BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – April 9, 2008
MINUTES
I. CALL TO ORDER
8:00 A.M. with Chairman Miller, presiding
Commissioners Present: Commissioner Ralph A. Garcia, Jr.; Secretary Larry R. Aikins; Vice Chairman, Richard A. Dodge; and, Chairman, Lewis D. Miller
Commissioners Absent: Commissioner Richard S. Claire
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 Aikins led the Pledge of Allegiance.
II. APPROVAL OF MINUTES:
A Motion to Approve Minutes of Regular Meeting of March 26, 2008 was made by Commissioner Dodge and Seconded by Commissioner Garcia. The motion passed by a unanimous voice vote of all Commissioners present at that meeting. Commissioner Richard S. Claire was absent and Commissioner Aikins abstained.
III. CLAIMS:
A Motion to Approve Claims was made by Commissioner Aikins and it was seconded by Commissioner Dodge. The motion passed by a unanimous voice vote of all Commissioners. Commissioner Richard S. Claire was absent.
IV. ORDINANCE
A. ORDINANCE ESTABLISHING SALARY PLAN FOR THE OFFICERS AND EMPLOYEES OF THE PORT OF REDWOOD CITY, AND REPEALING ALL ORDINANCES, OR PORTIONS THEREOF, IN CONFLICT HEREWITH – 1st Reading – INTRODUCTION – OPEN PUBLIC HEARING
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Executive Director Giari explained that this ordinance sets the ranges for salaries and other provisions for the upcoming fiscal year. The Salary Ordinance is normally passed every year prior to setting the Budget but there was no salary ordinance needed or adopted for FY08. The Personnel Committee has recommended that the Salary Ordinance set the range for Manager of Economic Development at $65,000-$110,000. The Executive Director’s salary range shall be specified by the Commission; the specific salary shall be established by a resolution of the Commission.
Chairman Miller opened the Public Hearing. No comments were made. A Motion to Close the Public Hearing 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. Commissioner Richard S. Claire was absent.
Commissioner Aikins inquired about the employer’s contribution to CalPERS. Giari explained that the employer’s contribution has changed as a result of changes in the City’s plan amendment. In fiscal year 2008 the employer’s contribution is 15.09%. It changes every year based on an actuarial evaluation. The employees’ contribution, prior to the change, was 7%; and that employee contribution was paid for by the Port and the City. The change in the plan resulted in the employees’ share increasing to 8% with the Port paying 7% and the employee contributing 1%. Aikins commented that the Port pays the employer’s contribution of 15.09% plus 7% of the employees’ contribution so for every $100 in payroll, the Port pays $22.00 to CalPERS and the employee pays $1.00.
Attorney Sorba suggested the Commission set a range for the Executive Director’s salary.
A Motion to Introduce the Ordinance and include the Executive Director’s salary range of $0.00 to $175,000 and Waive the Reading Thereof 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. Commissioner Richard S. Claire was absent.
V. MOTION
A. MOTION APPROVING AND AUTHORIZING EXECUTION OF REIMBURSMENT AGREEMENT – (RENEWABLE ENERGY PRODUCTS, LLC)
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Items V-A and V-B were discussed as one item.
Executive Director Giari explained that Renewable Energy Products, LLC (REP), a wholly owned subsidiary of Energy Merchant Corp. is developing biodiesel production facilities at strategic locations throughout the U. S. with an initial emphasis on California. REP is seeking authorization by the Port to commence a CEQA study for a 10-million gallon per year biodiesel production facility to be located within the Port on a 4.4 acre parcel of vacant land. The new facility will include processing equipment, new storage tanks and a building, which will house a control room, office and laboratory. The facility will be planned to make use of an adjacent rail line, the Port’s Wharf No. 5, and a newly constructed truck loading rack.
REP has agreed to enter into a reimbursement agreement with the Port to pay the costs of all environmental studies. REP will deposit with the Port the estimated cost to perform the CEQA review plus a 10% administration fee. Any funds that are not expended on the cost of the studies and the administration fee will be returned to REP.
The Port issued an RFP to environmental consulting firms that had experience with biodiesel facilities. Port staff and consultant Steve Wright evaluated the three proposals that were submitted and TEC, Inc. was selected. TEC has completed CEQA reviews for a previously proposed project on the Port site and for a biodiesel facility at Port Hueneme. The estimated cost of the CEQA review and related studies is $110,066 and will take 10 months to complete.
Frank Benson, representative of REP, explained that REP is currently working on multiple projects in California regarding biodiesel, which is a renewable fuel and a replacement for diesel. REP is building their first plant in Santa Fe Springs, which will handle 10-million gallons per year. A benign process is used in which no emissions come from the plant and they store vegetable oil or animal fats in storage tanks. REP has developed a technology that allows them to build small modular systems in small spaces and believes that this fuel going forward has a big impact on cutting emissions throughout California and the U.S. Benson commented that the Port site offers the ultimate optimization of having rail, marine, and truck access. At this time, most biodiesel is imported from the mid-West. The governor of California has mandated that by 2010, 20% of renewable biodiesel fuel must be created within the state and this project will help meet that demand.
Commissioner Garcia asked REP to include the number of cars that will be using the rail line in their study. Benson replied that primary use of the rail line would be to bring in methanol, which would amount to a maximum of 4-6 rail cars per month.
Aikins commented that REP’s biodiesel is to be used in a mixture of 80% diesel fuel and 20% biodiesel and asked if their refinery utilizes the biodiesel to blend with diesel fuel. Benson explained that the California Air Resources Board (CARB) is working on the low carbon fuel standard for California and is going to require an offset of carbon emissions. Major oil companies may need to buy biodiesel to offset their carbon levels. Typically, any diesel fuel user today is using a blend of 20% biodiesel. Aikins asked if REP’s product leaving the Port would be 100% biodiesel. Benson explained that REP receives a dollar per gallon tax subsidy from the U.S. government and when they blend 1/10th of a percent of diesel into it, they can apply for the Excise Blender’s Tax Credit. REP would like to store diesel at the Port for the ability to blend and apply for that tax credit. Aikins asked what percentage of the 10-million gallon per year output proposed for the Port would be biodiesel. Benson said that would depend on what is allowed to be stored here under their permits. If REP is allowed to store 5,000-10,000 barrels in a tank of diesel fuel, they could potentially sell various blends. If not, REP would sell straight B-100, which is 100% biodiesel.
Commissioner Dodge asked how far REP has to go to find a source of feedstock. Benson said their primary feedstock is animal fat. Foster Farms, located not far from Redwood City, renders chicken fat, which is a non-hazardous product that can be brought to the Port in liquid form and converted into biodiesel. A future program could be started in this area in which REP collects waste cooking oil from restaurants to convert into biodiesel. Currently, REP is using animal fats and a blend of soybean oil. Dodge asked what the roadblocks are to collecting waste cooking oil. Benson explained that their business has not been in transportation but in production and marketing of oil products. If the community is in support of it, REP would initiate a program to collect waste cooking oils.
Chairman Miller asked if REP needed storage for 3-million gallons. Benson replied that 3-million gallons is an estimate in order to handle large volumes and to use the wharf. If REP were to buy or sell in the marine tanker market, they would need to aggregate anywhere up from 1-million gallons at a time. Essentially, they could bring in 1.5-million in feedstock and have 1.5-million finished biodiesel product going out. Vegetable oil and biodiesel are both non-hazardous and biodegradable.
Miller also asked if there would be any odors from REP’s facility. Benson said odors are not offensive; there may be a slight vegetable oil smell. They have a closed system unloading from the vessels through a closed pipeline to closed storage tanks to the production unit and back into the storage tanks. If there is an issue with vapors, a vapor recovery system is required by the BAAQMD.
Bill Duplissea, San Carlos, commented that it is important to look at this project in the context of the state, the regional, and the county level. The California Transportation Commission will give additional credits to transit opportunities if the transit operator will agree to use alternative fuel. There is a virtual frenzy in California to try to catch up with the governor’s executive orders requiring the use of alternative fuel in the state. The demand has outpaced the supply. The willingness to use renewable energy products is overwhelming in San Mateo County and the Bay Area.
Giari thanked Benson and his colleagues for being here today. He explained that the recommendation in the background report is for the Reimbursement Agreement and the Professional Services Agreement to be approved so we can move ahead with the CEQA review. However, after sending out the agenda, a development arose yesterday regarding an alternative use for the entire site. Giari asked the Port Commission to consider postponing action on this item until a future meeting in order to give staff additional time to evaluate this new development.
Commissioner Garcia commented that the Port needs diversification and suggested looking for another Port location that would be suitable for REP.
Chairman Miller announced that Items V-A and V-B would be tabled until a future meeting.
MOTION
B. MOTION APPROVING AND AUTHORIZING EXECUTION OF AGREEMENT FOR INITIAL STUDY/CEQA ANALYSIS For the Reusable Energy Project Biodiesel Facility – (TEC, INC.)
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Items V-A and V-B were discussed as one item and, subsequently, tabled.
MOTION
C. MOTION APPROVING AND AUTHORIZING EXECUTION OF MEMORANDUM OF UNDERSTANDING WITH U.S. FISH AND WILDLIFE SERVICE
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Executive Director Giari explained that U.S. Fish and Wildlife Service is the lead agency for the restoration of Bair Island. The City, the Port, and the U.S. Army Corps of Engineers have been coordinating with USF&WS on the use of dredged material from the Redwood City Channel for the restoration of Inner Bair Island. The project engineer, Moffat & Nichol, evaluated the design and construction issues related to using dredged material for the restoration. In their report of January 2007 they recommended a 31-acre site at the tip of Inner Bair Island, nearest the Channel, be used for receiving dredged material.
USF&WS is responsible for preparation of the site including the construction of a 1460 linear foot containment dike for the dredged material. The Corps of Engineers will use a hydraulic dredge to remove material from the Channel and pump it through a 24-inch floating pipeline to Inner Bair Island. The Corps will also pump the decant water, which is left as the dredged material settles, to Middle Bair Island.
USF&W and the Corps have asked the Port to cooperate in the project by ensuring that the dredged material “stays wet” until the levees are breached and the site is restored to tidal flow. This is a condition in the permits for the placement of the dredged material issued by BCDC and referenced in the MOU as Consistency Determination No. CN 1-07 F. Under the proposed MOU between USF&W and the Port, the Port will be responsible for constructing weirs, pipes, or other structures that would keep the dredged material wet. The design and plans for meeting this permit condition will be submitted to BCDC and the Regional Water Quality Control Board prior to placement of the dredged material.
Commissioner Dodge asked if the water used to keep the dredged material wet will come from the bay. Giari explained that bay water would be used, if accessible; otherwise water from another source would be used. Dodge asked what the cost would be to the Port. Giari said that Moffat & Nichol does not have an estimate because the method to be used to keep the material wet has not yet been determined. They do not think it would exceed $50,000.
Commissioner Aikins commented that the dredging volume can not exceed 300,000 cubic yards of dredged material going to the Bair Island site and asked if that would be enough to get the Channel depth to 30 feet plus 1 foot of over dredge. Giari replied, “No”, that the contract for maintenance dredging issued by the Corps specifies 29 feet plus 1. This is due to a possible combination of limiting factors of funding and site capacity. Aikins asked if there was a chance that the dredging could exceed the capacity of the site. Giari said that if that happened, the Corps would determine what to do with the rest of the dredged material.
A Motion to Approve was made by Commissioner Garcia. It was seconded by Commissioner Aikins. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioner Richard S. Claire was absent.
VI. PRESENTATION:
By Donald K. Snaman, Manager of Operations
A. QUARTERLY VESSEL AND TONNAGE REPORT - (December 31, 2007-March 31, 2008)
Don Snaman reported that the Port did well in the past quarter and that tonnage is catching up both to last year and to Budget. For the third quarter, tonnage is almost 115,000 metric tons over the same quarter last year. That also was an increase over the Budget of about 60,000 metric tons. The biggest commodity was limestone, of which we had little of last year. Sand, gravel and construction aggregates have also increased since last year.
The biggest decrease in commodities is cement. We have had some partial shipments come in and CEMEX is not very optimistic that we will have many more in the next year.
Seventy-five vessels have made calls at the Port for the past three quarters compared to 112 vessels last year.
VII. PUBLIC COMMENT:
None
VIII. MATTERS OF BOARD INTEREST:
Commissioner Garcia commented that he is adding approximately 1100 sq. ft. to his garage and was surprised to learn that his contractor bought cement for his project from Fremont instead of Redwood City. Apparently, even with fuel and handling charges, the cement from Fremont was $14 per yard less than what the contractor could buy it for in Redwood City. Garcia was concerned that Port clients are not competitive, which could reflect the decrease in cement coming in to the Port. Giari said that he believes this is a regional market, not a local market for construction materials. There shouldn’t be a big differential between Redwood City and Fremont and that he would look into it.
Chairman Miller thanked staff and Commissioners for a get-well card sent to his wife, Elizabeth.
IX. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari said a written report would be given to the Commission on recent meetings in Washington, D.C. with our representative, Anna Eshoo, and also with a number of agencies such as the Corps of Engineers and the Dept. of Transportation. They had a very busy schedule with many productive meetings.
On Saturday, April 19th, two events will be held at the Port. The Marine Science Institute will have an Earth Day Celebration and the Sequoia Yacht Club will host Opening Day of Boating Season. The Port is co-sponsoring both events, which are focused on Earth Day and clean up of the waterfront.
X. ADJOURNMENT
At 9:20 a.m. Chairman Miller requested that the Commission adjourn to its next regularly scheduled Meeting of April 23, 2008. A Motion to Adjourn was made by Commissioner Dodge. It was seconded by Commissioner Garcoa. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Richard S. Claire was absent.
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