Airport Highlights 2010 0709 - Laserfiche WebLink

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DATE; July 9, 2010 SUBJECT: Port of Oakland staff recommendations of terms for a proposal to revive and amend the Settlement Agreement between the Port of Oakland and the City of San Leandro Background Under the Settlement Agreement dated November 7, 2000, between the Port of Oakland and the City of San Leandro, the Port agreed to provide funding for the sound insulation of 200 homes. The project was required to be accomplished over a six year period, as was stated in the Settlement Agreement, section 5(c) 2 and referred to as the "Project Obligations Period". Upon review by the Port Attorney, it has been determined that the Project Obligations Period expired on October 8, 2008, at which time 81 of the 200 homes had been- insulated. Amendment to Extend the Project Obligations Period. Of the currently 119 remaining homes to be insulated to reach 200, 73 are ready for commencement of work in Phase IL For Phase II, staff would recommend a 2 Fiscal .Year (FY) reimbursement proposal from San Leandro, beginning with FY 10/11, with the following conditions: o .The Port's obligation is capped at $3,162, 934 ($2,574,472 construction costs + $588,462.00 Project Management costs) and would terminate on June 30, 2012. Any costs associated with Phase II that have not been submitted for reimbursement by this date would not be reimbursed. o Reimbursement for-Phase II costs shall be the LESSER of actual costs or the maximum cost of $3,162, 934, and reimbursements would be made in the amount of $1.5 Mil for FY 10/11, and the remainder of the balance in FY 11/12. Port staff would recommend that the remaining 46 homes in a Phase III be included in the amendment with the following stipulations: . o The Port's debt service coverage (DSC) on ALL debt is at least 1.7x in the prior FY and projected to be at least 1.7x for the 3 year adopted budget. (1.7x is the median DSC for airports according to Moody's). o Phase III Project Management costs are capped at the current estimate of $114,286 ($35,486.00 Phase III & $78,800 PR), and the construction costs are capped at the current estimate of $1,514,851 for a total maximum cost of $1,629,137. A COLA based on actual CPI, but no more than 3% ,per year, would be allowed for Phase III costs ONLY (no COLA for Phase II work) to ensure reasonable cost increases over time are considered. o There would be no FY restrictions for reimbursements for Phase III. All reimbursements will be made as soon as all requirements are completed and requests for reimbursements are made to the Port. o All work and reimbursements for Phase III must be completed by December 31, 2015. This is consistent with the original agreement, which also had a definite ending date.