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HomeMy WebLinkAbout01272011 City Council Packet Seward City Council Agenda Packet g",\ of S ew ___ 4 4 . . Is a :,:) , o ■ 4 1& s • Special CCouncil January 27, 2011 City Council Chambers Beginning at 6:00 p.m. The City of Seward, Alaska Special City Council Meeting January 27, 2011 6:00 p.m. Council Chambers 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 items Vice Mayor scheduled for public hearing. [Those who have signed in will Term Expires 2012 be given the first opportunity to speak. Time is limited to 2 minutes per speaker and 30 minutes total time for this agenda Robert Valdatta item.] Council Member Term Expires 2011 5. Approval of agenda Tom Smith 6. Executive Session Council Member Term Expires 2011 Go into executive session to discuss with the City Attorney potential Vanta Shafer litigation regarding the maintenance and operation of the City's Council Member shiplift facility and factors relating to agreements between the City Term Expires 2011 and Seward Ship's Drydock, Inc. Marianna Keil 7. Unfinished Business Council Member Term Expires 2012 A. Resolutions Ristine Casagranda g City Manager Resolution 2011 - 005, Authorizing The Cit Mana er To Extend Council Member Term Expires 2012 The Maintenance And Operating Agreement With Seward Ship's Drydock, Inc. Through August 31, 2011. Phillip Oates 7. Council comment City Manager S. Citizens' comments Johanna Kinney City Clerk 9. Council and administration response to citizens' comments Cheryl Brooking City Attorney 10. Adjournment City of Seward, Alaska Council Agenda January 27, 2011 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 January 27, 2011 at 6:00 y p.m. for the purpose of: 1. Go into executive session to discuss with the City Attorney potential litigation regarding the maintenance and operation of the City's shiplift facility and factors relating to agreements between the City and Seward Ship's Drydock, Inc. 2. Resolution 2011 -005, Authorizing The City Manager To Extend The Maintenance And Operating Agreement With Seward Ship's Drydock, Inc. Through August 31, 2011. x == Signed this 26 day of January, 2011. 7 Mayor City Manager 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.) yl �a. C j Of spit, NOTICE OF 11 SPECIAL MEETING NOTICE IS HEREBY GIVEN that the Seward City Council will meet in a special meeting on January 27, 2011, beginning at 6:00 pm, for the purpose of: 1. Go into executive session to discuss with the City Attorney potential litigation regarding the maintenance and operation of the City's shiplift facility and factors relating to agreements between the City and Seward Ship's Drydock, Inc." 2. Resolution 201 1 -005. Authorizing The City Manager To Extend The Maintenance And Operating Agreement With Seward Ship's Drydock, Inc. Through August 31, 2011. 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: 1/26/2011 at 12:00 p.m. City Hall bulletin board U.S. Post Office Harbormaster's Building Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2011 -005 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 AUGUST 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 January 31 2011; 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 has found that the coating is not complete, therefore the City will not grant full lease credits until the coating is complete; and WHEREAS, the City and Seward Ship's Drydock have not completed a thorough review of the Maintenance & Operating Agreement to complete revisions and updates to 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. 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 Seward Ship's Drydock, Inc. for a period from January 31, 2011 to August 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 24 day of January, 2011. I Council Agenda Statement Meeting Date: January 24, 2011 a { Of set To: Phillip Oates, City Manager y .,, From: Kari Anderson, Harbormaster 4�asKP Agenda Item: Extending the Maintenance & Operating Agreement with Seward Ship's Drydock through August 31, 2011 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 7 agreement to extend the Maintenance and Operating agreement is set to expire January 31, 2011. 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. The coating was applied by Seward Ship's Drydock and the City contracted with a NACE - certified coatings inspector to evaluate the application and condition of the coatings during September 2010. This report is attached. The coating of the splash -zone on the sheet piling is not complete, and at a minimum the coating must extend to mean low water. Full lease credits will not be granted for the splash zone coating until it is complete. This eighth extension to the maintenance and operating agreement provides the City time to negotiate a new agreement, rather than extending the existing document and piecing together revisions through each separate extension. 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 August 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. INTENT: To approve the City Manager to sign the eighth extension to the Maintenance & Operating Agreement with Seward Ships DryDock. CONSISTENCY CHECKLIST: Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures or Other Plans or Policies: 13 Yes (List Below) No 1. Comprehensive Plan Economic Development... 2. Strategic Plan Economic Base... 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 ofrepairs 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, O Operator shall propose rates and charges for use of Shi lift Facility. Such rates and charges char p p p g p Y $ 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. w City shall adopt rates and charges proposed by Operator that conform to the standards in this 4,k section." No rates or charges have been proposed by the Operator. t; Approved by Finance Department: ____;,,Z ATTORNEY REVIEW: Yes No X r RECOMMENDATION: City Council approve Resolution 2011 -005 authorizing the City Manager to sign the Eighth Amendment to the Maintenance and Operating Agreement with Seward Ship's Drydock. 1 - 7'-{ i EIGHTH AGREEMENT TO EXTEND THE TERM OF MAINTENANCE AND OPERATING AGREEMENT WITH SEWARD SHIP'S DRYDOCK The Maintenance and Operating Agreement effective March 30, 2000, as amended October 26, 2001 (the "Agreement ") was entered into between the City of Seward, Alaska, an Alaska municipal corporation ( "City ") whose address is P.O. Box 167, Seward, Alaska 99664 and Seward Ship's Drydock, Inc. ( "Operator ") whose address is P.O. Box 944, Seward, Alaska 99664. 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, dock, and related rail systems (the " Shiplift Facility "); and WHEREAS, the Operator and the City have entered into a Lease Agreement ( "Lease "), to operate a vessel repair and construction facility on land adjacent to the shiplift facility; and WHEREAS, the operator has completed the coating application to pipe pile and 54 cofferdam cells but agrees that some additional coating or touch up is necessary at the low tide area of the pile and cells; 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 until September 30, 2010; and WHEREAS, on September 27, 2010, the City Council adopted Resolution No. 2010 -085 authorizing the City Manager to enter into an agreement for the Renewal of Term of the Maintenance and Operating Agreement containing a temporary extension until January 31, 2011; and WHEREAS, additional time is sought by both parties to evaluate and update the language in the Maintenance & Operating Agreement. NOW THEREFORE, the parties agree as follows: Section 1. The Operator will complete the application of coating or touch up at the low tide area of the pile and cells when weather and tides permit completion of that work. Section 2. The Operator agrees to diligently work with the Seward City Manager to evaluate and update language in the Maintenance and Operating Agreement during the term of this extension agreement. Section 3. The Agreement Term as described in Section 2.01 of the Agreement is hereby extended from January 31, 2011 to August 31, 2011. Section 4. The exten sion of meal owed by this ame dment shall not co nstitute a waiver of any rights of the City or Operator. Section 5. All other poisons o the Agreement remain in full force and effect. Section 6. This Agreement is subject to approval by the Seward City Council and shall become eff civ upon the signatures of both parties. DATED this day of January, 2011. City: Operator: CITY OFSEWARD SEWARD SHIP'S DRYDOCK, INC Phi1lpOae,Clty M gr 1491447.44 T. Pruitt, President ATTEST: Johanna Kinney, CMC, City Clerk � . — � � ... . . . . . . . . . . . . . .. .. . . . .. . . ...... .. .� QA Services, Inc. An Alaskan Owned and Operated Testing and Inspection Company Quality .Assurance * Weld Inspection' Coating Inspection * Nondestructive Testing * API 653 Tank Inspection * Special Inspections City of Seward, Alaska 9 September, 2010 Attn: Kari Anderson, Harbormaster Re: Seward's Ship DryDock Specific: Protective Coating Rehabilitation Observations REPORT Arrived at Seward Harbor at 0700 hours on 8 Tuesday, 2010 and met with Kari Anderson and Jim Lewis and traveled in harbor skiff to drydock for inspection. Tide at this time was minus 1.5 and conditions were calm. We conducted observations and inspections around sheet pile buffer and pipe piles under dock area. My observations are as follows: • Surface preparation and coatings were very erratic in base elevation as attached photos show. The maintenance preparation and coatings should be between high and low tide elevations as this is the most corrosive environment. Coatings were taken to the top of all pile but the splash zone is most critical. Recommend complete preparation and coating to low tide level • Poor surface preparation prior to coating was encountered throughout both sheet and pipe pilings. Loose scale, barnacles, particulate matter, etc. was observed on coated surfaces resulting in voids in coating system. Oxidation present in these areas. Large flakes of delaminated oxidation were easily picked off, revealing uncoated surfaces underneath. Coating manufactured recommends high pressure washing at minimum 3000 psig. Contractor was not conducting surface preparation while observations were being conducted. Due to the levels of oxidation and surface defects observed, I would recommend surface preparation by abrasive blasting with a nickel slag or garnet abrasive ( no EPA concerns ) or at a minimum, water jetting per SSPC -SP 12, which requires a minimum 10,000 psig or greater and would be much more effective in removing oxidation and other organic contamination in order to expose a solid substrate in which to coat. • Several attempts to measure dry film thickness of maintenance coatings were indeterminate due to levels of oxidation. Numerous holidays were observed as well as concentrated corrosion in the pinhole form on surfaces prepared and coated. Manufacturer's data sheet for the product being utilized recommends a dry film thickness of 3 -8 mils, and in my opinion, is not adequate to encapsulate the substrate. I would recommend surface preparation as stated above and coating with a 100% solids Polyurea product to attain a dry film thickness of 60 -250 mils in order to better encapsulate the substrate and any surface defects. • Adhesion testing of the maintenance coatings were taken at 3 locations, all high on the sheet pile, out of the splash zone. Results were as follows 1. Inside sheet pile, 448 psi, adhesive failure 2. End sheet pile, 128 psi, coating failure 3. Outside sheet pile, 274 psi, adhesive failure Adhesion is marginal at best and results need to be taken in the splash zone, which is difficult to attain due to cure time of dolly adhesives. • As no surface preparation was being conducted during our observations, no testing for surface contaminates was conducted. In overview, my opinion of the maintenance being conducted is very poor to poor at best. The amount of oxidation already present on surfaces prepared and coated is disturbing. Surface preparation is the most key element in the longevity of a properly specified and applied coating system. With what is currently being done, the extended life of the pilings will be very little. I suggest consulting a corrosion engineering firm for further recommendations and analysis. If you have any questions or need me to expound further on any item, please feel free to call. Respectfully, Tyrell C. Amberg NACE Certified Level 3 Coating Inspector, #1808 P.O. Box 112328 * Anchorage, AK 99511 -2328 * Ph: (907) 522 -1969 * FAX: (907) 344 -1980 1`1 . �sne An Alaskan Services Inc QA O d and Operated Testing and Inspection Company Quality Assurance * Weld Inspection * Coating Inspection * Nondestructive Testing * API 653 Tank Inspection * Special Inspections t 7i R , , i ':,:; ' 1 fil . t 9 4 qag: {{ c- 4 iF f 6 1 5 k 9. ' s : 09/08/2010 07:54 Typical failure of new coatings under dock !�t i :1 ! j A ': 9; � i 1 1 `; 1 ! 1, 4 j ( a � I s 1 6 f: ' , K : ,+,. 1 - ' ' /- •' v - , :, ' ,,,,,),, ' t'''''' ' y rr �. S �'� .. :".4/ 14 ' '0 s'. "1 11 1 .,i. ',. - t?,::: .' 4' . W g - ^ t ,sl 7 `1 { _ z`" mad' y • oollo, a> C o° o1 Inconsistent surface preparation and coating elevations throughout piles. Preparation should cover the entire splash zone defined as the area between low and high tides. P.O. Box 112328 * Anchorage, AK 99511-2328 * Ph: (907) 522 -1969 * FAX: (907) 344 -1980 4 QA Services, Inc. An Alaskan Owned and Operated Testing and Inspection Company Quality Assurance * Weld Inspection * Coating Inspection * Nondestructive Testing * API 653 Tank Inspection * Special Inspections r , . ^,..0 6 t, . "" i s fit y t ' t ' R e' ' C ' $ F '''Yh 1' 'V - y f 1 1 Z y pr Typical oxidation due to lack of encapsulation of the substrate by coating system. Scale delamination can also be seen with oxidation leaching from under poorly adhered scale. ti • Z a a � - Y , . • r' \. s �, t 191 08 /20'10` 0 07 # , ..e Loose scale and inadequate coating thickness. P.O. Box 112328 * Anchorage, AK 99511 -2328 * Ph: (907) 522 -1969 * FAX: (907) 344 -1980 QA Services, Inc. An Alaskan Owned and Operated Testing and Inspection Company Quality Assurance * Weld Inspection * Coating Inspection * Nondestructive Testing * API 653 Tank Inspection * Special Inspections Fi> 09 /08/2010 07 :51 � Poor surface preparation and inconsistent elevations under dock. , 94 , • • • • • • 4 '" l l r: . °. More flaking of scale with oxidation leaching from under. Area with sheen is extremely thin coatings probably due to over thinning. P.O. Box 112328 * Anchorage, AK 99511-2328 * Ph: (907) 522 -1 969 * FAX: (907) 344-1980 20 F ebruary 2011 February 2011 March 2011 SuMo TuWe Th Fr Sa SuMo TuWe Th Fr Sa 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 11 12 - 6 7 8 9 10 11 12 13 14 15 16 17 18 19 13 14 15 16 17 18 19 20 21 22 23 24 25 26 20 21 22'23 24 25 26 27 28 27'28 29 30 31 Monday Tuesday Wednesday Thursday 31 Feb 1 y Friday 2 3 4 7:30pm P &Z Meeting 12:00pm PACAB Meetin v CO v LL M C 7 8 9 10 11 11 :30am Seward Comm v LL 14 15 16 17 18 7:00pm City Council M 6:30pm P &Z Work Ses 12:00pm PACAB Work S 9:00am Social Security 6:30pm Historic Preser co .n v LL 21 22 23 24 25 President's Day; Officd L N v LL 28 Mar 1 2 3 4 7:00pm City Council M v a Co N N LL Nanci Richey 1 1/26/2011 11:53 AM