Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8d
ACTION ITEM
Date of Meeting
March 8, 2022
DATE: February 25, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Wayne Grotheer, Director - Aviation Project Management
Wendy Reiter, Director - Aviation Security
SUBJECT: Employee Services Center Budget Request (CIP# C800934)
Amount of this request:
$1,309,000
Total estimated project cost:
$11,675,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to authorize an additional
$1,309,000 for a total project authorization of $11,675,000 for the Employee Services Center
project at Seattle-Tacoma International Airport.
EXECUTIVE SUMMARY
Commission authorized construction of this project in October 2020. Since that time the project,
now under construction, has faced cost increases beyond its budget and now requires additional
budget to complete.
Project cost increases are attributed to several factors including a temporary relocation cost
increase, varying site conditions and WELL Certification.
This project is constructing a new “Employee Services Center” which will include credentialing,
training, and employee parking transaction services in a “one-stop shop” services center for all
employees at Seattle-Tacoma International Airport (Airport). To form the new Center this project
relocated the Lost and Found office, vacated the Meditation Room, built out a second temporary
space, merged the Credential Center with the Training Office and added a waiting room to reduce
queues and provide a more efficient user experience.
The project will be applying for WELL Building Standard Certification for this new consolidated
office. WELL Certification offers a framework to help improve the health and well-being for
everyone that visits, works in, or experiences this facility. It includes design factors such as
circadian lighting, careful selection of materials with low impact to indoor air quality, and real
COMMISSION AGENDA – Action Item No. 8d Page 2 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
time air quality monitoring. It further includes a means to measure results over time. This is the
first time the Port of Seattle has pursued this environmental certification.
JUSTIFICATION
This request is for additional budget for the Employee Services Center project. After construction
authorization had been received several factors led to cost increases. These include the
temporary relocation of the credentialling and training functions, varying site conditions, and the
need to adapt project processes to include WELL certification. All are described in more detail
below. Additionally, due to Port staffing constraints additional WELL consultant support has been
required.
Diversity in Contracting
There is a nine percent (9%) Women and Minority Business Enterprise {WMBE) goal for this
project’s construction contract. Of the amount paid to date, 59.72% has been paid to WMBE
firms. Note that the prime contractor is an MBE.
DETAILS
This project (C800934) included both the Airport Lost and Found Relocation as well as the
Employee Services Center. The Lost and Found Relocation project opened for use in 2021.
Project cost increases are attributed to several factors:
Temporary relocation cost increase: The first step in starting construction required the relocation
of the existing credentialing and training functions to a temporary space constructed in a former
auditorium space nearby. As the temporary space was being prepared it became apparent that
required features such as security cameras and access control were not included in the design
that had been estimated. Providing these features required additional cost and took time which
delayed the start of construction.
Varying site conditions: As construction started, demolition and abatement activities uncovered
site conditions that were not accounted for in the construction bid documents. Examples include
walls to be demolished that were composed of concrete masonry rather than lightweight steel
framing and steel channels from demolished walls that were imbedded in concrete floors.
Responding to these unforeseen conditions has required additional staff time and exhausted the
budget for construction contingency set up for this purpose.
WELL Certification: The Employee Services Center is in an environment that can be challenging
to work within, located away from access to natural light above a busy and loud Airport security
checkpoint. The WELL Building Standard Certification process is new to the Port and WELL aims
to improve working conditions. As it was the first time a Port project would seek WELL
Certification, the magnitude of the effort required to meet certification goals was not completely
understood as project cost estimates were prepared. The project bid documents required much
COMMISSION AGENDA – Action Item No. 8d Page 3 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
coordination and modification to meet these requirements. Further, a means to track these
requirements had to be developed. A benefit of piloting this certification at the Port through this
project has been realized. Now that this effort has been completed, a model set of documents
has been developed that can serve as templates for future projects seeking WELL certification.
Scope of Work
This project constructs a new Employee Services Center on the mezzanine of the airport. This
center includes offices and workstations, breakrooms, restroom, conference room, and training
room. It also includes a lobby and waiting area. The credentialing and training areas were
temporarily relocated. Regulated materials (including asbestos) within the site are being abated.
The project’s furniture, fixtures, and equipment are being separately procured from the
construction contract.
Schedule
Construction is anticipated to complete, and the facility open for use in Quarter 4 of 2022.
Activity
Construction start
In-use date
Cost Breakdown
This Request
Total Project
Design
$2,137,000
Construction
$9,538,000
Total
$11,675,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
An alternative to take no action was considered but deemed not viable as construction that is
underway would not be completed and would result in partially completed and unusable spaces.
This left the sole alternative to increase the project budget.
Cost Implications: $1,309,000
Pros:
(1) Would allow the project to be completed.
(2) Would complete the Port’s first WELL certified project.
Cons:
(1) Would increase the project budget.
This is the recommended alternative.
COMMISSION AGENDA – Action Item No. 8d Page 4 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
FINANCIAL IMPLICATIONS
The previous changes to the project cost estimate addressed changes to the lost and found
enabling project described as a part of that project’s construction authorization in February 2020.
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$7,264,000
0
$7,264,000
Previous changes – net
$2,035,000
$1,067,000
$3,102,000
Current change
$1,309,000
0
$1,309,000
Revised estimate
$10,608,000
$1,067,000
$11,675,000
AUTHORIZATION
Previous authorizations
$9,299,000
$1,067,000
$10,366,000
Current request for authorization
$1,309,000
0
$1,309,000
Total authorizations, including this request
10,608,000
$1,067,000
$11,675,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project, CIP C800934, was included in the 2022-2026 capital budget and plan of finance with
a budget of $9,299,000. A budget increase of $1,309,000 was transferred from the Aeronautical
Reserve CIP (C800753) resulting in zero net change to the Aviation capital budget. The funding
source will be Airport Development Fund and revenue bonds.
Financial Analysis and Summary
Project cost for analysis
$11,675,000
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
NOI after depreciation will increase due to inclusion of
capital (and operating) costs in airline rate base.
IRR/NPV (if relevant)
N/A
CPE Impact
$0.06 in 2023; $0.02 for 2024 and beyond
Future Revenues and Expenses (Total cost of ownership)
This project will not have significant impacts on annual aviation maintenance operating and
maintenance costs related to mechanical and electrical systems, or custodial services.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
COMMISSION AGENDA – Action Item No. 8d Page 5 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 13, 2020 – The Commission authorized construction of the Employee Services Center
Project
February 11, 2020 – The Commission authorized construction of the Lost and Found
Relocation Project
May 28, 2019 – The Commission authorized design of the Employee Services Center Project
April 23, 2019 – The Commission authorized design of the Lost and Found Relocation Project