Port of Grays Harbor

Commission Meeting

June 12, 2017

The Port of Grays Harbor Commission Meeting for June 12, 2017 was called to order at 9:00 a.m.

Art Blauvelt, Legal Counsel, 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 - 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
Lisa Benn - Accounting Manager

VISITORS
Charles Wallace - Grays Harbor County Emergency Management
LCDR Todd Stansfield - Naval Disaster Response Planner
Rosie Litterer - Pirate Daze Committee
Arnie Martin - Grays Harbor Audubon
Linda Orgel - Private Citizen
Marge Brando - Grays Harbor Housing Coalition
Shelli HopsecgervCoast Controls & Automation, Inc.

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 May 9, 2017 Regular Commission Meeting as recorded in the Minutes Book No. 20 on pages 98 through 108 inclusive.

VOUCHERS:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued May 19, 2017 and June 5, 2017, ACH/Wire Transfers No. 99900855 through and including No. 99900874 and General Disbursement Vouchers No. 94205 through and including No. 94564 for payment in the amount of $2,975,212.46.

REPORTS:
Defense Support of Civil Authority (DSCA)- Exercise Update
Mike Johnson introduced Charles Wallace of Grays Harbor Emergency Management. He spoke of the need for organized preparation in case of a large earthquake and tsunami. This exercise will demonstrate to the public that there is a plan and help will be in route in the event it is needed in this area. Mr. Wallace introduced LCDR Todd Stansfield, Naval Disaster Response Planner. These agencies have been working together to create and implement a plan for disaster relief in the area of Westport.

Lieutenant Commander Stansfield spoke of the many pieces of equipment including water, land and aircrafts which will be brought to Westport for the exercises in August. FEMA asked the Navy to create a complex plan which would be used to deliver supplies, help in medical aid and clean up debris in the event of a disaster. The Navy will bring ships and other equipment into the area using the Westport Marina boat launch and will welcome spectators to view the drill.

The Navy has conducted similar drills at other Ports which allow the public to see the gear loading and unloading as it would in the case of an emergency. The drill in Westport will go for about 4 hours and will load and unload a local ambulance. The City of Westport administration is excited for this opportunity and feedback that may be gained.

Commissioner Caldwell asked if there would be signage at the boat launch area prior to the drill. Yes, Molly Bold stated that they plan to post signage and tell boaters in the office prior to this event. The boat launch will be closed to the public for a few morning hours on August 1, 2017 during the drill.

Rusty Scupper’s Pirate Daze
Molly Bold introduced Rosie Litterer, Pirate Daze Committee. Ms. Litterer invited all to join in the fun for the sixteenth annual Rusty Scuppers Pirate Daze Festival. Throughout the weekend of June 23rd to 25th there will be about a dozen bands in addition to various other types of entertainment and fun. Ms. Litterer extends a big thank you to the Port of Grays Harbor for financial support of the festival. She is hopeful it will be another success and hopes many will come out for the festivities.

Westport Marina Activities Update
Molly Bold reported on the latest happenings at Westport Marina. She introduced the newest employee at the Marina and stated she is a sea captain, and is very familiar with fishing trends and regulations. Seagra Carkonen presented on the season and fish reports for the year so far. She re-capped fishing that has already started and the anticipation of tuna season that will begin in mid-July. The Marina boat slips have been very busy and Ms. Carkonen has been learning first-hand how to maximize space for all the boaters that seek out Westport Marina for fishing.

Ms. Bold reported prices for crab and prawns have been really strong and fishermen have been in good spirits as things ramp up for the rest of the season.

There are many events planned throughout the summer and new commerce opportunities have been popping up in the city of Westport attracting more to the area. Port staff continues to focus on maintenance and beautification of the marina area in the summer months. They are gearing up to add seasonal staff to maximize the better weather months. Reservations for the year went smoothly and the marina is full throughout the summer

Commissioner Pinnick asked if Fourth of July fireworks are planned. Ms. Bold stated that it was up in the air for a bit, but the celebration is planned this year.

FY2017 Port Security Grant Program
Mike Johnson reported the Port is in process of applying for the Security Grant Program. Lisa Benn presented further detail on past grants the Port has been awarded and the needs being addressed in the current application.
The improvements which will be addressed in the application due this month will cover three improvements which will be listed separately and may be awarded individually. Applying for them in this way means that some portions may be granted funding while another may not; it allows greater flexibility if the grant program feels strongly about individual items.

The first item is installing covered areas at our two main terminal entrances, Terminal 2 and Terminal 4, to allow ease of inspections as trucks enter the Port area in inclement weather. Next, the Port is applying for a permanent restroom at Terminal 4; the guards currently use a portable restroom. Lastly, the Port would like to install additional security cameras throughout the Marine Terminals area.

Mr. Nelson asked if the covered areas will also require new security arms for any truck lanes. Mr. Johnson stated it would be contingent on whether the restroom project at Terminal 4 is granted, in that case there would be a new arm installed.

2017 4th Grade Tour Wrap Up
Kayla Dunlap reported on the 4th grade tours that took place in late May and early June. The Port welcomed 38 classes from throughout the county to learn more about the Port through an indoor presentation and a bus tour of the Marine Terminals. The Port will be requesting feedback from the teachers and asking for recommendations for improvements in our curriculum packet provided ahead of time or in the tours given.

The Port would like to thank the Grays Harbor Community Foundation and the Gladys Phillips Cultural Tours Grant which continues to offer full reimbursement for travel to all schools in the county as well as an offering of a free lunch for each student on the day of their visit. This is a very generous donation and allows schools throughout the county to participate; we appreciate their partnership in allowing this to continue to be such a successful program. Other partners that allow this program to succeed include Hesco, AGP, REG, PanelTech, Pasha and more that offer samples and/or gifts for the students.

Public Information Report
Kayla Dunlap reported that last month Port Commissioners and staff along with representatives from REG and Contanda participated in the Grays Harbor Economic Summit hosted by the Quinault Indian Nation. All parties worked together presenting on new developments and future opportunities for economic development in the area.

The Port continues outreach presentations for each city council in the county. Upcoming meetings include: Oakville, July 10th at 7:30 p.m., Hoquiam, August 14th at 7:00 p.m. and Ocean Shores, August 28th at 6:00 p.m.

The Port continues to follow the legislature to ensure the Port will be awarded funding for our Westport Marina Dredging project.

Grays Harbor received an additional $3.336M in the Corps FY17 work plan bringing the total to $13.334M. Staff will meet with the Seattle District soon to discuss how the extra funding will be spent.

Satsop Business Park was the recipient of WPPA’s Outstanding Job Creator Award for the Overstock.com project which led to 150 new jobs at the park.

Vessel Activity
Leonard Barnes reported for May 2017, the Port handled nine deep water vessels and one barge which resulted in 155,029 MT of cargo. YTD the Port has handled 827,586.456 MT of import/export cargo. Total ship calls for 2017 have been 42 deep water vessels and three barges.

The Port is looking at strong numbers for this time of year especially. Projected for June we are expecting 11 deep water ships; more than we were originally projecting. The Port will be loading a ship heading to South Korea for the first time and is looking forward to this expanded market.

Public Comment:
Linda Orgel of Aberdeen presented the idea to the Commission to add a Citizen Advisory Committee to the Port of Grays Harbor. Ms. Orgel stated that other ports in Washington have formed these committees, and she presented the information used by the Port of Olympia to form their committee. The Commission will consider this idea presented.

ACTION/RESOLUTION ITEMS:
Action Item No. 1
Mike Johnson reported on the authorization to proceed with Contract No. 1904, Fuller Forks Timber Sale.

The Port would like to contract for the harvest and hauling of approximately 255 MBF of sawlogs, peelers and poles on approximately 8 acres of land at Satsop Business Park.

Staff will advertise this contract right away and if a responsive bid is received, will plan to do the work this summer. The estimated cost for this contract is $36,000.00 and the estimated net revenue is $81,325.00

Commissioner Pinnick asked if this contract would be in concert with Grays Harbor College. Mr. Johnson stated yes, Todd Bates of GHC will run the operation.

Motion to Authorize the Executive Director to proceed with Contract No. 1904, Fuller Forks Timber Sale, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Resolution 2929
Randy Lewis reported on the approval of Resolution No. 2929, the 6 year Transportation Improvement Program (TIP). On an annual basis the Port is required to update its 6 year TIP which allows the listed projects to be eligible for state or federal funding. This plan is also used as a local planning tool for projects that may not be eligible for state or federal funding but are still surface transportation related. The plan can be updated during the year if necessary for changes in project definitions and required information.

Mr. Lewis stated there were two projects added this year, but no projects were completed last year so none will be removed. He pointed out that it is better to leave a project on the plan right up until it is fully complete in case anything comes up at the end. The Port can always leave a project in, but to add a project at any point requires an amendment to the plan.

Commissioner Thompson asked if we will be adding a grade separation on Port Industrial Way. Yes, a bit more information on this project is needed, but it can be added to the plan when we are ready.

Motion to Adopt Resolution No. 2929: Adoption of the Port of Grays Harbor Six Year Transportation Improvement Program 2018-2023 was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0. Resolution Adopted.

Resolution 2930
Art Blauvelt reported on Resolution No. 2930, authorizing the Executive Director to change the location and time for the July Commission Meeting.

The Port plans to hold the upcoming July Commission meeting on its regular Commission day, Tuesday, July 11, 2017. The regular meeting will be held at Satsop Business Park at 1:30 p.m. Notice of this change will be advertised to the public. The Port will also be hosting a business after hours in the same location at 5:30 p.m. the same day.

Motion to Adopt Resolution No. 2930: Authorization for the Executive Director to Change the Location and Starting Time of the July 11, 2017 Commission Meeting, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0. Resolution adopted.

Public Comment:
No Comment

1. WORKSHOP: The New Normal: Sustainable Growth for the Industrial Properties and Bowerman Airport
Leonard Barnes introduced Shelli Hopsecger to conduct a workshop on two lines of business at the Port. Ms. Hopsecger stated the task at hand today was to spend time on the Industrial Properties area as well as Bowerman Field Airport. Ms. Hopsecger mentioned how far the Port has come through the years. It wasn’t very long ago that the Port only had 9 ships call in one year. Now we are getting that or more in one good month of traffic.

Mr. Barnes stated the importance of history as well as a strong vision and plan for the future. The Port has made this progress by turning every rock and looking for all opportunities.

There are different types of users who choose to lease Port buildings and different entities that benefit from the users choices. Leasehold excise tax goes to Grays Harbor County; this helps local community fire and police districts. The state and the county benefit from tenants of the Port.

Ms. Hopsecger asked that the Commissioners review the policy that has been in place to see if they would like to make any updates.

Mr. Barnes noted that the last time they updated the policy it was due to inconsistencies in lease agreements. The Port worked to streamline this process and added a fair market value clause to all new leases. The Port now works to compare our space with other business spaces offered to remain competitive yet fair in the community. The standards followed come from the Department of Revenue.
Art Blauvelt mentioned that the Port has created a model lease which is a standardized form that a new potential tenant can view to see where the Port begins with negotiations.

Mr. Barnes mentioned there may be a few more changes coming to the standard lease structures; he will be working on changes to present to staff for input by the end of 2017. They are looking to modernize the policy.

Commissioner Pinnick asked if Mr. Blauvelt would be able to review the policy as it relates to ORMA. Yes, he does plan to review the policy with this in mind.

Ms. Hopsecger commented that this policy has proven itself with long term tenants here as well as at SBP.

Mr. Nelson mentioned a few infrastructure development concerns. Grays Harbor has difficulty offering strong medical services and health care options. Also, education for K-12 students in this area does not rank highly. These are some very important factors when recruiting new businesses and unfortunately there has been a decline in these critical services in this county as of late.

Mr. Barnes stated the continual work to reduce costs and keep them as flat as possible in order to maximize revenues.

Ms. Hopsecger asked the group what opportunities in the marketplace they may see in the short term 2-5 years. Commissioner Pinnick stated the importance of working with existing tenants. Continue to be good partners and work with these businesses if they need a larger space etc. Also, be aware of co-location opportunities where tenants may gain a mutual benefit being housed in close proximity.

Commissioner Pinnick asked if there is a need for increased signage at the rail stops. Mr. Nelson stated if Terminal 3 acquires a consistent tenant then usage in this area could increase, which would prioritize the need for additional security measures.

Ms. Hopsecger wrapped up with the Industrial Properties line of business and moved on to Bowerman Airport trends.

Commissioner Pinnick feels that having the airport in our area gives the opportunity for a stronger community.

Commissioner Thompson commented that the Port needs to figure out how to turn the airport’s financial position to a positive. The airport has not operated at a positive net cash flow. This requires other lines of business to subsidize the airport operations, maintenance and improvements.. There have been three attempts to offer commuter services with similar plans, but none of them were able to turn a profit. The Port even put in baggage handling equipment to accommodate commercial service, but none of these trials found sufficient demand to continue operations.

Mr. Nelson does not see a way to make this airport profitable. Other regional general aviation airports rely upon surrounding land leases for financial support. They are also able to sustain amenities like restaurants and aircraft maintenance.

Mr. Barnes reported that in past years, fuel contacts with the military helped to offset some of the costs of the airport. These contracts no longer exist, and all attempts to gain them back have been exhausted.

Ms. Anderson mentioned that we have one land lease with a private hangar. Most of the other hangar buildings are very old and would need a lot of work to be able to keep them in good condition. The Federal Aviation Administration assists with airport improvements that directly affect aviation, like runways, taxiways and navigation aids. Without this vital funding, the Port would not be able to maintain the airport to FAA standards.

Mr. Nelson stated that he would not recommend rebuilding hangars; the Port would not be able to recover these costs. It is of note that as a general trend pilots that keep personal planes are aging and the younger generations cannot afford to keep individual planes as was more common in the past. It is believed that this trend is affecting usage at Bowerman Field.

Ms. Anderson noted that investing to attract users to the facility has proven to not be lucrative nor effective at this airport; a better approach would be to invest when a customer is in hand.

Commissioner Pinnick mentioned the time the airshow came and drew a crowd to the airport. Mr. Barnes stated that when these events take place, the Port is required to participate and required to pay them to arrive.

Commissioner Thompson mentioned the vacant restaurant building that used to run as Lana’s. Mr. Barnes said that unfortunately, that building needs so much work it is not profitable to get another restaurant in there. The last operator chose to relocate along the main highway corridor at the foot of the Simpson Avenue Bridge. Potential operators have looked, but when they see all of the inspection findings there are too many updates that would be required. Large things like the sewer and the structure need attention and the costs outweigh the benefits to fix everything. Staff continues to advertise the restaurant building and other facilities in general aviation publications.

Commissioner Thompson also brought up the idea that had been visited years ago to close the airport, but the FAA will not allow it without full grant repayment or building an equivocal airport at another location which would be too costly.

Commissioner Caldwell feels that we have given this airport plenty of opportunity. There is always the possibility of something new, but at this point the Port has tried many things with no long term success.

Ms. Hopsecger wrapped up and commented on the productive discussion. The Port will continue to be open to new ideas, but it is clearly a challenge to make this airport profitable.

NEW BUSINESS:

Gary Nelson went over dates for upcoming events.
• June 13th -14th – Kayla Dunlap and Leonard Barnes will be attending the AAPA Economic Development Seminar in Portland, OR
• June 15th - Pilotage meeting in Seattle
• June 19th-21st – Commissioner Pinnick and Gary Nelson will attend the PNWA Summer Conference in Seattle
• July 11th – Regular July Commission Meeting will be held at SBP as stated in the earlier resolution

There being no further business to come before the Commission, the Regular Meeting recessed at 12:20 p.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 and fifteen minutes.

The Executive Session ended at 2:15 p.m. after one half hour extension and the Regular Meeting adjourned at that time.