Item No. 7c_supp_2 
Date:   October 28, 2014 

Tax Levy Discussion 

October 28, 2014

Topics 
Tax levy uses 
Current 
Pre 2010 and Policy Change 
2014 Tax Levy Update 
2015-2019 Forecast 
Consideration of Additional Uses 
Taxing Authority 
Recommendations 

2

Levy Uses - Framework 
Legal: Levy may be used for any Port purpose 
except payment of revenue bond debt service 
Port has pledged the tax levy to pay debt service on General
Obligation (G.O.) bonds 
Policy: Set by the Commission 
Tax levy resource has traditionally been used to fund investments
that are 
Consistent with the Port's economic development mission 
Have limited ability to recover costs through revenue 
The levy may be used as a funding source on a cash basis or in the
form of G.O. bonds 
Limit G.O. bond debt service to 75% of annual tax levy 

3

Levy Uses - Current 
Environmental remediation for legacy liabilities 
Seaport and Real Estate properties 
Remediation not tied to current business operations 
Examples include the Lower Duwamish clean-up, T-91 tank farm 
Regional freight mobility 
Port contributions to regional transportation projects/freight mobility 
FAST corridor, Argo Yard Road 
Transportation and Infrastructure Fund (T&I Fund) to set aside contributions to
SR99 tunnel and South Park Bridge 
Port Jobs (Airport portion has been paid by the Airport) 
Beginning in 2010, the tax levy has been used to support the Real Estate
division 
Pays for most capital projects 
Pays for the annual net operating income shortfall 
Payment of G.O. bond debt service 

4

Levy Uses - Former 
Prior to 2010, the Port used the tax levy to support investment in
Seaport job generators: 
Container Shipping: Between 1994 and 2006 G.O. bonds provided
significant funding for expansions at Terminals 5 and 18 and
improvements at Terminals 30 and 46 
Cruise: Tax levy was used to develop the central waterfront
including the cruise facilities at P-66 
Fishing: Tax levy was used to support improvements at T -91 in
support of large fishing vessels 
Tax levy was also used to invest in facilities that were moved into the
Real Estate Division formed in 2008 
Fishermen's Terminal 

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Capital Uses  1994-2009 
Facilities                  Tax/G.O. bonds $ mil. 
Terminal 5                        210 
Container terminal
Terminal 18                      156 
spending
Terminal 46                       71 
represented 63%
Dredging                       24            of levy funded
Other Container Terminals             46            capital spending
Total Container Facilities              507             during this period 
Seaport capital
Central Waterfront                  122            accounts for 89% 
Terminal 91                       47 
Other docks                      43 
Fishermen's Terminal                27             69% of capital
Eastside Rail Corridor (net (1))           39               was paid with
Other                          26             G.O. bonds 
TOTAL CAPITAL SPENDING        811 
(1) Net of payments from partners to date 
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Policy Change in 2010 
By 2010 there was no immediate need for levy support of Seaport 
the Port had record container volumes of over 2 million TEUs 
Container terminal lease payments were strong 
Cruise passengers peaked at 932,000 
Commission ceased use of tax levy cash for Seaport Capital 
At the same time the Port anticipated other needs 
Support for environmental remediation was expected to increase 
The Eastside rail corridor was purchased 
The Port agreed to contribute up to $300 million to the SR99 Tunnel
Replacement 
Commission initiated the Transportation Infrastructure Fund to
set aside cash for future SR99 payments 

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Changes in Tax Levy Uses 



Less levy is now used to fund      Other uses have grown including: 
capital projects                    Regional mobility 
G.O. bond debt service pays for       Environmental remediation 
projects funded between 1994        Operating expenses (Real
and 2009                     Estate) 
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2014 Tax Levy, Estimated Actuals vs. Budget 
Significant Variances 
$ million                                Budget     Est. Act. 
Sources 
Beginning balance higher        Beginning balance                51.7      65.9 
due to spending delays          Annual Levy                    73.0       73.0 
Interest Earnings                         -          0.3 
Environmental Recoveries                 7.0         7.0 
Additional $2 million deposit
Rail Corridor Reimbursements               -           - 
to T&I fund due to better
Total Sources                        131.7       146.2 
than forecast Real Estate
Uses 
net income 
Existing G.O. Bond Debt Service (1)           68.9        68.9 
Environmental Remediation               16.0        16.0 
Highline School projects          Regional mobility and T&I Fund deposit       9.4       11.5
budgeted for 2013 occurred       Port JOBS (non-Airport share)           0.1       0.1 
in 2014                     Highline Noise Insulation and Aviation HS      2.4       6.5 
Real Estate Capital Projects                14.8         10.8 
Real Estate Operating Support              7.3         7.3 
Real Estate capital
Total Uses                          118.8       121.1
spending below budget 
Ending balance                       12.9        25.1 
(1) Includes early redemption of $15.3 million 
Numbers may not add due to rounding 

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Tax Levy Cash Flow: 2015-2019  Current Uses 
5 Years
$ million                                        2015    2015-2019
LEVY SOURCES
Beginning Tax Levy Fund Balance                 25.1         25.1 
Reimbursements - Environmental                  1.4      1.4
Eastside Rail Corridor Reimbursements              6.1     19.6 
Annual levy                                 73.0        365.0
Total Sources:               105.6    411.1
LEVY USES
General Obligation (G.O.) Bonds Debt Service (DS)
G.O. Bonds DS - existing debt                      28.4        142.1
Future G.O. Bonds DS - contribution to SR99 Tunnel         4.5     67.8 
Subtotal G.O. Bond debt service            32.9        209.8
Other uses
Regional Mobility & T&I Fund deposits                  8.1      11.6 
Highline Schools NOISE Insulation                     2.4      4.5
Environmental Remediation Liabilities                   10.4         37.4 
Workforce Development/Port Jobs                   0.2      1.0
Subtotal Other                  21.1         54.5 
Real Estate Support
RE Capital Total                                7.0      47.0 
RE Operating Subsidy                          6.8     46.7 
Subtotal RE Support                13.8         93.7 
Total Uses:                 67.8        358.0
Projected Ending Tax Levy Fund Balance            37.8        53.1 
Numbers may not add due to rounding 
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Considerations for Potential Uses 
Renewed support for Seaport capital investments 
Industry competitive pressures may require significant new investments, e.g. T-
5 redevelopment to accommodate large ships 
Revised container rate structure and T-5 lease termination limit ability to
provide 100% capital funding from revenues 
Seaport capital plan has a funding gap of $110 million in 2017 
G.O. bond for $110 million would require debt service that would use an
estimated $26 million by the end of 2019 
Use of the levy for Seaport will need to be evaluated in the context of the
Seaport Alliance 
Additional deposit to Transportation and Infrastructure fund 
Add an additional $15 million toward the SR99 contribution 
Reduces G.O. bond funding need 

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Port's Taxing Authority 
Washington State port districts have authority to levy a tax on the value
of property within the port district (coterminous with King County) 
The Port is subject to two limitations on the amount of tax it may levy 
45 cent limit 
1% limit 
The more restrictive 1% applies to the Port 
In 2014, the Port assessed a levy of $73 million 
The maximum levy the Port could have assessed was $93 million
based on the 1% limit 
King County assessed value in 2014 was $339 billion 
Preliminary 2015 assessed value is $385 billion (a 13% increase) 
The Port can levy up to the statutory maximum 

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Annual Levy vs. Statutory Max 
Annual levy is well below statutory maximum 
Preliminary 2015 maximum levy estimate is $95 million 






13

Staff Recommendations 
Enhance funding for the Seaport capital program 
Use levy cash or G.O. bonds as appropriate 
Primary funding source continues to be revenue generated by
Seaport businesses  use levy as needed 
Make an additional T&I deposit to increase the cash contribution to
SR99 




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ADDITIONAL INFORMATION
FOR BACKGROUND ONLY 


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Levy Limits 
45 cent limit 
The amount of the tax levy in any given year is limited to 45 cents
per $1000 of assessed value (2014 rate is 21.5 cents) 
For 2014, this limit is $152.7 million 
Excludes the amount needed to pay G.O. bond debt service of 
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 2014 would have been $93 million 
The 1% limit applies - more restrictive for the Port 

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Tax Levy Uses  G.O. Bonds 
The levy can be pledged to pay general obligation bonds (G.O. bonds) 
Port currently has $268 million G.O. bond debt outstanding 
State statute limits the amount of G.O. bonds 
Non-voted  limit on the amount of G.O. debt that does not
require voter approval 
0.25% of assessed value 
$849 million total in 2014 
Voted  limit on the total amount of G.O. debt even with voter
approval 
0.75% of assessed value 
$2.5 billion in 2014 
Port policy  limit G.O. bond debt so that debt service does not
exceed 75% of the annual tax levy 

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Transportation & Infrastructure Fund 
Commission established in 2010 
Purpose is to set aside funds for Port contributions to regional
transportation projects 
SR99 Tunnel ($268 million due in 2015/2016) 
South Park Bridge (payments in 2014 & 2015) 
Funds are restricted by policy, not law 
Transportation & Infrastructure Fund Forecast   2014     2015 
$ million 
Beginning balance                        40.8     47.0 
Deposit from tax levy fund                     8.0      5.0 
Interest earnings                            0.3      0.1 
South Park Bridge payment                  (2.1)     (2.1) 
Ending balance                         47.0     50.0 

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