BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – June 14, 2006
MINUTES
I. CALL TO ORDER
8:00 A.M. Chairman Aikins, presiding
Commissioners Present: Secretary Lewis (Lew) Miller; Vice Chairman John (Jack) Castle; and, Chairman Larry R. Aikins
Commissioners Absent: Ralph A. Garcia, Jr., and, Richard (Dick) Dodge
Staff Present: Special Counsel to Port, Francois X. Sorba; Director of Finance & Administration, Cynthia D. Hampton; Manager of Economic Development, Steven Wright; Manager of Operations, Donald K. Snaman; Staff Accountant, Evelyn Lim; and, Receptionist and Administrative Assistant, Margaret Astesano
Commissioner Castle led the Pledge of Allegiance.
II. APPROVAL OF MINUTES
A Motion to Approve Minutes of Regular Meeting of May 10, 2006 was made by Commissioner Castle and was Seconded by Commissioner Miller. The Motion passed by a unanimous voice vote of all Commissioners present with Commissioners Garcia and Dodge absent.
Due to a lack of quorum of Commissioners present at the May 24, 2006 meeting, Chairman Aikins deferred approval of the minutes for that meeting to the next Port Commission meeting.
III. CLAIMS
A Motion to Approve Claims was made by Commissioner Castle. Commissioner Miller Seconded the Motion and the motion passed by a unanimous voice vote of all Commissioners present with Commissioners Garcia and Dodge absent.
IV. ORDINANCE
A. ORDINANCE APPROPRIATING ANTICIPATED REVENUES AND OTHER GENERAL FUNDS OF THE PORT OF REDWOOD CITY FOR THE FISCAL YEAR JULY 1, 2006-JUNE 30, 2007–INTRODUCTION – PUBLIC HEARING
A Motion to Introduce the Ordinance was made by Commissioner Castle, which was Seconded by Commissioner Miller. The Motion passed by a unanimous voice vote of all Commissioners present. Commissioners Garcia and Dodge absent.
Ms. Hampton began the Fiscal Year 2007 Budget PowerPoint presentation by reviewing the detail of each of the budget components: tonnage, operating revenue, operating expense, non-operating income/(expense), subvention and net income. After reviewing the detail, she then provided a recap of the components:
Tonnage 1,878,000 metric tons
Operating revenue $6.3 million
Operating expense $3.5 million
Operating income $2.8 million
Non-op income/(expense) $(158,000)
Net income before subvention $2.65 million
Subvention $378,000
Net income after subvention $2.28 million
Ms. Hampton explained that the $378,000 total subvention is comprised of $378,000 base subvention, $0 supplemental subvention and $0 emergency subvention.
Ms. Hampton continued the presentation with a slide of the cash flow statement. She explained that while net income after subvention is a positive $2.28 million, the FY07 budget reflects a negative cash flow of $5.3 million, primarily as a result of the $8.1 million in anticipated capital expenditures during FY07. She noted that the Port has been building its cash reserves for the purpose of funding these anticipated capital expenditures, and because cash reserves will be used to fund the expenditures, no new debt is planned.
Ms. Hampton then presented the detail of the $8.1 million in capital expenditures. The largest projects in FY07 are the LBT clean up at $4.2 million, followed by launch ramp improvements at $980,000.
Ms. Hampton concluded her presentation with charts which compared components of the FY07 Budget to four other periods: FY03 actual, FY04 actual, FY05 actual and the FY06 forecast, and explained significant variances and trends. She noted that the Port’s tonnage reached its apex in FY05 after several years of unparalled growth; the FY06 forecast shows an 8% decline in comparison to FY05, and the FY07 budget reflects a 7% increase in comparison to the FY06 forecast. The FY07 Budget reflects resumption of a more typical pace in tonnage growth as compared to the very fast growth experienced in the recent past few years.
Vice Chairman Castle inquired how the 12% Marina vacancy factor used in the FY07 Budget compares to the vacancy factors at other marinas in the Bay Area. Ms. Hampton replied that based on a survey prepared by Rich Ferrari, Harbormaster, it is lower than most. She explained that Rich Ferrari was present and could provide significantly more detail when the Marina Tariff agenda item was addressed later in the meeting.
Vice Chairman Castle then inquired why $22,000 was budgeted to hire a consultant for a benefits analysis. Ms. Hampton explained that the Finance Committee had requested a review of the entire benefits package as a whole to see how it compares to benefits offered by other entities, and to see if the cost of benefits could be lowered. She went on to clarify that the $22,000 budgeted is an estimate only, and may not reflect the actual cost.
Chairman Aikins commented that as a result of the tremendous amount of detail that goes into the Budget, it is an excellent management tool that is useful on a daily basis, year round. He went on to note that FY07 overall performance as budgeted is somewhat flat, but that it appears to be a year of regrouping and positioning ourselves for considerable future growth, and that he expects that expenditures made in FY07 will result in increased revenue in subsequent years. Chairman Aikins concluded by expressing his appreciation to Ms. Hampton and Port Staff for their efforts in preparing the Budget.
Chairman Aikins declared the Public Hearing Open and invited comments from the public. No comments were made and a Motion to Close the Public Hearing was made by Commissioner Castle. Commissioner Miller Seconded the Motion. The Motion passed by a unanimous voice vote of all Commissioners present with Commissioners Garcia and Dodge absent.
A Motion to Approve the Introduction and Waive the Reading Thereof was made by Commissioner Miller. Commissioner Castle Seconded the Motion. The Motion passed by a unanimous roll call vote of all Commissioners present with Commissioners Garcia and Dodge absent.
ORDINANCE
B. ORDINANCE OF THE BOARD OF PORT COMMISSIONERS OF THE CITY OF REDWOOD CITY APPROVING SECOND AMENDMENT TO LEASE AGREEMENT – (ROMIC ENVIRONMENTAL TECHNOLOGIES CORPORATION) – INTRODUCTION – PUBLIC HEARING
Click Here for Agenda Sheet and Ordinance
Steve Wright, Manager of Economic Development, stated that in 2001 Romic Environmental Technologies Corporation entered into a ten year lease with the Port on .87 acres located on Herkner Road. The ten year lease consists of the initial five year term, which ended on March 31, 2006, with a renewal term of one five year extension. Wright explained the base rent and tank car charges that Romic paid during the first five year term and the proposed base rent and tank car charges for the next five years.
Commissioner Castle commented that it was his understanding that during Romic’s tenancy at the Port, there have been no spills, contamination or problems on the rental site. Chris Stampolis, Director of Community Education and Government Relations for Romic Environmental, stated that Romic has had an excellent working relationship with Port staff and looks forward to the next five years at the Port.
A Motion to Open the Public Hearing was made by Commissioner Castle and Seconded by Commissioner Miller. The Motion passed by a unanimous voice vote of all Commissioners present with Commissioners Garcia and Dodge absent. Chairman Aikins invited comments from the public. No comments were made and a Motion to Close the Public Hearing was made by Commissioner Castle. Commissioner Miller Seconded the Motion. The Motion passed by a unanimous voice vote of all Commissioners present with Commissioners Garcia and Dodge absent.
A Motion to Approve the Introduction and Waive the Reading Thereof was made by Commissioner Castle. Commissioner Miller Seconded the Motion. The Motion passed by a unanimous roll call vote of all Commissioners present with Commissioners Garcia and Dodge absent.
At this time in the Meeting, Chairman Aikins moved to Item V-C, RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF MARINA RATE INCREASE. (Please refer to Item V-C below.)
V. RESOLUTION
A. RESOLUTION SETTING SALARY OF PORT EXECUTIVE DIRECTOR
Cynthia Hampton, Director of Finance & Administration, explained that the Commission adopted an Ordinance on May 24, 2006 establishing the salary ranges for the officers and employees of the Port. The Commission is requested to determine the annual salary for the Executive Director, which would become effective July 8, 2006.
Chairman Aikins stated that the Personnel Committee, consisting of Commissioners Castle and Dodge, recently conducted a performance review of the Executive Director and it was their recommendation to set the salary for the Executive Director at $147,000 per year.
A Motion to Adopt with the Executive Director’s Salary set at $147,000 per year was made by Commissioner Castle. Commissioner Miller Seconded the Motion, which was passed by a unanimous roll call vote of all Commissioners present. Commissioners Garcia and Dodge were absent.
RESOLUTION
B. RESOLUTION APPROVING CONTRACT DOCUMENTS FOR IMPROVEMENT OF EXISTING PARKING AREA AND AUTHORIZING AND DIRECTING ADVERTISEMENT FOR BIDS THEREFOR – (DRY BOAT STORAGE)
Click Here for Agenda Sheet and Background Materials
Donald Snaman, Manager of Operations, stated that the Port owns a 3-acre parcel at the corner of Chesapeake and Saginaw Drives, across the street from the public boat launching facility. He explained that approximately half of the area was paved at the time of the development of the boat launch ramp and used for parking of vehicles and boat trailers using the launch ramp. In 1999 the remainder of the area was paved and lighted as the Port planned to use the area for a dry boat storage facility. The Port has had a temporary dry boat storage facility on this parcel since June 2004 and now wishes to move forward with the construction of a permanent facility. Snaman said that plans, specifications, and bid documents have been prepared and are included with the documents for this agenda item. He explained that changes have been made to these documents since the Commissioners’ packets were prepared and gave a description of the changes, which consist primarily of changes in the area to be repaved and the area to be slurry sealed. The Commissioners were provided with updated information and documentation.
Commissioner Castle commented that the Port is making improvements to Port property (the dry boat storage facility), which is currently operated by a client of Castle Insurance. Castle asked Attorney Sorba whether or not he should vote on this agenda item. Attorney Sorba asked Snaman what impact this would have on the operator. Snaman explained that before the project is completed staff will bring an agreement for dry boat storage management before the Board. The agreement may or may not be with the current operator. Sorba said that Commissioner Castle could vote on this item.
Chairman Aikins referred to the bid that is going out to asphalt companies, which includes the relocation of the light pole, a 28 foot wide sliding gate and new fencing. He asked if it was common for these types of improvements to be incorporated in one bid from asphalt companies. Snaman responded that the work is not outside the scope of work that paving contractors encounter. Attorney Sorba explained that the State sets the classifications as to what type of work can be performed by a company. The engineer is required to determine what type of license is required to do a certain type of job. In this instance, an “A” license is required, which covers general engineering, including construction.
A Motion to Adopt was made by Commissioner Castle and was Seconded by Commissioner Miller. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Garcia and Dodge were absent.
B. At this time in the Meeting, Chairman Aikins moved to Item V-A, RESOLUTION SETTING SALARY OF PORT EXECUTIVE DIRECTOR. (Please refer to Item V-A above.)
RESOLUTION
C. RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF MARINA RATE INCREASE
Click Here for Agenda Sheet and Background Materials
Cynthia Hampton, Director of Finance & Administration, explained that Port staff is recommending an increase in berthing fees for the Port of Redwood City Marina. The last increase for berthing rates was in February 2004. Since that time, operating costs have increased primarily for utilities, security and insurance. Ms. Hampton stated that the proposed increases in berthing rates are modest and are weighted towards the larger boats. The rate increases would result in an overall increase in revenue from the Marina of 3.1 percent. A notice of the public meeting on the proposed increase in berthing fees was mailed to all Marina tenants. If adopted by the Port Commission, the new berthing fees would take effect on July 1, 2006.
In response to Commissioner Miller’s inquiry about whether or not the proposed rate increase would have any effect on the vacancy rate at the Marina, Rich Ferrari, Manager of the Port of Redwood City Marina, replied that he did not think it would have much of an impact. Ferrari conducted a survey of marinas in Redwood City and the Peninsula in March 2006. In analyzing the vacancy factor of all the marinas primarily in the South Bay, the vacancy rate was at 22 ½ percent and at that time, the Port’s vacancy was at about 12%. Within the past few months, that vacancy rate has dropped by approximately 5%.
Chairman Aikins asked if Ferrari had a time line on when Westpoint Marina would begin operation and whether or not it would affect the Port’s occupancy rate. Ferrari said that he could not estimate a time line any sooner than a year out, but that the proposed slips at Westpoint Marina are for 40’, 50’, and 60’ slips, The Port’s marina is primarily for smaller boats, with only twelve 40’ slips, therefore, Westpoint Marina should have little effect on the occupancy rate at the Port’s marina.
A Motion to Adopt was made by Commissioner Castle and was Seconded by Commissioner Miller. The Motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Garcia and Dodge were absent.
At this time in the Meeting, Chairman Aikins moved to Item V-B, RESOLUTION APPROVING CONTRACT DOCUMENTS FOR IMPROVEMENT OF EXISTING PARKING AREA AND AUTHORIZING AND DIRECTING ADVERTISEMENT FOR BIDS THEREFOR – (DRY BOAT STORAGE) (Please refer to Item V-B above.)
VI. PUBLIC COMMENT
None
VII. MATTERS OF BOARD INTEREST
Vice Chairman Castle commented that Councilwoman Diane Howard and Executive Director Giari attended Water Transit Advocates meetings in San Francisco regarding future ferry service. He said that WTA has requested to have a ferry demonstration ride from the Port of Redwood City to San Francisco and that this would be an opportunity to bring awareness to the community of the City and the Port’s roles in promoting ferry service.
Vice Chairman Castle commented that he was disheartened to learn of the cancellation of a firework’s display for this year’s 4th of July celebration. Castle said that he believed the 4th of July celebration, including the fireworks, has been a strong community event that has drawn up to 100,000 people in past years and that he hopes the firework’s display will be reinstated by next year.
Chairman Aikins clarified that cancellation of the fireworks has been made at the direction of the Peninsula Celebration Association and not the Port of Redwood City.
VIII. EXECUTIVE DIRECTOR'S REPORT
None
IX. ADJOURNMENT
At 9:00 a.m. Chairman Aikins requested that the Commission adjourn to its next regularly scheduled Meeting of June 28, 2006
A Motion to Adjourn was made by Commissioner Miller. It was Seconded by Commissioner Castle. The motion passed by a unanimous voice vote of all Commissioners present. Commissioners Garcia and Dodge were absent.
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