BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – January 28, 2009
MINUTES
I. CALL TO ORDER
8:00 A.M.: Chairman Dodge, presiding
Commissioners Present: Commissioner Larry Aikins; Commissioner Lorianna Kastrop; Vice Chairman Ralph Garcia, Jr.; and, Chairman Richard Dodge
Commissioners Absent: Secretary Richard 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 Garcia led the Pledge of Allegiance.
II. APPROVAL OF MINUTES:
A Motion to Approve Minutes of Regular Meeting of January 14, 2008 was made by Commissioner Garcia and Seconded by Commissioner Kastrop. The motion passed by a unanimous voice vote of Commissioners present at the January 14th meeting. Commissioner Dodge abstained. Commissioner Claire was absent.
III. CLAIMS:
A Motion to Approve Claims was made by Commissioner Aikins and it was seconded by Commissioner Kastrop. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
IV. RESOLUTION
RESOLUTION APPROVING STANDARD SUBLEASE AGREEMENT – (Portside Investors – Phase I Lease Agreement) – (Netedge, Inc.)
A Motion to Adopt was made by Commissioner Aikins. It was seconded by Commissioner Kastrop. The motion passed by a unanimous roll call vote of all Commissioners present. Commissioner Claire was absent.
V. MOTION
A. MOTION TO APPROVE TRACK SUPPLEMENT AGREEMENT TO BASIC AGREEMENT BY AND BETWEEN THE PORT OF REDWOOD CITY AND UNION PACIFIC RAILROAD COMPANY AND DATED JANUARY 24, 2007
Executive Director Giari explained that in January 2007, Union Pacific Railroad (UP) and the Port executed an Industry Track Contract for the rail spur located on Port property. In August 2008, UP notified the Port that a derail device must be installed on the Port’s tracks to prevent the Port’s rail cars from rolling out onto the main UP line paralleling Frontage Road. In October 2008, the Port installed a derail device approved by UP. This motion allows the Executive Director to execute the Track Supplement Agreement on behalf of the Port allowing the Port to perform switching at any time on the Port’s tracks. All other provisions of the original agreement remain in place.
A Motion to Approve was made by Commissioner Kastrop. It was seconded by Commissioner Aikins. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
MOTION
B. MOTION APPROVING AND AUTHORIZING SPONSORSHIP IN THE AMOUNT OF $_________ FOR THE SPONSORSHIP OF THE REDWOOD CITY EDUCATION FOUNDATION
Executive Director Giari explained that the Redwood City Education Foundation (RCEF) is asking the Port to support their enrichment programs for Redwood City schools by being a sponsor of their fund raising event, “Benefit for a Brighter Future”. The Port Commission sponsored RCEF’s fund raising event last year in the amount of $5,000. Sponsorship provided the Port the benefit of recognition at the fund raising event as well as on going recognition in the RCEF newsletter and website. The Port’s FY2009 budget has included sponsorship of RCEF in the amount of $4,000.
Jo-Ann Sockolov, President RCEF, Redwood City, CA, thanked the Port Commission for its past sponsorship of RCEF. Ms. Sockolov commented that this year’s theme is all about helping students reach their goals and fulfill their dreams. It is named, “I Am Your Future, Invest In A Dream”. RCEF is also working with the Civic Cultural Commission and Redwood City Parks & Recreation Department to sponsor an essay and art contest, asking children in Redwood City’s elementary schools to either portray in a piece of art or write in a short essay what it is they want to be when they grow up and to talk about what it is going to take to get there.
A Motion to Approve sponsorship of RCEF in the amount of $5,000.00 was made by Commissioner Garcia. It was seconded by Commissioner Kastrop.
Commissioner Dodge asked what student ages would be targeted. Ms. Sockolov responded that the essay and art contest will be for children in grades K-8 and that RCEF has worked closely with the School District’s Curriculum Director to make sure that if children choose to write the essay, it is age appropriate.
Commissioner Kastrop commented that RCEF does a tremendous amount of good with the school children in our community and that Commissioner Garcia has been very involved in the Music Ed program. Ms. Kastrop said that this is an area where the Port can show its support for the community. At the $5,000 dollar sponsorship level, the Port’s logo would be on banners at 16 schools and on El Camino Real near Sequoia High School.
Commissioner Dodge asked if the Port’s Budget could be increased from $4,000 to $5,000 for this sponsorship and Giari replied that it could. Commissioner Aikins requested that the motion be restated to approve $5,000 for this sponsorship with no budget modifications necessary.
A Motion to Approve sponsorship of RCEF in the amount of $5,000.00 with no budget modifications was made by Commissioner Garcia. It was seconded by Commissioner Kastrop. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
MOTION
C. MOTION TO APPROVE AGREEMENT FOR SECURITY/EMERGENCY MANAGEMENT CONSULTATION AND TRAINING AND AUTHORIZING EXECUTION THEREOF – (AANKO TECHNOLOGIES, INC.)
Executive Director Giari presented the staff report on this item involving the Port and Aanko Technologies entering into an agreement for security/emergency management consultation and training services. This item was presented at the last Port Commission meeting but was tabled because we received last minute notification that funding from the California Office of Homeland Security was suspended. Steve Longoria, Aanko Technologies, and Eric Napralla, Port of Redwood City, modified the scope of work in the agreement by removing a task relating to Transportation Workers Identification Credentials (TWIC) infrastructure.
Commissioner Kastrop asked how much money was set aside and would the TWIC item be brought back before the Board in a later contract? Napralla explained that the cost of TWIC in the previous agreement was approximately $50,000 and the TWIC task was dropped from the agreement before the Commission today. Once we have information as to how, when or where we can obtain funding for TWIC, we can bring it back before the Port Commission for approval.
A Motion to Approve was made by Commissioner Aikins. It was seconded by Commissioner Kastrop. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
VI. REPORT/PRESENTATION:
By Redwood City Community Development Department
A. Presentation on location of Eastside emergency water tank
Phong Du, City of Redwood City engineer, presented an overview of the City’s water system, the need for emergency water storage tanks to be used for drinking and fire protection, location criteria and suitability of locating a large, 3 million gallon potable water storage tank on approximately 2 acres of the former LBT site. The City needs support from the Port Commission to locate a tank on Port property. An emergency water storage tank at the Port would benefit the community by providing increased fire protection for existing and future Port businesses.
Commissioner Garcia commented that the Port actually needs to have more land and asked if it would be possible to lower the height of the tank or put it underground and use the top of the tank for another purpose. Du explained that in order to avoid any chance of cross contamination, the Department of Health does not permit a potable water tank submerged in the soil when there is high ground water.
Commissioner Dodge inquired about the timing for this water tank project. Du said that although it is needed right away, it realistically would take about two years for the development to be completed.
Commissioner Kastrop said that the Port is located on low lying land and asked if the fact that there may be encroachment of water levels into Port property had been considered. Peter Vorametsanti, City of Redwood City Supervising Engineer, explained that if the City built the tank, the base of the tank would be above the base flood elevation. There is also the possibility of building a levee around the tank.
Commissioner Kastrop asked if views of the tank from Highway 101 had been considered. Vorametsanti commented that they are always sensitive to the concerns of the community and put a great focus on public input. He explained that a shorter, wider tank is desirable at the Port. Landscaping to screen the water tanks and the color of the tank blending with its environment would make a big difference.
Commissioner Kastrop expressed concern about filling a 3 million gallon water tank in a drought year and asked how that could be accomplished. Du explained that Redwood City uses 10 million gallons of water per day and the water we get from San Francisco is free flowing. The water is not stored for long time periods in the tanks. If the water is not used for emergency purposes, it is released for domestic use. The tank is a temporary storage place.
Commissioner Kastrop commented that the proposed emergency water tank at the Port might be located on the Cargill site, fulfilling both the emergency water needs of the Port area and those of any potential development on the Cargill site. Vorametsanti said the City’s position is that there is no project proposed for development of the Cargill site. Today’s presentation is about a real need that we are facing now.
Commissioner Garcia questioned whether or not recycled water would be used at the Port to fight fires. Du answered, “No”. He explained that recycled water is saltier than potable water. The Fire Department would need equipment, including trucks and pumps, to work with salty water and specific training for their firefighters. The Department of Health does not want recycled water to be used as a firefighting source because of a possibility of cross contamination with potable water.
Commissioner Dodge commented that San Francisco has a system for pumping water from the Bay for fighting fires and asked why Redwood City couldn’t do the same thing. Vorametsanti explained that San Francisco’s system was built about 100 years ago and it would be a significant investment for Redwood City to build a similar system today. Du explained that the Fire Department does not have the infrastructure or the equipment and training to set up a separate saltwater system at this time.
Commissioner Garcia asked when this item would be brought before the Port Commission for action. Executive Director Giari said there is no fixed time line but staff would like to update the Port Commission and share information with the City on what is happening with prospective users for the LBT site. Within the last 6-12 months, the economy has gone through significant changes and prospective tenants that we have been working with may have changes in their economic situations. We are working on the EIR for the biodiesel company but it is not moving ahead as quickly as we anticipated. The aggregate company also has had possible changes in plans. The City’s engineers think now is a good time to consider an emergency water tank at the LBT site before other potential users have spent resources on finalizing site plans and engineering plans that may require alterations.
Commissioner Garcia asked about the number of acres involved, Giari said there is a total of 9 acres at the LBT site. The biodiesel company needs 4-5 acres and the City needs 1.5-2 acres, leaving a balance of approximately 2 acres.
Commissioner Kastrop asked if any Port tenants are considering shrinking their site and if there is a potential of a 2 acre site at another Port location. Giari said he had briefly discussed with the City the possibility of the area by the potential ferry terminal. The problem with that site is that the 16” water line does not run all the way out there. At this time there are no Port tenants shrinking their sites.
Vorametsanti explained that they seek input and support of the Port Commission and are well aware that there are competing interests for the use of the land at the Port.
Commissioner Dodge inquired about the type of financial transaction that might be proposed by the City for locating an emergency water tank at the Port. Giari replied that there would be compensation either in the form of a sale or a lease. Vorametsanti explained that the Water Fund is an enterprise fund which is independent from the City Budget. They would entertain sale or lease arrangements as applicable but would like to reserve the financial arrangements to the City Manager.
REPORT/PRESENTATION:
By Cynthia Hampton, Director of Finance & Administration
A. Mid Year Financial Results (December 31, 2008 Comparative Results)
Ms. Hampton presented the financial results for the first six months of Fiscal Year 2009, July 1 to December 31, 2008. She reported that actual tonnage was 663,000 metric tons versus a budget of 851,000 metric tons, and was on par with last year’s 660,000 metric tons. Actual volume was less than budget for all commodities except scrap, and less than last year for all commodities other than limestone.
Ms. Hampton reported Total Operating Revenue of $2.8 million; the Maritime segment generated just slightly below $2 million, or 72%, of the total. She commented that sand and aggregates generated the largest portion of maritime revenue at $807,000 or 41% of the total, moving cement out of its usual number one position. Scrap came in second at $640,000, or 32%.
Total Operating Expense was reported at $1.5 million, of which just slightly over $1 million, or 69%, was attributable to the Operations segment and $455,000, or 31%, to Administration.
Ms. Hampton reported that both actual Operating Income and Operating Expense were down in comparison to budget, however, the shortfall in actual Operating Income was almost negligible at $29,000, or 2%. Actual Non-Operating Income was close to budget; the composition of the dollars budgeted versus the actual dollars differed but the total was fairly on target. Actual Subvention was $15,000 less than budget due to lower revenues. Actual Net Income After Subvention was slightly less than $1.4 million whereas budget was slightly more than $1.4 million; the net variance was $53,000 or 4%.
Ms. Hampton concluded her presentation with a comparison of the mid-year results to the full-year budget to illustrate what would have to be achieved in the second half of the fiscal year in order to reach budget goals.
Commissioner Kastrop inquired whether the decrease in actual expense as compared to budget was due to delaying planned expenses. Ms. Hampton replied that timing differences do play a role, but that there are some budgeted items that likely will not be expended at all.
Executive Director Giari commented that when the budget was developed in the Spring of 2008, it was anticipated that the demand for construction materials would start to turn around by the second half of FY09. The economic outlook was different then than it is today and that is not likely to happen. He expects that the variance between actual and budget may increase.
B. Certified quarterly Investment Report (quarter Ended December 31, 2008)
Ms. Hampton reported that the Port’s cash and investments increased by almost $340,000 this quarter and totaled $17.3 million at December 31, 2008, of which $16.2 million is unrestricted and $1.1 million is restricted.
Interest rates and investment returns have continued to decline; the best return continues to come from funds invested in LAIF. Last quarter (09/30/08) the cumulative adjustment from par to market was a negative $11,000, meaning that recorded value was higher than market value. This quarter there is a positive cumulative adjustment of almost $40,000 and market value is now higher than recorded value.
VII. PUBLIC COMMENT:
None
VIII. MATTERS OF BOARD INTEREST:
None
IX. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported that there was a discussion about the Bay Front area of the General Plan at the January 26 City Council Meeting. Clem Molony and Greg Greenway, representing the Seaport Industrial Association, commented that all of the efforts and work that have been done to date, related to industrial uses and the Port that were discussed at the November 25, 2008 Joint Meeting of the Planning and Port Commissions, should be captured and utilized as the process moves forward.
X. ADJOURNMENT
At 9:27 a.m. Chairman Dodge requested that the Commission adjourn to its next regularly scheduled Meeting of February 11, 2009. A Motion to Adjourn was made by Commissioner Garcia and it was seconded by Commissioner Aikins. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
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