Template revised September 22, 2016. COMMISSION AGENDA MEMORANDUM Item No. CTION ITEM March 28, 2017 Amount of this request: 8,939,925 Total estimated project cost: 33,505,000 ACTION REQUESTED EXECUTIVE SUMMARY JUSTIFICATION COMMISSION AGENDA Action Item No. _ ___ Page of ��Template revised September 22, 2016; format updates October 19, 2016. DETAILS This seismic retrofit effort will reinforce the tunnel and loading dock areas to meet the building code structural stand ards for a design quake for both collapse and life/safety. The Loading Dock was added to the project after modeling indicated it did not perform to standard during the design interval quake and would be seriously damaged and cause further damage to the Mai Terminal, Parking Garage, Central Mechanical Plant, and adjacent Service Tunnel Of the $5,605,000 cost growth, t he additional Loading Dock work accounts for $3,200,000; while the $2,405,000 balance reflects an active construction market and additional costs incurred to mitigate operational impacts within the tunnel and on the drives. Staff will be holding a pre advertisement information session to generate bidding interest within the contracting community. A pre bid conference will also be held to further inform bidders. Scope of Work The project will construct seismic reinforcemen t walls, reinforce portions of the tunnel roof, and increase the spacing between existing structures to allow for vastly improve structural performance during a major quake. Advanced analysis has resulted in targeted and optimized structural modificatio ns that benefit the schedule, reduce operational impact and eliminate some night shift work. It impacts the following three project work elements (1) Analysis of the Loading Dock structure was absorbed in the design effort at no additional cost. Strengtheni ng and widening the space between the Loading Dock and adjacent structures will be added to the project scope to eliminate potential failure of the Loading Dock roof structure and damage to it and the adjacent terminal and parking st ructures during an eart hquake. (2) Advanced numerical analysis indicated that the southern cast place tunnel segment could withstand the design quake as is, and it was subsequently deleted from the project scope. The same type of analysis was performed on the northern cast place tunnel segment , allowing for a more targeted and streamlined reinforcement solution in that structure. (3) Proposed modifications to the northern retaining wall leading to the tunnel were removed from the project w ork scope. It is likely the wall will e demolished and replaced during a reconfiguration of the terminal drives triggered by the Sustainable Airport Mast er Plan. Reinforcing it would just complicate this demolition. There is a limited risk of the North Retaining Wall failing during a major ear thquake, but it is a manageable risk, and one that is expected to be eliminated within the next 10 years. Small Business Throughout the project, elements within the scope of work will provide small business opportunities , including minority and women owned business enterprises Analysis of small business utilization is on going , but we anticipate a 20% requirement COMMISSION AGENDA Action Item No. _ ___ Page of ��Template revised September 22, 2016; format updates October 19, 2016. Schedule Activity Construction tart 2017 Quarter 3 se ate 2019 Quarter 4 Cost Breakdown This Request Total Project Design 4,5 ,0 Construction 8,939,925 28,939,925 Total 8,939,925 33,505,00 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 Leave it “as is” Cost Im plications: 4,565,075 to date, plus the cost of repair or replacement after an event Pros (1) Minimizes capital expenditures (2) Tunnel performed adequately during the 2003 Nisqually earthquake (160 year interval quake), though there was damage Cons (1) Potential points of failure during a major earthquake include the Service Tunnel, Central Loading Dock, Arrivals Drive and Departures Drive (2) Failure to perform the modifications could also lead to damage of the Central Mechanical Plant, Parking Garage and terminal structures (3) Damage did occur during the Nisqually earthquake, particularly to the portion of the tunnel supporting the southern Arrivals Drive, which could have collapsed if the shaking had continued. (4) Would need to write off $4.5 million design costs This is not the recommended alternative. Alternative 2 Tunnel Only Seismic Upgrades Cost Implications: 30,305,000 Pros (1) Allows Service Tunnel, Departures and most of Arrivals Drive (with exception of the portion above the Loading Dock) to meet building code standards for collapse and life safety during an earthquake Cons (1) Not performing the loading dock modifications ould lead to Central Mechanical Plant, Terminal and Parking Garage structural damage during a major earthquake COMMISSION AGENDA Action Item No. _ ___ Page of ��Template revised September 22, 2016; format updates October 19, 2016. (2) Failure of the Arrivals Drive directly above the Loading Dock is possible during an earthquake This is not the recommended alternative. Alternative 3 Tunnel and Central Loading Dock Seismic upgrades Cost Implications: 33,505,000 Pros (1) Brings the entire length of the Service Tunnel structure, to include the Central Loading Dock, into compliance for surviving a design level quake (2) Provides increased safety to our public and employees, and ensures continuity of operations Cons (1) Adds $5,605,000 to the original authorized project budget of $27,900,000. (2) Longer project duration This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate /Authorization Summary Capital Expense Total COST ESTIMATE Original estimate 27,586,00 314,00 27,900,00 Current change $5,605,00 $5,605,00 Revised estimate $33,191,000 $314,00 $33,505,00 AUTHORIZATION Previous authorizations $4,5 ,0 $4,5 65,075 Current request for authorization 8,6 25,925 314,00 939 925 Total authorizations, including this request 3,191 ,00 314,00 $33,505,00 Remaining amount to be authorized Annual Budget Status and Source of Funds Service Tunnel Renewal/Replace project (CIP #C102112) was included in the 201 capital budget and plan of finance with a budget of $27, 586 ,000. The budget increase is an adjustment to t he preliminary cost estimate driven by increased inflation, clarification and additions to project scope, and mitigation costs associated wit h minimizing operational impact. The budget increase w ill be transferred from the Aeronautical Allowance CIP (C800753) , resulting in no net change to the airport capital budget. The funding source for this project will be the Airport Development Fund (ADF) and future revenue bonds , to be issued in 2017. The airlines approved this project through a majority interest (MII) vote in 2014, with a budget of $27.6 million. The current cost estimate would require another MII vote; however, the Port COMMISSION AGENDA Action Item No. _ ___ Page of ��Template revised September 22, 2016; format updates October 19, 2016. elected to use the management reserve allowance per the signatory lease and operating agreement (SLOA) to cover the increase. The airlines were briefed on the project and the Port’s plan to use management reserve at the March 2, 2017 airport airline affairs committ ee Project cost for analysis $33,505,000 Business Unit (BU) Roadways Effect on business performance (NOI after depreciation NOI after depreciation will increase IRR/NPV (if relevant) CPE Impact .07 in 2020 Future Revenues and Expenses ( Total cost of ownership The existing service tunnel structure is nearing the end of its design service life. he Service Tunnel and Central Loading Dock will remain essential to the operation of the airport for decades. The completion of this project will help to expand the useful life of these facilities for 20 to 50 years. We do not anticipate a significant change in operating and maintenance costs for these facilities as a result of this project. ATTACHMENTS TO THIS REQUES (1) Presentation slides Vicinity map and project details PREVIOUS COMMISSION ACTIONS OR BRIEFINGS August 5, 2014 The Commission authorized the Chief Executive Officer to execute professional services agreement for the design development of the Service Tunnel Renewal/Replacement project at Seattle Tacoma International Airport in the amount of 565,075 of an estimated total project cost of $27,900,000. April 1, 2014 Commissio n was briefed on the Service Tunnel Renewal/Replacement Project March 27, 2007 Commission authorized the Chief Executive Officer to 1) purchase materials, 2) perform environmental evaluations, 3) perform studies and preliminary engineering, 4) advertise , execute and award small works contracts, 5) and execute and award outside professional services agreements for the Parking Garage/Service Tunnel Pre Design project at Seattle Tacoma International Airport for a total authorization of $966,500 . Project res ulted in a detailed needs assessment for both the garage and service tunnel, but no construction, and has since been expensed.