Lynnwood Link Extension Update Sound Transit Board Meeting August 24, 2017 DRAFT - SUBJECT TO CHANGE Today’s Agenda  Project Status  Current Pre-Baseline Project Cost Estimates/Schedule  Value Engineering Efforts  Federal Funding Update DRAFT - SUBJECT TO CHANGE 2 Lynnwood Link Extension • Length: 8.5 miles from Northgate to Lynnwood • Elevated/at-grade: approximately 4.1 miles of elevated guideway and 4.4 miles at-grade • Stations: Shoreline South/145th, Shoreline North/185th, Mountlake Terrace, Lynnwood City Center • Parking: 3 parking garages with 1,500 added spaces over the 8.5 mile extension Project Benefits • Fast, frequent, reliable service in congested I-5 corridor - 28 minutes from Lynnwood Transit Center to downtown • Generates over 74,000 weekday boardings system-wide by 2035 • Connects Shoreline, Mountlake Terrace, and Lynnwood to regional Link system • Serves existing transit centers at Mountlake Terrace and Lynnwood Transit Center • Potential TOD opportunities 4 Project Status • Final Design began in April 2016 • Designer, Civil GC/CM Contractors, Construction Management Consultants on board, co-located with staff • Currently at 60% level of design DRAFT - SUBJECT TO CHANGE 5 Previously Reported/Monitored Top Risks • Third party approvals – Cities, WSDOT, FHWA • Timely ROW acquisition for construction • Uncertainty with Federal funding • Construction market conditions – price escalation, labor shortages ongoing • Differing site and underground utility conditions 6 Cost Estimates* (YOE$) • ST2 cost estimate (2005): up to $2.4B – Start of revenue service 2023 • Preliminary Engineering estimate (2015): $2.1B – Start of revenue service 4Q 2023 • Preliminary Engineering re-estimated (2016): $2.4B** • Final Design 60% estimate (2017): $2.9B – Start of revenue service mid-2024 *All estimates include assigned costs for light rail vehicles and Operations and Maintenance Facility **Estimate used in FTA/ST risk assessment (Feb 2017) DRAFT - SUBJECT TO CHANGE 7 ST2 Cost Estimate vs Current 60% Cost Estimate ST PHASE Administration Preliminary Engineering Final Design Right of Way Construction Construction - OMFE Construction Services Third Parties Vehicles Unallocated Ctg. For Const. Total (excludes finance charges) ST Estimate 60% Estimate Variance (60% to ST2) % Change (60% to ST2) (YOE$, M) (YOE$, M) (YOE$, M) % $100.4 $61.5 $147.7 $134.8 $1,367.0 $184.2 $116.5 $0.0 $169.0 $137.1 $2,418.2 $95.0 $22.7 $126.9 $235.7 $1,878.5 $184.2 $111.5 $17.3 $169.0 $93.9 $2,934.8 ($5.4) ($38.9) ($20.8) $101.0 $511.5 $0.0 ($5.0) $17.3 $0.0 ($43.1) $516.6 -5% -63% -14% 75% 37% 0% -4% N/A 0% -31% 21% Note: 60% estimate does not include $19.8M spent prior to entry to project development. DRAFT - SUBJECT TO CHANGE 8 Major Factors Increasing Cost Estimates • Real Estate Acquisition / Market Conditions • Construction Market Conditions • Design Evolution/Scope Changes • General Contractor/Construction Manager Contracting DRAFT - SUBJECT TO CHANGE 9 Cost Estimate Increases by Major Capital Budget Increase Factors Factors $100M Real Estate $140M - $190M Construction Market Conditions $150M - $190M Design Evolution/Scope Changes $90M - $120M GC/CM Contracting 0 50 100 150 $ in millions DRAFT - SUBJECT TO CHANGE 200 250 10 Real Estate Acquisitions / Market Conditions • Number of needed properties has increased • Appraisals are 44% higher than 2014  20-25% higher than anticipated escalation • Relocation is difficult  limited supply of comparable properties DRAFT - SUBJECT TO CHANGE 11 Construction Market Conditions • Saturated market & labor shortages • Not a “buyer’s market”, multiple contracts to pursue • Public work less preferred for contractors in this overheated market • Material and commodity price escalation continues • Current market risk influences pricing • Other regional public agencies experiencing DRAFT - on SUBJECT TO CHANGE overheated market impacts cost Ellen M. Banner / The Seattle Times 12 Design Evolution/Scope Changes • Transit integration – better bus transfer facilities with partner agencies • Changes in 3rd party requirements, evolving codes/regulations • ST3 integration (BRT, 130th Station) • Trees – approx. $32 million more in landscaping costs DRAFT - SUBJECT TO CHANGE 13 Design Evolution/Scope Changes • Design provisions to minimize construction disruption ‒ Temporary noise walls ‒ Temporary traffic control ‒ Temporary parking DRAFT - SUBJECT TO CHANGE 14 GC/CM Contracting • 5-10% initial higher cost than Design-Bid-Build (DBB) contracting • Benefits include: – Contractor input into value engineering, constructability, scheduling, estimating – Reduces risks during construction – Typically requires less contingencies than DBB (subject to FTA concurrence) DRAFT - SUBJECT TO CHANGE 15 Snapshot of Building Cost Escalation 2015 - 2017 Description Market Condition Percentage Division 3 – Concrete 8% Division 4 – Masonry 100% Division 5 – Metals 30% Division 7 – Thermal/Moisture Protection 45% Division 8 – Openings (doors & windows) 40% Division 9 – Finishes 35% Division 14 – Conveying Systems (elevators & escalators) 350% Division 31 – Earthwork 10% Source: Hoffman Construction DRAFT - SUBJECT TO CHANGE 16 Construction Cost Escalation Example University of Washington Station • Contract Award to Hoffman 2011: $141M • Sound Transit Engineer’s Estimate: $143M • Hoffman’s Current Estimate if station was bid and built today: $248M DRAFT - SUBJECT TO CHANGE 17 What We Are Doing to Lower Costs • Value Engineering – Brainstorming and analyzing multiple cost saving options – Engaging with jurisdictions, revisiting requirements • Risk Assessment – Working with GC/CM contractors to identify and properly allocate risk for pricing • Peer Review ‒ Invited experts from Dallas and Portland • Process results in new direction to design team 18 Federal Funding Update • Executive Branch Budget Proposals • Congressional actions • FFGA Process 19 Next Steps  Complete Cost Saving Idea Evaluation: 4Q 2017  Incorporate cost saving ideas: 1Q 2018  Prepare Revised Cost Estimates: 1Q - 2Q 2018  Risk Assessment: 2Q 2018  Secure land use permits/agreements with cities and WSDOT: 4Q 2017 - 1Q 2018  Baseline Project (budget and schedule) and Execute FFGA: 3Q 2018  Complete Design/Begin Construction: 4Q 2018 20 Continuing Top Risks • Uncertainty with Federal funding • Construction market conditions – price escalation, labor shortages ongoing • Time and cost of ROW acquisition for construction • Third party approvals – Cities, WSDOT, FHWA • Differing site and underground utility conditions 21 Major Project Status • ~$7B of ST2 projects baselined, fully committed & trending within budget: – – – – • South 200th, Northgate, East Link Extensions I-90 Two-Way Transit & HOV Operations (Stage 3) Tacoma Trestle Track & Signal, Sounder Yard Expansion projects Light Rail Vehicle Procurement ST2 projects not baselined, facing cost and schedule uncertainty: ‒ Lynnwood, Federal Way Link Extensions ‒ Sounder Maintenance Base, Sounder Access Improvement projects • ST3 Program includes financial capacity for limited market fluctuations ‒ Staff will continue monitoring and responding to potential cost impacts DRAFT - SUBJECT TO CHANGE Souun'nunsrr HIDE THE WIFE Questions?