DATE: March 12, 2019
SUBJECT: MULTI-YEAR MAJOR MAINTENANCE PROJECT FUNDING
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PRESENTATION ON MULTI-YEAR PROJECT FUNDING STRATEGY FOR THE MAJOR MAINTENANCE PROGRAM AND DIRECTION TO STAFF
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EXECUTIVE SUMMARY:
Staff will present a multi-year project funding strategy for the Major Maintenance Program and seek direction on its advancement and related BPC policy modifications for implementation.
The Major Maintenance program includes complex engineering and construction projects which comprises of four common phases; Preliminary Design, Design, Procurement, and Construction. A typical project can take an average of 18 months to complete all phases, and larger projects can take longer.
Currently, the budget for the Major Maintenance program is included in the District’s overall annual fiscal year budget and contains individual projects, each having a specified funding amount. Any variance between the Board-approved project budgets and actual expenditures at the end of the fiscal year are returned to the general operating fund as surplus regardless of the project’s status. A multi-year project budget process will commit funding to projects until they are complete, in lieu of the existing year-by-year approach. This aligns the Port’s project funding practices with its member cities.
In order to implement a multi-year major maintenance program, funding modifications to BPC Policies 90 and 130 will be necessary.
RECOMMENDATION:
Recommendation
Receive a presentation on multi-year project funding strategy for the Major Maintenance program and provide direction to staff.
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FISCAL IMPACT:
This item requires no action from the Board and has no fiscal impact.
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A Port that is a safe place to visit, work and play.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
Staff will present a multi-year project funding strategy for the Major Maintenance Program and seek direction on its advancement and related BPC policy modifications for implementation.
The Major Maintenance program includes complex engineering and construction projects which comprises of four common phases; Preliminary Design, Design, Procurement, and Construction. A typical project takes an average of 18 months to complete all phases, and larger projects can take longer. New information is acquired during each phase which can lead to schedule impacts. As a result, projects'’ timelines rarely align with a fiscal year end date.
Currently, the budget for the Major Maintenance program is included in the District’s overall annual fiscal year budget and contains individual projects, each having a specified funding amount. Any variance between the Board-approved project budgets and actual expenditures at the end of the fiscal year are returned to the general operating fund in the form of a surplus regardless of the project’s status. Projects which overlap fiscal years are re-budgeted in the following fiscal year. This process can be streamlined by eliminating the need to re-budget a previously approved project.
A multi-year project budget process will commit funding to projects until they are complete, in lieu of the existing year-by-year approach. This aligns the Port’s project funding practices with its member cities. All the District’s member cities develop multi-year project lists and spending plans.
In order to implement this change modifications to BPC Policies 90 and 130 will be proposed. BPC Policy 90 defines the process for funding transfers. Modifications will be proposed regarding the transfer of funds between projects and their associated approval processes. BPC Policy 130 defines the process for approving projects. Modifications will be recommended regarding approval of a multi-year program rather than an annual one. Other anticipated revisions include a process for the inclusion and removal of projects from the program. Final modifications will be prepared after Board direction is received and submitted for approval at a subsequent Board meeting.
General Counsel’s Comments:
The Office of the General Counsel has reviewed and approved this agenda as to form and legality.
Environmental Review:
The proposed Board direction or action, including without limitation, a presentation and direction to staff on multi-year project funding for the Major Maintenance Program, does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because no direct or indirect changes to the physical environment would occur. CEQA requires that the District adequately assess the environmental impacts of projects and reasonably foreseeable activities that may result from projects prior to the approval of the same. Any project developed as a result of Board’s action or direction that requires the District or the Board’s discretionary approval resulting in a physical change to the environment will be analyzed in accordance with CEQA prior to such approval. CEQA review may result in the District, in its sole and absolute discretion, requiring implementation of mitigation measures, adopting an alternative, including without limitation, a “no project alternative” or adopting a Statement of Overriding Consideration, if required. The current Board direction or action in no way limits the exercise of this discretion. Therefore, no further CEQA review is required.
In addition, the proposed Board direction or action complies with Sections 21 and 35 of the Port Act, which allow for the Board to pass ordinances and resolutions and to do all acts necessary and convenient for the exercise of its powers. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board direction or action is consistent with the Public Trust Doctrine.
The proposed Board direction or action does not allow for “development,” as defined in Section 30106 of the California Coastal Act, or “new development,” pursuant to Section 1.a. of the District’s Coastal Development Permit (CDP) Regulations because they will not result in, without limitation, a physical change, change in use or increase the intensity of uses. Therefore, issuance of a Coastal Development Permit or exclusion is not required. However, development within the District requires processing under the District’s CDP Regulations. Future development, as defined in Section 30106 of the Coastal Act, will remain subject to its own independent review pursuant to the District’s certified CDP Regulations, PMP, and Chapters 3 and 8 of the Coastal Act. The Board’s direction or action in no way limits the exercise of the District’s discretion under the District’s CDP Regulations. Therefore, issuance of a CDP or exclusion is not required at this time.
Equal Opportunity Program:
Not applicable.
PREPARED BY:
Christopher McGrath
Program Manager, Engineering-Construction
Attachment(s):
Attachment A: BPC Policy No. 090 - Transfer Between or Within Appropriated Items in Budget
Attachment B: BPC Policy No. 130 - Major Maintenance Program