PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      5b 
ACTION ITEM 
Date of Meeting     August 6, 2013 
DATE:    July 24, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Craig J. Kerr, Treasury Manager 
SUBJECT:  Banking Services Contract 
Amount of This Request:        $9,700,000   Source of Funds:  Non operating budget 
for basic banking
Est. Total Project Cost:          $9,700,000 
services. Credit card
fees are budgeted as
operating expense by
the affected
departments. 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a contract for
banking services for five years with the option to extend for two additional one-year periods at
an estimated cost in banking fees of $9,700,000. 
SYNOPSIS 
The Port of Seattle intends to issue a request for proposal (RFP) for banking services.  The
contract term will be for five years with the option to extend for two additional one-year periods.
It is the intent of the Port to select one banking institution to provide Port banking services. The
Port's selected bank will receive deposits and disburse Port funds and process the Port's debit
and credit card transactions. Only the approximately 80 financial institutions that have been
determined to be qualified public depositories by the Public Deposit Protection Commission
(PDPC) are eligible to compete for the Port's business. All qualified public depositories will be
notified that the Port is soliciting proposals for banking services. Due to PDPC requirements
along with the Port's need for a robust electronic banking platform with controls, the number of
banks interested in and able to handle the Port's business will likely be quite small. 
BACKGROUND 
In 2009, staff bid for banking services for five years with the right to extend for two additional
one-year periods. The current banking contract expires on July 31, 2014. The Port has hired a
consultant, Vizant Technologies, to monitor debit and credit card fees. Over 96% of the Port's
banking fees result from processing debit and credit card payments. Vizant's fee is based on a
percentage of savings experienced by the Port as a result of their card acceptance savings

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 24, 2013 
Page 2 of 3 
recommendations. Given the opportunity to reduce banking fees based on Vizant's review and
the ongoing technology changes in banking, including increased utilization of electronic and
mobile commerce, staff felt it was an opportune time to rebid for banking services at this time
and not exercise the extension provisions of the current contract. 
Banks and the Port have significant costs to implement a banking contract on an electronic
platform and significant savings result with longer duration contracts. The Request for Proposal
for banking services will provide a competitive selection process for all qualified banks. The
selection will be based on a combination of fees and the quality of service offered by the bank
and will be made by a team of internal and external experts. 
STRATEGIES AND OBJECTIVES 
The Port intends to select one banking institution to provide Port banking services. The selected
bank must be a technologically strong banking partner with an internet banking solution capable
of meeting the Port's current and future electronic banking demands. In addition, Washington
State Public Treasurers, by statute, can only deposit money with a State "qualified public
depository" and the PDPC further limits the amount of public deposits at each bank based on a
bank's net worth. This result s in a limited pool of banks the Port can utilize for its banking
services. A bank must apply to the State's Public Deposit Protection Commission for approval to
become a qualified public depository and provide 100% collateralization of all public funds on
deposit. 
The Port intends to have a new contract signed by March 1, 2014, and implementation completed
by August 1, 2014. 
Breakdown of Banking Fees: 
The majority of Port banking fees result from accepting debit and credit cards. Airport parking
accounts for 78% of all Port debit and credit card receipts. Card acceptance provides four (4)
advantages over alternative payment modes. Those advantages are: immediate receipt of funds,
no credit analysis efforts, no collection efforts and a higher degree of security over cash and
checks. Set out below is a breakdown of Port banking fees for 2012: 
Credit Card Fees                   $1,256,735        96% 
All Other Banking Fees:              $133,634         04% 
Total Banking Fees                 $1,390,369 
Implementation: 
The successful bidder will need to implement and test all aspects of the electronic internet
banking solution to ensure every function of receiving and disbursing Port money is fully
operational before implementation takes place. Some examples of banking functions that would
be affected if a new bank is selected are as follows:

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 24, 2013 
Page 3 of 3 

Electronic Money -The Federal Government, State of Washington and various large customers
pay the Port with electronic transfers (i.e. wires, and ACH Credits). Various notifications must
be made to all electronic payers. 
Direct Deposit of Payroll - All bank account numbers in the payroll and accounting system must
be changed and Payroll files reformatted to ensure the Direct Deposit of Payroll can be accepted
by the bank for all employees selecting direct deposit (approximately 97% of all Port
employees). 
Fraud Control (Positive Pay) -For every accounts payable and payroll check written, Port staff
must change the bank account numbers and ABA numbers in the Payroll and Accounts Payable
system as well as program the format to fit the bank's system to accomplish fraud control
functions. 
IRS Tax and Social Security Deposits  Port staff must coordinate with the IRS through the
appropriate Federal Reserve Bank, change bank account numbers and ABA numbers so these
moneys can be deducted from the Port's bank account by the IRS on paydays.
Due to these requirements, staff estimates that there will need to be a four to five month
transition period if a new bank is selected. The cost of internal staff time for a conversion is
estimated to be between $75,000 and $90,000 but should be recaptured through the use of new
technology and high quality service. 
Source of Funds 
All banking services are budgeted annually with the basic banking services budgeted in the nonoperating
budget and credit card fees budgeted as operating expense by the affected departments. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None.