SUBJECT: RESOLUTION NO. - ZERO EMISSIONS CONTAINER MOVER SYSTEM REQUEST FOR CONCEPTS & SOLUTIONS: COST SHARING AGREEMENT WITH PORT OF LONG BEACH

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1 DATE: MAY 13,2010 FROM: GOODS MOVEMENT DIVISION SUBJECT: RESOLUTION NO. - ZERO EMISSIONS CONTAINER MOVER SYSTEM REQUEST FOR CONCEPTS & SOLUTIONS: COST SHARING SUMMARY: In the fall of 2008, American Maglev, Inc., Powder Springs, Georgia submitted an unsolicited proposal to the Port of Long Beach (POLB) to construct a zero emissions container mover system (ZECMS) between POLB's Pier A and the Union Pacific Railroad's Intermodal Container Transfer Facility (ICTF) in Carson at no cost to the POLB. The POLB subsequently released on June 3, 2009, a formal Request for Concepts/Solutions (RFCS; see Transmittal 3) to design, build, finance, and operate/maintain a ZECMS between the Ports of Long Beach/Los Angeles (Ports) and the ICTF, and at no cost to the Ports. The POLB developed the RFCS with assistance from the Port of Los Angeles (POLA) and the Alameda Corridor Transportation Authority (ACTA). Seven (7) responses were received by the POLB on October 23, The Ports/ACTA are presently reviewing the submissions, and interviews with all seven respondents are being held on May 24, The RFCS process should be completed by June In the spirit of the "Clean Air Action Plan (CAAP) Master Cost Sharing Agreement" (see Transmittal 3) and the CAAP Technology Advancement Program (TAP), the former City of Los Angeles Board of Harbor Commissioners (Board) president attended several meetings with the former City of Long Beach Board of Harbor Commissioners (POLS SOHC) president in 2008 and 2009, to discuss cost sharing for the RFCS process. From these discussions, the Board presidents felt the two Ports should share equally to pay for half of the costs of several consultants retained by the POLB that were required for the RFCS effort, contingent upon the required subsequent approval of the full BOHC for each Port. It is thus recommended that the Board approve this cost sharing agreement with the POLB, in a maximum amount of $455,995 (50% of the total RFCS phase consultant cost of $911,989) (Transmittal 1). At this time, staff has not recommended participation in any effort beyond this initial RFCS phase.

2 DATE: MAY 13, 2010 PAGE 2 OF 6 RECOMMENDATION: It is recommended that the Board of Harbor Commissioners: 1. Approve this cost sharing agreement with the POLB, in a maximum amount of $455,995 (half of the total cost of $911,989 for the RFCS phase); 2. Authorize the Executive Director to execute and the Board Secretary to attest to the cost sharing agreement with the Port of Long Beach; and 3. Adopt Resolution No. _ DISCUSSION: POLA-General Atomics ZECMS Demonstration Project Conceptual Design Study - In 2006, several vendors/developers of technologies/systems for moving containers on fixed guideways, powered by electricity and/or electromagnetic mechanisms (e.g., magnetic levitation) lobbied the Ports to implement a system. At that time, the Port was investigating different options to minimize emissions associated with the proposed BNSF Railway near-dock railyard (Southern California International Gateway-SCIG). As such, in 2006, the Port had General Atomics (GA) prepare a conceptual design study of a container maglev system between Terminal Island and the Union Pacific Railroad Intermodal Container Transfer Facility (ICTF) in Carson (GA has a maglev test track at their campus in San Diego). The GA study yielded an estimated implementation cost of $575 million for a 4.7-mile system. Given this excessive cost, and the various other technologies being proposed, the Ports then elected to conduct a comprehensive evaluation of all of the technologies/systems. POLB/POLA Zero Emissions Container Mover System Evaluation - In 2007, the Ports retained a consultant team to assess various proposed ZECMS technologies that were purported to be market ready and technologically appropriate for possible near/mid/long-term implementation. The POLS was the actual contracting agency for this study that cost $167,388. The POLA paid for half of the cost of this study under a different cost sharing agreement which was executed under the auspices of the "Clean Air Action Plan Master Cost Sharing Agreement" (see Transmittal 4). The final report, transmitted to the Board in April 2008, included a detailed review of thirteen (13) systems and/or technologies (see Transmittal 2). No recommendations for further project development were made in the 2007 study. The following briefly summarizes these 13 systems and their proponents: In 2007, most of these technologies were merely basic concepts with no preliminary ZECMS design having been completed.

3 DATE: MAY 13,2010 PAGE 3 OF 6 One of the technologies/proponents is an operating magnetic levitation passenger train in Shanghai, China. Two proponents have magnetic levitation system test tracks, one with a passenger type railcar and the other with a 20' freight container. POLB Request for Proposal Development - One of the ZECMS study vendors/developers, American Maglev, submitted an unsolicited proposal to the POLB in the fall of 2008 to construct a system between POLB's Pier A and the ICTF at no cost to the POLB. Subsequently, the POLB BOHC instructed staff to develop a request for proposal (RFP) for a potential demonstration project from Pier A to the ICTF. The POLS SOHC also instructed staff to retain the services of the University of Southern California (USC) Keston Institute for Public Finance and Infrastructure Policy (Keston Institute) to evaluate submissions. To assist in this RFP development, the POLB retained the following other consultants with roles and budgets listed in the table below. Firm (contract execution) Role Budgeted Amount Parsons Brinkerhoff (Jan. 2009) RFCS technical requirements $49,620 Psomas (Nov. 2008) Potential alignments/property impacts $149,000 Keston Institute (February 2010) Review/evaluate RFCS submissions $113,369 Brownstein, Hyatt, Farber, Schreck, LLP (April 2009) Legal services: procurement, P3 $500,000 Fulwider Patton, LLP (June 2008) Legal services: patents $100,000 TOTAL $911,989 Approximate Costs expended as of April 1, 2010: $600,000 Through providing support on the RFP development, the City of Long Beach Attorney's Office determined that outside, specialized legal services with expertise in public works procurement (particularly design-build procurement) and Public-Private Partnerships (P3) were needed. Subsequently, on April 20, 2009, the POLS BOHC approved retention of the legal firm of Brownstein, Hyatt, Farber, Schreck, LLP, Los Angeles, California (BHFS). The firm of Fulwider Patton, LLP, Los Angeles, California, who had been previously retained by both Ports for the CAAP TAP for counseling on intellectual property issues, was also utilized by the POLB on this project. Because of the uncertain economic viability, BHFS recommended vetting the financial feasibility of the potential technologies via a Request for Concepts/Solutions first, and then decide if issuing a request for qualifications (RFQ) or RFP is appropriate. Request for Concepts and Solutions - On June 3, 2009, the POLB, in conjunction with the POLA and ACTA, released the RFCS for a Public-Private Partnership to design, build, finance, operate, and maintain/manage a ZECMS between the Ports and the existing/proposed expanded letf, and possibly the proposed BNSF Railway's near

4 DATE: MAY 13, 2010 PAGE40F6 dock railyard (Southern California International Gateway or SCIG), and at no cost to the Ports or ACTA. Some of the key parameters that apply to the RFCS are: The proposed system is not intended to either diminish or replace on-dock rail loadings. The system would still need to compete financially with drayage; i.e., the Ports could not ban the use of trucks to the near-dock railyard(s). Prospective respondents are instructed to assume that they will be responsible for the costs of all non-port, private right-of-way. Prospective respondents are to assume that this would be a stand-alone project, i.e. one that will be financed without contribution or subsidy by the Ports or ACTA. Seven (7) responses were received by the POLB on October 23, Only three of the entities reviewed in the 2007 study responded to the RFCS, encompassing three different technologies, thus indicating that very few of the studied technologies had progressed beyond basic concepts. To ensure that sensitive proprietary information contained in each concept document was properly protected during the review process, a confidentiality agreement amongst the Ports and ACTA was executed on December 3, 2009, and the POLA received the seven submissions for review on December 8, The Keston Institute contract with the Port of Long Beach was executed on February 19, The Ports, ACTA, and Keston are presently reviewing the submissions and should be completed by June Potential Long-Term Deployment of ZECMS Technologies - The potential deployment of ZECMS is also presently being analyzed in the following two significant, regional transportation planning/engineering activities that the POLA is actively involved in: Corridor Project Environmental Impact Report/Environmental Impact Statement (EIR/EIS) - Market, technology assessment, system requirements, and engineering feasibility studies have been completed for ZECMS technologies as part of the Corridor Project EIR/EIS. The Ports and ACTA participated in these efforts, which yielded the following two technical studies (see Transmittal 5): "Alternative Goods Movement Technology Analysis Study" and "Railroad Goods Movement Study." The ZECMS is presently being evaluated in detail as an element of two of the project alternatives (see Transmittal 5). The draft EIR/EIS is expected to be released for public review in September Southern California Association of Governments (SCAG) Comprehensive Regional Goods Movement Plan and Implementation Strategy - In early 2009, SCAG

5 DATE: MAY 13, 2010 PAGE 5 OF 6 commenced this study, which is being conducted by the same consultant firms that prepared the aforementioned 2007 Ports ZECMS study, as well as the two primary firms working on the EIRIEIS. This study will include a conceptual plan for a potential ZECMS throughout the entire region, between the north end of the Corridor and the eastern boundary of the SCAG region. The Director of POLA's Goods Movement Division is involved in this effort. POLA Cost Sharing Commitment - In June 2007, the Ports executed the "Clean Air Action Plan Master Cost Sharing Agreement" (see Transmittal 3) for costs to be shared for activities/projects/studies undertaken by both Ports, and a study-specific cost sharing agreement for the aforementioned 2007 ZECMS Evaluation. In the spirit of these agreements and collaboration, on March 20, 2009, former Board president David Freeman met with the former POLB BOHC president James Hankla, and initially agreed to pay for half of the Keston Institute costs. Through subsequent discussions between the former Boards of Harbor Commission presidents, and other meetings with the executive directors, both Ports agreed in November 2009 that the cost sharing would include all consultant costs (this is partly the reason for the delay in submitting this agreement to the Board). Recommended Approval - It is recommended that the Board approve this cost sharing agreement with the POLS, in a maximum amount of $455,995 (half of the total cost of $911,989) for the ongoing RFCS phase of this project. At this time, Harbor Department staff is not recommending participation in any effort beyond this initial RFCS phase. ECONOMIC BENEFITS: Spending under this Board action will have no additional direct employment effect. ENVIRONMENTAL ASSESSMENT: The proposed action is a cost sharing agreement with the POLB for the ZECMS RFCS effort. As an administrative action, the Director of Environmental Management has determined that the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines. FINANCIAL IMPACT: Funds in the amount of $455,995 for this 50%, one-year cost sharing agreement between the POLA and POLB have been programmed in the approved FY09-10 budget in Work Order #24894, Account #54290, Center #1172, and Program #000. At this time, no funds are being requested beyond FY09-10 and staff is not recommending

6 DATE: MAY 13, 2010 PAGE 6 OF 6 participation in any effort beyond this initial RFCS phase. Approval of the proposed cost sharing agreement with POLS does not commit the POLA to any other costs beyond maximum amount authorized or the scope of said cost sharing agreement. CITY ATTORNEY: The Office of the City Attorney has prepared and approved as to form and legality this cost sharing agreement. TRANSMITTALS: 1. ZECMS RFCS Cost Sharing Agreement ZECMS Evaluation Technologies 3. ZECMS Request for Concepts/Solutions 4. CAAP Master Cost Sharing Agreement & 2007 ZECMS Evaluation Cost Sharing Agreement Corridor Project EIS/EIR Technical Studies FIS APproval: l.if /J, --/ I/f,v/~ KERRY CARTWRIGHT, P.E. Director of Goods Movement MICH EL R. CHRISTENSEN Dep y Executive Director I (initials) GERA DINE KNATZ, Ph.D. Exec ive Director KC:jb Author: K. Cartwright ZECMS Cost Share Agreement Board memo