7c Supp

ITEM NO.: _    7c_______
DATE OF MEETING:    10/12/2010

Preliminary Tax Levy Discussion

October 12, 2010

Topics
Tax Levy Background
2010 Budget
Preliminary 2011 Budget
Policy 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 is below maximum
General Purpose tax levy authorized for "any lawful Port purpose"
Tax Levy Uses
Payment of General Obligation bond debt service
Port policy  annual debt service is no more than 75% of levy
collection
General Purpose use established by Commission policy
Non-aviation environmental remediation
Regional freight mobility projects
Real Estate Division Support
Airport noise mitigation ineligible for airport funding
3

Levy Capacity
Statutory maximum levy exceeds current levy amount
Maximum increases each year by 1% + allowance for new construction






4

Century Agenda: Funding Policy & Strategy Principles
The Port should be primarily funded through the self-sustaining enterprises that
are at the core of its mission. Revenues from the Port's tax levy should be used
for activities that are not fully self-sustaining and cannot be funded in another
manner. These activities should directly support the Port's core mission,
provide for critical infrastructure investments, or provide environmental
mitigation that cannot be funded through its enterprises.
The Port should demonstrate to the public that it has managed its financial
resources as a disciplined steward of the public interest, guided by priorities set
forth in its strategic plan
The Port should foster a culture of partnership and collaboration in pursuing
public and private funding partnerships for investments that reap shared
benefits to all its partners, and that no single entity can achieve independently.
Adopted August 4, 2009

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Tax Levy Background  Funding Context
Airport financially self sufficient
Except for portions of mitigation not eligible for Airport funding
Seaport financially self sufficient beginning 2010
Levy continues to fund
G.O bond debt service  bonds previously used for Seaport assets
Environmental remediation - mostly legacy items
King County Property tax - 2009
Port
2%          All Other
15%          State Schools
22%
County
13%

Local Schools
Municipal                                 29%
19%



6

Existing G.O. Bond Debt Service (1)
2009
(in 000's)
Containers
Stage II Dredge- Phase I                                           $922
T-5 Expansion & Upgrades                                  18,089
T-46 Expansion Redevelopment                               4,458
T-18 Expansion & Upgrade                                 12,074
Total Containers                                                  $35,544
Docks and Commercial Properties
T-91 Apron & Infrastructure Improvements                      2,219
Pier 17 Dock Replacement                                      122
T-86 Terminal Upgrades                                        120
Total Docks and Commercial Properties                            $2,461
Commercial Properties
World Trade Center Garage                                     640
Fishing
Fishermen's Terminal Docks & Seawall Renewal                 1,778
Total G.O. Bond Debt Service                                 $40,423
(1) Debt service on bonds originally issued between 1994 and 2004

7

Levy Sources and Uses  2010 Adopted
Budget & Forecast
Amount  Flat amount at $73.5 million for five years
Uses
Seaport and Real Estate Environmental mitigation
Regional Transportation
Freight mobility projects/FAST Corridor
Eastside Rail Corridor
Transportation and Infrastructure Fund
Highline School District
Noise mitigation and Aviation High School
Not eligible for Airport funding
Non-Aviation portion of Port Jobs program
Real Estate Division support
Capital Plan
NOI shortfall
8

2010 Budget  Levy Forecast (as of Nov. 2009)
$'000                                      2010      2011      2012      2013      2014
LEVY USES
G.O. DS -existing                           40,426    40,438    40,442    40,444    40,442
Other uses
Roads and Transportation Projects          15,744     5,709     3,100
School Construction & Noise Insulation      9,075       650    10,554     1,744       - 
Sea & RE Environmental Expenditures       8,712     5,587    13,894     6,000     6,000
Transportation & Infrastructure Fund       13,000       -           -       13,000    18,900
PortJobs                                     46        46        46        46        46
Subtotal Other                           46,577    11,992    27,594    20,790    24,946
Real Estate Support
RE Capital                                   16,996    22,050    12,350     8,425     4,781
RE Operating Subsidy                       3,450     3,166     2,988     3,583     3,611
Subtotal RE Support                      20,446    25,216    15,338    12,008     8,392
Total Uses                               107,449    77,646    83,374    73,242    73,780
LEVY SOURCES
Available Balance                          48,000    14,051     9,905        31       289
Annual levy                              73,500    73,500    73,500    73,500    73,500
Total Sources                            121,500    87,551    83,405    73,531    73,789
Projected Ending Fund Balance             14,051     9,905        31       289         9 
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Changes since last year
Changes reflected in levy update
Projected environmental mitigation expenditures have increased as
projects move forward in scoping and review process
Real Estate needs have increased
Capital spending plan
Better estimates on deferred maintenance
Potential needs/changes not yet fully incorporated  pending further
Commission discussion and direction
SR99 tunnel contribution
South Park Bridge
Additional environmental expenditures


10

Preliminary 2011-2015 Tax Levy Forecast
$'000                                                      2011       2012       2013       2014       2015
LEVY USES
G.O. DS - existing                                            40,438     40,442            40,444     40,442     30,746
Other uses
Roads and Transportation Projects                           9,100      5,050        600        -          -
School Construction & Noise Insulation                        650      7,160      3,028      1,094              -
Sea & RE Environmental expenditures - preliminary         11,559     23,985           18,348      3,952          10,009
Transportation & Infrastructure Fund                                                                      4,000 
PortJobs                                                    46         46         46         46           46 
Subtotal Other                                          21,355     36,241           22,022      5,092          14,055
Real Estate Support
RE Capital Total                                              20,357     20,477            12,109     11,455     11,395
RE Operating Subsidy                                      5,372      5,312      5,707      5,175           5,086 
Subtotal RE Support                                      25,729     25,789           17,816     16,630     16,481
Total Uses                                                87,521    102,472     80,281     62,164     61,282
LEVY SOURCES
Beginning Tax Levy Fund Balance                        26,634     12,613          (16,359)   (23,140)           (11,805) 
Rail Corridor reimbursements
less repayment of GF loan
Annual levy                                           73,500     73,500           73,500     73,500     73,500
Total uses                                                (87,521)   (102,472)             (80,281)    (62,164)            (61,282) 
Projected Ending Tax Levy Balance                         12,613    (16,359)   (23,140)    (11,805)               413
Transportation & Infrastructure Fund Balance               13,000     13,000            13,000     13,000     17,000

11

Policy Discussion

Currently forecasted levy uses exceed sources assuming continued flat
dollar amount
Options include increasing future levy and/or reducing spending
Near-term decisions:
Levy amount for 2011 and direction regarding 5-yr planning
assumptions




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