PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      6a 
ACTION ITEM               Date of Meeting    April 23, 2013 

DATE:    April 16, 2013 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Mark Reis, Managing Director, Aviation 
SUBJECT:  First Reading of Resolution No. 3677: Establishing a rates and charges
methodology and other policies for the use of facilities at Seattle-Tacoma
International Airport 
ACTION REQUESTED:
Request First Reading of Resolution No. 3677: A Resolution of the Port Commission of the Port
of Seattle establishing a rates and charges methodology and other policies for the use of facilities
at Seattle-Tacoma International Airport; and authorizing the Managing Director, Aviation
Division to calculate Airline rates and charges in accordance with said methodology, and
implement all other provisions of this Resolution. 
SYNOPSIS: 
From January 1, 2006, through December 31, 2012, airline rates and charges were established by
agreement with the signatory airlines of the Signatory Lease and Operating Agreement (SLOA).
Beginning in early 2012, Port staff and airline representatives met regularly to negotiate a new
agreement. The negotiations were not successful and a new agreement was not reached. In the
absence of an agreement, airports are permitted to establish rates and charges consistent with
policy established by the Department of Transportation. Consistent with this policy, staff has
consulted with airline representatives to develop the rates and charges methodology incorporated
in Resolution No. 3677. 
Upon approval of this resolution, Port staff will have the authority to notify airlines of the new
rates to be implemented in 2013 if negotiations over a new lease agreement are not successful.
When implemented, the rates will be retroactive to January 1, 2013. The rates established by this
resolution will generate approximately $4.2 million less airline revenue to the Port than budgeted
in 2013, but the same amount as presented to the Commission at the 2013 budget update on April
2, 2013. 
BACKGROUND: 
Port staff distributed to the airlines a draft resolution and rates on December 11, 2012. We met
with the airlines on December 13 to present the proposed rate methodology. On January 10,

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
April 16, 2013 
Page 2 of 2 

2013, we again met with the airlines to hear their questions and concerns. We received written
comments from Alaska Airlines, Southwest Airlines, United Airlines and Federal Express.
On February 7, Port staff sent the airlines by letter a summary of proposed revisions in the draft
resolution (along with detailed exhibits of the rate calculations, etc.). On February 15, we
received comments from Alaska Airlines and Southwest Airlines. 
Based on airline input, the Port revised key elements of the rate setting approach resulting in
lower costs to the airlines and lower revenues to the Port.
FINANCIAL IMPLICATIONS: 
The rates and charges policies established under this resolution will affect airline revenues only
(e.g., landing fees, terminal rents paid by airlines). Implementing this resolution will result in
lower 2013 airline revenues to the Port than were included in the 2013 budget. In the absence of
better assumptions, the 2013 budget was based on a continuation of SLOA. SLOA could only be
extended by agreement with the airlines. 
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1: Continue to negotiate in 2013 to obtain a new agreement. Negotiations were
effectively terminated in October 2012 when Alaska Airlines, as Chair of the Airlines Airport
Affairs Committee for Sea-Tac, requested that the Port develop rates and charges by
resolution. Since that time, Alaska Airlines has paid its 2013 invoices "under protest."
Alternative 2: Negotiate a one-year extension to SLOA to give more time to negotiate a new
agreement. This alternative was rejected by the airlines. 
Alternative 3: Maintain 2012 rates for 2013. Airline rates are set to recover costs. For 2013,
airline costs are increasing due to the airline realignment within the terminal, increased debt
service on existing bonds, and general cost increases for salary, benefits and wages. Also,
2012 rates were set below cost recovery for 2012 due to a surplus from 2011. In addition, the
airlines have claimed that the continuation of the SLOA rate methodology in 2013 is not
allowable since the agreement expired at the end of 2012. 
Alternative 4: Approve a resolution to set rates and charges while continuing to negotiate a
new lease agreement. The rates set by resolution will be retroactive to January 1, 2013. This
appears to be the only alternative at this time. This is the recommended alternative. 
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Resolution No. 3677 
Exhibits A  J related to rates and charges 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
None.