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PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 6c CORRECTED COPY Date of Meeting November 8, 2011 DATE: January 18, 2012 TO: Tay Yoshitani, Chief Executive Officer FROM: Stan Shepherd, Manager, Airport Noise Programs SUBJECT: Sound Mitigation of Highline Community College Building 4 (CIP #C200042) Amount of this Request: $1,939,689 Source of Funds: Airport Improvement Federal Grants 80% Passenger Facility Charges 15% Airport Development Fund 5% Estimated State and Local Taxes Paid: $126,970 Total Estimated Project Cost: $10,822,000 No. of Jobs Created: ? ACTION REQUESTED: Request Commission authorization for the Chief Executive Officer to execute all documents necessary to complete the sound mitigation work on Building 4 at the Highline Community College (HCC) at an estimated project cost of $2,154,266, including administrative expenses. This authorization request is for $1,939,689 and will bring the total authorization for various sound mitigation projects at HCC to $8,194,619. SYNOPSIS: This request for authorization will complete the Airport's obligation to acoustically insulate HCC Building 4 which is the 14th building (of 22 total) the Airport has helped insulate against aircraft noise as a result of cooperative agreements dating back to 1994. This authorization of $1,939,689 will be added to the remaining available prior authorization of $2,114,577 to satisfy the Airport's total obligation of $2,154,266 for Building 4. The Federal Aviation Administration (FAA) Airport Improvement Program (AIP) reimburses 80% of eligible costs to the Airport. The State of Washington pays other costs beyond acoustic noise insulation to complete the renovation of the building. There is no Port property tax levy funding associated with this request. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 18, 2012 Page 2 of 5 BACKGROUND: In April, 1994, the Port of Seattle (Port) and HCC entered into an agreement to provide Port funding to the college to sound insulate a maximum of 22 classroom buildings against aircraft noise. HCC hires and manages the contractors, and the Port reimburses the college for the approved insulation-related work. Port insulation funds were understood to be dependent on the State of Washington providing funding for the college's capital program. The complete set of insulation projects was budgeted at $10,822,000 based on a very preliminary estimate before appreciable final design or investigation work was completed. The details of each building were unknown, as was the schedule. In general, the rate of remodeling has been slow, with HCC often remodeling only one building each summer. Thirteen buildings have currently been sound insulated. The remaining classroom buildings will be evaluated to determine need, funding availability, and eligibility based on noise audits. Originally, staff sought Commission authorization for three to five buildings at a time. To better plan, estimate, and manage this multi-year commitment, Port staff will now be seeking Commission authorization for one building at a time, after the HCC architect's estimate is available. Due to the competition among colleges for state funding, a schedule has not been set for the remaining eligible buildings. We will return to the Commission in the future for authorization when additional buildings are identified for acoustical installation remodel work. Additional funding may be needed at that time. State funding has been slated for 2012 for HCC to help complete work on Building 4. In addition, the Port has worked with the FAA to make this Airport Capital Improvement Program (CIP) AIP noise grant eligible to account for 80% of eligible costs. Based on estimates provided by the acoustical architect, the entire cost for the renovation of Building 4 is estimated at $2,496,257. The Port's portion of funding to noise mitigate the building is $2,154,266, which includes administrative costs as well as a contingency for construction costs. Because there is only $214,577 remaining in the current CIP authorization, we are requesting authorization for $1,939,689 which is the rest of the Port's portion. After this authorization, approximately $2,627,381 of unauthorized budget will remain in the overall CIP budget for future authorizations to improve other buildings. It is anticipated that more budget will be necessary in the future to insulate the eight remaining buildings. PROJECT DESCRIPTION/SCOPE OF WORK: The scope includes renovation of all remaining eligible items in the renovation of Building 4. Major elements include installing sound rated windows, acoustical roof treatments, and mechanical ventilation systems. The Port and FAA will be funding only acoustical-related items in the reconstruction. HCC and the state will fund all non-acoustical related items. All work should be completed in the years 2012 and 2013. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 18, 2012 Page 3 of 5 PROJECT JUSTIFICATION: In support of the airport strategy to Develop and Maintain a Supportive Community, the Community Development Department works closely with local and regional leaders and residents to develop and implement mutually beneficial land use compatibility agreements, sound insulation programs, and property acquisition for noise. Completion of these programs will reduce noise impacts on Airport neighbors while increasing land use compatibility around the airport. FINANCIAL IMPLICATIONS: This request provides FAA AIP grant funds and Airport funds for mitigation of aircraft noise in Building 4 at HCC. The budget authorization is based upon the estimate prepared by the acoustical architect hired by HCC and an upfront allocation of eligible costs agreed to by the Port. The Port reimburses HCC after the appropriate documentation is presented, reviewed, and approved by the Port. Budget/Authorization Summary Original Budget $ 7,500,000 Budget Increase 3,322,000 Revised Budget 10,822,000 Previously authorized $ 6,254,930 CIP Cost-to-date 6,040,353 Authorization Remaining in CIP 214,577 Total Project Cost Current Request 2,154,266 Current Authorization Request 1,939,689 Remaining budget to be authorized $2,627,381 Project Cost Breakdown Current Request Construction Estimate $1,336,523 9.5% Sales Tax 126,970 Permits 53,460 Testing @ 1% 13,365 Design Services 235,474 Total Construction Related POS 1,765,792 Contingency 20% 353,158 POS Admin 2% 35,316 Total Project Cost $2,154,266 COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 18, 2012 Page 4 of 5 Source of Funds: This project (CIP # 200042) is included in the 2011-2015 capital budget and plan of finance. The funding plan for this project includes a combination of AIP grant funds (80% of eligible costs, or approximately 75% of total costs), PFCs (20%) and ADF (5%). Financial Analysis: CIP Category Compliance Project Type Noise Mitigation Risk adjusted Discount rate N/A Key risk factors N/A Project cost for analysis $1,939,689 Business Unit (BU) Airfield Effect on business Only the ADF funded portion of the capital costs will be included in the performance airline rate base as an equity amortization charge. NOI after depreciation will increase. IRR/NPV N/A CPE Impact Less than $0.01 in 2013, but no changes to business plan forecast as this project was included. PROJECT SCHEDULE: Construction should be complete in the Spring of 2013. OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: Map of Highline Community College depicting buildings insulated. PREVIOUS COMMISSION ACTIONS: On January 9, 1985, the Commission adopted Resolution No. 2943 to conduct an on-going noise remedy program consisting of the insulation of homes and public buildings including assistance in the sale of homes located in the airport vicinity. On July 17, 1996, the Commission adopted Resolution No. 3212 to fulfill additional noise reduction measures in accordance with the Puget Sound Regional Council resolution A-96-02. On January 11, 2005, the Commission authorized staff to proceed with funding of several noise remedy projects including buildings at the Highline Community College. On May 13, 2008, the Commission authorized staff to proceed with funding for Building 19 at Highline Community College. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 18, 2012 Page 5 of 5 On November 3, 2009, the Commission authorized staff to proceed with funding for Building 9 at the Highline Community College. L gend CmpHm B.wH.mgS -Building 4
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