COMMISSION AGENDA MEMORANDUM Item No. ACTION ITEM Date of Meeting DATE: January 14, 2019 TO: Stephen P. Metruck, Executive Director FROM: Michael Ehl, Director, Aviation Operations Wayne Grotheer, Director, Aviation Project Management Group 6f January 22, 2019 SUBJECT: Parking Garage Elevator Modernization (CIP# C800789) Amount of this request: Total estimated project cost: $4,251,500 $23,276,000 ACTION REQUESTED Request Commission authorization for the Executive Director to (1) prepare design and construction bid documents for Phase 2 of the Parking Garage Elevator Modernization project at Seattle-Tacoma International Airport; and (2) use Port of Seattle crews and small works contracts for preliminary work if required. The amount of this request is $4,251,500. The total estimated project cost is $23,276,000. EXECUTIVE SUMMARY The Seattle-Tacoma International Airport parking garage elevators provide vertical circulation services for millions of airport parking and ground transportation customers every month. Continued and reliable operations of these systems are vitally important to the traveling public as well as Airport operations. Using energy efficient drives and equipment, this project will reduce energy usage in the Airport parking garage by an estimated 56,000 to 211,000 kilowatt hours (kWh) per year. The Airport has developed a renewal and replacement program to ensure thoughtful modernization of all 27 elevators, which vary by age and condition. As a result, the Parking Garage Elevator Modernization project is comprised of two major phases. The first phase, which was approved under a prior authorization, weatherizes the 8th floor parking garage sections PGB and PGC, and eliminates slip/trip hazards in the Section PGB, PGC, PGD, and PGE elevator lobbies on all eight floors. The second phase of the project, which is seeking authorization under this action, will renovate the interior architectural finishes of all elevator cabs and modernize the mechanical and electrical systems as necessary to ensure continued reliable vertical circulation in the Airport Template revised April 12, 2018. COMMISSION AGENDA - Action Item No. __6f__ Meeting Date: January 22, 2019 Page 2 of 6 parking garage. The total estimated cost of this project is $23,276,000 and it is included in the 2019 - 2023 capital budget. JUSTIFICATION This project provides for continued reliable vertical circulation services within the airport parking garage for the next ten plus years while reducing maintenance costs and decreasing energy consumption. Additionally, this project will contribute to the Port's Long Range Plan (LRP, HPO Strategy 1, Objective 1a) to improve customer service. The project replaces worn end-of-life components with new energy efficient systems and extends their useful life. The modernized elevators will use energy efficient regenerative drives that use less energy and produce less waste heat. The total energy savings is estimated at 56,000 to 211,000 kilowatt hours (kWh) per year. This energy reduction represents approximately 0.1 percent of the total airport electrical energy consumption. This project will contribute to the Port's goal to be the greenest and most energy efficient port in North America. DETAILS Scope of Work The elevators located in the parking garage are organized physically into five elevator sections from North to South: PGA, PGB, PGC, PGD, and PGE. Elevator section PGA contains seven elevators, while the remaining four elevator sections PGB, PGC, PGD, and PGE contain five elevators each for a total of 27 elevators. Many of these elevators and associated facilities are over 40 years old and are at the end of their service lives. This second phase of the Parking Garage Elevator Modernization project is comprised of the following project scope: Elevator section PGA was refreshed approximately nine years ago and is still in good mechanical and electrical condition. It will be updated with new architectural finishes only. Elevator sections PGB and PGC are approximately 48 years old, have reached the end of their useful lives, and will receive comprehensive modernization of all components. Elevator sections PGD and PGE were installed approximately 19 years ago and are in generally good mechanical condition. However, the electrical drive systems on all but one of these elevators are at the end of their service life and will be renewed with more energy efficient systems. Diversity in Contracting The project manager will work with the Diversity in Contracting Department to determine participation opportunities and set goals for women and minority business enterprises (WMBE) Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA - Action Item No. __6f__ Meeting Date: January 22, 2019 Page 3 of 6 attainment. These affirmative efforts are in accordance with Resolution No. 3737. Execution of a project labor agreement for this project was approved previously by the Commission. Schedule - Phase 1 Design start Commission construction authorization Construction start In-use date (Core Structures) In-use date (Lobbies) 3rd Quarter 2018 2nd Quarter 2019 3rd Quarter 2019 4th Quarter 2019 4th Quarter 2019 Schedule - Phase 2 Design start Commission construction authorization Construction start In-use date (First Elevator Bank) In-use date (Final Elevator Bank) 2nd Quarter 2019 1st Quarter 2020 1st Quarter 2021 4th Quarter 2021 1st Quarter 2023 Cost Breakdown - Phase 1 This Request Total Work Project $0 $0 $0 $595,000 $2,004,000 $2,599,000 Cost Breakdown - Phase 2 This Request Total Work Project Design Construction Sub-Total $4,251,500 $0 $4,251,500 $4,366,000 $16,311,000 $20,677,000 Combined (Phases 1 & 2) Cost Breakdown This Request Total Project Design Construction Total $4,251,500 $0 $4,251,500 $4,961,000 $18,315,000 $23,276,000 Design Construction Sub-Total ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 - Do not proceed to prepare design and construction bid documents for this project. Cost Implications: An estimated $81,000 in costs to date would need to be expensed if this project is canceled. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA - Action Item No. __6f__ Meeting Date: January 22, 2019 Page 4 of 6 Pros: (1) (2) Does not require capital investment. Does not involve any shutdown of current facilities Cons: (1) (2) (3) This option would result in the facility continuing to deteriorate until potential failures of greater impact and severity occur. Since the parking garage is critical infrastructure and a significant revenue source, a "planned" outage is far more desirable than an "unplanned" outage. The parking garage facility would not experience the energy savings that the replacement systems in the two banks would deliver. This is not the recommended alternative. Alternative 2 - Proceed with the recommended scope but schedule the work to remove only one elevator at a time per bank from service. Cost Implications: $23,866,000 Pros: (1) (2) (3) This option will result in the planned renewal of critical Airport infrastructure and minimize the risk of an "unplanned" outage. Minimizes disruption to customers in the parking garage. The parking garage facility will experience the energy savings that the replacement systems in the two banks will deliver. Cons: (1) (2) Would result in a total construction schedule of approximately seven years. The long construction schedule increases the risk of elevator failure prior to replacement. This is not the recommended alternative. Alternative 3 - Proceed with the recommended scope and allow entire elevator cores to be removed from service to improve the project schedule. Cost Implications: $23,276,000 Pros: (1) (2) This option will result in the planned renewal of critical Airport infrastructure and minimize the risk of an "unplanned" outage. The parking garage facility will experience the energy savings that the replacement systems in the two banks will deliver. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA - Action Item No. __6f__ Meeting Date: January 22, 2019 (3) Page 5 of 6 Minimizes the total construction schedule to approximately two years. Cons: (1) Will result in significant impacts for parking garage customers during construction. This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate Previous changes - net Revised estimate $23,276,000 0 $23,276,000 $0 0 0 $23,276,000 0 $23,276,000 AUTHORIZATION Previous authorizations Current request for authorization Total authorizations, including this request Remaining amount to be authorized $709,500 $4,251,500 $4,961,000 $18,315,000 0 0 0 $0 $709,500 $4,251,500 $4,961,000 $18,315,000 Annual Budget Status and Source of Funds The Parking Garage Elevator Modernization project (#C800789) is included in the 2019-2023 capital budget and plan of finance with a budget of $23,276,000 for all phases. The funding source would be the Airport Development Fund and future revenue bonds. This project is categorized as a non-aeronautical cost center, which does not impact the airline rate base. Financial Analysis and Summary Project cost for analysis Business Unit (BU) Effect on business performance (NOI after depreciation) IRR/NPV (if relevant) CPE Impact $23,276,000 Parking NOI after depreciation will decrease N/A N/A Future Revenues and Expenses (Total cost of ownership) Renovation is expected to reduce future repair costs and increase the operational availability of the system. The estimated useful life will be extended for all 27 elevators located in the parking garage. The new elevators in Sections PGB and PGC (10 elevators total) will have a useful life of Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA - Action Item No. __6f__ Meeting Date: January 22, 2019 Page 6 of 6 approximately 20 years, while the remaining 17 elevators located in Sections PGA, PGD and PGE will have a useful life of 10 years. ATTACHMENTS TO THIS REQUEST (1) Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS May 8, 2018 - The Commission authorized design of WP U00434 (Phase 1) work. Template revised September 22, 2016; format updates October 19, 2016.