ITEM NO:       7a_Supp___ 
DATE OF MEETING: October 27, 2015 
2016-2020 Draft Plan of Finance
and 
Tax Levy Discussion 
October 27, 2015

Topics 
Introduction & Recommendations 
Non-Airport Funding 
Baseline CIP 
Consolidated Funding Approach 
Funding Resource  Income from Businesses 
Funding Resource  Tax levy 
Draft Plan of Finance 
Funding Plans 
Finance Activity 
Additional Information 

2

Introduction 
Like most Washington State ports, the Port of Seattle levies a
tax levy on property owners within it's district 
The levy is available for general port purposes 
Port's current tax levy is $73 million 
19 cents per $1000 of assessed value 
Same dollar amount since 2012 
Below maximum statutory levy of $95 million in 2015 
Levy has been used to fund: 
Environmental remediation 
Regional freight mobility projects 
Job-generating infrastructure investments 
Economic development initiatives 
Staff is recommending a flat levy for 2016 

Recommending a $73 million levy for 2016, well below the maximum statutory amount. 
3

Introduction 
As part of the annual budget process, staff provides information
on 
Funding for the five-year capital improvement plan (CIP) 
Tax levy 
To establish the uses of the tax levy, and 
To establish the amount of the tax levy 
Most non-Airport costs can be paid either from operating
income (General Fund) or from the tax levy based on
Commission guidelines 
The recent reorganization provides an opportunity to revisit the use
of the tax levy 
This year's presentation will begin with Non-Airport funding and
combine information on the tax levy and Plan of Finance 
Airport is separately funded due to regulatory restrictions 

Presentation focuses on funding of non-Airport businesses 
4

Recommendations 
Today's presentation will provide information
on a capital funding approach focused on non-
Airport business operations 
Key recommendations include: 
1. All non-Airport businesses share funding
resources 
2. Modify use of the tax levy  funding for
designated projects and initiatives vs. specific
divisions: 
Use for capital projects and specific strategic initiatives
that meet criteria approved by the Commission 
Pay general operating expenses from operating
revenues, not tax levy 
The presentation will provide background on these recommendations 
5

Non-Airport CIP Funding 
Northwest Seaport Alliance
(NWSA) 
Maritime 
Economic Development (EDD) 


6

2016-2020 Baseline CIP is $202 million 
Baseline CIP includes 
Port's share of NWSA baseline CIP 
Maritime and EDD CIPs presented on October 13, 2015 
Non-Airport allocation of corporate CIP  primarily information
technology investments 
$ million                   2016       2016-2020 
Maritime                  27         112 
EDD                    12        25 
Corporate  allocated share        1           7 
NWSA  Port share             13         59 
Total                         55          202 

The combined non-Airport CIP totals $202 million over the next five years 
7

Recommendation #1  Consolidate
Funding 
Reorganization of the Port provides an opportunity to revisit Non-
Airport funding 
Former approach was to segment funding by division 
Recommended approach is to consolidate into a single fund with
guidelines for funding allocation  more efficient, less complicated 

Former Businesses            Current Businesses 
Seaport  self funded, but during a                          NWSA  relies on capital
period of modest capital investment  contributions from homeports per
Charter 
Real Estate (RE)  negative income,  Maritime  modest net income 
operations and capital supported by insufficient to fully fund its CIP 
tax levy 
EDD  negative income, will need
financial support 
Consolidation of funding promotes consistent priorities 
8

Non-Airport Capital Funding Resources
from Business Operations 
Net income from businesses (after the payment of debt service) 
NWSA  largest contributor to net income 
Maritime  modest net income 
EDD  negative net income 
Existing available cash is in excess of: 
Minimum fund balance (6 months Maritime and EDD O&M) and 
Deposit to NWSA working capital and reserve 
Net Income first pays revenue bond debt service 
Funding from additional revenue bonds may be available if 1.50x debt
service coverage target is achieved 
Other potential resources  grants, private capital, property sale
proceeds 

Capital funding is available from net income and existing cash balances 
9

Funding Resources from Business Operations 
Business operations are forecast to provide $82 million of capital funding 
An additional $95 million is available from existing cash and $10 million from TIGER
grant. 
Total funding derived from business operations 2016-2020 is $187 million 
$ million    2016     2016-2020
Net Income from Business Operations
Maritime                            7       44
EDD                        (9)     (38) 
NWSA (1)                          52       264 
Total                               50       270 
Less Revenue Bond Debt Service                 (38)         (188)
Net Available for Capital Funding               12         82
Plus Available Cash                            95         95
Plus TIGER Grant                           -          10
Total Funding from Business Operations         107          187 
Baseline CIP                               (55)          (202)
Funding Surplus/(deficit)                      52        (15) 
(1) net of certain Port of Seattle operating expenses associated with the NWSA

Funding from business operations is sufficient to fund much of the baseline CIP 
10

Potential Additional Funding Needs 
Additional NWSA projects  estimated total Port share of $237
million 
2016   2016-2020 
Redevelopment of T-5 
Channel dredging      North Harbor       24     181 
Redevelopment of T-4    South Harbor       16     56 
Total new NWSA      40      237 

Baseline CIP          55      202 
Total CIP with new     95      439 

Does not include unanticipated future projects or new opportunities
requiring investment 

Baseline CIP does not include T-4 and T-5 redevelopment 
11

Funding For Additional CIP 
Funding from Business operations are insufficient to fund the baseline CIP and the
additional NWSA redevelopment of T-4 & T-5 
Port's careful use of tax levy resources creates capacity to fund these additional
projects 
Port has capacity to use a combination of cash and G.O. bonds 

2016-2020 
Funding from business operations         187 
Total CIP (including T-4 & T-5)             439 
Funding surplus/(deficit)               (252) 

Available funding from tax levy            137 
Additional G.O. bonds                 115 
Funding surplus/(deficit)                0 

Tax levy and G.O. bonds can provide full funding for new NWSA projects 
12

Recommendation #2 Modify Use of Tax Levy  
for Designated Projects & Strategic Initiatives 
Tax levy is a flexible funding source 
Can be used for any Port purpose except payment of revenue bond debt
service 
First used to pay General Obligation (G.O.) bonds 
Remaining "net" levy available to fund capital investments and strategic
initiatives based on Commission policy 
Current Policy Uses          Recommended        Rationale 
Legacy environmental       No change          Public benefit 
remediation 
Regional mobility projects      No change           Public benefit 
Operating expenses  RE and   Fund from operating   Expenses can be funded
PortJobs                 revenues            from operations and allow
Capital projects  RE only      Fund projects that     levy to be used for capital
meet certain criteria,   initiatives 
regardless of division 
Recommendation focuses the levy on Commission driven priorities 
13

Tax Levy Assumptions 
Levy funds from: 
Levy amount of $73 million per year 
Sale of Tsubota site for approximately $8 million (originally
tax levy funded) in 2016 
Continued funding for: 
2016 G.O bond issuance to fund a portion of the final
payment for the SR 99 Tunnel project 
Funding for other regional mobility initiatives including the
Heavy Haul corridor plan with the City 
Legacy environmental remediation 
Highline School Noise Mitigation 
Additional uses: 
Pier 66 redevelopment for cruise growth 
Other capital projects based on criteria 
Available levy cash can be used for key capital initiatives 
14

Former Levy Uses for Capital 
Prior to 2010, the Port used the tax levy to support major
investments in several businesses: 
Container Shipping: Between 1994 and 2006 G.O. bonds provided
significant funding for expansions at Terminals 5 and 18 and
improvements at Terminals 30 and 46 
Cruise: Tax levy was used to develop the central waterfront including the
cruise facilities at P-66 and T-30 
Fishing: Tax levy was used to support improvements at T -91 in support of
large fishing vessels and at Fishermen's Terminal 
Beginning 2010, Tax levy was used: 
To fund Real Estate Division capital (including Fishermen's Terminal) 
No tax funding for the Seaport  no major investments, capital
funded from operations 

Prior to 2010, the levy was used to fund key capital projects 
15

Proposed Criteria for Levy Funding 
Operating Cash          Tax Levy 
Asset Renewal & Replacement    Positive net income      Economic benefit 
Strategic Initiatives               Short payback/        No or long payback 
Self funding 
Location                     South Harbor          North Harbor 
Criteria developed to support Century Agenda 
Projects would be eligible for levy funding based on recommended
criteria 
Capital Investments That Meet Criteria     2016-2020 ($mil.) 
P-66 Redevelopment for Cruise Growth         14 
Fishermen's Terminal Improvements           32 
Other projects supporting fishing               4 
Total recommended for levy funding          50 
See Slide 38 for a complete list of projects recommended for tax levy funding. 
Several baseline CIP projects meet the criteria for levy funding 
16

Tax Levy Recommendations 
Maintain $73 million levy for 2016 
Prioritize funding across Port based on recommended guidelines 
Use tax levy to fund specific projects based on criteria: 
P-66 redevelopment to accommodate cruise growth 
Propose levy funding for: 
Fishermen's Terminal Improvements 
Other projects that support the fishing industry 
Monitor new initiatives that may require funding, including NWSA
redevelopment projects 
Monitor funding needs for environmental remediation 
Preserve tax levy and G.O. bond capacity for additional funding
needs 

The Tax Levy is a strategic resource for capital funding 
17

Proposed Tax Levy Sources & Uses 
Uses are based on Baseline CIP only 
Positive ending fund balances can be preserved to support additional projects,
including NWSA redevelopment 
Provide cash and/or support additional G.O. bonds 
2016 Tax Levy Sources & Uses ($ mil.)
Sources                        2016 Proposed  2016-2020
Beginning Balance                       58        58
Annual Levy                           73       365 
Tsubota Sale                            8         8
Total                              139          431 
Uses
G.O. Debt Service - existing                    35        169 
G.O. Debt Service - SR99 Tunnel                4        32
Environmental Remediation                 7        43
Regional Mobility                          2        10
Highline Schools Noise Mitigation              -           3
Approved CIP - P66 Cruise                   12        14
Proposed CIP - Fishing Industry                  4         37
Total                               63       308 
Ending Fund Balance                         76       123 

Levy fund balance is available for future capital initiatives 
18

Total CIP Funding Tax Levy Sources & Uses 
To fully fund the total CIP including additional NWSA projects additional levy
cash and G.O. bonds are needed 
2016 Tax Levy Sources & Uses ($ mil.) - Total CIP
Sources                        2016 Proposed  2016-2020
Beginning Balance                       58        58
Annual Levy                           73       365 
Tsubota Sale                            8         8
Additional B.O. bond proceeds               -         115 
Total                              139          546 
Uses
G.O. Debt Service - existing                    35        169 
G.O. Debt Service - SR99 Tunnel                4        32
G.O. debt Service - additional CIP               -           36
Environmental Remediation                 7        43
Regional Mobility                          2        10
Highline Schools Noise Mitigation              -           3
Approved CIP - P66 Cruise                   12        14
Proposed CIP - Fishing Industry                  4         37
Additional CIP - NWSA                     24       202 
Total                               87       546 
Ending Fund Balance                         52        (0)
Additional projects are fully funded 
19

2016-2020 Draft Plan of Finance

Funding Assumptions 
Tax levy is available to fund non-Airport CIP
based on funding guidelines 
Financial policies are maintained 
Revenue Bond debt service coverage 
1.50x for non-Airport 
1.25x for Airport 
Minimum fund balances are maintained 
Non-Airport provides funding for NWSA
operating reserve 

Plan of Finance based on meeting key financial targets 
21

Non-Airport Funding  Baseline CIP 
Net Income after payment of existing revenue bond debt service 
Available operating cash 
After minimum fund balance, and 
After deposit to NWSA minimum operating reserve 
TIGER grant 
Tax levy based on recommended funding guidelines 
There is minimal capacity for additional revenue bonds during
this funding period 


Plan of Finance based on funding recommendations described in this presentation 
22

Non-Airport Baseline CIP Funding 2016-2020 
2016-2020
($million)
Non-Aviation Funding Sources
Net income                       82.0
Operating funds                     95.2
Grants                          10.1
Tax levy Recommended (1)              36.5
Tax levy Authorized (2)                 13.5
Future revenue bond proceeds             - 
TOTAL                  237.3
Non-Aviation CIP                     195.1
Allocated Corporate CIP                    7.2
Total Non-Aviation CIP                   202.3 
Additional Available Capacity                35.0
(1) Related to Maritime CIP associated with Fishing Industry
(2) Pier 66 redevelopment
Funding plan can be re-evaluated if additional NWSA projects proceed 
Baseline CIP is fully funded and there is capacity of $35 million for future projects 
23

Total CIP Funding 2016-2020 
2016-2020
($million)
Non-Aviation Funding Sources
Net income                       82.0
Operating funds                     95.2
Grants                          10.1
Tax levy Recommended (1)              36.5
Tax levy Authorized (2)                 13.5
Tax levy Additional CIP                 87.0
Future G.O. bond proceeds             115.0
TOTAL                  439.3
Non-Aviation CIP                     195.1
Allocated Corporate CIP                    7.2
Additional CIP                        237.0
Total Non-Aviation CIP                   439.3 
(1) Related to Maritime CIP associated with Fishing Industry
(2) Pier 66 redevelopment
Funding plan includes NWSA projects 
Use of additional G.O. bonds and tax levy provide full funding 
24

Airport Funding Sources 
The Draft Plan of Finance includes funding
from: 
Net operating income (after payment of revenue
bond debt service) 
Operating fund balances (above minimum
requirement) 
Existing and future revenue bond proceeds 
Passenger Facility Charges 
Grants 
Tax levy 

The Airport is self-funding 
25

Aviation Capital Funding 2016-2020 
2016-2020
Aviation Funding Sources                    ($million)
Net income                           295.5 
(1)
Tax levy                                3.5 
Grants                               150.0 
Passenger Facility Charge                     245.0 
Existing revenue bond proceeds                142.1 
Future bond proceeds                    1,248.7 
TOTAL                     2,084.8 
Aviation CIP                               2,049.7 
(2)
Allocated Corporate CIP                         35.2 
Total Aviation Funded CIP                      2,084.8 
(1) Highline Schools noise insulation
(2) Assumes funding with Net Income only.

Future bonds will fund $1.2 billion of the CIP 
26

Revenue Bond Debt Service Coverage 
2016-2020 Port-Wide Forecast 




By managing to financial targets coverage is forecast to remain strong 
27

2015 Finance Activity - Results 
G.O. bonds to fund $120 million for the Port's 2105
contribution to the SR99 project and refund bonds
for present value saving of $11 million 
Airport bond issue to fund project spending and
refund bonds for $42 million present value savings 
Evaluated options for extending and/or replacing
letters of credit (LOCs) expiring in 2015/2016 
Note: Request for replacement LOC for a portion of the Port's
commercial paper program scheduled for November 


Successful completing of 2015 work plan 
28

2016 Planned Finance Activity 
G.O. bonds to fund a portion of the final SR99
Tunnel payment 
Transportation and Infrastructure Fund cash ($62
million) can fund a portion or be used for other needs 
Monitor existing bonds for refunding for debt
service savings 
Extend or Replace LOCs that support variable rate
debt 
Select a new bond underwriting team 
Monitor Airport funding needs  next new money
issue expected in 2017 
2016 includes several on-going debt management projects 
29

ADDITIONAL INFORMATION FOR
BACKGROUND ONLY 


30

2015 Tax Levy, Estimated Actuals vs. Budget 
2015 Tax Levy Sources & Uses ($ mil.)
Significant Variances          Sources                2015 Budget 2015 Forecast
Beginning Balance                 25.1       40.8
Annual Levy                    73.0       73.0
Beginning balance higher
Grants/reimbursements             1.4          0.8 
due to spending delays 
Rail Corridor sales                    6.1           14.3
Interest earnings                    -          0.3 
King Co. rail corridor                 Total                     105.6     129.1
payment received early            Uses
G.O. Debt Service                  32.9       29.8
G.O bond issue resulted in            Environmental Remediation         10.4      7.4 
lower debt service                  Regional Mobility               3.1         4.5 
T & I Fund Deposit                  20.0       15.0
PortJobs                       0.3          0.3 
Some environmental
Highline Schools Noise Mitigation         2.4           -
remediation spending delays 
Real Estate Capital                   7.0           7.2 
Real Estate Operating                6.6           5.7 
T&I deposit lower due to lack          P-66 Cruise Redevelopment          -        1.5 
of Snohomish Co. payment           Total                  82.7     71.4
for rail corridor                   Ending Fund Balance                  22.8       57.7
Numbers may not add due to rounding 
Ending levy fund balance is projected to be $57.7 million 
31

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 2015, the Port assessed a levy of $73 million 
The maximum levy the Port could have assessed based on the
1% limit was $95 million in 2015 and $96 million in 2016 
King County assessed value in 2015 was $388 billion 
Preliminary 2016 assessed value is $421 billion (an 8% increase) 
The Port can levy up to the statutory maximum 

The Port can tax up to $96 million is 2016 
32

Changes in Tax Levy Uses 


Less levy is now used to fund       Other uses have grown including: 
capital projects                 Regional mobility 
Environmental remediation 
G.O. bond debt service pays for
Operating expenses (Real Estate) 
projects funded between 1994 and
2009 
Recent levy use has invested in regional mobility and environmental remediation 
33

Tax Levy Uses  G.O. Bonds 
The levy can be pledged to pay general obligation bonds
(G.O. bonds) 
Port currently has $322 million G.O. bond debt outstanding 
By 12/31/2015, the Port will have $306 million 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 
Provides an additional $746 million bonding authority 
Voted  limit on the total amount of G.O. debt even with voter
approval 
0.75% of assessed value 
Provides an additional $2,848 million bonding authority 
Port policy  limit G.O. bond debt so that debt service does not
exceed 75% of the annual tax levy 

Port's policy limit on G.O. bonds is more restrictive than statute 
34

Transportation & Infrastructure Fund 
Commission established in 2010 
Purpose was to set aside funds for Port contributions to regional transportation
projects 
SR99 Tunnel ($120 million contributed in 2015 funded with LTGO bonds; remaining $148
million due in 2016) 
South Park Bridge (payments in 2014 & 2015) 
Funds are restricted by policy, not law 
Transportation & Infrastructure Fund Forecast 
2015     2016 
($ million) 
Beginning balance                            49.3      62.5 
Deposit from tax levy fund                       15.0       0 
Interest earnings                               0.3        0 
SR 99 Tunnel Project cash payment                  0       (62.5) 
South Park Bridge payment                      (2.1)       0 
Ending balance                              62.5       0 
The T&I balance is available to fund the final SR99 payment 
35

IDD Levy - Background 
Port can levy property tax within an Industrial Development District (IDD) 
In addition to regular property tax 
A port can form multiple districts 
Coextensive with port district, or 
Smaller area within the Port district 
The Port already has two Industrial Development Districts 
Port can implement the levy twice - Port of Seattle implemented first round
in 1963 
Purpose is to provide for harbor improvements or industrial development of
marginal lands 
Broadly defined 
Includes areas of poor planning or declining tax receipts 
The IDD levy provides a potential additional funding source 
36

IDD Levy - Implementation 
Port may implement a second round based on a new
formula 
Maximum of $1.14 billion over a period of up to 20 years 
Average amount = $57 million (13.6 cents for 20 years) 
Maximum annual amount = $189 million (45 cents for 6 years) 
Port can establish a smaller IDD or collect a lesser amount 
Process to implement 
Publish notice by April 1 to begin collecting the next year 
If within 90 days a petition of 8% of voters (voting in the
most recent gubernatorial election) opposes, the Port must
hold a special election to approve the levy 

Implementation may require voter approval 
37

IDD Levy Information: "Marginal lands" are defined to include property subject to the
following (RCW 53.25.030) conditions: 

1. An economic dislocation, deterioration, or disuse resulting from faulty planning. 
2. The subdividing and sale of lots of irregular form and shape and inadequate size for proper
usefulness and development. 
3. The laying out of lots in disregard of the contours and other physical characteristics of the ground
and surrounding conditions. 
4. The existence of inadequate streets, open spaces and utilities. 
5. The existence of lots or other areas which are subject to being submerged by water. 
6. By a prevalence of depreciated values, impaired investments, and social and economic
maladjustment to such an extent that the capacity to pay taxes is reduced and tax receipts are
inadequate for the cost of public services rendered. 
7. In some parts of marginal lands, a growing or total lack of proper utilization of areas, resulting in a
stagnant and unproductive condition of land potentially useful and valuable for contributing to the
public health, safety and welfare. 
8. In other parts of marginal lands, a loss of population and reduction of proper utilization of the area,
resulting in its further deterioration and added costs to the taxpayer for the creation of new public
facilities and services elsewhere. 
9. Property of an assessed valuation of insufficient amount to permit the establishment of a local
improvement district for the construction and installation of streets, walks, sewers, water and other
utilities. 
10. Lands within an industrial area which are not devoted to industrial use but which are necessary to
industrial development within the industrial area. 

38

Projects Recommended for Levy Funding ($'000)
CIP Number Project Description         2016   2017   2018   2019   2020  TOTAL
C800307 MIC West & Central Piers Resur           70    638               708 
C800592 Cruise Terminal Tenant Improv    12,000   1,500 -               13,500
C800439 T91 Substation Upgrades        1,073        26  -               1,099
C800137 FT C15 HVAC Improvements       30                           30
C800344 FT C-2 (Nordby) Roof & HVAC      54  -                       54
C800527 FT Net Shed 9 Roof Replacement     21  -                       21
C800005 FT Paving/Storm Upgrades        800    50  - -           850 
C800191 FT C14 (Downie) Roof & HVAC     105   1,015        72  -          1,192
C800526 FT Net Shed 3,4,5 &6 Roof Rpl      105   2,515        91  -          2,711
C800750 C15 Building Tunnel Improvmnt      700   -                      700 
C800675 P91 South End Fender          950   1,127                       2,077
C800821 T91 P91W Slope Stabilization      120    404                     524 
C800525 FT Strategic Plan                 1,000      5,000      4,000           10,000
C800528 FT W Wall N Fender Replacement          10    190   2,750            2,950
C800529 FT W Wall N Sht Pile Crsn Prtn            10    190   2,575            2,775
C800530 FT S Wall Wt End Improvements          174    970    530         1,674
C800531 FT Dock 3 Fixed Pier Improvmnt      10    190    800   2,000            3,000
C800532 FT Dock 4 Fixed Pier Corr Prot      10    190   1,000      2,300            3,500
C800533 FT W Wall S Sht Pile Cor Protn                       10    190    200 
C800534 FT S Wall Cl Fndr Rp & Cor Prt                       10    190    200 
C800567 FT Net Shed 10 Roof Overlay                                     -
C800568 FT Net Shed 11 Roof Overlay                                     -
C800569 FT Net Shed Electrical System                  70   2,168            2,238
TOTAL                    15,978   8,281   9,021  16,343   380     50,003

39

NWSA  Funding Resources to Port 
Port recognizes as revenue half of the NWSA net income after
depreciation (non-cash expense) 
Port receives cash payments from NWSA based on cash flow
from operations (depreciation is added back) 
Port estimates approximately $220,000 per year in Port
expenses, but associated with the NWSA 
$ million                             2016     2017     2018     2019     2020    TOTAL
NWSA Net Income - POS share           51.8        47.1        47.3        55.7        54.9       256.8 
NWSA depreciation - POS share           0.3        1.0        2.0        2.0        2.6        7.8 
POS expense for NWSA management        (0.2)       (0.2)       (0.2)       (0.2)       (0.2)       (1.1) 
NWSA Funding Available to POS           51.9        47.9        49.1        57.4        57.3       263.6 


NWSA provides significant net income to the Port 
40

Current Bond Ratings 
RATING AGENCY
Fitch  Moody's  S&P
General obligation bonds            AAA   Aa1   AAA
First lien revenue bonds              AA    Aa2    AAIntermediate
lien revenue bonds        A+     A1    A+
Subordinate lien revenue bonds         A     A2    A+
Passenger Facility Charge revenue bonds   A     A1    A+
Fuel Hydrant Special Facility bonds             A2     A-

Noted Credit Strengths: 
Diverse asset and revenue base 
Airport's market position and enplanement levels 
Solid coverage and liquidity levels 
Conservative debt structure 
Pro-active Port Commission and deep and experienced staff 
Vibrant and resilient area economy 
A solid capital funding plan is critical to investors and supports the Port's strong ratings 
41