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Edna Bay Bulk Fuel 2015
DRAFT Business Operating Plan of the Edna Bay Bulk Fuel Facility JANUARY,2015 The City of Edna Bay P.O.Box EDB Edna Bay,Alaska 99950-040 Phone:(907)594-6301 Fax:(907)594-6107 TABLE OF CONTENTS PAGE I.EXECUTIVE SUMMARY .....scsscsssosscssscssssssscesscssscsssssssccssecssscsetcessecsensssussessecesssussacsoessssecssoscsssesesaseeceszes 2 Document Interrelationships ...........cssesssesssesseecseeceeeseecsesseeceesssesssessseesesssecseeess sessessesecessessessssssvsssessscscscesesesssneavenes 2 II.BACKGROUND.,.....scsscssesescenecsecssssnscnencoocccesessassnacsssuscccsssssseseccessssssscecesenessessetesseseesscssscecesecesceuseescssccece 3 Selected Statistics -Edna Bay ....cssssssssssssssssesssssssssessssuesssesssssscesssessaseessseceessnresssntessusessasesssssessusessasecsssscssssesensavecs 3 TIT.FACILITY UPGRADE ........ccsccsssssccesesesccesccsssscsncssseesssesssccescesssssssesscesesecscnsecesuscsessasssssssseuscssssseseessesenees 4 Bulk Fuel Storage Facility Description......ccssessessssesssesssssesseecsseessecssssecsneecsseessusessscsssecesasesssesssesescessscnsseessesenecenes 4 Project Exclusions .....scessecssssseessssccsssseesscsscscsssssessssessssassussessecsussusssssesssesscsscsessnsascassesesssessesacsassasssceassssscsacsassseeneeaens 4 Community Site Plan w.ccscsscsssessessssseessccssessscsceseessescsessnsenecauecseesscnscsusssussnecasesuesssssssessesssesseasecsscsuessesssesessecserssess 5 Bulk Fuel Storage Facility Capacity...ccssssssssssssssssssssssssssesssesssessnesssseessscsssecnsessasecseessnessucscasecsuessasesseesnseecesneessa 6 IV.FACILITY PARTICIPANTS......cscssssssssssccsssesosrsecsscccersccesssceesssessaccasavecescssssvessucesasacecsecesecnsueaceescaseasanenses 8 Participant Contact ...cesescsssscccsssssscsseensscssssesseeseesssssssssssnsesecussussvesessassussesssesassasssccsesessesussussesecsucsecsessusssecaeseesesensenses 8 Piping Plan and Tank Schedule .....ecccscsssessesssssessessesssessssseeseessssneessecseessecseensscuecsessesssecuessssaseasssacsnesasaseeseeasessses 9 Vv.FACILITY OPERATOR .......cccccsesescccccsssccccsnsecccncssecccucsccccucccccsssaccsccececsccssescscessescsccececcnsvecessscessessenenesecs 10 Turnover and Assumption of Responsibilities /Sustainability........ssesssecseecssecseeseeeseecseeeceessseessecseeneeeneesseeesees 10 Staffing and Training...scssecsssssssesssssssssssesssssssssssesssssssesessssessssssssosessececcccsssnssseetensessceeseeatsssesectecseceseesacsessessaseases 10 Financial Responsibilities ......ccccsccsssssssssssssssessessesssssssssasssesssssessssesssanssessnssnsnnssssescesateaesesnensaaseseeaeenesessaceeeeseeneeaseess 11 Operations and Maintenance Guidelines........ccccsssesssesssssessesssssesnssesessssseessesesssesssssssesessssssesssssesstssossssaeesuesnvesees 11 Renewal and Replacement Guidelines .........ccsssssssessssssssessscssssessscsscesssssssssvssssasensssessoesonsssecsesneeneeaseateaserseseentes 12 Annual Audit .......ccscsescscssssssssssessesesseseesssesssccsececsrssssnessesesssacsesacseseesesessessssesesscauseenssacausacsesacsaacssscssceesesscessesasescesseess 12 VI.INSURANCE .osssccsssscsssscsssccsssssensccsnnncecsscesssscsnsscsnsorsssusessnasssssenresoneusessasenonesenssseessssescsesesaesensssesnecanseses 13 VII.REGULATORY COMPLIANCE ......cccsccosscccesscccnscccescnccscensessecessccccsscevenceescencssceseccacceccensceenssssccessasceseseess 14 VITI.FINANCIAL INFORMATION .....ccccssccssesesscscccccscvccscccnccsecscescnccccnenscncasssccsccensnsocsscceescceansstascsececscesssenscens 15 Key Financial Assumptions «........scssesssssesssssssessessessessssssensssssssssssssecescssecssssssssnessessuesneesscsucaseessessenneeneeseessssseaseaneessenss 15 Key Operating Assumptions ........sscsssssesssssesssessssssessessesssesessssneesssanecsscssscasssncsareaneasecnecsucsuessessssaesnerasesseeseesecnsstasenies 15 Explanation of Financial Terms ......ccscessessessescssessesssscsssseesseessesesecesessssesssessecssscsaseenecsaeesecseccasecssessscansesscesesesseesses 15 Bulk Fuel Facility Funding...cccsssessesssesseesssesssssstsssessesssecssssesscessesseesssecsnessnecssecsecsanessusssssnessnesanessucesscesnessasenscssnes 15 Subsequent Operating Year Revisions......csssssssssssesssssssssesssessssseensesssssessesstsssessesssensesneesessuseasenssssseeeseenesssensessaesees 16 Financial Overview....ccccccscscsssscssssssssscessssscsssscsssscseesesecsussssssessessecesccaustsecauseesestencessseseseessesessesesceneessseeeseesesscuestenestenees 17 TABLES Table A:Summary of Facility Expenses ...c.cecsssssssssssesssccsssesecsssssnsssssssssssseessecsasnnseaseecssceneenseenecsassssecsueeenessnessase 18 Table B:Participant Allocation ....essssssssessessesssesssesssssssessesssecssessnesssesssessnesssssssesssecssegqueensensuessesentscneetseenteeanessaes 19 Table C:Annual O&M Schedule oc.cccccssssesssesessesssssesessesscesesesssscsssccscsusescesseseesenecesenssceasaenqeqesessseeeetsceceasesaanens 20 Table D:40 Year O&M Cashflow.......ccsccccsssssseresssssssssccscssscscssesssescssessneneneccecssssscessssacacecsesesesaueuseeseneceesasaeasaesasees 21 Table E:40 Year R&R Schedule ..cccccccssccsscscsssssscesceccsrserssetessescessaseessesesessenssesaessesesesavsrsessesurscesssceenssseeaseaesenses 22 Table F:40 Year R&R Cashflow ..ccccsscssssssssseccssssssssssssescsssscscsesesscscessnenenessecussceasssseseececsceseacsassuceasacscsaeaeneasasseenes 23 Table G:Loan Schedule v.ccccssscscssssssesesssccccsssssscsscssssscneneessssessesesssesssesesseesesesenssssassenssesenssseetecieecuseseesecsesaseseeeananes 25 APPENDIX A:FACILITY OPERATOR BUSINESS ORGANIZATION APPENDIX B:O&M AND R&R CosT ESTIMATE -ADDITIONAL RELATED AND ATTACHED DOCUMENTS SEE BACK1,SITE CONTROL DOCUMENTS COVER FOR 2.R&R ACCOUNT INFORMATION CD VERSION OF THIS PLAN. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 1 of 25 I.EXECUTIVE SUMMARY This Business Operating Plan (the "Plan”)provides a guideline for the City of Edna Bay (the "City”) for maintenance,operation and sustainability of a new Bulk Fuel Storage Facility (the "Facility”). The City will own the Facility and be the Facility Operator. This Plan has been developed to assist The City of Edna Bay with maintaining and operating the facility.The Plan provides estimates of operation and maintenance needs and renewal and replacement and costs,and estimates a per gallon surcharge for fuel. The Bulk Fuel Upgrade (BFU)project will construct a new bulk fuel Storage facility in Edna Bay. Upon construction,the Facility will be turned over to the City after the satisfactory completion,as determined by the Alaska Energy Authority (AEA)or its representative,of a 14-day test period. After this test period,the AEA will provide written notice (Certificate of Substantial Completion) that the Facility is ready for Beneficial Occupancy.Upon receipt of this Certificate,The City of Edna Bay will become the Facility Operator and will assume responsibility for the use,day-to-day operations and long-term maintenance of all Facility components.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. 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 the Financial Overview and Table A:Summary of Facility Expenses to Participants for the estimated per gallon bulk fuel surcharge. Document Interrelationships Attached to this Plan are: e Management Agreement e Site Control Documents e Grant Agreement e R&R Account Information The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 2 of 25 II.BACKGROUND Edna Bay is located on the southeast coast of Kosciusko Island,northwest of Prince of Wales Island,in Southeast Alaska.The community is approximately 175 miles southeast of Juneau and 60 miles southwest of Wrangell.Edna Bay has a maritime climate with average winter and summer temperatures of 37°F and 58°F,respectively.Annual precipitation is around 120 inches,including 40 inches of snowfall. is accessible by floatt plane,helicopter,barge and skiff The Community has a small boat dock and Ct Mendanchorageareawithabreakwater.Kosciusko Island has an expansive system of Forest Service roads rlythatareutilizedforsubsistenceandrecreationalactivities.propeliatis Selected demographic and historical data for the community is provided below: Selected Statistics Edna Bay Population 2010 (DCCED Certified Population)42 2000 49 1990 86 1980 6 1970 112 1960 135 1950 41 Housing (1990 Data) Occupied Housing 25 Vacant Housing Due to Seasonal Use 4 P j!Other Vacant Housing % The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 3 of 25 III.FACILITY UPGRADE The Bulk Fuel Upgrade project will construct a new Bulk Fuel Storage Facility in Edna Bay. Bulk Fuel Storage Facility Description The proposed new tank farm will be located on City-owned land (Tract A within Lot 1,Section 23, Township 68 South,Range 76 East,Copper River Meridian)recently acquired from ADNR. Access to the site is by Forest Development Road (FDR)1525.The tank farm will consist of three horizontal double wall,skid mounted ASTs including one 20,000-gallon (gasoline)tank,one dual product 28,000-gallon AST (20,000-gallon diesel #2,8,000-gallon diesel #1)and one 5,000 gallon protected,dual product dispensing tank (2,500 gasoline and 2,500 diesel #2).The proposed tanks will be placed on a new gravel pad foundation within a lined concrete dike containment area.A new dual product truck header will be installed to fill the facility.In addition,a new dual product retail dispenser and fleet fuelling hose reel dispenser will be provided. Project Exclusions The BFU project does not include the following: e Decommissioning of existing tanks or environmental remediation e Rolling stock e Fuel to fill tank farm Manufacturer warranties will be transferred at the time of project turnover (defined in Sectzon V. Facility Operator). The facility site plan is shown on the next page. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 4 of 25 Tank Farm Site Plan The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 5 of 25 File:J:\Yobsdata\\30406.00EdnaBayBulkFuelUpgrades\00CADD\01WorkingSet\O1Civil\30406.00C2ToC8SITEPLAN,COVER.dwq.&NN ae zo awee3at>™mee _ges <3 33 a.G 5 EmTemeoG>ost aNNaewwe____.||<8<ace ul-"-SOL LS *he we h Wo 28ce,2 FOS-wes<§$83 .3 4<"EXISTING Done.ce,a0 raed aHCkweO65*of PARKING dp --5 x -.. * enaoe .RIVE CENTERLINE OF EXISTINGCONTAINMENTJ.Forest SERVICE ROAD #1525Sre)ss]%--bea)5 4 "e 3 ses 66"ROW %-_KEeGp SRIPSTRUT WALKWAY __________ DRIVEWAY =---TO ee SN ees : =}-20,000 GALLON>haar SG BOLLARD (TYP OF 6)Ci2r GASOLINE TANK -a 16 LF CANTILEVER GATE «faze 7 \-TRUCK FILL C24F (TYP.OF 8)5438 -@ 82,:yy ae a 3 £267 HEADERS to 35 ee wade7DOUBLESWINGGATEasa oes men NCA =--f{-1 reewinoxGSkSegi:(TYP.OF 5)\C24 Rae Z oy8swoe&eee*es DUAL PRODUCT TANK Pa 2288RETAILDISPENSER"6 *20,000 GALLON DIESEL #2."ey @ 32° OSURE "E17,™*6,000 GALLON DIESEL #1 z 25 -==/[TT 'S ae,<x ™-S |vy.S t 4 23 em,2> >"Teri 1289 ©600 4 cS n = =pe J <q bat 4 z Z Ss |A A $22 3SS{WEST PAD#re ro 3 C8 oal| cimaaeeia oe 2325 # TT ' 2\_MAN GATE saz ° °ag TAD:Td a ZA 24)(TYP.OF 5)z wozja"|/eo:ae ack8x20CONNEXVANnyAe. A ns ca ;:+5 SUMP (TYP.OF 2)Z34.¥*(SPILL RESPONSE EQUIPMENT /_-//rs --a Sx &AND RETAIL SALES KIOSK)ax3 o™:\Lukuot | |>.4 cence ro) =i //Y WY Y YY iY)T"a ch on /\VALVE Box >|| - =>} 5,000 GALLON DUAL PRODUCT, o Ne C1 PROTECTED DISPENSING TANK ;MAN GATE (2 Kad ulan(TYP.OF 5)C24 MAN GATE (%iPROPERTYBOUNDARYN/(TYP.OF 5)024 STAIRS AsC2©a"75.& "¢ ELEVATED WALKWAY OVER PIPING.CONTRACTOR TO PROVIDE SHOP DRAWINGS FOR ENGINEER APPROVAL.da HIGHEST ASTRONOMICAL TIDEAR4y(13.4 FT ABOVE MLLW)- wo =7 |Ll"3 APD 2 TANK SCHEDULE TANK CAPACITY NUMBER (GALLONS)TANK TYPE PRODUCT - z 1 20,000 HORIZONTAL SINGLE WALL GASOLINE wl +2A 8,000 HORIZONTAL,SINGLE WALL,DUAL PRODUCT DIESEL #1 S|2 3NZZ2820,000 HORIZONTAL,SINGLE WALL,DUAL PRODUCT DIESEL #2 S|2 zGRAPHICSCALEL|nf =-Jk ¢8 10 0 10 20 3A 2,500 HORIZONTAL,DUAL PRODUCT,PROTECTED DISPENSING GASOLINE see 8 8aoafa)/-\TANK FARM SITE PLAN a 3B 2,500 HORIZONTAL,DUAL PRODUCT,PROTECTED DISPENSING DIESEL #2 aree oO.NC SCALE:GRAPHIC SCALE IN FEET C4 SHEET. Bulk Fuel Storage Facility Capacity The following table provides a summary of tankage at the new facility: Facility Components &Capacities Gallons Total Gallons Total Storage/Dispensing Capacity Number PerTank Gallons Per Tank Gallons (Gross)(Gross)(Net)(Net) City of Edna Bay Diesel #1 Primary Storage 1*8,000 8,000 |7,200 7,200 Dispensing 0 0 0 0 Subtotal Diesel #1 1 8,000 7,200 Diesel #2 Primary Storage 1*20,000 20,000 |18,000 18,000 Dispensing 1*2,900 2,500 |2,250 2,250 Subtotal Diesel #2 2 22,250,|20,250 F Gasoline Primary Storage 1 20,000 20,000 |18,000 18,000 Dispensing 1*2,500 2,500}2,250 2,250 Subtotal Gasoline 2 22,250 |,20,250 oe Total Storage/Dispensing 5 53,000 47,700 Pipeline Components Number Truck Header 3 Fill/Transfer Pipelines to Primary Storage 3 Fill/Transfer Pipelines to Fleet Dispenser 2 Fill/Transfer Pipelines to Retail Dispenser 2 Fleet Dispenser Hose Reels 2 Truck fill Area 1 Dual-Product Retail Dispenser 1 *Part of a dual product tank Currently,there is no centralized bulk fuel storage or dispensing facilities in Edna Bay.In the past, local lodges have provided limited fuel storage and sales for residential use but,due to regulatoryconcerns,these practices have ceased.The school district (Southeast Island Schools)owns several aboveground storage tanks and a small power generation plant located adjacent to the schoolbuilding.The district utilizes the tanks for storing heating fuel for the school building.Theeneratorbuildingprovidespowertotheschool,and-to-an adjacent satellite telephone facilitycwnedbyAlaskaPoweraidTelephone(P&T).A separate,AP&T-owned,5,000-gallon diked +eenaet SNASTislocatedadjacenttothefacilityandprovidessupplementalfueltotheschoolgenerators.Reportedly,fuel for the School District and AP&T is delivered via barge or large fishing vessel,temporarily stored in a local contractor's tanks,and then trucked to the school/AP&T tanks using a The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 6 of 25 local fuel truck.Fuel for residential use is brought into town in 55-gallon drums via local fishingvesselsonanas-needed basis.Reportedly,fuel is also available from a local contractor who sells fuel using a locally owned tank truck. Edna Bay's population has varied considerably over the last few decades.However,over the past 10-years the population has remained stable at around 50-residents,and the school recently re- opened after an extended closure due to a lack of students.Based upon the increasing number of school-age children in the community,and tourist interest in local lodges,it is anticipated that the community will grow during the design period.For the purposes of this study,it's assumed that fuel demands will increase by the following rates:Diesel #1 .25%,Diesel #2 .5 %and Gasoline .25%. Further,it is assumed that the community fuel demand will increase linearly with population growth. Based on these assumptions,the annual fuel consumption is expected to reach approximately 83,093-gallons within ten years. Edna Bay is located on a year round ice free point capable of receiving ocean going vessels.The recommended tank farm storage capacity is based upon the community's estimated fuel consumption at design,assuming two barge deliveries per year,and the desire to provide a minimum of 7-months capacity at design. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 7 of 25 IV.FACILITY PARTICIPANTS The Facility participants are: City of Edna Bay Primary Contact Name:Mayor Heather Richter Phone:(907)594-6312 Address:City of Edna Bay,P.O.Box EDB,Edna Bay,AK 99950-040 Email:mayor@cityofednabay.org Project:The City will own and operate the facility. The Edna Bay BFU Facility is organized as follows: 1.Land:The site is owned by the City of Edna Bay. 2.Improvements:The City of Edna bay will own all facility improvements including pipes, dike,pumps,appurtenances and fill,etc. 3.Facility Operator:The City of Edna Bay will be the facility operator.The Facility Operator will take care of the O&M (annual operations and maintenance,training,testing and etc.)and R&R of the facility. Following is a facility operating schematic and Tank Schedule. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 8 of 25 Piping Schematic and Tank Schedule The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 9 of 25 rile:J:\Jobsdata\30406.00EdnaBayBulkFuelUpgrades\00CADD\O1WorkingSet\01Civil\30406.00C1-OPSCHEMATIC.dwg<E e 4xowsSEa®gesasts aeNOTESPe7Epeusee1.SYSTEM REPRESENTATIONS ON THIS SHEET ARE |)ala utSCHEMATIC.SEE SITE PLAN AND TANK DETAILS FOR D2 D2 5 Oe <5 eeMORESPECIFICINFORMATIONONCOMPONENT| 'o 'a |orf We be AOCATIONS.>--____weeOss" ->02 °|28,000 GALLON nes <§as *a.2.NOT ALL TANK APPURTENANCES (VENTS,ETC.)ARE D2 Va 28,000 GALLON Bu ee vSHOWNONTHISSHEET.SEE TANK DETAIL SHEETS DUAL a 2FORtNSTALLATIONDETAILS.Fc-3 FC 10)FC-11 _*!OneoeeE DRIVE IN.SECONDARY 72s eet ra 9 A]|+Zogeorca :3.SEE SHEET G1 FOR SYMBOL LEGEND.|W CONTAINMENT BASIN prv-4 pRV-s pRV-3 x |©B000-CAL\ oe Man,4.SEE SHEET C6 FOR PIPING PLAN.|0 5 |DIESEL #1 spt Lay,Bv-6 Bv-5)€BV?$||Ay,Fy?| :FeiFC |_'CONCRETE gui|c-5 rc-6§ss Fe-7 3 !LT CONCE fol 2 =8 CONTAINMENT eA gf|SHA-2A%Asy_]QLsHA-28 Yasv_2 PASV-3 WALL WeeJSH-2A LSH-2B o || BOUNDARY fatOO5Lsi 2 LSL-2B ||asv-4 |FC-4 Bv-4 waaay P-28D C7 p-28H |eevee re)RETAIL "< )-4q TANK 2A TANK 2B |a deDISPENSERP=8,000-GAL 20,000-GAL |ae ee -FC-8 DIESEL #1 DIESEL 92 8 |a :ESSR|p sy,|py 83:Ltt i ro |boy Ys gie8|0 00 2”SH80 29 2S 8 5 |Pf S og3s|-|ra Qé 259%TANK 4 FC-16 FC-17,||%gge*|20,000-GAL -9 p>Y 94SS-|GASOLINE J ©|i| | PRV-6 FA PRV-7 x]|- a|; Bv-9 |c-12 §Fe-1 -o ™ |t 3 Py 8 a |||” DRIVE IN SECONDARY 2 cv-7 Y cv-8 od |||CONTAINMENT BASIN 4 i LSHA-3AJ HA-38SECONDARY|°i LSHA ||h|o o CONTAINMENT LSH-3A %B LSH-38 <ug o||2 BASIN DRAIN |UsL-3A isi-3e x |||ese 5LSLA-3A -3A -38 LSLA-38 v a qos >|=)|Ix -_-7Ta |af oa Wi|5 |eu -47 |oe 8ae2,500--GAL _EDGE OF 32|||Tre SCHEDULE °GASOLINE DIESEL #2 ||GRAVEL PAD a 52 ¢_2 ZzI©)NUMBER |(GALLONS)WK TE ;PROOUCT |_o -nw s "a <(WORIZONTAL QxS0UNE -4|h eT ee rom ete wo [pen.#1 oo -5,000 GAL DUAL 4 a z xs &|ago HORIZONTAL,SINGLE WALL,DUAL PROOUCT 'DENEL §2 at PRODUCT 8 Pay |o|9 -«[ 200 a DUN.PRODUCT,Tornoe _-DISPENSING TANK||_2.900 _DUAL PRODUCT,O=SEL 92 |oo |-||L--|o |2"SCH BO A|9 D2 D.D2 D2 02 D2 D2 D2<D2 D2 D2 D2 |]°- 2"SCH 80 <||\DI DI D1 1 D1 DI D1 <1 D1 DI p01 D1 D1 | |||g||. ||Li ig eg gp ,--sae S <8 G G |& |L -p2-----p2---02----p2----D D2 D2 D2 D2 D2 D2 | |BURIED 2"SCH 80 LINES TRANSITION TO BURIED | zLoee(--\TANK FARM OPERATING SCHEMATIC gXoSCALE:NTSTANKFARMOPERATIONALNARRATIVEFILLINGTHEDISPENSINGTANKTHEDUALPRODUCTDISPENSINGTANKCONTAINSCOMPARTMENTST3A FLEET DISPENSER/HOSE REEL OPERATION RETAIL SALES DISPENSER OPERATIONFILLINGTANKFARMFROMFUELTRUCK(GASOLINE)AND 138 (DIESEL #2),WHICH ARE FILLED FROM THE HOSE REELS ARE INTENDED TO FACILITATE THE FILLING OF LOCAL RETAIL DISPENSING WILL TAKE PLACE DURING SET ATTENDANT HOURS.THE NEW TANK FARM WILL BE FILLED VIA A NEW,THREE PRODUCT CORRESPONDING BULK TANKS 11 -AND 22.FLEET VEHICLES/HEAVY EQUIPMENT AND BULK TRANSFER TO TANK e ONCE CONTACTED AT THE SALES KIOSK,THE ATTENDANT WILLTRUCKHEADERWITHTHREE3--INCH FILL LINES (DIESEL #1,#2,AND ©THE DISPENSING TANK FILL OPERATION IS STARTED MANUALLY TRUCKS.ACCOMPANY THE CONSUMER TO THE RETAIL DISPENSER AND _GASOLINE).FROM CP-1,LOCATED ON THE INTERIOR OF THE SPILL RESPONSE *PRIOR TO FILLING,TURN OFF ENGINE,CHOCK WHEELS AND CONNECT DISPENSE THE DESIRED AMOUNT OF FUEL.$e BEFORE BEGINNING THE FILL PROCESS THE OPERATOR SHALL CONNEX.STATIC GROUNDING CABLE.*UPON RETURNING TO THE KIOSK,THE CONSUMER WILL MAKECONFIRMTHATALLTANKISOLATIONVALVESINTHETANKFARMeTHEOPERATORISRESPONSIBLEFORENSURINGTHATTHEBULKeOPENISOLATIONVALVE,INPUT DESIRED FUEL VOLUME INTO PRE-SET PAYMENT AND BE ISSUED A RECEIPT,AND THE ATTENDANT WILL LOG inMETER,SET SPRING LOADED MECHANICAL VALVE AND DEPRESS PUMP THE SALE.-|=ARE CLOSED.TANK HAS SUFFICIENT FUEL FOR THE TRANSFER.RT TO PRESSURI a =z)e BULK TANKS SHOULD BE FILLED ONE AT A TIME BY SEQUENTIALLY e THE FILLING PROCESS IS INITIATED WHEN THE OPERATOR PRESSES STAR BUTTON TO URIZE HOSE. NER AND a *)2OPENINGSANDCLOSINGINDIVIDUALTANKISOLATIONBALLTHEPUMPSTARTBUTTONONCP-1.*UNWIND HOSE,PLACE NOZZLE IN APPROVED FUEL CONTAI <|J 2DEPRESSTRIGGERTOINITIATEFLOW.-|3 2VALVES.¢HIGH LEVEL FLOAT SWITCHES WITHIN THE DISPENSING TANK Ovi TINUOUS MON/TORIN RING F PROCESS.FLOW 2 J &e LINE PRESSURE WILL BE SUPPLIED BY THE FUEL TRUCK PUMPING AUTOMATICALLY DE-ENERGIZE THE TRANSFER PUMP WHEN THE FUEL °PR L DE co TICALLY STOP AT ORE NG UME.SUT PUMP.WILL si oe 2 &SYSTEM. op ONITOR THE F ©PROCESS LEVEL REACHES 90%FULL,STOPPING THE TRANSFER.CoN Time ta aN --SET VOLUME,B ad 4 6 &e THE TANK FARM OPERATOR WILL MONI HE FILLIN «A TIME-OUT FUNCTION WILL ALSO STOP TRANSFER.AFTER A . VIA CLOCK GAUGES AND GAUGING ROD AT EACH TANK.TIME-OUT OCCURS,RESET SYSTEM BY TURNING PUMP HOA SWITCH °WHEN FUELING 1S COMPLETE,DEPRESS PUMP STOP BUTTON,WIND Sheet No.C1eATTHECONCLUSIONOFFILLING,CLOSE TRUCK HEADER ISOLATION TO OFF,THEN BACK TO AUTO.HOSE ONTO REEL,HANG UP NOZZLE,AND NOTE VOLUME OF FUEL VALVES AND DISCONNECT FILL HOSE.DISPENSED.sucet___6 _o¢_XX V.FACILITY OPERATOR The Facility Operator for the Edna Bay Bulk Fuel Storage Facility is the City of Edna Bay.A detailed description of the City's organization is included as Appendix A. Turnover and Assumption of Responsibilities /Sustainability The Facility will be turned over to the City after the satisfactory completion,as determined by the AEA or its representative,of a 14-day test period.After this test period,the 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 of Edna Bay will become the Facility Operator and will assume responsibility for the use,day-to-day operations,and long-term maintenance of all Facility components. 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 Facility Operator is responsible for the long-term sustainability of the Facility for the benefit of the local community.It is recommended that the complete Facility 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 Facility Operator is responsible for the purchase transportation and transfer of fuel and no costs for this activity are included in the Plan. Staffing and Training It is recommended that the Facility Operator designate a Facility Manager (the "Manager”)and book keeper for the Facility. The Manager and bookkeeper may utilize training programs offered by the AEA,the Alaska Vocational Technical Center (AVTEC)in Seward and other training programs. Financial Responsibilities There are two cost categories that will be incurred in the ongoing operation and upkeep of the Bulk Fuel Facility -O&M and R&R. 1)O&M:The Facility 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 ate detailed in Tabk C:Annual O@>M Schedule and a narrative detail is provided in Section VIII:Finanaal Information. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 10 of 25 2)R&R:R&R costs are those expenses defined as items costing greater than $5,000 and/or that are not incurted 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 Facility Operator is responsible to establish and manage bank accounts and accounting records to ensure that sufficient resources exist to sustain the Facility into the future.For this reason,it is recommended that the Facility Operator maintain separate O&M and R&R accounting records and a separate R&R bank account. . The R&R bank account is recommended to be an interest-bearing savings account,which requires two signatories and a community resolution for withdrawals.When the cash balance of the R&R account makes an escrow account more cost effective,the R&R account should be transferred to an interest-bearing invested escrow account.See Attachment 4:R¢*R Account Information,for information about R&R accounts and a sample community resolution that limits the use of funds to R&R expenses only. It is recommended that at least once a year,no later than November 30",the Facility Operator develop a budget for the upcoming fiscal year,January 1"through December 31",for both O&M and R&R.The budget should take account of both annual O&M and R&R costs and annual bank deposits. Operations and Maintenance Guidelines The Facility Operator should maintain separate accounting records and maintain a sufficient O&M cash balance for the Facility O&M.This will enable the Facility Operator to complete the O&M schedule and sustain Facility Operations.Section VII:Financial Information provides Table C:Annual Oe@>M Schedule and Table D:40 Year O&M Cashflow as a guide to plan annual maintenance activities. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 11 of 25 Renewal and Replacement Guidelines It is recommended that the Facility Operator establish a Bulk Fuel Facility savings account or interest-bearing invested escrow account,which will ensure capitalization of an amount sufficient to maintain the R&R Schedule.It is assumed that the R&R activities for Year 20 will be funded 35% from the R&R account and 65%from debt financing,at 5.4%over 10 years.Section VIII:Financial Information provides a guide to plan for annual R&R activities and cash contributions in Tab E:40 Year RO*R Schedule,Table F:40 Year R&R Cashflow,and Table G:Loan Schedule.These costs are based upon the R&R cost estimate provided by CRW Engineering Group,LLC,see Appendix B: Oe>M and R&R Cost Estimate. It is recommended that the Facility Operator use the estimates in this Plan for year one contributions and recalculate contributions in subsequent years based on actual costs. Annual Audit It is recommended that the Facility Operator arrange an annual financial audit by a qualified, independent Certified Public Accountant.The auditor may or may not travel to Edna Bay, _depending on the Facility Operator's preference.The audit may be conducted in conjunction with other programs /activities managed by the Facility Operator. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 12 of 25 VI.INSURANCE The Facility Operator is responsible to be insured for General Liability Insurance.Insurance rates have not yet been established for The City of Edna Bay.General Estimates are included in the annual O&M costs,and need to be updated for future budgeting. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 13 of 25 VII.REGULATORY COMPLIANCE The Facility 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 Facility 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: e The U.S.Coast Guard Facilities Transferring Oil or Hazardous Material in Bulk regulations apply to fuel facilities that are capable of transferring fuel,in bulk,to or from a vessel with a capacity of 10,500 gallons or more.This regulation includes two separate plans:(1)Oil Spill Response Plan and (2)Operations Manual.The Oil Spill Response Plan is a spill response plan similar to the EPA's Facility Response Plan and it outlines spill planning requirements.The Operations Manual is a plan which addresses the procedures and equipment required for receiving fuel at the facility.The Coast Guard requires these two plans,and a Letter of Intent to Operate,to be submitted to the Captain of the Port for approval prior to delivery of fuel.Since the Edna Bay facility plans to receive fuel via tank truck,the USCG regulatory plans are not required. e The U.S.Environmental Protection Agency (EPA)regulations include two regulatory plans for fuel facilities:(1)Spill Prevention Control and Countermeasures (SPCC)Plans and (2)Facility Response Plans (FRPs).The SPCC Plan identifies minimum fuel facility requirements for aboveground tanks which have an aggregate volume of more than 1,320 gallons.The FRP is a spill response plan for facilities which are filled by marine vessel and which have a storage capacity of more than 42,000 gallons.Since the Edna Bay facility will not be filled via marine vessel,the USEPA FRP is not required. e On November 16,2012 the State of Alaska Fire and Life Safety Regulations adopted the 2009 editions of the International Fire Code (IFC)and the International Building Code (IBC).The code requirements of the IFC establish the primary design requirements for new fuel facilities.On April 18,2013,the State Fire Marshal entered into a Memorandum of Agreement with the Alaska Energy Authority which incorporates modifications to the IFC to accommodate unique circumstances of construction in rural Alaska. e The State of Alaska Oil and Hazardous Substances Pollution Control regulations (C- Plan)apply to fuel systems which have a storage capacity of more than 420,000 gallons per Owner or Operator.The proposed bulk tank farm is not subject to C-Plan regulations. The Facility Operator is responsible to 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 ptoper records and conducting periodic spill drills. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 14 of 25 VIII.FINANCIAL INFORMATION All estimates and assumptions contained in this Plan are intended for the first year of Facility operation.Starting with the second year,as operating experience specific to this Facility is obtained, the Facility Operator should update annual O&M and R&R budgets and payment schedules based on actual costs. Key Financial Assumptions e Annual inflation rate of 1.5%. e Annual investment rate of 3%. e General lability insurance is estimated based upon current coverage,with subsequent years inflated at 1.5%.Additional insurance has not been included in the Annual OC@™M Schedule nor the 40 Year OC7M Cashflow. e Year 20 R&R activities will be funded 35%from the R&R account and 65%from debt financing,at a fixed 5.4%over 10 years. e R&R funds should be deposited into an interest-bearing savings or invested escrow account.Bank fees are assumed to be 1%beginning in the year that the R&R balance teaches $100,000. e Assumptions regarding labor rates,required labor hours and other operating costs are provided in the tables that follow. e Existing debt or other obligations of the bulk fuel facility operator are not included in this Plan. Key Operating Assumptions e Retail financial operations,or its profits,are not included in the Plan. e Initial annual throughput estimates of Corporation usage:5,000 gallons/diesel #1, 55,000 gallons/diesel #2 and 20,000 gallons/gasoline. e Throughput is estimated to grow annually at a rate of .50%for diesel #2 and .25%for diesel #1 and gasoline. Explanation of Financial Terms e Throughput -The annual estimated gallons of fuel that will flow through the Facility. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 15 of 25 Subsequent Operating Year Revisions The Facility Operator is responsible for all aspects of the management and financial accounting for the Facility,including: ¢Proper establishment and maintenance of a financial management system,including budgets, financial reports and audits. e Accounting for,billing for and using its best efforts to collect all receivables. e Establishment of bank account(s)and deposit of monies into the appropriate accounts. e Maintenance of adequate cash reserves for both O&M and R&R. Starting with the second year,as operating experience specific to this Facility is obtained,the projections and assumptions upon which the Plan is based should be reviewed and modified.It is recommended that the Facility Operator develop a budget for the O&M and R&R costs and payments every year.The following guidelines are for use in subsequent operating years in preparing O&M and R&R budgets and payment schedules: Step 1:Review previous years'O&M and R&R costs and compare to current projections Step 2:Develop an O&M and an R&R budget for the year Step 3:Calculate annual R&R payments Step 4:Estimate annual throughput and calculate the appropriate per gallon surcharge to cover O&M and R&R costs. The Facility Operator will receive a "Management Guide:Bulk Fuel Facility Business Operating Plan”at the same time that they receive a completed and signed copy of the Business Operating Plan.The Management Guide provides a variety of information,worksheets and computer-based materials to assist the Facility Operator with implementing management tools and systems for the Facility.The Management Guide provides reference material for the following: e Fuel Pricing -Worksheets,samples and instructions e Bulk Fuel Loan -AEA Loan Program Information e Training -AEA Training Program Information e Inventory Control --Worksheets,samples and instructions e Budgeting and Annual Planning -Worksheets,samples and instructions e R&R Account Information The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 16 of 25 Financial Overview The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 17 of 25 FINANCIAL OVERVIEW PRIMARY CAPACITY AND INITIAL THROUGHPUT The City of Edna Bay NA NA Total Primary Capacity Gallons 47,700 0 0 47,700(Net)Percentage 100%0%0%100% Initial Throughput Gallons 71,500 0 0 71,500 Volume Percentage 100%0%0%100% %Share of O&M and R&R on Common > Assets (based upon Primary Capacity)100%%0%100% YEARS 1 THROUGH 5 -ESTIMATED O&M PAYMENT SUMMARY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Estimated O&M Payments Annual $$per Annual |$$per Annual |$$per Annual $$per Annual $$perPayments|Gallon”}||Payments |Gallon”||Payments |Gallon*||Payments |Gallon*||Payments |Gallon* The City of Edna Bay |$23,075 |$0.323 ||$23,421 |$0.326 |]$23,772 |$0.329 5 24,129 $0.333 4]$24,491 |$0.336 NA $-j$-$-[3 -$-_|$_-$-|$-$-[$- NA $-|$_-$-|[$-$-_{$_-$-|$_-$-|$- TOTALO&M {|$_23,075 ||}23,421 |||23,772 |L$24,129 |L]s 24,491 | YEARS 1 THROUGH 5 -ESTIMATED R&R PAYMENT SUMMARY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Esti d R&RSPemente Annual |$$per Annual |$$per Annual |$$per Annual |$$per Annual $$perymPayments|Gallon*||Payments |Gallon*|'|Payments |Gallon*||Payments |Gallon*||Payments |Gallon* The City of Edna Bay |$20,020 |$0.280 |]$20,318 |$0.283 J]$20,620 |$0.286 |]$20,927 §0.288 |]$21,238 |$0.291NA$-[$-3 -_|[$_-$-|[$-$-[$ -$-_[$s - NA $-$-$:$-$-$.-$-$_-$-$_- TOTALR&R |$20,020 |||$20,318 |I{$20,620 }{$20,927 |L{s 21,238 | YEARS 1 THROUGH 5 -ESTIMATED TOTAL (O&M PLUS R&R)PAYMENT SUMMARY YEAR !YEAR 2 YEAR 3 YEAR 4 YEAR 5 Estioumated Fowal Annual |$$per Annual |$$per Annual |$$per Annual |$$per Annual $$perymPayments|Gallon*||Payments |Gallon*|-]Payments |Gallon*||Payments |Gallon*Payments |Gallon* The City of Edna Bay}$43,095 |$0.603 [|$43,739 |$0.609]|]$44,392 |$0.615 F{$45,056 |$0.621 11 $45,729 |$0.627 NA $-|$_-$-[$3 -$-_|$-$-_{$-$-_|$- NA $-|$-$-[$.-$-|§-$-{$-$-_|$- TOTAL [$43,095 |l{$43,739 |L}$s 44,392 |[1 $45,056 |}1$45,729 | fuel used to heat buildings and fuel contributed for community purposes The City of Edna Bay Bulk Fuel Facility Business Operating Plan *NOTE:This is the amount that should be charged,per gallon,to all fuel uses -including retail customers purchasing fuel,electric utility, Table A:Summaty of Facility Expenses to Participants The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 18 of 25 TABLE A Summary of Facility Expenses to Participants The City of Edna Bay NA NA y.O&M R&R Total O&M R&R Total O&M R&R Total ear Annual $$Per Annual $$Per Total Total Per Annual $$Per Annual $$Per Total Total Per Annual $$Per Annual $$Per Total Total Per Payments Gallon Payments Gallon Payments Gallon Payments Gallon Payments Gallon Payments Gallon Payments |Gallon |Payments |Gallon |Payments Gallon 1 $23,075 |$0.323 |$20,020 |$0.280 |$43,095 |$0.603 $-$-$:$-$-|[$-$-{$-|$-{$-|$-|[$: 2 $23,421 |$0.326 |$20,318 |$0.283 |$43,739 |$0.609 $-$-$:$:$-|$=$-{$-|{$-{$-|$-|$- 3 $23,7721 $0.329 |$20,620 |§0.286]$44,392 |$0.615 |1 $:$:$-$:$-|$:$-|$-|$-|3 -|$-|$- 4 $24,129)$0.333 |$20,927 |$0.288 |$45,056 |$0.621 $:$:$:$-$-|$:$-{$-|$-|$-|$-|[$- 5 $24,491 |$0.336 |$21,238 |$0.291 |$45,729 |$0.627 $-$:$-$-$-|[$-$-{|$-|[$-{$-{$-1$- 6 $24,858]$0.339 |$21,554 |$0.294 |$46,412 |$0.634 $:$:$-$:$-|[$-$-{$-|$-|$-|$-1$- 7 $25,231)$0.343 |$21,874 |$0.297 |$47,106 |$0.640 $:$:$:$-$-|$:$-1$-|$-{$-|$-1$- 8 $25,610]$0.346 |$22,200 |$0.300 |$47,810 |$0.647 $:$-$:$-$-|$-$-1$-|$-{$-18 -|$- 9 $25,994 |$0.350 |$22,530 |$0.303 |$48,524 |$0.653 $-$-$:$-$-|[$-$-{$-13$-|$-{$-|$- 10 $26,384 |$0.353 |$22,865 |$0.306 |$49,249 |$0.660 $:$-$-$:$-|[$-$-{$-{s -{$-|{$-|$- 1 $26,779}$0.3571 §23,205 |$0.309 |$49,945 |$0.666 $:$-$-$-$-{[$-$-}$-{$-{$-|$§-{|$- 12 $27,181 |§0.361 |$23,551 |$0.312 |$50,732 |$0.673 $:$:$:$:$-{$:$-|$-{$-{$-|$-|$- 13 $27,589 |$0.364 |$23,901 |$0.316 |$51,490 |$0.680 $-$-$:$-$-|[$-$-1$-[$-{$-|$-{1$- 14 $28,003 |$0.368 |$24,257 |$0.319 |$52,259 |$0.687 $-$:$-$:$-|{$:$-{$-|3 -{$-|$-{$- 15 $28,423 |$0.372 |$24,618 |$0.322 |$53,040 |$0.693 $:$-$x $:$-|$-$-|$-|s$-|$-|$-1$- 16 $28,849 |$0.375 |$24,984 |$0.325 |$53,833 |$0.700 $:$-$:$-$-|$:$-|$-|$-|$-|[$-|[$- 17 $29,282 |$0.379 |$25,356 |$0.328 |$54,638 |$0.707 $-$-$:$:$-|$:$-|$-|[$-|$-{$-{|$- 18 |$29,721 |$0.383 |$25,733 |$0.332 {$55,454 |$0.715 |ES -$:$:$:$-|$:$-|$-|$s -|$-/$-|$- 19 $30,167 |$0.387 [$26,116 |$0.335 |$56,283 |$0.722 $-$:$-$:$-|$-$-|$-|$-{$-[$-|$- 20 $30,619 |$0.391 1 §26,504 |$0.338 |$57,124 |$0.729 $:$:$:$-$-|[$:$-|$-|$-|$-|$-4$- 21 $31,079]$0.395 |§26,899 |§0.342 |$57,978 |$0.736 $-$=$-$-$-[$-$-{$-|$-{[$-{$-1$- 22 [$31,545]$0.399 |$27,299 |$0.345 |$58,844 |$0.744 |TS -$-$-$-$-[$:$-{$-{$-{$-{$-[$- 23 [S$32,018]$0.403 |$27,705 |$0.349 |$59,723 |$0.751 ||$:$:$:$:$-|s :$-|s -|S§-1$-|§-{[$- 24 |S 32,498|$0.407}$28,118]$0.352]$60,616 |$0.759 FS -|$-ts -_|$-_|$-|$:$-|$-|$-|$-|$-|$- 25 |S 32,986]$0.411 4 $28,536 |$0.356]$61,522 |$0.766 |4 $:$:$:$:$-|$:$-|$-|s -|$-|$-|$- 26 $33,481]§0.415 |$28,961 |$0.359 |$62,442 |$0.774 F 4 $-$-$:$-$-{$-$-{$-|$-{$-|$-|$- 27 $33,983 |$0.419 |$29,392 |$0.363 |$63,375 |§0.782 $:$-$=$:$-|$-$-{$-{$-|$-|$-|$- 28 $34,493 |$0.424 |$29,829 |$0.366 |$64,322 |$0.790 $-$-$:$-$-|$-$-|$-{$-|$-1$-{$- 29 $35,010 |$0.428 |$30,273 |$0.370 |$65,283 |$0.798 $=$:$-$:$-|$:$-{$-{8 -{$-{[$-]$- 30 |$35,5351 $0.432 |$30,724 |$0.374 |$66,259 |$0.806 ||$-$-$:$:$-{[$:$-|s$-48 -|{$-|$-|[$- 31 JS 36,068]$0.437 |$31,181 |$0.377 |$67,249 |$0.814 |TS -$-$:$:$-|$:$-{§-|8§-|$-|$§-|$- 32 |$36,609]$0.441]§31,646 |$0.381 1$68,255]$0.822 |1 $-$-$-$-$-|{$-$-|$-|§-|$-|$-|$- 33 $37,158]$0.445 |$32,117 |$0.385 |$69,275 |$0.830 $-$:$:$-$-{[$:$-{$-|$§-{$-|$-|$- 34 $37,716)$0.450 |$32,595 |$0.389 |$70,310 |$0.839 $-$:$=$-$-|{$:$-{$-|$-{$-|{$-|$- 35 $38,281]$0.454 1 $33,080 |$0.393 |$71,361}$0.847 $-$-$:$-$-|$-$-|$-|$-{$-1{$-{$- 36 $38,856 |$0.459 |$33,572 |$0.397 |$72,428 |$0.856 ||$:$-$:$:$-|$:$-|$-|$-{$-{5 -1$- 37 [$s 39,438/$0464/3 34072]8 o4o1]$73,511|8 0.864 1 $-[s -[s -[s -[s -[s -$-[s -|$-[$-[$-[s- 38 $40,030 |$0.468 |$34,579 |$0.405 |$74,609 |$0.873 $:$:$-$:$-|[$-$-|$-{$-{$-|$-{$- 39 [$40,630]$0.473 |$35,094 |$0.409 |$75,725 |$0.882 |1 $:$:$:$:$-|s$:$-|$-48 -|$-|s -|$- 40 $41,240]$0.478 |§$35.617 |$0.413 |§76,857 |$0.891 $-|$$-$-$-|$$-1$-{$-|$-|$-1$- The City of Edna Bay Bulk Fuel Facility Business Operating Plan Table B:Participant Allocation The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 19 of 25 PARTICIPANT ALLOCATION TABLE B (based upon Primary Capacity) City of Edna Bay NA NA Total Primary Capacity (Net)Gallons 47,700 0 0 47,700 Percentage 100.0%0.0%0.0%100% Initial Throughput Gallons 71,500 0 0 71,500 Volumes Percentage 100%0%0%100% %Share of O&M and R&R on Common Assets 100.0%0.0%0%100% The City of Edna Bay Bulk Fuel Facility Business Plan ) Table C:Annual O&M Schedule The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 20 of 25 The City of Edna Bay TABLE C ANNUAL "0 and M"SCHEDULE Rate Per Fringe Total Hourly Position Hour Rate Cost Duties Operator 1 $20.00 10.0%$22.00 Maintenance Bookkeeper $20.00 10.0%$22.00 Invoicing,Fuel Quantity Tracking Facility Manager $30.00 10.0%$33.00 |.[Manager Annual O&M Costs: Labor Costs Participant Share Hours/Hourly Monthly Annual *4City.NA NALabor:Month Cost Cost Costs Operating Labor The City of Edna Bay 20.0 $22.00}{$440.00 NA 0.0 $22.00]|$- NA 0.0 $22.00}3 $- Subtotal Operating Labor 20.00 $440.00 $5,280 $5,280 Administrative Labor | Bookkeeper The City oF Edna Bay 8.0 $22.00}7 $176.00 NA 0.0 $22.00}|$- NA 0.0 $22.00]|$- Facility Manager The City oF Edna Bay 6.0 $33.00]{$198.00 NA 0.0 $33.00}1 $- NA 0.0 S$33.00}73 - Subtotal Administrative Labor 14.0 $374.00 $4,488 $4,488 Materials: Materials &Equipment Rental $4,032 $4,032 Other Costs: Training (Lump Sum)$2,000 $2,000 Spill Response/Homeland Security (Based upon current)$3,005 $3,005 Annual Pressure Testing $270}1 $270 Annual Off-Site Audit $3,000 $3,000 Power Costs (Based upon current)$-$- Insurance $1,000 $1,000 Total Annual O&M Costs $23,075 $23,075 Bulk Fuel Facility Business Operating Plan Table D:40 Year O&M Cashflow The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 21 of 25 TABLE D 40 YEAR "O and M"CASHFLOW Initial Throughput -Gallons:Throughput Growth Rate: City of Edna Bay City of Edna Bay Diesel #1 Consumption 5,000 Diesel #1 Consumption 0.25% Inflation Rate Diesel #2 Consumption 48,000 Diesel #2 Consumption 0.50%) Gasoline Consumption 18,500 Gasoline Consumption 0.25% NA -NA 0.00%| Annual O&M_Expense Assumed Throughput (Gallons Per Gallon O&M Payment Cu of Edna Bay Year)City of Edna Bay}NA NA Total NA NA City of Edna Bay |NA NA°Dresel #1 Diesel #2 Gasoline Consumption |Consumption |Consumption Toral 1 $23,075 |$$-$$23,075 5,000 48,000,18,500 71,500 $0,323 |$-$- 2 $23,421 |$$-|{$23,421 5,013 48,240 18,593 71,845 $0.326 |$-$- 3 $23,772 |$$-|[$23,772 §,025 48,481 18,685 72,192 $0,329 |$-$- 4 $24,129 |$$-[$24,129 5,038 48,724 18,779 72,540 $0.333 |$-$: 5 $24,491 |$$-[$24,491 5,050 48,967 18,873 72,890 $0.336 |$-$- 6 $24,858 |$$-|$24,858 5,063 49,212 18,967 73,242 §0.339 |$-$- 7 $25,231 |$$$25,231 5,075 49,458 19,062 73,596 $0.343 |$-$- 8 $25,610 |§$$$25,610 5,088 49,705 19,157 73,951 $0.346 |$-$: 9 $25,994 1§$$25,994 5,101 49,954 19,253 74,308 $0.350 |$-$- 10 $26,384 |$$$26,384 5,114 50,204 19,349 74,667 $0.353 |$-$- 11 $26,779 |$$$26,779 5,126 50,455 19,446 75,027 $0.357 |§-$- 12 S$27,181 |$$-|[$27,181 5,139 $0,707 19,543 75,390 $0.361 |$-$- 13 $27,589 |$$-|[$27,589 5,152 50,961 19,641 75,754 $0.364 |$-$: 14 $28,003 |$$-[$28,003 5,165 $1,215 19,739 76,120 $0.368 |$-$- 15 $28,423 |§$$28,423 5,178 51,471 19,838 76,487 $0.372 |$-$- 16 $28,849 |$$-[$28,849 5,191 §1,729 19,937 76,857 $0.375 |$-$- 17 $29,282 |$$$29,282 5,204 51,987 20,037 77,228 $0.379 |§-$- 18 $29,721 |$$$29,721 5,217 52,247 20,137 77,601 $0.383 |§-$: 19 $30,167 |$$$30,167 5,230 52,509 20,238 77,976 $0.387 |$-$- 20 $30,619 |$$$30,619 5,243 52,771 20,339 78,353 $0.391 1 $-$- 21 $31,079 |$$$31,079 5,256 53,035 20,441 78,732 $0.395 1 §-$- 22 $31,545 |$$$31,545 5,269 53,300 20,543 79,112 $0.399 |$-$- 23 $32,018 |$$$32,018 5,282 53,567 20,645 79,494 $0.403 |$-$- 24 $32,498 |$$$32,498 5,296 53,834 20,749 79,879 $0.407 |$-$- 25 $32,986 |$$$32,986 5,309 54,104 20,852 80,265 $0.411 1 $-$- 26 $33,481 |$$$33,481 5,322 54,374 20,957 80,653 $0.415 |$-$- 27 $33,983 |$$$33,983 5,335 54,646 21,062 81,043 $0.419 |§-$- 28 $34,493 |§$$34,493 5,349 54,919 21,167 81,435 $0.424 |§-$- 29 $35,010 |§$$35,010 5,362 55,194 21,273 81,829 $0.428 |§-$- 30 $35,535 |$$$35,535 5,375 55,470 21,379 82,224 $0.432 |$:$: 31 $36,068 |$$$36,068 5,389 55,747 21,486 82,622 $0.437 |$-$: 32 $36,609 |$$$36,609 5,402 56,026 21,593 $3,022 $0.441 |$:$- 33 $37,158 |§$$37,158 5,416 56,306 21,701 83,423 5 0445/$ -[$s - 34 $37,716 |$$$37,716 5,429 56,588 21,810 83,827 $0.450 |§-$- 35 $38,281 |$$$38,281 5,443 56,871 21,919 84,232 $0.454 |$-$- 36 $38,856 |$$$38,856 5,457 57,155 22,028 84,640 $0.459 |$:$- 37 $39,438 |$$$39,438 5,470 57,441 22,139 85,050 $0.464 |$-$- 38 $40,030 |§$$40,030 5,484 57,728 22,249 85,461 $0,468 |§-$- 39 $40,630 |$$$40,630 5,498 58,017 22,361 85,875 $0.473 |$-$- 4)$41,240 1$$$41,240 5,511 58,307 22,472 86,290 $0.478 4S $s - The City Of Edna Bay Bulk Fuel Facihty Business Operating Plan Table E:40 Year R&R Schedule The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 22 of 25 }{t TABLE E 40 YEAR "R and R"SCHEDULE Cost Allocation Year of Present Day Inflated [Yearly Inflated City of Edna NA Activity R&R Activity Value Value Total ay 5 Electrical Upgrade $2,680 2,844 S$2,844 2,844 ff $- 10 Fence Upgrade $10,840 12,394 12,394 ||$- Repair Steps,Landing,Enclosure 5,411 6,187 6,187 - Replace Pumps,Valves,Gauges 3,000 |3,430 3,430 - Repair Pipelines 11,690 13,366 13,366 - Electrical Upgrade 2,680 3,064 |3,064 - }{Tank Inspection 15,550 17,780 Hl $56,221 17,780 - 15 Electrical Upgrade $2,680 3,301 fj 3,301 Ff]$- Replace Dispensing Equipment 87,550 107,840 1]$111,141 107,840 - 20 ||Fence/Gate Replacement 1 $11,885 |)15,771 15,771 $- Repair Steps,Landing,Enclosure 5,411 |7,180 |7,180 |- Replace Pumps,Valves,Gauges 3,000 3,981 3,981 H - Replace Valves 65,300 86,650 86,650 - Replace Pad Fill --- | - Major Electrical ---- Repair Pipelines 11,690 15,512 15,512 - Tank Inspection 15,550 20,634 [1 $149,727 20,634 - 25 _||Electrical Upgrade 2,680 3,831 |]$3,831 [3,831 - 30 Fence Upgrade $10,840 16,693 16,693 }$- Repair Steps,Landing,Enclosure 5,411 8,332 8,332 - |{Replace Pumps,Valves,Gauges 3,000 4,620 }4,620 |- Replace Dispensing Equipment 87,550 134,825 134,825 - Repair Pipelines 11,690 18,002 |18,002 - Electrical Upgrade 2,680 4,127 4,127 |- |{Tank Inspection 15,550 23,947 fH]$210,547 23,947 |- 35 Electrical Upgrade 2,680 4,446 [1 $4,446 4,446 - 40 Fence/Gate Replacement ie)11,885 21,241 21,241 1]$- Replace Steps and Grating 7,750 13,851 13,851 - Replace Pumps,Valves,Gauges 3,000 5,362 }5,362 :- Replace Foundation/Liner 76,700 137,079 137,079 - ;{Replace Pad Fill --&£.. |.{Replace Valves 65,300 fi 116,705 |116,705 - Major Electrical ---- Replace Tanks 193,552 345,918 i 345,918 - Replace Pipelines 44,451 79,444 |$719,599 79,444 f - $799,635 1,258,358 ff $1,258,358 1,258,358 |$- The City of Edna Bay Bulk Fuel Facility Business Operating Plan Inflation Rate R&R Activities: Fence Upgrade Fence/Gate Replacement Repair Steps,Landing,Enclosure Replace Steps and Grating Replace Pumps,Valves,Gauges Replace Foundation/Liner Replace Pad Fill Electrical Upgrade Major Electrical Replace Dispensing Equipment Replace Tanks Repair Pipelines Replace Valves Replace Pipelines Tank Inspection Cost Category ARPAwWOBANAFAAARBACity Interval (Years) $10,840 10/30 $11,885 20/40 $5,411 |, | 10/20/30 $7,750 40 $3,000 10/20/30/40 $76,700 40 $-20/40 $2,680 ||5/10/15/25/30/35 $-20/40 $87,550 15/30 $193,552 |40 $11,690 |10/20/30 $65,300 20/40 $44,451 |40 $15,550 10/20/30 Table F:40 Year R&R Cashflow The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 23 of 25 ;: TABLE F 40 YEAR RENEWAL AND REPLACEMENT CASHFLOW City of Edna Bay Inflation Rate :1.50%Initial Cost per gallon ($/gallon):|$0.280 Reinvestment Rate :3.00%Cry of Edna Bay 20 Year R&R:|$149,727 |City of Edna Annual Increase J $0.010 Escrow Fees:1.00%20 Year Loan Proceeds:|$89,836 Bay Initial Throughput (gallons):71,500 NA NA Initial Throughput (gallons):Initial Cost per gallon ($/gallon):NA Loan Rate:5.50%.NA Initial Throughput (gallons):-Annual Increase NA Loan Term:10 Years NA Initial Cost per gallon ($/gallon):NA Annual Increase NA R &R Fund Balance Assumed Throughput (Gallons)Per Gallon Payment Year Beg,of - Annual Depost Principal .Renewals/Interest End of City of Edna City of EdnaYearCityofEdnaNANATotalReceivedDebtServiceReplacementsEarnings(Net Year Bay NA NA Bay NA NA Balance Bay of Fees)Balance 1 $-$20,020 |$$-1{$20,020 $-|[$-|$20,020 71,500 $0.280 |$-$ 2 $20,020 |$20,318 |$$-|$20,318 $-|$601 |$40,938 71,845 $0.283 |$:$ 3 $40,938 |$20,620 |$$-|$20,620 $-|$1,228 |$62,786 72,192 LAS 0.286 |$-$ 4445 62,786 |$20,927 |$$-|[$20,927 $-1$1,884 |$85,597 |72,540 o1$0.288 |$-$ 5 $85,597 |$21,238 |$$-|$21,238 $2,844 |$2,483 |$106,473 72,890 $0.291 |$-$ 6 4S 106,473 |$21,554 |$$-|$21,554 $-|[$3,194]$131,221 73,242 $0.294 1 $-$ 7 $131,221]$21,874 |$$-|$21,874 $-[8 3,937 |$157,032 73,596 me)0.297 |$-$ 8 YS 157,032]$5 22,200 |$$-|$22,200 $-{[$4711]$183,943 73,951 $0.300 |$-$ 9 $183,943]$22,530 |$$-([$22,530 $-{$5,518 |$211,991 74,308 $0.303 |$-$ 10 $211,991 |$22,865 |$$-|$22,865 $56,221 |$4,673 1%183,308 |74,667 $0.306 |$-$ 11 $183,308]§23,205 |$$-|$23,205 $-41$5,499 1$212,013 75,027 $0.309 |$-$ 12 $212,013 |$23,551 |$$-|$23,551 $-|$6,360 |$241,924 75,390 4g 0.312 |$-g 13 $241,924 |$23,901 |$$-{$23,901 $-|$7,258 1$273,083 75,754 4$0.316 |$-$ 14 $273,083]$24,257 |$$-|$24,257 $-|$8,192)$305,532 76,120 $0.319 1 $-$ 15 $305,532]$24,618 |$$-{$24,618 $111,141 |$3,888 1$222,896 76,487 ah)0.322 |$-$ 16 $222,896]$24,984 |$$-|$24,984 $-{|$4,458 ]$252,338 76,857 $0.325 1$-$ 17 $252,338]$25,356 |$$-|$25,356 $-|[$5,047 |$282,741 77,228 "41g 0.328 |$-$ 18 $282,741 |$25,733 |$$-|$25,733 $-|[3 5,655 |$314,128 77,601 $0.332 |$-$ 19 $314,128 |$26,116 |$$-1$26,116 $-|3 6,283 |$346,527 77,976 $0.3354$-$ 20 $346,527]$26,504 |$$-{$26,504 |$89,836 $149,727]$3,936 |$317,076 78,353 $0.338 |$-$ 21 $317,076]$26,899 |$$-|$26,899 $11,861 |$-{$6,104]$338,218 78,732 we)0.342 §$:$ 22 |1S 338,218}$27,299 |$$-[$27,299 $11,861 |$-{$6,527 |$360,183 79,112 1S 0.345 |$-$ 23 FY$360,183 |$27,705 |$$-|[$27,705 $11,861 |$-{$6,966|]$382,994}79,494 4 §0.349 1$-$ 24448 382,994]$28,118 |$$-|$28,118 $11,861 |$-[$7,423 |$406,673 79,879 $0.352 |$-$ 25 F 48 406,673 |$28,536 |$$-{[$28,536 $11,861 |$3,831 |$7,820 |$427,337 80,265 $0.356 |$-$ 26 $427,337 |$28,961 |$$-|$28,961 $11,861 }$-4$8,310]$452,746 80,653 $0.359 |$-$ 27 $452,746]$29,392 |$$-1$29,392 $11,861 |$-1$8,818 ]$479,094 81,043 $0.363 |$-$ 28 $479,094 |$29,829 |$$-|$29,829 $11,861 |$-{|$9,345 1$506,407 81,435 $0.366 |$-$ 29 $506,407]$30,273 |$$-|$30,273 $11,861 |$-|$9,891]$534,710 81,829 $0.370 |$-$ 30 $534,710]$30,724 |$$-|$30,724 $11,861]$210,547 |$6,2461$349,271 |82,224 $0.374 |$-$ 31 $349,271 |$31,181 |$$-|[$31,181 $-|$6,985 |$387,438}82,622 .1$0.3774 $:$ 32 $387,438]§31,646 |$$-|$31,646 $-1$7,749 |$426,833 f 83,022 1$0.381 |$-$ 33 |{$426,833 |$32,117 |$$-|$32,117 $-|$8,537 |$467,486 83,423 $0.385 }$-$ 34 $467,486 |$32,595 |$$-|[$32,595 $-1$9,350}$509,430 83,827 1s 0,389 |$:$ 35 £8 509,430]$33,080 |$$-{$33,080 $4,446 |$10,100 |$548,164 84,232 $0.393 |$-$ 36 $548,164]$33,572 |$$-|$33,572 $-{|$10,963 |$592,699 §84,640 $0.397 1 $-$ 37 FAS 592,699 |$34,072 |$$-[$34,072 $-|$11,854]$638,625 85,050 $0.401 |$-$ 38 $638,625 |$34,579 |$$-|$34,579 $-|[$12,773 |$685,977 85,461 $0.405 |$-$ 39 $685,977 [3 35,094 |$$-|$35,094 $-|$13,720 ]$734,791 85,875 $0.409 |$-3 40 $734,791]$35,617 1 $$-|$35,617 $719,599 }§304 |$51,112 86,290 1$0.41316 -$ The City of Edna Bay Bulk Fuel Facility Business Operating Plan Table F continued The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 24 of 25 - : TABLE F -PAGE 2 R and R Participant Payment Schedules City of Edna Bay NA R &R Fund Balance R &R Fund Balance Year aed'Annual Principal Debt Service Renewals/Earnings (Net Total Year Yee 'Annual Principal Debt Renewals/rarsines TotalBalanceDepositReceivedReplacementsofFees)Balance Deposit Received Service Replacements (Net of Fees) 1 $-$20,020 $-|$20,020 1 $-$-$-|$ 2 $20,020}$20,318 $601 |$40,938 2 $-$-Ly -|$ 3 $40,938 |$20,620 $1,228 |$62,786 3 $-$-$-1$ 4 $62,786 |$20,927 $1,884 |$85,597 4 $-$-$-1$ 5 $85,597 )$21,238 $2,844 |$2,483 |$106,473 5 $x $:$-$-1$ 6 $106,473 |}$21,554 $3,194 |$131,221 6 $-$-$-|$ 7 $131,221 |$21,874 $3,937 |$157,032 7 $-$-$-|$ 8 $157,032 |$22,200 $4,711 ]$183,943 8 $-$-$-|$ 9 $183,943 |$22,530 $5,518 |$211,991 9 $-$-$-|$ 10 $211,991 |$22,865 $56,221 |$4,673 |$183,308 10 $-$-$-§-|$ 11 $183,308 |$23,205 $5,499 |$212,013 11 $-$-§-|$ 12 $212,013 |$23,551 $6,360 |$241,924 12 $-$-$-1$ 13 $241,924/$23,901 $7,258 |$273,083 13 $-$-$-|$ 14 $273,083 |$24,257 $8,192 |$305,532 14 $-$-§-|$ 15 $305,532 |$24,618 $111,141 |$3,888 }$222,896 15 $-$-$-$-|$ 16 $222,896|$24,984 $4,458 1$252,338 16 $-$-$-|$ 17 $252,338 1$25,356 $5,047 |}$282,741 17 $-$-$-|$ 18 $282,741 |$25,733 $5,655 |$314,128 18 $-$-$-1$ 19 $314,128 |$26,116 $6,283 |$346,527 19 $-$-$-{$ 20 $346,527 |$26,504)$89,836 $149,727 |$3,936 |$317,076 20 $-$-$-$-|$ 21 $317,0761$26,899 $11,861 $6,104 |$338,218 21 $-$-$-|$ 22 $338,218)$27,299 $11,861 $6,527 |$360,183 22 $-$-$-|$ 23 $360,183 |$27,705 $11,861 $6,966 |$382,994 23 $-$-$-|$ 24 $382,994 |$28,118 $11,861 $7,423 |$406,673 24 $-$-$-|$ 25 $406,673 |$28,536 $11,861 |$3,831 |$7,820 |$427,337 25 $-$-$-$-1$ 26 $427,337 |$28,961 $11,861 $8,310 |$452,746 26 $-$-§-|$ 27 $452,746 |$29,392 $11,861 $8,818 |$479,094 27 $-$-$-|$ 28 $479,094 |$29,829 $11,861 $9,345 |$506,407 28 $-$-$-|$ 29 $506,407 |$30,273 $11,861 $9,891 1$534,710 29 $-$-$-|$ 30 $534,710 |$30,724 $11,861 |$210,547 |$6,246 |$349,271 30 $-$-$-$-|$ 31 $349,271 /$31,181 $6,985 |$387,438 31 $-$-$-|$ 32 $387,438 )$31,646 $7,749 |$426,833 32 $-$-$-|$ 33 $426,833 |$32,117 $8,537 |$467,486 33 $-$-$-|$ 34 $467,486 |$32,595 $9,350 |$509,430 34 $-$-$-|$ 35 $509,430}$33,080 $4,4461$10,100/}$548,164 35 $-$-S -$-1$ 36 $548,164 /$33,572 $10,963 |$592,699 36 $-$-$-|$ 37 $592,699 |$34,072 $11,854 |$638,625 37 $-$-$-1$ 38 $638,625 |$34,579 $12,773 |$685,977 38 $-$-$-|§ 39 $685,977 |$35,094 $ 13,720|$734,791 39 $-$-g -|$ 40 $734,791 |$35,617 |$-$719,599 |$304 |$51,112 40 $-$-$-$s -$ The City of Edna Bay Bulk Fuel Facility Business Operating Plan Table G:Loan Schedule The City of Edna Bay Bulk Fuel Facility Business Operating Plan Page 25 of 25 TABLE G Loan Schedule Year 20 R&R Loan City of Edna Bay Principal $89,836 Term 10 Years Rate 5.4% Payment $(11,861.30) Beginning Principal Ending Year Balance Interest Payment |Payment |Balance 1 $89,836.45 |$4,851.17 ($11,861.30)|$7,010.13 $82,826.32 2 $82,826.32 |$4,472.62 ($11,861.30)$7,388.68]$75,437.64 3 $75,437.64 |$4,073.63 ($11,861.30)}$7,787.67 |$67,649.97 4 $67,649.97 |$3,653.10 ($11,861.30)$8,208.20]$59,441.77 5 $59,441.77 |$3,209.86 ($11,861.30)]$8,651.44 |$50,790.32 6 $50,790.32 |$2,742.68 ($11,861.30)]$9,118.62 $41,671.70 7 $41,671.70 |$2,250.27 ($11,861.30)|$9,611.03 $32,060.67 8 $32,060.67 |$1,731.28 ($11,861.30)|$10,130.02 $21,930.65 9 $21,930.65 |$1,184.26 ($11,861.30)|$10,677.05 $11,253.6110[$11,253.61 |$607.69 |($11,861.30)[$11,253.61]$(0.00) $28,776.55 ($118,613.00)$89,836.45 The City of Edna Bay Bulk Fuel Facility Business Operating Plan APPENDIX A:FACILITY OPERATOR BUSINESS ORGANIZATION The Facility Operator Business Organization includes: 1.A description of the Facility Operator,its personnel and experience,and its responsibilities and functions.This discussion includes its history of operating other business enterprises,as well as a description of the Facility Operator's fiscal controls and accounting procedures.This discussion details organizational history,management and structure;key personnel,and an organizational chart. 2.<A description of pertinent training available to the Operator staff through the AEA. THE CITY OF EDNA BAY Community History The community of Edna Bay was established in 1983.The name Edna Bay was originally given to the area by the U.S.Coast and Geodetic Survey in 1904.The land that the community occupies is located on the Southeastern corner of Kosciusko Island and was initially part of a large state land disposal sale.The logging industry and commercial fishing became the community's main sources of income and economic growth. The initial logging operations started in the 1940's during World War II,harvesting local Sitka Spruce trees.Through the late 1970's to the early 90's,logging in the area drastically subsided,and fishing had become more prevalent. Today,Edna Bay is primarily a community driven by commercial fishing.There is a state dock system,on island phone services,AT&T broadband services,a public school,post office,local store, transport services,and local lumber mills as well.There is even a Karelian Beardog breeder located in the bay.Emergency response systems include a fire truck,an emergency medical building,and multiple trained EMT's on the island. Description of Business History Edna Bay just recently became a 2nd Class City in the Prince of Wales-Hyder Census Area.As such, the entity has no previous business history.However,the primary city staff has operated a multitude of successful private businesses in the past. Description of Fiscal Controls and Accounting Procedures (to be determined) City Management,Structure and Identification of Key Facility Personnel Facility Manager (Heather Richter)and two facility operators (Tyler Poelstra and Lee Grief)have been selected by community vote based on volunteers deemed capable and responsible to fill the position.Both Operators have recently completed the AVTEC bulk fuel training program. The organizational chart below shows the vatious components of The City of Edna Bay's overall administrative structure. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-1 The City Of Edna bay Organizational Chart Mayor Heather Richter Treasurer Myla Poelstra Clerk 1 Clerk 2 Clerk 3 Tyler Poelstra Myla Poelstra vacant Training The City may utilize training resources available through the AEA and the Alaska Vocational Technical Center to ensure proper training of its personnel.The Alaska Energy Authority has developed a series of courses relating specifically to Bulk Fuel operations and business management. The operations coutses are taught through the Alaska Vocational Technical Center (AVTEC)in Seward and the business courses are taught in Anchorage: Contacts Jed Drolet,Energy Information Analyst and Training Programs contact,Alaska Energy Authority/AIDEA Address:813 West Northern Lights Blvd.,Anchorage,Alaska 99503 Phone:(907)771-3000 Fax:(907)771-3044 Web Address:www.aidea.org/training.htm Email address:jdrolet@aidea.org Dick Harrell,Instructional Administrator,Alaska Vocational Technical Center Address:P.O.Box 889 809 2nd Avenue,Seward,Alaska 99664 Phone:(907)-224-3322 1-800-478-5389 fax (907)224-4400 Web Address:www.avtec.alaska.edu Email:dick-harrell@avtec.edu As of January 15,2015,the primary bulk fuel training provided by AEA 1s: The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-2 Bulk Fuel Operator Training -This course provides the knowledge and skills necessary to safely operate and maintain a bulk fuel storage facility,while complying with state and federal laws.The program includes bulk fuel storage facility construction,facility operations,tank farm inspection criteria,facility maintenance,inventory control,tank farm safety,spill detection and spill response planning. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-3 RESUMES/JOBS DESCRIPTION The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-4 THE CITY OF EDNA BAY JOB DESCRIPTION BULK FUEL FACILITY MANAGER Exempt (Y/N):No Salary: Division:Bulk Fuel Location:Hoonah 'Employee:Supervisor:N/A Approved By:N/A 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,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 with annual reporting of operations to the City. Implements the spill response and related regulatory plans and ensures 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 druls. 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. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-5 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. The City of Edna Bay Bulk Fuel Facility Business Operating Plan Appendix A-6 APPENDIX B:O&M AND R&R CosT ESTIMATE BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS EDNA BAY TANK FARM &MARINE FUELING STATION EDNA BAY,ALASKA PREPARED BY:CLIENT Alaska Energy and Engineering,Inc.: AEA P.O.Box 111405 813 W.Northern Lights Blvd. Anchorage,Alaska 99511-1405 Anchorage,Alaska 99503 January 19,2015 BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING PAGE 1 EDNA BAY,ALASKA DATE:1/20/2015 NOTES REGARDING THE PREPARATION OF THIS ESTIMATE These Operations/Maintenance and Replacement/Renewal costs are based on the Edna Bay Bulk Fuel Upgrade project conceptual design dated,September 30,2010 and subsequent 90%design drawings prepared by Alaska Energy and Engineering,Inc.of Anchorage,Alaska and do 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 using outside consultant/contractor rates,per diem and travel costs."Force Account"labor rates are assumed as an average hourly rate. O&M costs are established on yearly basis in 2014 dollars and should be projected to the initial 40 years of the facility using appropriate inflation factor over next 40 years. Renewal costs are based on repairing tank farm equipment two to six times over 40 years. Replacement costs are based one to three times over 40 years. ESTIMATING ASSUMPTIONS Operation/Maintenance Costs:All costs are on yearly basis for one time event only. )5 10 18 20 25 30 35 40 Years:||||||||| I |I T I t I T 1 Renewal/Replacement Costs:Total cost column represents one time event only.Years in parentheses indicate number of times to be renewed/replaced.Therefore,the Business Plan should apply the total dollars and multiply by the number of years item to be renewed or replaced. i BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM PAGE 2 EDNA BAY,ALASKA DATE:1/20/2015 SUMMARY TOTAL COST One Time Cost (In 2007 Dollars) A.Operations &Maintenance Costs (Yearly)$19,431 x 40 Years =$777,240 B.Renewal Costs (Over 40 Years)See Business Plan Table C.Replacement Costs (Over 40 Years)See Business Plan Table TOTAL O&M AND RENEWAL/REPLACEMENT COSTS (2009 DOLLARS):See Business Plan NOTE:Items B and C costs are for multiple events over 40 years period.See Business Plan Tables for costs including inflation factor and number of occurrences/event. BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA PAGE 3 DATE:1/20/2015 QUANTITY}MATERIAL LABOR EQUIPMENT] A.Operations &Maintenance Costs (Yearly)No.of;Unit |Unit Cost MH Total Cost |Unit ;Cost}TOTAL Units |Meas|Price $Unit Hrs Rate $Price $$ 14.GROUND MAINTENANCE Annual maintenance 12 Mos 20.000 240.000 22.00 5280 5,280 SUBTOTAL 1.GROUND MAINTENANCE (YEARLY):5,280 5,280 2.TANKS,PIPELINES AND INSPECTIONS Fuel delivery (35,750 gallons -2 times)2 EA 12.000 24.000 22.00 528 528 (71,500gallons,annually) Perform minor repairs,replace faulty valves and gauges (1 time/year -3 tanks)1 LOT 500.00 500 12.000 12.000 22.00 264 150.00 150 914 Annual inspection/pressure testing (1 outside person)1 LOT 10.000 10.000 22.00 220 100.00 100 320 Consumables (Spill Response,safety Equip,etc.)1 LOT 500.00 500 4.000 4.000 22.00 88 588 SUBTOTAL 2.TANKS,PIPELINES,ETC.(YEARLY):500 1,012 250 2,350 3.OTHER COSTS Operator training 1 EA 1000.00 1,000 50.000 50.000 22.00 1,100 2,100 Administration -clerical 12 Mos 8.000 96.000 22.00 2,112 2,112 Supervision 12 Mos 4.000 48.000 33.00 1,584 1,584 BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING PAGE 4 EDNA BAY,ALASKA DATE:1/20/2015 QUANTITY|MATERIAL LABOR EQUIPMENT] A.Operations &Maintenance Costs (Yearly)No.of|Unit]Unit Cost MH Total Cost |Unit |Cost}TOTAL Units |Meas|Price $Unit Hrs Rate $Price $$ Annual audit 1 EA 12.000 12.000 100.00 1,200 3,000 Tankage insurance (based upon current)4 EA Regulatory Compliance (Exercise Equipment,spill drills,plan updates)1 LOT 10.000 10.000 22.00 220 3,005 SUBTOTAL 3.OTHER COSTS (YEARLY):1,000 5,996 11,801 SUMMARY (YEARLY) 1.GROUND MAINTENANCE 2.TANKS,PIPELINES AND INSPECTIONS 3.OTHER COSTS $5,280 2,350 11,801 TOTAL IN PRESENT DOLLARS/YEAR:$19,431 i ' BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA i PAGE 5 DATE:1/20/2015 QUANTITY]MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (Yearly)No.of|Unit}Unit Cost MH Total Cost |Unit |Cost}TOTAL Units |Meas|Price $Unit Hrs Rate $Price $$ 424.000 City Hours Monthly 35.33 i +i | BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA { PAGE 5 DATE:1/20/2015 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost |TOTALUnits|Meas Price $Unit Hrs Rate $Price $$ 1A.FENCE Repair fence and gates (at 10 and 30 years -2 times)400 LF 5.00 2,000 0.250 100.000 25.00 2,500 1.60 640 5,140 1B.PADS AND DIKE Repair steps and landings and bulk transfer enclosure (at 10,20, and 30 years -3 times)887 SF 4.00 3,548 0.050 44.350 25.00 1,109 1.00 887 5,544 SUBTOTAL 1A &B.FENCE AND PADS &DIKE:5,548 3,609 1,527 10,684 2A.TANKS Miscellaneous Tank Repair (at 10,20,30 and 40 years -4 times)1 LOT 3000.00 3,000 12.000 12.000 25.00 300 400.00 400 3,700 2B.Dispensing/bulk Transfer Equipment Repair dispensing/bulk transfer equipment (at 10 ,20,30 years-2 times)1 LOT 3000.00 3,000 16.000 16.000 25.00 400 250.00 250 3,650 2B.PIPELINES AND HEADERS (Continued) Check and repair tank fill lines manifold (at 10,20,and 30 years -3 times)1 LOT 1500.00 1,500 24.000 24.000 25.00 600 300.00 300 2,400 SUBTOTAL 2.TANKS AND PIPELINES:7,500 1,300 950 9,750 3.ELECTRICAL MAINTENANCE \!1 -4;}. BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING PAGE 6 EDNA BAY,ALASKA DATE:1/20/2015 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost |TOTALUnits|Meas Price $Unit Hrs Rate $Price $$ Minor electrical upgrades (10 and 30 years -2 times)1 LOT 1000.00 1,000 18.000 18.000 85.00 1,530 150.00 150 2,680 SUBTOTAL 3.ELECTRICAL MAINTENANCE:1,000 1,530 150 2,680 SUMMARY (One time cost -multiply by number of times to be renewed) 1A &B.FENCE AND DIKES $10,684 2A &B.TANKS AND PIPELINES 9,750 3.ELECTRICAL MAINTENANCE 2,680 TOTAL IN PRESENT DOLLARS FOR 40 YEARS:$23,114 i ' BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA PAGE 7 DATE:1/20/2015 QUANTITY MATERIAL LABOR EQUIPMENT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units Meas Price $Unit Hrs Rate $Price $$ 1A.FENCE Replace 6'fenc and gates (at 20 and 40 years -2 times)400 LF 25.00 10,000 0.500 200.000 25.00 5,000 4.40 1,760 16,760 1B.PAD,DIKE AND STEPS 3"gravel surfacing to pad, (at 20 and 40 years -2 times)4817 SF 0.45 2,168 0.010 48.173 25.00 1,204 0.20 963 4,336 Replace misc steel structures (40 years -1 time)1 LOT 35000.00 35,000 1000.000 1000.000 25.00 25,000 2.50 3 60,003 Replace concrete pads/foundations under tanks (at 40 years -1 time)40 CY 300.00 12,000 7.000 600.000 25.00 15,000 200.00 8,000 35,000 Excavate,replace liner and backfill (at 40 years -1 time)2,500 SF 2.50 6,250 0.060 150.000 25.00 3,750 1.50 3,750 13,750 Tank Farm-Replace alum dike liner (at 40 years -1 time)3,600 LB 0.50 1,800 0.029 104.400 27.00 2,819 3.00 10,800 15,419 SUBTOTAL 1A &B.FENCE,PAD &DIKE:65,418 49,954 14,476 129,848 2A.TANKS AND DISPENSING 54 Replace dispensing equipment (at 15 and 30 years -2 times)1 EA 58000 58,000 80.000 390.000 75.00 29,250 300.00 300 87,550 3 tanks (at 40 years -1 time)1 LOT 115000 115,000 1000.000 1000.000 75.00 75,000 1000.00 7,602 197,602 2B.PIPELINES AND HEADERS !|'\\ BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA PAGE 8 DATE:1/20/2015 QUANTITY MATERIAL LABOR EQUIPMENT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units Meas Price $Unit Hrs Rate $Price $$ Replace fill lines,tank farm piping manifold and supports (at 40 years -1 time 410 LF 15.00 6,150 0.335 137.350 75.00 10,301 9.20 28,000 44,451 Replace pipe fittings and flexes and appurtenances at tanks (at 40 years -1 time)1 LOT 27000 27,000 300.000 300.000 75.00 22,500 2500.00 2,500 52,000 Replace pipeline valves at barge and tank lines (at 20 and 40 years - 2 times)1 LOT 50550 50,550 150.000 150.000 75.00 11,250 3500.00 3,500 65,300 2C.INSPECTION (OUTSIDE CONTRACTOR) Major inspection of tanks by outside group including per diem and travel costs (at 10,20 and 30 years - 3 times -3 tanks)1 LOT 2800.00 2,800 150.000 150.000 75.00 11,250 1500.00 1,500 15,550 SUBTOTAL 2.TANKS,PIPELINES &INSPECTION:259,500 159,551 43,402 462,453 3.ELECTRICAL SYSTEMS Major Electrical Upgrades (at 20 and 40 years -2 times)2 LOT 20000.00 40,000 150.000 300.000 75.00 22,500 5000.00 10,000 72,500 SUBTOTAL 3.ELECTRICAL SYSTEMS:40,000 22,500 10,000 72,500 SUMMARY (One time cost -multiply by times to be replaced) 1A &B.FENCE AND DIKES $129,848 BULK FUEL OPERATION/MAINTENANCE AND REPLACEMENT/RENEWAL COSTS -TANK FARM &MARINE FUELING EDNA BAY,ALASKA PAGE 9 DATE:1/20/2015 QUANTITY MATERIAL LABOR EQUIPMENT C.Replacement Costs (Over 40 Years)No.of Unit Unit Cost MH Total Cost Unit Cost TOTAL Units Meas Price $Unit Hrs Rate $Price $$ 2A &B.TANKS AND PIPELINES 462,453 3.ELECTRICAL SYSTEMS 72,500 TOTAL RENEWAL:$664,801 ADDITIONAL RELATED AND ATTACHED DOCUMENTS 1.Site Control Summary &Documents 2.R&R Account Information SITE CONTROL SUMMARY &DOCUMENTS Site Control Summary The community of Edna Bay has been pursuing a suitable bulk fuel tank farm site for a number of years.A small Tract owned by DNR and located between the dock and Forest Service Road was eventually selected.In November 2012,after a public and internal review period,DNR issued a Final Finding and Discussion to transfer the 0.22 acres of land to the Community of Edna Bay (Attached).As a condition of the land sale,a Plat was developed and recorded forming the bulk fuel tank farm site known as Tract A. THE STATE of A Department of Natural ResourcesL,\SKA Division of Mining,Land &WaterSoutheastRegionalLandOffice GOVERNOR SEAN PARNET!P.O.Box 111020 Juneau,Alaska 99811-1020 Main:907.465.3400 TOD:907.465.3888 Fax:907.586.2954 November21,2012 Edna Bay Community,Inc. Attn:Myla Poelstra P.O.Box 000 Edna Bay,AK 99950-0040 Re:ADL 107923;Final Finding and Decision and Survey Request Dear Ms.Poelstra: Enclosed please find the Final Finding and Decision and all related attachments in this matter,including the Site Diagram,Appeal Rights,and a copy of the Preliminary Decision dated October 17,2012.Also enclosed is a Request for Survey Instructions form to be completed fully and returned to this office along with payment of $225.Payment of the purchase price of the parcel will also need to be received within 30-days. As discussed on pages 7 and 12 of the Decision,prior to a disposal of interest by the State,Edna Bay Community must complete and record an Alaska State Land Survey (ASLS)of the parcel.The ASLS parcel boundary must include the entire area for intended use and will define the boundary of the parcel to be conveyed.Additionally,approval of a disposal of interest in this parcel is contingent upon DOTPF formally relinquishing its interest in the surveyed parcel. Again,Edna Bay Community must complete the Request for Survey Instructions which include the contact information and signature of the surveyor selected by the community to complete the survey in addition to payment of the $225 fee.All costs of the survey are the responsibility of Edna Bay Community.You may make payment by credit card or check.Checks should be made to payable to the State of Alaska,Department of Natural Resources. Our office will forward your request to DNR-Surveys in Anchorage for processing.Currently,the DNR- Survey Section is experiencing a backlog of survey instruction requests,so please expect that it may take four or more months to process your survey instructions.On that basis,we encourage you to complete and submit the enclosed Request for Survey Instructions form as soon as possible. If you have any questions,please contact me at the address above or call 907-465-3432. '4_Sincerely,YY)C aJe2(CeStevenC.Winker Natural Resource Manager Enclosure ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING,LAND AND WATER SOUTHEAST REGIONAL OFFICE Final Finding and Decision ADL 107923 Land Sale under AS 38.05.810(a) To Edna Bay Community This Final Finding and Decision,and all attachments hereto,supplement the Preliminary Decision dated Octoher 17,2012,and comprise the record of decision for this land sale under AS 38.05.810{a). Agency and Public Comments: e There were no Agency or public comments. Director's Finding for Conveyance at Less than Fair Market Value: e The Director's finding is attached as Attachment 1. Modifications to the Preliminary Decision: e There are no modifications to the Preliminary Decision. The preliminary decision referenced above has been reviewed and considered.The case-file has been found to be complete and the requirements of all applicable statutes have been satisfied.It is the finding of the Commissioner of the Department of Natural Resources that it is in the best interest of the State to proceed with this conveyance under the authority of AS 38.05.810. Recommend Approval *: . °wn a a oaYeeCUceeGee fe 2-20)2. David L.Kelley Date Southeast Regional Manager A person affected by this decision who provided timely written comment or public hearing testimony on this decision may appeal it,in accordance with 1!AAC 02.Any appeal must be received by December 11,2012, and may be mailed or delivered to Daniel S.Sullivan,Commissioner,Department of Natural Resources, 550 West 7th Avenue,Suite 1400,Anchorage,Alaska 99501-3561;faxed to 1-907-269-8918;or sent by electronic mail to drr.appeals@alaska.gov.If no appeal is filed by that date,this decision goes into effectasafinalorderanddecisiononthe31°day after issuance.An eligible person must first appeal this decision in accordance with 11 AAC 02 before appealing this decision to Superior Court.A copy of 11 AAC 02 is enclosed.A copy of the regulations pertaining to appeal rights is attached hereto as Attachment 2. ADL 107923 Final Finding and Decision Page | Memorandum State of Alaska [SE ae _.M Ve 4DepartmentofNaturalResourcesDivisionofMining,Land and Water G2 Southeast Alaska Region [S55okey AND €BATE TO:Brent Goodrum,Director \2 DATE:October 17,2012 THRU:David Kelley,SE Regional Manager TELEPHONE:(907)465-3512 FROM:-_Steve Winker,Natural Resources Manager FAX:=(907)465-3432 SUBJECT:Director's Finding for an .810 Public &Charitable Sale at Less than Fair Market Value Edna Bay,Bulk Fuel Storage Facility,ADL 107923 The Southeast Region Office proposes to issue the attached Preliminary Finding and Decision to sell land to Edna Bay Community,a non-profit corporation,for the operation and management of a bulk fuel storage facility. Under AS 38.05.810(a),the department may convey land to a nonprofit corporation organized and operated for the management of a public facility,for less than fair market value,which is deemed fair and proper and in the best interests of the public,with due consideration given to:(i)the nature of the public services or function rendered by the applicant and (ii)the terms of the grant under which the land was acquired by the state. As discussed in the Preliminary Decision,the 0.3 acre parcel of land will accommodate a bulk fuel storage facility that will be owned and operated by the applicant (Edna Bay Community,a non-profit corporation). Revenues that exceed the cost of the fuel will be used for routine maintenance and repair and other facility- related purposes.The project as proposed by the applicant has been deemed consistent with the intent of AS 38.05.810.This along with the fact the requested parcel of land was part of a National Forest Community Grant (NFCG 129)providing lands to promote and sustain Community and economic development,a sale for less than fair market value is considered to be fair and proper and in the best interest of the public. Based on an appraised value per acre of approximately $14,600 that is associated with a 2011 land sale of a nearby waterfront parcel in the Edna Bay Subdivision made by the Mental Health Land Trust Office(MHLTO)',DMLW determined that the value of this parcel (approximately 0.3 acres)would be approximately $4,380.00. Absent specific guidance in statute or regulation as to what percentage of fair market value would be appropriate sale price,DMLW notes that a rental of state land under AS 38.05.8 10(d)"may not be less than one percent of the fair market value”on land acquired primarily for development. Under AS 38.05.097,exemptions from rental payments on land leased by non-profits are limited to land being used for a youth encampment or similar recreational purpose.In this case,if the parcel were leased to the applicant under AS 38.05.810 for the purpose of operating a bulk fuel facility,the applicant would not qualify for an exemption from rental payment.At a minimum,annual rent for a leasehold interest in the requested parcel would be approximately $45.00.Therefore,based on an effective use life of 40 years "ASLS 81-116,Block 14,Tract P (MHT #9100682) ATTACHMENT 1 October 17,2012 Page 2 for the facility,the applicant would expect to pay a total of approximately $1,800.00 over that period oftimetoleasetheparcel.” In this case,where the land is being sold rather than leased,it is similarly reasonable that the applicant would not be exempt from paying some amount of the land value when purchasing the property.It is also reasonable to conclude that the state would not receive an amount significantly less than if the parcel were to be leased for public and charitable purposes.Therefore,a sale price in the amount of $1,800 for this parcel is recommended.This amount represents approximately 41%of the parcels FMV. Pursuant to AS 38.05.810(g),DNR will retain a reversionary interest in the land. APPROVAL:I find the value of $1,800.00 for conveyance of the parcel (approx.0.3 acres)proposed by DMLW for sale to Edna Bay Community (ADL 107923)to be appropriate and in the public interest.Buco Go -sofia /roirBrentGoodrum,Director Date Division of Mining,Land and Water ?Under AS 38.05.105.a lease would also be subject to periodic rent adjustments Final Finding and Decision ADL 107529 Appeal References Alaska Statute (AS)38.05.035 (i)A person who is eligible to file an administrative appeal or a request for reconsideration,as appropriate,under this subsection and who is aggrieved by the final written finding of the director entered under (€)(5)or (6)of this section may,within 20 days after the issuance of the final written finding,file an administrative appeal or request reconsideration of the decision by the commissioner.A person is eligible to file an administrative appeal or a request for reconsideration if the person (1)meaningfully participated in the process set out in this chapter for receipt of public comment by : (A)submitting written comment during the period for receipt of public comment;or (B)presenting oral testimony at a public hearing,ifa public hearing was held; and (2)is affected by the final written finding. (j)An administrative appeal or a request for reconsideration submitted under (1)of this section must specify the written finding complained of and the specific basis upon which it is challenged. The commissioner shall grant or deny the administrative appeal or reconsideration request within 30 days after issuance of the final written finding.Failure of the commissioner to act on the request for reconsideration within this period is a denial of the request for reconsideration and a final administrative decision for purposes of appeal to the superior court. Alaska Administrative Code (AAC)-11 AAC 02.Appeals It AAC 02.010.APPLICABILITY AND ELIGIBILITY.(a)This chapter sets out the administrative review procedure available to a person affected by a decision of the department.Ifa statute or a provision of this title prescribes a different procedure with respect to a particular decision,that procedure must be followed when it conflicts with this chapter. (b)Unless a statute does not permit an appeal,an applicant ts eligible to appeal or request reconsideration of the department's decision on the application.An applicant is eligible to participate in any appeal or request for reconsideration filed by any other eligible party. (c)Ifa statute restricts eligibility to appeal or request reconsideration of a decision to those who have provided timely written comment or public hearing testimony on the decision,the department will give notice of that eligibility restriction as part of its public notice announcing the opportunity to comment. (d)If the department gives public notice and allows a public comment period of at least 30 days ona proposed action,and if no statute requires opportunity for public comment,the department may restrict eligibility to appeal or request reconsideration to those who have provided timely written comment or public hearing testimony on the proposed action by including notice of the restriction as part of its public notice announcing the opportunity to comment. (e)An eligible person affected by a decision of the department that the commissioner did not sign or cosign may appeal the decision to the commissioner within the period set by 11 AAC 02.040. (f)An eligible person affected by a decision of the department that the commissioner signed or cosigned may request the commissioner's reconsideration within the period set by 11 AAC 02.040. (g)A person may not both appeal and request reconsideration of a decision.(Eff.11/7/90,Register 116;am 9/19/2001,Register 159) 11 AAC 02.015.COMBINED DECISIONS.(a)When the department issues a combined decision that is both a final disposal decision under AS 38.05.035(e)and any other decision,including a disposal decision combined with a land use plan decision,or a disposal decision to grant certain ADL 107923 Attachment 2 page 1 disposal decision combined with a land use plan decision,or a disposal decision to grant certain applications combined with a decision to deny others,the appeal process set out for a disposal decision in AS 38.05.035(i)-(m)and this chapter applics to the combined decision. (b)A decision of the department may include a statement that a final consistency determination under AS 46.40 (Alaska Coastal Management Program)has been rendered in conjunction with the decision.A person may not,under this chapter,appeal or request reconsideration of the final consistency determination,including a requirement necessary solely to ensure the activity is consistent with the Alaska coastal management program as approved under AS 46.40.(Eff.9/19/2001,Register 159) It AAC 02.020.FINALITY OF A DECISION FOR PURPOSES OF APPEAL TO COURT.(a)Unless otherwise provided in a statute or a provision of this title,an cligible person must first either appeal or request reconsideration of a decision in accordance with this chapter before appcaling a decision to superior court. (b)The commissioner's decision on appeal is the final administrative order and decision of the department for purposes of appeal to the superior court. (c)The commissioner may order or deny a request for reconsideration within 30 calendar days after issuance of the decision,as determined under 11 AAC 02.040(c}-(e).If the commissioner takes no action during the 30-day period,the request for reconsideration is considered denied.Denial of a request for reconsideration is the final administrative order and decision of the department for purposes of appeal to the superior court. (d)If the commissioner timely orders reconsideration of the decision,the commissioner may affirm the decision,issue a new or modified decision,or remand the matter to the director for further proceedings.The commissioner's decision,other than a remand decision,is the final administrative order and decision of the department for purposes of appeal to the superior court.(Eff.11/7/90,Register 116; am 9/19/2001,Register 159) 11 AAC 02.030.FILING AN APPEAL OR REQUEST FOR RECONSIDERATION. (a)An appeal or request for reconsideration under this chapter must (1)be in writing; (2)be filed by personal service,mail,fax,or electronic mail; (3)be signed by the appellant or the appellant's attorney,unless filed by clectronic mail;an appeal or request for reconsideration filed by electronic mail must state the name of the person appealing or requesting reconsideration and a single point of contact to which any notice or decision concerning the appeal or request for reconsideration is to be sent; (4)be correctly addressed; (5)be timely filed in accordance with 1]AAC 02.040; (6)specify the case reference number used by the department,if any; (7)specify the decision being appealed or for which reconsideration is being requested; (8)specify the basis upon which the decision is challenged; (9)specify any material facts disputed by the appellant, (10)specify the remedy requested by the appellant; (11)state the address to which any notice or decision concerning the appcal or request for reconsideration is to be mailed;an appellant may also provide a telephone number where the appellant can be reached during the day or an electronic mail address;an appeal or request for reconsideration filed electronically must state a single address to which any notice or decision concerning the appeal or request for reconsideration is to be mailed; (12)identify any other affected agreement,contract,lease,permit,or application by case reference number,if any;and (13)include a request for an oral hearing,if desired;in the appeal or request for reconsideration,the appellant may include a request for any special procedures to be used at the hearing, the appeal or request for reconsideration must describe the factual issues to be considered at the hearing. ADL 107923 Attachment 2 page 2 (b)At the time an appeal is filed,and up until the deadline set out in 11 AAC 02.040(a)to file the appeal,an appellant may submit additional written material in support of the appeal,including evidence or legal argument. (c)If public notice announcing a comment period of at least 30 days was given before the decision,an appellant may not submit additional written material after the deadline for filing the appeal, unless the appeal meets the requirement of (a)of this section and includes a request for an extension of time,and the department determines that the appellant has shown good cause for an extension.In considering whether the appellant has shown good cause,the department will consider factors including one or more of the following: (1)comments already received from the appellant and others; (2)whether the additional material is likely to affect the outcome of the appcal; (3)whether the additional material could reasonably have been submitted without an extension; (4)the length of the extension requested; (5)the potential effect of delay if an extension is granted. (d)If public notice announcing a comment period of at least 30 days was not given before the decision,an appellant may submit additional written material after the deadline for filing the appeal,if the appeal meets the requirements of (a)of this section and includes a notice of intent to file the additional written material.The department must receive the additional written material within 20 days after the deadline for filing the appeal,unless the appeal also includes a request for an extension of time,and the department determines that the appellant has shown good cause for an extension.In considering whether the appellant has shown good cause,the department will consider factors including one or more of the following: (1)comments already received from the appellant and others; (2)whether the additional material is likely to affect the outcome of the appeal; (3)whether the additional material could reasonably have been submitted without an extension; (4)the length of the extension requested; (5)the potential effect of delay if an extension is granted. (e)At the time a request for reconsideration is filed,and up until the deadline to file a request for reconsideration,an appellant may submit additional written material in support of the request for reconsideration,including evidence or legal argument.No additional written material may be submitted after the deadline for filing the request for reconsideration. (f)If the decision is one described in 11 AAC 02.060(c),an appellant who believes a stay of the decision is justified may ask for a stay as part of the appeal or request for reconsideration.The appellant must include an argument as to why the public interest requires a stay.(Eff.11/7/90,Register 116; am 9/19/2001,Register 159) Editor's note:The address for an appeal or request for reconsideration by personal service and by mail is:Department of Natural Resources,Commissioner's Office,550 W.7th Avenue,Suite 1400, Anchorage,Alaska 99501-3561.The number for an appeal or request for reconsideration by fax is:1- 907-269-8918.The electronic mailing address for an appeal or request for reconsideration by electronic mail is:dnr_appeals@ dnr.state.ak.us 11 AAC 02.040.TIMELY FILING;ISSUANCE OF DECISION.(a)To be timely filed,an appeal or request for reconsideration must be received by the commissioner's office within 20 calendar days after issuance of the decision,as determined under (c)or (d)of this section,unless another period is set by statute,regulation,or existing contract.If the 20th day falls on a day when the department is officially closed,the appeal or request for reconsideration must be filed by the next working day. (b)An appeal or request for reconsideration will not be accepted if it is not timely filed. ADL 107923 Attachment 2 page 3 (c)If the appellant is a person to whom the department delivers a decision by personal service or by certified mail,return receipt requested,issuance occurs when the addressee or the addressee's agent signs for the decision.If the addressee or the addressce's agent neglects or refuses to sign for the certified mail,or if the address that the addressee provided to the department is not correct,issuance by certified mail occurs when the decision is deposited in a United States general or branch post office,enclosed in a postage-paid wrapper or envelope, addressed to the person's current address of record with the department,or to the address specified by the appellant under 11 AAC 02.030(a)(11). (d)If the appellant is a person to whom the department did not deliver a decision by personal service or certified mail,issuance occurs (1)when the department gives public notice of the decision;or (2)if no public notice is given,when the decision is signed;however,the department may state in the decision a later date of issuance and the corresponding due date for any appeal or request for reconsideration. (e)The date of issuance constitutes delivery or mailing for purposes of a reconsideration request under AS 44.37.01 1(d)or AS 44.62.540(a).(Eff.11/7/90,Register 116;am 9/19/2001,Register 159) 11 AAC 02.050.HEARINGS.(a)The department will,in its discretion,hold a hearing when questions of fact must be resolved. (b)The hearing procedure will be determined by the department on a case-by-case basis.As provided in 11 AAC 02.030(a)(13),any request for special procedures must be included with the request for a hearing. (c)In a hearing held under this section (1)formal rules of evidence need not apply;and (2)the hearing will be recorded,and may be transcribed at the request and expense of the party requesting the transcript.(Eff.11/7/90,Register 116) 11 AAC 02.060.STAYS;EXCEPTIONS.(a)Except as provided in (c)and (d)of this section, timely appealing or requesting reconsidcration of a decision in accordance with this chapter stays the decision during the commissioner's consideration of the appeal or request for reconsideration.If the commissioner determines that the public interest requires removal of the stay,the commissioner will remove the stay and allow all or part of the decision to take effect on the date set in the decision or a date set by the commissioner. (b)Repealed 9/19/2001. (c)Unless otherwise provided,in a statute or a provision of this title,a decision takes effect immediately if it is a decision to (1)issue a permit,that is revocable at will; (2)approve surface operations for a disposal that has already occurred or a property right that has already vested;or (3)administer an issued oil and gas lease or license,or an oil and gas unit agreement. (d)Timely appealing or requesting reconsideration of a decision described in (c)of this section does not automatically stay the decision.However,the commissioner will impose a stay,on the commissioner's own motion or at the request of an appellant,if the commissioner determines that the public interest requires it. (e)A decision takes effect immediatcly if no party is eligible to appeal or request reconsideration and the commissioner waives the commissioner's right to review or reconsider the decision.(Eff. 11/7/90,Register 116;am 9/19/2001,Register 159) 11 AAC 02.070.WAIVER OF PROCEDURAL VIOLATIONS.The commissioner may,to the extent allowed by applicable law,waive a requirement of this chapter if the public interest or the interests of justice so require.(Eff.11/7/90,Register 116;am 9/19/2001,Register 159) ADL 107923 Attachment 2 page 4 11 AAC 02.080.DEFINITIONS.Repealed.(Eff.11/7/90,Register 116;repealed 9/19/2001, Register 159) 11 AAC 02.900.DEFINITIONS.In this chapter, (1)"appeal”means a request to the commissioner to review a decision that the commissioner did not sign or cosign; (2)"appellant”means a person who files an appeal or a request for reconsideration, (3)"commissioner”means the commissioner of natural resources; (4)"decision”means a written discretionary or factual determination by the department specifying the details of the action to be allowed or taken; (5)"department”means,depending of the particular context in which the term is used, the Department of Natural Resources,the commissioner,the director of a division within the Department of Natural Resources,or an authorized employee of the Department of Natural Resources; (6)"request for reconsideration”means a petition or request to the commissioner to review an original decision that the commissioner signed or cosigned.(Eff.11/7/90,Register 116:am 9/19/2001, Register 159) ADL 107923 Attachment 2 page 5 ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING,LAND AND WATER SOUTHEAST REGIONAL OFFICE Land Sale under AS 38.05.810(a)! to Edna Bay Community,ADL 107923 Preliminary Decision AS 38.05.035(e) REQUESTED ACTION:Edna Bay Community (applicant),a nonprofit corporation formed for the purpose of promoting the social welfare of the residents of Edna Bay,requests to lease a parcel of state owned uplands for the development and operation of a bulk fuel storage facility.The applicant's most recent development plan,dated September 19,2012,requests a parcel located on the northeastern shore of Edna Bay on Koskiusko Island east of a US Forest Service (USFS)Marine Transfer Facility (MTFY and upland from and immediately adjacent to the AlaskaDepartmentofTransportationandPublicFacilities(DOT/PF)community harbor.'As proposed,the facility would occupy a portion of land that is within a public easement issued to DOT/PF.* The requested parcel is also bounded by U.S.Forest Service Development Road (FDR)1525 andbyKosciuskoDriveaplattedpublicright-of-way.”See Attachment A for the Development Plan and Site Diagram. i 7Py*,ve ?*ne .eae :-"-ok -ot ,;we :ED tA pd ose'f if 5 " Vf an ; ,oy "|at,MES -:, Coe 'no .* 'io an os ee 3B i .by ose my 'f \Le {Le ey me Fig.1 DMLW mapper view Fig.2 Development Plan 9-20-2012 PROPOSED ACTION:Under AS 38.05.810(a),the Alaska Department of Natural Resources, Division of Mining,Land and Water (DMLW),may lease or convey lands to a qualified applicant for public and charitable use.Edna Bay Community qualifies as an entity eligible to potentialreceiveasaleorotherdisposaloflandunderAS38.05.810.°DMLW has determined that,as proposed,the bulk fuel facility is a public facility and is a project appropriate to consider under AS 38.05.810. . AS 38.05.810(a)provides for the sale or other disposal of state land to a tax-exempt,nonprofit corporation organized and operated for the management of a public facility. ADL 107923 ADL 104317 ATS 1309 and FDR 1525 and is within the public easement issued to DOTPF ADL 106135. ADL 106135 ASLS 81-116 recorded March 8,1982 in the Ketchikan Recording District as Plat 82-19 Department of Commerce,Community &Economic Development records verify Edna Bay Community is a Nonprofit Corporation (Entity #31165D)in good standing and,per email communication dated Septemter 7,2012, has been the recipient entity for Community Revenue Sharing funds since state fiscal year 2009.ow&wh Under AS 38.05.810,DMLW is required to ensure that a disposal of land serves a public purpose and is in the public interest.First,DMLW's approval of a disposal of land for the bulk fuel project at this site is contingent on DOT/PF relinquishing its interest to that portion of the existing easement upon which the proposed bulk fuel facility would be sited.Second,DMLW proposes that the dimensions of the requested parcel be reduced to consistent only of the footprint required for placement of the bulk fuel facility including reasonable access to the perimeter of the project for routine maintenance.Third,DMLW proposes that the boundary of the parcel maintain adistanceofatleast50feetuplandfromtheMHWboundaryofATS1309.'Finally,rather than authorize land use for a bulk fuel facility in the form of a lease,DMLW proposes to sell the applicant a portion of the requested parcel,as proposed by DMLW,subject to the terms and conditions outlined in this decision document. The public is invited to comment on the Preliminary Decision.The deadline for comments is November 5,2012;see Page 13 for details on how and where to send comments. AUTHORITY:The applicable authority includes AS 38.05.035(aX(6),AS 38.05.035(e),and AS 38.05.810(a).The Director has delegated to the Regional Manager the authority to approve Preliminary and Final Decisions under AS 38.05.035(e).The authority to lease land or,alternatively, sell land at less than fair market value as provided for in AS 38.05.810(a)resides with the Director. ADMINISTRATIVE RECORD:Case file ADL 107923 is the administrative record for this case. Also incorporated by reference is the Prince of Wales Island Area Plan (POWIAP),October 1998. SCOPE OF DECISION: The scope of administrative review,under AS 38.05.035(e1)(2),for a disposal of interest in the requested parcel,shall be limited to:(1)the requested public and charitable use qualifies for disposal under AS 38.05.810;(2)reasonably foreseeable effects of the proposed development;(3)assurances that the use is consistent with AS 38.05.810;(4)applicable statutes and regulations;(5)the facts pertaining to the land or resources;(6)leasing considerations;and (7)issues that are material to the determination that the proposed disposal will best serve the interests of the State,including receiving less than fair market value for the parcel and whether the reversionary interest required by AS 38.05.810(g)should be waived. 7 AS 38.05.127 and 11 AAC 51.045 Page 2 of 13 DESCRIPTION Location;The subject parcel is located in the community of Edna Bay on the southeastern coast of Kosciusko Island in southeast Alaska.Edna Bay is approximately 90 miles northwest of Ketchikan and 60 miles southwest of Wrangell. Borough/Municipality:Unorganized Native Regional Corporation:Sealaska Corporation Native Village Corporation:None Tribal Contact:N/A USGS Quad man:Craig N-5 Legal Description:A fractional portion of Lot 1,as shown on plat of survey accepted May 6,1936, within Township 68 South,Range 76 East,Section 23,Copper River Meridian and containing approximately 0.3 acres. TITLE Acquisition Authority:The State of Alaska received title to the affected uplands under the National Forest Community Land Grant (NFCG)129.U.S.Patent No.50-85-0112 recorded February 4,1985.8 The land and mineral estate of the subject parcel is vested in the State of Alaska.” Title Restrictions/Reservations:Exceptions and reservations contained in the federal patent issued to the state include a federal right-of-way for ditches and canals,construction of railroads, telegraph and telephone lines canals under the Act of August 30,1890 (26 Stat.391)U.S.C.945. Additionally,serialized as AA-43942 in the vicinity of the requested parcel include a right-of-way sixty-six (66)feet in width for Forest Development Road (FDR)No.1525 (formerly FDR No. 5778)and a Forest Service log transfer site,containing approximately five (5)acres,located adjacent to FDR 1525 that is also in Lot |of section 23.As proposed,the project is not located within these reserved areas. Reservation of Mineral Estate:As required by AS 38.05.125,the State of Alaska expressly saves, excepts,and reserves out of the grant those resources specified by statute.These include,but are not limited to,all oils,gases,coal,ores,minerals,fissionable materials,geothermal resources,and fossils of every name,kind or description,including the right to explore the same. *-For a disposal of land less than appraised value under AS 38.05.810(a),due consideration must be given to thetermsofthegrantunderwhichthelandwasacquiredbythestate.Section 6(a)of the Alaska Statehood Act entitles the state to select 400,000 acres of vacant,unappropriated land from within the national forests (Tongass and Chugach).The national forest selections are commonly referred to as National Forest Community Grant lands (NFCG). *DNR Realty Services Title Report #3438,issued February 28,2012. Page 3 of 13 BACKGROUND History Edna Bay was the site of a logging community in the early 1940's_A state land disposal in 1982 created a permanent community.The community now has a diverse economic base that includes commercial fishing,construction,tourism,and other seasonal opportunities.Currently,the community of Edna Bay has a school,an access float,and a small boat harbor.Access to the Edna Bay is by boat,floatplane,or the isolated road system on Kosciusko Island. Bulk fuel storage at Edna Bay is limited.The school building has above ground storage tanks to store heating fuel used specifically for the school's needs.Alaska Power and Telephone has a separate,company-owned 5,000 gallon storage tank to heat their facility and provide supplemental fuel to the school building when needed. Annual fuel consumption at Edna Bay is reportedly an average of 60,000 gallons.'°In the past, fuel arrived in a delivery truck that shipped to the community on a landing craft.However,thiswasagainstCoastGuardrulesandthepracticeendedin2008.''DMLW was informed that local lodges have provided limited fuel storage and sales for residential use,but due to regulatory concerns,these activities have also ceased.Absent a local bulk fuel storage facility,residents havetransportedfuelintothecommunityaboardskiffsorfishingvesselsin55-gallon drums.” The applicant has stated that they have not been able to secure private interest or funding for a bulk fuel facility,and being a community association with limited resources,the only option to secure support and potential funding for a project of this magnitude was to apply for grant funds from the Alaska Energy Authority (AEA). Site Selections/Alternatives The applicant had identified several sites before applying for the current site.In 2009,the applicant applied for use of a site situated adjacent to and partially within a selected five (5)acre portion of Lot 1,Section 23 located "adjacent to FDR 1525”reserved for a USFS log transfer facility (LTF).A barge loading ramp/marine access facility (MAF)on state-owned tide andsubmergedlandadjacenttotheLTFisauthorizedbythestate.'?However,contemplating future plans to use the area for log transfer operations,the USFS determined that this site was not acceptable because the proposed location of the fuel dispenser and containment unit would be situated too close to the bulkhead and loading ramp to facilitate safe and simultaneous operation oftheMAFandtheproposedbulkfuelstoragefacility.'* The USFS suggested two alternative sites.The first alternative site was to relocate the facility further east and outside of the USFS LTF.However,due to the steep topography and increased costs associated with site preparation,the applicant did not consider this location to be favorable for the facility.The second alternative site was a gravel extraction site located northwest of the existing MAF partially within the USFS LTF reservation and partially on land owned by the Alaska Mental Health Trust. ©E-mail communication received October 5,2012 "Anchorage Daily News,November 16,20102AnchorageDailyNews,November 16,2010 ADL 107433 44 E-mail from Jason Anderson,USFS Thorne Bay District Ranger,to Joanne Schmidt,September 23,2011 Page 4 of 13 The applicant identified another site,the parcel subject to this consideration,on the eastern side ofthebayuplandandadjacenttotheDOT/PF community boat harbor.Following a site visit by the USFS and Alaska Division of Forestry,the USFS recommended that this site would be more suitable regard to topography and access than the two alternative sites that were suggested. As proposed,the bulk fuel facility would be sited partially within DOT/PF's public easement (ADL 106135),and DOT/PF indicated in an email that "[t]here isn't any FFA money in theproperty,so I don't see any difficulty as regards to a release of part ofour easement.”!>Currently, parking for the community boat harbor is west of the FDR,and future parking needs can be accommodated within the public access easement on this side of the FDR.Therefore,siting of the facility on the east side of the FDR should not impede or reduce available parking for the community boat harbor. PLANNING AND LAND USE CLASSIFICATION Planning and Land Use Classification State-owned uplands in the vicinity of the proposed conveyance area are subject to the Prince of Wales Island Area Plan (POWIAP),October 1998.This site is within Subunit 8b and situated in a polygon with two primary designations:1)Public Facilities (P)and 2)Settlement-Commercial (Sc).These designations convert to Reserved Use Land and Settlement Land respectively. Fig 1 ATS 1309 NOAA Shorezone 8-2-2007 Fig.2 POWLAP map Subunit 8b inset Although it is typical to reclassify a parcel to the conveyable classification of Settlement ®,under AS 38.05.810 there is no specific classification requirement.Additionally,while most area plans identify whether a specific classification is considered conveyable,the POWIAP does not include this requirement.Therefore,since the proposed use is compatible with the planning and classification for this subunit,a plan amendment for this action to occur is not required. DMLW has received no information to indicate that the proposed use would not be compatible with any adjacent residential use. '5E-mail communication dated May 18,2012 from DOT/PF "©11 AAC $5.020(d) Page 5 of 13 Mineral Orders The proposed project area is closed to mineral entry.'” Local Planning The proposed project area is outside of a municipality.No local comprehensive plan or zoning ordinances are in effect,and the proposed project area is not subject to local planning and zoning ordinances. Plan for land disposal Under the POWIAP,a disposal for public purposes should be considered if the growth of the community results in a need for additional areas for such uses.Commercial and industrial usesshouldconcentrateinthisarea,designated Settlement-Commercial,on the east side of Edna Bay." The proposed use and site location is consistent with this management guideline. Traditional Use Finding Pursuant to AS 38.05.830,DMLW is not aware of any traditional uses of the land.If,through public review of the preliminary finding,DMLW becomes aware of traditional uses with the potential for conflicts with the proposed conveyance,DMLW will,if necessary,modify the decision or develop a plan to resolve or mitigate the conflicts. Physical and Legal Access Physical access to the proposed project area is by the Forest Development Road (FDR)1525. Upland access to the site may also be available in the future via Kosciusko Drive,which is currently platted but not yet developed.The applicant proposes to use the USFS MAF to land fuel trucks by barge which would deliver fuel to the facility. The site may also be accessed via DOT/PF's Edna Bay community boat harbor (ADL 104317/ ATS 1309)and its associated upland easement (ADL 106135).DOT/PF has expressed concernsaboutafuelbargebeinginthevicinityoftheagingdock.'® Before a lease or sale of state land adjacent to a body of water or waterway occurs,DNR mustmakeadeterminationofnavigableandpublicwater.””Edna Bay is a navigable,tidal body ofwater.”!Therefore,under AS 38.05.127(a)(2),DNR must provide for the specific easements or rights-of-way necessary to ensure free access to and along the body of water,unless regulating or limiting access is necessary for other beneficial uses or public purposes. The applicant requested a parcel extending to the Mean High Water (MHW)of Edna Bay.If the requested parcel is conveyed,in its entirety,the uplands located within 50 feet of MHW and currently part of a DOTPF easement that serves as an alternative access to the boat harbor will bereservedasapublicaccesseasementinaccordancewithAS38.05.127.2 '?POWIAP,Ch.3,p.132 '®POWIAP,Ch.3,p.134 '?Memorandum,CRW Engineering Group LLC,dated February 10,2012 9 AS 38.05.127 2!Submerged Lands Act 43 USC §1301(a)(2) 2 See also 11 AAC 51.045(c) Page 6 of 13 As proposed,the bulk fuel facility does not require the use of the requested parcel in its entirety, particularly that portion of the parcel located within 50 feet of MHW.Therefore,DMLW proposes to retain an access corridor extending along Edna Bay 50 feet above MHW.This corridor will remain part of the existing easement issued to DOTPF and continue to provide an alternative means of access to the boat harbor while assuring long term public access along Edna Bay. If the requested parcel is conveyed,in its entirety,DMLW will reserve a continuous access easement that extends at least 50 feet landward above MHW as required by 11 AAC 51.045(c). However,the reservation of such an easement is not a requirement of conveyance if it is determined that reserving the easement is not necessary to ensure free access to and along the water or thatregulatingorlimitingaccessisnecessaryforotherbeneficialusesorpublicpurposes.”° Hazardous Materials and Potential Contaminants It is DMLW's management responsibility to protect the overall public interest if there is a reasonable expectation that a hazardous condition,or hazardous,toxic,or radiological material or contamination from such material exists or is known to exist on the land being disposed.No hazardous material or contamination from hazardous material is known by DNR to exist on the requested parcel of land. Due to the nature of the proposed project,there is some environmental risk associated with it. Alaska Department of Environmental Conservation (ADEC)regulates above-ground fuel storage tanks with a capacity greater than 420,000 gallons.The U.S.Environmental Protection Agency (EPA)would regulate the proposed bulk fuel storage facility at Edna Bay which will have only a 48,000 gallon capacity. The EPA requires a Spill Prevention,Containment and Countermeasures (SPCC)Plan to be established and maintained for the life of the project.The most common risk will be spillage of fuel when dispensing fuel,but the applicant can minimize this risk by exercising care when fueling,following all protocols and recommendations in the SPCC to prevent spillage,and keeping all necessary containment and clean up equipment and supplies on hand in the event a spill occurs. Survey Prior to a disposal of interest,the applicant must complete and record an Alaska State Land Survey (ASLS)of the parcel.Because this parcel is framed by an FDR right-of-way,a platted right-of-way associated with Kosciusko Drive and a minimum 50 foot access area between the parcel and MHW, survey work of the requested parcel must be completed prior to any site development. The ASLS parcel boundary must include the entire area intended for use.The ASLS will define the boundary of the parcel to be conveyed.The applicant will be required to submit a $225.00 fee anda request for survey instructions to the DNR,Cadastral Survey Section upon issuance of a favorable decision. All costs of the survey shall be borne by the applicant.The applicant shall be responsible for securing a surveyor with the proper qualifications to complete the survey.Once construction is complete,an as-built survey of the facility will be required to ensure no encroachment beyond the ASLS parcel. 311 AAC 51.045(h) Pave 7 of 13 Appraisal and Fair Market Value An appraisal to determine market value of the parcel will not be required. Under AS 38.05.810(a),a salemay be made "for less than the appraised value as determined to befairandproperandinthebestinterestsofthepublic,with due consideration given to the nature ofthepublicservicesorfunctionrenderedbytheapplicant,and of the terms of the grant under which the land was acquired by the state.”While the default sale price under AS 38.05.810(a)would be the appraised value,the state has the discretion to establish a sale price at less than this amount. In this case,requiring a sale price at less than the appraised valueis appropriate.The state acquiredtherequestedlandfromthefederalgovernmentaspartofaNationalForestCommunityGrant™for the purposes of furthering the development of and expansion of communities.DMLW believes that use of this parcel for a non-profit community bulk fuel facility would be in accord with that purpose and provide an essential beneficial service to residents of the community of Edna Bay. Based on an appraised value per acre of approximately $14,600 that is associated with a 2011 land sale of a nearby waterfront parcelin the Edna Bay Subdivision made by the Mental Health LandTrustOffice(MHLTO)”,DMLW determined that the value of this parcel (approximately 0.3 acres)would be approximately $4,380.00. Absent specific guidance in statute or regulation as to what percentage of fair market value would be appropriate sale price,DMLW notes that a rental of state land under AS 38.05.810(d)"may not be less than one percent of the fair market value”on land acquired primarily for development. Under AS 38.05.097,exemptions from rental payments on land leased by non-profits are limited to land being used for a youth encampment or similar recreational purpose.In this case,if the parcel were leased to the applicant under AS 38.05.810 for the purpose of operating a bulk fuel facility, the applicant would not qualify for an exemption from rental payment.At a minimum,annual rent for a leasehold interest in the requested parcel would be approximately $45.00.Therefore,based on an effective use life of 40 years for the facility,the applicant would expect to pay a total ofapproximately$1,800.00 over that period of time to lease the parcel.”° In this case,where the land is being sold rather than leased,it is similarly reasonable that the applicant would not be exempt from paying some amount of the land value when purchasing the property.It is also reasonable to conclude that the state would not receive an amount significantly less than if the parcel were to be leased for public and charitable purposes.Therefore,DMLW recommendsa sale price in the amount of $1,800 for this parcel. Agency Review State agency review for this decision will be conducted concurrently with public review of this Preliminary Decision.The agencies to be contacted will include the Alaska Department of Fish and Game;Alaska Department of Environmental Conservation;Department of Transportation and Public °4 NFCG selections were authorized under Section 6(a)of the Alaska Statehood Act Public Law 85-508,72 Stat.339, July 7,1958*5 ASLS 81-116,Block 14,Tract P (MHT #9100682) *6 Under AS 38.05.105,a lease would also be subject to periodic rent adjustments Page 8 of 13 Facilities;DMLW Water Section;State Historic Preservation Office;US Arny Corps of Engineers; Alaska Mental Health Trust-Land Office;US Forest Service,Thome Bay Ranger District and the Southeast Alaska Conservation Council (SEACC). State agency review for Edna Bay Community's lease application was initially conducted during the period from September 12,2011 through October 12,2011.Several agencies (DNR Division of Forestry,US Forest Service,and State Historic Preservation Office)expressed concerns with the location of the project.Subsequently,the applicant selected a new site location for the bulk fuel facility. An Agency Review and Public Notice of the applicant's revised bulk fuel facility location occurred during the period from August 24,2012 through September 7,2012.No comments were received during this notice period. Discussion and Alternatives Edna Bay Community is a nonprofit community association eligible to receive a disposal of land from the State of Alaska under AS 38.05.810 (Public and Charitable).Under AS 38.05.810(a), Edna Bay Community applied for a lease for a parcel of state land to develop a bulk fuel storage facility.The proposed activity is within the scope of the applicants Articles of Incorporation.As proposed,the project for a bulk fuel storage facility is considered to be a public facility,and therefore meets both threshold requirements for a disposal of state land. The proposed use for this parcel is consistent with POWLAP management intent¥and guidelines forthisarea.In accordance with the area plan,public facilities must be sited,designed,and operated consistent with U.S.Corps of Engineers'requirements,federal and state water quality standards,and ADF&G's habitat protection regulations.[f necessary,DNR may impose additional stipulations toensureenvironmentalorhabitatprotection,use compatibility,or to meet the objectives of this plan.”' Under AS 38.05.810,an alternative to authorizing land use under a lease would be a sale of state land to a qualifying entity organized and operated for the management of a public facility.If determined to be fair and proper and in the best interests of the public,a sale of land may be made by negotiation and for less than fair market value.In making this determination,due consideration given to the nature of the public services or function rendered by the applicant,and of the terms of the grant under which the land was acquired by the state. The applicant states that the bulk fuel storage facility will be managed as a public facility for the benefit of the public,and all revenues generated from the sale of fuel will be used to payoperationalexpenses,repair and maintenance fees,and replacement costs as required by AEA. Approval of the applicant's request for land to develop a site for bulk fuel storage facility will provide benefit to the citizens of Edna Bay and visitors to the region. If a sale of the parcel is approved,the State shall retain a reversionary interest in the parcel and a deed restriction will be made to ensure that the site will be operated as a non-profit bulk fuel ”POWIAP,chpt.3 p.133>8 Statement of Intent by Edna Bay Communty provided to DMLW,August 29,2012 Pace9of13 facility in accordance with the intent of AS 38.05.810 and exclusively dedicated to nonprofit public use. Alternatives Considered: DMLW considered the following alternatives: 1)Deny use of the requested parcel for this purpose. 2)Authorize the proposed use under a lease with a term not to exceed fifty-five years. 3)Sell the requested parcel under AS 38.05.810(a). i Alternative I:Deny use ofthe requested parcelfor this purpose.This is not the preferred alternative,although any approval for use of this parcel would be subject to DOTPF relinquishing its interest in the project site.As proposed by the applicant,the project is partially situated in an upland easement /night of way issued to DOTPF immediately adjacent to the public harbor facility.The proposed project is a long term use.The Community of Edna Bay is not connected to other communities by a road system and depends on its public harbor facility for access.Sport and commercial fishing activities also have an important local economic role and are supported by a public harbor facility.DMLW recognizes that a disposal of this parcel may limit the ability of the public harbor to expand its upland facilities should there be a future need to do so. However,DMLW also believes that not having a bulk fuel storage facility to meet the community's heating and transportation needs also causes significant hardship to local residents and limits development and economic opportunities in Edna Bay. Alternative 2:Authorize the proposed use under a lease with a term not to exceedfifty-five years.”? Following consultation with the Alaska Energy Authority,DMLW was informed that the industry estimate of the life of the project is forty (40)years.Ifa decision is made to lease,an appropriate term would be forty years.|fowever,while this project could be authorized under a lease,Edna Bay Community,as a non-profit community association,does not have the financial capacity to meet DMLW's leasing conditions including providing a performance guaranty.For this reason,it seems appropriate to sell the parcel to Edna Bay Community rather than lease the parcel to them. In order to protect state land from damage and ensure that improvements are constructed and/or removed at the termination of a land use authorization and returned to a usable condition,it is DMLW's policy to consider whether a performance guaranty would be required.”Generally,an authorization for the use of State land requires a performance guaranty.In this case,the applicant is unable to secure appropriate bonding for the project.Edna Bay Community indicated that it hadappliedforabondwithseveralcompaniesandhadbeenrejected?!Additionally,the non-profit corporation does not have the cash flow through State's community revenue sharing program to cover the surety with a cash bond.The applicant would be unable to provide an adequate performance guaranty if this were a condition of obtaining a lease for the proposed bulk fuel facility. >*Although there is no maximum lease term specifically indicated under AS 38.05.810,under AS 38.05.070(c),a lease may be issued for a period up to 55-years,if determined to be in the best interest of the state. *Director's Policy File 07-01;11 AAC 96.060 3!E-mail communication dated May 31,2012 Page 10 of 13 Alternative 3 (Preferred):Public and Charitable Sale underAS 38.05.810(a).This is the preferredalternative,Subject to the provisions of AS 38.05.810,DMLW would sell the land required toaccommodatetheproposedbulkfuelfacilitytotheapplicantforlessthantheappraisedvalue.> As previously discussed in this decision document,DMLW determined that an appropriate sale price for this parcel would be $1,800.00 based on a fair market value of approximately $4,380.00. As proposed by DMLW,the size of the requested parcel would be reduced in size to accommodate the development footprint of the facility,approximately 0.3 acres,and would be at least 50 feet above MHW).In order to ensure that this disposal of land continues to serve a public purpose and is in the public interest,the state shall retain a reversionary interest in accordance with AS 38.05.810(a). RECOMMENDATIONS:DMLW proposes to sell and transfer ownership of the subject property to Edna Bay Community under AS 38.05.810(a),subject to the following conditions: |.Approval of a disposal of state interest is subject to the DOT/PF relinquishment of that portion of the DOT ROW (ADL 106135)upon which the facility is proposed to be sited. 2.Reduce the area of the requested parcel to the footprint of the bulk fuel facility only (approximately 0 .2 acres)and retain in state ownership an access corridor extending at least 50 feet above MIIW which would remain part of the easement already issued to DOTPF to facilitate its harbor operations to meet the requirements of AS 38.05.127.The specific location and design indicated on Attachment A may be somewhat altered to meet this recommendation. 3.Completion of an Alaska State Land Survey (ASLS).All survey costs shall be borne by the applicant.A state patent will not be issued for this parcel until the required ASLS has been completed.Upon final construction of the bulk fuel facility is complete,a satisfactory as-built survey must be completed and submitted to DMLW. 4.Pursuant to AS 38.05.810(g),DNR retains a reversionary interest in the land.The property will revert to the State should construction of the proposed bulk fuel facility not be initiated within 5 years,and substantially completed within 10 years,from the date of conveyance. 5.Notwithstanding the above,and pursuant to AS 38.05.810(a),the following reverter clause is proposed to be included in the state patent to Edna Bay Community and would attach to any future conveyance of the property. "This parcel of land shall be used for the management and operation of a non-profit bulk fuel facility in accordance with the intent of AS 38.05.810 and exclusively dedicated to nonprofit public use.If the Director of the Division of Mining,Land and Water of the Department of Natural Resources determines that the Grantee or Grantees successors in interest have failed to observe this condition,the Director may declare a forfeiture of this conveyance and title hereby conveyed shall thereupon revert to the State of Alaska." 6.The conveyance will be subject to all valid existing rights and the reservations referenced under Title Restrictions,above. *?See attached Director's finding (Attachment B)approving a conveyance of this parcel at less than fair market value. Paceliaf13 7.As required by AS 38.05.125,the mineral estate will be reserved to the State. 8.Within 30-days after issuance of a final decision approving sale of the parcel,DMLW must receive a payment in the amount of $1,800 for the parcel of land and a request for survey instructions including the required $225 processing fee. Prepared and Presented by:Steve Winker,Natural Resource Manager The Preliminary Decision presented above has been reviewed and considered.I find that the recommended action may be in the State's best interest and is hereby approved to proceed to public neue./')Bie?LCi Lig f WeV2DavidL.Kelley j f /Date Southeast Regional Manager As 38.05.035(e)to Commissioner DNR to Director To Regional Manager SERO July 9,2012 Delegated Authority Date Pace 1?af 1% PUBLIC NOTICE,FINAL DECISION AND APPEAL PROCESS: In accordance with the provisions of AS 38.05.945(b)(3),public notice seeking comments on this Preliminary Decision will be published in the Alaska Online Public Notice System at www.alaska.gov (click on "Notices”at top of page)and Posted at the Edna Bay Post Office and _ Distributed to:the US Forest Service;Alaska Department of Transportation and Public Facilities;Sealaska Corporation;Alaska Energy Authority;and Southeast Alaska Conservation Council (SEACC). The public is invited to comment on this Preliminary Decision.Comments must be received in writing by the DNR Division of Mining,Land and Water by mail at 400 Willoughby Ave.,Suite 400,Juneau, Alaska 99801,by fax at 907-586-2954,or by electronic mail at steve.winker@alaska.gov,by November 6,2012 in order to ensure consideration.Please include your mailing address and telephone contact.In order to establish appeal rights regarding this decision,you are required by law to meaningfully participate in the decision process by commenting on the decision,in writing,prior to the comment deadline.Following the deadline,all timely written comments will be considered,and DNR may modify this decision based on public comments received. If DNR determines that public comments in response to this notice indicate the need for significant changes to the decision,additional public notice will be given.If no significant changes are required, the Preliminary Decision,after any necessary minor changes,will be issued as the Final Finding and Decision.A copy of the Final Finding and Decision,along with instructions on filing an appeal,will be sent to all persons who comment on the Preliminary Decision. Persons who do not submit written comments during the comment period will have no legal right to appeal the Final Finding and Decision. Attachment A:Development Plan and Site Diagram Pane 1%anf it OteeeOemene2a4ateMesh)CaeRsBtotUngemeOOCatcetalleerea|EXISTING FOREST SERVICE ROAD FOR¢1525 PROPOSED BULK FUEL TANK FARM AND me DISPENSER (FINAL DESIGN PENDING:ae SITE CONTROL AND SURVEY)- pou .=ee a ee red +}Saat Te .\te TT te j ae eeeheEmPhe,a etZanwmSS teuw)t=OC?;ee we =.=OM SI eeOo©pe ene ac aeLatNUenewalleoO;---,,<q<2loa : Fac -ef aes on : PUBLIC EASEMENT AS SHOWN ON -- me ATTACHMENT A OF ADL 106135 ROW/EASEMENT DOCUMENT 50°MHW SETBACK a {SHOWN FOR : DISCUSSION ADL 104217 A.1.5.1309 LAND STATUS thganewentS On__USES ROW/EASEMENT CONSTRUCTIONADOTPUBLICEASEMENT74PARCELREQUESTEOBYEDNABAYDOCKANDZs |LONA Bay SEAPLANE FACILITY aPORTIONOFREQUESTED/PARCEL IN PUBLIC : EASEMENT £7)SITE PLAN.SAL emNeE 66 FDOR¢1525 ROW BASED ON 33° OFFSETS FROM EXISTING CENTERLINE Aes,LAToyDeesSecaAIDEA/AEAAwaEnergyGroupiaega8yge2" t raya?a)4,ital R&R ACCOUNT INFORMATION How to Establish a Renewal and Replacement Account Background For Alaska Energy Authority funded bulk fuel upgrade projects,a Business Operating Plan is provided to the Utility that outlines sustainable operation and maintenance of the Facility.An R&R account provides a mechanism for the community to save money for the inevitable renewal and replacement costs associated with the Facility. Generally,the Business Operating Plan states:"The R&R account is recommended to be an interest-bearing savings account,which requires two signatories and a community resolution for withdrawals.When the cash balance of the R&R account makes an escrow account more cost effective (at least when the balance reaches $100,000),the R&R account should be transferred to an interest-bearing invested escrow account.” General Guidelines of a Renewal and Replacement Escrow Account e Allows Facility Operator to make monthly deposits e Should be an interest-bearing account e Only allows withdrawal of funds for Renewal and Replacement costs of the facility. o Requires a Resolution from the governing body certifying funds are being used for Renewal and Replacement expenses related to the Facility that was partially or wholly-funded by the Alaska Energy Authority. Financial Institutions for R&R Escrow Accounts Any institution that will allow accounts that meet the guidelines above are acceptable. SAMPLE Resolution for Disbursement of Renewal and Replacement Funds for Energy Facility An Identical Resolution Should be Required and Signed by the Operator To Withdraw Funds from The R&R Account COMMUNITY OF: RESOLUTION No. WHEREAS,the Community of has established an interest-bearing renewal and replacement account with the financial institution of for the purpose of renewal and replacement expenditures related to the facility,and WHEREAS,pursuant to the approved business plan for facility the facility operator,and other participants,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 Bulk Fuel facilities this includes but is not limited to:Access Roads,Buildings,Poles, Generators,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 hereby attests that the funds being requested from the 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 requests the total sum of $for the following detailed expenses Signed by two representatives