PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6a
Date of Meeting
January 25, 2011
DATE: January 18, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: David Soike, Director, Aviation Facilities and Capital Program
Wayne Grotheer, Director, Aviation Project Management Group
Michael Ehl, Director, Aiport Operations
Elizabeth Leavitt, Director, Aviation Planning & Environmental Services
SUBJECT: FIS (Federal Inspection Services) Mid-Term Improvements Phase 1 at Seattle-
Tacoma International Airport (CIP # C800426).
Amount of This Request: $475,000 Source of Funds: Airport Development Fund
State and Local Sales Tax Paid: $0 Jobs Created: N/A
Estimated Maximum Value of Value of Design Contract: $3,500,000
Total Assessment Project Cost: $31,700,000
ACTION REQUESTED:
Request Commission authorization to: 1) proceed with the Federal Inspection Service (FIS)
Mid-Term Improvements Phase 1 project (CIP C-#800426) for planning and pre-design work in
the amount of $475,000 for this project; and 2) execute a contract for design work related to the
FIS Mid-Term Phase 1 Improvement project for an estimated cost of $3,500,000. No funding is
associated with this element of the request. The total estimated project cost for this entire project
is $31,700,000.
SYNOPSIS:
The Airport’s forty-year-old FIS facility has been strained beyond capacity with the increase in
international traffic occurring during peak periods. This increase in international traffic,
important to the region’s economy and the airlines serving the Airport, has resulted in crowding
and waiting conditions unacceptable for a world class international gateway. The Airport is
developing improvements to the FIS in order to better accommodate international passengers and
better promote future international flights to this region. This authorization covers necessary
planning and pre-design work for this FIS project in order to prepare a basis of design that will
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 18, 2011
Page 2 of 6
inform a future project design team of project scope and programming elements and allow for an
efficient and cost effective design development process. In order to perform the pre-design
effort, a service directive to a previously executed terminal development strategy campus
planning services IDIQ will be executed in the amount of $385,000, with an additional $90,000
in Port project management and soft costs, bringing the total request to $475,000.00.
Another element of this authorization will allow execution of a project specific Service
Agreement for design services for the FIS Improvements Phase 1 project. A competitive process
will be used to select the best qualified entity to perform these design services. The estimated
not-to-exceed cost for the contract is $3,500,000. This authorization will only authorize the
execution of the contract. Service Directives for design work will be issued authorizing the
consultant to perform a specified scope of work only after staff has received authorization and
funding for the project in accordance with Port policies and procedures.
BACKGROUND:
The FIS facility at the Airport has been located at the South Satellite since its construction in the
early 1970’s. It is located within the building and provides a means to maintain separation
between international arriving passengers and other travelers until the international arriving
passengers have cleared the customs and immigration screening processes. The facility was
expanded once in the mid-1980s but today it is too small for the volume of international traffic
arriving at peak times. Growth in international passengers using the FIS at Sea-Tac increased by
approximately 8.8% over 2009, and is expected to continue to grow. In order to accommodate
this growth, which is important to the region’s economy, facility improvements are necessary.
PROJECT JUSTIFICATION:
This project will provide critically needed additional capacity for international arriving flights
and necessary asset renewal for the Airport’s 40 year old FIS facility. The FIS facility operation
is currently over capacity even when all scheduled flights arrive on time. When flights are off
schedule resulting in overlapping flight arrivals, congestion is extreme, and from time to time
results in two conditions which are costly and unacceptable to airlines: (1) lack of space to queue
waiting passengers results in their being held on-board the inbound aircraft which can delay the
outbound service; and (2) prolonged wait and process times cause connecting passengers to miss
their domestic flight out of Sea-Tac. Additional international arrivals during the peak will only
exacerbate this situation.
PROJECT SCOPE OF WORK AND SCHEDULE:
Scope of Work:
The first phase of this project will make targeted improvements to several capacity pinchpoints
in the FIS facility: primary immigration inspection, baggage claim, secondary customs/
agriculture inspection, and security checkpoint screening. A second phase will be necessary in
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 18, 2011
Page 3 of 6
the future, which will include passenger flow down stream of the first phase projects, and may
include improvements to the STS trains and other improvements. Separate Commission
authorization will be sought for FIS Mid Term Phase 2 improvements.
Basic structural changes on the primary inspection level of the FIS facility, such as a floor
opening infill, will create space for additional passenger queuing and more booths for Customs
and Border Protection (CBP) officers. The expanded floor space on this level will also
accommodate CBP offices displaced by the project when increased baggage claim capacity is
added. It also provides access to an additional emergency exit for improved lifesafety.
The number of baggage claim devices on the lower level of the FIS facility will be increased
from 4 to 6. Other improvements on this level include a revised layout that will improve
passenger flow through secondary customs/agriculture inspection and security checkpoint
screening. While improvements to the STS train system are not included in the design and
construction scope at this time, detailed planning under the this design contract will assess the
timing for this project and impacts to passengers connecting to other flights.
Schedule:
The project schedule is as follows:
Commission Authorization to Start Pre-Design January 2011
Procure designer start February 2011
Pre-Design complete June 2011
Design start October 2011
Design complete April 2012
Bid advertisement April 2012
Construction start July 2012
Construction complete May 2013
FINANCIAL IMPLICATIONS:
Budget/Authorization Summary:
$21,100,000
$10,600,000
$31,700,000
0
$475,000
$475,000
$31,225,000
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 18, 2011
Page 4 of 6
Budget Status and Source of Funds
This project was included in the 2011-15 capital budget as a business plan prospective project
(CIP # C800426) with a budget of $21.1 million. The budget increase will be transferred from
the Aeronautical New Projects CIP (C800152), thus resulting in no net change in the Aviation
five-year capital budget. The funding source for pre-design and design will be the Airport
Development Fund. Construction will be funded by either the Airport Development Fund or
existing revenue bonds and future revenue bonds as outlined in the plan of finance. A portion of
the planning work, not eligible for capital funding, was included in the 2011 operating budget.
Financial Analysis
CIP Category
Revenue/Capacity Growth
Project Type
Business Expansion
Risk adjusted Discount rate
N/A
Key risk factors
N/A
Project cost for analysis
$31,700,000
Business Unit (BU)
Terminal
Effect on business performance
NOI after depreciation will increase.
IRR/NPV
N/A
CPE Impact
Increase CPE by $0.17 in 2014, but no change
compared to business plan forecast as this project
was included.
Lifecycle Cost and Savings:
The lifecycle cost and savings of this project will be determined as an element of design.
Project Cost Breakdown
This Request
Total Project
Construction costs
0
$21,500,000
Sales tax
0
$ 2,000,000
Outside professional services
$385,000
$ 3,300,000
Aviation PMG and other soft costs
$ 90,000
$ 4,900,000
Total
$475,000
$31,700,000
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 18, 2011
Page 5 of 6
ENVIRONMENT AND SUSTAINABILITY:
This project will contribute to environmental sustainability by reducing the need to hold
passengers on aircraft, minimizing air emissions and energy use. Opportunities for sustainable
design elements will be explored in this project.
STRATEGIC OBJECTIVES:
The project ensures Airport vitality by providing enhanced capacity and asset renewal in our FIS
facility, which benefits our passengers and airline partners.
TRIPLE BOTTOM LINE SUMMARY:
This project will provide tangible benefits to the FIS facility for arriving international passengers
and our airline partners. It will increase capacity to meet immediate and anticipated needs. It
will enhance passenger experience. It will extend the life of the existing facility through some
renewal of aging assets. It will provide economic benefits to the regional ecomony and to our
airline partners by minimizing the need to hold passengers on aircraft and the costly situation of
passengers missing connecting flights.
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
Alternative 1 (Mid-Term Improvements/Phase 1 )
Make mid-term improvements to existing facility that will provide capacity to meet immediate
needs . These improvements can be implemented more quickly and economically than a larger
facility that provides capacity to meet long-term needs. This approach optimizes the capacity of
our existing footprint for FIS at the South Satellite and is viewed by our airline partners as the
best practical solution at this time. This is the recommended alternative.
Alternative 2 (Long-Term Improvements)
Make larger capital investments to our FIS with a new and substantially larger facility that will
provide capacity over a longer time horizon. These improvements would cost substantially more
than the mid-term approach and do not have the support of our airline partners at this time. This
approach would take substantially longer to implement than Alternative 1, forcing us to operate
with the current capacity constraints for a longer period of time and possibly limiting our ability
to attract new international air service. Long-term improvements, which include an expansion of
the FIS at the south satellite, or a second FIS facility will be needed in the future, but is not
justified at this time. This is not the recommended alternative.
Alternative 3 (Do Nothing)
Do nothing results on continued operation with the current capacity constraints and limits our
ability to adequately serve our existing traffic and to attract new international air service. This is
not the recommended alternative.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 18, 2011
Page 6 of 6
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
None.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:
On June 8, 2010, the Commission authorized execution of an IDIQ (Indefinite Delivery
Indefinite Quantity) Service Agreement for Terminal Development Strategy Campus Planning
Services, which included planning for improvements to our FIS facility. The maximum value of
this IDIQ Service Agreement was authorized at $1,300,000.
On February 2, 2010 the Commission was briefed on South Satellite passenger growth and
facility considerations, Delta’s proposed airline lounge and other possible future aviation projects
which included a briefing on FIS.