Port ofSeattle                                              2012 Budget and Business Plan

A. TAX AT A GLANCE
Exhibit       '6
Port Commission  chtw
o  The maximum allowable levy for 2012 is $90.1 million.
MeetingMW
0  For 2012 the levy will be $73.0 million.

0  The millage rate is estimated to be $0.2313.

o  The 2012 levy will be used for:

0 General Obligation (G.O.) Bonds Debt Service

0 Public Asset Expense: Freight Mobility

o  Seaport and Real Estate Environmental Remediation Liability

0 A portion of Real Estate operating expenses

0 Real Estate Capital Improvements

0 Highline School District: Aviation High School

0 Ofce of Port Jobs

0 Additions to the Transportation Infrastructure Fund

B. TAX LEVY SOURCES

TYPES AND LIMITS OF LEVIES:

Regular Tax Lexy

The County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities.
Taxes are levied annually on January 1 on property value listed as ofthe prior year. Assessed values
are
established by the County Assessor at 100% of fair market value. A re-evaluation of all
property is required
annually.

Taxes are due in two equal installments on. April 30 and October 31. Collections are distributed to the Port by
the County Treasurer.

The Port is permitted to levy up to $0.45 per $1,000 of Assessed Valuation for general Port
purposes under
Washington State law in Revised Code of Washington ("RCW") Chapter 53.36. The levy may go beyond the
$0.45 limit to provide for GO. Bonds debt service. However, the rate
may be reduced below the $0.45 limit
for the following reason: RCW Chapter 84.55 limits the annual growth ofregular property taxes
to the lesser
of 1% or the ination rate, where ination is measured by the percentage change in the implicit price deator
for personal consumption expenditures for the United States, after adjustments for
new construction. This 1%
limit factor was instituted by Initiative 747 that Washington State voters approved in November 2001. Prior to
the passage of the Initiative, the growth limit was the lesser of 6%
or the ination rate (for levy limit
calculation see Section XII Statutory Budget).





IX -1

Port ofSeattle                                              2012 Budget and Business Plan

FIGUR_E D(-l shows the maximum levy permitted by law
versus the actual levy levied by the Port from 1991
(the last year the Port levied the maximum) to 2012. In 1989, the law was changed whereby a port could have
a levy at less than the maximum while preserving the ability to tax up to the maximum in the future if the need

was justied. This allows a port to tax at the lower level in the years when the maximum levy is not required,
but return'to the maximum level in years of need. Since 1991, on a cumulative basis, the Port has levied a
total of $350 million less than it could have if it had levied the maximum allowable levy each
year.
FIGURE IXl: ACTUAL TAX LEVY VS. MAXIMUM ALLOWABLE LEVY: 1991-2012

SMllons

$100

5"
Maximum Allowable
Levy

$70

$50

$50



$30

$21)

$10 

$0
1991  I'll  I"!  I".  1995  19"  1'97  1".  I"!  2000  IWI  2"!  zoo:  2004  IM  zoos  2N7  mo: 2"  2010  2011  1011

FIGURE lX-2 shows the historical millage rate from 2003 to 2012. The Port kept the tax levy at $73.5
million for 2010 and 2011. The levy amount has been reduced to $73.0 million for 2012.

FIGURE IX-2: TAX LEVY VS. MILLAGE RATE 2003-2012

S Mllllons

SIG
"                                          575.90                                   50'"
575.90
57350   573.50   573.00

$68.81
57 ,
- $0.60
$62.78    $62.79
S59.66
560 :  553.00
- $0.50

S50 1

> 9'

540 '

".3.
$30 .

".10
$20 '

* 50.")
SW


so - -  ,  ' -- - --l- -+  ~ moo
2003     2004     2005     2006     2007     2008     2009     1010     20"     1"

luITIX Lny (Len Sale)                    *Mllllgklul Selle)



IX -2

Port ofSeattle                                              2012 Budget and Business Plan

Special Tax Levies

Special levies approved by the voters are not subject to the same limitations as the regular levy.

The Port can levy property taxes for dredging, canal construction, leveling
or lling upon approval of the
majority of voters within the Port District, not to exceed $0.45 per $1,000 of Assessed Value oftaxable
property within the Port District.

Industrial Development District Tax Levies

The Port may also levy property taxes for Industrial Development Districts (under
a comprehensive scheme of
harbor improvements), for twelve years only, not to exceed $0.45
per $1,000 of Assessed Value oftaxable
property within the Port District. The Port of Seattle levied the tax for a six-year period between 1963 and
1968 for property acquisition and development ofthe lower Duwamish River. Ifthe Port intends to levy this
tax for a second six years (or the seventh through twelfth year period), the Port must publish notice of intent to
impose such a levy and if signatures of at least eight percent (8%) of the voters protest the levy, a special
election must be held with majority approval required. The Industrial Development Levy could be imposed at
up to $0.45 per $1,000 in the rst year and the lesser of $0.45 per $1,000 or the 1% limit factor described
above in subsequent years. The Port has not levied the seventh through twelfth
year period but if the Port were
to Levy under this law, Port may levy up to an estimated $874 million over the six
year period.

C. TAX LEVY USES

Each year as part of the budget process, the Commission reviews and
approves the use of the tax levy. While
the levy, by statute, may be used broadly for general Port purposes, the Port has used the levy to fund capital
investments in critical Seaport and Real Estate infrastructure and other expenditures providing community
benets such as environmental mitigation in the Seattle Harbor and the Port's regional freight mobility
initiative. In 2009, the Port used tax levy funds to purchase the Eastside Rail Corridor. Per a memorandum of
understanding, portions of and easements on the corridor are being sold to other entities; the proceeds of those
sales are reected as sources of tax levy funds. The Port also uses the levy to fund
a small annual contribution
to PortJobs, a non-prot organization that helps develop Port and Airport-related career opportunities. The
levy has not traditionally been used to fund improvements at Sea-Tac International Airport, which is
exclusively supported by user fees; however, the Commission approved the use of levy funds for noise
mitigation projects for the Highline School District and improvements at the Aviation High School which are
not eligible for Airport funding.

For 2012, the Port plans to use the regular levy for the debt service on GO. Bonds, Real Estate capital
improvements, FAST Corridor, Seaport and Real Estate environmental costs, the Aviation High School
project, and Port JOBS. Similar to 2011, no Seaport capital projects will be funded with the levy, and
on an
interim basis, a portion ofReal Estate operating expenses will be levy funded. TABLE IX-l shows how the
Port plans to spend the levy in 2012. Additional details are provided in Tables D(-2 and D(-3.

In 2010, the Port used $13 million of tax levy to fund a Transportation & Infrastructure
reserve fund (TIF) to
set aside resources for certain regional transportation projects, including the Port's contribution to the SR99
tunnel. The 2012 budget includes making an additional $23 million contribution to TIF from the tax levy
fund, and anticipates using $2.5 million from the TIF as payment toward the South Park Bridge project.
Expenditures from the TIF are not included in Table IX-l.



IX -3

Part ofSeattle                                              2012 Budget and Business Plan

TABLE IX-l: SOURCES AND USES OF TAX LEVY

TABLE IX-l shows how the Port plans to spend the levy in 2012.


SOURCFS
Prior Year Levy Fund Balance
Projected Tax Levy Collection
Eastside Rail Corridor Partner Reimbursement
Total Projected Sources                                              119,618

EELS.
G.O. Bonds Debt Service - Seaport
G.O. Bonds Debt Service - Real Estate
Total Projected 60. Debt Service

Committed Capital Expenditures - Real Estate

Expenses:
Public Expense: Seaport Freight Mobility
Transportation & Infrastructure Reserve Fund
Environmental Remediation Liability (Seaport & Real Estate)
Portion of Real Estate Operating
Port Jobs & Apprenticeship Program
Aviation High School
Total Expenses
Capital Expenditures: BP Prospective - Real Estate
Total Projected Uses                                              103,418

Pro'ected Endin Balance
Notes:
1) Net of grant receipts.
2) Includes project cashows for environmental projects already or expected to be expensed and liabilities booked.
3) Includes Seaport non-operating ERL and Real Estate non-perating and operating ERL .









IX -4

Port ofSeattle                                              2012 Budget and Business Plan

TABLE IX-2 provides the estimated 2012 project spending that the Port expects to md with the tax levy. In
addition, any Real Estate Business Plan Prospective projects that are advanced in 2012 may be eligible for levy
funding.

TABLE IX2: LEVY FUNDED COMMITTED PROJECTS

TABLE 1X-2 provides the committed projects that the Port expects to fund with
a portion ofthe tax levy
proceeds.

2012
($ in 000's)
Real Estate
Pier 69 Renewal Projects                  4,223
Fishermen's Terminal                   3,572
Technology, Small and Other Projects         1,315
Tenant Improvements                  1,148
Fleet Replacement
Bell Harbor Lighting Control Upgrade
Total Real Estate Projects

LevySources&Uses Tables IX- 1 and Ix-2 and lX-3 fnal doc.xls



















IX -5

Port ofSeattle                                              2012 Budget andBusiness Plan

TABLE IX-3: EXISTING G.O. BONDS DEBT SERVICE BY PROJECTS AND GROUP

TABLE D(-3 provides the allocation of existing G.O. bonds debt service to the projects that
were funded by
G.O. bonds issued in 1994, 2000, 2004, 2006 and 2011.



Containers
Stage II Dredge- Phase I
T-5 Expansion & Upgrades
T-46 Expansion Redevelopment
T-l8 Expansion & Upgrade
Total Containers

Docks and Commercial Properties
T-91 Apron & Infrastructure Improvements
Pier 17 Dock Replacement
T-86 Terminal Upgrades
Total Docks and Commercial Properties

Commercial Properties
World Trade Center Garage

Fishing
Fishermen's Terminal Docks & Seawall Renewal
Special Item
Eastside Trail

Total G.O. Bond Debt Service                     $ 40,353
LevySources&Uses Tables IX- 1 and lx-2 and Ix-3 fnaldomds














IX -6

Port ofSeattle                                              2012 Budget and Business Plan

D. GENERAL OBLIGATION CAPACITY

Non-Voted and Voted General Obligation Debt Limitations

Under Washington State law the Port may incur indebtedness payable from ad valorem taxes in
an amount not
exceeding one-fourth of one percent of the value ofthe taxable property in the District without a vote of the
people. With the assent ofthree-hs of the voters voting thereon, the District may incur additional G.O.
indebtedness provided the total indebtedness of the Port at any time shall not exceed three-fourths of
one
percent ofthe value ofthe taxable property in the District. For the Port, the following estimates the 2012 debt
limit:

Value of Taxable Property                                        $ 31525889522233

Debt Limit, Non-Voted General Obligation Bonds (25% of Value of Taxable Property)      $ 788,970,881
Less: Outstanding Non-Voted General Obligation Bonds as of 12/31/2011               $ 336,120,000
Less: Capital leases and other general obligations as of 9/30/2011 -
Remaining Capacity of Non-Voted General Obligation Debt                  $ 45228502881
Debt Limit, Total General Obligation Debt (.75% of Vahie of Taxable Property)           $ 2,366,912,642
Less: Total Outstanding General Obligation as of 12/31/2011                      $ 336,120,000
Less: Capital leases and other general obligations as of 9/30/2011
Remaining Capacity of Total General Obligation Debt                      3   2203027922642

The Port may levy property taxes sufcient for the payment of principal ofand interest
on voted G.O.
indebtedness. The existing limitation provides that unless a higher rate is approved by
a majority of the voters
at an election, the increase in regular total property taxes payable in the following
year shall not exceed the
lesser of ination or one percent of the amount of regular property taxes lawfully levied for such district in the
highest of the three most recent years in which such taxes were levied for such district, plus an additional
dollar amount calculated by multiplying the increase in assessed value in that district resulting from
new
construction and improvements to property by the regular property tax levy rate of that district for the
preceding year. With a super majority vote, the Port Commission can increase the levy by 1% if ination is
less than 1%.

Interaction between General Purpose Lexy and General Obligation Debt Capacity

Since the 101% levy limitation applies to the total levy for GO. debt service and for general Port
purposes, an
increase in the tax levy for G0. bonds may result in a decrease in the amount which could be levied for
general Port purposes, unless a higher aggregate tax levy was approved by the voters.

Beginning with the 2001 Budget, the Port established a target to use no more than 75% of the levy for debt
service and retain at least 25% for general purposes.






IX -7

Port ofSeattle                                              2012 Budget and Business Plan

E. TAXPAYER EFFECT                    '

FIGURE 1X-3 shows the assessed valuation as compared to the millage rate from 2003 to 2012. The graph
shows that the assessed value has increased from $225 billion in 2003 to
an estimated $316 billion in 2011,
while millage (the rate paid per $1,000 Assessed Value) has decreased from $02590 in 2003, to the 2012 rate
of $0.2313. Assessed value for 2011 is estimated to be $315,588,352,233. (The 2011 assessed valuation is
used for 2012 tax collection).

FIGURE IX3: KING COUNTY ASSESSED VALUATION VS. PORT MILLAGE RATE 2003-2012

SBllons                                                                                   Rite/$1,000

420                                                                                 $1.00

4m .

3w '
- $0.90
,
360 '

340 '
- $0.80
320 -

3CD -
~ $0.70
280 >
.4
260
'
$0160
Value   240 A
220
.                                                                                    1-
Amulet!                                                                                            $0.50
zoo '

1w -

160 '                                                                                  $0.40
_
140 '
-
1 20 '                                                                                      $0.30

100          ,

80 >
' $0.20
60 .
.
40 -                                                                                V 50.10

20 '

0 -~ ' $0100
03       04       05       06       07        08       09       10        1 1       12

*AsmycdVine (Le Sce)          tMillqc (Right Scale)

F. COUNTY PROPERTY TAX COMPARISON

For 2011, the Port accounted for 2.1% of the total property taxes collected by the County.

FIGURE IX4: 2011 PERCENTAGE OF TAX LEVIES BY TAXING DISTRICT

Port

State Schools
21%


. LA.-;~1.t,"d.mj.)t
E' V:






IX -8