HomeMy WebLinkAbout07112011 (2) City Council Packet Seward City Council
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Special CCouncil Meeting
July 11, 2011
City Council Chambers Beginning Immediately Upon
The Adjournment Of The Regular
City Council Meeting
The City of Seward Alaska
Special City Council Meeting
July 11, 2011 Beginning Immediately Upon The Council Chambers
Adjournment Of The Regular
City Council Meeting
Willard E. Dunham 1. Call to order
Mayor 2. Pledge of allegiance
Term Expires 2011 3. Roll call
Jean Bardarson 4. Citizens' comments on any subject except those
Vice Mayor items scheduled for public hearing. [Those who
Term Expires 2012 have signed in will be given the first opportunity to
speak. Time is limited to 2 minutes per speaker and 30
Robert Valdatta minutes total time for this agenda item.]
Council Member 5. Approval of agenda
Term Expires 2011
6. New business
Torn Smith
Council Member A. Resolutions
Term Expires 2011
Vanta Shafer Resolution 2011 -058, Authorizing An Emergency
Council Member Appropriation And Repair Contract With Harmon
Term Expires 2011 Construction For The Repair Of The Lagoon
Boardwalk From The Damage Caused By A Vehicle
Marianna Keil Accident On July 1, 2011 In An Amount Not -To-
Council Member Exceed $8,000, And Appropriating Funds Pg. 5
Term Expires 2012
Ristine Casagranda Resolution 2011 -059, Authorizing A Sole Source
Council Member Professional Service Contract With Northern
Term Expires 2012 Economics, Incorporated For The Economic Analysis
And Financial Strategy For Homeporting Community
Phillip Oates Development Quota (CDQ) Fishing Vessels In Seward,
City Manager Alaska In An Amount Not -To- Exceed $85,000 And
Appropriating Funds Pg. 9
Johanna Kinney
City Clerk
7. Other New Business
Cheryl Brooking
City Attorney Discussion and direction for the engineering of the Coastal
Villages Region Fund Project (CVRF) .Pg. 12
City of Seward, Alaska Council Agenda
July 11, 2011 Page 1
8. Council comments
9. Citizens' comments
10. Council and administration response to citizens' comments
11. Adjournment
City of Seward, Alaska Council Agenda
July 11, 2011 Page 2
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SPECIAL MEETING REQUEST
Pursuant to Seward City Code 2.10.030 (2), this is to serve as the written notice calling a Special
Council Meeting on Monday, July 11, 2011 following adjournment of Regular City Council
Meeting for the purpose of:
NEW BUSINESS
Resolution 2011 -058, Authorizing An Emergency Appropriation And Repair
Contract With Harmon Construction For The Repair Of The Lagoon Boardwalk
From The Damage Caused By A Vehicle Accident On July 1, 2011 In An Amount
Not -To- Exceed $8,000, And Appropriating Funds.
Resolution 2011 -059, Authorizing A Sole Source Professional Service Contract With
Northern Economics, Incorporated For The Economic Analysis And Financial
Strategy For Homeporting Community Development Quota (CDQ) Fishing Vessels
In Seward, Alaska In An Amount Not -To- Exceed $85,000 And Appropriating
Funds.
OTHER NEW BUSINESS
Discussion and direction for the engineering of the Coastal Villages Region Fund Project
(CVRF).
Signed this 8 day of July 2011.
Mayor City anager
2 Council Members
Upon this request the City Clerk will give due and proper notice as required by SCC 2.10.032
(No business shall be transacted other than stated above.)
NOTICE OF uk 4 ktr> SPECIAL MEETING
NOTICE IS HEREBY GIVEN that the Seward City Council will meet in a special meeting on
Monday, July 11, 2011, immediately following the adjournment of the Regular City Council
Meeting, for the purpose of:
NEW BUSINESS
Resolution 2011 -058, Authorizing An Emergency Appropriation And Repair
Contract With Harmon Construction For The Repair Of The Lagoon Boardwalk
From The Damage Caused By A Vehicle Accident On July 1, 2011 . In An Amount
Not -To- Exceed $8,000, And Appropriating Funds.
Resolution 2011 -059, Authorizing A Sole Source Professional Service Contract
With Northern Economics, Incorporated For The Economic Analysis And Financial
Strategy For Homeporting Community Development Quota (CDQ) Fishing Vessels
In Seward, Alaska In An Amount Not -To- Exceed $85,000 And Appropriating Funds.
OTHER NEW BUSINESS
Discussion and direction for the engineering of the Coastal Villages Region Fund Project
(CVRF).
The meeting will be conducted in City Council Chambers, City Hall, 410 Adams Street,
Seward. All interested persons are invited to attend.
JOHANNA KINNEY
CITY CLERK
POSTED: 7/8/2011 at 3:00 p.m.
City Hall bulletin board
U.S. Post Office
Harbormaster's Building
Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -058
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA AUTHORIZING AN EMERGENCY APPROPRIATION AND
REPAIR CONTRACT WITH HARMON CONSTRUCTION FOR THE
REPAIR OF THE LAGOON BOARDWALK FROM THE DAMAGE
CAUSED BY A VEHICLE ACCIDENT ON JULY 1, 2011 IN AN AMOUNT
NOT -TO- EXCEED $8,000, AND APPROPRIATING FUNDS
WHEREAS, a portion of the Lagoon Boardwalk was severely damaged in a vehicle
accident July 1, 2011; and
WHEREAS, the Lagoon Boardwalk damage creates a safety hazard to the public in the
damaged condition; and
WHEREAS. the Lagoon Boardwalk is a well - travelled pathway by Seward residents.
and visitors; and
WI-IEREAS, Harmon Construction has submitted a bid to do an immediate emergency
repair of the boardwalk for $8,000 and the Seward City Code allows for exemption from
competitive procurement in cases of emergent necessity; and,
WHEREAS, the City of Seward is seeking reimbursement for the repair work from the
owner of the vehicle.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
SEWARD, ALASKA:
Section 1. The City Manager is hereby authorized to enter into a contract for $8,000 with
Harmon Construction to do an emergency repair to the Lagoon Boardwalk.
Section 2. The Seward City Council hereby finds that it is in the public interest to waive
the competitive procurement requirements of the Seward City Code based on the urgency of the
need to make these repairs
Section 3. The amount of $8,000 is hereby appropriated from the General Fund fund
balance account no. 101- 0000 -3050 to general services contracted services account no. 101-
1 180 -5790.
Section 4. This resolution shall take effect immediately upon its adoption.
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -058
PASSED AND APPROVED by the City Council of the City of Seward. Alaska, this 11 day of
July 2011.
THE CITY OF SEWARD, ALASKA
Willard E. Dunham, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Johanna Kinney, CMC
City Clerk
(City Seal)
1,0
Council Agenda Statement
Meeting Date: July 1 1, 201 1 � � so
Through: Phillip Oates, City Manager
From: Michelle Weston, Assistant City Manager I P
•
Agenda Item: Emergency appropriation to repair lagoon boardwalk
BACKGROUND & JUSTIFICATION:
The Lagoon boardwalk was damaged in a vehicle accident on July 1, 2011. The accident completely
removed one walking section of the boardwalk and has created a safety hazard to the public. $8,000 is
needed to do an emergency repair of the boardwalk. The City is seeking reimbursement for this repair from
the person responsible for the accident. Harmon Construction has submitted an estimate of $8,000 to
complete this work. The Seward City Code authorizes an exemption from competitive procurement in
cases where an emergency does not provide sufficient time to obtain competitive bids. Given the potential
for personal injury to pedestrians, this repair is deemed to constitute an emergency.
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.
FISCAL NOTE:
Funding for this repair will come from the General Fund's undesignated reserves.
Approved by Finance Department: °� i
ATTORNEY REVIEW: Yes No X
RECOMMENDATION:
City Council approve Resolution 201 1 , a uthorizing the City Manager to appropriate $8,000 for
an emergency repair of the Lagoon Boardwalk.
1
HARMON CONSTRUCTION INC. BID
P.O. BOX 1650
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'1. 802.5 PORT AVE.
i., 1 1
roposal# 377 Job: 2011077
- T SEWARD AK 99664-1650 P (
Phone 4 907-224-7145 Date: 07/08/2011 Accepted By
----- 1
Fax # 907 224-7144 By.
. , . LAWRENCE HARMON
7: License 4 32752 Description: BID FOR BOARDWALK REPAIR
To: CITY OF SEWARD I Project: CITY BOARDWALK REPAIR
PO BOX 167
SEWARD AK 99664
We respectfully submit our proposal as requested for the above named project:
Description
Amount
BID TO REPAIR BOARDWALK DAMAGE 8.000.00
SCOPE OF WORK TO INCLUDE:
DEMOLISH & DISPOSE OF DAMAGED BOARDWALK.
LABOR AND MATERIALS TO:
BUILD APPROXIMATELY 30 FEET OF NEW BOARDWALK USING THE SAME TYPE OF MATERIALS AND DESIGN AS
EXISTING BOARDWALK
quote good/or 30 days from date issued
We Hereby Propose to furnish material and labor as specified above for the sum of
$ 8,000.00
Terms: All material is guaranteed to be as specified. All work to be completed in a workmanlike manner. Any
alteration,fi.om the specifications involving extra costs will be executed only upon written Change Orders, and
will become an additional charge above this Proposal Any Questions Please Call Larry
'R.
Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -059
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA AUTHORIZING A SOLE SOURCE PROFESSIONAL SERVICE
CONTRACT WITH NORTHERN ECONOMICS, INCORPORATED FOR
THE ECONOMIC ANALYSIS AND FINANCIAL STRATEGY FOR
HOMEPORTING COMMUNITY DEVELOPMENT QUOTA (CDQ)
FISHING VESSELS IN SEWARD, ALASKA IN AN AMOUNT NOT -TO-
EXCEED $85,000 AND APPROPRIATING FUNDS
WHEREAS, the City of Seward secured a FY 2012 Designated Legislative Grant in the
amount of $400,000 for the Coastal Villages Region Fund Engineering and Economic Analysis;
and
WHEREAS, the Coastal Villages Region Fund is one of the six Community
Development Quota groups; and
WHEREAS, grant funds may be used to develop an economic analysis and financial
strategy for relocating the Coastal Villages Region Fund fishing fleet to Seward, Alaska; and
WHEREAS, the City has worked collaboratively with Northern Economics,
Incorporated to accomplish Phase 1 of the economic analysis; and
WHEREAS, Northern Economics, Incorporated has over 25 years of experience in
Alaska and beyond -- providing clarity for its clients through impartial analysis; and
WHEREAS, Northern Economics. Incorporated has studied the impacts of various
potential projects on regional economies based on the direct, indirect, and induced employment;
labor income; value added benefits /costs; and tax revenues; and
WHEREAS, Northern Economics, Incorporated has provided excellent services at
competitive prices for the City of Seward; and
WHEREAS. the City will carefully manage the project with Northern Economics,
Incorporated to accomplish a comprehensive economic analysis and financial strategy for
relocating the Coastal Villages Region Fund fishing fleet to Seward, Alaska; and
WHEREAS, the Seward City Code SCC 6.10.120(A)(8) exempts specialized products
and professional services from the competitive procurement process; and
WHEREAS, this grant allows the City of Seward to utilize its own procurement code to
expend these grant funds.
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -059
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
SEWARD, ALASKA:
Section 1. The City Manager is hereby authorized to enter into a sole source professional
service contract with Northern Economics, Incorporated, in substantially the form presented at
this meeting, to complete a comprehensive economic analysis and financial strategy for
relocating the Coastal Villages Region Fund fishing fleet to Seward, Alaska
Section 2. The City Council finds that this contract involves professional services as
described in SCC 6.10.120(A)(8) and is therefore exempt from competitive procurement
provisions.
Section 3. The amount of 585,000 is hereby appropriated from State legislative grant
account no. 1 01- 0000 - 4680 -0200, to contracted services account no. 101-1120-5390
Section 4. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this day of
July 2011.
THE CITY OF SEWARD, ALASKA
Willard E. Dunham, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Johanna Kinney, CMC
City Clerk
(City Seal)
Council Agenda Statement
Meeting Date: July 18, 2011
\ 4 SF
Through: Phillip Oates, City Manager u . � �' o,
From: Michelle Weston, Assistant City Manager 41.4--110
NIP
Agenda Item: Contract with Northern Economics for homeporting CDQ fishing vessels in Seward
BACKGROUND & JUSTIFICATION:
The City of Seward has received a 2012 State of Alaska legislative grant of $400,000 for the Coastal
Villages Region Fund Engineering and Economic Analysis. A portion of the grant funds are designated to
be used for an economic analysis and financial strategy for homeporting Community Development (CDQ)
fishing vessels in Seward, Alaska, beginning with the Coastal Villages Region Fund fishing fleet. Seward
City Code SCC 6.10.120(A)(8) allows for the exemption of specialized products and professional services
from the competitive procurement process.
Northern Economics has submitted a proposal to complete the study for $85,000 with a start date in July
2011 and a completion date in December 2011. Northern Economics has the following qualifications to
complete the economic analysis and financial strategy: (1) recognition as a leading firm specializing in
economic development studies in Alaska; (2) experience in analyzing the impacts of various potential
projects on regional economies based on direct, indirect, and induced employment, labor income; value
added benefits /costs, and tax revenues; (3) satisfactory completion of earlier economic studies for the City
of Seward, such as a planning study for future investment in the Seward Marine Industrial Center; (4)
participation with a PND Engineers team to develop a federal grant application for SMIC improvements;
and (5) experience working with the City of Seward and PND Engineers to complete the conceptual phase
of this homeporting initiative and the request for legislative funding of this phase of the project.
INTENT: To authorize the City Manager to enter into a sole source professional service contract with
Northern Economics to complete a comprehensive economic analysis and financial strategy for relocating
the Coastal Villages Region Fund fishing fleet to Seward, Alaska in an amount not -to- exceed $85.000.
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. Specifically, Seward City Code SCC
6.10.120(A)(8) exempts specialized products and professional services from the competitive procurement
process.
FISCAL NOTE:
Funding for this project is coming from a State gran . d does not impact the City's finances.
Approved by Finance Department: ,et a ,� � . I7,
•
I
ATTORNEY REVIEW: Yes X No
RECOMMENDATION: 4I
City Council approve Resolution 2011- "authorizing the City Manager to enter into a
professional services contract of $85,000 with Northern Economics
t 1
Northern
PROFESSIONAL SERVICES CONTRACT
between Northern Economics, Inc. and City of Seward
for the Economic Analysis and Financial Strategy for Homeporting CDQ Vessels in Seward, Alaska
This Professional Services Contract (the "Agreement ") is made effective this t 2 ay of July, 2011 (the
"Effective Date "), by and between Northern Economics, Inc. ( "Northern Economics ") and the City of
Seward ( "Client ") for professional services on the above referenced project ( "Project "), and is subject to the
terms and conditions set forth below.
ARTICLE 1
Scope of Services and Compensation. The scope of services to be supplied by Consultant, its employees
and /or subcontractors is as described in Attachment A. The scope of services may be amended in
accordance with Section 7.6, provided that the City Manager may authorize written change orders that do
not increase cost or extend the term.
1.1 Compensation. Consultant's compensation for services rendered under this Agreement shall be as
set forth in Attachment A.
1.2 Invoicing; Payment. Consultant shall submit invoices to Client for the work performed during each
invoice period. The form and frequency of the invoices shall be as described in Attachment A. Client shall
pay Consultant the amount of each invoice, within thirty (30) days of each invoice delivered to the Client,
provided that final payment is not due and payable unless the Client has received and accepted the final
report prepared by Consultant.
1.3 Late Payment. Invoices not paid within thirty (30) days of invoice date shall be subject to interest at
the rate of one and one half percent (1.5 %) per month, or such lesser amount as required by law.
1.4 Records. Consultant shall maintain records of all work performed hereunder for a period of two (2)
years following the expiration or earlier termination of this Agreement. Payment to the Consultant for
services hereunder includes full compensation for all work products and other materials produced by the
Consultant and its subcontractors pertaining to this Agreement. The originals of all material prepared or
developed by the Consultant or its employees, agents, or representatives hereunder, including documents,
drawings, designs, calculations, maps, sketches, notes, reports, data, models, computer tapes, and samples
shall become the property of the Client when prepared, whether delivered or not, and shall, together with
any materials furnished to the Consultant and its employees, agents, or representatives by the Client
hereunder, be delivered to the Client upon request and, upon termination or completion of this
Agreement. Materials previously created and copyrighted by the Consultant included in this project will
remain property of the Consultant. Copies will be made available to the Client upon request. Materials
purchased from and copyrighted by third parties are not included in this provision.
1.5 Audit. Client shall have the right to audit such records during such two -year period upon reasonable
notice to Consultant, during Consultant's regular business hours, and at Client's sole expense.
ARTICLE 2
2.1 Term. The term of this Agreement shall be as set forth in Attachment A.
ARTICLE 3
3.1 Independent Contractor. Consultant shall act and be deemed at all times hereunder as an
independent contractor, and nothing contained herein shall be construed to create the relationship of
principal and agent, employer and employee, partners, joint venturers, or any other relationship between
Northern Economics, Inc. Professional Services Contract Page 1 of 7
1 2--
Client and Consultant or between Client and Consultant's employees or subconsultants. Consultant shall
have no authority to enter into any contract or agreement or to bind Client except as specifically provided
herein.
3.2 Control. Any employees or subconsultants engaged by Consultant shall be under the exclusive
direction and control of Consultant. Consultant shall assume responsibility for all of its agents and
employees under any federal, state, or local laws or regulations regarding employees' liability, worker's
compensation, unemployment insurance, income tax withholding, and authorization for employment, as
well as any other acts, laws or regulations of similar impact.
ARTICLE 4
4.1 Indemnification. Consultant agrees to indemnify, defend and hold harmless Client, its agents,
subconsultants, and employees from and against any and all losses, claims, liabilities, damages, or costs,
including without limitation attorneys' fees, arising out of or resulting from Consultant's breach of this
Agreement or Consultant's or its agents', officers', employees', or sub - subcontractors' negligence, gross
negligence or willful misconduct.
4.2 Limitation of Liability. Except as to compensation due Consultant pursuant to this Agreement, in no
event shall either party have any liability to the other for special, indirect, incidental, consequential, or
punitive damages.
ARTICLE 5
5.1 Insurance. Consultant shall obtain and keep in full force and effect, at its own expense, during the
performance of any work under this Agreement, the following minimum policy limits:
5.1.1 Worker's Compensation, in accordance with the laws of the State of Alaska, and Employer's
Liability Insurance with minimum limits of $1,000,000 / $1,000,000 / $1,000,000.
5.1.2 General Liability Insurance in an amount not less than $1,000,000 per occurrence; $1,000,000
personal and advertising injury; $2,000,000 general aggregate; and $2,000,000 products /completed
operations aggregate for bodily injury or death and for property damage.
5.1.3 Professional Liability with minimum limits of $1,000,000 aggregate and each claim.
5.1.4 Automobile Liability Insurance covering owned, non - owned, or hired vehicles used by Consultant,
with limits not less than $1,000,000 combined single limit for bodily injury and property damage.
ARTICLE 6
6.1 Termination. This Agreement may be terminated by either party upon thirty (30) days written notice
to the other party. Upon receipt of written notice of termination, Consultant shall cease further work under
this Agreement other than the routine tasks associated with winding up the Project. Consultant shall he
paid for services rendered up to the effective date of the termination.
ARTICLE 7
7.1 No Exclusivity. Consultant agrees to perform the services described in Attachment A for Client on a
non - exclusive basis, and nothing in this Agreement shall be deemed to restrain Consultant from performing
work for other clients.
7.2 No Assignment. Neither party shall assign or otherwise transfer the obligations under this Agreement
without the prior written consent of the other party, provided, however, that Client acknowledges and
agrees that Consultant may assign particular tasks associated with the scope of services to subconsultants of
Consultant's choosing, and that the subconsultant shall also be subject to the terms of this Agreement.
7.3 Jurisdiction; Venue. This Agreement shall be governed by the laws of the State of Alaska. Any action
brought by either party to enforce or interpret this Agreement shall be filed and maintained in the Third
Judicial District in Anchorage, Alaska.
Page 2 of 7 Professional Services Contract Northern Economics, Inc.
13
7.4 Severability. If any provision of this Agreement is held to be invalid and /or unenforceable, the
remaining provisions shall be valid and binding upon the parties.
7.5 Waiver. One or more waivers by either party of any provision, term, condition, or covenant of this
Agreement shall not be deemed to be a waiver of any subsequent breach of the same by the other party.
7.6 Amendments; Modifications. This Agreement may be amended or modified only by written
instrument signed by both parties.
7.7 Attorney's Fees and Costs. Should litigation be initiated to enforce the terms or provisions of this
Agreement, then all actual, reasonable litigation costs, including court costs and attorneys' fees, shall he
paid by the non - prevailing party.
7.8 Construction. This Agreement shall not be construed more strictly against any party hereto regardless
of which party is responsible for its preparation, it being agreed that this Agreement was fairly negotiated
by the parties and that both parties have had the opportunity to have this agreement reviewed and
negotiated by an attorney of their choosing.
7.9 Notice. Any notice required or permitted to be given under this Agreement shall be in writing and
shall be deemed given:
(i) upon receipt if delivered by hand;
(ii) upon receipt by the sending party of confirmation of successful transmission if sent by facsimile or
email; or
(iii) five (5) business days following its deposit in the United States mail, postage prepaid, and
addressed to the address set forth after the parties' signatures below.
7.10 Entire Agreement. This Agreement, together with any Attachments and documents attached hereto
(all of which are incorporated herein by this reference), represent the entire and integrated agreement
between the parties concerning the subject matter hereof and supersedes all prior negotiations,
representations, or agreements, whether written or oral.
7.11 Counterparts. This Agreement may be executed in counterpart, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date first
set forth above.
Northern Economics, Inc. City of Seward
By: B
7/8/2011
Patrick L. Burden Date Phillip Oates Date
President City Manager
880 H Street; Suite 210 P.O. Box 167
Anchorage, AK 99501 Seward, AK 99664
ATTEST:
Johanna Kinney, CMC, City Clerk
Northern Economics, Inc. Professional Services Contract Page 3 of 7
1�
Attachment A: Scope of Services, Compensation, Invoicing, and Term
1. Scope of Services
Consultant, its employees, and subconsultants shall perform the services for Client as described in
Attachment A -1.
2. Compensation
Consultant, its employees, and subconsultants shall perform the services described above on a fixed price
basis. Total compensation will equal $85,000, and includes all actual and reasonable expenses.
3. Invoicing
Consultant shall submit regular invoices that specify: a) the project name, b) the invoice number, c) the
period covered by the invoice, d) a description of the services provided during that period, e) the date of
the invoice, f) the date that payment is due, and g) the total amount of the invoice. In addition, the invoice
will include such details as by the type of contract as specified in Part 2 above. A sample invoice is
included as Attachment A -2. Invoices will be submitted on a monthly basis.
4. Term
The term of this Agreement shall commence on the Effective Date and, unless sooner terminated pursuant
to Article 6, shall expire on 30` day of June, 2012.
Page 4 of 7 Professional Services Contract Northern Economics, Inc.
Attachment A -1: Details on the Scope of Work
The following paragraphs describe our proposed approach to quantify the benefits of homeporting
Community Development Quota vessels in Seward Alaska rather than Puget Sound, and identification of a
preliminary financing plan to achieve the goals of the project.
Major components of our proposed study include: economic benefits accruing to the State of Alaska and
appropriate local and regional governments from construction and operation of the facility, fiscal impacts
on the state and local governments, benefits and costs to the CDQ groups, identification of industries and
other infrastructure needed to support a large number of CDQ vessels, and a preliminary financing strategy
for the project.
Based on the requirements for a homeport location, we believe Seward is the best candidate for the
proposed facility. Seward is an ice -free port and has highway and rail system connections. It is relatively
close to Anchorage and the Ted Stevens Anchorage International Airport which has direct connections with
major communities in the CDQ region of western Alaska and to Seattle. Three operators provide
scheduled barge freight service to Seward. Seward also has sufficient uplands space, skilled maritime
maintenance workers, and vocational training (through AVTEC) in the community. AVTEC provides training
for all of the licenses that are needed for maritime maintenance and operations.
We anticipate CDQ groups would require a drive -on dock, work areas, warehousing and office space, and
living areas. If located in Seward, the CDQ facility could be located adjacent to the existing infrastructure
in the Seward Marine Industrial Center (SMIC), resulting in higher utilization of the SMIC facilities and
benefiting from existing infrastructure and services located at SMIC. Additional upland space would be
needed for companies providing support service to the vessels. The number of vessels is uncertain at
present, but is expected to grow over time due to the requirement that CDQ groups invest at least 80
percent of their income into the fishing industry. The potential Alaska ports should have sufficient land and
water areas to accommodate more than one hundred vessels in the future.
The economic benefits of homeporting the CDQ fleet in Alaska would be driven primarily by spending on
vessel maintenance work and other goods and services in Alaska, rather than in the Puget Sound region,
and the large number of jobs available on the vessels and in the support industries. It would allow Alaska
businesses to compete with providers in Seattle and elsewhere in the Puget Sound region. Annual
operations and maintenance expenditures of the larger CDQ vessels can reach hundreds of thousands of
dollars and involve a variety of specialty services. We will use 2010 expenditure data from several CDQ
groups to evaluate the amount of money spent by these fleets on each type of service. This information will
be used to extrapolate the needs of the vessels that can be accommodated in the first phase of
development as well as the entire CDQ fleet if it were to homeport in Alaska. Using annual expenditure
data, we will evaluate the economic impact on the state and local governments for the port that best fits
the homeport criteria identified by the CDQ groups using IMPLAN input - output modeling software. A
similar evaluation will be conducted for construction of the new facilities using cost information generated
by an engineering firm to be selected by the City.
In addition to the economic benefits to the state and region, the state and local governments could also see
increased corporate income taxes, sales taxes, real and personal property taxes, and moorage revenues as a
result of the additional economic activity. Some CDQ groups may prefer to lease uplands and dock space
for longer periods of time and recommendations for a preferential use agreement will be included as well
as potential lease revenues. The cost of providing some public services could also increase, with the biggest
cost perhaps being due to an increased presence of port and harbor staff at a facility. Our study will look at
the fiscal system in place in Seward and estimate the fiscal effects of additional revenues and expenses
associated with activity at a new facility. The potential revenues will be evaluated and we will work with
AIDEA, the Kenai Peninsula Economic Development District, and other parties to evaluate the level of
bonding that could be supported by these additional revenues, and other parts of a financial strategy
necessary to implement the project.
Northern Economics, Inc. Professional Services Contract Page 5 of 7
r 10
From the perspective of CDQ groups, homeporting vessels in Alaska could provide substantial cost and
time savings from not having to move the vessels to and from their fishing grounds and the Puget Sound
region. In addition, CDQ groups could save millions in airfare costs by dramatically reducing travel
between Seattle and Alaska for vessel crews and management. Puget Sound's support industry benefits
from efficiencies of scale, however, so the cost of goods and services at a new facility in Alaska would likely
be higher. The cost premium would shrink as more vessels homeport in Alaska, though some goods and
services will likely only be available in Puget Sound. We will conduct a benefit -cost analysis from the
perspective of the CDQ groups to evaluate their interest in the facility.
At present, many of the services used by CDQ groups in the Puget Sound region are not available in Alaska
or are of insufficient size to serve the number of vessels that could homeport in- state. A fourth major
component of our study will be an industry cluster study that looks at the types of services used by the
fishing industry. Ballard's waterfront is a good example of the range of services offered in close proximity to
haul out and work facilities. An initial challenge in attracting businesses to serve vessels will be the
seasonality and operational capacity of a facility, since the work done on the CDQ vessels would occur at
limited times during the year, during the off - season. Use of these services by other fishing vessels may help
to alleviate the seasonality, since the shipyard does operate year- round. Other types of vessels, such as
research, nonprofit, or private vessels, may also have an interest in using or relocating to the facility.
Northern Economics has done a number of studies in Seward that will help to inform its work on this study.
Recently, Northern Economics completed a planning study for future investment in SMIC for the City of
Seward, and was part of the PND Engineers team in developing a TIGER grant application for SMIC
improvements. Northern Economics also conducted some of the original studies for the SMIC and the
synchrolift in the 1980s and early 1990s.
The economic analysis and financial strategy for the CDQ Homeporting study will cost $85,000 to
complete. Assuming a start date in early July 2011, we can submit a draft report on December 1, 2011.
Assuming a one month review of the draft report by the City, with comments returned to us by January 1,
2012, we can submit a final report on February 1, 2012. The written report will be preceded by a
PowerPoint presentation covering our preliminary findings, to be completed by September 30, 2011.
Page 6 of 7 Professional Services Contract Northern Economics, Inc.
Attachment A-2: Example Invoice
The figure below contains an example invoice in that format that will be used in this project.
Figure 1. Example Invoice for a Fixed Price Contract
Northern Economics, Inc. Invoice
880 H Street, Suite 210
‘,
Anchorage, AK 99501
907-2 Fat: 907-2
t
Cot
123
A1,1-3 ,1 9,7 , 1
Aztr,
PRO
e •
DESCRIPTION
Pre:esse,:rial vIce,s and Expenses ue
e , Hee C /CI - t'ic complete, :5% oes
•
apat? the Or7.■orton■ty to be of se:Ro Ii yo,: oa.,,1 any n nton please
Invoice Total
cont,4-,-,I 0 at onee
t
Payment&Crecitts
Balance Due
Northern Economics, Inc. Professional Services Contract Page 7 of 7
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