and i wonder why it's not included in our study. once we understand the vulnerability, how will that be funded? how does it work in relation to this? >> the reason the southern waterfront is part of the city's overall study is so all port property as well as the oceanside, all public property touching water is part of the city's vulnerability assessment. we happen to know more about the seawall because we've done the vulnerability assessment, but all of our property is included in the study. the reason this project is not also assessing southern waterfront and southern waterfront improvements is because we're trying to get the urgency issue and address the seawall as quickly as possible. the southern waterfront has sections of seawall, but no contiguous massive rock dike the way the northern waterfront has. it has in many places a softer

urban edge so the types of improvements we'll make are not exactly the same because it's smaller sections of seawall, different, more runway in temples when to respond in -- in terms of when to restopped in some areas because of the northern part of the waterfront implicates major transportation systems in muni and bart. so that's why we're focused on making construction improvements here without delay and why the study is focused on this three-mile stretch. >> but all the time and money we're spending on analyzing and studying -- >> right. the reason why -- the reason why we're taking time to study this section is to know what the

worst soil conditions are first so we know where the life safety risk is the worst so we tackle it first. some of that screening will show areas are better than we thought so we can move them further down the list. my expectation, though this is not on the geobond schedule but i certainly think it ought to be. there will be a sea level rise bucket of funding every 10 years. we're coming forward in november 2018 for a seawall an every 10 years we'll be on the bond rotation schedule. that is commissioner kelly's request. i see improvements for the southern waterfront as well as ocean beach as well as other areas coming through future phases. the city when it finishes it's

vulnerability areas, i mean we have some low lying areas, i anticipate that we'll see vulnerability to the southern waterfront that we need to tackle. some of it may implicate other city infrastructure and we'll part nir with the puc in some instances and it will be specific to the location we're talking about. i think in the summer when we come back to talk about what the vulnerability assessment has found, that will give us a clear understanding of where the urgent areas are where you need more investigation relative to sea level rise. this is a seismic project. it's trying to tackle critical life safety as it relates to earthquake. whereas the southern waterfront work and sea level rise work is looking at flood more. we'll make seismic improvements as we go along, but the seismic risk of the northern waterfront

is especially critical. >> especially critical because of the amount ofinfrastructure that sits over the soil protected by the seawall. >> [inaudible] >> there is seismic risk in southern waterfront. there is not the -- >> i'm trying to figure out how we can move this along together. so that we are looking at the total port and not pushing one part out to a city study versus what we're focused on. i'm trying to figure out how we can come along the same path to make sure we're getting the same results. >> so, one of the outcomes in this planning phase under the alternative development portion can have one of the outcome is tools and process for portwide applications.

we're going to get information out of it that is beneficial for down there. and development form seismic sie assessment for the southern waterfront. >> i hope we call it the "port" not here and there. >> port. >> the waterfront. >> and then to go back to your point around sea level rise and earthquakes, we've got usgs, we have a 70% probability of a major earthquake in the next 30 years. that's a near certainty. are we going to see significant flooding? under the high sea level rise, we'll see more flooding. we're going to see it here first near the ferry building, bart and muni tunnel entrance.

we'll see it in mission creek. i think we have more time to figure out appropriate strategies for dealing with the flood risk. we're running out of time to deal with the earthquake. earthquake, as pointed out earlier. >> may i make a broader comment. we read in the news, it was great to hear that the city's credit rating has gone up. that's not something to take lightly. which means that the chances of -- voters have to approve the geobond, but when you go to market, that the city will not have trouble raising the bonds once the vote is approved both if terms of the interest rate as well as the interest. i think that when you said there is a schedule of every 10 years, you'd hope that the city would consider if you have a better bond rating now, you can go to

the market at a lower interest rate. it's a lower interest rate5f8 now.onmenti we don't know what is going to happen. these are other variable factors that should be discussed among all of you as what the city should be doing in terms of financing. to say we're only doing it every 10 years, you have to be opportunistic and understand the circumstances. i think it's not -- we have apparently one of the best credit ratings in the country now. let's not discount that. >> any other comments? thank you stephen, this was a great report and we appreciate everyone coming out and discussing it with us. >> thank you. >> item 8-b to award 2790, marine structural projects for the power engineering

construction. and authorize the contract contingency fund of 10% for total of $7,416,768. >> good afternoon commissioners. thank you if yourer time today. i'm jonathan roman, the project manager for the marine project number 4. it's a little review, october 24th last year, the commission authorized us to advertise for bid for the substructure repair of piers 29 and 30. today we have the details in the presentation. let's quickly review. turning to the screen. this is the vicinity map of the project. pier 31 is on the left. pier 29 on the left. embarcadero is down at the bottle. pier 31.5 is currently occupied by the alcatraz ferry service.

pier 29 is unoccupied currently. the purpose of this project is repair pier sub scruk tour sockets to remove load restrictions. they bundled the two piers together to leverage the proximity for construction management and economy of scale. it has several objectives. it will help with the rye at that timvitalityof the northern. our investment site improvements and long term alcatraz operations. the repairs will give them the freedom to build their new facilities which will be currently limited by current restrictions. we'll help with the renewal of the northern waterfront. pier 29 is currently unownershipped. real estate has potential

tenants to occupy it. we'll extend the life of the pier for 30 years if not longer as well as minimize future repairs which will be less accessible t due to sea level rise. this is an overview of pier 31-point a. the blue area is the project footprint. the embarcadero will be to the south and pier 31 on the left and pier 33 on the right. they extend eastward into the bay. the alcatraz ferry is at the top of the screen. the blue color represents the footprint. the colors and lines indicate the repair type and locations. we've also solicited for two alternate areas pier 31 and 33. however, due to budget constraints, we'll not be awarding these and they will not

affect operations. this is an overview of the footprint at pier 2 29 embarcado on the right. peer -- i'm sorry embarcadero at the bottom of the page. pier 27 to the right. the pier extends into the bay. there is a quick summary of the nature of the work. as we discussed in october, over time water can infiltrate concrete and causes the rebar to expand and flake off. the cycle repeats and can cause further damage. this is loading limitations. by removing the unsound concrete and cleaning the rebar or splicing with new rebar when necessary and applying new concrete, we can repair the assets to remove the restrictions.

this is under pier pictures of what you'd see if you're down there. the lines are the exposed rebar which were covered with concrete in the past. you can also see that the access is difficult due to the rising tides. this is specialtily over water work. it has the following considerations, safety, coordination, environmental issues. so tight spaces, the water changes, it's dark. there is -- there will need to be ship rotations to accommodate the timeframe we want the work done and environmental issues to prevent debris from falling in the water. these are pictures of similar conditions and methods. you can see there are curtains capture any dust during

jackhammering and a dance floor which is a term they use for the scaffolding. then pictures of lighting. this will be done during the day and during the night. even at other ends, it will be dark even during the middle of the day. the summary of bids, we received authorization to advertise in october. and we actually placed the advertisement for bid on december 11th. three bids were received on january 25th of this year. the prices range from $10 million to over $15 million for the entire scope of work for pier 29 and 31½. it's a $5 million spread. however, all the bids exceeded engineering estimates and available funding. power engineering construction company's bid was the low bid as well as the only responsible bid

at $10,045,000. they exceeded their lb goal, complied with local hiring policy and met other requirements in the advertisement for bid. there were two other bidders but they were disqualified. there were no bid protests. this is the summary of the cost and funding. when we went to authorize for -- to advertise, we believe the ennear's estimate would be $8 million. the funding was $9.6 million. the low bid was over $10 million. with contingency of a million dollars and construction interacts which would account for inspection which is $1.3 million, the total is $12.4 million. the column on right helps to em emphasize the three components

make up the total cost. we currently would have a deficit of $2.8 million or $2.9 million. the bid form was broken up into different line items. so those are summarized here. pier 31½ by itself would cost $6.8 million. with contingency of less than $700,000, that scope of wor woro award would be $7.5 million. we'd have a surplus of $2 million to be applied towards our engineering construction indirects. the port is also looking to appropriate an additional $2.8 million next fiscal year. again, the alternates would not be awarded. so, we're here today to request the authorization to award for

construction contract 2790. weed he like to authorize the pier 31½ scope of work for $7.5 million -- $7.516000 to power engineering. the alternates would not be awarded. while we're appropriating the additional money in next fiscal year, power engineering said they would honor their bid for 220 days and we'd likes to return back to the commission in august, if the funding is approved. power engineering has agreed to this split funding. and we've also made it cleareto them that the appropriation is not a guarantee and they would still honor -- still honor their

bid. also, we also have a regulatory approvals in place. that's not an issue. >> i'm confused by something you said. you said we'd come back to the port commission to authorize port 29. i'm not reading the resolution that way. >> as a change order? >> let me clarify. i think as this is written, you'd authorize both scopes of work. isn't that right? i'm reading it. if you've already proved and recommended the additional funding for pier 29, if the board ever supervisors and mayos and mayor signs off on that, if you'd like to come back on 29, i think we need to rework the resolution because that's not how it is currently drafted. i wanted to clarify that point. >> okay.

>> doesn't that require that you find the $2.8 million in your budget first? >> we put it in. we put it in in the capital budget. you've recommended, we haven't got it approved through the process yet. >> let's just -- i'm sorry -- >> i have more about the schedule. but that is fine. i'm almost done. this is the last slide. so if we received the what approval to start today, then we would issue a notice to proceed in may and start the work of pier 31½ and issue a ndz to proceed for pier 31 and finish it in 2019. that concludes my presentation. so thank you.

>> can i have a motion? >> so moved. >> thank you. is there any public comment on this item? seeing no public comment, commissioner katz. >> l. katz: a couple of questions. when -- thank you for your presentation. i'm glad we're going to see these piers move towards getting rehabilitated. but in terms of the solicitation that went out and the way the respondents replied, on the financial piece here, it's here somewhere. you have it broken down so there is the estimate, their bid for 29, and 31½. then you have it broken down for 31½, and 29. did they break it down

themselves? or did they bid on 31½, and 29 and added the two? >> the bid form in specific lines then we added it together. >> the question i have is, and i know this might delay the process a bit, but it seems to me that that might be an inaccurate number, because the economy of scale so so they've broken it out for two separate piers, it would be different than in they were bidding on the two simultaneously. they would order materials at a discounted rate and get all the benefits of that. what i'm concerned about is if you added up their numbers, that may not actually reflect the cost by adding the two together as opposed to if we had said, what would your bid be for the combined piers? if you follow that. >> i do understand that. let me think for a second on that. let me talk about the economy of

scale of what would occur and what we would be saving is the mobilmobilization would be $450. if they were split up, there would be potentially $450,000. >> i guess that's the reverse of what i was saying. you had them bid on it split up, not combined. so right there, instead of the combined total of 10 million, 45, it should be 9 million, something hundred something. >> if we did it as a complete line item number, there would beer in economy scale. >> i don't know if there is a way to go back to them and ask they will. but right there that's almost half a million dollars that we could be potentially saving. >> so this project was bid as a

combined 29, and 31½. we did this to save -- we consciously made this decision to pair them together to save on the moanlizatio mobilization fe. but we did split out the piers, the work by piers, but in the end, we selected for the low bid price was for the two combined projects. i don't think we are not receiving. >> that's my question, did we do the math for them by adding the two up? or did they submit their total that the two combined would be the 10 million, 45? >> that is part of -- so there were individual line items but added up to 10,000,045.

so it was a funding issue that was a wrinkle. >> that's what i wanted to make sure we didn't have them break it out and then we did the math. >> it was always meant to be combined. this is still the intent. >> so their two bids did include the economy of scale? >> yes, and they would still honor it. we believe the economy of scale is built in. >> thank you. i know we're looking at them rebuilding it with concrete and rebar. i guess with all the technological advances we've had in building materials recently, i know there hadn't been many until the last couple of years. have we looked at any other options? are there any other materials? did we specify the materials to use? did we give them flexibility in

indicating there might be better materials available? boop include -- we were prescriptive in -- -- we include -- we were prescriptive in the durable finish that is easier to apply. i can get into the details on that. there were other items that we gave them the option for. there was a range. we haven't included any specifir word, space age type of technology. >> i wonder if rebuilding it to the way it was, if there aren't some other opportunities that maybe recast versus port in place as you pointed out is one. >> for this project, we did not do that although we're wrapping the piers -- the efficient piles

which is a newer construction method where they put in fiberglass. it's simple when you see. there are videos on line on how to do it. did that answer your question? >> so they have flexibility so we're not too prescriptionive. >> there is some flexibility. >> pres. brandon: commissioner woo ho? okay. so i guess -- what i heard from director forbes is the question of the extra funding is subject now to the budget process that is in city hall? >> jonathan was correct, i was not correct. the way that this is written, though i would suggest not clearly, is that we are allocating only -- we're only requesting your authorization for the scope of work related to

31½. and as jonathan said, we're asking, should the budget be approved, to then come back to you to authorize a change order to the contract. while this is not required, that's not what staff intended here. jonathan expressed it the way it was intended. i would suggest one quick edit. because the resolution says 29, and 31½. but the numbers are just for the allocation for the 31 piece of the work. so as staff is proposing it, this would be subject to the board of supervisors and mayor's office approving the allocation you suggested in your capital budget to add dollars to complete the pier 29 work and also subject to your review and approval in order for us to execute a change in our contract. >> the reality is the contractor is not going to wait 220 days to

find out whether he gets the second part. because it's the budget process final line that determines when they will know whether they are getting -- that we have the ability to give them the second part of the project, is that correct? >> that is correct. >> i wanted to be clear on that. because it seems like to hold the price for 220 days is quite long. i think they're not expecting to fully ride that timeline. >> just to follow up. by calling it a change order, will that impact us in any way? are there any added costs when something is a change order versus included in the contract? >> i'm not sure how this proposed? is it a typical change order? >> good afternoon,

commissioners. i'm from the city attorney's office. technically, when there is an increase in scope or duration of a construction contract, we call that either a change order or contract modification. the industry, the vernacular is to issue change orders. the administrative code for the city specifically refers to contract amendments that increase scope, time of duration, more than 10% as a contract modification. and that requires commission approval. so i think the question before you is whether that approval for the later scope subject to budget approval could be given prospectively or not. typically the price is negotiated with the contractor or change in circumstances and staff come back to you and ask for express approval of the change. here we're deviating a bit, because the scope is being reduced due to lack of funding.

but the contractor has agreed to hold prices until funds are available through the city's budget process. then that work for pier 29 would be added by way of change order or contract modification. >> what i'd be concerned about maybe when we draft the agreement is some language that would not have the change order coming back to haunt us if we get into if any disputes late where the contractor, since usually those are over change orders and increased scope of work and delays, etc. always blamed on the new change orders. i just want to make sure by whatever we call it, change order, contract modification or amendment, whatever we call it, i want to make sure that doesn't come back to us down the line who as a delay in the project that increases costs. if you follow where i'm going with this, i imagine that can be done and we could waive that with respect to this particular

item. >> yes, we've anticipated that. i believe staff negotiated with the contractor to hold prices firm for the delayed or deferred scope at pier 29. we anticipate -- >> and they'll release any claims for delayed damages down the line because of the modified scope of the project. that's where i'm going, not necessarily down, but down the line if things are delayed or whatever, this would not be added on to potential claim -- delay damage claims. >> we can certainly add that language into the contract. i don't think staff anticipates any claims for extended overhead or field extensions. they're mobilizeed in the area. >> commissioner woo ho, are you done? >> d. woo ho: no. generally speaking, you give

background on the contractor. are they worked on a port projects before? have they worked on other city projects? executive director forbes will remember that my typical question is: have we checked their references and track record in terms of performance? >> there was a requirement in the bid document, i can't remember exactly what it was or how it was phrased. but a number of years in port projects as well as city-related projects. i can forward you the language. power engineering has done the substructure work and doing the work next door to the downtown ferry terminal. >> so we've had good experience with them before? >> that's correct. i believe they did the substructure repair at the ferry building next door. i think that is where some of the pictures came from. >> my question two, we always have 10% contingency. we understand the concept behind

it. in es pens -- in essence does tn they get the other 10%? or how often do we know that the 10% or even a portion of it is utilized? how does the-machine in actuality, i understand the concept, but does it end up that the contract ends up costing us 10% more? >> so, if things are presented that are not in scope and we detail the scope of work, unanticipated things, and they would be added -- >> d. woo ho: i understand the rationale, but do we find that is always utilized? >> no we do not always use contingency. we can run a report that would be beneficial for the commission to see. how often we did the contingency and go over the 10%. we do not always spend all or

even some of the contingency. so we'll run a report to show you it's not an absolute, no one anticipates getting the dollars. we set them aside for those things that are unanticipated so we have room to keep the project moving. because in construction, there are events that occur. >> so if they came in over what we budgeted, that they're kairvel ithey arekaifer in the l to the funds we issue. >> the genesis, if you will for the 10% co contingency arises fm the city's administrative code which allows the commission to prospectivelprospectively delegf the ability to increase the a contract in scope, plies and duratioprice andduration by no .

granting the staff flexibility and not having to come back to you for anything below 10%, this is typically included in the resolutions at your discretion, of course. i can see from experience in doing this, there are many contracts that are completed under budget in which there are budget savings as a result at the end of the day. >> that's the end of my questions. >> i am more confused than when we started. i thought that guy was going to get up and speak too. but anyway, colleagues, are we good wjgjwom this? i'm -- i don't quite understand it, but i think you said he was right. >> i think director forbes might want to phrase the resolution.

have a few questions, the first, i guess is why the responses came in 50 to 100 percent over our estimated. >> 50%? i'm sorry? >> the estimate was $8 million. >> so the bid was $10,045,000. the next lowest bid was i believe valentine, and they were less than a -- less than $11 million. dutra was at $15 million. approximately. we asked ourselves what was happening or how that -- why we had such a gap. the best answer is that power

and i think valentine are set up to do this kind of work. the work underneath the piers with the scaffolding, jack hammers, dutra, i believe is a larger heavy equipment company that is not quite as set up for this. i think when they estimate this project or to do this type of work, it gets priced in that way. i'm sure you all know that marine contracting, repair work like this is a very small and specific field. it doesn't -- it's not surprising that you would get two bids or one bid that is low because it fits somebody's equipment and work style. and it's not surprising you'd get another bid that is 50% over because they're not exactly set up for this. this type of work.

>> but if our estimate was $8 million, including everything and the lowest responsible bidder is 12.5 million. >> the $8 million didn't include the engineering construction. >> north contingency? >> correct. so that's where it's not included. >> so there are two million over what we thought it should be. and that's because it's specialized? >> the construction industry is quite high. the demand for the work gets priced into these things. >> and so we're comfortable with the bid that we received thinking that they can come in on or under budget. >> personally speaking, i've

been around or exposed to power for over 20 years and i know that they are a good company and they're con she conscientious. so barring completely -- some completely unexpected discovery, we'll come in close to budget. >> why were the other two bidders disqualified? >> do you want to talk about that? >> go ahead. >> so one of the requirements that we had was a safety raight. an experienced modification -- safetying rating. an experienced modification rate. this is an energetic location on the waterfront. lots of boat wakes and wave action. we have conditions where we are exposed -- where the workers are exposed to that. we have to deal with the tides and such.

it's a constrained space. and so, in the beginning, we had a tight deadline that we were trying to meet to satisfy real estate tenants who were going to move in. and so, the experience modification rate -- having a lower experience modification rate or emr means that you are likely safety conscious and you're also planning your work. and so, we set that value as a requirement for this contract. to be .8. the other two contractors were above it, one of them was just slightly above, the other one was, i think at .93. >> thank you.

and then how much are we saving bhi puttinby putting the two to? >> the mobilization -- come to the mic. >> the mobilization is $450,000. we're looking to get someone, a contractor to do that work for us as part of the $1.3 million. that would be anywhere from 2 to $400,000 in savings as well as any other economy scale and purchasing. anywhere from 450 to $800,000 in savings maybe even more. >> okay. i'm just -- i think this is a good deal. i'm not sure because it's over our estimates and we don't have

the complete funding for it and there is a possibility, and i'm not sure if we should do it or not, that we should go with pier 31½ and rebid pier 29 later when we actually know what actually needs to be done. >> so, i would suggest that i understood from the team and from legal that bidding it again was not an option. is that right? to just award 31? >> how could it be an option if we're not committed to giving them the additional funding. >> the city's administrative code in chapter 6, specifically addresses the situation where department receives multiple bids as in this case, but there is only one responsible bidder above budget. in that instance under 6.23 of

the administrative code, the department, with the commission's approval is permitted to negotiate scope and price for reduced amounts with the sole bidder. >> our budget is 7 point some odd million? >> allowing staff to renegotiate for a lower price and scope requires that staff and the commission find that rebidding it would not result in substantially lower bids due to two factorses, one, a finding that the bid qualifications and requirements are too stringent. and number two, that the flaws in the nonresponsive bids could

not easily be cured. and so, this determination was made internally based on policy considerations with the time sensitivity -- >> but we don't have the funding. >> i understand. i understand. >> we don't have the funding. either you have to come back to us for approval for additional funding, or -- >> you've budgeted. >> i don't understand. i don't understand what you're putting before us. >> let me try to clarify what is before you. at editional money, first of all for 31 -- i'm sorry for 29, you put into your capital budget. it's headed towards the board of supervisors for signature by the mayor this summer. that's when the funds would become available should they make our recommendation on the capital budget which typically they do. so we anticipate that the funding will be available -- >> but if it's not? >> if it's not, we have full --

what we're asking for to you do today is to approve the contract for the improvements for pier 31½ in the amount of $7,516,768. now and then we're asking that in the summer, should the money be -- budget become available as we anticipate it would, we'd come back to you to ask to execute a contract amendment or a change order, depending on your lexicon, for the work at pier 29. now, in awarding 7.5 million for 31½ today will have surplus money set aside, $1.8 million. it's already in the bank. it will be sitting there. the new budget coming in late summer for an additional 2.8 would give us the total cost of pier 29 which is 3.532.

so you'll have future approval rights over 29. >> but we are approving 31½ for $7.5 million. >> and that's it. >> and it's our decision when you come back and the number if we want to approve -- in the summer if you want to approve. >> it would be their decision. they can choose not to do the pier 29 work. >> the resolution would award the contract for the scope of work at pier 31½, the amount stated and if funding is approved by the board of supervisors and the funds become available to the port, then the contract presumably would be awarded for the -- the contract change order would be awarded to power engineering, if you grant and approve the change order. >> but the resolution is hard to

understand. >> does the commission have latitude to deny the pier 29 work if the summer? >> i believe it would. >> okay. okay, so it would. >> yes. >> you'll have the latitude to vote up or down the additional work and to reflect that correctly, i think we need to make an amendment to the final result clause. where it discusses pier 29 and 31 super structure substructure repairs. i think we should strike it to say pier 31½ substructure repairs to clarify this resolution is not related to the work at pier 29, just the $7.50 million for 31½. i think that is a better -- provides better clarity. >> certainly. i think given the tenor of the discussions and comments from commission today, it would be appropriate to add something to the resolve clause that says that subject to the appropriation of funds, and port

commission approval, the additional scope would be negotiated with power engineering. i think up until now the assumption has been that pier 29 was important enough asset that the port desired to move forward with the improvements. >> we definitely want to move forward. we want to make sure we're getting the best deal. >> if we're coming back to the commission, they have to have an affirmative yes or no. >> any contract amendments in excess of 10% require your approval. so it's subject to your approval and discretion in any event. >> any other questions? >> just playing devil's advocate, if we're not clear that -- well -- if they have locked in the added scope regardless of what we do today, they've locked in the price, power engineering has agreed to

that $3.5 million price for the work at pier 29 regardless of what we do and they'll hold that for 220 days? >> that's correct. they'll hold the price. yes, they'll hold that price but it's clear to them that there is no guarantee that the funding could become available and then i think with the clause get approval -- the commission's approval. that wasn't made clear, but that's clarification. >> clarifies it under the law. but that won't change then the price for pier 31 only? because if you were trying to get the economies of scale, that price won't gup and there won't be any change orders as a result? >> won't go up and there won't be a change orders as a result? >> that won't go up.

>> so, what are we agreeing to? >> before you approve this resolution, we're going to change the language on the finae clause where it says pier 29 and 31½, we'll have pier 31 and also we'll add an additional resolve clause to clarify the future action is subject to port commission approval and budget appropriations. >> i stand corrected. the way the resolution is currently written, i don't think it requires an additional revision. the 10th whereas clause makes it clear that "if port staff secure the future appropriations for such additional funding, staff intends to seek commission approval to amend the proposed contract with power engineering to add the pier 29 scope" there is a grammatical your there.

it's clear they intend to come back to you for your approval if the funding is appropriated. ment resolve claus.ment re-- ths to award it for pier 31. it doesn't say anything about pier 29, so it's not binding. >> so only one small change required. >> i would move an amendment to remove pier 29 from the resolve clause. so in the prens it would read pier 31 singular sub scruk tour re-- su substructure? >> so the amendment has been approved.

>> thank you. >> eye pem 9a is second proposal for the shipyard located at pier 68 and 70 lot 329 including dry dock number 2 and dry dock eurekaa. eureka. >> i'm jeffy bower. requesting for approval of 9a which is the second request for proposal to operate and lease are the dry dock. as you recall in the summer of 2017, this commission authorized port taaffe to issue the first proposal for the shipyard. it was issued august are 15th, 2017. the port received -- we received three respondents only one was

actually responsive. the other two were letters and really inquiries. the respondent was from vigor and the other two were from [inaudible] the port is seeking a tenant that can demonstrate the ability to modernize and operate the shipyard and assets through the life of the lease and to achieve the port strategic goals of renewal,al stability, economic, vial at that time, engagement and liveability. what are the key terms of the rfp? that is the real key here. sorry.

the port is suggesting in the new rfp a smaller footprint which would reduce the operator's maintenance and repair cost for the buildings that are not actually required to operate the shipyard. building 6, building 111 and building 38. the port has potential capital and financial support for the shipyard. again, demolishing pier 38, dredging under dry dock 2 and potentially on going maintenance dredging in the future as we do with other facilities. pier 27 and pier 80. potential asset transfer. learning a lot from the process not only from vigor but bay shipping. and industry professionals, you

know, there is a need tp do some investment in both of these dry docks. one is 70 years old, the other one, i believe is 47 years old. what we're suggestin suggestinge respondent could offer -- the port would offer some type of asset transfer. that could be the eureka for example. we could do an asset transfer that eureka could be scrapped or rebuilt or moved or bought. those funds would be used to do work in the shipyard, retrofit the shipyard, particularly dry dock 2 which is the money maker of the dry dock. the respondent proposed asset transfer and also other uses.

ancillary to the dry dock. we're seeking to do more outreach, that could be metal fabrication within the dry dock. ferry ex-curing to re-- excursion etc. the sequel to the dry dock one requires the respondent to do a brief presentation before the commission along with staff as you recall, vigor did a brief presentation. next steps, this is really -- this is the reduced footprint. you can see building 6, or the hash-marked buildings are taken out. it's more of an economic dry dock. here is another view of the reduced footprint.

timeline, this is the timeline from the first offering. we're very aggressive with this offering. you saw it as an emergency. we're aggressive. i think the timeline was too short, too condensed, but we did learn a lot. we learned a lot from the tours that we conducted from interviewing industry experts and i think that has been translated well into the sequel of the second offering. you can see the -- here we go, this is some of the potential investments. we are doing an electric -- electrielectrification of the separation of the electricity.

and we talked about possible asset. important part, we would be able to issue as early as tomorrow the modified updated r fp, the submission and approval. we're giving it a two-month period of time. so it's a longer period of time. the respondent presentations to the port commission and we're going to cast a wider net. and send it to other industries as well as other dry docks and operators. scoring, scoring is similar to the first offering. you can see. and i'm happy to answer questions you may have. >> pres. brandon: thank you. may i have a motion? is there a second?

>> second. >> pres. brandon: is there any public comment on this item? no public comments. commissioner woo ho. okay. so i understand the reduction footprint. two questions. on the reduction footprint, what would we do with the other buildings. and secondly, did we get feedback from possible interested parties by reducing the footprint they'd have more interest in bidding? >> we did. absolutely. i think that was a concern when you go back to b.a.e., are they a ship repair, dry dock operator? or a developer? being like for example building 111 is just $10 million. so we got feedback they wanted to be in the ship repair

business. they did not want to be a developer. we have had interest. in fact, building 111, i've shown it to a company that is a sub tenant for development and they may be interested in developing it. >> i just want to clarify a couple of things. we're focused right now on finding a repair operator. we heard from rfp1 say these buildings are putting a drag on the financial viability of the yard. with this reduced footprint, operators can say we would like more of the buildings included. as you'll remember from the operations, many of these buildings were once part of the ship repair business, fabrication shops, etc. but over time the buildings fell into disrepair and they turned their back on some of the fiments.

we have not begun to refurbish the buildings. our first priority has been to find our ship repair operator then we'll know which buildings we have to reposition and come to you to talk through different requests for proposal processes etc., where we can find a development partner for the buildings. >> i did gloss over, but the fact that those buildings are optional, so they could propose, for example building 611 is. >> but the -- there would be a reduced footprint. >> correct. >> how much have we invested so far and we're offering more in this rfp, right? >> we've made several investments in the facility to date. we've been working on separating the electrical. we've done