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PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 5d Date of Meeting January 24, 2012 DATE: January 12, 2012 TO: Tay Yoshitani, Chief Executive Officer FROM: Michael Ehl, Director, Airport Operations Wayne Grotheer, Director, Aviation Project Management Group SUBJECT: Airline Realignment: CUSE (Common Use System Emulation) at Ticket Counter/Gates & Seating (CIP #C800473) Amount of This Request: $484,000 Source of Funds: Airport Development Fund Total Project Cost: $2,371,000 ACTION REQUESTED: Request Commission authorization for the Chief Executive Officer to authorize design of Common Use System Emulation (CUSE) at Ticket Counter/Gates & Seating as part of the Airline Realignment at Seattle-Tacoma International Airport (Airport). This authorization is for $484,000 of a total project cost of $2,371,000. SYNOPSIS: This request provides design for CUSE, which allows multiple airlines to use the same computers at ticketing and at gate holdroom positions. This common use equipment provides the Airport flexibility to move airline operations when needed and ultimately reduce airlines operating costs. This authorization is necessary for the one-time realignment of air carrier operations that is expected to occur in 2012-2013. The existing proprietary gates that are scheduled to be reassigned as Port gates will be converted to a common use system with the latest processing equipment and technology. Gates will receive casework and computer hardware equipment. Carpeting infill will be provided as needed where gate podiums are removed, and new passenger seating will be provided at these common use gates. In addition, existing ticket counter positions in the main terminal will be reconfigured to accommodate additional CUSE positions. Electrical and communications infrastructure will be provided to support the common use systems. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 12, 2012 Page 2 of 6 BACKGROUND: With ongoing airline consolidation interests and a goal to maximize utilization of our existing facilities, the Airport has issued intent to exercise the One-Time Reallocation provision in the current Signatory Lease & Operating Agreement. The reallocation will require a number of modifications associated with the airlines who will relocate their gate and ticket counter operations to effectively operate in their new locations. The realignment was driven by the merger of major carriers and the consolidation needs of Alaska Airlines necessitating the repositioning of aircraft gate holdrooms and ticketing positions throughout the Airport. The following airlines are relocating their gates and/or ticket counters from their existing to new locations under the provisions of the One-Time Reallocation: Frontier, JetBlue, Air Tran, Virgin America, Hawaiian, American and United Airlines. PROJECT JUSTIFICATION: Project Objective: Accommodate the airline relocations by providing common-use passenger processing and other miscellaneous improvements throughout the Airport terminal. PROJECT SCOPE OF WORK AND SCHEDULE: Scope of Work: This request includes the following elements for certain positions within Concourse B and ticketing zones 2 and 5 as shown on Attachment A: CUSE at Gate Positions CUSE at Ticketing Counter Positions CUSE communication and electrical infrastructure Seating for Terminal Schedule: Design Start January 2012 Design Complete May 2012 Commission Authorization to Bid Work June 2012 Construction Start October 2012 Construction Complete January 2013 FINANCIAL IMPLICATIONS: Budget/Authorization Summary: Original Budget $2,371,000 Budget Increase $0 COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 12, 2012 Page 3 of 6 Revised Budget $2,371,000 Previous Authorizations $0 Current request for authorization $484,000 Total Authorizations, including this request $484,000 Remaining budget to be authorized $1,887,000 Project Cost Breakdown: This Request Total Project Construction Costs $0 $1,559,000 Sales tax $0 $ 100,000 Outside professional services $281,000 $281,000 Aviation PMG and other soft costs $203,000 $431,000 Total $484,000 $2,371,000 Budget Status and Source of Funds: This project is included in the 2012-2016 Capital Budget and Plan of Finance as a committed project within CIP # C800473, CUSE at Ticket Counters/Gates & Seating Airline Realignment. The funding source will be the Airport Development Fund. Financial Analysis: CIP Category New/Enhancement Project Type Renewal & Replacement Risk adjusted Discount rate N/A Key risk factors N/A Project cost for analysis $2,371,000 Business Unit (BU) Terminal Airline Equipment Effect on business performance NOI after depreciation will increase IRR/NPV N/A CPE Impact CPE will increase by $.01 in 2013, but no change to business plan forecast as this project was included. Lifecycle Costs and Savings: Annual Operating and Maintenance costs are not forecasted to appreciably change, and will be analyzed after the design is complete and more specific information is available. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 12, 2012 Page 4 of 6 BUSINESS PLAN OBJECTIVES: This project facilitates airline relocations to different gates and ticket counters. The project ensures Airport vitality by providing flexibility of the existing Airport facilities and supports the airline realignment program, which benefits our passengers and airline partners. ENVIRONMENT AND SUSTAINABILITY: This project demonstrates environmental sustainability by improving existing Port assets and better utilizing existing resources. Realignment will allow more effective use of terminal facilities, and this enables efficient operation for airlines at new locations. More sustainable operations of the Airport are expected to generate lower lifecycle costs of the needed investments. STRATEGIC OBJECTIVES: This project promotes the Port's strategic goals to "Ensure Airport and Seaport Vitality" and "Be a Catalyst for Regional Transportation Solutions." With numerous airlines relocating to other gate and ticket counter locations, there are building modifications that must be addressed throughout the terminal. The airline relocations and associated building improvements will yield a better balanced facility, increasing through-put rates in a terminal of limited size. This is one of a number of projects that are directly tied to the One-Time Reallocation (Airline Realignment) program, that are in concert with Alaska Air Group's Master Plan to consolidate their gate operations onto the North Satellite and Concourse C. TRIPLE BOTTOM LINE SUMMARY: This project will increase the long-term ability of the Airport to serve a growing number of both passengers and airlines. Long-term vitality of the Airport benefits the regional economy, the local environment, and nearby communities. ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: Alternative 1: Do nothing. This alternative would preclude the realignment program as jointly recommended by the Airline Airport Affairs Committee and the Aviation Division. This alternative is not recommended. Alternative 2: Design common-use passenger processing and provide seating in the terminal to support the airline realignment program. Work includes casework, computer hardware, electrical and communications infrastructure, carpet and seating for the terminal. This alternative is recommended. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 12, 2012 Page 5 of 6 OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: CUSE at Ticket Counter/Gates and Seating Map PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: On December 6, 2011, the Port Commission authorized construction of Baggage Handling System (BHS) improvements- C22 BHS Connection to C1/C1-MK1 Replacement (C800382) at Seattle-Tacoma International Airport in the amount of $3,604,000. On December 6, 2011, the Port Commission authorized design of the Miscellaneous Building Improvements-Airline Realignment project (C800475) at Seattle-Tacoma International Airport in the amount of $1,721,000. On December 6, 2011, the Port Commission authorized design of the Airline Tenant Improvements- Airline Realignment (expense) at Seattle-Tacoma International Airport in the amount of $3,776,000. On September 27, 2011, the Port Commission authorized execution of an IDIQ contract for Airline Realignment Tenant Improvements and Ticket Counter Design services totaling $10,000,000. On September 12, 2011, the Port Commission received a summary briefing on the Airport Realignment Program at Seattle-Tacoma International Airport. On June 14, 2011, the Port Commission authorized design of the Exterior Gate Improvements- Airline Realignment project (C800472) at Seattle-Tacoma International Airport in the amount of $499,000. On June 14, 2011, the Port Commission authorized design of the Airport Signage-Airline Realignment project (C800474) at Seattle-Tacoma International Airport in the amount of $238,000. On March 1, 2011, the Port Commission authorized design and some construction of the Baggage Handling System (BHS) Improvements - C22 BHS connection to C1/C1-MK1 Replacement /TC3 Replacement (C800382) in the amount of $1,731,000. On February 22, 2011, the Port Commission was shown a summary listing of realignment projects and authorized Planning for Terminal Realignment in the amount of $713,000. On February 22, 2011, the Port Commission authorized design and some construction for the Passenger Loading Bridge Replacement Project - Airline Realignment (C800467) in the amount of $6,700,000. On January 25, 2011, the Port Commission was given an overview of the airline realignment and authorized design and construction of the Concourse D Common Use Expansion Project (C800455) in the amount of $4,250,000. Commission was also briefed on the Airline Realignment Program as part of this item. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 12, 2012 Page 6 of 6 On September 28, 2010, the Port Commission was given a summary briefing of the upcoming 2011 capital improvement plan that included the airline realignment program elements. On June 8, 2010, the Port Commission authorized execution of an IDIQ contract for the Terminal Development Strategy Campus Planning Services IDIQ in the amount of $1,300,000.
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