The business economist at work: the Port of Seattle.
The Port is headed up by five commissioners who are elected by the voters of the port district. The commissioners select an executive director who in turn hires the port staff. The commissioners set policy and the staff implements it. Below the executive director are the three division directors. Economics reports to the Director of the Finance and Administration Division.
The mission of Economics is to assist the division director, executive management and the operating departments in the forecasting, planning, budgeting and financial analysis of port business opportunities and activities. This task is accomplished through three types of functions called the economics, budget, and finance functions. The basis goals for each function are:
1. Economics. Keep port executive management
informed of economic trends and issues and
their implications for current and future port
business activity, provide assumptions underlying
the port's operating and capital budgets,
and determine the nonpecuniary economic returns
to the port of its investment activities,
i.e., economic impacts.
2. Budget. Assist with the operating and capital
budgeting process to ensure the monitoring
and control of the port's financial position.
3. Finance. Provide professional review of major
port leases, review and conduct financial analysis
of capital projects, analyze financial issues
and provide policy recommendations to port
executive and management, manage the port's
In a series of portwide belt tightening measures three years ago, both Economics and Market Research were cut 60 percent. Economics now has two people as full time professional staff whose titles are Chief Economist and Economist. At the same time, the Port, as has many other organizations, decentralized the economics/finance function by placing persons with that kind of background in the operating divisions. The major responsibilities of these positions are budgeting, project financial analysis, and business activity forecasting. They work closely with Economics.
Because much of Economics work is project oriented, we use consultants and interns to a large extent. Currently we have a contract consultant on full time to assist with financial modeling and analysis, a graduate student intern part time to manage our economic and trade data bases, and a faculty member from Seattle University on retainer to provide advice and recommendations on some of our projects. This year we also have hired consultants to conduct several special studies.
1. One is a study of price indexes and their appropriate
application at the Port of Seattle.
The results of this study have been used by07
the operating divisions as escalators in long-term
leases, input for labor negotiations, and
determinates of the market value of land.
2. Consultants also were retained to conduct a
portwide economic impact study. One of the
purposes of the Port is to promote economic
activity within the region. The objective of the
economic impact study is to estimates those
benefits in terms of jobs, employee earnings,
business revenues and tax impacts. One product
of the study is an impact model that will
allow us to measure the marginal impacts of
land-use planning and capital investment decisions
at our airport and marine facilities.
3. We also have used consultants for estimating
market prices using hedonic price-estimating
techniques. The issue was whether or not to
raise prices at our pleasure-boat marina,
which has a ten year waiting list, and, if so,
to what level. The outcome of the technical
analysis assisted in resolving those issues.
In addition to using consultants and graduate student interns, Economics also uses the forecasting services of the major econometric forecasting services as well as forecasts provided by certain banks, The budget for Economics this year is a little over a quarter of a million dollars.
Economics has four reports prepared on an annual basis for both internal and external readers:
1. The business assessment for the operating
budget, which includes the trade and economic
assumptions underlying the budget and
a forecast of key financial indicators for the
2. A report on the status of the Port of Seattle
and King County property tax levy;
3. A report containing historical data on the
trade, passenger and other business activity
of the Port and on the financial position of the
4. A year-end review of economic conditions and
port business activity and a preview of the
Additionally, Economics prepares a variety of reports and briefing papers for the port executive management and commission. During the past year these have included briefing papers on our Pacific Asia trading partners, a major report on the financial capacity and capital improvement programs of Puget Sound ports, and an analysis of alternative proposals to the Port of Seattle tax levy. Economics also prepares the reports for bond rating agencies.
Activities in professional associations are encouraged as these are viewed as providing continuing education. However, these activities are not to interfere with Port job responsibilities and deadlines. Economics belongs to NABE, being active in both the local chapter and the national organization, the American Economics Association, the American Finance Association, the Financial Management Association, the Western Economic Association, and the Institute of Chartered Financial Analysts. We also belong to international trade associations, including the Washington Council on International Trade and the World Trade Club. We also participate in activities sponsored by local civic groups, such as the Chamber of Commerce and City Club, as long as they involve port-related issues.
*Susan Doolittle is Chief Economist, Port of Seattle, Tacoma, WA, and a member of The Board of Directors of NABE.
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|Date:||Jan 1, 1989|
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