BOARD OF PORT COMMISSIONERS
SPECIAL MEETING
WEDNESDAY – January 29, 2008
MINUTES
I. CALL TO ORDER
8:00 A.M.: Chairman Miller, presiding
Commissioners Present: Commissioner Richard S. Claire; Commissioner Ralph A. Garcia, Jr.; Secretary Larry R. Aikins; Vice Chairman, Richard A. Dodge; and, Chairman, Lewis D. Miller
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; Assistant Manager of Operations, Eric Napralla; Accounting Clerk, Linda Hawkins; and, Executive Assistant, Rita F. Artist
Commissioner Dodge led the Pledge of Allegiance.
II. APPROVAL OF MINUTES:
A Motion to Approve Minutes of Regular Meeting of January 9, 2008 was made by Commissioner Dodge and Seconded by Commissioner Claire. The motion passed by a unanimous voice vote of the Commissioners present at the January 9th meeting. Secretary Aikins abstained.
III. 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.
IV. RESOLUTION
A. RESOLUTION APPROVING SECOND AMENDMENT TO SUBLEASE AGREEMENT – (Portside Investors – Phase I Lease Agreement) – (DYNA COMP, INC.)
A Motion to Adopt was made by Commissioner Dodge. It was seconded by Commissioner Aikins. The motion passed by a unanimous roll call vote of all Commissioners.
RESOLUTION
B. RESOLUTION ACCEPTING GRANT FOR THE RECEIPT OF REIMBURSEMENT FROM THE DEPARTMENT OF HOMELAND SECURITY – OFFICE OF GRANTS AND TRAINING FOR EXPENSES INCURRED BY PORT IN CONNECTION WITH HOMELAND SECURITY AND AUTHORIZING EXECUTION OF DOCUMENTS
Executive Director Giari explained that on September 30, 2007 the Federal Department of Homeland Security awarded the Port funding in the amount of $33,060 under the FY 2007 IPP-Port Security Grant Program. Project 1 was funded; the federal share is $33,060 and Port’s match is $11,020. Projects 2 & 3 were not funded. To date, the Port has received two Federal Grants from DHS and one State Grant from the California Office of Homeland Security. Port staff is recommending approval of this resolution to obtain the reimbursement of costs incurred for the projects described in the grant application.
Chairman Miller inquired about the possibility of receiving funding for Projects 2 & 3 and Giari replied that they have been included in a grant application to the State of California.
Commissioner Aikins commented that Port staff has done a good job of submitting grants. The Port has received security and emergency preparedness funding to date in the amount of $439,000.
A Motion to Approve was made by Commissioner Aikins. It was seconded by Commissioner Garcia. The motion passed by a unanimous roll call vote of all Commissioners present.
RESOLUTION
C. RESOLUTION ACCEPTING BID FOR THE FORMER LBT DEMOLITION AND SITE REMEDIATION SUPPLEMENTAL OFF-SITE WORK PROJECT AT THE PORT OF REDWOOD CITY; AUTHORIZING EXECUTION OF AGREEMENT FOR SAID WORK; AND DIRECTING RETURN OF SECURITY DEPOSITS
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Executive Director Giari explained that on December 12, 2007 the Board approved contract documents for this item. On December 22, 2007 an invitation for bids was published. Seven contractors requested contract documents and attended the mandatory pre-bid meeting. Bids were received from three contractors; low bidder was Ferma Corporation of Mountain View, CA in the amount of $102,760. The Port’s engineer, URS Corporation, and Port staff is recommending execution of an agreement with Ferma Corporation for the LBT Supplemental Off-Site Work.
Commissioner Dodge commented that the Port engineer’s estimate for this job was substantially lower than the bids received. Don Snaman, Manager of Operations, said that typically the engineer’s estimate is higher and that he would ask the engineers to respond. Commissioner Garcia said that because this is a very small job, it is possible the bidders inflated their bids to make it worth their while.
Chairman Miller asked Snaman whether or not DTSC would sign off on the Clean Up of the LBT site once this project is completed. Snaman said that once the LBT Supplemental Off-Site Work is restored to a risk standard equal to the clean up at the LBT site, then DTSC should be able to sign off on closure of the site.
A Motion to Approve was made by Commissioner Aikins. It was seconded by Commissioner Dodge. The motion passed by a unanimous roll call vote of all Commissioners present.
V. REPORTS & PRESENTATION
By: Cynthia D. Hampton, Director of Finance & Administration
A. Mid Year Financial Results (December 31, 2007 Comparative Results)
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B. Certified Quarterly Investment Report (Quarter Ended December 31, 2007)
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Cynthia Hampton gave a PowerPoint presentation of the mid-year financial results for fiscal year to date December 31, 2007. She reported that tonnage is 660,000 metric tons, which is 78% of the 843,000 MT budgeted and 85% of last year’s 777,000 MT. Volume is down for all commodities in comparison to budget and last year, except for sand and bauxite. Actual sand volume is higher than both budget and last year, while bauxite is below budget but higher than last year.
Operating revenue is $2.6 million, and maritime revenues accounted for $1.9 million or 72% of that total. Recreational boating, commercial and other operating revenue categories account for the remaining $753,000, and each is running fairly close to budget.
Ms. Hampton continued the presentation with a review of maritime operating revenue by commodity and operating expenses. While all operating revenue categories other than maritime are fairly on budget, all categories of operating expense are below budget. She pointed out that while revenues are down $449,000, the overall decrease in expense produced a net income after subvention which is just $26,000 less than budget.
Ms. Hampton continued with a slide depicting what level of revenues and expenses would have to be generated in the last half of the fiscal year in order to achieve budget. Ideally we’d like to see that there is less than 50% to go for revenues and more than 50% to go for expenses. Results for both revenues and expenses indicate that there is more than 50% to go. Expenses are fine, but revenues are falling short. Commission Aikins commented that a major factor to the decline in revenue is cement tonnage and asked if anything had happened in January to encourage us about the second half of FY 2008. Snaman replied that we did have a partial vessel in January and another partial vessel is scheduled for the end of February. We’re not going to be able to make up the deficit we have now in the cement tonnage.
Executive Director Giari commented that the general outlook for the construction industry is not very rosy. The second half of 2008 is supposed to be better than the first. Cemex has an import terminal in Long Beach as well as a terminal here in Redwood City. Things have slowed up for the demand in southern California as well as northern California. They haven’t been able to completely unload imported cement in Long Beach from the last two vessels so they were partially unloaded in Long Beach and then came to Redwood City to unload the rest. We see cement possibly coming back slowly, but, as Don said, we’re not going to make up our original budget forecast, which was overly optimistic; and, we’re not going to hit the amount of tonnage that we had in the last fiscal year by the end of this year. Chairman Miller asked if the recovery they are talking about in 2009 for the construction industry will be preceded by an increase in demand for cement. Giari explained that there are a number of factors and what Cemex is telling us is that with public infrastructure projects starting up and a slow recovery in the housing market in California, it will take the rest of 2008 before we see a significant increase in cement imports.
Commissioner Dodge asked if supplemental subvention was included in the FY08 Budget. Ms. Hampton replied that it was calculated, and that the calculation resulted in zero supplemental subvention. Dodge asked for confirmation that the City is not expecting anything other than base subvention; Ms. Hampton replied in the affirmative.
Ms. Hampton moved on to the Quarterly Investment Report. She reported that as of December 31, 2007, total cash and investments were $15.3 million, of which $13.9 million was unrestricted. She mentioned that interest rates have declined, and may continue to do so. As a result, she has moved some funds out of certificates of deposit and into LAIF, which is earning more than 4%. Fiscal year to date December 31, 2007, interest income was approximately $8,000 more than budgeted. She said that she didn’t expect that the second half of the year would produce as much interest income as the first half.
VI. STUDY SESSION:
Discussion of the City Charter questions for the Port Commission from the Ad Hoc Charter Review Committee of the City Council
Executive Director Giari explained that the subject of this Study Session is to provide an opportunity for Port Commissioners and members of the public to offer comments and discussion regarding a series of 28 questions that have been posed by the City Ad Hoc Charter Review Committee to the Port Commission. For several years the City Council has been reviewing provisions of the City Charter with the goal of updating and improving the City Charter. An ad hoc Port Commission committee, consisting of Commissioners Dodge and Claire, Port staff, and the Port Attorney has reviewed the questions and discussed possible draft responses. After considering the input received at today’s meeting, the draft responses will be finalized and submitted to the City to be included on the City Council Agenda of February 11.
Commissioner Dodge commented that some questions seem to indicate that there is not a clear understanding of the Commissioners’ role at the Port or how the Port is operated, which he thinks is a result of a failure to communicate. A top priority of the Port Commission over the years has been to improve communications. Our newsletter, Currents, is a good example of that. Previously, we have had meetings on a regular basis between the Mayor/Vice-Mayor and the Chairman/Vice-Chairman of the Port Commission to discuss Port issues of interest to the Council. The Port submits quarterly reports to the City Council and frequent updates on issues that the Port thinks would be of interest to Council members. Dodge considers it of utmost importance that the Port Commissioners convey their desire to improve communications with the City Council at the February 11 meeting.
Clem Molony, Lyngso Garden Materials and Secretary of the Seaport Industrial Association, commented that he has been in Redwood City for 13 years and has paid particular attention to issues affecting the Port area. Molony agreed with Commissioner Dodge’s theme of improved communications with the City. Back in the 1930’s one of the best models for setting up the Port Commission was to have a semi-autonomous board appointed by the City Council as a liability protection layer between the City Administration and the Port. The Charter review can be seen as an attempt to fine tune the Charter provisions and an attempt to strengthen communications between the Port and the Council. This is an opportunity for the Port and its businesses to communicate to the City Council that the Port keeps evolving and moving forward because it provides important services and economic activity to the community.
Mr. Molony also discussed Redwood City’s General Plan, its impact on transit oriented development and the importance of Port participation with the Planning Commission. It is critical that Port businesses, and Blomquist Street businesses, be posited as a basic, fundamental principal of the General Plan.
Commissioner Dodge commented that about 12 years ago, it took a long time for Pacific Shores Center to obtain Port Commission approval on changing the land use designation of where it is now located. One of the key issues that the Port Commission focused on was to protect its tenants, which is demonstrated by the berm and roadway that separate the Port industrial area from Pacific Shores and better accommodates both truck and automobile traffic. It is important that the Commission protect Port tenants again during the decision process of developing the Cargill site adjacent to Seaport Boulevard.
Commissioner Claire commented that former issues regarding Pacific Shores could be one of the reasons these questions were generated. The City thought the Port was an obstructionist to the Pacific Shores’ development because it was not understood what the Port needed to do in order to protect its industrial tenants. Claire agreed with Dodge in that we need to open the communications issue. The Planning Commission wants the Port to be involved with the General Plan process and this is an opportunity for the Port to work cooperatively with both the Planning Commission and the City Council and to make our point of view known.
Lorianna Kastrop, 28 Meadow Lane, Redwood City, said that she is very active in public activities and non-profit organizations in the City and that a vast majority of City residents do not know what an excellent resource the Port is for Redwood City. The Port’s newsletter helps but the Port is very much out-of-sight, out-of-mind to members of the public. Ms. Kastrop asked the Commission to consider that, in addition to its responsibilities of running the Port as a business, it is also administrating and protecting a public resource. Some of the issues regarding the Port that Redwood City residents do not understand are: that the Port subvents money back to the City; that the Port provides security and safety to the public through water access to the peninsula; that the Port provides an entry point for construction aggregates and keeps thousands of trucks off the roads and highways daily; and they do not understand the maritime uses of the Port. Ms. Kastrop urged the Commission to raise the profile of the Port in an attempt to help the public realize the benefits to them by having the Port as a part of Redwood City.
Commissioner Dodge responded that the Port has been trying to do that very thing and asked Ms. Kastrop if she could suggest ways to accomplish it. Ms. Kastrop encouraged the Port’s continued participation in community activities such as the 4th of July fireworks display; to hold more public festivals at the Port; and to use those opportunities to hand out fact sheets about how the Port benefits Redwood City. The Port could include articles about the Port and its activities in the City’s email newsletter that is sent to citizens of Redwood City on a regular basis.
Commissioner Aikins suggested that some of the comments made today may be incorporated in the Port’s responses to the City Charter questions. Aikins said there are several sections in the Charter that are specifically addressed but the questions represent such a broad spectrum of things related to the Port that they do not help us to understand what the Council is looking for. Today’s discussion has not zeroed in on what the Council is hoping to improve in the Charter regarding the Port. Chairman Miller and Commissioner Dodge said that they did not think the City Council had any particular agenda with regard this process.
VII. PUBLIC COMMENT:
NONE
VIII. MATTERS OF BOARD INTEREST
A. Chairman Miller reported that he and Commissioner Claire will serve on a sub-committee to discuss the future of the Cargill area and the Port’s role in its development with Redwood City Industrial Saltworks. Miller asked Giari to schedule a meeting between John Bruno and the sub-committee as soon as possible.
B. As a result of attending the Association of Pacific Port’s Mid-Year Conference and Board Meeting in Honolulu, Commissioner Dodge made a presentation about the Superferry service between Honolulu and Maui. The ferry accommodates two levels of vehicles, both autos and trucks, and is quite luxurious for passengers with large viewing windows, comfortable seats and tables, flat screen televisions throughout the ship, and good food service. Although the seas were rough at the time, Dodge said his ride was quite smooth and comparable to being in an airplane.
Commissioner Dodge was impressed with their passenger terminal, which is basically a tent situated so that the prevailing winds do not blow rain into the terminal. There is a ticket office (a small temporary building), seats for waiting passengers, and restroom facilities. Dodge considered the tent to be a viable alternative for the Port to consider when planning its ferry terminal.
Executive Director Giari asked if the Superferry had a reliable schedule and whether or not the passengers seemed to be pleased with the experience. Dodge said the ferry arrived and departed on time and it was a very pleasant ride. The crew demonstrated the true “Aloha” spirit in making the passengers happy.
IX. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported that the Port will host a triathalon sponsored by Stanford University on March 2nd. It is named “Treeathalon” and the event consists of a swim, a bike ride, and a run for intercollegiate athletes, as well as a duathalon for 6-12 year old children. Stanford has made arrangements to use the Port parking lot near the Marina, the staging area near Wharf 5, and Treeathalon contestants plan to swim from “F” Dock to the launch ramp off Herkner Road.
Commissioner Dodge inquired about the date of the “Opening Day of Boating Season” and Don Snaman responded that it will take place on April 19th. Giari and Snaman will attend a Sequoia Yacht Club planning committee meeting for the event.
X. ADJOURNMENT:
At 9:26 a.m. Chairman Miller requested that the Commission adjourn to its next regularly scheduled Meeting of February 13, 2008. A Motion to Adjourn was made by Commissioner and was seconded by Commissioner. The motion passed by a unanimous voice vote of all Commissioners.
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