PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      6f 
Date of Meeting   December 15, 2009 
DATE:    November 16, 2009 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Phil Lutes, Deputy Managing Director, Seaport 
Joe McWilliams, Managing Director, Real Estate & Property 
Management, 
Ticson Mach, Capital Project Manager, Seaport Project Management 
SUBJECT:  Water & Sewer Meter Upgrade 
Amount of this Request: $373,000      Source of Funds: Seaport
General Fund 
ACTION REQUESTED 
Request Commission authorization to prepare design and construction for the Water and
Sewer Meter Upgrade in the amount of $373,000. 
SYNOPSIS 
The Seaport and Real Estate Divisions request approval for the design and construction
of Water and Sewer Meter Upgrades in the amount of $373,000. The upgrade of the submeters
is needed to meet and be compatible with the Seattle Public Utilities (SPU)
Automated Meter Reading (AMR) system. If these sub-meters are not upgraded, the Port
will be required to pay higher commercial sewer charges. 
PROJECT DESCRIPTION AND JUSTIFICATION 
SPU policy includes a provision for commercial customer sub-meters that measure water
used exclusively for irrigation, delivery of water to ships, evaporation and water used in
manufactured goods and commodities  water that does not go into the sewer system.
The provision allows the Port or its tenants to pay for all water consumed, but only the
sewer usage based on the readings from the sub-meters. The Port has numerous submeters
throughout the Seaport and Real Estate properties in order to capture the correct
sewage discharge; however, the sub-meters do not meet current SPU guidelines.
SPU revised its Sewer Sub-meter Program requirements as of January 2006. One of the
revisions obliges property owners to install sub-meters that meet current SPU Automated
Meter Reading (AMR) technology. AMR is the technology that uses radio frequency


COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 16, 2009 
Page 2 of 4 
(RF) to collect consumption water meter between the meter and handheld device, and
transferring that data to a central database for billing, troubleshooting, and analyzing.
SPU notified the Port in late 2008 that unless sub-meters are upgraded to meet the current
standard, the sewer charge will be calculated as the same volume as the water consumed.
This is a significant financial impact to the Port and tenants, since the cost of sewer is
approximately two and half times of water. As a result, Port Maintenance estimates that
the water and sewer bill could increase from 10% to over 100% depending upon location. 
On February 29, 2009, SPU issued time extensions to the Port for continuing to read the
old style meters. The new billing method was effective as of June 1, 2009 for all TWIC
areas and December 1, 2009 for non-TWIC areas. 
Included in this authorization are some sub-meters for which Port tenants pay the utility
bills. As shown in the financial analysis below, this work will be reimbursed to the Port
by the tenants. Approximately two thirds of the work is the Port's responsibility and one
third is tenant reimbursable. 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Overall project scope is to prepare design and to complete construction for the
upgrade of all sub-meters throughout the Seaport and Real Estate properties to be
compatible with the AMR technology. 
This action will enable the Port and tenants to continue to pay for only the actual
sewer usage. 
Properties will begin construction as design is completed, so in some instances
construction will begin ahead of overall project design completion. 
Project Schedule: 
Commission Authorization              December 15, 2009 
100% Design Completed (all locations)      April 17, 2010 
Construction Complete                December 11, 2010 
STRATEGIC OBJECTIVES: 
This project supports the Port's strategies to "Ensure Airport and Seaport Vitality" and
"Exhibit Environmental Stewardship through our Actions" by: 
Maintaining financial performance. 
Assuring regulatory compliance. 
Providing safe and easy access for SPU meter reader, as required by SPU policy, and
eliminate the periodic trips to each physical location to read a meter. 
BUSINESS PLAN OBJECTIVES:

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 16, 2009 
Page 3 of 4 
The purpose of the project is to maintain the use of sub-meters in order to capture and
pay for the actual sewage used.
FINANCIAL ANALYSIS: 
Previous Authorizations (Planning CIP)                              $0 
Current request for authorization                                $373,000
Total Authorizations, including this request                        $373,000 
Remaining estimated budget to be authorized                          $0 
Estimated Project Cost Breakdown 
Design                                            $128,000
Project Management                                    $34,000
Permitting                                               $5,000
Overhead                                         $20,000
Construction                                           $186,000
Total Estimated Project Cost                                 $373,000
Source of Funds 
The Water and Sewer Upgrade project is an expense project. This project was included
in the 2010 Operating Budget in the amount of $230,000. However, delayed timing will
result in an unfavorable operating expense variance in 2010 of approximately $143,000.
It is currently expected that this will be offset by tenant reimbursements and favorable
expense variances in other areas. The project will be funded by the General Fund. 
Financial Analysis Summary 
CIP Category           Renewal/Enhancement 
Project Type            Infrastructure Upgrade 
Risk adjusted Discount rate  N/A 
Key risk factors          1) The increase in sewer costs that would result if the Port does
meet the requirements of the Sewer Sub-meter Program are
uncertain. Preliminary estimates were based on 2008 consumption
and rates provided by SPU and Project Management.
2) Delaying the installation of AMR technology will result in
higher commercial sewer charges. 
3) Meter upgrade costs have been estimated and could potentially
fluctuate as meters are identified and assessed. 
4) SPU reserves the right to approve any additional deduct meters
identified by the Port. 
Project cost for analysis     $373,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
November 16, 2009 
Page 4 of 4 

Business Unit (BU)      Portfolio Management Group; Real Estate Development & Planning;
Containers & Support Properties; Cruise & Industrial Properties 
Effect on business      The installation of the Automated Meter Reading technology avoids
performance          an increase in sewer charges or eliminates current sewer charges that
would result from the revision in the SPU Sub-meter Program.
The true amount of the savings is difficult to determine due to
variations in usage, identification of appropriate meters, and the
benefits associated with the Port versus Port tenants. However, based
on information provided by Project Management and SPU, the
potential benefit to the Port could be as much as $1,000,000 per year.
Using the same information, the potential benefit to Port tenants
could be as much as $850,000 per year. The estimated costs to install
the AMR's are $250,000 for the Port and $123,000 for Port tenants. 
Due to delayed timing, the cost of the project will create an
unfavorable operating expense variance in 2010 of approximately
$143,000. Tenant reimbursements, which will be reflected in
revenue, are estimated to offset $123,000 of this variance.
IRR/NPV          N/A 
SUSTAINABILITY AND LIFE CYCLE COSTS: 
Value Engineering will be incorporated as part of the design to ensure the best
solution for the upgrade, including but not limited to cost, product selection, and
maintenance.
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Do Nothing: Not upgrading the sub-meters would mean not meeting the
requirements of SPU Sewer Sub-meter Program. The calculation for sewer usage
will be solely based on water consumption. Port Maintenance estimates that the
water and sewer bill could increase from 10% to over 100% depending on location. 
Upgrade sub-meters to AMR technology: Proceeding with the design and bid
package for the requested action would enable the Port to minimize further financial
burden on the divisions and tenants due to non-compliant sub-meters. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
None