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Commission Meeting Minutes
June 28th, 2010
COMMISSION MEETING MINUTES
June 28, 2010
9:30 a.m.
PRESENT:
Jim McEntire, Vice-President Jerry Demetriff, Public Works Mgr.
John Calhoun, Secretary Doug Sandau, Airport/Marina Mgr.
Jeff Robb, Executive Director Pat Deja, Property/Mkrt Mgr
William James, Director of Finance Holly Hairell, Human Resources Mgr.
Dave Hagiwara, Dir Trade & Dev. Dave Neupert, Port Attorney
CALL TO ORDER – OPEN SESSION
PLEDGE OF ALLEGIANCE
NOTE: Commissioner Schoenfeldt is excused from the meeting.
I. MINUTES OF JUNE 14, 2010 COMMISSION MEETING
Commissioner Calhoun stated he reviewed the June 14, 2010 Commission Meeting Minutes, found them to be accurate and made the motion to approve as written. Commissioner McEntire seconded and the motion passed unanimously.
II. EARLY PUBLIC COMMENT SESSION
There were no public comments.
III. PROPERTY
A. DNR Harbor Area Lease for Log Storage
Dave Hagiwara, Director of Trade and Development, noted that last year the Port entered into an agreement with the Department of Natural Resources (DNR) for area inside Ediz Hook east of Nippon for log storage. At the time it was anticipated that Dunlap Towing would be the operator, but in the middle of the economic downturn and declining forest products market Dunlap announced they would cease operations in Port Angeles. Mr. Hagiwara explained that the local timber industry continued to solicit support from the Port to move forward with the DNR lease despite Dunlap’s business decision. The Commission made the decision at that time to move forward and the Port was able to negotiate a revision to the agreement that would allow the Port to lease the area for one year without being committed to the remaining five-year term. Mr. Hagiwara said we are now one year in and faced with whether or not to move ahead with the remaining four years of the five-year agreement. He indicated that if the lease is terminated, we would still be liable for damages. The annual rental is $12,483.17. The Port anticipates entering into an operating agreement with Dunlap Towing to move log booms and rafts into and out of the storage area and additional handling charges to customers and Dunlap will generate approximately $20,000.00 to $40,000.00 based on volume and number of loads. Mr. Hagiwara stressed that it is critically important to have water borne transportation.
Commissioner Calhoun said he recalls the previous report and that staff has done a good job one year into it. He stated that he strongly supports this lease and indicated that we are better off today than a year ago. He added that the Port is headed in the right direction and it would be foolish not to proceed. Commissioner McEntire agreed in his strong support and encouraged staff to move forward.
B. Alternative Energy Briefing
Property Manager Pat Deja provided a brief report on a June 15 meeting with Battelle and their presentation on harnessing ocean technology and the opportunities for coastal communities. Battelle is the world’s largest non-profit independent research and development company with $5 billion dollars in revenues. The focus of the June presentation was to discuss two key drivers for coastal communities: ocean renewable energy and ocean observation & prediction management. A main emphasis was in harnessing ocean energy which can be done by a variety of approaches and is focusing on some areas in our locale. Battelle has done a lot of research from Department of Energy grants on such things as wave power, ocean current power otherwise called hydro-kinectic energy which uses wind turbines, tidal power and off shore wind turbines. Mr. Deja noted that on the West Coast, Washington State is number one in hydro ocean power generation, first in hydro ocean related federal research and development (R&D) awards, third in venture capital investments in both bio-mass and fuel cells, seventh in wind power generation, and eighth in fuel cell-related federal R&D grants. He said some external forces driving renewable alternative
energy is to influence and stop climate change, to prevent pollution and to strategically reduce dependence on foreign oil. Reiterating that Battelle is one of the research leaders in the world, Mr. Deja acknowledged that it is nice to have them in our own backyard in Sequim.
Executive Director Robb reported that he and Bill James met with Battelle on their campus last week with representatives from the City of Sequim. The purpose was to identify potential funding mechanisms that could assist them with bringing infrastructure to their campus. He said Battelle is looking at building complexes that would house R&D firms. The spinoff of that is R&D or possibly manufacturing that could occur in our Industrial Park and Director Robb pointed out that Battelle would not do manufacturing on their own property. He reiterated that having Battelle in our backyard is a positive opportunity and emphasized that Battelle are experts in R&D, but they are not developers. He indicated that the Port could possibly own and manage assets at Battelle’s campus, but that is likely years into the future.
Commissioner Calhoun commented that he is in the energy policy camp and that he looks at the strategic importance of energy investments in terms of energy policy imperatives that we have in the United Stated which include climate mitigation, energy independence and sustainability of supply. He observed that this could be significant in having an economic impact to our area and although they are in the R&D phase, it may be several years away from implementation. Commissioner Calhoun indicated there doesn’t seem to be immediate action the Port can take, but needs to be well positioned to take advantage when the time is right and he encouraged staff efforts to keep track of progress. Commissioner McEntire agreed and pointed out that this is one of the cardinal things that emerged from the Economic Development Summit. Secondly, he said there is an Initiative that passed several years ago in which Washington State is to displace about 15% of energy used to come from alternative energy sources. He indicated that we need to move forward in a way that doesn’t pick winners or losers and in a way that fast tracts the range of alternative energy sources so that we spend as little time as necessary to determine the parameters of success. Commissioner McEntire said he believes the Olympic Peninsula could be a net exporter of this type of power. The Commissioners encouraged staff to stay on top of this and determine how the Port can be a leader in moving forward.
IV. OLD BUSINESS
A. Terminal 3 Fendering System Replacement Acceptance
Public Works Manager Jerry Demetriff provided information on this project. As part of the 2010 Work Plan and the 2009 Budget for Major Maintenance, funding was allocated for repairing the existing Terminal 3 fender system. The project consisted of driving 18 steel pile and select replacement of the existing fender system. American Construction of Tacoma won the bid and started the project January 11, 2010 with a scheduled completion date of February 28, 2010. Mr. Demetriff said that during the final week of construction it was discovered that the subcontractor supplied the incorrect fender pile panels and that it would take two months to manufacture and ship the proper panels. He stated that Director Robb issued a contract extension on March 8 and that the correct panels were installed with all work completed June 14 with quality results. Staff recommendation is to accept the contract with American Construction as complete. The retainage may be released 30 days from point of acceptance and subject to having releases from the State of Washington. Mr. Demetriff noted that there is a claim filed by the contractor against the Port which staff is working through with Port legal counsel. Discussion followed.
Commissioner Calhoun moved to accept the contract for the Terminal 3 Fendering System Replacement project with American Construction Company in the amount of $254,900.00 as complete. Commissioner McEntire seconded and the motion passed unanimously.
B. Cruise Ship Report
Executive Director Robb mentioned the two successful cruise ships that docked at the Port this spring. The City of Port Angeles asked for a meeting with the Port to discuss their interest in the possibility of having 20-25 cruise ships calling annually as it would have a dramatic impact and they were considering aggressively pursuing. The question was how many cruise ships would it take before impacting Port marine terminal operations. The Port met with the City staff and Councilman, several Chamber of Commerce Board reps, the Olympic Peninsula Visitor Bureau, Port Commissioner Schoenfeldt and Port staff including Jeff Robb, Dave Hagiwara and Mike Nimmo. Some of the discussions were that the City could accommodate a cruise ship off of the City Pier which would be a better location. Director Robb indicated that the City was taken aback when they heard that it would take a minimum from $3 to $5 million dollars for a suitable pier. The current City Pier would not accommodate cruise ships because of lack of depth or strength. After that realization, the City was not prepared to advance the cause and they concluded that from two to four ships at the Port marine terminal would be wonderful. Director Robb indicated that tendering was discussed which meant that a vessel would anchor in the harbor and tend passengers via small boat to the City Pier. He also mentioned that Mr. Hagiwara has been active with the cruise ship industry and there is an organization with two annual events which brings the cruise industry together which he will attend to pulse the market to see if we can get increased awareness. Emphasis was placed on Port challenges in that cruise ships prevents us from bringing in tankers that would produce up to 30 days instead of a one day call. Director Robb suggested that investment in berth facility and commitment for cruise ships needs to be with the City at the City Pier.
Commissioner Calhoun encouraged staff to continue in the mode of accommodating cruise ships where possible around Port main lines of business which is marine trades and top side repair for which we are uniquely qualified. He would like to encourage the City to follow up on the Economic Summit findings which identified increasing tourism as one of the five major investments. He indicated that is not really the business of the Port, but he feels we need to play big ball and encourage the City to make the investments as it is a great potential to increase tourism. Commissioner Calhoun stated it is a great opportunity for the Visitor Bureau if they are serious about increasing tourism as they stated in the Economic Summit. Commissioner McEntire offered several observations. First, he agreed with Commissioner Calhoun’s comments. He indicated there are several ways to do this that minimize the impact of the core business of the Port at Terminal 1. He mentioned that when Ms Schostak, Executive Director of the Visitor Bureau
was briefing the Economic Summit attendees, he observed that we need to look at all aspects of the tourism market to see if there are segments that we currently do not occupy and move vigorously in those directions. As a result of higher fuel prices, one potential market of the cruise business is smaller regional cruising and smaller markets. Commissioner McEntire cautioned by stating that there is a need for investing but we need to carefully consider how not to over invest.
C. Second Quarter 2010 Work Plan Update
Executive Director Robb presented the Second Quarter 2010 Work Plan to the Commissioners. He expressed thanks to staff for their efforts and hard work in accomplishing their mission. Director Robb indicated the Work Plan is a project status report card and that staff deserve all the credit. He did not review all the projects, but highlighted and explained one or two projects for which each staff member was responsible in each category. There are 35 projects in total. Discussion followed after each project explanation. The Second Quarter Work Plan is an agenda attachment on the Port’s website under Minutes and Agendas at www.portofpa.com and will be posted in the news section this date. Commissioners McEntire and Calhoun individually complimented staff for their work.
V. PUBLIC COMMENTS SESSION
There were no public comments.
VI. ITEMS NOT ON THE AGENDA
A. Bill James, Director of Finance and Administration, explained that the Port has a fair number of boats that fall delinquent on their moorage payments. There have been discussions among staff on the way in which the current Marinas Rules and Regulations documents reads and some of the implementation attempted over the years as far as working with tenants. Mr. James presented A New Policy Emphasis for All Marina Tenants notice. The notice will be sent to all tenants with their bills and it was noted this is not a change in rules, but a change in application beginning July 1, 2010 forward. As background, the Port is authorized to seize vessels if more than 60 days past due and given a 15-day written notice that charges are owing. The new policy states that a tenant with an overdue account may be reinstated as a moorage tenant if the account is prepaid three months in advance for twelve months following date of reinstatement and any missed payments during this period will be cause for termination of moorage agreement. Mr. James explained that we have been extremely accommodating in the past and the feeling is that it is undermining the rules. He emphasized the policy will be strictly enforced without exception and he asked for Commission approval. It was determined that a motion was not necessary.
Commissioner McEntire suggested wording in the notice stating that this has been a long standing policy rule of the Port and is not anything new. What is new is that the Port is going to pay close attention in enforcing the rule to maintain the high standards all the tenants expect and it is to the benefit of all that we maintain those standards. Director Robb noted the policy came from the Advisory Committee and boat users and that they were appalled at the number of delinquencies.
B. Commissioner Calhoun commented that the Port was one of three entities that financed the Clallam County Economic Development Summit. He said that he has been asked how to get access to the final report and suggested it be posted on the website since we were a primary sponsor.
C. Commissioner McEntire reported on the Propeller Club Annual Meeting he recently attended and commented the Club is a consortium of maritime industry folks from Seattle and Puget Sound and he believes there is value in attending meetings to maintain ties with the maritime industry.
VII. NEXT MEETING – JULY 12, 2010
VIII. EXECUTIVE SESSION
Commissioner McEntire moved the Board of Commissioners into executive session at 10:50 a.m. to consider one property item, one litigation item and no personnel items. These items are discussed in executive session in accordance with title 42.30.110 of the Revised Code of Washington. It is estimated that the executive session will conclude in approximately 45 minutes and no action is anticipated.
IX. ADJOURN
Commissioner McEntire reconvened the regular meeting at 11:40 a.m. and immediately adjourned with no action taken.
PORT OF PORT ANGELES
BOARD OF COMMISSIONERS
____________________________
George H. Schoenfeldt, President
__________________________
John M. Calhoun, Secretary
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