BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – August 22, 2007
MINUTES
I. CALL TO ORDER
8:00 A.M. : Chairman Miller, presiding
Commissioners Present: Commissioner Richard S. Claire; Commissioner Ralph A. Garcia, Jr.; Vice Chairman Richard A. Dodge; and, Chairman Lewis D. Miller
Commissioners Absent: Secretary Larry R. Aikins
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; Assistant Manager of Operations, Eric Napralla; Executive Assistant, Rita F. Artist
Commissioner Claire led the Pledge of Allegiance.
II. APPROVAL OF MINUTES:
A Motion to Approve Minutes of Special Meeting of August 15, 2007 was made by Commissioner Garcia and Seconded by Commissioner Dodge. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Aikins was absent.
III. CLAIMS:
A Motion to Approve Claims was made by Commissioner Dodge and it was seconded by Commissioner Claire. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Aikins was absent.
IV. RESOLUTION
A. RESOLUTION ACCEPTING GRANT FOR THE RECEIPT OF REIMBURSEMENT FROM THE PRESIDENT’S DEPARTMENT OF HOMELAND SECURITY FOR EXPENSES INCURRED BY PORT IN CONNECTION WITH HOMELAND SECURITY AND AUTHORIZING EXECUTION OF DOCUMENTS
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Donald K. Snaman, Manager of Operations, explained that in January 2007 the U.S. Dept. of Homeland Security opened the application period for the FY 2007 Infrastructure Protection Program grants. Under the Port Security Grant Program category, the Port was eligible to apply for funds and was permitted to submit up to three projects that addressed defined priorities. All public agency applicants are required to provide a 25% funds match for each project funded greater than $24,999. In March, the Port submitted a grant application with a total project amount of $252,115, of which the Port would match $56,797. The Port’s projects included 1) Emergency Operations Support; 2) Intrusion Detection-Landside/Waterside; and, 3) Training Support. Snaman stated that on August 9 the Port was awarded $181,527 by the Dept. of Homeland Security. Projects 1 and 2 were fully funded with the federal share at $181,527 and the Port’s match at $56,797. Project 3 was awarded $11,005, with no Port matching funds. Port staff is recommending approval of this resolution to obtain the reimbursement of costs incurred for the projects described in the grant application.
Commissioner Dodge requested a description of the boat that would be purchased under Project 2. Snaman replied that it would be approximately a 25’ fiberglass hull Whaler with a center console, which could be used both as a work boat and a patrol boat. Dodge asked if it would be used as a rescue boat at any time and Snaman responded that Port staff has not been trained in that function. Dodge inquired about a boat that the Port transferred to either the Police or Fire Dept. Snaman said that the Police Dept. has a 25’-30’ boat that is currently in need of repairs. Staff is working with the Police Dept. to get that boat back in service as a police boat.
A Motion to Adopt was made by Commissioner Garcia. It was seconded by Commissioner Dodge. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioner Aikins was absent.
RESOLUTION
B. RESOLUTION ACCEPTING ADMINISTRATION BUILDING PARKING AREA AND HERKNER ROAD IMPROVEMENT PROJECT AND TO AUTHORIZE RELEASE OF PAYMENT AND PERFORMANCE BONDS ACCORDING TO THE TERMS OF THE CONTRACT – (UNION CITY CONSTRUCTION)
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Donald K. Snaman, Manager of Operations, commented that in April 2007 the Port Commission awarded a public works contract to Union City Construction for improvements to the administration building parking area and Herkner Road. In May the Port issued a Notice to Proceed to Union City to complete the improvements for a contract price of $83,765. Snaman explained that from the time the contract documents were issued and the day work started, additional areas of deterioration were identified beyond those areas denoted on the plans resulting in an increase to the engineer’s estimate of 485 tons to 557 tons of asphalt. Change Order #1 in the total amount of $18,208 was issued for additional excavation and disposal of deteriorated areas and for additional asphalt concrete. The final contract price will be $101,973. BKF Engineers and Port staff recommends acceptance of the project by the Board.
Chairman Miller asked why the engineers had not included the additional areas of deterioration in their original bid documents. Snaman explained that staff and engineer marked the areas of deterioration in January 2007 but when the contractor and staff walked the site in May 2007, it was agreed that some of the area of deterioration should be larger because of the way it was deteriorating and in order to prevent future problems. Commissioner Dodge inquired about the removal of 3-4 concrete pilings. Snaman replied that one was removed and the others were broken off about 3-feet below the surface and pulled out. Dodge suggested that the new surface be slurry sealed on a regular basis in order to prevent “alligator cracking” and extend the life of the surface.
A Motion to Approve was made by Commissioner Dodge. It was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioner Aikins was absent.
V. REPORT / PRESENTATION:
By Cynthia D. Hampton, Director of Finance & Administration
A. FY 2007 Unaudited Annual Financial Report
Ms. Hampton presented the unaudited financial results for the fiscal year ended June 30, 2007. In summary: Tonnage 1.4 million metric tons; Operating Revenue $5.5 million; Operating Expense $3.2 million; Operating Income $2.3 million; Non-Operating Income $545,000; Net Income Before Subvention $2.9 million; Subvention to the City $331,000; Net Income After Subvention $2.5 million.
She explained that the $545,000 Non-Operating Income/(Expense) is comprised of three primary categories: $682,000 Interest Income; $541,000 Interest Expense; and $404,000 Other Non-Operating Income/(Expense).
She reported that the $404,000 Other Non-Operating Income/(Expense) includes $150,000 in grant funds for security from the federal government through the State of California; $4,000 in grant funds from the first draw on the $1-million grant from the DBW for launch ramp improvements; and $230,000 in insurance proceeds for the F Dock damage claim.
Ms. Hampton reported that Operating and Non-Operating Revenues combined generated $6.6 million, and explained that of the $6.6 million in total revenue generated, $2.0 million was expended on Operations, $1.1 million on Administration, $541,000 for Interest Expense, $331,000 to the City in Subvention, and the remaining $2.5 million was retained as equity.
Ms. Hampton continued her presentation with an explanation of the variances between Fiscal Year 2007 actual results in comparison to the FY07 Budget and Fiscal Year 2006 results.
She reported that fiscal year 2007 ended with a small but positive Cash Flow of $268,000.
Commissioner Dodge requested a copy of the supplemental subvention calculation which reflects the Port’s targeted reserves. Ms. Hampton replied that she will be happy to do so and explained that it is prepared after the annual audit is completed. She mentioned that there was $0 supplemental subvention for fiscal year 2007 (which was based on FY06 results).
Chairman Miller thanked Ms. Hampton for a great presentation.
B. QUARTERLY INVESTMENT REPORT (Quarter ended June 30, 2007)
Ms. Hampton move on to the Quarterly Investment Report and explained that it reflects two categories of cash and investments: restricted and unrestricted. At June 30, 2007, there was $13.2 million unrestricted and $1.5 million restricted, for a total cash and investments of $14.7 million.
The $1.5 million restricted balance represents $1,385,000 on deposit with the trustee for the 1999 Series Revenue Bonds, and $170,000 in an escrow account at Mid-Peninsula Bank, which is part of the Pacific Shores Exchange Agreement and earmarked for the purpose of mitigating nuisances such as noise and dust, etc. She explained that recognition of the revenue associated with the escrow funds will occur when the funds are ultimately expended.
Chairman Miller stated he remembers fighting to get those funds and asked why they are not on deposit where they will receive more interest. Ms. Hampton mentioned that since opening the escrow account it has earned almost $20,000 in interest, and explained that the funds are in escrow as part of the agreement we have with Pacific Shores; we cannot move or withdraw them unilaterally. Ms. Hampton will contact Pacific Shores to see if he will agree to move the funds.
Returning to the Quarterly Investment Report, Ms. Hampton reported that she had called in a couple of Certificates of Deposit right before June 30th in anticipation of making payments in early July to Cleveland Wrecking and URS for the LBT project. However, due to billing issues there was a delay in processing the invoices for payment, and as a result at June 30th the funds were in a lower yielding account rather than in certificates of deposit.
Chairman Miller asked if our money is distributed well enough to satisfy the auditors this year. Ms. Hampton replied that since funds were moved out of Bay Area Bank (now Mid-Peninsula Bank) several years ago into certificates of deposit amongst multiple banks, the auditors have been satisfied. She explained that the Port is subject to the City’s investment policy, and the Port’s certificates of deposit total more than the 7.5% policy limit.
Commissioner Dodge asked if the October 1st take over of Mid-Peninsula Bank by Wells Fargo will affect the Port having its funds in a local bank versus a national bank, and asked if the Port is considering moving its funds to another community bank.
Ms. Hampton responded that she intends to issue a Request for Proposal for banking services which will be sent to local banks as well as national banks. She mentioned that there are very few community banks left, although she understands that, in addition to First National Bank of Northern California, there will also be a branch of United American Bank opening in Redwood City.
Chairman Miller thanked Ms. Hampton again.
VI. PUBLIC COMMENT:
NONE
VII. MATTERS OF BOARD INTEREST:
Commissioner Garcia commented that tonight will be the last of the 2007 Concert in the Park series at Stafford Park. The Port Commission is a major sponsor of these concerts and Garcia invited all to attend. Garcia is also a member of the Optimist Club, who has sold hot dogs and hamburgers at the concert series every Wednesday night of this season.
VIII. EXECUTIVE DIRECTOR'S REPORT:
Donald Snaman, Manager of Operations, reported that a notice was received from the U.S. Department of Homeland Security advising that there are supplemental funds available for grants. Although the Port did receive $181,000 in grant funding, which was reported on earlier, the Port will submit an application once again in order to get funding for training.
IX. ADJOURNMENT
At 9:35 a.m. Chairman Lewis requested that the Commission adjourn to its next regularly scheduled Meeting of September 12, 2007. A Motion to Adjourn was made by Commissioner Dodge and it was seconded by Commissioner Garcia. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Aikins was absent.
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