Port of Grays Harbor

Commission Meeting

February 9, 2016

The Port of Grays Harbor Commission Meeting for February 9, 2016 was called to order at 9:00 a.m.

Leonard Barnes, Deputy Executive Director, 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
Mike Johnson - Contract & Project Manager
Randy Lewis - Director of Environmental and Engineering Services
Leonard Barnes - Deputy Executive Director
Marisa Yauch - Executive Administrative Assistant
Robin Leraas - Westport Marina Manager
Alissa Shay - Manager of Business Development
Shannon Anderson - Business & Trade Development Asst.
Seth Taylor - Marine Terminals Manager
Kayla Dunlap - Public Affairs Manager
Lisa Benn - Accounting Manager
Ross Read - Operations Manager

VISITORS
Ray Brown - GHGOP
Stan Gabara - Pasha
Fred Goheen - JSC
Fred Rapp - Custom Security/ReachOne
Jon Davies - BHC
Bob Esposito - Hoquiam Private Citizen
Arnie Martin - GH Audubon
Marc Horton - Washington Project Consultants
Vicki Cummings - GHCOG
Dave Haviland - Jodesha
Kyle Mittan - Daily World

Items discussed and action taken where required is as follows:

MINUTES:
1. By motion made by Commissioner Caldwell, seconded by Commissioner Pinnick and unanimously approved, the Commission adopted the Minutes of January 12, 2016 Regular Commission Meeting as recorded in the Minutes Book No. 19 on pages 179 through 188 inclusive.

VOUCHERS:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued January 20, 2016 and February 5, 2016, ACH/Wire Transfers No. 99900634 through and including No. 99900645 and General Disbursement Vouchers No. 90433 through and including No. 90642 for payment in the amount of $2,176,537.65.

Before the Reports began, Commissioner Thompson took a few minutes to recognize Stan Gabara, of Pasha Automotive Services, in his retirement this month. A tremendous partnership between Pasha and PGH has grown throughout the years. Pasha and PGH have been business partners since 2006, but the relationship with some staff and Commissioners goes much further back to the 1990’s. Mr. Gabara was presented with a blown glass fish mounted on a plaque inscribed with well wishes. Each Port Commissioner, Gary Nelson and Leonard Barnes expressed their appreciation for Mr. Gabara as a friend and business partner. Partnering with Pasha back in the mid 2000’s greatly improved the Port and the Grays Harbor economy. This partnership has been invaluable in bringing new opportunities and encouraging other businesses to partner with PGH.

Mr. Gabara also thanked the Port Staff and Commissioners for this long running partnership. He has been in this business a long time and has done business with many Ports throughout the world. He was very complementary of the Port of Grays Harbor on many levels and is excited to see PGH continue to grow. Mr. Gabara plans to officially retire from PAS on February 15, 2016.

REPORTS:
Paneltech Update
Leonard Barnes introduced Scott Olmstead of Paneltech to present an update on their current business success. Mr. Olmstead presented on the history of Paneltech and where they are today.
Paneltech was founded in 1996, but ownership changed in 2013. They make resin using chemicals and technical equipment. From there recycled paper is dipped, dried and cut to size for a multitude of applications including overlays, Paperstone and ballistic panels. Paperstone is used to manufacture kitchen cabinets, counter tops, lab tables etc. Their goal is to use recycled waste paper to create higher value products. They operate in 65,000 square feet of various warehouses on Port property. They are dedicated to expert service and are recognized for their expertise in application and solutions in the industry. Their products continue to evolve and be found useful in many new forms. Their business is about 40% domestic and 60% export. Since 2007 when business was steady they have been able to double their growth. They employ 45 full time workers in this community. Paneltech is thankful to the Port for the partnership that has been successful for many years.

Leonard Barnes inquired about their exports. Mr. Olmstead stated that they are exporting to foreign markets in Europe, Chile and Asia.

Commissioner Caldwell commented that the previous Friends Landing owners purchased tables made of Paperstone a number of years ago for outdoor use at the facility. They are holding up well exposed to the elements daily; a very impressive product.

Leonard Barnes also commented on how pleased he is with the long standing partnership they have had for many years.

Port of Grays Harbor Recreation Lands and Facilities Plan Update
Randy Lewis introduced Vicki Cummings from Grays Harbor Council of Governments to give a final presentation on the Recreation Plan that will be submitted to the Recreation and Conservation Office (RCO) of Washington State by next month. The committee working on the Port Recreation Lands and Facilities Plan is now entering the home stretch. The plan, in its entirety, was available to the public for a month and was advertised through various avenues. The 30 day comment period for the public ended on February 4th and there were 9 comments received. These will be addressed where applicable and all documents needed for submission are expected to be ready by February 19th so the plan can be sent to RCO before the March 1st deadline.

Grants for these recreation projects are available every other year from the RCO, so priorities are ranked with this in mind. This is a six year plan from 2016-2022, but is a working document that can be updated during this time frame. A preliminary review of the document by the RCO found the plan to be thorough and complete. Everything is in place to meet this deadline comfortably with a strong document outlining each project under consideration.

Public Information Report
Kayla Dunlap noted a new title for this report section that will include various information and announcements that pertain to Port activity.

ICF is wrapping up responses to the comments received on their draft EIS documents for Westway and REG. The document for REG is being modified to reflect the recent announcement that crude oil has been removed from their list of commodities which may be handled during the expansion. A new scope and budget to finish each project is due by February 15th.

Gary Nelson presented at an Evergreen State College Class on January 30th. The class explored an array of issues surrounding fossil fuel exports in the Northwest. The day also featured speakers from the Quinault Indian Nation and Friends of Grays Harbor to discuss various perspectives on the topic.

On February 4th, Commissioners and staff attended a presentation on climate change put on by various environmental agencies. Topics included climate change, sea level rise and climate impacts which all focused on Western Washington.

On February 8th, Grays Harbor Coastal Futures held a workshop to discuss potential impacts of evolving coastal hazards in Grays Harbor County. Randy Lewis, Director of Environmental and Engineering Services attended.

On February 11th a coastal resilience workshop will be held to discuss scenarios of Cascadia Subduction Zone earthquake and tsunami hazards. This workshop is for the City of Aberdeen to explore new methods of planning for such an event.

Upcoming Port outreach presentations include; February 16th, Grays Harbor PUD, and February 17th, AHS Business Communications Class with tenant tours by Kenworth, PGH, REG, Paneltech, and Westport, LLC.

Vessel Activity
Leonard Barnes announced in January 2016 the Port handled five deep water ships and one barge which resulted in 179,123.788 MT of cargo.

The month of February is going strong with some new commodities including
yellow corn coming in from the mid-west for export. The changing economy is resulting in more boats handled to be carrying smaller loads of various products.

Commissioner Caldwell commented on the yellow corn asking if it was loading straight to the vessel since we do not have storage for that product. Yes, product is being loaded from the train to the vessel as this is the most efficient transition.

Commissioner Thompson asked how the loads are separated on the ship. Mr. Barnes commented that the products are differentiated by hatch during loading; this is the most cost effective way to control the separation of the products.

Public Comment:
No public comment.

ACTION/RESOLUTION ITEMS:
Action Item No. 1
Mike Johnson reported on an authorization to approve the purchase of Petroleum Products from MASCO in the amount of $91,682.50.

MASCO Petroleum has a card lock facility with everything PGH needs to fuel the various vehicles. This is a 3 year contract, from February 1, 2016 to December 31, 2018, where the Port will only pay MASCO for fuel used. Daily fuel prices change, but the constant gross margin of $.09 per gallon will remain in effect until the expiration of the agreement. Below is a fuel pricing grid including approximate usage quantities. The prices and quantities here show one year estimation, but the contract will be in place for longer according to this pricing agreement which will come from the Port’s Operating budget.

Commissioner Thompson clarified that this will also include fuel needed at Satsop. Yes, they have facilities closer to SBP which are used for their equipment and are included in the estimates.

Motion to authorize the Executive Director to approve purchase of Petroleum Products from MASCO Petroleum in the amount of $91,682.50 (includes taxes), was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 2
Art Blauvelt presented a motion to ratify the actions of the Executive Director in declaring an emergency, and awarding contracts for the removal and disposal of the sunken F/V Persistence.

On December 6, 2015 the vessel sank while at Float 11 in the Westport Marina. Initially, the owner planned to take responsibility for the vessel and getting it out of the water, however on December 21, 2015, it became clear that removing the vessel would require direct action by the Port.

The Port solicited bids and took the most responsive and lowest bid from Express Diving in the amount of $30,000.00. Since that date two change orders have added Morris and Morris Construction to assist the divers and added $15,000.00 to costs.

All documentation has been obtained from the owner and the vessel mortgage holder to allow the Port to take action on vessel recovery.

Brumfield Construction has been contracted to perform upland removal, testing and disposal of the vessel. Estimated cost for this will be about $14,500.00; the Department of Natural Resources derelict vessel fund is expected to contribute to some of the $14,500.00 in disposal costs.

Motion to ratify the Executive Director’s finding of an emergency and ratify the awarding of the contracts to Morris and Morris Construction, LLC, Express Diving Service, LLC and Brumfield Construction, pursuant to this finding of an emergency, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Resolution 2903
Randy Lewis reported on finalization of the PGH Recreation Lands and Facilities Plan. As reported earlier in this meeting, the plan is set to meet all requirements for RCO and is ready to be submitted for grant considerations. The committee members and Commissioners will receive a copy of the final plan with all related documents before it is submitted. This is a six year plan which includes projects from 2016-2022.

Motion to adopt Resolution No. 2903: Adoption of the Port of Grays Harbor Recreation Lands and Facilities Plan 2016-2022, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0. Resolution adopted.

Resolution 2904
Mike Johnson reported that the work for Contract No. 1852, Terminal Maintenance Dredging is complete. On December 8, 2015, Contract No. 1852 was awarded to American Construction Company, Inc., for annual maintenance dredging at Terminals 2 and 4. The project is complete and has been accepted by Port Staff. At Terminal 2 - 34,454 cy were removed and at Terminal 4 - 6,273 cy were removed. Cost for removal was $10.03 per cy which came to $408,444.01 which includes WSST. Funds for this project will come from the Port’s Operating Budget.

Motion to adopt Resolution 2904: Authorization for the Executive Director to Accept the Work Completed Under Contract No. 1852, Terminal Maintenance Dredging, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed unanimously with a vote of 3-0. Resolution Adopted.

Public Comment:
Fred Rapp from Elma asked if Paneltech changed their name. Leonard Barnes responded that their ownership did change, but their business name did not change. Next, Mr. Rapp asked if they made panels for jeeps in combat. Gary Nelson replied that they have made panels for protection on jeeps. Lastly, Mr. Rapp announced the Pair of Hearts Ball that will be held February 20th at the QBRC. Tickets are $40.00; proceeds go to local child advocacy programs.

Ray Brown of Westport stated that he attended the climate change workshop that Ms. Dunlap referred to in her report. He stated that he pointed out at the workshop the importance of CO2 in our atmosphere. He is concerned that our planet may be doing too much to reduce Carbon emissions to the point that at some point we may not have enough CO2 to live. Basic science shows that CO2 is needed in photosynthesis and counts of this compound have gone from 7,000 parts/million to 400 parts/million. He stated that if the atmosphere falls below 200 parts/million life would not be able to function. Are humans creating a bigger problem with CO2 reduction; the bigger problem may be too little CO2.

Arnie Martin of Hoquiam responded to Ray Brown’s comments stating that this is an alternative view directly relating to global warming. He does not believe the planet is at risk of running out of CO2.

NEW BUSINESS:
The Regular Meeting was recessed at 10:19 a.m. for a Special Meeting of the Industrial Development Corporation.
The Special Meeting of the Industrial Development Corporation was closed at 10:20 a.m. and the Regular Commission Meeting reconvened.

Gary Nelson went over a few dates for upcoming events
• February 9 – Shipping Club Crab Feed, record attendance expected
• February 10 – PGH Annual Business Review
• February 11 - Pilotage meeting in Seattle
• February 12 – WPPA Meeting

Randy Lewis announced a presentation of the SMP updates for Cosmopolis, Hoquiam and Aberdeen scheduled for early March.

There being no further business to come before the Commission, the Regular Meeting recessed at 10:23 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 an hour and a half.

The Executive Session ended at 12:00 p.m., and the Regular Meeting adjourned at that time.