DATE: November 14, 2023
SUBJECT: STORAGE TANKS DEMOLITION AND STORM WATER IMPROVEMENTS AT TENTH AVENUE MARINE TERMINAL
Title
A) ORDINANCE AMENDING THE FY 2024 DISTRICT BUDGET INCREASING THE FY 2024 EQUIPMENT OUTLAY AND OTHER CAPITAL PROJECT APPROPRIATION BY $3,800,000 TO BE FUNDED FROM UNRESTRICTED RESOURCES AND FY 2023 CARRYOVER - CUMULATIVE UNRESTRICTED RESOURCES FOR THE STORAGE TANKS DEMOLITION AND STORM WATER IMPROVEMENTS AT TENTH AVENUE MARINE TERMINAL PROJECT.
B) RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND AWARDING BASE BID SCHEDULE AND ADDITIVE BID SCHEDULES A THROUGH D OF CONTRACT NO. 2022-01R TO AMG DEMOLITION & ENVIRONMENTAL SERVICE, INC. IN THE AMOUNT OF $4,666,497.79 FOR THE STORAGE TANKS DEMOLITION AND STORM WATER IMPROVEMENTS AT TENTH AVENUE MARINE TERMINAL PROJECT, SAN DIEGO, CALIFORNIA AS AUTHORIZED BY THE BOARD IN THE FY 2022 ECONOMIC RECOVERY PROGRAM APPROPRIATION.
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EXECUTIVE SUMMARY:
Staff recommends the San Diego Unified Port District (District) Board of Commissioners (Board) approve a FY 2024 District budget amendment and also approve plans and specifications and authorize the award of an Economic Recovery Program (ERP) Project construction contract to AMG Demolition & Environmental Service, Inc. in the amount of $4,666,497.79 for the construction of The Storage Tanks Demolition and Storm Water Improvements at Tenth Avenue Marine Terminal Project, along with the associated budget actions identified in item A to fully fund the project for contract award.
The plans and specifications define the contract work which includes but is not limited to the following:
• Base Bid Schedule: Includes the demolition and removal of three welded steel storage tanks and associated tank piping, foundations, perimeter containment wall, and reinforced concrete footing, reinforced concrete pump pit, valve vault, vault staircase, fencing, valves and piping, tank piping, above grade and below grade yard piping, and for removal and proper disposal of hazardous export soil material.
• Additive Bid Schedule A: Includes the removal and proper disposal of unsuitable hazardous materials, export of soil material, and excavated materials handling for backfill and compaction.
• Additive Bid Schedule B: Includes the electrical pad equipment relocation, conduit, and electrical improvements.
• Additive Bid Schedule C: Includes storm drain improvements incorporating demolition, backfilling, and grading operations for RCP storm drain, concrete storm drain structures, and stormwater quality BMP treatment based on 25-year storm events.
• Additive Bid Schedule D: Comprises of grading and reinforced Portland cement concrete pavement suitable for heavy loads.
The construction contract was advertised on August 24, 2023. Construction bids were opened on October 11, 2023. Three (3) bidders responded with bids ranging from $4,666,497.79 to $6,746,928.00. The responsive bids are listed in Attachment A. The lowest responsive and responsible bid was received from AMG Demolition & Environmental Service, Inc. in the amount of $4,666,497.79.
Originally scoped to only address the demolition of storage tanks at Tenth Avenue Marine Terminal (TAMT), this project has evolved during the design phase. It now includes heavy-duty pavement for cargo operations, relocation of electrical systems, and stormwater improvements. These additions aim to enhance TAMT's commercial and operational capabilities.
The project benefits TAMT in several ways:
1. Provides short-term storage and staging for cargo, generating an estimated $120K/year.
2. Allows for front gate realignment, improving operational efficiency.
3. Enhances the value proposition for the Consolidated Bulk Facility (CBF), boosting revenue potential for bauxite, soda ash, and sugar movement.
4. Develops outdoor Foreign Trade Zone (FTZ) space.
5. Improves rail alignment, benefiting military deployments and general rail access.
6. Furthermore, the project aligns with water quality improvement goals and compliance with the Municipal Stormwater Permit1. It will remove potential sources of pollutants and enable stormwater treatment on a 0.6-acre area.
To fully fund the expanded scope, an additional $3,800,000 from the District's Unrestricted Resources and FY 2023 Carryover- Cumulative Unrestricted Resources has been identified as a recommended funding source to close the funding gap. During the FY 2024 Budget process, the Board identified the use of FY 2023 Carryover in Cumulative Unrestricted Resources to be applied towards the NCMT 24-10 Shore Power project. The identified funding of $2,500,000 is no longer required for the Shore Power project as funding has been identified from the revenue generated by the IQHQ easement. The balance of $1,300,000 needed for this Molasses Tank project will be funded by the District’s Unrestricted Resources.
1 San Diego Regional Water Quality Control Board Order No. R9-2013-0001 as amended by Nos. R9-2015-0001 and R9-2015-0100
RECOMMENDATION:
Recommendation
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A) Adopt an ordinance amending the FY2024 District Budget increasing the FY 2024 Equipment Outlay and Other Capital Projects appropriation by $3,800,000 to be funded from Unrestricted Resources and FY 2023 Carryover - Cumulative Unrestricted Resources for the Storage Tanks Demolition and Storm Water Improvements at Tenth Avenue Marine Terminal Project.
B) Adopt a resolution approving plans and specifications and awarding base bid schedule and additive bid schedules A through D of Contract No. 2022-01R to AMG Demolition & Environmental Service, Inc. in the amount of $4,666,497.79 for the Storage Tanks Demolition and Storm Water Improvements at Tenth Avenue Marine Terminal Project, San Diego, California as authorized by the board in the FY2022 Economic Recovery Program appropriation.
FISCAL IMPACT:
Approval of this action will amend the FY 2024 Budget in the Equipment Outlay and Other Capital Projects Appropriation increasing it by $3,800,000 to be funded from the District’s Unrestricted Resources and FY 2023 Carryover - Cumulative Unrestricted Resources.
During the FY 2024 budget development process, NCMT 24-10 Shore Power (Fiscal Year 2024 Budget, Section 3, Pg 23) was scheduled to be funded in part by the District’s FY 2023 Carryover in Cumulative Unrestricted Resources (Fiscal Year 2024 Annual Budget, Section 1, Pg 25).
Subsequently, staff negotiated and received $3,500,000 of unanticipated revenue from the IQHQ easement, from which NCMT 24-10 Shore Power was funded with $2,500,000 of this easement revenue (Agenda file 2022-0310). As a result, the $2,500,000 that was originally planned to fund the NCMT 24-10 Shore Power project from the FY 2023 Carryover in Cumulative Unrestricted Resources is now available for the Storage Tanks Demolition and Storm Water Improvements at TAMT project. The $1,300,000 balance will be funded from the District’s Unrestricted Resources.
In addition to the $3,800,000 identified above, a $200,000 savings in the TAMT Electrical Improvements and Substation project budgeted in the ERP Capital Outlay appropriation is recommended for a total increase in project costs of $4,000,000. The $200,000 savings within the ERP Capital Outlay appropriation will be recommended for reallocation to the ERP Storage Tanks Demolition and Storm Water Improvements at TAMT project and will be included in Agenda Item No. 2023-0249 of this November Board Packet, where Staff will be providing an update and recommendation related to various projects within the Economic Recovery Program.
The sources of funding are summarized below:
The Fiscal Year 2024 budget summary is summarized below:
The Storage Tanks Demolition and Storm Water Improvements at the Tenth Avenue Marine Terminal project is included in the Fiscal Year 2024 ERP Capital Outlay appropriation with an allocated budget of $1,245,700 for design and construction support services. The above budget amendment will increase the project fiscal year budget to $5,245,700 to include an expenditure of construction bid, soft costs, capital labor, and construction contingency pursuant to BPC Policy No. 110.
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.
• A thriving and modern maritime seaport.
• 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:
The Storage Tank Demolition and Storm Water Improvements at TAMT project will demolish and remove of three welded steel storage tanks and associated tank piping and foundations. The project is located near the Crosby Road entrance to the TAMT at the southern end of the Port of San Diego’s property. The three welded steel storage tanks were originally furnished and installed for the Pacific Molasses Company in 1961 and were abandoned for more than 30 years. Each welded steel storage tank is essentially identical and has a nominal diameter of 73 feet, a nominal height of 32 feet, nominal capacity of 23,800 barrels. They held liquid commodities like molasses and palm oil. The work will also include the demolition of the perimeter containment wall; site piping and utilities, and electrical system; salvaging of steel material, and lead-containing materials abatement. Additive Bid Schedules A through D allow for the development of the site suitable for lease to a new tenant. The additive bid schedules include the relocation of an electrical transformer, conduit and electrical improvements, storm water and storm drain improvements, stormwater quality improvements, grading, and the installation of reinforced Portland Cement Concrete (PCC) pavement, curb, and bollards.
The Storage Tanks Demolition and Storm Water Improvements at Tenth Avenue Marine Terminal is an Economic Recovery Program (ERP) project, ERP CAP Appropriated item Res. 2021-133 & Ord. 3026, with $1,500,000.00 in funding, with $500,000 allocated to soft costs.
Originally this project was scoped to only address the demolition of the storage tanks at Tenth Avenue Marine Terminal, as indicated in the budgeted project title (Removal of Molasses Tanks). The project has gone through considerable vetting from various stakeholders through the design phase, resulting in additional design elements such as storm water improvements, relocation of electrical systems, and heavy-duty pavement for cargo operations. The purpose for incorporating these additional design elements into the project include the following:
• Heavy-Duty Pavement: As described in more detail below, equipping the project area with the appropriate pavement loading capacity will maximize the commercial and operational capabilities of the terminal.
• Relocation of Electrical Systems: In order to maximize the commercial and operational capabilities of the terminal, the electrical infrastructure within this area needs to be relocated.
• Storm Water Improvements: The addition of heavy-duty pavement to the project introduces areas of disturbance that trigger additional storm water quality treatment improvements, pursuant to the Municipal Stormwater Permit1.
This staging laydown area has been evaluated by Maritime Staff and the project area has the potential to create available space to support further advancement of the diversified maritime portfolio at TAMT in several areas:
• Short-term storage and staging for cargo. ($120K/year)
• This space allows for an improved footprint to look at front gate realignment and efficiency.
• The proposed Consolidated Bulk Facility (CBF) envisions moving all bulk products via a conveyance to Berths 10-7 and 10-8. Removal of the tanks would allow the parties interested in the CBF to incorporate this land into their footprint thereby enhancing the value proposition for bauxite, soda ash, and sugar movement through TAMT. This additional space translates to a more viable economic model for the CBF that would increase revenue potential for the Port.
• The current outdoor FTZ space is insufficient to support this lucrative business opportunity at TAMT. The existing location of storage tanks has the potential to be used as storage for excess cargo by moving long-staying cargo to an area away from on-dock operations at Berths 10-5 and 10-6.
In addition, the location of these storage tanks creates significant limits on the rail alignment for the BNSF rail to move railcars directly into TAMT from North to South. Improvement of the alignment will have a significant impact on military capabilities for strategic military deployments in/out of TAMT as well as improve rail access generally into the terminal.
This project furthers the District’s goal of water quality improvements at the marine terminals and complies with the Municipal Stormwater Permit1. The project will remove a potential source of pollutants from the terminal and the installation of the stormwater treatment structures and paving will enable the treatment of runoff from the 0.6-acre area.
Due to the added scope described above, an additional $3.8M is required to award the construction contract. Staff is recommending this funding gap be closed using $3.8M from the District’s Cumulative Unrestricted Resources as indicated in the fiscal impact section of this staff report.
This project was originally advertised from February to May 2023 with Project Labor Agreement (PLA) requirements, pursuant to Ordinance No. 3076. The District did not receive bids, and the project was re-advertised as a conventional solicitation without the PLA requirements, resulting in a 4-month delay.
The construction contract was re-advertised on August 24, 2023. Construction bids were opened on October 11, 2023. (3) Three bidders responded with bids ranging from $4,666,497.79 to $6,746,928.00. The responsive bids are listed in the following table and Attachment A.
Based on a review of the bids, the lowest responsive and responsible bid was determined to be submitted by AMG Demolition & Environmental Service, Inc. in the amount of $4,666,497.79 The engineer’s construction cost estimate was $3,033,089.00.
Upon Board authorization, construction is expected to commence in December 2023 and be completed in June 2024.
General Counsel’s Comments:
The Office of the General Counsel reviewed this agenda and approved the propose contract as presented to it as to form and legality.
Environmental Review:
The proposed Board actions, including without limitation, resolutions approving the transfer of funds within the District FY 2024 Budget pursuant to BPC Policies No. 90 and No. 120, ordinance amending the FY 2024 District Budget increasing the FY 2024 Equipment Outlay and Other Capital Project Appropriation by $3,800,000, and resolution approving plans and specifications and awarding Base Bid Schedule and Additive Bid Schedules A through D of Contract No. 2022-01R to AMG Demolition and Environmental Service, Inc. for the Storage Tanks Demolition and Storm Water Improvements at Tenth Avenue Marine Terminal Project, were adequately analyzed in the Final Environmental Impact Report (FEIR) for the Tenth Avenue Marine Terminal Redevelopment Plan and Demolition and Initial Rail Component (UPD# EIR-2015-39, SCH #2015-031046, Clerk Document No. 65901) prepared and certified by the District on December 13, 2016 (Resolution No. 2016-199). The proposed project is not a separate project for CEQA purposes but is a subsequent discretionary approval related to a previously approved project. (CEQA Guidelines § 15378(c); Van de Kamps Coalition v. Board of Trustees of Los Angeles Comm. College Dist. (2012) 206 Cal.App.4th 1036.) Additionally, pursuant to CEQA Guidelines Sections 15162 and 15163, and based on the review of the entire record, including without limitation, the FEIR, the District finds and recommends that the proposed Board actions do not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the previous FEIR due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; and 2) no new information of substantial importance has come to light that (a) shows the project will have one or more significant effects not discussed in the previous FEIR, (b) identifies significant impacts more severe than those analyzed in the previous FEIR, (c) shows that mitigation measures or alternatives are now feasible that were identified as infeasible and those mitigation measures or alternatives would reduce significant impacts, or (d) shows mitigation measures or alternatives which are considerably different from those analyzed in the previous FEIR would substantially reduce one or more significant effects on the environment. Because none of these factors have been triggered, pursuant to CEQA Guidelines §15162(b), the District has determined no further analysis or environmental documentation is necessary. Accordingly, the proposed Board actions are merely a step in the furtherance of the original project for which environmental review was performed and no supplemental or subsequent CEQA has been triggered, and no further environmental review is required.
The proposed Board actions comply 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 actions are consistent with the Public Trust Doctrine.
The proposed Board actions are consistent with the Coastal Development Permit (CDP) for the Storage Tank Demolition and Stormwater Improvements at Tenth Avenue Marine Terminal Project (CDP-2022-05; Clerk Document No. 74483) approved for issuance by the District on August 9, 2022 (Resolution No. 2022-082) and issued September 27, 2022. No additional action under the California Coastal Act is required at this time.
Diversity, Equity, and Inclusion Program:
Due to limited known sub opportunities, no SBE goal was established for this contract. AMG Demolition & Environmental Services, Inc., listed three SBEs as part of their team for a total of 15.8% SBE participation.
PREPARED BY:
Abraham Pineda
Capital Project Manager, Engineering and Construction
Attachment(s):
Attachment A: Bid Tabulation