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City weighs municipal asphalt plant options as Port issues RFP for Pier 94 site
Summary
The committee heard presentations from DPW and the Port about the city's aging municipal asphalt plant and a Port RFP for a concrete batching or asphalt production lease at Seawall Lot 352 (Pier 94). Supervisors requested a controller analysis before choosing between a city-run plant and a private lessee.
The Budget and Finance Committee examined whether San Francisco should continue operating its own municipal asphalt plant or support a private operator at a Port site after hearing separate presentations from the Department of Public Works (DPW) and the Port of San Francisco on Oct. 28.
DPW reported the municipal plant at 1801 Gerald Street was built in 1954, had been renovated in 1993, and has suffered repeated breakdowns and at least one explosion in the past year. The plant is permitted to produce up to 100,000 tons per year but produced roughly 36,000 tons in earlier years and only about 17,000 tons last year. DPW staff said the aging site constrains storage of sand, gravel and liquid asphalt, limits the use of recycled content (current plant max 15% vs. newer plants up to ~50%), and leads to much higher costs: the department estimated production costs were roughly 60% higher per ton than private producers. DPW said it planned to shut the current plant down at the end of the paving season (around Thanksgiving) unless a viable option is identified; three DPW employees currently staff the plant and DPW intends to reassign them to other Street and Sewer Repair positions.
Brad Benson, Special Projects Manager for the Port of San Francisco, explained the Port issued an RFP (May 29) for Seawall Lot 352 near Pier 94 and described the site's advantages (barge and rail access, larger acreage, distance from residential neighborhoods) and RFP criteria that combine lease and public works supply considerations. For the asphalt-production option the RFP allocates 15 points (out of 100) to pricing and guaranteed supply for the City. Responses to the RFP were due Oct. 29; the Port's competitive evaluation includes an advisory panel, scoring and environmental review before any lease award.
Supervisors asked whether the city should municipalize the service or accept a private-lessee model. DPW said, under current conditions, its existing plant cannot achieve the produce volumes needed to be cost-competitive and estimated that repairing the existing plant and increasing production would require producing roughly 62,000 tons to reach breakeven; a financed new plant would require substantially higher throughput (DPW cited roughly 225,000 tons) to amortize construction and operating costs. The Port said a new facility on Port property could achieve efficiencies (marine and rail delivery) not possible at the current site.
Monique Smuda of the Controller's Office agreed to analyze the municipal option and said the office could produce a short analysis in a few weeks, noting that the RFP responses would inform the market side of that review. Committee members moved to continue Item 2 to the call of the chair pending the controller's report; the motion was taken without objection.
Next steps: The Port will evaluate RFP responses and the Controller's Office will provide an analysis of municipal vs. private options; the committee will revisit Item 2 after those inputs are available.
