PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting     January 27, 2015 
DATE:    January 9, 2015 
TO:     Ted Fick, Chief Executive Officer 
FROM:    R. Borgan Anderson, Director, Aviation Finance & Budget 
SUBJECT:  International Arrivals Facility  Funding Plan Update & Fourth Quarter
Report 
SYNOPSIS 
The focus of this briefing is to 1) present an updated capital plan to the Commission; and
2) illuminate the policy issue inherent in the funding plan for the new International
Arrivals Facility (IAF), currently estimated to cost $608 million. Under all circumstances,
the Port can easily finance the capital program, including the IAF; however, by shifting
the allocation of Passenger Facility Charges (PFCs) among cost centers, the Port can
manage the impact airline rates, and thereby balance the benefits of PFC use. 
BACKGROUND 
Passenger Facility Charge revenues (PFCs) have been an important funding source for
Seattle-Tacoma International Airport since 1992. Since capital costs (either construction
costs or debt service on revenue bonds) paid by PFCs are excluded from the airline rate
base, the use of PFCs is an important financing tool to reduce airline costs as measured 
by passenger airline cost per enplaned passenger (CPE). For example, the airport has
used PFCs to provide important funding for such projects as the Satellite Transit System
refurbishment, the expansion of Concourse A, and the construction of the Third Runway
(16R/34L), thereby reducing terminal rents and landing fees paid by the airlines. In fact,
since 1992, the Port has used $972 million of PFCs for airfield and terminal projects, but
has not yet used any PFC's for a project exclusively serving international flights. 
The current airline agreement (SLOA III) established the Federal Inspection Services
(FIS) area as a separate cost center. This means that all of the capital and operating costs
associated with this cost center are recovered from only the users of this cost center
(airlines with international arrivals using the FIS facility).  The Port agreed to the
establishment of this new cost center with the understanding that the plan of finance
would be used to manage airline costs through the use of PFCs. Thus, the funding plan
for the IAF has always assumed that PFCs would be used in a manner that maintained the
FIS rate within the market of western North America airports. 
The terms of SLOA III, together with the fact that not all airlines use the FIS facility,
have created a situation where airlines have different financial interests relating to the use
of PFCs by cost center. Consequently, the use of PFCs has become an important policy

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 9, 2015 
Page 2 of 3 
decision because of the impact on airline rates and payments. The presentation will show
four possible funding scenarios with resulting impacts on airline rates, CPE components,
and CPE by airline (example domestic and international airlines). 
Based on Commission input and further input from the airlines, staff will return in late
February with a refined proposed funding plan for the IAF. In March, the Port will seek
airline approval for the IAF project through a majority-in-interest vote (MII).  The
proposed funding plan will be the basis for the financial impacts (airline rates and CPE)
of the project reflected in the MII proposal. However, final decisions on the allocation of
PFCs to pay debt service of projects in various cost centers will depend on the terms of
the airline agreement in place at that time. (The current agreement SLOA III expires on
December 31, 2017). 
To use PFCs as a funding source for a project, an airport must receive approval from the
Federal Aviation Administration through an application process that includes
consultation with the airlines.  The Port plans to develop and submit an application to
use PFCs for the IAF, the North Satellite Expansion project,  and the Baggage
Optimization project in the spring of 2015.

ATTACHMENTS TO THIS BRIEFING 
Computer slide presentation. 
IAF Fourth Quarter report memo. 
IAF Fourth Quarter computer slide presentation. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
January 13, 2015  IAF Update. 
December 2, 2014  IAF Scope and Budget Update. 
October 28, 2014  IAF Q3 Quarterly Briefing. 
August 19, 2014  IAF Q2 Quarterly Briefing. 
August 5, 2014  IAF RFQ Advertisement. 
July 22, 2014  IAF Progress Briefing. 
June 10, 2014  IAF Update and Quarterly Briefing. 
May 6, 2014  IAF Project Delivery Briefing. 
April 22, 2014  Capital Program Briefing. 
March 11, 2014  IAF Master Planning authorization. 
February 25, 2014  IAF Program Briefing. 
November 19, 2013  International Arrivals Facility Construction Management,
testing and inspection; surveying and locating and safety service agreements. 
July 23, 2013  International Arrivals Facility Project & Program Support; and
Price Factor Design Build Methodology authorization. 
July 9, 2013  Sea-Tac Airport International Arrivals Facility Briefing. 
July 9, 2013  Alternative Public Works Contracting Briefing.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
January 9, 2015 
Page 3 of 3 
April 9, 2013  Sea-Tac Airport International Arrivals Facility Briefing. 
June 26, 2012  Briefing on Airport Terminal Development Challenges at Seattle-
Tacoma International Airport. 
June 14, 2011  International Air Service Growth and Future Facility briefing. 
February 2, 2010  Briefing on South Satellite Passenger Growth and Facility
Considerations, Delta's Proposed Airline Lounge and Other Possible Future
Aviation Projects.