BOARD OF PORT COMMISSIONERS
SPECIAL MEETING
WEDNESDAY – August 15, 2007
MINUTES
I. CALL TO ORDER
8:00 A.M.: Chairman Miller, presiding
Commissioners Present: Richard S. Claire; Ralph A. Garcia, Jr.; Vice Chairman Richard A. Dodge; and, Chairman Lewis D. Miller.
Commissioners Absent: Secretary Larry R. Aikins
Staff Present: Executive Director Michael J. Giari; 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; Assistant Manager of Operations, Eric Napralla; Executive Assistant, Rita F. Artist
Commissioner Dodge led the Pledge of Allegiance.
II. SWEARING IN OF PORT COMMISSIONER:
Vice Chairman Dick Dodge announced that at a Special Meeting of the City Council on May 21, 2007, Dick Claire was appointed as a new Port Commissioner for a 5-year term ending July 31, 2012. At the same meeting, incumbent Ralph Garcia was reappointed to the Port Commission, also for a 5-year term ending July 31, 2012. At this time, on behalf of the Port Commission, Dodge welcomed back Commissioner Garcia; and referred to Chairman Lew Miller who administered the Oath of Office to Dick Claire.
Chairman Miller commented that he has known Dick Claire from many years of working together at Cañada College and is pleased that Claire will bring his business and educational background along with his many years of experience as a civic leader to the Port Commission.
III. APPROVAL OF MINUTES:
Due to a lack of quorum of Commissioners present at the June 27, 2007, July 11, 2007, and July 25, 2007 meetings, Chairman Miller deferred approval of the minutes for those meetings to a future Port Commission meeting. Special Counsel to Port, Francois X. Sorba, explained that in order to approve the minutes for the two meetings in July, it would be necessary for a Commissioner who was absent from the meeting(s) to listen to the audio tape of those meeting(s).
IV. CLAIMS:
A Motion to Approve Claims was made by Commissioner Dodge and it was seconded by Commissioner Garcia. The motion passed by a unanimous voice vote of all Commissioners present. Secretary Aikins was absent.
V. RESOLUTION
A. RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF ASSIGNMENT OF LEASE AGREEMENT – (ROMIC ENVIRONMENTAL TECHNOLOGIES CORP.)
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Executive Director Giari explained that in June 2001 the Port Commission approved a lease agreement with Romic for the operation of a hazardous waste rail transfer facility at the Port. Romic’s rail transfer operations are authorized by a permit with the Dept. of Toxic Substances Control (DTSC). DTSC’s permit requires Romic to provide a mechanism for financial assurance for closure of the site and Romic has provided a bond in the amount of $298,151 to cover closure of the site in the event that Romic fails to do so. Due to the potential financial burden on the Port, the Port has required Romic to provide an irrevocable Letter of Credit (LC) in the amount of $368,962 to cover estimated closure costs. Staff has reviewed Romic’s Closure Plan and closure cost estimate (approved by DTSC), found them to be reasonable and have increased the amount required by DTSC by nearly 25% as a contingency.
Giari stated that in May 2007 Romic was issued an enforcement order requiring Romic to close their East Palo Alto facility within the next 12 months. The order also requires Romic to close the rail transfer facility at the Port within 12 months after closure of the East Palo Alto facility. On June 28, 2007 Clean Harbors Environmental Services, Inc., a large, national environmental services corporation, announced the acquisition of certain assets of Romic, including the Port’s rail transfer facility. Romic requested an assignment of the lease of the rail transfer facility to Clean Harbors. The Port sent Romic a letter requesting certain conditions be satisfied before the Port executes the assignment to Clean Harbors. Port staff has worked closely with Romic and Clean harbors to ensure a smooth, well-planned assignment of Romic’s lease. Clean Harbors has supplied the Port with their 2006 Annual Report showing the size and strength of their organization and Port staff is recommending execution of the assignment with the conditions requested.
Commissioner Dodge stated that $368,962 to cover estimated closure costs seemed low based on what the Port has seen in the past. Giari explained that there is no storage of hazardous waste at the rail transfer facility site, and, the maximum amount of hazardous waste that can be on the site at any time is limited to 60,000 gallons. The facility is on less than 1-acre and is fully contained by a cement containment structure that meets the DTSC requirements. Staff has reviewed the Closure Plan and the Port is requiring a contingency factor that has increased the amount of the Closure requirement by DTSC.
Dodge commented that the assignment of the lease process has been time consuming and costly for the Port and said that those expenses should be covered by the entity requesting the assignment. Dodge suggested that be a provision of approval of this lease; and, that future leases contain a provision that the cost of an assignment be covered by the company requesting the assignment. Special Counsel to Port, Francois X. Sorba, explained that the current lease does not provide language saying that any costs can be passed on to the assignor or the assignee. As a policy matter, language to that effect can be added to future leases. Giari stated that the Port can and will ask Clean Harbors to pay for the costs to the Port for this assignment.
Commissioner Garcia asked what the costs have amounted to. Giari explained that he did not have that information at this time, but this assignment, because of the closure of the Romic facility by DTSC, the subsequent acquisition by Clean Harbors, and the requirement for the LC, Full Pollution Liability coverage, and the fulfillment of other conditions of the assignment required more time than expected for a routine lease assignment. Giari estimated the costs to be in the range of $5,000 to $7,000.
Garcia commented that Romic was ordered to shut down and close by DTSC due to violations at their East Palo Alto facility and asked if Romic had any outstanding violations at the Port. Giari responded that there were violations in 2005 for which Romic had provided a letter and documentation showing what happened and how the violations were corrected.
Chairman Miller asked if we are certain that there are no cracks or leakage at the rail transfer facility and are we certain that $368,962 would pay for all closure costs. Giari stated that there is no record of any spills at the rail transfer facility and that any spill would have to be reported to DTSC. Because there are no storage tanks at this facility, there is no possibility of leakage. Giari stated that the Commissioners would be provided with a copy of the Closure Plan.
Commissioner Garcia inquired about increasing the $368,962 amount as the lease continues for more years to allow for the potential of rising closure costs. Don Snaman explained that the lease has a requirement for an annual review to adjust the amount of the LC. Part of the Consent Order that Clean Harbors was issued requires them to perform a structural integrity test of the secondary containment within the next 6-months and every 6-months thereafter.
Commissioner Claire asked about the timing on the Letter of Credit and Giari replied that the Port has received the letter and that it has been reviewed by the Port attorney and Port staff.
A Motion to Adopt was made by Commissioner Dodge. It was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Secretary Aikins was absent.
RESOLUTION
B. RESOLUTION TERMINATING REIMBURSEMENT AGREEMENT WITH LV WESTERN MINING CLAIM LLC
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Executive Director Giari explained that in 2006 LV Western Mining (LV) proposed to build and operate a construction aggregate terminal at the Port. The Port Commission approved a Reimbursement Agreement between the Port and LV Western Mining of Phoenix, AZ under which LV paid for all of the costs of preparing the environmental CEQA review of the proposed project. The Port subsequently hired the consulting firm of TEC, Inc. to perform an Initial Study of the project and to prepare the required CEQA documents. LV deposited with the Port $83,386.60 for the cost of the study and an administration fee to the Port of 10 percent of the amount spent on the study. Giari stated that neither the Port nor LV wishes to continue work on the CEQA review and study for the proposed project. The remaining balance from the deposits made by LV with the Port is $2,111.84, which would be returned to LV following approval of the termination of the reimbursement agreement by the Port Commission.
Commissioner Dodge asked what it would cost to complete the study. Giari responded that TEC, Inc. had completed the Initial Study, which resulted in a recommendation to prepare a Mitigated Negative Declaration. He thought the $2,111.84 would probably cover most of the costs to prepare the MND but explained that to do so would not be of any benefit if we do not have a project. The Initial Study may be used in the future for a similar project.
A Motion to Adopt was made by Commissioner Dodge and it was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Secretary Aikins was absent.
VI. PUBLIC COMMENT:
None
VII. MATTERS OF BOARD INTEREST:
Commissioner Garcia asked how many Port customers handle toxic or hazardous waste materials; and, of those, how many transport materials over the Port’s wharves. Giari explained that toxic or hazardous wastes are handled under permit with the DTSC and that Romic is the only company at the Port who handles these materials. They do not use the Port’s wharves. Giari further explained that chemicals handled by Basic Chemical Solutions and Esbro Chemical are not covered by the DTSC because they are not a chemical waste. Seaport Refining receives Transmix, a fuel product that is a mixture of gasoline and other fuels, which is not a waste and is not hazardous.
Garcia also requested that the Port’s Travel Policy be reviewed by the Port Commission.
VIII. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported on the Annual Meeting of the Association of Pacific Ports that he and Commissioner Dodge attended in Mazatlan, Mexico. There was good attendance from approximately 30 member ports including APP ports from the west coast of Mexico, the United States, Canada, the Pacific Islands, and Taiwan. Giari gave a PowerPoint presentation at the Meeting on the development of the ferry terminal at the Port of Redwood City. It was of general interest to everyone because a number of the ports are involved with passenger transportation. Commissioner Dodge and Giari were on the Nominating Committee to select officers for the Association. Commissioner Dodge gave the Committee a report and the slate of officers was filled with a broad representation of APP’s members on the Executive Committee.
Commissioner Dodge commented that it was one of the better APP meetings he had attended. In terms of membership, APP is back up to 30 member ports with several other ports considering membership at this time. Dodge explained that APP is primarily a port commissioner oriented organization. Part of the APP’s growth is due to members joining from Mexico and the Far East, however, those ports do not operate with commissioners. They operate as a government entity that reports directly to the government. Dodge commented that APP will have to decide how to continue a strong emphasis on commissioner involvement and to work hard to get the word out to commissioners up and down the coast as to what APP is all about and why it is such a benefit to commissioners. APP’s Annual Meeting is one of the most important meetings that we attend each year from the standpoint of learning how events taking place in the maritime industry affect our roles as commissioners and the way we govern our individual ports.
IX. ADJOURNMENT:
At 8:40 a.m. Chairman Miller requested that the Commission adjourn to its next regularly scheduled Meeting of August 22, 2007
A Motion to Adjourn was made by Commissioner Garcia. It was seconded by Commissioner Dodge. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Aikins was absent.
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