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					                                                                                              AGENDA



                             PORT OF OAKLAND
                                                                                   JAMES W. HEAD
OMAR BENJAMIN                                                                            President
Executive Director            BOARD OF PORT COMMISSIONERS                      PAMELA CALLOWAY
                               530 Water Street  Oakland, California 94607      First Vice-President
DAVID L. ALEXANDER                                                               GILDA GONZALES
Port Attorney                           Telephone: (510) 627-1100              Second Vice-President
                                        Facsimile: (510) 451-5914              MARGARET GORDON
                                            TDD/TTY – Dial 711                      Commissioner
ARNEL ATIENZA
Port Auditor                                                                    KENNETH KATZOFF
                                   E-Mail:board@portoakland.com                      Commissioner
                             Website:   www.portofoakland.com                    MICHAEL LIGHTY
JOHN T. BETTERTON
                                                                                    Commissioner
Secretary of the Board
                                                                                        VICTOR UNO
                                             AGENDA                                     Commissioner



                         Meeting of the Board of Port Commissioners
                              Tuesday April 26, 2011 – 2:00 p.m.
                                        Board Room – 2nd Floor

ROLL CALL

           1st Vice President Calloway, 2nd Vice-President Gonzales, Commissioner Gordon,
           Commissioner Katzoff, Commissioner Lighty, Commissioner Uno and
           President Head.

1. CLOSED SESSION (2:00 p.m.)

   1.1     CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION. Pursuant to
           subdivision (a) of Section 54956.9.

           Sherri “Jean” Parks v. Port of Oakland; Alameda County Superior Court No.:
           RG 07361568

   1.2     CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION. Significant
           exposure to litigation pursuant to subdivision (b) of Section 54956.9: 6 matter(s)

   1.3     CONFERENCE WITH REAL PROPERTY NEGOTIATOR - As provided under California
           Government Code Section 54956.8:

                         Property: Various Parcels in Jack London Square
               Negotiating Parties: Port of Oakland, Jack London Square Ventures LLC,
                                    CEP-JLS II LLC
               Agency Negotiator: Director of Commercial Real Estate
                Under Negotiation: Price and Terms of Payment




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                                                                                            AGENDA




  1.4   CONFERENCE WITH LABOR NEGOTIATORS - Pursuant to Subdivision (f) of Section
        54957.6.

         Agency Designated Representative: Marsha Peterson
                  Employee Organizations: International Brotherhood of Electrical Workers
                                           (IBEW Local 1245), International Federation of
                                           Professional and Technical Engineers (IFPTE
                                           Local 21), Service Employees International
                                           Union (SEIU Local 1021), and Western Council
                                           of Engineers (WCE)

  1.5   PUBLIC EMPLOYEE PERFORMANCE EVALUATION

        Title: Executive Director, Port Attorney, Port Auditor, Board Secretary

ROLL CALL/OPEN SESSION (approximately 4:00 p.m.)

        1st Vice President Calloway, 2nd Vice-President Gonzales, Commissioner Gordon,
        Commissioner Katzoff, Commissioner Lighty, Commissioner Uno and
        President Head.

CLOSED SESSION REPORT

        The Port Attorney or Board Secretary will report on any final actions taken in Closed
        Session.

2. MAJOR PROJECTS

        This segment of the meeting is reserved for action and discussions regarding the status
        of Major Projects and issues of special importance.

  2.1   Utilities Presentation (Engineering)

  2.2   Authorization to Execute Agreements with the Northern California Power Agency for the
        Purchase of Renewable Electricity from the New Western GeoPower, Inc., Geothermal
        Power Plant at the Geysers in Sonoma County (Engineering)

  2.3   Authorization to Execute a Utilities Program Management Agreement between the Port of
        Oakland (Port) and the City of Oakland Redevelopment Agency (Agency) for Continued
        Operation, Maintenance and Repair of the Existing Integrated Utility Systems at the
        Former Oakland Army Base, for an Estimated Annual Cost of $200,000
        (Maritime/Engineering)

  2.4   Budget approval and other associated authorizations for Utility Improvements at the
        Airport (Aviation/Engineering)

  2.5   Waiver of Standard Bidding and Authorization for the Executive Director to Renew an
        Oracle ERP Software Licensing Agreement

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                                                                                              AGENDA




  2.6   Rejection of bids and authorization to negotiate and execute a contract for the
        Replacement of Pump House No. 4 (Engineering)

3. BUDGET & FINANCE

        This segment of the meeting is reserved for action or discussion regarding the status of
        Budget and Finance issues.

  3.1   Unaudited Financial Results for 8 Months Ended February 28, 2011

  3.2   Unaudited Capital Expenditures for 7 Months Ended January 1, 2011

  3.3   Authority to Renew Port of Oakland Insurance Policies in an Amount Not to Exceed $xxx

4. STRATEGY & POLICY

        This segment of the meeting is reserved for action or discussion on Strategy and Policy
        Issues.

  4.1   Adoption of a Land Use and Development Code for the Airport Business Park to Update
        and Replace Existing Standards and Restrictions (Engineering)

  4.2   Revisions to Port Policy on responsibilities of the Executive Director, Port Attorney, Port
        Auditor and Secretary of the Board in Personnel Administration. (Labor)

5. CONSENT ITEMS

        Action by the Board under “Consent Items” means that all matters listed below have
        been summarized and will be adopted by one motion and appropriate vote. Consent
        Items may be removed for further discussion by the Board at the request of any member
        of the Board.

  5.1   Approval of the Minutes of the Regular Meeting of April 12, 2011 (Board Secretary)

  5.2   Ratification of the Extension of the Contract Award Period for Procurement of Aircraft
        Rescue and Fire Fighting (ARFF) Vehicle Replacement (Engineering)

6. REMAINING ACTION ITEMS

        Remaining Action Items are items not previously addressed in this Agenda that may
        require staff presentation and/or discussion and information prior to action by the Board.

  6.1   Space/Use Permit with the Alameda County Building and Construction Trades Council,
        AFL-CIO, for Access to Oakland International Airport (Aviation)

  6.2   Authorization to enter into a contract with Northern California Public Radio for upcoming
        radio campaign on KQED FM and ad banner placement on KQED television and
        website. (Aviation)

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                                                                                           AGENDA




  6.3   Authorization to enter into contract with Titan Media for advertisement placements at Bay
        Area Rapid Transit (BART) (Aviation)

  6.4   Authorization to Renew the Contract for Performing Emergency Spill Response and
        Handling Hazardous and Contaminated Materials and Delegate Authority to the
        Executive Director to Approve Future Contract Renewal" For the Executive Director's
        review. (Environmental)

  6.5   Adoption of (1) the Port of Oakland Disadvantaged Business Enterprise (DBE) Program
        Plan for the Maritime Administration (MARAD), Department of Transportation (DOT); and
        (2) Federal Fiscal Year 2010-11 (FFY 10-11) Overall Annual Goal and Methodology
        Report to MARAD (SRD)

7. UPDATES/ANNOUNCEMENTS

        The President and/ or Executive Director will report on noteworthy events occurring since
        the last Board Meeting.

8. SCHEDULING

        This segment of the meeting is reserved for scheduling items for future Agendas and/or
        scheduling Special Meetings.

OPEN FORUM

        The Board will receive public comment on non-agenda items during this time. Please fill
        out a speaker card and present it to the Secretary of the Board.

ADJOURNMENT

        The next Regular Meeting of the Board will be held on May 10, 2011 at 2:00 p.m. in the
        Board Room.




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                                        PUBLIC PARTICIPATION

Disability Related Modifications
Any person who requires a disability-related modification or accommodation, including auxiliary aids or
services, in order to participate in the meeting, may submit a written request, electronic request, or telephone
request [via the California Relay Service (telephone) for the hearing impaired at (800) 735-2922], to the
Secretary of the Board no later than five working days prior to the scheduled meeting date.
                                    John Betterton, Secretary of the Board
                                    530 Water Street, Oakland, CA 94607
                                        jbetterton@portoakland.com
                                                (510) 627-1696
Language & Interpretive Services
As a grantee of federal aid grant funds from the US Department of Transportation, the Port is responsible for
ensuring equal access to its programs, services, and benefits. To request bilingual interpreters or materials in
alternate formats, please contact the Director of Social Responsibility no later than five working days prior to
the scheduled meeting date.
                             Diann Castleberry, Director of Social Responsibility
                                   530 Water Street, Oakland, CA 94607
                                      dcastleberry@portoakland.com
                                                (510) 627-1302
Scented Products
Please refrain from wearing scented products to this meeting so attendees who experience chemical sensitivities
may attend.
To Speak on an Agenda Item
You may speak on any item appearing on the Agenda. Please fill out a Speaker’s Card and give it to the Board
Secretary before the start of the meeting or immediately after conclusion of Closed Session. Cards received
after the start of the meeting will be treated as a single request to speak in Open Forum. All speakers will be
allotted a minimum of one minute.
Agenda & Related Materials
Should you have questions or concerns regarding this Agenda, or wish to review any of the Agenda Related
Materials, please contact the Board Secretary, John Betterton, at (510) 627-1696, or visit our web page at
www.portofoakland.com
To receive Port Agendas and Agenda Related Materials by email, please email your request to
jbetterton@portoakland.com




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                                        MAJOR PROJECTS Tab 2



                   MAJOR PROJECTS
This segment of the meeting is reserved for action and
discussions regarding the status of Major Projects and
issues of special importance.




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                                MAJOR PROJECTS Tab 2.1




Utilities Services and Business
      at the Port of Oakland


         Date: April 26, 2011




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                                               MAJOR PROJECTS Tab 2.1




                     Purpose


            To provide an overview of the
utility services and utility business operations at the
                   Port of Oakland




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                                                            MAJOR PROJECTS Tab 2.1




              Strategic Plan Alignment
Guiding Principle:
         Sustainable Economic and Business Development


Prioritized Goals:
         Maintain and aggressively grow core businesses
         Sustain healthy communities through leading edge environmental
         stewardship
         Improve the Port’s financial position
         Improve the processes for evaluating and managing capital
         expenditures and for long term management of Port property and
         infrastructure
         Create sustainable economic growth for the Port and beyond




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         Agenda

Infrastructure background
Functions
Service Comparison
Economic Benefits
Renewable Energy




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                         Port Owned Utilities


                                 Port Owned "House"      Port Owned Utilities in
     Utility Service Type            Pipes/Wires          Public Right-of-Way
                                 [Approximate Mileage]    [Approximate Mileage]
Sanitary Sewer                            37                        6
Water                                     30                       10
Electrical                               100 *                    40 *
Gas                                       5*                      <1*
Communication Conduits                   10 *                      5*

                         TOTAL           182*                      62*
* Guesstimated Mileage




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       Major Functions of the Utilities Department
                                    (Total 8 FTE)

        Landlord Function                           Utility Business Function
        (5.5 equivalent FTE)                               (2.5 equivalent FTE)
Provide utility services to the Port and its        Manage electricity business at
tenants                                             Former Fleet Industry Supply
Support tenant and Capital Improvement              Center (FISCO), Former Oakland
Projects                                            Army Base (OAB) and Oakland
Sub-metering Service                                Airport
Coordination with utility companies –
EBMUD, PG&E & AT&T
Develop and implement utility service
ordinances, standards and specifications
Ensure regulatory compliance for the
various utility systems
Asset Management
Develop and update utility master plan




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        Utility Services Comparison
               ( between Local Utilities vs. Port Utilities)

                            Local Utility
Type of Services            Companies                    Port Utilities
   Submetering               Not available                        Yes


Consultant Service           Not available                        Yes

                         Dictated by Utilities'
 Project Schedules                                         Port's control
                              schedules

   Service Fees             Non-negotiable                     Negotiable

      Master
 Planning/Capacity           Not available                 Port's control
     Allocation
  Service Outage         Dictated by Utilities'
                                                           Port's control
    Responses                 schedules




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              Economic Benefits
(purchasing electricity from the wholesale market FY09-10)




   $900K saving on Port-Use electricity cost

   $1.3M net benefit on electricity sales




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    Renewable Energy Goals


Port’s Goal adopted in 2004: 20% by 2017

State Regulation: 20% by 2013, 33% by 2020




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   Port Renewable Energy Portfolio Strategy Plan
                     (Draft)
                                                  2009             2011**           2014**            2020**

 Existing/Potential Power                         MW                MW               MW                MW
   Generation Contract           Vendor       Participation     Participation    Participation     Participation
Solar                          SunEdison               0.75             0.75              0.75              0.75
                              Western Geo
Geothermal*                      Power                                                    1.00                1.00
Solar*                         Recurrent                                                  1.00                1.00
Other Renewable Energy
Opportunities                                                                         TBD                  TBD

Renewable Portfolio %
w/o Large Hydro                                       3.26%             3.44% 14.93%***          13.19%***

Renewable Portfolio %
with Large Hydro                                     35.07%            36.71%           42.22%              39.29%

Annual Load Basis
(in MWH)                                             73,048            66,000          88,000              101,200

* Proposed Projects: Staff proposes to submit to Board for approval
** Based on Forecasted Load Data and CY 2008 Power Mix for Non-Specific Power
*** Staff will be evaluating other renewable engergy project participation opportunities; any gap in
    meeting the required goal will be met by purchasing Renewable Energy Credits (REC) in the REC market




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Questions ?




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                                                                            BOARD MTG. DATE: 4/26/11



                                          AGENDA REPORT
TITLE:                  Authorization to Execute Agreements with the Northern California Power
                        Agency for the Purchase of Renewable Electricity from the New Western
                        GeoPower, Inc., Geothermal Power Plant at the Geysers in Sonoma
                        County

AMOUNT:                 Annual Not to Exceed Amount of $1,695,000 Starting in FY 2014

PARTIES INVOLVED:

                        Corporate Name/Principal                                    Location
                        Northern California Power Agency                            Roseville, CA
                          Jim Pope, General Manager
                        Western GeoPower, Inc.                                      Richmond, CA
                          Kenneth MacLeod, President

TYPE OF ACTION:                         Resolution

SUBMITTED BY:                           Chris Chan, Acting Director of Engineering

APPROVED BY:                            Omar Benjamin, Executive Director

Summary

Staff is recommending the Port of Board Commissioners (Board) approve the Port of
Oakland’s (Port) participation in the Northern California Power Agency’s (NCPA) 1 Western
Geo project by delegating authority the Executive Director to execute various relevant
agreements with NCPA. This is a multi-participant, geothermal based renewable energy
project that is estimated to produce enough electricity to meet 10% of the Port’s load and 30%
of the Port’s renewable energy needs to meet the state mandated Renewable Portfolio
Standard (RPS) program.

         See Exhibit A for list of acronyms and terms used throughout this agenda report.

FACTUAL BACKGROUND

The Port of Oakland (Port), as a municipal utility, serves the Oakland International Airport
(Airport), a portion of the former United States Naval Fleet Industrial Supply Center- Oakland
(FISCO) 2 , and the former Oakland Army Base (OAB) with electricity from the wholesale
market. Other portions of the Maritime area and Commercial Real Estate area are served by

1
  Northern California Power Agency (NCPA) is a joint powers authority established in 1968 consisting of municipalities,
rural electric cooperative, irrigation districts and other publicly owned entities interested in the purchase, aggregation,
scheduling and management of electrical energy.
2
  The Fleet Industrial Supply Center – Oakland (FISCO) area is the area contained by Berths 55-56, Berths 57-59, Burlington
Northern Santa Fe rail yard, and the Port’s Harbor Facilities building. See map on Exhibit C.
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                                                                            BOARD MTG. DATE: 4/26/11


Pacific Gas and Electric Company (PG&E). This agenda report is only related to the 3 areas
served by the Port of Oakland utility. The 3 areas combined currently uses approximately
67,000 Megawatt-Hours (MWh) 3 of electricity annually. With the implementation of shore
power at Berths 55-59 in 2014, the 3 areas combined will use approximately 88,000 MWh.

Portfolio Management

The Port currently purchases approximately 26% of the Port’s electric needs through long term
contracts 4 and 74% of its electricity needs from the open market through energy marketers
such as Shell 5 and Powerex 6 . The pie chart below shows the amount of electricity the Port
purchases from various sources.

                                          Port's Electric Supply Portfolio
                                                 2%
                                                           24%

                                                                       Solar
                                                                       Hydroelectric
                                                                       Market Purchases

                                    74%




The most common practice for utilities to control costs is to build a balanced portfolio
containing a mixture of short term contracts (less than 10 years in length), long term contracts
(greater than 10 years) and electricity generating resources 7 . Building a portfolio with short
term forward contracts prevents utilities from being locked into high prices over a long period
when market prices are lower. At the same time, short term contracts do not protect utilities
from price volatility for an unknown duration during the period when the market price are higher
than predicted such as a market crisis as experienced in 2001, 2005, and 2008. Building a
portfolio consisting of long-term contracts put the utilities at risk for over paying for electricity
over a long period of time. However, doing so give utilities price certainty that is not

3
  Megawatt-hour (MWh) – is a unit of energy equal to the power of 1 MW operating for one hour continuously. This is
equivalent of leaving on 10,000 – 100 watt light bulbs on for 1 hour.
4
  Port has 2 long term contracts:
               1. 20-year contract for Solar Photovoltaic (PV) energy from SunEdison LLC. This project is located along the
                   North Field Runway at the Oakland International Airport
               2. 20-year contract for hydroelectric generation from the Western Area Power Administration, an agency of
                   the Department of Energy
5
  Shell Energy North America is a subsidiary of Shell and is the primary marketer for Shell’s natural gas production in North
America.
6
  Powerex is a trading partner and supply of wholesale power, natural gas. They are wholly owned subsidiary of BC Hydro,
Canada’s third largest electricity utility back by the security of BC Hydro's integrated hydroelectric system and financial
strength of BC Hydro.
7
  Electricity Generating Resource refers to any type of electricity generation facility or project.
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achievable with short term contract. The chart below shows how other utilities large and small
balance their portfolios and how the Port compares currently.

                                                              Long Term Contracts vs Short Term Contracts

                                      100%

                                                      26%                     25%                       25%
             Percentage of Porfolio




                                      75%
                                                                                                                               71%

                                      50%

                                                      74%                     75%                       75%
                                      25%
                                                                                                                               29%

                                       0%
                                                Small-Sized Utilities Medium-Sized Utilities             All                   Port
                                             (Total Loads < 250 GWH) (Total Load > 400 GWH)
                                                                                 Average Size of Utilities
                                                        Long Term Contracts (10 years +)   Short Term Contracts (< 10 Years)



Port staff currently purchases electricity from the open market for time periods up to 2 years in
advance to lock in prices which may go up or down at the time the electricity is used. The risk
associated with purchasing a significant amount of energy in the open market is the risk of
price volatility. Although the Port can recover the cost of the price volatility through its electric
rates, it subjects the Port and its tenants to volatile rates which can create budgetary problems
for the Port and its tenants. In this agenda report, staff is proposing to participate in the
Western Geo project, a renewable energy generation facility project to reduce the amount of
electricity purchased from the open market and thereby reducing the risk to price volatility and
stabilizing the Port’s electric rates.

Regulatory Requirements

The Port, as a municipal utility company must meet certain regulatory requirements such as
Local Resource Adequacy (LRA) capacity requirements and the Renewable Portfolio Standard
(RPS).

       Local Resource Adequacy (LRA) Requirement - The Local Resource Adequacy (LRA)
       requirement is mandated by the state grid operator, the California Independent Systems
       Operator (CAISO). They require Utility companies to retain generating rights either by
       participating in an electricity generation facility projects within a defined local area or
       purchase generation rights from generation facilities within a defined local area. This is
       to ensure that there is enough local electricity generation to keep the lights on in the
       event that large transmission lines fail. The Port currently does not participate in any
       generation facility project and such rights are not included with electricity purchased
       from marketers by default. Currently, the Port meets this requirement by purchasing
       generating capacity rights from Silicon Valley Power. The Port pays approximately
       $135,000 annually to satisfy the requirement.

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Renewable Portfolio Standard (RPS) - In July of 2004, by Resolution No. 04195, the
Board adopted a calendar year RPS to procure 20% of its electricity from renewable
energy resources and a good faith objective of achieving 40% by 2017. On March 29,
2011, the State Legislature voted in favor of Senate Bill X1-2 (SBX1-2) which raises the
RPS requirement to 33% by 2020 for all utilities including the Port. Governor Jerry
Brown signed SBX1-2 into law on April 12, 2011. Among other things, the new law will:
   •   Impose a new state-mandated RPS program whereby all utilities including the
       Port must meet certain targets by a certain year;
          o 20% RPS requirement by 2013
          o 25% RPS requirement by 2016
          o 33% RPS requirement by 2020
   •   Repeal the provision giving the Board the responsibility for implementing and
       enforcing a RPS.     Instead, the Board will only be responsible for the
       implementation RPS program;
   •   Give enforcement authority for publicly owned utilities including the Port to the
       California Energy Commission and State Air Resources Board;
   •   Require the California Energy Commission, by June 30, 2011, to study and
       provide a report to the legislature that analyzes hydroelectric generating facilities
       and whether they should be included as renewable electrical generating facilities.
Currently, the generally accepted renewable resources (Eligible Renewable) of
electricity are solar, wind, geothermal, biomass and small hydroelectric. Large
hydroelectric generators are not recognized by investor owned utilities as being
renewable because of the environmental impact cause by the restriction of water flow
through the river ecosystem, however, the option for local municipal utilities to count
large hydroelectric generation was left to their respective governing body, however, it
may soon change given the recent legislative action.

The Port’s current practice for meeting the RPS has been highly dependent on large
hydroelectric generation. As the chart indicates below, the Port’s only eligible renewable
resources come from a small portion of small hydroelectric power generation that NCPA
uses to meet the Port’s load requirement and the Port’s existing solar photovoltaic
installation along the North Field runway. If large hydroelectric generation is no longer
counted, the Port will be out of RPS compliance and will be subject to penalties by the
California Energy Commission or the California Air Resources Board, which is to be
determined.




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                                                    Port Renewable Portfolio

                                                                                Eligible
                                                                               Renewable
                                                                                  3%


                                                                                          Large
                                                                                       Hydroelectric
                                                                                           34%



                                   Non
                                Renewable
                                  63%




        Greenhouse Gas (GHG) Emissions - Managing the carbon footprint is equally as
        important with the proposed implementation of California Air Resources Board’s (CARB)
        Cap and Trade program. By utilizing renewable sources of generation, the Port would
        reduce the emissions content in the Port’s electricity portfolio.

This proposed project will help the Port meet a portion of the Local Resource Adequacy
requirement, a portion of the state mandated RPS and reduces the Port’s current emission
level and potential exposure to the state’s cap and trade program once implemented.

Original Western Geo Project Agreement

In 2008, the Northern California Power Agency (NCPA) presented the Port with a project
opportunity to purchase geothermal based renewable electricity at the Geysers in Sonoma
County, California along with other members of NCPA. See Exhibit 2 for a map of the
proposed project location. NCPA would execute a Power Purchase Agreement (PPA) with
Western GeoPower, Inc (WGP), the developer, to purchase the project output and NCPA
would sign a Third Phase Agreement with all the interested participants to transfer the project
output to the participants. At the time, the project was expected to have a generation capacity
of 33 Megawatts (MW 8 ) and the price was $98 per Megawatt-hour. There were 13 participants
including the Port who was interested in the project. Due to the strong interest in the project by
the participants, the Port was only allocated approximately 1% of the project. On March 4
2008 by Resolution No. 08052, the Board of Port Commissioners approved the Port’s 1%


8
  Megawatt (MW) – is a unit of measure for electrical power equal to 1,000,000 watts. This is equivalent of 10,000 -100 watt
light bulbs.
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                                                          BOARD MTG. DATE: 4/26/11


participation share in the project and authorized the Executive Director to execute the Third
Phase Agreement with NCPA.

A couple months after the Third Phase Agreement was signed by all the participants, the
developer notified NCPA that the results of further steam field studies indicated there is
insufficient amount of steam to continuously produce the expected project output and that
scaling back the project output required the price to increase in order to meet debt service
coverage ratios. NCPA (along with the participants) and WGP continued negotiations over the
last two years and have finally reached a new agreement.

Staff recommends that the Board approve the Port’s participation in the revised Western Geo
project as described below by terminating the existing Third Phase Agreement, entering into
the new Third Phase Agreement and the associated Facilities Agreement, both of which are
also discussed below.

ANALYSIS

Termination Agreement

Based on the changes in the original Western Geo project terms, a new agreement must be
executed if the Port desires to remain a participant. Because an existing agreement is already
in place, a termination agreement must be executed in order for the new agreement to take
effect. Thus, staff is requesting authority for the Executive Director to execute the Agreement
Terminating the Third Phase Agreement for Western GeoPower, Incorporated Renewable
Energy Power Purchase Agreement. This action must be taken regardless of whether the Port
participates in the proposed project.

Current Western Geo Project

The current Western Geo project is expected to have a generation capacity of 26 Megawatt
(MW) decreased from 33 MW. The price of the project has increased to $113 per Megawatt-
hour (MWh) from $98 per MWh. The total annual cost of Port’s share of the output is
approximately $978,015. There may be times especially during the first several years when
the production output may be higher than estimated. The Port has capped the annual cost to
$1,695,000 or approximately 15,000 MWh. The cap is based on the Port’s load requirement
and strategy to utilize various renewable technologies. The plant is expected to become
operational in the 4th quarter of 2013, however, since this is a PPA, the Port would only have
to pay when the project produces electricity. The table below highlights the significant
changes between the old project terms and the new project terms. Staff has evaluated the
new proposal and believes the project is still desirable and therefore is recommending that the
Board authorize the Executive Director to execute a new Third Phase Agreement with NCPA
to participate in the project.




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                                                                                 BOARD MTG. DATE: 4/26/11



              Contract Terms                                Original                                Proposed
                                                       Western Geo Project                      Western Geo Project

Plant Size                                                     33 MW                                    26 MW
Project Cost per MWh                                             $98                                     $113
Length of Contract                                            20 Years                                 25 Years
Number of Participants                                            13                                       5
Port’s % Share                                                  .78%                                     3.8%
Estimate Total MWh                                           2,255 MWh                                8,655 MWh
(% of Port Load 9 )                                      (2.5% of Port Load)                      (9.8% of Port Load)
Total Annual Costs for the Port                               $220,990                                 $978,015

Since the price increased, 8 participants of the original 13 participants requested to withdraw
from the project. This created an opportunity for the Port to receive a larger share of the
output. The remaining 5 municipal utilities that will share the project output are shown in the
following table:

                              Participant                          Participation Percentages
                              Santa Clara                                     50.5 %
                              Roseville                                       26.9 %
                              Palo Alto                                       15.0 %
                              Lompoc                                           3.8 %
                              Port of Oakland                                  3.8 %
                              Total                                         100.0 %

Benefits

The output from this project provides the following benefits:

           Renewable Energy Benefits

           By participating in the proposed Western Geo project, 10% of the Port’s electric needs
           will be met by renewable energy. This project will help the Port meet approximately 1/3
           of the new state mandated 33% RPS program signed into law by Governor Jerry Brown.
           Renewable energy is not readily tradable in the wholesale market because of its limited
           supply. Over the past couple of years, staff has evaluated several project opportunities
           with most either being overpriced, too large for the Port to consume on its own,
           developer is unable to finance or complete the project, or the projects are too risky due
           to the lack of maturity of the technology being used. If the Port opted not to participate
           in this project or in any project in the near future, the Port’s options for satisfying the
           RPS goal could be severely limited. Most projects takes years to study, design, and
           build and if the Port waited towards the end of the compliance period to comply, the Port
           most likely would not meet the regulations and would be subject to fines. This project
           reduces the Port’s exposure to fines and penalties that will be implemented if the RPS is

9
    Port Load is the anticipated load of all 3 areas in calendar year 2014 including the shore power at Berths 55-59.
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           not met. Currently, the penalty for California Public Utility Commission (CPUC)
           regulated utilities is $50 per MWh.

           Environmental Benefits

           In addition to meeting RPS, this project will help the Port reduce its overall GHG
           emissions and the GHG emissions within the Port’s electricity portfolio because the Port
           will be less reliant on fossil fuel 10 generated electricity. This will also reduce the Port’s
           exposure to the California Air Resources Board’s (CARB) proposed cap and trade
           program, which was passed in December 2010, but has been suspended due to legal
           challenges.

           Economic Benefits

           Participating in this project will help the Port stabilize 10% of the rates the Port charges
           the tenants because the fixed prices reduces the price volatility in the open market. If
           the Port decides not to participate in this project, there are 2 alternatives outlined in the
           table below to meet the RPS goal:




10
     Examples of fossil fuels include oil (petroleum), natural gas, coal.
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                    Proposed Western Geo                 Alternative Option 1               Alternative Option 2

                   • Rights to the electricity        • Purchase Bundled                 • Maintain Status Quo
 Options             generated and all                  RECs 11                          • Do Not Meet RPS
Summary              environmental                    • Equivalent of                    • Fined at $50/MWh
                     attributes including               participating in
                     Renewable Energy                   proposed project but
                     Credits.                           with a much shorter
                   • 25 year Contract with              term
                     fixed pricing at
                     $113/MWh

Estimated               $978,015 Annually                  $940,196 Annually                $1,027,196 Annually
  Cost                       (Fixed)                      (Subject to volatility)           (Subject to Volatility)
      Pros         • Significant progress             • This is almost                   • None
                     towards meeting RPS                equivalent of
                     goals.                             participating in the
                   • Purchasing electricity             proposed project
                     within state and                 • Meets RPS goals.
                     reliance on interstate
                     transmission
                   • Reduce Greenhouse
                     Gas Emissions
                   • Reduce price volatility
      Cons         • Higher electricity cost  • Energy portion of price                  • Negative outlook on the
                     than market cost during    is based on market                         Port for non-
                     the first 13 years based   costs and sold on a                        compliance with RPS.
                     on the current forecast    limited basis and is                     • Costs more than
                   • Other risks associated     subject to volatility                      compliance with RPS
                     with long term contracts • A $10 increase in price
                     discussed below.           per units results in an
                                                annual difference of
                                                $87,000.

           Alternative Option 1 generally has 2 pricing components. The first component is the
           energy price which is generally tied to market indices and the second component is the
           price of renewable energy credits. Choosing Alternative Option 1 puts the Port at risk
           for price volatility because of its relationship to the market indices. As noted in the table
           above, a $10 change in price would automatically increase the cost beyond the contract
           price of the proposed Western Geo project.

           Alternative Option 2 is not desirable because it goes against one the Port’s Strategic
           Management goal of sustaining healthy communities through leading edge

11
     Bundled Renewable Energy Credit (Bundled REC) – is a form of REC which includes the energy generated itself.
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        environmental stewardship. It also casts a negative light on the Port for not meeting the
        state mandated RPS program.

        The economic benefit of participating in this project is the ability to have a more
        balanced electricity portfolio which will give the Port and its tenants more cost certainty
        as a result of price stabilization. It will also partially reduce the Port’s exposure to price
        volatility in the open market and provide partial immunization from market price rallies.

Risks

There are four forms of risk associated with the Port’s engagement in this project:

        Plant Risk

        This project only contemplates the purchase of electricity generated by this project and
        not the ownership of the project. Therefore, the participants do not carry any of the
        ownership risk such as fire, explosion, or plant failure. If the project fails to produce
        electricity, the Port would simply stop payment. If the vendor, Western Geo Powers and
        its parent company Ram Power Incorporated goes out of business, the Participants
        through NCPA have the first right of refusal to step in to operate the plant.

        Participant Risk

        This project includes multiple participants and therefore has inherent risk associated
        with one or more participants defaulting. While no participant will be generally liable for
        the obligations of another participant, it is agreed that if there is a default by NCPA
        under the power purchase agreement, the participants will be liable for their
        proportionate share of the default until NCPA is able to fully recover from the default.
        For example, if one of the participants were to default on the Third Phase Agreement,
        NCPA would first attempt to sell the defaulting participant’s share of the generation. If
        NCPA sells the generation including attributes for market price that is above the
        contract price, no other participants would be affected by the defaulting participant.
        However, if the market price for the generation was below the contract price, the
        defaulting party would be responsible for the cost. However, if the defaulting participant
        could not repay NCPA, and NCPA has to default on the power purchase agreement,
        then the remaining participants would be required, based on their proportionate share of
        the project and cover any payment obligations until NCPA can recover from the
        defaulting participant.

        Staff looked at several scenarios to evaluate the financial impact of participant risk.
        One such scenario is if the largest participant were the defaulting participant. In this
        scenario:
                     •   If NCPA sells the generation into the market for more than contract price,
                         there would not be any additional obligation to the Port. (Best Case)
                     •   If NCPA sells the generation for less than the contract price, the Port
                         would have to cover its proportionate share of the difference between the
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                                      market price and the contract price until NCPA can fully recover the
                                      difference from the defaulting participant.
                              •       If NCPA could not sell the generation into the market because there was
                                      no demand for electricity, the Port’s obligation and liability would increase
                                      by $1,000,000, however, it is extremely unlikely that the demand for
                                      electricity would not exist. (Worst Case)
        Ultimately, the Port could be liable for 100% of the plant output and cost if all the project
        participants except the Port were to default, however, staff believes this scenario is
        highly unlikely.

        Financial Risk

        The financial risk associated with long term contracts such as Western Geo is
        overvaluing the costs and benefits. The chart below shows the forecasted market price
        of electricity for the period of 25 years beginning with year 2014 when the Port expects
        to begin receiving the generation.

                                                                                       Market Price vs Western Geo

                              140

                              120

                              100
                  $ per MWh




                              80

                              60

                              40

                              20

                                  0
                                      2014
                                             2015
                                                    2016
                                                           2017
                                                                  2018
                                                                         2019
                                                                                2020
                                                                                        2021
                                                                                               2022
                                                                                                      2023
                                                                                                             2024
                                                                                                                    2025
                                                                                                                            2026
                                                                                                                                   2027
                                                                                                                                           2028
                                                                                                                                                  2029
                                                                                                                                                         2030
                                                                                                                                                                2031
                                                                                                                                                                       2032
                                                                                                                                                                              2033
                                                                                                                                                                                     2034
                                                                                                                                                                                            2035
                                                                                                                                                                                                   2036
                                                                                                                                                                                                          2037
                                                                                                                                                                                                                 2038


                                                                                                                           Year

                                                                                          Market Price + RECs                             Western Geo Price

        Comparison of Annual Cost of Electricity Between Market (including RECs) and Western Geo 12

        The market price (red line) reflects the price of purchasing electricity that is bundled with
        renewable energy credit (Alternative Option 1). The Western Geo price reflects the flat
        cost that the Port will pay for renewable energy starting at the end of 2013. While in the
        near term, the alternative of purchasing electricity that is bundled with renewable energy
        credit (red line) seems like a lower cost solution, about mid way through the 25 year
        period, the Western Geo electricity price becomes more attractive.


12
  The market price is calculated as the annualized weighted average of the Platts M2M(month to month) 240-Month Natural
Gas Forward Curves dated February 28, 2011 plus the assumed average cost of the renewable energy credit component of
$40 per MWh.
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        With respect to this project, the fixed price of this project is competitive with other
        geothermal projects that are currently being built as seen in the table below.
        Furthermore, the price of this geothermal project is competitive with other types of
        renewable energy.

                    Renewable Energy Type                        Average $ per MWh 13
                            Solar                                    $110.70
                         Geothermal                                  $108.79
                          Biomass                                    $119.00
                            Wind                                     $115.20

        Given the recent attention to climate change and use of renewable energy, staff
        believes that demand for renewable energy will only increase and because of the limited
        amounts of renewable energy available, the price for renewable energy is only going up
        even with newer technology being tested and developed.

        Technology Risks

        As new renewable generation technology emerges, the technology typically takes
        decades before it is ready for commercialization for widespread use at an affordable
        price. Geothermal technology is not new and has been used over the last several
        decades. NCPA owns another geothermal project nearby. The electricity generated is
        predictable and continuous as opposed to solar photovoltaic or wind power technology
        which is highly intermittent and unpredictable. The only other type of renewable
        electricity that provides continuous generation is biomass/biogas. Port staff will
        continue to evaluate new technologies in order to meet the rest of the RPS requirement.

Facilities Agreement

One of the provisions within the Third Phase Agreement is the requirement to execute a
Facilities Agreement and participation on the Facilities Committee within NCPA. The Facilities
Committee is made up of individuals from each member utility who is a party to the Facilities
Agreement. The Facilities Committee reviews, makes recommendations, or take other actions
concerning project studies and other activities, or actions conducted by or proposed by NCPA.
Examples of such responsibilities include but are not limited to:

    •   Review and make recommendations concerning project studies conducted by NCPA
        staff or consultants;
    •   Review and make recommendations concerning proposed acquisition of property,
        easements, and water right by the NCPA staff;
    •   Review and make recommendations concerning proposed NCPA actions relative to
        obtaining Federal, State, and local permits, licenses, opinions and rulings;


13
   Most of these projects have lower starting cost between $95 per MWh and $108 per MWh but have annual cost escalators
over the life of the project between 1-2%.
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   •   Review and make recommendations regarding the operation and maintenance of NCPA
       projects, including maintenance schedules and operation plans;
   •   Review and make recommendations regarding annual budgets, and modifications
       proposed by the General Manager;
   •   Review and recommend fixed and variable costs for each NCPA project.

The participation into NCPA’s Facilities Agreement does not financially impact the Port directly
because there is no fee to join the Facilities Committee. There are costs associated with
participating in a project that are similar to the Port current practice of procuring power from the
open market. Staff anticipates that the NCPA costs the Port incurs as a result of participating
in this project will be offset by the savings of scheduling and coordination cost the Port would
have incurred if the Port purchased power from the open market instead of this project. These
cost are budgeted by NCPA on an annual basis and is included as part of the Port’s Utility
budgeting process.

Therefore, in consideration of all the information presented above, staff recommends the
Board authorize the Executive Director to execute the Third Phase Agreement, the Facilities
Agreement and the Termination Agreement with NCPA in order to participate in the Western
Geo Project.

STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan is a
cornerstone of the overall alignment of the Port. It provides the framework for focusing the
work of staff and the Board of Port Commissioners, and serves to guide an organization-wide
redesign to better match the skills and talents of Port employees with the overall strategic
goals of the organization in the key areas of Sustainable Business and Economic
Development, Stewardship and Accountability, Port Workforce and Operations, and
Communications and Information.

This project would help the Port achieve the following goal and objective:




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 STRATEGIC
                                                                        HOW THIS PROJECT
 PRIORITY          GOAL                  OBJECTIVE
                                                                        IMPLEMENTS + WHEN
 AREAS
                                                                                          th
                                                                        Beginning in the 4 quarter of
                                                                        calendar year 2014:

                                                                        The proposed project creates a
                                                                        partnership between the 5
                                                                        participants and NCPA to develop
                                                                        a renewable energy project which
                                                                        benefits the Port and the
                                                                        environment.
                   Goal G: Sustain
                                         1. Partner to share risk,
 Stewardship and   Healthy Communities                                  The use of geothermal energy to
                                         accountability, benefits and
 Accountability    Through Leading                                      generate electricity will reduce
                                         improve environmental and
                   Edge Environmental                                   greenhouse gas emissions within
                                         safety compliance.
                   Stewardship                                          the Port’s electricity portfolio;
                                                                        reduce the use of fossil fuels for
                                                                        generating electricity; and
                                                                        increase the Port’s use of
                                                                        renewable energy.

                                                                        Furthermore, this project will help
                                                                        the Port meet a significant portion
                                                                        of the new state mandated RPS
                                                                        program.

BUDGET & FINANCIAL IMPACT

This project is expected to generate approximately 8,655 MWh of electricity for the Port at the
total annual cost of $978,015. However, it is possible that the generation could be increase if
there is more steam in the ground or decrease if there insufficient amount of steam. The Port
has limited the amount of electricity it will purchase from this project to 15,000 MWh. The total
cost of 15,000 MWh is $1,695,000.

There is no immediate budget or financial impact on the Port until the Port begins receiving the
energy from the project in the 4th quarter of calendar year 2013. The funds used to pay for the
electricity will be included in the annual budgets under the Cost of Sale and Port Use expense
and will offset the amount of electricity the Port currently purchases on the open market. Staff
will revise electric rates in order to increase revenue to recover the additional cost of
renewable energy. This is a commitment to purchase electricity for 25 years.

STAFFING IMPACT

The matters contained in this Agenda Report will not impact current or future staffing.

SUSTAINABILITY

Power received from this power plant project will be from renewable sources to enable the Port
to achieve the goal of 33% renewable energy. These purchases will promote sustainable
energy production and help reduce greenhouse gas emissions.
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ENVIRONMENTAL

The proposal to authorize the Executive Director to execute a termination agreement with
NCPA and execute a new agreement with NCPA in order to purchase electricity from a new
geothermal power plant at the Geysers in Sonoma County was reviewed in accordance with
the requirements of the California Environmental Quality Act (CEQA) and the Port CEQA
Guidelines. The general rule in Section 15061(b)(3) of the CEQA Guidelines states that CEQA
applies only to activities that have a potential for causing a significant effect on the
environment. It can be seen with certainty that there is no possibility that authorizing the
agreements with NCPA will result in a physical change in the environment, and therefore they
are not a project under CEQA and no further environmental review is required. Furthermore,
the Board's action will increase the Port's use of renewable energy, which will have a beneficial
effect on the environment.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters addressed under this action are not within the scope of the Port of Oakland
Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the MAPLA do
not apply to this action.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

This action will not be insured by the Port's Owner Controlled Insurance Program (OCIP).

GENERAL PLAN

This action does not meet the definition of "project" under the City of Oakland General Plan,
and no conformity determination is required.

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements, do not
apply because the contract is not a covered service contract, but a contract for goods,
commodities, supplies or equipment with incidental service provisions.

OPTIONS

1. Authorize the Executive Director to execute a Termination Agreement with NCPA to
   terminate the existing Third Phase Agreement and execute a new Third Phase Agreement
   and Facilities Agreement with NCPA in order to purchase electricity from a new geothermal
   power plant at the Geysers in Sonoma County, in order to provide renewable energy to the
   Port, promote sustainability goals of the Port, help reach the 33% renewable energy goal,
   and better control the Port’s future energy costs. This is the recommended option.



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2. Do Not Participate: Authorize the Executive Director to execute the termination agreement
   to withdraw the Port’s participation from the Western Geo project. The Port would continue
   to acquire electricity from the electricity market with risk of power price volatility. The Port
   would also lose the opportunity to support its sustainability goals, impact its ability to reach
   the 33% renewable energy goal, and hinder the ability to reduce its green house gas
   emissions.

RECOMMENDATION

It is recommended that the Board authorize the Executive Director to execute a Termination
Agreement with NCPA to terminate the existing Third Phase Agreement and execute a new
Third Phase Agreement and Facilities Agreement with NCPA in order to purchase electricity
from a new geothermal power plant at the Geysers in Sonoma County, for an annual not to
exceed amount of $1,695,000 starting in 2014.




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                                          Exhibit A

                            List of Commonly Used Acronyms


Agency Acronyms

  •   CAISO – California Independent System Operator – Operator of one the largest
      electrical transmission grid in California. The Port is located within this grid.
  •   CARB – California Air Resources Board – is a part of the California Environmental
      Protection Agency, an organization which reports directly to the Governor’s Office, to
      promote and protect pubic health, welfare and ecological resources through the
      effective and efficient reduction of air pollutants while recognizing and considering the
      effects on the economy of the state.
  •   CEC – California Energy Commission – is the state’s primary energy policy and
      planning agency.
  •   CPUC – California Public Utility Commission – is an organization that regulates
      privately owned electric, natural gas, telecommunications, water, railroad, rail transit,
      and passenger transportation companies. The CPUC regulates Pacific Gas & Electric
  •   NCPA – Northern California Power Agency – is a Joint Action Agency, whose
      members are interested in purchase, aggregation, scheduling and management of
      electrical energy. The Port is a current member.
  •   PG&E – Pacific Gas & Electric – is an investor owned utility regulated by the Public
      Utility Commission that provides electrical and gas utility services
  •   WAPA – Western Area Power Administration – markets and delivers reliable, cost-
      based hydroelectric power and related services from multi-use water projects.

Energy Related Terms

  •   AB32 – Assembly Bill 32 – Also known as The Global Warming Solutions Act of 2006,
      was signed into law by Governor Arnold Schwarzenegger in 2006 to fight climate
      change by establishing a comprehensive program to reduce greenhouse gas emissions
      from all sources throughout the state.
  •   Bundled REC – Bundled Renewable Energy Credit – is a form of REC which
      includes the energy generated itself.
  •   GHG – Greenhouse Gases – are defined in AB 32 to include the following: carbon
      dioxide, methane, nitrous oxide, sulfur hexafluoride, hydro fluorocarbons and per
      fluorocarbons. These six gases are the same as those listed in the Kyoto Protocol.
  •   IOU – Investor Owned Utilities – are privately owned utility companies such as PG&E.
  •   MW – Megawatt – is a unit of measure for electrical power equal to 1,000,000 watts.
      This is equivalent of 10,000 -100 watt light bulbs.

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•   MWh – Megawatt-hour – is a unit of energy equal to the power of 1 MW operating for
    one hour continuously. This is equivalent of leaving on 10,000 – 100 watt light bulbs on
    for 1 hour.
•   POU – Publicly Owned Utilities – are not-for-profit public agencies consisting of
    municipal utility companies to irrigation districts.
•   PPA – Power Purchase Agreement – is a form of contract document generally used
    for the buying and selling of power between 2 or more parties.
•   REC – Renewable Energy Credit – are tradable, non-tangible energy commodities that
    represent proof that 1 megawatt-hour (MWh) of electricity was generated from an
    eligible renewable energy resource. These credits can be sold and traded, and the
    owner of the credit can claim to have purchased renewable energy.
•   RPS – Renewable Portfolio Standard – is a regulation that requires the increased
    production of energy from renewable energy sources. The RPS mechanism generally
    places an obligation on electrical service providers such as the Port to produce or
    purchase a specified fraction of their electricity from renewable energy sources.
•   TREC – Tradable Renewable Energy Credit – is a form of REC which is generally
    unbundled from the energy. The energy is generally sold separately from the REC
    itself.




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           Exhibit B

Map of Western Geo Project Site




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                             Exhibit C

                      Port Utility Service Area




Green Area - Former Oakland Army Base (Both Port and City of Oakland)
     Purple Area – Former Fleet Industrial Supply Center-Oakland
              Orange Area – Oakland International Airport




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           Exhibit B

Map of Western Geo Project Site




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                             Exhibit C

                      Port Utility Service Area




Green Area - Former Oakland Army Base (Both Port and City of Oakland)
     Purple Area – Former Fleet Industrial Supply Center-Oakland
              Orange Area – Oakland International Airport




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                                                            BOARD MTG. DATE:             4/26/11

                                AGENDA REPORT
 TITLE:             Authorization to Execute a Utilities Program Management Agreement
                    between the Port of Oakland (Port) and the City of Oakland
                    Redevelopment Agency (Agency) for Continued Operation,
                    Maintenance and Repair of the Existing Integrated Utility Systems at
                    the Former Oakland Army Base

 AMOUNT:            Estimated Annual Cost of: $200,000

 PARTIES INVOLVED:

                     Corporate Name/Principal                   Location
                     City of Oakland Redevelopment              Oakland, CA
                     Agency Walter Cohen, Director


 TYPE OF ACTION:                        Resolution

 SUBMITTED BY:                          James Kwon, Director of Maritime
                                        Chris Chan, Acting Director of Engineering

 APPROVED BY:                           Omar Benjamin, Executive Director


SUMMARY

The Port of Oakland currently provides electricity, water, sewer and gas utility management
services to the City of Oakland Redevelopment Agency’s (Agency) portion of the Oakland
Army Base (OAB) under three existing utility service agreements. The three existing
utilities service agreements are: Utility Program Management Agreement (UPMA),
Resource Service Management Agreement (RSMA) and Interconnection and Service
Agreement Between the Port of Oakland and the Oakland Base Reuse Authority (IA).
These agreements together allow the Port and the Agency to cooperate and pay for the
continued operation, maintenance and repair of the existing integrated utility system that
(1) provides Utility Services to the parties, tenants and other utility users, and (2) facilitate
the redevelopment of the former OAB area. The purpose of this Agenda Report is to
recommend the Board of Port Commissioners (Board) to authorize the Executive Director
to execute updated version of the three agreements for the continued operation,
maintenance and repair of the existing utility systems at the Former Oakland Army Base
(OAB).

FACTUAL BACKGROUND

Since August 2006, after the Oakland Base Reuse Authority (OBRA) transferred the Port’s
portion of the Oakland Army Base (Port Development Area) to the Port, and the Port
transferred the City of Oakland’s portions (Gateway Development Area) to the Oakland
Redevelopment Agency (Agency), the Port of Oakland was asked to take on the role as the
lead agency for operating and maintaining the existing Utility Systems for the entire former

                                               1



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Oakland Army Base (OAB) including the Gateway Development Area, until the properties
are transferred for third-party development. The Port currently provides electricity, water,
sewer and gas utility management services to the Agency under three existing utility
service agreements. The three existing utilities service agreements are:

   1. Utility Program Management Agreement (UPMA) This agreement provides
      provisions governing the cooperative relationship between the parties and for the
      Port to fully recover its costs in operating and maintaining the Utility Systems. The
      Agreement also provides for the setting of utility rates to be charged by the Port to
      recover cost including but not limited to commodities, Port administration services,
      engineering, maintenance and security, from tenants still on the former OAB
      property.

   2. Resource Service Management Agreement (RSMA) This agreement was
      executed in September 2006 with OBRA and the Agency. This agreement states
      the terms under which the Port shall manage the electrical loads of OAB area by
      managing the Base Resource Contract from Western Area Power Authority (WAPA)
      and by purchasing supplemental power to meet load requirements. This agreement
      expires August 2011.

   3. Interconnection and Service Agreement Between the Port of Oakland and the
      Oakland Base Reuse Authority (IA) This agreement was executed in July 2000
      with OBRA. When OBRA transferred its interest in the OAB area to the Port and the
      Agency, the Port and Agency agreed to extend the terms of IA. This agreement
      states the terms under which the Port shall connect the OAB’s electrical distribution
      system to the Port’s Davis Substation including the cost and maintenance of the
      substation.

These agreements together allow the Port and the Agency to cooperate and pay for the
continued operation, maintenance and repair of the existing integrated utility system that
(1) provides Utility Services to the parties, tenants and other utility users, and (2) facilitate
the redevelopment of the former OAB area. The purpose of this Agenda Report is to
recommend the Board of Port Commissioners (Board) to authorize the Executive Director
to execute updated version of the three agreements for the continued operation,
maintenance and repair of the existing utility systems at the former OAB area.

ANALYSIS

The former OAB utility systems are integrated and would be costly to separate. Prior to
redevelopment, both the Port and the Agency have the obligation to maintain and operate
the systems to provide utility services to their respective tenants and in compliance with the
minimum regulatory code requirements for safety, fire protection and other purposes. To
minimize Utility Systems costs, both parties agree that the Utility Systems shall remain
integrated with existing interconnections.

To the maximum extent possible, the Port will maintain and operate the Utility Systems at a
minimum cost sufficient to maintain the Utility Systems in their present condition and to
comply with regulations. At such time that any property or parcel is sold, ground leased or


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otherwise transferred for new development, the Utility Systems for such property or parcel
shall be separated from the existing system, and the operation, maintenance and repair of
utility service for such separated property or parcel shall become the responsibility of the
future owners or lessees of various developments and shall no longer be subject to the
provisions of the agreement. Both parties agree to share the profit and loss under the utility
program and believe that this is a cost-effective and efficient program to maintain the Utility
Services to the OAB area.

The Agency had originally anticipated that it would have developed the Agency’s portion of
the OAB area by 2011 and had previously limited the number of extensions it could seek
within the agreements. In order for the Port continue providing utility management services
to the Agency and the Agency to receive the services from the Port, the Port and Agency
must go back to their respective Board and Council to seek approval to extend and execute
three new agreements. In reviewing these agreements, staff recommends making the
following changes to the respective agreements:

       Utility Program Management Agreement (UPMA)

         1.   Terminate the existing Amended and Restated Utility Program Management
              Agreement On June 30, 2011 instead of August 7, 2011.
         2.   The new Utility Program Management Agreement will be effective July 1,
              2011 through June 30, 2016.
         3.   During the first 3 years, either Party may terminate this agreement with 12
              month notice. After the first 3 years, only a 90 days notice is required to
              terminate.
         4.   Decrease the Administration Fee from $46,000 to $36,000 which reflects the
              true cost to administer the utility management program.
         5.   Clarify the Port’s roles and responsibilities as system operator
              a. Port shall be responsible for daily operation of the utility systems
              b. Agency shall be responsible for developing and implementing utility
                  management programs for the Agency’s portion of the utility systems in
                  compliance with all regulatory requirements.

       Amendment to Resource Service Management Agreement

         1.   Change the Effective Date and Termination Date to be consistent with
              UPMA.
         2.   Agreement shall be coterminous with the UPMA and IA.
         3.   Revised the terms of disposition of the Agency’s share of Base Resource
              Contract from WAPA.

       Interconnection Agreement

         1.   Change the Effective Date and Termination Date to be consistent with
              UPMA.
         2.   Agreement shall be coterminous with the UPMA and IA.




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All three agreements are cost-share based and revenue-share based agreements with
true-up provisions. At the end of each designated period, the Port reviews all of the actual
labor and commodity costs and the revenue collected by each party. The Port and Agency
anticipated that it would not be able to pass all costs to tenants since the number of tenants
remaining on the Port Development Area and the Gateway Development Area are too few
to absorb all the fixed cost in operating the Utility Systems, such as streetlights, water lines
and the fire hydrant system. The Agency and the Port has agreed to share the Utility
System cost not paid by tenants and the common area usage costs equally.

The Port and Agency estimated the annual cost to each party would be approximately
$200,000. Since the Port inception of the Utility Systems in 2006, the average annual cost
to each party was $159,000. Such costs to the Agency and the Port are expected to
increase as the number of tenants diminishes. The Port and Agency may also need to pay
certain costs to make certain discretionary capital improvements in their respective areas.

If these agreements are not extended, the Agency’s tenants would no longer be able to
receive electricity, water or natural gas services without major utility infrastructure
investment because the source of these utilities are located on the Port Development Area.
On the other hand, the Port would not be able to discharge the sanitary sewer from some of
the Port area because the sewer line runs through the Gateway Development Area to the
East Bay Municipal Utility District treatment plant.

BUDGET & FINANCIAL IMPACT

Since there will be fewer tenants remaining at the former Oakland Army Base, the Agency
and the Port will bear a larger share of the O&M expenses in order to maintain the Utility
Systems. The expenses are shared 50/50 by the Agency and the Port. Staff estimates
each party annual cost will be approximately $200,000 per year. This amount has already
been budgeted for FY 2010-2011 and will continue to be budgeted until the partnership is
terminated.

STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan is a
cornerstone of the overall alignment of the Port. It provides the framework for focusing the
work of staff and the Board of Port Commissioners, and serves to guide an organization-
wide redesign to better match the skills and talents of Port employees with the overall
strategic goals of the organization in the key areas of Sustainable Business and Economic
Development, Stewardship and Accountability, Port Workforce and Operations, and
Communications and Information.




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This project would help the Port achieve the following goals and objectives:
STRATEGIC
                                                                     HOW THIS PROJECT
PRIORITY        GOAL                  OBJECTIVE
                                                                     IMPLEMENTS + WHEN
AREAS
                                                                     By providing utility services to the
                                                                     Agency, the Port is able to
                                                                     receive a portion of the revenues
                                                                     the Agency receives through the
                Goal A: Create
                                                                     sale of utilities to its customers.
                Sustainable
                                      1. Maximize the use of         These revenues help the Port to
                Economic Growth
                                      existing assets.               maintain the aging utility
                For The Port And
                                                                     infrastructure in the OAB area.
                Beyond
                                                                     This is an ongoing effort – this
                                                                     Agenda Report requests an
                                                                     extension of existing agreements.

                                                                     The OAB area is currently
                                                                     occupied by many small
                                                                     businesses. By continuing to
                Goal A: Create                                       provide Utilities to the Agency
                Sustainable           3. Increase revenue, job       portion of the OAB area, the Port
                Economic Growth       creation and small business    is enabling the Agency to serve
                For The Port And      growth.                        additional tenants. This is an
                Beyond                                               ongoing effort – this Agenda
                                                                     Report requests an extension of
                                                                     existing agreements.
Sustainable
Economic and
                                                                     By continuing to provide utility
Business
                                                                     services to the Agency and its
Development
                                                                     tenants, the Port is helping the
                                                                     Agency maintain its tenants.
                Goal B: Maintain
                                                                     Because the Port receives a
                And Aggressively      1. Retain existing customers
                                                                     portion of the revenue from utility
                Grow Core             and tenants.
                                                                     sales from the Agency, the
                Businesses
                                                                     Agency’s tenants are essentially
                                                                     Port tenants as well. This is an
                                                                     ongoing effort – this Agenda
                                                                     Report requests an extension of
                                                                     existing agreements.

                                                                     Given the need to maintain the
                                                                     utility system within the OAB
                                                                     area, the Port and Agency are
                                                                     maximizing its return on
                Goal D: Improve the                                  investment by selling utilities and
                                      3. Maximize return on
                Port’s Financial                                     recovering cost of maintenance
                                      investments (ROI).
                Position                                             and operation. This is an ongoing
                                                                     effort – this Agenda Report
                                                                     requests an extension of existing
                                                                     agreements.




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                                                                       Executing the agreements will
                                                                       enable the Port to maintain it’s
Stewardship and   Goal G: Sustain
                                        2. Partner to share risk,      partnership with the Agency and
Accountability    Healthy Communities
                                        accountability, benefits and   continue to share the benefits of a
Stewardship and   Through Leading
                                        improve environmental and      joint venture partnership. This is
Accountability    Edge Environmental
                                        safety compliance.             an ongoing effort – this Agenda
                  Stewardship.
                                                                       Report requests an extension of
                                                                       existing agreements.

STAFFING IMPACT

The matters contained in this Agenda Report will not impact current or future staffing.

SUSTAINABILITY

The Sustainability Policy does not apply.

ENVIRONMENTAL

The recommended Board approval and authorization for the execution of utilities services
agreements between the Port and Agency for continued operations, maintenance and
repair of the existing integrated utility systems at the former OAB was reviewed in
accordance with the requirements of the California Environmental Quality Act (CEQA), and
the Port CEQA Guidelines. The general rule in Section 15061(b)(3) of the CEQA
Guidelines states that CEQA applies only to activities that have a potential for causing a
significant effect on the environment. It can be seen with certainty that there is no
possibility that authorizing updated management agreements will result in a physical
change in the environment, and therefore approval of those agreements is not a project
under CEQA.

Furthermore, the commitments in the agreements to continue operating, maintaining and
repairing the existing integrated utility systems, involving negligible or no expansion of use
beyond that previously existing, are categorically exempt from CEQA under CEQA
Guidelines Section 15301(b).

All projects on the Economic Development Conveyance property at the former Oakland
Army Base must be completed in compliance with the September 27, 2002 Remedial
Action Plan (RAP) and Risk Management Plan (RMP, which is Appendix E to the RAP)
prepared for the State of California Department of Toxic Substances Control and the
Oakland Base Reuse Authority (OBRA).

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters addressed under this action are not within the scope of the Port of Oakland
Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the MAPLA
do not apply to this action.




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OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

These Resolutions and Ordinances will not be insured by the Port’s Owner Controlled
Insurance Program (OCIP).

GENERAL PLAN

The provisions of General Plan do not apply because this action is not related to
construction or alteration of property.

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements, do not
apply to this agreement because City of Oakland Redevelopment Agency is a government
agency.

OPTIONS

Option 1: Execute the three agreements: Utility Program Management Agreement,
Amendment to the Resource Management Agreement, and the Interconnection Agreement
thus allowing the Port and the Agency to continue its cooperative partnership in the Utility
Systems operation. This is the recommended option.

Option 2: Terminate the partnership with the Agency and separate the existing system at
this time by disconnecting equipment, cutting and capping pipelines at the property limits,
and establishing new and sub-metered services to the Gateway Development Area so that
the Port and Agency will maintain and operate their own respective utility systems. This
option could cost $1,000,000 or more.

RECOMMENDATION

It is recommended that the Board authorize the Executive Director to execute the three
agreements: Utility Program Management Agreement, Amendment to the Resource
Management Agreement, and the Interconnection Agreement thus allowing the Port and
the Agency to continue the operation, maintenance, and repair of the existing utility system
at the Former Oakland Army Base.




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                 Exhibit A

          Map of Oakland Army Base
(Rough Division of Area Between GDA and PDA)




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                            AGENDA REPORT
TITLE:           Budget approval and other associated authorizations for Utility
                 Improvements at the Airport

AMOUNT:          Capital Budget Authorization: $2,145,000


PARTIES INVOLVED:

                  Corporate Name/Principal               Location
                  Sanitary Sewer Improvements-
                  Phase 1
                  Design consultant                      To be determined
                  Construction contractors               To be determined

                  Water System Master Plan and
                  Water Pipeline Improvements
                  Design consultant
                                                         Oakland, CA
                    Kennedy-Jenks Consultants
                        Fred Neal, Vice President
                                                         To be determined
                  Construction contractors


TYPE OF ACTION:                   Resolution

SUBMITTED BY:                     Deborah Ale-Flint, Director of Aviation
                                  Chris Chan, Acting Director of Engineering

APPROVED BY:                      Omar Benjamin, Executive Director


SUMMARY

The purpose of this Agenda Report is to outline and recommend to the Board of Port
Commissioners (Board) several actions associated with sanitary sewer and water
system improvements at Oakland International Airport (OAK). The requested actions
are grouped according to each project:

   •   Sanitary Sewer Improvements – Phase 1
       o Authorize project budget
       o Authorize the Executive Director to award the contract to the lowest
          responsible bidder in an amount not to exceed $243,000
       o Delegate authority to the Executive Director to resolve any bid protests

   •   Water System Planning and Improvements
       o Authorize project budget
       o Authorize the Director of Engineering to Approve Plans and Project Manual
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       o Authorize staff to advertise for bids
       o Authorize the Executive Director to award the contract to the lowest
         responsible bidder in an amount not to exceed $539,000
       o Delegate authority to the Executive Director to resolve any bid protests

These projects are contained in the “other pipeline projects” category of the adopted
Capital Needs Assessment (CNA) under Utility Program Update (CNA No. AA0050199).
The budget authorization request of $2,145,000 will allow the Port to continue to meet
regulatory requirements for sanitary sewer rehabilitation, as required by the United
States Environmental Protection Agency, Region IX (EPA) and the California Regional
Quality Control Board (RWQCB); improve water service reliability to its tenants in North
Field; and to evaluate the condition of the entire airport water system for deficiencies
and develop a prioritized list for future short-term and long-term capital improvement
projects.

FACTUAL BACKGROUND

Sanitary Sewer Improvements- Phase 1

On May 18, 2010, the Board of Port Commissioners approved and adopted the Port of
Oakland Sewer System Management Plan (SSMP). The SSMP was prepared pursuant
to the requirements of the State Water Resources Control Board (SWRCB) Order No.
2006-0003. Under the terms of this Order, the Port is mandated to take necessary
steps to prevent sanitary sewer overflows and to develop and implement the SSMP.
Additionally, the U.S. Environmental Protection Agency, Region IX (EPA) issued an
Administrative Order (Docket No. CWA 309(a)-1 0-009 Findings of Violations and Order
for Compliance, Section X. Sewer Repair, Rehabilitation, And Replacement) requiring
the Port to submit an annual report of progress on improvements made to reduce
sanitary sewer outflows (SSO) from its collector system and to control infiltration and
inflow (I/I) that would contribute to SSOs.

The SSMP identified a number of improvements in the Maritime and Aviation areas to
mitigate existing system deficiencies by rehabilitating and/or replacing sewer pipelines
and lift stations. These improvements would result in reducing inflow and infiltration and
prevent overflow into sanitary sewer system. To comply with these regulatory orders,
the Port must demonstrate progress in completing improvements for reporting on an
annual basis.

Water System Improvements

Water System Master Plan

The water distribution system at Oakland International Airport (OAK) is not sufficiently
documented and mapped to provide an inventory of the entire water supply system
(both fire protection and domestic water service) including pipe sizes, valves, meters,
backflow preventers, piping materials, age and condition of the various reaches and
components of the water system.

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A Water System Master Plan (WSMP) for North and South Fields is needed to address
immediate needs and to plan for future growth in water demand.

Earhart Road and Grumman Street Improvements

The domestic water service on Earhart Road north of Cooke Street is provided from a
single waterline that is not part of a “looped” system. As a result, the service is
vulnerable to any waterline disruption that could occur.

Oakland Aviation Museum Domestic Water Connection

Aviation Facilities reported that the existing domestic water service at the Oakland
Aviation Museum is fed from a connection to the existing fire suppression system.
Currently, the airport water system is comprised of separate lines for fire suppression
and domestic supply. To provide reliable water service, the existing water supply
connection needs to be re-routed and connected to the domestic water supply line.

ANALYSIS

Sanitary Sewer Improvements- Phase 1

In the previous annual report to EPA filed on April 13, 2010, the Port identified three
improvements at the airport proposed for next year:

   o Rehabilitation or replacement of various sewer lines at the airport that are
     susceptible to I/I or sewer lines that potentially cause SSOs. The locations of
     which are detailed in the SSMP.
   o Replace an existing 3-inch diameter drain line with a 4-inch diameter cast iron
     pipe in Terminal 1, outside of Gate 9.
   o Investigations of 13 lift stations for rehabilitation or replacement (10 South Field
     and 3 North Field locations).

The above projects are listed in the SSMP under the Phase 1 Capital Improvement
category for Aviation. There are a number of other projects listed in this same category
for Maritime which will be implemented pending identification of funding. The Port must
demonstrate progress in implementing sanitary sewer improvements as required by
RWQCB and EPA. Due to limited Port resources, Port staff recommends implementing
the highest priority items recommended in the SSMP:

   o A closed-circuit television (CCTV) inspection of the 10-inch diameter sewer
     underneath the OAK terminal parking lot revealed several locations with pipeline
     fractures or voids with visible soil. Repairs will consist of focused repairs of
     collapsed and/or fractured sections and liner installation for the remainder of the
     line.

   o The existing 3-inch diameter sewer line near Gate 9 in Terminal 1 needs to be
     replaced with a 4-inch diameter cast iron pipe that meets minimum slope

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      requirements and has clean-outs every 35 feet for service from the floor area
      above.

   o There are 13 Sanitary Sewer Lift Stations at the Airport. It is recommended that a
     detailed evaluation and analysis be performed of all of the lift stations. The
     report should include schematic design and cost estimates for lift stations in need
     of replacement or rehabilitation.




          Proposed Daily Lot Improvements                Collapsed Sewer Pipeline

It is proposed that the sewer replacement portions of the work be designed in-house
and that the construction be accomplished by the Port’s On-Call Contractors following a
solicitation process. It is further proposed that the sewer lift station condition survey
work be accomplished by one of the design consultants approved by the Port on May 6,
2008. An informal selection process similar to that used for AIP-grant funded projects
will be used to select the specific consultant.

From the condition survey, a prioritized list of recommended sewer lift stations
improvements will be developed for a proposed capital improvement program schedule
for subsequent phases of the Sanitary Sewer Improvement project. A separate Board
approval will be sought for the design and construction for these future projects.

Water System Improvements

Water System Master Plan

Port staff recommends that a Water System Master Plan (WSMP) be initiated to
analyze and evaluate existing and future water demand requirements to ensure
continued reliable water service, both potable and fire protection, to its tenants and
customers at OAK. The WSMP would include an inventory of the existing water pipeline
infrastructure; a conditions assessment and systems analysis; evaluation of current and
future water demand; a water distribution system model; prioritized list of recommended
short-term and long-term capital improvements; identification of water system safety
and security issues; and potential strategies for water conservation. The WSMP would
also include recommendations for an Operations and Maintenance (O&M) plan for
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defining routine maintenance necessary for water service consistent with state or
federal regulations and meeting EBMUD standards.

Ultimately, the goal of the WSMP is to conduct water line improvements in a planned
and measured way while maintaining airport water service reliability in future years.

Currently, several of the Port’s North Field tenants experience service disruptions
whenever the existing water pipeline requires maintenance. It will be necessary to
make water pipeline improvements to provide reliable water service for a higher level of
customer service. The scope consists of constructing new pipelines with associated
valves, backflow prevention devices, and water meters along Earhart Road, Cooke
Street, and Grumman Street.

Earhart Road and Grumman Street Improvements

The scope of the improvements will consist of replacing the existing waterline and
adding new sections to create a “looped” system. A “looped” system offers the benefit of
having the ability to isolate a portion of the system should it become damaged while
continuing to provide water service from either end. A “looped” system also provides
better flow characteristics which result in improved water quality.

Oakland Aviation Museum Domestic Water Connection

The scope of the work will include the installation of approximately 500 feet of new 4”
diameter pipeline is proposed to be constructed along Earhart Road with a new
connection to existing domestic water service at Cooke Street. A new water meter will
be installed to track usage at the facility.

Prior to implementation of the CNA, Port staff conducted a selection process from the
design consultants approved by the Port on May 6, 2008 and selected Kennedy-Jenks
Consultants to perform the design work associated with the water system
improvements. However, in April 2010, staff determined it was best to delay
implementation of these improvements as the Port performed its CNA. It is proposed
that Kennedy-Jenks Consultants also be utilized to prepare the water system master
plan. The firm has demonstrated considerable expertise in this area having recently
completed similar water system master plans for the Sacramento airport, San Jose
State University and Yosemite National Park.

LOCAL BUSINESS UTILIZATION

Based on the funding source (Port cash) if approved, the Port’s Non-Discrimination and
Small Local Business Utilization Policy (NDSLBUP) will be applied to this project. The
Social Responsibility Division will work closely with Engineering to ensure outreach and
analysis in the accordance with the NDSLBUP.




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BUDGET & FINANCIAL IMPACT

This project was included in Fiscal Year 2011 “Other Pipeline Projects” under Utility
Program Update and part of the 5-Year Capital Needs Assessment. The project is
budgeted under CNA Project No. AA0050199 for $1,250,000. The following budget
authorization is requested to fund study, design, and construction activities:

                               Contractor        Consultant        Port Labor         Project        Total Project
         Project+                Cost *           Cost ++             Cost          Overhead **         Cost***
  Sanitary Sewer                $243,000          $119,000          $103,000         $24,000           $489,000
  Improvements- Phase 1
  Water System Master               $0            $410,000          $104,000          $13,000          $527,000
  Plan
  Water Pipeline                $593,000          $104,000          $380,000          $52,000         $1,129,000
  Improvements
  TOTAL                         $836,000          $633,000          $587,000          $89,000         $2,145,000
  * Includes a 10% change order allowance per Port Ordinance 1606 and other miscellaneous costs.
 ** Includes permit fees, OCIP, non-labor overhead
***Includes $1,250,000 previously approved under CNA Project No. AA0050199
+  The figures presented are based on estimates. Staff recommends that the total amount shown be adhered to,
    but that there be flexibility within the items in terms of balancing overages with under-runs.
++ Consultants will be used to supplement Port staff in preparing the more complex water system master plan and
      construction documentation.

The following tables provide a breakdown of the above costs by fiscal year:

 Sanitary Sewer                          FY 10-11                            FY 11-12
 Improvements- Phase                                                                                    TOTAL
 1+                              Amount               %             Amount               %
  Contractor Cost                $30,000             12%            $213,000            88%            $243,000
  Consultant Cost                $84,000             71%            $35,000             29%            $119,000
  Port Labor                     $11,000             31%            $24,000             69%             $35,000
  Project Overhead               $36,000             39%            $56,000             61%             $92,000
  TOTAL                         $161,000                            $328,000                           $489,000




 Water System Master                     FY 10-11                           FY 11-12
 Plan +                                                                                                 TOTAL
                                Amount                %             Amount               %
  Contractor Cost                   $0                0                $0                 0                $0
  Consultant Cost               $360,000             88%            $50,000             12%            $410,000
  Port Labor                     $25,000             71%            $10,000             29%             $35,000
  Project Overhead               $71,000             87%            $11,000             13%             $82,000
  TOTAL                         $456,000                            $71,000                            $527,000



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      Water Pipeline                         FY 10-11                           FY 11-12
      Improvements+                                                                                         TOTAL
                                    Amount                %             Amount                %
      Contractor Cost                   $0               0%             $593,000            100%            $593,000
      Consultant Cost                $84,000             81%             $20,000             19%            $104,000
      Port Labor                     $38,000            30%              $88,000             70%            $126,000
      Project Overhead               $75,000            25%             $231,000             75%            $306,000
      TOTAL                         $197,000                            $932,000                           $1,129,000

  +    The figures presented are based on estimates. Staff recommends that the total amount shown be adhered to,
        but that there be flexibility within the items in terms of balancing overages with under-runs.

  The estimated total cost for these projects is $2,145,000 and the Port will use available
  cash, debt or other sources to fund this cost. The cost for the Operations and
  Maintenance component of the WSMP is proposed to be part of the Operating budget
  for FY 2011-2012 and not included in this budget authorization.

  STRATEGIC PLAN

  The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan
  is a cornerstone of the overall alignment of the Port. It provides the framework for
  focusing the work of staff and the Board of Port Commissioners, and serves to guide an
  organization-wide redesign to better match the skills and talents of Port employees with
  the overall strategic goals of the organization in the key areas of Sustainable Business
  and Economic Development, Stewardship and Accountability, Port Workforce and
  Operations, and Communications and Information.

  This project would help the Port achieve the following goals and objectives:
STRATEGIC
                                                                                   HOW THIS PROJECT
PRIORITY               GOAL                    OBJECTIVE
                                                                                   IMPLEMENTS + WHEN
AREAS
Sustainable            Goal A: Create          1. Maximize the use of              The existing water system
Economic and           Sustainable             existing assets.                    infrastructure will continue to
Business               Economic Growth                                             serve the Port and its tenants.
Development            For The Port And                                            However, certain improvements
                       Beyond                                                      are necessary to increase system
                                                                                   reliability. The water system
                                                                                   improvements are proposed to be
                                                                                   completed by Fall 2011.

                                                                                   The SSMP identified collapsed
                                                                                   portions of the sewer that will
                                                                                   need repair. Only the collapsed
                                                                                   portions will be repaired and
                                                                                   remaining portions of the pipe will
                                                                                   be lined. Performing focused
                                                                                   repairs and lining of the existing
                                                                                   pipe, the Port would save costs to
                                                                                   remove and replace entire
                                                                                   sections of sanitary sewer
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STRATEGIC
                                                                         HOW THIS PROJECT
PRIORITY          GOAL                  OBJECTIVE
                                                                         IMPLEMENTS + WHEN
AREAS
                                                                         pipeline. This work is proposed to
                                                                         be completed by Fall 2011.
                  Goal B: Maintain      1. Retain existing customers     The Port’s water system is vital to
                  And Aggressively      and tenants.                     the daily operation of the Port’s
                  Grow Core                                              tenants. Any disruptions to their
                  Businesses                                             service would impact their
                                                                         operations. By 2012, the
                                                                         proposed water system
                                                                         improvements will increase
                                                                         system reliability in the North
                                                                         Field.

                                                                         The proposed sewer
                                                                         improvements will reduce the
                                                                         number of SSOs, thereby
                                                                         preventing any inconveniences
                                                                         tenants may face with SSOs.

                  Goal E: Improve
                  The Processes For
                  Evaluating And                                         The WSMP includes a list of
                                        2. Manage cash flow and
                  Managing Capital                                       priority water pipeline capital
                                        capital planning as distinct,
                  Expenditures And                                       improvement projects for use in
                                        but related, items.
                  For Long Term                                          planning future capital projects.
Stewardship and   Management of Port
Accountability    Property And
                  Infrastructure.
                                                                         The WSMP will identify system
                  Goal E: Improve                                        deficiencies and prioritize capital
                  The Processes For                                      projects needed to improve the
                  Evaluating And        5. Prepare plans for long-term   domestic water supply and fire
                  Managing Capital      use, development and             suppression system. Included in
                  Expenditures And      management of Port property      the WSMP will be suggested
                  For Long Term         and infrastructure.              long-range capital improvements
                  Management of Port                                     for capital projects planning. This
                  Property And                                           work is proposed to be completed
                  Infrastructure.                                        by late Fall 2011.
                                                                         Implementing the sanitary sewer
                                                                         improvements will help the Port
                                                                         achieve some reduction in SSOs,
                                                                         as required by the EPA and
Stewardship and                                                          RWQCB.
Accountability                          2. Partner to share risk,
                  Goal G: Sustain
                                        accountability, benefits and     The WSMP will provide
                  Healthy Communities
                                        improve environmental and        recommended safety
                  Through Leading
                                        safety compliance.               improvements that, when
                  Edge Environmental
                                                                         implemented, would provide
                  Stewardship.
                                                                         safety improvements to reduce
                                                                         the risk of injuries to Port
                                                                         maintenance personnel.




                                                   8




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STAFFING IMPACT

It is anticipated that these projects can be accomplished within the current Port staffing
levels. Consultant resources will be utilized due to the specialized nature of portions of
the work.

SUSTAINABILITY

The Port has a Materials Management Program (MMP) to segregate and process waste
concrete and asphalt rubble for reuse in future Port projects. The contract documents
will include provisions for transporting excavated earth materials and pavement
demolition materials to the Port’s MMP for processing and reuse;

ENVIRONMENTAL

CEQA Determination

This project involves enhancing and rehabilitating the current sanitary sewer and water
line pipes at the OAK. This project is categorically exempt from the requirements of
CEQA pursuant to Section 15301 (d), which addresses repair, maintenance, or minor
alteration of existing public or private structures, facilities, mechanical equipment, or
topographical features, involving negligible or no expansion of use beyond that existing
at the time of the lead agency’s determination.

This project is also exempt under Section 15302 (c). CEQA does not apply to the
replacement or reconstruction of existing utility systems and/or facilities involving
negligible or no expansion of capacity.

Environmental Compliance

The Port’s MMP Coordinator conducts daily inspections of the operations at the MMP
site to ensure compliance with environmental regulations. All material transported on
and off-site is manifested to document estimated quantities and types of material.
Access to the MMP site is controlled and all sites have secured access. An Annual
Report is prepared each year for the Regional Water Quality Control Board providing
information on all soil testing and concrete and asphalt handling activities over the
year.

Mitigation

This project will not have any significant impacts to the environment therefore no
mitigation measures are required.

Related Plans and Policies

This project does not require mitigation measures; therefore there are no related or
adopted plans for this project.

                                            9




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MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

Regarding the proposed public works contracts for the sanitary sewer and water
pipeline improvement projects, the provisions of the Port of Oakland Maritime and
Aviation Project Labor Agreement (MAPLA) apply to this work.

Regarding the use of the professional services consultants to assist Port in
development of the WSMP, this work is for professional services that do not include
construction testing and inspection and therefore, the provisions of the MAPLA do not
apply to this work.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

As the project and scope is funded under the CIP, the applicable Owner Controlled
Insurance Program (OCIP) coverages and provisions apply to the construction phase
and the Professional Liability Insurance Program (PLIP) coverages and provisions apply
to the design phase.

GENERAL PLAN

Sanitary Sewer and Water Pipeline Improvements: Pursuant to Section 727 of the
City of Oakland Charter, this project has been determined to conform to the policies for
the transportation designation of the Oakland General Plan.

Water System Master Plan: This project is for professional services and will not
directly include any alteration of property. Development projects that result from these
professional services will be subject to separate findings of conformity with the City of
Oakland General Plan in accordance with Section 727 of the City Charter.

LIVING WAGE

Sanitary Sewer and Water System Improvements: Living wage requirements, in
accordance with the Port’s Rules and Regulations for the Implementation and
Enforcement of the Port of Oakland Living Wage Requirements (the “Living Wage
Regulations”), do not apply because the contract is a construction contract covered by
state prevailing wage rules and the prevailing rate of wage is higher than the wage
required by the Living Wage Regulations. However, living wage requirements may
apply to the design portion of this contract, if the contract for design is more than
$50,000, and the contractors employs 21 or more employees.

Water System Master Plan: Living wage requirements, in accordance with the Port’s
Rules and Regulations for the Implementation and Enforcement of the Port of Oakland
Living Wage Requirements (the “Living Wage Regulations”), do not apply as the service
provider does not employ 21 or more employees working on Port-related work.
However, the service provider will be required to certify that should living wage
obligations become applicable, the service provider shall comply with the Living Wage
Regulations.

                                           10




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OPTIONS

1. Authorize project budgets and other associated authorizations for the Utility
   Improvements at the Airport. This is the recommended option.

2. Approve an amended option based on feedback and direction from the Board.

3. Do not proceed with this project. The Port would likely to incur increasing
   maintenance expenses to upkeep and maintain these critical airport utilities. In
   addition, the Port would not be compliant with the RWQCB and EPA orders and
   could be subject to civil actions.

RECOMMENDATION

It is recommended that the Board:

   1. Authorize the project budget of $2,145,000 for the Utility Improvements at the
      Airport;

   2. Authorize the Director of Engineering to approve Plans and Project Manual for
      the Water System Improvements;

   3. Authorize the projects to be Advertised for Bids;

   4. Authorize the Executive Director to award the Water System Improvement
      contract to the lowest responsible responsive bidder in an amount not to exceed
      $539,000; and

   5. Authorize the Executive Director to award the Sanitary Sewer Improvement
      contract to the lowest responsible responsive bidder in an amount not to exceed
      $243,000.

It is further recommended that the Board authorize the Executive Director to resolve any
bid protests in accordance with Port Ordinance No. 1606.




                                           11




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Budget approval and other associated authorizations for
Utility Improvements at the Airport




                                                          NORTH FIELD WATER PIPELINE
                                                               IMPROVEMENTS




                                                             SANITARY SEWER
                                                              IMPROVEMENTS




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                              AGENDA REPORT
TITLE:            Waiver of Standard Bidding and Authorization for the Executive Director
                  to Renew an Oracle ERP Software Licensing Agreement

AMOUNT:           Not to Exceed $XXXXXXX

PARTIES INVOLVED:

                  Corporate Name/Principal               Location
                  Oracle Corporation                     Redwood Shores, CA
                  DLT Solutions, Inc.                    Herndon, VA


TYPE OF ACTION:                      Resolution

SUBMITTED BY:                        Chris Chan, Acting Director of Engineering

SCHEDULED FOR BOARD:                 April 26, 2011

APPROVED BY:                         Omar Benjamin, Executive Director


SUMMARY

The Port has implemented an Enterprise Resource Planning (ERP) software system
provided by Oracle Corporation. The technical support, software bug fixes and system
patches for the Oracle ERP software are available only through Oracle or an authorized
Oracle reseller. There are no local authorized providers/resellers for these services. The
current software licensing agreements that provide for these services will expire in late
May and August 2011. Port staff, therefore, is requesting that the Board of Port
Commissioners waive standard bidding and authorize the Executive Director to renew one
year ERP software license agreements with Oracle or DLT Solutions to continue providing
these critical services.

FACTUAL BACKGROUND

On May 5, 2009, the Board of Port Commissioners passed Resolution #09064 authorizing
the Executive Director to execute an agreement to purchase Oracle’s ERP software system
via DLT Solutions Inc., an authorized Oracle ERP reseller. On May 18, 2010, the Board
passed resolution #10-60 authorizing a one year renewal of ERP software licensing. On
June 22, 2010, the Board passed resolution #10-73 authorizing the purchase of ERP
software licenses for Oracle Policy Automation which manages complex calculations and
data in ERP.




DMS#262881                                   1


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ANALYSIS

Continued licensing is necessary to ensure that Port staff and consultants under the Port’s
direction (e.g. Yield Technologies) can resolve technical issues, implement bug fixes and
system enhancements. As ERP is the principal software system of the Port, renewal of
licensing is critical.

Renewal of Oracle ERP software licensing is only available via Oracle and its authorized
resellers. The Port seeks to renew via DLT Solutions or directly via Oracle – whichever one
offers the best value. There are no local authorized providers.

Port staff is recommending that the Board of Port Commissioners waive standard bidding
and authorize the Executive Director to renew one year ERP software license agreements
with DLT Solutions or Oracle for $XXXXXX.

STRATEGIC PLAN ALIGNMENT

The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan is a
cornerstone of the overall alignment of the Port. It provides the framework for focusing the
work of staff and the Board of Port Commissioners, and serves to guide an organization-
wide redesign to better match the skills and talents of Port employees with the overall
strategic goals of the organization in the key areas of Sustainable Business and Economic
Development, Stewardship and Accountability, Port Workforce and Operations, and
Communications and Information. This project would help the Port achieve the following
goals and objectives:
    Strategic
                         Goal                 Objective             ERP System Impacts
  Priority Area
Communications    Goal L: Provide        3. Complete ERP        ERP Phase 1 has been
and Information   timely and relevant    Phase 1 and            completed. The system went
                  information to         commence Phase 2       “live” on October 1, 2010.
                  support critical       Analytics              Support and maintenance will
                  analysis and                                  help ensure the system runs
                  decision making                               properly.

Stewardship and   Goal E: Improve the    2. Strengthen          The system has capability for
Accountability    processes for          contract expenditure   project budgets, supplements
                  evaluating and         controls               performance management
                  managing capital                              systems and monitors spending
                  expenditures and for                          only for approved funded
                  long term                                     projects.
                  management of Port
                  property and
                  infrastructure
Port Workforce    Goal H: Develop        1. Identify, assess    The Oracle system will
and Operations    and maintain a high    and implement key      eventually provide the tools
                  performing             skills and knowledge   necessary to effectively perform
                  workforce              required for an        the tasks required. Ongoing
                                         employee within a      support to refine and improve
                                         public enterprise      the system will be needed on a
                                                                continuous basis.
                                              2




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BUDGET & FINANCIAL IMPACT

Funding in the amount of $XXXXXXX will be included in the FY 2011-2012 Information
Technology (IT) operating budget.

STAFFING IMPACT

No additional staffing is needed.

SUSTAINABILITY

To the extent possible, procurement staff will endeavor to meet the Port’s procurement
needs by placing orders or entering into agreements with vendors who have a sustainability
policy and follow green practices in the conduct of their business practices.

ENVIRONMENTAL

CEQA Determination
California Environmental Quality Act (CEQA) Guidelines Section 15378 states that “Project”
means the whole of an action that has a potential for resulting in either direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment. In addition, the general rule in Section 15061(b)(3) of the CEQA Guidelines
states that CEQA applies only to activities that have a potential for causing a significant
effect on the environment. Because it can be seen with certainty that there is no possibility
this project may have a significant effect on the environment, the action is not a “Project”
and is not subject to CEQA under the General Rule Exclusion. No further review of this
action under CEQA is required.

Environmental Compliance
This action will not disturb soil, groundwater, or hazardous materials.

Mitigation
This action will not significantly impact the environment. Therefore, mitigation measures are
not required.

Related Plans and Policies
This action does not require mitigation measures; therefore, there are no related or adopted
plans for this project.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Report do not fall within the scope of the Port of
Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
the MAPLA do not apply.




                                              3




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OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

OCIP does not apply.

GENERAL PLAN

This action does not meet the definition of "project" under the City of Oakland General
Plan, and no conformity determination is required.

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements (the
“Living Wage Regulations”), do not apply to this agreement as the service provider does
not employ 21 or more employees working on Port-related work. However, the service
provider will be required to certify that should living wage obligations become applicable,
the service provider shall comply with the Living Wage Regulations.

OPTIONS

   1) Waive standard bidding and authorize the Executive Director to renew one year ERP
      software licensing agreements with DLT Solutions or Oracle for $XXXXXXX. This is
      the recommended option.

   2) Do not approve entering into an agreement. This approach, however, would result
      in a lack of technical support and access to bug fixes / system enhancements for
      ERP -- the principal software system supporting the Port’s financial, human
      resources, procurement, and other functions.

RECOMMENDATION

It is recommended that the Board of Port Commissioners find and determine that it is in the
best interest of the Port to waive standard bidding and authorize the Executive Director to
renew one year ERP software licensing agreements with DLT Solutions or Oracle for
$XXXXXXX.




                                             4




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                              AGENDA REPORT
 TITLE:            Rejection of bids and authorization to negotiate and execute a
                   contract for the Replacement of Pump House No. 4

 AMOUNT:           Not to Exceed $2,200,000

 PARTIES INVOLVED:

                    Corporate Name/Principal                  Location
                    Valentine Corporation                     San Rafael, CA
                      Robert O. Valentine Jr., President
                    R.M. Harris Company, Inc.                 Martinez, CA
                      David R. Harris, President
                    Maggiora & Ghilotti, Inc.                 San Rafael, CA
                      Gary Ghilotti, President
                    Monterey Mechanical Co.                   Oakland, CA
                      James D. Troup, Vice President
                    McGuire and Hester                        Oakland, CA
                      Michael R. Hester, President

 TYPE OF ACTION:                     Resolution

 SUBMITTED BY:                       Chris Chan, Acting Director of Engineering

 SCHEDULED FOR BOARD:                April 26, 2011

 APPROVED BY:                        Omar Benjamin, Executive Director


SUMMARY

On March 9, 2011, bids were received for the Replacement of Pump House No. 4, South
Field, Oakland International Airport, Oakland, California. All the bids exceeded the
maximum authorized amount. This Agenda Report requests authorization to waive
standard bidding procedures, reject all the bids, revise the project scope, and negotiate
with one or more of the bidders; and if the negotiations are unsuccessful, to negotiate on
the open market to execute a contract for the work in an amount not to exceed $2,200,000.

FACTUAL BACKGROUND

On January 18, 2011, by Resolution No. 11-9, the Board of Port Commissioners authorized
the advertisement for bids and authorized the Executive Director to award the contract for
the Replacement of Pump House No. 4 to the lowest responsible bidder in an amount not
to exceed $2,200,000.

Two addenda were issued to incorporate revisions to the technical specifications, modify
the determination of apparent low bidder provision and to extend the bid date.

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      Five (5) bids were received and opened on March 9, 2011 for Replacement of Pump House
      No. 4. The bids were as follows:


BIDDERS                 LOCATION            LIABE*       LBABE*       SBE*        VSBE*      TOTAL BASE BID               TOTAL BID PRICE
                                                                                                 PRICE                 (TOTAL BASE BID PRICE
                                                                                                                          + ALTERNATE A)

Valentine             San Rafael, CA                                                            $2,256,421.00**             $4,796,786.00** & ***
Corporation                                                                                          $0.00                     $2,655,365.00
R.M. Harris            Martinez, CA                        ****                                  $2,373,028.00                  $2,473,028.00
Company, Inc.
Maggiora &            San Rafael, CA                                                             $2,488,884.00                  $2,621,884.00
Ghilotti, Inc.
Monterey                Oakland, CA           ****                                               $2,619,000.00                  $2,759,000.00
Mechanical Co.
McGuire and             Oakland, CA            X                                                 $2,789,183.00                  $2,904,183.00
Hester, CA

        *        LIABE = Local Impact Area Business Enterprise, LBABE = Local Business Area Business Enterprise, SBE = Small Business
                 Enterprise, VSBE = Very Small Business Enterprise
        **       Total corrected in accordance with the provisions of Document 00200, Instructions to Bidders, paragraph 23, Bid Evaluation.
        ***      Bidder erroneously entered their Total Base Bid Price on the Alternate A Bid Item price line resulting in a much higher Total
                 Bid Price than intended by the Bidder. Since this entering error is not a mathematical error, it can not be corrected per the
                 provisions of Document 00200, Instructions to Bidders, paragraph 23, Bid Evaluation. The Bidder did not provide a separate
                 bid price for Alternate A.
        ****     Bidder not certified as LIABE or LBABE at the time of bid.


      ANALYSIS

      Determination of Apparent Low Bidder

      Due to the limited project budget, the bidders were required to submit a Total Base Bid
      Price for the project which excluded the cost of furnishing an emergency generator, and a
      Total Bid Price which include Bid Alternate A, the emergency generator. Per the Bid
      Documents, the basis of determining the apparent low bidder was as follows: If the lowest
      responsible and responsive Total Bid Price (Base Bid Price + Alternate A) was less than
      $2,200,000, then the Total Bid Price would be used to determine the apparent low bidder.
      Otherwise, the Base Bid Price would be used to determine the apparent low bidder.

      Based on the results of the bids, the basis of determination of the apparent low bidder was
      the Total Base Bid Price. Accordingly, Valentine Corporation (Valentine) with a Total Base
      Bid Price of $2,256,421.00 is the apparent low bidder. Errors in Valentine’s bid calculations
      were corrected per the provisions of the Bid Documents. Valentine has confirmed that it’s
      ready, willing and able to perform the work for the amount of the corrected Total Base Bid
      Price of $2,256,421.00. However, Valentine’s bid exceeds the previously Board authorized
      amount of $2,200,000.

      Non-Discrimination and Small/Local Business Utilization Policy

      In accordance with the Port’s Non-Discrimination and Small/Local Business Utilization
      Policy (Policy), for bid comparison purposes only, if bids are within 10% or $1,000,000 (one
                                                                              2



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million dollars), whichever is less, of the apparent low bidder’s bid price, the bids may be
modified (lowered) depending on the location of the bidders and their subcontractors and
the utilization of small and very small local businesses. Based on the comparison of the
modified bid amounts, Valentine remains the low bidder.

Rejection of Bids

All the bids exceeded the previously Board authorized amount of $2,200,000. Port Staff
believes that one reason for the high bid amounts is the excessive markup on the pump
equipment included in all bids received. Based on vendor information, this markup was
added due to the perceived notion that the pump equipment must be delivered to the
project site by October 15, 2011. On the contrary, the Port specifications require only an
approved temporary construction dewatering plan to be in-place prior to October 15. Port
staff believes this inaccurate interpretation caused all bids to be overpriced by between
$70,000 and $93,000.

Rejecting the bids and negotiating with the bidders will allow Port staff to clarify the
milestones for pump equipment delivery, and incorporate other value engineering
opportunities that may arise as part of the negotiations. Port staff believes that the
proposed modifications to the plans and specifications should result in significant savings
while maintaining the project objectives. The cost of the re-design effort will be relatively
low compared to the cost savings anticipated to meet the bid day budget of $2,200,000.

Accordingly, Port Staff recommends that the Board reject all Bids for the subject project
and authorize the Executive Director to negotiate with one or more of the bidders based
on informal sealed proposals or on the open market if no proposals from the original
bidders are acceptable. Additionally, Port Staff recommends that the Board authorize the
Executive Director to execute a contract for this work based on negotiated proposals in an
amount not to exceed $2,200,000.

Any required modification to the project specifications and drawings resulting from said
revised design and negotiations will be incorporated into a revised set of Plans and
Project Manual approved by the Director of Engineering.

BUDGET & FINANCIAL IMPACT

This project was included in the current Fiscal Year Adopted Capital Budget and part of the
5-Year Capital Needs Assessment. The project is budgeted under CNA Project No.
AA0056002 for $752,000 in prior years to fund design and environmental permitting
activities for Pump House Nos. 4 and 6. The following budget authorization is requested
through June 30, 2012 to fund construction and additional design and environmental
permitting activities for the project. The total budget authorization is unchanged from the
budget presented to the Board on January 18, 2011:




                                             3



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                                                                                               Total
                              Contractor       Consultant       Port Labor       Project     Project
         Project                Cost 1           Cost 2           Cost 3       Overhead 4      Cost
    Pump House No. 4          $2,450,000        $794,000         $554,000       $202,000    $4,000,000
1
  Includes contingencies and other miscellaneous costs.
2
  Includes $752,000 previously approved under CNA Project No. AA0056002
3
  Includes Port labor overhead
4
  Includes permit fees, OCIP, non-labor overhead


The following table provides a breakdown of the above costs by fiscal year:

                                        FY 10-11                          FY 11-12
    Pump House No. 4                                                                         TOTAL
                               Amount               %             Amount             %
    Contractor Cost            $450,000             18          $2,000,000           82     $2,450,000
    Consultant Cost            $754,000             95            $40,000            5      $794,000
    Port Labor                  $55,000             29            $133,000           71     $188,000
    Project Overhead           $107,000             19            $461,000           81     $568,000
    TOTAL                     $1,366,000                        $2,634,000                  $4,000,000

The Port will use available cash, debt or other sources to fund the entire Pump House No.
4 project.

STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan is a
cornerstone of the overall alignment of the Port. It provides the framework for focusing the
work of staff and the Board of Port Commissioners, and serves to guide an organization-
wide redesign to better match the skills and talents of Port employees with the overall
strategic goals of the organization in the key areas of Sustainable Business and Economic
Development, Stewardship and Accountability, Port Workforce and Operations, and
Communications and Information.

This project would help the Port achieve the following goals and objectives:




                                                         4



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STRATEGIC
                                                                         HOW THIS PROJECT
PRIORITY          GOAL                  OBJECTIVE
                                                                         IMPLEMENTS + WHEN
AREAS
                  Goal A: Create        1. Maximize the use of
                  Sustainable           existing assets.                 The existing pump house has
                  Economic Growth                                        been in use for over 54 years and
                  For The Port And                                       is beyond its serviceable life.
                  Beyond                                                 Replacing this pump house with a
                                                                         new structure and new low-
                                                                         maintenance equipment will
                                                                         provide the Port with a durable
                                                                         pump system that ensures long-
                                                                         term reliability in draining the
                                                                         airport’s watershed area. The
                                                                         expected start of construction is
                                                                         third quarter 2011.
Sustainable
Economic and
                  Goal B: Maintain      1. Retain existing customers     Pump House No. 4 provides
Business
                  And Aggressively      and tenants.                     drainage of a significant portion of
Development
                  Grow Core                                              the airport’s watershed area. Its
                  Businesses                                             compromise during peak
                                                                         rainstorms would likely cause
                                                                         localized flooding in paved areas
                                                                         thereby affecting aircraft
                                                                         operations and vehicle traffic.
                                                                         Airport tenants and customers
                                                                         would be impacted by flooding of
                                                                         roadways and terminal areas. The
                                                                         completion of new Pump House
                                                                         No. 4 in second quarter of 2012
                                                                         will ensure vehicle roadways and
                                                                         terminal areas are not impacted
                                                                         by potential flooding.

                  Goal D: Improve the   3. Maximize return on            A properly operating and reliable
                  Port’s financial      investments (ROI).               Pump House No. 4 system in
                  position.                                              second quarter 2012 allows the
                                                                         airport to continue operations
                                                                         without impact to the Port’s
                                                                         financial position.

                  Goal E: Improve       5. Prepare plans for long-term
                                                                         After second quarter of 2012, the
                  The Processes For     use, development and
                                                                         new pump station will eliminate
                  Evaluating And        management of Port property
                                                                         the need for expensive recurring
                  Managing Capital      and infrastructure.
                                                                         maintenance or major
                  Expenditures And
                                                                         rehabilitation in future years. This
                  For Long Term
                                                                         would free up resources for other
Stewardship and   Management of Port
                                                                         Port needs.
Accountability    Property And
                  Infrastructure.
                                                                         Port maintenance staff will be
                                        1. Identify, assess and          trained on the use of the new
                  Goal H: Develop
                                        implement key skills and         equipment and new remote
                  And Maintain A High
                                        knowledge required for an        monitoring capabilities of the new
                  Performing
                                        employee within a public         pump stations. This goal will be
                  Workforce.
                                        enterprise.                      achieved by second quarter of
                                                                         2012.


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STRATEGIC
                                                                       HOW THIS PROJECT
PRIORITY         GOAL                  OBJECTIVE
                                                                       IMPLEMENTS + WHEN
AREAS

                                                                       The new pump station improves
                 Goal H: Develop
                                       3. Continue to elevate health   the work environment for Port
Port Workforce   And Maintain A High
                                       and safety of the Port          maintenance staff by providing
and Operations   Performing
                                       workforce.                      sturdy support structures and
                 Workforce.
                                                                       safer access to equipment.


STAFFING IMPACT

It is anticipated that the execution of this contract, oversight, and management of the
Replacement of Pump House No. 4 project can be accomplished within the current Port
staffing levels.

SUSTAINABILITY

The Port has a Materials Management Program (MMP) to segregate and process waste
concrete and asphalt rubble for reuse in future Port projects. The contract documents will
include provisions for disposal of metal debris for recycling and transporting excavated
earth materials and pavement demolition materials to the Port’s MMP for processing and
reuse.

ENVIRONMENTAL

CEQA Determination
Reconstruction of Pump House No. 4 is exempt from the requirements of the California
Environmental Quality Act (CEQA) pursuant to Section 15302 Replacement or
Reconstruction of the CEQA Guidelines. Section 15302 exempts the reconstruction of
existing structures and facilities where the new structure will be located on the same site as
the structure replaced and will have substantially the same purpose and capacity.

Environmental Compliance
Reconstruction of Pump House No. 4 will temporarily impact 0.12 acre of Army Corps of
Engineers (ACOE) jurisdictional wetlands and other waters, and require work in the Bay
Conservation and Development Commission’s (BCDC) jurisdiction. Consequently, Port
staff applied to the ACOE for a Nationwide Permit (NWP), and to the SF Bay Regional
Water Quality Control Board (RWQCB) for a water quality certification, to comply with
Sections 404 and 401 of the Clean Water Act, respectively, and requested to amend the
Port’s shoreline maintenance permit with BCDC (Permit No. M89-75).

On February 24, 2011, Port staff received documentation from the ACOE that this project
qualifies for authorization under NWP 33 Temporary Construction, Access and Dewatering
and NWP 39 Residential, Commercial and Institutional Developments. On April 8, 2011,
the SF Bay RWQCB provided Section 401 Water Quality Certification No. 762542. BCDC
has commenced preparation of Amendment No. 7 to BCDC Permit No. M89-75.



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Hazardous materials such as asbestos, lead based paint and PCBs in building materials
will be properly abated prior to demolition of Pump House No. 4.

Since the project site has always been used as a pump station, construction workers are
not expected to encounter contaminated soil or groundwater.

Mitigation
Impact avoidance and minimization measures include Construction Worker Environmental
Awareness Training, preparation of contractor submittals including a Vegetation Removal,
Revegetation and Wildlife Protection Plan, and limiting and marking the construction area.

Related Plans and Policies
Reconstruction of Pump House Nos. 4 requires conformance with BCDC’s San Francisco
Bay Plan.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The provisions of the Port of Oakland Maritime and Aviation Project Labor Agreement
(MAPLA) apply to this work.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

As this project and scope is funded under the Capital Needs Assessment (CNA) Program,
the applicable Owner Controlled Insurance Program (OCIP) coverages and provisions
apply.

GENERAL PLAN

Pursuant to Section 727 of the City of Oakland Charter, this project has been determined to
conform to the policies for the transportation designation of the Oakland General Plan.

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements (the
“Living Wage Regulations”), do not apply because the contract is a construction contract
covered by state prevailing wage rules and the prevailing rate of wage is higher than the
wage required by the Living Wage Regulations.

OPTIONS

1. Reject all bids, waive standard bidding procedures and authorize the Executive Director
   to negotiate with one or more bidders or on the open market if negotiations with the
   original bidders are unsuccessful and execute a contract for the work based on informal
   proposals. This is the recommended option.




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2. Award the contract to the apparent low bidder. However, this option would forego the
   opportunity to realize any savings that should result from re-engineering the scope of
   work and negotiating with the bidders.

3. Reject all bids and authorize the Executive Director to solicit new bids via the standard
   bidding process. However, re-advertising and formerly re-bidding this project will be
   more costly and more time intensive than the above options. This option will
   significantly impede the ability to complete the replacement of the storm water pumping
   system prior to the next rainy season.

RECOMMENDATION

Port Staff recommends that the Board:

1. Ratify Addenda Nos. 1 and 2.

2. Authorize the Director of Engineering to approve revised Plans and Project Manual.

3. Reject all bids, authorize waiver of standard bidding procedures, and authorize the
   Executive Director to negotiate with one or more of the bidders based on informal
   sealed proposals or on the open market, if the initial negotiations with the original
   bidders are unsuccessful.

4. Authorize the Executive Director to execute a contract for the work based on sealed
   informal proposals and revised Plans and Project Manual in an amount not to exceed
   $2,200,000.

5. Authorize the Executive Director to resolve any bid protests in accordance with Port
   Ordinance No.1606.

It is further recommended that all bid securities be returned to the respective bidders.




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Rejection of bids and authorization to negotiate and execute a
contract for the Replacement of Pump House No. 4




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                  BUDGET & FINANCE
This segment of the meeting is reserved for action or
discussion regarding the status of Budget and Finance
issues.




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                                                   BOARD MTG. DATE: April 26, 2011



                              AGENDA REPORT
TITLE:            Authority to Renew Port of Oakland Insurance Policies and Port Insurance
                  Program in an Amount Not to Exceed $3,650,000

AMOUNT:           Not to Exceed $3,650,000

PARTIES INVOLVED:

 Corporate Name/Principal                              Location
 Alliant Insurance Services (Broker)                   San Francisco, CA

 Aon Risk Insurance Services West (Broker)             Seattle, WA

 Dealey Renton & Associates (Broker)                   Oakland, CA

 Jonathan Leong DBA: JLA, Inc. (Broker)                Alameda, CA

 Marsh Risk & Insurance Services (Broker)              San Francisco, CA

 Richard Freeman Insurance Services (Broker)           Oakland, CA

 California Association of Port Authorities            (1) Chicago, IL; (2) Pittsburg, PA; (3)
 (CAPA) Umbrella Excess includes: (1) AGCS             New York, NY; (4) Rye Brook, NY; (5)
 Marine Insurance Co. (Allianz Ins. Co.); (2           Boston, MA; (6) Boston, MA
 Chartis (National Union Ins. Co. of Pittsburg);
 (3) Starr Indemnity & Liability Co.; (4)
 Navigators Ins. Co.; (5) Liberty Mutual Ins. Co.;
 (6) Chartis (Lexington Ins. Co.)
 Crane Property Program includes: (1) Lloyds of        (1) London, UK; (2) Chicago, IL; (3)
 London; (2) Axis Surplus Insurance Co.; (3) Chartis   Boston, MA; (4) Omaha, NE; (5)
 (Lexington Ins. Co.); (4) Arch Specialty Insurance    Morristown, NJ; (6) Wilmington, DE; (7)
 Co.; (5) The North River Insurance Co.; (6)           Chicago, IL; (8) Gastonia, NC; (9)
 Endurance American Specialty Ins. Co.; (7) AGCS       Chicago, IL
 Marine Insurance Co. (Allianz Ins. Co.); (8) Maiden
 Specialty Insurance Co.; (9) Illinois Union
 Insurance Co.




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 Corporate Name/Principal                               Location
 Public Entity Property Insurance Program (PEPIP)       (1) London, England; (2) London,
 includes: (1) Lloyds of London; (2) Allied World       England; (3) London, England; (4)
 Assurance Company, Ltd; (3) Axis Specialty             London, England; (5) Vancouver, BC;
 Europe Ltd.; (4) Lancashire Insurance Co.; (5)         (6) Chicago, IL; (7) Los Angeles, CA;
 Continental Casualty Co. (CNA); (6) Endurance          (8) Wilmington, DE; (9) Cincinnati, OH;
 American Specialty Ins. Co.; (7) Essex Insurance       (10) Armonk, NY; (11) Mount Laurel,
 Co.; (8) Great American E&S Ins. Co. of New York;      NJ; (12) Winston-Salem, NC; (13)
 (9) Hiscox Insurance Company; (10) Homeland            Boston, MA; (14) Stamford, CT
 Insurance Company of NY; (11) Maiden Specialty
 Insurance Company; (12) Ironshore Specialty
 Insurance Company; (13) Chartis (Lexington Ins.
 Co.); (14) XL Insurance America Inc.
 (1) Chartis (AIG); (2) Chartis (AIG Aviation); (3)     (1) New York, NY; (2) New York, NY;
 Chartis (National Union Fire Ins. Co. of               (3) Pittsburg, PA; (4) New York, NY; (5)
 Pittsburg); (4) Chartis (AIG Worldsource); (5)         New York, NY
 Chartis Specialty Insurance
 Discover Re Ins. Co.                                   Farmington, CT
 Travelers Ins. Co.                                      Hartford, CT
 Lloyds’ London                                         London, UK
 Hartford Steam Boiler Ins. Co.                          Hartford, CT
 Hartford Ins. Co.                                      Hartford, CT
 Hiscox Insurance Co.                                   Chicago, IL
 Great American Ins. Co.                                Cincinnati, OH
 Chubb Ins. Co. (Federal Insurance Co.)                 Warren, NJ
 AGCS (Allianz Ins. Co.)                                Chicago, IL
 ACE Ins. Co. (Illinois Union Insurance Co.)            Philadelphia, PA

TYPE OF ACTION:                                Resolution

SUBMITTED BY:                                  Sara Lee, Chief Financial Officer

APPROVED BY:                                   Omar Benjamin, Executive Director

FACTUAL BACKGROUND

The Port purchases commercial insurance policies to cover catastrophic and other losses
that cannot prudently be assumed by the Port. In addition, under the terms of the Master
Trust Indentures for the Senior and Intermediate Lien Bonds, the Board is required to
procure and maintain commercial insurance or provide qualified self-insurance with respect
to Port facilities and operations, in such amounts and against such risks as are, in the
judgment of the Board, prudent and reasonable and subject to the condition that insurance
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                                                                   BOARD MTG. DATE: April 26, 2011


is obtainable at reasonable rates and upon reasonable terms and conditions. These
policies include airport liability, excess liability, general property including business
interruption, automobile physical damage and liability, public officials errors and omissions
including employment practices liability, fiduciary liability, fidelity bond, crane physical
damage, war and terrorism, earthquake damage at 530 Water Street building, excess
worker’s compensation and group travel and accident. The Port also has an Owner
Controlled Insurance Program (OCIP) and Professional Liability Insurance Program (PLIP)
for capital improvement construction projects and several pollution insurance policies.

Insurance policies in California do not cover earthquake damage, unless specific coverage
is purchased. Currently, the Port purchases the following earthquake coverage:

              •    About 1/3 of the total value of the cranes, including business interruption
              •    About 1/4 of the building and contents value and loss of rents at the 530
                   Water Street building
              •    Electronic data process equipment

Most of the Port’s insurance policies are for a term of one year with a renewal date of May
20th, June 1st or July 1st. The exceptions to this are (1) the Owner Controlled Insurance
Program (OCIP) which expires July 2014, (2) the Professional Liability Insurance Program
(PLIP) which expires January 2012, (3) pollution insurance policies with various expiration
dates, (4) General Liability for Special Events which expires January 2012. This Agenda
Report is requesting authorization to renew the Port of Oakland insurance policies expiring
on May 20, June 1 and July 1, 2011.

ANALYSIS

The insurance market has been favorable for several years. Overall, insurance capacity
remains strong and broad coverage remains readily available to most industry sectors,
including airports and seaports. However, it is currently very difficult to purchase
earthquake coverage not previously obtained due to the recent events in New Zealand and
Japan.1

Through its insurance brokers, the Port obtained multiple competitive insurance quotes
(typically 3 quotes per each type of insurance). The premiums quoted are approximately
flat compared to last year. However, the quoted premiums and terms leading up to the
renewal dates are subject to change based on global and local events impacting the
insurance market up until the insurance policies actually renew (May-July). Other than the
recent earthquakes in New Zealand and Japan, no such events are currently known or
expected. The premiums paid in 2010 for these policies totaled $3,482,481. The premiums
for this year’s renewals are estimated to total approximately $3,481,300. Provided as
Exhibit A, Summary of Insurance Renewals, is the summary of insurance coverage,
expiration date, and estimated renewal premium compared to the expiring insurance
coverage.
1
 Due to the recent earthquakes in Japan and New Zealand, insurance companies are effectively putting on hold issuing
new earthquake risk policies at ‘reasonable” prices; however, insurance companies are re-committing to the renewal of
existing earthquake polices at levels and costs similar to last year.
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Current Port Insurance Brokers

As summarized in the table below, the Port uses three prime brokers, three small/local sub-
brokers, and participates in two group insurance programs: California Association of Port
Authorities (CAPA) Umbrella Excess and the Public Entity Property Insurance Program
(PEPIP).

Insurance Broker       Office       Insurance             Comment
                       Location
AON Risk               Seattle      California            Aon manages the umbrella
Insurances West                     Association of Port   program for the following CAPA
                                    Authorities (CAPA)    participants: Port of Long Beach,
                                    Umbrella Excess       Port of San Diego, Port of
                                                          Oakland, Port of Sacramento, Port
                                                          of Redwood City, Oxnard Harbor
                                                          District-Port of Hueneme and
                                                          Humbolt Bay & Harbor District.
                                                          The advantage to participation is a
                                                          blended liability coverage form for
                                                          shore-side and marine risks
                                                          including ship collision. This
                                                          blended form approach lowers the
                                                          premium the ports would have to
                                                          pay compared to coverage
                                                          purchased separately.
Alliant Insurance      San          Public Entity         Alliant is the exclusive broker for
Services, Inc.         Francisco    Property Insurance    the United States’ largest public
                                    Program (PEPIP)       agency property program. This
                                                          group program was created by
                                                          Alliant in the 1980’s in California
                                                          and currently has participation
                                                          across the United States. Among
                                                          the thousands of participants are
                                                          the Port of Seattle, City and
                                                          County of San Francisco (including
                                                          SFO) and the San Diego Airport.
                                                          This group purchase program
                                                          provides a broad scope of
                                                          coverage for damage to property
                                                          and a low rate plan.
Marsh Risk and         San          All other insurance   See Exhibit A
Insurance Services     Francisco    policies
  − Jonathan Leong     Alameda      Sub-broker to         See “Local Participation” section
    DBA: JLA, Inc                   Marsh                 below
  − Richard Freeman    Oakland      Sub-broker to         See “Local Participation” section
    Insurance                       Marsh                 below
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   Services
 − Dealey Renton &    Oakland      Sub-broker to          See “Local Participation” section
   Associates                      Marsh                  below

Insurance Policy Renewal Process

The Port’s insurance renewal process begins in November of each year and takes
approximately seven months. The process includes:

             Risk analysis – Port identifies insurable risks and obtains benchmarking data
             Port assembles detailed disclosures for underwriting data and submittal of
             insurance applications
             World-wide marketing – Port works with the brokers to qualify insurance
             carriers who can provide the requested insurance
             Quotation negotiations, conditions and price – Brokers obtain multiple
             competitive quotes from interested insurers for each type of insurance
             Submittal to the Board for review and authorization
             Brokers place the insurance program as approved by the Board

The insurance purchasing process is exempt from the Port’s Purchasing Ordinance 1606.
This exemption reflects the Port’s understanding that its insurance needs are complex,
specialized and unique. The Port’s insurance program must be evaluated based on a
balance of price, scope of coverage and services provided by the insurance companies and
insurance brokers (especially in the event of a disaster), as well as the experience and
financial strength of the insurance companies. The insurance procurement needs of the
Port require the use of national insurance brokerage firms who:

             Understand the Port’s businesses and unique insurance requirements
             Have significant national and international experience placing insurance
             policies for large airport and seaports around the country
             Possess significant experience and knowledge of the insurance requirements
             needed by the tenants, contractors and vendors of large seaports and
             airports, as well as related environmental issues presented by such parties.
             Since risk transfer is a key element of the Port’s risk management plan, the
             consulting services provided by the Port brokers on matters related to the
             insurance requirements of the Port’s tenants, contractors and vendors is an
             important service. The prime brokers have practice groups related to
             aviation, maritime and real estate who can offer benchmarking and advice
             based on experience and best practices.
             Have sophisticated claims response teams who can respond to specialty
             losses related to maritime, airport, real estate, environmental losses and
             regional disasters, even if the local team is incapacitated
             Possess strong relationships with insurance companies worldwide in order to
             obtain the lowest, most competitive premium costs
             Provide highly sophisticated risk management analysis serviced by maritime,
             real estate and aviation specialty practice groups

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Although insurance purchasing is exempt from the Port’s Purchasing Ordinance, the Port
completed a competitive request for proposal (RFP) for insurance brokerage services in
January 2009. It is important to note that the RFP requirements and scope of work were
very specific and tied to the Port’s maritime and aviation insurance requirements. After
reviewing and scoring the proposals, it was determined that Marsh continued to best serve
the Port’s insurance and risk management needs. Through this process, it was also
reconfirmed that the industry experience, ability to service large deductibles/retentions and
asset requirements far exceeded what a small/local insurance firm would be able to provide
on its own.

Local Participation

During the competitive bid process that concluded in January 2009, Risk Management and
Social Responsibility Division (SRD) encouraged prime broker partnering with small/local
insurance brokers. The RFP specifically requested that proposals cite the sub-brokers that
would be utilized, the work that would be performed, and the specific level of compensation
that each of the sub-brokers would receive. Risk Management and SRD conducted
outreach to small/local sub-brokers and also provided a list of potential sub-brokers to the
prime brokers. The list included Port certified small/local insurance firms. Marsh committed
to pay 20% of its net commission with Port certified small/local firms. The current list of
small/local insurance sub-brokers is as follows:

             Jonathan Leong DBA: JLA, Inc.                    Alameda, CA
             Richard Freeman Insurance Services               Oakland, CA
             Dealey Renton & Associates                       Oakland, CA


Although Marsh’s overall commission fluctuates with the insurance premium from year to
year, Marsh has not reduced the payments to the small/local sub-brokers. The following
table is a summary of payments to the sub-brokers over the past three years:

                                            CY 2008        CY 2009        CY 2010
         Local Broker Commission            $67,281        $67,281        $67,281
         % of Marsh Net                        19%            25%            23%
         Commission

During this current year’s insurance renewal process, Marsh continues to be committed to
a minimum 20% net commission sharing arrangement with the three small/local firms listed
above (as agreed to in 2009). Marsh works in association with the sub-brokers as follows:

             JLA Inc. has been a sub-broker through Marsh for the Port for nine years. JLA
             provides administrative assistance to the Port to help track insurance
             certificates received by tenants, vendors and contractors to ensure
             compliance with the Port’s insurance requirements. JLA also assists with
             maintaining claims documentation.


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                  Richard Freeman Insurance Services (RFIS) has also been a sub-broker
                  through Marsh for the Port for nine years. RFIS is paid to encourage local
                  businesses to apply to the Port’s Social Responsibility Division for potential
                  projects and business opportunities at the Port.

                  Dealey, Renton & Associates has been a sub-broker through Marsh for the
                  Port for three years. They have assisted with updating the Port’s internal
                  claims tracking process.

Port staff will continue to monitor and assess Marsh’s relationship with its sub-brokers.

Last year, the Port’s Risk Manager informally surveyed the Port of Los Angeles, Port of
Long Beach, Port of San Diego and Port of Seattle with respect to their utilization of
small/local brokers for their insurance procurement needs. With the exception of the Port
of Seattle, these ports are not utilizing small/local brokers due to the unique and complex
nature of their insurance needs as an airport and/or seaport. Participation of sub-brokers in
the Port of Seattle’s insurance program was structured similar to the Port’s program with
the small/local firms working as sub-brokers to the prime broker, but with a lower
participation rate of 10%.

With respect to insurance companies, who underwrite the Port’s insurance policies and
assume the risk, there are no locally-owned or local offices of insurance companies who
can underwrite the Port’s policies.

Insurance Broker Compensation

Marsh and Alliant are each compensated solely by commissions paid by the insurance
companies. The commission varies based on the insurance policy and insurance market
conditions and typically ranges from 10% to 20% of the premium cost. The estimated
insurance broker’s commission/fee can be found in Exhibit A, Summary of Insurance
Renewals. For comparison purposes, 2010 commission/fees are also provided. In 2011, it
is estimated that Marsh will receive approximately $355,490 in commissions (approximately
14% of the premium costs) for renewal of the insurance policies it places. The small/local
sub-brokers will receive approximately $67,281(at least 20% of Marsh’s net commission).
Alliant will receive approximately $75,433 in commissions (11% of the premium cost) for
the PEPIP program.2 Aon will receive a $10,000 fee (about 4% of the premium cost) for
the CAPA program. With insurance premiums anticipated to be relatively flat for 2011, the
commissions and fees earned by the insurance brokers are expected to be relatively similar
to amounts earned in 2010.




2
 In addition, the Port recently learned that Alliant has a separate arrangement with the PEPIP insurance underwriters to
provide administrative services in return for an enhanced commission of an additional 12.5% of the premium.
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STRATEGIC PLAN

  Strategic Priority Area   Goal                  Objective         How and When
  Sustainable               Goal A: Create        1. Maximize       The Port’s insurance
  Economic and              sustainable           the use of the    policies protect the Port’s
  Business                  economic              Port’s existing   existing assets from various
  Development               growth for the        assets            risks, preserving the
                            Port and                                financial health of the Port
                            beyond                                  in the event of these risks.
                                                                    In addition under the terms
                            Goal B:               1. Retain         of the bond indentures and
                                                  existing          certain tenant agreements,
                            Maintain and
                                                  customers         the Board is required to
                            aggressively
                            grow core             and tenants       procure and maintain
                                                                    commercial insurance or
                            businesses
                                                                    provide qualified self-
                                                                    insurance

BUDGET & FINANCIAL IMPACT

The insurance premiums are budgeted under the Port’s Operating Budget Non-
Departmental, excluding amounts reimbursed by tenants to pay for a portion of the
insurance associated with properties, cranes and AirBART. Although insurance premiums
are subject to change based on global and local events impacting the insurance market up
until the insurance policies actually renew (May-July), it is anticipated that the insurance
premiums will cost approximately $3.48 million, essentially flat compared to 2010 premium
costs. For the insurance policies expiring in May-July 2011, $1,015,727 was reimbursed by
Port tenants. A similar amount of this year’s insurance premium is expected to be
reimbursed.

STAFFING IMPACT

No effect on current staffing.

SUSTAINABILITY

No sustainability opportunities are identified.

ENVIRONMENTAL

The California Environmental Quality Act (CEQA) Guidelines, Section 15061(b)(3) (“the
general rule”) states that CEQA applies only to projects that have the potential for causing
a significant effect on the environment. It can be seen with certainty that authorizing and
renewing Port of Oakland insurance policies and Port insurance program will not have a
significant effect on the environment, and therefore this action is not a project under CEQA,
and no environmental review is required.

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MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Report do not fall within the scope of the Port of
Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
the MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

This Program is not covered by the Port’s Owner Controlled Insurance Program.

GENERAL PLAN

Not Applicable

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements (the
“Living Wage Regulations”), do not apply because the requested action is not an
agreement, contract, lease, or request to provide financial assistance within the meaning of
the Living Wage Regulations.

RECOMMENDATION

It is recommended that the Board authorize the Port to renew the current insurance
program at a not to exceed amount of $3,650,000. The insurance described above is
prudent and reasonable for the Port and its facilities. All insurance policies shall be subject
to the Port Attorney’s review as to form and legality.




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                                                      Exhibit A
                                            Summary of Insurance Renewals


                                                                          Expiration                   Renewal Estimates
Recommended Coverage                                                  May 20, 2010-2011                May 20, 2011-2012


Airport Liability            Company:                               Chartis (AIG/AIG Aviation)       Chartis (AIG/AIG Aviation)
                             Limit:                                             $200,000,000                     $200,000,000
                             Retention:                                             $200,000                         $200,000
                             Premium including taxes & fees                          $180,595                         $161,008
                             Commission 15.5%:                                          $27,992                          $24,956

Automobile Liability         Company:                                             Discover Re                            Chartis
                             Limit:                                                $1,000,000                        $1,000,000
                             Retention:                                              $200,000                          $200,000
                             Vehicle Count:                                               356                               350
                             Premium including taxes & fees                           $151,300                          $140,762
                             Commission 15%:                                            $22,695                          $21,114

Automobile Physical Damage
(Airport Shuttles Only)      Company:                                                  Travelers                         Chartis
                                                                    Stated Value per vehicle/$8           Actual Cash Value per
                             Limit:                                             million per loss     vehicle/$7.5 million per loss
                             Retention:                                                $25,000                           $25,000
                             TIV (1):                                              $8,861,181                        $7,359,180
                             Rate                                              .68/$100 Value                  Rated per vehicle
                             Premium including taxes & fees                             $60,256                           $25,813
                             Commission 15%:                                             $9,038                           $3,750


                                                                  AGCS (Allianz) & Others (for     AGCS (Allianz) or Lexington
CAPA Umbrella                Company:                                         Excess Limits)       & Others (for Excess Limits)
                             Limit:                                            $150,000,000                       $150,000,000
                             Retention:                                           $1,000,000                        $1,000,000
                             Premium including taxes & fees                          $228,672                          $251,539
                             Commission: 0%                                                 $0                                $0
                             Broker Fee                                               $10,000                           $10,000



Crane Insurance Including
Electronic Data Processing                                        Lloyds London & Others (for      Lloyds London & Others (for
Equipment & Earthquake       Company:                                           Excess Limits)                   Excess Limits)
                             Limit:                                              $100,000,000                     $100,000,000
                             Retention:                             $1,000,000/10% Earthquake        $1,000,000/10% Earthquake
                             TIV (1):                                            $305,518,000                     $315,994,100
                             Premium including taxes & fees                        $1,491,075                        $1,512,828
                             Commission 13.64%:                                      $198,228                          $199,992

Crane Boiler & Machinery     Company:                                   Hartford Steam Boiler            Hartford Steam Boiler
                             Limit:                                              $20,000,000                      $20,000,000
                             Retention:                                             $100,000                         $100,000
                             Premium including taxes & fees                            $10,871                          $11,252
                             Commission 15%:                                             $1,631                           $1,688

Crane Terrorism              Company:                                          Lloyds London                     Lloyds London
                             Limit:                                             $100,000,000                      $100,000,000
                             Retention:                                             $100,000                          $100,000
                             Premium including taxes & fees                            $62,898                          $56,788
                             Commission 15%/12.5%:                                       $8,350                           $7,625

Electronic Data Processing
Equipment Floater            Company:                                           AGCS (Allianz)                   AGCS (Allianz)
                             Limit:                                               $2,999,800                      $14,468,500
                             Retention:                                              $15,000                          $15,000
                             Premium including taxes & fees                          $10,522                          $25,000

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                                                                                        BUDGET & FINANCE Tab 3.3


                                                               Exhibit A
                                                     Summary of Insurance Renewals


                                      Commission 20%:                                          $2,104                         $5,000


Excess Worker's Compensation &
Employers' Liability                  Company:                                           Discover Re                         Chartis
                                                                               Statutory & $1,000,000         Statutory & $1,000,000
                                      Limit:                                       Employers' Liability           Employers' Liability
                                      Retention:                                            $750,000                       $750,000
                                      Payroll:                                           $45,616,894                    $44,963,712
                                      Premium including taxes & fees                        $157,241                       $151,854
                                      Commission 12.5%/15%:                                   $19,655                        $22,778


Foreign Liability Package             Company:                             Chartis (AIG Worldsource)      Chartis (AIG Worldsource)
                                      Limit:                                             $1,000,000                     $1,000,000
                                      Retention:                                                 $0                             $0
                                      Premium including taxes & fees                         $2,500                         $2,500
                                      Commission 15%:                                          $375                           $375

Public Officials Errors & Omissions
(incl. Employment Practices
Liability)                            Company:                                         Chartis & ACE               Chartis & Hiscox
                                      Limit:                                            $25,000,000                   $25,000,000
                                      Retention:                                           $500,000                       $500,000
                                      Premium including taxes & fees                        $313,072                       $291,548
                                      Commission 14%/15.5%:                                   $43,890                        $40,773




                                                                                Expiration                  Renewal Estimates
Recommended Coverage                                                         June 1, 2010-2011              June 1, 2011-2012

Earthquake 530 Water Street
Building & Contents                   Company:                                        Lloyds London                  Lloyds London
                                      Limit:                                            $10,000,000                    $10,000,000
                                      Retention:                               10%/$25,000 minimum            10%/$25,000 minimum
                                      TIV (1):                                         $42,314,477                    $42,652,270
                                      Premium including taxes & fees                        $119,212                       $119,729
                                      Commission 15%/17.5%:                                   $17,319                        $20,293


Fidelity                              Company:                              Hartford/Great American        Hartford/Great American
                                      Limit:                                           $20,000,000                    $20,000,000
                                      Retention:                                            $50,000                        $50,000
                                      Premium including taxes & fees                         $28,680                        $28,680
                                      Commission 15%:                                          $4,302                         $4,302

Fiduciary Liability                   Company:                                                Chubb                          Chubb
                                      Limit:                                            $13,000,000                    $13,000,000
                                      Retention:                                            $10,000                        $10,000
                                      Premium including taxes & fees                         $16,250                        $16,250
                                      Commission 17.5%:                                        $2,844                         $2,844




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                                                                  Exhibit A
                                                        Summary of Insurance Renewals


                                                                                       Expiration                  Renewal Estimates
Recommended Coverage                                                                July 1, 2010-2011               July 1, 2011-2012

Non-Crane Property Insurance
including Terrorism & Boiler &
Machinery                                Company:                                            PEPIP various                   PEPIP various
                                         All Risk Limit:                                    $1,000,000,000                  $1,000,000,000
                                         Terrorism Limit:                                     $250,000,000                    $250,000,000
                                         Boiler & Machinery Limit:                            $100,000,000                    $100,000,000
                                         Retention:                                               $500,000                        $500,000
                                         TIV (1):                                           $1,359,313,250                  $1,449,927,052
                                         Rate per $100:                                            $0.0467                         $0.0462
                                         Premium including taxes & fees                           $634,427                        $670,589
                                         Commission 11% (2):                                       $149,090                        $157,588

Mobile Equipment (Fire Trucks)           Company:                                            PEPIP various                    PEPIP various
Physical Damage                          Limit:                                                $2,887,925                       $3,142,318
                                         Retention:                                                $5,000                           $5,000
                                         TIV (1):                                              $2,887,925                       $3,142,318
                                         Rate per $100:                                        $0.516288                        $0.482478
                                         Premium including taxes & fees                           $14,910                          $15,161
                                         Commission 13%:                                            $3,504                           $3,563


Overall Premium:                                                                                 $3,482,481                      $3,481,300

Marsh Commission:                                                                                  $358,424                          $355,490
Aon Broker Fee:                                                                                     $10,000                           $10,000
Alliant Commission (2):                                                                            $152,594                          $161,151

Note: Commission is based on premium not including taxes & fees.
(1) TIV = Total Insured Values
(2) For the Non-Crane insurance, Alliant also receives a 12.5% enhanced commission from the PEPIP insurance carriers for providing
administrative services.




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                  STRATEGY & POLICY
This segment of the meeting is reserved for action or
discussion on Strategy and Policy Issues.




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                                                           BOARD MTG. DATE: 4/26/11



                               AGENDA REPORT
TITLE:            Adoption of a Land Use and Development Code for the Airport Business
                  Park to Update and Replace Existing Standards and Restrictions

AMOUNT:           None

PARTIES INVOLVED:

                   Corporate Name/Principal                Location
                   Tenants of Oakland Airport              Oakland Airport Business
                   Business Park                           Park
                   Property Owners of Oakland              varies
                   Airport Business Park

TYPE OF ACTION:                        Ordinance

SUBMITTED BY:                          Chris Chan, Acting Director of Engineering

APPROVED BY:                           Omar Benjamin, Executive Director


Note: This item was continued from the Board meeting of 3/15/11 to 4/26/11 to address
comments from one of the Commissioners. Changes have been made to the Final Draft
LUDC to limit service uses from the Business Park Interior. One of the original goals of
the Business Park was to restrict retail and other uses with high public traffic volumes from
the interior streets, and these changes are consistent with that goal.

EXECUTIVE SUMMARY

After extensive community outreach and involvement, Staff proposes adoption of the
Oakland Airport Business Park Land Use and Development Code (LUDC) (Exhibit A) to
replace the existing outdated standards for development in the Oakland Airport Business
Park. The existing Standards and Restrictions (Ordinance No. 2832, as amended) (Exhibit
B) would be repealed by this action. The LUDC streamlines and more efficiently enables
the Port of Oakland to carry out its responsibility under the Charter to maintain land use
jurisdiction in the Port Area. The Oakland Airport Business Park contains nearly all of the
privately-owned parcels that remain in the Port Area and adoption of the LUDC would
streamline the approval process for project applicants, increase public participation, ensure
Airport-consistent uses, and maximize the Port’s cost recovery.

FACTUAL BACKGROUND

The Oakland Airport Business Park (Business Park) is an area north of the Oakland
International Airport (Airport) under Port land use jurisdiction, meaning that proposed
development is subject to discretionary approval by the Port rather than the City. It is
roughly bound by Hegenberger Road, Doolittle Drive, 66th Avenue, and I-880. Port
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Ordinance No. 2832, as amended, contains the standards and restrictions for development
in the area that are enforced by the Port of Oakland. Most of the area is privately owned,
with a few parcels still under Port ownership. When the Business Park was established in
1966, under Port Ordinance No. 1343, many more parcels were under Port ownership and
the standards and restrictions were considered to be Covenants, Conditions and
Restrictions (CC&R’s). CC&R’s are usually associated with a group of parcels under one
owner or manager. Over time the Port has sold most of its properties in the Business Park
and has become less of a property manager and more of a planning agency. The
proposed LUDC would function more like a standard planning or zoning ordinance;
therefore, will be familiar to those that need to use it (developers, architects, tenants, etc.).

Port Ordinance No. 2832, which replaced P.O. No. 1343 in 1988, has been amended
piecemeal a number of times since it was originally adopted, but no comprehensive review
has been done before now. Since that time, the City has updated the General Plan, and
the City Charter requires that the Port’s land use policies and actions comply with the
General Plan.

Port staff has worked over the last year and a half to complete the draft LUDC to comply
with the current General Plan and to be more user friendly. No consultants or outside
resources were used in this process. The process has included circulation of draft
documents to the public, several meetings with the public and City of Oakland
representatives, and input from Port and City staff. The proposed replacement LUDC is
largely a clarification of existing standards, many of which have been potentially confusing
or vague. Changes can be summarized as follows:

     1)   The land use section has been clarified significantly and now includes a
          comprehensive table of permitted uses;
     2)   Improved maps clearly show the area and location of the Business Park, and the
          designated land use areas;
     3)   Set back requirements have been reduced and simplified to be consistent with
          contemporary standards, and to expand development options and increase
          available on-site parking;
     4)   Approval procedures have been streamlined for simple projects and a public
          process has been developed for larger projects to be consistent with public
          participation for other jurisdictions in our area and the state;
     5)   Enforcement provisions have been added;
     6)   Minor language changes have been made to clarify standards, reflect current
          practice, and generally make the document more user-friendly.

PUBLIC PARTICIPATION and LUDC DEVELOPMENT PROCESS

Preparation of a new code for the Business Park was initiated by direction of a Port
Commissioner during a public hearing on a variance appeal on July 1, 2008, who observed
that some of the existing requirements seemed out of date, and that the “Standards and
Restrictions” should be reviewed. Thereafter staff began an evaluation of the Standards
and Restrictions and concluded that an update to the Business Park requirements were
long overdue. Work began in earnest in the Summer of 2009. Input during the process
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from the City of Oakland and the public was instrumental in creating a comprehensive
document that will serve to clearly and effectively regulate the Business Park for years to
come. The following is a timeline of the process to date, including public meetings and
input periods. See (Exhibit C) for specific details regarding the public input received.


2009
            Summer: Engineering and Environmental staffs work with the Port Attorney’s
                     Office to create a first rough draft.
        November 24: Administrative Committee- Presentation of rough draft and scope.
         December 1: Board of Port Commissioners- Presentation of rough draft and
                     scope.
        December 17: Public meeting to discuss initial scope of work and preliminary
                     proposed changes.
2010
             Spring: Draft is revised in consideration of issues raised at initial public
                      meeting.
           Summer: Port continues outreach to the public, evaluate compliance issues,
                      and revise document.
            June 17: Release of first draft to public, posted on Port website.
            June 24: Public meeting to present and discuss draft.
              July 6: Follow up public meeting with interested people to continue
                      discussion on certain items.
        July/August: Receive written comments from public and City staff to supplement
                      oral testimony.
                Fall: Revise and refine document based on all input.
November /December: Final staff review and edits.

2011
              January: Post final draft document on Port website for final public review.
                 April: Board approval scheduled.

ANALYSIS

1. Modernize Development Standards & Avoid Unnecessary Variances. The existing
standards retain a host of antiquated development restrictions, including unusually onerous
setback requirements. For this reason, it is common that the Port must issue as many as a
dozen variances for each application to develop a project within the Business Park. These
variances must be supported by State mandated findings and require special noticing and
hearing procedures. The variance process creates significant delay and cost for the
applicant, and unnecessary work for Port staff.

The LUDC provides for contemporary development standards that reflect prevailing
development patterns and provide greater consistency with the City of Oakland’s
development standards. This will avoid the unnecessary variance process. The LUDC
also includes detailed design standards that will replace the time consuming and ad hoc
design review process currently used by the Port.
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2. Align Standards with City’s General Plan & Avoid Potentially Vague and Limiting
Use Restrictions. The existing standards limit uses in the Business Park to a short list of
dated and potentially vague use classifications. This has required Port staff to undergo an
ad hoc evaluation of each proposed use to determine whether it might fit within the rubric of
such classifications.    These classifications may be off-putting to potential project
proponents who do not have a clear sense of what uses are allowed within the Business
Park. The LUDC provides an expanded and clarified list of uses and conditional uses in a
user friendly format, including a color-coded table. The LUDC’s uses are designed to
comply with the General Plan and to be generally complementary to the City’s zoning
designations in the areas abutting the Business Park.

3. Provide the Public with a User-Friendly Document. The current collection of
typewritten ordinances is not easy to navigate and many applicants experience some
confusion regarding both the substantive opportunities and restrictions in the Business Park
and the procedural requirements for application and approval for new development. The
LUDC is designed to be easily accessible and understood by both project applicants and
the public generally. It is designed to be navigable on the internet with hyperlinks and
features graphics, tables, and charts that clearly explain the substantive and procedural
requirements of development in the Business Park.

4. Clarify and Maximize Public Participation. The existing standards are potentially
vague and mostly silent regarding public participation in the development process within
the Business Park. For this reason, the existing standards may be confusing to the general
public and to project applicants with regard to the timing, scope, and availability of public
participation. The Code provides for a very clear and explicit public participation process,
establishing specific notice, hearing, and administrative appeal requirements. Under the
existing standards, the Executive Director considers most permits for development within
the Business Park and certifies environmental impact reports (“EIRs”) and mitigated
negative declarations (“MNDs”). These actions by the Executive Director are not taken at
noticed public hearings. For this reason, the Code proposes establishment of one or more
Permit Hearing Officers who would function as designees of the Executive Director –and in
certain cases of the Board (as explained below) – to act on building permits and to certify
and approve environmental documents as part of a properly noticed public hearing.

5. Streamline the Approval Process. Under the existing standards, project applicants
and other interested parties must navigate through a series of procedures to understand
who acts upon development permits and how administrative appeals are directed. Private
applicants must apply to the Executive Director, who – as explained above – is not
currently equipped to provide for noticed public hearings in order to consider such
applications. Port tenants within the Business Park must apply directly to the Board for
even the most minor building permits. This leads to significant delay for project
applications and has been a source of frustration for some applicants.              Board
considerations of such permits require compliance with all Planning and Zoning law and
CEQA notice and hearing requirements, a departure from typical Board meetings.
Decisions regarding land uses in the Business Park must be akin to decisions by the City’s
Planning Commission with requisite findings, conditions of approval, and procedures. This
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function is very different from typical Port-related actions performed by the Board and
Executive Director. For this reason, as explained above, the establishment of one or more
Permit Hearing Officer(s) is proposed.

Under the LUDC, very minor improvements would be subject only to City of Oakland
building permit requirements and exempted from issuance of a Port Building Permit, minor
approvals would be acted upon by the Permit Coordinator with appeals available to the
Permit Hearing Officer(s) and then to the Board. Approvals requiring an EIR or MND would
be acted upon by the Permit Hearing Officer(s) at a properly noticed public hearing with
appeals available to the Board. The LUDC requires the following delegations:

Delegations Proposed in LUDC
CEQA Clearance Port Owned Property (In Private Property
                 Bus. Park Only)
Categorical      Board       →   Permit Exec. Dir. → Permit Coordinator
Exemption        Coordinator
MND or EIR       Board → Permit Hearing Exec. Dir. → Permit Hearing Officer(s)
                 Officer(s)

6. Ensure Airport-Consistent Uses. The policy rationale for including the Business Park
within the Port Area has always been for the Port to ensure that no incompatible land uses
are established that might interfere with Airport operations. The current standards do not
provide for any conditions of approval or restrictions that would expressly limit Business
Park occupants from using their properties in a manner that could be inconsistent with
Airport operations. Further, the existing standards do not provide for any limitations on
Business Park occupant actions or claims against the Airport for nuisance or other causes
of action related to noise, vibrations, etc. associated with Airport operations. The LUDC
contains specific conditions of approval and requirements that Business Park applicants
affirmatively covenant to pursue activities that are consistent with the Airport and to waive
any all claims against the Airport related to Airport operations.

7. Maximize Cost Recovery. The existing standards do not provide for reimbursement of
the Port for many costs that are incurred in reviewing and processing applications,
administrative appeals, and other Business Park related oversight including abatement of
nuisances and correcting violations. The LUDC provides for a more comprehensive
recovery of these costs, including internal Staff and Port Attorney time, and outside counsel
and consultant costs and fees.

BUDGET & FINANCIAL IMPACT

Fees are collected from permit applicants to cover most Port staff costs. This LUDC will
reduce the staff time necessary to interpret the standards and answer questions for
potential projects before an application and fees are submitted. The LUDC will also allow
for greater cost recovery from project applicants and in code enforcement situations.



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STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. The Strategic Plan is a
cornerstone of the overall alignment of the Port. It provides the framework for focusing the
work of staff and the Board of Port Commissioners, and serves to guide an organization-
wide redesign to better match the skills and talents of Port employees with the overall
strategic goals of the organization in the key areas of Sustainable Business and Economic
Development, Stewardship and Accountability, Port Workforce and Operations, and
Communications and Information.

The Strategic Plan operates on a fiscal year schedule for five years. Each fiscal year
represents a stage in implementation. For FY 2010-2011, the stage theme is “Stabilize”
which focuses on activities that will continue to stabilize Port businesses and finances.
This project will stabilize the land use planning function for the Airport Business Park by
creating clear guidelines and streamlining processes so that developers and staff start the
permit process with similar expectations. The LUDC will provide a clear planning document
for the Business Park that stabilizes the permit process.

This action will also help the Port achieve the following goals and objectives:

  STRATEGIC                                                          HOW and WHEN THIS
   PRIORITY                GOAL                OBJECTIVE                    PROJECT
    AREAS                                                                 IMPLEMENTS
                                                                    The Port is responsible
                                                                    for land use planning in
                                                                    the Business Park. This
                     Goal A: Create                                 responsibility carries the
                     Sustainable                                    need to make clear
                                          2. Affirm Port identity
                     Economic Growth                                development guidelines
                                          as a public enterprise.
                     For The Port And                               so that businesses
                     Beyond                                         understand the goals
                                                                    when doing economic
                                                                    and business planning.
Sustainable
Economic and
                                                                The document created
Business
                                                                by this action (LUDC) will
Development                               2. Conduct
                                                                be available to anyone
                     Goal C: Provide      comprehensive
                                                                via the Port’s website
                     equitable            communication and
                                                                immediately after the
                     community            outreach to
                                                                Board’s approval. The
                     access to            stakeholders and
                                                                LUDC is written so that
                     employment and       strategic partners to
                                                                anyone can understand
                     business             improve workforce and
                                                                the requirements and the
                     opportunities.       small business
                                                                expectations of the Port
                                          opportunities.
                                                                for development of land
                                                                in the Business Park.

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                                                                  The new LUDC will
                    Goal G: Sustain     1. Ensure effective       provide a document to
                    Healthy             communication and         the business community
Stewardship and     Communities         education regarding       that clearly and
Accountability      Through Leading     environmental and         effectively communicates
                    Edge                safety standards with     the standards expected
                    Environmental       business partners and     by the Port for
                    Stewardship.        the community.            development of property
                                                                  in the Business Park.



                                        1. Identify, assess and
                                        implement key skills
                    Goal H: Develop                               The new LUDC will
                                        and knowledge
Port Workforce      And Maintain A                                improve the ability of Port
                                        required for an
and Operations      High Performing                               staff to provide
                                        employee within a
                    Workforce.                                    assistance to the public.
                                        public enterprise.




                                                                  The new LUDC serves
                Goal L: Provide                                   as a long range planning
                timely and                                        document that will
                relevant                                          provide tenants and
Communications                          1. Strengthen long
                information to                                    property owners with the
and Information                         range planning.
                support critical                                  information they need to
                analysis and                                      plan for future
                decision-making.                                  development.




STAFFING IMPACT

It is anticipated that the new LUDC will reduce staff time needed to answer pre-application
questions and to evaluate permit applications in the future, allowing more time to focus on
unusual conditions, high impact projects, and enforcement.

SUSTAINABILITY

This action does not approve any alterations or improvements to any property.




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ENVIRONMENTAL

City of Oakland Lead Agency CEQA Determination: The City of Oakland circulated for
public review a draft Environmental Impact Report on the proposed Oakland General Plan
Land Use and Transportation Element (EIR) on October 31, 1997. The public review and
comment period closed on December 30, 1997. Nine agencies and organizations
submitted written comments including the Port of Oakland. The City of Oakland responded
in writing to comments and prepared a Final Addendum to the draft EIR in February 1998.
The City of Oakland certified the Final EIR on February 13, 1998.

Port Responsible Agency CEQA Determination: The Port, as a responsible agency,
received the City's notice of preparation, participated in meetings with City staff, and
reviewed and provided comments on the draft EIR.             No entity has filed an action
challenging the City's certification of the EIR. The Port will file a Notice of Determination
based on the City's certified EIR and the following Findings and Statement of Overriding
Considerations.

        Findings and Statement of Overriding Considerations: Updating the
        Land Use and Development Code for the Business Park does not
        substantially change the land uses described in the EIR and certified by the
        City of Oakland. Since the City's certification of the EIR, no substantial
        changes have occurred, and no new information exists, requiring major
        revisions of the EIR due to new significant environmental effects or a
        substantial increase in the severity of previous identified significant effects.
        The Port adopts and incorporates by reference the City's Findings and
        Statement of Overriding Considerations. (See Exhibit D)

Any alterations or improvements to the physical environment will be subject to a separate
Port Permit and CEQA determination.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Report do not fall within the scope of the Port of
Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
the MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

There is no construction project associated with this action, so the Port of Oakland’s Owner
Controlled Insurance Program (OCIP) does not apply. Any future construction related to
this action would be the sole responsibility of the tenant.

GENERAL PLAN

The uses proposed are consistent with the Business Mix and Regional Commercial
designations for the area in the City of Oakland General Plan. The allowable uses
proposed in the document have been reviewed with City staff in the context of the General
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Plan and conform to the General Plan. Any alterations to specific properties in the
Business Park will be subject to separate determinations for each building permit. The
General Plan Conformity Report (see Exhibit D) that documents this determination will be
forwarded to the City Planning Director to confirm this assessment after the first reading of
the ordinance.

LIVING WAGE

In accordance with the Port’s Rules and Regulations for the Implementation and
Enforcement of the Port of Oakland Living Wage Requirements, living wage requirements
do not apply to this ordinance adoption. Future approval of projects under this ordinance
would be subject to separate evaluation of Living Wage requirements in effect at the time of
approval.

OPTIONS

1.   Approve the LUDC, as proposed. This is the recommended option.
2.   Approve the proposed LUDC subject to modifications.
3.   Disapprove the LUDC. However, this action would leave the Port with standards that
     are potentially non-compliant with the General Plan, and an alternative plan to come
     into compliance should be considered.

RECOMMENDATION

1.   Adopt the findings and authorize the delegations set fort in Exhibit D by ordinance;
     and,
2.   Approve the first reading of an ordinance to adopt the LUDC as proposed.




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                                                              BOARD MTG. DATE:   4/26/11

Adoption of a Land Use and Development Code for the Airport Business Park to Update and
Replace Existing Standards and Restrictions

Oakland Airport Business Park Vicinity Map




Oakland Airport Business Park          DRAFT – January 2011                           1




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Adoption of a Land Use and Development Code for the Airport Business Park to Update and Replace Existing Standards and Restrictions

  Airport Business Park Land Use Designations




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              DRAFT
   Land Use and Development Code
               for the




            FINAL DRAFT

For Board of Port Commissioners Decision
               April 2011




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                                          Table of Contents

Section 1. Purpose and Use of the Land Use and Development Code
   1.1 The Port of Oakland’s Land Use Authority .................................................................... 1
   1.2 Oakland Airport Business Park Land Use and Development Code ................................ 1
   1.3 Permit Process.................................................................................................................. 3

Section 2. Permitted Uses and Restrictions
   2.1 Land Use Areas................................................................................................................ 4
   2.2 Permitted Uses ................................................................................................................ 4
   2.3 Restrictions for Certain Permitted Uses........................................................................... 8
   2.4 Non-Permitted Uses .........................................................................................................10
   2.5 Accessory Uses ................................................................................................................10
   2.6 Legal Non-Conforming Lots and Uses ............................................................................11

Section 3. Development Standards
   3.1 Building Setbacks ............................................................................................................12
   3.2 Floor Area Ratio ..............................................................................................................13
   3.3 Minimum Lot Size ...........................................................................................................13
   3.4 Landscaping .....................................................................................................................13
   3.5 Parking .............................................................................................................................13
   3.6 Truck Loading..................................................................................................................15
   3.7 Driveway Curb Cuts ........................................................................................................16
   3.8 Sidewalks .........................................................................................................................16
   3.9 Fences ..............................................................................................................................16
   3.10 Temporary Structures.....................................................................................................16
   3.11 Alternative Energy .........................................................................................................16
   3.12 Nuisance Control ...........................................................................................................16
   3.13 Compliance with Laws and Regulations........................................................................17

Section 4. Design Standards
   4.1 Architectural Design ........................................................................................................18
   4.2 Signs.................................................................................................................................19
   4.3 Antennas and Microwave Dishes.....................................................................................21
   4.4 Outside Storage................................................................................................................22
   4.5 Maintenance.....................................................................................................................22



Oakland Airport Business Park                                DRAFT - April 2011                                                              i




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Section 5. Code Administration
   5.1 Compliance ......................................................................................................................23
   5.2 Improvements Exempt from the Development Permit Process.......................................23
   5.3 Development Permit Process ...........................................................................................23
   5.4 Use Consistency Determinations .....................................................................................30
   5.5 Findings............................................................................................................................30
   5.6 Conditions of Approval....................................................................................................33
   5.7 Administrative Appeals ...................................................................................................33
   5.8 Enforcement.....................................................................................................................35

List of Figures and Tables

Figures
   1.1 Airport Business Park Vicinity Map................................................................................ 2
   2.1 Airport Business Park Land Use Designations................................................................ 5
   3.1 Setback Requirements…………………………………………………………………..13
   4.1 Business Sign Photographs ..............................................................................................20
   5.1 Permit Process Chart .......................................................................................................24

Tables
   2.1       Permitted Land Uses..................................................................................................... 6
   3.1       Sample Calculations for Parking Stall Requirements ..................................................15
   5.1       Approval Chart .............................................................................................................28
   5.2       Notice and Appeal Chart ..............................................................................................34

Appendix A. Definitions
  A.1 General Definitions .........................................................................................................37
  A.2 Land Use Definitions ......................................................................................................48

Appendix B. Conditions of Approval

Information Available on the Port of Oakland’s website (per Section 5):
                     www.portofoakland.com/Doing Business
  •     Development Permit application
  •     Variance application
  •     Use Consistency Determination application
  •     Administrative Appeal form
  •     Notices of Decision (As Applicable)
  •     Fee Schedule
  •     Aviation Easement

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Section 1.                   Purpose and Use of the Land Use and
                             Development Code
1.1 The Port of Oakland’s Land Use Authority

         The City of Oakland Charter grants land use jurisdiction to the Port of Oakland (Port) 1 for
         land within the “Port Area” 2 . The Port Area includes the Oakland International Airport,
         the Oakland Airport Business Park (a commercial area comprising approximately 400 acres
         located northwest of the Airport) and the seaport located west of Clay Street and highway
         I-880.

1.2 Oakland Airport Business Park Land Use and Development Code

         This Land Use and Development Code (Code) regulates the construction, alteration and
         operation of buildings and structures in the area designated as the Oakland Airport
         Business Park (Business Park) 3 , as depicted in Figure 1.1.

         This Code ensures the orderly and appropriate development of the Business Park with land
         uses consistent with the City of Oakland General Plan, City of Oakland Charter, and the
         Alameda County Airport Land Use Compatibility Plan, and compatible with the operation
         and safety requirements of the Oakland International Airport.

         This Code replaces all previous codes and standards set by the Port for the Business Park.
         To the extent that provisions of this Code differ from prior Port ordinances, the provisions
         of this Code prevail.




1
 As defined by Section 708 of Article VII of the City of Oakland Charter.
2
    As defined by Section 725 of Article VII of the City of Oakland Charter.
3
  As designated by Port Ordinance No. 3760 dated September 2, 2003, the Business Park encompasses all “property
located in the “Port Area” of the City of Oakland, County of Alameda, State of California, bounded by the Freeway
on the northeast, Hegenberger Road on the southeast, Doolittle Drive on the south, and the Port Area line and the
Oakland-Alameda line on the north and west, excluding there from, however, any areas which the Board of Port
Commissioners has relinquished control and jurisdiction by official action to change the Port Area. The parcels on
either side of Doolittle Drive southeast of the intersection with Hegenberger Road within the Port Area are also
included in the Business Park area and form the south and southwest boundary of the Business Park.”


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                      Figure 1.1 – Oakland Airport Business Park Vicinity Map




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1.3 Permit Process

         A. Permit Required. Any alteration of a structure or property within the Business Park
            requires issuance of a Development Permit from the Port. The Port Development 4
            Permit substitutes for the City of Oakland zoning permit for properties in the Business
            Park. A tenant or private property owner must obtain a Port Development Permit
            before initiating any construction, extension, alteration, improvement, erection,
            remodel, or repair of any structure in the Business Park. For a graphic depiction of the
            Development Permit process, see Figure 5.1, Permit Process Chart.

              Once a Development Permit approval is obtained, the applicant may also need to apply
              for a building permit from the City of Oakland prior to commencing work, as
              necessary and applicable in accordance with City laws and requirements. Where the
              subject property or project is subject to the jurisdiction of other governmental
              agencies, permits may also be required from such other agencies. Building

         B. Use Approval. The Port does not issue “Use Permits” or “Conditional Use Permits.”
            All proposed uses are evaluated during the permit process and an approved
            Development Permit includes use approval. When no Development Permit is needed
            (See Section 5.2), the Port will make a use consistency determination to verify that an
            existing or proposed use meets the requirements of this Code, and issue a confirmation
            letter if needed or requested.

         C. Inspection. The City of Oakland building inspector conducts most inspections during
            a construction project. Separate Port inspections may be required, or may be requested
            by the City building inspector. The Port may also initiate property inspections at any
            time to investigate suspected violations of this Code and, if necessary, require that
            violations be abated. Further information on Code enforcement is found in Section
            5.8.




4
    Also referred to as a Port Building Permit (in Ordinance No. 2083 and in the City of Oakland Charter).

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            Section 2. Permitted Uses and Restrictions
2.1 Land Use Areas

The Business Park is divided into three main areas as shown on Figure 2.1 and described below:

      A. Commercial Corridor: Lots with frontages on (or surrounded by property that fronts
         or has existing access easements to) Hegenberger Road, Oakport Street, and Doolittle
         Drive south of Swan Way are designated as the Commercial Corridor. Hegenberger
         Road and Doolittle Drive form the Airport Gateway under the City of Oakland’s
         General Plan, which calls for Regional Commercial Uses. Oakport Street serves as the
         frontage road to I-880 and certain uses are permitted on properties with an Oakport
         Street frontage that are not permitted in the remainder of the Commercial Corridor.

      B. Business Park Interior: Lots without frontages on Hegenberger Road, Oakport
         Street, and Doolittle Drive south of Swan Way are designated as the Business Park
         Interior. This area consists of a mix of businesses serving local and regional
         customers, and includes light industrial, custom manufacturing, professional and
         personal services.

      C. Park and Open Space: Property currently used for recreational and open space. This
         includes upland areas and tidelands, sloughs and marshlands. The area is enhanced by
         the Martin Luther King Jr. Regional Shoreline Park, San Leandro Bay, and a network
         of pedestrian trails. Most of the park and open space is managed by the East Bay
         Regional Park District.

2.2 Permitted Uses

Subject to restrictions set forth in this section, each site in the Commercial Corridor and Business
Park Interior areas shall be used for the primary land uses specified in Table 2.1, including the
construction, extension, alteration, improvement, erection, remodeling, demolition or repair of
any facility. Certain uses are permitted only if restrictions described in Section 2.3 are met.
Non-permitted uses are listed in Table 2.1 and further described in Section 2.4. Definitions of
uses listed in Table 2.1 are provided in the Appendix (A.2 Land Use Definitions). Uses
incidental to the primary use are considered accessory uses, as described in Section 2.5.

Properties located in the Park and Open Space area are limited to open space and recreational
uses and may include accessory uses such as beverage and food concessions, storage and service
areas, and parking, among others.

Uses permitted in the Business Park Interior will be permitted in the Commercial Corridor where
the proposed use is set back a minimum of 200 feet from Hegenberger Road, Oakport Street or
Doolittle Drive.




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                                Figure 2.1 – Airport Business Park Land Use Designations

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                                      Table 2.1 - Permitted Land Uses

                                      Uses                                       Areas

                                                                   Commercial       Business Park
                                                                    Corridor          Interior
          1.    Administrative                                         P                     P

          2.    Adult Education/Vocational Training                    P                     P

          3.    Agriculture, Indoor                                    NP                     P

          4.    Alcoholic Beverage Sales                            PC(2.3A)              PC(2.3A)

          5.    Animal Breeding and Care                               NP                     NP

          6.    Automotive Fee Parking                                 NP                  PC(2.3B)

          7.    Automotive Sales, Rental, Services or
                                                                   PC (2.3B.2)                NP
                Brokerage

          8.    Automotive Servicing and Repair                    PC (2.3B.3)               NP

          9.    Business Communication and Media
                                                                       P                     P
                Services

          10. Community Assembly                                       NP                 PC(2.3C)

          11. Construction Operations                              PC (2.3D)             PC (2.3D)

          12. Construction Sales and Service                       PC (2.3D)             PC (2.3D)

          13. Consultative and Financial Service                       P                     NP

          14. Convenience Market                                       P                     NP

          15. Custom Manufacturing                                 PC (2.3E)                 P

          16. Fast-Food Restaurant                                  PC (2.3F.1)              NP

          17.   Full Service Restaurant                                P                     NP

          18. General Education                                        NP                    NP

          19. General Food Sales/Restaurants                           P                 PC (2.3F.2)



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                                     Uses                                     Areas

                                                                 Commercial      Business Park
                                                                  Corridor         Interior
          20. General Manufacturing                                 NP                   NP

          21. General Retail Sales                                   P                   NP

          22.   General Wholesale                                PC(2.3.E)               P

          23. Group Assembly                                     PC (2.3G)               NP

          24. Health Care                                           NP                   NP

          25. Heavy Manufacturing                                   NP                   NP

          26. Large-Scale Combined Retail and Grocery
                                                                     P                   NP
              Sales

          27. Light Manufacturing                                PC (2.3E)               P

          28. Mechanical or Electronic Games                        NP                   NP

          29. Medical Service                                        P                PC (2.3H)

          30.   Personal Instruction and Improvement                 P                   P

          31. Recycling and Waste Management                        NP                 PC (2.3I)

          32. Repair Services                                       NP                   P

          33. Research and Development                              NP                   P

          34. Retail Business Supply                                 P                   NP

          35. Retail Sales and Service                               P                   NP

          36. Telecommunications                                   PC(2.3J)            PC (2.3J)

          37. Transient Lodging                                  PC(2.3K)                NP

          38. Trucking and Truck-Related Freight                    NP                   P

          39. Trucking and Truck-Related Sales or
                                                                 PC(2.3L)                NP
              Services



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                                     Uses                                       Areas

                                                                     Commercial    Business Park
                                                                      Corridor       Interior
          40. Undertaking Services                                      NP                NP

          41. Utility and Public Service                                P                  P

          42. Warehousing, Storage, and Distribution                 PC(2.3M)           PC(2.3M)


                     P          =   Permitted
                                    Permitted conditionally with
                  PC (x)        =
                                    restrictions described in Section 2.3
                    NP          =   Not Permitted




2.3    Restrictions on Certain Permitted Uses

      The following uses are permitted subject to the stated restrictions:

      A. Alcoholic Beverage Sales: This use must be approved by the Port as part of a
         separate process prior to application to the State Alcoholic Beverage Commission.
         Off-sale (sale for off-site consumption) alcoholic beverage licenses, and on-sale (sale
         for on-site consumption) licenses not associated with a “full service” restaurant are
         subject to a Port finding of “public convenience or necessity” as required by the State
         of California. No off-sale license shall be allowed in the Business Park Interior except
         for wholesale sales.

      B. Automotive

            B.1 Automotive Fee Parking: A property owner may lease surplus parking to
            another business within the Business Park, only with prior approval of the Port after
            demonstrating that leased parking is not needed by on-site businesses. Such leased
            parking must not be considered a primary use on the property.

            B.2 Automotive Sales, Rental, Services, or Brokerage: No restrictions apply on
            properties with an Oakport Street frontage. For properties with a Hegenberger Road
            frontage, this use is permitted only where vehicles are stored and displayed indoors.
            However, outdoor storage and display is permitted for up to 21 days a year as part of
            special outdoor promotional events.




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            B.3 Automotive Servicing and Repair: This use is allowed on properties with an
            Oakport Street frontage. Such activities shall be contained within a building, and
            outdoor storage is limited under Section 4.4 of this code.
      C. Community Assembly: This use is generally not permitted in the Business Park,
         except that private clubs and park-related activities are permitted under certain
         conditions. Private clubs are permitted only for the express purpose of fostering
         business and community relationships, where membership is open only to a select
         qualified group. A process for membership approval must be in place that prohibits
         instant membership, i.e. no “pay-at-the-door” memberships will be permitted.
         Activities in public parks are limited to those that are permitted under the conditions of
         approval establishing such parks.

      D. Construction Operations and Construction Sales and Service: This use is allowed
         at any location in the Business Park Interior or with an Oakport Street frontage if the
         activity is limited to one of the following uses:

            1.    Contractor offices supporting business functions where no sale of materials takes
                  place. (This restriction does not prohibit sale of materials as part of a construction
                  contract where materials are supplied by the contractor. Storage activities are
                  allowed as accessory uses per Section 2.5.c, and must meet the requirements of
                  Section 4.4.)
            2.    Sale of materials and or products used in construction where retail sale to non-
                  contractors or building professionals comprises less than 10% of the total sales for
                  the location. This retail sales restriction does not apply to properties with an
                  Oakport frontage.

      E. Custom Manufacturing, Light Manufacturing and General Wholesale: Custom
         and Light Manufacturing and General Wholesale activities are permitted on properties
         with an Oakport Street frontage.

      F.    Restaurants

            F1. Fast-Food Restaurant: All disposable items shall be imprinted with the name of
            the restaurant. The applicant shall provide a site plan showing location(s) of recycling
            and debris containers. The applicant shall provide an operation plan including hours of
            operation, security, and litter removal. Where a drive-through window is proposed,
            the site plan shall also show traffic circulation from the street and within the site. If
            proposing a new fast-food restaurant, potential traffic impacts shall be analyzed in a
            study by a traffic engineer subject to approval by the Permit Coordinator.

            F2. General Food Sales/Restaurants: Restaurants are permitted as General Food
            Sales activities in the Business Park Interior only when the primary customers are
            occupants or visitors to the Business Park. Subject to Port approved modifications,
            hours should be limited to 7 AM to 6 PM Monday through Saturday. (An example of



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            an approved business would be a cafeteria in an office complex or a small sandwich
            shop in part of building. Such uses may not have retail signs (see Section 4.2).)

      G. Group Assembly: Group Assembly is permitted only in the Commercial Corridor.
         Prior to Port consideration of this activity, potential traffic impacts shall be analyzed in
         a study by a traffic engineer subject to approval by the Permit Coordinator.

      H. Medical Services: Medical Services will be allowed on the odd side of Edgewater
         Drive on the parcels directly opposite from the Commercial Corridor Parcels, from the
         intersection with Oakport Street to Hegenberger Road (8105 Edgewater and up.)

      I.    Recycling and Waste Management: These facilities are permitted only when the
            applicant can demonstrate to the satisfaction of the Port, that all potential impacts will
            be contained on site within a building or fenced outside storage area, in compliance
            with Section 4.4 this Code. Odors and sound shall not be detectable from neighboring
            sites. Debris from the site or transport vehicles shall not migrate off the site.
            Potential traffic impacts shall be analyzed in a study by a traffic engineer subject to
            approval by the Permit Coordinator. Satellite centers < 500 square feet are allowed
            anywhere in the Business Park provided they are maintained and free of debris.

      J.    Telecommunications Facilities: Telecommunications facilities meeting the
            requirements of the Federal Communications Commission are permitted anywhere in
            the Business Park if they meet the design standards in Section 4.3.

      K. Transient Lodging: Transient Lodging (otherwise known as hotels, motels, or inns)
         is permitted only on sites with access from Hegenberger Road. Such activities are
         only permitted where the facility meets the standards of a full service hotel defined as
         a minimum of one hundred (100) sleeping rooms, containing a full service restaurant
         providing three meals per day and room service, and including at least one indoor and
         one outdoor recreational amenity.
      L. Trucking and Truck Related Sales or Services: Truck and Other Heavy Vehicle
         Sales or Services may be permitted along Oakport Street only, and nowhere else in the
         Commercial Corridor.
      M. Warehousing, Storage, and Distribution: For all areas of the Business Park, storage
         uses meeting Part (C) of the definition in Appendix A, i.e mini or self-storage, will be
         allowed except for parcels with a Hegenberger Road frontage. In no case will such
         use be allowed within 300 feet of the Hegenberger Road right-of-way. This does not
         apply to any parcel deemed to be within the Regional Commercial area of the Oakland
         General Plan.
            For the Business Park Interior, only Warehousing, Storage and Distribution activities
            may be permitted that meet Part (A) of the definition for this activity in Appendix A.
            This essentially limits the activity to storage within a building with limited accessory
            outdoor storage for this area.



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2.4    Non-Permitted Uses
       Residential uses (including live/work space) and other uses not specified in Table 2.1 are
       not permitted in the Business Park. Specifically, uses not permitted as defined in
       Appendix A include, but are not limited to the following:

                •    Animal Breeding and Care
                •    Automotive Fee Parking
                •    General Education
                •    General Manufacturing
                •    Health Care
                •    Heavy Manufacturing
                •    Mechanical or Electronic Games
                •    Undertaking Services

2.5    Accessory Uses
      Accessory uses are subordinate or incidental to the primary permitted use. They support the
      primary function, but might not be allowed as a primary use. The following accessory uses
      shall only be permitted in conjunction with primary permitted uses.

      a.     Off-street parking and loading facilities serving a primary use, only if they are
             reserved for the employees, patrons, or service people utilizing the principal facility;

      b.     Open areas devoted to decorative paving or to swimming pools or other outdoor
             private permanent recreational facilities located on the same lot as a principal facility;

      c.     Storage and service areas and accessory buildings, other than those listed elsewhere
             in this section, if serving a principal facility on the same lot; provided that such
             facilities are enclosed according to the standard of Section 4.4.

      d.     Temporary construction yards and similar facilities which are necessary and
             incidental to development of facilities on the same lot, or on another of several lots
             being developed at the same time;

      e. Temporary real estate sales office which is necessary and incidental to, and located on
         the site of, a commercial subdivision being developed into five or more lots.

      f. On-site retail sales in the Business Park Interior if the volume of on-site sales is < 10%
         of total company sales, or less than 20% of the area is devoted to on-site retail sales.




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2.6 Legal Non-Conforming Lots, Uses and Structures
      All lots, uses and structures in the Business Park must conform with the standards set forth
      in this Code. However, if an existing lot, use or structure was lawfully established before
      January 1, 2011 and in existence or operation on January 1, 2011, such lot, use or structure
      will be allowed to continue in legal existence or operation, provided there is no change of
      use or substantial physical expansion of the use on the property. In the event of any
      proposed change of use or substantial physical expansion of the use, such use shall conform
      to the requirements of this Code.




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Section 3.                 Development Standards
The following standards pertain to physical site development in the Business Park.

3.1 Building Setback

       A. Setback Requirements: No buildings or structures shall be constructed, erected or
          placed within stated distances from the respective property lines on the site.


                                  Figure 3.1 Setback Requirements
       Each Landowner in the Business Park shall comply with the following setbacks:




                                                                       The curb line and property
                                                                       line may be the same




       Front: 20 feet minimum
               35 feet minimum on Edgewater Drive
       Side: 10 feet minimum
       Rear: 10 feet minimum


       B. Multiple Buildings: When more than one building fronting on a street is located on
          the same lot, each building shall be setback from the front property line by twenty (20)
          feet (35 feet from Edgewater Drive) and from other buildings and property lines by ten
          (10) feet. Note: Why this setback distinctions for sites with more than one building on
          them? Did you mean in increase the setback for all lots fronting on Edgewater or just
          in this limited instance of multiple buildings on one lot?


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       C. Corner Lots: Corner lots will conform to the front setbacks of each of the adjacent
          streets. On corner lots no property boundary line is to be considered as a rear lot line.
          Corner lots are considered to have two fronts and two sides.

3.2    Floor Area Ratio

       The maximum Floor Area Ratio is set by the City of Oakland General Plan.

3.3    Minimum Lot Size

       Except for existing legal non-conforming lots, no lot shall be less than one (1) acre in
       ground area. Any existing legal non-conforming lot shall have been lawfully created on or
       before the date of adoption of this Code.

3.4    Landscaping
       Landowners, at their own cost and expense, shall landscape, plant, and maintain
       landscaping and planting in accordance with the following requirements:

       The front setback area of a property must be completely landscaped from the curb line to
       the setback line except for sidewalks and driveways. Side lot setback areas are to be
       landscaped or paved. All landscaped areas shall be kept clean and free from weeds and
       debris at all times by the Landowner. In addition, plant materials, earth mounds and/or
       architectural screens shall, to the maximum extent feasible, conceal from public view those
       areas used for parking, storage, and loading. Use of methods to conserve water and
       drought-tolerant plants are encouraged.

       A minimum of one 24-inch or greater container size specimen tree for each fifty (50) linear
       feet of street frontage of the premises shall be planted in the landscaped areas forward of
       the building line at the time of building construction in accordance with Port-approved
       landscaping plans. All other plant materials shall provide adequate screening within three
       years after installation. Employee and visitor parking areas shall be landscaped on the
       periphery and in the interior of the lot, and landscaped in a manner to clearly demarcate the
       vehicular and pedestrian entrances to the site and/or facility.

       The entire area, as well as any area under option, is to be kept clean and free from weeds
       and debris at all times, and this applies also to any easement area between the curb or curb
       line and the leased or conveyed premises, or any other easements on the property. Planted
       areas shall always be maintained in a healthy and weed-free condition.

3.5   Parking

      A. General Requirements: Parking shall be provided on site for each use within the
         Business Park to adequately serve employees, service personnel, and visitors. There
         will be no on-street parking permitted at any time in the Business Park. The
         Landowner shall, at his or her own cost and expense, provide lighted off-street parking
         facilities on the premises for employees, customers, and visitors. Off-site parking may

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            be allowed to meet a portion of the employee parking requirement if the Port can make
            the findings that a) the off-site parking is not needed by the provider, and b) the
            Landowner or Tenant has an agreement with the provider for at least a one year.

            Parking shall be setback from the front property line by 20 feet on all streets, except
            that parking may be permitted between 5 and 20 feet of the front property line adjacent
            to driveway(s) with Port approval. No more than 20% of the front setback area may
            be used for parking and vehicle circulation. A six-foot wide sidewalk must be shown
            on the site plan. If no sidewalk is required or proposed, the portion of the sidewalk
            adjacent to spaces in the front setback and across the driveway must be constructed as
            part of the improvements.

            On-site areas used for parking, including any truck parking areas, shall be paved with
            a dust-free all weather surface, be graded to drain all surface water to catchment areas
            within the site, and of strength adequate for the traffic expected. This area shall be
            adequately landscaped and screened as much as possible with the intent of obscuring
            the view of the parking from the street and public ways. This can be accomplished
            with planting, fencing and architectural features. The intent is to provide visual interest
            that distracts from, or breaks up the view of the large parking areas, not necessarily to
            completely block the view.

       B. Parking Space Requirement: The applicant shall furnish evidence that sufficient
          parking exists for the type of building and proposed use. The Port may require the
          applicant to prepare a parking study completed by a qualified architect or engineer that
          evaluates demand and use patterns to determine the number of spaces necessary to
          serve the business. No use shall be made of any site that will demand parking in excess
          of the parking spaces available thereon unless off-site parking arrangements are made
          and approved by the Port.

            If a site specific parking study has not been prepared, then the parking requirement
            will be calculated using the formulas in this paragraph. (See Section C below for
            Hotel/Motel uses). Each site must provide a minimum of 0.83 parking stalls for each
            full and part time person to be employed on the premises plus adequate visitor
            parking; or 2.4 parking spaces for each one thousand (1,000) square feet of gross floor
            area of the proposed building (see Table 3.1 Sample Calculations for Parking Stall
            Requirements). The employee plus visitor formula will be used whenever the
            number of employees is known. Visitor parking will be assumed to be 10% of
            employee parking if otherwise unknown. These general parking requirements may be
            supplemented or replaced by parking requirements set forth in other sections.

      C. Hotel/Motel Parking Requirements: Guest parking shall be provided at the rate of
         one (1) parking stall per one (1) sleeping room assuming eighty percent (80%)
         occupancy. In addition, employee parking shall be computed at the rate of one (1)
         employee per thirteen (13) sleeping rooms, and three (3) parking stalls shall be
         provided for every four (4) employees. Management personnel shall have one (1)
         parking stall per one (1) employee (see Table 3.1).


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                Parking requirements for associated meeting rooms/banquet facilities shall be based on
                the total seating capacity and shall be calculated at the rate of one (1) parking stall per
                three (3) seats. Employee parking shall be provided based on sixty percent (60%)
                occupancy with seven (7) employees per one hundred (100) seats and one (1) parking
                stall per two (2) employees. These requirements are in addition to requirements
                applicable to guest parking, as described above.

                The following table provides sample calculations to determine applicable parking stall
                requirements.

                      Table 3.1 – Sample Calculations for Parking Stall Requirements

                     REQUIREMENT                                       EXAMPLE                    PARKING
                                                                                                   STALLS
General Requirements (Except Hotel/Motel):
    .83 stall per employee                  100 employees x .83 = 83 stalls                            83
  + visitor parking*                        Estimate 10% of above = 8                                   9
                           PREFERRED METHOD                            TOTAL:                          92

OR 2.4 per 1000 square feet floor area                     40,000 sq.ft. = 40 x 2.4 = 24               96

Hotel/Motel: (Sample for 200 room hotel with 2 managers and 100 seat banquet room)
     1 stall per room at 80% occupancy             1 x 200 rooms x 80%                                160
 + 3 stalls per 4 employees (1 employee per 13     200/13 = (16 employees /4) x 3                     12
     rooms)
 + 1 stall per manager                             1x2                                                  2
 + 1 stall per 3 seats in banquet/meeting rooms    1 x (100/3) = 1 x 34                                34
 + 1 stall per 2 banquet employees (7 employees per(100 x .6) / 7 = 60/7 = 9 / 2                       5
     100 seats at 60% occupancy)
                                                                                 TOTAL:               213


 NOTE: All results will be rounded up to the next whole number.
      * Visitor parking is based on the actual need of the proposed business. This will be estimated at
        10% of employee parking stalls unless an individualized assessment is available.


    3.6    Truck Loading
          The loading or unloading of trucks on streets in the Business Park is prohibited and trucks
          being loaded or unloaded may not project onto any street. Truck doors and loading docks
          are not permitted facing Hegenberger Road; structures facing Hegenberger Road must have
          truck loading doors at the sides or rear of the building. Suitable screening of truck doors
          from the frontage street of any site must be provided.

          Truck doors and docks are permitted to face streets other than Hegenberger Road provided
          they are screened from view by an architecturally acceptable fence or wall located on or to

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      the rear of the front setback line. Details, length and location of such fence or wall shall be
      subject to Port approval.

3.7 Driveway Curb Cuts

      All driveway curb cuts shall be at least twenty five (25) feet distant from the next closest
      driveways on the same street. Driveways shall be a minimum of twelve (12) feet in width
      for one-way traffic and twenty six (26) feet for two-way traffic. The maximum permitted
      curb cut shall be thirty five (35) feet wide. The direction of traffic flow shall also be clearly
      marked on the paved surface. All proposed driveways shall conform to City of Oakland
      Municipal Code requirements for the construction and repair of sidewalks, driveways, and
      curbs.

3.8   Sidewalks

      A six (6)-foot wide concrete sidewalk along existing street frontages shall be provided in
      all new construction.

      For existing developments where a substantial modification is anticipated in excess of
      $50,000, a six (6)-foot wide concrete sidewalk shall be required along the entire street
      frontage of the property. Where there is a planter strip adjacent to the curb and a six (6)-
      foot sidewalk would be impractical to be installed, a concrete walkway of six (6)-foot
      minimum in width at an alternate location within the front setback area shall be provided
      subject to approval by the Port. All construction of sidewalks shall be constructed to
      connect with similar improvements, if any, at the property lines.

3.9    Fences

      Fences may be constructed anywhere in the side and rear setback, but not in the front
      setback. Fences six (6) feet or higher require a Development Permit. No fence over 10 feet
      high shall be permitted.

3.10 Temporary Structures

      Trailers, portable container-type storage structures, and prefabricated office structures will
      not be allowed except for limited duration uses or during construction of a development,
      subject to approval by the Port.

3.11 Alternative Energy

      Based on the California Global Solutions Act of 2006, and renewable portfolio standards,
      energy efficiency and the use of alternative energy sources are encouraged.




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3.12 Nuisance Control

      No industry, business, or firm whose operation produces odors, fumes, smoke, dust, noise,
      vibration, interference with radio communication, or air pollution in amounts which the
      Port or other applicable governmental or regulatory entities finds to be objectionable, or
      whose operation is considered to be hazardous by reason of danger of fire, radioactivity, or
      explosion, shall be permitted in the Business Park.

3.13 Compliance with Laws and Regulations

      The development and operation of all facilities and uses within the Business Park shall be
      subject to the laws and regulations of all applicable government and regulatory agencies,
      including but not limited to:

           •    Port of Oakland
           •    City of Oakland
           •    County of Alameda
           •    Alameda County Airport Land Use Commission
           •    Bay Area Air Quality Management District
           •    San Francisco Bay Conservation and Development Commission
           •    San Francisco Bay Regional Water Quality Control Board
           •    State Water Resources Control Board
           •    California Department of Fish and Game
           •    California Department of Toxics and Substance Control
           •    State Lands Commission
           •    State Alcoholic Beverage Commission
           •    Federal Aviation Administration
           •    United States Army Corps of Engineers

           Development Permits shall also include conditions of approval appropriate to safeguard
           the public health, safety, and welfare among other matters. Furthermore, development
           within the Business Park may be subject to environmental review under the California
           Environmental Quality Act (CEQA).




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Section 4.                 Design Standards
The following standards pertain to the design of structures within the Business Park.
4.1 Architectural Design

      A. Permit Review: All structures shall be architecturally designed to create an
         aesthetically pleasing appearance compatible with the surrounding setting. Standards
         of design and construction are subject to review by the Chief Engineer or such other
         designee of the Executive Director, in consultation with the applicant, pursuant to such
         standards as set forth in this section. The Port reserves the right to reject plans for or
         request changes to any proposed structure, site plan or landscaping plan.

      B. Architecture Treatment: Enhanced architectural treatment of walls facing streets and
         public ways will be required and other walls of buildings shall be color treated and
         finished in a compatible manner. Walls consisting of any one type of building material
         shall incorporate, and be integrated with, other accent materials to avoid monotony in
         appearance. Additions to existing buildings shall match or be compatible with the
         architectural style of the existing structure.

      C. Fences: Any security and all other fences and walls constructed by the Landowner must
         conform to the applicable front setback requirement for the property. Fences may,
         however, be located in areas between the property line and the required side and rear lot
         setback line. All fences shall be subject to Port approval as to architectural treatment,
         type, and location prior to erection. Generally, solid fences or wrought iron fences shall
         be required. All street-facing fences and walls shall be composed of metal, stone, or
         stone-composite materials. Chain-link is not allowed for front street-facing fences.
         Where chain-link is approved for other fences it shall be treated with inserts.

      D. Mechanical, Electrical and Plumbing Equipment: All mechanical equipment,
         including electrical and gas meters, shall be architecturally screened from view and
         electrical transformers shall be either undergrounded, enclosed within the building, or
         placed behind the building so as not to be visible from streets and public ways.
         Plumbing vents and ducts which penetrate a roof shall be grouped together as much as
         feasible and all rooftop mechanical and electrical equipment shall be screened in such a
         manner that they become an integral part of the building design and are screened from
         view at ground level.

      E. Height: The height limit for any building in the Business Park shall be the maximum
         height allowed by the Federal Aviation Administration (FAA) that does not place any
         restrictions on aviation activities at the Oakland International Airport. Approval will
         not be given for the construction or placement of any building, structure, or other site
         improvement (including landscaping) at any height if, upon review by the FAA, it is
         determined that the building, structure, or improvement would be a hazard to air
         navigation. See www.faa.gov for FAA Form 7460 (Notice of Proposed Construction
         or Alteration).


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4.2 Signs

      This Code establishes standards for Business, Directional, Realty, and Special signs.
      (Advertising signs including billboards that identify or advertise businesses, goods or
      services located at offsite locations are not allowed under this Code.) No signs, placards,
      posters, sandwich boards, banners or other unapproved advertisements shall be allowed in
      the public sidewalk areas or median strips at any time, and may be removed by the Port
      without warning.

      A. Business Signs: Business signs are permanent signs used to identify the business or
         businesses on a site. Signs shall be attached to the face of the structure, or erected upon
         the premises, tastefully designed, compatible with the size and design of the building,
         and only identify the tenant or tenants of the building.

           Development Permit applications for Business signs shall be submitted to the Port for
           approval prior to installation and shall include:

                 •   Drawings and/or photographs showing proposed text, colors, size and details of
                     construction and installation;
                 •   Site plan; and,
                 •   An inventory of existing site signs including size, type and location.

           Only “wall”, “free-standing”, and “blade” signs shall be permitted in the Business Park
           (flashing, rotating, animated, or billboard-type signs are not permitted). (See Figure
           4.1 Sign Photographs.)

           1. Wall signs are those signs that are applied to, or mounted on the wall or surface of a
              building or a structure, the display surface of which is parallel to the supporting
              surface. No sign shall be directly painted on walls and/or roof of a building or a
              structure without specific approval by the Port. Such approval will only be given if
              the sign is tastefully designed and applied with durable weather resistant materials.
              No sign shall be permitted to extend above the roof or parapet line of a building.
              Signs may be placed on not more than two building frontages. Note: I think this
              prohibition against signs painted on building walls or awnings is too harsh. I think
              we should allow painted signs, as long as they are tastefully done and applied with
              durable weather resistant materials.

           2. Free-standing signs are signs that are supported by one or more uprights, poles, or
              braces in or on the ground. Free-standing signs shall be limited to a maximum of
              four (4) feet in height above highest adjacent grade within the Business Park
              Interior and shall be limited to a maximum of ten (10) feet in height in the
              Commercial Corridor. Free standing signs may be located within the front setback
              area.




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           3. Blade Signs are signs that are mounted perpendicular to the wall, and can be
              attached to the wall or an overhang structure. They are primarily used for buildings
              or sites with multiple tenants to identify the location of each tenant within a
              complex, or to mark an entrance that is parallel to the visitor’s approach. Blade
              signs are limited to a maximum 12 square feet each, unless otherwise approved by
              the Port.
           4. A retail sign is a Business sign that has the added purpose of attracting new
              customers or drive-by drop-ins, whereas a non-retail Business sign simply marks
              the location for customers already destined for that business. Retail signs generally
              have more color and illumination, and may include pictures or logos that describe
              the business activities. For example, a non-retail Business blade sign might be
              painted or carved wood without illumination, whereas a retail blade sign would be
              illuminated with color. Retail signs are not allowed in the Business Park Interior.
           5. The total area of Business signs on any one building frontage shall be limited to a
              maximum display surface allowing one (1) square foot for each foot of street
              frontage abutting a lot, or one half (0.5) square foot for each foot of street frontage
              on corner lots, but not exceeding one hundred (100) square feet in any one sign or a
              maximum of two hundred (200) square feet for all signs on the premises.
           6. Where the overall signage limit has been reached by a portion of existing tenants in
              a multi-tenant site, tenants without signage will be allowed 20 square feet each over
              the aggregate limit.




                                                                Blade sign
                                                                   (retail)



                     Wall sign (non-retail)




                      Free-standing sign                           Free-standing sign
                     Business Park Interior                       Commercial Corridor
                          (non-retail)                                   (retail)
                                 Figure 4.1 Business Sign Photographs

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      B. Directional Signs: Directional signs are signs that direct pedestrian or vehicle traffic
         within a site, and generally do not require a permit. Directional signs such as “enter”,
         “shipping”, etc., are allowed adjacent to each driveway, but shall not exceed four (4)
         feet in height above grade and ten (10) square feet in surface area. Approval of larger
         signs requires Port approval (a development permit).

      C. Realty Signs: Realty signs including “For Sale” and “For Lease” signs are typically
         short term signs placed on a building or site to inform potential purchasers or tenants of
         availability. These signs do not require a permit. No more than one “For Sale” or “For
         Lease”, or similar sign shall be permitted on any individual site at any time except that
         up to two signs will be allowed for multi-tenant sites. No such sign shall exceed thirty
         two (32) square feet in area. No such sign shall be equipped for illumination by interior
         or exterior light sources. Such signs shall include no more than a brief description of
         the premises to be sold or leased and the name, trademark, address and telephone
         number of the owners, brokers, or other person offering the premises. All “For Sale” or
         “For Lease” or similar signs shall be removed upon sale or lease of the building or
         building site. Any sign not conforming to this subsection shall be promptly removed
         upon written notice from the Permit Coordinator. More than one sign per lot and/or a
         sign larger than 32 square feet will require a permit.

      D. Special Signs: Special signs are those placed to mark special events or to display non-
         advertising messages for a short duration. These signs do not require a permit, but the
         Port may require removal if the sign violates this Code or if the Port determines that the
         sign(s) are detrimental to the character of the Business Park. Such signs are limited to a
         two-week display period, up to four times per year, except that “grand opening” signs
         may be displayed for up to one month.

4.3   Antennas and Microwave Dishes

      Antennas and microwave dishes are permitted as governed by the Federal Communications
      Commission.

      A. Roof-mounted: Roof-mounted antennas shall be installed in such a way as to avoid
         using guy wires for support. Roof-mounted dishes, as well as braces and struts used for
         support of the antennas shall be screened from view when viewed from the ground
         level. Antennas shall be painted a neutral color to reduce visibility and adverse visual
         impact.

      B. Ground-mounted: Ground-mounted dishes and/or antennas shall be placed on a
         concrete pad within a fenced enclosure and shall be landscaped around the periphery.

      C. Associated utilities: All electrical and telephone connections shall be through the
         conduits or connection of the existing utilities in the building. Emergency generators, if
         any are required, shall be installed within the building.




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      D. All receiving and/or transmitting systems shall insure that there is no electronic
         interference between the system, and commercial radio and television transmission or
         civilian aeronautical communication.

      E. Poles or towers that will be visible from the public way must be designed to blend with
         the environment. This could include the use of designed camouflage including “tree”
         poles.

4.4 Outside Storage

      Storage of material, supplies, products, equipment or other personal property will be
      permitted on any site outside a permanent structure, only under the following conditions:

      A. Placement: The storage area shall be confined to the rear portion of the property, and
         shall not extend closer to the street than the front of the main building; and

      B. Screening: The storage area shall be screened from view by a masonry wall or other
         approved screening, six (6) feet in height or rising two (2) feet above the stored goods,
         whichever is higher, provided no such wall or screen shall exceed ten (10) feet in
         height.

4.5 Maintenance

      The Landowners shall at all times maintain in good order, repair and condition all
      structures, fences, signs, walks, driveways and paved areas, lawns and landscaping on each
      site, and maintain in first-class condition all exterior painted surfaces and repaint such
      surfaces as often as required. It is the Port’s compelling interest to preserve existing
      structures and to maintain an aesthetically pleasing appearance compatible with the
      surrounding setting and consistent with this Code.




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Section 5.                 Code Administration
5.1 Compliance

      All structures and uses within the Business Park must comply with the terms of this Code.
      No person may construct or alter any structure or property or establish or alter any land use
      within the Business Park without first applying for and securing from the Port a
      Development Permit in accordance with the terms of this Code. Certain limited
      improvements are exempt from the Development Permit requirement (Section 5.2).
      Where a proposed alteration in land use is unaccompanied by an alteration in structure or
      property, such alteration in land use may be approved upon issuance of a Use Consistency
      Determination (Section 5.4). Any person failing to comply with the terms of this Code,
      including a failure to secure a Development Permit or Use Consistency Determination, will
      be subject to Code enforcement (Section 5.8).

5.2   Improvements Exempt from the Development Permit Requirement

      This Code’s Development Permit requirement does not extend to the following categories
      of construction work:

       1.   Work exempt from the City of Oakland’s building permit requirements (for assistance
            see www.oaklandnet.com/government/ceda/revised/build_ser/whenneed.htm or
            contact the City of Oakland Building Department).

       2.   Modifications made solely to the interior of an existing structure where no change in
            use occurs.

       3.   Repairs and in-kind replacement of exterior building components (e.g., doors,
            windows, roof, siding, etc.)

       4.   Erection or modification of signs meeting the following criteria:

            a.    Business signs: Replacement of a sign face copy or a new sign face within an
                  existing sign frame;
            b.    Realty, Directional and Special signs: Installation, alteration or removal of Realty,
                  Directional, or Special signs provided the requirements of Section 4.2 are met.

            However, the Port may require a Development Permit for any work initiated as a result
            of an enforcement action. All improvements, repairs and maintenance must comply
            with this Code, whether or not a Development Permit is required for the work.

5.3    Development Permit Process
       This Section establishes the permitting process to construct or alter a structure or property
       or to alter a land use within the Business Park. A graphic depiction of the permitting
       process is presented in Figure 5.1 – Permit Process Chart.


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      A. Alterations to Structures: No person may construct, extend, alter, improve, erect,
         remodel, or repair any structure within the Business Park without first applying for and
         securing a Development Permit.

      B. Alterations to Land Use: No person may alter or change the use of any land within
         the Business Park without first applying for and securing either:

            1.    A Development Permit where alterations to structures are also proposed; or,

            2.    A Use Consistency Determination where no alterations to structures are
                  proposed.

       C. Development Permit Applications: The application for a Development Permit may
          be found at www.portofoakland.com, or obtained in hardcopy from the Port’s Permit
          Coordinator.

            1.    Pre-Application Meetings. Prior to completing the application, applicants are
                  encouraged to attend a pre-application meeting with the Permit Coordinator.
                  Meetings are encouraged to understand the necessary information and associated
                  fees required to complete the application. In some cases, the alterations to
                  structures proposed may be exempt from the Development Permit requirements
                  and the Permit Coordinator may determine that an application is unnecessary.

            2.    Application Submittal. The application should be completed as fully as
                  possible. Completed applications, including required submittals, should be
                  submitted to the Permit Coordinator at the Port of Oakland offices located at 530
                  Water Street, 2nd floor, Oakland, or by email to
                  permitcoordinator@portoakland.com.

                  Applications should be accompanied by the applicable application fees at the time
                  of submittal. The Port’s application fee schedule may be found at
                  www.portofoakland.com.

            3.    Incomplete Applications. Upon submittal of a Development Permit application,
                  the Permit Coordinator will review the application for completeness. If a
                  submitted application is found to be incomplete, the Permit Coordinator will
                  contact the applicant to request additional information or submittals before
                  processing the application.

            4.    Complete Applications. Upon determining that the application is complete, the
                  Permit Coordinator will determine:

                  a.    Whether the proposed alteration of structures or property is consistent with
                        the Development and Design Standards (Sections 3 and 4);




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                  b.    Whether the proposed land use is consistent with Permitted Uses (Section 2);
                        and,
                  c.    Whether the proposed project is exempt from environmental review under the
                        California Environmental Quality Act (CEQA).

           5.     Permit Coordinator’s Determination.

                  a.    Where the Permit Coordinator determines the project is consistent with
                        Development, Design and Use standards and is exempt from CEQA, the
                        Permit Coordinator may approve the project subject to conditions of approval
                        (Section 5.6) based on written findings, or disapprove the project based on
                        written findings (Section 5). The Permit Coordinator’s approval or
                        disapproval is subject to administrative appeal as set forth in Section 5.7.
                        Prior to commencing work under an approved Development Permit, the
                        project proponent may also need to obtain permits or approvals from the City
                        of Oakland (Section 5.3I) or other regulatory agencies.

                  b.    Where the Permit Coordinator determines the project is consistent with
                        Development, Design and Use standards but is not exempt from
                        environmental review under CEQA, the Permit Coordinator will require
                        that the applicant prepare an Initial Study and a Negative Declaration,
                        Mitigated Negative Declaration, or Environmental Impact Report under
                        CEQA (Section5.3E), as appropriate. This determination is not appealable.

                  c.    Where the Permit Coordinator determines the project is inconsistent
                        with Development or Design standards, the Permit Coordinator will require
                        that the applicant either modify the project to comply with the Development
                        or Design standards and reapply, or apply for a Variance (Section 5.3D).
                        This determination is not appealable.

                  d.    Where the Permit Coordinator determines the proposed land use is
                        inconsistent with Permitted Uses, the Permit Coordinator will disapprove
                        the application. The Permit Coordinator’s disapproval is subject to
                        administrative appeal as set forth in Section 5.7. The applicant may choose
                        to revise the application to meet this Code and resubmit without penalty.

      D. Variances: Where the Permit Coordinator determines that that the proposed project is
         inconsistent with Development or Design Standards, the project may not be approved
         without a variance approved by the Port.

            1.    Variance Applications. The application for a variance may be found at
                  www.portofoakland.com, or obtained in hard copy from the Port’s Permit
                  Coordinator. Variance applications should be accompanied by the applicable
                  application fees at the time of submittal.



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            2.    Evidence Supporting a Variance. As part of the variance application, the
                  applicant must present substantial evidence justifying issuance of the variance,
                  including evidence that the following findings may be made:

                  a.    That because of special circumstances applicable to the subject property,
                        including size, shape, topography, location or surroundings, the strict
                        application of this Code will deprive such property of privileges enjoyed by
                        other property in the Business Park within the same area of land use
                        designation, as shown in Figure 2.1;

                  b.    That granting of the variance will be subject to such conditions as will assure
                        that the adjustment thereby authorized shall not constitute a grant of special
                        privileges inconsistent with the limitations upon other properties in the
                        Business Park within the same area of land use designation, as shown in
                        Figure 2.1; and,

                  c.    That granting of the variance will not authorize a use or activity which is not
                        otherwise allowed within the applicable land use designation of the Business
                        Park.

            3.    Variance Consideration Process. Upon submittal of a completed variance
                  application, the Port will consider approval of the variance based on written
                  findings. The Port’s approval or disapproval of a variance is subject to
                  administrative appeal as set forth in Section 5.7.

      E. Environmental Review: Where the Permit Coordinator has determined that the
         proposed project is subject to environmental review under CEQA, the applicant must
         prepare an Initial Study or a Negative Declaration (ND), Mitigated Negative
         Declaration (MND), or Environmental Impact Report (EIR), as determined by the
         Port.

            1.    Initial Study. The scope of environmental review will be determined by the Port
                  based on the analysis contained in the Initial Study. The Initial Study must be
                  prepared by the applicant or its consultant, at the applicant’s sole cost, but at the
                  Port’s direction. The individual(s) preparing the Initial Study and ND, MND, or
                  EIR must be a Port-approved CEQA document preparer. Port approval may not
                  be unreasonably withheld. The Initial Study must meet the requirements of
                  CEQA. Submittal of the Initial Study shall be accompanied by the applicable
                  environmental review fees at the time of submittal.

            2.    Preparation of Administrative Drafts. Based on the analysis contained in the
                  Initial Study, the Port will require that a ND, MND, or EIR be prepared by the
                  applicant or its consultant at the applicant’s sole cost, but at the Port’s direction.
                  The applicant is encouraged to work closely with the Port’s environmental staff in
                  developing its first administrative draft CEQA document. Because the Port must
                  adopt or certify the ND, MND, or EIR, and because the Port must exercise its


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                  independent judgment in so doing, the Port will not approve for release an
                  environmental document that it determines, in its sole discretion, is inadequate
                  under CEQA. For this reason, depending on the quality and sufficiency of the
                  administrative draft document, multiple administrative drafts may be required
                  prior to release for public review. As part of, or in addition to, the applicable Port
                  fees, the applicant must reimburse the Port for its environmental review services,
                  including environmental and legal staff time and, where their engagement is
                  deemed necessary by the Port, costs attributable to Port consultants and outside
                  CEQA counsel.

            3.    Circulation of Environmental Documents. Once the ND, MND, or Draft EIR is
                  completed, it must be circulated to the public subject to specific notice, comment,
                  and hearing procedures under CEQA. Should comments be received from the
                  public requiring responses under CEQA, the applicant or its consultant shall
                  prepare responses to comments, including the preparation of additional
                  environmental documents, analyses, studies, or other work products, at the
                  applicant’s sole cost, but under the Port’s direction. Again, the applicant must
                  reimburse the Port for its environmental review services.

            4.    Approval of Final Environmental Documents. Upon finalization of the ND,
                  MND, or EIR, the environmental document may be approved by the Port along
                  with the proposed Development Permit or Variance based on written findings
                  (Section 5.5). The Port’s approval (or disapproval) of the Development Permit or
                  Variance covered by such environmental document is subject to administrative
                  appeal as set forth in Section 5.7. The Port will file a Notice of Determination
                  with Alameda County within 5 working days after final approval by the Port.

      F.    Development Permit, Variance, and Environmental Approvals. Based upon
            written findings as set forth in Section 5.7, and subject to conditions of approval as set
            forth in Section 5.6, the following actions shall be taken for each entitlement by the
            following bodies, upon notice and a hearing as applicable:

                                              Table 5.1
                                            Approval Chart

              Entitlement                       Hearing Required? Approving Body
              Variance                                   Yes            Permit Hearing Officer(s)
              Development Permit
                                                          No            Permit Coordinator
              (Exempt from CEQA)
              Development Permit (ND,
                                                         Yes            Permit Hearing Officer(s)
              MND, or EIR)

            The decisions of the Permit Coordinator and the Permit Hearing Officer(s) (the
            Executive Director of the Port and/or his or her designee(s)) are subject to
            administrative appeal as set forth in Section 5.7. Absent an administrative appeal, or


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            upon exhaustion of administrative appeals, Development Permit, Variance, and
            environmental approvals or disapprovals shall become final at the end of the 14th day
            after a Notice of Decision is issued for such approval. Regardless of whether a Notice
            of Decision was issued or issued timely, such approval shall become final in no event
            later than 30 days after such approval, absent an administrative appeal or upon
            exhaustion of administrative appeals. (Note: Already stated below.)
      G. Scope, Expiration, and Extension of Approved Development Permits. Any
         approved Development Permit shall be subject to the plans, scope of improvements,
         and conditions of approval upon which it was granted. Unless a different termination
         date is prescribed, a final approved Development Permit shall terminate one (1) year
         from the date of the development approval unless actual construction or alteration has
         commenced and continues to be diligently pursued. The termination date for a
         Development Permit may be extended by the Port body that originally approved the
         Development Permit upon application in writing to such body prior to the termination
         of such permit. Applications for such an extension should be accompanied by the
         applicable application fees at the time of submittal. Approval of a Development Permit
         extension must be based on written findings, as set forth in Section 5.5, and may be
         subject to conditions of approval, as discussed in Section 5.6. The approval or
         disapproval of a Development Permit extension shall be subject to the same
         administrative appeal remedies available at the time the Development Permit was
         initially approved.

      H. Revocation of Development Permits. Where a Development Permit has been
         approved, such permit may be revoked upon: violation of any provision of this Code,
         a failure to comply with any prescribed condition of approval, a failure to pay any
         necessary fee, or a failure to commence or to diligently pursue the construction or
         alteration activities authorized under the Development Permit within one (1) year from
         the date of the development approval. The revocation of a Development Permit shall
         be subject to the same administrative appeal remedies available at the time the
         Development Permit was initially approved.

      I.    City of Oakland Building Permit. Prior to commencing work under an approved
            Development Permit, the project proponent may also be required to obtain a building
            permit or other permits and approvals from the City of Oakland. The City Building
            Department will review the work for consistency with the adopted version of the
            California Building Code. City permits may also be necessary from the Fire Marshal
            for high rise, assembly, and other types of projects. Work in the public right-of-way
            may also be subject to City of Oakland Permits. The City of Oakland may also impose
            other permit requirements. These permits do not supersede the Port's land use
            jurisdiction.




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5.4    Use Consistency Determinations

       Where an applicant seeks to alter or change the use of any land within the Business Park
       and no accompanying alteration of a structure is proposed, the applicant must first apply
       for and secure a Use Consistency Determination.

       A. Application Submittal. The Use Consistency Determination application should be
          completed as fully as possible. Completed applications, including required submittals,
          should be submitted to the Permit Coordinator at 530 Water Street. 2nd floor, Oakland
          or by email to permitcoordinator@portoakland.com. Applications should be
          accompanied by the applicable application fees at the time of submittal.

       B. Permit Coordinator’s Determination. Based upon written findings (Section 5.5),
          the Permit Coordinator will determine whether the proposed land use is consistent
          with the Permitted Uses. A Use Consistency determination by the Permit Coordinator
          is subject to administrative appeal as set forth in Section 5.7.

5.5    Findings

       Use Consistency Determinations and approvals or disapprovals of Development Permits,
       Development Permit extensions and revocations, Variances, and the approval of
       environmental documents must be supported by substantial evidence and based upon
       written findings, including an evaluation of the following:

       A. Consistency Determination Findings. The Port may issue a land use consistency
          determination, either as submitted or as modified, only upon finding that:

            1.    The proposed use is consistent with the purposes, restrictions, and regulations of
                  this Code as it applies to the land use area of the Business Park in which such use
                  is proposed to be located.

            2.    The proposed use will not be detrimental to the health, safety, peace, morals,
                  comfort or general welfare of persons working in the Business Park or be
                  detrimental or injurious to property and improvements of the adjacent properties,
                  the surrounding area or neighborhood or to the general welfare of the City.

            3.    The proposed use will neither interfere with the operations of Oakland
                  International Airport nor enable the establishment of uses that may be
                  incompatible with the potential imposition of noise, light, smoke, air currents,
                  electronic or other emissions, vibrations, discomfort, and/or inconvenience
                  resulting from airport operations.

       B. General Development Permit Findings. The Port may approve an application for a
          Development Permit, either as submitted or as modified, only upon finding that:




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            1.    The proposed project will not be detrimental to the health, safety, peace, morals,
                  comfort or general welfare of persons working in the Business Park or be
                  detrimental or injurious to property and improvements of the adjacent properties,
                  the surrounding area or neighborhood or to the general welfare of the City.

            2.    The proposed project is consistent with the City of Oakland’s General Plan.

            3.    The proposed project complies with provisions of this Code.

            4.    The proposed project has been adequately evaluated under CEQA.

            5.    The proposed project has been approved, or has a reasonable chance of being
                  approved, by all outside agencies having jurisdiction over the project, including
                  but not limited to: the City of Oakland, FAA, Regional Water Quality Control
                  Board, Airport Land Use Commission, Alameda County Health Department, and
                  State Lands Commission.

            6.    The proposed project will neither interfere with the operations of Oakland
                  International Airport nor enable the establishment of uses that may be
                  incompatible with the potential imposition of noise, light, smoke, air currents,
                  electronic or other emissions, vibrations, discomfort, and/or inconvenience
                  resulting from airport operations.

            7.    The Port has attached such conditions to issuance of the Development Permit as it
                  deems reasonable or necessary to achieve the purposes of this Code, to reduce or
                  to mitigate environmental impacts, and to address the project’s anticipated burden
                  on the Business Park and the Port, and which otherwise promote the health,
                  safety, and welfare of the surrounding community.

       C. Specific Development Permit Findings. In addition to the General Findings required
          above, the Port may approve an application for a Development Permit within a
          specific land use area of the Business Park, either as submitted or as modified, only
          upon finding that:

            1.    For projects proposed in the Commercial Corridor, such projects are consistent
                  with the purposes, use restrictions and development and design standards
                  established by this Code for the Commercial Corridor area.

            2.    For projects proposed in the Business Park Interior, such projects are consistent
                  with the purposes, use restrictions and development and design standards
                  established by this Code for the Business Park Interior area.

            3.    For projects proposed in the Park and Open Space, such projects are consistent
                  with the purposes, use restrictions and development and design standards
                  established by this Code for the Park and Open Space area.



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       D. Extension of Approved Development Permit Findings. An application for an
          extension of the life of an approved Development Permit may be approved, subject to
          payment of applicable fees and imposition of conditions, upon a finding that the
          extension will not create or perpetuate a situation imminently dangerous to life or
          property. Such an application for extension may be denied upon a finding that such
          extension would not meet any of the general or specific findings necessary to approve
          a Development Permit.
       E. Revocation of Approved Development Permit Findings. An approved
          Development Permit may be revoked upon a finding that any one of the following has
          occurred:

            1.    The holder of the Development Permit has failed to comply with one or more of
                  the conditions attached to the approved permit.

            2.    The use, structure or building permitted has been substantially expanded or
                  changed in character beyond that set forth in the approved permit.

            3.    The holder of the Development Permit has failed to diligently pursue
                  development of the project or use authorized by the approved permit.

       F. Variances. Variances from the development or design standards (but not the use
          restrictions) of this Code may be granted only upon finding that:

            1.    That because of special circumstances applicable to the subject property,
                  including size, shape, topography, location or surroundings, the strict application
                  of this Code will deprive such property of privileges enjoyed by other property in
                  the Business Park within the same area of land use designation, as shown in
                  Figure 2.1;

            2.    That granting of the variance will be subject to such conditions as will assure that
                  the adjustment thereby authorized shall not constitute a grant of special privileges
                  inconsistent with the limitations upon other properties in the Business Park within
                  the same area of land use designation, as shown in Figure 2.1; and,

            3.    That granting of the variance will not authorize a use or activity which is not
                  otherwise allowed within the applicable land use designation of the Business
                  Park.

            4.    The proposed variance will neither interfere with the operations of Oakland
                  International Airport nor enable the establishment of uses that may be
                  incompatible with the potential imposition of noise, light, smoke, air currents,
                  electronic or other emissions, vibrations, discomfort, and/or inconvenience
                  resulting from airport operations.

            5.    The Port has attached such conditions to approval of the variance as it deems
                  reasonable or necessary to achieve the purposes of this Code, to reduce or to

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                  mitigate environmental impacts, and to address the project’s anticipated burden
                  on the Business Park and the Port, and which otherwise promote the health,
                  safety, and welfare of the surrounding community.

5.6    Conditions of Approval

       The Port may attach conditions of approval as it deems reasonable or necessary to achieve
       the purposes of this Code, to reduce or to mitigate environmental impacts, to address the
       project’s anticipated burden on the Business Park and the Port, and/or which otherwise
       promote public health, safety and welfare. The standard conditions of approval in
       Appendix B apply to each project. Other specific conditions will be added based on the
       findings and details of each project. The combined standard and specific conditions will be
       known as the conditions of approval for the project, and must be incorporated into the
       approved plan set.

5.7    Administrative Appeals

       A. Administrative Appeal Form. Any person or entity aggrieved by Port approval or
          disapproval of a Use Consistency Determination, Development Permit, Variance or
          environmental document pursuant to this Code, may appeal such decision by
          submitting an Administrative Appeal Form to the Permit Coordinator. The
          Administrative Appeal Form may be found at www.portofoakland.com, or may be
          obtained in hardcopy from the Port’s Permit Coordinator.

       B. Appeal Limitations Period. The Administrative Appeal Form must be filed by the
          end of the 14th day after the Notice of Decision is issued for the subject approval or
          disapproval. When a Notice of Decision is not issued within 15 days of the subject
          approval or disapproval, the Administrative Appeal Form must be filed by the end of
          the 30th day after the subject approval or disapproval. Late filed Administrative
          Appeal Forms shall be of no effect and shall be deemed null and void.

       C. Failure to File an Administrative Appeal. Any failure to exhaust all administrative
          appeals hereunder shall be a complete bar to judicial review. No approval or
          disapproval under this Code shall be ripe for adjudication by any court unless and until
          the Board of Port Commissioners has reviewed and acted upon the approval or
          disapproval.

       D. Administrative Appeal Fee. The Administrative Appeal Form must be accompanied
          by the applicable administrative appeal fees at the time of submittal. Failure to pay the
          requisite administrative appeal fee at the time of submittal of the Administrative
          Appeal Form shall invalidate the administrative appeal and the submitted
          Administrative Appeal Form shall be deemed null and void.

       E. Basis and Scope of Administrative Appeal. The submitted Administrative Appeal
          Form must clearly and concisely set forth the grounds upon which the administrative
          appeal is based. On administrative review, the appeal will be deemed to concern


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            solely those issues raised in the Administrative Appeal Form. Failure to raise issues in
            the Administrative Appeal Form shall be deemed a waiver of such issues on appeal
            and upon any subsequent judicial review.

            1.    Takings. If a ground of the administrative appeal is that the Port's actions
                  constituted a taking of property under the California or United States
                  Constitutions, that ground and all evidence (including specific financial data and
                  analyses, if any) and argument in support thereof shall be clearly stated as a
                  separate ground of the appeal, or it shall be waived. If specific evidence is not
                  presented as part of the appeal, the takings claim shall be waived, and the
                  administrative appellant shall be deemed to have waived any claim to sworn
                  testimony and cross-examination. This requirement shall apply to appeals on the
                  ground that the Port's decision or any condition imposed by the Port denied the
                  applicant any reasonable economic use of the subject property, was not
                  sufficiently related to a legitimate public purpose, was not sufficiently
                  proportional to any impact of the project, or for any other reason constituted a
                  taking of property for public use without just compensation.

       F. Notice and Administrative Review. Notices of Decision for Port actions shall be
          issued and administrative review of administrative appeals shall be conducted as set
          forth in Table 5.2, below:

                                              Table 5.2
                                      Notice and Appeal Chart

Decision                Approving       Notice of                Appeal to:       2nd Appeal to:
                        Body            Decision
                                        distributed to:
Use Consistency         Permit          Applicant                Permit Hearing   Board of Port
Determination           Coordinator     Port website             Officer(s)       Commissioners
Variance                Permit          Newspaper,               Board of Port    None
                        Hearing         Applicant,               Commissioners
                        Officer(s)      Owner, Owners
                                        w/in 300 feet.
                                        Port website
Development             Permit          Applicant                Permit Hearing   Board of Port
Permit (Exempt          Coordinator     Port website             Officer(s)       Commissioners
from CEQA)
Development             Permit          Applicant,               Board of Port    None
Permit (ND,             Hearing         Electronic               Commissioners
MND, or EIR)            Officer(s)      Distribution List
                                        Port website
Note: Do we need two appeal bodies on the first and third categories of decisions or can we
just have one appeal level?



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5.8    Enforcement

       Any violation of this Code is deemed a public nuisance. Suspected violations can be
       reported to permitcoordinator@portoakland.com.

       A. Notice of Violation. Prior to taking any action to abate a public nuisance under this
          Code, the Port shall provide notice to the person(s) causing or responsible for the
          nuisance and a reasonable opportunity to cure and correct or otherwise abate the
          nuisance. Any violation of this Code that is not resolved after such notice and
          opportunity to cure, may be caused to be abated by the Port.

       B. Port Abatement. The Port Attorney may, at his or her discretion or upon order of the
          Board of Port Commissioners, commence any action or proceeding for the abatement
          and removal and enjoinment of violations of this Code in any manner provided by law
          or equity. Where the Port is the prevailing party in any action to abate a nuisance
          under this Code, the Port shall recover its attorney's fees and costs, including an
          amount attributable to the fees and costs of the Port Attorney. In addition to civil
          litigation, remedies available to the Port Attorney include, but are not limited to:

            1.    Administrative Penalties. The Port Attorney may impose an administrative
                  penalty of up to $10,000 jointly and severally on the person(s) responsible for any
                  nuisance and/or the property owner, and/or may impose a condition that the
                  property owners pay the costs of all Port services (including but not limited to
                  engineering services and Port Attorney costs) necessary to abate such public
                  nuisances.

            2.    Nuisance Abatement Liens. The Port Attorney may cause to be recorded a
                  nuisance abatement lien against the property on which the nuisance is maintained
                  and a personal obligation against the property owner in accordance with
                  California Government Code Section 38771 et seq., Civil Code Section 3494,
                  Code of Civil Procedure Section 731, or other lawful authority, to recover the
                  costs of any nuisance abatement effected by the Port, including litigation costs
                  and fees.

            3.    Criminal Prosecution. The knowing violation or maintenance of a violation of
                  any provision of this Code shall be deemed a misdemeanor. Any person
                  convicted of a misdemeanor under this Code shall be punished by a fine of not
                  more than five hundred dollars ($500.00), or by imprisonment not to exceed six
                  months, or by both such fine and imprisonment. Each and every day during any
                  portion of which any violation of any provision of this Code is committed,
                  continued or permitted shall be deemed a separate offense, and may be punished
                  accordingly.

       C. Private Right of Action. Any Landowner in the Business Park may bring a private
          action for injunctive and compensatory relief to prevent or remedy a public nuisance
          as defined in this Code. No action may be brought under this Section unless and until


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            the prospective plaintiff has given the Port and the prospective defendant at least 30
            days written notice of the alleged public nuisance and the Port has declined to initiate
            proceedings under this Section within that period, or after initiation, has failed to
            diligently prosecute. In any action prosecuted under this Section a prevailing plaintiff
            may recover reasonable attorney's fees costs.




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Appendix A:                     Definitions

While the Port Attorney shall be afforded deference in interpreting the provisions of this Code,
the following definitions are meant to clarify terms used in this Code. Where reasonable, the
plain meaning set forth in Webster’s Dictionary for any term not defined below shall control.

A.1     General Definitions

        Accessory Activities: See Section 2.5.

        Activity: Activity means the performance of a function or operation. “Activity” is
        synonymous with “Use.” Activities are the terms used in this Code to describe the
        business functions or uses at a particular site. Each business will be characterized by the
        primary activity from this Code that best describes the main use, as well as secondary and
        accessory activities. Refer to Section 1.4 for further definition and process for use or
        activity approval.

        Facility: The building, structure, or other human-made improvements that support
        an activity. A facility may serve more than one activity, or may be specific to a
        certain activity.

        Landowner: Landowner is to be interpreted broadly and is meant to include any
        applicant for a Development Permit, Use Consistency Determination, Variance or
        other approval under this Code as well as owners, tenants, lessees, users, permittees
        and occupants of real property in the Business Park. Landowner shall never be
        interpreted to include the Port, but it shall refer to and include tenants, lessees,
        users, permittees and occupants of Port-owned or administered lands.

A.2     Land Use Definitions

        Administrative: The executive, management, administrative, and clerical activities
        of public, private, and parochial institutions, and public utility administrative
        offices. Administrative uses shall include union halls and other general office uses.

        Adult Education/Vocational Training: Support services provided for independent
        living skills development including self-improvement education, employment and
        job training for off-site residents.

        Agriculture, Indoor: On-site indoor production of plant products including the
        raising of plant crops.

        Alcoholic Beverage Sales: The retail sale, for on- or off-premises consumption, of
        liquor, beer, wine, or other alcoholic beverages, but exclude full-service restaurants.


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        Animal Breeding and Care: Breeding facilities, veterinarian offices, and pet hotels
        where pets, livestock or wild animals are cared for as either office visit or for boarding.

        Automotive Fee Parking: The parking and storage of motor vehicles on a fee
        basis, other than the operation of parking facilities for the exclusive use of on-site
        visitors.

        Automotive Sales, Rental, Services and Brokerage: The retail or wholesale sale or
        rental, from the premises, of motor vehicles, with incidental maintenance. Motor vehicles
        include any passenger vehicle or light truck with a gross vehicle weight under 14,000
        pounds including motorcycles, cars, sport utility vehicles, light (pick up) trucks, vans,
        boats and recreational vehicles. Smaller facilities, where the capacity for on-site storage
        is not more than five vehicles, will be considered General Wholesale if the public is not
        invited to drop-in for on-site sales.

        Automotive Servicing and Repair: The sale, from the premises, of goods and the
        provision of services which are generally required in the operation and maintenance of
        automotive vehicles and the fulfilling of motorist needs, including sale of petroleum
        products together with sale and servicing of tires, batteries, automotive accessories, and
        replacement items, lubricating services, and performance of minor repairs, major repair or
        painting of motor vehicles, including body work and installation of major accessories, as
        well as the washing and polishing of motor vehicles. Smaller facilities, where the
        capacity for service is not more than two vehicles, will be considered Custom
        Manufacturing if the public is not invited to drop-in for service.

        Business and Communication Service: The provision, primarily to firms rather than to
        individuals, of services of a clerical, goods brokerage, communication, or minor
        processing nature, including multi-copy and blueprinting services; but exclude printing of
        books, other than pamphlets and small reports for another firm, and the storage of goods,
        other than small samples, for sale.

        Community Assembly: The activities typically performed by, or at, the following
        institutions or installations.

        A.     Churches, temples, and synagogues having an assembly room capacity of 20
               or more;
        B.     Food service and other concessions located within public parks;
        C.     Public, parochial, and private nonprofit clubs, lodges, meeting halls, and
               recreation centers;
        D.     Public and parochial playgrounds and playing fields;
        E.     Temporary nonprofit festivals;
        F.     Basketball courts, tennis courts, handball courts, lawn bowling, and similar
               outdoor park and recreational facilities;
        G.     Public, parochial, and private nonprofit gymnasiums;
        H.     Community swimming and wading pools, and other water play features;
        I.     Picnic areas.


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        Construction Operations: Enclosed and unenclosed facilities and accessory yards
        for construction and incidental storage activities and/or fabrication activities
        performed by construction contractors on lots other than construction sites.
        This classification includes, but is not limited to, the storage and custom cutting of stone
        for off-site applications, roofing and plumbing component storage and equipment storage
        for environmental contractors.

        Construction Sales and Service: Construction and incidental storage activities
        performed by construction contractors on lots other than construction sites, as well as the
        retail or wholesale sale, from the premises, of materials used in the construction of
        buildings or other structures, other than paint, fixtures, and hardware.

        Consultative and Financial Service: The provision of financial, insurance, and
        real estate brokerage services, as well as the provision of advice, designs,
        information, or consultation of a professional nature. Offices for such services
        where the public is not invited for drop-in service is considered an Administrative
        use.

        Convenience Market: The retail sale of food, beverages, and small personal convenience
        items, primarily for off-premises consumption and typically found in establishments with
        long or late hours of operation and a relatively small building.

        Custom Manufacturing: The small-scale production of artisan and/or custom products.
        This activity typically includes the production of finished parts or products by hand,
        involving the use of hand tools and small scale equipment within enclosed buildings.
        Custom Manufacturing Industrial Activities do not produce noise, vibration, air pollution,
        fire hazard or noxious emission that will disturb or endanger neighboring properties.

        This classification includes, but is not limited to, the production of:

        A.     Beverages (including alcoholic) and food (excluding the production of highly
               pungent, odor-causing items, such as vinegar and yeast) with ten thousand (10,000)
               square feet or less of floor area;

        B.     Cameras and photographic equipment;

        C.     Custom sign making;

        D.     Custom clothing;

        E.     Custom furniture building and refinishing;

        F.     Professional, scientific, measuring, and control instruments;

        G.     Musical instruments;

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        H.     Medical, dental, optical, and orthopedic instruments and appliances, and similar
               items;

        I.     Handicraft, art objects, and jewelry.

        Fast-Food Restaurant: The retail sale of ready-to-eat prepared foods and beverages, for
        on- or off-premises consumption, whenever the foods and beverages are available upon a
        short waiting time and are primarily served in or on disposable wrappers, containers, or
        plates. Fast-Food Restaurants may also exhibit other design and operating characteristics,
        including: (A) a limited menu; (B) food that is typically ordered and served at a service
        counter; (C) food that is paid for prior to consumption; (D) the facility in which the
        activity/use is occurring provides a take-out counter space and space for customer
        queuing. The sale of ready-to-consume prepared foods from trucks (“Vehicular Food
        Vending”) is not considered a Fast-Food Restaurant Commercial Activities.

        Full Service Restaurant: A restaurant where customers are served while seated, and
        order from a menu that provides enough choices to allow the customer to order a full
        meal. Such an establishment shall obtain at least 60% of its revenues from food service,
        and no more than 40% of its revenue from alcoholic beverage sales. The sale or service
        of sandwiches (whether prepared in an on-site kitchen or made elsewhere and heated on
        the premises) or snack foods shall not constitute a full-service restaurant.

        General Education: The activities typically performed by the following institutions.

        A.      Public, parochial, and private nursery schools and kindergartens;
        B.      Public, parochial, and private elementary, junior high, and high schools.
        General Food Sales/Restaurants: The retail sale, from the premises, of food or
        beverages for home consumption, as well as the retail sale of prepared food or beverages
        for on-premises consumption, except where more clearly described by another activity in
        this section, such as Alcoholic Beverage Sales, Convenience Market, or Fast Food
        Restaurant.

        General Manufacturing: Manufacturing, compounding, processing, assembling,
        packaging or treatment of products from extracted, raw, recycled or secondary materials;
        they may have some or all activities conducted outdoors. This classification excludes all
        activities under Intermediate Recycling Processing Facilities. The Port may place an
        activity that otherwise fits this description, but does not produce noise, vibration, air
        pollution, fire hazard or noxious emission that will violate standards by any other federal,
        State or local standards into the Light Manufacturing Industrial Activities classification.

        The classification includes, but is not limited to:

        A.     Chemical manufacturing (except for the chemical products listed under Heavy/High
               Impact Manufacturing);
        B.     Glass manufacturing;

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        C.     Metal foundries;
        D.     Paper finishing;
        E.     Pipe production facilities;
        F.     Textile mills;
        G.     Tire retreading and recapping;
        H.     Wood product manufacturing.

        General Retail Sales: The retail sale or rental from the premises, primarily for personal
        or household use, of goods consisting primarily of items including food and beverages
        and convenience items; but exclude sale or rental of motor vehicles, except for parts and
        accessories, and sale of materials used in construction of buildings or other structures,
        except for paint, fixtures, and hardware.

        General Wholesale: The storage and sale, from the premises, of goods to other firms for
        resale, as well as the storage of goods on the premises and their transfer to retail outlets of
        the same firm; but exclude sale or storage of motor vehicles, except for parts and
        accessories, and sale or storage of materials used in construction of buildings or other
        structures, except for paint, fixtures, and hardware. Sale of motor vehicles, where the
        capacity for on-site storage is not more than five vehicles, will be considered General
        Wholesale if the public is not invited to drop-in for on-site sales.

        Group Assembly: The provision of cultural, entertainment, educational, and athletic
        services, other than those classified as Community Assembly, to assembled groups of
        spectators or participants. These activities are generally pay-at-the-door businesses, and
        include night clubs, sports arenas, ice skating rinks, and conference centers. Gyms, yoga
        studios, etc. over 2,000 square feet and meeting rooms or assembly areas holding 100 or
        more people are considered Group Assembly.

        Health Care: All activities which primarily provide medical care and supervision other
        than those defined under Medical Services, and are typically performed by the following
        institutions.
        A. Health clinics;
        B. Hospitals;
        C. Skilled nursing, extended care, residential care (including facilities licensed for six
               or fewer residents), and assisted living facilities, all of which provide medical care
               on site;
        D. Nonresidential centers providing psychological or family counseling and mental
               hygiene services to individuals or groups;
        E. Support services which include regular individualized case management for both on-
               site and off-site residents in conjunction with Service-Enriched Permanent Housing
               and Transitional Housing Residential Activities;
        F. Facilities which provide inpatient and/or outpatient medical and/or psychological
               treatment for mental illness, substance and alcohol abuse and addiction;
        G. State licensed “Adult Day Care Facilities” and “Adult Day Support Centers”.

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        Heavy Manufacturing: High impact or hazardous manufacturing processes including but
        not limited to:

        A.     Any manufacturing use with large-scale facilities for outdoor oil and gas storage;
        B.     Any biotechnology research, development or production activities involving
               materials defined by the National Institute of Health as Risk Group 4 or Restricted
               Agents (commonly known as "bio-safety level 4");
        C.     Battery manufacturing and storage;
        D.     Lime and gypsum products manufacturing;
        E.     Non-ferrous metals production, processing, smelting and refining;
        F.     Painting, coating and adhesive manufacturing;
        G.     Synthetic dye and pigment manufacturing;
        H.     Urethane and other open-cell foam product manufacturing;
        I.     Petroleum and coal products manufacturing and refining;
        J.     Primary metal smelting;
        K.     Vinegar, yeast and other pungent, odor-causing items production;
        L.     Leather tanning;
        M.     Cement and asphalt manufacturing;
        N.     Explosives manufacturing;
        O.     Fertilizer and other agricultural chemical manufacturing.

        Large-Scale Combined Retail and Grocery Sales: The retail sale from the premises of
        goods and merchandise, primarily for personal or household use, from stores whose total
        sales floor area exceeds 100,000 square feet, and which devote more than 10% of sales
        floor area to the sale of non-taxable merchandise, but exclude wholesale clubs or other
        establishments selling primarily bulk merchandise and charging membership dues or
        otherwise restricting merchandise sales to customers paying a periodic access fee. This
        classification excludes the sale or rental of motor vehicles, except for parts and
        accessories, and the sale of materials used in construction of buildings or other structures,
        except for paint, fixtures, and hardware.

        Light Manufacturing : The manufacturing, compounding, processing, assembling,
        packaging, or treatment of components or products, primarily from previously prepared
        materials, and typically within enclosed buildings. Light Manufacturing Activities do not
        produce noise, vibration, air pollution, fire hazard or noxious emission that will disturb or
        endanger neighboring properties.

        This classification includes, but is not limited to, the production or assembly of:


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        A.     Production apparel manufacturing;
        B.     Computer and electronic products;
        C.     Pharmaceutical products;
        D.     Beverages (including alcoholic) and food (excluding the production of highly
               pungent, odor-causing items, such as vinegar and yeast) with ten thousand (10,000)
               square feet or more of floor area;
        E.     Electrical equipment, appliances, and components;
        F.     Furniture and related products;
        G.     Pharmaceutical production;
        H.     Sporting and athletic goods

        Live/Work Space: Live/Work is a use that combines residential and business uses in the
        same building or tenant space. For the purpose of this Code, a use that includes
        residential space in any proportion is considered “residential”.

        Mechanical or Electronic Games: The provision of pinball machines, video game
        devices, or other mechanical or electronic games, as defined in the Oakland
        Municipal Code, where the games can be played or operated by the public or by
        customers; but exclude the provision of such games in a pool- or billiard room or
        bowling alley for which a permit is required pursuant to Chapter 5.02 of the
        municipal code and from which persons under eighteen (18) years of age are barred
        at all times by the owner or operator, or in premises which are licensed by the State
        Department of Alcoholic Beverage Control for on-sale consumption of alcoholic
        beverages and which do not lawfully allow minors.

        Medical Service: The provision of therapeutic, preventive, or corrective personal
        treatment services by physicians, dentists, and other practitioners, as well as the provision
        of medical testing and analysis services.

        Personal Instruction and Improvement: Informational, instructional, personal
        and other similar services performed by professional and licensed practitioners,
        business typically performed by appointment only. Gyms, yoga studios, etc. under
        2,000 square feet are considered to be Personal Instruction and Improvement.

        Recycling and Waste Management: Recycling collection, intermediate processing, and
        other activities related to the storage and processing of used and waste materials.

        A.     Satellite Recycling Collection Centers. An activity accepting recyclable non-
               hazardous materials directly from the public by donation, redemption, or purchase at
               facilities less than five hundred (500) square feet in area that generally do not use
               power-driven processing equipment.




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               Satellite collection centers may include mobile recycling units, bulk reverse vending
               machines, kiosk type units, and/or unattended containers placed for the donation of
               recyclable materials. These facilities are generally located in or associated with
               supermarkets and shopping centers. Most, though not all, satellite collection centers
               are set up pursuant to requirements of the California Beverage Container Recycling
               and Latter Reduction Act of 1986, which requires establishment of such centers in
               all “Convenience Zones” in California, defined as the area within ½ mile of all
               supermarkets, to collect beverage containers made from materials such as
               aluminum, glass, plastic and bimetal for recycling.

        B.     Primary Recycling Collection Centers. An activity accepting recyclable non-
               hazardous materials by donation, redemption, or purchase at facilities occupying an
               area of more than five hundred (500) square feet that are not operated incidental to a
               host use and that may have a permanent building. Primary collection centers
               typically use power-driven equipment to sort and condense material for shipment to
               an intermediate processor or other user. Primary collection centers may have a
               combination of outdoor processing and storage.

        C.     Intermediate Recycling Processing Facility. An activity serving as a collection point
               for receiving, processing, storage, and distribution of large quantities of recyclable
               materials delivered from recycling collection centers or other sources. Processing of
               most or all material typically occurs inside a building, using mechanical and/or
               chemical processing equipment to alter the physical form of incoming material.
               Processed materials may be stored in outdoor areas prior to sale to manufacturers or
               other end users. Intermediate processing facilities do not accept materials from but
               may sell goods to the public. This classification does not include facilities that
               handle or process hazardous materials and solid waste facilities and transfer stations.

        Repair Service: The cleaning or repair of personal apparel and household appliances,
        furniture, and similar items, but exclude repair of motor vehicles and of structures.

        Research and Development: Scientific research for the design, development,
        engineering, and testing of high technology electronic, industrial or scientific products in
        advance of full-scale manufacturing of final products, other than medical testing and
        analysis and routine product testing, which is offered as a service or which is conducted
        by and for a private profit-oriented firm, other than a public utility firm. The only
        manufacturing uses in this classification consist of the creation of prototype products,
        plans, or designs for the primary purpose of research, development. or evaluation, rather
        than sale. This classification excludes manufacturing uses, wholesale and storage uses,
        repair and retail sales; this classification also excludes the on-site production of products
        for sale and biotechnology laboratories approved for National Institute of Health
        experiments using Risk Group 4 or Restricted Agents (commonly known as “bio-safety
        level 4”). This classification includes, but is not limited to biotechnology firms, “clean-
        tech”/energy, environmental, electronic research firms, or pharmaceutical research
        laboratories.



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        Retail Business Supply: The retail sale or rental from the premises, primarily to firms
        and other organizations using the goods rather than to individuals, of office equipment
        and supplies and similar goods, together with the provision of incidental maintenance
        services; but exclude sale or rental of motor vehicles, except for parts and accessories, and
        sale of materials used in construction of buildings or other structures, except for paint,
        fixtures, and hardware.

        Retail Sales and Service: The retail sale, from the premises, of drugs and other
        frequently needed small personal convenience items such as toiletries, tobacco, and
        magazines, as well as the provision of personal convenience services which are typically
        needed frequently or recurrently, such as barber and beauty care; and include shoe shining
        and operation of self-service laundromats and laundry or dry cleaning pick-up stations but
        exclude other apparel cleaning and repair services.

        Telecommunications: The transmission, between or among points specified by the user,
        of information of the user’s choosing, without change in the form or content of the
        information as sent and received.

        Transient Lodging: As distinguished from residential occupancy, allows lodging of
        transient guests on a daily basis.

        Trucking and Truck-Related: The provision of freight handling and shipping services
        by trucks as well as parking, maintenance and services for trucks and other heavy vehicles
        and equipment.

        Freight:

        A.     Freight/Truck Terminal: The accommodation of local or worldwide freight by truck.
               This classification includes facilities used primarily for transfer, breaking-down,
               and/or consolidation of freight, as well as parking and dispatch of trucks.
        B.     Truck Yard: Parking, dispatch, refueling and incidental repair of trucks, buses, or
               other fleets of heavy vehicles, where there is no on-site freight storage or transfer.
               This classification includes corporation yards operated by public and private towing
               operations. This classification does not include local courier and delivery services;
               or towing operations as an accessory activity to automotive repair and cleaning.
        C.     Truck Weigh Stations: The weighing of commercial trucks in truck weighing
               facilities, except as incidental to an approved activity.

        Sales or Services:

        D.     Truck and Other Heavy Vehicle Sales, Rental and Leasing: Sales, rental and leasing
               of medium and heavy trucks, truck tractors, construction or agricultural equipment,
               buses, commercial boats, heavy equipment, and other commercial vehicles that have
               gross vehicle weight ratings greater than fourteen thousand (14,000) pounds,
               including the sale, installation, accessory repair and servicing of related equipment


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               and parts. This classification does not include vehicle dismantling or salvage and
               tire re-treading or recapping
        E.     Truck and Other Heavy Vehicle Service, Repair, and Refueling: Repair, fueling. and
               other servicing of medium and heavy trucks, truck tractors construction or
               agricultural equipment, buses, boats, heavy equipment, and similar vehicles that
               generally have gross vehicle weights greater than fourteen thousand (14,000)
               pounds, including the sale, installation and servicing of related equipment and parts.
               This classification includes fueling stations, repair shops, body and fender shops,
               wheel and brake shops, engine repair and rebuilding, welding. major painting
               service, tire sales and installation, and upholstery shops for trucks and other heavy
               vehicles. This classification does not include vehicle dismantling or salvage.

        Undertaking Services: The preparation of dead bodies for burial or cremation, including
        the provision for visitations and/or services.

        Utility and Public Service: The maintenance and operation of the following
        installations, including certain activities accessory thereto:

        A.     Electric, gas, and telephone distribution lines and poles, and water, storm
               drainage, and sewer lines, with incidental appurtenances thereto;

        B.     Electrical substations;

        C.     Gas substations;

        D.     Newsracks;

        E.     Police stations and fire stations;

        F.     Private streets;

        G.     Public polling places;

        H.     Freeways, rapid transit routes, streets, alleys, and paths, but excluding uses on,
               under, or over such ways which uses are not customarily appurtenant thereto;

        I.     Post offices, but excluding major mail-processing centers.

        J.     Public and public utility corporation or truck yards;

        K.     Radio and television transmission stations;

        L.     Stormwater detention ponds and facilities.

        Warehousing, Storage, and Distribution: This includes five (5) subclassifications as
        described below:

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        A.     General Warehousing, Storage and Distribution: The warehousing and storage,
               primarily within enclosed buildings, of commercial goods (other than primary
               storage of hazardous materials), and the associated distribution activities that occur
               on-site prior to delivery of goods to wholesale and retail outlets or direct shipment to
               customers. These activities may also include ancillary truck parking and
               dispatching; and accessory outdoor storage areas where outdoor storage, not
               including parking and loading areas, does not occupy more than thirty percent
               (30%) of the total site area, and meets the design and location criteria under Section 4.4.

               This classification includes, but is not limited to, wholesale distributors of large
               furnishings, food products and auto parts.

        B.     General Outdoor Storage: Outdoor storage activities include principal outdoor
               storage of items for more than twenty-four (24) hours where such storage activities
               occupy more than thirty percent (30%) of the site area. The principal storage of
               goods and materials, equipment or vehicles; as well as the storage of operating
               equipment for warehouses, such as forklifts, pallets, and racks. This classification
               excludes outdoor storage uses that are more specifically described in this chapter,
               including, but not limited to container storage, salvage and junk yards and oil and
               gas storage.

               This classification includes but is not limited to construction trailers, outdoor sheds
               or accessory portable structures, or secondary sites for storage of building materials
               that are not for resale on-site.

       C.      Self or Mini Storage: Self- or mini storage consists of storage in small individual
               spaces, that are exclusively and directly accessible to a specific tenant, offered on a
               monthly or other limited basis, and available to the general public.

       D.      Container Storage: Container Storage includes the storage, repair, and “pre-
               tripping” of shipping containers including refrigerated shipping containers on open
               lots. Includes minor repair and cleaning of containers and may include the
               rehabilitation of containers for other uses.

       E.      Automotive Salvage/Junk Yards: Storage and dismantling of vehicles and
               equipment for sale of parts.




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Appendix B:                     Conditions of Approval
The Port may attach conditions of approval as it deems reasonable or necessary to achieve the
purposes of this Code, to reduce or to mitigate environmental impacts, to address the project’s
anticipated burden on the Business Park and the Port, and/or which otherwise promote public
health, safety and welfare. Other specific conditions will be added based on the findings and
details of each project. The combined standard and specific conditions will be known as the
conditions of approval for the project, and must be incorporated into the approved plan set.

The “applicant” is the primary contact for the project representing the occupant of the property,
under the authority of the property owner if different. The applicant is responsible for
communicating these conditions along with any other requirements to the property owner,
construction contractor, and all parties acting on behalf of the applicant to complete the
permitted project, and each will be held responsible for meeting the standard and specific
conditions of approval. The following standard conditions of approval apply to each project.

Standard Conditions of Approval

1.     All conditions of approval shall be printed on the final permit set of plans.
2.     The project shall conform to the Port-stamped approved plans, including the conditions of
       approval, unless otherwise approved by the Port. The applicant is responsible for including
       all details agreed upon, or conditions made by the Port, during the approval process.
       Failure to include any such details will not exempt the applicant from including them at a
       later time. The applicant is responsible for obtaining approval from the Port for any
       changes prior to construction.
3.     The use shall be fully described on the plans and is deemed approved by the Port approval
       stamp. Any modifications or clarifications will be included in the Specific Conditions.
       Any changes from the approved plans must be approved in writing by the Port.
4.     The applicant shall confirm that an aviation easement in favor of Oakland International
       Airport in a form approved by the Port Attorney has been recorded on the subject property.
       If not, the applicant shall grant and record an aviation easement.
5.     The applicant shall make improvements for sidewalk(s) as required. Such improvements
       shall be included in the approved plans, unless otherwise specified in the Specific
       Conditions.
6.     The applicant shall meet all conditions and requirements of all outside agencies having
       jurisdiction over the project, including but not limited to: the City of Oakland, Federal
       Aviation Administration, Regional Water Quality Control Board, Airport Land Use
       Commission, Alameda County Health Department, and State Lands Commission. The
       applicant shall report any conflicts with Port requirements to the Port prior to construction.
       Any such conflicts must be resolved by the applicant to the satisfaction of the Port and the
       outside agency involved.




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7.     The applicant shall agree to comply with the Land Use and Development Code for the
       Oakland Airport Business Park and consents to the enforcement procedures set forth in
       section 5.8 of this Code.
8.     The applicant shall comply with the requirements of all environmental documents prepared
       under the California Environmental Quality Act applicable to the subject project including
       mitigation and monitoring requirements approved for the Development Permit.
9.     The applicant shall defend, indemnify, and hold harmless the Port and its agents, officers,
       and employees from any claim, action or proceeding against the Port or its agents, officers
       or employees to attack, set aside, void, annul, or invalidate any Port approval concerning
       the subject project provided that the Port has promptly notified the Applicant of any such
       claim, action or proceeding and cooperates in the defense. Counsel retained in such
       defense shall be subject to the mutual approval of the Applicant and the Port. The
       Applicant shall reimburse the Port for its reasonable attorney and consultant fees incurred
       in such defense including amounts attributable to the Port Attorney’s legal services.
10.    The Applicant shall comply with applicable stormwater quality requirements including
       Low Impact Development site design.




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Addition of a Land Use and Development Code for
the Airport Business Park to Update and Replace
                                                                         2832
Existing Standards and Restrictions - Exhibit B                    Ycrion 1.0 11/01/0

                                     BOARD OF PORT COMMISSIONERS
                                           CITY OF OAKLAND


                                              PORT ORDINANCE No.       2832



                                AN ORDINANCE ESTABLISHING STANDARDS AND RES—
                                TRICTIONS REGULATING THE USE 0B LAND AND THE
                                DESIGN  AND  CONSTRUCTION   OF  STRUCTURES  AND
                                OTHER  INPROVEHENTS   IN  THE  OAXLAI{D AIRPORT
                                BUSINESS PARK, AND REPEALING PORT ORDINANCE
                                NO. 1343, AS ANENDED.




                                  WHEREAS, the Board of Port Corrunissioners of the City
                        of Oakland has heretofore on January 17,     1966, adopted Fort
                        Ordinance No.   1343, establishing standards and restrictions
                        regulating the use of land and the design and construction of
                        structures and other improvements in the Port of Oakland Indus
                        trial Park; and

                                  WHEREAS, in accordance with   Section 3 of Port Ordin
                        ance No. 1343 this Board from time to time has amended Port
                        Ordinance No. 1343, including amendment by Port Ordinance No.
                        1959 which changed the name “Port of Oakland Industrial Park”
                        to “Oakland Airport Business Park”; and

                                  WHEREAS, in accordance with Section 3 of Port Ordin
                        ance No. 1343, this Board has initiated action to amend the
                        standards and restrictions contained in Port Ordinance No.
                        1343, as amended, to set forth in full in this ordinance the
                        standards and restrictions as so amended and to repeal Port
                        Ordinancc No. 1343, as amended; and

                                   WHEREAS, this Board has determined that the amended
                        standards and restrictions, as set forth in Sections 1 through
                        5 of ‘this ordinance, are necessary to better provide for the
                        orderly, comprehensive and adequate development and improvement
                        of the Port Area; now, therefore,

                                  BE IT ORDAINED by the Board of   Port Commissioners   of
                        the City of Oakland as follows:




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Adoption of a Land Use and Development Code for the Airport Business Park
to Update and Replace Existing Standards and Restrictions – Exhibit C




           Oakland Airport Business Park Land Use Development Code (LUDC)
                         Public Comments – July/August 2010


Three meetings were held with the public: December 17, 2009, prior to the release of the draft
LUDC; June 24, one week after to the draft was released; and, July 6 with interested parties to
follow up on certain issues. Written comments were solicited for the official record and are
reprinted in this report. Additional public discussion of note made orally during public meetings
is referenced in the staff responses for the related topic. Additional use discussion is included
on the last page.


WRITTEN COMMENTS:                                PORT STAFF RESPONSES:

Michael Kuhn, Owner, 7755 Pardee Lane:            1 Many of the attendees agreed that the
                                                 setback on Edgewater should be maintained.
I object to the draft in the following           They expressed the feeling that Edgewater is
particulars: It decreases the current setback    the signature street for the Business Park,
from Edgewater Drive 1 and it allows chain       with the wide median, four traffic lanes, and
link fences as screens instead of the current    deep building setbacks. Many felt that this
requirement of masonry. 2.                       change was a gift to the one vacant property
                                                 on the street, and that no one else would be
 3 Our property at 7755 and 7799 Pardee          eager to expand or rebuild forward of the
Lane has been negatively impacted by our         existing front set back. Staff agreed to
neighbor on the corner of Edgewater and          maintain a deeper setback along this street to
Pardee for several years in spite of our         maintain the “signature” feel for the Business
repeated complaints and a finding in our favor Park. No survey of existing property owners
at the hearing. The neighbor is using the        or potential developers was conducted to
property as a contractor’s corporation yard      determine if there was any desire to build into
with a chain link fence surrounding it and no    the existing front setback.
improvement of the property from the street
                                                  2 The current standard requires solid
to the setback line. The Port’s failure to
enforce the current standards has and            fencing for the street facing fence, but allows
continues to have a major negative financial     the Port to waive the requirement under
impact on us. Rather than doing the              certain circumstances. Under the new
appropriate thing and enforcing the standards standard, chain link fences would not be
both properties agreed to when the land was      allowed as of right. Rather, a variance would
purchased, this seems to be a backdoor           be required to use chain-link for the front
attempt to get rid of the problem by defining it facing fencing. Hence there is no substantive
away.                                            change as to permissible fencing material.
…                                                 3 This is an on-going enforcement issue




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Section 3.1:        I believe that the setback       that is being addressed separately from this
line on Edgewater should remain at 35’. A            process. The general issue of enforcement
modification that I think would be advisable         has been addressed in the draft standards,
would be to keep the building line setback at        where procedures have been spelled out,
35’, but allow parking lot to start 20’ back,        and strengthened, including penalties for
with the 20’ setback reserved for sidewalk           refusal to comply.
and landscaping. 4.
                                                      4 The parking requirements have been
Section 3.5:        I would warn against
                                                     significantly revised from the current
reducing the parking ratio for office use below
                                                     standard, which emphasizes employee
4 spaces per 1,000 sq ft. 4 Street parking in        counts, which are not always known during
the park is not advisable and less parking           the permit process. 4 spaces per 1000 sq.ft.
may create buildings that are not usable. 5.         is a standard often used for office buildings,
Section 4:          I don’t think chain link fence   but there are very few buildings in the
parallel to a street is compatible with a            Business Park that are strictly office. The
business park environment. Solid fencing             standard for warehouse space could be as
should be required. 2 The issue pretty much          low as 1 space per 1000 sq.ft. The proposed
goes away if outside storage in front of             standard puts more emphasis on an
buildings is not allowable. 6.                       individual building analysis. When possible,
Section 4:          I believe that the realty sign   especially for new or expansion projects,
restriction is overly restrictive. 32 sq ft should   permit applications will require a parking
be allowed as a minimum, with larger signs           study to determine the necessary parking.
needing a permit. 4’ x 4’ signs are generally        Formulas are included for projects where a
the smallest commercial real estate signs            full study is not possible. The detailed
and, depending on the property, 4’ x 8’ are          hotel/motel parking standard has been kept
very common. The signs are meant to be               from the current standards. It is a complex
seen from passing vehicular traffic. Both            formula that takes into account the variety of
Robert Hamilton and Gary Fracchia asked              potential services offered by a hotel. The
me to include them as supporting my                  main issue seemed to be complexity, and this
comment. 7.                                          has been addressed with better instructions.
                                                     5 Parking is a major issue for tenants in the
Jonas Mok, Revolution Foods, Capwell
                                     Business Park. Street parking is not allowed
Drive:                               anywhere in the Business Park, so there are
                                                     no overflow spaces if there are not enough
I was not able to attend yesterday’s meeting,        spaces on-site for the tenants and visitors.
however I did attend the December meeting.           There was discussion at each meeting with
I would like to advocate for removal of the          the public regarding street parking, but the
restriction on street parking within the             general consensus was that the Port should
Business Park. We are fortunate enough to            not change that standard. Commenters felt
be growing quickly and creating jobs for             the amount of spaces that would be provided
Oakland residents and, as such, will need            was not significant enough to warrant the
more parking as we grow. I also have not             change. Because of high truck traffic it is
heard a compelling reason as to why the              necessary to maintain a significant width on
restriction is even in place. I would                streets like Capwell, where it may only be
appreciate it if you would pass this on to           safe to put parking on one side of the street.
those who are drafting the Code. 5.                  In addition, the visual impacts of street
                                                     parking could be significant, especially along
Ben Garfinkle, Clamp-Swing Pricing                   Edgewater Drive. The proposed standard
Co., 8386 Capwell Drive:                             balances [what does it allow?] the need for
                                                     on-site parking with aesthetic and safety
I was unable to attend the meeting on 6/24 as        concerns,. The Port will continue to evaluate
I had to be out of town. I wanted to submit          alternatives, including consideration of
these comments earlier but I was gone last           accepting off-site parking to mitigate on-site




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week as well and my schedule is only now           shortages.
allowing me time to do this. I hope I am not
                                                    6 Outside storage has not been allowed in
too late with my comments and questions.
                                                   the front setback or in the front half of the
                                                   site, though there is some ambiguity as to
3.4       Parking
                                                   how the standard should be applied in every
                                                   situation. The proposed standard clarifies the
Please explain this statement:
                                                   allowable placement and screening
                                                   requirements for outside storage areas, which
“Parking will be allowed within 5 feet or
                                                   will not be allowed in front of the front building
more of the front property line adjacent to
                                                   line.
driveway(s) with Port approval.” 8.
                                                    7 Realty signs were also discussed at the
I do not understand what area is “5 feet of        meetings. The current standard sets the
more of the front property line”. How wide         maximum area at 12 sq.ft., smaller than a half
or long can this be as long as it is               sheet of plywood (16 sq.ft.) Commenters
“adjacent” to the driveway? 8.                     agreed that this was not realistic, and staff
                                                   field surveys did not find any realty signs
Does the new parking lot on Capwell at the         under 16 sq.ft. The City of Oakland Zoning
                                                   has the same standard, which has not been
corner of Pendleton conform to this? 9.
                                                   enforced by the Port or the City. In
                                                   consideration that standards included in the
3.8       Sidewalks                                LUDC should be enforceable, staff proposes
                                                   raising the limit to 32 sq.ft. in the proposed
“For existing developments where a                 code. Realty signs meeting this standard will
substantial modification is anticipated in         not require a permit, though larger signs may
excess of $50,000, a six (6)-foot wide             be allowed if necessary with a permit.
concrete sidewalk shall be required along
the entire street frontage of the property.”        8 The proposed standard reduces the front
                                                   set back, allowing more space for parking. In
When this standard was established in              addition, the proposed standard would allow
                                                   additional parking along the driveway. No
1988 (ordinance 2832) the term used was
                                                   additional access aisles will be allowed within
“excessive remodeling”. Today $50,000 is
                                                   the front setback area. The standard in
not either “excessive” or “substantial”. If the    question would allow parking spaces within
dollar amount is intended to kick in when a        the front setback that use the driveway as
major project is undertaken, the dollar            access. There would still be a five foot
threshold should be substantially increased        setback requirement so that vehicles are not
to be in keeping with the times. Perhaps a         parked right up to the curb. This ensures
threshold of $500,000 is in order. 10.             visibility for vehicles leaving the site, gives
                                                   maneuvering space for vehicles entering the
4.2       Signs                                    site, and may be expanded to six feet if
                                                   needed for a sidewalk.
A.2       The 4 foot height limitation is an old
one and perhaps can be increased if the             9 There are new parking areas on Capwell
placement ensures that visibility is not           and Pendleton near this corner that do not
impaired for safety reasons. Something to the      comply with the standard. They were not
effect that with Port approval higher limits       permitted, and compliance will be required.
may be allowed. 11.                                 10 The 1988 standard to make sidewalk
                                                   improvements has not resulted in any
I think that is it for now. It is good to update   significant installations of sidewalks. Staff
the Code from time to time and this is a good      proposes leaving the threshold at $50,000 in
start.                                             order to increase sidewalk construction. The
                                                   issue of sidewalks, or lack of sidewalks, was
                                                   very important to meeting attendees. Other




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                                                   options, such as an assessment district, may
                                                   be considered outside the LUDC process.
                                                    11 The current height limit for free standing
ADDITIONAL USE DISCUSSION:                         signs is 4 feet, throughout the Business Park.
                                                   The proposal raises the standard to 10 feet in
One of goals of this revision is to clarify        the Commercial Corridor to accommodate
allowable or restricted uses. The proposed         retail businesses and the wider, higher speed
standard includes definitions for over 40          streets. The general consensus from those
uses. These definitions are the same as, or        commenting at the meetings was to leave the
similar to, the City of Oakland Zoning             height standard for the Business Park
Ordinance in order to reduce confusion for         Interior. Many businesses have met this
people working in both Port and City areas.        standard, and many have raised the effective
The City of Oakland Planning and Zoning            height with landscape burms. The variance
staff has been working on revisions to the         process is still available for tenants that have
City Zoning Ordinance. Their staff provided a      extraordinary circumstances.
number of comments on the use definitions in
the proposed LUDC. 12.

Public discussion of uses was largely
                                                    12 The LUDC drafting process began with
centered on whether or not certain existing
                                                   taking many of the City Zoning definitions to
uses would still be allowed under the new
                                                   create a list of uses for the Business Park.
LUDC. A few business owners found that
                                                   For some use definitions, such as Residential
their business might not be allowed under the
                                                   (which is prohibited), the broadest definition
new code. 13.
                                                   was used without including the many sub-
                                                   categories employed in the City Zoning
Many comments came from the public and
                                                   ordinance. The LUDC provides a category
City regarding medical cannabis uses. The
                                                   for every use, to provide clarity as to what
City regulates these uses through the City
                                                   definitions fit a proposed use. For example,
Managers Office and the Business License
                                                   the LUDC defines Full-Service Restaurant
process. They have been allowing
                                                   and Fast-Food Restaurant, but if a restaurant
dispensaries for a number of years, and will
                                                   does not meet one of those definitions it
now accept cannabis growing under the
                                                   would be classified as General Food Sales.
Business Code. The Oakland Zoning
                                                   The Port does not have a need in the
Ordinance has treated dispensaries as
                                                   Business Park to separate a café from a food
medical service facilities, much like a doctor’s
                                                   mart since there are very few of these uses
office or pharmacy. Cannabis growing
                                                   and the Port do not regulate them differently.
businesses would be considered as
manufacturing or agriculture. Public
                                                    13 With only one exception, all of the
discussion at the meetings was very much in
                                                   businesses that we identified as currently
favor of allowing these businesses, and
                                                   operating in the Business Park would be use
property owners were especially interested in
                                                   compliant under the new code. Some of the
assuring that cannabis growth would be an
                                                   definitions and allowable designations were
allowable use in the Business Park Interior.
                                                   adjusted to assure that those businesses
The City regulates the number of
                                                   could continue without concern of code
dispensaries allowed, and the maximum
                                                   enforcement action. The one exception is the
number has been reached, so there is very
                                                   Port-owned property on Hegenberger
little chance that a new dispensary would be
                                                   currently occupied by a water distribution
proposed in the Business Park. 14.
                                                   company. Hegenberger is the heart of the
                                                   Commercial Corridor, and the Airport
                                                   Gateway, so it is desired that more retail and
                                                   public uses be located at the front of these
                                                   properties. This will be considered a legal




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non-conforming use, and will be
“grandfathered” in until the use is changed by
the tenant or owner.

 14 A dispensary would be considered
Medical Service, which is defined and
allowed in the Business Park. These are
facilities offering professional medical
services on an out-patient basis, such as a
dentist or psychiatrist office. In response to
the cannabis growth discussion, staff added
Agriculture as a defined use, and the LUDC
will allow indoor agriculture only. Outdoor
agriculture will not be allowed, though
outdoor storage will be allowed as with any
other use, subject to the standards for
outdoor storage in the LUDC.




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Adoption of a Land Use and Development Code for the Airport Business Park to
Update and Replace Existing Standards and Restrictions – Exhibit D

Supplemental Findings for Adoption of a Land Use and Development Code for the Airport
Business Park to Update and Replace Existing Standards and Restrictions

I.     Environmental Findings

City of Oakland Lead Agency CEQA Determination: The City of Oakland circulated for
public review a draft Environmental Impact Report on the proposed Oakland General Plan Land
Use and Transportation Element (EIR) on October 31, 1997. The public review and comment
period closed on December 30, 1997. Nine agencies and organizations submitted written
comments including the Port of Oakland. The City of Oakland responded in writing to comments
and prepared a Final Addendum to the draft EIR in February 1998. The City of Oakland
certified the Final EIR on February 13, 1998.

Port Responsible Agency CEQA Determination: The Port, as a responsible agency, received
the City's notice of preparation, participated in meetings with City staff, and reviewed and
provided comments on the draft EIR.        No entity has filed an action challenging the City's
certification of the EIR. The Port will file a Notice of Determination based on the City's
certified EIR and the following Findings and Statements of Overriding Considerations.

        Findings: Adopting the Oakland Airport Business Park Land Use and Development
        Code (LUDC) to update and streamline the Port’s existing Standards and Restrictions in
        compliance with the General Plan does not substantially change the land uses described
        in the EIR and certified by the City of Oakland. Since the City's certification of the EIR,
        no substantial changes have occurred, and no new information exists, requiring major
        revisions of the EIR due to new significant environmental effects or a substantial
        increase in the severity of previous identified significant effects. The Port adopts and
        incorporates by reference the City's Findings, namely:

       A. That the Draft EIR was circulated for public review, and comment from October 31,
          1998 through December 30, 1998, and was independently reviewed and analyzed by
          the Planning Commission and reflects the independent judgment of the Planning
          Commission.

       B. That the Final EIR, consisting of the Draft EIR and the Final Addendum EIR, was
          completed in compliance with CEQA on February 13, 1998.

       C. That the EIR identifies all potential significant impacts and feasible mitigation
          measures that would reduce these impacts to a less than significant level; that all of
          the Mitigation Measures identified in the Draft and Final EIR and again in the
          Mitigation Monitoring Program will be adopted and implemented, and that the
          transportation, air quality, fire, safety, noise, and wind impacts described in the




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          Planning Commission staff report of February 25, 1998, could not be mitigated to a
          less than significant level.

       D. That a reasonable range of project alternatives was identified in the Final EIR, that
          alternatives to the project were rejected as inappropriate or disadvantageous when
          compared to the project.

       E. That the Land Use and Transportation Element project complies with CEQA; and that
           the Final EIR was presented to the Planning Commission and considered by the
           Commission prior to approving the project.

Any alterations or improvements to the site will be subject to a separate Port permit and CEQA
determination.

II.    Statement of Overriding Considerations

       A. In accordance with CEQA Guidelines Section 15093, the Port has, in determining
          whether or not to adopt the LUDC, balanced the economic, social, technological and
          other benefits of the project against its unavoidable environmental risks, and has
          found that the benefits of the project outweigh the significant adverse environmental
          effects that are not mitigated to less-than-significant levels, for the reasons set forth
          below. This statement of overriding considerations is based on the Port’s review of
          the EIR and other information in the administrative record for the project.

       B. Adoption of the Land Use and Transportation Element will facilitate the creation of a
          safe, healthy, and vital city offering a high quality of life through a dynamic economy
          that taps into Oakland's great economic potential and capitalizes on its physical and
          cultural assets; clean and attractive neighborhoods, a diverse and vibrant downtown,
          an active and accessible waterfront that also promotes Oakland's position as a
          international harbor and airport, an efficient transportation system that serves the
          needs of all its citizens and promotes Oakland's primacy as a transportation hub, and
          an awareness and enjoyment of Oakland's magnificent physical setting.

          Specifically, the adoption of the Land Use and Transportation Element is anticipated
          to result in the addition of 42,000 jobs and 12,000 new households in Oakland
          between 1997 and 2015. These new jobs and households will result in additional
          taxes and revenue that will be available to provide for necessary public services and
          public improvements in Oakland. The additional jobs will provide employment
          opportunities for many of the City's unemployed and underemployed. The new jobs
          will generate addition demand for existing Oakland business services and goods,
          which will also increase revenues and taxes to the City.

       C. Adoption of the Land Use and Transportation Element will ensure that the City
          pursues its development in a manner that is sensitive and responsive to the city's
          current and planned transportation network and that planning, transportation and
          capital improvement programming are coordinated within the City and with the Port
          of Oakland. Specifically, adoption of the Element will result in the designation of




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           Transit Streets, Transit Oriented Districts and highest priority transportation
           improvements that will facilitate the improvement of transportation in the City.

       D. Adoption of the Land Use and Transportation Element will establish a framework and
          guide for the comprehensive update of the City's zoning ordinance which is needed to
          reduce existing land use conflicts in neighborhoods and business areas. Specifically,
          adoption of the Element will result in the development and adoption of a number of
          zoning ordinance improvements and development guidelines, which are identified in
          the Mitigation Monitoring Program, and are needed to address current land use
          problems occurring throughout the City.

       E. Adoption of the Land Use and Transportation Element will establish a guide for
          prioritization of City efforts to focus and leverage economic development efforts to
          revitalize and strength the local economy and generate jobs for Oakland and. the
          adjacent community residents.

III.   General Plan Conformity Determination

Project and Property Description

Location: The project area is known as the Oakland Airport Business Park in Oakland,
California. The ordinance applies generally to the entire Business Park. The area lies generally
between I-880 and Doolittle Drive, from Hegenberger Road to 66th Avenue.

Description: The Port is preparing to replace the existing regulations- Oakland Airport Business
Park Standards and Restrictions (Port Ordinance No. 2832, as amended.) This action requires
that the Board of Port Commissioners approve a new ordinance to adopt the new standards, and
repeal the existing standards. The action must be heard at two meetings before becoming final.
The action would replace the outdated regulations with a new document that is in conformity
with the latest General Plan updates.

Purpose: The existing standards are out of date and sometimes hard to interpret, especially with
respect to allowable uses. The last major revision was nearly 30 years ago, and the General Plan
was updated in 1998. The revised Land Use and Development Code (LUDC) clarifies allowable
uses, some with specific conditions. It establishes new guidelines to assure public access to the
process. It reduces front setbacks for most properties, allowing for more on-site parking, and
revises other language and formatting to improve readability. All revisions were considered in
the context of the latest General Plan guidelines and the City’s adoption of specific zoning
designations for the area that reflect the revised General Plan.

Setting: The Oakland Airport Business Park is within Port Of Oakland land use jurisdiction.
The Business Park consists of mostly one and two-story structures on large lots and with surface
parking areas. It includes office, business service, warehouse, distribution, and research and
high-rise structures. Along Hegenberger Road and Oakport Street, a number of multi-story
office buildings and hotels exist. The Martin Luther King Jr. Regional Shoreline Park runs
through the business park and along Damon Slough at the end of Edgewater Drive. San Leandro
Creek and the Arrowhead Marsh are located in the Shoreline Park near the site. Located to the




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east of the Oakland International Airport, vicinity land uses in the business park consist of
distribution, warehousing, office, hotel and light industrial uses. The Oakland Airport Business
Park Standards and Restrictions allow commercial uses along Hegenberger Road, including
hotel/motel.

General Plan Land Use Designation

The Business Park contains sites in both the Regional Commercial and Business Mix areas of the
Oakland General Plan. Hegenberger Road divides the Port Area from the City of Oakland C-36
zone, and is in the Regional Commercial area. A portion of Doolittle Drive is also in the
Regional Commercial. Another portion is classified as Recreation and Open Space. The
remainder of the Business Park, and largest developable area, is designated as Business Mix.

Regional Commercial calls for “visitor serving activities”, businesses with regional draw,
primarily retail and entertainment oriented. Hegenberger Road is also part of the Airport
Gateway sub-area as one of the prime links between the freeway and the Oakland International
Airport. Hotels, restaurants and other businesses serving travelers are encouraged. The LUDC
recognizes these goals, and is consistent with the standards of the C-36 zoning in the City’s
jurisdiction across the street.

The Recreation and Open Space designation covers the area known as the Martin Luther King Jr,
Shoreline Park, including Arrowhead Marsh and portions of San Leandro Bay and Channel.
These areas are maintained by the East Bay Regional Park District by agreement with the Port of
Oakland. They are designated as Open Space in the LUDC, and would continue to be
maintained and operated in conformance with the Open Space and Recreation Element of the
General Plan.

“The Business Mix classification is a flexible “economic development zone”, which strives to
accommodate older industries and anticipate new technologies, including both commercial and
industrial operations.” The LUDC was written to assure that existing legally established
businesses that meet the current General Plan can continue to operate without undue restriction.
The second goal was to minimize restrictions on new businesses proposing to locate in the
Business Park. Uses allowed under the IO designation are generally allowed, except for a few
cases where it was determined that the uses would conflict with other allowable uses.

General Plan Conformity Analysis and Determination

One of the primary goals of the LUDC was to conform to the General Plan, and we have taken
care to meet that goal. The City of Oakland recently updated its zoning designations based on
the 1998 General Plan revision. During this revision, most of the Regional Commercial area of
the Business Park was designated as C-36, and most of the Business Mix area was designated as
IO. While these designations do not apply to individual development proposals on a practical
level, they are an indication of the interpretation of the General Plan designations. The LUDC
was reviewed in detail with City of Oakland Planning staff to assure that allowable uses are
consistent with the General Plan. By approval of the LUDC, the Board of Port Commissioners
makes the finding that the document conforms to the City of Oakland General Plan.




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IV.    Other Findings

WHEREAS, the Board of Port Commissioners (“Board”) of the City of Oakland (“City”) is
vested with the authority and responsibility to make provision for the needs of commerce,
shipping and navigation of the Port of Oakland (“Port”); and

WHEREAS, the Board has the complete and exclusive control and jurisdiction of the Port Area
of the City and the power to enforce therein general rules and regulations to the extent that they
may be necessary or requisite for port purposes and harbor development and in carrying out the
powers vested in the Board; and

WHEREAS, the orderly development of public and private lands in the Port Area is the
responsibility of the Board; and

WHEREAS, the Airport Business Park is a portion of the City lying within the Port Area; and

WHEREAS, the uncontrolled development of public and private lands in the Business Park is
not consistent with the comprehensive and adequate development and improvement of the Port
Area; and

WHEREAS, the Port has a compelling interest and federal mandate to prevent the establishment
of Business Park uses inconsistent with civil aviation at the Oakland International Airport; and

WHEREAS, the California Constitution confers on cities the power to make and enforce within
their limits all local police, sanitary and other ordinances and regulations not in conflict with
general laws to ensure the public, health, safety and welfare; and

WHEREAS, the Charter of the City of Oakland grants to the Board complete and exclusive
power to adopt and enforce such ordinances, orders and regulations and practices as are
necessary for the proper administration and discharge of its duties and powers, or for the
management and government of the port, and its facilities, grants the Board complete and
exclusive power to prescribe fines, forfeitures and penalties for the violation of any provision of
any ordinance, not to exceed Five Hundred Dollars ($500.00) or six (6) months imprisonment, or
both, grants the Board complete and exclusive power to have and exercise on behalf of the City
all the rights, powers and duties in respect to Port facilities, that are vested in the City, or any of
its departments or officers, or which may be provided for by general law, and provides that these
Charter provisions are to be liberally construed in favor of the Port; and

WHEREAS, the California Government Code specifies that violation of a city ordinance is a
misdemeanor and may be prosecuted by city authorities in the name of the people of the State of
California, and authorizes the Board to impose fines, penalties, and forfeitures for violations of
ordinances punishable by fine or imprisonment; and

WHEREAS, the Charter of the City of Oakland specifies that no person or persons shall
construct, extend, alter, improve, erect, remodel or repair any pier, slip, basin, wharf, dock or
other harbor structure, or any building or structure within the Port Area without first applying for




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and securing from the Board a permit so to do, in accordance with the rules and regulations
adopted by it; and now, therefore, be it

ORDAINED by the Board of Port Commissioners of the City of Oakland as follows:

        1. In the interests of administrative efficiency, to avoid redundancy with the permitting
work performed by the City of Oakland, and to streamline the entitlement process, the Port’s
building permit requirement shall not extend to those certain classes of improvements identified
in Section 5.2 of the LUDC;

        2. In the interests of administrative efficiency, increasing public participation in the land
use entitlement process, and in streamlining such process, the process and procedures set forth in
Section 5.3 of the LUDC for consideration and issuance of Port building permits (“Development
Permits”) shall be adopted and implemented by the Port. Specifically, the Board authorizes a
Permit Hearing Officer or Officers, composed of the Executive Director and/or his or her
qualified designee(s), to hear and approve applications for Variances and those Development
Permits subject to adoption of a negative declaration or mitigated negative declaration or subject
to certification of an environmental impact report. Further, the Board authorizes a Permit
Coordinator appointed by the Executive Director to hear and approve application for those
Development Permits that are not subject to a negative declaration or mitigated negative
declaration or subject to certification of an environmental impact report.

        3. In the interests of administrative efficiency, increasing public participation in the land
use entitlement process, and in streamlining such process, the process and procedures set forth in
Section 5.7 of the LUDC for administrative appeals shall be adopted and implemented by the
Port, such that the Board shall have the ultimate jurisdiction to hear all timely and properly filed
administrative appeals.

        4. In the interests of avoiding, preventing, and abating public nuisances and in ensuring
conformity and consistency with the LUDC, the process and procedures set forth in Section 5.8
of the LUDC regarding enforcement shall be adopted and implemented by the Port, and the Port
Attorney shall be charged with taking action to abate nuisances and to prosecuting violators as
deemed appropriate by the Port Attorney. Further, the Executive Director or his or her designee
shall be afforded deference in the manner the LUDC is implemented and the Port Attorney shall
be afforded deference in interpreting the provisions of the LUDC.

        5. In the interests of complying with all laws, correcting clerical or inadvertent errors in
drafting, and in properly and efficiently managing the implementation and application of the
LUDC to the Business Park, the Executive Director or his or her designee(s) shall be authorized
to modify any provision of the LUDC upon the advice and recommendation of the Port Attorney
that such modification is legally advisable or required by applicable laws. Modifications
required to comply with law, to correct clerical or inadvertent errors in drafting, or other minor
modifications shall become effective immediately and shall become final upon issuance of a
LUDC directive signed by the Executive Director. Major modifications, including but not
limited to changes to land use areas or designations or substantive development or design
standards, shall become effective within thirty (30) days of issuance of a LUDC directive signed




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by the Executive Director but shall be promptly presented to the Board for ratification,
modification, or disapproval.

        6. The LUDC shall be the Port’s controlling land use and development law for the
Airport Business Park. Accordingly all other Port ordinances regulating land use or development
in the Business Park inconsistent with the LUDC, including Port Ordinances 2832, 1343, 3472,
3670, 3760, 3790, 3943, and 3969, as amended, shall be deleted and repealed and shall be
replaced and preempted by the LUDC.

       7. If any part of the LUDC, including any modifications thereof or additions or
amendments thereto, shall be found to be invalid for any reason, the remainder of the LUDC
shall not be invalidated thereby but, in accordance with the intention of the Board hereby
expressed, shall remain in full force and effect, all parts of the LUDC and its implementing
ordinance(s) being hereby declared to be separable and independent of all others.




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                                                  STRATEGY & POLICY Tab 4.2


                                              BOARD MTG. DATE: April 26, 2011



                           AGENDA REPORT
TITLE:          Revisions to Port Policy on responsibilities of the Executive
                Director, Port Attorney, Port Auditor and Secretary of the
                Board in Personnel Administration.

AMOUNT:         N/A

PARTIES INVOLVED:

TYPE OF ACTION:                  Resolution

SUBMITTED BY:                    Marsha C. Peterson, Labor Advisor



APPROVED BY:                     Omar Benjamin, Executive Director

FACTUAL BACKGROUND

Four positions report directly to the Board of Port Commissioners: Executive
Director, Port Attorney, Chief Audit Officer and Secretary to the Board ("direct
reports"). At the direction of the Board of Port Commissioners, we have
reviewed the hiring and other personnel policies and procedures related to the
direct reports.

ANALYSIS

It was determined that, under the By-Laws of the Board, the Executive
Director is the chief executive and administrative officer of the Port, in charge
of the Board's business and properties and is responsible for efficient and
economical administration of the business and property. As stated in the
position description for the Executive Director, the Executive Director is the
"highest executive position in the organization" with supervisory
responsibilities over "all senior Port executives". The Executive Director
"gives directions to directors of divisions and offices, department managers,
and employees of the Port" and performs other management functions that
may be delegated to him by the Board. Accordingly, the Board directed
revisions to Port By-Laws, Administrative Policies, position descriptions,
resolutions and ordinances to reflect realignment of administrative duties
pertaining to personnel practices regarding hiring and execution of personnel
policies and procedures of the direct reports under the Executive Director

263674




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                                              BOARD MTG. DATE: April 26, 2011


BUDGET & FINANCIAL IMPACT

N/A

STAFFING IMPACT

N/A

SUSTAINABILITY

N/A
ENVIRONMENTAL

N/A

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

N/A

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

N/A

GENERAL PLAN

N/A

LIVING WAGE

N/A

OPTIONS

1.       The Board approves the revisions to the afore-referenced documents to
         reflect realignment of administrative duties pertaining to personnel
         practices regarding hiring and execution of personnel policies and
         procedures of the direct reports under the Executive Director.

2.       The Board does not approve the revisions to the afore-referenced
         documents to reflect realignment of administrative duties pertaining to
         personnel practices regarding hiring and execution of personnel policies
         and procedures of the direct reports under the Executive Director.

3.       Make further modifications to the revisions as deemed appropriate for
         further action.
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                                                 STRATEGY & POLICY Tab 4.2


                                            BOARD MTG. DATE: April 26, 2011




RECOMMENDATION

         The Board approve the revisions to the afore-referenced documents to
         reflect realignment of administrative duties pertaining to personnel
         practices regarding hiring and execution of personnel policies and
         procedures of the direct reports under the Executive Director.




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                                          CONSENT ITEMS Tab 5



                     CONSENT ITEMS
Action by the Board under “Consent Items” means that all
matters listed below have been summarized, and are
considered to be perfunctory in nature, and will be adopted
by one motion and appropriate vote. Consent Items may be
removed for further discussion by the Board at the request of
any member of the Board.




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                                                                              CONSENT ITEMS Tab 5.1



                                                                                        JAMES W. HEAD
OMAR BENJAMIN                PORT OF OAKLAND                                                  President
Executive Director            BOARD OF PORT COMMISSIONERS                           PAMELA CALLOWAY
                               530 Water Street i Oakland, California 94607           First Vice-President
DAVID L. ALEXANDER                                                                    GILDA GONZALES
Port Attorney                           Telephone: (510) 627-1100                   Second Vice-President
                                        Facsimile: (510) 451-5914                   MARGARET GORDON
                                            TDD/TTY – Dial 711                           Commissioner
ARNEL ATIENZA
Port Auditor                                                                         KENNETH KATZOFF
                                   E-Mail:board@portoakland.com                           Commissioner
                             Website:   www.portofoakland.com                         MICHAEL LIGHTY
JOHN T. BETTERTON
                                                                                         Commissioner
Secretary of the Board
                                                                                           VICTOR UNO
                                                                                           Commissioner
                                             MINUTES
                         Meeting of the Board of Port Commissioners
                              Tuesday April 12, 2011 – 2:00 p.m.
                                        Board Room – 2nd Floor
ROLL CALL

           President Head called the Regular Meeting of the Board to order at 2:01 p.m., and the
           following Commissioners were in attendance:

           1st Vice President Calloway, 2nd Vice-President Gonzales, Commissioner Katzoff,
           Commissioner Lighty, Commissioner Uno, and President Head.

           Commissioner Gordon was away on Port business.

1. 1st CLOSED SESSION (2:00 p.m.)

            President Head convened the Board in Closed Session at 2:02 p.m. to hear the
            following

   1.1      Agency Designated Representative: Marsha Peterson
                     Employee Organizations: International Brotherhood of Electrical Workers
                                              (IBEW Local 1245), International Federation of
                                              Professional and Technical Engineers (IFPTE
                                              Local 21), Service Employees International
                                              Union (SEIU Local 1021), and Western Council
                                              of Engineers (WCE)

ROLL CALL/OPEN SESSION

          President Head reconvened the Board in Open Session at 5:09 p.m., and the following
          Commissioners were in attendance:

          1st Vice President Calloway, 2nd Vice-President Gonzales, Commissioner Katzoff,
          Commissioner Lighty, Commissioner Uno, and President Head.

          Commissioner Gordon was away on Port business.




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1st CLOSED SESSION REPORT

        The Board Secretary reported that during Closed Session, on a Motion by Commissioner
        Uno, seconded by Commissioner Lighty, the following Resolution was passed
        unanimously (6 Ayes, Gordon excused):

        Resolution Approving And Authorizing Settlement Concerning Rodrigo Gutierrez v. O.C.
        Jones and Sons, Inc., State Of California Department Of Industrial Relations Division Of
        Workers’ Compensation Court No. ADJ 6652160

        President Head asked for a moment of silence in honor of Jesus “Chuy” Campos.

        Special Meeting Of Citizens Oversight Reporting Committee And The Board Of Port
        Commissioners

        President Head convened a joint meeting of the Citizens Oversight Reporting Committee
        (C.O.R.C.) and the Board of Port Commissioners at 5:11 pm. In addition to the members
        of the Port Board, Red Wetherill, Dave Needle of C.O.R.C. and Carmen Burg of
        C.L.A.S.S. (Citizens League for Airport Safety & Serenity) were in attendance.

        Aviation Director, Deborah Ale-Flint, reported on the progress of the Written Compliance
        Plan with CLASS (Citizens League for Airport Safety & Serenity) that is being developed
        to address the programs, methods and efforts that the Port is using to encourage airport
        user compliance with airport noise abatement procedures in compliance with various
        Settlement Agreements.

        The meeting was adjourned at 5:24 p.m.

2. MAJOR PROJECTS

        There were no Major Projects agendized for discussion.

3. BUDGET & FINANCE

        There were no Budget & Finance Items agendized for discussion.

4. STRATEGY & POLICY

        There were no Strategy and Policy Items agendized for discussion.

5. CONSENT ITEMS

        A Motion to approve the Consent Items (5.1 through 5.3) was made by Vice-President
        Gonzales and seconded by Commissioner Gordon.

  5.1   Approval of the Minutes of the Regular Meetings of March 15, 2011 & March 29, 2011
        (Board Secretary)


                                               2



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  5.2   Building Permit: AT&T Wireless Services (Engineering)

  5.3   2nd Reading of Ordinance No. 4153 an ordinance authorizing the Executive Director to
        execute an easement agreement with Alameda Gateway Limited for the navigational aids
        in the inner harbor.

        The Motion to approve the Consent Items passed by the following votes: (6) Ayes: 1st
        Vice President Calloway, 2nd Vice-President Gonzales, Commissioner Katzoff,
        Commissioner Lighty, Commissioner Uno and President Head; (1) Excused:
        Commissioner Gordon.

6. REMAINING ACTION ITEMS

        The Aviation Director, Deborah Ale-Flint, presented Item 6.1.

  6.1   Lease with the United States of America, General Services Administration, on behalf of
        the Transportation Security Administration, for Space at Oakland International Airport
        (Aviation)

        The Motion to approve item 6.1 passed by the following votes: (6) Ayes: 1st Vice
        President Calloway, 2nd Vice-President Gonzales, Commissioner Katzoff,
        Commissioner Lighty, Commissioner Uno and President Head; (1) Excused:
        Commissioner Gordon.

7. UPDATES/ANNOUNCEMENTS

        Vice-President Calloway and Commissioner Lighty gave a brief presentation of the
        Port’s recent advocacy and education trip to Washington, D.C.

8. SCHEDULING

        There was no discussion on scheduling.

OPEN FORUM

        There were no speakers in Open Forum.

2nd CLOSED SESSION

        President Head reconvened the Board in Closed Session at 5:47 p.m., and the following
        Commissioners were in attendance: to hear the following

1.2     PUBLIC EMPLOYEE Performance Evaluation: Titles: Executive Director, Port
        Attorney, Port Auditor, Board Secretary

  1.3   CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION. Significant
        exposure to litigation pursuant to subdivision (b) of Section 54956.9: 2 matter(s)



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2nd CLOSED SESSION REPORT

      There were no Items to report out of the Second Closed Session.

ADJOURNMENT

      There being no additional business the Board adjourned at 7:48 p.m.




      ____________________________                                          ______________

      John Betterton, Secretary                                               Date




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                                 AGENDA REPORT
   TITLE:            Ratification of the Extension of the Contract Award Period for
                     Procurement of Aircraft Rescue and Fire Fighting (ARFF) Vehicle
                     Replacement

   AMOUNT:           No Amount Involved

   PARTIES INVOLVED:

                      Corporate Name/Principal                 Location
                      N/A

   TYPE OF ACTION:                      Resolution

   SUBMITTED BY:                        Chris Chan, Acting Director of Engineering

   SCHEDULED FOR BOARD:                 April 26, 2011

   APPROVED BY:                         Omar Benjamin, Executive Director


SUMMARY

The purpose of this Agenda Report is to request that the Board approve and ratify the
extension of the award period from sixty (60) to ninety (90) days for the Procurement of Aircraft
Rescue and Fire Fighting (ARFF) Vehicle Replacement, Oakland International Airport, AIP 3-
06-0170-(Future).

FACTUAL BACKGROUND

On January 18, 2011, by Resolution No. 11-13, the Board of Port Commissioners delegated
authority to the Director of Engineering to approve the Procurement Manual, authorized the
advertisement for bids and authorized the Executive Director to award the contract for the
Procurement of Aircraft Rescue and Fire Fighting (ARFF) Vehicle Replacement.

This project is partially funded by the Federal Aviation Administration (FAA) through the
Department of Transportation (DOT). The FAA grant procedures require that the Airport
Improvement Program (AIP) grant amount be determined upon the receipt of bids.

Subsequently, on March 29, 2011, the Federal Aviation Administration (FAA) granted the Port
authorization to advertise for bids for this contract. FAA also recommended that the Port allow
ninety (90) days from the bid opening to award, because of the concern that the issuance of AIP
funding may be delayed pending the approval of the federal budget.

Port Ordinance No. 1606 stipulates that the contract shall be awarded by the Board to the
lowest responsible bidder any time not exceeding sixty (60) days after bid opening unless said
time is extended by the Board. Failure to award the contract within the sixty (60) days after
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receipt of bids would result in the expiration of bids (i.e., bidders would no longer be required to
hold their bid prices) jeopardizing the Port’s FAA funding.

On April 18, 2011, this project was issued for bid and bids are currently scheduled to be
received on May 18, 2011.

ANALYSIS
To ensure that FAA will have sufficient time to determine and award the Port’s funding
allocation, staff recommends that the Board extend the time to award the subject contract to
ninety (90) days after bid opening, in lieu of the sixty (60) days stipulated in Port Ordinance No.
1606.

Prior to issuing for bid, the Procurement Manual was modified to stipulate that bids will remain
subject to acceptance for ninety (90) days after the day of the Bid opening, effectively requiring
the bidders to hold their bid prices for the duration of said award period.

By approving and ratifying the extension of the contract award period, the Port will minimize
the risk of the bids expiring prior to the securing of the FAA funding.

BUDGET & FINANCIAL IMPACT

There are no budget and financial impacts associated with this action. However, the budget
authorized by the Board on January 18, 2011 by Resolution No. 11-13 for the Procurement of
Aircraft Rescue and Fire Fighting (ARFF) Vehicle Replacement project was as follows:

                      Contractor         Consultant        Port Labor            Project            Total Project
   Project +            Cost *             Cost              Cost              Overhead **              Cost
 ARFF Vehicle           $925,000                N/A           $75,000              $150,000           $1,150,000
 Replacement
* Includes costs of other construction related costs
** Includes permit fees, OCIP, non-labor overhead
+ The figures presented are based on estimates. Staff recommends that the total amount shown be adhered to, but that there
   be flexibility within the items in terms of balancing overages with under-runs.

The project is budgeted under CIP Element No. AA0079002 and the current project budget is
$1,150,000. Port cash will be used for the design portion of the project, which will be
reimbursed if AIP grant funding is approved. The 20% balance will be paid with PFC funds
from Application #14 (PFC #14). PFC #14 may require an administrative amendment to fund
this project.

STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. As previously detailed in
the January 18, 2011 Board Agenda Report authorizing the advertisement for bids for the
Procurement of Aircraft Rescue and Fire Fighting (ARFF) Vehicle Replacement, the following
is staff’s assessment of how this project supports the strategic priority areas, goals and
objectives of the Strategic Plan:

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  STRATEGIC                                                            HOW PROJECTS IMPLEMENT +
                    GOAL                 OBJECTIVE
  PRIORITY AREA                                                        WHEN

                    Goal A: Create
                                         3. Increase revenue, job
                    sustainable                                        While underway, the projects will
                                         creation and small
                    economic growth                                    create employment opportunities for
                                         business growth.
                    for the Port and                                   manufacturing-related jobs.
                    beyond.

                    Goal A: Create       4. Pursue strategic           The FAA is a strategic partner of the
                    sustainable          partnerships at all levels:   Port on several levels. Federal funding
                    economic growth      local, regional, national     is central to successful implementation
                    for the Port and     and international.            of this project. Application of FAA
                    beyond.                                            standards is central to this project.
                                                                       Close collaboration with FAA staff is
                                                                       essential to the success of this project.
                                                                       Working with the FAA and other
                                                                       stakeholders on this challenging project
  Sustainable                                                          both relies upon existing relationships
  Economic and                                                         and offers opportunities to develop and
  Business                                                             advance those strategic partnerships
  Development                                                          including achieving mutual agency
                                                                       goals.
                    Goal C: Promote
                    equitable
                                         1. Comply with all
                    community                                          The contractor for the project will be
                                         federal, State, local and
                    access to                                          selected in accordance with federal
                                         Port workforce
                    employment and                                     DBE requirements.
                                         mandates.
                    business
                    opportunities.

                    Goal C: Promote
                    equitable            3. Integrate workforce
                    community            mandates into all Port        The agreement for the project will be
                    access to            agreements, policies          completed in accordance with federal
                    employment and       and processes at the          DBE requirements.
                    business             front end.
                    opportunities.

                    Goal F:
                    Aggressively
                    Obtain Maximum
  Stewardship                            2. Partner with other
                    Amount Of                                          This project is proposed to be 80%
  and                                    agencies to create joint
                    External Grant                                     funded by FAA AIP grants.
  Accountability                         grant strategies.
                    And Government
                    Funding And
                    Regulatory Relief.



STAFFING IMPACT

It is anticipated that this project can be accomplished within the current Port staffing levels.



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SUSTAINABILITY

The contract for the Procurement of the ARFF vehicle will require that vehicle manufacturing
waste products including packaging from new parts be recycled when feasible. Additionally, as
also stated below in the Environmental Section, while these diesel vehicles are exempt from
the California Air Resources Board regulations, technology has advanced and the new vehicle
is expected to have cleaner emissions than its predecessor.

ENVIRONMENTAL

CEQA Determination
As analyzed in the January 18, 2011 Board Agenda (Resolution 11-13), procurement of an
ARFF vehicle does not qualify as a “Project” which will not result in a physical change in the
environment, therefore, it is not subject to the California Environmental Quality Act (CEQA)
pursuant to CEQA Guidelines Section 15378(2) and 15061 (b)(3). Similarly, for the action of
this agenda report, it can be seen with certainty that ratification of the extension of the contract
award to purchase the ARFF vehicle will not result in a physical change in the environment.
Therefore, it is not subject to CEQA.

Environmental Compliance
While diesel emergency vehicles are exempt from California Resources Board regulations,
technology has advanced and the new vehicles are expected to have cleaner emissions.

Mitigation
Because there are no significant impacts, mitigation is not required.

Related Plans and Policies
There are not related plans or policies for this agenda report.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

This action and the procurement of an ARFF vehicle are not within the scope of the Port of
Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

The Owner Controlled Insurance Program (OCIP) does not apply.

GENERAL PLAN

This action and the procurement of an ARFF vehicle do not constitute a project pursuant to the
Oakland General Plan; therefore, Section 727 of the City of Oakland Charter does not require
a conformity determination.




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LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements, do not
apply, because the contract is not a covered service contract, but a contract for goods,
commodities, supplies or equipment with incidental service provisions.

OPTIONS

1.    Approve and ratify the extension of the contract award period.         This is the
      recommended option.

2.    Take no action. However, if the Port is unable to secure the FAA funding within the
      current sixty (60) day period, the bids will expire, jeopardizing the FAA funding.

RECOMMENDATION

It is recommended that the Board approve and ratify the extension of time to award this
contract to ninety (90) days after the date of the bid opening.




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Ratification of the Extension of the Contract Award Period for
Procurement of Aircraft Rescue and Fire Fighting (ARFF)
Vehicle Replacement




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              REMAINING ACTION ITEMS
Remaining Action Items are items not previously addressed
in this Agenda that may require staff presentation and/or
discussion and information prior to action by the Board.




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                                AGENDA REPORT
TITLE:              Space/Use Permit with the Alameda County Building and Construction
                    Trades Council, AFL-CIO, for Access to Oakland International Airport

AMOUNT:             No Monetary Consideration

PARTIES INVOLVED:

          Corporate Name/Principal                                  Location
          Alameda County Building and Construction Trades           Oakland, CA
          Council, AFL-CIO
            Andreas Cluver, Secretary – Treasurer
            Josie Camacho, Executive Secretary – Treasurer

TYPE OF ACTION:                       Resolution

SUBMITTED BY:                         Deborah Ale Flint, Director of Aviation

APPROVED BY:                          Omar Benjamin, Executive Director

This action would approve the terms and conditions of a Space/Use Permit (SUP) with the
Alameda County Building and Construction Trades Council, AFL-CIO (the “Trades
Council”) and authorize its execution by the Director of Aviation. The SUP would provide
the Trades Council with access to the secured areas at Oakland International Airport to
perform its required duties under MAPLA (defined below) including project compliance
monitoring, dispute resolution and grievance handling.

FACTUAL BACKGROUND

The Maritime and Aviation Project Labor Agreement (MAPLA) was adopted by the Board of
Port Commissioners in March 2000. It was intended to cover the Capital Improvement
Program (CIP) for the Port’s Aviation and Maritime areas. In response to Port policies, the
MAPLA was designed to ensure project labor stability, the employment of Port Local Impact
Area (Oakland, Emeryville, San Leandro and Alameda) residents, and the utilization of Port
recognized small businesses. MAPLA also covered other CIP projects in the Maritime and
Aviation areas, and major maintenance.

Initially adopted for five years (through December 2004), MAPLA has been extended until
December 31, 2015 by Board action and the concurrence of the Building Trades Unions.
MAPLA continues its cornerstone position as a catalyst for Local Impact Area (LIA)
employment opportunities and sound labor relations.

The following types of projects are covered by MAPLA: non federally funded on-site
construction, modifications, alterations, repair and demolition of Port projects in the
Maritime and Aviation areas that are over $50,000 and Tenant Improvements in Maritime
and Airport North Field over $150,000 and over $50,000 in the Airport South Field.
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Article VI, Section 1 of MAPLA covers “Union Representation and Stewards” and
specifically states:

     Authorized representatives of the Union shall have access to the Project,
     provided that such representatives fully comply with posted visitor, security and
     safety rules and the environmental compliance requirements of the Project. It is
     understood that because of the geographical scope of the Project, and the type
     of work being undertaken on the Project site, visitors may be limited to certain
     times, or areas, or to being accompanied at all times while on the Project site;
     with this in mind, however, the Contractor recognizes the right of access set forth
     in this Section and such access will not be unreasonably withheld from an
     authorized representative of the Union.

At the Airport, many activities that would be defined as a “Project” by MAPLA are
constructed and/or carried out in secured areas that preclude access by the general public
(which could include union representatives). Access to these secured areas is governed by
the federal Transportation Security Administration (TSA) and the Airport’s Security
Program, which mandates specific security requirements including application for and
issuance of an I. D. badge, based on a third-party security/background check. Therefore,
currently, the only way union representatives can visit a Project within the secured area of
the Airport is under escort from a person with a valid Airport I. D. badge. Coordinating an
escorted site visit by a union representative is cumbersome and may not provide the proper
atmosphere to promote the success of MAPLA goals and objectives.

ANALYSIS

The Trades Council, Aviation and Social Responsibility Staff have determined that the best
solution for providing access to a Project within the secured areas of the Airport is to enter
into the Port’s standard form SUP with the following terms and conditions:

       Term:           Five (5) years, subject to the right of either party to terminate the
                       SUP on thirty (30) days written notice to the other party. In no event
                       shall the Term of the SUP extend beyond the term of MAPLA, as it
                       may be extended by the Board.

       Premises:       Non-exclusive access to the secured areas of the Airport, including
                       those areas (i) inside Terminals 1 and 2 beyond the TSA passenger
                       security checkpoint, and (ii) within the security fences of the North
                       and South Fields .

       Rental:         No rental or other fees will be charged to the Trades Council for its
                       right to access the secured areas of the Airport. The Trades Council
                       will pay all costs and fees for gaining access to the Premises,
                       including all of the Airport’s I.D. Badging charges.

       I. D. Badges:   The Trades Council will be limited to a maximum number of six (6)
                       Port-issued I. D. Badges at any one time authorizing access to the
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                        Premises. The Trades Council will identify the six recipients to
                        receive Port-issued I.D. Badges, who must meet all Port and federal
                        requirements for issuance of such I.D. Badges.

       Standard
       Provisions:      The proposed SUP contains all terms and conditions of the Port’s
                        standard provisions including insurance and indemnification.

STRATEGIC PLAN

The Strategic Plan was adopted by the Board on October 5, 2010. Following is staff’s
assessment of how entering into the proposed SUP supports the strategic priority areas,
goals and objectives of the Strategic Plan and supports key objectives of Goal C:
 STRATEGIC
                                                                          HOW & WHEN ACTION
  PRIORITY               GOAL                      OBJECTIVE
                                                                             IMPLEMENTS
   AREA
                                                                       Entering into the proposed
                                                                       SUP would meet the
 Sustainable    Goal C: Promote equitable                              requirements of Article VI,
                                            Comply with all federal,
 Economic and   community access to                                    Section 1 of MAPLA by
                                            State, local and Port
 Business       employment and business                                providing union
                                            workforce mandates.
 Development    opportunities.                                         representatives with access to
                                                                       the secured areas at Oakland
                                                                       International Airport.

BUDGET & FINANCIAL IMPACT

Entering into the proposed SUP is revenue-neutral: the Port will not incur any additional
expenses and the Trades Council will not pay any monetary consideration. Therefore,
there is no impact to the Fiscal Year 2010-11 Budget or future year budgets. [The Trades
Council will be responsible for paying all fees and costs for gaining access to the Premises,
including all of the Airport’s I.D. Badging charges.]

STAFFING IMPACT

No impact on current Port staffing by entering into the proposed SUP.

SUSTAINABILITY

There are no obvious environmental opportunities involved by entering into the proposed
SUP.

ENVIRONMENTAL

California Environmental Quality Act (CEQA) Guidelines Section 15378 states that “Project”
means the whole of an action that has a potential for resulting in either direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment. In addition, the general rule in Section 15061(b)(3) of the CEQA Guidelines
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states that CEQA applies only to activities that have a potential for causing a significant
effect on the environment. Because it can be seen with certainty that there is no possibility
that entering into a SUP with the Trades Council to provide them access to airport project
sites may have a significant effect on the environment, the action is not a “Project” and is
not subject to CEQA under the General Rule Exclusion. No further review of this action
under CEQA is required.

Mitigation
The Trade Council will be monitoring project compliance, disputing resolutions, and
handling labor grievances. They will not be performing any construction or maintenance
activities. Therefore, this project will not have any significant impacts to the environment
and mitigation measures are not required.

Related Plans and Policies
Approval of this action will not require mitigation measures; therefore, there are no related
or adopted plans for this project.

Environmental Compliance
As noted above, the Trade Council activities will not involve construction or maintenance
activities, including disturbance of soil and groundwater or management of hazardous and
contaminated materials.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Report relate to the Port’s responsibility under the
Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) to provide
authorized Union representatives access to construction project sites. However, this
specific Board action is not associated with the performance of construction work, and
therefore, the provisions of MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

Owner Controlled Insurance Program does not apply to the proposed SUP.

GENERAL PLAN

This aviation project conforms to established aviation uses and has been determined to be
consistent with the transportation designation of the City of Oakland Comprehensive Plan.




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LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements (the
“Living Wage Regulations”), do not apply because the requested action is not an
agreement, contract, lease, or request that provides financial assistance within the meaning
of the Living Wage Regulations.

OPTIONS

1.     Approve the terms and conditions, and authorize execution by the Director of Aviation,
       of a five-year/30-day terminable Space/Use Permit as outlined above with the
       Alameda County Building and Construction Trades Council, AFL-CIO to provide
       access to the secured areas of Oakland International Airport, in compliance with the
       Maritime and Aviation Project Labor Agreement;

2.     Reject the proposed five-year/30-day terminable Space/Use Permit as outlined above
       with the Alameda County Building and Construction Trades Council, AFL-CIO to
       provide access to the secured areas of Oakland International Airport, which could
       potentially jeopardize the Port’s relationship with the Trades Council and would
       require union representatives to gain access to the secured areas of the Airport by
       being escorted by someone with a valid Airport-issued I. D. badge; or,

3.     Reject the proposed five-year/30-day terminable Space/Use Permit as outlined above
       with the Alameda County Building and Construction Trades Council, AFL-CIO to
       provide access to the secured areas of Oakland International Airport, but recommend
       different terms and conditions for the Space/Use Permit.

RECOMMENDATION

It is recommended that the Board pass a resolution approving (i) the proposed five-year/30-
day terminable Space/Use Permit as outlined above with the Alameda County Building and
Construction Trades Council, AFL-CIO to provide access to the secured areas of Oakland
International Airport, and (ii) authorize execution of the Space/Use Permit by the Director of
Aviation, subject to the Port Attorney’s review and approval of the Space/Use Permit as to
form and legality.




\\10.1.7.107\HOME\bmark\My Documents\Alameda Trades Council\ACBCT-SUP-Agenda Report.4R (2011-04-26).DOC




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                            AGENDA REPORT
TITLE:            Authorization to enter into a contract with Northern California Public
                  Broadcasting for upcoming radio campaign on KQED FM and ad
                  banner placement on KQED television and website.


AMOUNT:           Not to exceed $67,000.00

PARTIES INVOLVED:

               Corporate Name/Principal                Location
               Northern California Public              KQED – 2601 Mariposa St.
               Broadcasting                            San Francisco, CA 94110
               Contact – Elizabeth Seirmarco


TYPE OF ACTION:                      Wavier of Formal Competition

SUBMITTED BY:                        Deborah Ale Flint, Director of Aviation

APPROVED BY:                         Omar Benjamin, Executive Director


SUMMARY

In support of the Port’s objectives and as identified in the Port Strategic Plan goals to
execute an aggressive marketing campaign promoting new and existing air service,
we seek to increase its OAK’s market share of air passengers in the region. Demand
for flights and related airport services is partially stimulated through consumer and
trade advertising, and promotions that highlight the many reasons for choosing OAK
as the first choice for air travel and shipping needs.

Aviation develops an annual marketing plan inclusive of business development
targets, route development events, promotions, industry activities, advertising
campaigns and customer service initiatives.

Set within the parameters authorized by the FAA for the use of airport funds, the
advertising budget is allocated to new route cooperative airline advertising as well as
airport branded radio, print (including location placement), and internet based
advertising. While the plan is structured, actual events such as new service can
require the plan be adjusted. As the 4th quarter is upon us, there is sufficient
remaining budget for an expansion of this targeted campaign.



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In this Agenda Report, staff seeks Board authorization to waive formal competitive
bidding and enter into a contract with Northern California Public Broadcasting for
advertising.

ANALYSIS

The Port is promoting Oakland International Airport services using public television
and public radio provided by Northern California Public Broadcasting (KQED). KQED
is the provider of public television (PBS) and public radio (NPR) in the greater San
Francisco Bay Area. KQED radio has more than two million Northern California
listeners making it top-rated in the Bay Area and one of the most listened to radio
stations in the nation. Similarly, KQED public television is one of the nation’s most-
watched public television stations during primetime. Demographic statistics for both
the radio listeners and television viewers show an extremely high propensity to travel
by air among them.

KQED is a Port purchasing department approved sole source provider.

The Port contracted with KQED for a successful radio campaign in summer 2010.
After careful evaluation of past performance and consideration of a wide range of
advertising options weighing various costs per possible impression and synergy with
the airport’s advertising message, KQED once again emerged as the logical choice.
A program was developed according to Port policy utilizing Port purchase orders and
based on annual budget approvals in amounts less than $50,000. This campaign is
currently underway beginning in mid-March 2011.

The current campaign underwrites KQED news broadcasts. The advertising program
consists of 123 peak hour, 8 second radio announcements over a period of 30 days
highlighting new Mexico City and Hawaii flights. It also includes an airport branded
banner posted to the KQED television broadcasts and website. KQED extends to the
Port, as a fellow non-profit agency, special pricing that is 20-25% below market rates.

We seek to extend the advertising program through May 2011 in support of new
flights from Oakland International to Kauai, Maui and Mexico City. Extension of the
campaign through the end of May will raise the total expenditure beyond the
$50,000.00 limit and, as such, Board approval is required for a waiver of formal
competition to continue with further advertising.


      Northern California Public Broadcasting is the sole source of public television
      and public radio in the greater San Francisco Bay Area.
      Based on the total number of KQED listeners, the cost per impression is less
      than $.03.



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           An aggressive advertising program is a part of the Port’s Strategic Plan and
           Implementing Actions and is budgeted under advertising in the Aviation
           Marketing and Communications Department.

    STRATEGIC PLAN

    The funding supports key objectives within the Port’s Strategic Plan including Goals
    A and B as summarized below.

Strategic Priority   Goal               Objective                    How Projects Implement
Area
Sustainable          Goal A: Create     2. Affirm Port identity as   Through aggressive and
Economic             sustainable        public enterprise            consistent advertising, OAK has
Business             economic                                        the opportunity to continuously
Development          growth for the                                  highlight our convenience and
                     Port and beyond                                 services, central location and
                                                                     new service
Sustainable          Goal B: Maintain   1. Retain existing           Grow customer and carrier
Economic             and aggressively   customers and tenants        intelligence and advise and
Business             grow core                                       utilize executing aggressive
Development          businesses                                      marketing campaign for new
                                                                     and existing air service
Sustainable          Goal B: Maintain   2. Market strategically      Initiate branding efforts to
Economic             and aggressively   and aggressively to          inform markets of OAK as
Business             grow core          attract new customers        access to SF Bay Area
Development          businesses         and tenants

    BUDGET & FINANCIAL IMPACT

    This expense is sufficiently within the approved Aviation Division FY 10/11 Budget.
    $50k has been spent via the authorized purchase orders on prior campaigns.
    Approval of this request allows staff to expend an additional $39K, thus launching an
    additional advertising program during this fiscal year. There are no budget increases
    associated with this request.

    STAFFING IMPACT

    No changes to staffing levels. Northern California Public Broadcasting capabilities
    have been in place since May 2010. Staff continues to research and make
    recommendations on the most valuable outlets for increasing passenger and cargo
    traffic.

    SUSTAINABILITY

    The Northern California Public Broadcasting system allows easy electronic ad
    transfer and printing that allows for reduced paperwork exchange between the

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Airport, its creative ad team and Northern California Public Broadcasting. Creation
and transfer of all documents are disseminated and communicated electronically.

ENVIRONMENTAL

CEQA Determination

California Environmental Quality Act (CEQA) Guidelines Section 15378 states that
“Project” means the whole of an action that has a potential for resulting in either
direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment. In addition, the general rule in Section
15061(b)(3) of the CEQA Guidelines states that CEQA applies only to activities that
have a potential for causing a significant effect on the environment. Because it can
be seen with certainty that there is no possibility this project may have a significant
effect on the environment, the action is not a “Project” and is not subject to CEQA
under the General Rule Exclusion. No further review of this action under CEQA is
required.

Environmental Compliance
This project does not involve handling or managing contaminated materials, including
soil and groundwater.

Mitigation
This project will not have any significant impacts to the environment and no mitigation
measures are required.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The work performed under this contract is not within the scope of the Port of Oakland
Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the
MAPLA do not apply to this work.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

OCIP coverage and provisions do not apply.

GENERAL PLAN

Pursuant to Section 727 of the City of Oakland Charter, this project has been
determined to conform to the policies for the transportation designation of the City of
Oakland General Plan.




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LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for
the Implementation and Enforcement of the Port of Oakland Living Wage
Requirements (the “Living Wage Regulations”), do not apply to this agreement as the
service provider does not employ 21 or more employees working on Port-related
work. However, the service provider will be required to certify that should living wage
obligations become applicable, the service provider shall comply with the Living
Wage Regulations.


OPTIONS

   1. Approve staff request for a waiver of formal competitive bidding and delegate
      authority to the Executive Director to negotiate and execute a general services
      contract agreement with Northern California Public Broadcasting for a total
      amount not to exceed $67,000.00 and for a maximum term not to exceed
      three (3) months. This is the recommended option.

   2. Do not approve the waiver of formal competitive bidding with Northern
      California Public Broadcasting. This would result in the Port reverting to less
      impactful advertising with a loss of opportunity to enhance OAK visibility via
      radio and television.


RECOMMENDATION

   1. It is recommended that the Board approve Aviation’s request for a waiver of
      formal competitive bidding to enter into contract with Northern California Public
      Broadcasting in amount not to exceed $67,000.00 for radio and television
      advertising in an effort to expand its local advertising and promotional
      marketing programs in the manner set forth above.




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                            AGENDA REPORT
TITLE:            Authorization to enter into contract with Titan 360 Media for
                  advertisement placements at Bay Area Rapid Transit (BART)


AMOUNT:           Not to exceed $ 89,999.00

PARTIES INVOLVED:

               Corporate Name/Principal                Location
               Titan 360 Media                         233 Post St., 3rd Floor
               Contact – Chelsea Cunningham            San Francisco, CA 94108


TYPE OF ACTION:                      Resolution

SUBMITTED BY:                        Deborah Ale Flint, Director of Aviation

APPROVED BY:                         Omar Benjamin, Executive Director


SUMMARY

In support of the Port’s objectives and as identified in the Port Strategic Plan goals to
execute an aggressive marketing campaign promoting new and existing air service,
we seek to increase OAK’s market share of air passengers in the region. Demand
for flights and related airport services is partially stimulated through consumer and
trade advertising and promotions that highlight the many reasons for choosing OAK
as the first choice for air travel and shipping needs.

Aviation develops an annual marketing plan inclusive of business development
targets, route development events, promotions, industry activities, advertising
campaigns and customer service initiatives.

Set within the parameters authorized by the FAA for the use of airport funds, the
advertising budget is allocated to new route cooperative airline advertising as well as
airport branded radio, print (including location placement), and internet based
advertising. While the plan is structured, actual events such as new service can
require the plan be adjusted. As the 4th quarter is upon us, there is sufficient
remaining budget for an expansion of this targeted campaign.

In this Agenda Report, staff seeks Board authorization to waive formal competitive
bidding and enter into a contract with Titan Media for advertising placements in the
Bay Area Rapid Transit System (BART) stations and five cable cars.
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ANALYSIS

Titan 360 Media has exclusive rights to sell advertising space in BART, MUNI, Cable
Car and AC Transit vehicles and station real estate. Titan 360 Media is a Port of
Oakland purchasing department approved sole-source provider. Possible
impressions at the subject BART stations are estimated at 9.8 million per month
capturing not only East Bay to SF daily commuters, but also other local resident
groups and visitors to the area. The impressions from advertising on the train
platform wall are premium as they are subject to repeated, high dwell time viewing by
the targeted audience.

The Port has contracted with Titan 360 Media since February 2009. After careful
evaluation of past performance and consideration of a wide range of advertising
options weighing various costs per possible impression and synergy with the airport’s
advertising message, BART station advertising became a logical choice. A program
was developed according to Port policy utilizing Port purchase orders based on
annual budget approvals in amounts less than $50,000. This campaign is currently
underway at Montgomery and Embarcadero BART stations.

This new advertising campaign is for ad installations at Powell Street BART station
and on five cable cars on the Powell Street line. It will follow a campaign currently
underway at Montgomery and Embarcadero BART stations and, to the extent
possible, will re-use materials in use in the current campaign. The new campaign will
raise the total purchase beyond the $50,000.00 limit and, as such, Board approval is
required to dispense with formal competition to continue the campaign May 2011.

This advertising expansion will significantly increase the efficacy of the campaign
because, in addition to the usual number of daily BART and Cable Car riders, the
campaign will also reach the more than 17,000 traveler industry buyers and other
professionals who will attend US Travel’s International Pow Wow, the travel
industry’s premier annual travel marketplace, to be held in San Francisco May 21-25.
The campaign will also be seen during the Memorial Day holiday weekend when
visitor traffic is expected to be at a higher than usual level. Finally, the campaign is
well timed to coincide with Port support of new flights to Mexico, Hawaii and Chicago
added this summer.

      Titan 360 Media is the sole source provider of advertising space at BART and
      Cable Cars.
      Based on the total number of BART daily travelers, the cost per impression
      (number if times viewed) is less than $.05.




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  STRATEGIC PLAN

  The funding supports key objectives within the Port’s Strategic Plan including Goals
  A and B as summarized below.


Strategic Priority   Goal                   Objective            How Projects Implement
Area
Sustainable          Goal A: Create         2. Affirm Port       Through aggressive and
Economic             sustainable economic   identity as public   consistent advertising, OAK has
Business             growth for the Port    enterprise           the opportunity to continuously
Development          and beyond                                  highlight our convenience and
                                                                 services, central location and
                                                                 new service
Sustainable          Goal B: Maintain and   1. Retain            Grow customer and carrier
Economic             aggressively grow      existing             intelligence and advise and
Business             core businesses        customers and        utilize executing aggressive
Development                                 tenants              marketing campaign for new
                                                                 and existing air service
Sustainable          Goal B: Maintain and   2. Market            Initiate branding efforts to
Economic             aggressively grow      strategically and    inform markets of OAK as
Business             core businesses        aggressively to      access to SF Bay Area. Ads in
Development                                 attract new          place May 2011
                                            customers and
                                            tenants


  BUDGET & FINANCIAL IMPACT

  This expense is sufficiently within the approved Aviation Division FY 10/11 Budget.
  $50k has been spent via the authorized purchase orders on prior campaigns.
  Approval of this request allows staff to expend an additional $17K, thus extending the
  advertising program for two additional weeks. There are no budget increases
  associated with this request.

  STAFFING IMPACT

  No changes to staffing levels. Titan Media capabilities have been in place since
  February 2009. Staff continues to research and make recommendations on the most
  valuable outlets for increasing passenger and cargo traffic.

  SUSTAINABILITY

  The Titan Media system allows easy electronic ad transfer and printing that allows for
  reduced paperwork exchange between the Airport, its creative ad team and Titan
  Media. Creation and transfer of all documents are disseminated and communicated
  electronically and ads are printed by Think Signs, a company that employs green
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printing practices that use recycled paper, vegetable-based inks and waterless
printing. To the extent possible, existing media currently in use will be reused in the
upcoming program.

ENVIRONMENTAL

CEQA Determination
The Port has determined that this project is categorically exempt from the California
Environmental Quality Act (CEQA) Guidelines pursuant to Section 15301, Existing
Facilities. CEQA does not apply to the operation, repair, maintenance, permitting,
leasing, licensing, or minor alteration of existing public or private structures, facilities,
mechanical equipment or topographical features, involving negligible or no expansion
of use beyond that existing at the time of the lead agency’s determination.

Environmental Compliance
This project does not involve handling or managing contaminated materials, including
soil and groundwater.

Mitigation
This project will not have any significant impacts to the environment and no mitigation
measures are required.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The work performed under this contract is not within the scope of the Port of Oakland
Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the
MAPLA do not apply to this work.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

OCIP coverage and provisions do not apply.

GENERAL PLAN

Pursuant to Section 727 of the City of Oakland Charter, this project has been
determined to conform to the policies for the transportation designation of the City of
Oakland General Plan.

LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for
the Implementation and Enforcement of the Port of Oakland Living Wage
Requirements (the “Living Wage Regulations”), do not apply to this agreement as the
service provider does not employ 21 or more employees working on Port-related
work. However, the service provider will be required to certify that should living wage
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obligations become applicable, the service provider shall comply with the Living
Wage Regulations.

OPTIONS

   1. Approve a waiver of formal competition and delegate authority to the
      Executive Director to negotiate and execute a general services contract
      agreement with Titan 360 Media for a total amount not to exceed $89,999.00
      and for a maximum term not to exceed three (3) months. This is the
      recommended option.

   2. Do not approve the waiver of formal competition with Titan 360 Media. This
      would result in the Port reverting to less impactful advertising with a loss of
      opportunity to enhance OAK visibility.


RECOMMENDATION

   1. It is recommended that the Board approve Aviation’s request for a waiver of
      formal competitive bidding to enter into contract with Titan 360 Media in
      amount not to exceed $89,999.00 for BART and Cable Car advertising in an
      effort to expand its local advertising and promotional marketing programs in
      the manner set forth above.




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                                           AGENDA REPORT

TITLE:                    Authorization to Renew the Contract for Performing Emergency Spill
                          Response and Handling Hazardous and Contaminated Materials and
                          Delegate Authority to the Executive Director to Approve Future
                          Contract Renewal

AMOUNT:                   Not to Exceed $150,000/year

PARTIES INVOLVED:

                             Corporate Name/Principal
                            1B1B1B                                                   Location
                                                                                     0B0B0B




                            Dillard Trucking, Inc., doing                            Byron, CA
                            business as Dillard Environmental
                            Services

TYPE OF ACTION:                                       Resolution

SUBMITTED BY:                                         Richard Sinkoff, Director of Environmental
                                                      2B2B2B




                                                      Programs & Planning

APPROVED BY:                                               Omar Benjamin, Executive Director
                                                      3B3B3B




SUMMARY

In April 2010, the Board of Port Commissioners (Board) delegated authority to the
Executive Director to approve the project manual for “Performing Emergency Spill
Response and Handling Hazardous and Contaminated Materials at Port of Oakland
Maritime and Aviation Construction Sites for the Period Commencing July 1, 2010 and
ending June 30, 2011, 2012, or 2013, Oakland, California” (Hazmat Removal Contract1)
and award the contract to the lowest responsible bidder (Resolution No.10-32). As part
of this action, the Board required staff to re-present this contract and seek Board
approval for a single or multi-year renewal.

Dillard Environmental Services (DES) was the lowest responsible (and only2) bidder and
entered into an agreement with the Port on July 1, 2010 (Contract No. 2010-04-S1).
This Hazmat Removal Contract will end on June 30, 2011 unless renewed each year,
for two years, with Board approval. The purpose of this agenda report is to request the
Board to renew the Hazmat Removal Contract with DES for the second year (July 1,
2011 to June 30, 2012). This agenda report also requests delegating authority to the
Executive Director to approve the second renewal of the Hazmat Removal Contract at
the end of the second year (June 30, 2012).

1
  This Hazmat Removal Contract applies to Port Maritime and Aviation construction sites covered under MAPLA. Non-MAPLA
projects are covered under a different contract.
2
  Since 2000, DES has either been the only contractor or one of two contractors that bids for this Hazmat Removal Contract. This is
due to Port requirements (LBA, LIA, SBE goals, union compliance, etc.) limiting hazmat contractors to bid on the contract.

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FACTUAL BACKGROUND

As required by federal, state, and local regulatory agencies and environmental statutes,
the Port of Oakland (Port) has a mandatory obligation to remove hazardous materials
when encountered during construction activities to protect the environment and health
and safety of workers and the public. When hazardous materials are known at the
construction site and/or removal of the hazardous materials is included in the
construction project’s scope of work, the construction general contractor on the project
is responsible for performing emergency spill response and handling hazardous and
contaminated materials (commonly referred as hazardous materials removal). If
hazardous materials removal is not included in the construction project’s scope of work
or when hazardous materials were unknown at the site and encountered during
construction activities, the Port utilizes DES3 to perform the work4.

ANALYSIS

Given the nature of hidden or unforeseen hazardous materials encountered during
construction activities, there is an on-going need to utilize a Hazmat Removal
Contractor. Hazardous material removal is usually performed as directed in the field by
Port personnel. The cost variables for this work include the Port’s project needs and the
efficiency with which the hazardous materials removal work is managed as described
below in the “Consequences if Board Does not Authorize Renewal of the Hazmat Removal
Contract” section. Therefore, as has been done in previous Hazmat Removal Contracts, it
is appropriate to renew this annual contract to realize available savings in contract or
change order preparation costs.

Hazardous Material Removal Summary

From July 2010 to February 2011, the Port has utilized DES for four projects. The
project location, work description, schedule, and actual costs are outlined in Table 1:
July 2010 to February 2011 Hazardous Material Removal – MAPLA Projects and shown
on Figures 1 and 2.
Consequences if Board Does not Authorize the Renewal of the Hazmat Removal
Contract

If the Hazmat Removal Contract renewal with DES to June 30, 2012 is not authorized,
the Port will need to prepare a draft project manual to bid for a new Hazmat Removal
Contract. If a Hazmat Removal Contract is not in place by July 1, 2011, any hidden or
unforeseen hazardous materials that are encountered during construction activities will
require a purchase order for the hazardous material removal or a change order to the
general construction contractor on the project. However, delays associated with
processing purchase orders and lack of hazardous materials contractor availability may

3
  This Hazmat Removal Contract applies to Port Maritime and Aviation construction sites covered under MAPLA. Non-MAPLA
projects are covered under a different contract.
4
  Hazardous Removal Work consists of cleaning up oil spills, chemicals, and other hazardous and/or flammable substances; abating
(removing) lead-based paint, asbestos, and other contaminated waste; transporting and disposing of hazardous waste, and other
related field work encountered during construction activities.

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affect the Port’s ability to perform critical environmental work within mandated time
frames potentially subjecting the Port to regulatory penalties.

Additionally, past experience indicates that the purchase order or change order
approach is less cost efficient than utilizing a dedicated Hazmat Removal Contractor to
perform the work because of the additional time involved in acquiring a Hazmat
Removal Contractor for every incident. Either obtaining a purchase order or executing a
change order can potentially take several weeks to finalize. This additional time will
also cause delays to the construction project schedule which could result in increased
costs to the Port.

Future Renewal of the Contract with DES in July 2012

Because of the hidden or unforeseen hazardous materials encountered during
construction activities, there is a need to utilize DES under the current Hazmat Removal
Contract. The Hazmat Removal Contract with DES ends on June 30, 2011 and
requires Board approval for an option to renew the Hazmat Removal Contract at the
end of each fiscal year (up to June 30, 2013), which places a procedural burden on the
Board for actions that are ministerial in nature and appropriate for Executive Director
action. Therefore, Port staff requests that the Board delegate authority to the Executive
Director to approve the second renewal of the Hazmat Removal Contract at the end of
the second year (June 30, 2012).

     RELATIONSHIP TO STRATEGIC PLAN
4B4B4B




The Strategic Plan (adopted by the Board on October 5, 2010) operates on a fiscal year
(FY) schedule for five years. Each FY represents a stage in implementation. For FY
2010-2011, the focus is on activities that will continue to stabilize Port businesses and
finances. Renewing the Hazmat Removal Contract with DES and delegating authority
to the Executive Director to approve the future renewal under the current Hazmat
Removal Contract provides a cost-effective measure for the Port’s requirement to
immediately remove unexpected or unforeseen hazardous materials when encountered
during construction activities; thereby, saving time and resources.

In addition, this action meets Goal D and G of the Strategic Plan. This agenda report
action protects the environmental and health and safety of the public, as described
below.




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         Strategic Priority   Goal                 Objective               How and When Plan is
         Areas                                                             Implemented

         Sustainable          D: Improve the       Minimize                Renewing the Hazmat Removal
         Economic and         Port’s Financial     expenditures and        Contract with DES will reduce
         Business             Position             focus on core           costs associated with contract
         Development                               services                procurement and allow the Port to
                                                                           immediately respond to
                                                                           unexpected or unforeseen
                                                                           hazardous materials encountered
                                                                           during construction activities.
                                                                           The Port is required under local,
         Stewardship and      G: Sustain healthy   Partner to share
                                                                           state and federal regulations to
         Accountability       communities          risk, accountability,
                                                                           remove hazardous materials when
                              through leading      benefits and
                                                                           encountered during construction
                              edge environmental   improve
                                                                           activities. Renewing the Hazmat
                              stewardship          environmental
                                                                           Removal Contract with DES
                                                   and safety
                                                                           provides an immediate resource to
                                                   compliance.
                                                                           the Port to protect public
                                                                           environment and public health and
                                                                           safety when hazardous materials
                                                                           removal is required.


     BUDGET & FINANCIAL IMPACT
6B6B6B




Cost of Hazardous Material Removal

The current Hazmat Removal Contract has an annual maximum of $500,000 per year
with a total combined expenditure not to exceed $1,500,000 for the three year term of
this contract5. As shown in Table 1, the total costs spent from July 2010 to February
2011 were $68,731. The Hazmat Removal Contract period for the first term ends on
June 30, 2011, therefore the total costs will increase by the end of the first term
because of current projects that have not yet been complete. The total costs are
expected to be within the $500,000 budget. However, based on the expenditures from
this first term of the contract and the projected maritime and airport capital improvement
projects covered by MAPLA for the next fiscal year (July 1, 2011 to June 30, 2012), Port
staff have adjusted the annual maximum to be $150,000 per year for the remaining
contract term.

Source of Funds

The Governmental Accounting Standards Board (GASB) establishes standards for state
and local government accounting and financial reporting. Under GASB Statement No.
49, the Port is required to assess and disclose remediation liabilities, which obligates
the Port to address current or existing pollution, such as hazardous material removal.
The Port has established environmental liability accounts to comply with GASB 49.


5
 Expenditures from July 2007 to July 2010 from the previous Hazmat Removal Contract were
$1,384,479.00; therefore $500,000/year was determined to be an appropriate annual limit when the
contract was executed.
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Payments associated with hazardous material removal are paid with Port cash and
applied against the environmental liability accounts, and cannot be capitalized.

7B7B7B STAFFING IMPACT

Because of the technical complexity of hazardous material removal (particularly with the
requirement for appropriate licensed staff) Environmental Programs and Planning
division (EP&P) recommends the assistance of a Hazmat Removal Contractor. This
action will not increase Port Full-Time Equivalents (FTEs).

          SUSTAINABILITY
11B11 B11 B




Local, state, and federal regulations dictate the proper disposal of hazardous wastes. The
Port works to reduce the toxicity of products handled by employees and to reduce the
overall waste stream from hazardous material removal. Whenever possible, collected
wastes (for example, some petroleum products or batteries) will be recycled at permitted
recycling facilities.

          ENVIRONMENTAL
12B12 B12 B




CEQA Determination

The California Environmental Quality Act (CEQA) Guidelines Section 15378(2), Project
states “Project” means the whole of an action, which has potential for resulting in either
direct physical change in the environment, or a reasonably foreseeable indirect physical
change in the environment. The general rule in Section 15061(b)(3) of the CEQA
Guidelines also states that CEQA applies only to activities that have a potential for
causing a significant effect on the environment. It can be seen with certainty that there
is no possibility that authorizing the renewal of the Hazmat Removal Contract with DES
and delegating authority to the Executive Director to approve the second renewal in
June 2012, will result in a physical change in the environment; therefore, it is not subject
to CEQA.

The work conducted under the Hazmat Removal Contract entails hazardous material
removal work. The California Environmental Quality Act (CEQA) Guidelines Section
15330 exempts minor cleanup actions taken to prevent, minimize, stabilize, mitigate, or
eliminate the release or threat of release of a hazardous waste. Such minor cleanup
actions include removal of sealed, non-leaking drums or barrels of hazardous waste or
substances that have been stabilized, containerized, and are designated for a lawfully
permitted destination. Where this contract is used for remediation projects or removal
actions costing more than one million dollars, those projects will require further CEQA
analysis and approval by the Board of Port Commissioners.

Environmental Compliance

Activities under the Hazmat Removal Contract will involve handling of waste, chemicals
and/or hazardous materials. All waste and materials will be properly removed,
transported and disposed of according to local, state, and federal regulations.
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Mitigation

There is no mitigation measures associated with or required by this action. Mitigation
measures are adopted for each project, as needed, pursuant to CEQA.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The Hazmat Removal Contract is for work on Port construction project sites covered by
the Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
MAPLA apply to this work.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

Owner Controlled Insurance Program (OCIP) will not apply to this contract because it is
not a capital improvement project and OCIP excludes hazardous waste removal
activities. The Contractor will be required to provide insurance in accordance with the
coverage and limits specified in the Contract Documents

8B8B8B GENERAL PLAN

The services covered under this action do not constitute a "project" under the City of
Oakland General Plan. Where such services support development projects, those
projects will be subject to separate findings of conformity with the City of Oakland
General Plan in accordance with Section 727 of the Charter.

9B9B9B LIVING WAGE

Living wage requirements, in accordance with the Port’s Rules and Regulations for the
Implementation and Enforcement of the Port of Oakland Living Wage Requirements
(the “Living Wage Regulations”), do not apply because the contract is a construction
contract covered by state prevailing wage rules and the prevailing rate of wage is higher
than the wage required by the Living Wage Regulations.

          OPTIONS
13B13 B13 B




The Board of Port Commissioners has the following options:

                    1)   Authorize the renewal of the Contract for Performing Emergency
                         Spill Response and Handling Hazardous and Contaminated
                         Materials with DES to June 30, 2012 and delegate authority to the
                         Executive Director to approve the second renewal of the contract at
                         the end of the second year (June 30, 2012). This is the
                         recommended option.

                    2)   Authorize the renewal of the Contract for Performing Emergency
                         Spill Response and Handling Hazardous and Contaminated
                         Materials only. This would require Port staff to seek and obtain
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                    Board authorization for the second renewal at the end of the
                    second year for the contract to continue from July 1, 2012 to June
                    30, 2013.

               3)   Take no action. This would require Port staff to seek and obtain
                    Board authorization to prepare a draft project manual for a new
                    Hazmat Removal Contractor or issue purchase orders or change
                    orders through the general construction contractor on the project for
                    this work.

       RECOMMENDATION
10B10B10




It is recommended that the Board select Option 1 to authorize the renewal of the
Contract for Performing Emergency Spill Response and Handling Hazardous and
Contaminated Materials with DES to June 30, 2012 and delegate authority to the
Executive Director to approve the second renewal of the Hazmat Removal Contract at
the end of the second year (June 30, 2012). Port staff will provide an informational
report to the Board by the end of the second year regarding hazmat removal activities
and expenditures to date.




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Table 1: July 2010 to February 2011 Hazardous Materials Removed (MAPLA
Projects)
 Project                                                    Actual
                     Work Description         Schedule               Figure
 Location                                                    Costs
                                                Airport
                      Dispose of drums
                      containing mud and soil
 South Field          from geotechnical studies
                                                          September 2010         $4,140          1
 Perimeter Dike       for the South Field
                      perimeter dike
                      improvement project.
                      Remove and dispose of
                      asbestos-containing pipe
                      insulation and floor tile
                      and lead-containing
 Terminal 1,                                              September 2010
                      ceramic wall tiles in                                      $54,412         1
 M102                                                     to January 2011
                      preparation for the
                      renovation work at the
                      former Giant Burger
                      location in M102.
                      Remove several areas of
                      exterior and interior lead-
 Hangar 6,                                                December 2010 –
                      containing paint from the                                  $3,000*         1
 North Field                                              March 2011
                      roof and ceiling truss for
                      seismic improvements.
                                               Maritime
 Howard               Dispose of drums
 Terminal, Berth      containing benzene and              November 2010          $7,179          2
 61                   lead contaminated soil.
                                                          Total Costs            $68,731
*This is the invoice amount we have received up to February 2011. Actual costs for this project are
expected to be around $50,000.

Source: Port of Oakland, Environmental Programs & Planning Division, April 2011




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Figure 1: Hazardous Material Removal Locations at the Airport




                                          Hangar 6, North Field




                                                              Terminal 1, M102



 South Field Perimeter Dike




Source: Port of Oakland, Environmental Programs and Planning Division, April 2011




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Figure 2: Hazardous Material Removal Location in the Maritime Area




                                                                  Howard Terminal, Berth 61




Source: Port of Oakland, Environmental Programs and Planning Division, April 2011




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                                                      BOARD MTG. DATE: 4/26/11

                             AGENDA REPORT
 TITLE:           Adoption of the Disadvantaged Business Enterprise (DBE) Federal
                  Fiscal Year 2010-2011 (FFY 10-11) Overall Annual Goal and
                  Methodology Report and DBE Program Plan, for the Maritime
                  Administration (MARAD), United States Department of
                  Transportation (DOT)

 AMOUNT:          $0

 PARTIES INVOLVED: No outside parties involved

                    Corporate Name                         Location



 TYPE OF ACTION:             Resolution

 SUBMITTED BY:               Diann Castleberry, Director of Social Responsibility

 APPROVED BY:                Omar R. Benjamin, Executive Director


FACTUAL BACKGROUND

The United States Department of Transportation (US DOT) administers maritime grant
funds through the Maritime Administration (MARAD) to ports. The Port of Oakland
(Port) is in receipt of an $8.5 million grant, $7.85 million of which is for the
implementation of shore power. The MARAD deems the Port, as a grant recipient, the
contractual authority for establishing and administering the contract agreements, and,
as such, the Port is responsible for all contractual matters, including the administration
of grant assurance requirements. One of the grant assurances requires the Port to
implement a US DOT-approved Disadvantaged Business Enterprise (DBE) program
(Program) in compliance with 49 Code of Federal Regulations Part 26 (49 CFR Part
26).

Under this requirement, the Port must develop and implement a DBE Program Plan,
along with a Goal and Methodology Report (GMR), which specifically addresses the
proposed level of DBE participation under MARAD grant funding. The attached DBE
Program Plan and GMR were developed and outline how the Port will administer the
MARAD DBE Program, as well as the proposed level of DBE participation based on the
type of work that will be performed under the overall program. At the present time, the
Port has received only one grant from MARAD. Based on that amount and the type of
work that will be performed with the grant, the Port has identified a 17.05 percent
aspirational DBE goal for Federal Fiscal Year 2010-2011. Should the Port receive
additional MARAD grant funding, the GMR will be adjusted to address the overall
funding from MARAD.

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This Agenda Report seeks Board approval of the MARAD DBE Program Plan and Goal
and Methodology Report for federal fiscal year 2011-12, which is a requirement as
stated in the grant assurance for receipt of this grant funding. This report does not
present nor seek approval of a Port-wide DBE outreach and implementation plan. The
Port-wide DBE and local business plans will be presented to the Board as part of an
overall review, assessment and proposed action plan for the Social Responsibility
Division no later than June of 2011.

It is important to note that the shore power project is also expected to receive additional
grant funding from other sources, which include both federal and State funds. As these
grants are received, staff will prepare the required grant assurance documents and
present them to the Board for review and approval.

ANALYSIS

Overall Goal Outreach

As required under the MARAD DBE requirements, the Port conducted extensive
outreach to community based organizations, as well as targeted outreach to DBEs
identified in the specific work categories under the project. Stakeholder outreach, as
required by the regulations (45-day comment period), included advertising the goal and
methodology in the following media, including an email blast informing Port
stakeholders of the Port’s new goal and methodology for MARAD grant funding:

   •   Oakland Tribune
   •   El Mundo
   •   Sing Tao
   •   Anue Management
   •   Community Based Organizations (email blast and follow up by staff)
   •   Port of Oakland internet posting (www.portofoakland.com)
   •   Port of Oakland DBE comment hotline

The 45-day comment period is scheduled to conclude on April 23, 2011. There have
been no public comments received to date on either document. This outreach has been
documented and is part of the master project file as required by the MARAD DBE
requirements.

Project Specific Goal Outreach

The Port advertised the shore power project on January 9, 2011 and awarded the
contract on February 24, 2011. All prospective bidders were informed that the
aspirational goal of 17.05 percent applied to the shore power project via an addendum
to the bid documents. As construction contracts are selected on the basis of low bid,
DBE program requirements were not a condition of award for this project.

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Project specific outreach efforts included the identification of DBEs in the California
Unified Database which reside in the Port’s business area (Alameda and Contra Costa
Counties) and whose work category codes were identified as work items in the
proposed project. This included the following categories:
   • trucking
   • structural concrete and excavation
   • painting and striping
   • fencing
   • electrical
An email blast with specific bid information was sent to all potential DBEs, as well as all
certified small local businesses in the Port’s database, by the Social Responsibility
Division on January 12, 2011 announcing the project and requirements.

The successful bidder on the project was St. Francis Electrical. Staff met with the
contractor as there was no initial DBE participation identified on the project. The
contractor will be working with its subcontractors to determine if there is additional DBE
participation in lower contracting tiers that was not originally identified. Additionally, the
Port is anticipating the issuance of contract change orders on the project. The
contractor has stated that every effort will be made to outreach to qualified DBE firms on
all additional opportunities arising on the project.

STRATEGIC PLAN ALIGNMENT

The Strategic Plan was adopted by the Board on October 5, 2010. The following is
staff’s assessment of how adoption of the Disadvantaged Business Enterprise (DBE)
Federal FY 2010-2011 Overall Annual Goal Report to the Maritime Administration
(MARAD) supports the following strategic priority area, goal and objective of the Port’s
FY 2011-2015 Strategic Plan:

Strategic Priority Area: Sustainable Economic and Business Development

 Goal                        Objective                       How & When Plan is
                                                             Implemented
 Goal C: Promote             1. Comply with all federal,     Adoption of the DBE
 Equitable Community         state, local contracting and    Overall Annual Goal and
 Access To Employment        Port workforce mandates.        Methodology Report and
 And Business                                                DBE Program Plan to the
 Opportunities.                                              MARAD meets one of the
                                                             requirements identified in
                                                             the assurances for
                                                             receiving the TIGER grant
                                                             from MARAD for the shore
                                                             power project.




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BUDGET & FINANCIAL IMPACT

There is no impact on budget and finance.

STAFFING IMPACT

Monitoring and reporting for compliance will be managed by current staff (Social
Responsibility/Contract Compliance and Engineering Division/Resident Engineers)
along with additional staffing resources identified within the Maritime Shore Power
project scope (at .5 FTE for the life of the project).

SUSTAINABILITY

Implementation of the Port’s DBE Program contributes towards the sustainability of
small disadvantaged businesses who seek to gain work through the Port and the Port’s
federal aid funding stream.

ENVIRONMENTAL

The California Environmental Quality Act (CEQA) Guidelines, Section 15061(b)(3) ("the
general rule") states that CEQA applies only to projects which have the potential for
causing a significant effect on the environment. Where it can be seen with certainty that
there is no possibility that the activity may have a significant effect on the environment,
the activity is not subject to CEQA. Adoption of the DBE FFY 10-11 Overall Annual
Goal and Methodology Report to the MARAD, therefore, is not a project under CEQA
and no environmental review is required.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Sheet do not fall within the scope of the Port of
Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of
the MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

OCIP does not apply to the proposed action.

GENERAL PLAN

General Plan conformity does not apply to the proposed action.

LIVING WAGE

In accordance with the Port’s Rules and Regulations for the Implementation and
Enforcement of the Port of Oakland Living Wage Requirements, living wage
requirements do not apply to this regulatory reporting action.

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OPTIONS

   1. Adopt the Port’s MARAD DBE Program Plan and the MARAD DBE FFY 10-11
      Overall Annual Goal and Methodology Report.

   2. Do not adopt the Port’s MARAD DBE Program Plan and the MARAD DBE FFY
      10-11 Overall Annual Goal and Methodology Report. This option may jeopardize
      the Port’s MARAD grant funding.

RECOMMENDATION

Adoption of the Disadvantaged Business Enterprise (DBE) Federal Fiscal Year 2010-
2011 (FFY 10-11) Overall Annual Goal and Methodology Report and DBE Program
Plan, for the Maritime Administration (MARAD), United States Department of
Transportation (DOT)

ATTACHMENTS

   • Transmittal Letter and Accompanying MARAD DBE Program Plan and MARAD
     DBE FFY 2010-2011 Overall Annual Goal and Methodology Report to the MARAD

   • Overall Annual Goal and Methodology Report Acronym List




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                             UPDATES & ANNOUNCEMENTS Tab 7



            UPDATES & ANNOUNCEMENTS
The President and / or Executive Director will report on
noteworthy events occurring since the last Board Meeting.




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                                            SCHEDULING Tab 8



                      SCHEDULING
This segment of the meeting is reserved for scheduling
items for future Agendas and/or scheduling Special
Meetings.




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