Packet - Port of Port Angeles

DRAFT
SPECIAL COMMISSION MEETING MINUTES
Thursday, March 12, 2015
9:00 a.m.
PRESENT:
James Hallett, President
John Calhoun, Vice President
Colleen McAleer, Secretary
Ken O’Hollaren, Executive Dir.
Chris Hartman, Dir. of Engineering
Jerry Ludke, Airport/Marina Mgr.
I.
Tanya Kerr, Property Manager
Mike Nimmo, Marine Terminal Mgr.
John Nutter, Process Analyst
Holly Hairell, Human Resources Mgr.
Sylvia Teichert, Executive Asst.
Simon Barnhart, Port Attorney
CALL TO ORDER – OPEN SESSION
II.
PLEDGE OF ALLEGIANCE
NOTE: Executive Director O’Hollaren introduced the newest staff member, John Nutter,
Process Analyst.
IV.
APPROVAL OF CONSENT AGENDA (taken out of order)
A.
Minutes of February 24, 2015 Commission Meeting
B.
Vouchers in the Amount of $407,337.08
Commissioner McAleer moved to approve the Consent Agenda.
Calhoun seconded and the motion passed unanimously.
Commissioner
III.
TIME SPECIFIC: 9:15 a.m. Platypus Marine, Judson Linnabary
Judson Linnabary and Marty Marchant, President and Sales & Marketing Director respectively
of Platypus Marine, presented a report on the company’s desire to purchase five acres of Port
property which they currently lease located at 102 N. Cedar Street. A summary report prepared by
Olympus Consulting was explained indicating that 75 new sustainable family wage jobs would be
added over a five-year period with average pay of $48,500. Platypus also proposes to spend $5
million for improvements and construction with completion occurring at the end of five years. The
company builds and services commercial, recreational and military vessels. Mr. Linnabary
emphasized that he prefers to purchase the land so they can move forward in ensuring financial
certainty with a business model that works. Discussion followed. The Commissioners concurred in
their appreciation of the presentation, exciting proposition and Platypus Marine’s contribution to the
community. Commissioner Calhoun expressed concern about selling rare waterfront property piece
by piece and he stressed that consideration will have to be given to the long-term charge and purpose
of the public port. Further discussion followed on long-term leases, conveyance and reversion clauses
and right of first refusal. In conclusion, the Commissioners gave Executive Director O’Hollaren 30
days to investigate and discuss the possibility of a long-term lease or the possibility of a sale with a
buyback clause.
V.
COMPLETION OF RECORDS
The Master Policy Report is attached for information as directed by the Commission. There
was no discussion.
VI.
EARLY PUBLIC COMMENT SESSION
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A.
Paul Forrest, long-term PABH tenant and Yacht Club Vice-Commodore, asked for
Commission approval to renew the Port’s participation in the May 3 Water Activities Open House as
well as renewing the joint commitment in the Port Townsend Wooden Boat Festival in September.
Marina Manager Jerry Ludke remarked that the Yacht Club members are great marina advocates and
that the Port is happy to work with them.
B.
Peter Ripley, 114 E. 6th Street, Port Angeles, commented that the continuing capital
projects “bidding wars” have to change to a friendlier local contractor environment and said he would
like to see local governments lobby Olympia to change rules regarding the bidding process.
C.
County Commissioner Mike Chapman commented on frustration between the
government and private sector in figuring out how to get to “yes”. Referring to the Platypus
presentation, he indicated the proposal is a great opportunity to extend a hand to a company that is
trying to create badly needed jobs and to deliver a positive message to the community’s economy.
Commissioner Chapman stated this is one of the most fruitful discussions he has witnessed in 15
years of public service. Discussion followed on the Economic Development Council (EDC).
Commissioner Hallett pointed out that the Port is a county-wide organization tasked with economic
development and inquired about the possibility of reframing the discussion on economic development.
Commissioner Chapman responded that his long standing public position is that because of the Port’s
far reaching impact, it should be the economic engine for the County. He has objected to the County
proposal providing funds for additional staff at the EDC and suggested the Port already has the staff
and could hire an additional person in taking on the leadership role.
VII.
PLANNING
A.
Ag Forestry National Government Seminar Report
Chris Hartman, Director of Engineering, provided background and an overview of this program
of which he is a participant. Ag Forestry is a two-year leadership development program with a vision
of providing training and networking to support natural resources industries and communities. Mr.
Hartman explained the seminar locations and topics over the two-year program, the most recent of
which was a National Government Seminar in Washington DC. Commissioner Calhoun commented
that the value of this program has long-term benefits of leadership development in being able to
operate at the national and state level within a network of contacts achieved resulting in lifetime
benefits.
VIII.
PROPERTY
A.
PA Marine - Lease Agreement, Agency Agreement and Memorandum of
Understanding
This item postponed.
IX.
MARINAS
No items
X.
AIRPORTS
A.
Small Community Air Service Incentive Program - Report on Port of
Seattle Commission Action
Executive Director O’Hollaren reported on the successful outcome of the recent Port of Seattle
Commission meeting he attended and in which Commissioner McAleer testified for the Port. Also
attending were two Port Angeles City Council members and Nathan West, City Director of Community
and Economic Development. The Seattle Port Commission voted unanimously for a 100% fee waiver
for two years for small communities who do not currently have service into SeaTac. Executive Director
O’Hollaren emphasized this is a positive step which makes it more feasible for carriers to work with
communities to begin the process of air service into SeaTac. He pointed out that the Port is also
working with a consultant to develop an air service market study. Commissioner Calhoun thanked
Commissioner McAleer for her work on this project and remarked that the Port of Seattle has
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responded quickly to the need. He said this has high potential in having scheduled flights from Port
Angeles with security checks directly into SeaTac. Commissioner Hallett thanked colleagues at the
City and suggested a letter of thanks be sent to the City and to the Port of Seattle.
XI.
NEW BUSINESS
A.
Marine Terminal Security Improvements Professional Service
Agreement - Moffat & Nichol
Mr. Hartman reported the Port was a recipient of a federal funding grant of $701,063.00 to
improve the surveillance/lighting system, access control and cyber-security at Marine Terminals 1 and
3. Because of excellent qualifications and previous work with the Port, Moffat & Nichol was selected
for this project with a negotiated fee amount not to exceed $125,000.00. The consulting fee is part of
the grant which means 75% of that fee will be reimbursed by FEMA resulting in a fiscal impact of
$31,250.00 to the Port.
Commissioner McAleer made the motion to authorize the Executive Director to sign a
Professional Service Agreement with Moffat & Nichol for an amount not to exceed $125,000.00
for Marine Terminal Security Improvements. The motion was seconded by Commissioner
Calhoun and passed unanimously.
XII.
OLD BUSINESS
A.
USFS NW Forest Plan Listening Session - Attendance by Commissioner
Calhoun
The Forest Service is beginning a process of revising the 15-year old Forest Plan which
includes Northern California, Oregon and Washington. Part of that is the NW Forest Plan which is a
policy document seeking to implement strategies for the Northern Spotted Owl. Commissioner
Calhoun previously presented draft talking points to the Commission and asked for their input or
directions for one of three listening sessions he will be attending and presenting testimony on March
18 in Seattle. Commissioner Hallett suggested adding in the front end of the presentation to have an
analysis of the economic impacts and to make that an equal part of the discussion. Commissioner
McAleer thanked Commissioner Calhoun for being the timber advocate on the Port’s behalf.
Commissioner Calhoun mentioned a letter signed by several Congressmen including Derek Kilmer in
which they indicated they do not believe that three listening sessions are enough to obtain adequate
public input and specifically asked for more meetings in this first round of listening. A full report of the
listening sessions will be provided at a future meeting.
XIII.
PUBLIC COMMENTS SESSION
Carol Johnson, Executive Director of the North Olympic Timber Action Committee, Port
Angeles, thanked Commissioner Calhoun for bringing up the letter signed by the Congressmen on the
NW Forest Plan Listening Session. She suggested that he specifically ask for a meeting venue on the
Olympic Peninsula because of the uniqueness of the Olympic forests.
XIV.
ITEMS NOT ON THE AGENDA
None
XV.
NEXT MEETING
A.
March 16, 2015 Workshop on Master Policy (public invited)
B.
March 24, 2015 Regular Meeting
XVI.
EXECUTIVE SESSION
Commissioner Hallett moved the Board of Commissioners into executive session at 10:55 a.m.
to consider three items of property with no items of litigation or personnel. These items are discussed
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in executive session in accordance with title 42.30.110 of the Revised Code of Washington. It is
estimated that the executive session will conclude no later than 11:30 a.m. and no action is expected.
XVII.
ADJOURN
Commissioner Hallett reconvened the regular meeting at 11:30 a.m. and immediately
adjourned. No action was taken.
PORT OF PORT ANGELES
BOARD OF COMMISSIONERS
____________________________
James D. Hallett, President
___________________________
Colleen M. McAleer, Secretary
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4
ITEM FOR CONSIDERATION
BY THE
BOARD OF PORT COMMISSIONERS
March 24, 2015
SUBJECT:
Olympic Logging Conference Activities
Presented by:
Mike Nimmo, Marine Terminal Manager
BACKGROUND:
The 70th annual Olympic Logging Conference is scheduled this year for April 29th
through May 1st in Victoria, B.C. As has been the practice for many years, the
organizers of the conference have requested the Port be a sponsor of the Thursday
morning “Meet and Greet” during conference registration. The conference is an annual
event, bringing together most of the logging/timber/sawmill interests on the Olympic
Peninsula.
RCWs and Port policies related to this event include promotional hosting and travel.
RCW 53.36.120 thru 53.36.150 on Promotional Hosting requires budget line item
authority and states that Commissioners are not allowed to incur promotional hosting
expenses unless specifically approved in advance by the Port Commission. Resolution
14-1084 delegates promotional hosting expenses up to and including $2500 to the
Executive Director. Promotional hosting is in the nature of a gift where something of
value is not exchanged. It includes meals, receptions, tours, gifts, etc. for customers,
potential customers and other parties that can influence industrial development.
Sponsorship is not considered promotional hosting; it is marketing because the Port
receives value in return for the sponsorship such as advertising or name placement on
program listings, displays, etc.
Resolution 14-1087 on travel requires that travel outside of Washington State and
British Columbia, Canada must be approved in advance by the Commission for a Port
Commissioner and by the Executive Director for staff. Travel in excess of $5,000 per
individual must be approved in advance by the Commission.
ANALYSIS:
Included in the program for the conference are speakers who will discuss timber supply,
markets, and new equipment development. The theme for this year’s program is
“Security in the Timber Industry”.
The conference is the one event where a broad range of people involved in the timber
industry on the Olympic Peninsula get together and provides an opportunity for the Port
to meet and network with many of the customers and users of Port facilities. The “Meet
XI. A. 1
and Greet” function is the official opening event of the conference and entails a
continental breakfast for the conference registrants on Thursday morning. The Port has
been a sponsor of this event for many years. In return for the Port’s sponsorship, the
Port will receive advertising and recognition through prominent listing as a sponsor on
banners, program materials and handouts valued at $1,500.
In addition to the above sponsorship, the Port has traditionally held a luncheon for its
customers, which would be considered promotional hosting, and is approximately
$1,000. This function replaced other hosted events held over the many years of the
Conference. The luncheon has been well attended and appreciated by the customers.
ENVIRONMENTAL IMPACT:
None
FISCAL IMPACT:
The cost of the sponsorship for the “Meet and Greet” and the Luncheon event typically
is $2500.00 which includes $1500.00 for the sponsorship. The cost varies by the
attendance at the luncheon event. The total expenses for travel, sponsorship and
promotional hosting were included in the Port’s budget for Log Yard. The promotional
hosting expenses are within the approved budget line item for Log Yard of $7,500 and
within the Port-wide budget line item of $18,500.
RECOMMENDED ACTION:
Commission review and discuss participation in the 70th annual Olympic Logging
Conference.
XI. A. 2
ITEM FOR CONSIDERATION
BY THE
BOARD OF PORT COMMISSIONERS
March 24, 2015
SUBJECT:
Asia Marketing Trip
Presented by:
Ken O’Hollaren / Mike Nimmo
BACKGROUND:
In support of our Marine Terminal Line of Business, it is important that the Port develop
and maintain relationships with all players in the supply chain for cargo exported from
Port Angeles. This requires periodic travel to Asia to visit with our shippers’
representatives, end users, and other ports associated with the log export trade.
ANALYSIS:
In connection with that background, we have identified the need to visit S. Korea and
China, as those are the two destinations for exports originating from Port Angeles. We
will be working with our US based customers in coordinating these visits. We have
tentatively scheduled this trip from June 17-26, with two days in S. Korea (Seoul &
Pusan) and six days in China (Qingdao and Shanghai).
ENVIRONMENTAL IMPACT:
n/a
FISCAL IMPACT:
Estimated cost is $15,000 and was included in the 2015 Business Development
Department Budget.
RECOMMENDED ACTION:
Authorize travel to S. Korea and China for Ken O’Hollaren and Mike Nimmo for forest
products industry marketing from June 17- 26, 2015.
XI. C. 1
ITEM FOR CONSIDERATION
BY THE
BOARD OF PORT COMMISSIONERS
March 24, 2015
SUBJECT:
KPly Cleanup Agreed Order
Presented by:
Jesse Waknitz, Environmental Manager
BACKGROUND:
KPly (also known as PenPly) Mill was operated as a plywood mill since the early 1940’s,
on Port-owned property. A number of corporations owned and operated the plywood
mill. In December of 2011 the mill closed for business and the Port concluded the
viability for the continued use of the mill facilities to manufacture plywood was
unsustainable. Redevelopment of the site to support Marine Trades is in the
community’s best interest and consistent with the Port Central Waterfront Master Plan.
Past operations at the site (mill & fuel pipeline) polluted the soil and ground water at the
site, thus the first step of the redevelopment was demolition of the mill and a Remedial
Investigation per the State Model Toxics Control Act (MTCA) and Agreed Order No. DE
9546 between the Port and State Department of Ecology.
Cleanup Work completed under AO No. DE 9546, October 2012, included:

Remedial investigation completed in 2013.

Draft Remedial Investigation/Feasibility (RI/FS) Study detailing the pollution at
the site and evaluating cleanup alternatives submitted to Ecology in spring of
2014.

Draft Cleanup Action Plan (DCAP) detailing the preferred cleanup method
submitted to Ecology in November 2014.
The proposed cleanup at the site per the DCAP consists of:

Removing 16,000 cubic yards of polluted soil. The clean soil on the top of the
polluted soil will be removed and reused.

Using bioremediation to clean up polluted groundwater. Nutrients and oxygen will
be added to excavated areas prior to back filling.

Monitoring soil and groundwater until cleanup standards are met.
XI. D. 1
The cleanup is scheduled for this summer of 2015 and a new Agreed Order requiring
the implementation of the finalized Cleanup Action Plan is needed.
ANALYSIS:
Ecology is hosting a public comment period (April 2 - May 4, 2015) on the proposed
cleanup plans (Agreed Order, RI/FS, DCAP, Public Participation Plan & SEPA Docs) for
the KPly Site. Ecology has requested that the Port enter into a new Agreed Order
requiring the Port to implement the CAP prior to this public comment period.
Attached is a draft Agreed Order that specifically addresses the work activity the Port will
be required to accomplish.
ENVIRONMENTAL IMPACT:
The cleanup actions conducted at KPly will meet the requirements of State and local
permits and approvals.
FISCAL IMPACT:
The cost of the KPly cleanup is estimated at $5.0 Million in 2015 and $200,000 for site
monitoring over the next ten years. $4.5 Million has been allocated from the Port’s
Capital Reserves for this project in the 2015 Budget.
The Port is also aggressively pursuing indemnity costs with insurance carriers and is
currently seeking to recover cleanup costs from former operators (Rayonier and Exxon
Mobil) at the site. The Port is also seeking State Remedial Action Grant funding. Under
Ecology’s 2015-17 biennial budget, the project is listed for $1.5 Million of potential grant
funding.
RECOMMENDED ACTION:
Authorize the Executive Director to sign the Agreed Order with Department of Ecology
for the KPly cleanup work.
XI. D. 2