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HomeMy WebLinkAboutRes2009-049Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2009-049 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO AMEND AND EXTEND THE MAINTENANCE AND OPERATING AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC. THROUGH SEPTEMBER 30, 2010 WHEREAS, the current Maintenance and Operating Agreement ("Agreement") between Seward Ship's Drydock and the City of Seward for the Shiplift Facility is set to expire June 3Q 2009; and WHEREAS, due to the economic value ofthis industry to the community of Seward and the necessary service this business provides to the marine industry, the City wishes to keep the facility open; and WII F.REAS, the City of Seward considers Seward Ship's Drydock, Inc. to be in default of the Agreement; and WH ERF.AS, the City agrees to allow additional time for Seward Ship's Drydock to applythe i protective coating ofthe pipe piling and the cofferdam cells in the splash zone as outlined in Exhibit A of the Agreement describing deferred maintenance obligations; and WHEREAS, Seward Ship's Drydock requested a change in the company required to conduct annual inspections of the Synero]ift; and WHEREAS, in consideration for the amendments, Seward Ship's Drydock will provide the city with its recommended procedure which complies with NACE standards for correcting the splash zone maintenance problem. The City will review the recommended procedures and if accepted by the city, Seward Ship's Drydock will complete the corrected maintenance by September 30, 20}0; and WHEREAS, upon completion of the coating the City may consider the cost of the coating as a capital improvement; and WHEREAS, a thorough review of the Maintenance & Operating Agreement shall be completed during the next 15 months to evaluate the compliance of Seward Ship's Drydock with the terms outlined in the Agreement. NOW, THEREFORE, BF, IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: CITY OF SEWARD, ALASKA RESOLUTION 2009-049 Section 1. Subject to Section 3 below, the City Manager is authorized and directed to sigh, on behalf of the City of Seward, a Sixth Amendment to the Maintenance and Operating Agreement in substantially the form presented at this meeting, with the Seward Ship's Drydock, Inc. to extend the terns for a period from .Tuly 1, 2009 to September 30, 2010 for the purposes of allowing the Operator to cure all defaults and to amend Section 3.04 to change the inspecting agency from NEI Synerolift, Inc. to Pcarlson Shiplift Corporation responsible for certain annual inspections. Section 2. The Amendment to the Agreement is nos intended to waive auy rights of the City as owner of the Shiplift Facility as described in the Agreement. Section 3. Compliance by Seward Ship's Drydock with all provisions of the Maintenance and Operating Agreement by September 30, 2010 will generate a full 5-year tcnn for a subsequent Maintenance and Operating Agreement from that date forward. The City Manager is authorized to negotiate a five year agreement in accordance with this Section. Section 4. This resolution supersedes the council motion passed on March ] 0, 2009. Section 5. This resolution shall take effect immediately after adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 22nd day of June, 2009. THE CITY OF SEWARD ALASKA Clark Corbridgc, Mayor AYES: Smith, Valdatta, Kellar, Keil, Bardarson, Dunham, Corbridge NOES: None ABSENT: None ABSTAIN: None A"fTEST Jcat~ Lewis, City ~C Cilw Seal pF SEiy,~ ~8~ N,.».....~~ a oQpo~yTQ ,'Po r ~-~ g ~` .y. ~ ~ ~~ ry r • •.,~~ omp' p ~. COUNCIL AGENDA STATEMENT Meeting Date: June 22, 2009 Through From: Phillip Oates, City Manager ~ ~~ Kari Anderson, Harbormaster ~, / ~h~ /i -, `tY ~~, Subject Seward Ship's Drydock Maintenance & Operating Agreement Extension IIACKGROL~ID & JUSTIFICATION fhc City of Seward has long pursued the development of the Seward Marine Industrial Center, and has expended over $40 million in construction df improvements to the area, including a Synerolift Shiplifr System, Ship Transfer System, and related rails, dock, and breakwater. An initial agreement was signed between the City and the Operator (Seward Ship's Drydock, Inc.) ou April 25, 1995 relating to the Shiplift Premises regarding Maintenance and Operating standards. A second Maintenance and Operating Agreement was signed again on March 30, 2000, and extended in 2005. This agreement is set to expire June 30, 2009. The Seward City Council went into Executive Session on Tuesday, March 1Q 2009 to discuss possible litigation with Seward Ship's Drydock in regards to their Maintenance and Operating Agreement. Counci I came out of executive session and made the following motion which was approved by unanimous consent: "Instruct the City Manager regarding possible litigation with Seward Ship's Drydock in regards to their maintenance and operating (M&O) agreernent. The City Council finds theta in default of the M&O agreement. We authorizethe city manager to list the discussed defects and conditions, in whatever detail he deems appropriate. If defects that have been discussed are con'ected, the council is willing to discuss negotiation of a successor M&O agreement. if conditions, requirements and deadlines as set out by the city manager fail to be met, council will proceed to lenninate the M&O agreement because of defauh. Within 30 days thereafter, the council will act to terminate their ground Iease.° On June 1, 2009 the Seward City Council went into Executive Session again to discuss possible litigation with Seward Ship's Drydock. Council announced that they had given direction to the City Manager ou how to proceed with Seward Ship's Dtdock in regards to their Maintenance and Operating Agreement. The City Manager has discussed the status of the splash zone coating on the piling and the cofferdam cells and the need for this area to be coated by Seward Ship's lltydock to avoid further corrosion. A 15 mouth extension gives Seward Ship's Drydock time to determine the hest course of action and to complete this coating project in accordance with the Maintenance and Operating Agreement. The coatings will be applied by Seward Ship's Drydock on or before September 30, 2010. If Seward Ship's Drydock completes this coating project, the Maintenance and Operating Agreement may be extended beyond September 30, 20]0 subject to Council approval. The Sixth Arnendmenl to the :Maintenance and Operating Agreement will extend the tcnn, as described above, and will also amend Section 3.04 to name Pearlson Shiplift Corporation for providing annual inspections in place of NE1 Syncrolifl, Inc. CONSISTENCY CHECKLIST 1. Cotnprehensive Plan Ccnnomic Development.. 2. Strategic Plan Yes No NiA X X 1-.conomic Base... rlscAl. No~rE Section 3.06 of the Maintenance and Operating Agreement states "Prior to the beginning of each Fiscal Ycar, Operator shall prepare and file with the city an operating plan for the ensuing Fiscal Year. The operating plan shall include an estimate of expenses and a schedule of repairs and maintenance of the Deferred Maintenance to be performed during the Fiscal Ycar." Section 3.08 of the Maintenance and Operating Agreement states "With each annual operating plan submitted to City, Operator shall propose rates and charges for use of the Shiplift Facility. Such rates and charges shall not discriminate among users of a class of service or among different classes of service. Rates and charges do not diseritmmate among classes of service if they are reasonably related to the wst of providing each class of service, allocated according to Generally Accepted Accounting Principles. City shall adopt rates and charges proposed by Operator that conform to the standards in this section." No changes to current rates and charges have been proposed by the Operator. Finance Department: _y~~f~J ATTORNEY REVIEW' Yes RECOMIVIENUATION Council approve Resolution 2009-~~r~ authorizing the City Manager to enter into the Sixth Amendment to the Maintenance and Operating Agreement with Seward Ship's Drydock, Inc.