DATE: April 11, 2023
SUBJECT:
Title
A. ADOPT AN ORDINANCE AMENDING THE DISTRICT FY2022-2023 BUDGET INCREASING THE EQUIPMENT OUTLAY AND OTHER CAPITAL APPROPRIATION ITEM BY $5,450,970 FOR SHORE POWER INSTALLATION AT NATIONAL CITY MARINE TERMINAL BERTH 24-10 AND 11 PROJECT, SAN DIEGO, CALIFORNIA.
B. RESOLUTION FINDING THE BOARD ACTION EXEMPT UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA), INCLUDING, BUT NOT LIMITED TO, CEQA GUIDELINES SECTIONS 15301, 15303, AND 15304 AND APPROVING PLANS AND SPECIFICATIONS AND AWARDING CONTRACT NO. 2022-03 TO THE RYAN COMPANY INC. IN THE AMOUNT OF $7,182,700 FOR THE SHORE POWER INSTALLATION AT NATIONAL CITY MARINE TERMINAL BERTHS 24-10 AND 11 PROJECT, SAN DIEGO, CALIFORNIA AS AUTHORIZED BY THE BOARD IN THE FY 2022 ECONOMIC RECOVERY PROGRAM APPROPRIATION.
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EXECUTIVE SUMMARY:
The proposed project for Shore Power Installation at National City Marine Terminal is part of the San Diego Unified Port District’s effort to comply in advance of the forthcoming California Air Resources Board (CARB) at berth regulations which require roll-on/roll-off vessels calling on California Ports to plug into a grid-based shore power system or use other emission-mitigating technology to reduce harmful emissions. This project advances electrification efforts to meet the CARB at berth regulations and is identified in the Maritime Clean Air Strategy (MCAS) as Ocean Going Vessels At-Berth Objective 2B (At the National City Marine Terminal, add a new shore power system with at least two plugs and/or an alternative technology that reduces ocean-going vessel emissions at berth by 2025). Ocean-going vessels contribute more than a third of the District’s total diesel particulate matter emissions, according to the District’s 2019 Emissions Inventory, thus the proposed project will improve air quality and reduce greenhouse gas emissions benefiting the communities within the vicinity of the working waterfront at National City Marine Terminal.
The construction contract was advertised on February 24, 2023. Construction bids were opened on March 28, 2023. Six (6) bidders responded with bids ranging from $7,182,700 to $8,576,000. The lowest responsive and responsible bid was received from The Ryan Company Inc. in the amount of $7,182,700. Additional funding is needed to complete the construction of this work and the requested $2,950,9700 will allow us to fully address the current deficit
RECOMMENDATION:
Recommendation
A. Adopt an Ordinance amending the District FY 2022-2023 Budget increasing the Equipment Outlay and Other Capital appropriation item by $5,450,970 for Shore Power Installation at National City Marine Terminal Berth 24-10 and 11 project, San Diego, California.
B. Adopt a resolution approving plans and specifications and awarding contract No. 2022-03 to The Ryan Company Inc. in the amount of $7,182,700 for the Shore Power Installation at National City Marine Terminal Berth 24-10 and 11 project, San Diego, California as authorized by the Board in the FY 2022 Economic Recovery Program appropriation.
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FISCAL IMPACT:
The Port has been awarded $2,500,000 in grant funding from the Volkswagen (VW) Environmental Mitigation Trust (Trust) for California to install one shore power plug at the National City Marine Terminal (NCMT). In addition, $3,500,000 is budgeted in the Economic Recovery Program (ERP). $400,000 of ERP funds have already been allocated for design costs resulting in $3,100,000 remaining for construction.
Due to disruptions in the supply chain, current economic climate, and contingencies the recommended budget is $8,550,970. To address the current deficit of 2,950,970 the approval of this agenda will authorize the $2,500,000 of the $3,500,000 the District has received easement revenue from IQHQ. and $450,970 is requested from Low Carbon Fuel Standards (LCFS) credit reserves.
The sources of funding are summarized below:
The fiscal year appropriations changes are summarized below:
* This project was approved in the ERP Capital Outlay budget for a total project budget of $3,500,000 with a remaining budget of $3,200,000 for FY 2023. $400,000 of ERP funds have already been allocated for design costs with $3,100,000 remaining.
COMPASS STRATEGIC GOALS:
This agenda item supports the following Strategic Goal(s).
• A thriving and modern maritime seaport.
• A Port with a healthy and sustainable bay and its environment.
DISCUSSION:
In accordance with CARB regulations, on January 1, 2025, roll-on/roll-off vessels calling on California Ports will be required to plug into a grid-based shore power system or use other emission-mitigating technology to reduce air pollution from diesel generators typically used on vessels while at berth. Shore power installation is a system that allows vessels to connect to an electrical power source when docked or anchored at a port thereby allowing the vessel to shut down its onboard diesel generators.
To meet this regulatory requirement and to deliver power to roll-on/roll-off vessels while they are at berth, Port staff propose to install the first shore power plug at NCMT Berth 24-10/11. Berth 24-10/11 is located on the south side of NCMT, adjacent to Pepper Park and the National City Aquatic Center.
The project’s construction plans and specifications were advertised on February 24, 2023. Bids were opened on March 28, 2023. A total of six (6) construction bids were received ranging from $7,182,700 to $8,576,000 as listed in the following table:
Based on the review of the bids, the lowest responsive and responsible bid was submitted by The Ryan Company Inc. in the amount of $7,182,700. The Engineer's construction cost estimate for this work was $8,500,000. Staff recommends the Board approve the Resolution adopting plans and specifications and award Contract No. 2022-03, to The Ryan Company Inc. for the Shore Power Installation at National City Marine Terminal Berth 24-10 and 11, San Diego, California.
In addition, approval of this agenda item will authorize the expenditure of the construction bid, soft costs, capital labor, and allow a 10% construction contingency pursuant of BPC Policy No.110 for a revised recommended budget of $8,550,970. See the table summary below:
The final service cost to complete this project will be the SDG&E new primary meter service. SDG&E is to provide additional power at the site. The District has filed an application for additional power from SDG&E. The requested funding of $300,000 will allow District staff to continue coordination and install the infrastructure upgrades required for the shore power installation project.
Funding
The Port has previously been awarded a $2,500,000 grant (File No. 2021-0363) from the Volkswagen (VW) Environmental Mitigation Trust (Trust) for California to install one shore power plug at the NCMT which will be applied to this project. The inability to meet the proposed aggressive schedule or to plug in grant specified number of vessels in advance of the 2025 At-Berth regulation implementation may result in a reduction in reimbursable funds under this award. In the event that the Port cannot meet the terms of the grant, $2,500,000 from future fiscal year District reserves will be presented to the Board for approval.
This project was approved in the FY 2023 ERP Capital Outlay budget for $3,500,000 from Shore Power Installation at NCMT Berth 24-10 and 11 project. $400,000 of ERP funds have already been allocated for design costs with $3,100,000 remaining.
Recently, the District received $3,500,000 from the IQHQ project for easement revenue, of which $2,500,000 will be applied toward the installation of this shore power project. Consequently, additional funds of $450,970 from Low Carbon Fuel Standards (LCFS) credit proceeds are anticipated to complete the construction of this work including an allowable contingency amount to cover unforeseen changes in conditions. See the table summary below:
General Counsel’s Comments:
The Office of the General Counsel has reviewed and approved this agenda and draft resolution and ordinance, as presented, as to form and legality.
Environmental Review:
The proposed Board action, including without limitation, resolution approving plans and specifications and awarding Contract No. 2022-03 to The Ryan Company Inc. in the amount of $7,182,700 for the Shore Power Installation at National City Marine Terminal Berths 24-10 and 11 Project, San Diego, California, as authorized by the Board in the FY 2022 Economic Recovery Program Appropriation, is categorically exempt pursuant to California Environmental Quality Act (CEQA) Guidelines Sections 15301 (Existing Facilities), 15303 (New Construction or Conversion of Small Structures), and 15304 (Minor Alterations to Land) and 3.a.(7), 3.c.(2)(3), and 3.d.(7) of the District’s Guidelines for Compliance with CEQA because the project would consist of minor construction at an existing marine terminal that would involve no expansion of use beyond that previously existing, would not result in a significant cumulative impact due to the continuation of the existing use, and would not involve the removal of mature, scenic trees. The District has determined none of the six exceptions to the use of a categorical exemption apply to this project (CEQA Guidelines Section 15300.2). The project was previously determined to be exempt from CEQA on July 6, 2021. Pursuant to Section 15378(c) of the CEQA Guidelines, the term “project” refers to the activity being approved, which may be subject to several discretionary approvals of governmental agencies and does not mean each separate governmental approval. Accordingly, the proposed Board action is a subsequent discretionary approval of a previously approved project. No further action under CEQA is required.
The proposed Board action complies with Section 87 of the Port Act which allows for the establishment, improvement, and conduct of a harbor, and for the construction, reconstruction, repair, maintenance, and operation of wharves, docks, piers, slips, quays, and all other works, buildings, facilities, utilities, structures, and appliances incidental, necessary, or convenient, for the promotion and accommodation of commerce and navigation. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board action is consistent with the Public Trust Doctrine.
The proposed Board action is considered excluded development pursuant to Sections 8.a.(2) (Existing Facilities), 8.c.(2)(3) (New Construction or Conversion of Small Structures), and 8.d.(6) (Minor Alterations to Land) of the District’s Coastal Development Permit Regulations because the project would consist of minor construction at an existing marine terminal that would involve negligible expansion of use beyond that previously existing, would involve no change of existing use of the property, and would not involve the removal of mature, scenic trees. A categorical determination of exclusion and notice of approval was previously issued for this project on July 6, 2021 and became effective 10 working days after notification to California Coastal Commission staff, since no appeals were received. Therefore, issuance of a Coastal Development Permit or subsequent exclusion is not required for the proposed Board action.
Diversity, Equity, and Inclusion Program:
A 5% SBE participation goal was established for this contract opportunity. The Ryan Company Inc. listed 3 subcontractors and 1 supplier, all of which are SBEs for 5.2% SBE participation which includes 2.2% DVBE participation.
PREPARED BY:
Jesus Puebla
Capital Project Manager, Engineering-Construction