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HomeMy WebLinkAbout1987-04-14; City Council; 8961; Batiquitos LagoonOF CARLSBAD — AGENt 3ILL 7 3 4/14/87 PEPT CM FITLE: BATIQUITOS LAGOON DEPT. HP. ^ CITY AT CITY MGR. Oa:o_O. <C Og< _J O OO RECOMMENDED ACTION: Adopt Resolution No. 7Pel 3. approving agreement with City of Los Angeles for preparation of preliminary engineering studies for Batiquitos Lagoon Enhancement Plan. BACKGROUND: Port of Los Angeles has agreed to pay $450,000 for preliminary engineering and environmental studies to determine the feasibility of constructing the Batiquitos Lagoon Enhancement Plan. Under the agreement, the City of Carlsbad will hire an engineering firm to conduct the studies and the City of Los Angeles will pay for the work. The L.A. Board of Harbor Commissioners approved the agreement on April 8. Following approval by Carlsbad, the following actions will take place: 1) Coastal permit to open the mouth of the lagoon will be considered by Coastal Commission on Wednesday, April 22 at Marina del Rey. 2) Agreement with engineering firm (CH.M Hill) will be on Council agenda April 14. 3) Engineering studies will take 9 months to complete. FISCAL IMPACT: Engineering contract will cost $392,200. Carlsbad will be allowed $50,000 for administrative costs. Invoices will be sent to Port of Los Angeles for payment. EXHIBITS: 1. Letter from Port of Los Angeles, dated April 8, 1987. 2. Resolution No. 1986 WORLDPORT LA Annual Report FlL-b 5,, > * - CONTENTS Letter from the President 2 Los Angeles City Officials 3 Board of Harbor Commissioners 3 Executive Director's Report 5 Financial Review 21 Report of Independent Certified Public Accountants 21 Balance Sheets 22 Statements of Operations 23 Statements of Changes in Contributions/Land Valuation Equity and Retained Earnings 24 Notes to Financial Statements 25 Financial Overview 29 Ten Year Highlights 1977-1986 30 Capita/ Deue/opment Program 30 Operating Reuenue 1982-1986 31 Reuenue Tons 1982-1986 31 Vessel Arrivals by Type of Vessel 1985-1986 32 Cash Flow from Operation 1982-1986 32 Net income 1982-1986 32 Certificate of Conformance in Financial Reporting 33 Revenue Tonnage Billed 33 Tonnage by Trade Route 33 Harbor Department Staff 34 The Honorable Tom Bradley, Mayor and the Honorable City Council City of Los Angeles ^ rJ / his annual report of the progress and accomplishments of _1 WORLDPORT LA for the fiscal year 1986 is forwarded in com- pliance with Article IV, Section 64, of the Los Angeles City Charter. With increasing emphasis, the Board of Harbor Commissioners has established a high priority for preserving the diversification of this world-class facility. Certainly, the success of our harbor is and must be measured in terms of tonnage and dollars. Yet no longer can the sole impetus be monetary and industrial gains. We also place high value on the people of our port community — on the small businessperson, the minority "newcomers" in the field and, of course, on the public for whom our recreational areas are planned. No where else in the world is the bustle of a premier international harbor in harmony with the community as it is in Los Angeles. We have a stake in the local area and a responsibility to be a good neighbor. We have but to look around these 7,300 acres to see the maritime community at its best as it proceeds into the next decade as a major force for the economic well-being of the Southern California region. In meeting the demands placed upon us by this ever-growing in- dustry, we are grateful for the support and far-sighted guidance of the Mayor and City Council. Respectfully submitted, Jun Mori President Board of Harbor Commissioners BOARD OF HARBOR COMMISSIONERS Tom Bradley CITY OFFICIALS Tom Bradley Mayor James Kenneth Hahn City Attorney Rick TurtleController CITY COUNCIL Pat Russell President Councilwoman, 6th District Joan Milke FloresPresident Pro Tempore Councilwoman, 15th (Harbor) District Joel Wachs 2nd District Joy Picus 3rd District John Ferraro4th District Zev Yaroslavsky 5th District Ernani Bernard!7th District Robert C. Farrell 8th District Gilbert W. Lindsay9th District Marvin Braude 11th District Hal Bernson 12th District Michael Woo13th District Richard Alatorre 14th District Jun Mori, Esq. President Joseph J. Zaninovich Vice President Michael W. Schwab Commissioner E. Grace Payne, LL.D. Commissioner Robert G. Rados Sr. Commissioner EXECUTIVE DIRECTOR'S REPORT Ezunial Burts Attracting cargo is not the biggest challenge the Port faces today. e have the geographic advan- tage. We have the economic strength. We have the proximity to Southern California's resources and population. We have ultra- modern facilities. It's for all of those reasons that WORLDPORT LA finds itself in the forefront of West Coast ports. The responsibility for keeping the Port of Los Angeles there is awesome. And our Harbor Department team of 700 employees, led by our Harbor Commission of five, has accepted the challenge with enthusiasm. Attracting cargo is not the biggest challenge the Port faces today. We are more immediately charged with the development of land, channels and an infrastructure which will accommodate —. the additional commerce we know is coming our way. This onslaught of new cargo and shipping activity cannot be handled reactively. Thus the Board of Harbor Commissioners in 1986 launched a Strategic Plan, the first published by any West Coast port, which Har- bor Department staff designed to pro- vide critical advance planning for growth. The plan describes a sys- tematic way of making today's deci- sions for tomorrow's results. It goes beyond just facilities planning to a mission statement and management philosophy which will prevail for years to come. A "bottom up" planning process provided input for the Strategic Plan. The kinds of businesses the Port is involved in and the services offered within this maritime business enuiron- ment mere reviewed at all Department staff levels to develop the ultimate plan. In so doing, management clarified the objectives to be pursued in attaining the overall goal of better service to the public. " I 'he impact of WORLDPORT LA _/ has gone far beyond the local economic environment to the entire global community. More than just a gateway to the Far East, we have become partners with our Pacif- ic Rim neighbors. Over the last four years, the Port of Los Angeles has grown at a faster rate than any of its major competitors. Total tonnage in fiscal year 1986 reached 51.1 million metric revenue tons, a 13.4% increase over the previ- ous year and a 45.6% growth in five years. Contrary to the general export orientation of West Coast ports, the Port of Los Angeles has historically been an importing port, accounting/or more than 20% of all West Coast in- bound traffic and approximately 10% of its exports. WORLDPORT LA counts among its trading partners some 140 nations, iw'th Japan, Korea, Taiwan, Indonesia and the Netherlands as its major mar- kets. These five countries account for 62% of all tonnage and almost 70% of its total dollar value. Japan alone was responsible for approximately 30% of all Port traffic, followed by Korea and Taiwan. This surge of Pacific Rim traffic has made WORLDPORT LA the leading West Coast port for automobiles, gas- oline and jet fuel, lube oils, motor vehi- cle parts, iron and steel scrap, coal and cotton. \ / fore than 58% of total Pacific Rim _ _1 foreign import cargo arrives through San Pedro Bay ports destined for U.S. markets. Some 60% of those goods are bound for the local market. The greater Los Angeles area is now recognized as the nation's #1 manufac- turing center. In the last 10 years more than 177,000 manufacturing jobs have been added here, compared with sig- nificant decreases in other metropolitan areas of the country. The need for imported goods by the 12 million Southern California popu- lace combines iw'th a recent demand for some 47% of U.S. domestically produced cargo to find markets here. West Coast exports tend to be agri- cultural and bulk products bound for Far Eastern markets for consumption in those countries or for manufacture into finished goods for export back to the West Coast. Commodities which follow this trend include cotton which is woven into fabric or apparel for re- export, scrap for recycling intoU.S.- bound automobiles and components for manufacturing into small electronic goods for American retailers. r, xperts have projected that by the _L_j year 2010, Pacific Rim coun- tries will account for 4.5 billion people, 60% of the world's consumers and half of the world's largest cities. As the focus of international trade continues to shift to West Coast dominance, WORLDPORT LA —- is well placed to increase its share of that world market. The Los Angeles Customs District, with the Port of Los Angeles strategically located at its hub, has outpaced all The greater Los Angeles area is now recognized as the nation's #1 manufactur ing center. other U.S. Customs districts in tuorfd trade growth. The greater Los Angeles area with its large and growing population, coupled with high per capita personal income, provides a dual thrust to local demand for goods and services. The manufacturing concentration and consumer market of Southern California create another favorable situation for WORLDPORT LA as shippers recognize the two-way po- tential for intermodal traffic. Not Far Eastern fabric for U.S.-bound apparel. Hi >> *v- t? * : <•>>.•.<*'a , «* « IW ^X - ' - - .^i «, f - -4, VI STRA%:^ • k. Tl^r-_ :i \*fi-.. v *%. Crackers and biscuits from Australia/1 Zealand grains. • * ' ->• -•»> "F provides a critically tded San Pedro Bay-based yard... only does the Southern California intermodal system provide interna- tional shippers with efficient, cost effective transportation, but west- bound rail systems carry cargo back to a thriving retail market. The available intermodal system brings a full 50% of discretionary cargo through Southern California. Shippers' access to all types of intermodal ship- ping services, year-round clear weath- er for uninterrupted movements and substantial two-way markets for con- tainer traffic join to make Southern California the most advantageous immui West Coast load center. Between 70% to 80% of con- tainers return to Southern California with domestic cargo destined for local consumers. ^ T he Port of Los Angeles' intermo- ( dal capabilities were enhanced in late 1986 with the opening of the 165-acre Intermodal Container Transfer Facility (ICTF), a joint project with the neighboring Port of Long Beach and operated by Southern Pa- cific Transportation Company. Located on Port of Los Angeles property, the ICTF provides a critically needed San Pedro Bay-based rail yard within five miles of any container ter- minal in either harbor. Throughput in the first year is estimated at 360,000 containers. As a second phase is completed, handling capability will reach 500,000 containers, and will ultimately grow to 700,000 with the third phase. Development of the ICTF and other intermodal transportation systems is not without impact in areas other than consumer supply. It is acknowledged that rail and high- way access to and from theSanPedro Bay ports must be developed to ac- commodate future expansion. The effects of increased cargo movements on the communities near the transpor- tation corridors are of substantial concern. To address these issues in a constructive manner, the Alameda Corridor Task Force was formed in late 1984 as an outgrowth of a Port funded access study by the Southern California Association of Governments (SCAG). The task force focuses on such issues as prioritization of street and rail improvements, operation of a consoli- dated rail corridor and mitigation of adverse economic and enuironmen- tal impacts. " Lumber from Huropc, Ga|ada and the Pacific Northwest for LoJSfMgcles area newspaper production. ./»^j£.* C f; led landfill, terminal and ship channel lion respond to accel- Pacific Rim trade... he adequacy of intermodal trans- I portation links comes under ad- ded scrutiny as the San Pedro Bay ports look toward the cargo handling projections for the year 2020. In line with the philosophy that the future must be planned now, the ports, with the U.S. Army Corps of Engineers, have developed the 2020 Plan. The pro- posed landfill, terminal facilities and ship channel expansion respond to accelerated Pacific Rim trade to the West Coast and to recent advances in shipping and port technology. Phase one of the 2020 Plan mmm includes creation of the 350-acre Pier 400 landfill by dredging deepwater of up to 75 feet to the 190-acres from the Port's 1983 deepening project. Phase one also calls for a 63-acre trans- ^^^ portation corridor proposed for ^^m construction beginning in 1989. Anchoring Pier 400 will be the Pacific Texas Pipeline (PacTex) Project, a 1,030-mile pipeline from the Port of Los Angeles to Midland, Texas, where the Alaskan crude oil can be further distributed. A 106-acre landfill island will be created by the dredging of a 75-foot channel to the two-berth marine oil terminal.An estimated $15 million facelift of Batiquitos Lagoon in Carlsbad, Cali- fornia, is under consideration as off-site mitigation for this PacTex Project. This is the first time WORLDPORTLA has selected a project outside its boundaries to secure the necessary environmental credits for a construction project. Restoration of the 600-acre lagoon involves the opening of the lagoon mouth to the ocean to restore tidal action while improving natural wildlife habitats. Thus, winter flooding of the surrounding area will be alleviated, an adjacent stretch of sandy beach will be replenished and the lagoon's ap- pearance in the summer will be en- hanced. This planned restoration has brought together a team of eight local, state, federal and private agencies. It is slated to begin in early 1988 for completion by year's end. /\s WORLDPORT LA maintains J~_ipromrnence in the international shipping community, it is recognized that port management is only one part of an overall international transportation system. Open com- munication with various segments of the maritime industry, including labor, steamship lines, tenants, customers and government agencies, is also readily sought. With the Port looking toward the future and the next decade's shipping needs, it is critical that a co- hesiveness and sense of cooperation prevail throughout the system. 11 ii£ if?-' he teamivork of all these seg- ments of the industry is more vital as the Port searches out and uitro- duces new market opportunities into the system. Most recently, in addition to the traditional markets in the Far /East and Europe, this Port has investi-4 gated South American andlndian sub- continent areas for potential increases in trade. South American produce has become more commonplace in American supermarkets in normally off-season months. The use of thePprt of Los Angeles as a transshipment center for traffic from South America and to the Far East is proving advan- tageous to shippers. Fruits and steel slabs from our southern neighbors are now shipped to Southern California to join other goods being loaded for trans- pacific destinations. The discovery of still other worldwide cargo trends has resulted from Port .business development trips to investi- gate trade potentials. / \ fations of the Indian Ocean pro- J. J vide textile imports. All-water routes from Europe, more traditionally to East Coast ports for westbound landbridging, are currently under consideration to the West Coast. A newly acquired line, Associated Container Transportation/PACE Line, has selected Los Angeles as one of four West Coast ports of call in its West Coast-to-Australia service Also re- cently initiating cafls to WORLDPORT LA is the Transportacion Maritima Mexicana container service. As cargo throughput increases, fr nancial diversification is seen in import/ export balance and revenue producing sources. Aside from strict cargo consi- derations, sources of revenue include non-trade related income such as rent- als and royalties. In fiscal year 1986, rental income provided$27,6 mfljfon to the Port, an increase of 16.9% due m some measure to the addition of the Cabrillo Marina and manage- ment of property such as par- cels in the Wilmington Acquisi- tion Area. Yet it is commodity diversifi- cation ivhich provides revenue stability for the Port as almost 160 different types of cargo pass over these tuharves annu- ally. Petroleum, the Port's major commodity in terms of tonnage but a lotv wharfage item, ac- counts for less than 10% of total revenue. Substantial net income has allowed the Port to build reserves to insulate it from adverse economic situations. As the nation's leader in retained earnings, WORLDPORTLA reported $58 million in the last year, continuing its long history of demonstrated finan- cial strength and stability. It is this strength that makes subsidizing of the Port by public taxes unnecessary. ^ {~ he Port's leadership role isfur- _! thered by its implementation of a diverse $500 million capital develop- ment program and the utilization of previously unused properties. As the 12 can fruit gra. premier auto import harbor in America, the Port last year sought to streamline vehicle processing by storing autos at locations away from the wharf. Los Angeles'24% increase in import auto traffic, from 420,000 units in 1985 to 520,000 in 1986, has created the demand for other improved facilities. Late 1986 saw the opening of the new Distribution and Auto Services (DAS) terminal in an area formerly used for passenger vessels. The terminal will be used exdusiue/y/or Nissan products, the single largest auto importer through Los Angeles. This 83-acre terminal at Berths 195-199 was built at a cost of $16 million. The property vacated by DAS at Berths 136-139 will by mid-1987 be the first exclusive U.S. container terminal for Mitsui-O.S.K. Lines in joint service with East Asiatic Company. The new container facility is being completed at a cost of more than $30 million and covers 70 acres. The Port's capital development pro- gram includes other container facilities to accommodate a continuing rise in container trqffic. Fiscal year 1986 saw an increase in TEUs (twenty-/oot equi- valent units, maritime terminology for measuring container traffic) to 1,182,000 TEUs, a 13.9% growth rate/or the year. ) eve/opment continues at ' Berths 142-46 and 174-181 where container-strength wharves have been completed and future utilization of gantry cranes is under consideration. In addition, the /filing of Slip 228 at the northern end of the Seaside Container Terminal Complex adds still more acreage to the Overseas Container Terminal, home to major Pacific Rim and European steamship lines. WORLDPORTLA is also a major West Coast bulk port. Liquid bulk commodities, with petroleum as a major component, increased 21.7% last year. Scrap exports to the Pacific Rim rose 28.4%, leading dry bulk commodities which added 35.5% overall. An innovative silo ship, Falcon Pacific's Muscat Cement, made its debut in America at its permanent mooring in the Port's West Basin. With a 600-/oot horizontal silo, the vessel is capable of receiving cement from bulk carriers for storage, bagging and delivery in bulk or bagged form to trucks at whar/side. The ship, however, will not be involved in bagging opera- tions in Los Angeles. This facility is the Port's first for handling the finished cement product. Adding to the diversification of WORLDPORTLA is the recent devel- opment of new public ac- cess facilities for visitors and tourists. Beyond its economic impact on the San Pedro -Wilmington areas, the Port /irmly be- lieves itself a good neighbor, one having a stake and a «•« responsibility in the welfare of its harbor communities. ...the Port firmly believes itself a good neighbor, one] having a stake and a respoi sibility in the welfare of its harbor communities. 14 From foreign aulo assembly lines to Los Angeles dealerships. 4T <*T Steel girders fabricated overseas in powered by U.S. raw materials. (^"^ uch concern was shown in the d^ Port's participation in the Wil- mington Community Task Force. The Wilmington District of the Port has been an area of largely industrial growth. Planning for future devel- opment of the area brought together representatives of the 15th Council- manic District, Harbor Department, City Planning Department, Community Redevelopment Agency and com- munity leaders. Their task is to share ideas, identify community concerns and develop recommendations to re- spond to those voiced concerns. As approved by the Board of Harbor Commissioners for final consideration by the Planning Department, the task force report provided proposals for community and recreation oriented areas to buffer Wilmington households and small businesses from harbor industrial development and traffic increases. Also considered were im- provements in public access to the waterfront through recreational devel- opment after current oil extraction activities in the Cerritos Channel have ceased. The Port's ongoing capita/ devel- opment program also takes into consideration the need for other non- shipping facilities, including the West Channel/Cabrillo Beach Recreational Complex and its multi-use acreage for the enjoyment of the public. Completion of the early phases of this 370-acre complex was celebrated in October when a Citizens Advisory Committee was lauded for its part in the planning of this entire area "The Cabrillo Dream," as the celebration was titled, paid tribute to these indi- viduals whose planning insured that the complex would include a youth camp, an environmental salt marsh, an improved beach and parking area, commercial properties, a 1,137-slip marina (phase one), sportfishing, pe- destrian and bicycling paths, andother amenities for the casual stroller, the sports enthusiast, youngsters and senior citizens. Currently under construction within the showcase complex are the 250-room Doubletree Compri Hotel, the Cabrillo Beach Yacht Club, a sportfishing land- ing and a youth camp operated by the Boy Scouts of America. Mike's Marine, a fuel dock/restaurant/marine hard- ware facility, opened in late 1986. A Marina Operations Building for the Cabrillo Marina will be completed by summer 1987. With the first slips of the marina already fully occupied, plans are now proceeding for the second phase to add another 1,900 slips. ^~ P his entire area will be visually ' and in some cases architecturally linked in the future with a proposed fishermen's wharf complex, the popular Ports O' Call Village and the World Cruise Center, all along the western bank of the Main Channel. The fishermen's wharf area, as pro- posed, will provide a much-needed 17 freezer warehouse, retail and wholesale outlets and other facilities for the pubKc : within a festive European marketplace atmosphere. ^pte Port «/ Los Angeles,; jfnce Consistently the second -tijsrskmg commercialfishjteg - port in the country, is now the homeof ordy one tuna cannery^ PanPacific Fisheries, However, local fishermen operate despite of tuna fishing and canning activities to other areas of the world. ; - he Los Angeles World/ Cruise Center, operated by LA. Cruise Ship Template, Inc., a consortium of passenger lines, is home to America's secorid ^busiest cruise business. Passenger traf- fic in Los Angeles increased 30% in 1986to488,000,or419%sincel979.The massive population pool of Southern California has a direct impact on the marketing of cruises. The summer of 1987 wOl see com- pletion of a new passenger terminal building at Berth 91 and a refurbished Berth 93AB facility. Proposals are still under consideration for the com- mercial site in the Cruise Center and for a third passenger embarkation/ debarkation area at Berth 93DE. Other facilities and parking restructuring for the $100 million project will be ready in 1988. Passenger traffic in Los Angeles increased 30% in 1986 to 488,000, or 419% since 1979. requirements for man- agement of these non-shipping facilities are recognized in a recently announced reorganization of the Harbor Depart- ment staff which calls for creation of a Property Management Section for Commercial/Retail. The new organi- zation plan, which will not take full effect for several months, proposed a departure from the one-over-one struc- ture in which almost all managers have reported to the Executive Direc- tor through a Chief Deputy Executive Director. In the restructuring, all four senior managers will report directly to the Executive Director, "flattening out" the chain of command. 18 / s:the Port develops, ifa bustle of 'iTT,^ construction and mcwiteriance and the §rou«nff oe^d for arid service contracts iel$|ar-- stepped-up equal «pporfemSy "'''"' |« Snewith other City de- IMinorfly afltf lffe|Nl3S Enterprise fl^W^godk o> 12% and 2% for contracts w excess . o/SJOCl(300..sr T«S^ • ; wan i^^pyii^iKimiiiiJiiyii l^*<*^£;;^ ^•'^'^^^rinr-^Hs"- QJiiiWf'>*«• y"l^@p|^^^ffjfe^^RPW.io«is' fii^Wt .._„«,,.. dB cori- com- Vparfici* ihaf --the Departm^if «bes thispafe ft has set. Pfe re- are firm, yet maxmm spportunfty is afforded to everyone to ^Sfce part in the performance of the 1I^% contracts, subcontracts, permits dn<f leases. T^iese standards clearty reject the concern WORLDPORTLA has/or the community. Coupled tuith our geographic posi- tion and economic stability, our con- cern for the community completes the circle of strength necessary for the Port to carry out its strategic planning mission of sewice to our worldwide public. ...maximum opportunity is afforded to everyone to take part in the performance of the Port's contracts... 20 ;iAL REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 725 S. Figueroa Street Los Angeles, California (213) 972-4000 Peat, Marwick, Mitchell & Co. Gilbert Vasquez and Company A joint venture The Board of Harbor Commissioners Port of Los Angeles (Harbor Department of the City of Los Angeles, California): We have examined the balance sheets of the Port of Los Angeles (Harbor Department of the City of Los Angeles, California) as of June 30,1986 and 1985 and the related statements of opera- tions, changes in contributions/land valuation equity and retained earnings and changes in financial position for the years then ended. Our examinations were made in accordance with generally ac- cepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we con- sidered necessary in the circumstances. In our opinion, the aforementioned financial statements present fair- ly the financial position of the Port of Los Angeles (Harbor Depart- ment of the City of Los Angeles, California) at June 30, 1986 and 1985 and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally ac- cepted accounting principles applied on a consistent basis. August 15, 1986 21 Port of Los Angeles (Harbor Department of the City of Los Angeles, California) BALANCE SHEETS June 30, 1986 and 1985 (In thousands of dollars) Assets 1986 1985 Current assets: Cash on hand and on deposit with City Treasurer (note 2) Accounts receivable, less allowance for doubtful accounts of $1,660 in 1986 and $631 in 1985 Materials and supplies Prepaid and deferred expenses Accrued interest receivable Other receivables Total current assets Cash and cash equivalents, restricted as to use: Bond funds Certificates of participation Properties: Land Harbor facilities and equipment, less accumulated depre- ciation of $139,946 in 1986 and $127,562 in 1985 Construction in progress Preliminary costs — capital projects Net properties Notes receivable (note 7) Investment in Intermodal Container Transfer Facility (note 8) Other assets Total assets $ 57,570 16,551 1,182 741 4,258 1,702 82,004 34,929 117,266 151,837 289,586 95,738 3,867 541,028 12,839 2,859 2,070 $ 792,995 49,162 13,484 1,356 601 377 64,980 128,463 142,647 256,145 81,966 1,673 482,431 12,470 2,859 601 691,804 Liabilities, Equity and Retained Earnings Current liabilities: Trade accounts payable Accrued construction costs payable Current installments of notes payable — bond indebtedness Bonds and coupons due but not yet presented for payment Accrued interest Accrued employee benefits Deferred interest income Total current liabilities Long-term liabilities: Notes payable, net of current installments (note 3) Certificates of participation (note 3) Bond indebtedness — Harbor Revenue Bonds, net of amounts to be paid within one year (note 3) Other liabilities Total long-term liabilities Total liabilities Equity and retained earnings: Contributions/land valuation equity Retained earnings Total equity and retained earnings Commitments and contingencies (notes 4, 5 and 6) ' Total liabilities, equity and retained earnings 1986 $5,807 9,394 12,785 278 3,290 3,231 1,979 36,764 6,915 140,000 34,800 2,394 184,109 220,873 92,314 479,808 572,122 $ 792,995 1985 7,963 7,160 3,436 264 2,453 3,407 802 25,485 11,184 140,000 9% 152,180 177,665 92,314 421,825 514,139 691,804 See accompanying notes to financial statements. Lo* Angeles (Harbor Department of the City of Los Angeles, California) ATEMENTS OF OPERATIONS *ndtd June 30, 1986 and 1985 (In thousands of dollars) 1986 1985 •rating revenues: Shipping services: Dockage Wharfage Storage Demurrage Pilotage Assignment charges Cranes Total shipping services Rentals (note 6): Land Buildings Warehouses Wharf and shed revenue Cabrillo Beach recreational complex Total rentals • Royalties, fees and other operating revenues: rtts, concessions and royalties . Oil royalties ; Othe? r Total royalties, fees and other operating revenues 1 Total operating revenues Irtttrtfl and administrative expenses •, Income from operations before depreciation prton (or depreciation 1 Income from operations •Moating revenues (expenses): fPtntr Income and expenses, net •MtfMt income from investments pnitrwt expense on bond indebtedness and notes payable H^E Net nonoperating revenues t1 Net incomeIk $ 7,717 60,378 367 3,091 3,138 1,282 7,933 83,906 23,174 1,163 2,375 577 342 27,631 870 1,233 1,830 3,933 115,470 47,516 67,954 13,673 54,281 (1,245) 5,428 (481) 3,702 $57,983 6,764 45,215 574 2,060 2,783 1,183 5,287 63,866 20,577 734 1,693 579 51 23,634 1,225 2,700 1,391 5316 92,816 37,742 55,074 13,192 41,882 745 6,294 (174) 6,865 48,747 /ing notes to financial statements. Port of Los Angeles (Harbor Department of the City of Los Angeles, California) STATEMENTS OF CHANGES IN CONTRIBUTIONS/LAND VALUATION EQUITY AND RETAINED EARNINGS Years ended June 30, 1986 and 1985 (In thousands of dollars) Balance, July 1,1984 Donated land, at estimated fair value Net income Balance, June 30, 1985 Net income Balance, June 30, 1986 Contributions/land valuation equity $ 78,314 14,000 92,314 $ 92,314 Retained earnings 373,078 48,747 421,825 57,983 479,808 Total 451,392 14,000 48.747 514,139 57.983 572,122 Port of Los Angeles (Harbor Department of the City of Los Angeles, California) STATEMENTS OF CHANGES IN FINANCIAL POSITION Years ended June 30, 1986 and 1985 (In thousands of dollars) 1986 1985 Sources (uses) of cash: Operating activities: Net income Items not requiring (providing) cash: Depreciation Loss on sale of equipment Cash provided by operations Cash provided by (used for) changes in: Accounts receivable Accrued interest receivable Materials and supplies and prepaid and deferred expenses Other receivables Accounts payable Accrued construction expenditures Accrued expenses and other Net cash provided by operating activities Financing activities: Notes payable Increase (reduction) of bond indebtedness outstanding Issuance of certificates of participation Donated capital — donated land Investment transactions: Additions to properties Proceeds from sale of equipment Notes receivable, net Change in cash and cash equivalents restricted as to use Investment in Intermodal Container Transfer Facility Other, net Net increase in cash Cash on hand and on deposit with City Treasurer at beginning of year Cash on hand and on deposit with City Treasurer at end of year $57,983 13,673 925 72,581 (3,067) (3,881) 34 (1,702) (2,156) 2,234 3,250 67,293 4,880 35,000 39,880 (73,716) 221 (369) (23,432) (1,469) (98,765) 8,408 49,162 $ 57,570 48,747 13,192 61,939 (1,795) (523) (203) 4,310 1,306 65,034 6,620 (15,651) 140,000 130,969 14,000 (79,589) 31 (123,392) (2,859) (601) (206,410) 3,593 45,569 49,162 See accompanying notes to financial statements. *- - ,'.*-•» Port of Los Angeles (Harbor Department of the City of Los Angeles, California) NOTES TO FINANCIAL STATEMENTS Jura 30, 1986 and 1985 1. Organization and Summary of Significant Accounting Policies Organization The Port of Los Angeles (Harbor Department of the City of Los Angeles, California) (Port) is an independent Mif-supporting department of the City of Los Angeles, and is under the control of a five-member Board of Harbor Commissioners and is administered by an Executive Director. The Port is granted control of tidelands Under trust from the State of California. The Port prepares and controls its own budget, administers and controls its fiscal activities, and is responsible for all Port construction and operations. THc Port operates as principal landlord for the purpose of assigning or leasing Port facilities and land areas. Tht Port's principal source of revenue is from shipping services under tariffs (dockage, wharfage), rentals of land and facilities and royalties (oil wells) and other fees. No part of its income is derived from taxes. Capital Construction is financed from operations, bonded debt and loans secured by future revenues and Federal grants. Daily operation of the Port facilities and regular maintenance are performed by the Port's permanent force. Generally, major maintenance and new construction projects are assigned to commercial con- praetors. immary of Significant Accounting Policies Following are the significant accounting policies followed by the Port of Los Angeles: Method of Accounting — The Port is accounted for as an enterprise fund, and as such, its financial statements are presented on the full-accrual method of accounting. Accordingly, unbilled service re- ceivables are included in the determination of the year-end balance of accounts receivable in the accompanying financial statements. Materials and Supplies — Inventories of materials and supplies are stated at average cost on a first-in, first-out basis. Properties — Properties are carried at cost or at appraised fair market value at the date received in the case of properties acquired by donation or by termination of leases, less allowance for accumulated depreciation. Depreciation — Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets. The useful lives of all properties are systematically reviewed every five years by the Port's Engineer and management and revised as deemed appropriate. The last revision was made in 1983. Current ranges of useful lives for depreciable assets are as follows: Wharves and sheds 10 to 40 years Buildings and facilities 10 to 40 years Equipment 4 to 25 years * Accrued Employee Benefits — The Port records all accrued employee benefits, including accumulated vacation and sick pay, as a liability in the period benefits are earned. Preliminary Costs — Proposed Capital Projects — Development costs for proposed capital projects that are incurred prior to the finalization of formal construction contracts are capitalized. When reasonable assurance is obtained that construction contracts will begin, such preliminary costs are transferred to the Port's construction-in-progress account. In the event that proposed capital projects are abandoned, the associated preliminary costs are charged to expense in the year of abandonment. Indirect Project Costs — The Port capitalizes indirect project costs associated with the acquisition, development and construction of new capital projects used in the Port's operations. Approximately $2,092,000 and $2,700,000 of such indirect project costs were allocated to construction projects for years 1986 and 1985, respectively. Interest Costs — The Port capitalizes interest expense for real estate projects during development and construction. During 1986 and 1985, interest income on borrowings to construct real estate projects exceeded interest expense by approximately $2,430,000 and $991,000, respectively, and those projects were adjusted accordingly. Rtclassifications — Certain ^classifications of amounts reported in prior periods have been made to conform to the 1986 presentation. (Notes to Financial Statements, continued) 2. Cash on Deposit with the City Treasurer The Port participates in a pooled investment program with the City of Los Angeles, where funds on deposit are pooled with other City departments and invested in time deposits and short-term government securities. The Port receives a monthly interest allocation based on the average daily balance on deposit and the earnings of the fund. 3. Bonded Debt A summary of the Port's long-term indebtedness at June 30, 1986 is as follows. Harbor Revenue Bond Issue of 1985 During 1986, the Port issued harbor revenue bonds in the amount of $35,000,000. Payments are to begin in 1987 and run through 2015 with interest rates ranging from 8.40% to 11.25%. This bond issue is payable solely from revenues of the Port and does not constitute a general obligation of the City of Los Angeles. Debt Defeasance I In December 1984, the Port defeased its outstanding Harbor Revenue Bonded indebtedness issues of 1960, 1965 and 1971, aggregating $14,875,000 as follows (in thousands of dollars): I1 Amount t Description Rates outstanding t 1st issue of 1960 2nd issue of 1960 Issue of 1965 Issue of 1971 3.90% 3.50 3.10 - 3.45 4.30 - 5.90 $ 890 1,760 2,445 9,780 $14,875 * I ] j Such debt was defeased through the establishment of an irrevocable escrow fund with a major financial insti- ' t | tution, whereby monies placed in trust which, when considered with interest to be earned thereon, would be | I | sufficient to make required debt service payments through the earliest possible debt retirement dates. The resulting gain from the defeasance transaction is not considered significant to Port's operations and therefore was not included in the Port's 1985 Statement of Operations as nonoperating other income. \ Certificates of Participation During 1985, the Port formed the Los Angeles Harbor Improvements Corporation, a nonprofit corporation (Corporation). The purpose of the Corporation is to finance various major capital improvements for the benefit of the Port and its tenants through the issuance of indebtedness. In this regard, the Corporation has issued $140,000,000 in certificates of participation. ij The $140,000,000 of indebtedness is payable solely from payments by the Port under a long-term lease agreement for the use of the facilities so constructed between the Port and the Corporation. Such lease pay- 26 ments approximate the annual debt service on the outstanding certificates of participation. The certificates of participation do not constitute a general obligation of either the Port of Los Angeles or the City of Los Angeles. The certificates of participation bear interest at rates which are adjusted weekly, subject to a maxi mum annual rate of 15%. Interest rates ranged from 3.75% to 8.625% and from 4.38% to 6.38% in 1986 and 1985, respectively. Payments on such debt are scheduled to begin on December 31, 1988 and run through December 1, 2014 at varying amounts. In addition, from time to time, the Corporation intends to issue other long-term indebtedness to finance specific capital facilities improvements on behalf of Port's tenants. The nature of these financings is such that the long-term indebtedness is that of the Port tenant and not the Port or the Corporation. The Corporation , . issued $29,185,000 and $4,185,000 in certificates of participation on behalf of specific Port's tenants in 1986 * and 1985, respectively. 1 >posit rities. •nings yn in solely 1960, lease ;pay- icates f Los maxi- 1985, rough lance \ that •ation 1986 (Notes to Financial Statements, continued) Other Long-Term Debt The Port has obtained loans aggregating $11,000,000 from the California Department of Boating and Water- ways for use in the financing of the Port's Cabrillo Beach Project. These loans consist of the following at June 30, 1985 (in thousands of dollars): Year of loan 1983 1984 1985 Interest rate 7.90% 10.75 7.90 Original issue $ 4,000 4,000 3,000 $11,000 First payment due August 1, 1985 August 1, 1986 August 1, 1987 During 1986, the Port paid off the $4,000,000 loan bearing interest at 10.75%. These notes are secured by the future revenues of the Harbor Department and do not constitute a general obligation of either the Port of Los Angeles or the City of Los Angeles. The first of 30 annual installments of principal and interest on such notes will begin as outlined in the table below; however, payments will not begin to reduce such liability until 1990. The Port also secured a loan from the Community Development Department of the City of Los Angeles. At June 30, 1985, the loan balance was $3,163,000. In addition, the Port has several installment purchases aggre- gating $457,000, which are payable in varying amounts through 1986. During 1986, the loan balance was increased to $12,278,000 and the maturity date was extended to 1987. Following is a summary of maturities of the Port's indebtedness (in thousands of dollars): insti- 1 ild be I The I •efore I ration I r the I n has I •HI fiscal yearKin?•pswHi969 ifiwoHaPHpFrWreafter HP®'*1 California boat loan $85 91 98 106 114 6,506 $7,000 1985 Harbor Revenue Bond 200 200 400 400 600 33,200 35,000 Community development loan 12,278 12,278 Installment purchases 222 222 Certificate of participation 800 900 1,000 137,300 140,000 Total 12,785 291 1,298 1,406 1,714 177,006 194,500 Retirement Plan jbitantially all of the Port's employees participate in the City of Los Angeles City Employees' Retirement Item (System), administered by the City of Los Angeles. Such plan is solely the obligation of the City of Los eles, which is responsible for the funding of the System and for the determination and resolution of any fllunded Retirement System liabilities. Under requirements of the City Charter, the Port makes annual itributions to the System, based upon determinations made by the City of Los Angeles and is not responsi- lor further funding requirements. Such contributions for the years ended June 30, 1986 and 1985 aggregated aximately $4,392,000 and $3,500,000, respectively. |i Leases, Rentals and Revenue Sharing Agreements •ubstantial portion of the harbor lands and some of the facilities are leased to others. The majority of these provide for cancelation on a 30-day notice by either party and for retention of ownership by the Port at expiration of the agreement; accordingly, no leases are considered capital leases for purposes of financial arting. aforementioned agreements are intended to be long term in nature (as long as 20 years) and to provide Port with a firm tenant commitment for a minimum fixed income stream into future years. The properties facilities under lease to others are generally structured to provide the Port with a minimum fixed annual it. Many agreements also provide for additional payments beyond the fixed portion, based upon tenant or volume. Such agreements are also generally subject to periodic inflationary escalations in base jnts due the Port. For years ended June 30, 1986 and 1985, such revenues, from all operating sources, legated approximately $56,443,000 and $43,526,000, respectively. 27 (Notes to Financial Statements, continued) 5. Leasing, Rentals and Revenue Sharing Agreements (continued) Assuming that the aforementioned agreements run their full course, minimum tenant commitments due the Port over the next five years are expected to aggregate approximately (in thousands of dollars): Year ending June 30 Amount 1987 $ 81,313 1988 88,098 1989 92,758 1990 96,835 1991 99,360 1 '! ===== 6. Commitments Open purchase orders and uncompleted construction contracts amounted to approximately $73,493,000 on l June 30, 1986 and $36,249,000 on June 30, 1985. Such open commitments do not lapse at the end of the Port's J fiscal year and are carried forth to succeeding periods until fulfilled. j In 1985, the Port received a parcel of land, with an estimated value of $14,000,000, from the Federal Govern- ment for the purpose of construction of a marina. The Port has agreed to reimburse the Federal Government up to $14,000,000 from excess revenues generated from marina operations, if any, after the Port has recovered all costs of construction. 7. Notes Receivable In the normal course of business, the Port has several notes receivable consisting of the following at June 30, 1986 and 1985 (in thousands of dollars): 1986 1985 Note receivable relating to the sale of equipment bearing interest at an effective rate over the term of the note of 10%, annual payments of ap- proximately $1,604 through 1991 $12,200 12,200 Note receivable bearing interest at 8%, annual payments of approximately. $40 through 1993 240 270 Note receivable bearing interest at 15.25%, monthly payments of approxi- mately $14 through 1991 399 — $12,839 12,470 8. Investment in Intermodal Container Transfer Facility (ICTF)no The Port has entered into a joint venture with the Port of Long Beach to construct a facility to transfer con- tainers between trucks and railroad cars. The facility is in the construction phase and has not started operations. The Project will be fully developed by Southern Pacific Transportation Company, which will operate the facil- ity. The ICTF investment of $2,859,000 represents the total investment required of the Port. 9. Related Party Transactions During the normal course of business, the Port is charged a fee for services provided by the City of Los Angeles, the most significant of which relates to fire protection. The fees charged by the Los Angeles Fire Department were $7,223,000 (including retroactive adjustments) and $6,200,000 for 1986 and 1985, respectively. Port of Los Angeles (Harbor Department of the City of Los Angeles, California) FINANCIAL OVERVIEW The Port achieved record levels in operating revenues and net income in /iscolytw 1*^6, A iWt» stantial increase in shipping activity, coupled with a modest increase in the tanffrufr retwe$mt#ti key factors in this realization of this achievement. Key indices of activity, i. e., conjo ft rtmoft**, f«w senger activity, auto unit throughput, and container equivalent units expanded (Jrumcilkuffv- A/so contributing to this year's performance was the opening of the new marina and cx/xtmion of rental revenues. Comparison Between FY 1986 and FY 1985 Financial Performance Operating Revenue Gross operating revenue of $115.5 million represents a $22.7 million or 24.4% improvement over 1985. This is primarily attributable to higher revenues from wharfage and other shipping services and to an increase in rental revenues, Shipping Services Shipping services revenue increased 31.4% from $63.9 million in 1985 to $83.9 million this year. This improvement is due to an increase in the revenue tonnage throughput of 13.4% and an increase in tariff rates implemented during the ytar, averaging approximately 13%. Shipping services revenue per ton increased 22% from $1.42 per ton last year to $1.64 per ton this year. This is pri- marily due to the increase in tariff rate changes in commodity mix. Rental Revenue Rental revenue increased 16.9% from $23.6 million to $27.6 million. This increase is due primarily to the addition of 25 raw buildings this year and to renegotiation of expiring land rental agreements. The shortfall in royalties, fees, and other revenues of $1.4 million is primarily due to a reduction in production reve- nues resulting from the decline in oil prices and unsold inventory. : Operating Expenses • Operating and administrative expenses reflected an increase of $9.8 million or 25.8% over last year. Net Income [ Nf I income increased from $48.7 million in 1985 to $58.0 million this year. This is due to the improvement in income -from operations of 32.3% or $13.5 million which offset the $4.2 million deterioration in non-operating income. | Accounts Receivable lAccounts receivable increased by $3.1 million from $13.5 million to $16.6 million due primarily to higher operating Mrtivity and slower payment by customers. The ratio of current assets to current liabilities decreased from 2.5 in 1985 .2 this year. This deterioration is due to the movement of loan obligations to the Community Development Depart- and California Department of Boating, to current liabilities from long term. ih Flow ? Port's available cash balance increased from $49.2 million to $57.6 million. This improvement is due primarily to a crease in spending on capital projects resulting from a lower level of construction than anticipated and to drawing i financing programs. During the year, $2.4 million of net interest income and $2.0 million of construction overhead re capitalized in the construction fund. rgo Movement ff»lal revenue tonnage billed this year of 51.1 million tons represents a 13.4% of 6.0 million ton improvement in through- tit volume over 1985. This improvement is primarily attributable to significant increases in Domestic, Far East and i?titern European trade activity. Domestic tonnage increased 32.1% from 17.6 million tons in 1985 to 23.3 million tons this year due to an increase in outbound shipments of 60.4% or 6.6 million tons. Far East Trade Tonnage increased by 9.1% or 1.8 million tons and is attributable to an increase in inbound ship- ments of 16.7% or 2.1 million tons. Trade tonnage to and from Western Europe increased 60.5% or .7 million tons, as improvements in both inbound and outbound volume increased 48.5% and 88.1%, respectively. 1 with moderate improvements in other trade route categories, trade tonnage increases more than offset short- itn Australia/New Zealand of 25.7% or .3 million tons, and inWestern Mexico, Central and South America of 20.7% ,2 million tons. Port of Los Angeles (Harbor Department of the City of Los Angeles, California) TEN YEAR HIGHLIGHTS (In millions of dollars) 1986 1985 1984 1983 1982 1981 1980 1979 1978 19771 Cash Cash Balance—Rev Fund Cash Balance—Restricted Property Total Property Allowances for Depreciation Net Property Replacement Cost New Construction & Maintenance Additions to Properties Maintenance Expenses Employees Salaries Paid Number of Employees Rates General Cargo Tariff Rate Basic Dockage (600')Required Rate of Return Bonds Bonding Capacity* Bond Coverage Ratio** 56.8 152.2 49.2 128.5 45.6 5.1 74.0 4.3 91.04.4 68.7 4.2 72.0 5.0 62.8 5.4 50.5 8.0 33.C 7.91 680.8 139.8 541.0 N/A 610.0 127.6482.4 1,185.5 530.7 114.7 416.0 1,023.7 452.9 92.7 360.2 892.4 373.9 83.9 290.0 792.0 344.6 78.6 266.0 696.1 313.0 72.6 240.4 649.1 282.9 68.5 214.4 591.3 259.2 63.9 195.3 563.3 70.9 3.7 79.6 3.0 78.9 4.1 79.4 6.0 32.0 3.9 30.5 4.2 30.0 4.6 24.6 4.2 11.5 2.3 23.2 697 22.0 650 20.3 672 19.4 672 17.6 677 14.8654 12.5 614 11.4 601 11.4 598 10.315851 44.0 1,62310% 3.90 1,395 10% 3.90 1,395 10% 3.90 1,395 10% 3.55 1,268 10% 3.55 1,15810% 3.25 961 10% 3.00 7009% 2.60 620 9% 548 6.6 359 19.0 286 14.6 173 6.2 218 8.4 250 14.9 336 11.0 285 9.6 225 7.9 *Assumes 1.5 coverage ratio, 9% 30-year bonds for 1981 thru 1985 and 6% 30-year bonds for 1975 thru 1980 "Adjusted defeasance of bonded bond Port of Los Angeles (Harbor Department of the City of Los Angeles, California) CAPITAL DEVELOPMENT PROGRAM Fiscal Years 1986/87 and 1987/88 (In thousands of dollars) Project Description Estimated Expenditure Berths 49-54 Dolphin & Fender System 1,7 West Channel Recreation Complex and Street Improvements 4,1 Cranes 9 Berths 195-199 Automobile Terminal 7,1 Berths 200B & H Lumber Depot 6,! Berths 174-181 Container Terminal 20,1<Pier 400 - South Landfill 1, West Basin Widening 2,. Berths 171-173 Wharf 6,: on Reeves Field Improvements Seaside Avenue Improvements 4,i Seaside Terminal Improvements 5,1' Berths 91-93D/E World Cruise Center 19,711 Berths 225-229 Seaside Container Terminal 23,4' Berths 136-139 Mitsui O.S.K. Container Terminal 24,0Fire Boat Station 3,5 Berths 212-214 Bulk/Container Handling Facility 5, Pier "A" Street Improvements 1, Pier 300 - Terminal Island 9,1Parcel J-l and J-2 Development 6,' Miscellaneous Projects .' 20,2i Total.... Land Acquisition 35, Total for FY 1986/87 and 1987/88 Projects to be completed in FY 1988/89 thru FY 1990/91 309,Land Acquisition - 60,i Total Five Year Capital 589,37 v^Mp•* "* *t fty.LV t,r~~&'*! ">', Port of Los Angeles (Harbor Department of the City of Los Angeles, California) OPERATING REVENUE Fiscal Years 1982 to 1986 (In $ millions) Port of Los Angeles (Harbor Department of the City of Los Angeles, California) REVENUE TONS Fiscal Years 1982 to 1986 (In millions of tons) item) 120 110 L »-,., : 1 t l» n HnH oo £ f t- eo ; H ri H 00? Cg CO Tj! COs 3j VD g Ms 2 3 3 3 inli-t—it^ oosi os vO CM co (In millions of tons} 1--#- CM CO qa 31 1982 1983 1984 1985 1986 1 Rental • Shipping IOtherTotal 1982 1983 1984 1985 1986 Dry Bulk I General Cargo I Liquid Bulk I Total Port of Los Angeles (Harbor Department of the City of Los Angeles, California) VESSEL ARRIVALS BY TYPE OF VESSEL Fiscal Years 1986 and 1985 Totals 1985/86 Type of Vessel Cargo Cargo Passenger Tanker Bunker Only Lumber Number of Vessels 1,869 315 571 747 58 Vessel Tonnage 216,073 39,786 93,056 83,944 1,264 1984/85 Number of Vessels 1,842 326 533 690 67 Vessel Tonnage 205,832 30,045 85,278 73,981 1,129 3,560 434,123 3,458 396,265 Port of Los Angeles (Harbor Department of the City of Los Angeles, California) CASH FLOW FROM OPERATION Fiscal Years 1982 to 1986 (In $ millions) Port of Los Angeles (Harbor Department of the City of Los Angeles, California) NET INCOME Fiscal Years 1982 to 1986 (In $ millions) (J millions) 60 - 50 40 30 20 10 36.2 57.6 44.9 30.1 1982 1983 1984 1985 1986 <$ mittm) 5&0 42.9 41.7 31.2 1982 1983 1984 1985 1986 Port of Los Angeles (Harbor Department of the City of Los Angeles, California) REVENUE TONNAGE BILLED Fiscal Years 1986 and 1985 (In thousands) I. Cargo Billed Under Port of Los Angeles Tariff Metric Revenue Tons Metric Revenue Tons General Cargo Merchandise, NOS Merchandise, NOS, OCP Merchandise, NOS, Wt in vans Merchandise, NOS, OCP in vans Merchandise, NOS, Bulk in vans Merchandise, NOS, Bulk in OCP Merchandise, NOS, Bulk not in vans Bulk, Coal, Coke, etc. Scrap Metal — Bulk Bananas Beer/Malt Liq. in Bottles/Cans Bldg. Modules— Others Cargo Vans, Merchandise Cargo Vans, Empty Coffee— Green in Bags Fresh Fish Fresh Fruit & Vegetables Metals — Loose in Bundles Pipe, Iron or Steel Liquids (Excluding Petroleum) Lumber Military Articles Paper & Paper Products U.S. Mail Motor Vehicles Vessel Stores C ff t f Achievement for Excellence in Financial Reporting Presented to Port of 1985/86 280 11 2,933 1,311 18 2 40 2,683 1,388 189 246 4 7,320 435 9 61 891 1,001 7 351 64 -0- 147 3 1,351 10 Los Angeles, California For its Comprehensive Annual Financial Report (or the Fiscal Year Ended June 30, 1985 A Certificate d Achievement for Excellence in Financial Reporting it presented by the Government finance Officers Atsociation of lh« United Slate* and Canada 10 governmental units and public employee retirement system* whose comprehensive annual financial conform to program standard > t j££ Executive Dtoedor ^u ? -* 1984/85 470 5 3,004 1,951 8 1 27 1,744 1,075 230 163 36 4,503 320 10 72 208 1,039 3 464 69 1 108 -0- 1,334 11 General Cargo Antiques, Bric/Brac Appliances Bicycles Clothing, New NOS Wt/Eb Food or Food Prep. Cans/Bottles Elec. Equip. LCL Food or Food Prep. Dry/Deh. Footwear Furniture NOS wt/eb off. Household Goods & Personal Eff. Motorcycles Resins Tires & Tubes Specified Merchandise in Vans Subtotal Advance Wharfage & Accruals Total General Cargo (Includes Dry Bulk) Petroleum Bulk Oil Bunkers Total Petroleum Total Revenue Tons Billed II. Tonnage By Trade Route Foreign Tonnage Mediterranean Far East Africa Caribbean Eastern South America Mexico & South America Western Europe Australia & New Zealand Persian Gulf & Red Sea Total Foreign Tonnage Domestic Tonnage Bunkers in Port Total Revenue Tonnage 1985/86 15 44 178 1,131 -0- 1,105 90 783 677 442 1% 159 351 1,158 27,084 589 27,673 15,798 7,661 23,459 51,132 1985/86 440 21,190 151 185 159 725 1,979 732 2,050 27,611 23,521 -0- 51,132 1984/85 3 58 114 967 180 1,106 70 503 428 251 177 86 350 1,648 22,797 3,013 25,810 12,791 6,487 19,278 45,088 1984/85 225 20,502 65 153 155 971 1,307 1,047 1,806 26,231 12,370 6,487 45,088 PORT OF LOS ANGELES Headquarters Office 425 South Palos Verdes Street San Pedro, CA 90731 Mailing Address Post Office Box 151 San Pedro, CA 90733-0151 Telephone (213) 519-3400 Telex 18-2387 POLA SPRO HARBOR DEPARTMENT STAFF ADMINISTRATIVE Ezunial "Eze" Burts Executive Director Jack L. Wells Chief Deputy Executive Director Donald L. Mosman Deputy Executive Director Bill Stein Director of Port Administration Sid Robinson Director of Planning & Research Charles T. Gibson Director of Govt. & Community Relations Lee Zitko Director of Advertising & Marketing Promotions Richard Root Director of Personnel Ronald W. Kennedy Director of Property Management W. Calvin Hurst Harbor Environmental Scientist Arnie Netka Purchasing Officer FINANCE Rami Furman Chief Financial Officer William A. Gonzales Controller ENGINEERING & OPERATIONS Edward L. Gorman Chief Harbor Engineer Earl K. Clark Director of Construction Management Roy J. Cootes Director of Port Construction & Maintenance Capt. Edward C. Henry Port Warden Edward J. Hill Chief Wharfinger Capt. Jackson Pearson Chief Pilot LEGAL Winston F. Tyler Senior Assistant City Attorney Raymond P. Bender Assistant City Attorney INTERNATIONAL MARKETING NETWORK Steven Paul Resnick Director of Marketing Albert B. Fierstine Assistant Director of Marketing Paul St. Onge General Manager Special Commodities Group Arthur B. Goodwin Internal Marketing Manager National & International Accounts Group Masashi Morimoto International Marketing Manager National & International Accounts Group William Grindrod General Manager Pricing Group Ralph Staunton Pricing Specialist Pricing Group Wendy Hill General Manager Marketing Services Group DOMESTIC Andrew Corbett Jr. A.J. Corbett & Sons (New York) OVERSEAS Shuji Nomura Port of Los Angeles Office (Tokyo, Japan) Shin-I Lin Port of Los Angeles Office (Taipei, Taiwan) William Mortson Port of Los Angeles Office (Hong Kong) T.E. Wang Hyopsung Shipping Corporation (Seoul, Korea) Hans Andersen Eurolist, Limited (London, U.K. and Copenhagen, Denmark) Bob Bell L.N. Shipping Pte., Ltd. (Singapore) Dick Dundas Dundas Maritime Services, Ltd. (Wellington, New Zealand) Frank Williamson Thompson, Clarke, Williamson (Melbourne, Australia) Is f Editorial Lee Zitko Julia Nagano Design Graphic Services ._.._.. n i ,^i.j owi .j-t.^y -? i<4Q6y;tt 04/03/1987 09=40 coRT'OF Lfi 213 83^^439 P. 02 Executive Director's Report to the Board of Harbor Commissioners Dare: April 8, 1987 Subject: REIMBURSEMENT AGREEMENT BETWEEN CITY OF LOS ANGELES AND CITY OF CARLSBAD FOR THE PRELIMINARY ENGINEERING STUDY OF THE BATIQUITOS LAGOON ENHANCEMENT PROJECT RECOMMENDATIONS: It is recommended that the Board resolve to: 1. Approve the attached Agreement between the City of Carlsbad and the City of Los Angeles for the preparation of preliminary engineering design and related technical studies for the Batiquitos Lagoon Enhancement Project; and 2. Authorize the Executive Director to execute said Agreement for and on behalf of the Board in an amount not to exceed the sum of $450,000. DISCUSSION; 1. As previously discussed with the Board relative to the Pacific Texas and 2020 Phase 1 projects, the enhancement of Batiquitos Lagoon in the City of Carlsbad, San Diego County, will produce a significant number of "habitat unit" credits which will serve to mitigate the loss of biological habitat from the proposed fills in the Port's outer harbor. These habitat credits will be obtained from the establishment of new saltwater tidal and intertidal habitat by: dredging and excavation within the currently deteriorated wetlands boundary of the lagoon; maintaining an open mouth to the ocean; and controlling freshwater sedimentation while preserving existing bird habitat values within the lagoon, including least tern sites. 2. To date, the Batiquitos project has been conceptually described in a draft enhancement plan prepared by the California Coastal Conservancy. However, a number of critical questions remain on the feasibility of the project which must be answered before the Port can commit to final design, construction and maintenance of the enhancement/mitigation project. Of particular concern are the: cost of construction, cost of annual (long-term) maintenance of the completed lagoon, technical feasibility of controlling sedimentation, technical feasibility of maintaining an open lagoon mouth for tidal flushing, suitability of dredged material for adjacent beach enhancement, and the number of habitat units anticipated to be available, based on final lagoon contours. The proposed scope of work included as Exhibit B to Transmittal No. 1 is intended to answer these questions within a six to eight month period. Other questions of project feasibility (property acquisition, environmental impacts) will be addressed in subsequent implementation steps based on the resultsof the preliminary englneerina work. 04/03/1987 09:30 PORT OF LA 213 831 0439 P.03 Date: April 8, 1987 Page 2 of 3 SUBJECT: REIMBURSEMENT AGREEMENT BETWEEN CITY OF LOS ANGELES AND CITY OF CARLSBAD FOR THE PRELIMINARY ENGINEERING STUDY OF THE BATIQUITOS LAGOON ENHANCEMENT PROJECT 3. In order to achieve the schedule contained 1n the joint work plan developed by the Ports of Los Angeles and Long Beach and the Corps' Los Angeles District Engineer's Office, for implementation of Phase 1 of the 2020 Plan, 1t is mandatory to determine the feasibility of Batiquitos as the principal mitigation site for the Port's 2020 landfills, whether or not the Pacific Texas project 1s undertaken. This feasibility determination is needed for the specific Phase 1 2020 project description scheduled to be announced publicly in September 1987 when we anticipate initiating the EIR/EIS process. 4. Transmlttal No. 2 1s the draft contract between Carlsbad and the selected consulting team headed by CH2M Hill. Port staff fully participated 1n the selection and negotiation processes and reviewed the Carlsbad/CH2M H111 agreement for consistency with the reimbursement agreement. Under the provisions of the reimbursement agreement, the Port will be providing a Project Manager to work with Carlsbad's staff and to direct the efforts of the consulting team. 5. The approval to reimburse the City of Carlsbad, which will be the lead agency for Implementation of the Batiquitos project is being sought prior to either: the approval of a Memorandum of Agreement (MOA) with various state and federal agencies covering all phases of implementing the Batiquitos project; or the deposit by Pacific Texas of $15 million to fund the enhancement project as required by Coastal Permit No. 5-85-623-A. The reimbursement agreement is an interim agreement that will be effectively superseded by the MOA. In order to maintain the 2020 schedule, the feasibility work should be started during April 1987. Once the MOA is approved by all parties, the Port Itself will be reimbursed for monies advanced from the escrow account established by Pacific Texas. 6. Until approval of the MOA and the Pacific Texas deposit has been made, the Port's financial exposure upon approval of the reimbursement agreement will be the CH2M H111 contract amount of $392,200 and reimbursement for Carlsbad expenses, not to exceed $57,800; a total of $450,000. Although not required by Carlsbad policies, the consulting team includes the firm of TekmaMne, a certified MBE, which will be accomplishing Tasks PI, P5, P7 and P15 representing approximately 31% of the lump sum $392,200 contract. 7. Under the provisions of the 1986 "Dills Bill", Public Resources Code 6306.1, the City of Los Angeles "...acting by and through its Board of Harbor Commissioners, may take all action which are necessary for mitigation of expansion of the Port of Los Angeles by the enhancement, restoration and management of Batiquitos Lagoon in the County of San Diego." The determination of the Batiquitos project's feasibility to achieve the required mitigation is the first step in the process. iti_t'.-.ui itiK Ytuti ; *4- o,-ay oi^yHi'i ;ii^ toi tw^y -? 04/03/1987 09:30 PORT OF Lfl . 213 831-0439 P.04 Date: April 8, 1987 Page 3 of 3 SUBJECT: REIMBURSEMENT AGREEMENT BETWEEN CITY OF LOS ANGELES AND CITY OF CARLSBAD FOR THE PRELIMINARY ENGINEERING STUDY OF THE BATIQUITOS LAGOON ENHANCEMENT PROJECT _ 8. The proposed reimbursement agreement and the agreement with CH2M H111 is scheduled to be considered by the Carlsbad City Council at its regular meeting of April 14, 1987, following Board approval, The preliminary engineering work would begin the week following Carlsbad's approval of these two agreements. 9. The proposed reimbursement agreement has been approved as to form by the City Attorney's office. 10. Funds are available under Item 856, Object No. 048. 11. The Environmental Scientist has determined that approval of the reimbursement agreement is exempt from the requirements of CEQA as set forth in Article III, Sections 2 d and 2 f of the Los Angeles City CEQA Guidelines. 12. The proposed action has been reviewed with and 1s acceptable to the Council's Industry and Economic Development Committee members and the Mayor's office under Executive Order No. 39 . TRANSMITTALS: 1, Reimbursement Agreement between City of Carlsbad and the City of Los Angeles with: Exhibit A: Batiquitos Lagoon Enhancement Plan Exhibit B: Scope of Work, Batiquitos Lagoon Enhancement Plan Predesign 2. Engineering Agreement between City of Carlsbad and CH2M Hill (without exhibits). VEH:py VERNON E. HALL csc3-548B 2020 Project Manager APPROVED: UUMALU L. MUbMAN Deputy Executive Director EZUNIAL BURTS ^- Executive Director 1 RESOLUTION NO. 9022 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING 3 REIMBURSEMENT AGREEMENT BETWEEN CITY OF LOS ANGELES AND CITY OF CARLSBAD FOR THE 4 PRELIMINARY STUDY OF THE BATIQUITOS LAGOON ENHANCEMENT PLAN. 5 6 WHEREAS, City of Los Angeles acting by and through the 7 Board of Harbor Commissioners (BOARD) and the City of Carlsbad 8 (CITY) intend to pursue a proposed project identified as the enhancement 9 of Batiquitos Lagoon (PROJECT) as mitigation for Los Angeles harbor 10 fills requiring an Environmental Impact Report (EIR) and Environmental 11 Impact Statement (EIS); and 12 WHEREAS, in order to adequately scope the EIR/EIS and to 13 determine whether the lagoon enhancement project is feasible, preliminary 14 i engineering design and related technical studies and cost estimates must 15 be completed, and 16 WHEREAS, BOARD and CITY will be parties to an Agreement 17 ("MOA") with various federal and state agencies which will establish 18 procedures and responsibilities for design, construction and maintenance 19 | of the Project; and 20 WHEREAS, BOARD desires to fund the amount necessary to 21 carry out the preliminary engineering studies prior to and until said 22 MOA has become effective; 23 NOW, THEREFORE, BE IT RESOLVED as follows: 24 1. The above recitations are true and correct. 25 2. The attached agreement entitled "REIMBURSEMENT 26 AGREEMENT" between the City of Los Angeles and City of Carlsbad 27 is hereby approved. 28 1 3. Mayor is hereby directed to sign agreement on behalf 2 of City of Carlsbad. 3 PASSED, APPROVED AND ADOPTED at a regular meeting of 4 the Carlsbad City Council held on the 14th day of April , 1987 5 by the following vote, to wit: 6 AYES: Council Members Lewis, Kulchin, Pettine, Mamaux, and Larson 7 NOES: None 8 ABSENT: None 9 10 > CLAUDE A. LEWIS, Mayor 12 ATTEST: 13 fj^^at^ J. & 14 ALETHA L. RAUTENKRANZ, City Clefck 15 (SEAL) 16 17 18 19 20 21 22 23 24 25 26 27 28 REIMBURSEMENT AGREEMENT REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF CARLSB/ AND THE CITY OF LOS ANGELES FOR THE PREPARATION OF THE PRELIMINARY ENGINEERING DESIGN AND RELATED TECHNICAL STUDIES FOR THE BATIQUITOS LAGOON ENHANCEMENT PROJECT day of QdNJ 1987,THIS AGREEMENT is made this between the CITY OF CARLSBAD, a municipal corporation of the 'State of California, hereinafter referred to as CITY, and the City of Los Angeles acting by and through the Board of Harbor Commissioners hereinafter referred to as BOARD. RECITALS WHEREAS, BOARD and CITY intend to pursue a proposed project identified as the enhancement of Batiquitos Lagoon (Project) as mitigation for Los Angeles harbor fills requiring an Environmental Impact Report (EIR) and Environmental Impact Statement (EIS); and WHEREAS, in order to adequately scope the EIR/EIS and to determine whether the lagoon enhancement project is feasible, preliminary engineering design and related technical studies and cost estimates must be completed; and WHEREAS, BOARD and CITY will be parties to an Agreement ("MOA") with various federal and state agencies which will establish procedures and responsibilities for design, construction and maintenance of the Project; and WHEREAS, BOARD desires to fund the amount necessary to carry out the preliminary engineering studies prior to and until said MOA has become effective; NOW, THEREFORE, in consideration of the covenants and conditions, it is agreed as follows: 1. CITY will engage the firm of CH2M Hill hereinafter referred to as CONSULTANT to perform the necessary preliminary engineering for that area more particularly depicted upon a site map attached as Exhibit "A" - Batiquitos Lagoon Enhancement Plan. 2. It is understood that CONSULTANT'S services shall conform to the eighteen tasks specified in the Scope of Work attached as Exhibit B and made a part of this agreement. To carry out these tasks, Consultant shall: (a) Conduct field explorations; (b) Communicate weekly with the CITY staff; (c) Write reports; and (d) Perform such other work as necessary to properly evaluate the proposed Project. 3. It is understood that Exhibit B - Scope of Work pertains only to the preliminary engineering and related technical studies necessary to determine the estimated project costs and engineering feasibility and to adequately scope the work required for an EIR/EIS. Separate agreements may be entered into by BOARD, CITY and CONSULTANT for the preparation of the EIR/EIS. 4. BOARD shall pay to CITY the actual cost of CONSULTANT'S services provided these costs shall not exceed $392,000.00 without prior written approval of BOARD plus actual CITY administrative costs, not to exceed $50,000.00. Such cost shall be based on the fees set forth in Exhibit B and shall be payable as Consultant completes and bills for work performed on each of the eighteen tasks. CONSULTANT'S invoices, in accordance with Section 5 of the engineering agreement between CITY and CONSULTANT, shall be forwarded monthly to BOARD for direct payment to CONSULTANT by BOARD in a timely manner. Monthly invoices for actual CITY administrative costs, shall be paid by BOARD in a like manner. Said invoices shall be fully documented by CITY. 5. It is understood that CONSULTANT shall be an independent contractor of CITY. 6. It is understood that BOARD shall provide CITY with a Project Manager to assist CITY in carrying out the preliminary engineering studies. The Project Manager shall report to and take direction from CITY, through the City Manager or his designee, provided however, that CITY agrees that it will at all times consult with BOARD if BOARD expresses any concerns regarding the Project and will implement all requests of BOARD unless it expressly finds such requests are unreasonable. The Project Manager shall comply with all laws, rules and policies of CITY and may be removed by BOARD or the CITY, after consultation with BOARD, if his/her performance is in any respect unsatisfactory. The Project Manager shall be provided appropriate office space and facilities, if available, (phone, copier, files, etc.) by CITY. 7. It is understood that, since BOARD is advancing funds for preliminary engineering work which may be accomplished and paid for in accordance with Sections 5 and 9 of said MOA, BOARD shall be reimbursed for the actual amount of its payments to CONSULTANT and CITY from the Escrow Account established under the terms of the MOA, upon written request by BOARD. BOARD shall have the right to terminate the work of CONSULTANT at anytime for any reason as long as BOARD reimburses the CONSULTANT and CITY for costs incurred to date. Such termination shall be accomplished by BOARD providing CITY a written notice and CITY terminating the CONSULTANT'S Agreement as provided in that Agreement. 8. The work product of CONSULTANT shall be owned jointly by CITY and BOARD. CITY and BOARD agree that the plans developed by CONSULTANT are proprietary information which have an economic value to a person restoring the lagoon. If for any reason BOARD does not proceed with the project, it agrees that CITY may use the plans developed by CONSULTANT to itself restore the lagoon. CITY agrees that if any other person wishes to restore the lagoon and use such plans, that BOARD shall be entitled to be reimbursed from such person the value of the plan to the extent BOARD funds have paid for the work of the CONSULTANT. IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day and year first above written. CITY OF CARLSBAD, a Municipal Corporation of the State of California ".LEWIS, Mayor ATTEST: CITY OF LOS ANGELES, a Municipal Corporation of the State of California L BURTSi-Exe'cutivV Director for Board of Harbor Commissioners ALETHARAUTENI^Z/ISUyctelrk APPROVED AS TO FORM: ll-fr&O Ql LL,( CornltrrssTon Secretary APPROVED AS TO FORM: Assistant City Attorney VEH:lm csc3-5387 3/24/87 JAMES KyflAHN City Attorney Assistant 3 < 3 H 00 I X LLI EXHIBIT B III. SCOPE OF WORK CH2M HILL BATIQUITOS LAGOON ENHANCEMENT PLAN PREDESIGN Revised August 13, 1986 Revised February 5, 1987 Revised February 18, 1987 Revised February 22, 1987 TASK PI—LAGOON INSTRUMENTATION TO CALIBRATE MODEL OBJECTIVE Determine the water levels and current speeds and directions in each of the three Batiquitos Lagoon basins under the influence of real ocean tides and to ascertain the friction factor at the three choke points and the east basin to calibrate the hydrodynamic computer model and observe the sediment transport process at the entrance. METHODOLOGY The east, central, and west basins of the lagoon will be instrumented with four current meters and four tide gages. The mouth of the lagoon will be opened by bulldozing the sand and gravel sill aside. The instruments will record water levels and circulation currents in the deeper parts of the three basins for 10 days. A cross-section at the opened inlet will be surveyed three times in the 10 days. The client will arrange for any permits needed to conduct this task. Consultant will furnish a description of the planned opening and instrumentation. III-l PRODUCT Tabulation of tides, water levels, current speeds and directions as a function of time to be used as input into RMA2. TASK P2--MODEL CIRCULATION OF PREFERRED ALTERNATIVE OBJECTIVE Using water elevation records and current data from the lagoon instrumentation task, and lagoon geometry from the fathometer survey task and digitizing map task, model RMA2 will be run to evaluate circulation, mixing, flushing, and tidal prism propagation in the lagoon assuming implementation of the preferred alternative. METHODOLOGY The hydraulic analysis will be done using the Corps of Engi- neers' two-dimensional flow model called RMA2 (or TABS2, which is an integrated combination of RMA2, RMA4 and SED4). This model will be run for the preferred alternative (Plan 1) The results will be compared to the established goal and objectives for compliance. PRODUCTS A calibrated hydrodynamic model of Batiquitos Lagoon and a series of maps (figures) showing circulation patterns in Batiquitos Lagoon for the Preferred Alternative. Also, input data for RMA4 will be generated. III-2 TASK P3—MODEL CIRCULATION OF TWO DEVELOPMENT OPTIONS OBJECTIVE The circulation, mixing, flushing, and tidal prism propagation in Batiquitos Lagoon for Plans 2 and 3 will be evaluated. METHODOLOGY Lagoon geometry for Batiquitos Lagoon conforming to Plans 2 and 3 will be developed and modeled. RMA2 will be run to evaluate circulation, mixing, flushing, and tidal prism propagation•in the lagoon. The results will be compared to the project goals and objectives for compliance.' PRODUCT A series of maps (figures) showing circulation patterns in Batiquitos Lagoon and input data for RMA4 will be generated for Plans 2 and 3. TASK P4—EXISTING DATA OBJECTIVE Obtain all pertinent information and data on Batiquitos Lagoon to assist in engineering design aspects and prevent a duplication of study efforts. METHODOLOGY Existing data will be gathered on such items as: o Bridge plans from CalTrans III-3 o Contour maps of lagoon o Bench mark identification and horizontal and ver- tical coordinates o Right-of-way surveys o Easements o Upland erosion and sedimentation rates o Plans for existing utilities and gas line o Test holes data from bridge investigations and other studies o Stream flow hydrographs o Tide and tidal current data o Littoral drift o Previous modelling efforts o Previous beach profiles o Traffic counts and traffic patterns o Noise measurements o Dredging records of other California tidal inlets o Air quality analyses o Water quality data III-4 o Copies of city, state, and federal engineering standards The data will be reviewed to identify gaps in the required information. Copies of the data will be assembled and sent to project engineers and preparers of the EIR/EIS. PRODUCT Sets of information and data to assist in initiating such activities as computer modeling, preparation of master map, grading plans, inlet design, and dredging and disposal plan. TASK PS—BATHYMETRIC SURVEY OBJECTIVE There are no survey data for the deeper sections of Batiquitos Lagoon west of 1-5. A bathymetrie survey will provide data to fill this gap in the lagoon geometry. METHODOLOGY A bathymetrie survey consisting of a series of tracklines on a 100-foot grid across the lagoon west of 1-5 will be conducted. Bathymetric records will be reduced and contours generated for the unmapped sections of the lagoon. PRODUCT A contour map at 1"»100' scale, with 1-foot contour intervals will be produced to supplement the existing contour map. III-5 TASK P6—SOILS AND LABORATORY ANALYSIS OBJECTIVE The soil/sediment analysis will be undertaken to resolve the question of whether the soils in the east end of the lagoon are contaminated with pesticide residues or toxic materials identified in the testing described below. The information resulting from the analysis may be used to apply for permits for dredging, Section 404 inwater disposal, and ocean dumping. METHODOLOGY Soils conditions in the western portions of the lagoon have been evaluated for structural purposes to some extent, but soils in the eastern portion require additional sampling and mechanical analyses. There appear to be anomalies in the lagoon depositions, which will require analysis sufficient for engineering dredging and disposal, grading designs, cost estimating, and structural uses on- and offsite. No chemi- cal testing of soils has been done. We have not had access to any of the boring logs or test results from previous sampling efforts; therefore, our proposed sampling/testing effort contains a degree of uncertainty. From a recent conversation with a representative of the Corps of Engineers, South Coast District, it appears than an accurate estimate of bioassay/bioaccumulation studies neces- sary for the Enhancement Plan design cannot be made without knowledge of the chemical characteristics of the lagoon sediments. For ocean disposal, the Corps requires bioassays on three particular species (zooplankton and invertebrates) in both the solid phase and the liquid phase. According to the Corps representative, a proposed bioassay program must be submitted to the Corps for approval; the proposed program III-6 should be based on knowledge of the sediment chemical char- acteristics. Our proposed chemical sampling program will provide enough information to develop a bioassay program for Corps approval. However, a bioassay is not included in this scope. Sampling for potential contamination and permitting purposes will be required. Possible contamination from offsite activ- ities has been raised as a concern, due to agriculture and other upland uses. Potential contamination must be deter- mined for construction purposes (health and safety, air quality, etc.) and for disposal options analysis (i.e., will there be limitations to disposal siting). There will be soil samples taken from five locations for chemical and physical sampling, and 20 locations for physical sampling throughout the lagoon. Samples will be taken with either hand-driven coring or float mounted vibra-core equip- ment. Each hole will be cored to a maximum depth below mudline of 10 feet, or an elevation of -8 feet (MSL). The samples for the chemical testing will be taken adjacent to the creek mouths and the nursery area and at certain drainage points around the lagoon. Samples will be composited and undergo elutriate tests for the following: metals, cya- nide, total phenol, acid extractables, base/neutral extract- ables, pesticides/PCB's, chlordphenoxy herbicides, and volatiles. In addition, each will undergo a bulk sediment analysis to meet the Corps of Engineers criteria. The sampling program is designed to resolve the issue of contami- nated soils and to provide the information necessary for dredging permits and development of a bioassay program for Corps approval. A two-page summary of the methods proposed will be submitted to the client for their coordination with EPA and the Corps of Engineers. III-7 Twenty test holes will be cored for determination of physical characteristics of the proposed dredged material. Samples taken would be subjected to laboratory classification (including grain size analysis). The cores will be from throughout the lagoon and we propose using coring equipment as mentioned above. Samples from each test hole will be placed into plastic jars for grain size laboratory analysis. CH2M HILL will conduct both the sampling and the laboratory analyses unless another local EPA certified laboratory demonstrates it can be as expeditious. CH2M HILL has two EPA certified labs in Redding, California and Corvallis, Oregon. Any permits required and/or access permission needed will be acquired or arranged by the client. PRODUCT Results of soil sampling and testing will be included in a Forty Percent Predesign Report. Maps of test hole sites, boring logs, and physical and chemical laboratory test re- sults will be included in the Preliminary Design Report. TASK P7—TIDAL INLET ANALYSIS AND PRELIMINARY DESIGN OBJECTIVE The purpose of this task is to develop the preliminary design of a self-maintaining tidal entrance to the Batiquitos Lagoon. III-8 METHODOLOGY This task will be performed in the following manner: o Collect and analyze current and historical data on the physical and geological processes relating to the lagoon outlet and its adjacent coastal and nearshore region. Relevant literature will also be reviewed including the Coastal Conservancy's Enhancement Plan, the previous reports by the Scripps Institution of Oceanography, comments by Waterways Experiment Station (WES) and local interests. o Perform a bathymetrie and sub-bottom profile survey of the offshore sea bed surrounding the lagoon outlet in order to obtain high-resolution informa- tion of the site-specific boundary condition in support of the entrance design. A total of seven survey transects will be deployed within 300 feet upcoast and downcoast of the outlet, extending to a depth of 30 feet. o Perform a conceptual, functional design of the tidal entrance. The design will be accompanied by the supporting rationales as well as estimates of silting rates in the lagoon and closure frequencies in consideration of tidal fluctuations, storm frequencies and regional coastal sediment budget. o Perform a preliminary, structural design of the tidal entrance, accompanied by the provisions for jetties or no jetties, channel dimensions and configurations, specification or armor types for the channel and the jetty, and preliminary design drawings. III-9 Analyze potential impacts of the proposed entrance design, with special reference to possible disrup- tion to the longshore sediment transport, and alter- ation of water circulation and quality in the adjacent oceanfront area which might adversely affect surfers, swimmers and other beach users. Evaluate construction methodologies, construction scenarios, schedules, and costs, and provide pre- liminary estimates and specs on labor, material and -equipment. Develop maintenance methodologies, schedules and costs. PRODUCTS The Preliminary Design Report will summarize the rationale, the preliminary design, the construction methods, the esti- mated costs for construction and maintenance, and the main- tenance procedures. TASK P8— WATER QUALITY ANALYSIS OBJECTIVE The purpose of this task is to examine how the lagoon cir- culation of the preferred alternative affects water quality, specifically salinity and temperature. The hydrodynamic analysis is assumed to provide sufficient circulation data for water quality assessment in the lagoon on a seasonal basis. 111-10 METHODOLOGY The sensitivity of the preferred alternative lagoon config- uration will be examined for its impact on lagoon water quality. This evaluation will provide assessments of the design to maintain acceptable water quality and habitats for each of four seasonal conditions. Seasonal projections are necessary due to the physical, habitat, environmental, and climatological changes experienced throughout the year. The specific tidal hydraulic information developed during the Enhancement Plan studies will be used to provide the data required to evaluate water quality characteristics. The results of RMA-2 circulation model will feed into a sec- ond Corps model (also two-dimensional) called RMA-4, which models water quality. With RMA-4, we can model dissolved oxygen, temperature, biological oxygen demand, and salinity in the lagoon assuming a purely advection-dispersion mass transport without detailed kinetic relationship. RMA-4 has the potential to handle one or two conservative substances in addition to the parameters listed above; we will determine which, if any, should be modeled based on input from our biologists. The sensitivity of Batiquitos Lagoon to climatological con- ditions, circulation patterns, and runoff water quality is integrated into the water quality analysis. We will permit examination the seasonal variations of water quality. Existing data and analytical techniques will be utilized for this effort, and are assumed to be sufficient for the required analysis. III-ll PRODUCTS The water quality assessment of the Enhancement Plan will be summarized in the Preliminary Design Report complete with data, assumptions, methods, results, and conclusions. The product will include a recommendation and/or confirma- tion of continued water quality monitoring and analysis, sedimentation monitoring, and closure/erosion process data near the mouth. Because certain estuarine processes are difficult to project accurately, this data collection and monitoring program concept may be necessary for reevaluation of lagoon operations in the future. TASK P9—PRELIMINARY ENVIRONMENTAL REVIEW OBJECTIVE The objective is to review early design concepts to determine if the resulting enhancement project will provide suitable habitat for biota. An important aspect of the engineering program is inter- action between engineers and biologists to ensure that the project design fulfills the biological goals of the concep- tual plan considering the data already developed as part of the HEP. Our approach involves an iterative feedback pro- cess. The results of the circulation and water quality model are reviewed by biologists to determine how well they meet the criteria for fisheries and bird habitat. If necessary, the biologists suggest modifications which can be used to refine the grading plan and remodel circulation and water quality. The process may require up to three adjust- ments to achieve a good fit between engineering design and biological requirements. 111-12 PRODUCT Minor adjustments will be made in design concepts to better accommodate biological needs. TASK P10—DIGITIZE MAPPING OBJECTIVE Contour maps of the existing and proposed topography of Batiquitos Lagoon will be prepared to provide base maps, develop the grading plan, and determine the volume of material to be dredged. METHODOLOGY Topography for the existing lagoon, the recommended (preferred) plan and one alternative, will be digitized using CADD. Maps will be prepared at a scale of 1"=100' with 1-foot contour intervals in the areas to be dredged. Topographic and bathymetrie data collected under the fathom- eter survey task will be digitized to complete the existing- condition and preferred-plan maps. Volume differences will be computed. PRODUCT Three contour maps will be produced. The dredge volumes will be summarized in the Preliminary Design Report. 111-13 TASK PI 1—DREDGING AND DISPOSAL PLAN OBJECTIVES The purpose of this task is to prepare: o A lagoon dredging plan to create 220 acres of sub- tidal habitat, 170 acres of intertidal habitat, and 135 acres of supertidal habitat. o An alternative dredging plan to the one above. o A plan, schedule, and cost estimate to properly dispose of approximately 3 million cubic yards of sand and mud (wet silts and clays). METHODOLOGY The conceptual plans for the dredged configuration will be coordinated with the circulation studies to optimize flush- ing and conform to the Enhancement Plan. Design criteria will be supplied by the client. Results of the soil testing will be reviewed to determine if any contaminated sediments are present. If contaminants are present, those areas will be delineated for special handling procedures. This could include locating approved disposal site(s), surveying potential haulers, and initiating the permitting process for dredging, hauling, and disposing of toxic materials. If no contaminated soils are found, the entire dredging process is simplified. Grain size results will be reviewed to delineate homogeneous soil types. A list of potential dredging contractors and disposal sites will be developed. A telephone survey will be conducted to assess contractor interest, equipment 111-14 available, equipment rates, and scheduling. Disposal site operators will be queried as to ability to take 3 million yards of material, site location, transportation available, and costs. Reasonable and proven methods of excavation will be ex- plored. Proper sizes and types of dredging equipment will be identified, work capacities estimated, handling require- ments catalogued, and costs estimated. Adequate dredging schemes and techniques will be documented. A set of dredging plans (contours and/or slope grades) will be drawn up for each of the alternatives using our CADD sys- tem. The dredging plans will be compared to the existing ground contours and dredging quantities computed. The amount and character of sediments to be removed will be reviewed to schedule when and from what part of the lagoon the different soil types will be removed. Sand will be eas- ier to handle and will be more valuable (as commercial aggregate, for beach nourishment, or as structural fill) than the muds. Once the various layers have been identified and tagged as to haul method and destination, a schedule (in flow chart fashion, similar to CPM) will be drawn up to optimize the disposal, avoid delays due to traffic conflicts, and put the disposal site facilities on notice to receive the material. Habitat requirements of the least tern will be supplied by the client. Provisions for protection of least tern nesting and foraging will be included in the Preliminary Design Report. A cost estimate will be prepared which will include engi- neering and administrative costs, hauling of the material to the disposal site (whether by truck, slurry pipeline, Charge, 111-15 ship, or train), spreading of the material at the disposal site, and any post-disposal costs (such as grading or plant- ing the disposal site(s), marking and/or fencing the disposal site(s), renting the disposal site(s) for a number of years, or turning the disposal site(s) into special habi- tats) . Beach nourishment as a means of disposal is discussed else- where . PRODUCTS A set of preliminary dredging plans consisting of new con- tours (dark.) for each of the preferred plan and Phase I superimposed on the existing contours (screened). A dredge disposal plan consisting of schedule, locations, haul methods and routes, flow charts, and cost estimates. All will be included in the Preliminary Design Report. TASK PI2—GAS LINE RELOCATION OBJECTIVE At least one gas line is known to cross the lagoon and will require relocation. The existing line will be located and a relocation scheme developed. METHODOLOGY The Southern Cities Gas Company will be queried as to the exact location of their gas pipeline across Batiquitas Lagoon. Relocation schemes will be developed, discussed with Southern Cities Gas Company and Caltrans, and a pre- ferred relocation scheme selected. Conceptual drawings of the preferred relocation scheme will be prepared. . 111-16 PRODUCT A discussion of the relocation scheme and drawings will appear in the Preliminary Design Report. ' TASK PI3—SEDIMENT CONTROL PLAN OBJECTIVE The purpose of this task .will be to examine and evaluate the proposed sediment control plan and to integrate the resul- tant net sedimentation to the Batiquitos Lagoon with a sedi- ment transpo'rt model of the lagoon. This will be performed for the preferred plan and one alternative. Estimates of net sediment movement to the lagoon area from both upland loadings and ocean loadings will be developed to evaluate potential maintenance requirements. These analyses will be determined for the hydrologic condi- tions used in the Preferred Plan. METHODOLOGY The upland erosion and sedimentation rates for the drainage areas surrounding Batiquitos Lagoon will be examined using the available data. Where data on sediment yield in the basins are lacking, correlation estimates will be used for similar drainages nearby which have sediment load data. The design storm used will be the one anticipated to yield the greatest sediment deposition. Grain size distributions of both suspended sediment data and bed material data in the study area will be used to estimate the effectiveness of the proposed sediment basins. Sample streambed sediment data will be collected in the major 111-17 loads defined at the boundaries of the lagoon. These data will provide information to better assess lagoon design configurations, areas of excessive sediment build-up, and general estimates of maintenance that may be required. A prediction of when the lagoon would fill up with sediment, assuming no control, will be made for use in the EIR/EIS No Action Alternative. This will be based on sedimentation rates; no modeling will be done. The integration of the basin runoff hydrology, sedimentation characteristics and yield, lagoon hydrodynamics, and pro- posed control facilities will best address the overall Sediment Control Plan. The resultant analysis and evalu- ations will then be used to develop a complete impact assessment of the proposed Sediment Control Plan including possible changes. PRODUCT The Preliminary Design Report will include the data used to confirm and develop sediment loading rates for the drainages to the lagoon, trapping efficiencies for the sediment control facilities, assumptions, baseline hydrology, estimated maintenance requirements, and schedules. In addition, the sediment transport analysis of the Bati- quitos Lagoon will be included to show the expected nature of material movement throughout the area. Estimated quan- tities of sediment build-up or depletion will be shown along with bottom contours for the design hydrologic condition. Model assumptions and data will be presented for complete understanding of the details and limitation of the analysis. Sediment control traps will be designed for the two creeks 111-19 and upland drainage paths. The traps will conform to the City of Carlsbad and Caltrans standards. TASK P14— (TASK DELETED) TASK PI5—BEACH NOURISHMENT OBJECTIVES The objectives of this task are to prepare preliminary design data for the preferred plan as follows: o Prepare background information on site-specific coastal processes to support evaluation of beach nourishment options. o Develop optional schemes and compare their rela- tive merits and demerits. o Assess possible adverse impacts of the beach nour- ishment work on the adjacent shorelines. o Determine a feasible beach nourishment scheme with the optimum combination of technical and economic merits and minimum adverse impacts. METHODOLOGY To develop the background information, we will conduct the following tasks: o Interview the engineers at the SG&E Encino plant to assess and reappraise their biannual beach 111-20 nourishment records since 1954 (thus far at Least 13 nourishment operations). o Interview local and adjacent coastal residents on factual information on the behavior (namely, seasonal changes, extreme events) and history of the beaches. o Investigate factual data from literature and ar- chives on the history of shoreline and beach pro- file, their changes and equilibrium conditions, seasonal and extreme events. Using the background information described above, we will develop various schemes for sand placement strategy and will evaluate innovative concepts which will .enhance the local residence tine of the placed sand to the maximum possible extent. The concepts to be evaluated will include: (a) soft- armor (geotextile fabric material) mattresses containing cobbles to serve as stationary permeable underlayer to arrest the placed sand against wave agitation? (b) "perched" or terraced beach configuration using retained cobble deploy- ment with soft-armor technology (i.e., to minimize offshore loss); (c) horizontal soft-armor retention devices made with geotextile tailored mattresses containing cobbles or sand (i.e., to minimize longshore loss); (d) graded cobble dis- tribution to serve as permeable underlayer for the placed sand, with no structural retention; (e) "headland" shoreline concept using redistributed cobble piles with soft-armor retention. We will conduct the following tasks: o Determine volumetric allocation of sand placement along the shoreline. 111-21 o Investigate timing and schedule of the nourishment operations to maximize the project benefits while minimizing possible adverse impacts. o Evaluate the useful project life of each alterna- tive scheme, with and without maintenance. o Derive preliminary cost estimates. All of this information will be used to evaluate and compare the technical merits and disadvantages of the alternative schemes. Potential adverse effects will be assessed, including the following: o The implications of an increased presence of beach sand on the silting potential at the Batiquitos entrance. o The enhanced turbidity and its spatial distribu- tion during the nourishment operation as a func- tion of timing, duration, and placement methods. o Possible enhancement of sediment entrainment into the Agua Hedionda lagoon. o Possible adverse local recreational and aesthetic impacts. From this information, we will synthesize the technical mer- its and impacts of the various schemes and will determine the best alternative in light of the significance of the technical merits and adverse impacts, regulatory constraints and permit requirements, and desires of the City of Carlsbad, the Port of Los Angeles, and the general public. 111-22 PRODUCTS The Preliminary Design Report will discuss the various beach nourishment schemes evaluated, their technical merits, and their adverse impacts. The report will recommend the best plan and present reasons for the recommendations. TASK PI6—PRELIMINARY ENGINEERING REPORTS 1. FORTY PERCENT PREDESIGN REPORT Fifteen copies of a Forty Percent Predesign Report will be delivered to the client. This report will summarize the results of preliminary investigations and modeling. The intent of the 40 percent Predesign Report is to allow an early review of initial design concepts and the overall direction of the project. Consequently, the report will be terse and will include rough graphic illustrations. Much of the material may be presented as tables rather than text. The report will cover these topics: o Results of Initial field work and testing Sediment quality by grain size class Sediment quality (contaminants found) Elutriate test results Offshore survey data 111-23 o Suitable excavation method o Dredging depths and boundaries o Tidal Inlet Tidal hydraulics Inlet design options o Lagoon circulation and flushing (RMA-2 Model- ing results) o Lagoon Water Quality (RMA-4 Modeling results) o Resulting habitats o Revisions to grading plan/inlet desian to improve habitats 2. PRELIMINARY DESIGN REPORT Ten copies of a Draft Preliminary Design Report (PDR) will be submitted for client review. We will revise the Draft and deliver 20 copies of the Final PDR. The PDR will expand the Forty Percent Predesign Report to include: o Results of soil borings o Volume of dredged materials by type o Dredged materials disposal sites o Dredged materials disposal methods 111-24 o Beach nourishment o Final grading plan o Utilities relocation o Sediment traps o Cost estimates TASK" P17 — PRELIMINARY ENGINEERING MEETINGS The consultant will attend and participate in meetings and other meetings during the course of the preliminary engi- neering, as requested by the client, up to a total of 16 man-meetings. It is anticipated that these meetings will include: o Two periodic progress and coordination meetings with the client to present interim findings. o One agency meeting to present/discuss the alternatives and the Forty Percent Predesign Report. o Two city council meetings; one to present/discuss the alternatives and the Forty Percent Predesign Report, and one to present a summary of the Predesign Report. TASK PI8—MANAGEMENT AND ADMINISTRATION OF PRELIMINARY ENGINEERING CH2M HILL will provide a Project Director who will be responsible directly to the client and will manage the overall activities of the consulting and subconsulting staff. He will also be responsible for project administration. 111-25 Day-to-day engineering tasks will be directed by the lead engineer. Management and administration will extend over the 5-month period of active project work. TASK PI9—AVIFAUNA SURVEYS OBJECTIVE Document avifaunal activity within the lagoon. METHODOLOGY ' Conduct monthly, 1-day field surveys of Batiquitos Lagoon for five consecutive months. The field surveys will record species numbers and abundance, habitat utilization and acti- vities of birds present in and immediately adjacent to Batiquitos Lagoon. PRODUCT Data compilation will consist of transcribing recorded notes onto a master species list, with abundance, activity (e.g., feeding, nesting, resting) and habitat (e.g., open water, nearshore vegetation, mudflat, etc.) recorded for each taxon. BC/001 111-26 BATIQUITOS LAGOON ENHANCEMENT PLAN PREDESIGN SCHEDULE Calendar Days Milestone 0 Notice to Proceed (including permitting to open lagoon mouth) 25 From notice to proceed, completion of Task PI, lagoon instrumentation to calibrate model 45 From completion of Task PI (or from permission to access property, if later), completion of field work and data collection 45 From completion of previous milestone, submit Forty.Percent Predesign Report (21) Completion of client review of Forty Percent Predesign Report 75 Following receipt of client comments, submit Draft Predesign Report (DPDR) (21) Client review of DPDR 21 Following receipt of client review of DPDR, submit Predesign Report ( ) Numbers in parenthesis designate client review time. BC/002 LJ <Q —I LJ CLX LJ ^ LJ < CJH- LJ O^U OD LJ-o: Q_ or* CN O •*CM O ?j O00 (/} < Q UJ O o<o TASKS• *iu o: •IS*/_! UJ•j 0<E '111 _ \ _J UJ•y O (T • 4 r^ 3 Q t—c/iUJ » _ r L Q 0 ft L Q -\ » L C f- if L C -) (/ L C 5 r* L QL Q O r L Q n _ L C D - L Q - C L Q - si f L C 'DELETED") -^- U L CL Q 1 • • * * . • • • •> to Is*- co o L Cu Q. Q_ CL * EXHIBIT 8 SCOPE COST BATIQUITOS LAGOON PRaiMINARY ENGINEERING COST ESTIMATE SUMMARY FEBRUARY 22, 1987 Approx. Days toTask Fee Finish P1 Lagoon Instrumentation $37,000 30 P2 Model Circulation 42,000 180 P3 Model Circulation 26,000 180 P4 Existing Data 6,000 30 P5 Bathymetric Survey 12,000 30 P6 Soils Analysis • 44,000 60 P7 Tidal Inlet 43,500 200 P8 Water Quality 22,000 200 P9 Environmental 4,000 190 P10 Mapping 10,000 45 P11 Dredging 30,000 100 P12 Gasline 4,200 200 P13 Sediments 41,000 270 P15 Beach Nourishment 29,000 'MV1 P16 Engineering 16.000 200 P17 M-eeUn-gT1* }*'™ f«j P18 Administration JJgg 230 5,500 130 AL: $392,200 270