Port of Grays Harbor

Commission Meeting

November 8, 2016

The Port of Grays Harbor Commission Meeting for November 8, 2016 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
Jack Thompson - Commissioner
Stan Pinnick - Commissioner
Chuck Caldwell - Commissioner, by phone
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
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
Chris Hunt - IT Manager
Lisa Benn - Accounting Manager

VISITORS
Fred Rapp - Custom Sec.
Scott Jones - PNW Carpenters Union
Bob Esposito - Hoquiam Private Citizen
Arnie Martin - GHAS
Cindy Taylor - Rainier Connect
Dave Haviland - Jodesha
Jon Davies - BHC Consultants
Todd Bates - GHC
Kevin Campbell - Brusco Tug
Linda Orgel - CCH
Rob Bearden - Mayor of Westport

Items discussed and action taken where required is as follows:

MINUTES:
By motion made by Commissioner Caldwell, seconded by Commissioner Pinnick and unanimously approved, the Commission adopted the Minutes of October 11, 2016 Regular Commission Meeting as recorded in the Minutes Book No. 20 on pages 27 through 34 inclusive.

VOUCHERS:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued October 20, 2016 and November 4, 2016, ACH/Wire Transfers No. 99900759 through and including No. 99900769 and General Disbursement Vouchers No. 92437 through and including No. 92657 for payment in the amount of $2,096,226.78.

REPORTS:
Final Forest Product Sales Report, Contract No. 1879 Utility Lane Timber Sale
Mike Johnson reported that the final sales report for the most recent timber sale at Satsop Business Park was finalized. He introduced Todd Bates who helped with the planning of this logging for long term sustainability. The original plan was for work in a different area than was completed. While in the planning stages, a root rot disease was found to be just beginning in the area that was logged before it became too advanced. The stand was approximately 115 years old and dominated by Douglas fir. They got a bit of a late start since this was not the original location picked. In 45 days they hauled 93 loads and 120 thousand board feet and the project brought more revenue than expected. It was an area that was clear cut with variable retention leaving diversity of habitat.

Gary Nelson commented that the loggers did a great job of sorting and maximizing the return on logs. He also mentioned the forestry program at GHC and asked for an update on progress. Mr. Bates stated that the program is going really well. It is working out well for students that were already working towards an Associate of Arts, now they can complete the four year bachelor’s degree at the college.

TimberWorks Master Plan Update
Randy Lewis reported on the TimberWorks project. This project is a team effort between the cities of Aberdeen and Hoquiam to come up with plans to reduce flooding issues in the low lying areas of the cities. Homeowners in these areas pay large premiums for flood insurance and the cities would like to help reduce these costs and reduce risk of large floods in the future. There are several strategies which are being looked into based on costs and feasibility. A levee plan has been discussed, but this would cost a lot of money for the cities and it would take a certification process which could take time and be very expensive in order to actually change the flood status with insurance companies. There are other cost effective plans in the works which include rain gardens and other city roadway improvements to increase area for the water to drain. The bottom line is that the city drainage facilities are undersized for storm weather events so other options for water basins and increased absorption capacity need to be explored.

Commissioner Pinnick clarified that Port property is not included in the flood plain area. Mr. Lewis replied that the Port is definitely not in the flood plain area, this has been certified.

Commissioner Thompson asked in the case of a levee being built, would waterfront properties still be waterfront. Mr. Lewis stated that the TimberWorks group should do a presentation on the specifics of the levee option. He is not sure if the levee would impede waterfront property.

Update on Recent Vessel Incidents in Grays Harbor
Randy Lewis reported on recent vessel issues in Grays Harbor and some in Westport Marina. All are being handled by the required agencies with spill prevention and response at the forefront. Two of these vessels sank while at berth in the Westport Marina. There is great cost to getting these vessels out of the water and removing oil and gas that may spill from the vessels.

Commissioner Pinnick asked if either vessel had insurance. No, neither of the vessels that sank at berth had insurance at the time of their respective incidents.

Commissioner Caldwell commented on the importance of boat owners having insurance. It became a state law in 2014 for boaters to have insurance. Environmental cleanup following an incident is very expensive, the state has an emergency fund to help if insurance money is exceeded or in the case there is no insurance. The Port continues to work to ensure all vessels in the marina are properly insured, as the funds from the state are limited.

Westport Marina Summer Activity Report
This report was moved to the December Commission meeting.

Public Information Report
Kayla Dunlap reported that the City of Hoquiam published a Notice of Application for shoreline substantial development in October; the 30-day comment period will end November 19th. The City will then have 120 days to make a decision on the application. They will be hiring an unbiased consulting firm to write a draft decision for the application.

The Port continues community outreach presentations throughout the county and will plan to present at City Council meetings in Ocean Shores on November 14th, Hoquiam on November 28th, Cosmopolis on December 7th and Grays Harbor PUD on December 19th.

Vessel Activity
Leonard Barnes announced in October 2016 the Port handled ten deep water ships, resulting in 176,338.572 MT of cargo. YTD import/export cargo totals 1,669,103.517 MT and total ship calls are 73 ships and five barges.

Mr. Barnes mentioned a new product being handled by the Port which is canola meal pellets. The marine terminals are expected to finish strong in November and December.

Public Comment:
Commissioner Thompson welcomed Mayor Bearden and thanked him for his attendance. Mr. Thompson also welcomed Mr. Fred Rapp as he has been dealing with health issues.

Linda Orgel of Aberdeen inquired on the connection between Timberworks and the cities. Mr. Lewis confirmed that both cities are applying for funds through the flood authority. The levees seem to be moving forward, there is support for the project.

Fred Rapp of Elma stated he was happy to be back and able to attend the Port Commission meeting. He commented that Leonard’s marine terminal reports are great news. Mr. Rapp also wanted to announce a new business in Elma. There is a new Burger King off the highway, he encourages all to visit.

ACTION ITEMS:
Action Item No. 1
Mike Johnson reported on the authorization to proceed with Contract No. 1890, Satsop Enterprise Warehouse Fence.

A security fence has been requested by the new tenant. A perimeter fence around the exterior paved area of the building will be 8 feet high and chain link style with a 20 foot gate. Estimated cost for the project is $86,000. Contractors will be selected from the Port’s Small Works Roster to submit bids for the work.

Gary Nelson stated that there will also be lighting added to the area which is estimated to cost between 20,000 and 25,000, but Port staff time and materials on the property will be used. The project is included in the Port’s Capital Budget.

Motion to authorize the Executive Director to proceed with Port of Grays Harbor Contract No. 1890, Satsop Enterprise Warehouse Fence, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 2
Art Blauvelt reported on the authorization to allow the Executive Director to Contract for the Removal and Demolition of the F/V Lady Lillian.

The F/V Lady Lillian Sank on September 3, 2016 at the Westport Marina. It is unknown at this time why the vessel sank at the marina. The owner of the vessel has put funds toward the raising of the vessel, but the costs exceed the funds and there is no marine insurance on the vessel.

The Port has negotiated with the owner for release of custody of the vessel. The owner has agreed, as raising the vessel will be a salvage effort and the boat will be demolished. Total costs are not known at this time, but the Port is working with its insurance company on a combination of the owner’s deposit, Port funds and insurance proceeds to pay for the work.

Commissioner Caldwell inquired on an update to the number of vessels in the marina that have insurance. Lisa Benn stated that the Port has current insurance documentation for 56% of the vessels, but there are more being received daily. Commissioner Caldwell asked what our next step will be. The Executive Director does have the right to deny access to the marina to those that are not following the state law. At this point, individual letters and calls are being made to get in contact with boaters that have not fulfilled the requirement.

Mr. Nelson stated that Port Staff continues to identify high risk boats in the marina in order to monitor them. Commission Pinnick asked if the Coast Guard conducts annual reviews on vessels. No, this is not required so it is necessary for marina staff to monitor vessels in the harbor.

Motion to authorize the Executive Director to negotiate and execute such contracts as are reasonably necessary to remove and dispose of the F/V Lady Lillian from the Westport Marina was made by Commissioner Pinnick and seconded by Commissioner Caldwell. Motion passed with a vote of 3-0.

Action Item No. 3
Mary Nelson reported on the consideration of an optional property tax levy to recover property tax revenue lost during 2016 due to adjustments and refunds made to taxpayer accounts by GH County Treasurer. This optional levy would be in addition to the Port’s regular property tax levy proposed in Resolution 2912 which will be presented later in this meeting.

During the year, adjustments are made to taxpayer accounts by the GH County Treasurer. For 2016, the adjustments total $33,649.43 and represent lost revenue to the Port.

There are three options in considering this special Refund Levy.
a) Re-levy ALL lost revenue from 2016;
b) Re-levy PART of the lost revenue; or
c) Re-levy NONE of the lost revenue.

Mr. Nelson asked if the County can collect on our portion. Ms. Nelson stated that the county cannot, they have their own portion to consider, but cannot take our levy.

Commissioner Pinnick asked if it will impact our ability to collect in 2017. No, this has not impact on future collections.

Staff recommends that the Port Commission approve option (c) listed above, and authorize the Director of Finance & Administration to notify the County that the Port does NOT WISH TO RE-LEVY ANY additional taxes to recover lost tax revenue from the prior year’s levy. Motion to accept the Staff recommendation to choose option (c) was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

PUBLIC HEARING - 2017 BUDGET
Mary Nelson reported on the public hearing being held today in regard to the 2017 Port budget. This was advertised twice in the paper to the public prior to the meeting. Ms. Nelson mentioned that the budget had been available to the public in a booklet at the last meeting as well as here today; there have been no changes since the last budget presentation

The proposed 2017 budget includes operating revenues totaling $25 million and expenses of $24.2 million. The Port’s cash reserves are expected to be $17 million at the end of 2017, with $6.6 million maintained in the general fund.

No Public Comment.

The Public Hearing was closed at 10:44 a.m. and the Regular Commission Meeting reconvened at that time.

Resolution 2912
Mary Nelson reported on the approval of Resolution No. 2912 for adoption of the Ports 2016 Property Tax Levy for Collection in 2017.

Each year the Port’s property tax levy is set as a part of the budget process. Port staff recommends a 0% increase in the tax levy and that the Port preserve its ability to enact the .953% increase allowed by the law in the future. This can be enacted at any time in the future to meet financial needs.

The Port’s levy rate for 2016 is currently $0.4113 per $1,000 of property value and 3% of a property owners total tax bill. The maximum levy rate allowed is $0.45; it is expected to remain at $0.4113 for 2017.

Motion to adopt Resolution No. 2912: Adoption of 2016 Property Tax Levy for Collection in 2017 to include a 0% increase over the previous year was made by Commissioner Pinnick and Seconded by Commissioner Caldwell. Motion passed with a vote of 3-0. Resolution Adopted.

Resolution 2913
Mary Nelson reported on the adoption of Resolution No. 2913 for the Port’s budget for 2017. A public hearing was held by the Port Commission on November 8, 2016 and no comments were made. The budget proposed for adoption was reviewed and the importance of quarterly reviews was commended. The Port is run like a business and needs to be reviewing trends regularly in order to make timely adjustments.

Motion to adopt Resolution No. 2913: Adoption of 2017 Budget was made by Commissioner Caldwell and Seconded by Commissioner Pinnick. Motion passed with a vote of 3-0. Resolution Adopted.

Public Comment:
No public comment

NEW BUSINESS:
Gary Nelson went over dates for upcoming events.
• November 10 – Pilotage meeting, Seattle
• November 14 – Outreach meeting, Ocean Shores
• November 16-18 – WPPA Annual Meeting in Tacoma, WA
• December 14 – Deeper Draft Celebration at PGH – Coffee, displays, appreciation to Seattle USACE and others in Washington D.C. for this great accomplishment

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 ninety minutes.

The Executive Session ended at 12:30 p.m., and the Regular Meeting adjourned at that time.