Minutes of February 5, 2002 Port of Hood River Commission Regular Meeting
Expo Center Conference Room
7:30 P.M.

Present: Commissioners Sherry Bohn, Fred Duckwall, Don Hosford, Bill Lyons, and Bob Nichols; Attorney Jerry Jaques; from staff, David Harlan, Mike Doke, Linda Hull, Linda Shames, and Laurie Borton

Absent: None

Media: Chris Huggett, Radio Q104

President Bill Lyons called the regular session to order at 7:30 p.m.

1. INTRODUCTIONS: Rick Cyphers, with Onstott & Broehl, P.C., stated he would be commenting on the fiscal year 2001 audit report.

2. MODIFICATIONS OR ADDITIONS TO THE AGENDA: None.

3. UNSCHEDULED ITEMS FROM THE GENERAL PUBLIC: None.

4. APPROVAL OF MINUTES: Commissioner Bohn noted a correction for work session item 1 in which it should be noted that Mike Schend is an ad hoc member of the Columbia Gorge Community College board.

Motion: Move to approve minutes of the January 22 (work session/regular meeting), 2002 meeting as corrected.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, and Lyons
Absent: Nichols
MOTION CARRIED

5. REPORTS:

a) Executive Director: Executive Director David Harlan reported on an approximate $20,000 savings on the bridge utilities relocation project and that an additional savings on the construction management portion of the project would also be realized. A letter has been received from the Columbia River Research Laboratory, U.S. Geological Survey Biological Resources Division, requesting placement of antennas on the bridge in April to conduct salmon and steelhead research between May 1 and July 30. Harlan reported the start date for stringer replacement on the bridge is unknown and that HNTB, the Port's bridge engineering consultant, notified the Port of potential need for lane closures, which had not been anticipated. Harlan stated there appeared to be little hope of the Oregon Department of Transportation endorsing the bridge redecking as a TEA 21 project but that he would continue to pursue support from others. Harlan presented a conceptual drawing of an integrated technology center and community college campus that had been shown to Congressman Greg Walden during a recent visit to the Expo Center. No deficiencies were noted in the Phase I environmental assessment received on the Wasco Avenue property. Harlan reported that Cooper Industries would be forwarding a Level I assessment of the Western Power Products building and that Cooper is preparing a draft termination agreement with the Port of Hood River that would need to be reviewed by Attorney Jerry Jaques.

Mike Doke reported the SR-35 Columbia River Crossing Feasibility Study will be holding an open house on Thursday, February 28 from 5:00 p.m. to 8:00 p.m. at the Hood River Inn. The study is half way into a three-year process and a final bridge alternative will be presented this summer. Doke reported costs have not yet been identified.

b) Commissioners: President Lyons reported on the meeting with Congressman Greg Walden, Executive Director Harlan, Commissioner Duckwall, Columbia Gorge Community College President Dr. Frank Toda, and Michelle Giguere of Ball Janik's Portland office. Economic priorities were discussed relative to an integrated technology center and satellite community college campus. Waterfront drawings highlighting the Expo lot, possible footprints and future expansion, and classroom and incubator shared areas were reviewed with Congressman Walden. Walden was questioned about the Port's chances on Phase 2 grant monies. Lyons noted the $150,000 grant received in December 2001 has been put on President Bush's potential rescission list. Lyons reported that Walden said the technology center and community college satellite campus was a number one priority for his district. Lyons also commented that Hood River Electric Co-op has a contract for final engineering to place fiber optic cable from Parkdale to Hood River with a loop through the waterfront that is hoped to be completed the last quarter of this year. Lyons also reported that Columbia Gorge Community College is now holding budget meetings and discussing the possibility of a bond levy in November. Lyons stated separate votes would be taken in The Dalles and Hood River; however, both levies would have to pass to take effect.

Commissioner Duckwall added the Port's relationship with Columbia Gorge Community College would have a positive financial synergistic effect between the two organizations.

6. ITEMS FROM WORK SESSION:

a) Columbia Gorge Community College Partnership Resolution:

Motion: Move to approve Resolution No. 2001-02-4 in support for Columbia Gorge Community College Partnership.
Move: Hosford
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Nichols
MOTION CARRIED

7. NEW BUSINESS:

a) FY 2001 Audit Report: President Lyons reported the audit committee met with staff to review the fiscal year 2001 audit report. Rick Cyphers, Onstott & Broehl, P.C. reviewed the audit for the Commission commenting nothing of significance stood out from prior years audits, that control systems were in place, and the Port was in compliance with legal requirements. Cyphers thanked Port staff for their cooperation, and Linda Shames in particular, in working with the Onstott & Broehl auditors. President

Lyons also complimented Shames on a job well done. Included in the audit was a Letter to Management notifying the Port of a new reporting model for state and local governments, which will affect the July 2003-June 2004 fiscal year audit. It is the recommendation of Onstott & Broehl, P.C. that the Port of Hood River assess what it needs to do to implement the provisions of Governmental Accounting Standards Board Statement 34 (GASB 34) and develop an implementation plan.

Motion: Move to accept the fiscal year 2001 audit as outlined.
Move: Bohn
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Nichols
MOTION CARRIED

b) Accounts Payable: None.

8. Executive Session: None.

The next Commission meeting will be held on Tuesday, February 19, 2002 at the Expo Center Conference.

President Lyons adjourned the meeting at 8:00 p.m.

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February 19, 2002 Meeting Canceled

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Minutes of February 20, 2002 Port of Hood River Commission Special Meeting
Strategic Planning Work Session
Expo Center Conference Room

Present: Commissioners Bill Lyons, Don Hosford, Fred Duckwall, and Sherry Bohn; Attorney Jerry Jaques; from staff, David Harlan, Mike Doke, Linda Shames and Linda Hull; from public, Stu Watson, Brian Shortt

Absent: Commissioner Bob Nichols

Media: None

President Bill Lyons called the meeting to order at 12:30 p.m. for the purpose of discussing the annual strategic planning and financial budget for the Port of Hood River.

Introduction: Executive Director David Harlan stated the Port is financially healthy at this point but must continue to reduce subsidization and increase revenue from its assets. The purchase of the Wasco property was a step in the right direction. Last year's waterfront development timelines were not met due to Leland's conceptual plan not being economically feasible. Harlan said staff is ready to focus on and complete the draft zoning for the revised plan, and will continue to work with the City on finalizing the Waterfront Zone. Harlan stated he would prefer all issues be brought directly to him first for resolution and discussion. Harlan also requested that an evaluation be done in accordance with his contract.

A. Financial Status Review. Linda Shames, Accounting Manager, presented the Cash Flow Report, indicating there is $4.8 million cash available at fiscal year end including estimated expenditures of engineering on Wasco property and the City waterline project. Shames reviewed the Year to Date Report pointing out that all debt except for the Airport Flexlease Program will be paid off by fiscal year end. Approximately 30% of the bridge revenue accrues in the dedicated Bridge Repair and Replacement Fund and will be used for the stringer repair and ongoing painting maintenance. If the Port obtained a 10-year bond for the deck replacement project, this fund could pay for its debt service. In reviewing the Asset Performance Report, Harlan stated almost all assets except the bridge are underperforming. The waterfront added costs this year with new landscaping and two restrooms to maintain. In reviewing FY 2002-2003 Budget Projections, Harlan stated the large ending cash balance is due to delays in the bridge redecking project and construction of the waterfront entrance road, and other related improvements as budgeted. He stated revenues are projected to be down for 2002-03. There are no large one-time payments due and many leases are expiring. Harlan emphasized the Port needs to continue to generate cash from operations and leverage its cash available for investment through matching federal and state granting resources and private investment. The Port must continue to invest in revenue-generating projects to accomplish its multi-use waterfront development project.

B. Financial Policy Review. Cash Flow Management: Harlan stated the strategic plan calls for the Port to maintain a 15% operating reserve in cash, cash flows should be maintained at $4-$500,000 annually; and non-bridge revenues to be maintained in a stable range (10%). This will be hard to do with the upcoming bridge-redecking project. The Port must replace revenue-producing assets when sold and add new ones. The strategic plan's goal for Rate of Return on assets was revised last year to 2%, calling for increasing the rate for new investments by .5% annually to reach 4% by 2005, which means increasing performance of assets over time. Commissioner Lyons stated the Port has a reasonable rate of return policy at the present time and that higher returns drive other funding resources. Lyons asked Linda Shames to provide tracking of new asset investments (restrooms, Wasco property) for the balance of the fiscal year. The strategic plan Debt Management policy is to retire debt when the associated asset it created is sold.

C. Asset Management.

1. Toll Bridge: Harlan stated the utility relocation project was just completed; the stringer repair project's engineering is almost done and project will be completed this fall; and the redecking project engineering has begun. The stringer repair will allow the redecking project to be postponed for up to five years. There are no structural alternatives for pedestrian/bike access over the bridge. Harlan stated the Port faces increased inspection, maintenance, and insurance costs. He also said that state and/or federal funding for the redecking is problematic and a political challenge. Harlan has had informal discussions with both ODOT and WSDOT regarding this issue. Lyons stated that federal funding of a bridge project must be at least $10 million and the Port would have to include its toll plaza upgrade project with the 2-year redecking project to be considered for TEA-21 funding. Harlan and Commissioner Hosford will include this project for discussion with Congressional staff while in Washington D.C. at the Pacific Northwest Waterways Association conference. Lyons said that if federal appropriations cannot be obtained, the Port will have to move ahead with the redecking project regardless. Shames stated it would take three months to put together a bond proposal, and that it would be good for three years, and the dedicated Bridge Repair Fund could adequately repay it.

2. Marina/Marina Park: The Marina continues to be an underperforming asset and labor intensive to administer. The Port increased moorage fees for 2002, however there are no user fees associated with the swim beach or park use. The River Walk project is a non-revenue amenity. The Gorge Games lost their major sponsor and may not be able to pay the Marina Green fees in 2002. Dept. of Motor Vehicles would like the Columbia Area Transit (CAT) office space when CAT moves to another location. Lyons asked if there has been any interest by developers. Harlan said he has discussed small-scale mixed-use commercial development with a developer to increase revenue to help pay for operations and maintenance of the park and marina areas. Port Office Building: An architectural review of the building is currently in process. This analysis will determine if the cost of upgrading for tenancy is prohibitive. Commissioner Duckwall stated and the Commission agreed that staff should develop a marina plan after the analysis is completed by April. Once in place, that plan would drive policy regarding operations in the Marina Park area. Harlan also said the sand spit will likely continue to grow and will continue to impact the windsurfing schools as well as the safety of the public using the swim beach.

3. Waterfront Complex: Harlan stated staff is ready to take Angelo Eaton's latest mixed-use zoning draft-with some revisions, to the City. Lyons asked if we need a mixed-use zone in order to develop. Hosford believes it gives us more flexibility to develop. Discussion followed regarding rezoning, CCRs and development standards, marketing and what needs to be in place before development can begin. The Commission agreed that staff should complete and submit the Waterfront Zone and CCRs to the City for approval. Attorney Jaques indicated the City placed a moratorium on building in the waterfront until an overlay zone was adopted, and that further analysis needs to be made on that issue. Harlan stated a good plan today is better than a perfect plan tomorrow and believes staff can work out the minor issues with the City as the process evolves. Harlan reported the waterfront entrance road, costing $5-600,000, could begin this year and may qualify for funding from the Oregon Economic and Community Development Department's Special Public Works Fund. The Commission agreed that engineering and construction of the road and related amenities should proceed in the coming fiscal year.

The discussion regarding the Expo Center centered on the Community College and Technology Center partnership and ownership issues. The college wants to purchase property for a permanent site but does not have the money to do that without passing a bond. Good reasons for the Port to retain ownership of the property include potential revenue, HUD grant issues, and the Chamber/Visitors Center. The Commission agreed that it cannot continue to subsidize the building for its current community use. Harlan stated other communities use room tax money for support of similar facilities. It is uncertain when the $150,000 federal money for the Technology Center will be available and for what kinds of activity it can be used. Options for the Expo Center include status quo (operating at a substantial loss), increased marketing, commercial or industrial re-use, demolition, or mothballing the structure for future use.

Harlan said the Event Site will continue to need an on-site attendant for revenue collection; users did not use the ticket pay machine in 2000. The new restroom and landscaping have increased operating costs. The service crew will be repainting the southern section of the parking lot to accommodate RVs. The Cruise Dock continues to see much activity and last winter two ships lay berthed in the basin. However, the fees collected will not cover the capital costs of upgrading the facility over time.

Lot 6 continues to be a development issue in regards to what size and who will develop and maintain it. The Commission agreed not to enter into a long-term lease of the Western Power Building at this time. Shorter-term lease periods will be considered. Harlan said there is interest by numerous parties for light industrial use.

Commissioner Duckwall asked about marketing Port properties and Mike Doke stated he gets many calls as well as CGEDA assistance. UTS Building continues to be difficult to lease because of the odor from the wastewater treatment plant. This will also affect the development of the surrounding area as an industrial campus. The community college is not interested in leasing this building temporarily for classes for the same reason. Harlan will discuss the situation with the City to see if the problem is fixable.

The Waterline Improvement Project, for which the Port is providing matching grant dollars, is stalled until the City Attorney prepares an intergovernmental agreement. The Commission agreed that the City should manage their STAG grant project, do all the paperwork, and the Port will give them the monetary match that was previously budgeted.

The issues at the Spit and Hook areas continue to be the kiteboarding/windsurfing conflict and calls for improvements with no revenue to offset the expenses. Commissioner Bohn said the Kiteboarding Association told her they want to meet with staff in March to discuss the issues for 2002.

4. Airport: Mike Doke reported the Master Plan will be completed by 2003, with projects identified that qualify for the continuing Federal Aviation Agency grant funds ($150,000 for three years, 90% grant), including property acquisition. This may include the café acquisition as identified in the 1992 Master Plan. The Windmaster Corner project will benefit the airport property development when completed although there may be potential costs. Harlan stated the environmental cleanup of the airport is continuing and the Commission will need to make a decision regarding recovering costs from other parties.

5. Land Management: The remaining Port-owned properties of the Diamond Complex are the Columbia Building and the Big 7 Building. The Commission agreed that selling Big 7 would be a good strategy assuming reinvestment of the proceeds in a revenue-generating asset as per the strategic plan. Harlan said staff would continue to work with Full Sail and DaKine regarding the Columbia Building and both companies' need for expansion room with that same policy in mind. Wasco Street property work will begin shortly with zoning discussions with the City and preliminary engineering work to settle on a street configuration and layout for the site. Commissioner Lyons suggested staff discuss the lot configurations with DaKine first for layout suggestions. CAT is interested in moving their office and the Greyhound Bus stop to the Wasco Street site, with a preference for street frontage for bus access. There are only three available lots remaining at John Weber Business Park (JWBP), underscoring the need for other industrial investments and acquisitions generating new revenues for the Port and driving job retention and creation for the community. The JWBP Incubator Building businesses have had good track records for growth and employment.

Executive Session: At 4:30 p.m., President Lyons called the Commission into Executive Session under ORS 192.660(1)(e), Real Estate. No action was taken as a result of the Executive Session. At the conclusion of the Executive Session, the Commission was called back into regular session at 5:00 p.m.

Other Property Acquisition(s) discussed included the Hanel property off State Highway 35, and the PP&L property. The Odell Sanitary District wastewater facility has limited available capacity for any substantial additional development at John Weber Business Park until improvements are made, limiting some types of fruit processing at that site. Harlan suggested the Port add marketing funds to the budget this year with new property (Wasco Street) and newly available structures (Western Power) to fill, along with the Port's waterfront properties. Commissioner Duckwall suggested staff work with the Community College on a lease option for the Expo Center in anticipation of a bond measure passing in the fall of 2002.