Template revised September 22, 2016 AGENDA MEMORANDUM Item No. CTION ITEM June 13, 2017 DATE: June 6 , 2017 TO: Dave Soike , Interim Chief Executive Officer FROM: Lindsay Pulsifer Director Maritime Division Anne Porter, Seaport Capital Project Manager SUBJECT: erminal 5 Pile Removal Amount of this request: 6,5 00,000 Total estimated project cost: 6,8 00,000 ACTION REQUESTED JUSTIFICATION ��COMMISSION AGENDA Action Item No. Page of Template revised September 22, 2016 ; format updates October 19, 2016 Small Business Under the current scope of work, this project presents o pportunities for small businesses interested in participating. The small business team along with CPO and the Port ’s Project Management staff will be promoting this project to maximize small business knowledge of this project. DETAILS Scope of Work The project scope consists of removal and disposal of all structures between the inner and outer harbor lines per DNR lease termination agreement installation of four steel piles to replace fishing net tie offs Structures to be removed include about 2,000 timber piles and connected beams, cross t ies, and decking. In one area known as the “ shipway ” removal of piles may destabilize an existing steel sheet pile wall. The project will clear, excavate, and regrade before removing the wall down to the mudline. The remaining slope will be armored with riprap to protect again st erosion. Schedule Activity Design tart Q4 2016 Commission construction authorization Q2 2017 Construction tart Q3 2017 se ate Q1 2018 Cost Breakdown This Request Total Project Design 300,00 Construction 00,00 6,5 00,00 Total 6,5 00,00 6,8 00,00 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 No action Pros: (1) Avoids costs associated with project. Cons: (1) Ignores lease termination obligation to DNR that is now 10 years old. (2) Will interfere with Lockheed Martin cleanup work. This is not the recommended alternative. ��COMMISSION AGENDA Action Item No. Page of Template revised September 22, 2016 ; format updates October 19, 2016 Alternative 2 dvertise/execute a major public works contract for the Terminal 5 Pile Removal project , and execute a cost sharing agreement with Lockheed Martin Cost Implications: The total project cost is approximately $ 6,8 00,000. Pros: (1) Fulfills 2007 lease termination obligation with DNR. (2) Sets the conditions for Lockheed Martin to proceed with their cleanup work. Cons: (1) None This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate /Authorization Summary Capital Expense Total COST ESTIMATE Original estimate AUTHORIZATION Previous authorizations $300,00 $300,00 Current request for authorization $6,500,00 $6,500,000 Total authorizations, including this request $6,800,00 $6,800,00 Remaining amount to be authorized Annual Budget Status and Source of Funds The T5 Pile Removal project was included in the 2017 draft plan of finance as a major expense for $5,300,000 The additional $1,500,000 due to sheet pile wall scope will be covered through expected favorable variances in the Maritime Division operating expense budget or future capital contingencies Source of funds are a s follows: $325,000 f rom Lockheed cost share agreement $500,000 from Environmental Remediation Liability $5,975,000 from Maritime expense budget Financial Analysis and Summary Project cost for analysis $6,800,000 Business Unit (BU) Joint Venture Effect on business performance NOI will decrease NPV $6,800,000 ��COMMISSION AGENDA Action Item No. Page of Template revised September 22, 2016 ; format updates October 19, 2016 Future Revenues and Expenses ( Total cost of ownership his project does not anticipate future revenues. Expenses will be included in the Maritime annual maintenance budget , but are not expected to be significant since the site is unoccupied ATTACHMENTS TO THIS REQUEST (1) Cost shar ing agreement signed by Lockheed Martin PREVIOUS COMMISSION ACTIONS OR BRIEFINGS None