BOARD OF PORT COMMISSIONERS
REGULAR MEETING
WEDNESDAY – September 10, 2008
MINUTES
I. CALL TO ORDER
8:00 A.M.: Vice Chairman Garcia, presiding
Commissioners Present: Commissioner Larry R. Aikins; Commissioner Lorianna Kastrop; Secretary Richard S. Claire; and, Vice Chairman Ralph A. Garcia, Jr.
Commissioners Absent: Chairman Richard A. Dodge
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 Claire led the Pledge of Allegiance.
II. APPROVAL OF MINUTES
Commissioner Aikins commented that in the Draft Minutes of August 27, 2008, Item III CLAIMS, the name of Commissioner Kastrop who made the motion to approve was left blank.
A Motion to Approve the Minutes of Regular Meeting of August 27, 2008 was made by Commissioner Kastrop with the stipulation that the name of the Commissioner who made the Motion to Approve the Claims at the August 27th Port Commission meeting be inserted. The motion was seconded by Commissioner Aikins. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Dodge was absent.
III. CLAIMS
A Motion to Approve Claims was made by Commissioner Aikins and it was seconded by Commissioner Claire. The motion passed by a unanimous voice vote of all Commissioners present. Commissioner Dodge was absent.
IV. RESOLUTION
A. RESOLUTION ACCEPTING GRANT FROM THE DEPARTMENT OF HOMELAND SECURITY FEMA – GRANT PROGRAMS DIRECTORATE IN CONNECTION WITH FACILITY AND PERIMETER SECURITY AND AUTHORIZING EXECUTION OF DOCUMENTS
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Eric Napralla, Assistant Manager of Operations and Facility Security Officer, explained that this item is to accept a Federal grant that the Port applied for in 2008. Application was made for three projects, two of which were funded. The total project cost is just over $1.1 million and, as a public agency, the Port is required to provide 25% matching funds in the amount of $283,000. The Port of Redwood City was awarded $850,515. In an upcoming grant, the Port will seek that 25% match for the Transportation Worker Identification Credential (TWIC) implementation project.
Commissioner Aikins asked if we spend less than the $1.1 million on TWIC, will the grant still cover 75% of the amount we spend. Napralla responded that a public agency has to provide a 25% match in funds for amounts of $25,000 and above.
Commissioner Kastrop inquired about the item that was not funded by this grant, asking if it would be applied for under another source of funding. Napralla replied, “Yes”, and also that we are hoping the application process will open later this year under the State Grant Program pending approval of the State budget.
A Motion to Adopt was made by Commissioner Claire. The motion was seconded by Commissioner Kastrop and was passed by a unanimous voice vote of all Commissioners present. Commissioner Dodge was absent.
B. RESOLUTION OF THE BOARD OF PORT COMMISSIONERS OF THE CITY OF REDWOOD CITY EXPRESSING OFFICIAL BOARD OF PORT COMMISSIONERS’ OPPOSITION TO MEASURE W AND ENUMERATING THE REASONS THEREFORE
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Vice Chairman Garcia opened the discussion for this item to public comments.
Jim Bigelow, representing the Redwood City-San Mateo County Chamber of Commerce, commented that the Chamber has been following Measure W for some time and strongly urged the Port Commission’s support in opposition to Measure W. The City of Redwood City, its legal counsel and the Board of Supervisors and their legal counsel have reviewed Measure W and believe that it has implications on both privately held property and public property. It impacts residential houses, Docktown Marina, land by Oracle, the fringes of the Bay, and the water area in Redwood Shores. The way the measure is written has a lot of hidden costs to the City of Redwood City and to property owners. There already is in place, without the Charter Amendment, an opportunity for the public to present a referendum to the voters. The Chamber believes that Measure W is an inappropriate action and a Charter Amendment that really is not needed. Bigelow stated that SAMCEDA is also opposed to Measure W and asked that the Port Commission join a number of us in stating its opposition to Measure W.
Carol Long, 852 Newport Circle, Redwood Shores, commented that she supported the opposition against Measure W. Her property is now designated as Open Space because it is both a controlled waterway and her property sits within the TPW. As an affected homeowner in Redwood Shores with waterfront property, Ms. Long asked the Port Commissioners to oppose Measure W because she believes the Port, as is her property, is caught in the crossfire of what the Open Space vote was intending to go after.
Commissioner Kastrop commented that Measure W designates the Port specifically as not able to approve or authorize any non-open space uses on Open Space lands within its jurisdiction, which are defined as San Francisco Bay waters in the measure, unless such use has been approved by the voters in accordance with the measure, which requires a 2/3 majority vote. Kastrop thinks it is very clear that the Port is impacted by Measure W in a negative way and that Measure W prevents the Port from proceeding with projects that we believe are important to the Port’s economic future and to the transportation and economic future of the entire Bay Area. She believes it is critical that the Port Commission oppose Measure W.
Commissioner Claire agreed with Kastrop on the effects of Measure W on the Port.
Vice Chairman Garcia commented that the Friends of Redwood City have proven on two separate occasions that the existing referendum system works and stated his opposition to Measure W.
A Motion to Adopt was made by Commissioner Claire. The motion was seconded by Commissioner Aikins and was passed by a unanimous roll call vote of all Commissioners present. Commissioner Dodge was absent.
V. MOTIONS
A. MOTION APPROVING AND AUTHORIZING FIFTH AMENDMENT TO AGREEMENT FOR SECURITY PATROL SERVICES – (COMMAND SECURITY, INC.)
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Executive Director Giari explained that this is a new two year contract with the Port’s existing security firm, Command Security, Inc.
Eric Napralla, Assistant Manager of Operations, explained that Command Security has been providing services to the Port since 2002. Command Security is proposing an hourly rate of $25.63 for security patrol services and for the gate guard who must be present when a foreign vessel is in port. This is a 3% increase from last year’s rate. The monthly vehicle fee will increase to $1,250 less the use of Port fuel. The Port has agreed to reimburse up to twenty TWIC cards (Transportation Worker Identification Credentials) with a maximum of $2,650 at $132.50 per card for current employees. After the national compliance date, the Port will also reimburse up to five TWIC cards for new employees per year of this agreement; not to exceed $662.50 annually.
Napralla commented that in the past year, CSI has continued to provide a very high level of security services to the Port.
Commissioner Kastrop asked if this contract would cover whatever the TWIC program may require. Napralla replied, “Yes.”
A Motion to Approve was made by Commissioner Aikins and was seconded by Commissioner Kastrop. The Motion was passed by a unanimous voice vote of all Commissioners present. Commissioner Dodge was absent.
VI. REPORT/PRESENTATION:
By Cynthia Hampton, Director of Finance & Administration
Ms. Hampton presented the Fiscal Year 2008 Financial Results. She noted that the financial statements presented are unaudited, however, the audit has since been completed and there were no adjustments.
She began the presentation by reviewing tonnage volumes and composition, noting that the cargo mix of the 1.5 million metric tons which crossed the wharves changed significantly in FY08. Whereas cement has typically been one of the largest volume cargos, this year it accounted for only 4% of total tonnage. She commented that a shift in cargo mix can result in significant impact on revenue because not all tons generate equal revenue streams, however, contractual minimum annual guarantees help offset volume-related declines in revenue.
Ms. Hampton reported that FY08 total revenue generated, which includes both operating and non-operating revenues, was $6.3 million. The Maritime segment of the Port’s business produced almost $4.0 million in revenue or 64% of Total Revenue generated. She presented comparisons of FY08 operating and non-operating revenues and expenses to the FY08 budget and FY07 prior year results, and explained the notable differences. She reviewed cash flow components and reported that the FY08 net increase in cash was $1.6 million, bringing the balance of cash and investments to almost $16.4 million at June 30, 2008.
Ms. Hampton discussed several additional items:
No revisions to the FY08 Budget will be necessary since all of the actual operating expense line items as classified per the FY08 Budget Ordinance were under budget.
FY09 implementation of Government Accounting Standards Board pronouncement GASB 45 Financial Reporting for Post-employment Benefit Plans Other than Pension Plans (“OPEB”). Prior to GASB 45, other post-employment benefits were accounted for on a “pay-as-you-go” basis; now an annual actuarial valuation will be required to determine the total cost of the benefits and any unfunded liability. Once the actuarial valuation has been completed, the results and funding options will be presented to the Commission for its consideration.
FY09 implementation of Government Accounting Standards Board pronouncement GASB 49 Accounting and Financial Reporting for Pollution Remediation Obligation. Because GASB 49 is new, and the Port’s circumstances pertaining to the LBT are atypical, it has been suggested by the Port’s auditors, Caporicci & Larson, that a summary of pertinent information be submitted to the GASB Board with a request that it provide its interpretation. Ahmed Badawi, the partner in charge of the Port’s audit, will discuss this matter when he presents the audited financial statements at the next Commission meeting.
Commissioner Aikins asked if Caporicci & Larson indicated what method they are proposing to use in order to determine the appropriate capitalized value of the LBT. Ms. Hampton replied that C&L is now suggesting that the entire amount may have to be written down.
Commissioner Claire commented that any non-profit generating more than $2.0 million per year in revenues is subject to Sarbannes-Oxley, and he inquired if that also applies to governmental agencies. Ms. Hampton replied that to the best of her knowledge the Port was not required to comply with “SOx”.
Ms. Hampton presented the Quarterly Investment Report. She reported that cash and investments had increased by $1.6 million in FY08, however, interest and investment income had declined as a result of market conditions. The Port’s cash position is very good - $15.2 million in unrestricted cash and $1.1 million in restricted cash for a total of $16.4 million. She stated that the Port has been building its cash reserves specifically to be able to fund either all or portions of some major projects which are underway – Wharves 1 & 2 and the potential channel deepening, for example, are very capital intensive projects.
VII. PUBLIC COMMENT:
NONE
VIII. MATTERS OF BOARD INTEREST:
Commissioner Kastrop announced that Coastal Clean Up Day is scheduled for September 20 with participants meeting in the morning at the Public Works Building. She plans to participate and encouraged people to both participate and/or pass the word to other groups that are interested in community service projects.
IX. EXECUTIVE DIRECTOR'S REPORT:
Executive Director Giari reported that on September 23rd a replica of Columbus’ ship, The Niña, will arrive at the Port. The Niña was here 4-5 years ago and was very popular with the public. We are very pleased that she will be returning and will be available for public walk-aboard, self-guided tours through October 13.
Teachers are invited to schedule 30-minute guided tours with a crew member and the Port is distributing information to all of the schools in Redwood City. Giari commented that the Port would like to thank the City Manager’s Office staff who translated into Spanish the flyer we are using to promote the Niña.
We are advertising the ship’s visit in some of the local newspapers as well. A number of community groups are also interested in the ship’s visit and the San Mateo County History Museum, which sponsors a Columbus Day Celebration, is involved with the visit of the Niña. The Columbus Day Committee is scheduling tours of the Niña for its members and guests.
To schedule guided tours, call the ship directly at #1-787-672-2152. View the ship’s website at www.thenina.com.
X. ADJOURNMENT
At 8:45 a.m. Vice Chairman Garcia requested that the Commission adjourn to its next regularly scheduled Meeting of September 24, 2008. A Motion to Adjourn was made by Commissioner Claire and it was seconded by Commissioner Kastrop. The motion passed by a unanimous voice vote of all Commissioners.
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