BOARD OF PORT COMMISSIONERS
SPECIAL MEETING
WEDNESDAY – February 21, 2007
MINUTES
I. CALL TO ORDER
CALL TO ORDER: 8:00 A.M.; Chairman Castle, presiding
Commissioners Present: Commissioner Ralph A. Garcia, Jr.; Vice Chairman Lewis D. Miller; and, Chairman John J. Castle
Commissioners Absent: Commissioner Larry R. Aikins; and, Secretary Richard A. Dodge
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, Steven Wright; Assistant Manager of Operations, Eric Napralla; Executive Assistant, Rita Artist
Commissioner Garcia led the Pledge of Allegiance.
II. APPROVAL OF MINUTES:
Due to a lack of quorum of Commissioners present at the January 24, 2007 meeting, Chairman Castle deferred approval of the minutes to the next Port Commission meeting.
III. CLAIMS:
A Motion to Approve Claims was made by Commissioner Garcia and it was seconded by Commissioner Miller. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
Chairman Castle asked if the Port has a list of readily available contractors to call upon for various small jobs. Executive Director Giari explained that under the Port’s Purchasing Policy, a limit of $50,000 is set for public works contracts for which staff must solicit three bids but are not required to advertise for public bidding. Public works contracts over $50,000 must be advertised for public bidding.
IV. RESOLUTION
A. RESOLUTION APPROVING REQUESTS FOR CHANGE ORDER FOR THE FORMER LBT DEMOLITION AND SITE REMEDIATION PROJECT AT THE PORT OF REDWOOD CITY AND AUTHORIZING PAYMENT THEREOF (RCO 2 AND 3B)
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Executive Director Giari gave a brief background on the two change orders that have been brought back before the Commission for approval at today’s meeting, explaining that the change orders had been reviewed by the Port’s engineer (URS), the Port’s attorney, and Port staff. Subsequent discussions with Cleveland Wrecking Company took place regarding these change orders and URS has provided recommendations in the attached letter dated January 18, 2007. Port staff has negotiated a settlement on Change Order 3B for 50% of the total costs. At this time, staff is recommending approval of Change Order 2 in the amount of $7,436.50 and approval of Change Order 3B in the amount of $7,576.00.
Commissioner Garcia asked if staff anticipates any additional change orders to be submitted in the future. Giari replied, “Yes.” The URS memo mentioned Change Order 5, however, staff is not asking the Commission to consider it at this time since it is still under review and discussion. Donald Snaman, Manager of Operations, stated that the only other change order he anticipates is for the removal of asbestos wrap that is on underground pipelines that have yet to be removed.
Commissioner Miller asked what fraction of work left to be completed at the LBT is underground and what fraction is aboveground. Snaman replied that most of the remaining work is underground.
Commissioner Garcia commented that the engineers should have anticipated the possibility of asbestos on the underground pipelines due to the age of the project. Commissioner Miller asked for the name of the engineering company that was originally responsible for the estimate and Giari answered that Treadwell & Rollo (T&R) drew up the contract specifications. Chairman Castle asked if any conversations had ensued between T&R and Cleveland Wrecking prior to the issuance of the contract. Chris Hannon, representative of Cleveland Wrecking (CW), replied that no conversations had taken place between T&R and CW. Cleveland Wrecking bid on the project based on the information provided by the Port in the bid documents.
Chairman Castle stated that in view of the fact that these two items had been brought before the Commission previously, he would suggest that these two change orders be paid with the proviso that all future change orders be brought to the attention of the Port Commission.
Commissioner Garcia commented on numbers 2 & 3 of this resolution regarding authorization and reporting by the executive director on future change orders, saying that he did not believe in micromanaging, however, he was unsure about pre-authorizing amounts up to $50,000 per change order on this project. Commissioner Miller said he thinks staff is making good progress on this project and that he has confidence in the decisions made by the executive director. Chairman Castle concurred with Garcia and suggested that the matter of authorizing approval of change orders by the executive director in numbers 2 & 3 be brought back before the Commission when a full quorum was present.
A Motion to Adopt the Resolution through number 1, approving requests for Change Order 2 and Change Order 3B and authorizing payment thereof, was made by Commissioner Miller. The motion was seconded by Commissioner Garcia and passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
RESOLUTION
B. RESOLUTION APPROVING STANDARD SUBLEASE AGREEMENT (PORTSIDE INVESTORS – PHASE I LEASE AGREEMENT) – (INSTITUTE FOR WOMEN’S LEADERSHIP, INC.)
A Motion to Adopt the Resolution was made by Commissioner Miller and it was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
RESOLUTION
C. RESOLUTION APPROVING SECOND AMENDMENT TO SUBLEASE AGREEMENT – (Portside Investors – Phase I Lease Agreement) – (AMTECH)
A Motion to Adopt the Resolution was made by Commissioner Miller and it was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
RESOLUTION
D. RESOLUTION APPROVING CONTRACT DOCUMENTS FOR THE PORT ADMINISTRATION BUILDING PARKING AREA AND HERKNER ROAD IMPROVEMENT PROJECT AND AUTHORIZING AND DIRECTING ADVERTISEMENT FOR BIDS THEREFOR
STAFF AGENDA SHEET FOR THIS ITEM MAY BE VIEWED AT WWW.REDWOODCITYPORT.COM UNDER TAB “COMMISSION MEETINGS”.
Click here to view the staff agenda sheet for this item
Executive Director Giari explained that due to the age and deteriorating condition of the pavement, Port engineers, BKF, have prepared the public works contract bids and specifications for this project. Construction costs are estimated to be $114,719 and the bid opening date is set for April 3, 2007. Estimated date for completion of the project is July 2007.
Commissioner Miller asked if contracts with Port tenants using Herkner Road, in particular aggregate haulers, requires them to contribute to the cost of this project. Giari responded that the Port does not currently assess traffic or truck related fees to any Port tenants. Chairman Castle asked if the contract documents specified the type of traffic and use of Herkner Road and the thickness of asphalt to be used. Snaman replied type and use of traffic was not identified but the engineer’s estimate includes an 1-1/2" overlay of new asphalt that meets specifications for heavy truck traffic.
A Motion to Adopt the Resolution was made by Commissioner Garcia and it was seconded by Commissioner Miller. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
V. MOTION
A. MOTION TO ACCEPT THE PERIMETER SECURITY FENCING PROJECT AND TO AUTHORIZE RELEASE OF PAYMENT AND PERFORMANCE BONDS ACCORDING TO THE TERMS OF THE CONTRACT – (REF: AAA FENCE COMPANY, INC.; RESOLUTION NO. 1934)
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Executive Director Giari commented that the contract price for this project was originally $51,660; and, due to a change in the linear footage of fence installed, the price was reduced to $46,768.90. This perimeter fencing has been designed to be consistent with the Port’s security plan and the project costs will be reimbursed from the $150,000 grant that we received from the State Office of Homeland Security. Commissioner Miller asked if the project had been inspected by the Office of Homeland Security. Giari explained that the fencing is consistent with the Port’s security plan, which has been reviewed and approved by the U.S. Coast Guard.
A Motion to Approve was made by Commissioner Miller and it was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
MOTION
B. MOTION TO APPROVE PROFESSIONAL SERVICES AGREEMENT FOR LAUNCH RAMP GRANT IMPROVEMENTS – (TranSystems/Concept Marine Associates, Inc.)
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Executive Director Giari explained that the Port received a grant from the California Department of Boating & Waterways (DBW) to make improvements to the existing boat launch ramp on Chesapeake Drive. The Port reviewed proposals from several engineering firms to develop the public contract bids and specifications, etc. TranSystems Corporation submitted a proposal to provide professional engineering services for the project for a total fixed firm price of $140,868. Snaman explained that TranSystems’ price will be in the ballpark of the $144,000 that is allowed to the Port by DBW. A certain percentage of the construction costs are allowed for different permitting, engineering, and inspection costs and TranSystems’ proposal is within that percentage. Giari stated that TranSystems will have six months to finalize the scope of work for approval by DBW and will then have six months to complete the public contract bid documents and specifications. TranSystems has estimated that the project will be completed by December 2008.
Commissioner Miller asked if the launch ramp would be closed during the performance of the improvements. Snaman replied that there will be times when the launch ramp will be shut down and that staff will post notices in advance to alert the public of those closures. Ken Johnson, Vice President of TranSystems, stated that with a two lane ramp, it is difficult not to shut down the whole ramp while improvements are being made. However, TranSystems has put into the specifications of similar projects that all equipment and materials required to do the work be on site before any demolition takes place in order to keep the down time to a minimum. Johnson thanked the Commissioners for awarding the contract to TranSystems.
A Motion to Adopt the Resolution was made by Commissioner Garcia and it was seconded by Commissioner Miller. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
VI. PRESENTATION
By: Cynthia D. Hampton, Director of Finance & Administration
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A. Mid-Year Financial Results (December 31, 2006 Comparative Results)
B. Quarterly Investment Report (Quarter Ended December 31, 2006)
Mid-Year Financial Results, fiscal year to date December 31, 2006.
Ms. Hampton reported that the 777,000 metric tons of cargo which moved through the Port in the first half of the fiscal year generated $2.3 million in Maritime Revenue, which represents 77% of the $3.0 million of total Operating Revenue generated fiscal year to date through December 31, 2006.
She reported total Operating Expense at $1.5 million, of which two-thirds or $1.0 million is attributable to the Operations segment, and one-third, or $500,000, is attributable to Administration. She mentioned that the ratio of Operations and Administration expense to total Operating Expense has remained fairly constant over the years.
Ms. Hampton next compared fiscal year to date actual to budget. Actual Operating Revenue of $3.0 million versus a budget of almost $3.4 million; Actual Operating Expense of $1.5 million versus a budget of $1.7 million, and Actual Operating Income $1.5 million versus a budget of almost $1.7 million.
She reported an approximate10% drop in actual versus budgeted Operating Revenue, primarily due to the decrease in Maritime Revenue, resulting largely from the decrease in tonnage.
Continuing with the comparison of actual to budget, Ms. Hampton reported that Operating Expense is down $196,000, or 11%, and all the Operating Expense line items reflected in the Income Statement are under budget. Operating Income is $141,000, or 9%, below budget.
Actual Non-Operating Income/Expense is a positive $54,000 versus a budget of negative $54,000; the positive increase in Non-Operating Income/Expense was due primarily to an increase in Interest Income.
Continuing the comparison of actual to budget, Ms. Hampton reported that actual and budgeted subvention are close, but actual is slightly lower than budget because Operating Revenue is less than budget, and base subvention is a function of Operating Revenue.
Actual Net Income After Subvention was $1,388,000 versus a budget of $1,415,000; the variance of $26,000 is slightly less than 2% below budget. Although tonnage is down, profitability has been maintained by adjusting expenditures. Mid-way through the fiscal year 61% of the Net Income After Subvention that was anticipated for the entire year has been generated, so there is only 39% to go to achieve budget. She said it appears likely at this point that the Port may be close to its bottom line budget goal at the end of the year.
Ms. Hampton mentioned that there is one caveat regarding the bottom line – as previously discussed an adjustment to the amount capitalized for the LBT will need to be booked, and that will likely happen at the end of this fiscal year. That adjustment will affect the bottom line and is not included in the budget.
Commission Miller asked if the interest rates on money invested in various banks has gone up in the last year. Ms. Hampton replied they had, and there is also a higher rate of return on funds invested in LAIF. Ms. Hampton referred the Commissioners to the quarterly cash investment report and reported that the Port’s cash reserve position is very healthy.
Chairman Castle asked how often the interest rates are reviewed. Ms. Hampton responded that CD rates are reviewed at maturity, typically between 30 and 92 days, and noted that public funds rates are less than the rates associated with private deposits. Commissioner Miller asked Ms. Hampton to explain; she replied that public funds require collateralization whereas private funds do not; therefore public funds rates are lower.
Chairman Castle thanked Ms. Hampton for a good presentation.
VII. PUBLIC COMMENT:
Byron Jacobs, Port Captain for Sequoia Yacht Club, commented on Item V-B of this agenda regarding launch ramp improvements. Jacobs stated that on Saturdays the Yacht Club has about 20 youth who participate in a Jr. Sailing Program. The boat storage for the program is located at the head of the current launch ramp and Jacobs asked if temporary access could be provided between the boat storage and the water during the periods of time that improvements to the launch ramp are being made. If that is not possible, Jacobs asked that they be given a 60-day notice when the launch ramp will be shut down in order to notify the students and parents. Executive Director Giari agreed to take that into consideration.
VIII. MATTERS OF BOARD INTEREST:
Commissioner Garcia reported that he toured the Port of San Francisco this past weekend, which he found very interesting. Garcia commented that one idea that he came away with was that when the Port is planning for its future ferry terminal, we might consider possibilities for a small coffee shop/restaurant/food vendor that would also bring income into the Port. Chairman Castle agreed and suggested that the Port Commissioners visit other ferry terminals in the Bay area.
IX. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported that Chairman Castle and he attended the Mid-Year Meeting of the Association of Pacific Ports that was held in Long Beach, CA. There were approximately 20 ports in attendance from the United States, Canada, and the Pacific Islands. Giari commented that it was an interesting and successful meeting other than having their JetBlue flights cancelled for their return trip. Castle and Giari rented a car and drove back home to the Bay Area from Long Beach.
X. CLOSED SESSION:
At 9:09 a.m., the Board adjourned to Closed Session to conference with Legal Counsel - Anticipated Litigation under Government Code Section 54956.9(a). Case name unspecified - Disclosure would jeopardize existing settlement negotiations.
At 10:00 a.m., the Board reconvened. Chairman Castle announced that no action had been taken by the Board.
XI. ADJOURNMENT:
At 10:00 a.m. Chairman Castle requested that the Commission adjourn to its next regularly scheduled Meeting of February 28, 2007. The Meeting was adjourned by unanimous voice vote of all Commissioners present. Commissioners Aikins and Dodge were absent.
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