6a memo
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 6a ACTION ITEM Date of Meeting May 6, 2014 DATE: April 29, 2014 TO: Tay Yoshitani, Chief Executive Officer FROM: Mike Burke, Director Seaport Leasing & Asset Management Mark Longridge, Project Manager, Capital Development Division SUBJECT: Terminal 115 Stormwater Improvements (CIP #C800689) Amount of This Request: $473,000 Source of Funds: General Fund Est. Total Project Cost: $548,000 ACTION REQUESTED Request authorization for the Chief Executive Officer to design, advertise, and construct stormwater modifications and upgrades at Terminal 115 in the amount of $473,000 for a project total of $548,000 and use Port crews in the performance of the work. SYNOPSIS This project is to separate stormwater originating from the Port leased area and the Common Use Area on Terminal 115 from the area exclusively used by Northland Services. The goal of the project is to intercept the stormwater collected from the Port areas and the Common Use Area and route it to an alternative existing conveyance system located in the northwestern corner of the Terminal 115 property to reduce the volume of water to the Northland services treatment system currently under design. The project schedule driven by Northland Services requires that the stormwater separation be completed by September 30, 2014. In order to meet this deadline this request is for both the design and construction funding of this work. Port Construction Services will perform this project using a combination of small works contracts and Port crews. BACKGROUND Stormwater discharges from the Northland premises are covered under Washington State Department of Ecology (Ecology) Industrial Stormwater General Permit (ISGP) number WAR000471. Northland reached the Level 3 corrective action stage for the ISGP in 2011. Ecology has required Northland to install and have operational a permanent treatment system that is designed with the goal of achieving benchmarks by September 30, 2014. Northland is completing the installation of stormwater conveyance infrastructure to meet requirements of Template revised May 30, 2013. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer April 29, 2014 Page 2 of 5 Industrial Stormwater General Permit and Ecology Administrative Order. The costs for these improvements are estimated to be $5,000,000. The Port has approximately 3 acres up gradient of the Northland leasehold. Of this 3-acre area, approximately 1.5 acres contribute stormwater volume to Northland's 70 acre stormwater system. Northland has requested the Port contribute upwards of $1,500,000 for its stormwater volume. This adjacent Port area does not fall under the ISGP held by Northland, and is used for a different tenant and different operations. The Port is taking the necessary steps to isolate the stormwater system from the Northland system prior to the action date set by Ecology on Northland of September 30, 2014. Stormwater volume coming from outside Northland's leasehold would increase the capital and maintenance costs of Northland's system. Isolation of stormwater systems will eliminate this additional cost. Under the Port's Phase I permit, all Port property is required to have best management practices implemented on site. The property up gradient of the Northland property has a Stormwater Pollution Prevention Plan (SWPPP) and is implementing the best management practices required by City Stormwater Code. Because Northland is under the ISGP, their site is required to have an ISGP SWPPP and associated best management practices. PROJECT JUSTIFICATION AND DETAILS Project Objectives Complete full design of the stormwater conveyance system. Construct the necessary catch basin and piping runs, and install all equipment and associated utilities. Scope of Work Several options were considered in the preliminary design and planning. Staff has considered both gravity and pumped or force main systems and has selected to proceed with the following option for several reasons. The stormwater work would consist of constructing a force main conveyance system parallel to the existing conveyance systems including the replacement of two catch basins, installation of a submersible pump, and construction of approximately 900 linear feet of piping. The new catch basins will be placed at the existing location and rim elevation to maintain current drainage patterns. The force main can be constructed of either ductile iron piping or HDPE piping. This option has the greatest amount of flexibility since the force main can change grade and alignment to avoid obstructions. It also disrupts a smaller area than any of the possible gravity options, and the disrupted area is further from the rail spurs. The main drawback to this option is the additional maintenance associated with a pump system. The capital costs for this system are anticipated to be less than the gravity options, but there will be additional costs and labor COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer April 29, 2014 Page 3 of 5 associated with operations and maintenance of the system. However, the proposed design has the lowest total cost of ownership including all expected costs. PCS crews will perform this work with some work performed by small works contractors, which provides excellent opportunities for small business utilization. Using Port crews and existing contracts to perform this work will allow us to start work immediately, complete this work in a timely manner to meet the deadline of September 30, and provide the greatest flexibility in coordinating with our tenant to maintain their operation of the active rail spurs adjacent to the project area. Schedule The proposed project schedule is as follows: Preliminary Design & Planning March-May 2014 Commission Authorization for Design and Construction May 2014 Design (Under Existing IDIQ) May 2014 Construction August-September 2014 FINANCIAL IMPLICATIONS Budget/Authorization Summary Capital Expense Total Project Original Budget $0 $0 $0 Previous Authorizations $75,000 $0 $75,000 Current request for authorization $473,000 $0 $473,000 Total Authorizations, including this request $548,000 $0 $548,000 Remaining budget to be authorized $0 $0 $0 Total Estimated Project Cost $548,000 $0 $548,000 Project Cost Breakdown This Request Total Project Construction $308,000 $308,000 Construction Management $47,000 $47,000 Design $57,000 $117,000 Project Management $22,000 $37,000 Permitting $10,000 $10,000 State & Local Taxes (estimated) $29,000 $29,000 Total $473,000 $548,000 Budget Status and Source of Funds This project was not anticipated in the capital budget and 2014 Draft Plan of Finance because the need to intercept stormwater from this area was not known at the time. The $548,000 required to fund this project is available under CIP C800002 Contingency Renewal & Replace. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer April 29, 2014 Page 4 of 5 This project will be funded by the General Fund. Financial Analysis and Summary CIP Category Renewal/Enhancement Project Type Infrastructure Upgrade Risk adjusted discount rate N/A Key risk factors Project Costs could exceed current estimates. Pump maintenance costs could exceed current estimates. Project cost for analysis $548,000 Business Unit (BU) Seaport Industrial Properties Effect on business performance This project preserves annual revenues of $78K generated by the Port's tenant that is located on the 3 acres up gradient of Northland. Incremental savings of $952K is created by pursuing this $548K project in lieu of contributing $1.5 million to participate in Northland's stormwater solution. Annually, this project will increase depreciation by $11K (based on a 50-year depreciable life) and will reduce Net Operating Income by a corresponding amount. Every 10th year after installation, incremental maintenance expense is estimated to increase $15K and Net Operating Income will decrease by a corresponding amount. IRR/NPV Net present value calculation reflects savings created by investing $548K in this project in lieu of contributing $1.5 million to the Northland project as well as increased maintenance expenses. NPV IRR (in $000's) (% ) $913 NA Lifecycle Cost and Savings In considering the alternative designs, the lifecycle cost analysis of the pump system was considered versus gravity system. Even conservatively assuming full pump replacement every 5 years, the pump system has a favorable net present value over the gravity flow system. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer April 29, 2014 Page 5 of 5 STRATEGIES & OBJECTIVES This work supports the Port's Century Agenda objective to be the greenest and most energy efficient port in North America by meeting or exceeding agency requirements for storm water leaving Port-owned or operated facilities. ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1) Do nothing. Continue to operate the system in its current state. This alternative would negatively impact the tenant by increasing the volume of water they would include in their treatment system. This is not the recommended alternative. Alternative 2) - Contribute $1,500,000 to tenant system. This is more expensive and maintains the Port contributing to the tenant system and being exposed to further improvement costs in the future. This also may require the Port to take the lead on construction as a public works. This is not the recommended alternative. Alternative 3) Design and construct a gravity flow system. Due to very flat grades and minimal fall in the existing system, this alternative would result in replacement of much more of the existing system and significantly higher initial capital costs. This is not the recommended alternative. Alternative 4) Design and construct a force main pumped system utilizing as much of the existing infrastructure as possible, minimizing tenant site impacts, along with construction costs and risks. In addition, the Port will monitor the tenant operations to ensure they are continuing to do best management practices at the site. This is the recommended alternative. ATTACHMENTS TO THIS REQUEST Aerial Photo PREVIOUS COMMISSION ACTIONS OR BRIEFINGS None.
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