4c
PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 4c ACTION ITEM Date of Meeting December 8, 2015 DATE: December 2, 2015 TO: Ted Fick, Chief Executive Officer FROM: Dave Soike, Director, Aviation Facilities and Capital Program Wayne Grotheer, Director, Aviation Project Management Group SUBJECT: South Utility Tunnel Steam Piping Upgrade (CIP #C800708) Amount of This Request: $990,000 Source of Funds: Airport Development Fund (ADF) Est. Total Project Cost: $1,000,000 Est. State and Local Taxes: $65,000 (Est.) ACTION REQUESTED Request Commission authorization for the Chief Executive Officer to design, advertise, and execute a major works construction contract for the South Utility Tunnel Steam Piping Upgrade project at Seattle-Tacoma International Airport in the amount of $1,000,000. SYNOPSIS This authorization would allow for design and construction of upgrades to the aging steam heat and hot water delivery system to the Airport's South Satellite. Design and construction are being requested simultaneously to expedite completion of the project during the summer months, when there is no need to heat the South Satellite. Performing work in the summer will enable the upgrades to be completed for winter when the heating is necessary. BACKGROUND The steam pipes that provide heat and hot water to the South Satellite run from the boiler room through a utility tunnel to the South Satellite. As the temperature of these pipes fluctuates through normal operations, the pipe lengths expand and contract. The expansion joints in these pipes allow the pipe to lengthen and shorten without being damaged. These expansion joints have exceeded their life expectancy by 15 to 20 years. Many now are showing signs of failure (leaking steam at joints) that could result in months long heat and hot water outages to the South Satellite. Authority for design and contract execution is being requested in one action in order to complete the project during the summer months, when it is not necessary to heat the South Satellite. Template revised May 30, 2013. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 2, 2015 Page 2 of 6 The existing steam piping expansion joints were installed 45 years ago and have exceeded the manufacturer's recommended useful life. The expansion joint conditions were assessed during several site visits and meetings by Aviation Facilities and Infrastructure and Maintenance groups, who determined that the expansion joints leak and should be replaced rapidlyy to prevent possible consequences caused by a major connection failure. Port Maintenance Crews have tightened the flange bolts in an attempt to fix the leaks. Further tightening of the flange bolts is not recommended due to the possibility of causing the flange gasket to fully collapse and disrupt steam service to the South Satellite for an extended period of time. On March 18, 2014, Commission approved funding of $1,250,000 for a similar project to upgrade the North Satellite steam piping and it was completed in October 2014, within approved budget. PROJECT JUSTIFICATION AND DETAILS Authorization of this request will allow existing expansion joints to be replaced prior to a connection failure. A connection failure could result in the following: Expansion joint failure could cause damage to the steam line, causing the South Satellite to be without heat or hot water for concessions and restrooms for several months. Expansion joint failure is also a safety concern. If one were to suddenly fail, any personnel located in the vicinity would be exposed to live high pressure steam that is operating at 100 pounds per square inch pressure and has a temperature over 300 degrees Fahrenheit. Existing steam leaks are causing energy losses that are estimated to be around $10,000 annually for a single steam leak through 1/8" orifice at 100 pounds per square inch operating pressure, which adds up to tens of thousands of dollars annually for multiple leaks present at the South Satellite tunnel. Project Objectives Replace existing expansion joints in steam and condensate lines in South Utility Tunnel. Complete project on schedule. Complete project within budget. Reduce risk of piping failure that could cause extended utility outages to South Satellite. Reduce safety risk to personnel working in South Utility Tunnel. Develop detailed plans for current pipe conditions in tunnel to be used on this project as well as future projects. Perform construction prior to winter months to remove cost impact of temporary heating. Minimize disruption to South Satellite tenants and operations by installing a temporary boiler to provide hot water to restrooms and concessions during construction. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 2, 2015 Page 3 of 6 Scope of Work Design for this scope of work will be procured under an existing design services indefinite delivery, indefinite quantity (IDIQ) contract. Survey and documentation of steam line to confirm locations of existing steam and condensate lines, supports, anchors, slides, guides, steam traps, ball joints, and appurtenances. Create updated tunnel plans and piping diagrams depicting this updated condition. Perform piping thermal analysis to allow for proper design of expansion joints. Engineer evaluation of existing pipe support, anchors, slides, guides, and support bracing. Replace as necessary. Replace existing expansion joints on existing steam and condensate lines in five locations in the South Utility Tunnel. Perform necessary abatement of existing gaskets and pipe insulation containing asbestos. Install temporary natural gas boiler to provide hot water to South Satellite during construction operations. Schedule The project schedule is as follows: Project Notebook Approval 4th Quarter 2015 Commission Authorization for Design and Construction 4th Quarter 2015 Design Start (Under Existing IDIQ) 1st Quarter 2016 Advertise, Execute 2nd Quarter 2016 Construction 3rd and 4th Quarter 2016 FINANCIAL IMPLICATIONS Budget/Authorization Summary Capital Expense Total Project Original Budget $1,000,000 $0 $1,000,000 Previous Authorizations $10,000 $0 $10,000 Current request for authorization $990,000 $0,000 $,990,000 Total Authorizations, including this request $1,000,000 $0,000 $1,000,000 Remaining budget to be authorized $0 $0 $0 Total Estimated Project Cost $1,000,000 $0 $1,000,000 Project Cost Breakdown This Request Total Project Design Phase $200,000 $200,000 Construction Phase $735,000 $735,000 State and Local Sales Tax Total (Est) $65,000 $65,000 COMMISSION AGENDA Ted Fick, Chief Executive Officer December 2, 2015 Page 4 of 6 Budget Status and Source of Funds This project was not included in the 2016-2020 capital budget and plan of finance. The budget transfer of $1,000,000 will be made from the Aeronautical Allowance CIP (C800404) which will result in no net change to the Airport capital budget. The funding source will be the Airport Development Fund. Financial Analysis and Summary CIP Category Renewal/Enhancement Project Type Renewal & Replacement Risk adjusted discount rate N/A Key risk factors N/A Project cost for analysis $1,000,000 Business Unit (BU) Terminal Building Effect on business performance NOI after depreciation will increase IRR/NPV N/A CPE Impact Less than $.01 in 2017 Lifecycle Cost and Savings This project will eliminate the several existing steam leaks that are causing energy losses estimated to at least $10,000 annually. (A single steam leak through 1/8" orifice at 100 pounds per square inch operating pressure will waste $10,000 annually. There are multiple leaks of unknown size present in the South Satellite tunnel.) STRATEGIES AND OBJECTIVES This project supports the Port's Century Agenda objective of meeting the region's air transportation needs at Sea-Tac Airport for the next 25 years. Maintaining our existing assets and infrastructure is necessary to meeting this objective. TRIPLE BOTTOM LINE Economic Development This project will allow the Port to continue providing our airline and concessions tenants with uninterrupted heat and hot water to the South Satellite. Completion of this project will prevent an inevitable heat/hot water outage, and also prevent the economic impacts of an emergency repair project and the potential costs to tenants at the South Satellite. Environmental Responsibility This project will eliminate the existing steam leaks that are causing energy losses. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 2, 2015 Page 5 of 6 Community Benefits The project manager and Central Procurement Office will coordinate with the Office of Social Responsibility to determine opportunities for small business participation in support of Resolution No. 3618. ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1) Delay the project by trying to maintain existing expansion joints. Cost Estimate: $0 Pros: Low short-term cost. Cons: Failure would expose personnel to live high pressure steam that is operating at 100 pounds per square inch pressure and has a temperature over 300 degrees Fahrenheit. As all of the joints are 45 years old and well past the expected life of 15-20 years, experience has shown that repair is not feasible. Given the age and condition of the joints, failure could occur each time any of the joints are cycled through the steam piping shutdown and startup. This will result in more steam and condensate leaks that will eventually lead to failure. Failure of the line will result in long outages of heat and hot water to restrooms and concessions in the South Satellite. This is not the recommended alternative. Alternative 2) Attempt to replace only the most vulnerable of the 32 expansion joints using small works funds. Cost Estimate: $250K-$1.5M Pros: Lower short-term costs. Cons: Failure would expose personnel to live high pressure steam that is operating at 100 pounds per square inch pressure and has a temperature over 300 degrees Fahrenheit. This alternative assumes that we can predict which joints are more likely to fail and requires shutdowns to the line during each replacement without the temporary boiler to provide hot water to the South Satellite during the outage. As all of the joints are 45 years old and well past the expected life of 15-20 years, there is considerable risk if only some are replaced. Given the age and condition of the joints, failure could occur each time any of the joints are cycled through the steam piping shutdown and startup. This alternative has the highest uncertainty for cost, schedule and emergency shutdowns. Potentially higher costs due to more shutdowns and additional contractor mobilizations. This is not the recommended alternative. COMMISSION AGENDA Ted Fick, Chief Executive Officer December 2, 2015 Page 6 of 6 Alternative 3) Replace the expansion joints in both the steam pipe and condensate lines. Cost Estimate: $1,000,000 Pros: This option allows the upgrade at one time. Temporary water heater can be provided during this work to minimize impact on the heating water and domestic water systems. This alternativeis the most economical over the life of the system because it requires only one mobilization to fix the issue for 20+ years. Cons: Highest initial costs. This is the recommended alternative. ATTACHMENTS TO THIS REQUEST None PREVIOUS COMMISSION ACTIONS OR BRIEFINGS March 18, 2014, Commission approved funding of $1,250,000 for a similar project (CIP #800659) to upgrade the North Satellite steam piping. The project was completed in October 2014, within approved budget.
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