Port of Grays Harbor

Commission Meeting

September 10, 2019

The Port of Grays Harbor Commission Meeting for September 10, 2019 was called to order at 9:03 a.m. at McCausland Hall in Westport.

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

Those in attendance at the meeting were as follows:

COMMISSION AND STAFF
Stan Pinnick - Commissioner
Phil Papac - Commissioner
Tom Quigg - Commissioner
Gary Nelson - Executive Director
Art Blauvelt - Legal Counsel
Leonard Barnes - Deputy Executive Director
Mike Folkers - Director of Finance & Administration
Mike Johnson - Contract & Project Manager
Randy Lewis - Director of Environmental & Engineering Services
Alissa Shay - Manager of Business Development
Molly Bold - Westport Business Manager
Kayla Dunlap - Public Affairs Manager
Shannon Anderson - Business & Trade Development Assistant
Seth Taylor - Terminals Operations Manager
Lisa Benn - Accounting Manager/Treasurer
Ross Read - Director of SBP Operations
Robin Leraas - Westport Marina Office Manager
Jeremy Plummer - Marina Operations Manager

VISITORS
Maria Cerdena - Chehalis Basin Fisheries Task Force
Terry Nielsen - Chehalis Basin Fisheries Task Force
Rob Bearden - City of Westport Mayor
Kathryn Franzen - City of Westport Councilperson
Kevin Goodrich - City of Westport Public Works Director
Shelli Hopsecger - CCAI
Jennifer Custer - Vessel Miss Kathleen
Hillary Bearden - WDCFA
Linda Orgel - FOGH
Gale Dahlstrom - Paneltech
Scott Olmstead - Paneltech
Darlene Camp - Citizen
Dru Garson - Greater Grays Harbor Inc.

Items discussed and action taken where required are as follows:

MINUTES:
1. By motion made by Commissioner Quigg, seconded by Commissioner Papac and unanimously approved, the Commission adopted the Minutes of August 13, 2019 Regular Commission Meeting as recorded in the Minutes Book No. 21 on pages 49 through 57 inclusive.

VOUCHERS:
1. By motion made by Commissioner Papac and seconded by Commissioner Quigg, the Commission unanimously approved for payment those Payroll Vouchers issued August 20, 2019 and September 5, 2019, ACH/Wire Transfers No. 99901238 through and including No. 99901250, and General Disbursement Vouchers No. 100576 through and including No. 100775 for payment in the amount of $3,573,572.74.

REPORTS:
Service Agreements for 2020
Mike Folkers, Director of Finance & Administration, introduced the presenters explaining the history of the Port funding to help organizations working on projects for the betterment of Grays Harbor County.

Terry Nielsen of the Chehalis Basin Fisheries Task Force (CBFTF) provided a power point presentation on the 2019 year in review. She thanked the Port for their continued support on behalf of the board of directors. Funds from Port support last year went to fish production and habitat restoration projects.

Dru Garson from Greater Grays Harbor Inc. (GGH) was delayed in arriving and presented later in the meeting.

Pilot Boat Maintenance 2019
Mike Johnson, Contract & Project Manager, reported that the annual maintenance to the Pilot Boat CHEHALIS is underway. A marine survey has been completed along with ultra-sonic testing of the hull. So far, the following work has been completed:
• Haul-out, pressure wash & clean hull
• Prime & paint above & below the waterline
• Replace zincs
• Inspect wheel, rudder & repack the stuffing box

Due to a busy schedule for the vessel, Captain D’Angelo has requested putting the boat back in service temporarily. The following remaining work will be completed by mid-September:
• Repair rusted areas
• Repair handrails where needed
• Clean, inspect hatch covers

Public Information Report
Kayla Dunlap, Public Affairs Manager, reported that BHP submitted a new SEPA checklist last month along with land use and shoreline permit applications to the City of Hoquiam for a proposed Potash Storage and Export facility at Terminal 3 in West Hoquiam.

The annual city council outreach is continuing with Grays Harbor County on October 24, Grays Harbor PUD on October 27 and City of Westport on November 12.

For the first time, a walking tour of the Westport Marina was conducted over the summer and was very successful.

Service Agreements for 2020 (continued)
Dru Garson, of Greater Grays Harbor Inc. (GGH) provided a PowerPoint presentation reviewing the municipal services agreement GGH has with the Port and results of GGH activities over the last year including:
• Business recruitment
• Business retention & expansion
• Entrepreneurial development
• Tourism development
• Networking events
• Ribbon cuttings
• Leadership Grays Harbor
• Greater Grays Harbor Foundation

In 2019, GGH has also been working on updating their website with a property search feature, modern design, new photography, and a revamped business directory.

Vessel Activity
Leonard Barnes reported for August 2019 the Port had calls from 7 deep-water vessels and 2 barges, which resulted in 222,295.87 MT of cargo being handled. Year-to-date, the Port has had 53 deep-water ships, 13 barges and handled 1,728,320 MT of cargo.

PUBLIC COMMENT
None

ACTION/RESOLUTION ITEMS:
Action Item No. 1
Mike Folkers reported that effective July 1, 2019, authority for general rate proceedings for marine pilotage services was transferred from the Washington Board of Pilotage Commissioners to the Washington Utilities and Transportation Commission (UTC). The Port has worked with the UTC to develop a timetable for the Port Commission to approve and recommend a new pilotage tariff that would become effective January 1, 2020. The timetable includes a public hearing to be scheduled for November 12, 2019.

Motion to schedule a public hearing on the 2020 Pilotage Tariff for November 12, 2019 was made by Commissioner Quigg and seconded by Commissioner Papac. Motion passed with a vote of 3-0.

Action Item No. 2
Mike Johnson stated that maintenance dredging is required at Port Terminals to ensure vessels can safely use the berths to load and unload cargo for our marine terminal customers. A contract will provide dredging services for the 2020 winter and summer dredging operations. Estimated volume for this contract is 134,000 cubic yards.

Motion to authorize the Executive Director to call for bids on Contract No. 2012, Terminal Maintenance Dredging, was made by Commissioner Papac and seconded by Commissioner Quigg. Motion passed with a vote of 3-0.

Action Item No. 3
Mike Folkers requested that the Commissioners hold a Budget Workshop on October 1, 2019 to review with staff the Port financial projections for 2020.

Motion to schedule a Special Meeting of the Port of Grays Harbor Commissioners for a Budget Workshop on October 1, 2019 at 9:00 a.m. in the Port’s Commission Meeting Room was made by Commissioner Quigg and seconded by Commissioner Papac. Motion passed with a vote of 3-0.

Action Item No. 4
Leonard Barnes reported that Paneltech International, LLC has requested to enter into a new lease agreement for a portion of Warehouse H, located at 2850 John Stevens Way in Hoquiam to accommodate their sample department, saw and wood shops and storage for totes and manufactured products. The lease will be for an initial term of 1 year and 11 months with two successive 5-year options to renew.

Motion to authorize the Executive Director to enter into Lease No. 1166 with Paneltech International, LLC, was made by Commissioner Papac and seconded by Commissioner Quigg. Motion passed with a vote of 3-0.

Action Item No. 5
Mike Folkers reported that due to damages caused by the U.S. Army’s KU MAB 6 Squadron’s aviation training on July 10, 2018, repairs needed to be performed to the roof on the Administration Building at the Satsop Business Park. An assessment of the damage was conducted and repairs accomplished. On July 15, 2019, the Port received a denial of the claim from the U.S. Army and the matter was turned over to the Port’s insurance carrier, Enduris. Enduris has made an offer of $396,269.11 less the Port’s deductible of $10,000, to settle this claim while also pursuing a subrogation claim against the U.S. Army. Cost of repairs totaled $477,997.95. Since the condition of the roof was well worn, staff believes this is a fair offer.

Motion to authorize the Executive Director to accept the offer of $396,269.11 from Enduris for the incident involving the U.S. Army at the Satsop Business Park on July 10, 2018 was made by Commissioner Quigg and seconded by Commissioner Papac. Motion passed with a vote of 3-0.

Action Item No. 6
Leonard Barnes reported that earlier this year, Paneltech International, LLC had requested to occupy the entire 40,000 square feet of Warehouse D. With Paneltech’s continuous growth and planned expansion into Warehouse H, their needs for Warehouse D have changed, resulting in their request to amend the lease and reduce the footprint to the original 20,000 square feet and return the term back to a month-to-month basis.

Motion to authorize the Executive Director to amend Lease No. 1018 with Paneltech International, LLC, was made by Commissioner Papac and seconded by Commissioner Quigg. Motion passed with a vote of 3-0.

Resolution No. 2983
Art Blauvelt, Legal Counsel, presented a resolution appointing Gary G. Nelson as the American Association of Port Authorities (AAPA) delegate for the upcoming 2019 annual convention and meeting of the organization. As a delegate, Mr. Nelson would have the authority to cast the votes of the Port of Grays Harbor on all motions and resolutions at the convention.

Motion to adopt Resolution No. 2983: Appointing Gary G. Nelson as AAPA Delegate for the 2019 Annual Convention and Meeting of the AAPA was made by Commissioner Quigg and seconded by Commissioner Papac. Motion passed with a vote of 3-0. Resolution adopted.

PUBLIC COMMENT
Kevin Goodrich, Public Works Director for the City of Westport, commented on the recent Marina Walking Tour. The tour was great, enjoyable and very informative. Also, Mr. Goodrich provided an update of the City’s Wilson Avenue project. Rognlin’s is the contractor and is scheduled to start work in September with completion in the first or second week of October. The contractor will be working around the sport fishing season, marina customers, the U.S. Coast Guard, Ocean Cold operations, and other users and businesses in the area.

Mr. Goodrich complemented the Port on the boat launch parking improvements project underway with RCO funding. He will be working with the Port on a possible joint ribbon cutting in the spring for both projects.

Gale Dahlstrom of Paneltech International, LLC, addressed earlier questions about the reason for changes in the lease of Warehouse D. Paneltech found that Warehouse D did not have sufficient floor space and utilities for their needs. Mr. Dahlstrom appreciated the actions the Port took today with regards to their leases.

Commissioner Quigg expressed the Port’s appreciation for the growth Paneltech has seen over the years and it’s continued tenancy on Port property.

NEW BUSINESS:
Randy Lewis stated that as part of the work that is being performed by Rognlin’s at Bowerman field Airport on the drainage system, the contract calls for repairs to some asphalt surfaces. In early-September, it became clear to Port staff that additional areas of asphalt were in need of repairs, in particular, a connecting apron serving a hangar.

Because of the urgency of the needed repairs, the Executive Director authorized staff to contract with Rognlin’s for the additional repairs. Rognlin’s submitted a cost estimate that was determined to be reasonable.

Motion to ratify the actions of the Executive Director in award of a contract to Rognlin’s for repairs to an asphalt connecting apron at a cost of $106,000 plus sales tax, was made by Commissioner Papac and seconded by Commissioner Quigg. Motion passed with a vote of 3-0.

Gary Nelson, Executive Director, listed upcoming calendar items:
• September 19 - WA Pilotage Meeting
• September 23 – BHP to present at Hoquiam City Council
• September 24 – BHP at the GGH Business Forum
• October 1 – Port Budget Workshop

At 10:31 a.m., President Stan Pinnick announced a 5-minute recess in the Regular Meeting before starting the Workshop.

The Regular Meeting reconvened at 10:39 a.m.

WORKSHOP
Westport Marina Strategy Session
Shelli Hopsecger led a presentation and discussion along with Westport Business Manager Molly Bold on the Westport Marina. The Port recognizes the synergy that exists in the Westport Marina District between the uplands and the boat basin. A discussion of the Westport uplands was included in an earlier strategy workshop, so today’s focus was on the marina basin.

Over the past ten years, the business model and strategic initiative for the port has been rebuilding the marina with an eye on tomorrow. By incorporating the Port Commission’s Strategic themes, it becomes easier to focus the limited resources on initiatives that are top priority. Strategic priorities include:
• Customer service and development
• Fiscal responsibility
• Asset protection and usage
• Public access and safety
• Environmental stewardship

With these priorities, the Port’s primary objective at the Westport Marina is to provide safe moorage and opportunities for economic development for the region.

A successful effort toward creating jobs, attracting investment and improving quality of life for the region has been the Port’s role in supporting industry growth. In this regard, the Port’s commercial fishing business model has been to encourage upland investments that support the user base. On the recreational and tourism side, the marina has served as an anchor for tourism activities on the South Beach. The Port’s contribution is through the launch, small vessel moorage, and public access to the marina infrastructure. Public access is also addressed with the public viewing assets.

Major foundation improvements like the bankline rebuild, dredging, industrial outfall, user amenities like restrooms and showers and an improved boat launch parking area are just a few of the more than $20 million that has been invested in the facility over the last decade. The Port has partnered with public and private partners to leverage Port dollars in order to make these investments.

Ms. Hopsecger reviewed the operating trends of the marina business division and Ms. Bold highlighted the projects that staff has been working hard to complete this year with minimal negative impacts to the users.

A discussion of the Port’s policy regarding seafood sales from the docks was held. There are two types of seafood sales allowed in Westport Marina Tariff Section 8: retail sales from the docks, and commercial buying from the docks. Recently, the City of Westport has been working to further define where commercial buying can occur. The intent is to regulate this activity so it is fair to mobile live seafood buyers as well as those buyers who have invested in property and are part of the community.

Members of the audience, including Mayor Rob Bearden, Jennifer Custer, and Hillary Bearden helped to inform the Commissioners on the current status of City ordinances regarding this issue along with information on the importance of this activity to commercial fishers who need access to live market buyers. Ideas shared included the need for a publicly-owned hoist with a central dock for offloading/loading, the current fee structure and number of “legal” buyers, the challenge of enforcing the policy and the impacts the tonnage transported over the floats has on the facility. Staff agreed to continue to work with the City and bring recommendations for potential tariff changes to the Commissioners at a later meeting.

The Regular Commission Meeting recessed at 11:48 a.m. for Commissioners, staff and public to participate in a driving tour of the Westport Marina and several of the construction projects currently underway. The tour included newly paved Yearout Drive, marina boat launch parking lot improvements, Wilson Avenue, marina dredging, new restrooms and showers across from Float 7/9, inspection of the newly acquired building at the corner of Wilson and Nyhus, and commercial vessels along Float 21.

The Regular Meeting reconvened at 1:15 p.m.

There being no further business to come before the Commission, the Regular Meeting recessed at 1:16 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 60 minutes.

The Executive Session ended at 2:15 p.m. and the Regular Meeting adjourned at that time.