ITEM NO:       7c_Supp_1___ 
DATE OF MEETING: October 25,2016 
Tax Levy and Draft Plan of Finance 
2017-2021 
October 25, 2016 

1

Agenda 
Tax Levy 
Background and 2016 update 
2017  2021 Forecast 
Draft Plan of Finance 
Assumptions 
Funding for 2017-2021 Capital Improvement Plan 
Appendix 
2

TAX LEVY 
3

Port Taxing Authority 
Washington State Ports have authority to
levy taxes on property within the Port
District (King County) 
2016 levy is $72 million 
2017 levy can be any amount up to $98.7 million
based on statutory limitations 
Port has a track record of levying below the maximum 
4

Uses of the Tax levy 
Statute allows the levy to be used for any Port
purpose 
Commission direction establishes actual use 
First claim on the levy is payment of General
Obligation (G.O.) bond debt service 
Revenue bond debt service cannot be paid from the
tax levy 
Commission sets the policy on tax levy use 
5

Traditional Uses of the Tax Levy 
Legacy environmental liability 
Regional transportation 
Highline Schools noise mitigation 
Economic Development initiatives 
Workforce Development 
Partnership Program (added in 2016) 
Capital projects that meet levy funding criteria 
Fishing industry support 
Strategic investment in Pier 66 cruise redevelopment 
The Commission has used the levy for these strategic purposes 
6

Criteria for Levy Funding Projects 
As part of last year's levy discussion, criteria was
established for funding projects with the tax levy 
Operating Cash         Tax Levy 
Asset Renewal & Replacement  Positive net income from   Economic benefit 
business unit 
Strategic Initiatives             Short payback/       No or long payback 
Self funding 
Location                    South Harbor         North Harbor 
Levy funding criteria supports Century Agenda 
7

2016 Levy Update 
2016   2016   Budget
SOURCES ($ million)                   Budget  Est./Act Variance
2016 Beginning Fund Balance                      57.6    71.3     13.7
Annual Tax Levy                               72.0    72.0      -
Tsubota Property Sale                             8.0     -       (8.0)
Grants & Other Reimbursements                     -       1.4      1.4
Rail Corridor Reimbursements (Snohomish County)          -       3.5      3.5
Investment Income during current year                  -       0.4      0.4
Total Sources                   137.6    148.7     11.0
USES ($ million)                                              There is also $20
General Obligation Debt Service (Existing)                34.5     34.5      -        million in the
General Obligation Debt Service (New)                   3.6     -        3.6      Transportation &
Environmental Remediation Liability                    7.0     9.8     (2.8)
Infrastructure fund for
Transportation & Infrastructure Reserve Fund deposit         21.3     21.3      -
Capital Expenditures                             16.0    20.0     (4.0)     Heavy Haul Corridor
Workforce Development                         1.5     1.6     (0.1)     projects 
Economic Development Partnership Program              -       1.0     (1.0)
Total Uses                     83.8    88.1     (4.3)
Balance rolls forward to
Estimated Ending Tax Levy Fund Balance           53.8    60.5      6.7     fund future obligations 
Totals may not add due to rounding
Estimated 2016 levy fund balance $6.7 million higher than budget 
8

SR99 Tunnel Funding Update 
Original funding plan sought to    Bond funding all SR99 costs frees
minimize debt                 $65 million in cash to use for other
projects instead of bond funding
G.O. bonds issued for SR99 enjoy
at higher interest cost 
the Port's lowest interest rates 
Exempt from all federal income tax    $ million       Original   Modified
Plan      Plan 
G.O. bonds for other projects, e.g.
Terminal 5 redevelopment or real    2015 bonds       120.0     120.0 
estate initiatives would be subject    2016 cash         65.0       0 
to alternative minimum tax or be     2016/7 bonds       82.7     147.7 
fully taxable 
Total              267.7      267.7 
Proposal to free-up $65 million for future growth initiatives 
9

Baseline Projects for Levy Funding 2017-2021 
Projects meeting the levy funding criteria 
Status               Projects                               $ million 
Included in 2016 Plan      Fishing Industry Support                        62.2 
Included in 2016 Plan      Strategic Investment in Cruise                    13.1 
Added during 2016       Fishing Support  T91 C-173 roof overlay             1.5 
Recommended for addition  Strategic Investment in Cruise  P66 Facade          11.4 
Recommended for addition  Strategic Investment in Real Estate  T-91 uplands       50.0 
TOTAL                                                 138.2 
Detailed project list in Appendix 
10

Excluded From the 2017-2021 Forecast 
Terminal 5 modernization 
Would require an increase in the tax levy to $77 million per year
beginning in 2018 
Based on Port funding of an estimated $147 million 2017-2021 
Expected to generate additional operating revenues 
New real estate and environmental initiatives in support of
the Century Agenda 
Inclusion of these items will require additional resources 
11

2017-2021 Tax Levy Baseline Forecast 
SOURCES ($ million)                    2017   2017-2021
2017 Beginning Fund Balance                      60.5         60.5 
Annual Tax Levy                                72.0        360.0
Bond Proceeds - reimbursement of SR99 payment           65.0         65.0      Additional G.O. bonds to
Grants & Other Reimbursements                      6.7      6.7   reimburse the $65 million
Total Sources                    204.2     492.2   SR99 cash payment;
USES ($ million)                                      provides low cost funding
for projects beyond the
General Obligation Debt Service (Existing)                 34.5         164.0
General Obligation Debt Service (New)                  10.2         50.8       baseline 
Environmental Remediation Liability                     9.4      47.4 
Regional Transportation                            2.2       8.0
Highline Schools Noise Mitigation                      -        3.5
Baseline Capital Expenditures                        28.4         138.2
EDD: Workforce Development & Partnership Program          2.6      13.8 
Total Uses                      87.3        425.6
Estimated Ending Tax Levy Fund Balance           116.9      66.6 
Totals may not add due to rounding
The baseline levy projects can be funded with a $72 million levy 
12

Alternative 2017-2021 Tax Levy Forecast  with T-5 
SOURCES ($ million)                    2017   2017-2021
2017 Beginning Fund Balance                      60.5         60.5 
Annual Tax Levy                                72.0        380.0
Bond Proceeds - reimbursement of SR99 payment           65.0         65.0 
Bond Proceeds - capital expenditure                     -        78.0 
Grants & Other Reimbursements                      6.7      6.7
Total Sources                    204.2     590.2
USES ($ million)
General Obligation Debt Service (Existing)                 34.5         164.0
General Obligation Debt Service (New)                  10.2         68.6 
Environmental Remediation Liability                     9.4      47.4 
Regional Transportation                            2.2       8.0
Highline Schools Noise Mitigation                      -        3.5
Baseline Capital Expenditures                        28.4         138.2
Capital Expenditure - Terminal 5                       15.6         146.6
EDD: Workforce Development & Partnership Program          2.6      13.8 
Total Uses                     102.9     590.0
Estimated Ending Tax Levy Fund Balance           101.3      0.2
Totals may not add due to rounding
Funding baseline levy projects plus T-5 requires a ~$77 million annual levy beginning in 2018 
13

Port's levy forecast is below the maximum allowable levy 
14

DRAFT PLAN OF FINANCE 
15

Draft Plan of Finance 2017-2021 
Key assumptions: 
Airport is self-funding (exception is Highline School noise mitigation) 
Maritime, Economic Development and Northwest Seaport Alliance share
non-Airport funding resources 
The Port maintains financial planning targets in support of the Port's credit
ratings 
Revenue bond debt service coverage: 1.25x Airport, 1.50x non-Airport 
Minimum fund balance based on O&M: 10 months Airport, 6 months non-
Airport 
Borrowing against the tax levy is limited  G.O. bond debt service no more than
75% of annual tax levy 
Staff provides a draft funding plan to inform Commission decisions 
16

Capital Improvement Plan (CIP) 
$ million                                   2017      2017-2021
Airport (1)                                           590.5         2,401.1
Non-Airport        Maritime                   35.0        164.6
Economic Development         16.0        81.6
NWSA  Port 50% share          43.9       109.2
NWSA  Legacy Port Projects        0.2         1.8
Total Non-Airport              95.1        357.2
Stormwater Utility (2)                                2.1           9.7
Corporate (3)                                       7.7          43.5
TOTAL Port Funded CIP                         695.4       2,811.5
(1) Excludes SAMP projects.
(2) Funded with stormwater utility funds only.
(3) Funded by Airport and non-Airport resources on an allocated basis.
Note: totals may not add due to rounding
Details were presented in prior budget meetings 
17

Funding Resources 
Operating funds and net income  separate for Airport and non-Airport 
Revenue bonds paid from net income  separate for Airport and non-
Airport 
Tax levy  primarily non-Airport 
G.O. bonds paid from tax levy non-Airport 
Capital grants  restricted to specific projects 
Passenger Facility Charges (PFCs) restricted to FAA approved
projects 
Customer Facility Charges (CFCs)  restricted to consolidated rental
car facility uses 
Many funding sources are restricted in use 
18

Airport Funding Plan 
2017-2021
Aviation Funding Sources         ($ million)
Net income                282.4 
(1)
Tax levy                      3.5 
Grants                   187.8 
Passenger Facility Charge        258.5 
Customer Facility Charge          1.8 
Existing revenue bond proceeds    130.0 
Future revenue bond proceeds    1,572.7 
TOTAL               2,436.8 
Aviation CIP                    2,401.1 
Allocated Corporate CIP              35.6 
Total Aviation Funded CIP           2,436.8 
(1) Highline Schools noise insulation.
Note: totals may not add due to rounding
Airport is self-funding 
19

Non-Airport Funding Plan 
2017-2021
($ million)
Non-Aviation Funding Sources
Operating Funds             110.2
Operating Cash Flow            67.0 
Grants                    10.3 
Tax levy                     138.2  Funds baseline CIP
Future revenue bond proceeds       -   only; assumes a $72
TOTAL                325.6 million tax levy per
year 
Non-Aviation CIP                 357.2
Allocated Corporate CIP               7.9
Total Non-Aviation Funded CIP         365.2
Shortfall can be resolved by
Funding Shortfall                (39.5) project deferrals or increased
Note: totals may not add due to rounding                      use of tax levy funding 
Funding is available for most of the Non-Airport CIP 
20

Projected Revenue Bond Debt Service Coverage 



Revenue bond debt service coverage remains in an acceptable range 
21

2017 Finance Initiatives 
Issue G.O. bonds to finish funding SR99 Tunnel
contribution  recommend full $147.7 million 
Issue Revenue bonds as needed to fund a portion of
the Airport CIP 
Monitor opportunities to refund bonds for savings 
Evaluate innovative funding strategies 
Including Public Private Partnerships (P3) for future projects 
Finance initiatives support the operating businesses and the Century Agenda 
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APPENDIX 
23

Appendix 
Baseline Levy Funded Project detail 2017-2021 
Regional Transportation Projects 2017-2021 
Tax Levy authority 
Industrial Development District (IDD) levy
information 
Bond ratings 
24

Tax Levy Funded Projects 
Total 2017-
Division  CIP Number  CIP Description                      2017      2018      2019     2020     2021      2021
Maritime - Fishing Industry Support
C800528   FT W Wall N Fender Replacement           10     190      2,750                 2,950
C800529   FT W Wall N Sheet Pile Corrosion Protection      10     190      2,575                 2,775
C800530   FT S Wall End Improvements            169       970       530                    1,669
C800531   FT Dock 3 Fixed Pier Improvement          150       840      2,000                 2,990
C800532   FT Dock 4 Fixed Pier Corrosion Protection      150      1,540    1,800                 3,490
C800533   FT W Wall S Sheet Pile Corrosion Protection                   10    190    1,000    1,200
C800534   FT S Wall Fender Repair and Corrosion Protection                10    190    4,150    4,350
C800526   FT Net Shed 3,4,5 &6 Roof Replacement      3,928     179                           4,107
C800525   FT Strategic Plan                 1,200    6,600   15,650   1,350    8,700    33,500
C800005   FT Paving/Storm Upgrades              90     800        55                  945
C800750   C15 Building Tunnel Improvement          400       300                            700
C800137   FT C15 HVAC Improvements              8                                  8
C800829   T91 Building C-173 Roof Overlay         1,397     54                        1,451
C800439   T91 Substation Upgrades               17  -                            17 
C800675   P91 South End Fender               2,278    -                          2,278
C800821   T91 P91W Slope Stabilization            650       600                           1,250
Maritime - Strategic Investments - Cruise Facilities
C800592   Cruise Terminal Tenant Improvement       12,800     200                          13,000
C800819   Cruise Terminal Improvement Staff Oversight    121                                  121
C800820   P66 Exterior Modernization -      4,470    6,850     30            11,350
Economic Development - Strategic Investments
C800158   T91 Uplands Pre-Development           5,000   15,000   30,000                50,000
TOTAL                                   28,378   31,933   62,230   1,760   13,850   138,151
Three new projects added 
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Regional Transportation Projects 
Total 2017-
CIP Number    CIP Description            2017    2018    2019    2020    2021    2021
TAX LEVY FUNDED
C001725     Fast Corridor I              50                             50
(1)
C001786     Fast Corridor II             605       69     2,500   2,500    730    6,404
C800401     North Argo Express Access       200                               200 
C800606     East Marginal Way Phase 2       350                               350 
C800759     P66 Alaskan Way St Improvement    960       15                        975 
TOTAL TAX LEVY FUNDED                     2,165     84     2,500   2,500    730    7,979
TRANSPORTATION & INFRASTRUCTURE FUNDED
(2)
C800823     Seattle Heavy Haul Network       130      3,000   2,000   2,000   2,000       9,130
(1) Includes anticipated $5.0 million contribution to the Lander Street project in 2019-2020.
(2) Estimated cash flows, but no specific projects identified yet. Total committed is $20 million over 20 years.
Forecast contributions of regional mobility 
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Port's Taxing Authority 
45 cent limit 
The amount of the tax levy in any given year is limited to 45 cents per
$1000 of assessed value (2016 rate is 16.95 cents) 
For 2017, this limit is $209.8 million 
Excludes the amount needed to pay G.O. bond debt service of $34.5 million 
1% limit 
The maximum levy is increased each year by the 1% limit factor 
Based on prior year's maximum 
Increased by the lessor of 1% or inflation plus an addition for new
construction 
The maximum levy for 2016 would have been $96.5 million 
The more restrictive 1% limit applies 
27

2017 Information 
King County preliminary assessed value for
2017 is $466 billion  an increase of 9.3% 
A $72 million levy equals a 15.44 cent
millage rate 

28

IDD Levy - Background 
Port can levy property tax within an Industrial Development District (IDD) 
In addition to regular property tax 
A port can form multiple districts 
Coextensive with port district, or 
Smaller area within the Port district 
The Port already has two Industrial Development Districts 
Port can implement the levy twice - Port of Seattle implemented first round in 1963 
Purpose is to provide for harbor improvements or industrial development of marginal
lands 
Broadly defined 
Includes areas of poor planning or declining tax receipts 
The IDD levy provides a potential additional funding source 
29

IDD Levy - Implementation 
Port may implement a second round based on a new formula 
Maximum of $1.26 billion over a period of up to 20 years 
Average amount = $63 million (13.5 cents for 20 years) 
Maximum annual amount = $210 million (45 cents for 6 years) 
Port can establish a smaller IDD or collect a lesser amount 
Process to implement 
Publish notice by April 1 to begin collecting the next year 
If within 90 days a petition of 8% of voters (voting in the most
recent gubernatorial election) opposes, the Port must hold a
special election to approve the levy 
Implementation may require voter approval 
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IDD Levy Information: "Marginal lands" are defined to include property
subject to the following (RCW 53.25.030) conditions: 
1. An economic dislocation, deterioration, or disuse resulting from faulty planning. 
2. The subdividing and sale of lots of irregular form and shape and inadequate size for proper usefulness and
development. 
3. The laying out of lots in disregard of the contours and other physical characteristics of the ground and surrounding
conditions. 
4. The existence of inadequate streets, open spaces and utilities. 
5. The existence of lots or other areas which are subject to being submerged by water. 
6. By a prevalence of depreciated values, impaired investments, and social and economic maladjustment to such an
extent that the capacity to pay taxes is reduced and tax receipts are inadequate for the cost of public services rendered. 
7. In some parts of marginal lands, a growing or total lack of proper utilization of areas, resulting in a stagnant and
unproductive condition of land potentially useful and valuable for contributing to the public health, safety and welfare. 
8. In other parts of marginal lands, a loss of population and reduction of proper utilization of the area, resulting in its
further deterioration and added costs to the taxpayer for the creation of new public facilities and services elsewhere. 
9. Property of an assessed valuation of insufficient amount to permit the establishment of a local improvement district
for the construction and installation of streets, walks, sewers, water and other utilities. 
10. Lands within an industrial area which are not devoted to industrial use but which are necessary to industrial
development within the industrial area. 

31

Current Bond Ratings 
Noted Credit Strengths: 
Diverse asset and revenue base 
Fitch  Moody's  S&P
General Obligation Bonds            AAA    Aa1   AAA      Airport's market position and
First Lien Revenue Bonds             AAA    Aa2    AA-       enplanement levels 
Intermediate Lien Revenue Bonds        A+    A1    A+       Solid coverage and liquidity levels 
Subordinate Lien Revenue Bonds        A     A2    A+      Conservative debt structure 
Passenger Facility Charge Revenue Bonds   A     A1    A+
Pro-active Port Commission and deep
Fuel Hydrant Special Facility Bonds              A2     A-
and experienced staff 
Vibrant and resilient area economy 

A solid capital funding plan is critical to investors and for strong credit ratings 
32