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Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/09/2019MPAC Meeting

Office of Move Seattle



Agenda

• Office of Move Seattle

• Seattle Construction Market Analysis

• SDOT’s Response

• Questions



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



$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



$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


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


.

Inflation has risen faster than anticipated




$50

$100

$150

$200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Levy


.

Levy Spending

3 YearRamp-up

< 1 YearRamp-up




$50

$100

$150

$200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Levy


.

Levy Spending

Preferred Annual Spend Plan Example

Date (xx/xx/xxxx) Department Name Page Number3/5/2019 Seattle Department of Transportation10/4/2018

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



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


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


That’s why the


was created



Seattle Construction Market Analysis



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



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



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



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



$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



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



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



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



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



Questions?

[email protected]| 206-979-2796

www.seattle.gov/transportation

office of move seattle page 1 - apwa...

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