COMMISSION MEETING October 13, 2009 The Port of Grays Harbor Commission Meeting for October 13, 2009 was called to order at 9:04 a.m. Mike Johnson led the meeting in the Pledge of Allegiance. Those in attendance at the meeting were as follows: COMMISSION AND STAFF Stan Pinnick - Commissioner Jack Thompson - Commissioner Chuck Caldwell - Commissioner Art Blauvelt - Legal Counsel Gary Nelson - Executive Director Leonard Barnes - Deputy Executive Director Mary Nelson - Director of Finance & Administration Lisa Benn - Accounting Manager Mike Johnson - Contracts Administrator Robin Leraas - Westport Marina Manager Seth Taylor - Marine Terminal Manager Diane Souron - Business & Trade Development Asst. VISITORS Kevin Campbell - Brusco Tug & Barge Rodger Freel - Knutson Towboat Kelly Atkinson - International Shipping Company Fred Goheen - Jones Stevedoring Company Steve Proctor - ILWU Local No. 24 Billy Swor - ILWU Local No. 24 Lonnie Crumley - Chehalis Basin Fisheries Task Force Terry Baltzell - Chehalis Basin Fisheries Task Force Dale Beasley - Private Citizen Chuck Custer - C/V Freedom Mark Donovick - Washington Marketing Assoc. Greg Mueller - Washington Trollers Assoc. Brian Pernula - Wild West Seafood Shane Reeves - F/V Betty Lee III Brian Toste - Huntress Enterprises Paul Toste - F/V Adventurous Ray Toste - Washington Dungeness Crab Fishermen’s Assoc. Whitey Forsman - Washington Crab Producers Bill Weidman - Washington Crab Producers Ron Pinnick - Grays Harbor Vision 2020 David Quigg - Grays Harbor Vision 2020 Josh Metcalf - HDR Engineering Items discussed and actions taken where required are as follows: MINUTES: 1. By motion made by Commissioner Caldwell, seconded by Commissioner Thompson and unanimously approved, the Commission adopted the Minutes of the September 8, 2009, Regular Commission Meeting as recorded in Minutes Book No. 16, on pages 228 through 233 inclusive. VOUCHERS: 1. By motion made by Commissioner Thompson, seconded by Commissioner Caldwell and adopted, the Commission unanimously approved for payment those Payroll Vouchers issued September 18, 2009 and October 5, 2009, and General Disbursement Vouchers No. 73995 through and including No. 74242 for payment in the amount of $1,793,141.60. REPORTS: Service Agreements for 2010 Grays Harbor Economic Development Council (EDC) Board Member Jack Thompson described the planning efforts including review of the EDC’s strategic master plan the Executive Board has recently undertaken. At a full Board Meeting October 20, the EDC Executive Board will present a plan for the future of the EDC. Lonnie Crumley, Chairman of the Chehalis Basin Fisheries Task Force (CBFTF), provided a PowerPoint presentation on the organization’s history, goals and programs. The Washington Department of Fish & Wildlife (WDFW) has recently approached the CBFTF about taking over the Satsop Springs Project as well as the Mayr Project in order for those fisheries enhancement efforts to continue. David Quigg and Ron Pinnick reported on recent activities of Grays Harbor’s Vision 2020, including development of an Action Plan. Now is the time to work toward implementation of the Action Plan. Westport Marina Marine Mammal Strategy Westport Marina Manager Robin Leraas spoke of the growing concern about aggressive sea lions in the Marina’s boat basin. The expected southern migration of the sea lions for mating season did not occur. Numbers of these marine mammals seemed to have increased over the course of the summer season rather than decrease, due to the abundance of food available in the Marina. Research on the issue, including contacting other marinas to determine how they handle aggressive sea lions and what steps they may have taken, has been accomplished by Marina Staff. The best course of action is believed to be pro-active, by forming a committee made of marina stakeholders and state and federal agency representatives this fall to: • Develop an education and outreach plan for stakeholders, marina users and tourists on the perils of feeding wildlife. • Develop guidelines and a process for disposing of fish waste (away from Marina waters). • Define a disciplinary process for those that ignore the disposal guidelines. • Work with state and federal agencies in developing an enforcement strategy. Pilot Boat Maintenance Update Mike Johnson provided a slide show on the recent annual maintenance work on the Pilot Boat CHEHALIS. The vessel was hauled out, pressure washed, had a hull inspection, new paint, zincs, and hull repairs. Abrasive blast cleaning, preparing, and painting the main deck, fo’c’sle deck, fo’c’sle deck bulkhead, and wave breakers was also included in this years work. Additional safety items were added or updated on the boat. Port Industrial Road Improvement Project Status Mike Johnson presented a short slide show outlining the construction status of the improvements to Port Industrial Road: • Storm system lines and equipment is being worked on • New culvert pipe across Industrial Road at 30th Street & new water line for the City of Hoquiam at Myrtle Street have been installed • Schedule for the first layer of asphalt to be installed starting October 23rd has been submitted. Work will be done at night to alleviate traffic congestion during the day. HDR’s Josh Metcalf reported that some paving items might have to wait for good weather in the spring before the project can be finished. Westport Marina Hoist Services Gary Nelson summarized the report provided at the August meeting concerning a public hoist within the Westport Marina. • Staff will continue to work with tenants that have hoists on their leasehold to improve consistency of rates and access as part of their lease negotiations. • A list of the Marina’s private hoists, contacts and rates will be developed and maintained. • Staff will continue to use the master plan for guidance in planning Marina improvements. • Next steps will be to continue working towards finding a suitable location for a public hoist within the Westport Marina. At the request of stakeholders, time had been allocated on the agenda for them to present their concerns to the Commission: Paul Toste referred to the guidance provided in the 2001 Marina District Master Plan that addressed the need for a public work dock, including hoists, at Westport. Fishermen are asking that an emergency location be appropriated for a public hoist in the short-term until a long-term solution can be constructed. Mark Donovick emphasized the importance of Westport as the largest commercial seafood port on the Coast and one of the largest seafood landing ports in the country. Mr. Donovick sees growth and consolidation of the seafood industry driving the need for a public work dock with hoists. He believes the Port and the County should embrace this industry and legislators need to be educated on how big Westport is to Washington State’s commercial fishing industry. Greg Mueller pointed out that the fishermen of Westport are first, and foremost, independent businessmen. They need a public working dock with 1-2 hoists, access to forklifts and a haul-out with a working yard to maintain their independence. Capital investment in Westport by the Port is necessary to make this facility a place where more commercial vessels will stop and conduct business. Brian Toste protested the rates charged by private hoist operators that are supposed to be available to the public. To avoid a charge of up to 16% of their net profit, fishermen are forced to get product off their boats using garbage cans and dollies in order to have access to a better price for their product. Brian Pernula has been coming to Port Commission meetings for eight months to discuss this issue and is disappointed to see there’s nothing for a public hoist proposed in the Port’s 5-Year Capital Plan. He would like to see a final plan and a final answer of when this need will be addressed by the Port. Ray Toste believes that people in Olympia and Washington D.C. understand the fishermen’s dilemma in Westport better than Grays Harbor citizens. Promotion of a public hoist, work dock and boat haul-out will hold fishermen in this community so they spend their money here rather than relocating to other ports that offer more support facilities. Mr. Toste encouraged the Port and fishing associations to work together on finding funding in Olympia and in D.C. and providing a united front to legislators with the fishing industries needs in Westport. Mark Donovick proposed working with the Port to pull together a task force to go back to D.C. to drum up support and funding for Westport facility improvements: work dock/public hoist, haul-outs (one for small vessels and one for large vessels), and large vessel moorage. Dale Beasley stated that there are sources of money around for capital improvements if you look for them. He believes funding assistance can be found to help with Westport facility improvements. Whitey Forsman of Washington Crab Producers acknowledged that the business model for seafood buyers has changed over time. Vessel Activity Leonard Barnes reported the Port has handled 25 ships year-to-date through September. During October, three wood chip barges are expected at T3, three AGP vessels at T2, and one log ship and one general cargo ship at T4. November is scheduled to be busy with three AGP vessels, four Willis barges, a Partner Shipping Ro-Ro vessel and Westway’s first vessel in late-November or early-December. Public Comment Kelly Atkinson of International Shipping Company provided information to the Port about a directive from the U.S. Coast Guard concerning the need for terminals to accommodate shore access for seafarers. Leonard Barnes responded that the Port is working on the issue. Mr. Atkinson also expressed his concern about the recent increase in dockage rates for grain vessels. He cautioned the Port to be prepared for backlash on the new dockage rates from ship owners. ACTION/RESOLUTION ITEMS: Action Item No. 1 Leonard Barnes reported that Puget Sound Truck Lines, Inc. is selling their building located on Port-leased land to Barrier West, Inc. Barrier West will use the premises for a truck shop, truck repairs, and storage of trucks and trailers and has requested a new lease for the property. Motion to authorize the Executive Director to negotiate and enter into Lease Agreement No. 1072 with Barrier West, Inc. was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Action Item No. 2 Leonard Barnes stated that Pasha Stevedoring & Terminals (PST) has requested to rent a portion of the upper level of 1620 E. Terminal Way office building from the Port. Motion to authorize the Executive Director to negotiate and enter into Rental Agreement No. 1073 with PST was made by Commissioner Caldwell and seconded by Commissioner Thompson. Motion passed unanimously with all Commissioners in favor. Action Item No. 3 Mike Johnson reported that two change orders were needed on Contract No. 1601, Port Industrial Road Improvement Project. Change Order No. 1 replaces the two feet of gravel borrow currently shown in plans with approximately one foot of quarry spalls and one foot of gravel base material in order to provide a better base upon which the widened road is being constructed. Change Order No. 2 allows for acceleration of the construction schedule through the end of October to allow the contractor to complete paving of the widened area prior to a winter shutdown by the asphalt supplier. Motion to authorize the Executive Director to award Change Order Nos. 1 and 2 for Contract No. 1601, Port Industrial Road Improvement Project, to Mountain West Construction, LLC in the total amount of $168,173.10, including sales tax, was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Action Item No. 4 Mike Johnson announced that bids due by 2:00 p.m. on October 8, 2009 for Contract No. 1607-A, Terminal 1 Enhancement Project Pier Construction were received from six contractors (includes Base and Additive Alternates 1 & 2 and sales tax): • Quigg Bros., Inc. $4,496,280.27 • American Construction Co., Inc. $5,536,298.17 • Advanced American Construction, Inc. $5,954,087.08 • General Construction Company $6,205,515.27 • Manson Construction Company $6,217,324.31 • MJ Hughes Construction Bid submitted late & was rejected Motion to authorize the Executive Director to award Contract No. 1607-A, Terminal 1 Enhancement Project Pier Construction to Quigg Bros., Inc. in the amount of $4,496,280.27 was made by Commissioner Caldwell and seconded by Commissioner Thompson. Motion passed unanimously with all Commissioners in favor. Action Item No. 5 Mike Johnson reported that two bids were received on Contract No. 1607-B, Terminal 1 Enhancement Project Dredging: • Hickey Marine Enterprises, Inc. $478,306.95 • General Construction Company $713,805.30 Both bidders, Hickey Marine and General Construction, did not conform to certain instructions in the bid documents. However, in the opinion of the Port staff these irregularities are such that the Port Commission should waive the bid irregularities and consider both bids as responsive. Rejection of the bids would cause significant hardship to the Port since there is a limited time window for this work to be accomplished. The bid from Hickey Marine used a Bid Proposal form that was replaced by Addendum #1; however, the cost of the dredging per cubic yard is still determinable. General Construction submitted a bid with mobilization/ demobilization costs that exceeded the 5% limit provision of the bid documents; however, the cost of the dredging per cubic yard is still determinable. With waiver of these irregularities, the unit price bids can be determined as follows: Mobilization/ Cost per Yard Demobilization • Hickey Marine Enterprises, Inc. $5.45 $22,000 • General Construction Company $6.30 $174,000 Motion to waive the bid irregularities for Contract No. 1607-B, Terminal 1 Enhancement Project Dredging by both bidders and consider both bids as responsive was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Motion to authorize the Executive Director to award Contract No. 1607-B, Terminal 1 Enhancement Project Dredging to Hickey Marine Enterprises, Inc., in the amount of $478,306.95, including sales tax, was made by Commissioner Caldwell and seconded by Commissioner Thompson. Motion passed unanimously with all Commissioners in favor. Action Item No. 6 Mike Johnson informed the Commission that new steel piling are needed at the Westport Marina to replace ten existing deteriorated or damaged treated wood piling in order to continue to provide secure moorage and a safe public facility. Repairs are estimated to be between $80,000 and $95,000. Bids for the work will be solicited from Contractors on the Port’s Small Works Roster. Motion to authorize the Executive Director to proceed with Contract No. 1610, Marina Piling Repairs was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Action Item No. 7 Mary Nelson, Director of Finance and Administration, provided a PowerPoint presentation regarding the 2010 Preliminary Budget, as prepared by staff. The preliminary budget reflects improving international trade conditions for Port customers, new marine terminal business and tenants, maintenance and refurbishment projects to ensure condition of Port assets to serve our customer base, increased marketing efforts to develop new marine business opportunities, and staff focus on tenant expansion plans and facilitating new development projects. Motion was made by Commissioner Caldwell and seconded by Commissioner Thompson to accept the Preliminary Budget, make it available to the public and schedule a public hearing on the budget during the Port’s regular meeting on November 10, 2009. Motion passed with all Commissioners in favor. Motion was made by Commissioner Thompson and seconded by Commissioner Caldwell to amend the 2009 Budget Line Item for Promotional Hosting to authorize expenditure up to $6,000. Motion passed with all Commissioners in favor. Resolution 2748 Mary Nelson reported that in 2008, the Port identified the need to expand Marine Terminal facilities due to planned marine trade development projects and growing demands for berth space at Terminal 2. The State Legislature appropriated $3 million in the State 2009-2011 Capital Budget to the Port in the form of a grant from the State’s Job Development Fund for the upgrade of Port Terminal 1 to accommodate Panamax-size vessels. In addition, CERB approved $1 million in aid for the project in the form of a $910,000, -0-% interest loan payable over 20 years, and a $90,000 grant. Motion to adopt Resolution No. 2748: Authorizing Execution of Required Agreements for Aid in Financing the Costs of Public Facilities Consisting of Improvements to Port Marine Terminal No. 1, Including Construction of Steel Pipe Support Piles and Dredging was made by Commissioner Caldwell and seconded by Commissioner Thompson. Motion passed unanimously with all Commissioners in favor. Resolution adopted. Resolution 2750 Gary Nelson informed the Commission that Staff has finished its due diligence and investigations concerning an option to purchase the Independent Distributor Building. Staff has determined that it is in the best interests of the Port of Grays Harbor to purchase the building located on property leased from the Port “as-is”. Legal Counsel Art Blauvelt briefly went over the terms of purchase, including the price of $462,500. Motion to adopt Resolution No. 2750: Authorizing the Executive Director to Exercise an Option to Purchase the Independent Distributor Building Located at 2210 Port Industrial Road, Aberdeen was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Resolution adopted. Resolutions 2749 & 2751 Gary Nelson reported that a funding opportunity for expanding rail at the Port’s Marine Terminal Complex Facility based upon a complete rail plan recently developed has become available. The Port’s Marine Terminal Rail System project was submitted for TIGER grant funding by the Port in September. The Port’s six-year Transportation Improvement Programs for both 2009-2014 and 2010-2015 need to be amended to incorporate this project in order to be eligible for state and federal funding. Motion to adopt Resolution No. 2749: Amendment of the Port of Grays Harbor Six Year Transportation Improvement Program 2009-2014 was made by Commissioner Caldwell and seconded by Commissioner Thompson. Motion passed unanimously with all Commissioners in favor. Resolution adopted. Motion to adopt Resolution No. 2751: Amendment of the Port of Grays Harbor Six Year Transportation Improvement Program 2010-2015 was made by Commissioner Thompson and seconded by Commissioner Caldwell. Motion passed unanimously with all Commissioners in favor. Resolution adopted. Public Comment Josh Metcalf of HDR Engineering reported that the community is already seeing benefit from the Port Industrial Road Improvement Project by increased commerce in the area from the 20 construction workers that are staying in town during the week and purchasing food, fuel, lodging, and supplies. In addition, local subcontractors are being used by Mountain West Construction, LLC to assist with the project. NEW BUSINESS: Gary Nelson reported on several upcoming calendar items: • October 15 – JOBS Team Legislative Tour • October 16 – Grays Harbor PDA will celebrate its 10th Anniversary & BMT will hold a ribbon cutting ceremony during the event • October 25-30 – Commissioner Caldwell & Gary Nelson will attend the AAPA Annual Convention • October 30 – Washington Crab Producers will celebrate its 50th Anniversary & hold a Memorial Dedication Ceremony in Westport Mary Nelson played Port radio spots with a partnership theme that will be heard over the airwaves of Grays Harbor in the months to come. Commissioner Jack Thompson announced that a Port Centennial Celebration Plan would be presented at the WPPA Annual Meeting in November. Legislation allowing port districts to be formed in Washington State will celebrate its 100th Anniversary in 2011, as will the first ports formed in the State: Port of Seattle and Port of Grays Harbor. There being no further business to come before the Commission, the Regular Meeting recessed at 11:47 a.m. The Board then went into Executive Session to consider the sale or lease of real property and discuss with legal counsel potential or actual litigation. No action to be taken during Executive Session. It was announced that the Executive Session would last two hours. The Executive Session ended at 2:47 p.m., after two half-hour extensions had been announced, and the Regular Meeting adjourned at that time.