Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
8b
ACTION ITEM
Date of Meeting
July 10, 2018
DATE: June 19, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Wayne Grotheer, Director Aviation Project Management
Jeffrey Brown, Director Aviation Facilities and Capital Programs
SUBJECT: Main Terminal Low Voltage System Upgrade (CIP #C800061)
Amount of request:
$22,586,000
Total estimated project cost:
$100,300,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) increase the Main Terminal
Low Voltage System Upgrade (MTLV) project scope and forecasted budget by $79,570,000 for a
revised total estimated project cost of $100,300,000; (2) advertise and execute a professional
services contract for design; (3) advertise and execute a General Contractor, Construction
Manager (GCCM) construction contract and authorize pre-construction services; (4) negotiate
and execute a project labor agreement; (5) utilize Port crews for pre-construction activities and
abatement. This authorization of $22,586,000 brings the total funding authorized to date to
$30,733,000.
EXECUTIVE SUMMARY
The project replaces the Main Terminal Low-Voltage (MTLV) distribution system, which
provides power to every floor of the main terminal and is at the end of its serviceable lifespan.
Since the last commission action in August 2014, the project has completed 30 percent design,
including a full physical inventory and condition assessment of the low voltage distribution
system in the Main Terminal. This early work demonstrated previous project scoping to be
substantially inadequate; as a result, the project has effectively been redeveloped and now
includes the appropriate level of work and associated budget. The cost and scope is divided
among five main areas: additional normal power work, emergency power work, Central
Terminal Power Distribution Load Center replacement, metering upgrades, and minimizing
airport operational disruption through off-shift work. The project will progress by procuring a
designer and a general contractor/construction manager (GCCM) to work together on
construction phasing, operational coordination, and execution. This contracting approach will
help minimize design, construction and operational risks.
COMMISSION AGENDA – Action Item No. _8b___ Page 2 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Today the Main Terminal Low Voltage project team requests Commission approval of funding
to complete the project design and to advertise and execute a contract with a GC/CM. During
design, the Port will negotiate a maximum allowable construction cost (MACC) with the GC/CM.
The MACC determination with the GCCM will occur in 2021.
JUSTIFICATION
The Airport's medium voltage electrical distribution system and power centers (primary
operating voltage levels of 5,000 to 15,000 volts) have all been renewed and replaced within
the last decade. The next phase of the Airport's renewal and replacement program for the
electrical system is the low-voltage system (operating voltage distribution levels of 120 to 600
volts). This infrastructure is critical to airport operations.
Large portions of the existing low-voltage electrical distribution system have reached the end of
their useful operating life, raising concerns over their continued reliability. The useful operating
life of electrical equipment primarily depends on age, with 30 years being a reasonable lifespan.
Some of the equipment included in this project is well over 40 years old. Equipment
maintainability and availability of spare parts are increasing concerns with aging equipment.
Much of the existing equipment is not compliant with the current National Electrical Code
(NEC). There are areas in the low-voltage electrical system where the available fault current
exceeds the current ratings for the existing equipment, thus creating operating and working
condition safety issues. Other safety-related NEC issues exist for these older installations
including dedicated equipment space, working clearances, illumination, identification, and the
need for Underwriters Laboratory (UL) listing of all equipment. The MTLV project will correct all
the issues in this area and bring the installation up to current standards and compliance with
current codes. Having adequate and reliable capacity in the low voltage distribution system is
also critical in supporting deployment of new technologies that can maximize facility
throughput.
The project team explored multiple project delivery methods, strategies, and impact
mitigations. Delivery methods investigated included design-bid-build, design-build, progressive
design-build, and the selected GC/CM. Impact mitigation investigated included tenant
relocation, both in and outside of airport facilities, structured zone wide outages, and use of
Port construction crews to complete the work. The current plan of action helps minimize, as
much as feasible, the risks to operational impacts in construction.
Since authorization in 2014, the project team has completed both 15% and 30% design which
included a full physical inventory and condition assessment of all electrical equipment in the
main terminal. The condition assessment has driven the necessary renewals and project
scoping. The need for these major work elements is detailed below.
COMMISSION AGENDA – Action Item No. _8b___ Page 3 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Normal Power Work
The 2014 action for renewal and replacement approached the Main Terminal Power
Distribution System with a phased concept. The team assumed that only the worst power
distribution panels, roughly 10% or 30 panels, needed immediate replacement. The
comprehensive year-long condition assessment of this system in 2016 established this to be
incorrect. The assessment found that nearly all the panels were in poor and failing condition
due to age and there were many more electrical panels than previously assumed. The project
now includes the replacement of nearly 300 of the 600 electrical panels; these panels are of
similar age and condition and are at a similar risk of failure.
Emergency Power Work
The emergency power distribution system is of similar age, condition and risk of failure as the
normal building power: inadequate working clearance, no replacement parts, etc. In addition,
the emergency power panels are often located in the same electrical closets as the normal
building power which is not permitted per current codes.
Central Terminal Power Distribution Load Center
The Central Terminal Power Center is nearing the end of its useful life and will soon be
enveloped by new baggage conveyance systems making replacement at a future date
exceedingly difficult and costly. It is the only passenger terminal power center that was not
upgraded in the mid 2000’s and is the only power center that is not configured for maximum
reliability.
Energy Metering
Branch circuit metering will allow the Port of Seattle to identify and implement future energy
saving projects to comply with Washington State Energy Code for 2015 as adopted by Port
Resolution 3745.
Regulated Materials
Most of the work locations for this project are in areas where regulated materials are present.
Due to the large geographic areas this project covers, asbestos abatement costs will be
significant and have been estimated at $13,000,000.
DETAILS
Scope of Work
This project covers the renewal and replacement of end of life low-voltage electrical
distribution switchboards, feeders, panels, and tenant metering in the Main Terminal served by
the five Main Terminal Power Distribution Load Centers. The work will be carried out in a
manner that minimizes disruptions to normal airport operations.
Specific Scope Items:
(1) Normal Power renewal, replacement, optimization, and expansion. ($61 million)
COMMISSION AGENDA – Action Item No. _8b___ Page 4 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
(2) Emergency Power renewal, replacement, optimization, and expansion. ($5 million)
(3) Replacement of the Central Terminal Power Distribution Load Center. ($14 million)
(4) Implement branch circuit level energy metering in new work. ($7 million)
(5) Minimize disruption to normal airport operations during construction. (Allocated
Costs)
(6) Abatement of regulated materials as incident to the overall scope. ($13 million)
Small Business
Aviation Project Management has been partnering with the Port’s small business group to
ensure proper outreach to small businesses and those owned by women and minorities (WMBE
firms) ranging from email outreach and presentations, to those businesses that may be
interested in the opportunities this project presents.
Schedule
2019 Quarter 1
2021 Quarter 3
2021 Quarter 4
2025 Quarter 1
Cost Breakdown
This Request
Total Project
Design
$17,107,000
$29,754,000
Construction
$5,479,000*
$70,546,000
Total
$22,586,000
$100,300,000
*Construction costs associated with this request support the GCCM contract during design.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 –Do not replace the main terminal low voltage distribution system
Cost Implications: $2,400,000 (30% design costs to date would be expensed)
Pros:
(1) Defers significant capital spending
Cons:
(1) Renewal and replacement of the system will be deferred.
(2) Continued risk of injury to personnel.
(3) Increased risk of extended unplanned electrical outages.
(4) Future equipment replacement will cost more as a result of escalation.
(5) Increased cost to projects in Main Terminal as individual upgrades are needed.
(6) Existing work will be expensed.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. _8b___ Page 5 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Alternative 2 – Proceed with full replacement scope without branch circuit metering
Cost Implications: $90,300,000
Pros:
(1) Reduced project cost due to removal of branch circuit level metering.
(2) Power distribution system will be replaced in a planned manner.
(3) Increased reliability of normal and emergency power systems.
(4) Outages (planned and unplanned) will be minimized.
(5) Safe work environment for personnel.
(6) Increased capacity for support of future projects.
Cons:
(1) Loss of ability to track detailed energy usage in the Main Terminal.
(2) No added metering for revenue and energy conservation.
(3) Operations must be maintained during construction
This is not the recommended alternative. This alternative is no longer viable due to the
adoption of Port Resolution No. 3745 on February 13, 2018, adopting the 2015 Washington
State Energy Code, which requires metering.
Alternative 3 – Proceed with full scope for design.
Cost Implications: $100,300,000
Pros:
(1) Power distribution system will be replaced in a planned manner.
(2) Increased reliability of normal and emergency power systems.
(3) Outages (planned and unplanned) will be minimized.
(4) Safe work environment for personnel.
(5) Increased capacity for support of future projects.
(6) Detailed metering for revenue and energy conservation.
Cons:
(1) Highest cost alternative
(2) Operations must be maintained during construction.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Anticipated Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$19,640,000
$1,090,000
$20,730,000
Current change
$67,120,000
$12,450,000
$79,570,000
Revised estimate
$86,760,000
$13,540,000
$100,300,000
COMMISSION AGENDA – Action Item No. _8b___ Page 6 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
AUTHORIZATION
Previous authorizations
$7,607,000
$540,000
$8,147,000
Current request for authorization
$22,586,000
$0
$22,586,000
Total authorizations, including this request
$30,193,000
$540,000
$30,733,000
Remaining amount to be authorized
$56,567,000
$13,000,000
$69,567,000
Annual Budget Status and Source of Funds
The Main Terminal South Low Voltage System Upgrade #C800061 is included in the 2018-2022
capital budget and plan of finance with a budget of $19,640,000. The project has completed
scoping and the engineer’s estimate shows an increase in project costs and additional scope.
The capital budget increase of $67,120,000 was transferred from the Aeronautical Allowance
CIP C800753 resulting in no net change to the Airport capital budget. The regulated material
expense will be included the operating budget in the year when the remediation obligated
event occurred. The funding sources will be the Airport Development and future revenue
bonds. This project was presented to the airlines at an Airport Airlines Affairs Committee
meeting on December 7, 2017. The majority-in-interest (MII) ballot was due to the Port on May
14, 2018, and approved the project increase.
Financial Analysis and Summary
Project cost for analysis
$100,300,000
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
NOI after depreciation will increase
IRR/NPV (if relevant)
N/A
CPE Impact
$0.46 in 2023 and 2024 for expense items and $0.25 by
2025 for ongoing capital costs.
Future Revenues and Expenses (Total cost of ownership)
Renovation is expected to reduce future repair costs and increase the power available and
operational availability of the system. The new major assets will include electrical panels,
electrical power distribution load center, and miscellaneous electrical equipment. This
equipment has a useful life-span of thirty years.
ADDITIONAL BACKGROUND
The Main Terminal Low Voltage Upgrade Project was originally approved by the Commission in
June 2007 for design and construction of a limited scope. The project completed its design work
and was shelved in 2009 prior to construction. In 2013 the project was restarted and combined
with two others of identical limited scoping that encompassed the entire main terminal.
Combining the projects and completing the design was approved in August 2014 by the
Commission. Since authorization in 2014 the project team has completed both 15% and 30%
design which included a full physical inventory and condition assessment of all electrical
COMMISSION AGENDA – Action Item No. _8b___ Page 7 of 7
Meeting Date: July 10, 2018
Template revised September 22, 2016; format updates October 19, 2016.
equipment in the main terminal. The condition assessment has driven the needed renewals and
overall project scoping.
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides
(2) Work Area Map
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
June 12, 2018 – The Commission was briefed on the contents of this action.
August 5, 2014 – The Commission approved project consolidation and design.
June 28, 2007 – The Commission approved design and construction of a project which is
much more limited scope and budget and is now included in the larger current effort.