7a supp 3

ITEM NO.   7a_Supp_3_____ 
DATE OF 
MEETING October 23, 2012 

Preliminary Tax Levy Funding Plan
Discussion 

October 23, 2012

Topics 

Tax Levy Overview and background 
2012 Tax Levy update 
Tax Levy 10-year funding uses 
Tax Levy scenarios and discussion 


2

Tax Levy Overview 
Tax Levy Amount 
Levy amount established by the Commission each year as part
of the budget process 
Statutory limitations on annual collection 
Port may set Levy at any amount up to the statutory
maximum 
Maximum increases each year by the lesser of inflation or
1% plus a factor for new construction 
10-yr average of 2.5% (range of 1.6%-3.3%) 
Tax levy may legally be used for general Port purposes, actual use
has been guided by Commission policy 
Payment of General Obligation bond debt service 
Port policy  debt service is no more than 75% of annual levy 
Currently at 55% 

3

Annual Levy vs. Statutory Max 
Annual levy is well below statutory maximum 
Preliminary 2013 maximum levy estimate is $91.4 million 






4

2012 Tax Levy, Estimate/Actual vs. Budget 
Budget   Est./Act.
$'000                                            2012      2012
LEVY SOURCES
Significant Variances 
Beginning Tax Levy Fund Balance                          41,618     39,281
Eastside Rail Corridor Partners Reimbursements                  5,000     18,746
Receipt unanticipated
Tax Levy Fund Investment Earnings                                    552
environmental grants          Annual levy                      73,000   73,000
Total Sources:                     119,618    131,579
Approx. $1 million this year
netted against spending      LEVY USES
General Obligation (G.O.) Bonds Debt Service (DS)
Lower environmental
G.O. Bonds DS - existing debt                                40,353     40,353
expenditures 
Other uses
Receipt of unbudgeted         Roads and Transportation Projects                     3,954    3,728
rail corridor payment from     Seaport Capital - Argo Roadway Element                    192
Aviation School, and Highline & other Schools NOISE Insulation            650       650
Sound Transit                                      (1)
Environmental Remediation Liabilities, Seaport & Real Estate - prelim.     15,889      6,656
Lower Real Estate capital       Funding of Transportation & Infrastructure Fund               23,000   23,000
PortJobs                                              126       126
spending due to project                 Subtotal Other             43,619   34,352
deferrals 
Real Estate Support
(2)
RE Capital Total                                        14,524     4,213
RE Operating Subsidy                                   4,922     4,211
Subtotal RE Support                     19,446     8,424
Total Uses:                      103,417    83,129

Projected Ending Tax Levy Fund Balance                     16,200    48,451
Notes:
(1) Includes project cash flows for environmental projects already or expected to be expensed and liabilities booked
(2) Includes Committed and Business Plan Prospective projects                                         5

2013- 2022 Uses of the Tax Levy 
General Obligation bond debt service, existing and new 
Contribution to the Alaskan Way Tunnel and South Park Bridge 
Funding of Seaport/Real Estate legacy environmental remediation
costs (non-operating): 
Includes Lower Duwamish/East Waterway 
Costs are net of payments by potentially liable parties; excludes
potential recoveries from grants, insurance or litigation 
Substantial completion of FAST Corridor initiative & Highline Schools
noise mitigation program 
Partial funding of Seaport Argo Road Element project and Corporate
capital allocations to Real Estate 
PortJobs  including Apprenticeship and Transportation Programs 
Real Estate Capital Improvement Plan 
Real Estate support for net income deficit 
6

Estimated Tax Levy Uses 2013-2022 
$ million 
Baseline Uses previously  Existing G.O. Debt Service               339.5 
identified 
Alaskan Way Tunnel                 281.0 
Reflects current       South Park Bridge                       2.5 
estimated spending      Argo Yard                              1.7 
FAST Corridor                       5.4 
Assuming an annual levy
of $73 million, these     Highline Noise Mitigation                     10.6 
estimates result in a
PortJobs (and related programs)             2.1 
deficit of $121 million in
2022 
Environmental Remediation              169.8 
Real Estate CIP                      153.5 
Corporate CIP - RE allocation               5.1 
RE support for operating deficit              86.2 
TOTAL                 1,057.5 

7

Alaskan Way Tunnel 
Port has agreed to provide up to $300 million to fund the replacement
of the Alaskan Way Viaduct with a tunnel 
$19 million has already been paid 
$31 million has been set aside in the transportation and
infrastructure fund 
Additional funds may be side aside 
Increases funding gap, but reduces debt 
2012    Available
Budget    cash only 
Contributed         19         19 
Additional cash       55         31 
Bond Proceeds      226        250 
TOTAL         300       300 

8

Transportation & Infrastructure (T&I) Fund 
Funds set aside for specific projects identified by the Commission 
Current projected uses: 
South Park Bridge - $5 million 
$2.5 million end of 2012 
$2.5 million 2013 
Alaskan Way Tunnel - $31 million (of $281 million total) in 2016 
Current fund balance is $36 million 


9

Other Potential Funding Needs 
The following are not included in the baseline assumptions: 
Environmental Remediation Costs 
Costs of key projects are estimates 
Other potential liabilities are not included 
Changes to the Seaport business could result in a need for Seaport tax
levy funding 
Competition could reduce revenues 
Unanticipated capital upgrades, renewal or property acquisitions 
Customer support e.g. storm water mitigation 
Century Agenda goals could require funding beyond operating
divisions' resources 
Sodo traffic mitigation 

10

Upside Potential 
Surplus levy balance due to lower or delayed spending  average $24
million 2002-2011 
Potential property sales 
Continue past level of environmental recoveries  average $2 million
per year 2002-2011 





11

Levy Options 
2013 Tax Levy 
Levy assumption for future years 
Additional deposits to T&I Fund to increase cash for the Alaskan Way tunnel 
1. Current   2. #1 plus extra    3. #2 plus     4. #3 plus
Projections     T&I deposit      upside      extra costs 
potential 
Tunnel funding    $31 mil. cash &  $55 mil. cash &  $55 mil. cash &  $55 mil. cash &
$250 mil. debt    226 mil. debt     226 mil. debt     226 mil. debt 
$73 mil. Flat Levy
(121) mil.       (132) mil.        (81) mil.        (151) mil. 
funding gap 2022 
Annual increase
2.8%         3.0%         1.9%        3.4% 
to close gap 
2013 Levy ($mil)       75.0          75.2          74.4          75.5 
If delay increase
3.4%         3.7%         2.3%        4.1% 
to 2014 

12

Staff Recommendation 
2013 Tax Levy  3% increase to $75.2 million 
Assumption for future  3% increase (1.9%3.4% based on actual experience) 
Additional deposits to T&I Fund  add $24 million for tunnel funding 
1. Current   2. #1 plus extra    3. #2 plus     4. #3 plus
Projections     T&I deposit      upside      extra costs 
potential 
Tunnel funding    $31 mil. cash &  $55 mil. cash &  $55 mil. cash &  $55 mil. cash &
$250 mil. debt    226 mil. debt     226 mil. debt     226 mil. debt 
$73 mil. Flat Levy
(121) mil.       (132) mil.        (81) mil.        (151) mil. 
funding gap 2022 
Annual increase
2.8%         3.0%         1.9%        3.4% 
to close gap 
2013 Levy ($mil)       75.0          75.2          74.4          75.5 
If delay increase
3.4%         3.7%         2.3%        4.1% 
to 2014 
13

Discussion & Next Steps 
Draft Plan of Finance assumes that the tax levy is sufficient to fund all
currently projected uses 
Other potential options could be employed: 
Reduce, delay or eliminate some expenditures 
Increase Real Estate NOI to reduce operating subsidy 
Consider additional asset sales 
Staff can provide additional scenarios if desired 
Commission to provide guidance 



14

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