PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA                   Item No.        5b 
Date of Meeting     October 12, 2010 
DATE:      September 9, 2010 
TO:       Tay Yoshitani, Chief Executive Officer 
FROM:     Mike McLaughlin, Senior Manager, Cruise and Industrial Properties 
Rod Jackson, Capital Construction Project Manager, Seaport 
SUBJECT:   Terminal 91 Waterline Replacement 
CIP #800298 
Amount of this request: $3,555,000      Source of Funds: General Operating Funds 
and Tax Levy $145,000 
Total Project Cost: $4,255,000           Sales Tax: $132,000 
Estimated Workers Employed: 5 
ACTION REQUESTED:
Request authorization for the Chief Executive Officer to direct staff to proceed with the
construction phase of the Terminal 91 Waterline Replacement Project by (1) funding the
remaining work in the amount of $3,555,000, bringing the total project authorization to
$4,255,000; (2) purchasing materials necessary for the construction, and using Port
Construction Services (PCS) and Maintenance to self-perform majority of the
construction work; and (3) using existing or new small works construction contracts to
implement the remaining work. 
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 the fire
protection systemscritical to terminal/tenant operations and safety. Replacement of
these aged pipelines will 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 and negative impacts absorbed by our tenants when waterlines break. If

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 9, 2010 
Page 2 of 6 
nothing is done, additional water main failures are to be expected, resulting in higher 
frequency of emergency repairs and related significant impacts to the various terminal
operations. Now that final design is complete and permit applications prepared, staff is
ready to move into the construction phase. The tax levy will cover the costs associated
with environmental remediation. 
PROJECT STATEMENT AND OJECTIVES: 
Project Statement: 
This project will replace deteriorated waterlines, valves, and hydrants, separate domestic
and fire system lines, and install back-flow preventers dry pipe valves and above ground
hot boxes at several existing facilities including buildings; M-28, W-40, W-50 and
W-392 at T-91 by December 2011.
Project Objectives: 
Separate domestic and fire system lines while providing back flow preventers at
several existing facilities per Department of Development and Planning (DPD) and
National Fire Protection Association (NFPA) codes. 
Minimize disruptions to terminal operations during construction. 
Minimize future maintenance & repair work of the system. 
Upgrade the water system to provide additional capacity and connection points for
future T-91 development. 
Project will be on budget and at minimum cost. 
Project will be delivered on-time to meet schedule milestones. 
Project will be environmentally sound and will utilize sustainable environmental
elements. 
Project will coordinate with other projects including the T-91 Paving project within
the area. 
PROJECT SCOPE OF WORK AND SCHEDULE: 
Scope of Work: 
The overall project scope will utilize PCS to demolish and replace deteriorated
waterlines, valves, and hydrants; prepare base materials; provide new future utility stub
connections for additional capacity; separate domestic and fire system water service at
several of the existing facilities while installing back flow preventers per DPD and NFPA
codes; and restore pavement as required. Scope of this final request includes the
construction, permitting, testing of excavated soils and execution of contract documents
to support the final construction installation.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 9, 2010 
Page 3 of 6 
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          December 2011 
Close Out             January 2012            March 2012 
Due to busy terminal operations and seasonal peaks in traffic volumes, the construction
work is expected to be completed in phases to minimize impact on terminal operations. 
Request for project funding approval has been done in two steps: 
Step-1: This step consisted of funding for project pre-construction activities that included
design; engineering; cost estimating; permitting; phasing; and preparation of final
construction documents. This work is now nearly complete. 
Step-2: This current step will seek funding approval for construction cost and begin
installation shortly after Commission authorization.
FINANCIAL IMPLICATIONS: 
Budget/Authorization Summary 
Original Budget                                                                 $0 
Previous Authorizations (per Commission Approval on March 9,         $ 700,000 
2010) 
Current request for authorization (construction cost)                       $3,555,000 
Total Authorizations, including this request                               $4,255,000 
Remaining budget to be authorized                                              $0 
Total Project Cost                                                         $4,255,000 
Project Cost Breakdown 
Construction                                                            $3,366,000 
Sales Tax                                                               $ 132,000 
Soft Costs                                                                 $ 618,000 
REMEDITATION Environmental Reserves                         $ 145,000 
Total Project Costs                                                       $4,255,000

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 9, 2010 
Page 4 of 6 
Source of Funds 
This project was included in the 2010 Plan of Finance under Committed CIP# C800298,
T-91 Water Main Replacement N. of Bridge, in the amount of $4,200,000. The
additional $55,000 required to fund the balance is available due to anticipated timing
delays in other 2010 Plan of Finance Committed projects, such as the Terminal 104 Site
Improvements. 
The environmental reserve portion will be accounted for as environmental reserves and
charged to expense in accordance with Port Policy AC-9. The cash funded by
Environmental Reserves, 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         9.0% 
Discount rate 
Key risk factors         Project schedule could be delayed due to project complexity, weather,
and the need to minimize disruptions to terminal operations and existing
tenants/customers. This risk is partially mitigated with a phased
construction approach. 
Construction costs may increase if the schedule is significantly delayed.
The environmental component of the project may be more extensive as
site specific information becomes available during construction. 
Project cost for         $4,255,000 
analysis 
Business Unit (BU)     Seaport Industrial Properties 
Effect on business      This asset replacement project will not generate any incremental revenue.
performance          However it will eliminate disruptions to terminal operations, tenants, and
customers that would result from continued water main breaks. Revenue
from Terminal 91 operations (multiple lines of business) is budgeted to be
approximately $14,500,000 in 2011.
Incremental depreciation expense from this project is estimated at
$85,100/year, based on a 50 year asset life. NOI after Depreciation will
decrease by the associated depreciation from this project. 
IRR/NPV           No incremental revenue or operating expense. NPV is present value of
project costs. 
NPV
($3,953)
(in $000's)

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 9, 2010 
Page 5 of 6 
ECONOMIC IMPACTS AND BUSINESS PLAN OBJECTIVES: 
This project is aligned with the business plan objectives to maintain safe working
facilities and assets that provide customers with compelling value. This is a renewal and
replacement project to rebuild the major waterlines at T-91 which support all of the
current businesses at the terminal. 
STRATEGIC OBJECTIVES: 
This project supports the Port strategy to Ensure Airport and Seaport Vitality through
renewing and replacing vital Seaport Infrastructure to the Port of Seattle Waterfront
operations and to Exhibit Environmental Stewardship through our Actions by; 
Investing in, and renewal of Port assets; 
Maintaining the long term revenue generating capability of the waterlines supplied
to existing tenants. 
Best management practices will be deployed in the selection of materials, work practices
and ongoing total cost of ownership. 
Meet Environmental Obligations 
In addition to removing existing deteriorated waterlines from the environment, the project
will;
Acquire all necessary and required permits from appropriate agencies prior to the start
of construction; and; 
Comply with all conditions stipulated by permit authorities. 
Develop and Maintain Community Support 
This project will continue to develop and maintain community support by showing the
Port's commitment to long-term asset renewal and replacement of the deteriorated
waterline infrastructure at T-91, and its continued support for the variety of maritime
customers the terminal serves including commercial fishing, cold storage, and cruise
industries sustaining positive economic impacts to the region. 
ENVIRONMENTAL SUSTAINABILITY AND COMMUNITY BENIFITS: 
Replacement of the existing deteriorated waterline system with ductile iron pipe will
follow Policy EX-15, Sustainable Asset Management. Factors such as life-cycle cost,
structural performance, maintenance frequency, constructability, construction impacts on
tenants, environmental objectives and overall business objectives were considered.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 9, 2010 
Page 6 of 6 
No impact to the environment is anticipated as a result of this project. Upgrades will be
constructed with materials that have demonstrated long life and durability. 
What plans have been made to reduce maintenance cost? If not, why? 
This project replaces the existing waterlines that are essential to the activities at T-91.
The project will also reduce maintenance and repair costs by preventing potential damage
to tenant processing equipment and to fire protection systems at the site. 
What is the design life span of this project? 
Ductile iron pipe is commonly designed with a 50-year life span. 
TRIPLE BOTTOM LINE: 
The project supports the Port's Triple Bottom line: 
Economic Development- The project will provide long-term enhancement to a
revenue-generating Port asset that supports all tenants and customers at T-91. 
Environmental Sustainability- Water quality benefits will be provided by removing
deteriorated waterlines that will be replaced with ductile iron pipe. 
Social Equity- Project construction will be scheduled, phased and coordinated to
minimize impacts on vessels, tenants, and customers by minimizing impacts on
customers and to the port. 
ATERNATIVES CONSIDERED AND THEIR IMPLICATIONS: 
Alternative 1: Do nothing. Without replacement, the existing waterlines will continue to
deteriorate and the possibility of failure will continue to increase. Local repairs at points
of failure through the terminal have been costly and negatively impact the on-going
terminal operations when they occur. For this reason, Alternative 1 is not recommended. 
Alternative 2: Complete full 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 which cause tenant inconvenience when they occur.
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 March 9, 2010, Commission authorized $700,000 to proceed with the Design and the
Permitting phase of the project including construction document preparation.