Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
Page 1
Office of Move Seattle
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
Page 2
Office of Move Seattle
Agenda
• Office of Move Seattle
• Seattle Construction Market Analysis
• SDOT’s Response
• Questions
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Why an Office of Move Seattle?
• 9-year levy program size and complexity
• Rising Consumer Price Index / Construction Cost Index
• High leverage assumptions, at $560M
• No central portfolio delivery data system
• Overly optimistic original work plan
• Delivery commitments greater than resources
• Frequent work plan changes
Leverage: assumed funds that come from grants, partnering agencies, and other non-SDOT sources
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
$1,500 M
$1,000 M
$500M
$0
$365MBTG Levy
Bridging The Gap Levy to Move Seattle
$179MLocal
$69M Leverage
$930MMove
SeattleLevy
$264MLocal
$564MLeverage
This assumes a very large amount of funds will come from grants, partnering agencies, and other sources
Total = $1.8B
Total = $600M
Levy by the Numbers
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
$930MMove
SeattleLevy
$365MBTG Levy
$179MLocal
$69M Leverage
$264MLocal
$564MLeverage
B r i d g i n g T h e G a p L e v y t o M ov e S e a t t l e
.
$0
$50
$100
$150
$200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Local BTG Levy Leverage
Construction Cost Index
$0
$50
$100
$150
$200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Levy
Decline in CCI helped SDOT’s 2009 - 2015 spending with very low construction bid prices
When BTG was being planned & estimated the CCI was rising at a significant rate, which was assumed to continue throughout the 9 year Levy
Original Annual Spend Plan
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
Page 6
Office of Move Seattle$0
$50
$100
$150
$200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Levy
Construction Cost Index
CCI was very flat during the time the Levy to Move Seattle was being planned & estimated, moderate inflation was assumed
B r i d g i n g T h e G a p L e v y t o M ov e S e a t t l e
.
Inflation has risen faster than anticipated
Original Annual Spend Plan
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
Page 7
Office of Move Seattle$0
$50
$100
$150
$200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Levy
B r i d g i n g T h e G a p L e v y t o M ov e S e a t t l e
.
Levy Spending
3 YearRamp-up
< 1 YearRamp-up
Original Annual Spend Plan
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle$0
$50
$100
$150
$200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Levy
B r i d g i n g T h e G a p L e v y t o M ov e S e a t t l e
.
Levy Spending
Preferred Annual Spend Plan Example
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/4/2018 Page 9
Work & Spend Plan Example
Planning
Design/ROW/Environmental
Construction
Other
0%
10
%
30
%
60
%
90
%
10
0%
Ad
NTP SC P
C
Construction
Construction Admin
Design
Right of WayEnvironmental
Planning
Project Development
• Reduce risk of under delivering/spending
• Reduce carry-forward funds
• Demonstrate Levy delivery to the public
• Better cash flow management
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Data Collection & Sharing
Move Seattle
Database
Scope
Schedule
Budget & Cost Est.
Contingency
Change Control Board
Funding
Spending Plan
Risk
Levy Deliverables
Delivery Method
Levy Program
dotMAPs
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation2/5/2019 Page 11
Office of Move Seattle Goals
• Realistic Project Schedules
• Scope Control
• Prudent Cost Estimates
• Refined Spend Plans
• Qualitative Risk Management
• Deliverable Tracking
• Comprehensive Data
• Monitor Progress
• Accurate Reporting
• Better Decision Making
• Share Lessons Learned
• Support & Guidance
Success = Public Support for the Next Levy
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation2/5/2019 Page 12
That’s why the
Office of Move Seattle
was created
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Seattle Construction Market Analysis
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
SDOT Concerns
• SDOT has recognized a significant rise in construction costs in the past few years, which is impacting SDOT’s ability to deliver the entire Levy as anticipated
• Many design consultants are busier than ever before
• Contractors are busier, and taking on more projects each season than ever before
• SDOT is finding it more difficult to attract labor
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Regional Construction Market Analysis
• SDOT hired Otak to assist in examining the current construction market in the Seattle area
• Collected data from all major agencies
• City of Seattle, WSDOT, Sound Transit, Port of Seattle, King County, City of Tacoma, PSRC, etc.
• Local AGC, large contractors, etc.
• SDOT reviewed this data and other research to understand the trends in the local construction market
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
2018 2019 2020 2021 2022 2023 2024
$0.7
$0.6
$0.5
$0.4
$0.3
$0.2
$0.1
$-
Bill
ion
s
City of Seattle
Estimated All City of Seattle Spend
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
2018 2019 2020 2021 2022 2023 2024
$0.7
$0.6
$0.5
$0.4
$0.3
$0.2
$0.1
$-
Bill
ion
s
Estimated Tri-County All Government Spend$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$-
Other Puget Sound Gov’t Agencies
City of Seattle
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
$70
$60
$50
$40
$30
$20
$10
$-
Bill
ion
s
2018 2019 2020 2021 2022 2023 2024
Private Construction
Private Soft Costs
Estimated All Tri-County SpendAnnual Spend Staying Near $50 Billion
City of SeattleOther Puget Sound Gov’t Agencies
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Analysis Results
• Region Construction Market Analysis Findings:
• Many projects in the Puget Sound competing for skilled labor
• Labor is the largest contributor to construction cost; varying data
suggests a labor shortage up to 10%
• Baby Boomers are retiring from the construction industry, Millennials are
not backfilling, leaving a deficit in the labor supply
• Uncertainties in immigration
• Employee benefits: primarily salary and health care costs are rising
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Analysis Results
• Region Construction Market Analysis Findings (cont.):
• Tariff wars are not having much effect on material cost increases
for steel or concrete
• Recent Federal policies have created uncertainty
• Oil prices have a large effect on construction costs
• Asphalt, vehicle fuel cost, production of materials, shipping
• Currently prices are relatively stable
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
SDOT’s Response
• SDOT is taking the following actions:
• SDOT is currently using the following construction escalation
(inflation) factors for the Seattle market:
5.00% for 2019
4.50% for 2020
4.15% for 2021
• The strong Puget Sound economic growth in the past few years is
expected to remain steady for the remainder of the Levy
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
SDOT’s Response
• SDOT continues to monitor unit bid prices and adjust cost
estimates, budgets, and escalation factors accordingly
• SDOT continues to meet regularly with Associated General
Contractors, maintain close coordination, and share
information
Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting
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Office of Move Seattle
Questions?
[email protected]| 206-979-2796
www.seattle.gov/transportation