June 3, 2022
SPECIAL MEETING NOTICE
SUBJECT: THE LOS ANGELES BOARD OF HARBOR COMMISSIONERS SPECIAL MEETING – WEDNESDAY, JUNE 8, 2022 @ 9:00AM
The Los Angeles Board of Harbor Commissioner are virtually scheduled to meet on Wednesday, June 8, 2022 at 9:00am.
This Special Meeting is in lieu of their previously scheduled Regular Meeting on June 9, 2022 at 9:00am.
Please refer to the Port of Los Angeles website at www.portoflosangeles.org for further details.
AMBER M. KLESGES
Board Secretary
Los Angeles Board of Harbor Commissioners
Harbor Administration Building
425 S. Palos Verdes Street
San Pedro, California 90731
Harbor Administration Building
425 S. Palos Verdes Street
San Pedro, California 90731
SPECIAL MEETING AGENDA
WEDNESDAY, JUNE 8, 2022 AT 9:00 A.M.
Board of Harbor Commissioners
President Jaime L. Lee
Vice President Edward R. Renwick
Commissioner Diane L. Middleton
Commissioner Lucia Moreno-Linares
Commissioner Anthony Pirozzi, Jr.
ORDER OF BUSINESS
Convene in Memory: Robert Bailey – C&M
OPEN SESSION
A. Roll Call
B. Executive Director Remarks
C. Comment from the Public on Non-Agenda Items
D. Report from the Neighborhood Council Representatives – An opportunity for Neighborhood Council representatives to provide remarks on Neighborhood Council Resolutions or Community Impact Statements filed with the City Clerk which relate to any agenda item listed or being considered on this agenda for the Board of Harbor Commissioners.
E. Reports of the Commissioners
F. Board Committee Reports
- Audit Committee Meeting of May 26, 2022
G. Approval of the Minutes
- Regular Meeting of May 12, 2022
- Regular Meeting of May 26, 2022
H. Presentation
None
I. Level I Coastal Development Permit
None
J. Board Reports of the Executive Director
Consent Items (1 - 6)
Cargo Marketing
Summary: Staff requests approval of a third Temporary Order to amend Port of Los Angeles (Port) Tariff No. 4, (Tariff No. 4) approving (i) a rate increase of 9.4 and 11.8 percent applicable to the respective petroleum products; (ii) a note to the Merchandise Not Otherwise Specified (NOS) rate stating that any change in the Merchandise NOS rate shall be offset by any scheduled increase in the compensation section of a container terminal permit; (iii) a definition in Section 1 of Tariff No. 4 defining a “Scheduled Increase in Compensation”; and (iv) the deletion of rated tariff items which are no longer relevant, effective January 1, 2022. At the November 4, 2021, Board of Harbor Commissioners (Board) meeting, the Board approved Temporary and Permanent Orders amending Port of Los Angeles Tariff No. 4, Items 550-600 through 550-625; and deleting Item 550-650, Items 550-902 through 550-975, Items 560-001 through 560-975, and Item 1220. Changes in the Tariff require City Council approval. A second Temporary Order was approved at the March 10, 2022 Board meeting to allow additional time for the Permanent Order to pass through the City Council approval process. The second Temporary Order will expire on June 29, 2022. The City Council has not calendared and approved the Permanent Order and Ordinance. Therefore, a third Temporary Order is proposed to allow additional time for the Permanent Order to pass through the City Council approval process. This third Temporary Order, if approved, will expire in 90 days after the day it is published or upon execution of the Permanent Order by the City Council, whichever occurs first.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) under Article III Class 1(31) of the Los Angeles City CEQA Guidelines; (2) adopt Temporary Order No.____________ to amend Port of Los Angeles Tariff No. 4 adding a definition to Section One “Definitions”; increasing rates to Section Five “Wharfage”, Items 550-600 through 550-625; and deleting Item 550-650, Items 550-902 through 550-975, Items 560-001 through 560-975, and Item 1220; (3) authorize the Board Secretary to certify the adoption of a Temporary Order by the Board of Harbor Commissioners and cause the same to be published once in a newspaper printed and published in the City of Los Angeles, to take effect prior to adoption by Ordinance for a period not-to-exceed 90 days pursuant to City Charter Section 653(b); and (4) adopt Resolution No.___________.
Cargo Marketing
Summary: Staff requests approval of the Foreign-Trade Zone (FTZ) Operating Agreement between the City of Los Angeles Harbor Department (Harbor Department) and DSV Air and Sea, Inc., (DSV), to operate its facility within FTZ No. 202, Site 11B, located at 21906 Arnold Center Road, Carson, CA 90810. The 2.6-acre property includes a warehouse and office space, approximately 9 miles north of the Port of Los Angeles. In the third quarter of 2021, DSV took over all assets from Agility Logistics Corporation. Agility was the operator of Site 11B at 21906 Arnold Center Road in Carson under Operating Agreement 14-3323. Due to the ownership change, a new Operating Agreement is required. The proposed Agreement is for a term of five years with three, five-year renewal options. If the proposed Agreement is approved, the Harbor Department will receive $7,750 annually from DSV (per FTZ Tariff No. 2).
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the proposed Foreign-Trade Zone Operating Agreement between the City of Los Angeles Harbor Department and DSV Air and Sea, Inc.; (3) direct the Board Secretary to transmit the proposed Foreign-Trade Zone Operating Agreement to the Los Angeles City Council for approval pursuant to Section 373 of the Charter of the City of Los Angeles and Section 10.5 of the Los Angeles Administrative Code; (4) authorize the Executive Director to execute and the Board Secretary to attest to the proposed Foreign-Trade Zone Operating Agreement; and (5) adopt Resolution No.___________.
Port Police
Summary: Staff requests approval of a Second Amendment to Agreement C1870612-35788 (Agreement) between the State of California Department of Parks and Recreation, Division of Boating and Waterways (DBW) and the City of Los Angeles Harbor Department (Harbor Department) for reimbursement of costs associated with law enforcement boating training classes being conducted at the Maritime Law Enforcement Training Center (MLETC). The proposed Second Amendment will extend the contract completion date of the Agreement until December 31, 2022. This extension will allow for unused, previously allocated, State of California funding to be utilized. Under this Agreement, the DBW will continue to reimburse the Harbor Department for training of police officers from agencies within the State of California.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II, Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the proposed Second Amendment to Agreement C1870612-35788 between the Harbor Department and the State of California Department of Parks and Recreation; (3) authorize the Executive Director to execute and the Board Secretary to attest to the Agreement; and (4) adopt Resolution No.____________.
City Attorney
Summary: The Office of the City Attorney (Office) requests approval of the First Amendment to Agreement No. 21-9802 (First Amendment) between the City of Los Angeles Harbor Department (Harbor Department) and Remy Moose Manley LLP (Remy). The proposed First Amendment increases the maximum compensation authority by $830,000 for a total maximum compensation of $930,000. The authority allows Remy to perform the necessary environmental legal services for multiple designated improvement projects at the Harbor Department. The increase will also fund general California Environmental Quality Act (CEQA) advice for the Port of Los Angeles. The Harbor Department is financially responsible for payment for legal services rendered under Agreement No. 21-9802. It is anticipated that $543,568 of the agreement total will be reimbursed by third parties through reimbursement agreements.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) find in accordance to Charter Section 1022 that the scope of work of the proposed Agreement can be more economically and feasibly provided by an independent contractor than by City employees; (3) approve the First Amendment to Legal Services Agreement No. 21-9802 with Remy Moose Manley LLP, to increase the compensation authority by $830,000 for a maximum compensation authority of $930,000; (4) authorize the Executive Director and Board Secretary to execute and attest to the First Amendment; and (5) adopt Resolution No.___________.
Waterfront & Commercial Real Estate
Summary: Staff requests approval of the annual budget for Fiscal Year (FY) 2023 for operation of Cabrillo Way Marina (CWM) by Westrec Marina Management, Inc. (Westrec) under Agreement No. 13-3125 (Agreement). The Agreement was approved by the Board in 2013 for Westrec to manage CWM as a fee operator, while passing through all expenses and revenue to the City of Los Angeles Harbor Department (Harbor Department). Westrec’s estimated FY 2023 revenue is $7,996,187 with total expenses of $3,523,660. FY 2023 proposed net income of $4,472,527 results in a net profit margin of 55.9 percent an increase from FY 2022 approved budget margin of 48.4 percent and FY 2021 actual net profit margin of 54.9 percent.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the Westrec Marina Management, Inc. annual budget for Fiscal Year 2023 under Agreement No. 13-3125; and (3) adopt Resolution No.___________.
Cargo & Industrial Real Estate
Summary: Staff requests approval of Permit No. 957 (Permit) with Innovative Terminal Services, Inc. (Innovative) for use of 337,538 square feet (7.75 acres) comprised of paved land, unpaved land, and a maintenance shed building located at 916 Barracuda Street, Terminal Island. The proposed Permit will yield $732,887 in revenue the first year, including rent credits (net of applicable rent credits). Further increases will be applied on July 1, 2023, and annually thereafter based on the greater of Consumer Price Index (CPI-U) or two percent. The term of the Permit is three years, plus (2) two one-year extension options exercisable by the City of Los Angeles Harbor Department.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action has been previously evaluated pursuant to the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(i) of the Los Angeles City CEQA Guidelines; (2) find that entering into this Permit No. 957 is in the best interest of the City of Los Angeles, despite certain exceptions to the City of Los Angeles Harbor Department’s Leasing Policy, Section XI, concerning a 2 percent holdback on security instruments for a maintenance fund and Section VIII concerning the rate of return policy; (3) approve Permit No. 957 with Innovative Terminal Services, Inc.; (4) authorize the Executive Director to Execute and the Board Secretary to attest to Permit No. 957; and (5) adopt Resolution No.___________.
Regular Items (7 - 9)
Debt & Treasury
Summary: Staff requests approval of certain documents related to a proposed bond financing for the Alameda Corridor Transportation Authority (ACTA) including certain disclosures required from the Port of Los Angeles. Given the Port of Los Angeles’ role as a partial guarantor of ACTA’s debt along with the Port of Long Beach, it must provide certain financial and operating disclosures to the bond market for any ACTA bond transaction both at the time of the initial offering and for as long as the bonds remain outstanding. ACTA is projecting that future revenues will be insufficient to cover debt service payments starting in FY 2023, and that shortfall advance payments would be required from the two ports to help make up the difference. This transaction is expected to eliminate shortfall advances from the two ports from FY 2023 through FY 2026. The transaction amount is estimated to be $400,000,000 at minimum, with a maximum amount that is contingent on the success of the tender (buy back) process.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) authorize the execution and delivery of the Continuing Disclosure Certificate, the Letter of Representation, and other related documents and certificates in connection with the issuance and sale of the 2022 and 2023 ACTA Bonds; (3) authorize the City of Los Angeles Harbor Department’s Executive Director or Chief Financial Officer, each of them acting individually, to comply with the terms and intent of the Board’s Resolution, to assist ACTA in the issuance of the 2022 and 2023 ACTA Bonds, to execute and deliver any documents or instruments related thereto and to take such other actions as may be deemed necessary or desirable in order to carry out the purposes of the Board’s Resolution subject to: (i) approval of the issuance of the 2022 and 2023 ACTA Bonds by ACTA; and (ii) the conditions set forth in the Resolution; (4) approve the Reimbursement Resolution Waiver allowing ACTA to delay reimbursement of any amounts due to the Port of Los Angeles and Port of Long Beach until 2026; (5) approve certain disclosure relating to the finances and operations of the Harbor Department to be contained in the Preliminary Official Statement and the Official Statement for the 2022 and 2023 ACTA Bonds including the Audited Financial Statements of the Harbor Department, with such changes thereto as the Executive Director or the Chief Financial Officer may require or approve; and (6) adopt Resolution No.___________.
Financial Planning & Analysis
Summary: Staff requests approval of the Fiscal Year (FY) 2022/23 Proposed Annual Budget (Proposed Budget) of $1,886,989,538. The Proposed Budget is aligned with the 2018 – 2022 Strategic Plan (Strategic Plan) and will enable the City of Los Angeles Harbor Department (Harbor Department) to meet its commitments in the upcoming fiscal year. Adoption of the Proposed Budget will position the Port of Los Angeles (Port) to deliver value to its customers by providing superior infrastructure, promoting efficient operations, as well as forging strong and lasting relationships with its stakeholders. The Proposed Budget includes sources and appropriations of funds as follows:
TABLE 1: SOURCES AND APPROPRIATIONS OF FUNDS
|
Sources:
|
|
|
Appropriations:
|
|
|
Operating Receipts
|
$ 628,101,943
|
|
Operating Expenses
|
$ 334,039,691
|
|
Non-Operating Receipts
|
54,483,422
|
|
Non-Operating Expenses
|
107,031,411
|
|
Grant Receipts (Capital)
|
30,871,093
|
|
Capital Budget
|
211,826,758
|
|
Debt Issuance Proceeds
|
|
|
Debt Repayments
|
40,210,000
|
|
|
|
|
Accrual Adjustments
|
52,485,912
|
|
Available Cash:
|
|
|
Projected Year-End Balances:
|
|
|
Unrestricted Funds
|
1,101,121,513
|
|
Unappropriated Balance
|
1,036,359,199
|
|
Restricted Funds
|
72,411,567
|
|
Restricted Cash
|
105,036,567
|
|
Total Sources
|
$1,886,989,538
|
|
Total Appropriations
|
$1,886,989,538
|
The Proposed Budget represents the ongoing commitment of Harbor Department staff to operate and maintain the Port in a fiscally sound manner according to the guidelines, policies, and direction set forth by the Board of Harbor Commissioners (Board). Furthermore, the Proposed Budget complies with the Board-approved Financial Policies that relate to debt rating, debt service coverage, and reserve levels.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) adopt the Fiscal Year 2022/23 Proposed Annual Budget for the City of Los Angeles Harbor Department and appropriate funds in accordance herewith; (3) authorize the Executive Director, or his designee, to make any technical adjustments consistent with the Board action(s) to the Fiscal Year 2022/23 Proposed Annual Budget documents in the implementation of this budget; (4) approve the transfer of $20,682,370 from the Harbor Revenue Fund, Account 11010, Center 7000, Program 000 to the Harbor Special Operating Fund, Account 11035, Center 7000, Program 000; and (5) adopt Resolution No.___________.
Environmental Management
Summary: Staff requests approval of a proposed three-year Reimbursement Agreement (Agreement) between AltaSea at the Port of Los Angeles (AltaSea) and the City of Los Angeles Harbor Department (Harbor Department) for environmental analyses that may be required for the AltaSea project as described in the Amended and Restated Lease No. 904 (lease). The original AltaSea project was assessed through the City Dock No. 1 Marine Research Center Project Final Environmental Impact Report (EIR) dated October 18, 2012 and amended through Addenda dated September 2013 and February 2017. As stipulated in the lease, AltaSea is financially responsible for Harbor Department environmental assessment costs at the AltaSea project. Therefore, the Harbor Department seeks to enter into a new three-year reimbursement agreement so that AltaSea can continue to compensate the Harbor Department for subsequent as-needed environmental analyses that may be required based on new or modified project elements.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the proposed Reimbursement Agreement with AltaSea at the Port of Los Angeles to reimburse the City of Los Angeles Harbor Department for 100% of the costs incurred for environmental assistance; (3) authorize the Executive Director to execute and the Board Secretary to attest to, said Agreement for and on behalf of the Board; and (4) adopt Resolution No.____________.
K. Closed Session
1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to Permit 750 with SA Recycling Inc.:
Property: 901 New Dock Street, San Pedro
City Negotiator: Marisa Katnich
Tenant Negotiator: Terry Adams
Negotiating Parties: City and SA Recycling Inc.
Under Negotiation: Price and Terms
2. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(Subdivision (d)(1) of Government Code Section 54956.9)
Natural Resources Defense Council, et al. v. City of Los Angeles, et al.
Los Angeles Superior Court Case No. BS070017
3. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(Subdivision (d)(1) of Government Code Section 54956.9
Natural Resources Defense Council, et al. v. City of Los Angeles, et al.
San Diego Superior Court Case No. 37-2021-00023385-CU-TT-CTL
4. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to Permit 999 with China Shipping Holding Company, Ltd.:
Property: Berths 100-103, San Pedro
City Negotiator: Michael DiBernardo
Tenant Negotiator: Paul Nazzaro
Negotiating Parties: City and China Shipping Holding Company, Ltd.
Under Negotiation: Price and Terms
5. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
(Subdivision (d)(2) of Government Code Section 54956.9)
Significant exposure to litigation pursuant to subdivision (d)(2) of Section 54956.9:
(two cases)
6. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to a proposed permit with San Pedro Fish Market:
Property: Berths 93C, D, E, San Pedro
City Negotiator: Eugene D. Seroka
Tenant Negotiator: Michael Ungaro
Negotiating Parties: City and San Pedro Fish Market
Under Negotiation: Price and Terms
7. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to Lease 915 with San Pedro Public Market LLC:
Property: Berths 74-83, San Pedro
City Negotiator: Michael Galvin
Tenant Negotiator: Eric Johnson
Negotiating Parties: City and San Pedro Public Market LLC
Under Negotiation: Price and Terms
L. Adjournment