COMMISSION AGENDA MEMORANDUM Item No. ACTION ITEM Date of Meeting DATE : March 17, 2025 TO: Stephen P. Metruck, Executive Director FROM: Sarah Ogier, Director-Maritime Environment & Sustainability Alex Adams, Sr. Manager Environmental Programs David Fujimoto, Sr. Environmental Program Manager 8f April 22, 2025 SUBJECT: Authorization of Clean Ports Planning Grant Use of Funds Prior request: Amount of this request: Total estimated project cost: $ 1,060,000 $ 1,937,248 $ 2,997,248 ACTION REQUESTED Request Commission authorization for the Executive Director to: 1) expend up to $1,937,248 in grant funds; and 2) to execute related service agreements, not to exceed $1,471,600, to achieve the results of the EPA Clean Ports Program Climate and Air Quality Planning Grant. EXECUTIVE SUMMARY The Port of Seattle applied for approximately $3 million in funding through the U.S. Environmental Protection Agency (EPA) Clean Ports Program (CPP) Climate and Air Quality Planning Competition to accelerate efforts to transition to low and zero emissions harbor craft and advanced clean maritime fuels for ocean-going vessels. The Port was awarded $2,997,248 for its proposal titled, "Powering the Maritime Transition in the Pacific Northwest." In May 2024, the Commission authorized a competition waiver and execution of service agreements with three non-profit partners as sub-recipients in the amount of $1,060,000. This request seeks authorization to expend the balance of grant funds for project management and service agreements for technical analysis, community engagement, strategy planning, and workforce development to meet the objectives of the grant award. The Port will institute project management, contractual, and financial management measures to reduce exposure to financial risk. Below is a summary of the authorization requests: Template revised January 10, 2019. COMMISSION AGENDA - Action Item No. 8f Meeting Date: April 22, 2025 Date May 21, 2024 Amount $1,060,000 Additional Grant Authorization (this request) $1,937,248 Total $2,997,248 Page 2 of 5 Description Competition waiver, authorization to name designated sub-recipients and enter into agreements with Washington Maritime Blue, American Bureau of Shipping (ABS), and RMI subject to grant award Budget authorization for the balance of funds and authorization to execute related service agreements JUSTIFICATION The Port's Clean Ports project addresses two key maritime sectors serving the Port and is designed to accelerate pathways to reduce emissions and meet the goals of the Port's Century Agenda, the Northwest Port's Clean Air Strategy, and the Maritime Climate and Air Action Plan. The project provides funding for a variety of activities including: a vessel activity and fuel inventory; harbor vessel modernization feasibility study; fuel demand and infrastructure analysis; a fuel supply acquisition strategy; methanol bunkering desktop exercise; a fuel strategy roadmap; community engagement to help ensure neighboring communities and interested parties are informed and educated about future fuels (vital to long-term success as new fuels are deployed in the region); and an assessment of workforce impacts to inform the Port's Workforce Development strategies. In addition, the grant provides for project management to ensure successful execution of all grant conditions. As a one-time funding opportunity, the EPA Clean Ports Program award is a unique opportunity for the Port to leverage federal funds and significantly expand existing resources. This award enables the Port to work with nationally recognized partners and develop strategies to increase the region's competitiveness. Given the ongoing uncertainty of federal grant funds, staff have conferred with project partners and has confirmed their interest in continuing to move forward with the project. The Port expects to establish measures to manage funding risk including increased frequency of grant reimbursement, contractual conditions specifying grant-contingent funding, increased monitoring and reporting frequencies, and contractor risk evaluations. Diversity in Contracting The Maritime Environment and Sustainability Department will evaluate opportunities for women and minority-owned business enterprise (WMBE) services for consultant contracts directly managed by the Port under this grant pursuant to Port policies and grant requirements. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: April 22, 2025 Page 3 of 5 DETAILS This project will help catalyze the transition to next generation vessels and prepare the region, maritime industry, communities, ports, and workforce for the transition to advanced clean fuels. Please see Attachment 3 for a description of the Scope of Work and Schedule. Cost Breakdown Prior Request Personnel Contracts Subawards Other Costs (participant support: translation, meals, etc.) Total This Request Total Project $1,060,000 - $455,523 $721,600 $750,000 $10,125 $455,523 $721,600 $1,810,000 $10,125 $1,060,000 $1,937,248 $2,997,248 ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 - Do not authorize the expenditure of funds Cost Implications: ($1,937,248 - $2,997,248) - loss of funds Pros: (1) Cons: (1) (2) (3) (4) Reduces staff time for project delivery support, potentially freeing time for other efforts. The Port would need to identify alternative sources of funding and/or phase project elements over several years to complete a similar body of work. If previously authorized elements were to proceed, a failure to authorize significant remaining portions of the grant project would require renegotiation of the grant scope, which would likely jeopardize overall project funding. If previously authorized elements were to proceed, a failure to authorize significant remaining portions would mean there would be no project management support for sub-recipient projects previously approved. Port does not gain the benefit of these analyses. Without additional understanding of these issues, the Port is not prepared for this transition to future fuels. This is not the recommended alternative. Alternative 2 - Delay authorization of funds. Cost Implications: unknown Pros: (1) Delaying authorization of funds may provide for additional clarity regarding the availability of funds with program changes at the federal level. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: April 22, 2025 Cons: (1) (2) (3) Page 4 of 5 Delaying implementation of the project could impact the Port's ability to deliver the project within the timeframe of the grant award and may require renegotiation of the schedule with EPA. Delays in authorization of this request would negatively impact the previously authorized portions of work. Project management support for sub-recipient projects and grant administration to meet all necessary conditions would be limited. The Port already expects to implement measures to manage funding risk, including but not limited to contractual conditions specifying contingent funding, increased monitoring and reporting frequencies, and contractor risk evaluations. This is not the recommended alternative. Alternative 3 - Authorize the use of funds, including contingency funds, and execution of service agreements needed for implementation of the grant award. Cost Implications: $1,937,248 Pros: (1) (2) (3) (4) (5) Cons: (1) (2) Allows the Port to leverage federal funding to advance Port goals. Allows the Port to follow through on current commitments to EPA. All project subrecipients have confirmed their interest and ability to proceed with the project within the uncertain funding environment. A combination of Port instituted contract provisions, increased frequency of project reimbursement, and contingency funds will reduce financial exposure and risk. Through successful grant project implementation, the Port intends to gain critical market, community and technical insights to guide the agency in the fuels of the future transition. The Port will need to closely monitor funding availability and subrecipient expenditures considering uncertainties in the current federal funding environment. Availability of funding through the term of the grant award is uncertain at this time and conditions are highly unpredictable. This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate/Authorization Summary Capital Expense Total COST ESTIMATE Original estimate $0 $0 $0 AUTHORIZATION Previous authorizations 0 $1,060,000 $1,060,000 Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8f Meeting Date: April 22, 2025 Current request for authorization Total authorizations, including this request Remaining amount to be authorized Page 5 of 5 0 0 $0 $1,937,248 $2,997,248 $0 $1,937,248 $2,997,248 $0 Annual Budget Status and Source of Funds This work is fully funded by the EPA Climate and Air Quality Planning Grant and the grant does not require matching funds. This request is to authorize the expenditure of those funds. Financial Analysis and Summary Project cost for analysis Business Unit (BU) Effect on business performance (NOI after depreciation) IRR/NPV (if relevant) CPE Impact $2,997,248 Environmental and Sustainability Programs Up to $2,997,248 in expenditures will be offset by grant revenues. n/a n/a Future Revenues and Expenses (Total cost of ownership) n/a ATTACHMENTS TO THIS REQUEST (1) (2) (3) Grant award Scope of Work Summary Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS May 21, 2024 - The Commission determined a competitive process was not appropriate, authorized the Port to specify three named non-profit partners as sub-awardees in this grant application, and authorized the Port to execute resulting service agreements pending funding award. Template revised June 27, 2019 (Diversity in Contracting).