Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8b
ACTION ITEM
Date of Meeting
April 18, 2023
DATE: April 6, 2023
TO: Stephen P. Metruck, Executive Director
FROM: Keri Stephens, Director, Aviation Facilities and Capital Programs
Eileen Francisco, Director, Aviation Project Management
SUBJECT: Deaerator (DA) and Condensate System Upgrades (CIP# C801223) –
Design and Construction Authorization
Amount of this request:
$3,500,000
Total estimated project cost:
$14,656,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) increase the project budget
by $4,639,000, for a revised total budget of $14,656,000; (2) execute a professional services
contract for design services; (3) Prepare design and construction bid documents for the
Deaerator and Condensate System upgrade project; (4) Advertise and execute a major works
construction contract for the installation of the secondary air compressor portion of this project;
(5) utilize Port crews for pre-construction activities and abatement. The amount of this request
is $3,500,000 for an estimated total project cost not to exceed $14,656,000.
EXECUTIVE SUMMARY
The Central Mechanical Plant (CMP) uses a campus steam and condensate return system to
provide domestic heating and hot water for the Sea-Tac Airport. The original plant, along with
the Deaerator (DA) and condensate systems, was constructed in 1969-1970. This project will
replace the DA and condensate tanks and associated equipment to continue to provide domestic
hot water and heat to the terminal. Additionally, a second air compressor system in mechanical
room 211 will be installed to serve CMP pneumatic systems required for CMP operation.
Since the preliminary budget was developed three years ago, it has become necessary to add
scope (needed for continuous operations) related to the CMP pneumatic systems and services.
In addition, rising material costs, increased labor rates, and increased abatement scope has
resulted in $4.6 million in additional costs.
COMMISSION AGENDA – Action Item No. 8b Page 2 of 5
Meeting Date: April 18, 2023
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
These DA and condensate systems including the tanks, associated piping, and pumping are at
their end of life and suspected to be near failure due to age and use. Failure of these systems
would render the Airport unable to use the boiler system as designed until they are replaced.
This would result in a lack of hot water for the airport, meaning restaurants and lounges would
no longer be able to operate.
This project will have a potential net energy use reduction. Installing more energy efficient
pumps, variable frequency drives (VFDs), and upgrading the 50-year-old systems should improve
the CMP’s overall efficiency.
Diversity in Contracting
Part of the design services will be completed using an existing IDIQ contract that was established
in 2022 which has a 17% WMBE participation utilization requirement. WMBE goals will be
evaluated for the remaining project specific design services.
DETAILS
Scope of Work
Key elements of this project include:
(1) Add a second air compressor to mechanical room 211 to serve as a backup when the
three Joy air compressors are removed from the CMP.
(2) New backup air compressor to be supplied with emergency power.
(3) Remove and dispose of the Boiler Room air handling unit to allow access to the DA and
condensate tanks and piping.
(4) Remove and dispose of the three Joy air compressors and the associated air dryers and
receivers, to allow access to the DA and condensate tanks and piping.
(5) Remove and replace the DA (1 tank) and Condensate (1 tank) tanks and piping as
required to support the three 30,000 lbs./hour steam boilers and one 40,000 lbs./hour
steam boiler.
(6) Remove and replace the blowdown and flash tank capable of supporting the three
30,000 lbs./hour steam boilers and one 40,000 lbs./hour steam boiler.
(7) Remove and replace the feedwater pumps and piping and condensate pumps (6 pumps
total).
(8) Install three new VFD's and install feedwater controls as required to the three feedwater
pumps.
(9) Install VFD's for the three condensate pumps to improve efficiency.
(10) Relocate (permanently or temporarily) two Siemens DDC Panels (HCP Nodes 10 and
11) located in the project area. The panels were replaced in 2016 and do not need
replacement but they are a physical obstacle. The panels control / interface with the
boiler operating equipment and will need to be evaluated during design for phasing
impacts depending on whether new systems are installed in parallel.
COMMISSION AGENDA – Action Item No. 8b Page 3 of 5
Meeting Date: April 18, 2023
Template revised June 27, 2019 (Diversity in Contracting).
(11) Add level control loop to adjust condensate pump(s) VFD speed.
(12) A temporary system will be required during construction to provide the needed
domestic hot water for ADR and tenants.
(13) Structural upgrades will be required, per new building codes, for the existing elevated
platform that the tanks are mounted on.
(14) Remove and replace the make-up feedwater and water softener.
(15) This project will require abatement (tanks and associated piping are presumed to be
wrapped in asbestos insulation).
Schedule
Commission Design & Construction
Authorization – Secondary Air Compressor
Commission Design Authorization – DA &
Condensate
Commission Construction Authorization– DA
& Condensate
Construction Start – Air Compressor
Construction Start – DA & Condensate Tanks
In-Use Date Air Compressor
In-Use Date – DA & Condensate
Cost Breakdown
This Request
Total Project
Design
$2,750,000
$3,500,000
Construction
$750,000
$10,000,000
Total
$3,500,000
$14,656,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Defer project to a later date or cancel project.
Cost Implications: Expense approximately $40,000 for notebook development costs.
Pros:
(1) Defer major capital investment costs.
Cons:
(1) System failure could occur at any time resulting in large expense costs for emergency
repairs and shutdowns to restaurants, lounges, and other tenant owned spaces.
(2) Potential for additional increase in costs for materials, labor, and/or inflation.
This is not the recommended alternative.
Alternative 2 – Remove secondary air compressor from this project and replace at a later date
with a separate project.
COMMISSION AGENDA – Action Item No. 8b Page 4 of 5
Meeting Date: April 18, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Cost Implications: Capital project investment of an estimated $13.6M for planning, design, and
construction.
Pros:
(1) Shorten overall project schedule.
(2) Defer estimated $1,000,000 for the design and construction of the secondary air
compressor.
Cons:
(1) Single point of failure for the CMP. Proper air compressor operation is critical to CMP
function. Failure of the Air system will be catastrophic to the CMP, and Airport
Operations.
(2) Potential for additional increase in costs for materials, labor, and/or inflation if this
portion of the project is deferred to a later date.
This is not the recommended alternative.
Alternative 3 – Remove and replace the Deaerator (DA) and Condensate tanks in the Central
Mechanical Plant and add a secondary air compressor in Mechanical Room 211.
Cost Implications: Capital project investment of an estimated $14.6M for planning, design, and
construction.
Pros:
(1) Mitigate potential for failures that negatively affect the operation of the boiler system.
(2) Improved efficiency over existing systems.
(3) Increase reliability and decrease maintenance costs.
Cons:
(1) Large capital project investment.
This is the recommended alternative.
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$9,805,000
$0
$9,805,000
Current change
$4,639,000
$212,000
$4,851,000
Revised estimate
$14,444,000
$212,000
$14,656,000
AUTHORIZATION
Previous authorizations
$100,000
$0
$100,000
Current request for authorization
$3,500,000
$0
$3,500,000
COMMISSION AGENDA – Action Item No. 8b Page 5 of 5
Meeting Date: April 18, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Total authorizations, including this request
$3,600,000
$0
$3,600,000
Remaining amount to be authorized
$10,844,000
$212,000
$11,056,000
Annual Budget Status and Source of Funds
This project, C801223, is included in the 2023-2027 capital budget and plan of finance with a
budget of $9,805,000. The capital budget increase of $4,639,000 was transferred from the
Aeronautical Allowance CIP C800753 resulting in no net change to the Airport capital budget. The
funding sources will be the Airport Development Fund and future revenue bonds. This project
was presented to the airlines at an Airport Airlines Affairs Committee and the Majority in Interest
(MII) ballot will be approved on April 10, 2023.
Financial Analysis and Summary
Project cost for analysis
$14,656,000
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
$0.04 in 2028
Future Revenues and Expenses (Total cost of ownership)
As a result of this project, Aviation Maintenance may see a small increase in preventative
maintenance support.
ATTACHMENTS TO THIS REQUEST
(1) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None