Port of Grays Harbor

Commission Meeting

May 8th, 2018

The Port of Grays Harbor Commission Meeting for May 8, 2018 was called to order at 9:03 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
Mike Folkers - Director of Finance & Administration
Leonard Barnes - Deputy Executive Director
Mike Johnson - Contract and Project Manager
Randy Lewis - Director of Environmental and Engineering Services
Seth Taylor - Marine Terminals Manager
Shannon Anderson - Business & Trade Development Asst.
Kayla Dunlap - Public Affairs Manager
Keya Bernhardt - Communications & Administrative Coordinator

VISITORS
Linda Orgel - CCH
David Havilland - Jodesha
David Dagnen - WRE/ABB
Bob Parnell - City of Westport
Tim Horton - Skilling’s Connolly
Cindy Taylor - Rainier Connect
Perry Walker - Citizen

Items discussed and action taken where required are as follows:

MINUTES:
1. By motion made by Commissioner Pinnick, seconded by Commissioner Thompson and unanimously approved, the Commission adopted the Minutes of April 10, 2018 Regular Commission Meeting as recorded in the Minutes Book No. 20 on pages 198 through 205 inclusive.

VOUCHERS:
1. By motion made by Commissioner Thompson and seconded by Commissioner Caldwell, the Commission unanimously approved for payment those Payroll Vouchers issued April 20, 2018 and May 4, 2018, ACH/Wire Transfers No. 999001008 through and including No. 999001019, and General Disbursement Vouchers No. 96803 through and including No. 97037 for payment in the amount of $2,184,680.10.

REPORTS:
U.S. Coast Guard April Industry Breakfast and Cyber Security Workshop
Mike Johnson reported on the U.S. Coast Guard’s April Security Workshop. Mr. Johnson spoke about the Homeland Security Act which established the Department of Homeland Security (DHS) in 2002 and made DHS responsible for safeguarding our Nation’s critical infrastructure from physical and cyber threats that could affect national security, public safety, and economic prosperity. Within the DHS Office of Cybersecurity & Communications Mr. Ronald D. Watters Jr., Cyber Security Advisor presented the Cyber 101 Workshop. Mr. Johnson introduced Ross Read and Chris Hunt whom attended April’s workshop.

Chris Hunt presented on The Cyber 101 Workshop. There are many ways cybercrime can happen, some of those ways include, business email compromise, supply chain attacks, and ransomware extortion. The consequences from these attacks include lost files, compromised PCs, erosion of public trust, and compromise of employee data. Mr. Hunt shared that Port staff is working on preventing these attacks from happening by performing regular backups, using Endpoint Software, cyber insurance, domain name and IP monitoring, and a central log collection.

To insure the Port’s cyber security, staff will continue cyber resiliency review, penetration testing, making sure destruction of old equipment takes place, tabletop exercises, and email signing certificates.

Corps of Engineers Beneficial Use of Dredged Materials Pilot Project Application
Randy Lewis reported on the Corps of Engineers Section 1122 Call for Projects. In Section 1122 of the Waterways Resources Development Act of 2016 (WRDA 2016), Congress directed the Corps of Engineers to establish a pilot program to carry out 10 pilot projects nationwide for the beneficial use of dredged materials. The Corps issued a call for proposals in February with a 30 day deadline for applications.

Mr. Lewis reported that the Port has participated in meetings and working groups over a number of years that included various local, state and federal agencies and looked at solving the issue of beach erosion at both Westport and Ocean Shores. After reviewing the information on the RFP, staff decided to submit a proposed project to tie all of these efforts together for the placement of dredged materials on both the north and south beaches. The project would provide funding to the Corps to mobilize a dredge with the necessary equipment to place the material directly on the beaches, and to monitor, likely in conjunction with Ecology, the success of the project to determine whether it is practically and financially feasible to repeat in the future.

Mr. Lewis reported that the Division had completed their review of the proposals and submitted their evaluations last week. The feedback staff received was that all the proposals were considered to be “viable projects”. It is anticipated that one or two projects at the most will come from this region. It is also important to understand that WRDA 2016 didn’t include any funding to accomplish the projects. After selection of the projects, the Corps will request funding from congress which means that work would not begin for at least 3 to 5 years.

Mr. Lewis noted that the pilot project does not require a local match for projects associated with a federal navigation

Opportunity Zone Update
Kayla Dunlap presented on the Grays Harbor Opportunity Zones. The Opportunity Zones were designed to spur economic growth in destressed communities. These designated zones provide tax incentives to investors who fund businesses within these zones. Businesses who invest in these areas will be able to defer paying capital gains taxes for up to 9 years. There are currently three tracts designated in Grays Harbor County as Opportunity Zones. Kayla Dunlap introduced Dru Garson of Greater Grays Harbor to present on how the selection process of the three tracks for Grays Harbor were submitted for consideration for the counties Opportunity Zones.

Dru Garson, GGHI, showed three slides representing each of the three Opportunity Zones that were nominated for Grays Harbor. Fourteen eligible zones were looked at closely and it was determined that the three tracks chosen had an individual poverty rate of at least 20 percent or median family income up to 80 percent of the area median.

Public Information Report
Kayla Dunlap reported that the District 1 outreach wrapped up last month visiting Oakville, McCleary, Elma and Montesano. District 2 including, Aberdeen and Westport will be schedule for June and July.

Ms. Dunlap reported that the 4th grade tours have been scheduled, and currently has over 750 students attending for 2018. The tours will begin May 24th and run through June 8th.

The summer public tours will be announced in just a couple of weeks, and we will expect to hold tours in July, August and September. Satsop also has walking tours schedule through October with the full schedule available at Satsop.com

Vessel Activity
Leonard Barnes reported for April 2018, the Port had calls from 8 deep-water vessels and 1 barge, which resulted in 273,000 MT of cargo being handled. Year-to-date, the Port has handled 33 ships, 7 barges and 612,539 MT of cargo.

Public Comment:
N/A

ACTION/RESOLUTION ITEMS:
Action Item No. 1
Leonard Barnes, Deputy Executive Director, requested authorization for the Executive Director to amend Lease Agreement No. 966, Grays Harbor Council of Governments.

Motion to authorize the Executive Director to amend Lease Agreement No. 966, Grays Harbor Council of Governments was made by Commissioner Pinnick and seconded by Commissioner Thompson. Motion passed with a vote of 3-0.

Action Item No. 2
Randy Lewis, Director of Environmental and Engineering Services, requested authorization for the Executive Director to call for bids for Bowerman Field Airport Drainage Improvement Project.

The estimated cost for construction is $3,422,233.47 with an additional $200,000 for engineering services. 90% of the project costs will be funded through a grant from the FAA, with the Port providing 10%.

Motion to authorize the Executive Director to call for bids for Bowerman Field Airport Drainage Improvement Project was made by Commissioner Thompson and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 3
Mike Johnson, Contract and Project Manager, requested authorization for the Executive Director to proceed with Port of Grays Harbor Contract No. 195
3, Lambert Ledge Timber Sale.

The total estimated cost for the logging services, project setup, administration, and regeneration is estimated at $60,250. The total estimated net revenue is $83,250.
Motion to authorize the Executive Director to proceed with Port of Grays Harbor Contract No. 1953, Lambert Ledge Timber Sale was made by Commissioner Thompson and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Action Item No. 4
Art Blauvelt, General Counsel, requested Commission pass a motion ratifying the actions of the Executive Director in declaring an emergency and awarding a contract to Rognlin’s, Inc., for the repair/replacement of a damaged fire hydrant at the Satsop Business Park.

Motion to ratify the Executive Director’s finding of an emergency was made by Commissioner Thompson and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Motion to ratify awarding of the contract to Rognlin’s pursuant to this finding of an emergency was made by Commissioner Pinnick and seconded by Commissioner Thompson. Motion passed with a vote of 3-0.

Resolution 2946
Mary Nelson, Director of Finance & Administration, presented for Commission consideration, Resolution No. 2946, Resolution to Appoint Mike Folkers as Port Auditor.

Motion to adopt Resolution No. 2945: A Resolution of the Port Commission of the Port of Grays Harbor Appointing Michael K. Folkers as Port Auditor was made by Commissioner Pinnick and seconded by Commissioner Thompson. Motion passed with a vote of 3-0. Resolution adopted.

Visitors/Public Comment:
N/A

NEW BUSINESS:

Mr. Nelson noted future meetings and events:
• May 9th-11th - WPPA Spring Meeting
• May 17 - Pilotage
• May 22 – PGH hosting after hours for Cosmopolis
• May 30 – Governing Tariff visit
• May 31 – 150th anniversary of Pilotage Committee

Chuck Caldwell, Port of Grays Harbor District 1 Commissioner, announced his resignation effective July 31, 2018. Mr. Caldwell spoke about how it has been an absolute pleasure to serve the Port over the past 16 years and is incredibly proud of the business diversification and growth of the Port during this time, but it is now time for him to focus his energy on other important areas of his life.

Art Blauvelt, General Counsel, requested that the Commission pass a motion authorizing the Executive Director to place advertisements regarding the Commission vacancy, set an application deadline of May 31, 2018, and schedule meeting dates for interviews, evaluations of applicants and the appointment of a qualified candidate.

Motion to authorize the Executive Director to place advertisements regarding the commission vacancy, set and application deadline of May 31, 2018, and schedule special meetings for interviews and the appointment was made by Commissioner Thompson and seconded by Commissioner Pinnick. Motion passed with a vote of 3-0.

Regular meeting was recessed at 10:33 a.m. for a short break.

Regular meeting reconvened at 10:44 a.m.

The Regular Meeting was recessed at 10:44 a.m. for a Special Meeting of the Industrial Development Corporation.

The Special Meeting of the Industrial Development Corporation was closed at 10:48 a.m. and the Regular Commission Meeting reconvened.

WORKSHOP: 1ST QUARTER PORT FINANCIAL REVIEW
Mary Nelson, Director of Finance and Administration, reported on the Ports 1st Quarter Financial Review. Ms. Nelson’s quarterly financial review provided staff and Commissioners the opportunity to re-evaluate business trends using the most current customer forecasts and market analysis, and to quickly respond to changing market conditions impacting customer and Port operations. The Port proactively updates forecasts based on this evaluation to ensure business and financial objectives are achieved.

Ms. Nelson reported that the Port’s 2018 financial outlook is positive. The 2018 forecast has been updated to show estimated operating revenues totaling $34.4 million instead of the original projection of $28 million.

There being no further business to come before the Commission, the Regular Meeting recessed at 11:23 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 15 minutes.

The Executive Session ended at 1:30 p.m. and the Regular Meeting adjourned at that time.