BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – June 10, 2009
MINUTES
I. CALL TO ORDER
8:00 A.M.: Chairman Dodge, presiding
Commissioners Present: Commissioner Larry R. Aikins; Commissioner Lorianna Kastrop; Vice Chairman, Ralph A. Garcia, Jr.; and, Chairman, Richard A. Dodge
Commissioners Absent: Secretary 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; Accounting Clerk, Linda Hawkins; and, Administrative Assistant, Margaret Astesano
Commissioner Kastrop led the Pledge of Allegiance.
II. APPROVAL OF MINUTES
A Motion to Approve Minutes of Regular Meeting of May 13, 2009 was made by Commissioner Kastrop and Seconded by Commissioner Aikins. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Claire was absent.
The Minutes of May 27, 2009 were tabled due to the lack of a quorum of Commissioners present at that meeting.
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. ORDINANCE
A. ORDINANCE APPROPRIATING ANTICIPATED REVENUES AND OTHER GENERAL FUNDS OF THE PORT OF REDWOOD CITY FOR THE FISCAL YEAR JULY 1, 2009-JUNE 30, 2010 - INTRODUCTION
Executive Director Giari explained that the Fiscal Year 2010 Budget for the Port is being introduced at today’s meeting. A Notice of Public Hearing to be held on June 24, 2009 will be published in the newspaper along with publication of the Ordinance. The Finance Committee, comprised of Commissioners Dodge and Aikins, met with Port staff to review the budget, which was subsequently provided to all Port Commissioners for review.
Ms. Hampton, Director of Finance & Administration, introduced the Fiscal Year 2010 Budget with a PowerPoint presentation. She began with summary data, continued with detailed information regarding revenues and expenses, and concluded with data comparing the most recent five year periods.
The FY10 Budget includes 830,000 metric tons of cargo, operating revenue $5.3 million, operating expense $3.4 million, operating income slightly under $1.9 million, non-operating income/(expense) $689,000, base subvention $317,000 and net income after subvention $2.2 million.
In general, tonnage is declining, revenues remain flat, and expenses are rising. Together, these factors result in shrinking profitability. Despite the confluence of these factors, net income after subvention remains positive at $2.2 million.
Chairman Dodge inquired what impact netting grant expenses against grant revenues would have on the bottom line. Ms. Hampton replied that the grant revenues are used primarily for capital expenditures rather than expenses, so there would be little impact on the bottom line.
Commissioner Aikins commented that security related grant revenues are budgeted at $1,030,000 and security related capital expenditures are budgeted at $1,225,000, so the Port will be funding several hundred thousand dollars for security related capital expenditures.
Commissioner Aikins commented that a huge effort goes into the preparation of the Port’s budget. Ms. Hampton and Mike Giari, along with other members of the staff, work together to examine each component that comprises income and expense, building the budget from the ground up. There is a staggering amount of detail that is not shown here. Ms. Hampton runs an extremely professional accounting operation.
Commissioner Kastrop commented that she usually has many questions after reviewing budgets, but found that the detail provided by Ms. Hampton answered her questions as she continued reading through the budget binder. Commissioner Kastrop said she appreciated the fact that the assumptions used in the budget are very conservative considering today’s economic situation. Giari commented that the numbers are conservative due in part to Port customer reports that they do not expect an upswing in 2010.
Chairman Dodge thanked Ms. Hampton for her presentation.
A Motion to Introduce the Ordinance and Waive the Reading Thereof was made by Commissioner Aikins. The motion was seconded by Commissioner Kastrop and the motion was passed by a unanimous roll call vote of all Commissioners present. Commissioner Claire was absent.
V. RESOLUTION
A. RESOLUTION APPROVING STANDARD SUBLEASE AGREEMENT – (PORTSIDE INVESTORS – PHASE I LEASE AGREEMENT) – (KI THERAPEUTIC MASSAGE AND CORE FITNESS)
B. RESOLUTION APPROVING FIRST AMENDMENT TO SUBLEASE AGREEMENT (PORTSIDE INVESTORS PHASE I LEASE AGREEMENT) – ( PERITUS PRECISION TRANSLATION)
Resolutions A&B were handled as one item and a Motion to Approve was made by Commissioner Garcia. It was seconded by Commissioner Aikins. The motion passed by a unanimous voice vote of all Commissioners present.
C. RESOLUTION APPROVING SECOND AMENDMENT TO SUBLEASE AGREEMENT -(PORTSIDE INVESTORS – PHASE I LEASE AGREEMENT) – (W. BRADLEY ELECTRIC, INC.)
Commissioner Kastrop commented that the letter from the leasing agent did not agree with the lease agreement in the amount “per square foot” for rent. Giari replied that staff checked with the leasing agent and determined that the letter has an error. The second amendment to the lease has the correct rent of $1.70 per square foot. Kastrop next asked why the $1.70 per square foot was lower than rents currently in the $1.90 to $2.00+ range. Giari explained that this lease area may be in a less desirable location but that he would review the original lease for more information.
Chairman Dodge also commented that location has an effect on the rental rate. He said that in general, commercial leasing rates are down due to a lack in demand and asked Commissioner Aikins to comment. Aikins, a local realtor with Terrace Realty, explained that at the beginning of the year there was a projection for a dramatic decline in demand for commercial space with the rental rates going down. That has proven to be true to date and is expected to continue throughout the year.
A Motion to Approve was made by Commissioner Garcia. It was seconded by Commissioner Aikins. The motion passed by a majority roll call vote of all Commissioners present. Commissioner Kastrop was opposed and voted “No”. Commissioner Claire was absent.
D. RESOLUTION APPROVING CONTRACT DOCUMENTS FOR THE FRONTAGE ROAD TRACK CROSSING PAVEMENT IMPROVEMENT PROJECT AND AUTHORIZING AND DIRECTING ADVERTISEMENT FOR BIDS THEREFOR
Executive Director Giari explained that BKF Engineering was hired to engineer this project for paving of the new railroad crossings. Port staff asked them to give priority to the contract documents. Don Snaman, Operations Manager for the Port, has several items that need to be reviewed with BKF before putting this project out for bid. Staff requests that this item be deferred to a future meeting.
Chairman Dodge moved on to Item VI without any discussion or action being taken by the Board.
VI. PUBLIC COMMENT:
None
VII. MATTERS OF BOARD INTEREST:
Commissioner Garcia commented on Portside I leases and asked how much leeway the Board has with rents since the subleases are negotiated by the leasing agent for Portside Investors. Giari explained that the Port has the master lease with Portside Investors. The master lease requires that subleases be approved by the Board and that such approval shall not be unreasonably withheld by the Board. Giari stated that occasionally staff has questions about the use of a rental space. Setting rental rates is basically to be determined by Portside Investors but the Port Commission does have the discretion to decide if rental rates are unreasonably high or low.
Commissioner Kastrop expressed an interest in having an arrangement with a public transit agency to shuttle people to the Port when the Disney Train Tour is here. Kastrop’s parents attended the Disney Train Tour in Albuquerque, New Mexico last week and reported long lines and parking problems. Chairman Dodge said staff is researching possible offsite parking locations and shuttle service.
VIII. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported that the Bay Area Economic Council this week released the Bay Area Economic Recovery Workplan, which coordinates the region’s response to federal stimulus funding opportunities. The Bay Area is positioning itself to maximize its share of California’s more than $31 billion in direct federal stimulus funds and an additional $20 billion of federal stimulus funds potentially available to California that will be competed for in Washington.
The Port’s modernization of Wharves 1&2 is among the projects the Workplan highlights as being ready for implementation in 2009 or 2010, and worthy of funding because of its significance to the region’s economy. Rebuilding and improving the 60-year old waterfront facility at the Port will increase the capacity and efficiency of shipping construction materials needed in the mid-Peninsula/Silicon Valley region.
IX. ADJOURNMENT:
At 8:45 a.m. Chairman Dodge requested that the Commission adjourn to its next regularly scheduled Meeting of June 24, 2009.
A Motion to Adjourn 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.
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