Port of Grays Harbor

Commission Meeting

July 12, 2016

The Port of Grays Harbor Commission Meeting for July 12, 2016 was called to order at 9:00 a.m.

Randy Lewis, Director of Environmental and Engineering Services, led the meeting in the Pledge of Allegiance.

Those in attendance at the meeting were as follows:

COMMISSION AND STAFF
Jack Thompson - Commissioner
Stan Pinnick - Commissioner
Chuck Caldwell - 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
Chris Hunt - IT Manager

VISITORS
Bob Peterson - Ocean Shores City Council
Scott Jones - PNWRCC
Fred Rapp - Custom Sec.
Jon Davies - BHC Consultants
Dave Haviland - Jodesha
Ray Brown - GHGOP
Tammy Domike - CCH
Linda Orgel - CCH
Kevin Campbell - Brusco Tug
Doris Small - WDFW
Kim Smith - GHCD
Jackie Farra - Ocean Shores Citizen

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 June 14, 2016 Regular Commission Meeting as recorded in the Minutes Book No. 19 on pages 224 through 230 inclusive.

VOUCHERS:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued June 20, 2016 and July 5, 2016, ACH/Wire Transfers No. 99900708 through and including No. 99900718 and General Disbursement Vouchers No. 91608 through and including No. 91801 for payment in the amount of $2,157,720.70.

REPORTS:
Lower Satsop River Floodplain Project

Alissa Shay introduced Doris Small from the Washington State Department of Fish and Wildlife. She presented on the Lower Satsop River, a project that has been in the works since 2002. The project proposed would re-route the lower Satsop River in an area that is on Port property and very close to an operating well owned by the Port. If the Port allows, WDFW would plan to remove fill creating a pilot channel which would cut off one turn in the river. The existing bend would become an area which would only see overflow water in flood stages. All of the studies conducted by WDFW show that adding this pilot channel will be an effective way to take pressure off the bank. The river is already heading in this direction naturally, but they feel it will be beneficial to accelerate.

Commissioner Caldwell asked the status of the well which would need to be relocated. Alissa Shay replied that it is vital that we keep this water source; the well is needed at SBP either there or relocated nearby.

Commissioner Pinnick asked if the cost of relocating the well has been built into the grant funding or would this be a cost incurred by the Port. Ms. Small stated that at this point it would be on the Port to pay for the well relocation, but there may be grant funding available for the project.

Commissioner Caldwell is very concerned about losing the well. He inquired on if there were any other options considered that would be a better solution and avoid relocation of the well. Ms. Small stated there were studies completed on a few different options and this had the best results. She will send information on the other studies completed. Their goal was to make the best decision for the entire area and they are working to protect Keys Road as well in times of flooding.
Mr. Nelson asked Ms. Small about the timeline for the project and when it would be expected that the well would be relocated.Ms. Small stated they are looking for funds through the flood authority and they plan to complete the project before winter of 2017. They will need to get all of the permitting in place, but are working on this as quickly as they can.

Ms. Small stated that 7,500 cy of material will need to be removed and it has not been decided where this material will be placed. They will continue to work on the details and ask that the Port approve the project. They will send additional materials to the Port for review.

Army Corps of Engineers Projects Update
Randy Lewis reviewed a report originally given by Elizabeth Chien of the U.S. Army Corps of Engineers in June of 2016. Mr. Lewis reviewed the upcoming Operations and Maintenance Dredging as well as the Deeper Dredge Project. Placement sites for dredge materials have been established for in water placement and upland disposal. Some additional revetment repairs at Pt. Chehalis are scheduled to take place in the fall.

Commissioner Caldwell asked if dredging of the Westport Marina is still in the feasibility. Yes, Mr. Lewis stated the timeline for this is late 2017 or 2018. After samples were taken and examined it was established that 18k to 35k cy will have to be deposited upland. It will be dried out for over a year and water coming off of the dredged materials will be tested to determine the best disposal method.

NewWood Asset Recovery Update
Alissa Shay introduced Doug Moore, owner of Eurosource, LLC to review progress on the sale of the NewWood assets. Mr. Moore reported that the sale has been going smoothly. The space will be emptied, clean and rentable in 45 days or less. 30,000 sq. ft. will be available for rent and 3 of 4 transformers can be removed from service in order to reduce power and get a better energy rate. As more of the assets are sold and removed, additional areas will be available for lease with different options for various businesses.

Leonard Barnes asked Mr. Moore if he had any potential leasers of the space lined up. He stated that the space is difficult to visualize because there are large “ecology blocks” in the building waiting to be removed. It is tricky to show the property as it isn’t fully cleaned out and can be hazardous while industrial machinery is still on the premises. He believes the space on the North end of the building will be attractive to a business and hopes that will rent quickly once completely cleaned out. He estimates about 30% of material has been removed at this point.

Public Information Report
Kayla Dunlap reported that on Wednesday, June 29th the City of Aberdeen passed a first reading of an ordinance prohibiting the location of bulk crude oil storage and handling facilities in the City of Aberdeen. The term of the ordinance, includes material with US DOT placard numbers 1267 and 1288, and does not include biofuel. The ordinance will have a second public hearing and reading on Wednesday, July 13th at the council meeting.

On July 8th, several hundred people gathered in Hoquiam to protest crude oil transfer in Grays Harbor.

Public Tours of the Port are filling up, but all are welcome to reach out to the Port offices if interested in a tour of the Marine Terminals or a Satsop walking tour.

The Port is continuing community outreach throughout the year, the next month we will be presenting at McCleary, July 13th, Elma, July 18th and Oakville, Aug 8th.

Vessel Activity
Leonard Barnes announced in June 2016 the Port handled seven deep water ships and one barge which resulted in 160,531.454 MT of cargo. YTD import/export cargo totals 1,000,792.763 MT and total ship calls are 41 ships and four barges.

Commissioner Pinnick asked if the Hastings plant was still scheduled to open in September. Yes, Mr. Barnes stated the crop has been good and they are expecting a strong season.

Public Comment:
Fred Rapp of Elma stated he appreciated the work that is going into the Satsop River project. He also wanted to invite staff out for the next East County Rotary meeting at the Elma Lanes; they will be having a party that morning.

Jackie Farra of Ocean Shores asked if dredge materials were tested for quality. Yes, Mr. Lewis replied, it was through testing that the Port learned that some of the dredge materials would be required to be placed upland. The US Army Corps keeps record of all disposed materials.

Ms. Farra asked Alissa Shay if the Port is bringing in more money than is being spent at Satsop Business Park. Ms. Shay stated that we have been continuing to see new customers, but that revenues are still falling lower than expenditures at this time.

Ms. Farra asked if local schools had shown any interest in space at SBP. Schools have inquired about tours of the facility, but the Port has not advertised specifically to local schools. Meeting rooms are used by many in the community including the military and the workforce. Ms. Farra also stated that we are doing a great job.

ACTION ITEMS:
Action Item No. 1
Mike Johnson reported on the authorization to award Contract No. 1872, for Terminal Maintenance Dredging.

Annual maintenance dredging at all four of our berths is needed to keep the necessary depth for ocean class vessels calling the Port. Our estimations show we will need to have about 136,000 cy removed, but we had pricing bids turned in for 154,000 in case it is found that more should be removed.

On July 6th, bids were opened and one bid was received from American Construction Company, Inc. Funds for this project will come from the Port’s 2016 Operating Budget.

Motion to authorize the Executive Director to Award Contract No. 1872, Terminal Maintenance Dredging, to American Construction Company, Inc., in the amount of $1,430,313.40 (includes taxes), was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Action Item No. 2
Mike Johnson reported on the authorization to call for bids on Contract No. 1877, Marina Improvements Phase III (bankline and fencing).

The Port is continuing efforts to replace and upgrade the bankline at the marina. The first phase was installed in 1993, the second in 1998 and now the third phase will be installed. This will include 735 feet of bankline repairs, a new chain link style railing will be installed as well as entrance ways to Floats 5, 7, 9 and 11. Funds for this project will come from the Port’s Capital Budget.

Motion to authorize the Executive Director to Call for Bids on Contract No. 1877, Marina Improvements Phase III (Bankline and Fencing), was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 3
Mike Johnson reported on the authorization to call for bids on Contract No. 1878, Terminal 4B Dolphin Replacement.

Plans and engineering design have been provided by BERGER/ABAM Engineers, Inc., for replacement of the existing dolphin. This project will include removal of the existing creosote wood dolphin and installation of the new dolphin to required specifications. Fiscal impact is expected to be between 450,000 and 500,000 and will come from the Port’s Capital Budget.

Gary Nelson confirmed that with the replacement of the T4B dolphin, the T3 dolphin is the last to be improved to steel; all others will have been converted.

Motion to authorize the Executive Director to Call for Bids on Contract No. 1878, Terminal 4B Dolphin Replacement, was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Action Item No. 4
Mike Johnson reported on the authorization to proceed with Contract No. 1879, Utility Lane Timber Sale.

This is a contract for the harvest and hauling of about 505 MBF of logs on approximately 7 acres of land at Satsop Business Park. There are four types of timber in the area and processing will include cutting, yarding, processing, sorting, loading, and delivering to various locations. Staff will advertise the bid right away and will plan to do the work this summer. The total estimated cost for the logging services is $76,750.00 with revenue estimated about $177,450.00.

Motion to authorize the Executive Director to Proceed with Port of Grays Harbor Contract No. 1879 Utility Lane Timber Sale, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 5
Mary Nelson reported on the authorization to pay off Craft3 Loan No. 15953. Craft3 has provided a final loan payoff of $822,715.71 effective July 13th, which includes $817,894.67 in principal plus accrued interest and other charges.

This loan was set up in December of 2013 to purchase the NewWood processing equipment from receivership. The Port worked with multiple businesses that showed interest in using the equipment and space, but they never came to fruition. In May 2016, the Port hired EuroSource, LLC to assist with the asset recovery process. Since May, EuroSource has arranged asset sales totaling $948,215.00 resulting in net receipts to the Port of $787,018.00. Paying this loan off in July 2016 will save the Port $75,000.00 in interest costs. This loan bears interest at the rate of 6.25% and was due to mature in 2019.

The Port was appreciative that Craft3 allowed sale of collateral items before payoff of the loan. This allowed for a straight forward transaction now that enough equipment has been sold to cover the loan in full, which worked out very well.

Motion to authorize the Executive Director to Proceed with Pay Off of Craft3 Loan No. 15953 in the amount of $817,894.67 in Principal, Accrued Interest and Other Charges was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Public Comment:
Fred Rapp of Elma asked if there was any progress in securing the land that was used for the pontoon project. Mr. Barnes replied that this land is still not available for sale so there has been no progress towards a sale. Mr. Rapp also asked about the Harbor Paper Property owned by Rayonier and if the Port was interested in acquiring the property. Mr. Barnes replied that the Port has looked into this, but the Port is not planning a purchase at this time.

Jackie Farra of Ocean Shores commented on the oil proposals. She recognizes that Grays Harbor needs jobs, but worries the area could be destroyed if a spill were to occur, resulting in no jobs. She urges Commission to amend contracts on the oil storage proposal agreements stating that if the Port really wants, they can amend.

NEW BUSINESS:
Commission President, Jack Thompson, brought up an issue that has been visited a few times throughout recent years. He has been approached recently by a few people interested in adding a boat haul out at the Westport Marina. These are anglers that use the facility regularly and would like to have a haul out station to remove large boats from the Marina. He would like to have the Commissioners consider looking into a haul out facility again as permits have expired from previous attempts.

Commissioner Pinnick mentioned a number of years ago there was a master plan created so updating that would be the best place to begin. All three Commissioners agreed this is a good place to start and they would like Port Staff to begin looking into this project again.

Gary Nelson went over dates for upcoming events.
• July 14-15 – Gary Nelson will attend the Port Directors seminar in LaConner, WA
• July 21 – Pilotage meeting, Seattle
• August 9 – Shipping Club Golf Tournament and BBQ
• August meeting will likely include a proposal for updates to the Port Tariff.
• August meeting will also have the 2nd quarter budget review
• September will be the strategic planning session for 2017
• Early October will be a preliminary budget workshop
• October will be a budget review
• November will be the adoption of the 2017 budget.

Public Comment:
Jackie Farra urged the Commissioners to please get out of the box and look at what oil transport could create if there were an accident – no jobs at all. She requests that the Commissioners please amend the contracts with oil companies.

There being no further business to come before the Commission, the Regular Meeting recessed at 10:55 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 1:00 p.m., after one half hour extension, and the Regular Meeting adjourned at that time.