Title
Staff Report for Resolution Authorizing the City Manager to Execute a Consultant Services Agreement with GHD Services, Inc. in the amount of $107,002.85 for Preparation of a Decommissioning and Demolition Plan for the San Leandro Marina
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council authorize the City Manager to execute a Consultant Services Agreement with GHD Services Inc., for preparation of a Decommissioning and Demolition Plan for the San Leandro Marina.
BACKGROUND
The City’s boat harbor operations are one of three accounts in the Shoreline Enterprise Fund that also includes an account for the Monarch Bay Golf Courses and one for shoreline maintenance. Historically, the costs to operate the boat harbor were covered by berthing revenues. The ability to fund dredging of the two-mile federal channel and interior basin, as well as proper disposal of the dredged materials has not been financially positive for over 10 years. Prior to 2005, the City was able to effectively lobby the federal government for funding to dredge the channel. The City’s General Fund provided loans to fund the dredging of the interior basin as well as disposal of all the material. The revenue from the City’s golf courses and shoreline business leases (American Golf Corporation, El Torito, Horatios and The Marina Inn) have been used to repay the General Fund loans as well as the four outstanding loans to the California Department of Boating and Waterways. Since 2003, the Shoreline Enterprise Fund has paid interest only on the City’s two General Fund loans.
The last dredge of the federal channel, which was only a partial dredge, occurred in 2009 at a cost of $2,146,500 (federal grant). The dredge spoils were placed in the City’s upland Dredge Materials Management Site (DMMS, located adjacent to and south of Estudillo Channel), but the estimated $2.5M needed for removal and disposal, which would need to be paid for by City funds, was never funded. The last dredge of the berths was in 1997, at a cost of $556,245. At that same time, the chamfers and federal channel were also fully dredged, with the costs associated with the federal channel, $587,584, paid for by a federal grant. Disposal costs were greatly reduced at that time because the City off-hauled to Alcatraz. In 2001, the federal channel was again dredged and paid for by a grant of $1.5M. Off-hauling of the materials was done to Oyster Bay Regional Park and Metropolitan Golf Course, at a cost of $1,368,372. In the five short years between the 1997 and 2001 dredge events, even though the same amount of material was removed, the costs to dredge tripled.
Discounting the debt service associated with several Cal-Boat loans that were obtained for a variety of Marina projects, harbor operations have for the most part been relatively cost neutral, taking in revenues that covered expenditures. A number of deferred maintenance projects exist, but have not been undertaken due in part to the proposed Monarch Bay Shoreline Project and also the lack of funds identified for on-going dredging. In fiscal year 2010, the last year that estimates were done, it was estimated that $10 million in capital improvements were needed for the 462-slip harbor. Dredging costs that would keep the full harbor operational at that time were estimated at $1.5 million to $2 million annually. Current occupancy of the harbor is at approximately 24 percent.
In 2005, the City began exploring a comprehensive development at the Shoreline in part to turnaround the failing Shoreline Enterprise Fund and boat harbor. A Master Developer approach was suggested for the landside development. The development objectives include no General Fund revenue would be used to subsidize the development. The hope was that lease revenue from the development could assist the City in redeveloping the boat harbor with much needed capital improvements as well as on-going annual funding of approximately $1.5 million for dredging.
In 2008, the City entered into an Exclusive Negotiating Rights Agreement with Cal-Coast to develop 40 acres of the City’s Shoreline. Following a two-year process with the Shoreline Citizens Advisory Committee (CAC), Cal-Coast presented a plan to the City Council for the 40 acres of landside development. The City Council requested that staff and Cal-Coast work with the CAC to evaluate the feasibility of future harbor basin improvements as part of the development project. Using the information from the Harbor Basin Alternatives Study performed by ESA in 2011, the CAC evaluated the feasibility of three options for the harbor basin - a Marina Park Alternative, an Aquatic Park Alternative, and a Nature Park Alternative. After consultation with the Bay Conservation and Development Commission (BCDC), the alternatives were further refined with the assistance of CH2MHill, an engineering company. In 2011, the CAC revised its recommendation to the City Council so that the City should maintain the harbor for as long as feasible, then move to redevelopment of the harbor should additional funds (whether for dredging or deferred maintenance) not be identified. Given that no new funding has become available for dredging and other capital needs, it is appropriate at this time to begin planning for the decommissioning of the marina boat harbor.
Analysis
If authorized, the consultant is able to commence work immediately. This work, which will establish the decommissioning process and the anticipated costs associated with demolishing the Marina, is critical to the City’s negotiations with the master developer on the proposed Development Agreement for the Monarch Bay Shoreline Project. This Plan will also outline the regulatory process required for decommissioning and demolishing the Marina, as well as the potential for some assets, such as the concrete docks, to be sold.
This work is split into two phases, with the first phase anticipated at $96,402.85 (plus potential lab analyses, which will be determined on need). Based on the outcome of findings from this first phase, staff will return to the City Council with a defined scope of work for the second phase, which will include bid documents for use in bidding the work out. There is a maximum of $10,600 in reimbursable expenses associated with this scope of work.
GHD has been providing demolition and decommissioning services to government agencies and Fortune 500 companies throughout North America and Europe for over 20 years. GHD has completed decommissioning and demolition evaluation related services of over one billion square feet of property. Recent and local project experience/clients include the San Francisco Marina West Harbor Renovation Project (San Francisco Recreation & Parks), Argo Solvents Plant and Barge Dock Facility Decommissioning, and the Morton Newark Salt Plant Decommissioning.
Fiscal Impacts & Budget Authority
This estimated project cost for Phase I is $107,200.85 and will be funded from the $1,000,000 included in the 2016-17 budget in the Shoreline Development Account 210-57-114-5120.
ATTACHMENT(S)
Attachment(s) to Related Legislative File
• Attached to Resolution:
• Consultant Services Agreement between the City of San Leandro and GHD Services Inc. for a Decommissioning and Demolition Plan for San Leandro Marina
PREPARED BY: Debbie Pollart, Public Works Director