DATE: October 11, 2022
SUBJECT:
Title
RESOLUTION SELECTING AND AUTHORIZING AN AGREEMENT BETWEEN SAN DIEGO UNIFIED PORT DISTRICT AND AFTZ LLC (SERVICE PROVIDER) FOR CUSTOMS BORDER PROTECTION REPORTING & FOREIGN TRADE ZONE ACTIVATION AND OPERATOR SERVICES AT TENTH AVENUE MARINE TERMINAL FOR AN AMOUNT NOT-TO-EXCEED $367,000 AND A DURATION OF FIVE YEARS. FISCAL YEAR (FY) 2023 FUNDS ARE BUDGETED. FUNDS REQUIRED FOR FUTURE FISCAL YEARS WILL BE BUDGETED IN THE APPROPRIATE YEAR, SUBJECT TO BOARD APPROVAL UPON ADOPTION OF EACH FISCAL YEAR'S BUDGET.
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EXECUTIVE SUMMARY:
Staff recommends that the San Diego Unified Port District (District) Board of Port Commissioners (Board) authorize an Agreement for Customs Border Protection Reporting & Foreign Trade Zone (FTZ) Activation and Operator Services at the Tenth Avenue Marine Terminal (TAMT).
The FTZ is an important tool for business development and retention, offering value-added services to existing and potential customers at TAMT. The purpose of an FTZ is to provide shippers with reduced or eliminated duties on imported/exported cargo in the form of Duty Deferral. The Duty Deferral allows for cash flow savings until the cargo is imported and exported to and from the FTZ. U.S. Customs and Border Protection (CBP) protects the revenue on behalf of the U.S. Department of Treasury, and serves as the primary approval entity granting FTZ Activation. Currently, the FTZ Program Grantee in San Diego is the City of San Diego, creating a two-(2) track FTZ process. The continued operations of the FTZ at the District's TAMT provides a new revenue stream for the District and serves as a tool for prospective ocean carrier recruitment.
The FTZ has been under a Pilot Program since August 11, 2021. [CLf1]AFTZ LLC (Service Provider) currently serves as the District's FTZ documentation clearinghouse CBP's AES system, without which District could not perform such services on its own as a requirement for the FTZ Program.
The Request...
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