PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4h 
ACTION ITEM 
Date of Meeting     February 9, 2016 
DATE:    January 19, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Elizabeth Morrison, Director, Corporate Finance 
SUBJECT:  Competitive Selection Process for a Finance Team to Provide Underwriting,
Remarketing and Debt Services related to the Issuance of Port Debt. 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to select an Underwriting,
Remarketing and Debt management Finance Team through a competitive selection process to
provide on-going information for the Port's debt management program and to participate in
individual debt transactions through a negotiated sale process. A contract with participating
members of the Finance Team will be issued for each debt transaction. 
SYNOPSIS 
The Port manages the issuance and remarketing of debt by utilizing a team of investment
banking firms. The team is selected approximately every five years through a competitive
selection process and provides services over the duration of the term. The most recent Finance
Team selection was held in 2011. This process establishes a team, but no underwriting contract,
and no compensation obligation, exists until the Commission approves an individual sale of
bonds. As in previous contracts, the project manager will coordinate with the Office of Social
Responsibility for the meaningful inclusion of small business firms .
BACKGROUND 
The Port currently has $3.2 billion of outstanding debt which is actively managed to minimize
cost of capital and risk including refunding existing debt to generate debt service savings. In
addition, the Port engages in long-term capital planning that includes a funding forecast "The
Draft Plan of Finance." The 2016-2020 Plan anticipated the use of approximately $1.2 billion of
new debt to fund capital projects. The Port's Finance Team provides on-going assistance with
the Port's debt management program including financing strategies and potential new funding
tools and opportunities. The Finance Team participates in individual debt transactions through a
negotiated sale process, providing underwriting, remarketing and related services. A contract
with participating members of this Finance Team will be issued for each debt transaction; staff is
required to seek Commission authorization for each debt issuance prior to execution of these
contracts.  The Port's current finance team is comprised of two small firms:  Backstrom
McCarley Berry & Co., LLC and Drexel Hamilton, LLC and four major banks: Barclays Capital;
J.P. Morgan Securities, LLC; Merrill Lynch, Pierce, Fenner & Smith Inc. and Morgan Stanley &
Co. Inc. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 19, 2016 
Page 2 of 3 
SOLICITATION DETAILS: 
The RFQ will be publicized in both the Daily Journal of Commerce and in the Bond Buyer in
order to solicit broad participation. Firms will be evaluated based on both banking experience and
on sales and distribution capability. A two-step selection process will include a written statement
of qualifications and, if needed, oral interviews. Firms that qualify as small businesses per Port
guidelines may apply for a small business position on the team. In prior selections, the Port
offered small firm positions to one or two firms that became part of the team and participated in all
transactions. For this selection, staff recommends qualifying a pool of small firms out of which 
one or two firms would be selected for each individual transaction; selections will rotate to provide
equitable opportunities for all small firms in the pool. Subsequent to the selection in 2011, the
Small Business Administration increased the maximum size for a small investment bank and staff
anticipates that more firms will qualify for that role. In addition, some larger banks have
developed mentorship programs with smaller firms that the Port can leverage. Selection will be
made by a team comprised of staff from multiple finance groups and the Port's Financial Advisor.
Staff expects to post the RFQ on or around February 10 and conclude the process in April. 
ALTERNATIVES CONSIDERED 
The recommended alternative described above is a model frequently used by larger issuers like
the Port. There are two alternatives that the Port considered.
First, the Port could undergo a selection process prior to each bond sale. This has the
benefit of providing frequent opportunities for banks to participate. The primary
disadvantages are the additional time a selection would add to selling bonds making
access to capital markets less nimble and the significant additional work involved given
the frequency of Port bond sales.
The second alternative considered is exclusive use of the competitive sale process rather
than negotiated sales. In a competitive sale, the Port and its financial advisor prepare all
documents and predetermine the bond structure and sale date; the bonds are then sold to
the highest bidder (highest price paid, lowest interest rate). The Port uses this process for
most of its General Obligation bond sales because tax-backed bonds are far more
prevalent in the municipal market, generally have lower credit risk, and are most
frequently issued as Non-AMT (public purpose) debt, which is tax exempt to all
bondholders. As a result they are well understood by most investors and are relatively
easy to sell. Most of the Port's bonds, however, are Revenue bonds that are tied to the
Port's specific business/credit profile and are issued as AMT debt (private activity) which
may not be tax exempt to some investors. A negotiated sale process works best for more
complex credits like this because the underwriters fully participate in the development of
documents that help explain the Port's credit, the credit rating process and, most
importantly, are directly involved in the marketing of the bonds to investors. This
approach is beneficial for Port Revenue bond sales because investor concerns can be
more readily be identified and addressed as part of the sale process, which can ultimately
result in lower interest rates.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 19, 2016 
Page 3 of 3 
There are also alternatives for incorporating small business participation in the finance team.
The approach outlined above has the benefit of providing opportunities to a broader group of
small firms. Another option is the one the Port currently uses. Under this option the Port would
select two firms that are used for all bond sales. This has the benefit of providing a longer-term
opportunity, but to fewer firms. Both models are used by other issuers. 

ATTACHMENTS TO THIS REQUEST 
None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
October 24, 2015- Briefing on the Preliminary Tax Levy and the Draft Plan of Finance
2016-2020