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