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									 Commissioners                                                              M.R. Dinsmore
                                                                               Chief Executive Officer
 Patricia Davis                                  P.O. Box 1209
      Chair and President                 Seattle, Washington 98111
 Paige Miller                                www. portseattle.org
 Clare Nordquist                                 206.728.3000
 Lawrence T. Molloy
 Bob Edwards


                            APPROVED MINUTES
               COMMISSION REGULAR MEETING NOVEMBER 25, 2003

The Port of Seattle Commission met in a regular meeting at 12:00 p.m., Tuesday,
November 25, 2003 in the Large Auditorium, Main Terminal Building, Seattle-Tacoma
International Airport. 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 Patricia Davis, Chair and
President.

2.       EXECUTIVE SESSION

The meeting was immediately recessed to an executive session for approximately one
hour and ten minutes to discuss real estate and litigation/legal risk/potential litigation
matters, and reconvened to public session.

         PLEDGE OF ALLEGIANCE

3.       APPROVAL OF MINUTES

Commissioner Edwards moved approval of the minutes of the regular meeting of October
28 and special work session November 6, 2003, without reading in the records. Motion
unanimously carried.

Commissioner Edwards moved approval of the minutes of the special meeting of
November 6, 2003, without reading in the record. Motion carried. (Commissioner
Molloy was not in attendance at the subject meeting.)

4.       SPECIAL ORDER OF BUSINESS

       a. Commissioner Nordquist, on behalf of the Commission, presented M. R.
Dinsmore, Chief Executive Officer, with a framed original copy of an editorial cartoon
that was printed in the June 26, 2003 edition of the Seattle Times.



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TUESDAY, NOVEMBER 25, 2003                                                             P. 2
5.       UNANIMOUS CONSENT CALENDAR

None.

6.       POLICY AND STAFF BRIEFING

         a.   CONTAINER TERMINAL ACCESS STUDY – 2003 UPDATE

Presenters: Stephanie Jones, Manager, and Eric Hanson, Senior Planner, Seaport
Strategic Planning and Policy.

Presentation Documents: Commission Agenda Memorandum dated November 11, 2003
from Ms. Jones and Mr. Hanson; and compute slide presentation entitled, “Container
Terminal Access Study 2003 Update, Port of Seattle Commission, November 25, 2003”.

As reported in the presentation document, in 1993, the Port conducted the original
Container Terminal Access Study (Access Study) as a means of supporting and
efficiently executing the 1991 Container Terminal Development Plan. In this regard the
original Access Study was highly successful in that 13 of the 15 roadway improvement
recommendations have been completed or designed.

This year staff initiated an update to determine the current state of the roadway network
in the vicinity of the Port‟s major container terminals, and if improvements are needed to
serve continued growth through the forecast year of 2015. Given the success of the first
study, the update utilized the same methods of roadway analysis as the original 1993
Access Study.

The updated study (Study) identifies the key solutions needed to support growth in the
Port‟s container business and will guide the Port‟s Freight Mobility efforts in the coming
years.

Mr. Hanson introduced Marni Heffron, President, Heffron Transportation, Inc., who
participated in the presentation.

A summary of topics reviewed by staff and Commission/staff discussion is as follows:

        PROJECT STATEMENT
        HISTORY – RESULTS OF THE 1993 STUDY
        TRUCK TRIPS
        TRAFFIC OPERATIONS YEAR 2015

In response to Commissioner Miller, Mr. Hanson advised though not a part of the Study,
staff would make inquiries to the appropriate jurisdictions about the delay in the opening
and closing of the swing bridge over the Duwamish waterway.

        SOLUTIONS MATRIX


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TUESDAY, NOVEMBER 25, 2003                                                                  P. 3

Commissioners Davis, Edwards and Miller and staff discussed the “No Action” and
“Scenario A” priorities as they relate to future potential consolidation of terminal
operations/higher use of on-dock intermodal rail/more trains-fewer trucks, etc.
Commissioner Davis requested to review the information that is behind the Solutions
Matrix; that is, a sub-set to the matrix.

Commissioners Molloy, Edwards, and Miller and staff discussed the potential for future
increases in container volumes and access to terminals; peak hours of operations and
traffic volumes; appointment system/demand side management system used in Los
Angeles; scheduled bridge openings or advance notice to use alternate route and
opportunity to look into that possibility with the City.

In response to Commissioner Miller, Mr. Hanson advised the Study is an analysis of the
roadway network as it relates to terminal operations and did not include terminal gate
operations.

M. R. Dinsmore, Chief Executive Officer, advised that staff would return to the
Commission at a future meeting to discuss how the Port would get to three million
Twenty-Foot Equivalent Units both in Scenarios A and B, including looking at new
technology that may be available, working with labor partners, gate hours, etc.

      SOLUTIONS: EAST MARGINAL WAY GRADE SEPARATION
      SOLUTIONS: DUWAMISH INTELLIGENT TRANSPORTATION SYSTEM
      SOLUTIONS: SPOKANE STREET VIADUCT IMPROVEMENT PROJECT

In response to Commissioner Miller, Mr. Hanson advised that the Alaskan Way Viaduct
project is on the Seaport priority list of projects but stated this update Study does not
attempt to prioritize the projects that have been identified within the Study.

      SOLUTIONS: SPOKANE STREET/WEST MARGINAL WAY

In response to Commissioner Molloy, staff advised that the section of the bicycle path
through that intersection has been completed. Charles Sheldon, Managing Director,
Seaport Division, noted that a path south of the intersection needs resolution, advising the
Port has worked with the appropriate advisory board on the bike path, particularly with
respect to the Terminal 5 project.

      OTHER PRIORITY SOLUTIONS

           Consider alternatives to bike lane on West Marginal Way

Ms. Jones advised the goal is to build a bicycle path without it interfering with freight
movement.

           Study alternatives to SR-519 Phase 2


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In response to Commissioner Edwards, Ms. Jones advised that there is some money in
2004 to look at solutions but that actual project funding is a number of years into the
future.

        CONCLUSIONS

7.       MARINE ITEMS

        a. Resolution No. 3520, “A RESOLUTION of the Port Commission of the Port
of Seattle amending Unit 20 of the Comprehensive Scheme of Harbor Improvements of
the Port of Seattle by deleting therefrom certain real property located at 3317 Third
Avenue South (formerly 219 South Horton Street); and further authorizing the Manager,
Seaport Division, to execute all documents necessary to remove the deed restrictions on
the property associated with the Lower Duwamish Industrial Development District”, was
introduced.

Presenters: Mike Kriston, Leader, and Mike Campagnaro, Manager, Seaport Industrial
Property, Seaport Property Management.

Request Document: Mr. Kriston‟s Commission Agenda Memorandum dated November
18, 2003.

As reported in the request document, the subject property was declared surplus and no
longer needed for Port purposes on May 27, 1980, and sold on July 8, 1980. As
statutorily required for properties within Unit 20 (Lower Duwamish Industrial
Development District) of the Port‟s Comprehensive Scheme of Harbor Improvements
(“Comprehensive Scheme”), the deed for the property restricted the use of the premises
to industrial uses, specifically, commercial food distribution and storage. In January
1983, the restriction was liberalized to permit: manufacturing, processing, production,
assembly, warehousing, transportation, pollution, solid waste or energy as a covenant
running with the land.

American Life, Inc. acquired this property in 1999. The subject property consists of
27,580 square foot of land area with a 2-story building of 9,000 square feet and an
attached open shed of 14,000 square feet. The property is phase one of an integrated
office, retail and modern industrial campus located on nine contiguous acres along 3rd
Avenue South. American Life intends to upgrade four warehouses to suit modern uses.
The campus will be tied together with common color scheme, landscaping, parking, and
building design.

American Life, Inc. is requesting the deletion of the property from Unit 20 of the
Comprehensive Scheme. This will permit removal of the deed restrictions on the
property to concur with current zoning in the area and permit American Life‟s proposed
development.




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TUESDAY, NOVEMBER 25, 2003                                                              P. 5
Commissioner Miller moved first reading of Resolution No. 3520. Motion carried.
(Commissioner Edwards was absent for the vote.)

Pursuant to notice published on November 14 and 21, 2003 in The Daily Journal of
Commerce, Commissioner Davis declared the meeting a public hearing for comment on
Resolution No. 3520. There were no comments from the public. Commissioner Davis
then closed the public hearing.

8.      AVIATION ITEMS

        a. Request was presented for project-wide authorization for the Chief Executive
Officer; Managing Director, Aviation Division; Deputy Managing Director, Aviation
Facilities; Director, Aviation Capital Improvement Program; Director, Airport Operations;
Director, Engineering Services; General Manager, Port Construction Services; Manager,
Procurement Services and Aviation Project Manager to prepare drawings, plans,
specifications, schedules and cost estimates; prepare contract documents; perform
construction services; execute and amend outside professional services agreements;
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 the Seattle-Tacoma International Airport (Airport) Mobile Pre-
Conditioned Air System, for an estimated cost of $548,000.

Presenter: Mark Coates, Manager, Aeronautical Operations.

Request Document: Commission Agenda Memorandum dated October 7, 2003 from
Mike Ehl, Director, Airport Operations, and Dave Soike, Director, Aviation Project
Management Group.

SCOPE OF WORK:

This project includes the specification development, procurement, delivery,
commissioning, and operations and maintenance training for three (3) Mobile Pre-
Conditioned Air units and all necessary accessories to deliver Pre-Conditioned Air to
Delta Air Line’s aircraft.

As reported in the request document, Delta Air Lines has a pre-conditioned air system in
operation at their gates on Concourse B. The system provides chilled air to aircraft while
they are parked so that on-board auxiliary power units and auxiliary ground units do not
need to be run. The existing system, funded and installed by Delta, saves energy and
reduces air emissions. Delta Air Lines will move to Concourse A in June 2004. While
Concourse A is designed to eventually have PC Air utility at each gate, the project for the
central PC Air plant has been deferred due to economic conditions in the aviation
industry. Current projections forecast an implementation date of 2008. This project will
provide them with three (3) mobile units that will be used to service the 4 gates they will
occupy on Concourse A, allowing Delta to continue to utilize PC Air on their aircraft.




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TUESDAY, NOVEMBER 25, 2003                                                            P. 6
Mr. Coates, responding to Commissioner Molloy, advised that staff would provide the
Commission information regarding auxiliary power units on newer aircraft, power
generated, etc.

Commissioner Molloy moved approval of Item 8a. Motion carried. (Commissioner
Edwards was absent for the vote.)

9.      GENERAL BUSINESS

General Business Items 9d and 9e were advanced on the agenda, as follows:

       d. Request was presented for authorization for the Chief Executive Officer to
execute a new Labor Agreement between the Port of Seattle and the International
Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge 160, Local
289.

Presenter: Mikel O‟Brien, Labor Relations Manager.

Request Document: Ms. O‟Brien‟s Commission Agenda Memorandum dated November
5, 2003.

As reported in the request document, this agreement covers 21 Port employees in both
Aviation Maintenance and Seaport Maintenance. The current agreement expired on June
30, 2002.

SCOPE OF THE AGREEMENT

Term of the Agreement: July 1, 2002 through June 30, 2005

Wages:

    Year 1: $1300 lump sum payment in lieu of a base wage increase ($1500 for
     foremen)
    Year 2: 2.0% retroactive to July 1, 2003
    Year 3: 100% of the February 2003-February 2004 CPI-U, effective July 1, 2004

Benefits:

    Local 289 employees are switching to the Port benefit plans, with the exception of
     dental, effective January 1, 2004. By switching to the Port‟s medical plan, Local 289
     employees will be eligible for domestic partner coverage.
    Maintenance of benefits has been eliminated, with the exception of dental where all
     increases beginning in 2004 will be split 50-50 with the employees.
    If the members vote for short-term disability, they can do so via payroll deduction.
    The Union may opt out of the Port‟s benefit plans, but the contract limits the amount
     the Port would have to contribute to benefits to the Port‟s January 1 composite rate.


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TUESDAY, NOVEMBER 25, 2003                                                            P. 7
Other:

   Employees shall be paid on a bi-weekly basis.
   The new agreement will contain restriction of the use of leave without pay, limiting
    such leave to situations where paid leave has been exhausted.
   Employees will receive three additional days of sick leave, bringing their
    accumulation rate to nine (9) days/year.
   The Port has also agreed to additional limitations on the use of temporary employees.

Commissioner Molloy moved approval of Item 9d. Motion carried. (Commissioner
Edwards was absent for the vote.)

        e. Resolution No. 3521, “A RESOLUTION of the Port Commission of the Port
of Seattle authorizing the issuance and sale of three series of limited tax general
obligation bonds of the Port in the aggregate principal amount of not to exceed
$350,000,000 for the purpose of financing or refinancing costs of Port capital
improvements and refunding certain outstanding Port bonds; providing for the annual
levy of taxes to pay the principal of and interest on the Bonds; delegating authority for
the sale of the Bonds and, the preparation of a preliminary official statement; and
authorizing ongoing disclosure”, was introduced.

Presenters: Elizabeth Morrison, Finance Manager, and Tonya Chin, Senior Financial
Analyst.

Request Document: Commission Agenda Memorandum dated November 19, 2003 from
Ms. Morrison and Ms. Chin.

As reported in the request document, in the 2003 Plan of Finance, the Port anticipated the
issuance of General Obligation (G.O.) bonds to fund portions of the Seaport Division
Capital Improvement Program. The projects to be funded with the Limited Tax General
Obligation Bonds, Series 2004 (the Bonds) are improvements at Terminals 18 and 46
including crane acquisitions for Terminal 46, dredging, improvements at Pier 17,
Terminal 86, Terminal 91 and Fishermen‟s Terminal. An estimated $84 million of the
bond proceeds will be used to pay down outstanding commercial paper issued as interim
funding for the projects and for construction of the World Trade Center parking garage
completed in 1998. Refunding the commercial paper will lock in long-term interest rates
and free-up revenue bond capacity for future use. Exhibit A of this memorandum
provides additional detail on the use of the bond proceeds.

In addition, the Series 2004 bonds will refund $137 million of outstanding Limited Tax
General Obligation Bonds and Revenue Bonds issued in 1994 to fund the Terminal 5
expansion project. The estimated present value savings is approximately $10 million.

GENERAL OBLIGATION BONDS, SERIES 2004




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TUESDAY, NOVEMBER 25, 2003                                                               P. 8
The Series 2004 Bonds will be issued as 20-year, fixed rate, Limited Tax General
Obligation Bonds substantially similar to the Series 2000 G.O. Bonds. The Bonds
include three series: Series A are governmental purpose bonds exempt from all federal
income tax and Series B are private activity bonds exempt from regular federal income
tax but subject to the Alternative Minimum Tax (AMT). Proceeds from both Series A
and B will be used to fund new project spending and to repay the commercial paper.
Series C bonds are also private activity bonds; proceeds will be used to call the Limited
Tax General Obligation Bonds Series 1994 and the Revenue Bonds Series 1994. The
bonds will be payable through the State‟s fiscal agent and will be uncertificated.

As Limited Tax General Obligation bonds, debt service on the bonds will be paid from
the Port‟s non-voted property tax levy in the same manner as the Port‟s currently
outstanding G.O. bonds are paid.

The bonds are scheduled to be sold through competitive sale. Most Port bond issues are
backed by Port operating revenues and, due to the complexity of the Port‟s revenue credit,
these bonds are sold through negotiated sale in order to achieve the best price and
structure. The Series 2004 bonds are backed by the Port‟s tax levy and are suitable for a
competitive sale. The Bonds can be sold through negotiated sale, if circumstances
indicate that a negotiated sale would lead to a better pricing. The Bonds will be pre-
approved for insurance and the winning bidder, at its option and cost, can insure the
Bonds.

Since a portion of the bonds are Private Activity Bonds, a Tax Equity and Fiscal
Responsibility Act (TEFRA) Hearing is required by Internal Revenue Service regulations
governing the issuance of tax-exempt bonds; staff will hold a hearing on December 5,
2003. Second Reading of Resolution 3521 is planned for December 9, 2003 and at that
time, the parameters for delegating authority to the Chief Executive Officer to approve
pricing will be set. Pricing is scheduled for January 22, 2004 in order to take advantage
of the measurable drop in interest rates that ordinarily occurs in January due to low
supply of new bond issues.

RESOLUTION NO. 3521

Upon adoption, Resolution No. 3521 will approve the issuance of the Bonds and will
approve, by reference, the Official Statement; establish the delegation of approval of
interest rates, maturity dates, aggregate principal amounts, maturities and redemption
rights; and provide for Annual Disclosure.

                   EXHIBIT A - PROJECTS TO BE FUNDED WITH
                SERIES 2004 GENERAL OBLIGATION BOND PROCEEDS

       Projects                                        Bond Funded Costs
                                                       Pre-2004 (1)             Total
       Terminal 18 Improvements                             13.2                55.2
       Dredging                                              1.6                19.4
       Terminal 46 Demolition / Improvements                34.6                55.1


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TUESDAY, NOVEMBER 25, 2003                                                                 P. 9
       Terminal 91 Improvements                                    15.0             18.8
       Fishermen‟s Terminal Development                             5.1             11.4
       Pier 17 Dock Replacement                                     1.5              1.5
       Terminal 86 Grain Terminal Improvements                       0               1.5
       World Trade Center Garage                                   13.5             13.5
          TOTAL                                                    84.5            176.4

        (1)     Funded with commercial paper to be reimbursed with Bond proceeds

Commissioner Miller moved first reading of Resolution No. 3521. Motion unanimously
carried.

The agenda was returned to General Business Item 9a, as follows:

          a. Resolution No. 3517, “A RESOLUTION of the Port Commission of the Port
of Seattle adopting the final budget of the Port of Seattle for the year 2004; making,
determining and deciding the amount of taxes to be levied upon the current assessment
roll; providing payment of bond redemptions and interest, cost of future harbor capital
improvements and acquisitions; and for such general purposes allowed by law which the
Port deems necessary; and directing the King County Council as to the specific sums to
be levied on all of the assessed property of the Port of Seattle District in the year 2004”,
was presented.

Presenters: Dan Thomas, Chief Financial Officer, and Steve Queen, Corporate Budget
Manager.

Request Document: Commission Agenda Memorandum dated November 17, 2003 from
Mr. Queen.

As reported in the request document, at the November 11, 2003 Commission regular
meeting, Resolution No. 3517 was amended, as follows:

Increase the tax levy rate over the 2003 amount by one percent plus new construction.

As a result of this amendment, an increase of one percent plus new construction will yield
a new levy amount of $59,655,268. This amount is 2.85 percent higher than the 2003
levy of $58,000,000.

Commissioner Miller confirmed that the Resolution No. 3522, as Amended, reflects a
lower levy amount than was proposed in the preliminary budget and noted that while the
2004 levy amount is higher than the 2003 levy, it does represent a decrease in the levy
rate.

In response to Commissioners Edwards and Davis, Mr. Thomas advised the guideline
established by Initiative 695 is one percent plus new construction. He reported the Port is




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TUESDAY, NOVEMBER 25, 2003                                                            P. 10
below its statutory levy limit, which is $74,000,000 and a $.32 levy rate, and advised the
levy rate in the proposed 2004 final budget is $.254.

Commissioner Molloy moved second reading and final passage of Resolution No. 3517,
as Amended.

Prior to the vote, Commissioner Nordquist noted that in the last ten years three different
policies or directives have been given to staff with respect to the budget. Mr. Nordquist
advised these included the directive of eight years ago to keep the levy amount flat, the
consequence of which was that each year the levy decreased and was $35,000,000. He
noted that two years ago the millage rate was increased which increased the levy amount
by approximately $4,000,000. He also noted that in 2002 because of pressures on
performance, the Commission authorized an increase in the millage rate. Commissioner
Nordquist stated his preference for going back to where the Port was eight years ago, that
is, a flat dollar amount and decreasing millage rate correspondingly each year. Mr.
Nordquist advised he is uncomfortable with a „creeping‟ rise in the levy, noting that
while $1.5 million is not a large increase, it is still an increase.

On call for the question, Commissioner Molloy‟s motion for second reading and final
passage of Resolution No. 3517 carried; Commissioners Davis, Edwards, Miller and
Molloy voting, “yes”; Commissioner Nordquist voting, “no”. Thereupon Resolution
No. 3517 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. Resolution No. 3518, “A RESOLUTION of the Port Commission of the Port
of Seattle establishing positions, classifications, salaries, allowances and adjustments for
Port salaried (not represented by a labor union) positions; authorizing and establishing
conditions in connection with the following benefits: Social Security, industrial
insurance, unemployment compensation, military leave; retirement; compensated leave,
including civic duty, bereavement leave, holidays, paid time off/extended illness leave,
shared leave, and awarded time; insurance benefits, including medical, dental, life and
long-term disability; and authorizing this resolution to be effective on January 1, 2004
and repealing all prior resolutions dealing with the same subject, including Resolution No.
3492”, was introduced.

Presenter: David Henderson, Total Compensation Manager.

Request Document: Mr. Henderson‟s Commission Agenda Memorandum dated
November 21, 2003.

The Salary and Benefit Resolution is the delegation of authority from the Commission to
the Chief Executive Officer to implement the administration of compensation and
benefits for salaried, non-represented employees.




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TUESDAY, NOVEMBER 25, 2003                                                          P. 11
PROPOSED CHANGES

Staff recommends there be no increase to salary ranges for 2004. At year-end 2003, the
salary range midpoints are very close to average actual pay in the market place. Average
actual pay in the Puget Sound region is estimated to increase about 3.3% in 2004. If this
happens, the Port‟s salary range midpoints may fall approximately 3.5% behind average
actual pay by the end of the year. This difference is still well within our guidelines of
targeting range midpoint, plus or minus 5%, to be comparable to market average pay
rates. Not increasing the salary ranges is consistent with the Port‟s emphasis on budget
constraint.

V. ESTABLISHMENT AND ADMINISTRATION OF SALARIES,
ALLOWANCES, AND ADJUSTMENTS: Consistent with the Port‟s emphasis on
budget constraint, staff recommends the Pay for Performance program be suspended for
2004. Staff recommends the six-month and probationary increases for employees who
are promoted or hired and who complete their six-month or probationary periods within
2004 also be suspended. Promotional adjustments and Temporary Pay for Temporary
Assignments are retained with the current provisions.

FINANCIAL IMPLICATIONS

The direction given to the Human Resources and Development Department was to
present a flat Total Compensation (pay and benefits) budget for 2004. This has been
accomplished in spite of the initial 40% rate increase for 2004 from Regence Blue Shield
(which would have increased costs by approximately $2 million).

A flat Total Compensation budget is achievable through the following measures (which
are both inside and outside of the Salary and Benefit Resolution):

1. Suspending the Pay for Performance program for one year keeps pay flat instead of
   increasing salaries by $1.75 million.
2. Not increasing salary ranges for one year keeps pay flat instead of costing $33,000 to
   bring employees who fall out of the bottom of their range up to the new range
   minimum.
3. Suspending the 401(a) Supplemental Savings Plan for Salaried Employees saves
   approximately $1.26 million.
4. The increase in medical and dental costs was reduced to an increase of approximately
   $1.16 million (still 18.2% over 2003 rates) by implementing a modest decrease in
   benefits and transferring coverage from Regence Blue Shield to Premera Blue Cross.
5. Of the $100,000 difference between items 3 and 4, about half is used to fund the
   0.08% increase in the employer contribution rate to the Public Employees‟
   Retirement System (PERS).
6. The bottom line is a “flat” budget, give or take $50,000, on an annualized payroll for
   non-represented employees of $58.2 million.




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Approximately 186 union employees (26% of the represented workforce) have the same
insurance coverage as salaried, non-represented employees. Represented primarily by
Locals 9 and 286, these employees are also affected by the changes to the medical
insurance plans.

Commissioner Miller stated the action proposed in Resolution No. 3518 is not „business
as usual‟ with respect to salaries and benefits for salaried, non-represented employees.
Ms. Miller advised that this employee group has been asked to continue to provide
excellent service and performance and not receive additional compensation, as well as
some benefits being suspended. She stated that would not be asked of employees unless
it was important, and she acknowledged the sacrifice made by these employees by
changing the policy. Commissioner Miller referenced the poor economic health of the
airlines and the pressures that places on the Aviation Division, noted businesses going
away in the Seaport Division, and also security costs post 2001 that have impacted the
Port. Ms. Miller stated Resolution No. 3518 reflects the fact that this is a difficult time
for the Port and the organization is doing its best to keep costs flat, asking employees to
share in that effort, and thanked the group of employees covered under the proposed
Resolution.

Commissioner Davis endorsed the comments of Commissioner Miller. Ms. Davis
expressed her hope that the Port emerges from the current economic difficulties in the
short term.

In response to Commissioner Molloy, Mr. Henderson advised that staff would provide
information on the number of actual employees in Grades 1 through 7, referenced on
page 2 of the Resolution, and the total salary and benefit compensation for those grades.

Commissioner Edwards advised that it will be important to pay attention to salary market
rates as there could be a point where the Port would have to play catch up and that should
be planned for. Mr. Edwards noted it is important in order for the Port to remain
competitive and to retain employees. He also expressed his thanks to salaried non-
represented staff for their continued service through the proposed interim policy change.

Commissioner Edwards moved first reading of Resolution No. 3518. Motion
unanimously carried.

        c. Resolution No. 3519, “A RESOLUTION of the Port Commission of the Port
of Seattle amending employer contributions to the Port of Seattle‟s 404(a) Supplemental
Savings Plan for salaried employees by suspending 2004 contributions”, was presented.

Presenter: David Henderson, Total Compensation Manager.

Request Document: Mr. Henderson‟s Commission Agenda Memorandum dated
November 18, 2003.




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As reported in the request document, the 401(a) Supplemental Savings Plan for Salaried
Employees was enacted by the Commission under Resolution No. 3375 on April 6, 2000.
The Plan provided that the Port would establish a 401(a) tax-deferred account for all post-
probationary salaried employees effective July 1, 2000. The Port would automatically
contribute a fixed amount, based on tenure, per eligible employee per year. The Port
would also match eligible salaried employee‟s contributions to their 457 Deferred
Compensation Plan.

Through October 2003, the Port has contributed more than $1.9 million and matched
more than $2.8 million in employee deferrals. The $4.7 million in total Port
contributions had an actual value of more than $5.1 million at the end of the third quarter.

The plan adopted pursuant to Resolution No. 3375 allows amendments at any time by the
employer. As noted in the presentation of the 2004 Salary and Benefit Resolution No.
3518, the Human Resources and Development Department was charged with presenting a
flat Total Compensation (pay and benefits) budget for 2004. Suspending employer
contributions to the Port‟s 401(a) Plan for 2004 is an essential ingredient in achieving the
flat budget, given the substantial increase in health insurance costs.

PROPOSED CHANGES

Staff recommends a plan amendment to provide the Chief Executive Officer the authority
to suspend and, when appropriate, to resurrect Port‟s contributions to the 401(a)
Supplemental Savings Plan for Salaried Employees for the calendar year 2004.

FINANCIAL IMPLICATIONS

Suspending the Port‟s contributions to the 401(a) Supplemental Savings Plan for Salaried
Employees for 2004 will save approximately $1.26 million. This will offset the increase
in health insurance premiums of approximately $1.16 million, assist in keeping the Total
Compensation budget flat for 2004, and thereby assist in ensuring Airport and Seaport
Vitality.

Commissioner Edwards moved first reading of Resolution No. 3519. Motion
unanimously carried.

10.     NEW BUSINESS

2.      EXECUTIVE SESSION

The meeting was then recessed to an executive session for approximately two hours and
fifteen minutes to discuss real estate and litigation matters.

11.     ADJOURNMENT

The meeting was reconvened and immediately adjourned at 4:40 p.m.



Nov25mins.doc1/5/2011

								
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