Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8e
ACTION ITEM
Date of Meeting
August 9, 2022
DATE: July 11, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Dan Hytry, Manager, Mechanical Systems
Mike Tasker, Director, Aviation Maintenance
SUBJECT: Chiller 6 Repairs
Amount of this request:
$500,000
Total Requested project
cost:
$500,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to prepare, advertise, award, and
execute appropriate contract documents to procure Repairs to Chiller 6 in the Central Mechanical
Plant (CMP) at SEA. The agreement would be structured to execute required repairs to Chiller 6,
currently estimated at $500,000.
EXECUTIVE SUMMARY
Chillers provide cold water for the HVAC systems, which in turn provide cool air for critical
equipment, planes, passengers, tenants, and employees throughout SEA. Chiller 6 has failed to
such an extensive level that the existing maintenance contract would not have funding capacity
to effect repairs. It is for this reason that we are asking for specific funding to repair this asset
using Major Construction contracting. In 2021, a quote was prepared for anticipated repairs and
an expense budget line item was requested, and approved, for the 2022 budget in the amount
of $150,000. In early 2022, additional repairs were identified that were not previously accounted
for. The total anticipated cost to repair Chiller 6 has increased substantially to $500,000. There
may still yet be other unknowns with this type of work that won’t truly be discovered until the
asset is disassembled.
JUSTIFICATION
Chiller 6 at SEA has not been operational for approximately two years. This is one of eight chillers
at SEA and provides roughly 10% of total capacity, all of which is critical to passenger comfort.
Having all chillers available allows for resiliency during peak cooling season. In addition, Facilities
& Infrastructure is upgrading the chiller controls on other chillers and Chiller 6 is part of that
COMMISSION AGENDA – Action Item No. _8e_ Page 2 of 4
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
upgrade. This chiller must be operational to complete the project work and is sequenced to be
upgraded last to allow time for repairs on Chiller 6 to be completed.
DIVERSITY IN CONTRACTING
We are working with Diversity in Contracting to determine if a WMBE Aspirational Goal can
should be established.
DETAILS
Scope of work was prepared by F&I to breakdown the specific items needing attention on Chiller
6.
Scope of Work
Disconnect Chiller 6 from operating system and perform breakdown and repairs, servicing or
replacing several faulty components, performing cleaning, replacing seals, bearings and gaskets,
reassemble, charge with refrigerant, test for correct operation, and return to service. Some
components will be sent out for specialty repairs.
Schedule
A new RFP will be issued upon approval of this request.
Activity
Commission design authorization
2022 Q3
Design start
2022 Q3
Commission construction authorization
2022 Q3
Construction starts
2022 Q4
In-use date
2023 Q1
This Request
Total Project
Design
$50,000
$50,000
Construction
$450,000
$450,000
Total
$500,000
$500,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Previously, $150,000 has been approved in the 2022 budget for repairs. We are seeking $500,000
with this request.
Alternative 1 – Do not approve additional funds for the repair of Chiller 6.
Cost Implications: Spend the already approved $150,000 to perform disassembly work on Chiller
6 in efforts to validate the newest quote for repair.
COMMISSION AGENDA – Action Item No. _8e_ Page 3 of 4
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Pros:
• $150,000 has already been approved in the AVM Expense budget for work on Chiller
6. This would be enough to start work, but unfortunately would not be enough to
return the asset to full service. We would be able to disassemble the chiller, confirm
the repairs proposed, perform some level of repairs, calculate the new repair costs
most accurately, and wait for additional funding to complete the work.
Cons:
• By waiting to perform repairs on a protracted schedule, continued atrophy of the
asset will continue. As is, gaskets have already dried up from sitting idle and need to
replace. Some components are rusting from inactivity. Further deterioration will
occur.
• If we wait too long, possibly yet another maintenance contractor will replace the
current maintenance contractor (who is most familiar with the equipment).
• Costs of materials continue to escalate due to supply chain issues and availability.
• Chiller 6 is unable to be utilized for the cooling season (summer). Customers will be
affected by elevated ambient temperatures within SEA and possibly other assets will
be damaged by inadequate cooling.
• We continue to run the other available chillers above maximum capacity, thereby
reducing their lifespan and potentially running them to failure without backup.
This is not the recommended alternative.
Alternative 2 – Replace Chiller 6 in its entirety.
Cost Implications: The cost of a new chiller would be a capital project and run in the millions for
the cost of the asset, costs of design and major construction for installation.
Pros:
• A new asset would operate as a new asset and therefore theoretically be without
operational issues.
Cons:
• Actual costs are unknown but are likely to be in the millions to purchase a new asset.
• Lengthy installation time and disruption to the existing operations at SEA.
• Continued unavailability during the construction/installation timeframe.
• Lack of available cooling to SEA customers and operations.
• Equipment like this is not “on the shelf” and would need to be designed and
manufactured specifically for SEA.
• Compatibility issues with the existing system may be challenging.
This is not the recommended alternative.
Alternative 3 – Approve the requested funds so that we may start work as soon as possible.
COMMISSION AGENDA – Action Item No. _8e_ Page 4 of 4
Meeting Date: August 9, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Cost Implications: Request $500,000 to fix Chiller 6 and return it to service.
Pros:
• The estimated repairs have already been identified, by the manufacturer of the asset.
• Confidence is HIGH on repairs needed.
• Partial funding has already been approved.
• A plan is already in place to proceed with repairs.
Cons:
• This request is for $500,000.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$0
$150,000
$150,000
Current change
$0
$350,000
$350,000
Revised estimate
$0
$500,000
$500,000
AUTHORIZATION
Previous authorizations
$0
$0
$0
Current request for authorization
$0
$500,000
$500,000
Total authorizations, including this request
$0
$500,000
$500,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
Financial Analysis and Summary
Project cost for analysis
Business Unit (BU)
Effect on business performance
(NOI after depreciation)
IRR/NPV (if relevant)
CPE Impact
ATTACHMENTS TO THIS REQUEST
(1) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None