RESOLUTION NO. 3589
A RESOLUTION    of the Port Commission of the Port of Seattle
amending Section 10 ("Diversification") of the Port of
Seattle Statement of Investment Policy.

WHEREAS, on December 11,2001 the Port Commission adopted Resolution No. 3476
appointing the Chief Financial Officer of the Port as the Treasurer of the Port ("Treasurer") pursuant to
RCW 53.36.010; and
WHEREAS, the Treasurer developed a Port of Seattle Statement of Investment Policy
("Policy") in order to facilitate the exercise of the Treasurer's responsibilities; and
WHEREAS, pursuant to Resolution No. 3487 the Port Commission adopted the Policy effective
June 11,2002; and
WHEREAS, consistent with the Association of Public Treasurers and the Government Finance
Officer's Association best practices, the Chief Financial Officer completed a reviewof the Policy
resulting in the Port Commission's adoption of Resolution No. 3569on December 12,2006;and
WHEREAS, the investment objectives of the Policy are to ensure the safety of the principal,
maintain liquidity of the Port's investment portfolio and seek a yield reflecting a market rate of return;
and
WHEREAS, the Policy allows for some flexibility on diversification limits when portfolio size
fluctuates due to sudden market changes, but does not specifically address fluctuations due to cash flow,
and would require staff to liquidate securities to comply with the Policy even though the situation would
usually resolve itself within a short amount of time; and
WHEREAS, it is both prudent and consistent with the objectives of the Policy to implement
revisions clarifying that flexibility on diversification limits applies to unexpected fluctuations in
portfolio size due to cash flow timing issues.

NOW, THEREFORE, BE IT RESOLVED by the Port Commission of the Port of Seattle that:

Section 1.   Section 10 ("Diversification") of the Policy is amended as provided in attached
Exhibit A.

ADOPTED by the Port Commission of the Port of Seattle at a regular meeting thereof,
held this d 3rd day of  O C ~kr    ,2007, and duly authenticated in open session by the
signatures of the Commissioners voting in favor thereof and the seal of the Commission.
JOHN CREIGNTON
U YHARAb

PORT OF SEATTLE
STATEMENT OF INVESTMENT POLICY
Exhibit A
1.   POLICY                   To Resolution No. 3589
It shall be the policy of the Port of Seattle (the "Port") to manage its investments in order to preserve
principal while maximizing income and maintaining liquidity to meet anticipated cash needs and to conform
to all statutes governing the investment of public funds.

2.   INVESTMENT OBJECTIVES
The primary investment objectives of the Port, in priority order, are as follows:
1. Safety - Safety of principal is the foremost objective of the Port's investment program. Investments
shall be selected in a manner that seeks to insure the preservation of capital in the portfolio. This will
be accomplished through security selection, portfolio diversification, and maturity limitations, as more
fully described below.
2.  Liquidity- The Port's investment portfolio shall remain sufficiently liquid to meet all cash flow
requirements that may be reasonably anticipated.
3. Yield - The portfolio shall be managed with the objective of attaining a market rate of return
throughout economic cycles, taking into account investment risk constraints and liquidity needs.
Return on investment is of least importance compared to the objectives of safety and liquidity.

3.   SCOPE
This policy covers all funds managed by the Port as reported in the Port's Annual Financial Report unless
specifically excluded by this policy. This policy does not apply to the Port's deferred compensation funds,
employee pension, health and welfare funds, or other funds managed by third party administrators.
This investment policy does not cover any moneys collected and held by King County or the State of
Washington until such time as those moneys are remitted to the Port of Seattle.
All investments shall comply with federal and state laws and this policy. Funds related to the issuance of
tax-exempt debt shall at all times be invested and otherwise treated in accordance with Internal Revenue
Service rules and regulations.

4.   STANDARDS OF CARE
Prudence - The standard of prudence to be used by investment personnel shall be the "Prudent Investor
Rule", and shall be applied in the context of managing the overall portfolio at all times:
Investments shall be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in the
management of their own affairs, not for speculation, but for investment, considering,
in priority order, the probable safety and liquidity of their capital as well as the
probable income to be derived.

Investment personnel acting in accordance with this policy and exercising due diligence shall be relieved of
personal liability for an individual security's creditrisk or market price changes, provided deviations from
expectations are promptly reported and appropriate action is taken to control adverse consequences.
Ethics and Conflict of Interest - Officers and employees involved in the investment process shall refrain
from personal business activity that could conflict with proper execution of the investment program or that
could impair their ability to make impartial decisions. Investment officials and personnel shall disclose to
the Port's General Counselany material financial interests in financial institutions that conduct business
with the Port, and shall further disclose any personal financiallinvestment positions that could be related to
the performance of the Port's portfolio.

5.  DELEGATION OF AUTHORITY
Authority to manage the Port's investment program shall reside with the Chief Financial Officer, appointed
Port Treasurer pursuant to Resolution No. 3476. The Treasurer shall be accountable for all investment
transactions and shall establish written procedures and internal controls designed to insure that the Port's
assets are protected from loss, theft or misuse. The Treasurer may delegate the day-to-day duties and
responsibilities related to the Port's investment program.

6.  SAFEKEEPINGAND CUSTODY
All securities transactions shall be settled on a delivery versus payment (DVP) basis. All securities shall be
held at the Port's safekeeping agent, or that agent's representativein New York City, or the agent's account
at the Federal Reserve Bank.

7.  SECURITIESLENDING
The Treasurer may enter into one or more contracts with the custodial banks or financial institutions, or any
one of them, holding the Port's securities for the lendingof all or part of these securities to reputable brokers
and financial institutions to earn additional investment revenue or fees from such loans, provided that
collateral equal to at least 102% of the market value of loaned securities shall be continuously maintained.

8.  FINANCIAL INSTITUTIONSAND SECURITIES DEALERS
The Treasurer shall maintain a list of financial institutions and security brokerldealers authorized to provide
investment services to the Port. Firms eligible to provide such services must meet the following criteria:
Financial Institutions
Banks: The Port may make deposits and purchase CDs only from banks that are qualified public
depositories as determined by the Washington Public Deposit Protection Commission (PDPC). The
Treasurer shall monitor the net worth and financial condition of these institutions on an ongoing basis, and
may restrict andlor exclude any institution based on such evaluation.
Securities Dealers
Primary Dealers: Security Dealers that can buy and sell Government Securities and deal directly with the
Federal Reserve Bank of New York.

Secondary Dealers: The Port will transact securities with Secondary Dealers having an office in the State
of Washington, doing investment business with other public entities in the State, that have a minimum
capitalization of $10 million and retained earnings of $1 million.
Security brokerldealersengaged in investment transactions with the Port must have demonstrated knowledge
and expertise in public sector investing and shall certify, in writing, that the dealer has read, understands, and
agrees to comply with this investment policy. Dealers shall also provide the Port with annual audited
financial statements. Should concerns arise regarding a dealer's financial condition, business practices, or
compliance with the Port's investment policy, the firm may be restricted from conducting business with the
Port at the sole discretion of the Treasurer.

9.  AUTHORIZED INVESTMENTS
In accordance with and subject to restrictions embodied in Revised Code of Washington (RCW) 36.29.020,
the following investments are authorized by this policy:
A.  Certificates of Deposit (CDs) with qualified public depositories as defined in RCW 39.58.
B.  Certificates, notes, bonds, bills, or other obligations of the U.S. government or its agencies, or of any
corporation wholly owned by the U.S. government, all of which are secured by the full faith and credit
of the United States for the repayment of principal and interest.
Obligations of U.S. government-sponsored corporations eligible as collateral for advances to member
banks as determined by the Board of Governors of the Federal Reserve System. These include, but are
not limited to, Federal Home Loan Bank bonds or notes, Federal Farm Credit Bank consolidated notes
and bonds, Federal National Mortgage Association notes, debentures and bonds, Federal Home Loan
Mortgage Corporation bonds or notes. In addition, the following mortgage backed securities of these
agencies are allowed for purchase including: (1) collateralized mortgage pools having a stated final
maturity not exceeding the maturity limits of this policy and (2) planned amortization and sequential
pay classes of collateralized mortgage obligations collateralized by 15-year agency-issued pooled
mortgage securities and having a stated final maturity not exceeding the maturity limits of this policy..
D.  Bankers' Acceptancespurchased in the secondary market. Bankers' Acceptance purchases arelimited
to the largest 50 world banks as listed each July in the American Banker. The banks must meet Tier
one and Tier two capital standards.
E.   Commercial Paper authorized by RCW 43.84.080(7) purchased from the secondary market, ,
consistant with policy of thestate Investment Board . Any changes to the State Investment Board
Guidelines will be communicated in writing to the Commission as soon as possible.
F.   Repurchase Agreements structured with securities eligible for purchase (as defined in B through E
above), provided that a Master Repurchase Agreement has been executed with the contra-party.
1) All securities used in a repurchase agreement shall be priced to reflect current market conditions.
2) Repurchase Agreements ("Repos") will not exceed 60 days in duration. Repos shall only be
executed with Primary Government Bond Dealers and will be collateralized in excess of 102% if
under 30 days and 105% from 30- 60 days. The collateral must be marked to market no less
frequently than daily, and additional collateral posted if necessary. Pricing shall be rendered at a
price the Port could reasonably expect to receive if those securities were sold on the open market
(bid side of the market). The maturity of the underlying collateral cannot exceed five years.
3) Collateral on Repurchase Agreements shall be delivered to the Port's SafekeepingAgent as
described in Section 6. Any excess collateral requirement will be determined at the time of the
transaction, as specified in the Master Repurchase Agreement.

G. Reverse Repurchase Agreements ("Reverse Repos") not exceeding 60 days in duration. When used
for yield enhancement rather than cash management purposes, only "matched book transactions will
be utilized, meaning that the maturity date of the acquired security is identical to the end date of the
reverse rep0 transaction. Reverse Repos will only be executed with Primary Government Bond
Dealers.
H.  Municipal Bonds of the State of Washington and any local government of the State of Washington: or,
general obligation bonds of a state other than the State of Washington and general obligation bonds of
a local government of a state other than the State of Washington. RCW 39.59.020 prohibits purchase
of municipal revenue bonds of jurisdictions outside the State of Washington. At the time of purchase,
these bonds must have one of the three highest credit ratings of a nationally recognized rating agency
(i.e. "A" or better).
Investments shall not be made in the following securities:
Corporate stocks
Corporate bonds
Foreign Government Obligations
Futures Contracts
Investments in Commodities
Real Estate
Limited Partnerships
Negotiable Certificates of Deposit
I.     Inverse Floaters
J.   "Interest Only" and "Principal Only" Mortgage Backed Securities

10. DIVERSIFICATION
Portfolio risk shall be mitigated by diversification with respect to security class and issuer. The following
limitations shall apply:
Type of Securities                  Maximum Holding
U.S. Treasury Bills, Certificates,          100% of portfolio
Notes and Bonds
U.S. Government Agency            60% of portfolio
Securities (*)
Agency Mortgage-Backed Securities       10% of portfolio
Certificates of Deposit                 15% of portfolio
5% per Issuer
Bankers' Acceptances               20% of portfolio
5% per bank
Commercial Paper                 20% of portfolio
3% per issuer
Repurchase Agreements
Overnight                   15% of portfolio
Term Only                 25% of portfolio
Reverse Repurchase Agreements         5% of portfolio

(*) U. S. Government Agency Discount Notes shall not apply toward maximum Agency limitations. In
addition, Discount Notes cannot exceed 20% of the Portfolio.
No transaction is required if market fluctuations or a sudden unexpected change in portfolio size causes the
category holdings to exceed their limits, subsequent investment transactions will work towards returning the
portfolio to the diversification limits contained in the above guidelines within a reasonable amount of time.
Within fifteen (15) days of a limits exception, staff will notify the audit committee and identify a plan and
estimated time for returning the portfolio to its diversification parameters. Weekly reports will be submitted
to the audit committee until the portfolio is within its established diversification parameters.

11. MATURITY RESTRICTIONS
The investment program shall be administered in a manner that will ensure adequate liquidity to meet
reasonably anticipated cash needs. Purchases shall attempt to match, but should not exceed, the anticipated
need for the funds. To further ensure the satisfaction of these needs, securities purchased shall have a
maximum maturity not longer than ten (10) years.

12. PORTFOLIO STRATEGY STANDARD
The portfolio shall maintain a 2.0 target duration standard plus or minus 50 basis points.

13. PERFORMANCE STANDARDS
The portfolio shall be managed to obtain a market rate of return through economic cycles and consistent with
the Port's investment objectives. Portfolio performance shall be benchmarked against the Merrill Lynch
TreasuryIAgency 3 Year Index for the period of time being evaluated.

14.  INDEPENDENT REVIEW
Annually, the Washington State Auditor's Officeand external auditors will review the Port's investments
and investment controls to ensure effective and appropriate controls exist. A periodic review of investments
and controls, by the Port's internal auditor, will also occur.

15. REPORTING
At least annually, the Treasurer will provide an investment report to the Port Commission.