COMMISSION 
AGENDA MEMORANDUM                        Item No.          8d 
ACTION ITEM                            Date of Meeting     September 8, 2020 
DATE:     August 31, 2020 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Elizabeth Morrison, Director, Corporate Finance 
Scott Bertram, Manager, Corporate Financial Analysis 
SUBJECT:  Resolution No. 3777, Amending Resolution No. 3456, as Amended - Commercial
Paper Authorization 
ACTION REQUESTED 
Request introduction of Resolution No. 3777, amending Resolution No. 3456, as amended,
regarding term, size and certain delegated authority with respect to the Port's Subordinate Lien
Revenue Notes (Commercial Paper) program. 
EXECUTIVE SUMMARY 
As part of its debt management program, the Port uses Commercial Paper (CP) authorized under
Resolution No. 3456 to provide interim capital financing and general liquidity.   Staff is
recommending that the program be updated to extend the expiration date from June 1, 2021, to
June 1, 2051, to increase the program size from $250 million to $400 million and to delegate to
staff the future selection of letter of credit (LOC) providers that support of the CP program. 
JUSTIFICATION 
In 1997 the Commission authorized the issuance of up to $100 million of Commercial Paper (CP)
and in 2001 authorized the expansion of that program to $250 million pursuant to Resolution
No. 3456. The program expires June 1, 2021. Over the past twenty-two years, CP has proved to
be an effective financial management tool, providing interim funding for the Port's ongoing
capital program, as well as access to additional liquidity. CP is a flexible low-cost tool, and the
Port can issue CP as needed and repay outstanding CP as it matures. Maturing CP can be paid 
with cash, the issuance of new CP (roll-over) or with proceeds from a long-term bond issue. CP
has been used for bridge financing in anticipation of grant receipts or a bond issuance. It has also
been used for longer-term variable rate financing and amortized gradually. The Port pays interest
on the outstanding CP only and not on the full authorized program amount, and because CP is a
short-term obligation it benefits from the generally lower interest rates at the short end of the
yield curve.  The Port currently has approximately $18 million CP outstanding; outstanding
amounts have ranged from $0 to $186 million over the life of the program. 

Template revised January 10, 2019. 
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COMMISSION AGENDA  Action Item No. 8d                                  Page 2 of 3 
Meeting Date: September 8, 2020 
Although primarily used for capital funding, it can also provide additional liquidity. For example,
the Port has managed the program to maintain $50 million available for emergencies and has
thereby been able to avoid the purchase of costly earthquake insurance. The Port can also use
this liquidity layer to help manage temporary cash shortfalls; a potentially important tool as the
Port manages through the current business downturn caused by the pandemic. 
CP, like the Port's long-term variable rate bonds, are issued on the Port's Subordinate Lien and
are secured by a direct pay letter of credit.  The current LOC providers are Sumitomo Mitsui
Banking Corporation and Bank of America, N.A. These LOCs expire on November 19, 2020 and
June 1, 2021, respectively. LOCs are competitively selected and may be extended if terms are
favorable to the Port based on market information. Staff recommends extending the CP program
prior to its expiration date in order to extend the Sumitomo LOC for a three-year term.
In 2001, when the current CP program was authorized, the Port's annual capital spending
averaged $276 million over the preceding five years (1996-2000); the Port's average annual
capital spending over the most recent five years (2015-2019) has increased to $410 million.
Similarly, the Port's operating expenses have increased over the past 20 years, from $194 million
in 2000 to $443 million in 2019.  Due to the increase in capital spending and growth of the
organization and the expectation that during the life of the program the Port will continue to
grow, staff recommends increasing the CP program from $250 million to $400 million. However,
due to the high fees currently associated with LOCs and there being no immediate needs to utilize
the additional CP capacity, staff does not recommend adding a new LOC provider at this time. As
such, there is no cost associated with the additional authorization. A LOC can be added  at a
future date, as needed, through a competitive selection.  Staff further recommends that the
selection of any future LOCs in support of the CP program be delegated to staff; this is consistent
with the delegation for the management of the Port's other variable rate debt. 
DETAILS 
Resolution No. 3777 amends resolution No. 3456 in three ways.  First, the program term is
extended to June 1, 2051. Second, the program size is increased to $400 million to support the
growth of the organization and costs of capital construction. Third, the Resolution amends the
delegation to staff to manage the letters of credit in order to be consistent with the Port's other
Subordinate Lien variable rate debt. Pursuant to Resolution No. 3456, the amendment requires
consent from the existing LOC providers; both have reviewed and provided preliminary consent
to this amendment. The amendment will become effective upon final adoption and receipt of
the LOC providers' formal consent. 
ATTACHMENTS TO THIS REQUEST 
(1)   Resolution No. 3777 
(2)   Resolution No. 3456, as amended 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. 8d                                  Page 3 of 3 
Meeting Date: September 8, 2020 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
Adoption of Resolution No. 3456 on June 26, 2001 

















Template revised June 27, 2019 (Diversity in Contracting).