HomeMy WebLinkAboutPDF Larsen Bay BFU Business Operating Plan 2003
Business Operating Plan of the
City of Larsen Bay
Bulk Fuel Facility
NOVE MBER 17, 2003
City of Larsen Bay
P.O. Box 8
Larsen Bay, AK 99624
Phone: (907) 847-2211
Fax: (907) 847-2239
TABLE OF CONTENTS
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Page 1 of 25
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I. EXECUTIVE SUMMARY ......................................................................................................................2
Document Interrelationships .....................................................................................................................................2
II. BACKGROUND ...................................................................................................................................3
Selected Statistics – Larsen Bay .................................................................................................................................3
III. FACILITY UPGRADE ..........................................................................................................................4
Bulk Fuel Storage Facility Description .....................................................................................................................4
Project Exclusions .......................................................................................................................................................4
Community Site Plan and Details .............................................................................................................................5
Bulk Fuel Storage Facility Capacity ..........................................................................................................................7
IV. FACILITY PARTICIPANTS...................................................................................................................8
Participant Contacts ....................................................................................................................................................8
Facility Component Ownership ................................................................................................................................8
V. PRIMARY OPERATOR ........................................................................................................................9
Turnover and Assumption of Responsibilities/Sustainability ..............................................................................9
Staffing and Training...................................................................................................................................................9
Financial Responsibilities ...........................................................................................................................................10
Operations and Maintenance Guidelines .................................................................................................................10
Renewal and Replacement Guidelines .....................................................................................................................12
Audits and Reporting ..................................................................................................................................................12
VI. SECONDARY OPERATOR ...................................................................................................................13
VII. INSURANCE ...........................................................................................................................14
VIII. REGULATORY COMPLIANCE .............................................................................................................15
IX. FINANCIAL INFORMATION ...............................................................................................................16
Key Financial Assumptions .......................................................................................................................................16
Key Operating Assumptions .....................................................................................................................................16
Bulk Fuel Facility Funding .........................................................................................................................................17
Subsequent Operating Year Revisions .....................................................................................................................17
TABLES
Table A: Summary of Facility Expenses to Participant ........................................................................................18
Table B: Participant Allocation ................................................................................................................................19
Table C: Annual O&M Costs ...................................................................................................................................19
Table D: 40 Year O&M Cashflow ...........................................................................................................................20
Table E: 40 Year R&R Schedule ..............................................................................................................................21
Table F: 40 Year R&R Cashflow .............................................................................................................................22
Table G: Loan Schedule ............................................................................................................................................24
APPENDIX A: PRIMARY OPERATOR STATEMENT OF QUALIFICATION
APPENDIX B: O&M AND R&R COST ESTIMATE
ADDITIONAL RELATED AND ATTACHED DOCUMENTS
1. SECONDARY OPERATOR AGREEMENT
2. SITE CONTROL DOCUMENTS
3. GRANT AGREEMENT
4. R&R FUND ACCOUNT -- SAMPLE DOCUMENTS
I. EXECUTIVE SUMMARY
This Business Operating Plan (the “Plan”) provides a guideline for the City of Larsen Bay’s (City)
maintenance, operation and sustainability of a new Bulk Fuel Storage Facility (the “Facility”).
The City will be responsible to maintain and sustain the Facility. Therefore, a critical concern for
the City is the ongoing sustainability of the newly installed Facility. This Plan has been developed to
assist the City with that effort: it estimates operation and maintenance needs and costs, estimates
renewal and replacement needs and costs, and a per gallon surcharge for fuel.
The Bulk Fuel Upgrade Project will construct a new Bulk Fuel Storage Facility in Larsen Bay that
will replace all of the existing storage facilities of the City. The City will utilize its Facility assets to
operate City owned utilities and directly retail fuel.
The Facility will be turned over to the Primary Operator after the satisfactory completion, as
determined by AEA or its representative, of a 14-day test period. After this test period, AEA will
provide written notice (Certificate of Substantial Completion) stating that the Facility is ready for
Beneficial Occupancy. Upon receipt of this Certificate, the City will become the Primary Operator
and will assume responsibility for the use, day-to-day operations, and long-term maintenance of all
Facility components, except those noted elsewhere in the Plan. When the project has been
completed (the Facility is complete, crews have demobilized, invoices have been paid and there are
no outstanding issues), the AEA will issue through its Grants Manager a Certificate of Project
Completion. This Certificate is included in the Grant Agreement; see Additional Related and Attached
Documents.
This Plan focuses on wholesale operations only. Additional costs that will be borne by the end-user
include fuel costs and other retail operation and maintenance costs (defined later in this Plan).
These additional costs are not part of this Plan. See Table A: Summary of Facility Expenses to Participant
for the estimated per gallon fuel surcharge.
Document Interrelationships
The Business Operating Plan is a plan, not an agreement. Attached to this Plan are four documents:
• Secondary Operator Agreement
• Site Control Documents
• Grant Agreement
• R&R Fund Account – Sample Documents
The Secondary Operator Agreement references the Plan, and includes language requiring the Plan be
followed. The Plan takes effect after this agreement is executed. Acceptance of the Plan by
execution of the Secondary Operator Agreement is pre-requisite to funding from the Denali
Commission (the “Commission”), which will be provided through a separate Grant Agreement (See
Attachments).
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Bulk Fuel Facility Business Operating Plan
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II. BACKGROUND
The Denali Commission was established by the Federal Government to fund improvement projects
within the State of Alaska, including the Bulk Fuel Upgrade Project. The Alaska Energy Authority is
a state-owned corporation that assists in the development of safe, reliable, and environmentally
sound energy systems for Alaska’s communities. AEA will coordinate the planning, construction
and funding of the City of Larsen Bay Bulk Fuel Facility, which is to be partially funded by the
Commission.
The village of Larsen Bay is located on the northwest coast of Kodiak Island and is a traditional
Alutiiq settlement, which practices a commercial fishing and subsistence lifestyle. The economy of
Larsen Bay is primarily based on fishing and employment at Kodiak Salmon Packers.
Transportation to the village is by air or water year-round, with regular and charter flights available
from Kodiak. There is a state-owned lighted 2,700’ gravel airstrip and a seaplane base. Docking
facilities are available and the Corps of Engineers began construction of a breakwater and boat
harbor in the summer of 1997. A cargo barge arrives every six weeks from Seattle.
Water is supplied to Larsen Bay by an infiltration gallery on Humpy Creek and is treated and stored
in a 50,000-gallon wood stave tank. All 40 homes are connected to the piped water system and a
community septic tank with outfall lines; the majority of homes are fully plumbed. A new 200,000-
gallon water storage tank is needed due to significant leakage in the existing tank. Weekly refuse
collection services are provided and the community uses an incinerator. The City provides most
utility services; operating the water utility, sewer utility, refuse collection and electric utility.
Selected demographic and historical data for the community is provided below:
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Bulk Fuel Facility Business Operating Plan
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Selected Statistics – Larsen Bay
Population
2000 115
1990 147
1980 168
1970 109
1960 72
1950 53
Housing (2000 Data)
Occupied Housing 40
Vacant Housing Due to Seasonal Use 28
Other Vacant Housing 2
Economic Data (2000 Data)
Unemployment Rate 10.26%
Median Household Income $40,833
III. FACILITY UPGRADE
•
•
The Bulk Fuel Upgrade (BFU) Project will construct a new Bulk Fuel Storage Facility in Larsen Bay
that will replace all of the existing storage facilities of the City (the “Participant”).
Bulk Fuel Storage Facility Description
The AEA contracted with HDR Alaska, Inc. to develop a Draft Conceptual Design Report (CDR),
which was submitted to AEA on July 2000, and contracted with LCMF, Inc. to update the CDR on
February 2001 and, subsequently, revised designs in May 2002 and July 2003. The purpose of these
efforts is to provide a concept design and construction cost estimate for consolidation and upgrade
of bulk fuel storage in the community, which are referenced in this Plan. This Plan is predicated
upon the information contained in the preliminary designs and its acceptance by the community.
The new Facility will be located adjacent to the existing City bulk fuel facility at a location near the
outskirts of the City, and a new marine header will be located near the small boat harbor.
Project Exclusions
The BFU project does not include the following:
Decommissioning of existing tanks or environmental cleanup
Retail business: including licenses, revenue, prices, taxes, profits, or contributions to the
wholesale fuel storage program
The AEA and the Commission will not provide any guarantees, warrantees or ongoing support,
other than that which is defined in the Plan. However, manufacturer warranties will be transferred
at the time of project turnover (defined in Section V. Primary Operator).
See the following diagrams for the details of the Facility:
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Bulk Fuel Facility Business Operating Plan
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Tank Farm Layout
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Bulk Fuel Facility Business Operating Plan
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Site Plan
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Storage Facility Capacity
The following table provides a summary of the tankage, by type of fuel (obtained from the Facility
designs), which will be included in the Facility upgrade:
Facility Components & Capacities
Primary
Storage/Dispensing
Number
Gallons
Per Tank
(Gross)
Total
Gallons
(Gross)
Gallons
Per Tank
(Net)
Total
Gallons
(Net)
City
# 2 Diesel
Primary Storage 3 25,000 75,000 22,500 67,500
Dispensing *1 1,500 1,500 1,500 1,500
Subtotal Diesel 4 76,500 69,000
Heating Oil
Primary Storage +1 10,000 10,000 9,000 9,000
Subtotal Heating Oil 1 10,000 9,000
Gasoline
Primary Storage 1 25,000 25,000 22,500 22,500
Primary Storage +1 15,000 15,000 13,500 13,500
Dispensing *1 1,500 1,500 1,500 1,500
Subtotal Gasoline 3 41,500 37,500
Total Primary
Storage/Dispensing
6 128,000 115,500
Pipeline Components Number
Marine header 1
Filler pipelines (From header
to facility)
2
Marine dispenser on dock 1
Retail Dispenser 1
Dual-fuel retail dispenser 1
* One Tank with dual capacity for dispensing diesel and gasoline.
+ One Tank with dual storage capacity for heating oil and gasoline.
The Facility’s storage capacity is similar to its present usage. However, if annual fuel requirements
increase to levels above planned storage capacity, multiple fuel deliveries can be made each year.
IV. FACILITY PARTICIPANTS
The Facility participant is:
City of Larsen Bay
Primary Contact Name: Allen Panamaroff, Mayor
Phone: (907) 847-2211 Fax: (907) 847-2239
Address: City of Larsen Bay
P.O. Box 8, Larsen Bay, AK 99624
Usage: The City will utilize its Facility assets to operate its utilities and to retail fuel.
Facility Component Ownership
The City owns 100% of the Facility, and is responsible for the Operation and Maintenance
(“O&M”) and Renewal and Replacement (“R&R”) of the Facility and all associated costs.
The Larsen Bay BFU Facility is organized as follows:
1. Land: The proposed fuel storage facilities will be located on land owned by the City of
Larsen Bay and, therefore, a land lease will not be needed.
2. Pipeline Easements/Right of Ways: The City of Larsen Bay owns the land required for
the upland portion of the Facility pipeline, and has been granted management authority
by the State of Alaska for the tide and submerged land needed for the remainder of the
pipeline.
3. Primary Operator: The City of Larsen Bay will be the Primary Operator (PO). The
Denali Commission will select a Secondary Operator if the PO does not perform per this
Plan. The PO will take care of the O&M (annual operations and maintenance, training,
testing, etc) and R&R of common facilities.
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Bulk Fuel Facility Business Operating Plan
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V. P RIMARY OPERATOR
The Primary Operator for the City of Larsen Bay Bulk Fuel Storage Facility is the City. A detailed
statement of qualification for the Primary Operator is included as Appendix A: Primary Operator
Statement of Qualification.
Turnover and Assumption of Responsibilities/Sustainability
The Facility will be turned over to the Primary Operator after the satisfactory completion, as
determined by AEA or its representative, of a 14-day test period. After this test period, AEA will
provide written notice (Certificate of Substantial Completion) stating that the Facility is ready for
Beneficial Occupancy. Upon receipt of this Certificate, the City will become the Primary Operator
and will assume responsibility for the use, day-to-day operations, and long-term maintenance of all
Facility components, except those noted elsewhere in the Plan.
When the project has been completed (the Facility is complete, crews have demobilized, invoices
have been paid and there are no outstanding issues), the AEA will issue through its Grants Manager
a Notice of Project Completion. This Notice is included in the Grant Agreement; see Additional
Related and Attached Documents.
The Primary Operator is responsible for the long-term sustainability of the Facility for the benefit of
the local community. The complete Facility will be maintained according to guidelines outlined in
this Plan, all manufacturers’ recommendations for maintenance, and all state and federal laws, codes
and regulations governing operation. The Primary Operator is responsible for the transfer of fuel
and no costs for this activity are included in the Plan.
The Primary Operator is responsible to establish and manage accounts for O&M and R&R to
ensure that sufficient financial resources exist to sustain the Facility as specified in the Plan.
Staffing and Training
The Primary Operator will designate an Operations and Maintenance Manager (the “Manager”) for
the Facility. The Manager will be the point of contact for communications between the Primary
Operator, the Commission and all other interested parties. The Primary Operator will name the
Manager prior to the start of operation and will inform the Commission in a timely fashion
whenever a Manager is to be replaced. The Manager will manage the Primary Operator 's
enterprises and will be given complete responsibility for operating the Facility in compliance with
this Plan.
It is recognized that there will be, from time to time, turnover in various operational, maintenance
and administrative positions. Because all functions are essential to the successful operation of the
Facility, replacements will be recruited and trained as necessary. The Manager will be responsible
for maintaining adequate staffing and training at all times. When the Primary Operator lacks trained
operators and administrative staff, training will be obtained to ensure sustained Facility operation.
The Primary Operator will utilize training programs offered by AEA, the Alaska Vocational
Technical Center (AVTEC) in Seward, the Commission and other training programs.
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Facility Business Operating Plan
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Financial Responsibilities
There are two cost categories that will be incurred in the ongoing operation and upkeep of the
Facility – O&M and R&R.
The Primary Operator will incur a number of expenses relating to the O&M of the Facility. O&M
items are defined as expenses that are incurred on a regular basis (administration, audits, etc) and
maintenance expenses that are incurred on an annual basis. O&M expenses are detailed in Table C:
Annual O&M Costs and a narrative detail is provided in Section IX: Financial Information to address
estimates and assumptions.
R&R costs are those expenses defined as items costing greater than $5,000 and/or that are not
replaced on an annual basis. Table E: 40 Year R&R Schedule details the anticipated items, the
frequency of their replacement and their present day value.
The Primary Operator will maintain separate O&M and R&R accounts and will maintain a sufficient
account balance to meet the O&M and R&R financial goals in this Plan. The O&M account may be
an active non-interest bearing account, while the R&R account must be an interest-bearing, managed
savings account, which requires two signatories and a community resolution for withdrawals, until
such time as the cash balance makes an escrow account more cost effective; then the R&R account
must be transferred to an interest-bearing invested escrow account that is acceptable to the Denali
Commission. The Manager will be authorized to draw against the O&M funds for routine expenses
of the Facility, however individual expenditures in excess of $5,000 will require the authorization of
the Primary Operator’s management or governing body. See Appendix A: Primary Operator Statement
of Qualification for an overview of the Primary Operator’s fiscal controls and accounting procedures.
At least once a year, no later than May 31, the Primary Operator will develop a budget for the
upcoming fiscal year, July 1 through June 30, for both O&M and R&R.
Operations and Maintenance Guidelines
The Primary Operator will establish an active non-interest bearing account for the Facility O&M so
that the O&M schedule can be completed and the Facility operations can be sustained into the
future. Section IX: Financial Information provides Table C: Annual O&M Costs as a guide to plan for
annual maintenance activities and Table D: 40 Year O&M Cashflow as a guide to estimated yearly
O&M required contributions. These costs are based upon the O&M cost estimate provided by
HMS, Inc, see Appendix B: O&M and R&R Cost Estimate.
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Bulk Fuel Facility Business Operating Plan
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Participants’ Operation and Maintenance Responsibilities
Operational
Responsibilities
City NA Cost
Pipelines
Diesel Filler Pipelines
Marine Header – City Manifolds x City
City Manifold – City Tanks x City
Gasoline Filler Pipeline
Marine Header – City Tanks x City
Heating Oil Filler Pipeline
Marine Header – City Tanks x City
Tank Interconnections
City – City x City
Dispenser Pipelines
City Tank – Diesel Dispenser x City
City Tank – Gas Dispenser x City
Tanks/Foundations
City Primary Tanks x City
City Dispensing Tanks x City
Dispensing Pumps
City Gasoline Pump x City
City Diesel Pump x City
Support
Dikes x City
Fence x City
Footprint x City
Electricity
Lights x City
City Distribution Pumps x City
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Bulk Fuel Facility Business Operating Plan
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Renewal and Replacement Guidelines
The Primary Operator will establish an interest bearing escrow managed renewal and replacement
account acceptable to the Denali Commission, which will ensure capitalization of an amount
sufficient to maintain the R&R Schedule (see R&R Fund Account – Sample Documents for “How to
Establish a R&R Account”). It is assumed that the R&R activities for Year 20 will be funded 40%
from the R&R account and 60% from debt financing, at 5.5% over 10 years. Section IX: Financial
Information provides Table E: 40 Year R&R Schedule as a guide to plan for annual R&R activities,
Table F: 40 Year R&R Cashflow as a guide to estimated yearly R&R required contributions, and Table
G: Loan Schedule as a guide to Year 20 R&R loan assumptions and payment schedules. These costs
are based upon the R&R cost estimate provided by HMS, Inc, see Appendix B: O&M and R&R Cost
Estimate.
The Primary Operator will periodically remit R&R funds to the administrator of its R&R escrow
account according to guidelines to be established by the Denali Commission. Management and
other fees charged by the escrow fund administrator will be automatically deducted from the
Primary Operator’s R&R escrow account, according to an Escrow Agreement or other similar
document.
The Primary Operator will use the estimates in this Plan for year one contributions, and in
subsequent years will recalculate contributions based upon assets to be maintained as actually built.
Audits and Reporting
The Primary Operator will arrange for an annual financial reconciliatory audit that is conducted by
qualified, independent auditors at their office. The auditors will not travel to Larsen Bay unless the
Primary Operator requests an on-site audit. The Primary Operator will provide an annual report of
operations to the Commission that includes a summary description of O&M and R&R projects,
annual O&M and R&R budgets and expenditures, a projection of future O&M and R&R cash flows,
and any other information appropriate to the Facility. The Commission will review the reports and
the annual financial reconciliatory audits of Facility operations and will actively monitor the Primary
Operator’s ability to operate consistent with guidelines outlined in this Plan. The Commission has
reserved the right to visit the site and to access all books and records related to the Facility at any
time upon written request.
VI. SECONDARY OPERATOR
The Secondary Operator for the Larsen Bay Bulk Fuel Facility project will be determined in the
future by the Denali Commission, if the need arises. See the attached Secondary Operator
Agreement for details.
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Bulk Fuel Facility Business Operating Plan
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VII. INSURANCE
The Primary Operator is required to be insured for General Liability Insurance, which will be
included in the annual O&M costs. Currently, the City is insured, for its bulk fuel facility, through
the Alaska Municipal League Joint Insurance Association (AMLJIA), Inc., Policy # GP 2002-062,
for General Liability coverage of up to $10.25 million per occurrence at an annual cost of $459. It is
anticipated, by the AMLJIA, Inc., that the cost of this insurance will increase by up to 30% over the
next 12 months. Therefore, initial annual costs for General Liability Insurance have been estimated
to be $600 per year.
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Bulk Fuel Facility Business Operating Plan
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VIII. REGULATORY COMPLIANCE
•
The Primary Operator is responsible for ensuring the operation and maintenance of the storage
tanks and transfer systems that they own and operate are compliant with state and federal
requirements. The Primary Operator shall comply with the procedures established in the spill
prevention and response plans listed below and will maintain and be familiar with the following
regulatory plans:
US Coast Guard Facility Response Plan (33 CFR Part 154)/EPA Facility Response Plan
(40 CFR Part 112) – This plan establishes spill response procedures and organization for
the tank farm. It commits the Participant to maintain adequate spill response equipment
and to conduct annual training and drill programs.
• US Coast Guard Operations Manual (33 CFR Past 154) – This plan describes the
required procedures to be followed by the Participant when off-loading fuel from marine
vessels to the tank farm.
• US Environmental Protection Agency (EPA) Spill Prevention Control and
Countermeasures Plan (SPCC) (40 CFR Part 112) – This plan confirms compliance of
the Facility with the spill prevention and operating requirements of 40 CFR Part 112. A
Registered Professional Engineer must certify the plan.
These plans include commitments and guidelines for spill prevention, response, and other related
environmental information to ensure the environmental integrity of the Facility and the community.
The plans will be developed near the end of tank farm construction. The Primary Operator will
participate in development and review of the plans as requested. Estimated expenses have been
provided herein and include the anticipated costs of implementing the plans, ensuring the reliability
of the spill response equipment, maintaining the proper records, and conducting periodic spill drills.
The Primary Operator shall ensure the plans are approved, maintained, and updated in accordance
with Coast Guard and EPA requirements described in the plans.
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Bulk Fuel Facility Business Operating Plan
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IX. FINANCIAL INFORMATION
All estimates and assumptions contained in this Plan are preliminary and are anticipated to change as
the project progresses. Actual expenses may vary throughout the life of the Facility and these
estimates should not be considered final.
Key Financial Assumptions
•
•
•
•
•
•
•
•
•
•
•
Annual inflation rate of 1.5%.
Annual investment rate of 3%.
Annual General Liability insurance is estimated to be $600, based upon current coverage.
Year 20 R&R activities will be funded 40% from the Primary Operator’s R&R account
and 60% from debt financing, at 5.5% over 10 years.
R&R funds may be deposited into an interest bearing invested escrow account. Fees are
assumed to be 1%, beginning when the account balance is estimated to reach $100,000.
Detailed assumptions regarding labor rates, required labor hours, and other operating
costs are provided in the tables that follow.
Existing debt, or other obligations, of the bulk fuel Facility are not included in this Plan.
Key Operating Assumptions
Throughput – The annual estimated gallons of fuel that will flow through the Facility.
Initial annual throughput estimates: 179,000 gallons of diesel, heating oil and gasoline.
Throughput is estimated to grow annually at a rate of .5%.
Retail operations, or its profits, are not included in the Plan.
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Facility Business Operating Plan
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Bulk Fuel Facility Funding
This Plan is not a commitment to provide project funding; however, it is anticipated that project
funding will be provided by the State of Alaska and the Denali Commission.
Subsequent Operating Year Revisions
Starting with the second year, as operating experience specific to this Facility is obtained, the
projections and assumptions upon which the Plan is based will be reviewed and modified. The
following guidelines are for use in subsequent operating years in updating and modifying Plan
projections and assumptions:
Step 1: Review previous years’ O&M and R&R costs and compare to current projections
Step 2: Adjust O&M and R&R projections and assumptions based upon actual experience
Step 3: Recalculate City per gallon O&M costs based upon updated throughput estimates
Step 4: Recalculate City per gallon R&R costs based upon updated throughput estimates
Step 5: Recalculate total City per gallon fuel costs
TABLE ASummary of Facility Expenses to Participant Annual Payments$$ Per GallonAnnual Payments$$ Per GallonTotal PaymentsTotal Per GallonAnnual Payments$$ Per GallonAnnual Payments$$ Per GallonTotal PaymentsTotal Per GallonAnnual Payments$$ Per GallonAnnual Payments$$ Per GallonTotal PaymentsTotal Per Gallon1 12,598$ 0.070$ 27,745$ 0.155$ 40,343$ 0.225$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2 12,787$ 0.071$ 28,302$ 0.157$ 41,089$ 0.228$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 3 12,979$ 0.072$ 28,870$ 0.160$ 41,849$ 0.231$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 4 13,173$ 0.073$ 29,450$ 0.162$ 42,623$ 0.235$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 5 13,371$ 0.073$ 30,041$ 0.165$ 43,412$ 0.238$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 6 13,571$ 0.074$ 30,644$ 0.167$ 44,215$ 0.241$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 7 13,775$ 0.075$ 31,259$ 0.169$ 45,034$ 0.244$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 8 13,982$ 0.075$ 31,887$ 0.172$ 45,868$ 0.247$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 9 14,191$ 0.076$ 32,527$ 0.175$ 46,718$ 0.251$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 10 14,404$ 0.077$ 33,180$ 0.177$ 47,584$ 0.254$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 11 14,620$ 0.078$ 33,846$ 0.180$ 48,466$ 0.258$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 12 14,840$ 0.078$ 34,525$ 0.183$ 49,365$ 0.261$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 13 15,062$ 0.079$ 35,218$ 0.185$ 50,281$ 0.265$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 14 15,288$ 0.080$ 35,925$ 0.188$ 51,214$ 0.268$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 15 15,517$ 0.081$ 36,647$ 0.191$ 52,164$ 0.272$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 16 15,750$ 0.082$ 37,382$ 0.194$ 53,133$ 0.275$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 17 15,986$ 0.082$ 38,133$ 0.197$ 54,119$ 0.279$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 18 16,226$ 0.083$ 38,898$ 0.200$ 55,125$ 0.283$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 19 16,470$ 0.084$ 39,679$ 0.203$ 56,149$ 0.287$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 20 16,717$ 0.085$ 40,476$ 0.206$ 57,192$ 0.291$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 21 16,967$ 0.086$ 41,288$ 0.209$ 58,256$ 0.295$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 22 17,222$ 0.087$ 42,117$ 0.212$ 59,339$ 0.299$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 23 17,480$ 0.088$ 42,963$ 0.215$ 60,443$ 0.303$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 24 17,743$ 0.088$ 43,825$ 0.218$ 61,568$ 0.307$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 25 18,009$ 0.089$ 44,705$ 0.222$ 62,714$ 0.311$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 26 18,279$ 0.090$ 45,602$ 0.225$ 63,881$ 0.315$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 27 18,553$ 0.091$ 46,518$ 0.228$ 65,071$ 0.319$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 28 18,831$ 0.092$ 47,452$ 0.232$ 66,283$ 0.324$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 29 19,114$ 0.093$ 48,404$ 0.235$ 67,518$ 0.328$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 30 19,400$ 0.094$ 49,376$ 0.239$ 68,776$ 0.332$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 31 19,691$ 0.095$ 50,367$ 0.242$ 70,059$ 0.337$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 32 19,987$ 0.096$ 51,378$ 0.246$ 71,365$ 0.342$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 33 20,287$ 0.097$ 52,410$ 0.250$ 72,696$ 0.346$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 34 20,591$ 0.098$ 53,462$ 0.253$ 74,053$ 0.351$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 35 20,900$ 0.099$ 54,535$ 0.257$ 75,435$ 0.356$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 36 21,213$ 0.100$ 55,630$ 0.261$ 76,843$ 0.361$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 37 21,531$ 0.101$ 56,747$ 0.265$ 78,278$ 0.365$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 38 21,854$ 0.102$ 57,886$ 0.269$ 79,740$ 0.370$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 39 22,182$ 0.103$ 59,048$ 0.273$ 81,230$ 0.375$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 40 22,515$ 0.104$ 60,233$ 0.277$ 82,748$ 0.381$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ R&R YearTotal NACity of Larsen BayNAO&M R&R Total R&R Total O&M O&M City of Larsen BayBulk Fuel Facility Business Operating PlanPage 18 of 25
TABLE BPARTICIPANT ALLOCATIONCity NA NA Total115,500 0 0 115,500100.0% 0.0% 0.0% 100%179,000 0 0 179,000Volumes100.0% 0.0% 0.0% 100%100.0% 0.0% 0.0% 100% TABLE CANNUAL O&M COSTSCity NA NA TotalAnnual O&M Expenses(per HMS cost estimate)11,648$ -$ -$ 11,648$ Common Power Costs( estimated based upon current)350$ -$ -$ 350$ Insurance(based on AML coverage estimate)600$ -$ -$ 600$ 12,598$ -$ -$ 12,598$ Percentage(based upon Primary Capacity)% Share of O&M and R&R on Common AssetsAnnual O&M CostsPrimary Capacity (Net)GallonsPercentageInitial Throughput GallonsCity of Larsen BayBulk Fuel Facility Business Operating PlanPage 19 of 25
TABLE D40 YEAR "O and M" CASHFLOW Initial Throughput - Gallons: Throughput Growth Rate:City0.50%City179,000 NA- Inflation Rate 1.5%NA- NA- NA- 1 12,598$ -$ -$ 12,598$ 179,000 - - 0.070$ -$ -$ 2 12,787$ -$ -$ 12,787$ 179,895 - - 0.071$ -$ -$ 3 12,979$ -$ -$ 12,979$ 180,794 - - 0.072$ -$ -$ 4 13,173$ -$ -$ 13,173$ 181,698 - - 0.073$ -$ -$ 5 13,371$ -$ -$ 13,371$ 182,607 - - 0.073$ -$ -$ 6 13,571$ -$ -$ 13,571$ 183,520 - - 0.074$ -$ -$ 7 13,775$ -$ -$ 13,775$ 184,438 - - 0.075$ -$ -$ 8 13,982$ -$ -$ 13,982$ 185,360 - - 0.075$ -$ -$ 9 14,191$ -$ -$ 14,191$ 186,287 - - 0.076$ -$ -$ 10 14,404$ -$ -$ 14,404$ 187,218 - - 0.077$ -$ -$ 11 14,620$ -$ -$ 14,620$ 188,154 - - 0.078$ -$ -$ 12 14,840$ -$ -$ 14,840$ 189,095 - - 0.078$ -$ -$ 13 15,062$ -$ -$ 15,062$ 190,040 - - 0.079$ -$ -$ 14 15,288$ -$ -$ 15,288$ 190,991 - - 0.080$ -$ -$ 15 15,517$ -$ -$ 15,517$ 191,945 - - 0.081$ -$ -$ 16 15,750$ -$ -$ 15,750$ 192,905 - - 0.082$ -$ -$ 17 15,986$ -$ -$ 15,986$ 193,870 - - 0.082$ -$ -$ 18 16,226$ -$ -$ 16,226$ 194,839 - - 0.083$ -$ -$ 19 16,470$ -$ -$ 16,470$ 195,813 - - 0.084$ -$ -$ 20 16,717$ -$ -$ 16,717$ 196,792 - - 0.085$ -$ -$ 21 16,967$ -$ -$ 16,967$ 197,776 - - 0.086$ -$ -$ 22 17,222$ -$ -$ 17,222$ 198,765 - - 0.087$ -$ -$ 23 17,480$ -$ -$ 17,480$ 199,759 - - 0.088$ -$ -$ 24 17,743$ -$ -$ 17,743$ 200,758 - - 0.088$ -$ -$ 25 18,009$ -$ -$ 18,009$ 201,762 - - 0.089$ -$ -$ 26 18,279$ -$ -$ 18,279$ 202,770 - - 0.090$ -$ -$ 27 18,553$ -$ -$ 18,553$ 203,784 - - 0.091$ -$ -$ 28 18,831$ -$ -$ 18,831$ 204,803 - - 0.092$ -$ -$ 29 19,114$ -$ -$ 19,114$ 205,827 - - 0.093$ -$ -$ 30 19,400$ -$ -$ 19,400$ 206,856 - - 0.094$ -$ -$ 31 19,691$ -$ -$ 19,691$ 207,891 - - 0.095$ -$ -$ 32 19,987$ -$ -$ 19,987$ 208,930 - - 0.096$ -$ -$ 33 20,287$ -$ -$ 20,287$ 209,975 - - 0.097$ -$ -$ 34 20,591$ -$ -$ 20,591$ 211,025 - - 0.098$ -$ -$ 35 20,900$ -$ -$ 20,900$ 212,080 - - 0.099$ -$ -$ 36 21,213$ -$ -$ 21,213$ 213,140 - - 0.100$ -$ -$ 37 21,531$ -$ -$ 21,531$ 214,206 - - 0.101$ -$ -$ 38 21,854$ -$ -$ 21,854$ 215,277 - - 0.102$ -$ -$ 39 22,182$ -$ -$ 22,182$ 216,353 - - 0.103$ -$ -$ 40 22,515$ -$ -$ 22,515$ 217,435 - - 0.104$ -$ -$ NA NACityPer Gallon O&M PaymentCity NA NAYear Total Annual O&M ExpenseCity NA NACity of Larsen BayBulk Fuel Facility Business Operating PlanPage 20 of 25
TABLE E40 YEAR "R and R" SCHEDULE5 Repair Enclosure 4,632$ 4,916$ 4,916$ -$ -$ Inflation Rate1.5%Electrical Upgrade 3,100 3,290 8,206$ 3,290 - - 10 Fence Upgrade 3,434$ 3,927$ 3,927$ -$ -$ Pad Upgrade 8,548 9,773 9,773 - - Pump Replacement 13,414 15,337 15,337 - - Valve Replacement 3,350 3,830 3,830 - - Repair Fill Lines 3,294 3,766 3,766 - - Electrical Upgrade 3,100 3,545 3,545 - - Replace Dispensers 28,700 32,815 32,815 - - Tank Inspection 4,250 4,859 77,853$ 4,859 - - 15 Repair Enclosure 4,632$ 5,705$ 5,705$ -$ -$ R&R Activities: CostCity IntervalElectrical Upgrade 3,100 3,818 9,524$ 3,818 - - Category(Years)20 Fence Replacement 15,048$ 19,968$ 19,968$ -$ -$ Fence Upgrade B13,434$ 10/30Resurface Pad 17,483 23,199 23,199 - - Fence Replacement C115,048$ 20/40Replace Pig Catchers 30,550 40,538 40,538 - - Pad Upgrade B18,548$ 10/30Pump Replacement 13,414 17,800 17,800 - - Resurface Pad C117,483$ 20/40Valve Replacement 3,350 4,445 4,445 - - Repair Enclosure B14,632$ 5/15/25/35Major Electrical 39,050 51,817 51,817 - - Foundation/Liner C18,865$ 40Replace Dispensers 28,700 38,083 38,083 - - Pump Replacement B213,414$ 10/20/30/40Replace Pipelines 211,446 280,579 280,579 - - Valve Replacement B23,350$ 10/20/30/40Tank Inspection 4,250 5,640 482,069$ 5,640 - - Electrical Upgrade B33,100$ 5/10/15/25/30/3525 Repair Enclosure 4,632$ 6,621$ 6,621$ -$ -$ Major Electrical C339,050$ 20/40Electrical Upgrade 3,100 4,431 11,052$ 4,431 - - Replace Dispensers C228,700$ 10/20/30/4030 Fence Upgrade 3,434$ 5,289$ 5,289$ -$ -$ Replace Pig Catchers C230,550$ 20/40Pad Upgrade 8,548 13,163 13,163 - - Replace Tanks C2311,995$ 40Pump Replacement 13,414 20,657 20,657 - - Repair Fill Lines B23,294$ 10/30Valve Replacement 3,350 5,159 5,159 - - Replace Pipelines C2211,446$ 20/40Repair Fill Lines 3,294 5,073 5,073 - - Tank Inspection C24,250$ 10/20/30Electrical Upgrade 3,100 4,774 4,774 - - Replace Dispensers 28,700 44,197 44,197 - - Tank Inspection 4,250 6,545 104,857$ 6,545 - - 35 Repair Enclosure 4,632$ 7,684$ 7,684$ -$ -$ Variances from HMS Cost Estimate:Electrical Upgrade 3,100 5,143 12,827$ 5,143 - - 40 Fence Replacement 15,048$ 26,894$ 26,894$ -$ -$ Resurface Pad 17,483 31,245 31,245 - - Replace Pig Catchers 30,550 54,599 54,599 - - Foundation/Liner 8,865 15,843 15,843 - - Pump Replacement 13,414 23,974 23,974 - - Valve Replacement 3,350 5,987 5,987 - - Major Electrical 39,050 69,791 69,791 - - Replace Dispensers 28,700 51,293 51,293 - - Replace Tanks 311,995 557,601 557,601 - - Replace Pipelines 211,446 377,899 1,215,125$ 377,899 - - 1,210,297$ 1,921,512$ 1,921,512$ 1,921,512$ -$ -$ City NAYear of Activity R&R ActivityPresent Day ValueInflated ValueNAYearly Inflated TotalCost AllocationCity of Larsen BayBulk Fuel Facility Business Operating PlanPage 21 of 25
TABLE F40 YEAR RENEWAL AND REPLACEMENT CASHFLOW City Inflation Rate :1.50%Initial Cost per gallon ($/gallon) :0.155$ Reinvestment Rate :3.00%20 Year R&R:482,069$ Annual increase :1.50%Escrow Fees:1.00%20 Year Loan Proceeds:289,241$ City Initial Throughput (gallons) :179,000 NANA Initial Throughput (gallons) :- Initial Cost per gallon ($/gallon) :-$ Loan Rate:5.50%NA Initial Throughput (gallons) :- Annual increase :-$ Loan Term:10 YearsNAInitial Cost per gallon ($/gallon) :-$ Annual increase :-$ 1-$ 27,745$ -$ -$ 27,745$ -$ -$ 27,745$ 179,000 - - 0.155$ -$ -$ 2 27,745$ 28,302$ -$ -$ 28,302$ -$ 832$ 56,879$ 179,895 - - 0.157$ -$ -$ 3 56,879$ 28,870$ -$ -$ 28,870$ -$ 1,706$ 87,456$ 180,794 - - 0.160$ -$ -$ 4 87,456$ 29,450$ -$ -$ 29,450$ -$ 1,749$ 118,655$ 181,698 - - 0.162$ -$ -$ 5 118,655$ 30,041$ -$ -$ 30,041$ 8,206$ 2,209$ 142,698$ 182,607 - - 0.165$ -$ -$ 6 142,698$ 30,644$ -$ -$ 30,644$ -$ 2,854$ 176,196$ 183,520 - - 0.167$ -$ -$ 7 176,196$ 31,259$ -$ -$ 31,259$ -$ 3,524$ 210,980$ 184,438 - - 0.169$ -$ -$ 8 210,980$ 31,887$ -$ -$ 31,887$ -$ 4,220$ 247,086$ 185,360 - - 0.172$ -$ -$ 9 247,086$ 32,527$ -$ -$ 32,527$ -$ 4,942$ 284,554$ 186,287 - - 0.175$ -$ -$ 10 284,554$ 33,180$ -$ -$ 33,180$ 77,853$ 4,134$ 244,015$ 187,218 - - 0.177$ -$ -$ 11 244,015$ 33,846$ -$ -$ 33,846$ -$ 4,880$ 282,741$ 188,154 - - 0.180$ -$ -$ 12 282,741$ 34,525$ -$ -$ 34,525$ -$ 5,655$ 322,921$ 189,095 - - 0.183$ -$ -$ 13 322,921$ 35,218$ -$ -$ 35,218$ -$ 6,458$ 364,598$ 190,040 - - 0.185$ -$ -$ 14 364,598$ 35,925$ -$ -$ 35,925$ -$ 7,292$ 407,816$ 190,991 - - 0.188$ -$ -$ 15 407,816$ 36,647$ -$ -$ 36,647$ 9,524$ 7,966$ 442,905$ 191,945 - - 0.191$ -$ -$ 16 442,905$ 37,382$ -$ -$ 37,382$ -$ 8,858$ 489,145$ 192,905 - - 0.194$ -$ -$ 17 489,145$ 38,133$ -$ -$ 38,133$ -$ 9,783$ 537,061$ 193,870 - - 0.197$ -$ -$ 18 537,061$ 38,898$ -$ -$ 38,898$ -$ 10,741$ 586,700$ 194,839 - - 0.200$ -$ -$ 19 586,700$ 39,679$ -$ -$ 39,679$ -$ 11,734$ 638,113$ 195,813 - - 0.203$ -$ -$ 20 638,113$ 40,476$ -$ -$ 40,476$ 289,241$ 482,069$ 8,906$ 494,667$ 196,792 - - 0.206$ -$ -$ 21 494,667$ 41,288$ -$ -$ 41,288$ 38,373$ -$ 9,126$ 506,709$ 197,776 - - 0.209$ -$ -$ 22 506,709$ 42,117$ -$ -$ 42,117$ 38,373$ -$ 9,367$ 519,819$ 198,765 - - 0.212$ -$ -$ 23 519,819$ 42,963$ -$ -$ 42,963$ 38,373$ -$ 9,629$ 534,038$ 199,759 - - 0.215$ -$ -$ 24 534,038$ 43,825$ -$ -$ 43,825$ 38,373$ -$ 9,913$ 549,403$ 200,758 - - 0.218$ -$ -$ 25 549,403$ 44,705$ -$ -$ 44,705$ 38,373$ 11,052$ 10,000$ 554,682$ 201,762 - - 0.222$ -$ -$ 26 554,682$ 45,602$ -$ -$ 45,602$ 38,373$ -$ 10,326$ 572,238$ 202,770 - - 0.225$ -$ -$ 27 572,238$ 46,518$ -$ -$ 46,518$ 38,373$ -$ 10,677$ 591,060$ 203,784 - - 0.228$ -$ -$ 28 591,060$ 47,452$ -$ -$ 47,452$ 38,373$ -$ 11,054$ 611,193$ 204,803 - - 0.232$ -$ -$ 29 611,193$ 48,404$ -$ -$ 48,404$ 38,373$ -$ 11,456$ 632,680$ 205,827 - - 0.235$ -$ -$ 30 632,680$ 49,376$ -$ -$ 49,376$ 38,373$ 104,857$ 9,789$ 548,615$ 206,856 - - 0.239$ -$ -$ 31 548,615$ 50,367$ -$ -$ 50,367$ -$ 10,972$ 609,955$ 207,891 - - 0.242$ -$ -$ 32 609,955$ 51,378$ -$ -$ 51,378$ -$ 12,199$ 673,532$ 208,930 - - 0.246$ -$ -$ 33 673,532$ 52,410$ -$ -$ 52,410$ -$ 13,471$ 739,413$ 209,975 - - 0.250$ -$ -$ 34 739,413$ 53,462$ -$ -$ 53,462$ -$ 14,788$ 807,663$ 211,025 - - 0.253$ -$ -$ 35 807,663$ 54,535$ -$ -$ 54,535$ 12,827$ 15,897$ 865,268$ 212,080 - - 0.257$ -$ -$ 36 865,268$ 55,630$ -$ -$ 55,630$ -$ 17,305$ 938,203$ 213,140 - - 0.261$ -$ -$ 37 938,203$ 56,747$ -$ -$ 56,747$ -$ 18,764$ 1,013,714$ 214,206 - - 0.265$ -$ -$ 38 1,013,714$ 57,886$ -$ -$ 57,886$ -$ 20,274$ 1,091,874$ 215,277 - - 0.269$ -$ -$ 39 1,091,874$ 59,048$ -$ -$ 59,048$ -$ 21,837$ 1,172,760$ 216,353 - - 0.273$ -$ -$ 40 1,172,760$ 60,233$ -$ -$ 60,233$ 1,215,125$ -$ 17,868$ 217,435 - - 0.277$ -$ -$ Assumed Throughput (Gallons)City NA NAYear Renewals/Replacements Annual Deposit InterestEarnings (Net of Fees) Beg. ofYearBalance R & R Fund Balance City NA NA Total Per Gallon PaymentCity NA NA Principal Received Debt Service End ofYearBalance City of Larsen BayBulk Fuel Facility Business Operating PlanPage 22 of 25
TABLE GLoan Schedule Year 20 R&R Loan -CityPrincipal 289,241$ Term 10 YearsRate 5.5%Payment (38,372.99)$ Beginning Principal EndingYear Balance Interest Payment Payment Balance1 289,241.26$ 15,908.27$ ($38,372.99) 22,464.72$ 266,776.54$ 2 266,776.54$ 14,672.71$ ($38,372.99) 23,700.28$ 243,076.25$ 3 243,076.25$ 13,369.19$ ($38,372.99) 25,003.80$ 218,072.45$ 4 218,072.45$ 11,993.99$ ($38,372.99) 26,379.01$ 191,693.45$ 5 191,693.45$ 10,543.14$ ($38,372.99) 27,829.85$ 163,863.59$ 6 163,863.59$ 9,012.50$ ($38,372.99) 29,360.49$ 134,503.10$ 7 134,503.10$ 7,397.67$ ($38,372.99) 30,975.32$ 103,527.78$ 8 103,527.78$ 5,694.03$ ($38,372.99) 32,678.96$ 70,848.81$ 9 70,848.81$ 3,896.68$ ($38,372.99) 34,476.31$ 36,372.50$ 10 36,372.50$ 2,000.49$ ($38,372.99) 36,372.50$ (0.00)$ 94,488.67$ ($383,729.92) 289,241.26$ City of Larsen BayBulk Fuel Facility Business Operating PlanPage 24 of 25
APPENDIX A: PRIMARY OPERATOR STA T E M E N T O F QUA L I F I C A T I O N
The Primary Operator Statement of Qualification includes:
1. A description of the Primary Operator, its personnel and experience, and its
responsibilities and functions. This discussion includes a description of the ability and
history of the Primary Operator to operate a bulk fuel facility as a business and/or its
history of operating other business enterprises, as well as a description of the Primary
Operator’s fiscal controls and accounting procedures. This discussion details
organization history, management and structure; identification of key personnel, their
experience and responsibilities; and, proposed organization of bulk fuel facility
management and operations, including an organizational chart.
2. A description of the Primary Operator’s, if any, staffing or training needs.
3. A description of the training plan proposed by the Primary Operator to address current
and future needs.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Page 25 of 25
CITY OF LARSEN BAY
Overview
The City of Larsen Bay is the primary provider of basic services and governs the utilities, bulk fuel,
landfill, streets and roads, and all ordinances within the city boundaries. The City has been
incorporated since 1974 and the City Council consists of seven members elected for three year
staggered terms.
Larsen Bay is located on Larsen Bay, on the northwest coast of Kodiak Island. It is 60 miles
southwest of the City of Kodiak and 283 miles southwest of Anchorage. The area is believed to
have been inhabited for at least 2,000 years. Russian fur traders frequented the Island in the mid-
1,700’s. The present day Natives are Alutiiq (Russian-Aleuts). Alaska Packers Association built a
cannery in the village in 1911.
Larsen Bay is accessible by air and water. Regular and charter flights are available from Kodiak.
There is a State-owned lighted 2,700 foot gravel airstrip and a seaplane base. Docking facilities are
also available. A cargo barge arrives every six weeks from Seattle.
Commercial fishing, employment at Kodiak Salmon Packers, subsistence activities and government
employment are the economic mainstays of Larsen Bay. Very few sources of year-round
employment exist. The 2000 U.S. Census estimated 35 jobs in the community. The official
unemployment rate at that time was 10.26 percent and approximately 41.67 percent of all adults
were not in the work force. The median household income was $40,833.
The City of Larsen Bay has successfully administered and operated a wide variety of municipal
projects. The following table lists the City’s current programs:
SAMPLE CURRENT PROGRAMS
Social Programs:
Senior Center Building Provided
Community Services:
Water & Sewer/Solid Waste
Garbage Pickup/Landfill
Bulk Fuel Facility
Electric Utility Facility
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-1
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-2
Description of Business History
The City of Larsen Bay manages the following utilities and services: electric, fuel, septic pumping
services, sewer, refuse and landfill. Currently, community residents and organizations pay for all of
these services.
The City owns and operates the electric utility, Larsen Bay Utility Company, which supplies power
to residents, commercial users and community facilities. The City maintains the generator plant,
monitors electric meters at residences and commercial businesses, and collects electrical fees.
Currently, residents are paying 30.0 cents/kilowatt hour for their first 500 kilowatts with PCE.
Commercial businesses and those requiring greater than 500 kilowatts pay 40.0 cents/kilowatt with
PCE.
The City of Larsen Bay purchases fuel approximately three times a year from Petro Marine. Fuel is
purchased for approximately $1.491 per gallon/diesel (including excise taxes). Residents and
commercial businesses pay $1.741 per gallon/diesel. Gasoline is purchased for approximately
$1.685 per gallon (including excise taxes). Residents and commercial businesses pay $1.935 per
gallon. The City typically charges a 25 cent mark-up on all fuel sold. The City owns and operates a
fuel truck for delivering heating fuel to homes and organizations.
The City of Larsen Bay directly manages the community’s water/sewer and refuse collection
services. Currently, residents and community facilities pay $28.33 per month for these services.
While community senior residents pay a discounted fee of $14.17 per month for these same services.
Description of Fiscal Controls and Accounting Procedures
The mayor and project manager have the authority to submit check requests, which must have
supporting documents prior to being processed by the accounting clerks. All checks must be signed
by two of the council members. All council members have check signing authority. A copy of the
check is attached to the supporting documents and filed at the City office. The City operates on a
fiscal year beginning July 1 and ending June 30.
The City staff uses IBM compatible computers and the accounting clerks use the accounting
software program Quick Books Pro 2002.
Management and Structure
The Larsen Bay City Council consists of seven members, with Allen Panamaroff as Mayor. Below
are the names and titles of the Council’s 2003 Members and year their term ends.
CITY OF LARSEN BAY FY2003 - COUNCIL MEMBERS
Allen Panamaroff, Sr., Mayor (2004)
James Johnson (2007) Roy L. Jones, Jr., (2005)
Tim Carlson (2005)) Jack Wick (2007)
Brad Aga (2005) Neil Cheney (2004)
The following organizational chart shows the relationship between the various components of the
City’s overall structure. At the apex of management is a City Council, which is comprised of the
Mayor and Council Members, all representing the community of Larsen Bay.
CITY OF LARSEN BAY
ORGANIZATIONAL CHART
Bill ing Cl erk
Venessa Hochmuth
City Cl erk
Tammy Aga
Water/Sewer Facility Maintenance
Projects/Grants Electric Utility
Bulk Fuel
Project Manager
Mayor
Allen Panamaroff
City Council
Identification of Key Personnel
The Larsen Bay Bulk Fuel Facility will have overall direction from the City Council headed by Allen
Panamaroff, Council Member and Mayor. The Mayor currently fills the role of Project Manager.
See attached resumes.
Tammy Aga is responsible for payroll, accounts payable, accounts receivable, and for assisting with
tracking project expenses and preparing required project financial reports. See attached resume.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-3
Organization of Bulk Fuel Management and Operations
The following chart illustrates the staff relationships of the Larsen Bay Bulk Fuel Facility:
LARSEN BAY BULK FUEL FACILITY
PROJECT STAFFING
City Clerk
Ta mmy A g a
Primary Operator
Fa c ilit y Ma na g e r
Ma y o r
Allen Pa na maroff
City Council
Staff Training Needs
Below is an initial list of training and assistance the City has identified for staff:
• HAZWoper
• Oil Spill Response Training
• Bulk Fuel Operator Training
Proposed Training Plan
The City staff will coordinate HAZWoper, Oil Spill Response Training, and Bulk Fuel Facility
Operator Training as courses are offered by state agencies in the region.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-4
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-5
Additionally, the City will utilize training resources available through AEA and the Alaska
Vocational Technical Center to ensure proper training of its personnel. The following is a summary
of those resources:
• Alaska Energy Authority (AEA)
The Alaska Energy Authority has developed a series of courses relating specifically to Bulk
Fuel operations. These courses are taught through the Alaska Vocational Technical Center
(AVTEC) in Seward:
Phone: (907)-269-3000
Contacts
Bruce Tiedeman, Rural Energy Manager, Alaska Energy Authority/AIDEA
Address: 813 West Northern Lights Blvd., Anchorage, Alaska 99503
Phone: (907) 269-4641 Fax: (907) 269-3044
Web Address: www.aidea.org/training.htm
Email address: btiedeman@aidea.org
Dick Harrell, Instructional Administrator, Alaska Vocational Technical Center
Address: P.O. Box 889 ~ 809 2nd Avenue, Seward, Alaska 99664
Phone: (907)-224-4162 ~ 1-800-478-5389 ~ fax (907) 224-4144
Web Address: www.avtec.alaska.edu
Email: dick_harrell@educ.state.ak.us
Technical Assistance Provided
Facility Maintenance and Operations
Cost
The state will pay for transportation to and from your community to the Alaska Vocational
Technical Center (AVTEC) as well as lodging and $10 per meal allowance while in transit to
AVTEC. Furthermore, while at AVTEC the state will pay for tuition, deposit, room and
board and training related materials.
Currently, the primary bulk fuel training provided by AEA is:
Bulk Fuel Operator Training – This is a 2-week program that covers how to safely run a
tank system within a rural Alaskan community as well as covers information regarding the
Alaska Energy Authorities Bulk Fuel loan program and how to recognize deficient tank
systems.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-6
The following courses are anticipated for the future:
Itinerant Training – This course will provide follow-up onsite training following the
AVTEC Bulk Fuel Operator Training course. The Alaska Energy Authority (AEA) staff will
conduct all training. It is anticipated that 6 communities will be chosen as test sites or
demonstration projects.
Oil Spill Response Training – This course will be taught on-site and have the participation
of the Alaska Energy Authority (AEA), Department of Environmental Conservation (DEC),
Environmental Protection Agency (EPA) and the US Coast Guard. This course is
tentatively targeted to begin Summer-2002.
• Alaska Vocational Technical Center (AVTEC)
The Alaska Vocational Technical Center (AVTEC) is located in Seward Alaska
approximately 120 miles south of Anchorage via the Seward Highway. In addition to
offering onsite training and courses AVTEC staff also provide off-site training.
Contact
Admissions Office
Address: P.O. Box 889 ~ 809 2nd Avenue, Seward, Alaska 99664
Phone: (907)-224-4152 ~ 1-800-478-5389 ~ fax (907) 224-4143
Web Address: www.avtec.alaska.edu
Technical Assistance Provided
Skilled Labor
Business Administration
Facility Maintenance and Operations
Cost
Fees for courses vary based on the specific program. An estimated fee for various programs
has been included next to the listing of programs offered. The estimated fees include
tuition, activity fee, security deposit, room and board, and books and supplies. Broken out
these costs total - activity fee ($25), security deposit ($50), and room and board ($20/day).
The tuition, books and supplies vary in cost according to the course and course length.
The following programs and courses are offered relating to Skilled Labor:
Construction Machinery and Diesel Engine Technology – This program teaches
students the skills and competencies of servicing, maintaining, and repairing construction
machinery and diesel engines. Approximately 40 percent of the course is classroom
instruction with the remainder being shop work. Four certification levels can be obtained
within the program. The entire course will cost an estimated $7,280 and take approximately
40 weeks or 1379 hours.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-7
Basic course content includes: tire repair; basics of equipment operation; chassis
components; differentials; transmissions; brakes; electrical systems; hydraulic systems;
introduction to gas and arc welding; diesel engine operation and tuning; precision
measurement; disassembly and reassembly of diesel engines; fuel injection systems and
governors, including electronically injected diesels; mathematics; industrial first aid; job
search skills; and, shop safety.
Welding Technology – This program teaches students the skills necessary to successfully
pass the AWS-D1.1 Structural Certification Test and become employed in the welding and
fabrication industry. Certificates can be obtained in; Combination Welder, Welder SMAW,
Wire-Feed Welder, Aluminum Welder, and Welder Helper. The entire course will cost an
estimated $5,260 and take approximately 20 weeks or 700 hours.
Basic course content includes: O.A.W. (Oxyacetylene Welding); S.M.A.W. (Stick electrode);
G.M.A.W. (MIG); G.T.A.W. (TIG); shop safety; industrial first aid and CPR and job search
skills.
Industrial Electricity – This program prepares students for entry-level positions in the field
of industrial electricity. The course is broken into three parts; classroom presentation,
experimental lab work, and electrical maintenance shop work. Four certificates can be
obtained, Industrial Controls Technician, Industrial Electrical Technician, Electrical
Apprentice, and Electrical Helper. The entire course will cost an estimated $8,175 and can
take up to 40 weeks or 1400 hours depending on the certification level.
Basic course content includes: electrical theory and wiring practices; electrical construction
and national electrical code, industrial process automation, and job search and interview
skills.
The following program and courses are offered relating to Business Administration:
Business and Office Technology – This program is an individualized, self-paced program.
The following certificate levels can be obtained within the program, Accounting Clerk,
Administrative Assistant, General Business/Office Assistant, and Business/Office Clerk.
The entire course will cost an estimated $6,855 and take approximately 35 weeks or 1225
hours.
Basic course content includes: Computer operations and software applications; Keyboarding
and document processing; Proofreading and editing; Office procedures and office machines;
Machine transcription; Accounting and record keeping; Business English and mathematics;
Job and interview preparation; and, Internship training.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-8
The following programs are offered relating to Facility Maintenance and Operations:
Facility Maintenance/Construction Trades – This program prepares students for
installation, maintenance, service, repair and diagnostics to maintain installations and repair
numerous types of facility equipment. Approximately 50 percent of the course is classroom
instruction with the remainder being hands on training. Two certificates can be obtained:
Building Maintenance Repairer and Building Maintenance Repairer Helper. The entire
course will take approximately 38 weeks or 1316 hours.
The main courses of study are carpentry, plumbing, heating and electrical. Basic course
content includes: Carpentry (blueprint reading, power tools and hand tools, framing,
sheetrock, structural repair, foundations); Plumbing (names of fittings, join pipe, repair and
replace fixtures); Heating (proper cleaning, troubleshooting, preventative maintenance); and,
Electrical (electrical theory, residential wiring, electrical troubleshooting, national electrical
code, blueprints, schematics).
Facility Maintenance/Mechanical – This program prepares students for installation,
maintenance, service, repair and diagnostics of HVAC/R equipment. Approximately 45
percent of the course is classroom instruction with the remainder being hands on training.
Six certificates can be obtained: Plumbing and Heating Technician; Plumbing and Heating
Repairer; Plumbing and Heating Assistant Repairer; HVAC/R Technician; HVAC/R Unit
Repairer; HVAC/R Helper. The entire course will take approximately 36 weeks or 1260
hours.
Basic course content includes: electrical theory; troubleshooting and repair; reading
blueprints and schematics; electrical circuits and controls; testing circuits, system design;
retrofitting systems; heat loads; installation techniques; heat pumps; oil, gas and kerosene
heating systems; domestic refrigerators and freezers; small hermetic systems; refrigeration
systems; heating and cooling systems; introductions to carpentry, residential wiring and
computers, and industrial first aid.
Power Plant Operation – This program prepares students for employment within a power
plant. Approximately 60 percent of the course is spent operating and maintaining diesel
generator sets representative of installations in rural Alaska with the remainder of time spent
in classroom instruction. Certificates can be obtained in Diesel Plant Operator and Assistant
Diesel Plant Operator. The entire course will cost an estimated $1,935 and take
approximately 8 weeks or 280 hours.
Basic course content includes: engine theory, maintenance, and troubleshooting; electrical
system theory maintenance and troubleshooting; generator theory and maintenance;
introduction to electrical distribution systems; operation of diesel electric sets; control
panels; paralleling generator sets; load management; fuel management; waste heat recovery;
plant management skills; power plant safety; industrial first aid and CPR; and job search
skills.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-9
RESUMES/JOBS DESCRIPTION
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-10
City of Larsen Bay
PO Box 8
Larsen Bay, Alaska 99624
Work 907-847-2211
Fax 907-847-2239
Email: cityoflarsenbay@aol.com
Allen Panamaroff
Employment City of Larsen Bay
December, 1997-Present - Mayor
Previous Experience Kodiak Area Native Association, Board Member
Karluk IRA Council, President/Council Member
Commercial Fisherman, Summers
Education/Training United States Navy (1966-1970)
University Alaska Fairbanks (1964-1966)
Associate of Arts, Electronic Technology
Mt. Edgecomb High School, 1964
Community Service Karluk River Management, Board Member
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-11
City of Larsen Bay
PO Box 8
Larsen Bay, Alaska 99624
Work 907-847-2211
Fax 907-847-2239
Email: cityoflarsenbay@aol.com
Tammy Aga
Employment City of Larsen Bay
January, 1998 – Present, City Clerk
City of Larsen Bay
August, 1991 – Present, City Water Operator
Uyak Bay Lodge (Owner/Operator)
1989 - Present
Previous Experience City of Larsen Bay
August, 1991 to January, 1998 – City Billing Clerk
Education/Training AEA – PCE Training/Utility Clerk Training
Village Management Institute – Accounting/Office Mngt. Courses
DCED/RUBA – Utility Management Training
AK Municipal Clerks Conference – Multi Year Participation
University of Northern Colorado, One year - General Ed.
Kodiak High School
Community Service Larsen Bay Advisory School Board, Member
Alutiiq Dance, Leader
Larsen Bay, Volunteer Fire Department, Member
Equipment IBM/Apple computers and various software packages
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-12
CITY OF LARSEN BAY
JOB DESCRIPTION
BULK FUEL FACILITY MANAGER
______________________________________________________________________________
Exempt (Y/N): No Salary:
Division: Bulk Fuel Location: Larsen Bay
Employee: Supervisor: Mayor
Approved By: Mayor Date:
______________________________________________________________________________
SUMMARY: Plans and directs activities of bulk fuel facility operations. Ensures facility is maintained
according to guidelines outlined in Business Plan, the Operations and Maintenance Manual, all
manufacturers’ recommendations for maintenance, and all state and federal laws and regulations
governing operation.
ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be assigned.
Acts as point of contact for communications between the City of Larsen Bay, the Denali
Commission, Regulatory Agencies, and other interested parties.
Interprets company policies and methods and develops specific operating procedures.
Delegates functional activities to workers and establishes supervisory schedules and
responsibilities to ensure quality and timeliness of independent decisions required to provide
continuous service to public and safety of workers.
Maintains operator training program and training records to ensure that trained operators are
available to maintain sustained Facility operation.
Assists city clerk with annual report of operations to the Denali Commission and other
required reporting.
Implements the spill response and related regulatory plans and ensure that required spill
response and related regulatory plans are updated and available on-site: Ensures the
reliability of the spill response equipment, maintains the proper records, and conducts
periodic spill drills.
Oversees proactive program to recognize, identify and correct operational problems within
the facility. Investigates, evaluates, and determines best application of new developments in
bulk fuel storage industry, and devises other means of securing maximum efficiency of
personnel and equipment.
Directs maintenance of property records and upkeep of equipment and structures.
City of Larsen Bay
Bulk Fuel Facility Business Operating Plan
Appendix A-13
Job Description
Bulk Fuel Facility Manager
Page 2
________________________
SUPERVISORY RESPONSIBILITIES:
Directly supervises employees in the Bulk Fuel Facility. Carries out supervisory responsibilities in
accordance with the organization's policies and applicable laws. Responsibilities include
interviewing, hiring, and training employees; planning, assigning, and directing work; appraising
performance; addressing complaints and resolving problems.
QUALIFICATIONS: To perform this job successfully, an individual must be able to perform each
essential duty satisfactorily. The requirements listed below are representative of the knowledge, skill,
and/or ability required.
Education and/or Experience: Associate's degree (A. A.) or equivalent from two-year
college or technical school; or six months to one year related experience and/or training; or
equivalent combination of education and experience.
Language Skills: Ability to read and interpret documents such as safety rules, operating
and maintenance instructions, and procedure manuals. Ability to write routine reports and
correspondence. Ability to speak effectively before groups of customers or employees of
organization.
Reasoning Ability: Ability to solve practical problems and deal with a variety of concrete
variables in situations where only limited standardization exists. Ability to interpret a variety
of instructions furnished in written, oral, diagram, or schedule form.
PHYSICAL DEMANDS: The job will be physically demanding; will be required to push, maneuver
and sometimes lift heavy objects.
APPENDIX B: O&M AND R&R COST ESTIMATE
HMS #01175FREVISED FINAL SUBMITTALBULK FUEL OPERATION & MAINTENANCEAND REPLACEMENT & RENEWAL COSTSCITY TANK FARMLARSEN BAY, ALASKACOST CONSULTANTCLIENTHMS Inc.Aurora Consulting4103 Minnesota Drive 880 H Street, Suite 105Anchorage, Alaska 99503 Anchorage, Alaska 99501(907) 561-1653(907) 562-0420 FAX August 18, 2003City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-1
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 1DATE: August 18, 2003NOTES REGARDING THE PREPARATION OF THIS ESTIMATEThese Operations/Maintenance and Replacement/Renewal costs are based on Larsen Bay City Bulk Fuel Facility design documents drawings,dated July 23, 2003, prepared by LCMF, LLC of Anchorage, Alaska and does not include costs that could incur due to unexpected events such as natural disaster, vandalism, etc.Each work item is priced using "Force Account" local labor with exception of major testing, replacement, etc., which are priced usingoutside consultant/contractor rates, per diem and travel costs. "Force Account" labor rates are assumed as an average hourly ratefor each village scenario.O&M costs are established on yearly basis in 2003 dollars and should be projected to the initial 40 years of the facility using appropriateinflation factor over next 40 years.Renewal costs are based on repairing tank farm equipment every two to eight times over 40 years.Replacement costs are based one to four times over 40 years.Please note that this report excludes all work to the existing tank farm, O&M, and R&R costs for non-related tank farm work.ESTIMATING ASSUMPTIONSOperation/Maintenance Costs: All costs are on yearly basis for one time event only.Years:Renewal/Replacement Costs: Total cost column represents one time event only. Years in parentheses indicate number of times to berenewed/replaced. Therefore, the Business Plan should apply the total dollars and multiply by the number of years item to be renewed or replaced.0510152025304035City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-2
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 2DATE: August 18, 2003SUMMARYTOTAL COSTOne Time Cost (In 2003 Dollars)A. Operations & Maintenance Costs (Yearly) 11,648 x 40 Years = $ 465,912B. Renewal Costs (Over 40 Years)See Business Plan TableC. Replacement Costs (Over 40 Years)See Business Plan TableTOTAL O&M AND RENEWAL/REPLACEMENT COSTS (2003 DOLLARS): See Business PlanNOTE: Items B and C costs are for multiple events over 40 years period. See Business Plan Tables for actual costsincluding inflation factor and number of occurrences/event.City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-3
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 3DATE: August 18, 2003A. Operations & Maintenance Costs (Yearly)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$NOTE: These projections are based on Larsen Bay City fuel facilitytank farm comprising (4) 25,000 gallon tanks, (1) 25,000 gallon dual product and(1) 3,000 gallon dual project fuel tank with fill and dispensing linesand pumping system (total shell capacity 128,000 gallons).All costs are projected on yearly basis using local labor andconstruction equipment rented from local resources.1. GROUND MAINTENANCEAnnual maintenance 12 Mos 14.000 168.000 17.85 2,999 2,999SUBTOTAL 1. GROUND MAINTENANCE (YEARLY): 2,999 2,9992. TANKS, PIPELINES AND INSPECTIONSFuel delivery (179,000 gallons -2 times) 1 LOT 40.000 40.000 17.85 714 714Perform minor repairs, replacefaulty valves and gauges(1 time/year - 22 valves) 1 LOT 990.00 990 20.000 20.000 17.85 357 100.00 100 1,447Annual inspection/pressure testing(1 outside person) 1 LOT 750.00 750 16.000 16.000 75.00 1,200 200.00 200 2,150SUBTOTAL 2. TANKS, PIPELINES, ETC. (YEARLY): 1,740 2,271 300 4,311QUANTITY LABOR EQUIPMENTMATERIALCity of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-4
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 4DATE: August 18, 2003A. Operations & Maintenance Costs (Yearly)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$QUANTITY LABOR EQUIPMENTMATERIAL3. OTHER COSTSOperator training 1 EA 10.000 10.000 45.00 450 450Administration - clerical 12 Mos 6.000 72.000 16.80 1,210 1,210Supervision 12 Mos 4.000 48.000 18.30 878 878Annual audit (in Anchorage) 1 EA 18.000 18.000 100.00 1,800 1,800Tankage insurance (per occurance)(per AMLJLA quote for $10.25 million/per occurance) 1 LOT 600.00 600SUBTOTAL 3. OTHER COSTS (YEARLY): 600 4,338 4,338SUMMARY (YEARLY)1. GROUND MAINTENANCE$ 2,9992. TANKS, PIPELINES AND INSPECTIONS4,3113. OTHER COSTS4,338TOTAL IN PRESENT DOLLARS/YEAR:$ 11,648City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-5
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 5DATE: August 18, 2003B. Renewal Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$1A. FENCERepair fence and gates(at 10 and 30 years - 2 times) 350 LF 3.75 1,313 0.250 87.500 17.85 1,562 1.60 560 3,4341B. PADS AND DIKEGrade pads (at 10 and 30 years -2 times) 13,600 SF 0.20 2,720 0.010 136.000 17.85 2,428 0.25 3,400 8,548Repair truck loading, filling station anddispenser enclosure (at 5, 15, 25and 35 years - 4 times) 450 SF 3.25 1,463 0.250 112.500 17.85 2,008 1.15 518 3,988Ditto containment basin (ditto) 88 SF 3.70 326 0.180 15.840 17.85 283 0.40 35 644SUBTOTAL 1A & B. FENCE AND PADS & DIKE:5,821 6,280 4,513 16,6142A. TANKSReplace pumps (at 10, 20, 30 and 40 years - 4 times - 10 each) 1 LOT 12500.00 12,500 40.000 40.000 17.85 714 200.00 200 13,414Replace miscellaneous valves andgauges (at 10, 20, 30 and 40 years -4 times - 22 valves) 1 LOT 2750.00 2,750 28.000 28.000 17.85 500 100.00 100 3,350QUANTITY LABOR EQUIPMENTMATERIALCity of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-6
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 6DATE: August 18, 2003B. Renewal Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$QUANTITY LABOR EQUIPMENTMATERIAL2B. PIPELINES AND HEADERSCheck (2) products barge fill line manifold andrepair (at 10 and 30 years - 2 times) 1 LOT 500.00 500 16.000 16.000 17.85 286 100.00 100 886Ditto dock dispenser (ditto) 1 LOT 150.00 150 6.000 6.000 17.85 107 30.00 30 287Check and repair tank fill lines manifolds(at 10 and 30 years - 2 times, 9 each) 1 LOT 1350.00 1,350 32.000 32.000 17.85 571 200.00 200 2,121SUBTOTAL 2. TANKS AND PIPELINES: 17,250 2,178 630 20,0583. ELECTRICAL MAINTENANCECheck electrical systems serving pumps and fuel dispensers andrepair as necessary (at 5, 10, 15, 25,30 and 35 years - 6 times - 10 pumps) 1 LOT 2000.00 2,000 40.000 40.000 22.50 900 200.00 200 3,100SUBTOTAL 3. ELECTRICAL MAINTENANCE: 2,000 900 200 3,100SUMMARY(One time cost - multiply by number of times to be renewed)1A & B. FENCE AND DIKES$ 16,6142A & B. TANKS AND PIPELINES20,0583. ELECTRICAL MAINTENANCE3,100TOTAL IN PRESENT DOLLARS FOR 40 YEARS:$ 39,771City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-7
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 7DATE: August 18, 2003C. Replacement Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$1A. FENCEReplace 8'0" fencing (at 20 and 40years - 2 times) 350 LF 22.00 7,700 0.370 129.500 17.85 2,312 4.40 1,540 11,552Replace 4'0" man gates (at 20 and 40years - 2 times) 1 EA 325.00 325 6.000 6.000 17.85 107 432Ditto 8'0" 1 EA 600.00 600 10.000 10.000 17.85 179 50.00 50 829Ditto 16'0" sliding 1 EA 1850.00 1,850 16.000 16.000 17.85 286 100.00 100 2,2361B. PAD, DIKE AND STEPS3" gravel surfacing to pad, 158 CY(at 20 and 40 years - 2 times) 13,600 SF 0.45 6,120 0.030 408.000 17.85 7,283 0.30 4,080 17,483Replace steps and grating (at 20 and40 years - 2 times) -- SF 32.50 0.450 17.85 2.50Replace timber dike and liner (at 20 and40 years - 2 times) -- SF 9.50 0.450 17.85 1.25Replace 6"x6" pressure treated timberfoundations under tanks, 5'0" o/c(at 40 years - 1 time) 384 LF 4.30 1,651 0.200 76.800 17.85 1,371 0.50 192 3,214Excavate, replace geofabric andbackfill (at 40 years - 1 time) 5,940 SF 0.22 1,307 0.020 118.800 17.85 2,121 0.15 891 4,318QUANTITY LABOR EQUIPMENTMATERIALCity of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-8
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 8DATE: August 18, 2003C. Replacement Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$QUANTITY LABOR EQUIPMENTMATERIAL1B. PAD, DIKE AND STEPS (Continued)Excavate liner at basin(at 40 years - 1 time) 88 SF 6.50 572 0.400 35.200 17.85 628 1.50 132 1,332SUBTOTAL 1A & B. FENCE, PAD & DIKE: 20,125 14,285 6,985 41,3952A. TANKSReplace retail fuel dispenser (at 10, 20, 30and 40 years - 4 times) 1 EA 12500.00 12,500 32.000 32.000 75.00 2,400 2500.00 2,500 17,400Ditto diesel dispenser at dock (ditto) 1 EA 7500.00 7,500 24.000 24.000 75.00 1,800 2000.00 2,000 11,300Replace tanks, 25,000 gallon(at 40 years - 1 time - 4 tanks) 1 EA 179620.00 179,620 550.000 550.000 75.00 41,250 5000.00 5,000 225,870Replace pig catchers (at 20 and 40 years -2 each - 2 times) 1 EA 25000.00 25,000 64.000 64.000 75.00 4,800 750.00 750 30,550Replace dual product 3,000 gallon tank(at 40 years - 1 time) 1 EA 19500.00 19,500 75.000 75.000 75.00 5,625 750.00 750 25,875Ditto 25,000 gallon (ditto) 1 EA 47500.00 47,500 150.000 150.000 75.00 11,250 1500.00 1,500 60,250City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-9
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 9DATE: August 18, 2003C. Replacement Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$QUANTITY LABOR EQUIPMENTMATERIAL2B. PIPELINES AND HEADERSReplace 2" above grade marine headerand supports (at 20 and 40 years -2 times - 2 pipes) 5,200 LF 17.50 91,000 0.650 3380.000 17.85 60,333 5.20 27,040 178,373Ditto 2" marine dispensing line (at 20 and 40 years - 2 times - 1 pipe) 775 LF 10.30 7,983 0.500 387.500 17.85 6,917 3.70 2,868 17,767Replace 2" diameter above gradefuel transfer lines at tanks (at 20 and 40years - 2 times - 2 pipes) 390 LF 17.50 6,825 0.650 253.500 17.85 4,525 5.20 2,028 13,378Replace pipeline valves at headerand catcher lines (at 20 and 40 years -2 times - 12 each) 1 EA 1500.00 1,500 24.000 24.000 17.85 428 1,9282C. INSPECTION (OUTSIDE CONTRACTOR)Major inspection of tanks by outsideperson including per diem and travelcosts (at 10, 20 and 30 years - 3 times - 6 tanks) 1 LOT 1250.00 1,250 36.000 36.000 75.00 2,700 300.00 300 4,250SUBTOTAL 2. TANKS, PIPELINES & INSPECTION: 400,178 142,028 44,736 586,941City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-10
BULK FUEL OPERATION AND MAINTENANCE AND REPLACEMENT AND REMOVAL COSTS - CITY TANK FARMLARSEN BAY, ALASKAREVISED FINAL SUBMITTALHMS Project No.: 01175FPAGE 10DATE: August 18, 2003C. Replacement Costs (Over 40 Years)No. of Unit Unit Cost MH Total Cost Unit CostTOTALUnits Meas Price $ Unit Hrs Rate $ Price $$QUANTITY LABOR EQUIPMENTMATERIAL3. ELECTRICAL SYSTEMSReplace wiring, panels and circuitbreakers for pumps, etc. at each tank andtruck fill transfer (at 20 and 40 years - 2 times - 7 each) 1 EA 17500.00 17,500 280.000 280.000 75.00 21,000 550.00 550 39,050SUBTOTAL 3. ELECTRICAL SYSTEMS: 17,500 21,000 550 39,050SUMMARY(One time cost - multiply by times to be replaced)1A & B. FENCE AND DIKES$ 41,3952A & B. TANKS AND PIPELINES586,9413. ELECTRICAL SYSTEMS39,050TOTAL RENEWAL:$ 667,387City of Larsen BayBulk Fuel Facility Business Operating PlanAppendix B-11
ADDITIONAL RELATED AND ATTACHED DOCUMENTS
1. Secondary Operator Agreement
2. Site Control Documents
3. Grant Agreement
4. R&R Fund Account – Sample Documents
SECONDARY OPERATOR AGREEMENT
SECONDARY OPERATOR AGREEMENT
FOR THE CITY OF LARSEN BAY BULK FUEL STORAGE FACILITY
WHEREAS, the Denali Commission (“Commission”) has provided, or will provide, funds to the
Alaska Energy Authority (“Authority”) for a grant by the Authority to the City of Larsen Bay
(“City”) for the upgrading of the City’s bulk fuel storage facilities at Larsen Bay, Alaska (the
“Facility”) owned by the City; and
WHEREAS, grant funds may also be provided by HUD and/or the State of Alaska, and the financial
aspects of those separate grants will be managed and the Facility construction will be overseen by
the Commission (which term shall include HUD and/or the State of Alaska in this Secondary
Operator Agreement for the Facility, hereinafter the “Agreement”); and
WHEREAS, the Commission has adopted Sustainability Criteria that apply to the use of Commission
funds for the Facility, in order to ensure the long-term economic sustainability of the Facility; and
WHEREAS, the Commission and the City have agreed to a Business Plan consistent with the
Sustainability Criteria for the operation of the Facility, as contained in the City of Larsen Bay Bulk
Fuel Facility Business Operating Plan dated November 17, 2003 (“Plan”); and
WHEREAS, the Plan specifies that the City shall act as the Primary Operator of the Facility, as
specified therein, and shall operate the Facility in compliance with the terms and conditions of the
Plan; and
WHEREAS, the Commission and the City agree that, if the Primary Operator is not operating the
Facility in compliance with the terms and conditions of the Plan, the Commission may designate a
Secondary Operator to assist the Primary Operator or to take over such functions of the Facility
operations that the Commission determines are necessary for such time as it determines is necessary,
pursuant to the terms and conditions of this Agreement;
NOW THEREFORE, the Commission and the City agree as follows, in consideration for the mutual
promises contained herein and the benefits to the parties resulting from the completion and
operation of the Facility:
1. The Primary Operator shall operate the components of the Facility specified in the Plan in
accordance with the terms and conditions of the Plan and the requirements contained herein.
2. In addition to, and consistent with its duties specified in the Plan, the Primary Operator shall, in
a timely manner:
2.1 properly establish and maintain accurate books and records;
2.2 account for, bill for, and use its best efforts to collect all fuel sales and all other receivables;
Secondary Operator Agreement for the City of Larsen Bay Bulk Fuel Facility
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2.3 deposit moneys into the appropriate accounts, including deposits into the Operations &
Maintenance Fund account as well as deposits into the Renewal & Replacement invested
escrow account (as such accounts are defined in the Plan);
2.4 maintain adequate cash reserves for fuel purchases so that emergency fuel shipments are
not necessary;
2.5 obtain annual audits showing the absence of any management or financial irregularities;
2.6 perform necessary maintenance of and repairs to the Facility;
2.7 provide or obtain necessary training for Facility operations; and
2.8 meet its financial obligations.
3. If the Commission determines, in the exercise of its sole discretion, that the Primary Operator
has failed or is unable to operate the Facility in accordance with the Plan and this Agreement
and that this failure or inability significantly threatens the long-term economic sustainability of
the Facility, the Commission may contract with and utilize a Secondary Operator.
4. The Commission has the sole right to transfer the full custody and control of the assets and
business operations of the Facility, including but not limited to, the cash, receivables, and
inventory of the Facility, to the Secondary Operator and assign the Secondary Operator
responsibility for partial or total management of the Facility.
4.1 The Commission may appoint the Secondary Operator to assist the Primary Operator in
some or all aspects of the Facility operations or to take over some or all aspects of Facility
operation from the Primary Operator, in such a manner and for such period of time as the
Commission determines to be necessary and appropriate for operation of the Facility in
compliance with the Plan and the long-term economic sustainability of the Facility. (For
example, the Secondary Operator may be asked to assist the Primary Operator for a short
period of days or weeks in bringing certain aspects of the operations back into compliance.
Alternatively, the Secondary Operator may be asked to replace the Primary Operator as
Facility operator. The foregoing are intended only as illustrative examples, without limiting
the effect of this Agreement.)
4.2 If the Commission utilizes a Secondary Operator, the Primary Operator will transfer the
complete control and authority over the following assets to the Secondary Operator: the
books and records relating to the Facility operations, accounts receivable, and all account
funds. The City agrees to cooperate with the Commission and the Secondary Operator in
the release of the stated assets and the transfer of operations to the Secondary Operator.
4.3 The Secondary Operator will be entitled to reasonable compensation for its services. This
compensation will, at a minimum, reimburse the Secondary Operator for any and all
expenses associated with their duties as Facility operator, plus a reasonable profit. The
profit will not exceed what is considered normal and customary for like service, as
determined by the Commission in the exercise of its sole discretion.
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4.4 The parties anticipate that, if a Secondary Operator is appointed, the Commission will
appoint (to be determined), which will joint venture with an establish bulk fuel operator.
However, the parties acknowledge that (to be determined) may not exist or be willing to
serve in this capacity at the time a Secondary Operator is needed, or other circumstances
may prevent (to be determined) from serving as Secondary Operator. Therefore, the City
acknowledges and agrees that the Commission may appoint any qualified entity or entities
to serve as Secondary Operator. The Commission will consult with the City on the
replacement to the Secondary Operator; however, the Commission maintains final
approval authority for the replacement Secondary Operator.
4.5 The Commission will act reasonably and responsibly in its enforcement of the Plan and
this Agreement and its designation of a Secondary Operator, consulting with the City and
taking into account the needs and interests of the community of Larsen Bay as well as the
general public interest. If the Commission employs the Secondary Operator, the
Commission shall oversee the operations of the Secondary Operator to make sure that it is
conducting its operations reasonably, in a cost-efficient manner, and consistent with the
needs and interests of the community as well as the general public interest.
5. If a dispute or controversy arises between the parties to this Agreement or among the parties to
an agreement with the Secondary Operator, application or enforcement of this Agreement shall
be decided through mediation. If mediation is unsuccessful, any party to this Agreement may
bring an action to resolve the dispute in the Superior Court of the State of Alaska.
6. This Agreement may be executed simultaneously in two (2) or more counterparts, each of which
will be considered an original, but all of which together will constitute one and the same
instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by fax
shall be sufficient to bind the parties to the terms and conditions of this Agreement.
7. No delay on the part of a party in the exercise of any right, power, or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude
other or further exercise thereof or the exercise of any other right, power, or remedy. No
amendment, modification, or waiver of, or consent with respect to, any provision of this
Agreement shall be effective unless it shall be in writing and signed and delivered by the parties
hereto.
8. All notices, demands or requests required or allowed under this Agreement or applicable law
from one party to another shall be in writing and delivered in person or sent by mail, certified or
registered, postage prepaid, to the parties hereto at the addresses set forth in this Agreement or
to such other persons and addresses as either party may designate. Notice shall be deemed to
have been given three (3) days after the day of mailing.
9. This Agreement is a contract made under and governed by the laws of the State of Alaska. All
obligations and rights of the parties stated herein shall be in addition to, and not in limitation of,
those provided by applicable law.
10. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto, and their
respective heirs, successors, and assigns.
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11. This Agreement represents the entire agreement between the parties, and there are no other
agreements, either oral or written, with respect to the subject matter of this Agreement.
This AGREEMENT has been reviewed, agreed to, and executed by the following parties:
for the CITY OF LARSEN BAY
by
________________________________________________
(Signature)(Date)
________________________________________________
(Name Printed)(Title)
for the DENALI COMMISSION
by
________________________________________________
(Signature)(Date)
________________________________________________
(Name Printed)(Title)
for (TO BE DETERMINED)
by
________________________________________________
(Signature)(Date)
________________________________________________
(Name Printed)(Title)
SITE CONTROL DOCUMENTS
Site Control Opinion
Tank Farm Site, Pipeline, Marine Header and Dispenser
Larsen Bay, Alaska
As requested, I have reviewed the land status for the Larsen Bay Fuel System Upgrade project.
Land Status Summary
Land records were researched at the Bureau of Land Management, the State Department of
Commerce and Economic Development, the State Department of Natural Resources and the
State Recording Office. Research of the State Recording Office information was conducted on
line.
Tank Farm. The new proposed fuel tank farm appears to be located on a parcel of land
identified as Tract 37 which is within sections 31 and 32, Township 30S., Range 29W. Seward
Meridian. The City of Larsen Bay is the owner of record for this tract. Koniag, Inc., successor
in interest of Nu-Nachk Pit Inc, issued a statutory quitclaim deed to the City of Larsen Bay on
July 30, 1997. The deed was recorded on August 18, 1997, at Book 151, page 426, in the
Kodiak Recording District. A copy of the recorded deed is attached.
Fuel pipeline (upland portion). The proposed new fuel pipeline appears to cross Tract 37,
Tract H and Lot 10, in Section 31, Township 30S. Range 29 W., Seward Meridian. The City of
Larsen Bay owns all of these parcels by the same statutory quitclaim deed referenced above.
Additionally, the City also owns Lot 11, which is adjacent to Lot 10 to the south and Tract F
which, is adjacent to Lots 10 and 11 to the east.
Fuel pipeline, marine header, and marine dispenser (tide and submerged land portion).
Portions of the pipeline and the marine header and dispenser will be on tide and submerged land.
The State of Alaska has jurisdiction over tide and submerged land. However, the City of Larsen
Bay has applied (ADL 227775) for certain tide and submerged land in Larsen Bay. The
application includes the project area. On September 24, 2001, the State of Alaska, Division of
Mining, Land, and Water issued a “Final Finding and Decision” concerning the conveyance of
the tide and submerged land to the City of Larsen Bay. The final finding was that it was in the
best interest of the State to convey about 98 acres of tide and submerged land to the City of
Larsen Bay. This area includes the small boat harbor and the marine header and dispenser areas
The decision states that “management authority will transfer to the City when this decision goes
into effect.” The decision was not appealed and became effective on October 15, 2001.
Therefore, the City of Larsen Bay has management authority for the tide and submerged land
applied for under ADL 22775. A copy of the decision, which includes a map of the area to be
conveyed, is attached. On February 25, 2002, the State issued survey instructions for the survey
of the tide and submerged land applied for by the City. The City must have a survey completed
before actual title can be transferred.
City of Larsen Bay Page 1
Bulk Fuel Facility Business Operating Plan
Site Control Documents
Note: A 400 hundred foot portion of the road to the dock was apparently constructed with BIA
funding. This portion of the road is located on tideland. As noted above the City has
management authority over this portion of tideland. Allan Panamaroff, Mayor of Larsen Bay,
verified that the road was indeed built with BIA funds. However, he also stated that the City has
a maintenance agreement with BIA and that the City has management and maintenance authority
for the road.
Site control summary
The proposed tank farm and the upland portion of the pipeline appear to be on land owned by the
City of Larsen Bay. The City of Larsen Bay has been granted management authority for the tide
and submerged land under application. Accordingly, the City has the authority to proceed with
desired management action within the application boundary. Therefore, in my opinion, the City
of Larsen Bay has site control for the entire project. It is recommended that the City proceed
with the required survey of the tide and submerged land, so that actual title can be transferred to
the City.
Disclaimer: This site control opinion does not purport to insure, warrant or certify title. The
research of the Kodiak Recorders Office records was limited to a review of the computerized
records. The opinion is the result of a diligent research effort as described above.
Prepared by
Rick Elliott
Land Consultant
for LCMF, Inc.
August 7, 2003
Attachment: Statutory Quitclaim Deed
Final Finding and Decision
City of Larsen Bay Page 2
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Site Control Documents
GRANT AGREEMENT
State of Alaska
Alaska Energy Authority
Grant Agreement
Grant Agreement Number
2195195
Amount of Funds
$1,669,607.00
Project Code(s)
340140 Encumbrance Number/AR Project Title
Larsen Bay Bulk Fuel Upgrade
Grantee Authority Contact Person
Name
City of Larsen Bay
Name
Reuben Loewen
Street/PO Box
P.O. Box 8
Title
Project Manager
City/State/Zip
Larsen Bay, Alaska 99624
Street/PO Box
813 W. Northern Lights Blvd
Contact Person
Allen Panamaroff, Mayor
City/State/Zip
Anchorage, AK 99503
Phone
907-847-2211
Fax
907-847-2239
Phone
907-269-3027
Fax
907-269-3044
AGREEMENT
The Alaska Energy Authority (hereinafter ‘Authority’) and the City of Larsen Bay (hereinafter ‘Grantee’) agree
as set forth herein.
Section I. Upon receiving notification from the funding source(s) identified in Appendix 2 of the availability of
funds, the Authority shall grant to the Grantee funds for the construction of the Project and performance of
the Project work under the terms outlined in the attached scope of work. The Authority shall grant funds to
pay for expenses incurred by the Grantee that are authorized under this Agreement, in an amount not to
exceed $1,669,607.00, unless the grant amount is amended as provided herein.
Section II. The Grantee shall apply the grant funds to the construction of the Project and perform all of the
work and other obligations required by this Agreement.
Section III. Performance under this agreement begins upon signature by the Authority’s Executive Director
and shall be completed no later than June 30, 2004.
Section IV. The agreement consists of this page and the following:
ATTACHMENTS APPENDICES
Article A: Definitions
Article B: Special Provisions
Article C: General Provisions
AMENDMENTS: Any fully executed amendments
to this Agreement
Appendix 1: Notice of Project Completion
Appendix 2: Funding Sources
Appendix 3: In-Kind Contributions
Appendix 4: Employer Identification Number App
Appendix 5: EIN Power of Attorney
Grantee Authority
Signature
Signature
Printed Name and Title
Allen Panamaroff, Mayor
Printed Name and Title
Ronald W. Miller, Executive Director
Date
Date
Larsen Bay Bulk Fuel Upgrade Project
Grant Agreement Number 2195195
Page 2 of 18
ARTICLE A. DEFINITIONS
In this Grant Agreement:
a) “Authority” means the Alaska Energy Authority, a public corporation of the
State of Alaska. The Authority is herein charged with the role and
responsibility as both the Grantor and as an agent of the Grantee.
b) “Denali Commission” means the federal-state commission established under
42 USC 3121 and its successors or assigns.
c) “Executive Director” means the Executive Director of the Authority or
authorized designee.
d) “Grantee” means the City of Larsen Bay.
e) “Grantor” means the Alaska Energy Authority.
f) “Project” means the Larsen Bay Bulk Fuel Upgrade Project.
g) “Procurement Manager” means the employee of the Authority who
determines disputes as provided in Article C. Section 3.
h) “State” means the State of Alaska.
i) “Project Manager” means the employee of the Authority in charge of the
Project.
j) “Design Documents” are the technical documents and drawings specifying
how the Project is constructed.
k) “Construction Manager” means the on-site supervisor of the Project as
assigned by the Authority. The Construction Manager may or may not be an
employee of the Authority.
l) “Project Completion” means the Project is complete, the work is complete,
and all Project costs have been billed and paid as determined by the
Authority.
m) “Grants Manager” means the employee of the Authority in charge of
managing the Grant.
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ARTICLE B. SPECIAL PROVISIONS
Subject to appropriation and availability of funds, the Authority agrees to grant to the
Grantee the amounts stated herein, and the Grantee agrees to expend grant funds only
for eligible costs to perform the Scope of Work as attached and stated herein.
Section 1. Description of Project and Scope of Work.
This grant provides funding to be used for the design and construction of a new code
compliant consolidated bulk fuel tank farm in Larsen Bay, Alaska, as described more
fully in the 95% Design dated September 29, 2003, and detailed design documents and
specifications to be prepared by the Authority.
Section 2. Project Funding Sources.
This Grant is subject to appropriation and availability of funds from the sources of
funding shown in Appendix 2. The Authority may redesignate the sources of the grant
funding and/or adjust the project budget shown in Appendix 2, and will provide an
updated Appendix 2 to the Grantee upon the Grantee’s request.
If the Project costs exceed the Grant funds and if additional funds are available to
perform the work described in this Agreement, the Authority may grant additional funds
to the Grantee to perform this work by issuing and providing to the Grantee an amended
Appendix 2 showing the amended Grant amount. Grantee acknowledges that such a
grant of additional funds will be pursuant to the terms and conditions of this Agreement,
and acknowledges that by accepting the grant funds and the grant-funded Project work
it is accepting them subject to the terms and conditions of this Agreement.
Section 3. Grant Disbursements.
a) The Authority will disburse grant funds as eligible costs are incurred.
b) The Authority may engage an accounting firm (Trustee) to provide Project related
services. If engaged, the Trustee may receive and disburse a portion of Grant funds
to cover various project costs which may include payroll and related obligations,
including taxes and workers compensation insurance, and other selected project
costs as the Authority directs. If engaged, the Trustee may be used to prepare
quarterly and annual payroll tax reports for the IRS and the State of Alaska,
Department of Labor, as applicable, and W-2 Forms for the Project employees. If
engaged, the Trustee will submit such reports and pertinent checks to the
appropriate federal and state offices.
If the Authority retains the services of the Trustee, the Authority will be the liaison
between the Grantee and the Trustee. The Authority will follow the procurement
regulations specified by the funding sources.
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c) The Authority, as agent for the Grantee, will account for and disburse selected Grant
funds for any Project costs not covered under (b) of this section in accordance with
the funding sources referenced in Appendix 2. The Authority as agent for the
Grantee will disburse Grant funds as required by the funding sources.
d) Upon Project Completion:
1. any Grant funds not expended under this agreement and any interest accruing
on the grant funds belong to the Authority and shall be returned to the Authority;
2. the Authority may apply to other projects any other grant monies authorized for
the Project but not expended or obligated under this agreement.
Section 4. Eligible Costs Under This Grant.
a) The Authority, as Grantor, shall have sole discretion to determine which project
costs are eligible to be paid for from Grant monies under this agreement. No work
shall be performed or initiated without the prior approval from the Authority. Upon
approval by the Authority, the following necessary reasonable, actual expenses
associated with the design and construction of the Project are eligible for payment or
reimbursement from grant funds:
1. Payroll Costs. Payroll costs are comprised of wages paid to Grantee personnel
for time worked directly on the Project, plus payroll taxes and insurance, as well
as vacation, holiday, sick leave and retirement benefits, if any.
2. Direct Non-Salary Costs. These costs must be directly attributable to the
Project and shall include the following:
i. The costs associated with consultants, inspectors, surveyors, contractors,
subcontractors, and other services required to design and construct the
Project.
ii. The cost of materials, supplies and freight purchased by, or on behalf of, the
Grantee and used in the construction of the Project.
iii. The Grantee’s costs of reproducing plans, specifications, maps, reports, and
other documents.
iv. The cost of long distance communication and other utilities needed for
construction.
v. Purchase or rental of small equipment or tools needed in the construction of
the Project.
vi. Insurance covering the Grantee and the Authority.
3. The Authority may pay for costs not specifically listed in this section from Grant
monies, if in the determination of the Authority the costs are necessary.
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b) Costs not in listed in subsection a) of this section or not deemed eligible by the
Authority under a), 3) of this section are not eligible to be paid for from money
granted under this agreement.
Section 5. Authority as Grantee’s Agent.
a) The Authority will serve as the Grantee's agent for the design and construction
management of the Project, including, but not limited to, where applicable, issuing
Invitations to Bid and selecting contractors. The Authority will be responsible for all
matters related to the Project design and construction, including, but not limited to:
approval of plans and specifications; choices of scheduling, manpower, and
methods; procedures for administering the Project; procurement of materials;
insurance during construction; disposition of surplus equipment; payment of all
Project billings; complying with all federal reporting requirements (except as
provided in Article C section 12 or elsewhere herein); performance of final project
inspection; and issuance of a Notice of Project Completion. Permitting and other
items specified herein are the responsibility of the Grantee. The Construction
Manager, who serves as an on-site representative of the Authority, has the right to
hire and fire, and establish wage rates and work hours of Project employees.
The Authority shall not be responsible for environmental investigation or remediation
of the existing bulk fuel facilities or properties, or for any other environmental
matters. In addition, the Authority will not be responsible for the removal and
decommission of any existing facilities.
b) If the funding sources for the Project include Indian Community Development Block
Grant monies or Community Development Block Grant monies granted to the
Grantee, the Authority may enter into a Grant Management Agreement with the
Grantee in relation to some or all of those monies. If such agreement is entered into,
the Authority may have additional duties as the agent of the Grantee as outlined in
those Agreements which will be attached as an appendix hereto.
Section 6. Grantee’s Responsibilities
a) The Grantee is responsible for securing the real property interests necessary for the
construction and operation of the Project, through ownership, leasehold, easement,
or otherwise. The Grantee also is responsible for obtaining the required permits and
approvals. These permits may include, but are not limited to, Corps of Engineers’
Wetlands Permit, State Fire Marshal approval, rights-of-way for the pipelines, and
site control, including any necessary Coastal Zone Management coordination
through the Division of Governmental Coordination (DGC). The Authority will assist
the Grantee in obtaining these permits and approvals.
b) The Grantee will assist the Authority in obtaining qualified local labor for the Project
and will provide necessary local administration assistance, including recommending
qualified local personnel; assisting in obtaining necessary personnel information;
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assisting in obtaining housing for nonresident workers; facilitating communications
between the Authority, the community and local employees; and serving as a liaison
between the Authority and the community.
c) The Grantee will provide, as an in-kind contribution, local equipment (excluding
operator, fuel and maintenance) and tools as available to support the Project, and
the contribution specified in Appendix 3. The Grantee will not be paid for its
contributions of the use of equipment, tools, supplies, materials, or its contributions
of services except as agreed to in writing by the Authority. The Authority requires in-
kind contributions to demonstrate that the grantee and the community are committed
to and invested in the proposed project. Typical in-kind contributions include, but are
not limited to: land for the tank farm, the use of heavy equipment as available,
lodging, etc. The Authority encourages the grantee and the community to support
this project with in-kind contributions to the greatest extent possible.
d) The Grantee is responsible for reviewing project documents and monitoring the
Project work to the extent necessary for the Grantee to determine that the work is
proceeding satisfactorily and so that it can perform its responsibilities pertaining to
the Project, including its responsibilities to operate and maintain the Project after
Project completion. The Grantee will raise with the Authority promptly and prior to
Project completion any concerns or issues it may have regarding the Project, and if
those concerns or issues are not satisfactorily resolved will promptly give written
notice with a detailed description of the concerns or issues to the Authority’s contact
designated in Article C, section 18.
Section 7. Project Completion Notice.
The Grantee shall sign the Notice of Project Completion located at Appendix 1 within 15
days after it is delivered by the Authority. Upon receipt of the signed signature page,
the Authority will close the Grant. The Grant will automatically be closed if the Grantee
fails to return the Notice of Project Completion within 30 days after it is delivered by the
Authority.
Section 8. Grantee Responsibilities After Project Completion.
a) The Grantee will not sell, transfer, encumber, or dispose of any of its interest in the
facilities constructed with this grant funding during the economic life of the Project
without prior written Authority approval.
b) The Grantee agrees that upon completion of the Project it is responsible for and will
perform those activities and functions necessary for the operation and maintenance
of the Project for the public benefit, except for those that are expressly the
responsibility of another party under this Grant Agreement or any appendices
hereto. These responsibilities may not be altered or transferred without the prior
written approval of the Denali Commission.
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ARTICLE C. GENERAL PROVISIONS
Section 1. Inspection and Retention of Records.
The Grantee shall allow the Authority or its designees to examine all Project related
records at any reasonable time for the purpose of copying, audit or inspection. The
Grantee shall ensure that the Authority, its contractors and consultants, and any
Secondary Operators have reasonable access to Project facilities during construction of
the Project, and reasonable access for performance analysis and testing over the life of
Project facilities for no cost. The Grantee shall retain all Project related records for four
years following the completion date of the Project or until final resolution of any audit,
negotiation, claim or other action related to the Project which is started prior to the end
of the four year period, whichever is later.
Section 2. State and Authority held harmless.
As a condition of this Grant, the Grantee agrees to defend, indemnify, and hold
harmless the Authority and the State of Alaska, and their agents, servants, contractors,
and employees, from and against any and all claims, demands, causes of action,
actions, and liabilities arising out of, or in any way connected with this grant or the
project for which the grant is made, howsoever caused, except to the extent that such
claims, demands, causes of action, actions or liabilities are the proximate result of the
sole negligence or willful misconduct of the Authority or the State of Alaska.
Section 3. Disputes.
a) The parties agree that any dispute arising out of this agreement which cannot be
resolved by mutual agreement shall be addressed as set forth in this Section. It is
further agreed and understood that compliance with this Section shall be a condition
precedent to bringing or filing an action or court proceeding for determination of any
dispute. The intent of the dispute process set forth in this Section is to facilitate the
timely resolution of disputes arising from or out of this agreement.
b) Disputes which cannot be resolved by agreement shall be decided by the
Procurement Manager. The decision shall be in writing and be made not more than
60 days after receipt by the Procurement Manager of all appropriate information (as
determined by the Procurement Manager) from the Grantee. Failure of the Grantee
to furnish appropriate information (as determined by the Procurement Manager) to
the Procurement Manager within 21 days of the receipt of the Procurement
Manager’s request constitutes a waiver of the Grantee’s claim.
c) The time for issuing the Procurement Manager’s decision may be extended for good
cause by the Executive Director. The Procurement Manager shall notify the Grantee
in writing that the time for the issuance of a decision has been extended and of the
date by which a decision shall be issued. The Procurement Manager shall furnish a
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copy of the decision to the Grantee by certified mail or other method that provides
evidence of receipt. Pending a final decision, the Grantee shall proceed with diligent
performance of the agreement in accordance with the Procurement Manager’s
decision notwithstanding any disagreement with that decision.
d) The Procurement Manager’s decision is final unless, within 30 days of receipt of the
decision, the Grantee delivers a Notice of Appeal to the office of the Executive
Director. The Grantee shall provide a copy of the appeal to the Procurement
Manager.
e) The appeal must contain a copy of the decision being appealed and identification of
the factual or legal errors in the decision that form the basis for the appeal. General
assertions that the Procurement Manager’s decision is contrary to law or facts are
not sufficient.
f) Except as provided in subsection (g) of this section, a hearing on an appeal to the
Executive Director shall be conducted according to the procedures set out in (h) of
this article.
g) Within 15 days after receipt of an appeal on a dispute, the Executive Director may
adopt the decision of the Procurement Manager as the final decision without a
hearing, if the Executive Director determines that there are no material issues of
fact.
h) The Executive Director may act as the hearing officer and upon hearing the
evidence, render findings of fact and conclusions of law, or the Executive Director
may appoint an impartial hearing officer to conduct the hearing.
i) The hearing officer shall arrange for a prompt hearing and notify the parties in writing
of the time and place. The hearing will be conducted in an informal manner and will
be held in Anchorage, Alaska. Participants outside Anchorage may attend by
phone. The hearing officer may conduct the hearing as set forth in AS 36.30.670(b),
which is incorporated herein by reference.
j) If the Executive Director is not acting as the hearing officer, the hearing officer shall
recommend a decision to the Executive Director based on the evidence presented.
The recommendation must include findings of fact and conclusions of law. The
Executive Director may affirm, modify, or reject the hearing officer’s
recommendations in whole or in part, may remand the matter to the hearing officer
with instructions, or take other appropriate action.
k) The Executive Director’s decision shall be sent within 20 days after the hearing to all
parties by personal service or certified mail. The decision of the Executive Director
is final and conclusive unless appealed to superior court, Third Judicial District at
Anchorage within 30 days of receipt of the decision. The laws of the state of Alaska
govern this agreement.
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Section 4. Termination.
a) The Grantee shall have no rights to compensation or damages for termination
except as provided in this Section.
b) In addition to all other rights available under law, the Authority may terminate this
Agreement or stop work on the Project for the convenience of the Authority or for
cause upon ten (10) days written notice.
c) "Cause" for termination shall exist when the Grantee has failed to perform under this
Agreement, has provided incorrect or misleading information or has failed to provide
information which would have influenced the Authority's actions. In order for
termination to be for cause, the Grantee's failure to perform or the Grantee's
provision of incorrect, misleading, or omitted information must be material.
d) If this Agreement is terminated for cause, the Grantee shall be entitled to no
compensation. The Grantee shall reimburse the Authority for all grant funds
expended under this Agreement by the Grantee or on the Grantee’s behalf including
interest accrued from the date of disbursement. The Grantee shall also reimburse
the Authority for any costs incurred to collect funds subject to reimbursement, and
for any damages incurred by the Authority as a result of the Grantee’s failure to
perform or provision of incorrect or misleading information. The Authority may
require the Grantee to return to the Authority some or all of the project assets if this
Agreement is terminated for cause.
e) If this Agreement is terminated at the sole request of the Authority for the sole
reason of its convenience, the Grantee is not required to reimburse the Authority for
funds expended prior to the date of termination. If the Grantee has incurred costs
under this agreement, the Grantee shall only be reimbursed by the Authority for
eligible costs the Grantee incurred prior to the date of termination of the Agreement.
However, prior to making any claim or demand for such reimbursement, the Grantee
shall use its best effort to reduce the amount of such reimbursement through any
means legally available to it. The Authority's reimbursement to the Grantee shall be
limited to the encumbered, unexpended amount of funds available under this
Agreement.
Section 5. Sovereign Immunity.
By execution of this grant agreement, the Grantee irrevocably waives any sovereign
immunity which it may possess, and consents to suit against itself or its officials, under
the laws of the State of Alaska, in the courts of the State of Alaska as to all causes of
action by the Authority arising out of or in connection with this agreement. If the Grantee
is an entity which possesses sovereign immunity, it shall provide the Authority with a
resolution of the Grantee’s governing body waiving sovereign immunity, and such
resolution shall be incorporated into this agreement as an Appendix.
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Section 6. Binding Effect.
This Agreement and all of its terms, covenants, conditions and appendices represent
the entire Agreement of the parties and shall extend to and be binding upon the
respective heirs, executors, administrators, grantees, successors and assigns of the
parties to this Agreement.
Section 7. No Assignment or Delegation.
Unless otherwise allowed by this Agreement or in writing by the Authority, any
assignment by the Grantee of its interest in any part of this Agreement or any delegation
of its duties under this Agreement without such approval shall be void.
Section 8. Grantee Shall Not Act as an Agent of the Authority.
The Grantee, its officers, agents, servants and employees shall act in an independent
capacity and not as agents of the Authority in the performance of this Agreement.
Section 9. Rights of Other Parties.
The parties agree that the Denali Commission and any successor is a third party
beneficiary of the Grantees obligations in Art. B Sec. 7 (Grantee Responsibilities after
Project Completion), Art. C Sec. 1 (Inspection and Retention of Records), Art. C Sec. 9
(Compliance with Applicable Law and Funding Source Mechanisms), and Art. c Sec. 12
(Declaration of Public Benefit); otherwise, no person is a third party beneficiary of this
Agreement and this Agreement creates no third party rights. Specifically, any person
who is not a party to this Agreement shall be precluded from bringing any action
asserting the liability of a party or asserting any right against a party to this Agreement,
through the terms of this Agreement. No person, other than a party to this Agreement,
may bring any action based upon this Agreement for personal injuries, property
damages, or otherwise.
Section 10. Compliance with Applicable Law and Funding Source Requirements.
The Grantee shall comply with all applicable local, state and federal statutes,
regulations, ordinances and codes, whether or not specifically mentioned herein
including, but not limited to: the Americans with Disabilities Act (ADA) of 1990; Equal
Employment Opportunity Executive Orders; Copeland Anti-Kickback Act; Davis-Bacon
Act; Contract Work Hours and Safety Standards Act; Clean Air and Clean Water Act;
and 15 C.F.R. Part 24. The Grantee agrees to comply with all applicable grant terms
and conditions imposed by the Denali Commission and any other funding sources,
including Denali Commission policies on sustainability, private enterprise, project
prioritization, pipelines and dispensers, project design capacity, and construction
containment, and the other applicable terms and conditions in Denali Commission
Financial Assistance Award Number 0048-DC-2002-I1.
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Section 11. Audit Requirements.
The Grantee agrees that it will be bound by any audit requirements that may apply to
this agreement including 2 AAC 45.010 commonly referred to as the “Single Audit
Regulation” and any applicable federal audit requirements. The Grantee acknowledges
that it is responsible for compliance with federal and state single audit requirements and
all other applicable audit requirements, and agrees to obtain all required audits.
Section 12. Severability.
If any section, paragraph, clause or provision of this Agreement or any agreement
referred to in this Agreement shall be finally adjudicated by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall be
unaffected by such adjudication and all the remaining provisions of this Agreement shall
remain in full force and effect as if such section, paragraph, clause or provision or any
part thereof so adjudicated to be invalid had not been included herein.
Section 13. Declaration of Public Benefit.
The parties acknowledge and agree that the Project shall be constructed, owned and
operated for the benefit of the general public and will not deny any person use and/or
benefit of Project facilities due to race, religion, color, sex, marital status, age or national
origin.
Section 14. Nonwaiver.
The failure of either party at any time to enforce a provision of this Agreement shall in
no way constitute a waiver of the provision, nor in any way affect the validity of this
Agreement, or any part hereof, or the right of such party thereafter to enforce each and
every provision hereof.
Section 15. Amendment.
This Agreement may only be modified or amended in writing, executed by the
authorized representatives of the parties with the same formality as this Agreement was
executed. For the purpose of any amendment, modification or change to the terms and
conditions of this Agreement, the authorized representatives are the Executive Director
of the Authority or designee, and the Mayor of the Grantee or written designee of
record.
Section 16. Integration.
This instrument and all appendices, amendments, and attachments hereto embody the
entire Agreement of the parties concerning the grant funds granted hereunder. There
are no promises, terms, conditions, or obligations regarding said funds other than those
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contained in the documents described above; and such documents shall supersede all
previous communications, representations or agreements, either oral or written,
between the parties hereto.
Section 17. Applicable Law.
This Agreement is to be construed according to the laws of the State of Alaska. Any
civil action arising from this Agreement shall be brought in the Superior Court for the
Third Judicial District of the State of Alaska at Anchorage.
Section 18. Notices.
Any notice required of either party shall be in writing and, unless proof of receipt of such
notice is expressly required by another term of this Agreement, shall be deemed served
when deposited in the mail in a sealed envelope, with sufficient first class postage
affixed, and addressed to the appropriate party. The notices shall be sent to each
party's place of business, which in the case of the Authority shall be:
Deputy Director, Rural Energy
Alaska Energy Authority
813 West Northern Lights Boulevard
Anchorage, Alaska 99503
Phone 907-269-3000
Fax 907-269-3044
and in the case of the Grantee shall be:
Allen Panamaroff, Mayor
City of Larsen Bay
P.O. Box 8
Larsen Bay, Alaska 99624
Phone 907-847-2211
Fax 907-847-2239
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Appendix 1
NOTICE OF PROJECT COMPLETION
ALASKA ENERGY AUTHORITY
Date: ___________________________________
Project Name Larsen Bay Bulk Fuel Upgrade Project
Contracting Party City of Larsen Bay
Authority Contract No. 2195195
Agreement Execution Date
The ALASKA ENERGY AUTHORITY certifies and acknowledges that the Project
referenced above has been completed, and that all tasks have been satisfactorily
carried out in accordance with the terms and conditions of Agreement No. 2195195.
__________________________________ ___________________
Project Manager Date
Alaska Energy Authority
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The City of Larsen Bay certifies that the Project named above is complete in
accordance with the terms and conditions of Authority Agreement No. 2195195.
The City of Larsen Bay acknowledges and certifies that all expenses incurred by the
City under the Agreement have been paid in full. The City further acknowledges that it
can make no further claims for reimbursement.
_________________________________________ ______________
Authorized Signature (Title)
_________________________________________ ______________
(Name Printed) Date
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Appendix 2
FUNDING SOURCES AND TOTAL GRANT BUDGET
Project Code 340140 Total AEA Grant $1,669,607.00
Total Project Budget $1,669,607.00
Anticipated Funding Allocation:
Denali Commission: $1,980,893.00
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Appendix 3
GRANTEE IN KIND CONTRIBUTIONS TO THE PROJECT
The Grantee will provide, at no cost to the project the following:
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Appendix 4
EMPLOYER IDENTIFICATION NUMBER APPLICATION
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Appendix 5
EIN POWER OF ATTORNEY
R&R FUND ACCOUNT -- SAMPLE DOCUMENTS
City of Larsen Bay
R&R Fund Account – Sample Documents 1
First National Bank Alaska
Renewal and Replacement Account
Escrow Managed “First Investment” Account Agreement
Dated:_______________________Account No._____________
The parties to this deposit account agreement are ____________________, TIN No. __________________
(hereinafter “depositor”) and First National Bank Alaska (hereinafter “bank”). The agreement of the parties is as
follows:
1.Money paid to bank for credit to the above account and interest earned thereon and credited to the above account
shall constitute the “Renewal and Replacement Account” of depositor specified under the terms of depositor’s
agreement with the Denali Commission intended for use by depositor for replacement and repair of capital
expenditure items that are part of depositor’s Energy Facility as contemplated under that agreement. Depositor
hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be
reaffirmed upon each instruction given by depositor, that: (a) depositor is duly organized and existing under the laws
of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this
agreement and to perform its obligations hereunder; (b) this agreement has been duly authorized, executed and
delivered by depositor, constitutes a valid and legally binding obligation of depositor, enforceable in accordance with
its terms, and not statute, regulation, rule, order, judgment or contract binding on depositor prohibits depositor’s
execution or performance of this agreement; (c) the Taxpayer Identification Number shown above (TIN) is depositor’s
correct taxpayer identification number; and (d) depositor is not subject to backup withholding because taxpayer is an
exempt recipient under the Internal Revenue Service Regulations.
2.Under the terms of its agreement with Denali Commission, depositor is obliged to pay to bank the sum of $_______
and a like sum, not later than the last day of each and every month thereafter until the expiration of this agreement,
equal to 1/12 of the annual deposit required in the respective year, as set forth in Attachment D entitled “40 Year
Renewal and Replacement Cashflow” and any revisions thereof to be administered by FNBA in accordance with the
terms hereof. . Bank will furnish to depositor payment coupons that may be submitted by depositor with a payment to
bank for credit to the above account. Bank will give only provisional credit until collection is final for any item, other
than cash, bank accepts from depositor (including items drawn “on us”). Actual credit for payments of, or payable in,
foreign currency will be at the exchange rate in effect on final collection in U.S. dollars. Bank is not responsible for
transactions by mail or at an outside depository until it actually record them at it Escrow Department. Bank will treat
and record all transaction received after bank’s “daily cutoff time” on a business day bank is open, or received on a
day bank’s escrow department is not open for business on the next following day bank’s Escrow Department is open.
3.Bank shall credit to the above account interest earned on the account balance in accordance with the provisions of
bank’s “First Investment Account” agreement, as amended by bank from time to time.
4.Bank shall disburse credit to the account to the order of depositor when it receives a resolution from depositor in the
form of Attachment A hereto. Any two officers of depositor, acting together, may execute a resolution in the form of
Attachment A to withdraw or transfer all or any part of the above account balance at any time. Bank may require not
less than 7 days after receiving such a resolution before a withdrawal. Depositor authorizes any officer of depositor
to endorse any item payable to depositor or depositor’s order for deposit to the above account or any other transaction
with bank. Bank may require the governing body of the legal entity opening this account to give bank a separate
authorization telling bank who is authorized to act on its behalf. Bank will not honor the authorization until bank
actually receives at its Escrow Department written notice of a change from the governing body of depositor.
City of Larsen Bay
R&R Fund Account – Sample Documents 2
5.Bank’s current fee schedule for its services hereunder is attachment B hereto. Bank’s set-up fee and first year’s
annual fee have been paid to bank as of the date of acceptance of this account by bank specified below. Future
annual fees shall be due and payable by depositor to bank on the same day each consecutive year of the term hereof.
An annual fee is due and earned when an account year begins. The first account year begins on the effective date
hereof. Any fee due and payable to bank hereunder may be charged against the above account when due. Bank may
amend Exhibit B hereto from time to time on thirty days prior written notice to depositor.
6.On the last calendar day of each month of the term hereof, bank shall furnish to depositor and Denali Commission a
written statement of the above account specifying the account balance, and any payment(s) received and interest
earned credited to the account, as well as all disbursements of credit to the account to the order of depositor and fees
charged to the account by bank, since the last statement date. Until further instructed in writing statements shall be
furnished to depositor and Denali Commission by mailing the same in a first class postage prepaid envelope
addressed as follows:
To Depositor: ______________To Denali Commission __________
_____________ __________
_____________ __________
_____________ __________
Depositor must examine its statement of account with “reasonable promptness.” If depositor discovers (or reasonably
should have discovered) any unauthorized signatures or alterations, depositor must promptly notify bank of the
relevant facts. As between depositor and bank, if depositor fails to do either of these duties, depositor will either
share the loss with bank, or bear the loss entirely itself (depending on whether bank used ordinary care and, if not,
whether bank substantially contributed to the loss). The loss could be not only with respect to items on the statement
but other items with unauthorized signatures or alterations by the same wrongdoer. Depositor agrees that the time it
has to examine its statement and report to bank will depend on the circumstances, but will not, in any circumstance
exceed a total of 30 days from when the statement is first sent or made available to depositor. Depositor further
agrees that if depositor fails to report any unauthorized signatures, alterations, forgeries or any other errors in its
account within 30 days of when bank first sends or makes the statement available, depositor cannot assert a claim
against bank on any items in that statement, and as between depositor and bank the loss will be entirely depositor’s.
7.Bank’s duties are determined from these instructions alone and without reference to other agreements, including,
without limitation, any agreement between depositor and Denali Commission, and no covenant or obligation shall be
implied against bank in connection with this agreement.
8.The effective date hereof is the date of acceptance of the account as specified by bank below. Money received by
bank prior to acceptance is deemed to be received on the date of acceptance.
9.Bank may assign its duties hereunder (and thereby be released from its duties) to any corporation regularly engaged
in the business of providing, in Alaska, the service bank is required to provide hereunder.
10.Bank may terminate the above account upon 30 days written notice to depositor and Denali Commission. After such
termination bank will pay any account balance to the order of depositor.
11.Bank is deemed to have notice only when notice is actually received at its Escrow Department office, which does not
include any branch office of bank.
12.A claim against bank is unenforceable unless an action is commenced within 90 days after termination of this
agreement.
13.Bank shall not be liable for any costs, expenses, damages, liabilities or claims including attorneys’ and
Accountants’ fees (collectively, “Losses”) incurred by or asserted against depositor except those Losses arising out of
the negligence or willful misconduct of bank. In no event shall bank be liable to depositor or any third party for
special indirect or consequential damages, or lost profits or loss of business, arising in connection with this
agreement.
City of Larsen Bay
R&R Fund Account – Sample Documents 3
14.Bank has no duty to look to the propriety or application of any payment or distribution made to depositor, or to the
order of depositor, and depositor agrees to indemnify bank and hold bank harmless from and against any and all
Losses sustained or incurred by or asserted against bank by reason of or as a result of any action or inaction, or
arising out of bank’s performance hereunder, including reasonable fees and expenses of counsel incurred by bank in
a successful defense of claims by depositor; provided, that depositor shall not indemnify bank for those Losses arising
out of bank’s negligence or willful misconduct. This indemnity shall be a continuing obligation of depositor, its
successors and assigns, notwithstanding the termination of this agreement.
15.Bank shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the
suitability of any transactions affecting the above account.
16.Bank shall be entitled to rely upon any resolution in the form of Attachment A actually received by bank and
reasonably believed by bank to be duly authorized and delivered.
17. Bank is authorized to supply to any third party any information regarding the above account which is required by
any law, regulation, rule or court order (including without limitation any subpoena) now or hereafter in effect.
18.Bank shall not be responsible for preparing or filing any tax report or return nor for the payment of any tax
assessed against, or with respect to, any of the assets of the above account or any transaction for the account of
depositor.
19.Each and every right granted to either party hereunder or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof,
nor will any single or partial exercise of any other right.
20.In case any provision in or obligation under this agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining provisions shall not be amended or modified in
any manner except by a written agreement executed by both parties. This agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns.
21.This agreement shall be construed in accordance with the substantive laws of the State of Alaska, without regard
to conflicts of laws principles thereof. Depositor and bank hereby consent to the jurisdiction of a state or federal
court situated in the Third Judicial District, State of Alaska, in connection with any dispute arising hereunder.
Depositor hereby irrevocable waives, to the fullest extent permitted by applicable law, any objection which it may now
or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such
proceeding brought in such a court has been brought in an inconvenient forum. Depositor and bank each hereby
irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this
agreement. To the extent that in any jurisdiction depositor may hereafter be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (before or after judgment) or other legal process, depositor irrevocably
agrees not to claim, and it hereby waives, such immunity.
City of Larsen Bay
R&R Fund Account – Sample Documents 4
22.This agreement and the attachments hereto constitute the entire agreement of the parties. Bank has not made
representations or assurances to depositor not stated herein.
Date: _______________________________
____________________________________
Depositor
By:_________________________________
By:_________________________________
First National Bank Alaska accepted this account on __________________.
By: _________________________________
City of Larsen Bay
R&R Fund Account – Sample Documents 5
1.
2.
3.
4.
5.
6.
7.
8.
Wells Fargo
Renewal and Replacement Account
Escrow Managed “Regular Savings” Account Agreement
, 2003 Account No.
The parties to this agreement are (Owner), and Wells Fargo. Owner hereby appoints Wells
Fargo, acting through its Trust Department, as the Invested Escrow Agent for the investment
and disbursement of the funds in accordance with this agreement. Wells Fargo agrees to serve
as Invested Escrow Agent, pursuant to the terms set forth in this agreement.
Monies deposited by the Owner with Wells Fargo shall be for the purpose of establishing an
R&R Account, which shall be used for replacement and repair of capital expenditure items with
regard to the Owner’s Energy Facility, which is partially or fully funded with monies from the
Denali Commission.
On or before , 2003, Owner shall deposit the sum of $_______ and a like sum, not later than
the last day of each and every month thereafter,until the expiration of this agreement, equal to
1/12 of the annual deposit required in the respective year, as set forth in Attachment D entitled
“40 Year Renewal and Replacement Cashflow” and any revisions thereof to be administered in
accordance with the terms of this Agreement.
The funds shall be deposited into an interest bearing “Regular Savings” account. Disbursements
from this account will be restricted and can only be approved by Wells Fargo’s Escrow
Department pursuant to this agreement.
Upon written instruction from Owner, in the form of a Resolution identical to Attachment A,
signed by two parties, Wells Fargo’s Escrow Department shall disburse funds to the Owner.
The interest earned on the account shall accrue for the benefit of the Owner.
Wells Fargo will assess the fees and charges set forth in the fee schedule which is attached as
Attachment B.
Wells Fargo will compile a “Monthly Report”, at the end of each calendar month, on all Renewal
and Replacement Accounts that are established under similar agreement. This report will show
all account activity by each Owner including; deposit amounts, date of deposits, disbursements,
and date of disbursements. Monthly reports shall be sent to:
Denali Commission
Attn: Chief of Staff
510 L Street Suite 410
Anchorage, AK 99501
City of Larsen Bay
R&R Fund Account – Sample Documents 6
9.
Wells Fargo shall have no duties not expressly provided for herein, and will not incur liability if it
substantially complies with the instructions contemplated herein, using reasonable care in
executing transactions, and in safekeeping the funds.
Wells Fargo
By:Date
Its:
_________________________
(Owner)
Date
By:
Its:
Taxpayer ID #
Address:
City of Larsen Bay
R&R Fund Account – Sample Documents 7
PLEASE COMPLETE THIS AREA TO INSURE CORRECT ROUTING
ORIGINATED BY
ESCROW AGREEMENT
ACCEPTED COPY
Acct. # RETURN TO
TO: WELLS FARGO BANK ALASKA (WF),
its successors and assigns Date:
I hand you herewith the following described item(s):
Beginning Balance $ Payments of $ Maturity Date
Monthly Quarterly Semi-Annually Annually
First payment due: Interest start date at %
Payments made in excess of the regular scheduled amount will will not satisfy future payments due.
Excess funds will will not be applied to prior mortgage/debt. Interest calculation based on 360 days 365
days.
Attached: Exhibit A Special Payment Provisions Exhibit B Multiple Disbursements Exhibit C Partial Releases Exhibit D Reserves
Additional Instructions:
You are authorized to charge my WF Account # for the scheduled escrow payments, balloon payments.
Payer Signature
Remit payments to payee:
Address
Or Credit Payments to: Cashier’s Check E.F.T. (Enclose voided check)
Checking Savings: WF Acct. No. (Disbursement fees paid by payee per payment/ transaction)
Upon execution of this agreement the parties herein agree to pay fees in accordance with the current fee schedule, fees are collected per
payment/transaction. Set up fee: paid collect from first payment. Fees Paid by: Payee Payer Divide Equally
(Fees Subject to Change Without Notice) We request late payment monitoring (additional fee)
Unless otherwise instructed, all service charges and fees will be charged to Payee.
WF is hereby authorized to deliver, by registered mail or personally, the instrument(s) and/or document(s) herein mentioned to any one of the undersigned Payees for and on behalf of all Payees at any address given below or such other
address as any one of the undersigned Payees shall designate in writing upon Payee’s request or at WF’s option under the following conditions:
At Payee’s request when:
(a) Any payment is delinquent 30 days or more; or
(b) Payee furnishes WF evidence that Payer has received at least 20 days’ written notice of Payee’s intent to terminate, delivered by
registered or certified mail.
At WF’s option when:
(a) One payment has been delinquent for three months and WF has provided 10 days’ prior notice to Payee and Payer.
(b) Upon 30 days’ prior written notice by WF to Payee and Payer.
We the undersigned have read this Agreement, including the Terms and Conditions set forth on the reverse side, and understand the contents thereof and acknowledge that the terms of the Agreement are satisfactory to
each of us. Upon receipt by the Bank of the final payment, the Bank will deem the contract satisfied and the Instrument(s) and/or document(s) will be released to the Payer. Under penalty of perjury, I certify that the Social Security or
Employer I.D. Number provided below is true, correct and complete, and I am not subject to backup withholding.
Date Date
PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO. PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO.
X X
PAYEE (SELLER) SIGNATURE PAYER (BUYER) SIGNATURE
ADDRESS ADDRESS
PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO. PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO.
X X
PAYEE (SELLER) SIGNATURE PAYER (BUYER) SIGNATURE
ADDRESS ADDRESS
Received above item(s) subject to conditions herein mentioned.
Wells Fargo Bank Alaska.
By
PLEASE COMPLETE THIS AREA TO INSURE CORRECT ROUTING
WELLS FARGO BANK ALASKA ESCROW AGREEMENT
Terms and Conditions
Payments. Payer shall pay all sums due Payee from time to time in the manner set forth herein to WF Escrow Service Department, at P.O. Box 100600, Anchorage, Alaska
99510-0600 or such other address as may be directed by WF in the future. WF shall accept all payments tendered on this transaction, regardless of whether they are partial,
full, or additional payments or whether they are tendered before or after the payment due date. WF shall have no duty or obligation to refuse any payment nor shall it be
responsible for determining the sufficiency of any such payment unless otherwise agreed in writing by WF. WF will credit the account for payments as received and will
disburse funds the following business day, but shall not be required to disburse to Payee prior to the time WF determines the payment is from collected funds. If any check
received by WF is dishonored upon presentment for any reason, WF may notify Payee of such dishonor and the amount of funds which WF has disbursed to Payee or other
named Payees in reliance upon Payer’s dishonored payment. Upon receipt of such notice, Payee shall promptly remit to WF the amount of such funds so disbursed by WF
together with WF’s then customary charge for the handling of returned checks, which charge shall be stated in the notice sent to Payee. WF is hereby given authority to reverse
the credit to an account to which it has disbursed funds and/or to deduct from Payee’s account the amount of the charge plus the amount of funds it has disbursed in reliance
upon said dishonored payment. If two (2) checks are dishonored during any calendar year for any reason, WF may without notice terminate this account, cancel this Agreement
and return the documents to Payee.
Interest Computation. Interest will be computed on a 365-day factor, except for leap year. Payments will be applied first to WF’s fees, then to interest, the remainder, if any, to
principal. The parties shall have 30 days in which to dispute the application of payments as computed by WF. WF shall be notified of any such dispute in writing within 30 days.
If WF does not receive such notice within 30 days, all computations made by WF shall be conclusively deemed correct. Nothing in this paragraph shall modify or change any of
the agreements between, or rights and remedies of Payer and Payee, as between the two. Any modification to this method of computation must be agreed to in writing by WF.
Service Charge. WF may deduct its fees and service charges from payments received or credited to Payee’s account. If fees or service charges are not received within 30
days of their due date, WF is authorized to terminate this Agreement without notice and deliver the documents to Payee. The expenses of closing of this collection may be
deducted from the proceeds of the final payment. Service charges and fees are set forth in WF’s published rates, which are subject to change from time to time without notice.
Disputes. In the event of any dispute or misunderstanding, WF shall have the option to close the escrow and deliver instruments or documents to any one of the Payees or on
behalf of the Payees upon 30 days prior written notice by WF to Payee and Payer or to hold undisbursed funds, or to require settlement by a neutral party, such as an arbitrator
for determination, or to pursue any legal remedies which may be available to it, including the right to deposit the subject matter hereof in interpleader in the appropriate court of
the Third Judicial District, Anchorage, Alaska, and upon so doing to be absolved from all further obligations or liability hereunder. Payee and Payer jointly and severally agree to
pay to WF all costs and expenses incurred by WF, including actual attorney’s fees, in any interpleader action.
Limitation of WF’s Responsibility. WF shall be responsible only for the exercise of ordinary care in performing the duties set forth in this Agreement. WF shall be relieved
from any further or additional liability beyond the performance of the duties expressly set forth herein. The parties hereto jointly and severally agree to defend, indemnify, and
hold WF, its officers, employees, shareholders, attorneys, directors, agents and representatives harmless from and against, and to pay on demand all claims, costs, damages,
judgments, attorney’s fees, expenses, obligations and liabilities of every kind and nature suffered or incurred in connection with this Agreement except any liability founded upon
WF’s failure to exercise ordinary care in performing the duties contained herein. Payee and Payer agree that WF will not be responsible for any of the following.
(a) To notify any party of nonpayment or declaration of default, condemnation or the condition of any property;
(b) To construe, enforce or determine the performance or nonperformance of any terms of the documents underlying the transaction;
(c) To determine if any agreement or document is in compliance with local, state, or federal laws and regulations;
(d) To determine the authenticity, validity, enforceability or sufficiency of any document deposited, or for the accuracy of description of any such document, the
description having been furnished by the parties;
(e) To give notice of any change of ownership or to enforce any due-on-sale or similar provisions;
(f) To determine if any payment schedule will amortize any obligation;
(g) To determine the sufficiency or verification of the account balances on any other previously or subsequently-recorded encumbrance or security interest against the
property, including security interests which this collection agreement may, in whole or in part, satisfy; further, WF does not assume any responsibility for
determining if any payments being made by this escrow to satisfy, in whole or in part, any other obligation will, in fact, amortize the obligation receiving the
payments hereunder at or before the satisfaction of this escrow;
(h) To pay or notify any party regarding recording of documents, perfection of security interests, or nonpayment of insurance premiums, taxes or other assessments or
encumbrances;
(i) To assess, bill, collect or pay any late charges due under the terms of the documents deposited herewith unless otherwise agreed in writing by WF;
(j) For the determination of balances to third parties or overpayments to them where instructed to credit payments to persons other than the Payee;
(k) To verify or determine whether the assignment of the payments under this escrow for security purposes or otherwise does not create a default in the terms of the
documents underlying this transaction;
(l) To account or give credit for any payment made or received outside this collection;
(m) To vote or exercise any of the rights of ownership of corporate stock or similar items deposited herewith; or
(n) To perform any act not expressly set forth in this Agreement even though contained in any documents deposited herewith.
The liability of WF for negligent performance, or negligent non-performance, shall be limited to the amount of charges or fees charged to the parties hereto, under this
Agreement, for the month in which any damages are incurred. Under no circumstances will WF be liable for any special, consequential, or punitive damages. Notwithstanding
any other provision of this Agreement, WF will not be liable for any damage, loss, liability, or delay caused, directly or indirectly, in whole or in part, by those items set forth
above.
Lien-Offset. WF shall have a first and paramount lien on all documents, monies and things deposited in connection with this Agreement and the right of offset against any WF
account of any party hereto to secure payment of all costs, expenses, obligations and fees due WF.
Agreement Controls. In the event of conflict or omission between the documents deposited in connection with this Agreement, this Agreement shall control as to WF. WF
shall not be responsible for determining the existence of any such conflict or omission.
Authority to Release Information. If any party to this Agreement sells or contracts to sell the property described in the documents deposited herewith, or applies for financing
secured by the property, WF is authorized to furnish to the lender, closing agent, or any other interested party, any information concerning the status of this account, including
the payment records and copies of the documents deposited.
Authority to Transfer. WF is authorized to assign, delegate and/or transfer all its duties and the documents held hereunder to another institution upon ten (10) days’ prior
written notice to Payer and Payee. Upon such transfer, WF shall be relieved of all further duties and liabilities under or related to this Agreement.
Notice. Any notice to WF required or permitted hereunder shall be sent certified or registered mail to Wells Fargo Bank Alaska Escrow Service Department, P.O. Box 100600,
Anchorage, Alaska 99510-0600, or such other address as may be designated by WF. Notice shall be effective only when received in the Escrow Service Department.
General. This Agreement may be modified or amended only by written instructions accepted by WF and payment of the applicable fee. This Agreement is intended for the sole
benefit of the parties hereto, and shall not be construed to create any rights in third parties. This Agreement shall be governed and interpreted in accordance with the laws of
the State of Alaska, and any litigation arising out of or relating to this Agreement to which WF is a party shall be commenced and maintained only in the appropriate court of the
Alaska State Court System, Third Judicial District, at Anchorage.
City of Larsen Bay 8
R&R Fund Account - Sample Documents
ATTACHMENT A
Resolution for Disbursement of Renewal and Replacement Funds
for Energy Facility
An Identical Resolution to This Must be Passed and Signed by the Community To Withdraw Funds from
The R&R Account
Community of_______________
Resolution No. ______
WHEREAS, the Community of __________ has established an escrow managed interest bearing renewal and
replacement account with the financial institution of _____________ for the purpose of renewal and replacement
expenditures related to the _____________facility, which was partially or fully funded by the Denali Commission,
and
WHEREAS, pursuant to the communities approved business plan for _____________facility the community has
agreed that funds deposited into this renewal and replacement account will only be used for the renewal and
replacement of _____________facility, and
WHEREAS, eligible withdrawal of funds from this account must be for the labor, transportation, equipment rental,
professional services, materials, equipment and other costs for the replacement and repair of assets essential to the
on-going sustainability of the ___________________facility. For energy facilities this is including but not limited
to: Access Roads, Buildings, Poles, Transformers, Generators, Radiators, Electrical Systems, Wires, Meter
Systems, Pumps, Fencing, Fuel Storage Tanks, Fuel Distribution Systems, Walkways, Access Roads Dispensers,
Fill Stations, Tank Liners, Fencing, Pad, Valves, Pipelines, Piling, Decks, Manwalks, Headers, Ground Maintenance
and Containment Systems
THEREFORE, the Community of _____________ hereby attests that the funds being requested from the escrow
managed interest bearing renewal and replacement account with the financial institution of __________________ is
for renewal and replacement expenses related to the ____________________facility as outlined above and is not
being used for any other purpose, and
THEREFORE, the Community of ______________ requests the total sum of $_______ for the following detailed
expenses___________________________________________
__________________________________.
Signed by two people representing the community,
City of Larsen Bay 9
R&R Fund Account - Sample Documents
ATTACHMENT B
How to Establish a Renewal and Replacement Account for
Denali Commission Funded Public Infrastructure
Background
Under the guidelines of Denali Commission funding a community is required to have a business plan that outlines
how the Denali Commission funded project will be operated and maintained. One of the conditions required in the
business plan is a community established Renewal and Replacement (R&R) Account. An R&R account will
provide a mechanism for the community to save money for the inevitable renewal and replacement costs associated
with the facility.
General Guidelines of a Renewal and Replacement Account
• Allows community to make monthly deposits
• Must be an interest bearing account
• Only allows withdrawal of funds for Renewal and Replacement costs of the facility.
o Requires a Resolution from the community certifying funds are being used for Renewal and
Replacement expenses related to the facility that was partially or wholly funded by the Denali
Commission.
• Account must allow for Denali Commission and other Auditing agencies to monitor deposit and
withdrawal activity (Monthly Reports on account activity must be sent to Denali Commission)
Financial Institutions
The Denali Commission has negotiated terms with two Financial Institutions that will allow for the unique
guidelines of these R&R accounts. Other institutions that will allow accounts that meet the guidelines above are
acceptable.
First National Bank Wells Fargo
Contact Person Lorraine O’Neal
Sr. Escrow Officer
First National Bank Operations
Center
1751 Gambell St.
Anchorage, AK 99501
Phone: (907) 777-3424
Fax: (907) 777-3446
Jackie Zuspan
Escrow Manager
Wells Fargo
301 West Northern Lights Blvd.
Anchorage, AK 99503
Phone: (907) 265-2162
Fax: (907) 265-2170
Type of Account Escrow Managed “First
Investment”Account
Escrow Managed “Regular
Savings” Account
Set-Up Fee $30.00 $35.00
Annual/Monthly Fee $50.00 Annual Fee and $5
monthly fee until account balance
is above $2,500
$3 Monthly Fee until account
balance is above $300
Disbursement Fee $25.00 each time a community
requests funds (through approved
resolution)
$5.00 each time (for a Money
Order) when a community
requests funds (through approved
resolution)
City of Larsen Bay 10
R&R Fund Account - Sample Documents
Check Writing None None
Reports Monthly Report to Denali
Commission on Deposit and
Withdrawal activity (.50 Charge)
Monthly Report to Denali
Commission on Deposit and
Withdrawal activity (No Charge)
Requirement for Withdrawal of
Funds
Approved Resolution Identical to
Attached Template must be
submitted to Escrow Department
Approved Resolution Identical to
Attached Template must be
submitted to Escrow Department
Interest First Investment Account
Tiered depending on balance of
account (based on current
Treasury Bill). Below are
1/02/02 rates:
$0-$2,499 .557%
$2,500-$4,999 .778%
$5,000-$24,999 .825%
$25,000-$49,999 .846%
$50,000-$99,999 .887%
$100,000+ .917%
Based on the Regular Savings
account:
5/20/02 rate = 1%
To establish an account:
1. Contact one of the representatives above
2. Tell them you need to establish a “Denali Commission Renewal and Replacement Account”
3. Sign the Account Agreement for the institution.
4. Pay set-up fee and fill out other general information to establish account
Sample documents attached include:
o Business plan language that requires R&R accounts
o Account agreements (between institution and community) templates
o Example of the resolution that is required to withdraw funds from a R&R account
City of Larsen Bay 11
R&R Fund Account - Sample Documents
ATTACHMENT C
EXAMPLE OF LANGUAGE IN ALL DENAI COMMISSION FUNDED ENERGY
FACILTIES
Financial Responsibilities
There are two cost categories that will be incurred in the ongoing operation and upkeep of the
Facility – O&M and R&R.
The Primary Operator will incur a number of expenses relating to the O&M of the Facility. O&M
items are defined as expenses that are incurred on a regular basis (administration, audits, etc) and
maintenance expenses that are incurred on an annual basis. O&M expenses are detailed in Table C:
Annual O&M Costs and a narrative detail is provided in Section IX: Financial Information to address
estimates and assumptions.
R&R costs are those expenses defined as items costing greater than $5,000 and/or that are not
replaced on an annual basis. Table E: 40 Year R&R Schedule details the anticipated items, the
frequency of their replacement and their present day value.
The Primary Operator will maintain separate O&M and R&R accounts and will maintain a sufficient
account balance to meet the O&M and R&R financial goals in this Plan. The O&M account may be
an active non-interest bearing account, while the R&R account must be an interest-bearing, managed
savings account, which requires two signatories and a community resolution for withdrawals, until
such time as the cash balance makes an escrow account more cost effective; then the R&R account
must be transferred to an interest-bearing invested escrow account that is acceptable to the Denali
Commission. The Manager will be authorized to draw against the O&M funds for routine expenses
of the Facility, however individual expenditures in excess of $5,000 will require the authorization of
the Primary Operator’s management or governing body. See Appendix A: Primary Operator Statement
of Qualification for an overview of the Primary Operator’s fiscal controls and accounting procedures.
At least once a year, no later than May 31, the Primary Operator will develop a budget for the
upcoming calendar year, July 1 through June 30, for both O&M and R&R.
Operations and Maintenance Guidelines
The Primary Operator will establish an active non-interest bearing account for the Facility O&M so
that the O&M schedule can be completed and the Facility operations can be sustained into the
future. Section IX: Financial Information provides Table C: Annual O&M Costs as a guide to plan for
annual maintenance activities and Table D: 40 Year O&M Cashflow as a guide to estimated yearly
O&M required contributions. These costs are based upon the O&M cost estimate provided by
HMS, Inc, see Appendix B: O&M and R&R Cost Estimate.
Renewal and Replacement Guidelines
The Primary Operator will establish an interest bearing escrow managed renewal and replacement
account acceptable to the Denali Commission, which will ensure capitalization of an amount
sufficient to maintain the R&R Schedule (see R&R Fund Account – Sample Documents for “How to
Establish a R&R Account”). It is assumed that the R&R activities for Year 20 will be funded 40%
City of Larsen Bay 12
R&R Fund Account - Sample Documents
from the R&R account and 60% from debt financing, at 5.5% over 10 years. Section IX: Financial
Information provides Table E: 40 Year R&R Schedule as a guide to plan for annual R&R activities,
Table F: 40 Year R&R Cashflow as a guide to estimated yearly R&R required contributions, and Table
G: Loan Schedule as a guide to Year 20 R&R loan assumptions and payment schedules. These costs
are based upon the R&R cost estimate provided by HMS, Inc, see Appendix B: O&M and R&R Cost
Estimate.
The Primary Operator will periodically remit R&R funds to the administrator of its R&R escrow
account according to guidelines to be established by the Denali Commission. Management and
other fees charged by the escrow fund administrator will be automatically deducted from the
Primary Operator’s R&R escrow account, according to an Escrow Agreement or other similar
document.
The Primary Operator will use the estimates in this Plan for year one contributions, and in
subsequent years will recalculate contributions based upon assets to be maintained as actually built.
City of Larsen Bay 13
R&R Fund Account - Sample Documents
ATTACHMENT D40 YEAR RENEWAL AND REPLACEMENT CASHFLOW City Inflation Rate :1.50%Initial Cost per gallon ($/gallon) :0.155$ Reinvestment Rate :3.00%20 Year R&R:482,069$ Annual increase :1.50%Escrow Fees:1.00%20 Year Loan Proceeds:289,241$ City Initial Throughput (gallons) :179,000 NANA Initial Throughput (gallons) :- Initial Cost per gallon ($/gallon) :-$ Loan Rate:5.50%NA Initial Throughput (gallons) :- Annual increase :-$ Loan Term:10 YearsNAInitial Cost per gallon ($/gallon) :-$ Annual increase :-$ 1-$ 27,745$ -$ -$ 27,745$ -$ -$ 27,745$ 179,000 - - 0.155$ -$ -$ 2 27,745$ 28,302$ -$ -$ 28,302$ -$ 832$ 56,879$ 179,895 - - 0.157$ -$ -$ 3 56,879$ 28,870$ -$ -$ 28,870$ -$ 1,706$ 87,456$ 180,794 - - 0.160$ -$ -$ 4 87,456$ 29,450$ -$ -$ 29,450$ -$ 1,749$ 118,655$ 181,698 - - 0.162$ -$ -$ 5 118,655$ 30,041$ -$ -$ 30,041$ 8,206$ 2,209$ 142,698$ 182,607 - - 0.165$ -$ -$ 6 142,698$ 30,644$ -$ -$ 30,644$ -$ 2,854$ 176,196$ 183,520 - - 0.167$ -$ -$ 7 176,196$ 31,259$ -$ -$ 31,259$ -$ 3,524$ 210,980$ 184,438 - - 0.169$ -$ -$ 8 210,980$ 31,887$ -$ -$ 31,887$ -$ 4,220$ 247,086$ 185,360 - - 0.172$ -$ -$ 9 247,086$ 32,527$ -$ -$ 32,527$ -$ 4,942$ 284,554$ 186,287 - - 0.175$ -$ -$ 10 284,554$ 33,180$ -$ -$ 33,180$ 77,853$ 4,134$ 244,015$ 187,218 - - 0.177$ -$ -$ 11 244,015$ 33,846$ -$ -$ 33,846$ -$ 4,880$ 282,741$ 188,154 - - 0.180$ -$ -$ 12 282,741$ 34,525$ -$ -$ 34,525$ -$ 5,655$ 322,921$ 189,095 - - 0.183$ -$ -$ 13 322,921$ 35,218$ -$ -$ 35,218$ -$ 6,458$ 364,598$ 190,040 - - 0.185$ -$ -$ 14 364,598$ 35,925$ -$ -$ 35,925$ -$ 7,292$ 407,816$ 190,991 - - 0.188$ -$ -$ 15 407,816$ 36,647$ -$ -$ 36,647$ 9,524$ 7,966$ 442,905$ 191,945 - - 0.191$ -$ -$ 16 442,905$ 37,382$ -$ -$ 37,382$ -$ 8,858$ 489,145$ 192,905 - - 0.194$ -$ -$ 17 489,145$ 38,133$ -$ -$ 38,133$ -$ 9,783$ 537,061$ 193,870 - - 0.197$ -$ -$ 18 537,061$ 38,898$ -$ -$ 38,898$ -$ 10,741$ 586,700$ 194,839 - - 0.200$ -$ -$ 19 586,700$ 39,679$ -$ -$ 39,679$ -$ 11,734$ 638,113$ 195,813 - - 0.203$ -$ -$ 20 638,113$ 40,476$ -$ -$ 40,476$ 289,241$ 482,069$ 8,906$ 494,667$ 196,792 - - 0.206$ -$ -$ 21 494,667$ 41,288$ -$ -$ 41,288$ 38,373$ -$ 9,126$ 506,709$ 197,776 - - 0.209$ -$ -$ 22 506,709$ 42,117$ -$ -$ 42,117$ 38,373$ -$ 9,367$ 519,819$ 198,765 - - 0.212$ -$ -$ 23 519,819$ 42,963$ -$ -$ 42,963$ 38,373$ -$ 9,629$ 534,038$ 199,759 - - 0.215$ -$ -$ 24 534,038$ 43,825$ -$ -$ 43,825$ 38,373$ -$ 9,913$ 549,403$ 200,758 - - 0.218$ -$ -$ 25 549,403$ 44,705$ -$ -$ 44,705$ 38,373$ 11,052$ 10,000$ 554,682$ 201,762 - - 0.222$ -$ -$ 26 554,682$ 45,602$ -$ -$ 45,602$ 38,373$ -$ 10,326$ 572,238$ 202,770 - - 0.225$ -$ -$ 27 572,238$ 46,518$ -$ -$ 46,518$ 38,373$ -$ 10,677$ 591,060$ 203,784 - - 0.228$ -$ -$ 28 591,060$ 47,452$ -$ -$ 47,452$ 38,373$ -$ 11,054$ 611,193$ 204,803 - - 0.232$ -$ -$ 29 611,193$ 48,404$ -$ -$ 48,404$ 38,373$ -$ 11,456$ 632,680$ 205,827 - - 0.235$ -$ -$ 30 632,680$ 49,376$ -$ -$ 49,376$ 38,373$ 104,857$ 9,789$ 548,615$ 206,856 - - 0.239$ -$ -$ 31 548,615$ 50,367$ -$ -$ 50,367$ -$ 10,972$ 609,955$ 207,891 - - 0.242$ -$ -$ 32 609,955$ 51,378$ -$ -$ 51,378$ -$ 12,199$ 673,532$ 208,930 - - 0.246$ -$ -$ 33 673,532$ 52,410$ -$ -$ 52,410$ -$ 13,471$ 739,413$ 209,975 - - 0.250$ -$ -$ 34 739,413$ 53,462$ -$ -$ 53,462$ -$ 14,788$ 807,663$ 211,025 - - 0.253$ -$ -$ 35 807,663$ 54,535$ -$ -$ 54,535$ 12,827$ 15,897$ 865,268$ 212,080 - - 0.257$ -$ -$ 36 865,268$ 55,630$ -$ -$ 55,630$ -$ 17,305$ 938,203$ 213,140 - - 0.261$ -$ -$ 37 938,203$ 56,747$ -$ -$ 56,747$ -$ 18,764$ 1,013,714$ 214,206 - - 0.265$ -$ -$ 38 1,013,714$ 57,886$ -$ -$ 57,886$ -$ 20,274$ 1,091,874$ 215,277 - - 0.269$ -$ -$ 39 1,091,874$ 59,048$ -$ -$ 59,048$ -$ 21,837$ 1,172,760$ 216,353 - - 0.273$ -$ -$ 40 1,172,760$ 60,233$ -$ -$ 60,233$ -$ 1,215,125$ -$ 17,868$ 217,435 - - 0.277$ -$ -$ Total Per Gallon PaymentCity NA NA Principal Received Debt Service End ofYearBalance Year Renewals/Replacements Annual Deposit InterestEarnings (Net of Fees) Beg. ofYearBalance R & R Fund Balance City NA NA Assumed Throughput (Gallons)City NA NACity of Larsen BayR&R Fund Account - Sample Documents 14