COMMISSION 
AGENDA MEMORANDUM                        Item No.          8e 
ACTION ITEM                            Date of Meeting      October 12, 2021 

DATE:     September 20, 2021 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Eileen Francisco, Interim Director, Facilities and Capital Programs 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  Ratification of Critical Work for South Satellite Hot Water (C801271) 

Amount of this request:               $1,100,000 
Total estimated project cost:          $1,100,000 
ACTION REQUESTED 
Request Commission ratification of critical work authorization in the amount of $302,537 for the
hot water at Seattle-Tacoma International Airport's South Satellite and additional authorization
for the Executive Director to complete construction of the project using a Job Order Contract in
the amount of $600,000, for a total authorization in the amount of $1,100,000, and a total
estimated project cost of $1,100,000. 
EXECUTIVE SUMMARY 
Domestic hot water is required for both, restrooms and for airport dining and retail at the Seattle-
Tacoma International Airport (Airport). Currently, two hot water tanks provide domestic hot
water to the South Satellite facility (SSAT) - one for Airport Dining and Retail (ADR) locations and
one for restrooms. One of the hot water tanks failed at the end of 2020 and is not repairable 
because of a leak in the shell of the tank. The redundancy in the system continues to provide hot
water to the SSAT from the remaining tank. This project will replace the two existing hot water
tanks with a new hot water system to ensure continued operations at the SSAT. This project was
originally anticipated to be completed under a small works authorization; however, upon
completion of design, it became clear that due to project complexity and materials cost the
estimated project cost exceeded the small works threshold. Critical work was acknowledged by
the Executive Director on September 7, 2021, to allow staff to move forward with a job order
contract to procure long-lead items and start work to limit the risk of a disruption at the SSAT. 


Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. __8e__                              Page 2 of 4 
Meeting Date: October 12, 2021 
JUSTIFICATION 
Both hot water tanks were installed in 2005. One hot water tank developed pinhole size leaks
due to material failure from corrosion. As both tanks were installed at the same time, the second
tank is at risk of failure. If the second tank fails, the SSAT will be without hot water for restrooms
or ADR spaces until a temporary unit is provided. At a minimum the ADR spaces will be required
to close; worst case the facility would need to be shut down until temporary hand washing units
are provided for the restrooms. This project will ensure the domestic hot water system for the
SSAT is returned to normal operations. In addition, the new system uses technology that is more
energy efficient. 
This project started in early 2021 as a small works project to replace the two hot water tanks with
identical tanks. Staff determined that a replacement in kind was not possible because of multiple
factors, with space constraints being the biggest impact. Engineering started the design in March
2021. Upon completion of the design, it was determined that using small works contracts to
install was no longer feasible as thresholds would be exceeded. 
Given the complex site conditions, estimated costs increased. The removal of the failing tanks
will need to be cut up into smaller pieces. The installation of the newer tanks will require the
tanks to be lowered into the mechanical room from a 20 ft high ramp access hatch. Material price
increases and higher soft costs due to the complexity have also contributed to the higher
estimated cost. Additionally, this project includes the amount of $100,000 in contingency to
install a temporary natural gas boiler as a mitigation should the remaining hot water tank show
an indication of failure, which could render the SSAT inoperable. 
Diversity in Contracting 
The construction for this project will be completed using an existing Job Order Contract (JOC) 
contractor that has a Women/Minority Business Enterprise goal of 5%. 
DETAILS 
This project will replace the existing domestic hot water tanks with two new hot water tanks. 
Scope of Work 
Work will include the replacement of both domestic hot water tanks with new energy efficient
semi-instantaneous hot water tanks. The new tanks are smaller than the existing tanks, which
will require less modification to fit into the space and meet current code. 
Other work will include: 
(1)   Updating electrical wiring and connections 
(2)   Programming and connecting direct digital controls 
(3)   Modifying water and steam piping to fit new tanks 
(4)   Commissioning and testing of new tanks and piping 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __8e__                              Page 3 of 4 
Meeting Date: October 12, 2021 

Schedule 
Port of Seattle Engineering completed the design for the replacement of the hot water tanks
when the project was initially proposed as a small works project. Once it was determined that
the cost would be over the amount of $300,000, a critical work memo was drafted in order for
staff to continue moving the project forward without delaying the in-use date of Q1 2022. 
Activity 
Commission design authorization            N/A 
Design start                                    2021 Quarter 1 
Commission construction authorization       2021 Quarter 3 
Construction start                             2021 Quarter 4 
In-use date                                    2022 Quarter 1 
Cost Breakdown                                     This Request           Total Project 
Design                                                     $10,000                $60,000 
Construction                                              $590,000             $1,040,000 
Total                                                           $600,000              $1,100,000 

FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary              Capital        Expense           Total 
COST ESTIMATE 
Original estimate                                 $1,100,000               $0      $1,100,000 
AUTHORIZATION 
Previous authorizations                            $197,463               $0        $197,463 
Critical Work Declaration                           $302,537               $0        $500,000 
Authorization Increase                             $600,000              $0      $1,100,000 
Total authorizations, including this request       $1,100,000               $0      $1,100,000 
Remaining amount to be authorized                    $0             $0             $0 

Annual Budget Status and Source of Funds 
This project, CIP C801271, was not included in the 2021-2025 capital budget and plan of finance.
A budget transfer in the amount of $1,100,000 was transferred from the Aeronautical Reserve
CIP (C800753) resulting in zero net change to the Aviation capital budget. The funding source will
be Airport Development Fund. 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. __8e__                              Page 4 of 4 
Meeting Date: October 12, 2021 
Financial Analysis and Summary 
Project cost for analysis                         $1,100,000 
Business Unit (BU)                             Terminal Building 
Effect on business performance (NOI after     NOI after depreciation will increase due to
depreciation)                                  inclusion of capital (and operating) costs in
airline rate base. 
IRR/NPV (if relevant)                           N/A 
CPE Impact                                  Less than $.01 in 2023 
Future Revenues and Expenses (Total cost of ownership) 
ATTACHMENTS TO THIS REQUEST 
(1)   Presentation slides 
(2)   Critical work authorization memo dated September 7, 2021 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None 










Template revised June 27, 2019 (Diversity in Contracting).