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HomeMy WebLinkAboutRes2011-072 Sponsored by: Hunt Lim CITY OF SEWARD, ALASKA RESOLUTION 2011 -072 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A MAINTENANCE AND OPERATING AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC., EFFECTIVE APRIL 1, 2012 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 March 31, 2012; and WHEREAS, due to the economic value of this 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 WHEREAS, the City of Seward has worked with Seward Ship's Drydock, Inc. over the past several years to address deferred maintenance and to improve the condition of the City's Shiplift Facility. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is authorized and directed to sign, on behalf of the City of Seward, a Maintenance and Operating Agreement in the form presented at this meeting, with Seward Ship's Drydock, Inc. Section 2. This resolution shall take effect immediately after adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 12` day of March, 2012. THE CITY OF SEWARD ALASKA / David Seaward, Mayor Limo CITY OF SEWARD, ALASKA RESOLUTION 2011 -072 AYES: Valdatta, Bardarson, Keil, Casagranda, Shafer, Terry, Seaward NOES: None ABSENT: None ABSTAIN: None ATTEST: Jo anna Kinney, CMC ty Clerk (City Seal) F .mt 4 fy. ` 'L S Sk ,95r 1� Ng •gyp fa II :. p a N 4 v o V a "�' 4.0 o® 1 w4 eoxcar ` Qy A� X8 8 ® LL +u� u ,.ar�; 4b� �® Agenda Statement Meeting Date: March 12, 2012 �..* To: City Council Through: City Manager Jim Hunt 4-44_406, From: Mack Funk, Harbormaster Subject: Seward Ship's Drydock Maintenance & Operating Agreement BACKGROUND & JUSTIFICATION The City of Seward has long pursued the development of the Seward Marine Industrial Center, and constructed improvements to the area, including a Syncrolift Shiplift System, Ship Transfer System, and related rails, dock, and breakwater. An initial Maintenance and Operating Agreement was entered into between the City and the Operator, Seward Ship's Drydock, Inc., on April 25, 1995. A second Maintenance and Operating Agreement was signed again on March 30, 2000, and extended several times. One extension stretched for 3 '/z years from December 31, 2005 until June 30, 2009. The current agreement will expire March 31, 2012, unless extended. The facilities are currently maintained in the best condition in the history of the Seward Marine Industrial Center. The reason for several amendments was to extend the time for the Operator to complete its deferred maintenance obligations. The cathodic protection system has been replaced in order to protect the public's investment in the breakwater. The Shiplift Facility is now in much better condition than it was five years ago. On September 26, 2011 City staff recommended that the M & 0 Agreement be extended for five years. The proposed agreement is exactly the same (except for the applicable dates) as the agreement recommended to the City Council in September 2011. The agenda statement from that time listed four issues: 1. Coatings -- The Breakwater was coated by the operator and tentatively accepted by the staff 2. Environmental Matters —City staff continues to closely monitor this business (and all operators) and work with local, state, and federal regulatory agencies. 3. Operation and Maintenance — Obligations regarding Deferred Maintenance (Section 3.03 of the M & 0 Agreement) are deleted to reflect that all Deferred Maintenance has been completed. 4. "Land for Lease" Signs —This provision was dropped from the Agreement. The City has other property available for industrial development. CONSISTENCY Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures or Other Plans or Policies. FISCAL NOTE The fiscal impact on the City for potential costs associated with the failure of the pilings and cofferdam cells of the SMIC breakwater is significant, potentially as much as $20 to $40 million. The recently replaced Cathodic protection system and protective coatings mean that the breakwater assets are better maintained than in the past decade. Furthermore, the City's engineers have opined that a catastrophic earthquake that shakes the foundation of the breakwater is a significant possibility that can't be prevented. The potential impact on the City for environmental contamination is not easily projected. The M & 0 Agreement does require the operator to indemnify the City. The Shiplift system itself is a large piece of machinery and it is potentially a liability for the City if the mechanism was to fail, resulting in injury or property damage. The M & 0 Agreement does require operator training. And, from an overall Risk Management perspective, the Seward Ship's Drydock liability insurance is carefully reviewed by the City staff and Risk Control Specialist. The City is named as an additional insured in the event of a loss, so that the operator's insurance is required to cover any losses that may arise. Finance Department: ,/6Jl� _zi;>v ATTORNEY REVIEW Yes X No RECOMMENDATION 26 li - 01 Z Council approve Resolution 381 ---- authorizing the City Manager to enter into the Maintenance and Operating Agreement with Seward Ship's Drydock, Inc.in substantially the form presented at this meeting.