November 21, 2008

 

GOLDEN GATE FERRY TO PURCHASE AND REFURBISH TWO HIGH-SPEED FERRIES FROM WASHINGTON STATE

The  Golden Gate Bridge, Highway and Transportation District (District) Board of Directors (Board) approved the following actions at their regularly meeting on November 21, 2008, at 10 am. This matter was approved by the Building and Operating Committee of the Board on November 20, 2008.


The Building and Operating Committee of the Golden Gate Bridge, Highway and Transportation District (District) Board of Directors (Board) will be asked to approve the following actions at their regularly meeting on November 20, 2008, at 10 am:

  1. Authorize purchase of two existing high-speed passenger vessels from Washington State Ferries (WSF) at a price of $ 4 million ($2 million per vessel).
  2. Establish a budget of $19.1 million for the refurbishment of the WSF two vessels.
  3. Establish a contingency budget of $ 310,000 for sales/use tax that may be payable to the State of California.

If approved, this matter will be presented to the Finance Auditing Committee at its November 20, 2008, meeting (immediately following the Building and Operating Committee meeting) and then to the full Board at its November 21, 2008 meeting for appropriate action.

BACKGROUND

2007:
Board authorized the issuance of a Request for Proposals for procurement of a new high-speed passenger vessel with Tier 2-20 main engines to maximize emissions reduction.
 
July 2008:
One proposal was received from Nichols Brothers Boat Builders (Nichols Bros.) of Freeland, WA with a bid price of $18.6 million.
   
September 12, 2008:
After the District became aware of WSF desire to sell two high-speed ferry vessels that have been out of use for several years, the Board authorized staff to submit an offer of $2 million per vessel, subject to a number of conditions, including Board approval of the final purchase. The two vessels, MV Snohomish and MV Chinook, are eight feet longer than Golden Gate Ferry’s MV Del Norte and are of similar design. They were built shortly after the Del Norte and were operated for approximately three years and have been inactive since September 2003.
   

Since receiving confirmation from WSF that the conditional offer of $2 million per vessel was accepted, District staff and consultants have:

  • Inspected the vessels to confirm that the hulls are in excellent condition and have not experienced any unusual wastage of the hull plating or other major structural components.
  • Reviewed regulations to ensure the passenger capacity of each vessel can be increased to carry a minimum of 450 passengers and determined that there is sufficient space to install the necessary seating and other improvements necessary for our service.
  • Prepared a detailed estimate that identifies each improvement necessary to prepare the vessels for service.

 

COST COMPARSION

   
Purchase New High-Speed Vessel
  

Contract price, including bond/financing/insurance:

Contingency for change orders (3%):

Project Management (PM):

Miscellaneous District and staff costs:

$17,601,724

509,000
275,000

225,000
$18,610,724
   
Two Refurbished High-Speed Vessels  

Purchase price, two vessels
Potential Tax (Use/Sales)
Refurbishment Costs (includes 3% contingency and PM)


Potential Carl Moyer Program Funding Offset

Total for 2

$4,000,000

310,000

19,100,000

$23,410,000

$3,500,000

$19,910,000
   

VESSEL REFURBISHMENT INCLUDES

  • As required by the California Air Resources Board (CARB), both vessels will be re-powered with Tier 2 engines. Consistent with Board policy, the engines will be Tier 2-20 engines, which exceed current CARB requirements.
  • Other machinery to be replaced includes reduction gears; main shafting; bearings; engine controls and monitoring panels; electrical generator sets; and other miscellaneous pumps and controllers.
  • The four water jets will be completely refurbished to like-new condition.
  • Certain above-hull structures will be modified to accommodate additional inside seating capacity and new embarkation doors for passenger access at the upper deck.
  • Each vessel will be outfitted with new accessible restrooms; snack bar; new seating and tables; bicycle racks; new deck covering (carpet and tile).
  • The pilot house will be outfitted with new updated navigation equipment.
  • The vessel will be completely repainted.
  • Make necessary provisions to increase passenger from 350 to a minimum of 450 (this will require USCG certification).

 

NEXT STEPS - PROJECTED TIMELINE

End of 2008 Complete purchase of the two WSF
   
Early 2009 To provide customers continuity with high speed service during the all ready program re-powering of the MV Del Norte, we would place one, not yet refurbished, WSF into service as a substitute for the M/V Del Norte. The WSF is certified to carry 350 passengers and we would immediately work to obtain temporarily USCG recertification to 390 passengers as this is what the MV Del Norte currently can carry.
   
Early 2009 Complete drawings and specifications for refurbishment of WSF vessels.
   
May 2009 Award contract for refurbishment
   
Mid 2009 First WSF begins refurbishment process
   
Late 2009 First fully refurbished WSF vessel delivered to District
   
Late 2009 Second WSF begins refurbishment process
   
Mid 2010 Second fully refurbished WSF vessel delivered to District
   

ADVANTAGE OF TWO HIGH-SPEED VESSELS

  1. Meets the current needs of the District and positions the organization to be able to respond to any number of potential scenarios involving increased demand.
  2. Allows the District to fully examine the potential impacts of selling two of its three Spauldings as opposed to keeping them as valuable assets to the San Francisco Bay region during a time of emergency need. Staff will review this issue and present a recommendation to the Board later in 2009.

 

FISCAL IMPACT

This project is included in the FY 07/08 Ferry Division Capital Budget in the amount of $12,000,000 and is funded with $9,600,000 Federal Transit Administration (FTA) funds, $2,116,322 State (I Bond) funds, and $283,678 District funds (80% FTA/17.6% State/2.4% District).

A capital budget increase in the amount of $11,510,000 ($6,400,000 FTA funds and $5,110,000 from District reserves) is required to fully fund this project at the proposed budget of $23,510,000. Utilizing FTA funds to support the purchase of these two vessels and additional FTA funds to support the refurbishment of these two vessels was made possible by staff’s creative development of an efficient and effective funding proposal, and the FTA’s willingness to collaborate and achieve the best possible solution for the District.

The estimated total cost to implement this project is as follows:

     
Previous Expenditures
  
$100,000
Purchase two vessels
  
4,000,000
Sales/Use Tax Due State of California
  
310,000
Refurbishment costs for one vessel:

Design
200,000

Construction
8,700,000

Consultants (including project management)
150,000

Staff Labor
150,000

ICAP (75%)
100,000

Testing, Inspection, Trials, Delivery
200,000

Miscellaneous
50,000

SUBTOTAL
$9,550,000
Refurbishment Cost for Two Vessels
19,100,000
   
TOTAL BUDGET FOR TWO VESSELS
  
$23,510,000
   

The total project will be funded as follows: $16,000,000 FTA funds (68%), $2,116,322 State (I-Bond) funds (9%), and $5,393,678 District funds (23%).

Please note that certain aspects of the vessel refurbishment may also be subject to California sales tax. If this occurs, the extra expense will be addressed as a budget adjustment when awarding the refurbishment contract.