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HomeMy WebLinkAboutRes2005-053 Sponsored by: Corbridge \".. CITY OF SEWARD, ALASKA RESOLUTION 2005-53 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A THIRD AGREEMENT TO EXTEND THE TERM OF THE MAINTENANCE AND OPERATING AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC. FOR THE SHIPLIFT FACILITY WHEREAS, Seward Ship's Drydock, Inc. ("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 (defined below) if the Operator gives the City written notice of the exercise of its option to renew no later than 180 days before termination of the Agreement, if the Lease term has not expired, and if the 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, the City and the 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, expired December 31, 2004; 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 industrial solid waste generated at the Shiplift facility is routinely disposed of at unpermitted sites in and around Seward; and ... CITY OF SEWARD, ALASKA RESOLUTION 2005-53 ...J WHEREAS, DEC had samples tested on private 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, on December 14, 2004, the city council extended the terms of the lease through March 30, 2005, allowing DEC time to review and approve a plan for the operator, and Seward Ship's Drydock time to bring the facility within environmental compliance; and WHEREAS, on May 13, 2005, DEC issued a notice of violation to DEC for violations including fugitive emissions from industrial activities and violating the prohibition against air pollution; and WHEREAS, SSD submitted a corrective action letter to DEC on May 19,2005; and WHEREAS, on June 1,2005, DEC found that SSD's corrective action plan was not complete; and WHEREAS, as stated above, it is not in the city's best interest to fully renew the long-term agreement with Seward Ship's Drydock while these environmental issues are outstanding; and , I ....I WHEREAS, another short term extension would allow a reasonable opportunity for the operator to bring the facility within environmental compliance. 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 a third agreement with Seward Ship's Drydock, Inc. in substantially the same form as the attached extension of renewal of Term of Maintenance and Operating Agreement with such modifications as the City Manager deems necessary, effective upon approval ofthis resolution and signing by all parties, with a term continuing until September 30, 2005, provided that if the City receives notice from DEC and EP A on or before September 30, 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 of expiration or termination of the Lease term, or (ii) June 30, 2009. Section 2. This Resolution shall take effect immediately upon its adoption. .J CITY OF SEWARD, ALASKA RESOLUTION 2005-53 .... PASSED AND APPROVED by the City Council of the City of Seward, Alaska this 13th day ofJune, 2005. THE CITY OF SEWARD, ALASKA 1/{~ j~~~ Vanta Shafer, Mayor AYES: NOES: ABSENT: ABSTAIN: Branson, Dunham, Clark, Amberg, Valdatta, Lorenz, Shafer None None None ATTEST: .... ~_u ) ") \, /'y ~ /\ ,'.':/(4 v'\ fv<.-iL/'ix ) Jean"Lewis, eMf' CitS Clerk ,\""nll"" ..,,,,,, Of SE~ I",,, "''':<;.~ ........ ~ 'I#. (City SeaI.:' c) ....:n?POftq~... () \ .. .......0- ~. ~ :: l~ ____ v... -:. : : : .. ~ . SEAL ..- 'a G: : - ~ \ : : ~.. -.. ---- ! i .. . VJ. ~'V'.'Il" .. ~~:. ~~...~Jve 1 \?....~~ '", -17', ......1.. \l'-(().... ......,~..l: OF ~\..,,~.. ~"'I"UUl" ..... COUNCIL AGENDA STATEMENT Meeting Date: June 13, 2005 From: Clark Corbridge, City Manager Agenda Item: Resolution to allow a Third Extension Term of the 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”), expired December 31, 2004. On December 14, 2004, the city council authorized an extension of the agreement through March 30, 2005, to allow the Operator to bring the facilities within environmental compliance. A second extension was granted on March 29, 2005 allowing the Operator until June 30, 2005 to bring the facilities into environmental compliance. A third extension will be needed because there are still unresolved DEC compliance issues. 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 the plan was not accepted. The lease and the operating agreement require the Operator to be in compliance with all laws, including environmental laws. In response to other complaints, DEC has required the Operator to submit a fugitive dust control plan and a facility stormwater pollution prevention plan by the end of February. There has been no conformation these plans have been completed, therefore, it is 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 third temporary extension is needed until DEC completes its review process. If DEC finds the Operator to be in compliance during 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: No fiscal note Approved by Finance Department RECOMMENDATION: Council approves Resolution 2005-, authorizing a third extension of the term of the Maintenance and Operating Agreement with Seward Ship’s Drydock, Inc. for the shiplift facility.