PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6C 
ACTION ITEM 
Date of Meeting       8/19/2014 
DATE:    July 14, 2014 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Linda Styrk, Managing Director Seaport 
Bari Bookout, Director Commercial Strategy 
SUBJECT:  USACE Feasibility Cost Share Agreement (FCSA) 
Amount of This Request:          $1.5M 
Est. Total Project Cost:             $1.5M 
Est. State and Local Taxes:             $ 
Net Proceeds to the Port:            $ n/a 
ACTION REQUESTED 
Commission authorization requested for the Chief Executive Officer to sign a Feasibility Cost
Sharing Agreement (FCSA) with U.S. Army Corps of Engineers (USACE). 
SYNOPSIS 
Commission authorization is requested for the CEO to sign the USACE's FCSA, a commitment
for Port of Seattle to contribute 50% of the estimated $3M cost of a Feasibility Study of
alternatives for potentially re-authorizing and deepening the East & West Waterways as part of
Port of Seattle "Big Ship Ready" strategy. 
BACKGROUND 
While the Port of Seattle already is a deep-water port with navigation channels at depths mostly
at least -51' with a significant percentage deeper than -53', an update is needed to the federally
recognized depths of the port's waterways to reflect the current and future cargo fleets. The East 
Waterway is only partially authorized to -51' Mean Low Low Water (MLLW); the remainder of
the East Waterway and the West Waterway are authorized to -34' MLLW, while the expected
size of the fleet calling Seattle is growing past a draft + clearance need of -50' and deeper. In
order to continue to serve as a competitive international trade gateway and support nearly 23,000
seaport-related jobs, the Port has an interest in reauthorizing and deepening these channels.
Authorization by USACE is important, since USACE would then share both the construction 
cost and the Operation & Maintenance cost of navigation channels to their authorized depths. 


Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 2 of 7 
The Port of Seattle is a major gateway for regional and national exports, which tend to be heavy,
high-value goods like vegetables, apples, identity preserved grains, and seafood. Ships must be
able to call Seattle and take on cargo to their deadweight capacity and maximum draft. Ships
deployed on the U.S. West Coast have been rapidly increasing in size, and these ships need
drafts greater than -50' MLLW for safe passage. 
The Port worked with the USACE in 2012 to conduct an initial harbor appraisal. The appraisal
recommended that there is sufficient reason to investigate the feasibility of modifying the
channel depth in the East & West Waterways. The Reconnaissance Study will determine
whether there is federal interest for continuing the study project, which is informed by the
potential for positive cost-benefit ratios, national impact, safety improvement, and demonstrated
need. USACE received funding in the President's Fiscal Year 2014 budget for a Reconnaissance
Study and Congress authorized USACE to pursue only three "new starts" navigation studies in
the Murray-Ryan budget compromise. Port staff has been working with USACE to contribute
information, and the reconnaissance report is expected to be issued by September 2014.
The Feasibility Study will be the first under the new 3x3x3 principles in the Water Resources
Reform Development Act that stipulates Feasibility Studies be completed at a cost of no more
than $3M total in 3 years or less, and undergo concurrent reviews by 3 levels at USACE:
districts, divisions, and headquarters. Cost sharing for this study is 50% by Port of Seattle, with
Work in Kind (WIK) counting toward part of that commitment. The Feasibility Study will begin
after the Reconnaissance Study is completed only if the Reconnaissance Study results in a
favorable recommendation to study alternatives. A favorable outcome of reconnaissance is
expected. 
The next stage after Feasibility would be the actual project construction phase to deepen the
waterways to the chosen alternative. The Port will participate in cost share of the project but cost
share of construction and O&M may be different than a 50/50 split. Details and cost estimates
will be available when the Feasibility Study is completed. 

PROJECT JUSTIFICATION AND DETAILS 
The FCSA will be signed the last week in September by Port of Seattle and USACE, timed with 
the release of the completed Reconnaissance Study. The port must signal our approval to sign
the document in August, committing Port of Seattle to 50% of the cost of the Feasibility Study,
to fit in with timing of the USACE internal review process. A letter of intent has already been
sent indicating our support for this process.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 3 of 7 
Project Objectives 
The Port has an interest to deepen both waterways to handle the next generation of container
ships that are currently being deployed on the West Coast. The FCSA is a step in the process
toward reauthorizing and deepening our channels to handle these ships. 
Scope of Work 
The USACE Feasibility Study will examine the cost and benefits of a range of alternatives for
improving navigation in the East & West Waterways in the Port of Seattle.  The Port of Seattle
will contribute cash and work in kind (WIK) to the USACE study, up to $1.5M under this
agreement. Work in kind will include staff time, sediment sampling, outreach and NEPA
meetings facilitation, data purchase and compilation, and other similar contributions.  The
Feasibility Study will examine: 
Environmental & commercial benefits of deepening 
Several alternatives with a detailed cost benefit analysis of each that will lead to a
preferred outcome. 
Schedule 
USACE has included $200,000 of federal funding in the President's 2015 budget for this
Feasibility Study, which should begin in October 2014, and is planned to be completed by
October 2017.  Funding is also included in the House of Representatives Energy and Water
Appropriations legislation. The best current estimate of Port fund allocations is up to $500,000
each year. USACE will draw upon these funds, taking into account estimated anticipated WIK
from the Port and the proportion of the non-federal share of the cost share. Continued work by
USACE is dependent on Federal appropriations and the President's Budget each year, until
Study completion. 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Previous Authorizations                       $0          $0          $0 
Current request for authorization                  $0    $1,500,000    $1,500,000 
Total Authorizations, including this request           $0    $1,500,000    $1,500,000 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost                    $0    $1,500,000    $1,500,000 
Project Cost Breakdown To be determined         This Request       Total Project 
Construction                                     $0               $0 
Construction Management                         $0             $0 
Design                                       $0              $0 
Project Management                             $0             $0
Permitting                                      $0               $0 
State & Local Taxes (estimated)                        $0               $0

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 4 of 7 
Total                                           $0               $0 
Budget Status and Source of Funds 
Beginning with 2015, Seaport will include $500,000 annually for 3 years in the operating
expense budget for this project.  No funds were included in the 2014 Operating Budget.
However, costs in 2014 could be covered by underspending (approximately $1M) on the
Terminal 5 Maintenance Dredge project.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 5 of 7 
Financial Analysis and Summary 
CIP Category      NA 
Project Type       Expense Project 
Risk adjusted      NA 
discount rate 
Key risk factors       It is possible that the feasibility study will not support going
forward with the dredging of the East and West waterways and
funding from USACE would not be forthcoming. 
Of the total budget of $1,500,000, approximately $950,000 is
expected to be in the form of in kind contributions of Port labor
and outside contracting with the remaining will be cash
contributions. These contributions are requested annually in
advance. Should the Port be entitled to a refund upon final
accounting for the project, it will be provided subject to the
availability of government funds. If not available, government
will seek additional appropriations. This may take some time. 
In general, delays in Federal appropriation of funds for the
project could result in project delays. 
Project cost for     $1,500,000 
analysis 
Business Unit (BU)   Seaport - Container 
Effect on business   The estimated total project costs will have the following effect on Net
performance       Operating Income (NOI) in future years. It is assumed that labor of
existing Port employees is not an incremental expense. Depreciation
expense will not be impacted by this project, as it is an operating
expense. 
NOI (in $000's)             2015    2016    2017    Total 
Incremental Revenue                         $0     $0     $0     $0 
Total Costs                          $500    $500    $500   $1,500 
Less: Port Labor             ($100)    ($80)    ($80)   ($260) 
Incremental Costs             $400    $420    $420   $1,240 
NOI                       ($400)   ($420)   ($420)  ($1,240) 
Depreciation                 $0      $0      $0      $0 
NOI After Depreciation         ($400)   ($420)   ($420)  ($1,240) 
IRR/NPV        NA

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 6 of 7 
Lifecycle Cost and Savings 
The project is designed to update the existing federal authorization to reflect current and likely
future use conditions. If constructed, the project would provide for safer and more efficient use
of Port terminals. Tracking and trending of project benefits would be conducted in the FS. Port
operational costs associated with maintenance dredging post construction will likely either
decrease or remain the same as O&M in navigation channel would be cost shared with USACE if
the waterways are reauthorized to -50' or greater. 
STRATEGIES AND OBJECTIVES 
The Harbor Deepening Project is in line with the Port's Century Agenda strategy to position the
Puget Sound as a premier logistics hub and achieve the objectives of growing annual container
volume and tripling the value of outbound cargo. The Seaport has identified the ability to handle
big ships at our container facilities as a key priority in positioning the Seaport to remain
competitive and achieve growth. As a strategic export gateway, the ability to handle the largest
ships at a maximum departure draft will position the Port of Seattle well as a gateway for United
States commerce and preserve maritime jobs into the future. 
TRIPLE BOTTOM LINE 
Economic Development 
Container vessels are trending larger and channel deepening is essential to maintaining the Port
of Seattle's competitive position as a premier international trade gateway, particularly relative to
Canadian ports. U.S. ports on both coasts have deepening projects and Prince Rupert has no
depth limitation. Economic analysis from John Martin and Associates found that 6,200 of the
nearly 23,000 jobs that depend on the port's container business are at risk from cargo diversion
to Canada. 
Environmental Responsibility 
The project will likely remove low levels of additional contaminated sediment from the
waterways not already addressed as part of separate cleanup efforts. The FS will examine the
environmental impacts to the project and recommend mitigation measures, where impacts are
identified. If constructed, the project will encourage the fleet of larger, new, more efficient and
environmentally friendly container ships to call Puget Sound, replacing smaller, less efficient
ones. Potentially fewer ships will be required to carry the same amount of cargo. 
Community Benefits 
A strong working port is vital to the economic health of King County and Washington state.
Modernizing the Port of Seattle's navigation channels preserves tens of thousands of well-paying
maritime jobs that support the local economy, and $475.5 million in state and local taxes
generated by economic activity at the port. The port is a critical link connecting Washington's
exporters and other businesses with global markets. By ensuring the Port can continue to serve a
modern container fleet, this project will protect over $1 billion of the Port of Seattle's

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 14, 2014 
Page 7 of 7 
investments in our container facilities since the late 90s and the over $340 million the Port has
contributed to local road and rail projects over the last 5 years. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do Nothing  Leaving the current authorization levels at -34' MLLW in the
West Waterway and partially authorized to -51'MLLW in the East Waterway would mean the
Port would either need to assume the full cost of deepening to handle large ships or would
become uncompetitive as a gateway for container business. This is not the recommended
alternative. 
Alternative 2)  Participate as the Non-Federal Sponsor in the USACE Feasibility Study for
Harbor Deepening: Signing the FCSA is the first step for Port of Seattle participation in a study
of the alternatives for deepening our navigation channels to accommodate current and future
needs of containerships. This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
FCSA draft agreement (not available yet from USACE) 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None