Stephanie Jones Stebbins, PE Seaport Environmental Programs

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1 Sustainable Asset Management and Managing Environmental costs Stephanie Jones Stebbins, PE Seaport Environmental Programs

2 Outline Port of Seattle overview Sustainable Asset Management Resource Conservation during Operations Cost Recovery 2

3 Port of Seattle Overview 3 operating divisions Airport (15th busiest in US) Seaport (container port, bulk cargo, cruise, fishing fleet, grain) Real Estate 3

4 Seaport Terminals map to be inserted here 4

5 Seaport Asset Portfolio Current replacement value > $2.0 billion Terminal 91 Terminal 86 Terminal 10 Pier 2 Terminal 5 Terminal 30 Terminal 25 Pier 16/17 Terminal 18 Terminal 37/46 Pier 48 Pier 66 Pier 69 5

Pier 2 Terminal 5 Terminal 30 Terminal 25 Pier

responsible for maintenance Secondary: Port builds

6 Seattle Seaport Business model Primary: Port builds facilities Tenant leases facilities long - term Tenant responsible for maintenance Secondary: Port builds facilities Tenants rent facilities/pay dock moorage Port responsible for maintenance 6

7 Seaport capital assets Docks & piers Pavement Rail Buildings Cranes Utility infrastructure Roads & bridges 7

8 Our Challenge What do we own? What is the age, condition, and cost to replace? How long will they last based on appropriated maintenance funding? How long do we want it to last? Who is responsible for maintaining? How do we prioritize? 8

Sustainable Asset Management Policy adopted 2007 Focus on total cost of facility ownership to link capital investments & ongoing operating costs Benchmarking industry best

9 Sustainable Asset Management Policy adopted 2007 Focus on total cost of facility ownership to link capital investments & ongoing operating costs Benchmarking industry best practices to maximize efficient use of funds & conserve natural resources Integrate environmental & financial performance reduce total ownership costs AND reduce environmental impacts 9

best practices to maximize efficient use of funds & conserve natural resources Integrate

10 Environmental asset management CEO goal be the cleanest, greenest, most energy efficient Port in the US Our approach: 1. Achieve real environmental benefits 2. Make business sense Cost effective Enhance customer value Enhance long term competitiveness 10

11 Total cost of ownership Present value of: Initial capital cost Ongoing operations & maintenance Renewal at end of useful life Adjust for: Business model Changes in needs over useful life Levels of service 11

Renewal at end of useful life Adjust for: Business

Changing the model to total cost of ownership Much of total ownership costs occur after design and construction Decisions driving these costs occur before detailed

12 Changing the model to total cost of ownership Much of total ownership costs occur after design and construction Decisions driving these costs occur before detailed design is completed Change long standing approach - lowest initial cost Change internal/external expectations Design, engineering, project management Maintenance 12

design is completed Change long standing approach - lowest initial cost Change

Detailed facility assessments at the Seattle Seaport In-house facility condition assessments of 80-100 year old facilities Detailed - to building &

13 Detailed facility assessments at the Seattle Seaport In-house facility condition assessments of year old facilities Detailed - to building & utility system level Determine useful life, ongoing maintenance costs, renewal/replacement costs Combine with business planning for facility long term use 14

utility system level Determine useful life, ongoing maintenance costs,

14 Maintenance Goals Where Port responsible Focus on preventive maintenance Where tenant responsible Developing & documenting joint expectations Documenting asset condition Auditing tenant maintenance performance 15

Developing & documenting joint expectations

15 Resource Conservation 16

16 Resource Use and Conservation Sustainable Facility Management Energy Conservation Efforts: Port of Seattle Headquarters: 43% reduction in energy use: $126K annual savings Pier 66: 58% reduction in energy use: $156K annual savings 17

Headquarters: 43% reduction in energy use: $126K annual

17 Conservation Initiatives Installed VFDs Replaced all exit lights with LED Turned off unneeded lighting 18

18 Energy Savings Strategies New HVAC contract Repaired deferred maintenance items Negotiated a long-term contract w/ Seattle Steam Changed the way we operate equipment 19

19 Worked w/ Mechanical Contr. to modify HVAC equipment operation Scheduled larger spaces off 20

20 Chiller Plant Put the chillers on a schedule Raised chilled water set point 21

21 Electricity Savings 2002 usage 4,115,704 kwh 2006 usage 1,710,903 kwh 2,404,801 kwh 58.4% less electricity used $163, savings $200, savings 22

22 Cost Recovery 23

23 Past Cost Summary: $102 Million Figure 1a. Total Environmental Cleanup Cost "Gross" 1991 to 2009 $102 Million T117 Uplands, $4,021, 4% HI Uplands, $6,299, 6% T117 Sediments, $3,597, 4% T30, $2,031, 2% Other, $3,836, 4% Lower Duwamish, $25,409, 25% T91, $7,163, 7% East Waterway, $26,768, 27% T5 PSR, $20,893, 21% Footnote: Excludes environmental cleanup costs for: T5 Southwest Harbor Project RA1, RA-2, RA3, RA5; T30 cleanup costs between 1984 and

24 Cost Recovery by Site: $65 Million T91, $(1,733), -3% HI Uplands, $(5,423), -8% East Waterway, $(5,229), -8% T117 Sediments, $(1,510), -2% Other, $(1,417), - 2% Lower Duwamish, $(21,117), -33% T117 Uplands, $(10,860), -17% T5 PSR, $(17,654), -27% 25

25 Cost Recovery by Source ($65 Million) 1991 to 2009 TRUST, (8,304,504), - 13% LITIGATION Future Liability, ($11,155,000), - 17% REIMB, (18,798,691), - 29% GRANT, ($13,677,182), - 21% LITIGATION, (5,670,682), -9% INSURANCE, (7,309,662), -11% 26

26 Millions Cost Recovery by Year and Source Cost Recovery by Year and Source ($ Millions) $30 $25 $20 $15 $10 TRUST REIMB LITIGATION INSURANCE GRANTS LITIGATION - Future Liability $5 $ Footnote: only includes cost recovery through /30/

27 Stephanie Jones Stebbins

A. TAX AT A GLANCE B. TAX LEVY SOURCES TYPES AND LIMITS OF LEVIES:

A. TAX AT A GLANCE B. TAX LEVY SOURCES TYPES AND LIMITS OF LEVIES: A. TAX AT A GLANCE The maximum allowable levy for 2015 is $95.1 million. For 2015 the levy will be $73.0 million. The millage rate is estimated to be $0.1891. The 2015 levy will be used for: o General