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HomeMy WebLinkAboutRes2004-127 I I I Sponsored by: Shealy CITY OF SEWARD, ALASKA RESOLUTION 2004-127 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC. TO EXTEND THE TERM OF THE MAINTENANCE AND OPERATING AGREEMENT FOR THE SHlPLlFT FACILITY WHEREAS, the City and Seward Ship's Drydock, Inc. ("Operator") entered into a Maintenance and Operating Agreement effective March 30,2000, as amended October 26,2001 (the "Agreement"); and WHEREAS, the Operator has been maintaining and operating the City's shiplift facility since 1995, consisting generally of a Syncrolift Shiplift System, Ship Transfer System and certain related rail systems (the "Shiplift Facility"); and WHEREAS, the Agreement, by its terms, expires December 31, 2004; and WHEREAS, the Operator and the City have entered into a Lease Agreement dated April 1995, as amended ("Lease"), to operate a vessel repair and construction facility for a term ending June 30, 2009 unless sooner terminated or extended as provided in the Lease; and WHEREAS, the Section 7.06 of the Lease allows the Operator to renew the Agreement ifthe Operator gives the City written notice ofthe exercise of its option to renew no later than 180 days before termination ofthe Agreement, if the Lease term has not expired, and ifthe Operator is not in default under the Lease at the time the option is exercised; and WHEREAS, on June 3, 2004 the City received a written notice of the Operator's intent to exercise its option to renew the Agreement; and WHEREAS, On October 26, 2004 the City received a copy of a letter to the Operator from the State of Alaska Department of Environmental Conservation ("DEC") notifying the Operator that DEC is investigating several complaints alleging that an industrial solid waste generated at the Shiplift facility is routinely disposed of at unpermitted sites in and around Seward; and WHEREAS, DEC had samples tested on the Lorenz property in July and September 2004 and each time found diesel range organics and residual range organics exceeding the threshold allowed by DEC regulations; and WHEREAS, the Operator provided a plan to DEC and is awaiting approval; and CITY OF SEWARD, ALASKA RESOLUTION 2004-127 WHEREAS, the City and the Operator want to allow the Operator to continue operating under the Agreement and a temporary extension will allow DEC time to review and approve a plan for the Operator. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is authorized to enter into an agreement with Seward Ship's Drydock, Inc. in substantially the same form as the attached Agreement to Temporarily Extend Term of Maintenance and Operating Agreement, effective upon approval of this resolution and signing by all parties, with a term continuing until March 31, 2005, provided that if the City receives notice from DEC on or before March 31, 2005 that there are no violations of environmental laws or regulations, the City Manager is authorized to extend the Maintenance and Operating Agreement to the earlier of (i) the date or expiration or termination of the Lease term, or (ii) June 30, 2009. Section 2. This Resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska this 14th day of December, 2004. THE CITY OF SEWARD, ALASKA Van~.M1!:~~ AYES: NOES: ABSENT: ABSTAIN: Valdatta, Clark, Lorenz, Shafer Branson Dunham, Amberg None ATTEST: J e Lewis, f C ",'u"...... City Clerk J ft.............A <?~,~::*..;.#'#" ~ &":'0' P.?O.Q:';"!-?.A 'e.. ~ ~o .~;~~" ~ (City Seal) :: ...~. _ "0" ~ .. . .. 'III : el' S~ II L ~ = :: _,:~.,": 0 = .. . - \\ -u-...= ~;'~N~ C)...'I;..,~' " . <"b.:.'~"~ 1. ~~.,,~ ~ tr l..... ........ "'J:'-'- iJ, t;: OF ~\\.f"...J>"'" ""unn\" COUNCIL AGENDA STATEMENT Meeting Date: December 13, 2004 Through: Phil Shealy, City Manager From: Scott A. Ransom, Harbormaster Agenda Item: Resolution to Extend Term of Shiplift Maintenance and Operating Agreement with Seward Ship’s Drydock, Inc. BACKGROUND & JUSTIFICATION: Seward Ship’s Drydock, Inc. (the “Operator”) has operated the City’s shiplift facilities since 1995. The current agreement, dated March 30, 2000, as amended October 26, 2001 (the “Operating Agreement”), expires December 31, 2004. The City and Seward Ship’s Drydock also entered into a lease agreement for uplands adjacent to the shiplift facilities. Section 7.06 of the lease allows the Operator to renew the Operating Agreement if the Operator gives the City timely written notice of its intent to renew, the lease term has not expired, and the Operator is not in default at the time the option is exercised. On June 3, 2004 the City received a timely written notice of the Operator’s intent to exercise its option to renew the Operating Agreement. On October 26, 2004 the City received a copy of a letter to the Operator from DEC that DEC is investigating complaints alleging waste generated at the shiplift facility is routinely disposed of at unpermitted site in and around Seward. DEC’s consultant tested samples found on the Lorenz property in July and September 2004 and each time found diesel range organics and residual range organics exceeding the threshold allowed by DEC regulations. DEC requested a plan from the Operator for disposal of the waste currently stockpiled on the Lorenz property and future generated waste. The Operator submitted a plan to DEC but DEC has not completed its review. The lease and the Operating agreement require the Operator to be in compliance with all laws, including environmental laws. DEC has not yet determined whether the Operator is in compliance with certain environmental laws. To allow the Operator to continue maintaining and operating the shiplift, a temporary extension is needed until DEC completes its review process. If DEC finds the Operator to be in compliance within the temporary extension period, the Operator would be entitled to an extension of the term of the Operating Agreement as set forth in section 7.06 of the Lease. 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: Yes No 1. Comprehensive Plan ___ 2. Strategic Plan ___ 3. Other ___ FISCAL NOTE: Approved by Finance Department RECOMMENDATION: Council approves Resolution 2004-127, authorizing an extension of the term of the Maintenance and Operating Agreement with Seward Ship’s Drydock, Inc. for the shiplift facility.