Port of Grays Harbor

Commission Meeting

February 14, 2017

The Port of Grays Harbor Commission Meeting for February 14, 2017 was called to order at 9:00 a.m.

Gary Nelson, 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
Randy Lewis - Director of Environmental Engineering Services
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
Lisa Benn - Accounting Manager
Chris Hunt - IT Manager

VISITORS
Doris Small - WDFW
Michelle Cramer - WDFW
Marnie Tyler - Ecolution
Bob Esposito - Private Citizen
Mark Indrebo - WSE
Linda Orgel - CCH
Theressa Julius - GHCOG
Dave Haviland - Jodesha

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 10, 2017 Regular Commission Meeting as recorded in the Minutes Book No. 20 on pages 55 through 66 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, 2017 and February 3, 2017, ACH/Wire Transfers No. 99900802 through and including No. 99900814 and General Disbursement Vouchers No. 93136 through and including No. 93364 for payment in the amount of $2,642,745.91.

REPORTS:
WDFW Lower Satsop Floodplain Restoration and Erosion Reduction Project
Alissa Shay recalled a previous presentation by WDFW in July of 2016 to the Port Commission. This presentation discussed the possibility of manually helping the Satsop River to change course in order to protect agricultural lands in the area. There are recurring issues with flood and erosion through the winter months and it is clear through historic maps that the river changes course through weather events and flooding regularly over time. At the previous meeting, Port Commissioners were concerned about the plan to reroute the river as it was near Port property and could negatively impact the functional well used by Satsop Business Park.

Alissa Shay introduced Marnie Tyler, Ecolution and Mark Indrebo, Watershed Science & Engineering to speak on the latest research conducted on this site and what they predict will happen with the river if no change is made. There are several alternatives these agencies have researched. The preferred method they are leaning toward is making a riparian notch less than half the way between two curves in the river and letting nature do the rest of the work as it will want to migrate in the new direction. There is a chance this will ease river flow near the Satsop well, but it is very difficult to predict. With all of the modeling, they still cannot rule out the possibility of a negative impact to the Port well used by SBP.

The agencies feel this would be the most beneficial to all parties with a stake in the land on in all directions of the river. It has been eroding and removing portions of agricultural land adjacent to Port property, and the agencies feel that erosion near the well will continue with or without a change to the river.

Commissioner Caldwell is worried that if this change is completed it could create damage to the area of our well. He inquired on the responsible party for replacement of the well, should it become unable to be used.

Mr. Indrebo stated that the rip rap around the well is beginning to fail now and the Port should be concerned if nothing is done. They feel the change they are proposing could be beneficial to Port land as well as other surrounding parcels.

Commissioner Pinnick inquired on the timeline for the decision as well as action. WDFW would like to discuss these ideas with regulators immediately. They would like to get USACE and DOE on board soon to get wetland mitigation going. These steps could begin with a JARPA signed by the Port. This would be an agreement between the Port and WDFW to look into the project further, but a more thorough agreement would be needed to allow for construction. If agreed, construction could begin as early as September/October 2017.

Commissioner Thompson asked if FEMA funds were used to complete the rip rap around the well. Mr. Blauvelt replied that yes, the Port did receive FEMA funds to reinforce the well a number of years ago.

Mr. Barnes asked about costs. This project would cost about $150,000 to complete.

Port staff and Commissioners will continue to work with WDFW to determine if they can come to an agreement on a scenario that will work best to alter the river for a long term solution for all parties.

Update on Vessel Issues in the Westport Marina
Randy Lewis reported on several vessels in Westport Marina that are at risk for sinking or have already sunk and had to be raised while moored. There are several scenarios, but vessels that have recently been removed or are in process are: 32 Retriever, F/V Charlotte, F/V Restless C, and Lady Lillian.

No Port funds were used in the cases of the 32 Retriever, or the F/V Charlotte in removal from the marina. Costs for the Restless C will be below the insurance coverage allowed, so Port funds will be needed for this vessel. The Lady Lillian did not have insurance coverage and the costs will well exceed the $150,000 the owners were able to put towards the vessel after it sunk in the marina. Port staff continues to work with the Port insurance company on the claim. All parts or scraps that could be sold for money were removed prior to demolition and will be credited back to the balance of the costs owed.

Port’s Day
Kayla Dunlap reported on the 2017 Port’s Day at the legislature in Olympia. Ms. Dunlap attended along with Westport Business Manager, Molly Bold and Commissioner Jack Thompson. They touched on important issues for the Port including Westport Marina Dredging, CERB program opportunities, and the East Aberdeen Mobility Project in individual meetings with our local Caucus members and also attended group events put on in honor of Port’s Day.

Westport Boat Launch Improvement Updates
Molly Bold reported on the progress of an RCO grant application. She went over the requests and design ideas that were presented to the RCO Funding Board in January. Some of the items proposed include: an automated parking payment system, new bathrooms, a fish cleaning station, updates to the parking area and landscaping.

RCO will release the ranking of projects presented and funding opportunities subject to Legislative approval in 2017. Preliminary design could begin as early as April 2017 for a potential completion date of July 2018.

Commissioner Caldwell asked where the waste from the fish cleaning station would be released. Mr. Lewis stated that they plan to work with the city to see if it can go through the sewer. They are looking into a fine grinder which would break down the matter, but it may also require treatment for all of the fish oils. They will be sure the system works for City and the Port prior to installation.

Commissioner Pinnick asked the dimensions the wash-down system would accommodate. Mr. Lewis said there would be room to wash a 32 foot boat.

Commissioner Thompson asked if there would be fees involved on the wash-down system. Mr. Lewis stated that is definitely under consideration, but has not been decided.

Public Information Report
Kayla Dunlap reported on the Washington State Supreme Court decision released January 12th in regard to the decision to require Imperium and Westway, now REG and Contanda, to abide by Ocean Resources Management Act requirements. The decision overturns the Shoreline Hearings Board and Court of Appeals decision that ORMA does not apply to the proposed projects. This ruling is the first time ORMA has been applied to a project in Washington State. Contanda will be required to meet the additional eight regulations in order to move forward with the project.

The Hoquiam City Council met on January 23rd and reported that they had given Contanda notice that the permit from the City of Hoquiam was on hold until they are able to provide a plan as to how they will meet the ORMA requirements.

The Port continues to maintain outreach efforts in the community. Presentations were given recently in the cities of Elma and McCleary. The City of Montesano is scheduled for Tuesday, February 28th.

The Port will hold its 4th Annual Business Report on Wednesday, February 15th at 7:30 a.m. at the Log Pavilion.

Vessel Activity
Leonard Barnes reported for January 2017 the Port handled nine deep water vessels and one barge which resulted in 177,730 MT of cargo. This was a strong month and the first quarter, looks like it will continue to be busy; a trend for the first quarter in recent years.

Commissioner Pinnick asked for an update on how the Port is working with Volkswagen. Mr. Barnes stated that many VW’s have already been trucked into the Port and are being handled by Pasha. At this point the Port yard is full and there is a contract in place for more traded in VW’s to be stored in parking areas at the Satsop Business Park until further arrangements are made for the vehicles. Pasha will also be handling the cars at the Satsop location.

Public Comment:
No public comment.

RESOLUTION ITEMS:
Resolution 2921
Randy Lewis reported on Contract No. 1872, Terminal Maintenance Dredging. On July 12, 2016, Contract No. 1872 was awarded to American Construction Company, Inc., for annual maintenance dredging needs. The berth at T-3 did not require any dredging, but between T-1, T-2, and T-4 a total of 94,816 cubic yards were removed at a cost of $927,442.41. This dredging is essential to ensuring that the berths are kept at the necessary depth for ocean class vessels.

Motion to adopt Resolution No. 2921: Authorization for the Executive Director to Accept the Work Completed Under Contract No. 1872, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0. Resolution adopted.

Resolution 2922
Art Blauvelt reported on Resolution 2922, authorizing sale and removal of abandoned vessels in the Westport Marina. Recently, the Port has taken legal action to impound seven vessels at the marina for failure to pay moorage and electrical bills. Required laws have been followed notifying each owner of the status of their vessel in numerous attempts. No response was received by any of the owners through various methods of contact and the Port is planning to hold an auction to sell these vessels on February 22, 2017. Requirements of the winning bidder will be made clear as far as insurance requirements and removal of the vessel from Westport Marina if deemed unseaworthy until proper maintenance has been completed. Any funds received will go towards the existing balances owed on each vessel, the original owners will be held responsible for any balance remaining on their delinquent charges.

Motion to adopt Resolution 2922: Authorization for the Executive Director to Proceed with the Auction, and Allowance of the Port Director to Enforce the Requirement of Marine Insurance and Removal of the Vessel from Westport Marina, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed unanimously with a vote of 3-0. Resolution Adopted.

Resolution 2923
Art Blauvelt reported on Resolution 2923, rescheduling the regular Commission meeting from Tuesday, March 14th to Thursday, March 9th.

The regularly scheduled meeting of Tuesday, March 14th at 9:00 a.m. will be changed to Thursday, March 9th at 10:00 a.m.

Motion to adopt Resolution 2923: Authorization to Reschedule the Regular Commission Meeting from Tuesday, March 14th at 9:00 a.m. to Thursday, March 9th at 10:00 a.m., was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed unanimously with a vote of 3-0. Resolution Adopted.

WORKSHOP: PGH Year End Financial Review
Mary Nelson reported on the year-end financial review. The 2016 budget came in very close to what was expected from previous quarterly reviews. The Port continues to remain conservative in changes to the budget so numbers stay accurate throughout the year.

It was a record year for AGP export; they finished strong in 4th quarter. The Port has held steady at the Marine Terminals with 98 vessels for the year which is down slightly from previous years, but is still strong vessel traffic. The Marine terminals have been running about the same volume as last year, but the net operations trend line is beginning to go negative which is concerning. With this knowledge, it will be a priority to get these numbers steady or increasing in 2017.

Some smaller business tenants including Hesco are growing. Hesco is currently looking for expansion opportunities, while Paneltech has recently increased business space and operations in their company on Port property.

March 9th will be the Westport Marina strategy session and will highlight some key issues being worked on at the Marina facility.

Public Comment:
No public comment.

The Regular Meeting was recessed at 11:26 a.m. for a Special Meeting of the Industrial Development Corporation.

The Special Meeting of the Industrial Development Corporation was closed at 11:28 a.m. and the Regular Commission Meeting reconvened.

NEW BUSINESS:
Commissioner Pinnick mentioned the Grays Harbor Shipping Club Crab Feed taking place tonight, February 14, at the Grays Harbor Country Club.

Commissioner Thompson mentioned that a bar pilot from the Port of Los Angeles will be in the area next month and would like to get a tour of the Port.

There being no further business to come before the Commission, the Regular Meeting recessed at 11:30 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 hour.

The Executive Session ended at 1:00 p.m. after one 30 minute extension, and the Regular Meeting adjourned at that time.