Port of Grays Harbor

Commission Meeting

May 9, 2017

The Port of Grays Harbor Commission Meeting for May 9, 2017 was called to order at 9:00 a.m.

Mike Johnson, Contract & Project Manager, led the meeting in the Pledge of Allegiance.

Those in attendance at the meeting were as follows:

COMMISSION AND STAFF
Chuck Caldwell - Commissioner
Stan Pinnick - Commissioner
Jack Thompson - Commissioner
Gary Nelson - Executive Director
Arthur Blauvelt - Legal Counsel
Mary Nelson - Director of Finance & Administration
Randy Lewis - Director of Environmental and Engineering Services
Mike Johnson - Contract & Project Manager
Molly Bold - Westport Business Manager
Leonard Barnes - Deputy Executive Director
Marisa Yauch - Executive Administrative Assistant
Alissa Shay - Manager of Business Development
Shannon Anderson - Business & Trade Development Asst.
Seth Taylor - Marine Terminals Manager
Kayla Dunlap - Public Affairs Manager
Ross Read - Operations Manager

VISITORS
Rob Bearden - Westport Mayor
Sylvia Dickerson - Our Aberdeen
Bob Esposito - Private Citizen
Cindy Taylor - Rainier Connect
Sophie Sylvestri - PAS
Glen Ramiske - Private Citizen
Dave Haviland - Jodesha

Items discussed and action taken where required is as follows:

MINUTES:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Thompson and unanimously approved, the Commission adopted the Minutes of April 11, 2017 Regular Commission Meeting as recorded in the Minutes Book No. 20 on pages 86 through 93 inclusive.

2. By motion made by Commissioner Caldwell, seconded by Commissioner Pinnick and unanimously approved, the Commission adopted the Minutes of April 26, 2017 Special Commission Meeting as recorded in the Minutes Book No. 20 on pages 94 through 97 inclusive.

VOUCHERS:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued April 20, 2017 and May 5, 2017, ACH/Wire Transfers No. 99900840 through and including No. 99900854 and General Disbursement Vouchers No. 93906 through and including No. 94204 for payment in the amount of $2,588,685.41.

REPORTS:
NewWood Asset Recovery Update
Alissa Shay introduced Doug Moore from EuroSource, LLC. Mr. Moore had planned to be present for the meeting, but flight delays resulted in his joining the meeting over the phone. Mr. Moore reviewed the current recovery consisting of mostly domestic sales and including a Port tenant, PanelTech, for some equipment. This has resulted in over $1.4 million in recovery and just over $1 million net to PGH. EuroSource continues to advertise the assets, and as they are removed, additional space is being cleaned up to allow for new tenant agreements in this warehouse. Additional savings will result from reduced electrical usage and a rate restructure due to the substantial reduction.

Mr. Moore continued, stating that efforts will continue into year two to determine the best timing for removing and selling pieces of little value for scrap pricing. In addition, there is a total of approximately $635,000 in assets remaining for which the company will continue to market to find appropriate buyers. Mr. Moore commended the security efforts at the site which have prevented any issues of theft or other losses during this process. The SBP staff has been very reactive to removal and clean up needs, allowing for a smooth recovery process. Updates will continue into year two as needed.

Sea Scouts
Molly Bold introduced John Shaw the Director of the Westport Maritime Museum and Grays Harbor Sea Scouts Board Member. Mr. Shaw explained the goal of the program which is to get kids, especially at risk youth, excited about maritime opportunities. They work with school districts to recruit students interested in the program.

The organization was recently awarded 501(c)(3) status which will open them for additional funding opportunities. They strive to offer Career and Technical Education which will provide these students with skills that will help them with job opportunities in the maritime industry and more in the future. This is a volunteer run program with a Board of Directors focused on producing a well-rounded program that shows the students many opportunities for both vocational and life success.

Commissioner Caldwell asked how many scouts are enrolled in the program. There are 22 active scouts at this time.

Commissioner Thompson commended them on this positive program. These volunteers show a strong passion for teaching in this manner and we are glad to have this program teaching youth in the area.

School Tour Program
Kayla Dunlap reported that in 2016, the Port received the American Association of Port Authorities (AAPA) Award of Excellence for our 4th Grade tour Program. In 2017, the Port will invite all 4th graders in the county for the seventh year in a row where they will learn Port history and get to visit the Marine Terminals. There are 38 classes and over 850 students signed up for school tours.

Public Information Report
Kayla Dunlap reported on the upcoming Community Tours program. Separate tours are offered to visit the Marine Terminals as well as a walking tour offered at the Satsop Business Park in Elma. We encourage the public to attend our tours and learn more about their Port.

The Port continues to hold annual public outreach meetings with each city in our County. Upcoming meetings are scheduled in Aberdeen on May 24th at 7:15 p.m. and Oakville on July 10th at 7:30 p.m.

On April 24th the WA legislature began their first 30 day special session. At the end of the regular session in April, the Westport Marina Dredging Project was funded at $2.5 million in both the house and the senate budgets and $2 million in the governors proposed budget which was released last December. The Port will continue to follow as funding will be crucial in our dredging project at the Westport Marina.

Vessel Activity
Leonard Barnes reported for April 2017, the Port handled five deep water vessels which resulted in 106,978 MT of cargo. YTD the Port has handled 672,557.572 MT of import/export cargo. Total ship calls for 2017 have been 33 deep water vessels and two barges.

Public Comment:
Commissioner Thompson acknowledged Rob Bearden, Mayor of Westport for attending. Mr. Thompson also mentioned Glen Ramiske in attendance who was previously the President of the Local 24 unit of Longshoremen.

Sophie Sylvestri an employee with Pasha Automotive Services introduced herself to the Commission. She will be working out of California, but will be helping manage the Grays Harbor Pasha operation. She is looking forward to working with the Port.

Sylvia Dickerson of Aberdeen spoke on the recent projects being worked on by Our Aberdeen. They are working on mural projects downtown and they have a request for funding letter. With funding granted by the Port for 5 out of the last 6 years, they are thankful for the continued support from the Port.

Other projects being worked on include a connected trails project for hiking and biking in our area. Also, they are working on installing a pocket park downtown, and on restoration of the downtown critters.

Mrs. Dickerson inquired about cruise ships coming into Aberdeen for tourism. She has been working with Greater Grays Harbor Inc. to see if this is a way the area could use to create revenue again.

ACTION/RESOLUTION ITEMS:
Action Item No. 1
Mike Johnson reported on the authorization to call for bids on Contract No. 1897, Terminal Maintenance Dredging.

Annual dredging is required at Port Terminals to ensure vessels can safely use the berths to load and unload cargo for our marine terminal customers. It is estimated that approximately 134,000 CY will need to be removed between the four berths. This dredging will take place between July 15, 2017 and September 30, 2017. Additional work will take place after January 1, 2018 and would be completed by February 14, 2018.

Estimated Volumes for this contract:
T1- 20,000 CY
T2 - 60,000 CY
T3 - 30,000 CY
T4 - 24,000 CY
Total – 134,000 CY

Funds for this maintenance dredging will come from the 2017 operating budget; this contract is estimated at approximately $1.2 million.

Motion to Authorize the Executive Director to Call for Bids on Contract No. 1897, Marine Terminal Dredging was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Action Item No. 2
Leonard Barnes reported on an amendment to Lease Agreement No. 1019, Stevedoring Services of America, Inc. (SSA). Staff would like to amend Paragraph 2, “Term”.

SSA has been a tenant at this address since August of 1998. The current lease term began July 1, 2006 and ended July 30, 2011. The lease was amended in 2011 two times since this agreement bringing the expiration date to June 30, 2017. SSA is requesting that the lease term is extended for one additional year to June 30, 2018. Staff is requesting all other aspects of the lease remain the same.

This amendment has no fiscal impact to Lease No. 1019 with SSA, Inc.

Motion to Authorize the Executive Director to amend Lease Agreement No. 1019 with SSA, Inc., was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Resolution 2925
Mary Nelson reported on Resolution No. 2925, Accounts Receivable Bad Debt Write-Off.

The Port continually monitors its accounts receivable records and departments work together to encourage prompt payment by customers and tenants. When accounts become past due, collection procedures are followed. When all internal efforts have been exhausted the account is turned over to a collection agency for continued collection activity or legal action.

The Port currently has one account that has been determined to be no longer collectible and requires Commission authorization to be written off as bad debt. An annual moorage customer who owned the F/V Recruit failed to pay moorage and electrical charges beginning in 2014. Staff attempted to work with the tenant towards payment, without success. Rather than seizing the boat, the owner removed it from Westport Marina at the end of 2015. The owner still owes the sum of $21,005.70 to the Port of Grays Harbor; the charges have been turned over to a collection agency for further recovery.

Motion to Adopt Resolution No. 2925: Authorization for the Executive Director to Write-Off Bad Debt in the amount of $21,005.70, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0. Resolution adopted.

Resolution 2926
Molly Bold reported on Resolution No. 2926, Authorizing the Sale of an Abandoned Vessel at Public Auction.

After many attempts to contact the owner for payment, the F/V Perwyn has been seized for non-payment and the owner was notified of the timeframe for repayment or the vessel would be sold at auction.

Port staff has followed RCW 53.08.320 which allows for moorage facilities to seize and sell vessels whose owners fail to pay charges owing. After repeated attempts for payment, the vessel was seized by PGH on March 8th, 2017 and a certified letter sent to the owner informing him of the current status. The owner was then given 90 days to bring the account current or the Port would attempt to sell the vessel at auction.

Subject to Commission adoption of Resolution No. 2926, public auction of the vessel has been scheduled for June 7, 2017 at 2:00 p.m. Legal and public notices will be sent accordingly. If a bidder meets all of the sale requirements the boat will be transferred to the new owner.

Motion to Adopt Resolution No. 2926: Authorization for the Executive Director to Allow the Sale at Public Auction of the Abandoned Vessel Perwyn Due to Non-Payment, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0. Resolution adopted.

Resolution 2927
Alissa Shay reported on Resolution No. 2927, Authorizing the Application for Funding Assistance for a Grant to Support the Friends Landing Trail and Playground Renovation.

The Recreation and Conservation Office (RCO) requires a resolution be adopted by an agency’s governing body as part of their grant application process.

Initially, the project submitted to RCO by the Port was ranked at 51 out of 77 projects and Port staff did not think the project would make the list for funding in this is very competitive category. With the current levels of funding in both the Senate and the House, which have not been finalized, there is a remote possibility that we could receive funding. Therefore, the RCO would like the Port to approve this project and certify that we have the matching funds required to complete the project.

The Port estimates the total project cost to be $241,000 and the grant applied for requires a 50% match. We have applied for $120,000 in funding and propose to match the funds with $121,000. To date, the Port has received additional grant funds that can be applied to our matching funds in the amount of $25,000 from the Grays Harbor Community Foundation and $5,000 from the Seabrook Foundation. Should the Port not receive funding from RCO, the Port would still utilize these grant funds obtained for playground upgrades.

Commissioner Pinnick inquired on the timeline of the project. Ms. Shay stated that we should know in a month or so when budgets are finalized, but it could be longer if the budgets are not completed.

Motion to Adopt Resolution No. 2927: Authorization for the Executive Director to Make Application to the RCO Funding Board for the Friends Landing Trail and Playground Renovation Project, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0. Resolution adopted.

Resolution 2928
Randy Lewis reported on Resolution No. 2928, Authorizing the Application for Grant Funding to the Washington State Department of Transportation Aviation Division Airport Aid Program for Projects at Bowerman Field.

This report accompanies a resolution authorizing the Port to apply for funding from the Washing Department of Transportation Aviation Division 2017 Airport Aid Program for three projects at Bowerman Field.

This resolution applies to three eligible projects for which the Port is currently seeking funding. These projects include; frangible coupling installation on the runway, crack sealing repairs on the runway and drainage improvements design for the runway and surrounding areas.

The following is a breakdown for all three projects:

Project State $ Port $ Federal $ Total $
Frangible Coupling Installation 65,948.20 7,549.80 0 75,498.00
Crack Sealing 69,327.00 7,703.00 0 77,030.00
Drainage Improvements Design 8,000.00 8,000.00 144,000.00 160,000.00

 

All three projects are included in the Port’s Capital Budget. The fiscal impact of these three projects if funded by the state is $23,252.80.

Commissioner Pinnick asked when we will know if the Port will be awarded for any or all of these projects. Mr. Lewis stated that the Port would be notified by mid-July if the funds will be awarded.

Motion to Adopt Resolution No. 2928: Authorization for the Executive Director to Make Application for Grant Funding to the Washington State Department of Transportation Aviation Division Airport Aid Program For Projects at Bowerman Field, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0. Resolution adopted.

Public Comment:
No Comment

1. WORKSHOP: 1ST Quarter Port Financial Review
Mary Nelson presented a workshop on the 1st quarter 2017 financials. The review included operations, capital projects and debt service. Operating revenues have been 32.3% which is higher than last year which was 24.6% at this time. This is a 19% increase in revenues from first quarter of 2016. The Port finance department continues to listen and read the market in advance, making adjustments. Working closely with tenants; business expectations are assessed quarterly and adjusted accordingly when needed.

Commissioner Caldwell commented on this improvement, and stated our financial position sounds like good news. Ms. Nelson also stated this is still a conservative view and the Port anticipates these numbers will only be landing higher than reported. Ms. Nelson works to report only on numbers that are solid and if our tenants are unsure of the final outcome they will produce, finance reports on their conservative estimates rather than over-estimating.

Overall, 2016 was an unpredictable year. The strong US dollar negatively impacted Port business for the majority of the year. The fourth quarter of 2016 gained strength, and has continued into the first quarter of 2017, but stability is now improving.

Commissioner Pinnick inquired about the deeper draft project underway. Will this allow our vessels to ship greater volume of commodities? Mr. Barnes stated in some cases this will be possible, but there still may be draft issues at the Port where the ship is delivering. Our tenants have to be sure the vessel can unload safely on the other side.

The Commissioners thanked finance staff for another great update of our financials. They are glad to see the Port gaining ground and look forward to continuing the trend.

NEW BUSINESS:
Randy Lewis reported on the project Fish and Wildlife proposed to the Port a few months back on Satsop Business Park property. The Port sent a letter in response to their requests on the project and the agency recently replied. In their original presentation, WDFW had several ideas for this project including one that would require the use of Port property. They replied to the parameters the Port set and stated that they have dropped the option that involved Port property and will no longer need Port approval.

Commissioner Thompson inquired on the stability of the well on SBP property which came up as a concern through this process. Mr. Lewis stated that the Port is working on research and a report will be presented for what the well does need in order to remain in use by creating a 10 year action plan.

Commissioner Caldwell inquired on the stability of the facility now. Ms. Shay stated that the research being conducted will indicate if the Port would be better utilizing the other well on the property in the future.

Gary Nelson proposed the Commission consider moving the meeting of June 13th to Monday, June 12th. Art Blauvelt announced that upon approval, notice will be sent to all necessary parties and media and this change will be made.

Motion to Authorize the Executive Director to change the regular Commission meeting from Tuesday, June 13th to Tuesday, June 12th, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

• May 10th - grand opening ceremony for Overstock.com at SBP.
• May 10th – WCMAC meeting, last meeting before June submission to State of WA
• May 17th through 19th Commissioners and staff plan to attend the WPPA Spring Meeting
• May 24th - Outreach presentation, Aberdeen City Council
• May 30th - Tri-party collaboration meeting held at Quinault Beach Resort
• June 2nd – State of Grays Harbor Breakfast by GGHI
• June 6th – Public hearing for property up for re-zoning

There being no further business to come before the Commission, the Regular Meeting recessed at 10:40 a.m.

The Board then went into Executive Session to consider the acquisition, sale or lease of real estate and to discuss with Port’s legal counsel matters relating to agency enforcement actions, litigation or potential litigation. No action to be taken during Executive Session. It was announced that the Executive Session would last one and a half hours.

The Executive Session ended at 12:30 p.m. after one fifteen minute extension and the Regular Meeting adjourned at that time.