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HomeMy WebLinkAboutRes2010-085 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2010 -085 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO EXTEND THE MAINTENANCE AND OPERATING AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC. THROUGH JANUARY 31, 2011 WHEREAS, the current Maintenance and Operating Agreement between Seward Ship's Drydock and the City of Seward for the Shiplift Facility is set to expire September 30 2010; and WHEREAS, on June 22, 2009, the City Council adopted Resolution No. 2009 -049 authorizing the City Manager to enter into an agreement for the Renewal of Term of the Maintenance and Operating Agreement containing a temporary extension; and WHEREAS, the City has allowed for additional time for Seward Ship's Drydock to apply the protective coating of the pipe piling and the cofferdam cells in the splash zone as outlined in Exhibit A of the Agreement describing deferred maintenance obligations; and WHEREAS, the City has contracted with a NACE certified inspector to inspect the protective coating and is awaiting the results of that inspection; and WHEREAS, the City and Seward Ship's Drydock have not completed a thorough review of the Maintenance & Operating Agreement to evaluate the compliance of Seward Ship's Drydock with the terms outlined in the Agreement; and WHEREAS, a thorough review of the Maintenance & Operating Agreement shall be completed during the next four months to evaluate the compliance of Seward Ship's Drydock with the terms outlined in the agreement; and WHEREAS, additional time is sought by both parties to evaluate and update the language in the Maintenance & Operating Agreement, and review the inspection results by the NACE certified inspector. 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, the Maintenance and Operating Agreement with the Department Seward Ship's Drydock, Inc. for a period from September 30, 2010 to January 31, 2011 in substantially the form presented at this meeting. Section 2. This resolution shall take effect immediately after adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 27 day of September, 2010. THE CITY ! - SEWARD ALASKA f=illard E. Dunham, Mayor AYES: Valdatta, Bardarson, Smith, Keil, Shafer, Amberg, Dunham NOES: None ABSENT: None ABSTAIN: None ATTEST: can Lewis, City Qle . O SElti •. �� • � • •ue•q ••• • • • 1 0 d'' • • : -o- • I SEAL = • •• 45> 1, �•.g *�,.` OFA - �� Council Agenda Statement Meeting Date: September 27, 2010 r of Sett, Through: Phillip Oates, City Manager : ci {„4.s+ From: Kari Anderson, Harbormaster" 41, (ASv-P Subject: Seward Ship's Drydock Maintenance & Operating Agreement Extension BACKGROUND & JUSTIFICATION The City of Seward has long pursued the development of the Seward Marine Industrial Center, and has expended over $40 million in construction of improvements to the area, including a Syncrolift Shiplift 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.) on 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 several agreements were signed to continue this agreement in following years. This 6 agreement to extend the Maintenance and Operating agreement is set to expire September 30, 2010. The Seward City Council went into Executive Session on Tuesday, March 10, 2009 to discuss possible litigation with Seward Ship's Drydock in regards to their Maintenance and Operating Agreement. Council 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) agreement. The City Council finds them in default of the M &O agreement. We authorize the city manager to list the discussed defects and conditions, in whatever detail he deems appropriate. If defects that have been discussed are corrected, 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 terminate the M &O agreement because of default. Within 30 days thereafter, the council will act to terminate their ground lease." 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 on how to proceed with Seward Ship's Drydock 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. A 15 month extension gave Seward Ship's Drydock time to complete this coating project in accordance with the Maintenance and Operating Agreement. The coatings have been applied by Seward Ship's Drydock and the City has contracted with a NACE - certified coatings inspector to evaluate the application and condition of the coatings. This report will be immediately forwarded to City Council once it is completed. If the City and Seward Ship's Drydock cannot agree on revisions and updates to this document, the Maintenance and Operating Agreement will expire on January 31, 2011. Updates to the Agreement include defining the term managed parcel (with the 2002 re -plat and current lease language), eliminating references to deferred maintenance if it is deemed completed, and defining continuing maintenance. If the Operating Agreement is not extended, the City would be faced with operating the shiplift facilities on its own or shutting it down until a new operator is in place, CONSISTENCY CHECKLIST: Where applicable, this resolution is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. ATTORNEY REVIEW: Yes X No FISCAL NOTE Section 3.06 of the 2000 Maintenance and Operating Agreement states "Prior to the beginning of each Fiscal Year, Operator shall prepare and file with the City an operating plan for the ensuing Fiscal Year. The operating plan shall include an estimate of revenues and expenses and a schedule of repairs and maintenance and Deferred Maintenance to be performed during the Fiscal Year." Section 3.08 of the 2000 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 discriminate among classes of service if they are reasonably related to the cost 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 rates or charges changes have been proposed by the Operator. Finance Department:. RECOMMENDATION Council approve Resolution 2010- (fib authorizing the City Manager to sign the Seventh Amendment to the Maintenance and Operating Agreement with the Seward Ship's Drydock.