COMMISSION 
AGENDA MEMORANDUM                Item No.       6b 
ACTION ITEM                   Date of Meeting     August 8, 2017 
DATE:    May 25, 2017 
TO:     Dave Soike, Interim Executive Director 
FROM:   Jeffrey Brown, Director Aviation Facilities and Capital Programs 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  South Satellite (SSAT) HVAC Replacement/Upgrade (CIP #C800798) 
Amount of this request:         $11,200,000 
Total estimated project cost:      $12,500,000 
ACTION REQUESTED 
Request Commission authorize funding of $11,200,000 for South Satellite Heating, Ventilation
and Air Conditioning Upgrade and  for the Executive Director to (1) advertise, bid, and award
the construction contract at Seattle-Tacoma International Airport and (2)utilize Port crews to 
assist with the project. 
EXECUTIVE SUMMARY 
This project will improve the effectiveness and reliability of the heating, ventilation and air
conditioning system for the SSAT, a terminal that has seen dramatic passenger growth. The
additional HVAC capacity will also accommodate the expansion of Airport Dining and Retail
(ADR), providing needed customer amenities. Maintaining comfortable heating and cooling is a
basic necessity for a satisfying customer experience. While the Port intends to undertake a
major renovation of the SSAT, the inadequacy of the HVAC system today and its risk of failure
make this investment necessary. 
The SSAT was constructed in 1971 and the core mechanical and electrical utilities of the original
concourse have remained largely unchanged since it was built. Demand on the mechanical
systems has approximately doubled since 1971, primarily from additional cooling load caused
by new electronic systems, increasing passenger traffic, and small facility additions. Portions of
the HVAC system have failed recently due to age and condition. The resulting shutdown for
repairs to obsolescent fans caused a loss of cooling capacity in the SSAT for up to six weeks,
which compromised the passenger experience in the SSAT. 
At 30 percent design the Project team completed a scope, budget and constructability review. 
Four issues were identified that increase the project cost by $1,500,000: 
1.  The use of temporary air handling units  requires  much more ductwork than was
assumed at the notebook phase. (+$300,000) 

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 2 of 6 
Meeting Date: August 8, 2017 
2.  The quantity of regulated material (asbestos and lead) as part of the demolition cost is
higher than originally assumed. (RMM +$665,000) 
3.  The original plan included only 3 phases vs 6 in the current design. (The phasing
allowance increase +$250,000.)
4.  Relocation of communication equipment was not included in the original scope of work.
(+$285,000) 
Total budget increase $1,500,000 
Equipment installed as part of this project will most likely not be viable for the planned, larger
SSAT renovation project and the financial analysis assumes this outcome. Consequently, the
capital costs will be amortized over six years. 

JUSTIFICATION 
South Satellite use and growth in passenger volume has increased dramatically in the last three
years. This growth has put a premium on having a smoothly operating and serviceable HVAC
system at the SSAT. The major elements of the system are the air handler and air distribution
boxes, which are now 44 years old  nearly twice their expected useful lives. 
Failures in 2015 of a critical air handler component, the cold deck supply fan, highlight the need
to upgrade at least key components before catastrophic failure causes the SSAT to lose cooling
and ventilation during the summer or heating and ventilation during the winter. 
The solution recommended in this action request takes into consideration that a holistic SSAT
renovation project  is planned and that the following improvement projects are running
concurrently: 
South Satellite Structural Improvements (CIP #C800818) 
South Satellite Interior Renovations (CIP #C800549) 
Wi-Fi Enhancement (CIP #C800585) 
Combined, these projects represent a commitment of $32,900,000 and will maximize the level
of service the existing SSAT facility can provide. 
DETAILS 
Scope of Work 
This project will replace key components of a portion of the SSAT HVAC system. The project will
replace the constant volume air handler serving the Concourse level with a more energy
efficient variable air volume system and replace the distribution boxes serving the concourse
level. 
New, replacement equipment included: 
1.  HVAC air handler 
2.  cooling and heating coils and heating water piping 
3.  controls and variable frequency drives 
4.  terminal distribution boxes 

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 3 of 6 
Meeting Date: August 8, 2017 
5.  motor control center 
This project will: 
1.  Improve HVAC reliability. 
2.  Provide additional HVAC capacity for concourse level areas and support new tenant
spaces. 
3.  Improve energy efficiency. 
4.  Facilitate maintenance. 
5.  Replace obsolete equipment and infrastructure. 
By completing this project the energy efficiency for the heating and cooling will increase by
approximately 30% on the south satellite concourse level system, but due to the extra capacity
needed, actual energy savings will be considerably less. Calculations estimate electric savings
of 163,300 kwh/year on motor power and natural gas savings of 20,600 therms per year for
heat which combine for a total energy savings of 2,000 MMBTU/year and reduce greenhouse
gas emissions by 110 metric tons/year. This represents a savings of approximately 0.2% of the
total airport energy consumption and 0.5% of the total airport greenhouse gas emissions.
Small Business 
The Port staff is collaborating with the small business team in the Economic Development
Division to maximize small business opportunities within the design and construction phases. 
As part of the collaboration efforts, the PM will be participating in the Port's PortGen outreach
and training session for those small and diverse businesses. 
PortGen activities are intended to increase the small businesses knowledge of the project's
scope of work. 
Schedule 
Construction start                      2017 Quarter 4 
In-use date                          2019 Quarter 2 
Cost Breakdown                         This Request       Total Project 
Design                                       $0         $1,300,000 
Construction                             $11,200,000        $11,200,000 
Total                                      $11,200,000         $12,500,000 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Defer the HVAC system upgrade until the South Satellite Rennovation 


Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 4 of 6 
Meeting Date: August 8, 2017 
Cost Implications: $750,000 (expensed) 
Pros: 
(1) This alternative does not require immediate capital investment. 
Cons: 
(1) Costs of design would be expensed-approximately $750,000. 
(2) This alternative would significantly degrade the quality of passenger experience at
Sea-Tac airport, as it would not provide adequate cooling to the space. 
(3) Could potentially lead to airlines insisting on processing departing passengers in
severely congested hold rooms on other concourses already being used for other
flights.
(4) Does not provide capacity for additional tenant space development. 
(5) Does not provide a dependable indoor environment to facilitate airline operations.
This is not the recommended alternative. 
Alternative 2  Upgrade the existing HVAC System air handler, fans, controls and coils:
reconfigure the ducting and replace the distribution boxes. 
Cost Implications: $ 12,500,000 (11,250,000 cap, 1,250,000 ERL) 
Pros: 
(1) This alternative provides dependable indoor environmental quality in all seasons for
the foreseeable future. 
(2) This alternative allows the Satellite HVAC system to be operated during the "bridgeyears"
until the planned renovation of the entire Satellite. 
(3) This alternative aligns with the Century Agenda goal to meet the region's air
transportation needs at Seattle-Tacoma International Airport for the next 25 years
and encourage the cost effective expansion of domestic and international passenger
service. 
(4) This alternative will provide the capacity for the new tenant spaces. 
(5) This alternative will provide the most energy efficient solution. 
Cons: 
(1) This project will only partially address the under capacity issue at the South Satellite,
but it will provide enough capacity for additional tenant spaces. Additional air
handlers are needed to meet the current and near term cooling loads. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary          Capital      Expense        Total 
COST ESTIMATE 
Original estimate                      $6,000,000      $150,000    $ 6,150,000 
Previous changes  net                  $4,375,000     $475,000    $4,850,000 

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 5 of 6 
Meeting Date: August 8, 2017 
Current change                       $835,000     $665,000    $1,500,000 
Revised estimate                     $11,210,000    $1,290,000   $12,500,000 
AUTHORIZATION 
Previous authorizations                  $1,300,000          $0    $1,300,000 
Current request for authorization           $9,910,000    $1,290,000   $11,200,000 
Total authorizations, including this request    $11,210,000    $1,290,000   $12,500,000 
Remaining amount to be authorized             $0         $0         $0 
Annual Budget Status and Source of Funds 
The SSAT HVAC project (CIP #C800798) was included in the 2017-2021 capital budget and plan
of finance as a business plan prospective project with a total capital budget of $6,000,000.
The cost increase of $5,210,000 was transferred from the Aeronautical Allowance (CIP
#C800753), resulting in no net change to the capital budget. The environmental remediation
will be funded through the 2017 Operating Budget. The capital portion of this project will be
funded with the Airport Development Fund. 
To resolve the reliability issue, the original scope of work, for a budget of $6,000,000, was
only to replace the equipment in the penthouse air system. The current scope of work
includes reconfiguring the duct system and replacing the concourse air distribution boxes. The
new scope resolves the reliability and capacity issue for the Concourse level HVAC system. 
Due to the planned complete renovation of the SSAT, the estimated life of these improvements 
is approximately six years. 
Financial Analysis and Summary 
Project cost for analysis         $12,500,000 
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                $0.07 in 2020 
Future Revenues and Expenses (Total cost of ownership) 
This project replaces existing equipment that is old and dated. Replacement of the equipment
will require a similar level of maintenance (or slightly less) & does not have a material impact
on current Aviation Maintenance O&M costs. 
No future revenues are anticipated as a result of the completion of this project. 
ATTACHMENTS TO THIS REQUEST 
None 

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 6 of 6 
Meeting Date: August 8, 2017 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
January 17, 2017-The Commission authorized $1,300,000 for the preparation of design
and construction bid documents for the South Satellite HVAC Upgrade project. 
November 8, 2016  The Commission authorized $3,450,000 for the preparation of design
and construction bid documents, the advertising and execution of a major works
construction contract, and the utilization Port crews for the South Satellite Structural
Improvements (CIP C800818). 
May 24, 2016  The Commission authorized the advertising and execution of construction
contracts for the Wi-Fi Enhancement Project (CIP #C800585) for an estimated cost of
$7,239,000 and to increase the project's overall budget to $10,676,000 for additional scope. 
March 22, 2016  The Commission authorized a $6,256,000 construction contract for the
South Satellite Interior Renovations Project (CIP #C800549). 
July 24, 2012  The Commission authorized $6,500,000 for the redesign the SSAT HVAC
systems to meet current and future requirements. The design included adding an additional
penthouse system, replacing three existing systems, reconfiguring the ductwork, and
replacing all the distribution boxes. The 2012 estimated costs of these improvements were
about $37 million. The design effort was suspended in 2013 and canceled in 2014 after staff
determined that: 
o  The SSAT would require a seismic upgrade to facilitate any new systems. 
o  IAF and SAMP may change the use of SSAT. 
May 3, 2011  The Commission authorized the negotiation and execution of a professional
services contract for design services. No funding was associated with this authorization. 
September 22, 2009  The Commission was briefing on the condition of the HVAC systems
of the North and South Satellites. 









Template revised September 22, 2016.