I. Introduction
The purpose of this Report is to present the results of our review of the Port of Seattle's (the "Port") Terminal 18 ("T18") Bond Improvements and certain aspects of the Port's T18 Expansion and Redevelopment Program (the "Program") and to provide our findings regarding:
・ the ability of T18 to generate sufficient annual Pledged Revenues to meet Senior Payments, Debt Service Requirements on the Special Facility Revenue Bonds, 1999 (the "Bonds"), and the annual fund deposit requirements of a bond resolution authorizing the issuance of the Bonds by the Port (the "Resolution")
・ the projected debt service coverage on the Bonds;
・ the constructability and functionality of the proposed expanded T18 based on the preliminary plans and specifications;
・ the status of environmental factors and permit requirements;
・ the reasonableness of the estimated cost of the Bond Improvements; and
・ the reasonableness of the Bond Improvements schedule, project contingency, and construction oversight procedures.
The Bond Improvements are a component of the larger Program being planned and undertaken by the Port. A brief description of the balance of the Program elements is contained in this Report but we have not reviewed and are not commenting on any of the Program elements other than the Bond Improvements, except in our review of the functionality of the completed facility and in our review of the ability of T18 to generate sufficient revenue. Certain terms used throughout this Report are unique to the maritime container trade industry, and have been italicized for the reader's benefit. A list of such terms and their definitions is included as Appendix A at the end of this Report.
II. Assumptions
Black & Veatch Corporation has used and relied upon certain information provided by the Port and other industry experts in this assessment of the Bond Improvements. We believe the information provided is true and correct, and reasonable for the purposes of this Report. In preparing this Report and the opinions presented herein, we have made certain assumptions with respect to conditions which may exist, or events which may occur in the future . We believe that the use of this information and assumptions is reasonable for purposes of this Report. However, some events may occur or circumstances change, which cannot be foreseen or controlled by Black & Veatch Corporation, and which may render our assumptions incorrect. To the extent that actual future conditions differ from those assumed herein or provided to Black & Veatch Corporation by others, the actual results will differ from those that have been forecast in this Report. This Report summarizes Black & Veatch Corporation's assessment of the Bond Improvements as of the date of this Report.
Throughout this Report, we have stated assumptions and reported information provided by others, all of which were relied upon in the development of the findings of this Report. Following is a summary of principal considerations and assumptions made by Black & Veatch Corporation in reaching our findings as presented in this Report:
・ We have made no determination as to the validity and enforceability of any contract, agreement, rule, or regulation applicable to the Bond Improvements, Terminal 18, or its operations, and have not reviewed or been provided opinions. Therefore, for purposes of this Report; we have assumed that all such contracts, agreements, rules, and regulations will be fully enforceable in accordance with their terms and that all parties will comply with the provisions of their respective agreements.
・ Appropriate insurance coverage, to protect the parties, will be maintained throughout the construction of the Bond Improvements.
・ All improvements related to T18, but not a part of the Bond Improvements, will be designed, constructed and put into service as planned without impeding the Bond Improvements.
・ Agreements for utility services, land leases, permits and other rights of way will remain in effect over the term of the Bonds.
・ Railroad agreements to serve and store intermodal trains will be in place at the time of financing and will remain in place over the term of the Bonds.
