PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA                      Item No.         6b 
ACTION ITEM 
Date of Meeting   September 10, 2013 
DATE:      August 30, 2013 
TO:         Tay Yoshitani, Chief Executive Officer 
FROM:     Dave Soike, Director, Aviation Facilities and Capital Program 
Wendy Reiter, Director, Aviation Security and Emergency Preparedness 
SUBJECT:   Checked Baggage Recapitalization/Optimization Project Funding (C800612) 

Amount of This Request:         $15,000,000      Source of Funds:   Airport Development
Fund, TSA Federal
Est. Total Project Cost:          $286,000,000 
Funding 
to 
$317,000,000 
Est. State and Local Taxes:          TBD          Est. Jobs Created:      TBD 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to (1) execute an Other
Transaction Agreement (OTA) with the Transportation Security Administration (TSA) for
reimbursable   costs   for   design    and   construction    for   the   Checked   Baggage
Recapitalization/Optimization Project; (2) authorize $15,000,000 to continue from 30% to 100% 
design; and  (3) execute consultant service agreements for program management (including
project management, cost/schedule controls, constructability reviews) support services. The total
multi-phased project cost over approximately ten years is estimated to be $286,000,000 to
$317,000,000. 
SYNOPSIS 
Execution of an OTA with the TSA is the culmination of over a year's coordination between the
TSA and the Port. The two agencies have identified a plan to reconfigure the baggage system to
meet both the TSA's and the Airport's needs. The TSA benefits bymaking its portion of the
baggage system more efficient, reducing maintenance costs, and improving working conditions
(safety and comfort) for federal employees.  The Airport benefits in the long-term by having
created a long-term vision of how the overall baggage system could flexibly grow to meet the
long range capacity of the Airport where the number of enplaned passengers will ultimately
double over the next two to three decades.
The long-term plan to carefully reconfigure the Airport's baggage system  is named
"optimization" infederal terms.  The TSA has committed $93,220,422 toward the optimization
program which will lower TSA annual operating costs while improving the effectiveness of its 

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 2 of 9 
checked baggage security system. The TSA funding will reimburse a significant portion of the
Airport design and construction program over the coming years. It is expected the full TSA
commitment will be expended on the Airport's baggage optimization program.
The total duration for the multi-phased program will be approximately 10 years.  This includes
both the design and construction phases. The design will involve airline input and will be
carefully phased to minimize operational disruption to airline customers.
The airlines will provide a technical representative who will work with the Airport design team
to assure airline input is included within designs, phasing plans, and construction activities. This
optimization project is listed within the proposed airline lease agreement (SLOA III) as preapproved
to a $40 million level to keep design moving forward.  The agreement is nearing
culmination.  Also per the agreement, the Airlines will have an opportunity for majority-ininterest
(MII) vote on the construction project as is typical of major aeronautical projects at the
Airport. 
The TSA commitment of $93,220,422 in federal reimbursement funds will partially defray the
overall cost of the program, which is estimated between $286,000,000 and $317,000,000  A
more accurate cost estimate will be available as design progresses. No construction will begin
until after 100% of the design is completed.  The Airport expects to use the TSA funds over the
next 5 plus years.
TSA's funding is already authorized and appropriated and is held within the existing TSA
budget.  The funds will be available to support this project after Congressional notification.
Congressional notification is an annual process where the TSA provides notice of every project
over $1 million that the TSA plans to fund in the coming years so that Congressional members 
are aware of pending spending within their districts.  The Western Region of TSA includes our
Seattle Airport. This month the Western Region will provide project notices that include various
baggage projects at up to 10 different airports across the western states. The combined value of
those projects may range between $150 to 200 million.  Our Airport is expected to have the
largest commitment of reimbursement funds within the Western Region.
This baggage project was one of several listed within the preliminary business plan presented to
the Commission on August 20, 2013.  Port staff will periodically return to the Commission to
provide  budgeting  and  progress  updates  and  to  request  future  authorizations  of  phased
construction projects as each nears design completion and approaches bidding. 
The following is a breakdown of the OTA and Memorandum of Agreement (MOA):
Agreement                                   Amount 
Recapitalization/Optimization Design OTA                      $ 5,671,476 
Optimization Construction OTA                                $ 80,532,247 
Existing Baggage In-Line Screening MOA                      $ 7,016,699 
Total TSA Federal Reimbursement                     $ 93,220,422

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 3 of 9 
BACKGROUND 
The TSA has near-term challenges with checked baggage handling, and the Airport has both
near-term and long-term challenges. TSA's challenge is imminent and financially driven
because their costs are too high at airports across the country. The TSA financial challenges at
the Airport are driven by three factors:  (1) the Explosive Detection System (EDS) machines,
which were installed after September 11, 2001, are very expensive to maintain and are
approaching the end of their design life so their reliability will soon decrease; (2) the TSA
inspection facilities are spread in six areas across the Airport, which does not allow efficient
staffing; and (3) TSA employee-injury and safe-working-condition issues have arisen due to
existing  work  areas  that  are  confined  and  non-air-conditioned.   These  financially  driven
problems are exacerbated by the continuing federal budget pressures.
The Airport's near-term challenge is that a few of the existing separate baggage handling
systems, that are literally built immediately around the aging EDS machines, are reaching their
operational capacity maximums due to year-over-year passenger growth or because of relocating
large peak baggage loads onto certain systems. While this is important, the Airport's long-term
challenge, which is far more consequential, is that the existing separate baggage systems cannot
be grown to effectively handle the loads that the Airport will have to handle in the future. The
Airport handles 33 million annual passengers (MAP), but it must continue to operate in an
efficient manner all the way to the Airport's maximum capacity of 60 MAP. Twice the baggage
load is a huge stretch for separate systems, some of which are now struggling under current peak
loads. 
The baggage optimization design and construction plan uses the available TSA funding to solve
TSA's near-term problems by aggregating their inspection facilities from six locations to one
under a baggage systems optimization multi-year program.  Optimization makes significant
progress toward building a single baggage processing facility that benefits TSA's short-term
needs and allows the Airport to make great headway toward reconfiguring its baggage system to
effectively allow it to expand efficiently to 45 MAP, and eventually 60 MAP in 25+ years. 
Currently, the Airport baggage system is not a single system, but rather many separate systems
that bags must transfer between. Separate systems were the best way to rapidly increase security
after September 11th, and those separate systems were designed to include a nominal amount of
passenger growth.  In addition, as specific airline needs emerged over the ensuing years, or as
airlines were relocated, the separate systems have been modified to meet the carriers' specific
operating needs. Although various baggage projects have occurred to meet operating needs over
the years, the systems continue to have limited capacity to meet both near- and long-term growth
needs of the Airport overall.
Parts of the Airport baggage system controls and software are aging and certain systems are
experiencing problems at peak loads, such as mis-tracked bags. The Airport has a clear need to
both reinvest in the baggage system to meet current demands, and also to meet medium-term and 
longer-term demands.  Medium-term demands include being able to handle 50 percent more
travelers in a decade and thus grow to 45 MAP.  The work of the 30% design has focused on
preparing designs and associated cost estimates to reach the 45 MAP horizon.  Longer-term
demands include being able to handle nearly 100 percent growth, thus growing to 60 MAP which

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 4 of 9 
is the expected top-end limit of the Airport based on both airfield and landside capacities. The
design has also focused on building in easy growth capability into the plan. Thus, inherent in the
30% design is the ability to reach 60 MAP with minimal changes to the TSA security scanning
and search areas. Published Federal Aviation Administration growth rates indicate the Airport
will reach its top-end limit (maximum operating capacity) sometime between two to three
decades from now.
PROJECT SCOPE OF WORK 
Project Objectives to finalize 30% to 100% design 
Replace TSA EDS equipment that has reached the end of its useful life 
Meet TSA federal mandates for Electronic Baggage Screening Program as identified
under current Programming Guidelines Design Standards (PGDS) version 4.1 
Leverage federal improvements to optimize and reconfigure baggage system to provide
expandable capacity to meet long-term growth needs at the Airport 
Perform full design for all construction projects 
Minimize operational impacts to airline and airport operations 
Incorporate sustainability, including energy efficiency, into designs 
Design Development (30%) to Construction Documents (100%) 
Detailed design drawings refinement 
ROM construction and O&M cost estimates refinements 
Program schedule update 
Updated indication of equipment type 
Provide QA/QC of drawings before issuing to the Port 
70% design submittals (plans and technical specifications) 
Review draft technical specifications 
Confirm drawings are progressing and in compliance with the Port's CAD and AFUS
Standards Manual and the Aviation Consultants' and Contractors' User Guide to the Port
of Seattle's Drafting Standards 
Update design simulation 
Review Port provided 'Regulated Materials Good Faith Surveys' and incorporateinto
documents 
70% design review comment reconciliation with Port stakeholders 
Approval/rejections and submittal comments 
Provide written response to design document review comments and requests for
information within seven (7) calendar days of receipt. 
Interlocal Design Team/TSA meeting  100% design submittals (plans and technical
specifications) 
100% design review comment reconciliation with Port stakeholders 
Approval/rejections  and  submittal  comments:  Provide  written  response  to  design
document review within seven (7) calendar days of receipt. 
Incorporate any changes to 100% design submittals prior to issuance for bid 
Coordinate with Port for construction schedule baseline

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 5 of 9 
Update the expected equipment type and delivery schedule 
Schedule systems integration services from equipment manufacturers/vendors 
Provide input on construction phasing/sequencing 
Provide QA/QC oversight to A/E team for construction documents 
Permit/Pre-Bid/Bid Phase 
Review of permit applications with Airport Building Department 
Provide pre-bid technical assistance 
Attend pre-bid walk through 
Coordinate with Port Engineering for clarification on design/construction phasing 
assumptions 
Provide assistance for compilation of bid documents 
Document field conditions pertaining to the completed design prior to advertisement for
bid using the "Plan in Hand Survey" method 
Coordinate any addenda for bid phase 
Submit a final construction bid estimate one week prior to the advertisement of bids 
Provide timely response through the Port to all questions from potential bidders 
Maintain and provide the Port with a written log of questions from potential bidders and
responses provided from the Consultant 
Prepare addendum or clarification documents and drawings as directed by the Port 
Prepare revised cost estimates associated with addenda or clarifications 
Attend pre-bid conferences and inspection tours if requested by the Port 
Update, monitor, and analyze schedules as needed 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary                Capital        Expense     Total Project 
Original Budget                               $4,850,000       $150,000       $5,000,000 
Previous Authorizations                        $4,850,000       $150,000       $5,000,000 
Current request for authorization                $15,000,000          $0          $15,000,000 
Total Authorizations, including this request     $19,850,000      $150,000      $20,000,000 
Remaining budget to be authorized                TBD           TBD            TBD 
Total Estimated Project Cost               $286,000,000       TBD           TBD 
to
$317,000,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 6 of 9 

Project Cost Breakdown                          This Request           Total Project 
Construction                                            $0                      TBD 
Construction Management                         $500,000                TBD 
Design                                            $12,000,000                TBD 
Project Management                             $2,500,000                TBD 
Permitting                                               $0                      TBD 
State & Local Taxes (estimated)                        TBD                    TBD 
Total                                              $15,000,000           $286,000,000 
to 
$317,000,000 
Budget Status and Source of Funds 
This project, C800612, was not included in the 2013  2017 capital budget and plan of finance
because the TSA had not reviewed and responded to project proposals before annual Airport
budgeting was finalized. The initial $5 million and this additional $15 million will be transferred
from the aeronautical allowance CIP (C800404) resulting in no net change to the 2013  2017
capital budget. The estimated total cost will be incorporated into the 2014 capital plan and plan
of finance. The funding sources will include the Airport Development Fund,  TSA funding
($93,220,422) and future revenue bonds.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 7 of 9 
The TSA is committed to providing the funding noted earlier. That federal funding is already
authorized and appropriated, and it is held within the existing TSA budget.  While the funding
level for our Airport is high, which is a strong indicator of commitment, the TSA is also working
in a similar manner with many other airports to upgrade and consolidate their EDS and employee
areas. The nationwide effort is another indication of the TSA'sstrong commitment to this
national security improvement program.  Our Airport has a long and successful history in
working with the TSA, and in conducting work in a manner to meet federal guidelines in order to
be reimbursed. The Airport recently invoiced the TSA under the current design agreement, and
we have already received reimbursements from the TSA.
Financial Analysis and Summary 
CIP Category                   Renewal/replacement 
Project Type                     Renewal/replacement 
Risk adjusted discount rate       N/A 
Key risk factors                   N/A 
Project cost for analysis           $224 million (total less $93 million from TSA) 
Business Unit (BU)               Terminal, Baggage Handling Systems 
Effect on business performance   N/A 
IRR/NPV                   N/A 
CPE Impact*                  2014: 0.00 
2015: 0.05 
2016: 0.05 
2017: 0.34 
2018: 0.33 
2019: 0.64 
2023: 0.88 
The CPE impact related to Baggage Optimization would be additional, but already budgeted
allowances for future projects may be able to cover much of the CPE impacts depending upon
other future capital project decisions.
Lifecycle Cost and Savings 
Under the optimization program, the number of bag scanning machines would be reduced from
today's 27 EDS at 33 MAPto the following, which would result in reduced energy demand for
conditioned space, mechanical and electrical systems, and power to run the system. Currently,
the projected number of EDS for future growth at the Airport is as follows: 
11 EDS at 45 MAP 
15 EDS at 60 MAP 
STRATEGIES AND OBJECTIVES 
This project supports the Commission's Century Agenda objective of meeting the region's air
transportation needs at the Airport for the next 25 years.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 8 of 9 
TRIPLE BOTTOM LINE 
Economic Development 
Currently, there is a unique opportunity with TSA reimbursing the Airport for $93,220,422: 
This project will modernize Airport baggage systems, allowing the Airport to grow
efficiently and foster business and leisure travel. 
Under optimization, TSA costs are reduced. 
New system under optimization would allow for all airline growth and moves in the
future 
Environmental Responsibility 
Optimization allows for fewer machines, which results in decreases to energy demand at the
Airport. It also allows for opportunities to improve controls and add high efficiency conveyor
components for additional energy savings.  The design will provide opportunities to reduce
Airport lifecycle costs, improve operational efficiency, shorten passenger connecting time
between flights, and minimize energy consumption.
In the past 10 years, the baggage industry has made major strides in energy efficiency and green
technologies. These efficiencies can save upwards of 30 percent in energy consumption. These
energy savings are based on high-efficiency drives, improved belting materials, and smarter
control algorithms.  For example, using variable frequency drives eliminates the use of highmaintenance
clutch brake drive systems for energy and labor savings.  High-efficiency gear
boxes will further decrease energy consumption as well as lengthen replacement intervals further
reducing our environmental footprint.  Smart controls will increase operational efficiency by
starting conveyors and subsystems only when needed.   By using higher efficiency motors,
energy consumption can be reduced by two methods; first by reducing energy consumption with
higher output torques and second by giving the ability to size smaller motors to run larger
conveyor subsystems.
Community Benefits 
Increased reliability and decreases in the instances of missed bags would improve
customer service with the Airlines 
New system under optimization would meet region's transportation needs at Sea-Tacas
the Airport continues to grow 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Proceed with a recapitalization program. This involves replacing existing EDS
equipment with new and adding equipment as necessary without changing baggage conveyance
or configurations. It will result in an additional square footage of the building footprint and
reduction in the number of operating Airline gates. Current baggage throughput and capacity will
remain the same until 45 MAP. This alternative does not meet the post-45 MAP capacity, and in
order to meet additional capacity, an optimization program would need to be enacted.  This is
not the recommended alternative.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
August 30, 2013 
Page 9 of 9 
Alternative 2)  Proceed with an optimization program. The Airport will utilize the available
TSA funding to solve their near-term problems by consolidating their inspection facilities to a
single baggage handling system, which were previously six separate systems.  Optimization
would accommodate the Airport's near and long-term baggage handling systems' challenges, as
well as meeting the anticipated capacity requirements for 45 MAP, and ultimately 60 MAP in
25+ years. This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
August 20, 2013 - The optimization baggage project was one of several listed within
the preliminary Business and Capital Plan briefing on the 2014 budget. 
August 20, 2013 - Commission briefing for follow-up questions and answers on the
baggage optimization program at the Airport 
August 6, 2013 - Commission briefing on the near-term and long-term challenges
related to handling checked baggage at the Airport. 
January 22, 2013  The Commission authorized $5,000,000 for staff to begin design, to
take design to 30%, and to enter into an agreement to allow reimbursement from the
federal government to the Port for eligible elements of the 30% design work.
January 8, 2013  Baggage Systems briefing. 
August 14, 2012  Baggage system recapitalization/optimization was noted in the 2013
Business Plan and Capital Briefing as a significant capital project not included in 2013-
17 capital program. 
August 7, 2012  Baggage system recapitalization/optimization was referenced as one
of the drivers for the need to develop an Airport Sustainability Master Plan. 
June 26, 2012  The Airport's baggage systems were discussed during a briefing on
Terminal Development Challenges. 
May 10, 2012  TSA's interest in a national recapitalization/optimization plan for all
baggage screening operations was referenced in a design authorization request for the
C60  C61 Baggage Handling System Modifications Project.