INTERNAL AUDIT 
LEASE AND CONCESSION AGREEMENT AUDIT 
Cruise Terminal of America  (CTA) 
BACKGROUND 
The Port of Seattle owns cruise terminals at Piers 66 and 91. Cruise Terminals of America (CTA) has entered into a
lease agreement with the Port to lease and operate the cruise terminal facilities in exchange for percentage rent
payable to the Port. The lease agreement establishes a landlord tenant relationship between CTA and the Port. 
Prior to May 2003, the Port of Seattle contracted with CTA to manage the Port's cruise operations. In 2003, Port
Management and CTA transitioned the management agreement to a lease agreement. In 2005, the Port and CTA
entered into a new lease agreement that provided greater financial benefit to the Port in exchange for an
extended lease term to CTA. In 2012, the Port and CTA amended the agreement to simplify certain lease
provisions, further advance the Port's financial benefit and extend the term of the lease thru December 31, 2019. 
In 2015, according to portseattle.org/cruise, cruise ship terminals at Pier 66 and Terminal 91 served seven major
cruise lines. Each ship call brought approximately $2.5 million to the local economy. Overall, the Seattle cruise
industry generates approximately 3,647 jobs and $441 million in annual business revenue. 

FINANCIAL HIGHLIGHTS

INTERNAL AUDIT 
LEASE AND CONCESSION AGREEMENT AUDIT 
Cruise Terminal of America  (CTA) 
AUDIT OBJECTIVES AND SCOPE 
The purpose of the audit was to determine whether: 
1.  Maritime Cruise Operations and Finance monitoring controls were adequate and effective to ensure: 
Cruise Terminals of America completely and accurately reported percentage rent to the Port. 
Capital and Per Passenger maintenance allowance expenses were reviewed and approved. 
2.  Lessee complied with significant lease provisions, as amended. 
We reviewed and analyzed records for the period January 01, 2013  December 31, 2015.

INTERNAL AUDIT 
LEASE AND CONCESSION AGREEMENT AUDIT 
Cruise Terminal of America  (CTA) 
HIGHLIGHTS AND ACCOMPLISHMENTS 
During the course of the audit, we noted that Maritime Cruise Operations and Finance achieved the following
significant accomplishments. 
Amended and simplified key provisions within the Cruise Facility Lease Agreement, which eliminated the
need for the Port of Seattle to monitor CTA's detailed accounting records. 
Built and maintain strong working relationships with Cruise Terminals of America management through
the establishment of weekly and quarterly operations and finance meetings.

INTERNAL AUDIT 
LEASE AND CONCESSION AGREEMENT AUDIT 
Cruise Terminal of America  (CTA) 
AUDIT RESULT 

Monitoring controls performed by Maritime Cruise Operations and Finance are designed appropriately and
operating effectively. The lessee materially complied with significant provisions of the Lease Agreement.
Management's preventative controls over the lease process are not adequate. 
There was one reportable finding: 
1.  There is no formal process to evaluate whether lease agreement rent security is adequate to protect the Port
from risk of loss. 
The rent security provision in the Cruise Facility Lease agreement deviated from state law and Port
procedure guidelines. 
o  RCW 53.08.085 - Lease of Property - Security of Rent - requires rent security of one-sixth the
total rent, but not less than one year's rent or more than three years' rent with the port
commission having the discretion to adjust or waive rent security. 
o  Port Procedure RE-2 - provides a guideline that agreements of five years or more shall require
rent security of six months' rent with the Executive Director or designee having the discretion to
adjust the amount or form of security in appropriate circumstances. 
The deviation was not documented or expressly approved by the Port Commission.

INTERNAL AUDIT 
LIMITED OPERATIONAL AUDIT  Capital Program 
2015 Construction Activities - Runway 16C-34C Reconstruction project 
BACKGROUND 

This capital construction project includes reconstruction of 9,246 foot Runway 16C  34C, the center
runway, and portions of interconnecting taxiways. Related work includes pavement demolition,
excavation, grading, Portland cement concrete and asphalt paving, storm drainage, water mains and flush
fire hydrants, electrical duct-banks, LED airfield lighting systems and guidance signs, an automated
electronic Foreign Object Debris (FOD) detection system, and other miscellaneous work. 
FINANCIAL HIGHLIGHTS 
Aviation Division Capital Budget (in millions) 
2016       2017        2018        2019        2020       Total 
$360        $457        $454        $416        $363       $2,050 
Source: 2016 Capital Budget 
The project budget was $106.5 million. The estimated project cost is $80 million. The project is
still in progress. The Port was approved for $25 million in FAA grants. The remaining funding was
allocated from Airport Development Funds and future revenue bonds.

INTERNAL AUDIT 
LIMITED OPERATIONAL AUDIT  Capital Program 
2015 Construction Activities - Runway 16C-34C Reconstruction project 
AUDIT OBJECTIVES AND SCOPE 
The purpose of the audit was to ensure: 
1.  The contractors have complied with key contract deliverables such as: 
providing materials of the specified quality and quantity, including quality control 
meeting affirmative action goals 
meeting apprenticeship goals 
paying wage rates per the Project Labor Agreement 
complying with safety and operational requirements 
2.  Management controls were adequate to ensure that: 
the terms and conditions of the applicable FAA grant are met 
change orders are appropriately authorized 
status and regulatory reporting is accurate and timely 
work oversight and inspection is adequate 
We reviewed and analyzed records for the period January 1, 2015  December 31, 2015.

INTERNAL AUDIT 
LIMITED OPERATIONAL AUDIT  Capital Program 
2015 Construction Activities - Runway 16C-34C Reconstruction project

INTERNAL AUDIT 
LIMITED OPERATIONAL AUDIT  Capital Program 
2015 Construction Activities - Runway 16C-34C Reconstruction project 

AUDIT RESULT 

The contractors have complied with the key contract deliverables. Management controls over the
construction project were adequate.

INTERNAL AUDIT