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COMMISSION AGENDA MEMORANDUM Item No. 6c ACTION ITEM Date of Meeting July 25, 2017 DATE: July 17, 2017 TO: Dave Soike, Interim Executive Director FROM: Wayne Grotheer, Director, Aviation Project Management Group Michael Ehl, Director, Aviation Operations SUBJECT: Automated Screening Lanes at Seattle-Tacoma International Airport (CIP#C800920) Amount of this request: $17,000,000 Total estimated project cost: $30,000,000 ACTION REQUESTED Request Commission authorization for the Executive Director to (1) proceed with design for automated screening lanes at Seattle-Tacoma International Airport, (2) execute a contract to purchase the screening lane equipment, and (3) use Port crews. This authorization is for $17,000,000 of a total estimated project cost of $30,000,000. EXECUTIVE SUMMARY Passenger loads at Sea-Tac International Airport (SEA) continue to increase and longer security lines at the security checkpoints are one result. This project will make modifications to the passenger screening lanes at the airport's security checkpoints to increase security effectiveness and efficiency and improve the passenger experience. Automated Screening Lanes (ASLs) automate bin conveyance and the screening process at the checkpoint allowing items to move through screening without physical intervention. This past year the Transportation Security Administration (TSA) has been testing ASLs at its national test facility. As this equipment testing is completed, TSA has granted approval for field verification at specific airports around the country. The results of field verification to date have demonstrated that, when properly configured, ASLs have shown a 30 to 40 percent increase in passenger throughput. Increases are achieved primarily through parallel divestment, alarm bag divert for continuous flow and automated bin return. Additional gains can be achieved through centralized/remote screening once approved by TSA in the future. Along with increasing effectiveness and efficiency, security is further enhanced by added cameras and RFID bins allowing the TSA to positively track the items in the screening process. These improvements will benefit the passenger experience at the airport. While this project was not included in the 2017 2021 capital budget and plan of finance, staff recommends authorization at this time so that the initial installation can be completed by Q2 2018. Template revised September 22, 2016. COMMISSION AGENDA Action Item No. 6c Page 2 of 5 July 25, 2017 JUSTIFICATION SEA has seen unprecedented growth in passenger traffic along with unprecedented wait times and space requirements in the Airport's security queues. ASL's have rapidly developed and expanded at other US airports with 25 lanes deployed in 2016 and another 75 planned in 2017. They are demonstrating a measurable increase in passenger throughput. The TSA has now completed testing of two vendors' systems. This is the appropriate time to undertake procurement and installation of ASLs for this airport. With security checkpoint queuing becoming one of the main choke points for passengers at SEA, an ASL conversion will increase checkpoint efficiency, shorten queue lines and improve the overall customer experience. TSA has been a partner in this project though no federal funds are available to pay for it. Both Delta Air Lines and Alaska Airlines also support the installation of these lanes at the airport's security checkpoints. DETAILS This project will upgrade Passenger Security Checkpoints 2, 3 and 5 in a phased approach, one checkpoint at a time, taking security lanes out of service in pairs to install the ASLequipment. The new equipment will be integrated with the existing TSA X-Ray machines. The project will install new electrical and data infrastructure and relocate existing equipment to make room for the new lanes. ASLs are larger than the Airport's existing security checkpoint lanes. Security checkpoints will need to be reconfigured in order for the ASLs to fit. If necessary, new security grills, walls, or doors to provide off-hours closure will be installed. This will be determined during design after procurement of the lanes. Scope of Work Work will include making modifications to the screening lanes to increase security effectiveness and efficiency and improve passenger experience. These components include, but are not limited to, the following: (1) Procure ASLs through a competitive best value procurement (2) Install additional electrical power and data communications for the ASLs (3) Relocate existing checkpoint X-Ray equipment into the ASLs (4) Make revisions to the checkpoint security grills if needed (5) Install new checkpoint enclosure walls if needed Small Business In an effort to maximize small business interest, Port staff will leverage the Port of Seattle's Small Business Generator program (PortGen) to outreach and to provide contracting training to all small and diverse businesses interested in this project. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. 6c Page 3 of 5 July 25, 2017 Schedule Activity Design start Q3 2017 Commission construction authorization Q1 2018 Construction start Q2 2018 First In-use date Q2 2018 Last In-use date Q1 2019 Cost Breakdown This Request Total Project Design $3,800,000 $3,800,000 Procurement $13,200,000 $13,200,000 Construction $0 $13,000,000 Total $17,000,000 $30,000,000 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 Do not install Automated Screening Lanes. Cost Implications: $0 capital. Pros: (1) No capital cost, freeing funds for other uses. Cons: (1) No additional efficiency or throughput at checkpoints (2) Queue lines and congestion will stay similar or increase in size from the current situation (3) As queue lines increase in size, additional queue management may be required in the future (4) This would not achieve the airlines goals of providing a better customer experience This is not the recommended alternative. Alternative 2 Implement only a pilot/demonstration of ASL at one checkpoint Cost Implications: $11,000,000 Pros: (1) Allows us to better understand how the checkpoints may change operationally to better understand the necessary modifications to the entire checkpoint (2) Allows us to understand staffing levels for TSA and how that may affect overall checkpoint staffing Cons: (1) Much slower implementation if you plan to do all lanes later (2) Only provides minimal relief for congestion and queues Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. 6c Page 4 of 5 July 25, 2017 (3) Airlines will not get the added customer experience in the magnitude and timing they are requesting (4) Difficulty in securing the lanes during off hours due to size and length of new lanes This is not the recommended alternative. Alternative 3 Provide ASLs across all checkpoints (in a phased approach) Cost Implications: $30,000,000 Pros: (1) Provides a noticeable improvement in customer experience (2) Faster throughput provides a greater potential to decrease queue lines and congestion (3) Provides Airlines with their requested level of innovation at the checkpoints with increased customer experience Cons: (1) Due to size, new ASLs could create egress and circulation issues which has to be accommodated in the project space planning currently in progress (2) Due to size, new ASLs may require new security walls to be put in place at most checkpoints (similar to checkpoint 5) (3) Highest cost alternative This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate $30,000,000 $0 $30,000,000 AUTHORIZATION Previous authorizations $100,000 0 $100,000 Current request for authorization $17,000,000 0 $17,000,000 Total authorizations, including this request $17,100,000 0 $17,100,000 Remaining amount to be authorized $12,900,000 $0 $12,900,000 Annual Budget Status and Source of Funds The Automated Security Lane (CIP #C800920) was not included in the 2017-2021 capital budget and plan of finance. The budget was transferred from the Aeronautical Allowance (CIP #C800753), resulting in no net change to the capital budget. The funding source for this project will be future revenue bonds. The airlines were briefed at the airport airline affairs committee meeting on July 20, 2017, and a majority-in-interest (MII) vote ballot will be submitted subsequently. Template revised September 22, 2016; format updates October 19, 2016. COMMISSION AGENDA Action Item No. 6c Page 5 of 5 July 25, 2017 The ownership of the screening equipment will be transferred to the TSA. Accordingly, the cost of the equipment will be accounted for as public expense. In the table above, all costs are shown as capital. The assignment of costs to public expense will be refined and updated during design. Financial Analysis and Summary Project cost for analysis $30,000,000 Business Unit (BU) Terminal Building Effect on business performance NOI after depreciation will increase (NOI after depreciation) IRR/NPV (if relevant) N/A CPE Impact $.09 in 2019 Future Revenues and Expenses (Total cost of ownership) There will be no revenue or anticipated expenses to the Port. The ownership of the ASL equipment would be transferred to the TSA for consideration. ADDITIONAL BACKGROUND Checkpoint lines continue to get longer as passenger loads increase at airports nationwide. The TSA and other agencies have been looking for solutions to keep up with the demand. An innovation task force was established to foster innovation by integrating key stakeholders to identify and demonstrate emerging solutions that increase security effectiveness and efficiency, improve passenger experience and the flow of commerce, and deliver solutions that secure the freedom of movement throughout the nation's transportation system. TSA has worked closely with airlines, airport authorities, and vendors to deploy 25 ASLs in 2016 across four large hub airports; Atlanta Hartsfield International Airport, Los Angeles International Airport, Chicago O'Hare International Airport and Newark International Airport. ATTACHMENTS TO THIS REQUEST (1) Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS None Template revised September 22, 2016; format updates October 19, 2016.
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