Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8G
ACTION ITEM
Date of Meeting
January 24th, 2023
DATE: December 6th, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Mike Tasker, AVM Director
Eric Schaefer, AVM Senior Manager
Daniel Alter, AVM Manager
SUBJECT: Increase Authorization for Airfield Snow Equipment Replacement CIP 801227
Amount of this request:
$3,000,000.00
Total estimated project cost:
$11,620,000.00
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) increase project budget by
$3,000,000 and (2) execute contracts to purchase four (4) additional pieces of snow removal
equipment to project 106225 under CIP 801227. This request increases the project 106225
from $8,620,000 to $11,620,000.
EXECUTIVE SUMMARY
If approved the increased scope would replace four additional pieces of snow removal
equipment (SRE) that are model year 2008. This SRE was initially scheduled for replacement in
2025. Approving this request would allow replacement to arrive in 2024 while utilizing all AIP
entitlement funding available. This approval would increase procurement from (11) to (15)
pieces of SRE and increase the cost from $8,620,000 to $11,620,000. AIP entitlement funds
would contribute up to $4M towards the total project cost of up to $11,620,000 for SRE.
Utilizing AIP entitlement funds would reduce the Port’s total expenditure from $8,620,000 to
$7,620,000.
Currently, (SRE) replacement is approved for $8,620,000 to procure eleven (11) pieces of snow
removal equipment under CIP 801227. The Airport’s SRE renewal and replacement plan
includes the acquisition of (11) assets in 2022 and four (4) replacement snow brooms in 2025.
Since initial authorization, the Airport has identified sufficient Airport Improvement Program
(AIP) entitlement grants to pay the local share of the 2022 and 2025 acquisitions. To receive a
grant, the Airport will be required to submit all technical specifications, procurement
documents, and the bid outcome to the FAA prior to a grant offer. This request accelerates the
COMMISSION AGENDA – Action Item No. 8g Page 2 of 5
Meeting Date: January 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
SRE renewal and replacement plan so that the 2022 and 2025 acquisitions may be procured
simultaneously.
JUSTIFICATION
Approving this request would utilize AIP funds and allow us to replace existing equipment one
year earlier by replacing (4) broom systems for the snow removal team.
AIP entitlement funds are currently unallocated due to Covid delays around other projects
around the airport. Previous planned AIP entitlement funds need to be allocated to match up
with what was submitted on our plan.
The equipment being replaced are model year 2008 and should be replaced due to age and
productivity of the machines. If approved the MB brooms replaced would be over 16 years old.
These procurements would allow the Port to utilize AIP entitlement funds, which can cover up
to 75% of the acquisition cost which will be up to $4,065,000.
All equipment will run on renewable diesel which follows the Fleet Sustainability guidelines and
aligns the port to meet Century Agenda goals related to emissions standards while minimizing
total cost of ownership.
Diversity in Contracting
Due to the limited availability of WMBE businesses able to support this procurement, no WMBE
goal has been established. However, the Diversity in Contracting department along with the
project team will continue to outreach and notify firms of this procurement opportunity.
DETAILS
If authorized this increases the project to add four (4) snow brooms and $3,000,000.
Schedule
Activity
Commission authorization
2023 Quarter 1
Procurement
2023 Quarter 2
Equipment Arrives
2024 Quarter 2
In-use date
2024 Quarter 3
COMMISSION AGENDA – Action Item No. 8g Page 3 of 5
Meeting Date: January 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do Not Increase Authorization
Cost Implications: No change.
Pros:
(1) No change to the capital budget.
(2) Could still utilize $1,700,00 AIP entitlement funds.
Cons:
(1) Would not maximize use of AIP entitlement funds on ageing equipment that is near
end of life. There’s a risk that the Port will return these entitlement funds to the FAA.
(2) More snow equipment would be requested in 2023, requiring another authorization
and procurement.
(3) More revenue bond issuance would be needed to procure equipment.
This is not the recommended alternative.
Alternative 2 – Increase procurement authorization by two (2) pieces of snow removal
equipment and $1,500,000.
Pros:
(1) Two (2) pieces of snow removal equipment would be procured a year ahead of
replacement plan allowing for improved equipment earlier replacement of broom.
(2) Could utilize $2,900,000 AIP entitlement funds.
Cons:
(1) Would not maximize use of AIP entitlement funds on ageing equipment that is near
end of life. There’s a risk that the Port will return these entitlement funds to the FAA.
(2) More revenue bond issuance would be needed to procure equipment.
This is not the recommended alternative.
Alternative 3 – Increase procurement authorization by four (4) pieces of snow removal
equipment and $3,000,000.
Cost Implications: Increased project spend of $3,000,000 to increase possible spending from
$8,620,000 to $11,620,000. With this change AIP entitlement funds could cover up to
$4,065,000.
Pros:
(1) Four (4) pieces of snow removal equipment would be procured a year ahead of
replacement plan allowing for improved equipment earlier replacement of broom.
(2) Airline rate base decreased by $2,400,000.
(3) Procuring equipment one year ahead of schedule will save inflation cost increases
estimated at 6%.
COMMISSION AGENDA – Action Item No. 8g Page 4 of 5
Meeting Date: January 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) Procuring (4) broom systems a year ahead of schedule may require the equipment to be
replaced a year earlier when needed.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$8,620,000
$0
$8,620,000
Current change
$3,000,000
$0
$3,000,000
Revised estimate
$11,620,000
$0
$11,620,000
AUTHORIZATION
Previous authorizations
$8,620,000
$0
$8,620,000
Current request for authorization
$3,000,000
$0
$3,000,000
Total authorizations, including this request
$11,620,000
$0
$11,620,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project, CIP 801227, was included in the 2023-2027 capital budget and plan of finance with
a budget of $8,620,000. A budget increase of $3,000,000 was transferred from the from the
Aeronautical Allowance CIP C800753 resulting in no net change to the Airport capital budget.
The funding sources would be grants, airport development fund and revenue bond. The Airport
Improvement Plan entitlement grant funding is estimated at $4,065,000.
Aviation Maintenance does not anticipate any significant increase in operating expense because
of this procurement. The total number of pieces of equipment will be like the existing fleet.
Financial Analysis and Summary
Project cost for analysis
$11,620,000 (rate base cost of $7,555,000)
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
$.05 in 2024
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
COMMISSION AGENDA – Action Item No. 8g Page 5 of 5
Meeting Date: January 24, 2023
Template revised June 27, 2019 (Diversity in Contracting).
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
March 8th, 2022 – The Commission authorized Airfield Snow Equipment Replacement CIP
801227
