PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6b
Date of Meeting
December 6, 2011
DATE: November 22, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Scott Pattison, Seaport Asset Manager
Anne Porter, Capital Project Manager
SUBJECT: Terminal 18 Pilot Pile Cap Repair and Maintenance Project
(PID #104559)
Amount of This Request: $700,000 Source of Funds: General Fund
Est. State and Local Taxes: $9,000 Est. Construction Jobs Generated: 8
Total Project Cost: $1,000,000
ACTION REQUESTED:
Request authorization for the Chief Executive Officer to proceed with construction of the
Terminal 18 (T-18) Pilot Pile Cap Repair and Maintenance Project (PID #104559) using Port
Construction Services, Maintenance Crews and Small Works Contractors for an additional
estimated cost of $700,000, bringing the total authorized cost of this project to $1,000,000.
Expenditures incurred and payable in 2012 are included in the 2012 Operating Expense Budget.
SYNOPSIS:
This memo requests Commission approval in the amount of $700,000 to undertake and complete
the T-18 Pilot Pile Cap Repair and Maintenance Project (Pilot Project). This Pilot Project is
proposed in order to accomplish needed repair and maintenance and to obtain practical
experience as an aid in implementing future pile cap repairs at T-18 and other marine terminals.
The Pilot Project will provide information essential for future projects with larger scopes of work
as the need arises, including evaluating, planning, designing, permitting and implementing pile
cap maintenance and repair actions for similar port infrastructure and assets. The Commission
was previously briefed on the Pilot Project on May 10, 2011. The Commission approved
increasing the funding for the project to $300,000 for design, permitting and preparation of
construction documents on May 24, 2011. The aforementioned activities are substantially
complete and staff is now prepared to move into the construction phase of work, subject to
approval of this request for authorization. This Pilot Project was not anticipated in the 2011
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
November 22, 2011
Page 2 of 6
Operating Expense Budget and will result in a negative variance in 2011. The 2012 Operating
Expense Budget contemplates expenditures consistent with this Request.
PROJECT JUSTIFICATION:
The Pilot Project will undertake repair and maintenance affecting approximately 270 linear feet
on up to four (4) existing cast-in-place pile cap beams at Terminal 18 as a means of providing
practical guidance to:
1. Understand the extent and rate of deterioration of pile caps within our pier structures;
2. Analyze site conditions and more precisely determine when further repairs are required;
3. Prepare specific design documents and detailed project specifications on future scopes of
work;
4. Identify means to reduce risk to the Port associated with overly conservative or overly
aggressive bids on similar future Major Works contracts;
5. Identify means to reduce cost associated with similar and expanded future pile cap repair and
maintenance actions; and
6. Identify means to perform maintenance and repair actions while minimizing disruption of
cargo operations at marine terminals, avoiding negative impacts on Port tenants and
preserving revenues to the Port.
As a function of this project, these pile caps will be repaired to maintain their structural capacity
and preserve existing revenues.
PROJECT STATEMENT AND OBJECTIVES:
Project Statement:
Conduct a pilot pile cap repair and maintenance project at Terminal 18 for less than
$1,000,000 by the end of 2012.
Project Objectives:
Objectives under the construction phase of the Pilot Project include the following:
Identify effective means for construction access
Accurately estimate material and labor costs under alternative repair methodologies
Refine repair procedures to be more time and cost-efficient
Document repair production rates for various types of repair solutions
Reduce disruption to marine terminal cargo operations
Reduce the cost, time and disruption associated with pile cap repairs anticipated at T-18 and
other terminals in the future.
Determine elements to incorporate into any similar Major Works contracts to increase quality
and decrease cost and impact.
Repair up to four (4) pile caps at T-18 as part of the Pilot Project
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
November 22, 2011
Page 3 of 6
PROJECT SCOPE OF WORK AND SCHEDULE:
Scope of Work:
The repair and maintenance scope of work includes repairing up to four (4) pile caps at T-18.
The Pilot Project’s sample is representative of conditions identified on other pile caps, and
selected alternative repair techniques will be performed to gain field experience with each, which
will be useful when preparing to undertake future, larger, scopes of work to repair and maintain
pile caps at T-18 and other marine terminals. Alternative repair techniques may include any or
each of the following:
Removal of cracked and corrosive concrete from the lower portion of the pile caps
Cleaning the exposed concrete surface
Abatement of corrosion to existing reinforcing steel
Application of bonding agent to existing concrete
Casting or shotcrete application of new concrete or mortar
Epoxy injection
Schedule:
The construction schedule contemplates mobilization to the site in January 2012 and completion
of repairs and demobilization by June 2012. Below is a table reflecting key milestones to date
and targeted through the Pilot Project’s close-out.
Start
Finish
Pre-Design
January 2011
May 2011
Design
June 2011
August 2011
Permits
August 2011
October 2011
Construction
January 2012
May 2012
Project Construction Report
January 2012
June 2012
Project Close-Out
June 2012
July 2012
FINANCIAL IMPLICATIONS:
Budget/Authorization Summary
Original Budget
$50,000
Previous Authorizations
$250,000
Current request for authorization
$700,000
Total Authorizations, including this request
$1,000,000
Remaining budget to be authorized
$0
Total Estimated Project Cost
$1,000,000
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
November 22, 2011
Page 4 of 6
Project Cost Breakdown
Construction
$771,000
Construction Management
$44,000
Design
$106,000
Project Management
$54,000
Permitting
$16,000
State & Local Taxes (estimated)
$9,000
Total
$1,000,000
Source of Funds
The T-18 Pilot Pile Cap Repair Project was not anticipated in the 2011 Operating Expense
Budget. The design and permitting efforts for this project are expected to be completed in 2011
for approximately $100,000 and will create an unfavorable expense variance. This 2011
variance in the Seaport Division has been offset by increased revenue and through expense
reductions in other areas.
Based on the May 24, 2011 Commission action approving $300,000 for design and permitting of
this project, the funding to complete construction on the T-18 pile cap pilot project has been
included in the proposed 2012 Operating Expense Budget in the amount of $700,000. Due to
timing differences in project spending, the current estimated project costs for 2012 is $900,000,
which will create an unfavorable operating expense variance of 200,000 in 2012. The Seaport
Division will again work to find offsets to this unfavorable variance through either increased
revenue or through expense reductions in other areas. There is no anticipated unfavorable
variance in the overall project cost of $1,000,000.
This project will be funded from the General Fund.
Financial Analysis Summary:
CIP Category
N/A
Project Type
Repair (expense project)
Risk adjusted Discount Rate
N/A
Key Risk Factors
Project does not accomplish stated objectives
Cost to construct the pilot exceeds the stated budget
Project is not completed by stated schedule
Project Cost for Analysis
$1,000,000
Business Unit (BU)
Seaport Container Operations
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
November 22, 2011
Page 5 of 6
Effect on Business
Performance
The T-18 Pile Cap Pilot Project has been undertaken to
provide knowledge and experience in order to develop cost
effective approaches for larger scale pile cap repairs at T-18
and other marine terminals.
The impact of this pilot project on Net Operating Income
Before Depreciation is shown below. Depreciation Expense
will not be impacted by this project, as this pilot project is an
operating expense.
IRR/NPV
N/A
ECONOMIC IMPACTS AND BUSINESS PLAN OBJECTIVES:
Proceeding with the construction phase of the Pilot Project will ensure continued use of the
repaired pile cap portions of the terminal by the tenant and preserve existing revenues for the
port.
STRATEGIC OBJECTIVES:
This project supports Seaport Economic Vitality by analyzing and evaluating the service-life
requirements of aging infrastructure assets and implementing repair and maintenance solutions in
a cost-effective manner, while minimizing and avoiding potential disruption of tenant cargo
operations.
ENVIRONMENTAL SUSTAINABILITY AND COMMUNITY BENEFITS:
Project construction will include practices to avoid and minimize potential negative
environmental effects. The pilot project will identify repair and maintenance methods,
materials, and practices for effective under-pier work while avoiding release of deleterious
materials to the environment and reducing the potential for adverse effects on aquatic area
natural resource values.
Timely repair and maintenance extends the service life of existing infrastructure, as an
alternative for avoiding more environmentally disruptive and resource/materials consumptive
large scale structure replacement actions.
TRIPLE BOTTOM LINE:
Extending the useful service life of our existing assets defers eventual replacement costs for a
longer period of time, supporting the economic vitality of our operations.
NOI (in $000's) 2011 2012 TOTAL
Incremental Revenue - - -
Incremental OpExp (100) (900) (1,000)
NOI Before Depreciation ($100) ($900) ($1,000)
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
November 22, 2011
Page 6 of 6
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
1. Conduct a pilot repair and maintenance project and use the results of design, planning and
construction experience to improve efficiency of similar projects in the future, including
cost-effectiveness, schedule, and operational impacts on working terminals. This is the
recommended alternative.
2. Complete major repairs without the benefit of a pilot project. This alternative would reduce a
portion of the costs associated with a stand-alone project and get the work done sooner, thus
avoiding further deterioration and more extensive repairs in the future. Key risks include:
scheduling and performing work in areas beneath existing piers in the intertidal elevations at
low tide; variable productivity rates for differing repair solutions; accurately determining the
extent of repairs based on surveys of damage; and other risks that can be better understood by
performing a pilot project. This alternative was rejected due to the high risk of unknowns for
a full-scale repair project.
3. Monitor the pile cap distress over time and defer the cost of the pilot project and major
repairs until a later date. Further delay is likely to result in costlier repairs in the future as the
rate of deterioration in the pile caps accelerates over time. This alternative was rejected due
to higher anticipated costs, and risks of greater interruptions to terminal cargo operations.
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
Photo of distressed pile cap at Terminal 18
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:
May 10, 2011, the Commission was briefed on this project.
May 24, 2011, the Commission authorized increasing the funding for the project to $300,000
for design, permitting and preparation of construction documents.
