DATE: April 9, 2019
SUBJECT: MULTI-YEAR MAJOR MAINTENANCE PROJECT FUNDING
Title
AMENDMENTS TO BOARD OF PORT COMMISSIONERS POLICIES TO INCORPORATE BOARD FEEDBACK REGARDING MAJOR MAINTENANCE MULTI-YEAR FUNDING RECEIVED AT THE MARCH 12, 2019 BOARD MEETING
A) RESOLUTION APPROVING AN AMENDMENT TO BOARD POLICY NO. 90 - TRANSFER BETWEEN OR WITHIN APPROPRIATED ITEMS
B) RESOLUTION APPROVING AN AMENDMENT TO BOARD POLICY NO. 130 - MAJOR MAINTENANCE PROGRAM
Body
EXECUTIVE SUMMARY:
At the March 12, 2019 Board meeting, Staff presented a multi-year major maintenance project funding concept. The proposed modifications to Board of Port Commissioners (Board) Policies No. 90 and 130 are to incorporate the Board’s feedback staff received regarding multi-year funding.
The transfer of funds between or within appropriated items in the budget is authorized in accordance with Board Policy No. 90. Staff recommends the Board consider modifications regarding the authority to approve the transfer of funds between projects. This will improve management of the program allowing staff to respond to challenges at the project level. Construction spending can vary from forecast as progress is made. By allowing staff to manage at the program level, funds may be reallocated between approved projects throughout the year if expenditures vary from forecast.
The District’s Major Maintenance Program is implemented in accordance with Board Policy No. 130. Staff recommends the Board consider modifications regarding the project approval process and roll over of unspent annual project budget. These modifications will transform the Major Maintenance program allowing staff to define a long-term maintenance program, more efficiently execute projects, and commit funding to project completion.
Additional reporting will be provided by staff through a dashboard and future Board presentations.
Staff recommends that the Board approve the amendments to Board Policies No. 90 and 130.
RECOMMENDATION:
Recommendation
A) Adopt a resolution approving an amendment to Board Policy No. 90 - Transfer Between and Within Appropriated Items
B) Adopt a resolution approving an amendment to Board Policy No. 130 - Major Maintenance Program
Body
FISCAL IMPACT:
This proposed Board action has no fiscal impact. The annual budget for the major maintenance program will be approved as part of the District’s annual budget process.
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A thriving and modern maritime seaport.
• A vibrant waterfront destination where residents and visitors converge.
• A Port with a healthy and sustainable bay and its environment.
• A Port that is a safe place to visit, work and play.
DISCUSSION:
The Major Maintenance program includes complex engineering and construction projects which typically take longer than one fiscal year. On March 12, 2019 a staff presentation was provided to the Board regarding the typical project process, associated funding challenges, and a multi-year funding concept to improve Major Maintenance program execution. Staff received the Board’s feedback regarding policy revisions and additional reporting. The proposed resolutions are for policy changes related to the feedback received.
The implementation of a multi-year funding concept will redefine Major Maintenance. The list of projects provided in the budget will be a three-year look ahead. A total project budget will be shown along with recommended fiscal year budget for each project. At the project level, any remaining unspent budget at the end of the fiscal year for individual projects will remain in the respective project until completion. As presented to the Board on March 12, 2019, this change will allow staff to more effectively manage the overall program and respond to challenges at the project level.
In order to implement this change to the major maintenance program staff recommends modifications to Board Policies No. 90 and 130. Modifications are intended to address the transfer of funds, project approval process, reporting, and roll over of unspent project budget from the prior fiscal year.
The transfer of funds between or within appropriated items in the budget is authorized in accordance with Board Policy No. 90 (Attachment A) which was originally approved on June 11, 2013. The proposed modifications apply to the transfer of funds between projects and approval authority allowing staff to manage funds at the program level. Construction spending can vary from forecast as progress is made. By allowing staff to manage at the program level, funds may be reallocated between approved projects throughout the year if expenditures vary from forecast. Staff recommends the following:
• Modify the Executive Director’s authority to transfer funds between projects
• If the transfer will increase approved project budget greater than $175,000 or the available program budget, Board approval is required
Staff’s recommended modifications to BPC Policy No. 90 are shown in track changes format in Attachment B.
The District’s Major Maintenance Program is implemented in accordance with Board Policy No. 130 (Attachment C) which was originally approved on June 11, 2013. Over time, there have been modifications to the policy to improve efficiencies and project delivery. The proposed modifications apply to the project approval process and roll over of unspent funds. These modifications will redefine the Major Maintenance program project approval process and project funding. Staff recommends the following:
• Redefining the project approval process to incorporate the three-year look ahead
• Define how project funds will roll over to future fiscal years and remain with projects until completion, and how this will be reflected in the annual budget process.
Staff’s recommended modifications to Board Policy No. 130 are shown in track changes format in Attachment D.
In addition to the proposed policy changes, reporting will be provided by staff in two forms; a dashboard will be developed to provide Board members with one place to find program and project information, and a presentation will be given by staff to inform the Board on program progress.
Staff recommends that the Board approve the amendments to Board Policies No. 90 and 130.
General Counsel’s Comments:
The Office of the General Counsel has reviewed and approved this agenda and the proposed resolutions and policy amendment as to form and legality.
Environmental Review:
The proposed Board action, including without limitation, a resolution approving amendments to Board policies to initiate multi-year major maintenance project funding does not constitute an “approval” or a “project” under the definitions 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 Board’s action 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 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 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 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: Board Policy No. 90 - Transfer Between or Within Appropriated Items
Attachment B: AMENDED - Board Policy No. 90 - Transfer Between or Within Appropriated Items
Attachment C: Board Policy No. 130 - Major Maintenance Program
Attachment D: AMENDED - Board Policy No. 130 Major Maintenance Program