COMMISSION AGENDA MEMORANDUM ACTION ITEM Item No. Date of Meeting DATE: January 13th, 2024 TO: Stephen P. Metruck, Executive Director FROM: Delmas Whittaker, MM Director Shannon Zink, MM Senior Manager, Fleet and Facilities Levi Clark, MM Fleet and Transportation Manager Shayla Fortin, MM Fleet Asset Project Manager 8n February 11, 2025 SUBJECT: 2025 Maritime and Corporate Fleet Purchases The 2025 Maritime and Corporate Division Fleet Replacement Program is a critical initiative at the Port of Seattle aimed at enhancing operational efficiency and addressing environmental priorities. Aligned with the Maritime Climate and Air Action Plan (MCAAP), this program includes the acquisition of approximately forty (42) fleet assets to replace outdated vehicles across the Maritime Division (C801389) and Corporate Division (C802008). This replacement effort addresses both operational and technological needs and furthers the Port's sustainability goals under the Century Agenda to become the "Greenest, Most Energy Efficient Port in North America." With an estimated project cost of $5,655,000, this program emphasizes safety, functionality, fuel conservation, carbon reduction and air quality improvements. Amount of this request: 2025 Maritime Fleet Replacements 2025 Corporate Fleet Replacements Total estimated project cost: $5,655,000 $4,675,000 $980,000 $5,655,000 ACTION REQUESTED The Marine Maintenance Fleet Team requests Commission authorization for the Executive Director to initiate contracts for acquiring approximately forty-two (42) fleet vehicles or equipment. These acquisitions will not only meet the immediate operational needs of the Maritime and Corporate departments but will also implement advanced safety and environmental standards. Moreover, this acquisition supports the electrification strategy outlined in the MCAAP, the Sustainable Fleet Plan, and the Century Agenda, which collectively Template revised January 10, 2019. COMMISSION AGENDA - Action Item No. 8n Meeting Date: February 11, 2025 Page 2 of 6 prioritize the transition to electric vehicles (EVs) and other alternative fuel sources as part of a comprehensive approach to carbon reduction and air quality improvement. EXECUTIVE SUMMARY The 2025 Maritime and Corporate Division Fleet Replacement Program involves a systematic fleet update, ensuring that the Port's assets meet evolving environmental regulations and technological advancements. All fleet replacements were planned in the 2025 Draft Plan of Finance, aligning with EX-17, Fleet Management Policy, which emphasizes vehicle lifecycle maximization based on usage, maintenance needs, and environmental impacts. This program ensures the use of strategic sourcing and fleet management best practices, which streamline the acquisition process to fulfill operational needs efficiently. Guided by the Maritime Climate and Air Action Plan (MCAAP), this initiative targets goals to reduce greenhouse gas (GHG) emissions, with a 50% reduction by 2030 and an eventual goal of net-zero emissions by 2050. The MCAAP's Fleet Vehicles and Equipment Strategy promotes a shift from fossil fuels to renewable energy sources, with a significant emphasis on electrification. Of the 42 new assets, forty percent (17 assets) are anticipated to be Battery Electric vehicles, enhancing both operational capacity and environmental responsibility. The remaining assets will be procured to use Hybrid engine technology for light-duty to mid-sized equipment (where electrification is not yet available) or utilize Renewable Diesel (R99) if they are Class 6-8 Heavy Duty Assets or Equipment. Alignment with the Maritime Climate and Air Action Plan The MCAAP is the Port of Seattle's comprehensive response to climate change, highlighting specific strategies to address air pollution from maritime sources. It provides a structured pathway to achieve the Northwest Ports Clean Air Strategy (2020) and the Port's Century Agenda targets, including the ambitious goal of net-zero emissions from Port operations by 2040. By prioritizing the reduction of Scope 1 emissions from Port-owned vehicles and equipment, the MCAAP outlines clear actions, such as transitioning to 100% electric vehicles (EVs) by 2040, and supporting renewable diesel use where electrification is not immediately feasible. Specific to the 2025 Fleet Replacement Program:  GHG Emission Reduction: Emission reductions from the program directly contribute to the Century Agenda target to reduce emissions by 50% by 2030. This program is part of a long-term plan to lower emissions associated with Port operations through alternative fuel vehicles, efficient fleet management, and the deployment of renewable energy sources.  Community Health and Equity: Recognizing that emissions from the Port disproportionately affect nearby communities, especially in the Duwamish Valley, the MCAAP integrates equity considerations into its strategies. Reducing diesel particulate matter (DPM) and other pollutants will improve air quality, benefiting public health in these areas and aligning with the Port's commitment to environmental justice. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8n Meeting Date: February 11, 2025  Page 3 of 6 Energy Efficiency and Renewable Energy Use: The MCAAP's strategy includes deploying energy-efficient technologies across fleet assets, and this program prioritizes electrified and alternative fuel vehicles to reduce fossil fuel dependency. Additionally, the installation of solar charging units for EVs addresses energy access in locations without immediate infrastructure, further promoting renewable energy use within the fleet. JUSTIFICATION Established in 2008, Fleet Management Policy EX-17 governs fleet procurement, prioritizing safety, functionality, fuel conservation, and air quality improvements. The 2025 Fleet Replacement Program follows these guidelines, ensuring that new fleet assets replace aging vehicles that are less fuel-efficient and may no longer meet the operational and safety needs of Port staff. The planned acquisitions are consistent with EX-17's objective to fund capital fleet purchases through the Port's budget process, thereby reducing ongoing maintenance costs and minimizing environmental impact. Diversity in Contracting During the procurement process, firms will be notified that may be able to provide the assets, but due to limited opportunities and available firms, no WMBE goal was established. Schedule Commission Authorization Procurement Process Equipment Received Equipment In-Use Date 2025 Quarter 1 2025 Q2 - 2026 Q2 2025 Q3 - 2026 Q3 Varies by Class of Vehicle or by Manufacturer, 2025 Q3 - 2026 Q4 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 - No Action Taken to Procure: This would incur no immediate costs but would result in higher maintenance expenses for aging vehicles. The Port would risk operational delays, particularly as older vehicles fall behind current safety and technological standards. Pros: (1) (2) No Immediate Capital Expenditure: The Port would avoid the upfront costs associated with purchasing new fleet assets, freeing up budget in the short term. Avoidance of Procurement Process: Not acquiring new vehicles would eliminate the need for time and resources spent on bidding, procurement, and contract management. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8n Meeting Date: February 11, 2025 Cons: (1) (2) (3) Page 4 of 6 Increased Maintenance Costs: Aging vehicles typically require more frequent repairs, leading to escalating maintenance expenses that may surpass the cost savings from delaying procurement. Higher Downtime and Operational Delays: Older vehicles are more prone to breakdowns and operational inefficiencies, which could result in unexpected downtime, delayed responses, and reduced service reliability. Continued Use of Non-Renewable Fuel: Delaying the replacement of the obsolete assets would require those assets to continue to consume conventional liquid fuels such as gasoline and diesel. We would not have any renewable fuel offsets and Greenhouse Gas reductions because new electric vehicles, or alternatively fueled assets, would not be procured. This is not the recommended alternative. Alternative 2 - Rent Necessary Equipment as Needed: This approach would reduce maintenance and storage costs; however, rental delays and unpredictable costs would hinder timely response to operational demands, ultimately increasing total expenditures. Pros: (1) (2) Cons: (1) (2) Reduced Maintenance Costs: Renting equipment eliminates the need for ongoing maintenance and repair, as these responsibilities typically fall on the rental provider, reducing maintenance-related expenses. Flexibility to Adjust for Specific Needs: Renting allows the Port to select equipment that precisely matches the requirements of specific projects, providing flexibility to adjust to varying operational demands without committing to permanent assets. Rental Availability Delays: High-demand or specialized equipment may not always be readily available, potentially leading to significant delays in obtaining the necessary equipment and impacting operational timelines. Higher Long-Term Costs: Over extended periods, rental costs can accumulate and ultimately exceed the cost of owning equipment, resulting in higher total expenditures without asset ownership benefits. This is not the recommended alternative. Alternative 3 - Procure the Requested Fleet Assets (Recommended Alternative): This alternative enables the Port to achieve sustainable fleet management, with anticipated savings and Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8n Meeting Date: February 11, 2025 Page 5 of 6 enhanced capacity for rapid response. The 42 new vehicles, including electric and renewable fuel models, align with the MCAAP and reduce long-term environmental and financial costs. Cost Implications: Pros: (1) (2) Cons: (1) (2) Alignment with Environmental Goals: Procuring electric and renewable fuel vehicles aligns with the Maritime Climate and Air Action Plan (MCAAP) and the Century Agenda, supporting the Port's commitment to sustainability and emissions reduction targets. Increased Reliability and Reduced Downtime: New fleet assets are less prone to breakdowns and repairs, providing more consistent performance and lowering the risk of operational disruptions. Significant Upfront Capital Expenditure: Purchasing the fleet assets requires a substantial initial investment, which can impact the Port's short-term budget flexibility. Risk of Technological Obsolescence: As technology in fleet management continues to evolve, there is a risk that some purchased assets may become outdated before the end of their useful life, which could affect their resale value or necessitate earlier replacement. This is the recommended alternative. FINANCIAL IMPLICATIONS The total estimated cost for the 2025 Fleet Replacement Program is $5,655,000, covering both Maritime and Corporate Division needs. Of this, $4,675,000 will fund the Maritime Division (C801389), while $980,000 is allocated for the Corporate Division (C802008), with funding sourced from the General Fund and Airport Development Fund. Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate Previous changes - net Current change Revised estimate $5,655,000 0 0 0 $0 0 0 0 $5,655,000 0 0 0 AUTHORIZATION Previous authorizations Current request for authorization Total authorizations, including this request Remaining amount to be authorized 0 $5,655,000 $5,655,000 $0 0 0 0 $0 0 $5,655,000 $5,655,000 $0 Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8n Meeting Date: February 11, 2025 Page 6 of 6 Annual Budget Status and Source of Funds The 2025 Capital Plan includes: C801389 MD Fleet 2025 with a total cost of $4,675,000. These purchases will be funded by the General Fund. C802008 Engineering/PCS Fleet 2025, with a total cost of $980,000 to be funded by the Airport Development Fund (81.3%) and the General Fund (18.7%). Funding for this CIP was included under C801415 Engineering/PCS Fleet 2024+ in the 2025 Capital Plan. ATTACHMENTS TO THIS REQUEST (1) Presentation slides Template revised June 27, 2019 (Diversity in Contracting).