DATE: November 14, 2023
SUBJECT:
Title
RESOLUTION APPROVING REALLOCATION OF UNSPENT FUNDS IN THE ECONOMIC RECOVERY PROGRAM (ERP) BUDGET IN THE AMOUNT OF $200,000 TO ERP018 MOLASSES TANK REMOVAL, AND $345,000 TO ERP030 CUSTOMER PAYMENT PORTAL - S4/HANA UPGRADE
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EXECUTIVE SUMMARY:
District staff have completed two Economic Recovery Program (ERP) projects under budget, resulting in a total of $410,329 in unspent funds. A third ERP project is projected to be completed under budget. Two ERP projects, ERP018 Molasses Tank Removal and ERP 030 Customer Payment Portal - S4HANA Upgrade require additional funds. This agenda item approves the transfer of District-budgeted funds within the ERP program to meet the funding needs of projects ERP018 and ERP030.
This agenda item approves the transfer of $200,000 from ERP004 Tenth Avenue Marine Terminal Electrical Improvements and Substation to ERP018 Molasses Tank Removal, and $345,000 in unallocated ERP funds to ERP030 Customer Payment Portal - S4HANA Upgrade. Since this is the reallocation of currently budgeted District funds, there is no fiscal impact.
RECOMMENDATION:
Recommendation
Adopt a resolution approving the reallocation of unspent funds in the Economic Recovery Program (ERP) budget in the amount of $200,000 to ERP018 Molasses Tank Removal, and $345,000 to ERP030 Customer Payment Portal - S4HANA Upgrade.
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FISCAL IMPACT:
There is no fiscal impact caused by approval of this action. This agenda item would approve the reallocation of funds between projects within an existing District budgeted program.
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A Port with an innovative and motivated workforce.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
The Economic Recovery Program, funded by $110,000,000 in American Rescue Plan Act (ARPA or stimulus) funds, was established in October 2021, with agenda item 2021-0349. The ERP program consists of 40 projects grouped into ten project types:
o Major Maintenance
o Disadvantaged Communities - Electrification Projects
o Budget Stabilization Projects
o Personnel
o Environmental education program
o Stormwater
o Economic Development - Blue Tech
o Visitor Serving Projects
o Port Technology Investments
o Electrification
The ARPA funds are administered by the California State Lands Commission. The funding agreement with the State Lands Commission allowed the District to administratively reallocate funds as necessary between projects, provided that any administrative changes were relayed to the State Lands Commission via the regular reporting process. Further, the Board directed staff to notify the Board when funds were reallocated within project groups but seek approval when proposing to reallocate funds between project groups.
District staff have established a process for developing and advancing recommendations related to funding transfers between projects in different groups. A Program Steering Committee, consisting of ELG members and senior Directors who do not have staff responsible for implementing ERP-funded projects within their reporting chain, was established to provide oversight and direction regarding funding requests. The Steering Committee meets on a quarterly basis, or as needed.
District staff have completed two ERP projects under budget, resulting in unspent funds. The projects are ERP016 Employee Retention with $370,347 unspent and ERP035 Cybersecurity Upgrades (in the Port Technology Investments group) with $39,982 unspent, resulting in a total of $410,329 available for reallocation within the ERP program. There are currently two ERP projects that require additional funds to complete. They are ERP018 Molasses Tank Removal (in the Stormwater project group), and ERP 030 Customer Payment Portal - S4HANA Upgrade (in the Technology Investments project group). The ERP Steering Committee met on September 8 and made the following recommendations related to funding transfers within the ERP program.
ERP018 Molasses Tank Removal Project
The ERP018 Molasses Tank Removal Project will remove three large molasses storage tanks at the Tenth Avenue Marine Terminal. These storage tanks are defunct and no longer able to store or transfer liquid molasses cargo. Removing the tanks creates additional open lay-down area for heavy cargo handling and storage on the terminal.
This project was originally budgeted at $1,500,000 and scoped to only remove the tanks. Subsequent design work has increased the cost and scope of this project to include stormwater improvements, electrical system relocation, and heavy-duty pavement installation. The Engineering team has identified a suite of funding sources to address the budget needs for this project. Those sources, along with additional project details, are discussed in Agenda item 2023-0238, including $200,000 in funds from ERP004 Tenth Avenue Marine Terminal Electrical Improvements and Substation. This agenda item approves that transfer within the ERP.
The ERP004 Tenth Avenue Marine Terminal Electrical Improvements and Substation project currently has $1,400,000 in unspent balance. This transfer of funds will leave $1,200,000 available for implementation of that project. District staff believes that this is sufficient funding to complete ERP004.
ERP030 Customer Payment Portal - S4HANA Upgrade Project
The ERP030 Customer Payment Portal group of projects consists of upgrades to the District’s SAP system, HR customer service portal, and three external customer service portals. This agenda item addresses funding needs for the SAP upgrade only.
The SAP upgrade project is underway, with two major milestones already achieved: the implementation of the Grants Management Module and the Real Estate Management Module. Additional funds are required due to increased professional services support to achieve systems integration, and product and District-specific engagement with the software vendor (SAP) to ensure the quality of the final delivered system.
Staff is proposing to move $345,000 in unallocated funds to ERP030 Customer Payment Portal - S4HANA Upgrade.
Approval of this agenda item will leave $65,329 unallocated and available to address future funding needs within the ERP program.
General Counsel’s Comments:
The Office of the General Counsel has reviewed and approves this agenda and proposed resolution, as presented, as to form and legality.
Environmental Review:
The proposed Board action, including without limitation, approving reallocation of unspent funds in the Economic Recovery Program (ERP) budget in the amount of $200,000 to ERP018 Molasses Tank Removal and $345,000 to ERP030 Customer Payment Portal - s4/HANA Upgrade, does not constitute a project under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Sections 15352 and 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 the proposed Board action requiring the District or the Board’s discretionary approval resulting in a physical change to the environment would 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 exercise of this discretion is in no way limited by this proposed Board action. Therefore, no further CEQA review is required.
The proposed Board action complies with Sections 21 and 35 of the Port Act, which allow the Board to pass 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 action is consistent with the Public Trust Doctrine.
The proposed Board 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 there will not be, 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 would remain subject to its own independent review pursuant to the District’s certified CDP Regulations, Port Master Plan (PMP), and Chapters 3 and 8 of the Coastal Act. The exercise of the District’s discretion under the District’s CDP Regulations is in no way limited by the proposed Board action.
Diversity, Equity, and Inclusion Program:
This agenda sheet has no direct DEI impact on District workforce or contract reporting at this time.
PREPARED BY:
Aimee Heim
Director - Government & Civic Relations