4f memo
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 4f ACTION ITEM Date of Meeting June 24, 2014 DATE: June 16, 2014 TO: Tay Yoshitani, Chief Executive Officer FROM: David Soike, Director, Aviation Facilities and Capital Program Wayne Grotheer, Director, Aviation Project Management Group SUBJECT: Parking Garage Lighting (CIP #C800581) Amount of This Request: $1,243,000 Source of Funds: Airport Development Fund and future Est. Total Project Cost: $6,235,700 revenue bonds Est. State and Local Taxes: $340,000 ACTION REQUESTED Request Commission authorization for the Chief Executive Officer to prepare design and construction bid documents for the Parking Garage Lighting project at Seattle-Tacoma International Airport. This authorization is for $1,243,000 of a total estimated project cost of $6,235,700. SYNOPSIS This project is an energy conservation project that will retrofit all the lights on normal power circuits, on all eight floors in the parking garage. By utilizing new LED lighting technology, energy consumption can be reduced by over 60% while still providing the same lighting levels. In addition, this project will install additional lighting on the first floor and in the fourth floor plaza area to increase light levels and provide a better customer experience. This project was included in the 2014 2018 capital budget and plan of finance. BACKGROUND Lighting technology in the parking garage is over 15 years old. New LED technology enables lighting levels to remain the same while decreasing energy consumption. In 2013, we reduced energy consumption by 60% by retrofitting fixtures on the emergency circuits. This project will retrofit the remaining fixtures in the garage to realize the same energy savings for lights on normal power circuits. Template revised May 30, 2013. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer June 16, 2014 Page 2 of 5 PROJECT JUSTIFICATION AND DETAILS Project Objectives Utilize new lighting technology to reduce energy consumption in the parking garage by over 60% while providing the same lighting levels. Scope of Work Perform full design for all eight floors; Provide additional lights to the first and fourth floors to increase light levels and retrofit existing normal lights through a major construction contract; and Retrofit the existing normal lights on all remaining floors and helices to be performed by Port Maintenance Electricians. Schedule Commission Authorization June 2014 Design June 2014 - May 2015 Construction Major Construction 1st and 4th floor May 2015 - December 2016 Construction Port Maintenance 2017-2019 FINANCIAL IMPLICATIONS Budget/Authorization Summary Capital Expense Total Project Original Budget $5,000,000 $0 $5,000,000 Budget Increase $1,235,700 $0 $1,235,700 Revised Budget $6,235,700 $0 $6,235,700 Previous Authorizations $40,000 $0 $40,000 Current request for authorization $1,243,000 $0 $1,243,000 Total Authorizations, including this request $1,283,000 $0 $1,283,000 Remaining budget to be authorized $4,952,700 $0 $4,952,700 Total Estimated Project Cost $6,235,700 $0 $6,235,700 Project Cost Breakdown This Request Total Project Construction $0 $ 4,347,700 Construction Management $0 $ 265,000 Design $ 979,000 $ 979,000 Project Management $ 283,000 $ 283,000 Permitting $ 21,000 $ 21,000 State & Local Taxes (estimated) $0 $ 340,000 Total $1,283,000 $ 6,235,700 COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer June 16, 2014 Page 3 of 5 Budget Status and Source of Funds This project (C800581) was included in the 2014- 2018 capital budget and plan of finance with a budget of $5.0 million. Upon completion of the notebook, the cost to accomplish the lighting replacement increased by approximately $1,235,700. The budget increased as a result of several factors. First, new scope totaling $334,000 was added to the project to improve light levels on the 4th Floor Plaza area. Second, the original cost estimate did not account for the need to increase light levels on the 1st floor that are necessary to bring that floor up to current building code requirements or the need to replace rather than retrofit the existing 1st floor light fixtures. The additional work on the 1st floor accounts for the remaining $901,700. In addition, scope was added to increase the number of lighting fixtures on the first and fourth floors to achieve the same standard of illumination on the other floors. This will add approximately $704,000 to the cost. The cost increase will be transferred from the Non-Aeronautical allowance CIP, C800405, resulting in no net change to the Airport capital budget. The funding sources will include the Airport Development Fund and future revenue bonds. The Port anticipates issuing revenue bonds in late 2014 or early 2015 to fund multiple projects. Financial Analysis and Summary CIP Category Renewal and Enhancement Project Type Renewal and replacement and customer service Risk adjusted discount rate 7% Key risk factors Low risk Project cost for analysis $5,532,000 (cost excluding additional light fixtures) Business Unit (BU) Landside Effect on business performance When all floors are completed, it is anticipated that annual energy savings will exceed annual depreciation resulting in an increase in NOI. IRR/NPV NPV = $1.2 million, Modified IRR = 11% CPE Impact None The financial analysis is based on the scope and cost of retrofitting lighting fixtures to achieve energy savings (excludes scope and cost for added light fixtures) and assumes a total of $750,000 in incentives and grants are received (see below). Energy savings have been calculat ed using the Tier II rate from Bonneville Power Administration. At the margin, this is the rate that will be in effect in future years if energy savings are not realized. Lifecycle Cost and Savings This project qualifies for $250,000 in Bonneville Power Administration (BPA) conservation incentives and has been awarded a $500,000 grant from Washington State Department of Commerce (DOC). The DOC grant award is assured as long as the project has started construction by June 2015. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer June 16, 2014 Page 4 of 5 It's anticipated that the yearly ongoing O&M costs for the parking garage lighting will decrease beginning in years 2016 2018 as the garage lighting is replaced (phased in) utilizing LED lights. Year 2019 should have only minimal (incidental) O&M costs related to garage lighting. Beginning in 2020, if the Port chooses not to replace the LED retrofit fixtures with a new technology it is anticipated that the Aviation Maintenance department will be experiencing repair and replacement costs ranging from $250K -$466K per year to replace the LED lamps and repair or replace fixtures over a period of approximately nine years. STRATEGIES AND OBJECTIVES This project aligns with the Port's objective to be the greenest, and most energy efficient port in North America by meeting all increased energy needs through conservation and renewable sources. TRIPLE BOTTOM LINE Economic Development The project supports economic development by investing in an upgraded parking garage to serve the public need at the Airport and it helps the environment by reducing energy consumption at the Airport. Environmental Responsibility This project will provide the opportunity to apply environmental sustainability principles primarily through the use of energy-efficient light fixtures. These will reduce the energy use by an estimated 60% while providing more than four times the lamp operating life compared to what is currently installed. Community Benefits This project aligns with the Port's objective to minimize the Airport's environmental impacts and reduce energy demand through conservation while operating a world-class international airport by ensuring safe, secure, and sustainable operations. ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1) Do nothing. Do not implement this project. This is not the recommended alternative because energy will be wasted and the Port may not meet its goal of supplying all new load growth with conservation. Alternative 2) Implementing this project with the best available technology will help the Port reduce energy consumption and supports our Century Agenda goals. This is the recommended alternative. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer June 16, 2014 Page 5 of 5 ATTACHMENTS TO THIS REQUEST None. PREVIOUS COMMISSION ACTIONS OR BRIEFINGS None.
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