COMMISSION 
AGENDA MEMORANDUM                        Item No.          9b 
BRIEFING ITEM                             Date of Meeting      February 25, 2020 
DATE:     February 14, 2020 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Wayne Grotheer, Director Aviation Project Management Group 
Laurel Dunphy, Director Airport Operations 
Jeffrey Brown, Director Aviation Facilities and Capital Programs 
SUBJECT:  North Satellite Modernization Budget Increase Briefing 
EXECUTIVE SUMMARY 
The North Satellite (NSAT) Modernization project helps meet the needs of our growing airline
customers by making a deliberate and significant step to improving Seattle-Tacoma
International Airport's capacity, customer level of service and competitive ranking among peer
airports. This briefing describes that the current NSAT Modernization project estimate at
completion spending forecast is greater than the budget authorized by the Commission.
Increasing the budget in an upcoming Commission action will allow the NSAT Modernization
project to proceed to completion by providing the budget for scope changes, additional soft
costs, unforeseen conditions, and to respond to the fast-changing dynamics of the airport. 
This briefing lays out the intention of the project team to return March 10, 2020 to request
Commission authorization for the Executive Director to increase the project budget by $40
million. 
JUSTIFICATION 
Approval of the increased budget will provide sufficient construction contingencies for
construction completion and fund remediation efforts and support costs associated with the
construction. The need for additional funding results from differing site conditions found
during construction, additional contaminated and unsuitable soils discovered during
excavation, added scope through Phase 1 and Phase 2 to meet airline, customer service,
environmental, and code compliance needs and expectations, and an increased level of
passenger service to mitigate passenger impacts during construction. These factors have all
drawn down the construction contingencies and Project Reserves. 
Diversity in Contracting 
Hensel Phelps (HP) was contracted in July 2017 to achieve Small Contractor and Supplier
participation of 5.5%. There were also two aspirational goals that HP was expected to
attain: Small Business Enterprise participation of 16%, and Disadvantaged, Disabled Veteran,

Template revised April 12, 2018.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 2 of 8 
Meeting Date: February 25, 2020 
Minority, Women's Business Enterprise participation of 3.6%. The contractor is tracking to
meet or exceed these goals and requirements. Project metrics are included in the table below
in the Background section.  Staff has updated and will continue to update the Commission on
progress. 
DETAILS 
PROGRESS TO DATE 
We have completed Phase 1, opened the Alaska Lounge, turned over the Concourse C STS
station, and are halfway through the project construction. We continue to show project
turnover to be Q3 2021 as projected in August 2017 and reaffirmed in subsequent briefings. As
of December 31, 2019, the total construction contract is at $470.5 million capital construction
cost and $15 million expense.   The $485.5 million total construction cost includes the
preconstruction services completed by our contractor for a value of $5.5 million.
LOOKING FORWARD 
The project team continues to adjust our project completion schedule and spending forecast
based upon current data and metrics observed.  We completed Phase 1 construction and a
rigorous lessons learned process to deliver Phase 2 with better passenger service.  The team
evaluated all current expenditures, risks and trends and has predicted a financial estimate at
completion of the project. Our estimate includes an increase in the following key elements: 
Capital 
(1) Finalized Design Development Cost (previously reported as exceeding allowance) 
(2) Differing site conditions (e.g., existing building out of plumb, existing floor conditions 
requiring complete terrazzo replacement, buried utilities) 
(3) Critical trade worker shortages 
(4) Added Scope: 
a.  Restroom redesign 
b.  Nursing suite 
c.   Baggage Handling System revisions 
d.  Elevator/Escalator changes by L&I, including a code revision 
e.  Added mobile stairway equipment for ground boarding aircraft (Phase 2 gate
mitigation for construction) 
f.   Rainwater flushing system expansion 
Expense 
(1) Contaminated and unsuitable soils continue to exceed predictions 
(2) Incorporating activities directed towards delivering an enhanced customer level of
service; a feature of the Port's change in project priority from delivery of new gates

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 3 of 8 
Meeting Date: February 25, 2020 
to maintenance of customer level of service standards during construction. This
work has helped the project identify operational challenges, engage stakeholders,
and employ measures prior to and during the turnover of the facility from
construction to operational use. We have included this work in the project through
completion. 
(3) Additional construction barricade mitigation efforts for critical passenger circulation 
paths using escalators, stairs, and elevators.  The number of passenger escalators
and elevators needed to be reduced to complete the construction, creating single
points of failure for access to the Concourse.  We have deployed customer service
personnel, increased passenger wayfinding, improved the aesthetics of barricades
separating  the  public  from  the  construction  areas,  and  provided  for  better
operational activation activities to provide a better customer experience through
the STS station up to the gates.
Included in this budget increase is $5 million to replenish the project's Management Reserve.
The reserve is held outside of the construction contract and will only be used with approval of
the Executive Director. 

KEY POINTS 
Alaska has expressed verbally to Port that they concur with the budget increase and moving
forward with completion of this project. The Airlines were briefed on December 5, 2019 about
the current status of the project.
The team has refined the phasing to better address customer and operational service, gate
capacity and the passenger experience to ensure there is no significant degradation in level of
service during the construction.  The team is employing lessons learned on turning over the
facility  for  operational  use.   The  team  continues  to  improve  the  detailed  phasing  and
construction sequencing to continue to improve the passenger experience while constructing
the project. We have successfully maintained AS's operations and are providing 10 gates during
Phase 2.
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary               Capital        Expense           Total 
COST ESTIMATE 
Original estimate                               $659,825,232     $12,300,000   $672,125,232 
Pending change                              $32,090,895      $7,909,105    $40,000,000 
Revised estimate                             $691,916,127     $20,209,105   $712,125,232 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 4 of 8 
Meeting Date: February 25, 2020 
AUTHORIZATION 
Previous authorizations                       $659,825,232     $12,300,000   $672,125,232 
Pending request for authorization               $32,090,895      $7,909,105     $40,000,000 
Total authorizations, including this request     $691,916,127     $20,209,105   $712,125,232 
Remaining amount to be authorized                    $0             $0             $0 
Annual Budget Status and Source of Funds 
This project is included in the 2020-2024 capital budget and plan of finance with a budget of
$659.8 million. Staff will return to Commission to request a capital budget increase of
$32,090,895, which would be transferred from the Aeronautical Reserve CIP (C800753)
resulting in zero net change to the Aviation capital budget. The funding sources will be the
airport development, revenue bonds and Passenger Facility Charge revenue (PFCs). 
This project is under construction, per Signatory Lease and Operating Agreement (SLOA) any
additional budget increase does not require further Majority in Interest (MII) approval. 
Financial Analysis and Summary 
Project cost for analysis              $712,125,232 
Business Unit (BU)                  Terminal Building 
Effect on business performance    NOI after depreciation will increase due to inclusion of
(NOI after depreciation)             capital (and operating) costs in airline rate base. 
Increasing use of PFCs reduces Port revenue as capital
costs are excluded from airline rate base. 
IRR/NPV (if relevant)                N/A 
CPE Impact                        $0.60-$1.95 depending on amounts of PCs applied to
ongoing revenue bond debt service. 
The funding plan includes approximately $126 million of PFCs to fund construction costs.
Capital costs funded with PFCs are excluded from the airline rate base and therefore do not
impact passenger airline cost per enplaned passenger (CPE). The funding plan also includes the
use of PFCs to pay some level of ongoing revenue bonds debt service. Debt service paid by PFCs
is also excluded from the airline rate base. 
BACKGROUND 
Project Metrics 
Budget/Planned   Utilization
to Date 
Cumulative Spent Against Authorization           $672.1 M    $425.8 M 
Overall Work Complete                               60%        60% 
Cash flow for Reporting Period (Q1 2019)           $43.7 M     $37.1 M 
Net Construction Contingency                      $24.7 M     $17.0 M 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 5 of 8 
Meeting Date: February 25, 2020 
Management Reserve *                         $14.7 M      $6.9 M 
Small Contractor Supplier (SCS) Design                  6.4%        6.2% 
SBE Participation (Construction)                       16.0%      19.08% 
SCS Participation (Construction)                         5.5%       5.55% 
WMBE Participation (Construction)                    3.6%       3.77% 
Apprenticeship Utilization to Date                     15.0%      18.61% 
Minority  Utilization  to   Date   (%  of           15.0%       32.9% 
apprenticeship) 
Women  Utilization  to  Date  (%  of        10.0%      10% 
apprenticeship) 
* Requires Commission Notification 
M = million 
Total Construction Contract Metrics 
Budget/Planned     Percent 
Original Contract Sum                             $445.9 M 
Executed Change Orders                          $24,2 M       5.42% 
Current Contract Sum                            $470.1 M 
Net Construction Contingency                      $33.7 M 
Contingency Expended/Authorized                $24.2 M       71.7% 
Remaining Construction Contingency                $9.5 M       28.3% 
Negotiated Support Services (NSS) 
NSS Original Budget Value                          $40.1 M 
NSS Current Budget Value                         $39.3 M 
NSS Authorized Amount                          $19.8 M       50.5% 
NSS Remaining Amount                         $19.5 M      49.6% 
Change Orders executed over $300,000 (since last report): 
Number      Summary Description                      Cost 
544 & 590     Increase Contaminated Soil Allowance          $2.1 M 
634           Concourse topping slab removal               $960,000 
641 & 684     Concourse C steel and vertical core revision     $946,000 
631           Mother's Room modifications                  $415,000 
549           Additional GC's for estimator                  $447,000 
ATTACHMENTS TO THIS BRIEFING 
(1)   Presentation slides 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 6 of 8 
Meeting Date: February 25, 2020 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
North Sea-Tac Airport Renovations (NorthSTAR) (CIP #C800544) 
February 26, 2019  NorthSTAR Program status update 
November 13, 2018  NorthSTAR Program status update 
July 31, 2018  NorthSTAR Program status update 
May 22, 2018  NorthSTAR Program status update 
Jan 30, 2018  NorthSTAR Program status update 
Oct 24, 2017  NorthSTAR Program status update 
July 25, 2017  NorthSTAR Program status update 
April 25, 2017  NorthSTAR Program status update 
January 24, 2017  NorthSTAR Program status update 
September 13, 2016  Request Commission authorization for the Chief Executive Officer to
(1) increase the North Satellite Renovation & North Satellite Transit Station Lobbies
(NSAT) project scope and budget; (2) increase authorization for project design; (3)
amend design service agreement with URS that exceeds 50% of the value of the original
contract; and (4) increase authorization for Preliminary Work Package #2 (PWP #2)
construction.
August 9, 2016  NorthSTAR Program Status Update 
May 24, 2016  Commission authorized Chief Executive Officer to 1) increase the North
Satellite project scope and budget; 2) increase authorization for NSAT design and overall
project support;  3) amend service agreements with Jacobs Project Management
Company and AECOM; and 4) authorize the  use of port crews and small works
contactors to perform work for the project. 
February 23, 2016  NorthSTAR Program status update 
November 24, 2015  NorthSTAR Program status update 
July 14, 2015  NorthSTAR Program status update 
April 28, 2015  NorthSTAR Program status update 
January 27, 2015  NorthSTAR Program status update 
October 28, 2014 - NorthSTAR Program status update 
August 19, 2014 - NorthSTAR Program status update 
May 27, 2014  NorthSTAR Program status update 
January 14, 2014  NorthSTAR Program status update 
September 24, 2013  NorthSTAR Program status update 
June 25, 2013 NorthSTAR Program status update 
April 9, 2013  The Commission authorized the Chief Executive Officer to enter into a
project labor agreement covering the NorthSTAR program's five major construction
projects. 
March 26, 2013 NorthSTAR Program status update 
June 26, 2012   The Commission received a briefing on the status of the Airline
Realignment Program and budget restructuring in association with the NorthSTAR
Program. 
April  10,  2012   Authorizations  for  the  North  Seattle-Tacoma  International  Airport
Renovations program for: 1) preliminary project funding; 2) execution of consulting

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 7 of 8 
Meeting Date: February 25, 2020 
contracts for design/construction support services and project management services;
and 3) use of Port crews and consultants to conduct regulated materials management
surveys and field support services for preliminary project planning tasks. 
North Satellite Renovation & North Satellite Transit Station Lobbies (CIP #C800556) 
August 15, 2017  The Commission authorized 
Increase the authorized budget by $107,000,000 capital and $500,000 expense and
authorize the remaining $261,547,392 capital and $8,800,000 expense, amending the
Hensel Phelps (HP) contract by $161,563,526 for the final MACC to complete the
project in Q3 2021.  Authorize execution of all pending and future change orders to
the HP contract within the authorized budget and project scope to avoid potential
delays. Authorize Port crews to support NSAT construction and authorize Port staff to
enter into a TRA with AS for the reimbursement of AS and Port responsible design
efforts and improvements. 
June 27, 2017  The Commission authorized four NSAT related items: 
increase project authorization for the North Satellite Renovation & North Satellite
Transit  Station  Lobbies  Project  by  $200,000,000;  execute  Preliminary  Work
Amendment #3 (PWA #3) with Hensel Phelps (HP) for up to $200,000,000; authorize
Port staff to execute all change orders to the HP contract within authorized budget 
and project scope without returning for additional Commission authorization; and
authorize Port Construction Services (PCS) to execute small works contracts and use
Port crews to support NSAT construction 
September 13, 2016  The Commission authorized four NSAT related items: 
the increase of project scope and budget (capital) by $7,000,000 for the revised third
floor layout to better accommodate the signature restaurant, provide 3,000 additional
square feet of future airport related leasable space, and increase AS premium traveler
lounge as requested by 4,850 square feet. 
Increase authorization by $1,000,000 for project design. 
Amend design service agreements with AECOM that exceed 50% value of the original
contract. 
Increase authorization by $30,000,000 to accommodate Preliminary Work Package #2
construction. 
May 24, 2016 - The Commission authorized four NSAT related items: 
Increase of project scope and budget (capital and expense) by $121,219,098 for 30% &
60% design scope additions and risk contingencies 
Increased authorization of $11,000,000 for continued NorthSTAR Program/Project
Management services and NSAT design and overall project support. 
Amend service agreements with Jacobs Project Management Co. and AECOM. 
Authorize the use of port crews and small works contractors. 
December 8, 2015  The Commission authorized $98,100,000 for the following: 
Additional Pre-Construction services ($1,200,000) 
Construction auditing services 
Preliminary Construction work 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9b_                                Page 8 of 8 
Meeting Date: February 25, 2020 
March 24, 2015  The Commission authorized three NSAT related items: 
Expand the baggage handling system increasing the project scope for $14,400,000 and
$1,954,000 to complete the design. 
Entering into a developer agreement with Puget Sound Energy and $200,000 in
reimbursement for the design and construction of underground gas infrastructure. 
$5,300,000 to Prepare four locations to accommodate temporary passenger loading
bridges, to construct temporary construction offices; To complete construction of a
Satellite Transit System (STS) North loop Dynamic Display system; $600,000 in expense
funds for regulated materials management for AS's tenant improvement project; and
Approval to use Port crew labor and small works contractors to complete early project
work. 
August 5, 2014  The Commission authorized expansion of the NSAT, $191,323,143 budget
increase,  $15,717,800  to  complete  the  design,  execute  amendments  to  existing
consulting contracts; execute future consulting contracts and use of and to advertise for
General Contractor/Construction Manager (GC/CM) alternative public works contractor. 
July 22, 2014 - NSAT Expansion Briefing 
April 22, 2014  Seattle-Tacoma International Airport Capital Program - Briefing 
January 14, 2014  NSAT expansion briefing. 
May 28, 2013, Commission authorized the execution of separate service agreements for
Construction Management Services and Commissioning Services, of approximate values
of $10 million and $1.5 million. 
December 11, 2012   The Commission was briefed on the Vertical Conveyance
Modernization Project Aero Phases 1 and 2 and the possibility of adding the specified
elevators and escalators to the NorthSTAR program. 
July 24, 2012 - Commission authorized $32,000,000 for the design of the NorthSTAR NSAT
Renovation and NSTS Lobbies project. 
April 10, 2012 - The Commission authorized the execution of consultant contracts for
design and construction support services; program management services; and the
completion of site surveys for regulated materials management, for $1,200,000. 






Template revised September 22, 2016.