Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
6g
ACTION ITEM
Date of Meeting
September 10, 2019
DATE: August 22, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Skip Himes, Director, Marine Maintenance
Tin Nguyen, Sr. Manager, Marine Maintenance
Danny Good, Project Manager III, Marine Maintenance
SUBJECT: Emerson Maintenance Site Budget Amendment (CIP #C800892)
Amount of this request:
$35,000
Total estimated project cost:
$410,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to approve additional funding of
$35,000 to account for costs associated with Environmental Remediation activities during
construction of the Emerson Maintenance Site, for a total project cost not to exceed $410,000.
EXECUTIVE SUMMARY
A new fueling and maintenance site providing support for vehicles and equipment used in
operations at Northern Port properties was constructed in late 2018 / early 2019. During
excavation, petroleum contaminated soil was discovered at the site location. Following this
discovery, extensive effort was undertaken to remove contaminated soil from the site and
replace with new backfill material. Port of Seattle Environmental completed a discovery memo
in March, 2019 documenting findings and potential next steps.
The memo outlines steps taken by Port Environmental to profile the soil, direction provided to
Port Construction Services regarding handling and disposal of the soil, as well as guidance
provided to Marine Maintenance Project Management in regards to what costs would be
eligible for environmental cleanup designation. Upon review of the incremental costs
associated with soil remediation activities and review of policy AC-09, an Environmental
Remediation Liability (ERL) project was created to capture eligible cleanup costs which
exceeded the measurement threshold of $50,000. Due to the high costs associated with ERL
activities, the budgeted project contingency was insufficient to account for total project costs.
JUSTIFICATION
A thorough review of all eligible Environmental Remediation Liability costs associated with the
project resulted in an amount of $68,548.19. Though a $33,000 contingency was budgeted for
COMMISSION AGENDA – Action Item No. _6g_ Page 2 of 4
Meeting Date: September 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
the overall project, the high dollar amount of ERL costs exceeded the budgeted contingency
and will result in a final project cost above the previously Commission approved amount of
$375,000.
Diversity in Contracting
There are no opportunities to include WMBE aspirational goals and inclusion plans in this
request as it is a budget amendment request for combined capital and expense projects in
which construction has been completed.
DETAILS
Scope of Work
The scope of work for this request consists only of the incremental efforts beyond the original
construction scope that were required to complete the tasks included in the Environmental
Remediation Liability project. These tasks and associated costs consist primarily of labor,
equipment and materials required to excavate and replace contaminated soils, including waste
disposal fees. There are no proposed changes in construction design or project deliverables.
Schedule
Environmental Remediation efforts included in this request were ongoing throughout the
excavation phase of construction. Although construction of the capital project was complete at
the end of January, final construction costs and vendor invoicing did not reconcile to the project
in our accounting system until late June. While final construction costs continued to post to the
capital project, a concurrent effort was ongoing to create an ERL expense project to capture
remediation costs. Upon receiving the Environmental Discovery Memo in March, we
determined eligibility of costs per AC-09 and activated a separate ERL expense project in June.
Once the ERL project was created, a final determination was reached that the ERL expense
costs must be included in the total project cost, hence requiring a budget amendment for
Commission approval.
Activity
Commission design authorization
N/A
Design start
2017 Quarter 2
Commission construction authorization
2018 Quarter 3
Construction start
2018 Quarter 4
In-use date
2019 Quarter 1
This Request
Total Project
Design
$0
$0
Construction
$35,000
$410,000
Total
$35,000
$410,000
COMMISSION AGENDA – Action Item No. _6g_ Page 3 of 4
Meeting Date: September 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not approve the Emerson Maintenance Site Budget Amendment
Cost Implications:
A thorough review of all eligible Environmental Remediation Liability costs associated with
construction resulted in an amount of $68,548.19 at completion. The dollar amount of the ERL
expense costs exceeded the current budgeted project contingency of $33,000. This will result
in a final project cost above the previous Commission approved authorization of $375,000. Not
moving forward with this additional Commission authorization will result in a final combined
capital and ERL expense project cost exceeding the current Commission authorization.
This is not the recommended alternative.
Alternative 2 – Approve the Emerson Maintenance Site Budget Amendment
In order to sufficiently cover the costs of both the ERL expense project (WP 105994) and the
Emerson Maintenance Site capital project (WP 105595), additional funding of $35,000 will be
required for a total project authorization of $410,000.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$375,000
$0
$375,000
Current change
-($34,000)
$69,000
$35,000
Revised estimate
$341,000
$69,000
$410,000
AUTHORIZATION
Previous authorizations
$375,000
$0
$375,000
Current request for authorization
-($34,000)
$69,000
$35,000
Total authorizations, including this request
$341,000
$69,000
$410,000
Remaining amount to be authorized
$0
$0
$0
COMMISSION AGENDA – Action Item No. _6g_ Page 4 of 4
Meeting Date: September 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
Annual Budget Status and Source of Funds
Funding for the fueling and maintenance site was included in the 2019 Plan of Finance under
CIP C800892 Maritime Small Projects with a total project cost of $375,000 (design, permitting,
and construction).
The capital portion of the project is funded by the General Fund.
The environmental remediation costs (this request) are funded by the Tax Levy.
ATTACHMENTS TO THIS REQUEST
No attachments
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
July 10, 2018 – The Commission authorized the Executive Director to (1) proceed with
construction of a fueling and vehicle maintenance site for port vehicles at the port-
owned property of 1795 West Emerson Place for a total project cost not to exceed
$375,000, and (2) use port crews to construct the project (CIP #C800892).