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2021 Budget and Capital Improvement Plan Builds Equitable Recovery

Update on the Port's COVID-19 response Learn more.

Prioritizes essential services, sustainability, and investment in the future
October 22, 2020

Port of Seattle Executive Director Stephen P. Metruck proposed today a 2021 budget and five-year capital improvement plan to support an equitable, rapid and long-term recovery. Port of Seattle Commissioners will consider the preliminary budget during upcoming Commission meetings on October 27 and November 10. Commissioners will vote to approve the budget and five-year Capital Improvement Plan (CIP) approach at their November 17, 2020 meeting.

The Port’s plans call for sustained, and in some cases increased investment, in aviation, maritime industries, and critical trade and travel services to lead the recovery and prepare for the return of future growth. Plans include targeted reductions in 2021 expenses to maintain long-term financial strength, and a slight increase in the Port’s five-year capital investment plan from $3.3 billion to $3.7 billion over 2021-2025.

“We operate some of the most essential and productive economic platforms in our region, which puts the Port in a position to help lead the recovery,” said Port of Seattle Executive Director Stephen P. Metruck. “My preliminary 2021 budget and five-year capital plan maintain that focus on safe operations for essential services, deep investments in major projects that create short-term jobs and long-term results, and programs that make our community more equitable, sustainable, and resilient.”

“On behalf of the Commission, I express my gratitude to our Executive Director for navigating through the earliest days of the COVID-19 crisis,” said Port of Seattle Commission President Peter Steinbrueck. “We must be responsible stewards of the Port’s assets and taxpayer money while also trying to help drive local, regional, and state recovery efforts. Years of careful management by the Commission and staff, investments by the public in this Port, and invaluable collaboration with our industry and community partners, will make it possible for us to provide responsible stimulus for the region’s recovery while pursuing our long-term vision for the Port.”

The Port’s 2021 budget reflects the pandemic’s dramatic effect on economic activity. More than 50 percent of the Port’s funds come from operating revenue and fees, which declined significantly due to COVID-19 over the spring but began to show some recovery through the fall. The budget reduces expenses to account for lower revenue, including freezing pay for all non-represented employees and freezing or eliminating 167 full-time positions, equal to approximately eight percent of the Port’s workforce.

Forecasts expect that a full financial recovery will take multiple years. The pandemic will continue to impact lines of business. The Port based its budget on a forecast that Seattle-Tacoma International Airport (SEA) passenger volume will reach 2019 levels in 2024. The Port assumes at least a 25 percent resumption of cruising in 2021 and at least a 75 percent resumption of cruising in 2022. The Port will adjust its budget if the economic recovery occurs at a significantly faster or slower rate.

“Even as we face an uncertain 2021, we have historic milestones on our horizon,” said Metruck. “Major facilities open next year and we celebrate our organization’s 110th year of public service. We will face this difficulty united with our community and determined to build a stronger and more equitable recovery.”

The Port followed a transparent public process to bring its budget forward. The Port held two virtual community briefing sessions on October 8 and October 22, and multiple public briefings and study sessions on financial performance, capital improvement plans, and the 2021 budget recommendations. Those study session and briefing sessions are available at the Port’s 2021 budget website.

Capital Improvement Plan Highlights

Capital projects make up the largest category of Port spending. The Port’s 2021-2025 capital improvement plan anticipates spending $3.7 billion on projects to preserve assets, improve customer service, expand economic activity, generate additional Port revenue, and reduce environmental impact.

In 2021, the airport will open both the International Arrivals Facility and the North Satellite, two urgently needed projects that reshape the passenger experience at our airport. To prepare for the rebound and future needs we continue to modernize outdated terminal and lobby facilities. The Aviation Division plans to spend $3.3 billion over five years on airport improvements.

Capital project highlights include: 

  • A multi-story expansion with amenities and tenant space on the C concourse
  • Improvements to the ticketing, bag check, and security checkpoint areas in the main terminal
  • Renovation of the South Satellite
  • New airline and airport-operated lounges
  • Accelerate installation of noise insulation for residential neighbors

The Port’s Maritime and Economic Development Divisions plan major environmental and economic development improvements. Project highlights include:

  • COVID-19 safety measure installations for cruise terminals
  • A habitat restoration project at Terminal 117, the most significant habitat restoration project on the Duwamish River in the last decade
  • A project to bring clean electric shore power to the Pier 66 cruise terminal
  • Updates to the commercial fishing berths 6 and 8 at Terminal 91
  • Development of a new Maritime Innovation Center at Fishermen’s Terminal

In 2020 the Port postponed the study of its proposed new cruise terminal due to market uncertainty amid COVID-19. The Port’s five-year capital plan resumes the study of its proposed cruise terminal in 2023.  

In 2021, the Northwest Seaport Alliance, the joint venture with the Port of Tacoma that operates international cargo facilities in both harbors, will open the first phase of its modernized Terminal 5 in West Seattle. The new big-ship ready terminal will stand out as one of the premier international maritime shipping container terminals on the West Coast, anchoring maritime jobs and global shipping in our community for decades to come. 

Operating Budget Highlights 

The Port’s 2021 budget supports important initiatives aimed at safely operating our gateways, expanding economic opportunity, and improving the sustainability, equity, and resiliency of our communities.

  • Operating revenues are budgeted at $685.3 million, a $126.4 million or 15.6 percent decrease from the 2020 budget
  • Operating expenses are budgeted at $421.2 million, a $48.6 million or 10.3 percent decrease compared to the 2020 budget
  • Net operating income (before depreciation) is $264.1 million, a $77.8 million or 22.7 percent reduction from 2020

Highlights of operating budget initiatives include:

  • Increase programs to protect health and safety of the public and employees at the airport and all Port facilities
  • Launch a Port-wide effort to identify and eliminate sources of racial bias in the workplace and conducting an equity assessment of the Port of Seattle police department
  • Continue purchase of renewable natural gas to heat the airport and fuel the bus fleet
  • Open and operate the new International Arrivals Facility and Phase 2 of North Satellite Renovation
  • Improve airport customer experience by expanding checkpoint queue management, international arrivals support, and ground transportation support services
  • Support maritime innovation initiatives to discover, promote and help advance promising maritime ventures and startups
  • Continue to invest in workforce development programs and partnerships including high school and college internship programs to increase opportunities for local students

Property Tax Levy

As a public Port in Washington, the Port may exercise a limited property taxing authority. The Port continues to maintain a low rate of the levy by maximizing operational revenue, fees, and bonds. The levy provides less than five percent of the Port’s funds to supplement operational dollars by converting public investment into public good.

Executive Director Metruck’s 2021 budget continues the five-year strategy the Commission laid out in 2018 – increasing the levy by less than $2.00 per year for the median-valued home – to build up our investment capability for strategic investments in job creation, environmental sustainability, and community benefit.  For 2021, the planned levy increase is $1.58 for the median valued home.  

Expanding economic opportunity and community development takes on an even more important role in these times. Highlights of community programs fully or partially funded by the levy include:

  • South King County Fund environmental and economic development grants
  • Duwamish Valley Community Equity Program
  • City of SeaTac community relief
  • Economic development programs in tourism, workforce development, maritime innovation, and Diversity in Contracting

The airport operates without any tax revenue. Funding for SEA comes from fees, rents, or leases in place with airlines, tenants, and travelers. Additional resources related to the Port’s 2021 budget, five-year capital improvement plan, and how SEA is funded can be found on our 2021 Budget webpage.

Contact

Peter McGraw | Port of Seattle Media Relations
(206) 787-3446 | mcgraw.p@portseattle.org

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