Loading...
HomeMy WebLinkAboutRes2014-084 Sponsored by: Hunt iii... CITY OF SEWARD, ALASKA RESOLUTION 2014-084 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING PAYMENT IN THE AMOUNT OF $469,615.22 IN ACCORDANCE WITH THE PROJECT COOPERATION AGREEMENT BETWEEN THE CITY OF SEWARD AND THE US ARMY CORPS OF ENGINEERS, REPRESENTING THE REMAINDER OF THE INITIAL 10% CITY COST SHARE ON THE BREAKWATER CONSTRUCTION PROJECT, AND APPROPRIATING FUNDS WHEREAS, the City of Seward entered into a Project Cooperation Agreement ("PCA") with the U.S. Department of the Army, Army Corps of Engineers ("USACE") to construct a new harbor breakwater in June, 2003, as authorized by Resolution 2003-64, in accordance with the 1999 passage of the Water Resources Development Act ("WRDA") authorization to construct the Seward harbor breakwater; and WHEREAS, the PCA required the City to pay for the local project costs as well as 20% of the General Navigation Features ("GNF") of the project, with costs to be allocated between the USACE and the City upon completion of the project; and h.. WHEREAS, a breakwater design deficiency added unexpected additional costs to the initial project, and the project was further amended to include dredging the Small Boat Harbor to achieve economies of scale during a separate USACE dredging project; and WHEREAS, the balance remaining on the initial 10% of Phase I project costs is due and payable immediately, in the amount of$469,615.22; and WHEREAS, the Seward City Council has passed no less than seven legislative priority resolutions requesting $2.66 Million in relief from the requirement to contribute toward the local cost-share for this project but has not received grant funding and is required to timely submit payment for the remaining outstanding balance of the initial 10% of project costs for Phase I of this project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,ALASKA that: Section 1. The City Manager is hereby authorized to pay $469,615.22 to the US Department of the Army to fulfill the outstanding balance of the initial 10% of project costs for Phase I of the breakwater construction project, in accordance with the PCA dated June 13, 2003. CITY OF SEWARD, ALASKA RESOLUTION 2014-084 Section 2. Funding in the amount of $469,615.22 is hereby appropriated from the commercial passenger vessel (CPV) tax proceeds (account no. 11103-0000-3710) as anticipated by previous resolutions authorizing the breakwater construction and extension projects (account no. 11320-0000-3700). Section 3. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 13th day of October 2014. THE CITY OF SEWARD,ALASKA /16/2 /1.Jei4- can Bardarson, Mayor AYES: Keil, Casagranda, Terry, Squires, Butts, Darling, Bardarson NOES: None ABSENT: None ABSTAIN: None ATTEST: Jo .nna Kin .ar MC I Cit Clerk #####„ (City Seal) ,b: •., OF SF • SE J di• • • ../ OF AI- y6o Council Agenda Statement .4 OF SF�9 Meeting Date: October 13,2014 From: James Hunt, City Manager?' 44..4StcP Agenda Item: US Army Corps Payment Required for the Initial 10%Payment for the Harbor Breakwater Project and Small Boat Harbor Dredging Project BACKGROUND&JUSTIFICATION: The Water Resources Development Act("WRDA")passed by Congress in 1999,included authorization for the U.S. Department of the Army, Army Corps of Engineers ("USACE")to construct a new harbor breakwater in Seward. The City and USACE entered into a Project Cooperation Agreement("PCA")in June,2003 approved by Resolution 2003-64,with General Navigation Feature("GNF")costs to be shared 80%federal and 20%local match.In addition, the City was required to pay for 100%of local service feature costs which the City might include in the project.The City was required to pay for 10%of the local matching costs up-front, with the option to either pay the remaining 10%lump-sum,or to enter into a long-term loan to finance the remaining 10%of local matching costs. The purpose of this action is to seek funding for the remaining balance of the initial 10%of local cost share for the project. The City paid the initial estimated costs of the 10% local cost share, with the understanding that once the project was completed, a final accounting would be made and the USACE would request any remaining balance owed for the project. The remaining 10%of project costs estimated at$1,201,696 will come before Council in a separate action; with the option to pursue a 30-year loan at an initial variable interest rate of 3.875%. The initial breakwater construction was completed in 2005 at a total cost of$8,384,563.20. The City's initial 10% cost share for that portion of the project is $838,456.32. Due to design deficiencies in the construction of the breakwater,the City and the USACE worked together to obtain additional funding to correct the deficiency which was allowing potentially damaging wave action in the harbor basin. The WRDA Bill approved in 2009 authorized correction of the design deficiency and also required the City to pay 20%of the project costs. The total cost of Phase II of the breakwater(extension)was$4,267,396,with the City's initial 10%cost share for that portion of the project at$426,739.60. In 2009,the City and the USACE determined a need to dredge the Small Boat Harbor to eliminate vessel groundings and provide for safer navigation but the project was not pursued due to federal budget constraints. In January,2012, the City was informed that the federal government appropriated funds to dredge a portion of the Small Boat Harbor which was the federal government's responsibility. To take advantage of potential economies of scale by piggy- backing on the project,the City Council agreed to further amend the scope of the PCA between the City and USACE. Appropriations for the expanded scope were made on July 23 and October 8, 2012. The City's total cost for local features for the dredging and breakwater projects was$1,920,770.06,with the City required to pay 100%of those costs. The PCA between the parties anticipated a difference between the initial cost estimates for the project, final bid prices,and final project costs,and required the parties to finalize their respective contributions to the project once all costs were known. The City was notified in September,2012,of the total amount of project costs,and was presented a bill for the remaining initial 10%project costs in the amount of$469,615.22,plus informed of the need to make arrangements for the second 10%,equal to$1,201,696. The City delayed payment in order to seek federal relief to assist in covering a portion of the City's contributions to the project,passing no less than seven legislative priority resolutions(2009-009; 2010-103; 2011-084; 2012-084; 2013-012; 2013-093; 2014-012) seeking$2.66 million in relief. Despite persistent efforts,the City has not obtained relief and is now required to timely submit payment for the remaining balance of the initial 10%of project costs for this project or risk jeopardizing our ability to obtain other federal funding. (3 INTENT: The intent of this action is to appropriate the remaining initial 10%of local matching funds to the USACE related to Phase I construction of the harbor breakwater,Phase II construction of the harbor breakwater extension to correct a design deficiency, and dredging in the Small Boat Harbor. This action does not address the final required 10%of local match required, amounting to$1,201,696. CONSISTENCY CHECKLIST: Yes No N/A 1. Comprehensive Plan (document source here): 2. Strategic Plan (document source here): 3 Other(list): Project Cooperation Agreement between City of Seward and USACE dated June 2003, as subsea uentl amended X FISCAL NOTE: Funding for this project will come from cruise ship head tax proceeds. This funding source has been used to provide the local match for the harbor breakwater and breakwater extension projects as well as a portion of the dredging costs associated with the security dock. The portion of dredging costs associated with the Small Boat Harbor which were not considered beneficial to cruise ships, was paid from the Harbor MRRF Fund. Use of cruise ship head tax proceeds for this purpose will result in a remaining balance of approximately$1.4 Million in that account. Approved by Finance ,964.224, ATTORNEY REVIEW: Yes X No RECOMMENDATION: Recommend Council approve Resolution 2014- D�� authorizing the City Manager to submit payment in the amount of$469,615.22 to the US Army Corps of Engineers to satisfy the initial 10% local match for the harbor breakwater, breakwater extension, and dredging projects.