7b supp 1

ITEM NO: 7b_Supp_1____ _ 
DATE OF 
MEETING October 22, 2013 

Preliminary Tax Levy Funding Plan
Discussion 

October 22, 2013

Executive Summary 



2

Topics 
Port's taxing authority and limits 
Uses of the tax levy 
2013 Uses 
2013 cash flow: budget vs. forecast 
Tax levy forecast 2014-2018 
Uses 
Cash flow projection 


3

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 2013, the Port assessed a levy of $73 million 
The maximum levy the Port could have assessed is $91.5 million
based on the 1% limit 
King County assessed value in 2013 is $313 billion 
The Port can levy up to the statutory maximum 


4

Annual Levy vs. Statutory Max 
Annual levy is well below statutory maximum 
Preliminary 2014 maximum levy estimate is $93.3 million 






5

Levy Uses - Background 
The use of the tax levy has been directed by the Commission 
Levy may be used for any Port costs except payment of revenue bond debt
service (but is applied in the calculation of revenue bond coverage) 
Tax levy resource has traditionally been used to fund investments in the
community that are not financially self sufficient 
Environmental remediation for legacy liabilities 
Port contributions to regional transportation projects/freight mobility 
FAST, Argo Yard Road 
Transportation and Infrastructure Fund to set aside funds for SR99 tunnel and
South Park Bridge 
PortJobs (Airport portion is paid by the Airport) 
Prior to 2010, broadly supported Seaport and Real Estate capital investments
through cash and issuance of general obligation bonds 
Beginning in 2010, the tax levy is being used to support the Real Estate
division (Commission policy for Seaport to be self sufficient) 
Pays for most capital projects 
Pays for the annual net operating income shortfall 
6

2013 Tax Levy, Forecast vs. Budget 
Significant Variances 
$ million                                 Budget     Forecast 
Sources 
Beginning balance: deferral       Beginning balance                  48.5     56.3 
of FAST from 2012 to 2013       Annual Levy                    73.0    73.0 
and lower Real Estate CIP        Interest Earnings                   -     0.2 
Environmental Recoveries                   -       3.8 
Rail Corridor Reimbursements                 -       1.4 
Recoveries and
Total Sources                         121.5     134.8 
reimbursements:
Uses 
environmental & King
Existing G.O. Bond Debt Service              40.4      39.4 
County rail corridor payment 
Environmental Remediation                 12.8     12.8 
Regional Transportation                     2.8      5.0 
Regional Transportation:         Transportation & Infrastructure fund deposit      6.0     6.0 
FAST spending delayed        Port JOBS (non-Airport share)            0.2     0.2 
from 2012 to 2013             Highline Noise Insulation and Aviation HS       7.2     7.2 
Real Estate Capital Projects                  16.4       6.2 
Real Estate Operating Support                6.4      6.3 
Real Estate capital
Total Uses                            92.1      83.0 
spending 
Ending balance                        29.4     51.7 

7

2014 Budget and 5-yr Forecast 
King County estimated assessed value as of Oct. 8 
Increased 8%, first increase since 2009 
Total estimated assessed value for 2014 is $339 billion 
Estimated maximum levy for 2014 is $93.3 million 
Budget and Forecast assumptions 
Tax levy remains at $73 million 
Uses are consistent with 2013 
Additional $6 million deposit to transportation and infrastructure fund in
2014  future contributions considered annually 
Early redemption of G.O. bonds for the rail corridor 
Total outstanding $30 million due in 2014 & 2015 
$15 million mature in 2015, callable in 2014 
Estimated savings of $703,000 
Modest funding shortfall projected beyond the forecast period assuming
continuation of a flat levy of $73 million 

8

Tax Levy Cash Flow: 2014-2018 
5 Years 
$ million                                                                 2014          2014-2018 
LEVY SOURCES 
Beginning Tax Levy Fund Balance                                      51.72          51.72 
Reimbursements - Environmental                                       7.00           7.00 
Eastside Rail Corridor Reimbursements                                       -          13.54 
Annual levy                                                     73.00         365.00 
Total Sources:                            131.72         437.25 
LEVY USES 
General Obligation (G.O.) Bonds Debt Service (DS) 
G.O. Bonds DS - existing debt                                             38.11          151.79 
G.O. Bonds DS - existing debt Eastside Rail project                                30.79           30.79 
Future G.O. Bonds DS - contribution to SR99 Tunnel                                -          56.49 
Subtotal G.O. Bond debt service                         68.90          239.07 
Other uses 
Regional Transportation Projects                                             3.37           6.49 
Highline Schools NOISE Insulation                                          2.38           3.55 
Environmental Remediation Liabilities                                        16.01          74.58 
Funding of Transportation & Infrastructure Fund                                  6.00           6.00 
Port Jobs & Apprenticeship Opportunities Program                                0.06           0.30 
Subtotal Other                               27.82           90.91 
Real Estate Support 
RE Capital Total                                                       14.78           52.22 
RE Operating Subsidy                                                 7.29          37.54 
Subtotal RE Support                            22.07          89.76 
Total Uses:                              118.79         419.74 
Projected Ending Tax Levy Fund Balance                                 12.92         17.51 

9

Potential Risks and Opportunities 
Potential additional uses of   Potential increases to the
the levy fund              levy fund 
New environmental        Environmental recoveries:
liabilities                        grants, insurance
Property acquisitions          proceeds 
Additional transportation      Property sales 
mitigation/improvements 
Potential Seaport support 
Future unfunded
initiatives or mandates 


10

Discussion & Next Steps 
Staff seeks Commission direction: 
Tax levy Uses for 2014 and beyond 
Tax levy amounts for 2014 and beyond 




11

Full Presentation 



12

Topics 
Port's taxing authority and limits 
Uses of the tax levy 
2013 Uses 
G.O. Bonds 
Transportation & Infrastructure Fund 
2013 cash flow: budget vs. forecast 
Tax levy forecast 2014-2018 
Uses 
Cash flow projection 

13

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 2013, the Port assessed a levy of $73 million 
The maximum levy the Port could have assessed is $91.5 million
based on the 1% limit 
King County assessed value in 2013 is $313 billion 
The Port can levy up to the statutory maximum 


14

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 (2013 rate is 23 cents) 
For 2013, this limit is $140.8 million 
Excludes the amount needed to pay G.O. bond debt service of
$39.6 million in 2013 
Total levy under this limit would be $180.4 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 2013 would have been $91.45 million 
The 1% limit applies - more restrictive for the Port 
15

Annual Levy vs. Statutory Max 
Annual levy is well below statutory maximum 
Preliminary 2014 maximum levy estimate is $93.3 million 






16

Levy Uses - Background 
The use of the tax levy has been directed by the Commission 
Levy may be used for any Port costs except payment of revenue bond debt
service (but is applied in the calculation of revenue bond coverage) 
Tax levy resource has traditionally been used to fund investments in the
community that are not financially self sufficient 
Environmental remediation for legacy liabilities 
Port contributions to regional transportation projects/freight mobility 
FAST, Argo Yard Road 
Transportation and Infrastructure Fund to set aside funds for SR99 tunnel and
South Park Bridge 
PortJobs (Airport portion is paid by the Airport) 
Prior to 2010, broadly supported Seaport and Real Estate capital investments
through cash and issuance of general obligation bonds 
Beginning in 2010, the tax levy is being used to support the Real Estate
division (Commission policy for Seaport to be self sufficient) 
Pays for most capital projects 
Pays for the annual net operating income shortfall 
17

Tax Levy Uses  G.O. Bonds 
The levy can be pledged to pay general obligation bonds (G.O. bonds) 
Port currently has $309.56 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 
$782 million total in 2013 
Voted  limit on the total amount of G.O. debt even with voter
approval 
0.75% of assessed value 
$2.3 billion in 2013 
Port policy  limit G.O. bond debt so that debt service does not
exceed 75% of the annual tax levy 
For 2013  54% of levy paid G.O. bond debt service 
18

2013 G.O. Bond Debt Service 
Includes debt
2013 
service on           Tax Levy Use: GO Debt Service Portion      ($ in 000's) 
Containers 
multiple series of           General Seaport Improvement 1985 
G.O. bonds issued        Stage II Dredge- Phase I           $ 1,389
T-5 Expansion & Upgrades                    21,529
to fund projects            T-46 Expansion Redevelopment           4,353
T-18 Expansion & Upgrade                    6,313
from 1994-2011 
T-115 Yard Upgrades                         182
Total Containers                                    33,767
Docks and Commercial Properties 
T-91 Apron & Infrastructure Improvements            2,901
Pier 17 Dock Replacement                      109
T-86 Terminal Upgrades                        129
Total Docks and Commercial Properties                    3,139
Fishing 
Fishermen's Terminal Docks & Seawall
Renewal                              1,634
Special Item & Other 
Eastside Rail Corridor                            805
Total G.O. Bond Debt Service                       $ 39,346

19

Tax Levy Uses 
2013 Major Uses                   $ million 
G.O. bond debt service                           39.3 
Environmental Remediation                       12.8 
Highline school insulation and Aviation High School          7.2 
Real Estate operating support                       6.3 
Real Estate capital                                6.2 
Transportation Infrastructure Fund                     6.0 
Regional Transportation                           5.0 


20

Transportation & Infrastructure Fund 
Commission established in 2010 
Purpose is to set aside funds for Port contributions to regional
transportation projects 
SR99 Tunnel 
South Park Bridge (payments in 2013 & 2014) 
Funds are restricted by policy, not law 
Transportation & Infrastructure Fund 2013     $ million 
Beginning balance                        36.7 
Deposit from tax levy fund                     6.0 
Interest earnings                            0.3 
South Park Bridge payment                  (2.1) 
Ending balance                         40.9 

21

2013 Tax Levy, Forecast vs. Budget 
Significant Variances 
$ million                                 Budget     Forecast 
Sources 
Beginning balance: deferral       Beginning balance                  48.5     56.3 
of FAST from 2012 to 2013       Annual Levy                    73.0    73.0 
and lower Real Estate CIP        Interest Earnings                   -     0.2 
Environmental Recoveries                   -       3.8 
Rail Corridor Reimbursements                 -       1.4 
Recoveries and
Total Sources                         121.5     134.8 
reimbursements:
Uses 
environmental & King
Existing G.O. Bond Debt Service              40.4      39.4 
County rail corridor payment 
Environmental Remediation                 12.8     12.8 
Regional Transportation                     2.8      5.0 
Regional Transportation:         Transportation & Infrastructure fund deposit      6.0     6.0 
FAST spending delayed        Port JOBS (non-Airport share)            0.2     0.2 
from 2012 to 2013             Highline Noise Insulation and Aviation HS       7.2     7.2 
Real Estate Capital Projects                  16.4       6.2 
Real Estate Operating Support                6.4      6.3 
Real Estate capital
Total Uses                            92.1      83.0 
spending 
Ending balance                        29.4     51.7 

22

2014 Budget and 5-yr Forecast 
King County estimated assessed value as of Oct. 8 
Increased 8%, first increase since 2009 
Total estimated assessed value for 2014 is $339 billion 
Estimated maximum levy for 2014 is $93.3 million 
Budget and Forecast assumptions 
Tax levy remains at $73 million 
Uses are consistent with 2013 
Additional $6 million deposit to transportation and infrastructure fund in
2014  future contributions considered annually 
Early redemption of G.O. bonds for the rail corridor 
Total outstanding $30 million due in 2014 & 2015 
$15 million mature in 2015, callable in 2014 
Estimated savings of $703,000 
Modest funding shortfall projected beyond the forecast period assuming
continuation of a flat levy of $73 million 

23

Estimated Uses of the Tax Levy 2014-2018 
2014-2018 Major Uses                             $ million 
General Obligation bond debt service, existing and new for SR 99      239.1 
Tunnel funding 
Funding of Seaport/Real Estate legacy environmental remediation      74.6 
costs (non-operating): 
Includes a portion of Lower Duwamish costs (net of estimated
payments by potentially liable parties) 
Real Estate Capital Improvement Plan                        52.2 
Real Estate support for net income deficit                        37.5 
Regional Transportation - FAST Corridor and Argo Road             6.5 
Contribution to the Transportation Infrastructure Fund                6.0 
Highline Schools noise mitigation program                      3.6 
PortJobs  including Apprenticeship Program                    0.3 

24

Tax Levy Cash Flow: 2014-2018 
5 Years 
$ million                                                                 2014          2014-2018 
LEVY SOURCES 
Beginning Tax Levy Fund Balance                                      51.72          51.72 
Reimbursements - Environmental                                       7.00           7.00 
Eastside Rail Corridor Reimbursements                                       -          13.54 
Annual levy                                                     73.00         365.00 
Total Sources:                            131.72         437.25 
LEVY USES 
General Obligation (G.O.) Bonds Debt Service (DS) 
G.O. Bonds DS - existing debt                                             38.11          151.79 
G.O. Bonds DS - existing debt Eastside Rail project                                30.79           30.79 
Future G.O. Bonds DS - contribution to SR99 Tunnel                                -          56.49 
Subtotal G.O. Bond debt service                         68.90          239.07 
Other uses 
Regional Transportation Projects                                             3.37           6.49 
Highline Schools NOISE Insulation                                          2.38           3.55 
Environmental Remediation Liabilities                                        16.01          74.58 
Funding of Transportation & Infrastructure Fund                                  6.00           6.00 
Port Jobs & Apprenticeship Opportunities Program                                0.06           0.30 
Subtotal Other                               27.82           90.91 
Real Estate Support 
RE Capital Total                                                       14.78           52.22 
RE Operating Subsidy                                                 7.29          37.54 
Subtotal RE Support                            22.07          89.76 
Total Uses:                              118.79         419.74 
Projected Ending Tax Levy Fund Balance                                 12.92         17.51 

25

Potential Risks and Opportunities 
Potential additional uses of   Potential increases to the
the levy fund              levy fund 
New environmental        Environmental recoveries:
liabilities                        grants, insurance
Property acquisitions          proceeds 
Additional transportation      Property sales 
mitigation/improvements 
Potential Seaport support 
Future unfunded
initiatives or mandates 


26

Discussion & Next Steps 
Staff seeks Commission direction: 
Tax levy Uses for 2014 and beyond 
Tax levy amounts for 2014 and beyond 




27

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