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
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COUNCIL AGENDA STATEMENT
Meeting Date: June 22, 2009
Through
From:
Phillip Oates, City Manager ~ ~~
Kari Anderson, Harbormaster
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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.