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HomeMy WebLinkAboutRes2014-054 Sponsored by: Hunt CITY OF SEWARD, ALASKA RESOLUTION 2014-054 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, WAIVING COMPETITIVE PROCUREMENT REQUIREMENTS TO AUTHORIZE THE SOLE-SOURCE PURCHASE OF A NEW 330 TON BOAT LIFT FROM MARINE TRAVELIFT IN THE NET AMOUNT OF $1,441,087, DECLARING THE CURRENT BOAT LIFT SURPLUS TO BE USED AS A TRADE-IN, REVISING THE HARBOR TARIFF TO INCREASE THE LIFT RATES, AND APPROPRIATING FUNDS WHEREAS, the current boat lift is ageing and needs to be replaced; and WHEREAS, the recommended replacement is a 330 ton Marine Travelift; and WHEREAS, the purchase of a new lift will make the current lift surplus to the City's needs; and WHEREAS, the City proposes to increase its lift fees to help pay for the purchase. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. Sections 105, 260, and 265 of the Port & Harbor Tariff Regulations entitled respectively Application of Tariff, 250-Ton Travelift, and 250-Ton Travelift Fees are amended as follows: Strikeout = delete Bold Italics =new Table of Contents SECTION II - SERVICES AND CHARGES 260 2-50330-TON TRAVELIFT (a) Operating Policy (b) Boat Lift Agreement (c) Responsibilities (d) Dockside Lay Time 265 250330-TON TRAVELIFT FEES (a) Description of Charge (b) Lift Fee CITY OF SEWARD, ALASKA RESOLUTION 2014-054 105 APPLICATION OF TARIFF (a) General Application of Tariff Rates, charges, rules and regulations provided in this tariff will apply only to persons and vessels using certain terminal facilities under the jurisdiction and control of the City of Seward, merchandise received at or shipped from the facilities or properties operated under the jurisdiction and control of the City of Seward, and specifically to municipal docks, structures appurtenant thereto and waterways under the management of the City of Seward. The rates, charges, rules and regulations herein may apply to the Seward Small Boat Harbor, the harbor bounded by the rubble breakwater at the northwestern head of Resurrection Bay (Small Boat Harbor); the Seward Marine Industrial Center (SMIC), including yards, basin, docks, dolphins, 250330-ton Travelift, and shiplift platform; and any other terminal facilities under the jurisdiction and control of the City of Seward. SECTION II - SERVICES AND CHARGES 260 240330-TON TRAVELIFT (a) Operating Policy. The City owns and operates a X0330 ton Travelift in the Seward Marine Industrial Center. The Harbormaster generally schedules vessel lifts on a first-come, first-served basis, but he may deviate from that policy or refuse a lift when, in his judgment, the public interest would be served. In making this public interest finding, the Harbormaster will consider the following factors: 265 250330-TON TRAVELIFT FEES (a) Description of Charge. The lift fee is the charge for lifting a vessel from the water or the land utilizing the City's 2-5-0330-ton Travelift. A separate lift fee is generated whenever a vessel is lifted, even if it is only lifted and relocated on land. Lift fees do not include overtime labor charges for operation of the Travelift system as described in Subsection 225 of this tariff. (b) Lift Fee (1) Minimum Fee. The minimum fee for a lift on the 259330-ton Travelift shall be - 9 - - - �` P._ _ e • l . . - FOUR HUNDRED TWENTY-FIVE DOLLARS ($425.00)for the first hour of use or any portion of time less than one (1) hour. The overall length of the vessel will determine the lift fee. A full lift fee is charged once a lift has commenced, even if that lift is subsequently interrupted, suspended or canceled for any reason. The risk of loss because of a suspended or canceled lift by reason of mechanical failure or difficulty with the Travelift system is the responsibility of the vessel owner/operator. Once a lift is scheduled and the CITY OF SEWARD, ALASKA RESOLUTION 2014-054 boat owner fails to show or cancel the lift at least one hour prior to the scheduled lift time, the minimum lift fee will be charged. Section 2. The City Council of the City of Seward, Alaska, hereby finds that the public interest is best served by waiving competitive procurement requirements of Seward City Code §6.10, in accordance with SCC §6.10.130, based on the following findings: 1) past excellent service and response from Marine Travelift, the vendor of the City's existing boat lifts; 2) trade- in offer for the existing 250-ton lift; 3) the quality of Lift equipment and parts from Marine Travelift has been excellent; 4) maintaining a consistent make of equipment is cost-effective and standardization of equipment saves on repair time; and 5) preference to purchase from a vendor within the United States of America. Section 3. The City Manager is hereby authorized to enter into a purchase agreement with Marine Travelift for the purchase of a 330-Ton Marine Travelift for a gross cost of $1,881,087 including shipping, and the current boat lift is declared surplus and will be used as a trade-in, resulting in a net cost not to exceed $1,441,087. Section 4. Funding in the amount of$1,441,087 is appropriated to the SMIC Enterprise Fund equipment account no. 12000-2504-8103 as follows: 1) $62,000 from the SMIC Enterprise Fund cash reserves; 2) $350,000 from the General Fund reserves; and 3) a loan in the amount of him $1,029,087 from the Motor Pool Internal Service Fund, the terms of which will be authorized by separate resolution of the Seward City Council. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of July, 2014. THE CITY OF SEWARD, ALASKA /deu_dei4.4..e4A can Bardarson, Mayor AYES: Keil, Terry, Squires, Darling, Bardarson NOES: Casagranda ABSENT: Butts ABSTAIN: None AT EST: ` Jo ri anna inney, C r GE: 9 Ci y Cler •, •' e, •. a ' s a (City Seal) r • -, • • • Y tffA •4,.��i�'.� 6'.'�.. i�, q,� Mar• y c OF Agenda Statement e of sew Meeting Date: July 14, 2014 , To: City Council Through: Jim Hunt, City Manager From: Mack Funk, Harbormaster Agenda Item: Purchase of New 330 Ton Boat Lift to replace 250 Ton lift at SMIC BACKGROUND & JUSTIFICATION: The Seward Marine Industrial Center Enterprise Fund needs to replace the aging 250 Ton lift equipment. The lift provides an essential service to vessel owners that need to perform repairs and maintenance. In the 250-Ton cost center, boatyard Storage Fees and Boat Lift Fees combined, generated more than $225,000 in 2012 and $197,000 in 2013, with 54% of the revenue coming from storage. The expenses for the 250 Ton Shiplift Department totaled $186,000 in 2012 and $195,292 in 2013. The recommended plan is to replace the current lift with a larger capacity (300 metric tons/ 330 short tons), new lift. The new lift will be designed with the same wheelbase in order to fit on the existing haul-out pier. It will enable the harbor to haul out larger vessels which cannot currently be lifted due to machine weight limitations. For the past two months the harbor crew has struggled to troubleshoot and repair a problem that results in boats being raised and/or lowered in a jerky, uneven manner. Fortunately nobody has been injured and no damage has occurred. Keeping existing equipment operational is getting to be costly and is resulting in disruptions to local businesses which depend on the lift to repair their vessels. For example, during the week of June 7 the crew invested 30 hours to disassemble and replace a hydraulic valve, with no resulting improvement in the operation. Already, in 2014, approximately $18,000 has been spent on parts (most of the parts that were recently purchased had to be manufactured, as the parts are no longer available) for the old machine. If the boat lift equipment has to be taken out of service, it is very likely that private business owners will be adversely delayed and potential income will be lost. The lift is currently operational. The recommended approach is to purchase a new machine and trade in the old machine. The net cost to the city will be $1,441,087. It is also proposed that the Port and Harbor Tariff Regulations be amended to increase lift fees by 25% for vessels up to 55 feet and by 15% for each additional foot longer than 55 feet: Rate Basis Current Rate Proposed New Rate Minimum Fee (boats up to 55 feet long) $346.50 $425.00 (up 25%) Additional Fee per foot for vessels 55 feet and longer $21 $24 (up 15%) The proposed new rates will still be significantly lower than other Alaska harbors (see attachment). The rate increase should generate an additional approximately $20,000 per year. The new lift will also generate another $20,000 per year from vessels that currently have to be rj turned away due to size limitations of the existing Lift. An additional $10,000 per year is forecast from boats that come to Seward and want work in the Vigor shipyard. The Administration recommends a sole-source purchase of a Marine Travelift brand boat lift for the following reasons: We have received excellent service and response from this company over years of working with them on our two existing lifts; we will receive a trade-in on our existing Marine Travelift of$300,000; the quality of Lift equipment and parts from Marine Travelift has been excellent; maintaining a consistent make of equipment is cost-effective and standardization saves on repair time; and the alternative is to purchase from a foreign vendor, where there are added costs and challenges associated with ordering, shipping, and purchasing parts from overseas, since those parts are not available in-country and there are uncertainties associated with relying on parts and service from overseas. The delivery time for a new machine is approximately six months. INTENT: To authorize the purchase of a boat lift at a gross cost of $1,771,087, offset by a trade-in of $300,000 on the existing 250-Ton Lift, for a total cost including shipping, not to exceed $1,441,087. Funding will come from a combination of SMIC and General Funds, as well as a loan from the Motor Pool Fund. The loan could be repaid with grant funds if SMIC expansion efforts come in under budget. A separate resolution will come forward authorizing an inter-fund loan. CONSISTENCY CHECKLIST: Yes No N/A 2020 Seward Comprehensive Plan (page 18): Update and expand 1. infrastructure for commercial and industrial properties that are currently X undeveloped or underdeveloped. 2 City of Seward Strategic Plan (page 7): Expand Development in the Seward Marine Industrial Center X Other: SMIC Development Plan: An adequate transportation 3. infrastructure that will: (1) serve the needs of the industrial complex; (2) X allow for growth; and (3) attract new business to the community. FISCAL NOTE: The marine Lift does not generate sufficient income to support debt service on a revenue bond. However, the Lift does bring vessels and their crews and business into the community that might otherwise move business to another harbor if the Lift was not available. Therefore, the administration proposes funding this purchase as follows: 1) appropriate $62,000 in 2013 surplus cash from the SMIC Fund; 2) appropriate $350,000 from the General Fund, representing approximately $250,000 in one-time 2013 property tax proceeds from the Shell oil rig Noble Explorer, and $100,000 in 2013 raw fish tax proceeds; and 3) borrow $1.038 Million from the Motor Pool Internal Service Fund to be repaid over a period of seven (7) years at an interest rate of 2%, in annual payments of approx. $160,000. New revenues explained above, are expected to generate approximately $50,000 per year. Repair and maintenance costs associated with the old lift are expected to decline by approximately $10,000 per year. Based on 2012 and 2013 actual revenues, boat lift fees and storage fees are expected to generate $15,000 per year more than budgeted. This leaves an annual deficit of $85,000. It is expected that remaining grant funds from the SMIC Expansion Project could be used to pay for this Lift if the SMIC basin project comes in within budget, or that new revenues associated with expansion at SMIC could materialize. Alternatively, shortfalls would need to be covered by the General Fund each year, as it covers the deficits in the SMIC Enterprise Fund. Approved by Finance Department: J ii ,�. ATTORNEY REVIEW: Yes No X RECOMMENDATION: � Council approve Resolution 2014- O:J,'authorizing the City Manager to approve the sole source purchase of a 330 Ton boat lift for a net cost after trade-in of$1,441,087 including shipping, and declare the 250 Ton boat lift as surplus public property to be traded in.