PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6b 
ACTION ITEM 
Date of Meeting      May 24, 2016 
DATE:    May 5, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Elizabeth Morrison, Director, Corporate Finance 
SUBJECT:  Resolution No. 3721  sale and issuance of first lien revenue refunding bonds in
the aggregate principal amount of not to exceed $185,000,000 

ACTION REQUESTED 
Request First Reading of Resolution No. 3721: A Resolution of the Port Commission of the Port
of Seattle authorizing the issuance and sale of revenue refunding bonds in one or more series in 
the aggregate principal amount of not to exceed $185,000,000, for the purpose of refunding
certain outstanding revenue bonds of the Port; setting forth certain bond terms and covenants;
delegating authority to approve final terms and conditions and the sale of the bonds; and
authorizing remediation of a portion of the bonds being refunded. 
SYNOPSIS 
Commission authorization is requested to issue first lien revenue refunding bonds (the "Bonds")
in an amount estimated not to exceed $185,000,000 (including a reserve fund deposit and cost of
issuance) to refund up to $175,545,000 outstanding intermediate lien revenue bonds, Series 2006
for debt service savings. Staff also recommends issuing $6.3 million of the refunding bonds as
taxable bonds to provide flexibility for potential future non-qualified uses at Shilshole Bay
Marina. 
BACKGROUND 
As part of the Port's debt management program, the Port monitors opportunities to reduce debt
service. In 2007, the Port issued first lien revenue bonds to fund facilities currently managed by
the Northwest Seaport Alliance and the Maritime Division. The 2007 Bonds are callable in
October, 2016 and current low interest rates provide a favorable refunding opportunity. The
outstanding amount is $175.5 million and estimated present value savings are currently $19
million. The refunding bonds will be structured for level savings which will result in reduced
annual debt service with the same final maturity date as the 2007 Bonds. The total Bond amount
will also include proceeds sufficient to pay cost of issuance and to fund the required debt service
reserve. 
Also as part of ongoing debt management, the Port monitors compliance with regulations that
apply to tax-exempt bonds, including proposed uses on assets previously financed with tax-

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 5, 2016 
Page 2 of 3 
exempt debt since qualified tax-exempt uses are generally limited to those having a public
purpose or are directly related to airport or port activities. Among the projects originally funded
with the 2007 bonds are improvements at Shilshole Bay Marina. The Port has been considering 
development of a restaurant at the Marina, which does not qualify for tax-exempt financing, and
may wish to pursue other non-qualified development opportunities in the future. IRS regulations
allow for an issuer to remediate such a change in use by defeasing the related bonds with cash or
taxable debt. 
In order to provide greater opportunities for non-qualified uses at Shilshole Bay Marina, staff
recommends that the Port issue approximately $6.3 million of taxable refunding bonds as part of
this issuance and use the proceeds to defease the related portion of the 2007 bonds. Given
current rates there is minimal additional cost in issuing taxable rather than tax-exempt bonds
roughly $125 thousand on a present value basis, which staff believes is a worthwhile tradeoff to
provide future flexibility for potential non-qualified uses on the property. This is also more cost
effective than waiting for a change in use to occur subsequent to the refunding. Once the
refunding occurs, the next opportunity to call the bonds would be in ten years and remediation
would be inefficient because it would require depositing funds into a defeasance escrow in
advance, at an investment yield less than the interest rate on the bonds. Resolution 3721 includes
the authorization to take this remedial action.

ADDITIONAL BACKGROUND 
The Bonds are being issued pursuant to the First Lien Master Resolution No. 3059 as amended
and restated by Resolution No. 3577 and this Resolution No. 3721. The Bonds will be issued in
multiple series based on tax status. Series A will be issued as governmental bonds exempt from
all federal income tax (non-AMT). Series B will be issued as private activity bonds exempt from
regular federal income tax, but subject to the Alternative Minimum Tax (AMT). Series C will be
issued as taxable bonds. 
Resolution No. 3721 is similar in all material respects to other First Lien Series Resolutions and
provides for a contribution to the common debt service reserve fund that provides security for
certain senior lien bonds that participate in the common reserve (some First Lien bonds are 
secured by a debt service reserve fund unique to that series of bonds). 
The Resolution delegates to the Port's Chief Executive Officer the authority to approve interest
rates, maturity dates, redemption rights, interest payment dates, and principal maturities for the
Bonds (these are generally set at the time of pricing and dictated by market conditions at that
time). Commission parameters that limit the delegation are a maximum bond size, minimum
savings rate for the refunding and expiration date for the delegated authority. If the Bonds
cannot be sold within these parameters, further Commission action would be required. The
recommended delegation parameters are:

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 5, 2016 
Page 3 of 3 
Maximum size:                 $185,000,000 
Minimum debt service savings:         4.0% 
Expiration of Delegation of Authority:     October 31, 2016 
Upon adoption, Resolution No. 3721 will authorize the Designated Port Representative (the
Chief Executive Officer, the Chief Financial Officer) to approve the Bond Purchase Contract, the 
official statement, escrow agreement (if any), pay the cost of issuance and take other action
appropriate for the prompt execution and delivery of the Bonds. The Bonds will be sold through
negotiated sale to Merrill Lynch, Pierce, Fenner & Smith Inc.; Barclays Capital; Drexel
Hamilton, LLC; Citigroup Global Markets, Inc.; Goldman Sachs & Co.; and Siebert Brandford
Shank & Co., LLC. Piper Jaffray is serving as Financial Advisor, K&L Gates LLP is serving as
bond counsel and Pacifica Law Group is serving as disclosure counsel on the transaction. 

ATTACHMENTS TO THIS REQUEST 
Draft Resolution No. 3721 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
October 27, 2015 - Commission Briefing on Draft Plan of Finance