BOARD OF PORT COMMISSIONERS
SPECIAL MEETING
WEDNESDAY – August 30, 2006
MINUTES
I. CALL TO ORDER
8:00 A.M. Chairman Aikins, presiding
Commissioners Present: Commissioner Ralph A. Garcia, Jr.; Commissioner Richard (Dick) Dodge; Secretary Lewis (Lew) Miller; Vice Chairman John (Jack) Castle; and, Chairman Larry R. Aikins
Commissioners Absent: None
Staff Present: Executive Director Michael J. Giari; Special Counsel to Port, Francois X. Sorba; Director of Finance & Administration, Cynthia D. Hampton; Manager of Operations, Donald K. Snaman; Manager of Economic Development, Steve Wright; Assistant Manager of Operations, Eric Napralla; Executive Assistant, Rita F. Artist; Staff Accountant; Evelyn Lim
Commissioner Miller led the Pledge of Allegiance.
II. APPROVAL OF MINUTES
A Motion to Approve Minutes of Regular Meeting of July 26, 2006 was made by Commissioner Miller and was Seconded by Commissioner Dodge. The Motion passed by a unanimous voice vote of all Commissioners present at that meeting. Commissioners Garcia and Castle abstained.
A Motion to Approve Minutes of Regular Meeting of August 9, 2006 was made by Commissioner Garcia and was Seconded by Commissioner Castle. The Motion passed by a unanimous voice vote of all Commissioners present at that meeting. Commissioner Miller abstained.
III. CLAIMS
Chairman Aikins inquired about a payment made to United Site Services, Inc. Cynthia Hampton explained that the payment was for regular monthly portable restroom facilities.
A Motion to Approve Claims was made by Commissioner Castle. The Motion was seconded by Commissioner Garcia. The Motion passed by a unanimous voice vote of all Commissioners.
IV. RESOLUTION
A. RESOLUTION APPROVING SUBLEASE AGREEMENT – (Portside Investors – Phase I Standard Lease Agreement) – (LAW OFFICES OF PIRRONE AND PIRRONE, LLP)
RESOLUTION
B. RESOLUTION APPROVING SUBLEASE AGREEMENT – (Portside Investors – Phase I Standard Lease Agreement) – (G.T. KELLY & COMPANY, CERTIFIED PUBLIC ACCOUNTANT, A PROFESSIONAL CORPORATION)
Items III-A & III-B were handled as one item.
A Motion to Adopt was made by Commissioner Dodge and was Seconded by Commissioner Miller. The Motion passed by a unanimous roll call vote of all Commissioners.
V. MOTION
A. MOTION APPROVING AND AUTHORIZING EXECUTION OF AGREEMENT FOR PROFESSIONAL CONSTRUCTION MANAGEMENT, INSPECTION AND TESTING AND FINAL REPORT SERVICES – FORMER LBT SITE PORT OF REDWOOD CITY (URS CORPORATION)
Click here to view the staff agenda sheet and documents for this item
Executive Director Giari explained that on August 9th, the Port Commission awarded the Former LBT Demolition and Site Remediation public works contract to Cleveland Wrecking Company. Subsequently, Port staff contacted four environmental consulting firms to provide proposals to perform construction management services for this project. Three proposals were submitted from those firms and staff is recommending entering into an agreement with URS Corporation to perform those services. The construction management services include overseeing work performed by Cleveland Wrecking Company, daily monitoring of all activities, tracking all incoming fill and outgoing wastes and scrap, confirmation sampling as per the DTSC-approved Closure Plan, Corrective Measures Implementation Workplan, and the Consent Order Supplement, removal and installation of monitor wells, interaction with DTSC and other regulatory agencies, etc. URS will be required to draft and submit the Final Closure and Final CMI Completion Reports to DTSC. The contract is for a fixed price of $347,136 for the work described in the Agreement.
Giari pointed out that some of the work involves removal of contaminated soil and groundwater based on estimated volumes. If the volumes change, the work required by URS for oversight and testing will change and URS will bill the Port for that work based on the rates in their proposal. Giari also explained that Cleveland Wrecking Company is a wholly owned subsidiary of URS Corporation so the agreement contains provisions to help protect the Port from conflicts of interest (see paragraph 19, Ethical Considerations, of the Agreement). The Notice to Proceed for the LBT Demolition and Site Remediation will be issued to Cleveland Wrecking Company this week. Giari stated that it is necessary to contract with a construction management firm as soon as possible. URS is reviewing the contract and staff is aware that some minor changes may be made to the contract. Staff requests that the Board give authority to the Port Attorney to review and approve any minor legal changes that would not require Board action.
Commissioner Dodge commented that when the Port Commission approved the Cleveland Wrecking contract, several references were made to the “Port Engineer” and asked if URS would be filling that role. Giari explained that the construction contract with Cleveland Wrecking referred to the engineering that was done by Treadwell & Rollo to prepare the plans and specifications. Dodge referred to benchmarks in the agreement that stated approval must be obtained from the Port Engineer in order to go forward. Giari replied that in that case, they would be referring to URS Corporation and that URS has reviewed the contract with Cleveland Wrecking and understands all of the tasks required by URS as Port Engineer. Dodge asked what would happen in the event DTSC did not approve the Final Closure and Final CMI Completion Reports. Giari stated that it is the responsibility of URS Corporation to have those documents and reports signed off by DTSC. The Port, URS Corporation, and Cleveland Wrecking Company will work together with DTSC to determine what is required. Don Snaman, Manager of Operations explained that DTSC will have a representative overseeing the LBT site during the sampling of soil and other activities.
Commissioner Dodge asked for clarification regarding the rates at which additional work by URS would be billed in 2006 and 2007. Snaman explained that the contract allows for an increase in URS Corporation’s rate schedules for work approved in 2007. Chairman Aikins commented that although there will be two months of work performed in 2007, if it is part of the original scope of work specified in the contract, the work will be billed at the 2006 rates; only work approved in 2007 would be billed at new rates.
Commissioner Castle commented that URS Corporation and Cleveland Wrecking Company have been in business for many years and have a great deal of experience. In his opinion they should be providing a firm fixed price contract and should not bill the Port for additional work. Giari explained that the contract is a firm fixed price for specific items in the contract and other items in the contract are estimated due to the nature of the work to be done.
Commissioner Miller commented that there is a possibility that contamination may be present in areas underneath the tanks and that can only be determined once the tanks are torn down. Miller inquired about URS Corporations’ experience in working with DTSC.
Giari stated that they have done site remediation work on hazardous waste sites in California that are similar to this one. Mike Velzy, URS Corporation, stated that he has worked with DTSC several times during the past five years of his employment with URS, and that URS has a successful history of working with DTSC on hazardous waste site projects.
Chairman Aikins referred to page 4 of the URS proposal, preparation of reports, and asked if the Port would be required to provide monitoring reports indefinitely. Don Snaman, Manager of Operations, responded that it depended on what was found under the tanks. If there is staining under the tanks, the Port would have to comply with DTSC’s 20-year post closure monitoring requirement, but if there is no staining, it would not be necessary to comply with this requirement.
Chairman Aikins expressed his appreciation for the excellent job that Don Snaman has done in preparation and guidance of this project.
A Motion to Approve was made by Commissioner Dodge and the Motion was Seconded by Commissioner Miller. The Motion passed by the following roll call vote:
Commissioner Garcia: Yes; Commissioner Dodge: Yes; Secretary Miller: Yes; Vice Chairman Castle: No; Chairman Aikins: Yes.
VI. REPORT/PRESENTATION
By: Cynthia D. Hampton, Director of Finance & Administration
Click here to view this presentation.
A. FY 2006 UNAUDITED ANNUAL FINANCIAL STATEMENTS
B. QUARTERLY INVESTMENT REPORT (Quarter ended June 30, 2006)
Ms. Hampton began the presentation of the Fiscal Year 2006 financial results by explaining that while the presentation had been prepared prior to the audit, the audit has since been concluded and there are no adjustments or recommendations. Therefore, the results as presented should accurately reflect the final audited amounts.
Highlights of the presentation include the following information: a.) 1.8 million MT of cargo generated $4.75 million in maritime revenue, or 71% of the Port’s total revenue of almost $6.7 million. b.) Of the $6.7 million in total revenue, $1.9 million or 29% was expended by Operations and $1.1 million or 17% was expended by Administration. c.) Almost $2.5 million or 37% of total revenue was added to retained earnings. That means that 37 cents of every revenue dollar that was generated was retained in the business. d.) Because all operating expense line items are under budget, no adjustment to the FY06 budget will be necessary this year. e.) The combined effect of higher revenues and lower expenses resulted in almost $2.5 million in net income after subvention for FY06. This is $787,000 better than FY05 actual and $515,000 better than FY06 budget. f.) Cash balances have gone up almost $2 million in FY06, which brings total cash to $14.5 million at June 30, 2006
Commissioner Dodge commented that it was a very good report and requested that future financial statements be e-mailed to the Commissioners prior to the meeting, in addition to the hard copies they already receive.
Chairman Aikins asked if the interest expense associated with the 1999 bonds issued for the purpose of remediating the Liquid Bulk Terminal had been capitalized. Ms. Hampton explained that up until a year or two ago the interest expense had been capitalized, however, when it appeared that the book value of the work in progress related to the LBT might exceed its value, capitalization of interest ceased. Chairman Aikins inquired if any interim depreciation had been recorded on the LBT work in progress. Ms. Hampton responded said it had not, and explained why.
Commissioner Miller asked Executive Director Giari if the Port plans to spend the Pacific Shores mitigation money. Mr. Giari explained that it is included it in the FY07 budget as a capital project for the year, however, an appropriate project hasn’t yet been identified and the Port is working with our tenants to do so.
Commissioner Dodge requested Ms. Hampton to prepare a worksheet that compares the Port’s actual cash reserves to its needed level of cash reserves.
Chairman Aikins inquired about the interest rate for certificates of deposit which have recently matured. Ms. Hampton replied that the most recent CD maturity was on August 28th : $375,000 with Union Bank, 91 days, 3.75%. She pointed out that at June 30th, the overall weighted average rate was 4.13%.
Chairman Aikins complimented Ms. Hampton and the staff on the results and report.
VII. ELECTION OF OFFICERS
Commissioner Miller made a Motion to elect John (Jack) Castle as Chairman. Commissioner Garcia seconded the Motion. The Motion passed by a unanimous voice vote of all Commissioners. At this time in the meeting, Past Chairman Aikins turned over the gavel to Chairman Castle.
A Motion to elect Lewis (Lew) Miller as Vice Chairman was made by Commissioner Dodge. The Motion was seconded by Commissioner Garcia and passed by a unanimous voice vote of all Commissioners.
Commissioner Aikins made a Motion to elect Richard (Dick) Dodge as Secretary, which was seconded by Commissioner Garcia. The Motion passed by a unanimous voice vote of all Commissioners.
VIII. PUBLIC COMMENT
None
IX. MATTERS OF BOARD INTEREST
Chairman Castle stated that new Port Commission committees would be formed as soon as possible.
X. EXECUTIVE DIRECTOR'S REPORT
Executive Director Giari reported on the Annual Meeting of the Association of Pacific Ports (APP) that was held in Saipan last week. The attendance was good, including ports from the Western South Pacific as well as ports from Taiwan, Canada and United States. Commissioner Dodge and Giari made a presentation at the Conference on Building Relationships Between Port Management and Port Commissions, which was well received. The PowerPoint presentation will be made available to the APP member ports. Steve Wright, Manager of Economic Development, also attended the Conference and will provide Board members with a written report.
XI. ADJOURNMENT
At 9:15 a.m. Chairman Castle requested that the Commission adjourn to its next regularly scheduled Meeting of September 13, 2006
A Motion to Adjourn was made by Commissioner Aikins and was Seconded by Commissioner Garcia. The Motion passed by a unanimous voice vote of all Commissioners.
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