PORT OF SEATTLE

MEMORANDUM

COMMISSION AGENDA

Item No.

Date of Meeting

October 27, 2009

DATE: September 29, 2009

TO: Tay Yoshitani, Chief Executive Officer

FROM: Michael Ehl, Director, Airport Operations

Paul Grace, Senior Manager, Airport Operations

SUBJECT: Request authorization to procure 29 low-floor, compressed natural gas shuttle

buses for transportation services between the Consolidated Rental Car Facility

and the Main Terminal at Seattle-Tacoma International Airport (Airport).

ACTION REQUESTED

Request Port of Seattle Commission authorization for the Chief Executive Officer to prepare

contract documents, advertise a request for proposals, and procure 29 low-floor, compressed

natural gas (CNG) shuttle buses for the estimated amount of $16,000,000 as a part of the total

Consolidated Rental Car Facility (CRCF) project cost of $419,306,000, bringing the total

authorized amount to $374,371,346

SYNOPSIS

This memorandum requests authorization to advertise for and procure 29 new CNG buses for

passenger transportation between the Main Terminal Baggage Claim/Arrivals level of the

Airport to the Customer Services Building on the 5

Floor of the CRCF. The number of buses

reflects the project goal to purchase a bus fleet with adequate capacity for a minimum of two

years past the spring 2012 opening date of the CRCF. The Commission has previously

authorized $358,371,346 for the following program elements: 1) Construction of the CRCF,

2) Design of Off-Site Roadways, and 3) Design of the Bus Maintenance Facility. This

authorization will increase the project authorization by $16,000,000, for a total authorized

project cost to date of $374,371,346. Future authorization will be requested for construction of

the Off-Site Roads, Bus Maintenance Facility, and Main Terminal Improvements design and

construction.

BACKGROUND

Initial development of the Consolidated Rental Car Facility concept envisioned two alternatives

for transportation service between the Main Terminal and the Customer Service Building:

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 2 of 8

1) Transit-type Shuttle Buses or 2) Automated People Mover. Cost analysis and ridership

projections based on Airport activity levels indicated that the transit-style bus is most cost

effective.

Airport staff determined the magnitude of the bus purchase by combining real-world examples of

rental car shuttle bus operations at other airports with historical rental car data and growth

assumptions for Sea-Tac passenger demand. The analysis utilized the latest Airport passenger

activity forecast from July 2009. The Airport passenger forecast indicates a flat growth rate for

2010 and slight growth in the following years. Rental car passenger demand was forecast to 2014

based on the assumption there is a stable relationship between passenger demand and rental car

transactions. The table below summarizes the passenger forecast used for the fleet sizing analysis.

Year

Growth Rate

MAP* Level

2009

-4.5%

30.7

2010

30.7

2011

31.1

2012

2.5%

31.8

2013

2.7%

32.7

2014

2.7%

33.6

*Note: MAP refers to Million Annual Passengers

Field data for existing rental car shuttle bus operations were collected at the following airports:

Phoenix, Las Vegas, Dallas/Fort Worth, and Baltimore. Dwell times, occupancy and bag counts

were combined with manufactures’ specification data to complete a detailed peak-hour schedule.

Buses were assumed to accommodate 30 passengers per trip. Passengers were assumed to take 5

seconds per person to either board or alight the bus. Distance to the facility is 2 miles and

headways varied from 1 minute during the peak hour to a maximum of 5 minutes during the

lowest traffic (late night) times.

The peak-hour scheduling exercise was extrapolated to future years based on the Airport’s latest

forecast. The extrapolation analysis resulted in a forecasting tool that staff used to determine that

24 buses will be necessary for the new rental car shuttle bus operation. A maintenance factor was

included in the analysis to take into account the number of buses likely to be out of service due to

mechanical or technical problems. Combined with a maintenance rate factor of 20%, the resulting

analysis concluded that 29 buses will be necessary to begin service in March 2012 and provide

enough fleet capacity to operate through at least 2014. As part of the initial purchase, staff intends

to negotiate options for additional buses to meet future passenger activity levels. If necessary,

Port of Seattle employee buses could be utilized on a contingency basis to increase capacity.

Recent conversations with bus manufacturers indicate bus production can range from 12 to 18

months, depending on the order. In the case of this purchase, fit-out activities would occur at the

manufacturer. Examples of the fit-out include application of the exterior bus graphic and

installation of Port of Seattle specific hardware such as digital voice recordings or driver cameras.

Currently, bus delivery is scheduled for the fall of 2011. The analysis above has been shared with

the rental car agencies and has received their support.

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 3 of 8

PROJECT DESCRIPTION/SCOPE OF WORK

Project Statement: Provide CRCF shuttle bus fleet capacity sufficient to meet demand for opening

day of the CRCF plus two years based on the current Airport passenger growth forecast.

Project Objectives: Provide reliable and environmentally friendly transportation service between

the Main Terminal and the CRCF Customer Service Building.

Scope of Work: Procure 29 CNG, low-floor, transit-style buses in a perimeter configuration to

transport a minimum of 30 passengers and their luggage to and from the CRCF. The project will

provide funding for the procurement and fit-out of all buses including mechanical equipment,

interior finishes, exterior finishes, computerized diagnostic systems, and maintenance training.

STRATEGIC OBJECTIVES

The CRCF project, including the requested shuttle buses, supports the Port’s strategy to “Ensure

Airport Vitality” and to “Exhibit Environmental Stewardship through our Actions.” The RCF

program provides a long-term solution for rental car operations at the Airport. The CRCF busing

operation will be supported by a fleet of CNG-powered buses to minimize air emission impacts

caused by combustion equipment.

FINANCIAL IMPLICATIONS

Budget/Authorization Summary

Original Budget

$17,327,000

Budget Increase

Revised Budget

$16,000,000

Previous Authorizations

Current Request for Authorization

$16,000,000

Total Authorizations, Including this Request

$16,000,000

Remaining Budget to be Authorized

$1,327,000

Cost Summary

Description

Unit

Quantity

Unit Cost

Line Total

Total

Bus Purchase

Prepare RFP

$100,000

Bus Purchase Price

$400,000

$11,600,000

Contingency

16%

$1,856,000

Sales Tax

9.5%

$1,278,300

Subtotal

$14,834,000

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 4 of 8

Bus Fit-Out

Bus Fit-Out (Radios, Digital

Voice Player, Cameras, etc.)

$34,000

$986,000

Startup/Training

$180,000

Subtotal

$1,166,000

TOTAL ESTIMATED COST

$16,000,000

Source of Funds

This project was included in the 2009-13 capital budget and plan of finance as a business plan

prospective project. The Customer Facility Charge (CFC) provides 100% of the funding for the

RCF shuttle bus purchase. The requested authorization is consistent with the original budget

developed for the RCF program and consistent with past presentations. Once procured, operation

and maintenance of the fleet will also be covered by CFCs.

Financial Analysis

CIP #

800032

CIP Category

Capacity Growth

Project Type

Business Expansion

Risk-adjusted Discount Rate

N/A

Key Risk Factors

Increased procurement costs due to market

conditions

Project Cost Analysis

$16,000,000

Business Unit

Landside – Rental Cars

IRR/NPV

N/A

CPE Impact

No impact due to CFC funding source

Knowing that a rubber-tire type transit bus solution was necessary, Airport staff, in consultation

with the rental car industry, investigated the life cycle cost impacts and environmental

implications for various fuel types. Three bus types were explored: 1) Clean Diesel,

2) Compressed Natural Gas, and 3) Hybrid Diesel Electric. A total cost of ownership analysis was

conducted using King County Metro records for hybrid and diesel buses and Port of Seattle

records for CNG buses.

Clean Diesel

CNG

Hybrid Diesel Electric

Initial Capital Costs

$315,000

$390,000

$530,000

Annual Maintenance Costs

$17,500

$12,000

$7,500

Annual Fuel Costs

$27,345

$28,037

$24,965

NET PRESENT VALUE

$1,006,772

$1,000,489

$1,011,046

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 5 of 8

The total cost of ownership between all types of bus varied by 1%. This result is inconclusive.

However, given the Port’s familiarity with maintaining CNG buses and the established

environmental benefits associated with natural gas, Port staff recommended CNG-fueled buses for

the CRCF shuttle operation.

ENVIRONMENTAL SUSTAINABILITY/COMMUNITY BENEFITS

Air emissions from vehicles utilizing CNG are significantly lower than versions using gasoline or

diesel. Emission savings include: 35% nitrous oxides, 90% carbon monoxide and particulate

matter, and 25% carbon dioxide in comparison to fossil fuels such as diesel fuel or gasoline.

TRIPLE BOTTOM LINE SUMMARY

This project is budgeted with contingency and is expected to be at or below the authorized

amount. Air quality considerations were a major factor in choosing CNG technology for the bus

purchase. The Port currently operates a fleet of sixteen (16) CNG buses for its Employee Parking

operation and is satisfied with their long life and durability. The buses discussed in this request

will be built with similar material and handling specifications.

PROJECT SCHEDULE

Description/Task Date

Advertise Request for Proposals December 2009

Proposals Due January 2010

Bus Manufacturer Selection January 2010

Negotiations and Execute Contract February 2010

Initial Delivery Fall 2011

Operation March 2012

PREVIOUS COMMISSION ACTION

The following list of previous Commission actions or briefings are only related to the design and

construction of the RCF program and do not include the related property acquisition actions.

 February 9, 1998, the Commission authorized $2,125,000 for the solicitation and execution of

contracts for outside professional services for preparation of project analysis reports (PARs).

The RCF project is one of three projects that undertook the PAR process with a total budget of

$790,000.

 June 27, 2000, the Commission authorized $412,000 to complete post PAR pre-design and

project definition for the RCF project.

 March 27, 2001, the Commission authorized $3,500,000 for the completion of schematic

development for the RCF project.

 July 8, 2004, the Commission was briefed on the status of the RCF program.

 October 12, 2004, the Commission was briefed on the status of the RCF program.

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 6 of 8

 November 9, 2004, the Commission authorized $18,675,000 for the completion of facility

design for the RCF project, and for procurement of a GC/CM for the delivery of the project.

 May 24, 2005, the Commission heard the first reading and on June 14, 2005, the Commission

passed Resolution No. 3542 which imposed a CFC on customers of rental car companies

accessing the Airport for the purposes of financing, designing, constructing, operating, and

maintaining a consolidated RCF and common use transportation equipment and facilities,

which are used to transport customers between the consolidated RCF and other Airport

facilities.

 January 9, 2007, the Commission was briefed on the status of the RCF program.

 February 27, 2007, the Commission authorized $9,210,183, including $6,460,183 in additional

design funding for the RCF program and $2,750,000 for preconstruction services and for

demolition of buildings on the RCF site.

 April 30, 2007, the Commission authorized $1,800,000 for a five-year Cost Advancement

Agreement for technical consulting services to support the Airport rental car concessionaires in

their deliberations with the Airport.

 June 12, 2007, the Commission authorized $870,000 in additional design funding for technical

consulting services to support the Airport Rental Car Concessionaires.

 January 22, 2008, the Commission was briefed on the reassessment of the RCF alternatives

and the status of the RCF program. The Commission imposed a moratorium of undefined

duration on the program.

 February 26, 2008, the Commission deferred action on the project and requested a Project

Management Plan be created.

 March 11, 2008, the Commission authorized $5,000,000, including $850,000 for additional

design funding for the RCF program and $4,150,000 for additional preconstruction services

and for preparation of the RCF site for construction.

 April 22, 2008 the Commission was briefed on the status of the RCF program.

 May 13, 2008, the Commission authorized 1) $3,574,300 in additional design funds for the

RCF program, 2) the award of the GC/CM contract to Turner Construction Company and

$286,500,000 for the construction of the RCF project, and 3) the execution of a change order

in the amount of $1,606,710 for additional construction staff and logistics facilities.

 June 3, 2008 the Commission authorized a Change Order exceeding $200,000 for the RCF

project.

 June 10, 2008, the Commission heard the first reading and on July 1, 2008, the Commission

passed Resolution No. 3599, which amends and restates Resolution 3542 and requires Port

staff to raise the CFC to satisfy all of the obligations of the Bonds.

 June 10, 2008, the Commission heard the first reading and on July 1, 2008, the Commission

passed Resolution No. 3600, which authorized the issuance and sale of special facility CFC

revenue bonds in series in the aggregate principal amount not to exceed $425,000,000 for the

RCF program.

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 7 of 8

 June 24, 2008 the Commission was briefed on the status of the RCF program.

 August 5, 2008 the Commission authorized a Change Order exceeding $200,000 for the RCF

project.

 August 26, 2008 the Commission was briefed on the status of the RCF program.

 September 23, 2008 the Commission was briefed on the status of the RCF program.

 October 21, 2008, the Commission authorized the use of up to $20,000,000 in general Airport

funds to provide temporary funding for the RCF program.

 October 28, 2008 the Commission was briefed on the status of the RCF program.

 November 11, 2008 the Commission was briefed on the status of the RCF program and

authorized $552,000 for the ORI project for design and advance utility relocations.

 December 15, 2008 the Commission authorized the suspension of most work under the

contract for construction of the RCF project for an indefinite period, not to exceed one year.

Design for the BMF and ORI projects would continue.

 January 27, 2009 the Commission was briefed on the status of the RCF program and financial

markets.

 March 5, 2009 the Commission was briefed on the status of the financial markets and financial

plan options for the RCF program.

 May 12, 2009 the Commission was briefed on the proposed financial plan for the RCF

program.

 June 2, 2009, the Commission heard the first reading and on June 9, 2009, the Commission

passed Resolution No. 3619, which authorized the issuance and sale of revenue bonds in the

aggregate principal amount not to exceed $425,000,000 for the RCF program.

 June 2, 2009, the Commission heard the first reading and on June 9, 2009, the Commission

passed Resolution No. 3620, which authorized the issuance and sale of Subordinate Lien

Revenue Bond Anticipation Note in the principal amount not to exceed $100,000,000 for the

RCF program.

 June 2, 2009 the Commission authorized $607,000 for the BMF project for design of the CNG

Fueling Facility and the advance relocation of facilities.

 June 9, 2009, the Commission heard the first reading and on June 23, 2009, the Commission

passed Resolution No. 3621, which authorized the issuance and sale of CFC Revenue Bond

Anticipation Note in the principal amount not to exceed $100,000,000 for the RCF program.

 June 23, 2009 the Commission was briefed on the upcoming action request to lift suspension

and to restart the entire RCF program.

 June 30, 2009 the Commission authorized; 1) lifting the suspension and restarting the entire

RCF program, 2) an additional $591,670 design funds for the Bus Maintenance Facility (BMF)

and Off-Site Roadway Improvements (ORI), 3) an additional $27,826,000 construction funds

for the RCF and Main Terminal Improvements (MTI) projects, 4) executing multiple change

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

September 29, 2009

Page 8 of 8

orders for the suspension/restarts costs and schedule impacts, and 5) a one-time change to

increase the cumulative total of all change orders from 10% to 18% for the RCF GC/CM Total

Construction Contract (TCC).