6b memo
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 6b ACTION ITEM Date of Meeting January 14, 2014 DATE: January 7, 2014 TO: Tay Yoshitani, Chief Executive Officer FROM: Michael Burke, Director, Seaport Leasing and Asset Management Curtis Stahlecker, Project Manager, Seaport Project Management SUBJECT: Terminal 91, C-175 Building Roof Replacement (CIP #C800430) Amount of This Request: $2,210,000 Source of Funds: General Fund Est. Total Project Cost: $2,450,000 Est. State and Local Taxes: $167,000 Est. Jobs Created: 19 ACTION REQUESTED Request Commission authorization for the Chief Executive Officer to advertise for construction bids, execute construction contracts, and fund the construction phase of the Terminal 91, C175 Building Roof Replacement Project in an amount not to exceed $2,210,000 for a total estimated project cost of $2,450,000. SYNOPSIS The roofing system on the C-175 building at Terminal 91 is approximately 20 years old and has performed well. However, some portions of the roof are beyond their service life and show signs of aging and deterioration. Under the lease agreement, maintenance of the roof is the responsibility of the Port. The design is complete and the project is ready to advance into the construction phase. This phase will include advertising for construction bids, execution of a major construction contract, and all other work necessary to complete the project, which was included within the 2014 budget and plan of finance. BACKGROUND The C-175 building is leased to CityIce Cold Storage, LLC, which operates a cold storage operation in the facility. The building, built in the early 1990s, is in good condition. Roof inspections were performed in November 2009, February 2010, and December 2012. The first of these was sponsored by the tenant; the others by the Port. All of the inspections indicate the roof is showing signs of deterioration with membrane shrinkage, tenting, and uplift during strong winds. The 2009 and 2010 inspections recommended replacement by 2013 and 2014 respectively. The 2012 report identified areas of ice buildup within the roofing insulation system. The preliminary design identified that approximately one quarter of the roof is at the Template revised May 30, 2013. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 7, 2014 Page 2 of 5 end of its useful life and the remainder is in fair shape having a potential remaining useful life of two to five years, (2015 to 2018 respectively). Regardless of the remaining useful life, the entire roof would require replacement at one time. The design is complete and the project is ready to move into the construction phase. PROJECT JUSTIFICATION AND DETAILS As the roof membrane is near the end of its service life, replacing the roofing system now will avoid costs for future repairs and potential water damage to the building insulation, structural elements and tenant operations. The lease agreement between the Port and CityIce has the maintenance and repair of the roof as an obligation of the Port. Project Objectives Install a new roofing system on a Port-owned asset. Minimize disruption to the tenant and tenant operations. Incorporate environmentally sustainable practices into the project where practical. Complete project on time and within budget. Scope of Work The project consists of the following components: Remove and replace the 90,000 square foot roof membrane and associated roof appurtenances. Install the new roof system. Include environmentally sustainable components and construction methods as appropriate. Schedule Start Finish Commission Authorization for Construction January 2014 January 2014 Advertise and Award February 2014 April 2014 Construction May 2014 October 2014 FINANCIAL IMPLICATIONS Budget/Authorization Summary Capital Expense Total Project Original Budget $0 $0 $0 Previous Authorizations $240,000 $0 $240,000 Current request for authorization $2,210,000 $0 $2,210,000 Total Authorizations, including this request $2,450,000 $0 $2,450,000 Remaining budget to be authorized $0 $0 $0 Total Estimated Project Cost $2,450,000 $0 $2,450,000 COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 7, 2014 Page 3 of 5 Project Cost Breakdown This Request Total Project Construction $1,751,000 $1,751,000 Construction Management $237,000 $237,000 Design $ 0 $168,000 Project Management $49,000 $107,000 Permitting $6,000 $20,000 State & Local Taxes (estimated) $167,000 $167,000 Total $2,210,000 $2,450,000 Budget Status and Source of Funds This project was included in the 2014 plan of finance under Committed-Authorized CIP #C800430 P90 C175 Roof Replacement for a total cost of $2,450,000 (including actual spending in 2011 and 2012 and forecasted spending in 2013). This project will be funded from the General Fund. Financial Analysis and Summary CIP Category Renewal/Enhancement Project Type Renewal & Replacement Risk adjusted discount rate N/A Key risk factors Construction costs may increase due to market trends or unforeseen damage to the remaining roofing system below the roof membrane. Material costs, such as petroleum based roofing membrane are subject to price fluctuations. Project schedule could be delayed due to project complexity, weather, or the need to minimize tenant disruptions. Project cost for analysis $2,450,000 Business Unit (BU) Seaport Industrial Properties Effect on business performance Preserves T91 Building C175 revenue of approximately $458,000 per year. Depreciation expense will increase approximately $122,500 per year based on a 20-year useful life. IRR/NPV The NPV is the present value of the project cost. Lifecycle Cost and Savings A lifecycle cost analysis was performed using three types of roofing materials in three distinct design configurations with design life ranging between 20 and 30 years. The analysisrecommended roofing system with the best return on investment is a roof with a 20-year design COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 7, 2014 Page 4 of 5 life. This design includes the removal of the existing membrane and installation of a new fully adhered white membrane. With proper maintenance , this system should provide a service life of 25 to 30 years. STRATEGIES AND OBJECTIVES The project is consistent with Century Agenda objectives to optimize infrastructure investment and financial stewardship by preserving the life of a Port asset; supports economic growth and vitality by preserving existing jobs and commerce; and advances the objective of becoming the greenest and most energy efficient North American port by reducing pollutants and increasing energy efficiency. TRIPLE BOTTOM LINE Economic Development Replacing the roof complies with a lease obligation, protects the asset and maintains the expected service life of the building with minimal to no disruption to tenant operations. The project allows tenant operations to function relatively uninterrupted thereby maintaining jobs, commerce, and revenues. Environmental Responsibility The following environmentally sustainable components and activities investigated during the design phase will be incorporated into the new roof system. The roof membrane will have a solar reflective index (SRI) that meets or exceeds 80, which will reduce the thermal gain the building experiences requiring less energy to maintain the subzero temperatures in the freezer units that comprise roughly 80 percent of the building. The use of a roof with a high SRI may allow the Port of Seattle to receive an energy rebate from Seattle City Light. Staff is currently working on the application. The new roofing system will replace the existing metal flashing and gutter systems with zinc-free materials thereby eliminating the zinc contributions from the roofing systems that currently enter the waters of Puget Sound. Recycling of the existing roofing membrane is required, saving both the landfill space and allowing the roof components to be re-used elsewhere. An audio bird deterrent system will be tested on an area of the roof to deter geese. If effective, the system will be deployed on the entire roof, which will remove bird fecal material from being discharged from the roof drains into the Sound. Other environmentally sustainable components investigated but not incorporated into the project were: Generating energy through solar panels or wind turbines, not economically viable due to infrastructure costs, limited solar gain and available wind. Reuse of rainwater within the building is not viable due to infrastructure cost and low water usage. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 7, 2014 Page 5 of 5 Storm water bio-filtration not advanced due to limited available space on the terminal and limited effectiveness. Community Benefits The Office of Social Responsibility will coordinate with the project manager and the procurement departments to determine opportunities for small business participation in support of Resolution No. 3618. ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1) Do nothing/replace the roof after it leaks or fails. The roof is currently functioning. The risk of waiting until the roof leaks or fails is that emergency repairs would need to be performed during the period when the new roofing system is being designed and bid, potentially increasing the costs. Damage to the insulation and roof support structure could also occur, increasing the replacement cost as well as having the potential of disrupting tenant operations. This is not the recommended alternative. Alternative 2) Delay the replacement for one to two years, 2015 to 2018, respectively, to extend the existing service. During this time, additional monitoring and spot repairs would be performed as needed, paying particular attention to the section of the roof that is at the end of the service life. The risk of selecting this alternative is twofold. The first is the combination of increased costs for inspection and maintenance and unknown escalation costs of construction that may exceed the savings gained by the extended service live of the existing roof. The second risk is design may no longer be valid and would need to be redone in part to address any potential changes in the building code or materials. This is not the recommended alternative. Alternative 3) Total lifecycle costs were analyzed for roof systems having a design life of 20 years and 30 years, respectively. The roof system with a 20 -year design life has the lowest total cost of ownership and is the recommended replacement roof system. Replacement of the roof now will reduce future risks of a major roofing system failure, restore the energy efficiency of the roof, and reduce the risk of emergency repair costs. This is the recommended alternative ATTACHMENTS TO THIS REQUEST PowerPoint presentation. PREVIOUS COMMISSION ACTIONS OR BRIEFINGS July 26, 2011 the Port Commission approved $190,000 for the design and permitting phase of the Terminal 91, C-175 Building Roof Replacement project (CIP #C800430) for a total authorization of $240,000.
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