Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
10c
ACTION ITEM
Date of Meeting
August 9, 2022
DATE: July 29, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Sarah Cox, Director Aviation Environment and Sustainability
Stan Shepherd, Senior Manager Airport Noise Programs
Eileen Francisco, Director Aviation Project Management
SUBJECT: Apartment Sound Insulation Program - Phase 1 Construction Authorization
(CIP #C200096)
Amount of this request:
$40,000,000
Total estimated project cost:
$133,515,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to advertise, award and execute a
major public works contract, include a Project Labor Agreement, and fund construction of phase
1 of the apartment program in an amount not to exceed $40,000,000 of the total apartment
program cost of $133,515,000.
EXECUTIVE SUMMARY
The Sound Insulation Program exists to help reduce community noise impacts caused by aircraft
utilizing the Airport. As part of its long-term commitment to communities surrounding the
Airport, the Port offers sound insulation for eligible properties within the current Federal Aviation
Administration (FAA) Airport Noise Compatibility (Part 150) noise remedy boundary.
Construction work typically includes installation of new Sound Transmission Class (STC) rated
windows, doors, and storm doors, as well as supplemental ventilation to meet the FAA standard
of 45 decibel (dB) Day-Night Average Sound Level (DNL) interior noise that can be achievable with
at least a 5 dB reduction. The program currently has single-family home and condo construction
underway, and this request will allow the Port to commence with the first phase of apartment
construction. The Sound Insulation Program is on-track to complete in accordance with
Commission Motion 2020-04 requiring completion no later than 2026.
This request does not include work associated with condominium buildings, places of worship,
single-family homes, and south Approach Transition Zone (ATZ) voluntary residential acquisition.
COMMISSION AGENDA – Action Item No. _10c___ Page 2 of 6
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Staff will return to Commission to request authorization(s) associated with these items and
subsequent construction authorization(s) at a later date.
JUSTIFICATION
Resolution No. 3683 was adopted by the Commission on October 22, 2013, and included all
recommendations from the Part 150 Study, including sound insulation for eligible structures
within the Noise Remedy Boundary. This authorization will help to meet the requirements of
Resolution No. 3683 to conduct an ongoing Sound Insulation Program (SIP).
In February 2020, the Commission passed Motion 2020-04 to accelerate this work with the goal
of completing work on these programs by the end of 2026. Moving forward with the apartment
sound insulation is critical to compliance with the Motion.
Diversity in Contracting
The apartment program will be partially funded with FAA Airport Improvement Program (AIP)
grants, the Port will follow the United States Department of Transportation’s Disadvantage
Business Enterprise (DBE) program requirements. A DBE goal of 5% has been established for this
project and the DBE Plan will be administered in accordance with 49 CFR Part 26 by the Diversity
in Contracting Department. The DBE goal was calculated from the number of federally certified
DBE firms which perform the scope(s) of work as identified for the project.
DETAILS
This request for construction authorization includes 5 apartment complexes (phase 1) that are
eligible to participate in the program. Staff is planning to return to Commission requesting
construction authorization on additional construction phases of the apartment program.
Under state law, (R.C.W. 53.54.030), any owner who participates in the Program is required to
provide the Port with an Avigation Easement in return for the Port paying the cost of the
improvements. A Subordination Agreement or Consent is required to convey the Avigation
Easement if there is a mortgage, deed of trust, or other lien on the property.
Scope of Work
Typical construction to include:
(1) STC rated solid core doors
(2) STC rated windows
(3) Storm doors
(4) Positive exterior air ventilation
(5) Other associated work as determined to be necessary by the architect to reduce noise
or to meet code
(6) Regulated materials abatement as necessary to facilitate these installations
COMMISSION AGENDA – Action Item No. _10c___ Page 3 of 6
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Schedule
This is a multi-phased design and construction program. Design and construction will proceed
concurrently throughout the duration of the program (2021-2026). The first apartment
construction package will commence with a bid opening in Q4 – 2022 and will be followed by
subsequent design and construction packages until completion. Staff is planning to return to
Commission requesting construction authorization for design packages throughout the duration
of the program. The schedule below shows design and construction of phase 1.
Activity
Commission design authorization
Design start
Construction start
Cost Breakdown
This Request
Total Project
Design
$0
$34,461,000
Construction
$40,000,000
$99,054,000
Total
$40,000,000
$133,515,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Defer phase 1 construction by 2-years to allow for COVID economic recovery with
accelerated project duration
Cost Implications: $144,000,000
Pros:
(1) No Port construction expenditures until 2024
Cons:
(1) Costs would be more expensive in the long term
(2) Delaying the noise remediation program could reduce the Port’s credibility in the
community by not honoring the Port commitments in a timely manner
(3) Would not meet the intent of Commission Motion 2020-04 to accelerate the airport’s
noise mitigation programs prior to 2026
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. _10c___ Page 4 of 6
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 2 – Authorize Sound Insulation Program to commence phase 1 construction for the
Apartment Sound Insulation Program (CIP #C200096)
Cost Implications: $133,515,000
Pros:
(1) Meets commitment to noise remediation in the community per Commission Resolution
3683
(2) Maintains the critical path program schedule to meet the intent of Commission Motion
2020-04 to accelerate the airport’s noise mitigation programs prior to 2026
(3) Allows staff to begin construction of phase 1 of the apartment program
(4) Provides a direct community benefit to reduce aircraft noise impacts to tenants
Cons:
(1) The Port assumes the financial risk for this work if FAA AIP grant funding cannot be
secured
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$133,515,000
$0
$133,515,000
Total Estimated
$133,515,000
$0
$133,515,000
AUTHORIZATION
Previous authorizations
$34,461,000
$0
$34,461,000
Current request for authorization
$40,000,000
$0
$40,000,000
Total authorizations, including this request
$74,461,000
$0
$74,461,000
Remaining amount to be authorized
$59,054,000
$0
$59,054,000
Annual Budget Status and Source of Funds
This project, CIP C200096, was included in the 2022-2026 capital budget and plan of finance with
a budget of $133,515,000. The funding sources would be AIP grants, commercial paper and
revenue bonds. This project received Majority in Interest (MII) support from the airlines on
August 3, 2021.
The capital cost of the entire apartment program is estimated at $133,515,000. The funding plan
projects $69 million of AIP grants from 2022-2029. Therefore, the Rate Base Cost is estimated at
$64,515,000. The Rate Base Impact reflects a 25-year debt service term. Debt service would be
charged as landing fee when each apartment complex construction is substantially completed,
and grants are received.
COMMISSION AGENDA – Action Item No. _10c___ Page 5 of 6
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
There are project risks and uncertainties in the Port’s funding plan; however, the focus is
designed to allow the Port to minimize the airline rate base impacts. Lower costs or reduced
scope (due to ineligibility or owner reluctance to participate), combined with anticipated grants
would further reduce the rate base impacts.
Financial Analysis and Summary
Project cost for analysis
$133,515,000
Business Unit (BU)
Airfield Movement Area
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
$.21 in 2027
Future Revenues and Expenses (Total cost of ownership)
Once the project is complete and the avigation easement is permanently recorded on the parcel,
there will be no further expenses incurred.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
December 3, 2021 – Commission authorized design for the Places of Worship Sound
Insulation Program
August 10, 2021 – Commission briefing on sound insulation programs, acceleration and staff
recommendations
August 10, 2021 – Commission authorized design for the Apartment Sound Insulation
Program
December 15, 2020 – Commission briefing on sound insulation programs, acceleration and
staff recommendations.
December 15, 2020 – Commission authorized consultant services IDIQ contract to provide
sound insulation program development support for single-family homes, apartments, and
places of worship.
February 25, 2020 – Commission briefing on sound insulation programs, acceleration, and
staff recommendations. Motion 2020-04 of the Port of Seattle Commission directing the
acceleration of the sound insulation program at the Airport.
COMMISSION AGENDA – Action Item No. _10c___ Page 6 of 6
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
July 10, 2018 – Commission authorized contracting for Sound Insulation Architect and Project
Oversight Consulting for Condominiums.
October 11, 2016 – Commission authorized contracting for Sound Insulation Architect and
Project Oversight Consulting Services and Job Order Contracting (JOC) for Single-Family
Homes.
October 22, 2013 – Second Reading and Final Passage of Resolution No. 3683 concluding the
Federal Aviation Regulation (FAR) Part 150 Noise and Land Use Compatibility Study
Update for Seattle-Tacoma International Airport.
October 8, 2013 – First Reading of Resolution No. 3683 concluding the Federal Aviation
Regulation (FAR) Part 150 Noise and Land Use Compatibility Study Update for Seattle-
Tacoma International Airport.
April 23, 2013 – The Commission authorized contracting for Sound Insulation Consulting
Services and Job Order Contracting (JOC) for Single-Family Homes.