COMMISSION AGENDA MEMORANDUM Item No. ACTION ITEM Date of Meeting 8c November 11, 2025 DATE: October 30, 2025 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) - Construction Authorization Amount of this request: Total estimated project cost: $11,056,000 $14,656,000 ACTION REQUESTED Request Commission authorization for the Executive Director to (1) advertise, award, and execute a major-works construction contract for the DA and Condensate System Upgrades project; (2) execute related project change orders, amendments, work authorizations, purchases, contracts, and take other actions necessary to support and deliver the DA and condensate system upgrade project within the approved budget; (3) use Port of Seattle Crews and small works contracts to support construction activities. The amount of this request is $11,056,000 for a 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 all the domestic heating and hot water for the airport terminals. The original plant, along with the Deaerator (DA) and condensate systems, were constructed in 1969-1970. These two systems including tanks, associated piping, and pumping are at or beyond their service life and at risk of failure. This project will replace the DA and condensate tanks and associated equipment to continue to provide domestic hot water and heat to the terminal. JUSTIFICATION The DA and condensate systems 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. Template revised January 10, 2019. COMMISSION AGENDA - Action Item No. __8c__ Meeting Date: November 11, 2025 Page 2 of 5 Diversity in Contracting The design service is using a project specific designer with a diversity in contracting commitment of 19%. The consultant is on track to exceed that commitment with a project utilization of 24%. The WMBE aspirational goal analysis for construction is 5% due to a large percentage of the construction cost being the equipment installed for the project. DETAILS Scope of Work Work will include the demolition of existing obsolete equipment, installation and commissioning of the new equipment, and removal of the old systems. These components include, but are not limited to, the following: (1) Conduct abatement of regulated materials (existing tanks and associated piping are known to be wrapped in asbestos insulation). (2) Remove and dispose of the boiler room air handling unit to create space for the new DA and condensate tanks and equipment. (3) Remove and dispose of the obsolete air compressors and the associated equipment to create space for the new DA and condensate tanks and equipment. (4) Install the new the DA and condensate tanks, piping, and equipment necessary to replace the existing system. (5) Install new feedwater and condensate pumps (6 pumps total). (6) Install new Variable Frequency Drives (VFD's) and controls to improve efficiency. (7) Perform foundation upgrades as required, per new building codes, to support new tanks, equipment, and platform. (8) Construct a platform around the new tanks and a new catwalk platform around the boilers' steam header for ease of maintenance and safety. (9) After the installation and commissioning of the new equipment, remove the obsolete DA and condensate tanks, pumps, piping, the structural platform the tanks are mounted on, and all other out-of-use equipment. Schedule Activity Commission construction authorization Construction start In-use date 2025 Quarter 4 2026 Quarter 2 2028 Quarter 3 Cost Breakdown This Request Total Project Design Construction Total $0 $11,056,000 $11,056,000 $2,850,000 $11,806,000 $14,656,000 Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. __8c__ Meeting Date: November 11, 2025 Page 3 of 5 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 - Defer project to a later date or cancel project. Cost Implications: Expense approximately $2,000,000 for design development costs if project is cancelled. Pros: (1) Cons: (1) (2) (3) Defer major capital investment costs. System failure could occur at any time resulting in large expenses for emergency repairs and shutdowns to restaurants, lounges, and other tenant owned spaces. If a failure occurred, shutdown duration is unknown due to lead times and replacement timeline Potential for additional costs increases for materials and labor due to inflation. This is not the recommended alternative. Alternative 2 - Maintain the full scope of the project and replace the entire DA and condensate systems. Cost Implications: $14,656,000 Pros: (1) (2) (3) (4) Cons: (1) Mitigate the potential for failures that negatively affect the operation of the boiler system that supports heating and hot water for the airport. Improve efficiency over existing systems. Increase reliability and decrease maintenance costs. Mitigate hazardous materials in the Central Mechanical Plant. Large capital expense. This is the recommended alternative. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. __8c__ Meeting Date: November 11, 2025 Page 4 of 5 FINANCIAL IMPLICATIONS Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate Previous changes - net Current change Revised estimate $9,805,000 $14,444,000 0 $14,444,000 $0 $212,000 0 $212,000 $9,805,000 $14,656,000 0 $14,656,000 AUTHORIZATION Previous authorizations Current request for authorization Total authorizations, including this request Remaining amount to be authorized $3,600,000 $10,844,000 $14,444,000 $0 0 $212,000 $212,000 $0 $3,600,000 $11,056,000 $14,656,000 $0 Annual Budget Status and Source of Funds The DA and Condensate System Upgrades C801223 is included in the 2025-2029 capital budget and plan of finance with a budget of $14,656,000. The funding sources are the Airport Development Fund (ADF) and future bonds. Financial Analysis and Summary Project cost for analysis Business Unit (BU) Effect on business performance (NOI after depreciation) IRR/NPV (if relevant) CPE Impact $14,656,000 Terminal Building NOI after depreciation will increase due to inclusion of capital (and operating) costs in airline rate base. N/A $0.04 in 2029 Future Revenues and Expenses (Total cost of ownership) Operation and recurring maintenance costs will be budgeted within the Aviation Maintenance department's operating budget. As a result of this project, Aviation Maintenance may see a small increase in preventative maintenance support. ADDITIONAL BACKGROUND The CIP, C801223, includes two separate work projects, N06480 - DA and Condensate System Upgrades and N10295 - CMP Secondary Air Compressor. N10295 was a precursor to N06480 and installed a second air compressor in May 2025. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. __8c__ Meeting Date: November 11, 2025 Page 5 of 5 ATTACHMENTS TO THIS REQUEST (1) Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS April 18, 2023 - The Commission authorized for the Executive Director to (1) increase the project budget by $4,639,000, for a revised total budget of $14,656,000; (2) design and prepare construction bid documents for the DA and Condensate Project (N06480); (3) prepare and award a construction contract for the CMP Secondary Air Compressor Project (N10295), for a total amount of $3,600,000. Template revised June 27, 2019 (Diversity in Contracting).