PORT OF SEATTLE 

 

MEMORANDUM

 

 

COMMISSION AGENDA 

 

Item No. 

7a 

 

Date of Meeting 

May 12, 2009 

DATE:

 

May 6, 2009 

 
TO:

 

Tay Yoshitani, Chief Executive Officer 

 
FROM:

 

Elizabeth Morrison, Sr. Manager, Corporate Finance 

 
SUBJECT:

 

Briefing on Consolidated Rental Car Facility (CRCF) financing 

 

BACKGROUND

On May 13, 2008, the Commission authorized funding for the construction of the Consolidated 
Rental Car Facility (CRCF). Source of funding at the time of authorization was expected to be 
customer facility charges (CFCs) and stand-alone CFC-backed bonds to be issued in 2008.  CFC 
cash was expected to fund a portion of the project and construction of the facility began in [June] 
2008.   
 
On July 1, 2008, the Commission passed Resolution No. 3600, as amended, authorizing the 
issuance of CFC–backed revenue bonds to fund all of the CRCF project costs. These bonds 
would have been secured solely by CFC revenues.  Due to deteriorating bond market conditions 
resulting from the U.S. financial crisis, the Port decided not to proceed with the bond issue at that 
time. Credit markets in general and the taxable municipal market in particular worsened toward 
the end of 2008 and the Port suspended this transaction until credit markets improved, although 
the project continued to be funded with CFC collections and funds on hand. 
 
On October 14, 2008, the Commission authorized the use of general Airport funds in the amount 
not to exceed $20 million as interim funding to allow continuation of project construction on 
schedule toward the original May 2011 program target. This budget was established using Turner 
Construction Company’s estimated cash flow projection for the entire project as provided to the 
Port in September. These funds, in combination with available CFC funds, were expected to be 
sufficient to fund construction through the end of March 2009, by which time longer-term 
financing would be secured.  
 
In early November 2008, Turner provided a revised cash flow estimate that showed faster 
spending than previously anticipated due to favorable weather conditions and more refined 
estimates from subcontractors, with expenditures projected to exceed available funds around the 
end of 2008. As a result, on December 15, 2008, the Commission approved the suspension of the 
project for up to one year, and staff began developing an alternative financing strategy. 
 

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