PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No. 
ACTION ITEM             Date of Meeting    May 8, 2012 

DATE:    May 7, 2012 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Ralph Graves, Managing Director, CDD 
Dwight Rives, Director, PCS 
Rod Jackson, Capital Project Manager, Seaport 
SUBJECT:  Terminal 91 Waterline Replacement 
CIP #800298 
Amount of This Request: $300,000      Source of Funds: General Operating Funds 
Total Project Cost: $4,875,000 
ACTION REQUESTED:
Authorization for additional funding to complete construction of the project at an additional cost
of $300,000 for a total project cost of $4,875,000 
SYNOPSIS:
Portions of the underground waterlines at Terminal 91 (T-91) in the vicinity of the Magnolia
Bridge and upland area were installed over 60 years ago (1945 Navy era). These old, deteriorated
systems are unreliable and have exceeded their useful design/service life.
These pipelines distribute the domestic water throughout the terminal and supply water to the fire
protection systemscritical to terminal/tenant operations and safety. Replacement of these aged
pipelines was to prevent continued failures which create costly repairs and interruption of
operations for both the Port and our customers. Multiple water main failures during the past few
years have resulted in repair costs of over $150,000 plus the additional costs including negative
impacts absorbed by our tenants when waterlines fail. 
Commission approved the construction funds for this project on October 12, 2010 and
construction commenced November 2010.
During the first weeks of construction, the Project Team discovered the need to replace a 1200
foot long segment of pipe and valves which were not in the original work scope. At the time of

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 7, 2012 
Page 2 of 4 
discovery, the team felt that the project would have adequate contingency to absorb the costs of
additional pipeline installation and the decision was made to proceed with the additional work
scope and to closely monitor expenditures as construction continued. However, as construction 
progressed, the project's contingency was depleted and in January 2012, the Team went before
Commission to request an additional $320,000. At that time, the Team analyzed remaining work
and felt confident that the work could be completed within the revised authorized budget. 
Subsequently, due to varying site conditions and in finding more extensive deterioration of the
existing piping system than originally expected, the remaining work required a greater level of
effort than what was reported in January 2012. Based on current projections, the project will
need an additional $300,000 to complete the construction work. 
PROJECT STATEMENT AND OBJECTIVES: 
Project Statement: 
This project replaces deteriorated waterlines, valves, and hydrants, separates domestic and fire
system lines, installs back-flow preventers, dry pipe valves, and above-ground hot boxes at
several existing T-91 facilities including buildings M-19, M-28, W-39, W-40, W-50, W-390 and
W-391 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Scope of Work: 
The project was designed in-house, the construction portion utilized Port Construction
Services and Marine Maintenance crews to demolish and replace deteriorated waterlines,
valves, and hydrants; prepare base materials; provide new future utility stub connections for
additional future Upland capacity; separate domestic and fire system water service at several
of the existing facilities while installing back flow preventers per City of Seattle and National
Fire Protection Codes; and restore surface pavement as required.
Schedule: 
Start                  Finish 
Pre Design       January 2010         March 2010   (COMPLETED) 
Design           March 2010          September 2010 (COMPLETED) 
Permits           September 2010       October 2010   (COMPLETED) 
Construction       November 2010       June 2012   (IN PROGRESS) 
Close Out         July 2012          November 2012

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 7, 2012 
Page 3 of 4 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary 
Original Budget                                           $0 
Previous Authorizations                                 $4,575,000 
Current request for authorization                              $300,000 
Total Authorizations, including this request                     $4,875,000 
Remaining budget to be authorized                               $0 
Total Project Cost                                       $4,875,000 
Project Cost Breakdown 
Construction                                      $4,092,000 
Sales Tax                                        $ 150,000 
Soft Costs                                         $ 547,000 
REMEDIATION Environmental Remediation Liability           $ 86,000 
Total Project Costs                                     $4,875,000 
Source of Funds 
This project was included in the 2011 and 2012 Plan of Finance under Committed CIP#
C800298, T-91 Water Main Replacement N. of Bridge, in the amount of $4,255,000. The
additional $620,000 required to fund the balance is available due to deferred projects such as the
Terminal 25 South Redevelopment Phase 2 project. 
The Environmental Remediation Liability portion will be charged to expense in accordance with 
Port Policy AC-9. The cash funded by Environmental Remediation Liability, which pays for the
environmental cleanup project, is funded by the Port's Tax Levy.
The remainder of the project will be funded from the General Fund. 
Financial Analysis Summary:
CIP Category   Renewal/Enhancement 
Project Type    Renewal & Replacement 
Risk adjusted   NA 
Discount rate 
Key risk       Project schedule and costs could increase if there are continued unforeseen
factors         complexities such as underground obstructions. These risks are mitigated as
the project continues through the construction phase. 
The environmental component of the project may be more extensive as site
specific information becomes available. This risk is also mitigated as the
project continues through the construction phase.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
May 7, 2012 
Page 4 of 4 
Project cost for  $4,875,000 
analysis 
Business Unit   Seaport Industrial Properties 
(BU) 
Effect on      This project will not generate any incremental revenue. 
business
performance    Total depreciation expense from this project is estimated to be $97,500 per
year based on a fifty year life. The allocation of actual project costs to
specific assets will be finalized near the end of the project, estimated to be the
end of the second quarter 2012. Net Operating Income after Depreciation for
this facility will decrease by the associated depreciation expense of this
project. 
NOI (in $000's)        2012     2013     2014     2015     2016
NOI            $0     $0     $0     $0     $0
Depreciation          ($49)     ($98)     ($98)     ($98)     ($98)
NOI After Depreciation   ($49)     ($98)     ($98)     ($98)     ($98)
IRR/NPV       NPV
(in $000's)
($4,875)
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1: Shut down the project without completing the work. Alternative 1 is not
recommended. 
Alternative 2: Complete replacement of the failing underground water distribution systems
serving the existing facilities and tenants at T-91 to maintain water service throughout the
facility and provide required fire protection systems. This alternative will restore the
waterlines to full beneficial use and will minimize the possibility of future failures. This
upgrade will also provide needed capacity and additional connection points for future
development of the terminal. This is the recommended alternative. 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
On January 24, 2012, Commission authorized an additional $320,000 to complete construction
phase of the T-91 Waterline Replacement project. 
On October 12, 2010, Commission authorized $3,555,000 to proceed with the Construction
phase of the T-91 Waterline replacement project. 
On March 9, 2010, Commission authorized $700,000 to proceed with the Design and the
Permitting phase of the project including construction document preparation.