the overloaded, damaged, underrated and obsolete panels and motor control centers in the Main Terminal. A second future stage will upgrade the Concourses and Satellites. Schedule: Design 2nd Quarter 2005 Construction 2nd Quarter 2006 Completion 1st Quarter 2007 Budget: $6,434,000 CIP: 100662 Parking Terminal No. 3 Power Center Upgrade This project replaces the 30-year old No. 3 power center in the Parking Terminal. This project is part of the on-going renewal and replacement program to replace equipment as it reaches the end of its normal service life, before failure occurs. Schedule: Design 2nd Quarter 2005 Construction 2nd Quarter 2006 Completion 1st Quarter 2007 Budget: $2,185,000 CIP: 102105 FINANCIAL IMPLICATIONS Budget/Authorization Summary Description CIP Budget Satellite and Concourse Emergency Transformer Replacement 102034 $2,209,000 North Satellite 400Hz Power System Replacement 102102 2,614,000 North Terminal No. 2 Power Center Capacity Upgrade 102103 2,135,000 Electrical Power System Monitoring Phase 2 102104 3,375,000 South Satellite Power Center Capacity Upgrade 102045 3,248,000 Concourse B Power Center Capacity Upgrade 102106 1,473,000 Total Budget: $15,054,000 Previous Authorizations $0 Authorizations transferred with Budget Transfers $0 Net Previous Authorization $0 Curre nt Request for Authorization $15,054,000 Remaining Budget to be Authorized: $0 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 19 Project Cost Breakdown - Total Project Construction costs $10,913,000 Sales tax 960,000 Outside professional services 2,640,000 Other 541,000 Total $15,054,000 Source of Funds These projects are included in the 2003-2007 Capital Budget and Plan of Finance under the CIPs listed above. The projects will be funded by revenue bonds to be issued in 2003. Expenditures prior to the 2003 issue will be temporarily funded by commercial paper. Commissioner Molloy moved approval of Item 8b. Motion carried. (Commissioner Nordquist was absent for the vote.) c. Request was presented for project-wide authorization for the Managing Director, Aviation Division; Director, Deputy Managing Director, Aviation Facilities; Director, Aviation Capital Improvement Program; General Manager, Facilities and Infrastructure; Director, Engineering Services; General Manager, Port Construction Services; Manager, Procurement Services; and Aviation Project Manager to authorize work including perform environmental evaluations; prepare drawings, specifications, schedules, cost estimates and contract documents; execute and award outside professional services agreements and amendments; advertise and award major and small works contracts; pre-purchase materials and equipment including contract award and execution; perform construction services and perform contract administration for Seattle-Tacoma International Airport (Airport) Elevator and Escalator Modernization Program Stage II for an additional authorization of $5,081,000 bringing the total authorization to $6,876,000. Presenters: Mike Feldman, Deputy Managing Director, and Richard Ottele, General Manager, Aviation Facilities and Infrastructure, Aviation Division. Request Document: Commission Agenda Memorandum dated October 14, 2002 from Mr. Ottele and Mike Evans, Program Leader, Aviation Project Management Group. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 20 PROJECT DESCRIPTION/SCOPE OF WORK Stage II of the Elevator and Escalator Modernization Program will construct a central monitoring system that will eventually monitor the status of all elevators and escalators, refurbish (replace controls and provide code upgrades) six (6) escalators in the Parking Garage; and upgrade elevators NSA and NSBF (freight) in the North Satellite. This scope of work is included in CIP 101804. FINANCIAL IMPLICATIONS The cost estimate, source of funds, and financial analysis for this request are presented as follows. The anticipated design and construction costs for the total Elevator/Escalator Modernization Program is between $23 -$28 million dollars. Budget/Authorization Summary Original Budget Estimate $23,765,000 Budget Increase (decrease) $54,000 Revised Budget $23,819,000 Previous authorizations $1,795,000 Curre nt request for authorization $5,081,000 Remaining budget to be authorized $16,943,000 Curre nt Request Project Cost Breakdown Construction costs $3,634,000 Sales tax $320,000 Outside professional services $1,127,000 Other ________0 Total $5,081,000 Source of Funds Stage I of this program was funded under CIP 101038 which was approved by the Commission on November 13, 2001. Stage II of this program is included in the 2003- 2007 Capital Budget and Plan of Finance under CIP 101804. The efforts identified and funded under CIP 101804 will be incorporated into CIP 101038 and all work will be reported and tracked under CIP 101038 in the future. This current request will be funded by a future revenue bond issue, planned for mid-2003. Commercial Paper will be used as an interim- funding source. PROJECT SCHEDULE Complete Design 1st Quarter– 2003 Start Construction 3rd Quarter - 2003 Project Completion 4th Quarter – 2004 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 21 Commissioner Davis moved approval of Item 8c. Motion carried. (Commissioner Nordquist was absent for the vote.) d. Request was presented for project-wide authorization for the Managing Director, Aviation Division; Deputy Managing Director, Aviation Facilities; Director, Aviation Capital Improvement Program; General Manager, Facilities and Infrastructure; Director, Engineering Services; General Manager, Port Construction Services; Manager, Purchasing; and Aviation Project Manager to authorize work including perform environmental evaluations; prepare drawings, specifications, schedules and cost estimates; execute outside professional services agreements and amendments; advertise and award major and small works contracts; perform construction services and perform contract administration to construct a new biffy dump facility, pump station and connection to King County Sewer District at Seattle-Tacoma International Airport (Airport) for an additional authorization amount of $2,711,000 bringing the total authorization to $6,658,466. Presenters: Mike Feldman, Deputy Managing Director, and Richard Ottele, General Manager, Aviation Facilities and Infrastructure, Aviation Division. Request Document: Commission Agenda Memorandum dated October 14, 2002 from Mr. Ottele and Mike Evans, Program Leader, Aviation Project Management Group. PROJECT DESCRIPTION/SCOPE OF WORK This project will construct a modern biffy transfer facility and pump station located just north of Gate E-100 that consists of a dual bay facility for the biffy trucks to unload their contents using hosed connections to reduce odor potential. The biffy waste will pass through a grinder and into a pump station that will also accept sanitary sewage from the northeast area of the Airport, including the North Satellite. The pump station will have two pumps and will be served by stand-by power. The pump station will pump the combined sewage through a combination of pressure and gravity pipelines to a ValVue Sewer District manhole located on International Boulevard near South 170th Street. There will be approximately 2,000 feet of pipeline needed to make the connection to the ValVue sewer system. The Port has worked closely with the City of SeaTac on pipeline routing, design and installation within the International Boulevard right-of-way. FINANCIAL IMPLICATIONS Budget/Authorization Summary Original Budget $8,800,000 Budget Transfers (2,141,534) Revised Budget $6,658,466 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 22 Previous Authorizations $ 3,580,000 Authorizations Transferred with Budget Transfers 367,466 Net Previous Authorizations $ 3,947,466 Curre nt Request for Authorization $2,711,000 Total Authorization 6,658,466 Remaining Amount to be Authorized $ 0 Project Cost Breakdown Studies & Preliminary Design – STIA Sewer Systems $654,000 Pump Station Discharge Conversion in Main Terminal 100,000 Initial Non-transferrable Biffy Design - Expensed 110,000 Demolition of Old Biffy Facility 145,000 Temporary Biffy Facility 220,000 Sewer Connection Fees 1,001,300 Design and Construction of Permanent Biffy 4,428,166 Total $6,658,466 Curre nt Request Total Project Construction $1,150,000 $3,821,000 Sales Tax 101,600 336,000 Outside Professional Services 100,000 1,055,000 Sewer Connection Fee 1,001,300 1,001,300 Other (Port Staff, Admin) 358,100 445,166 Total $2,711,000 $6,658,466 Source of Funds This project was included in the 2003-2007 Capital Budget and Plan of Finance under CIP 100528. This project is funded by 1999 revenue bond funds. Commissioner Molloy advised that he would abstain from the vote on Item 8d, stating that his employer, EBARA Corporation, does provide systems tha t could be utilized or included in a bid for this work. Commissioner Davis moved approval of Item 8d. Motion carried; Commissione r Molloy, "abstain". (Commissioner Nordquist was absent for the vote.) e. Request was presented for project-wide authorization for the Managing Director, Aviation Division; Deputy Managing Director, Aviation Facilities; Director, Aviation Capital Improvement Program; Director, Engineering Services; General Manager, Aviation Facilities and Infrastructure; General Manager, Port Construction Services; Manager, Purchasing; and Aviation Project Manager to authorize work including: prepare drawings, specifications, schedules, cost estimates and contract documents; perform construction services; execute and award outside professional services agreements and amendments; advertise and award major and small works Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 23 contracts; pre-purchase materials and equipment including contract award and execution; and perform contract administration and execution for construction of Facilities Monitoring System for the Seattle-Tacoma International Airport (Airport) for an estimated additional cost of $1,800,000 for a current project total of $2,300,000. Presenters: Mike Feldman, Deputy Managing Director, and Richard Ottele, General Manager, Aviation Facilities and Infrastructure, Aviation Division. Request Document: Commission Agenda Memorandum dated November 8, 2002 from Mr. Ottele and Mike Evans, Program Leader, Aviation Project Management Group. SCOPE OF WORK This project will replace the existing, obsolete SCADA system with a new, state-of-the- art Facilities Monitoring System for $2,300,000 by the end of 2003. The specific project elements are as follows: 1. Provide new headend hardware and software to monitor and control the existing input points connected to the SCADA system and certain new points for elevator and escalator monitoring. 2. Provide field wiring and connections to the communications infrastructure backbone system. 3. Provide such field modifications to the existing points of connection as are necessary for those points to communicate with the new system. 4. Establishment of cut-over requirements to allow for the continuous monitoring of critical points during the implementation of the new system. 5. Provide a new local area network. 6. Provide training and documentation for Port personnel in the operation and maintenance of the new system. FINANCIAL IMPLICATIONS Budget/Authorization Summary Original Budget $2,300,000 Budget transfers $0 Revised Budget $2,300,000 Previous authorizations $500,000 Curre nt request for authorization $1,800,000 Remaining budget to be authorized $0 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 24 Project Cost Breakdown Curre nt Request Total Project Construction costs $1,300,000 $1,300,000 Sales tax 114,400 114,400 Outside professional services 100,000 400,000 Other 285,600 485,600 Total $1,800,000 $2,300,000 Source of Funds This project was included in the 2003-2007 Capital Budget and Plan of Finance, as part of the Phase II Program under CIP 101118. The initial $500,000 funding was provided by 2001 Revenue Bonds. Funding for the remaining $1,800,000 will come from a future revenue bond issue planned for 2003. Interim funding will be provided by Commercial Paper. PROJECT SCHEDULE The scheduled work is to be completed by the end of December 2003. Commissioner Molloy moved approval of Item 8e. Motion carried. (Commissioner Nordquist was absent for the vote.) f. Request was presented for project-wide authorization for the Managing Director, Aviation Division; Director, Aviation Capital Improvement Program; Director, Engineering Services; General Manager, Port Construction Services; Manager, Procurement Services; and Aviation Project Manager to authorize work including: prepare contract documents; perform construction services; execute and award outside professional services agreements; advertise and award major and small works contacts; pre-purchase materials and equipment including contract award and execution; and perform contract administration and execution for the Seattle-Tacoma International Airport Phase I Electrical Infrastructure Program, for an additional authorization of $259,966 bringing the total authorization to $78,286,557. Presenters: Bob Riley, Interim Director, Aviation Capital Improvement Program Ray Rawe, Director of Engineering Services Request Document: Messrs. Riley and Rawe's Commission Agenda Memorandum dated November 5, 2002. PROJECT DESCRIPTION/SCOPE OF WORK This project includes cleaning and removal of the oil/water separator baffle and vaults, along with removal and disposal of contaminated materials found in the pathway of Feeder 101. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 25 As reported in the request document, excavation for the Feeder 101 Replacement encountered an abandoned oil/water separator located below the vegetated slope between the south end of the United Fuel Farm and the north entry to the service tunnel. The facility appears to have been constructed by United Airlines to manage wastewater and/or surface water impacted by industrial activities, presumably aircraft-washing waste waters, from an undetermined time of construction (1958-1959) through the early 1960s. Airport 1966 Detailed Record Maps show the facility as removed . The facility was large, with two deep vaults, separated by a constructed baffle array. The baffle area was filled with soil. The sludge within the oil/water separator vaults was determined by chemical analysis to be hazardous/dangerous waste, due to the presence of chlorinated solvents and lead. The soil removed from the shallow zone of the ba ffle area was not hazardous/ dangerous waste, but still exceeded Model Toxic Control Act cleanup levels for total petroleum hydrocarbons. Waste materials and contaminated soil were removed. The oil/water separator was demolished, and the debris disposed offsite at an appropriate facility. Additional contaminated soil was excavated and removed, although some contaminated soil was left in place to prevent destabilizing the slope that overhangs a roadway. Aviation Environmental Management is communicating with United Airlines about cost recovery. The Commission was apprised of this situation in November 2001. At the time the change order was issued, authorized funds from CIP 100525, Electrical Infrastructure Upgrade, were used to pay for it. The extraordinary nature of the clean-up and disposal make it appropriate to fund from CIP 100635, Unprogrammed Projects. A prior budget transfer from the Electrical Infrastructure Upgrade, CIP 100525 to the Art Program, CIP 101242 has left Electrical Infrastructure Upgrade program with authorization in excess of the available budget. This action will transfer $757,312 from Unprogrammed Projects (CIP 100635) to cover the current Feeder 101 oil/water separator issue while only requiring an additional authorization o f $259,966. PROJECT DESCRIPTION/SCOPE OF WORK This project included cleaning and removal of the oil/water separator baffle and vaults, along with removal and disposal of contaminated materials found in the pathway of Feeder 101. FINANCIAL IMPLICATIONS Budget/Authorization Summary Original Budget; $73,000,000 Budget transfers $4,529,245 Pending budget transfer from Unprogrammed $757,312 Projects (CIP 100635) Revised Budget: $78,286,557 Previous Authorizations (CIP 100525) $73,297,050 Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 26 Authorizations transferred with Budget Transfers $4,729,541 Net Previous Authorization $78,026,591 Curre nt Request for Authorization $259,966 Project Cost Breakdown Construction (including disposal $209,100 Sales Tax (8.8%) $18,400 Other (Permit Fees, Admin., Wage Support, Contingency, etc.) $32,466 Total $259,966 Source of Funds This project was included in the 2002 – 2006 Capital Budget and Plan of Finance under CIP 100525. The budget to cover the increased cost of $757,312 will come from Phase I Program Unprogrammed Projects, CIP 100635. Commissioners and staff discussed the need for oversight of tenant work, potential for cost recovery from United Airlines and their bankruptcy filing, and shared costs among all airlines at Seattle-Tacoma International Airport. Commissioner Davis moved approval of Item 8f. Motion carried. (Commissioner Nordquist was absent for the vote.) 9. GENERAL BUSINESS a. Resolution No. 3499, "A RESOLUTION of the Port Commission of the Port of Seattle adopting a policy for payment of claims or other obligations of the Port of Seattle by check from solvent funds, designating the qualified public depository upon which checks are to be drawn, and designating, by title, the Port of Seattle employees authorized to sign checks", was introduced. Presenter: Craig Kerr, Treasury Manager. Request Document: Commission Agenda Memorandum dated November 27, 2002 from Dan Thomas, Chief Financial Officer. As reported in the request document, the State Legislature, during the last session, passed legislation, effective June 13, 2002, which authorizes a port district to pay its obligations by check. Checks are more efficient and less costly to issue than warrants. Other municipalities in Washington State that have switched from warrants to checks are most cities in Washington State including Seattle and Tacoma. Port districts issuing checks are Bellingham and Bremerton. Prior to a port district implementing the legislation, the statute requires the port district to adopt the pay by check legislation in the form of a resolution. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 27 Resolution No. 3499 fulfills the statutory requirement for adopting the pay by check process for payment of Port of Seattle obligations. In response to Commissioner Davis' inquiry, Linda Strout, General Counsel, advised that while it would have been appropriate to have had this resolution before the Commission at the same time the action on Port treasury was taken, it is her determination that there has been no prejudice to anyone receiving Port checks for payment of outstanding obligations of salaries and claims against the Port during the time between that action and today's resolution. Commissioner Davis moved first reading of Resolution No. 3499. Motion carried. (Commissioner Nordquist was absent for the vote.) Second Reading and Final Passage of Resolution No. 3499 will be an item on the December 19, 2002 Commission special meeting agenda. b. Request for authorization for authorization for a sole-source procurement and award of a professional services agreement with Technology Partners International for an evaluation of Information Technology sourcing options, for an amount not to exceed $240,000. Presenters: Tom Tierney, Deputy Chief Executive Officer, and Dan Thomas, Chief Financial Officer. Request Document: Messrs. Tierney and Thomas' Commission Agenda Memorandum dated December 9, 2002. As reported in the request document, over the past several years’ businesses, governments, and other organizations across the country have adopted a variety of different ways to manage information technology (IT) services. Some produce all of their own services through an internal IT department; some contract for all of the services; and others manage IT with a mix of internal and externally procured services. Strategically, organizations are looking for cost savings, increased quality of services, and/or enhanced resource management in making these decisions. Decisions regarding the model for provision of these services can be very complex, and it is our belief that they are best made with the assistance of an independent consultant who is familiar with the issues but is not actually selling external services. With this authorization, the Port would enter a contract with Technology Partners International, Inc., (TPI) for an objective assessment of the Port of Seattle IT organization, with the intention of improving current service-delivery and governance capabilities, through internal improvements, third party sourcing, or other approaches. The study would also identify the initiatives needed to go forward on any of the recommended paths, detailing the costs, risks, and risk- mitigation measures associated with each recommended path. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 28 The Port’s IT Department employs 80 full-time-equivalent (FTE) personnel. The department spends approximately $10 to $12 million per year on a cash basis. IT’s key responsibilities and services focus on effectively administering the Port’s information technology systems and services. The IT functions that would be included in the study are: Application development services Application maintenance services IT Help desk services Server support services Network services Desktop services Staff believes it is timely to undertake this study now, so the selection of a ne w Chief Technology Officer can be informed by this evaluation. The Port has advertised for and received applications from approximately 80 candidates at this time. This timeliness is the primary reason for sole-sourcing the contract to TPI. Additionally, however, TPI is a recognized international leader in independent evaluations of IT functions and organizational structure. PROJECT DESCRIPTION/SCOPE OF WORK This project is anticipated to require approximately eight (8) weeks of TPI effort, using the equivalent of two full- time TPI advisors with part-time support from others. The project would include generically the following steps: Develop Port IT services profiles, indicating IT roles and responsibilities Conduct interviews with IT leaders and staff Gather and validate data Build and validate financial model, including base case and 3-5 year forecasts Benchmark the Port IT functions with “best- in-class” Undertake sourcing impact analysis Develop “go- forward” options and implications Provide initial analysis and recommendations Conduct workshops and presentations to IT leadership and staff and Executive staff Provide “road map” for next steps, if any FINANCIAL IMPLICATIONS The TPI contract would be written to consume a maximum of $200,000 in TPI professional services. In addition, it is expected there will be approximately $35,000 in travel and other directly reimbursable costs, for a total value not to exceed $240,000. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 29 Source of funds Out of this six to eight week project, the work done in 2002 will be covered by the 2002 Portwide Contingency. Funding in 2003 will come from that year’s contingency. PROJECT TIMELINE The project would begin upon authorization and would take approximately eight weeks, ending in approximately mid-February 2003. M. R. Dinsmore, Chief Executive Officer, noted the challenges to various components of the organization, including the Information Technology Department. Mr. Dinsmore advised that with the support of Tom Tierney, Deputy Chief Executive Officer, and Rudy Caluza, Director, Accounting and Procurement Services, progress has been made towards resolving some of those challenges within IT. He reported that to go forward with that progress in an expeditious manner, it is necessary to look at the functions that are done within IT and what options there may be available for doing them differently, emphasizing the word 'if' the organization would choose to make any change. Mr. Dinsmore stated this review is no reflection on the performance of IT employees. Mr. Tierney advised that over the years other organizations have made decisions about how information technology services are provided. He expressed his view that it is now appropriate for the Port to take a systematic view as well. He referenced the current contract for Help Desk services. Mr. Tierney noted the need to look at what other services might be amenable to contract/outsource, what should be done within the organization. He suggested that before a new Chief Technology Officer (CTO) is hired, it is appropriate to complete this evaluation to better inform those individual applicants for that position. Mr. Tierney discussed two extremes wherein one may be the recommendation to contract out many of the services with a governance staff and a CTO who is more industry/venture oriented. He noted a second view might be to have a large existing staff to provide many of the services with a CTO whose qualities would lean more to administrator and leader of people. Mr. Tierney acknowledged the progress that has been made by IT staff in moving forward under the changes that have already been implemented. Mr. Tierney advised the proposed study would begin immediately and would have oversight from Dan Thomas, Chief Financial Officer; Mr. Caluza; and Rosalee Walz, Director, People Programs, and one or more IT management team members to make sure this effort is given the fullest perspective as it rolls forward. He confirmed this study is not a decision to outsource all IT services; it is intended to look at how systematically the Port does IT services. In response to Commissioner Davis' inquiry regarding the sole-source procurement and award of the agreement with TPI, Mr. Tierney advised the decision was based on the timeliness for moving forward with this study and stated that TPI provides objective evaluation and is renowned in the industry. He reconfirmed that TPI does not have its own services that it markets. Dec10reg MINS.DOC - 11/13/2010 PORT COMMISSION MINUTES OF THE REGULAR MEETING TUESDAY, DECEMBER 10, 2002 P. 30 Mr. Thomas clarified in response to Commissioner Molloy's comment that this study effort will not be reviewing the e-Business Department. Commissioner Davis noted the project schedule and requested that the employees of IT be made aware of this review effort and kept apprised of its progress. Ms. Davis referenced the impact of uncertainty on employees and the co mments she has heard during past reviews of organization components. She expressed her perspective with respect to IT within the Port stating it should not turn into an IT company. Commissioner Davis referenced the current employee talent within IT. Ms. Davis suggested that it is a question of whether the new cost, which may be more than in- house, is better or worse for the organization. She noted it may be better to bring change to the organization as change happens, noting cost is not the only factor for consideration. Mr. Tierney advised companies look at cost, service quality, strategic choices of how to manage the resources. He noted that Commissioners have expressed concerns over time how the Port moves forward in the management of IT services. He referenced the number of IT employees and the IT budget, in- house services and services provided externally. Mr. Tierney advised staff proposes to take those comments more as a question with respect to a systematic way to evaluate the mix of services and identifying which services the Port buys and which should be produced in- house. Commissioner Molloy moved approval of Item 9b. Motion carried. (Commissioner Nordquist was absent for the vote.) 10. NEW BUSINESS None. 2. EXECUTIVE SESSION The meeting was then recessed to an executive session for approximately one hour and thirty minutes to discuss real estate matters. 11. ADJOURNMENT The meeting was reconvened and immediately adjourned at 4:30 p.m. Dec10reg MINS.DOC - 11/13/2010
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