Minutes of March 4, 2003 Port of Hood River Commission Work Session/Regular Meeting
Expo Center Conference Room
5:30 P.M.

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

Absent: None

Media: None

President Bill Lyons called the work session to order at 5:35 p.m.

1. Review Waterfront RFQ Interviews: President Lyons provided a talking point outline to facilitate the work session discussion of the Waterfront RFQ interviews that occurred on February 13 and 20, 2003. Staff will prepare a draft Request for Proposal for further discussion at the Commission's March 18 planning session meeting. Executive Director David Harlan will contact the six respondents advising that no one has been eliminated, and Harlan will also confirm which parties are interested in either purchasing and/or having an equity interest in the available waterfront properties.

President Lyons closed the work session at 7:04 p.m. and reconvened the regular session at 7:10 p.m. at which time he also opened the supplemental budget hearing stating the hearing would be open until 7:40 .m. for public comment.

Linda Shames, accounting manager, reported on the unanticipated early receipt of Oregon Department of Transportation grant and interest revenues. Because the Port would not be expending appropriated capital outlay funds for the bridge stringer repair project, Shames recommended an early loan payment be made in order to save interest for the remainder of the year. Resolution No. 2002-03-2 further clarified changing the 2002-2003 budget for the bridge repair and replacement fund.

1. INTRODUCTIONS: Matt Kosmata, Maui Meyer, and Gary Fields were present at the meeting.

2. MODIFICATIONS, ADDITIONS TO AGENDA BY COMMISSIONERS: None.

3. UNSCHEDULED ITEMS FROM THE GENERAL PUBLIC: Gary Fields's questions regarding waterfront zoning and the use of Lot 6 were addressed by the Commission. Fields commented on a business that had approached the Port for assistance but located elsewhere. President Lyons suggested that Fields make an appointment to discuss this matter with Executive Director Harlan. Maui Meyer commented on the waterfront work session discussion relative to the RFP process.

4. APPROVAL OF MINUTES: Commissioner Streich requested an amendment be made to the February 4, 2003 minutes regarding his meeting on the Airport Master Plan Update with Century West. Streich wanted to clarify the runway extension was a "runway safety zone extension."

Motion: Move to approve the minutes of the February 4, 2003 work/regular sessions, as amended.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

5. REPORTS:

a) Executive Director: Executive Director Harlan reported a joint Port Commission/City Council meeting will be held on April 7 to discuss updates on the waterfront development project. Harlan informed the Commission that President Bush has signed the budget and that Port earmarks for the bridge and integrated technology center survived, as well as the City's waterline project. Harlan also reported on a successful lobbying trip to Washington, D. C. that he and Commissioner Hosford had just returned from, and that additional funding for the bridge redecking project will be pursued. Harlan commented that staff and the Commission would have further discussions on the Integrated Technology Center at the March 18 planning session, and that Columbia Gorge Community College has expressed renewed interest in the second floor of the UTS Portsite building. Harlan reported that he would be in Salem on March 5 testifying for HB2691, which would have a positive impact on Cardinal Glass locating at the lower Hanel Mill site. The City Planning Commission will hear the Barman property rezone on March 5 and Harlan reported that Attorney Jerry Jaques would represent the Port at the meeting. Harlan reported the Port's application for funding from the Oregon Housing and Community Services Department for Community Incentive Funds appears to have been successful. Harlan noted DaKine Hawaii had not been in contact with the Port regarding their right of first refusal and that just a few days remained on the 30-day right of first refusal period. DaKine's lease renewal has been drafted and Harlan stated that DaKine would be assuming the Art Larsen Architecture space with Larsen's move to the west wing of the Port Office Building. Other tenant information included updates on GorgeNet moving into the Big 7 Building by the end of March, and that Heelside should be cleared out of the UTS Portside Building by the end of the week. Harlan provided conceptual design illustrations submitted by three respondents to the Humanities Software RFP for the Wasco Business Park. Harlan requested the Real Estate Committee meet on March 6 to discuss the three proposals; there was consensus that the Real Estate Committee would award the RFP and the Commission would ratify the decision at a later meeting. Harlan then responded to Commissioners' questions relative to items on his Executive Director's Monthly Report.

At 7:45 p.m. President Lyons asked for public comment on the Supplemental Budget Hearing. No comments were offered and the budget hearing was closed.

b) Other: Commissioner Hosford reported on his and Executive Director Harlan's lobbying trip to Washington, D.C. stating they were well received by the Oregon and Washington delegation. Hosford stated the combined delegation works across partisan lines and was very knowledgeable of Port of Hood River projects. On a regional basis, Hosford stated efforts are being made to restore the U. S. Army Corps of Engineers budget to cover critically needed infrastructure maintenance projects, including the Columbia-Snake hydropower system, coastal jetties and needed dredging work. Commissioner Hosford finished his report by presenting Commissioner Duckwall with a packet of information he had received earlier at the Special Districts Association of Oregon conference.

President Lyons and Linda Shames reported on the February 20 Finance Committee meeting which reviewed the FY 2002 audit, toll collection systems, early loan payoff to the Oregon Department of Transportation, bond counsel information, and airport terrorism insurance.

President Lyons reported the Real Estate Committee met on February 18 to discuss a request from the Gorge Rebuilding Center for partial use of the Western Power Building and that staff would inform them the building would not be available. The committee also discussed covenants, conditions and restrictions (CC&Rs) for the waterfront, and Attorney Jaques indicated he would have further discussions with legal counsels from Portland. Lyons also reported the mezzanine project at the Columbia Building has been abandoned and that DaKine intends to occupy the space that will be vacated by Art Larsen Architecture with Larsen's relocation to the west portion of the Port Office Building.

6. ITEMS FROM WORK SESSION:

a) Waterfront RFQ: The Commission directed staff to prepare a draft Request for Proposal outline for further discussion at the Commission's March 18 planning session.

7. NEW BUSINESS:

a) Automated Weather Observation System Design and Construction Scope of Services: Mike Doke referred to the January 2003 approval by the Commission of $25,000 for the AWOS engineering scope of work, but stated that costs had turned out to be higher than anticipated. A contract has been received from Century West not only for the engineering scope of work but also for bid and construction services, for a total contract amount of $43,982.80. Doke stated the Federal Aviation Administration has encouraged the Port to consider Century West as the project manager for the AWOS. There was Commission consensus that because a Request for Proposal had not been issued for the bid and construction portion of the project that the approval for engineering scope of services would be amended.

Motion: Move to approve an amount up to $27,271.24 for the AWOS engineering scope of work from Century West.
Move: Streich
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

b) Adoption of FY 2002 Audit:

Motion: Move to accept the Finance Committee's recommendation to adopt the FY 2002 audit.
Move: Hosford
Second: Streich
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

c) Supplemental Budget Resolution No. 2002-03-2:

Motion: Move to adopt Resolution No. 2002-03-2 changing the 2002-2003 budget for the bridge repair and replacement fund.
Move: Duckwall
Second: Bohn
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

d) Oregon Department of Transportation Order for Services: An Order for Services, which was expected prior to the Commission meeting, had not arrived. Linda Shames explained the Order would allow the Oregon Department of Transportation to start reviewing paperwork on bridge grant funding and that a deposit of approximately $10,000 would be required. There was consensus that the Finance Committee would review the Order for Services for approval when received and the Commission would then ratify any action taken at a later meeting.

e) Cascade Locks Enterprise Zone Expansion Letter of Support:

Motion: Move to authorize staff to submit a letter of support to the Hood River County Economic Development Coordinator regarding the expansion of the Cascade Locks Enterprise Zone.
Move: Hosford
Second: Bohn
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

f) Accounts Payable:

Motion: Move to authorize Accounts Payable expenditures, ratifying $29,500.00 and approving $209,434.18.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Lyons, and Streich
MOTION CARRIED

8. EXECUTIVE SESSION: President Lyons called the Commission into Executive Session at 8:28 p.m. under ORS 192,660(1)(e) Real Estate.

At the conclusion of Executive Session, the Commission was called back into regular session at 8:30 p.m. No action was taken as a result of the Executive Session.

9. NEXT MEETING DATE: The Commission will hold a planning session meeting on Tuesday, March 18, 2003 at the Expo Conference Room from 12:00 noon to 4:00 p.m.

President Lyons adjourned the meeting at 8:35 p.m.

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Minutes of March 18, 2003 Port of Hood River Commission Special Meeting
Strategic Planning Work Session
Expo Center Conference Room

Present: Commissioners Bill Lyons, Don Hosford, Fred Duckwall, Hoby Streich and Sherry Bohn; Attorney Jerry Jaques; from staff, David Harlan, Mike Doke, Linda Shames and Linda Hull; Others: Maui Meyer, Linda Maddox, Matt Kosmata, Lynn Guenther

Absent: None

Media: None

President Bill Lyons called the special meeting to order at 12:15 p.m. for the purpose of discussing the annual 2003 strategic planning and financial budget for the Port of Hood River and the Commission immediately went into a work session.

Introduction: Executive Director David Harlan stated the Port is financially strong but must continue to reduce subsidization and expand revenue from its assets if it is to remain so over time.

Financial Status Review. Linda Shames, Accounting Manager, discussed the assets and return on investments. The bridge revenues continue to increase by 1% a year. Lease revenues have fluctuated due to company cut backs. The Columbia Building has been full; revenue from the Big 7 Building were down 29% because of Electronic Assemblers' downsizing, but the building will again be full shortly; UTS Portsite lost 57% of revenues due to uncollected debt at year's end. Western Power, the Expo Center, and the Event Site/Cruisedock are all down in revenue. Airport revenues remain constant, although several tenants have given up hangars and the waiting list is now down to 9. It was suggested that current hangar tenants be polled and a public notice be prepared to establish the need for more hangar space.

Shames reviewed the 2003-04 debt payment schedule, indicating the bridge bonds will be approximately $614,000 a year, to come from the designated bridge repair fund. The bridge bonds will be sold in July of this year. Other possible debt might include the 2nd street project and the Wasco Business Park building construction loan.

Asset Management.

1. Toll Bridge: Harlan stated that staff will establish an ongoing 5-year modernization and maintenance program for the bridge after the redecking project is completed, in accordance with HNTB's (bridge engineers/consultants) guidelines. The program will include annual May through September blasting and painting work to prevent pack rust in the joints. Bike and pedestrian access will continue to be a problem because the bridge width cannot be increased due to structural limitations. Mt. Hood Transportation provided shuttle service through a limited grant but it was not used very frequently. Upgrade of the toll plaza and approach lanes were discussed as a future project. Harlan also explained the staging area for the redecking would be a bid item and can be negotiated with the contractor. Another issue forthcoming might be the Washington SR-35 Bridge Replacement recommendation to increase the toll to establish a bridge replacement fund.

2. Marina/Marina Park: The Budget Committee has asked that staff come back this year with recommendations for balancing the Marina Park's costs with revenues. Restrooms were added at the beach and the River Walk non-revenue improvements are ongoing. The Marina Green was also a substantial non-revenue investment. Marina rates have been increased, offsetting some portion of those operational costs; however, bridge revenues continue to subsidize the Marina Park's costs. Harlan stated that modest commercial development on the south side of the marina would help substantially in making the Park self-supporting. Harlan also stated an RV Park facility would add significant revenue. The Commission discussed the idea of unifying both waterfront areas as one total area as the waterfront development progresses. The Port Office Building west wing is being remodeled to accommodate Arthur Larsen Architect, who will be moving out of the Columbia Building. An ADA restroom will be added, and heating, electrical and lighting improvements have been made. DaKine will utilize the Columbia Building space Larsen is vacating.

3. Waterfront Area:

Harlan stated the City and the Port are very close on the Waterfront Zone and will be discussing it at the planned joint April 7 meeting. Goals and timelines will be the focus of that meeting. The City will require a transportation impact study prior to the adoption of the zone. The RFQ-RFP process was discussed for a waterfront developer. It is apparent that each developer will want to create their own master plan with associated design guidelines and CC&Rs. The issue of Port control over the development was discussed in the context of a sale of all or a portion of the property

The 2nd Street entrance road was discussed as ready to go to bid. The Community Incentive Fund monies recommended for the project appear to be in limbo due to the state crisis. Moving the road east involves ODOT right of way and may not be feasible at this point. Adding parking to the west might impact City transportation regulations. Harlan explained the City and Port have discussed the creation of a Tax Increment Financing District to fund the Waterfront Park and improvements to the wastewater treatment plant. The odor issue remains a major problem for waterfront development and needs to be resolved.

The Event Site, Hook and Spit areas have revenue issues comparable to the Marina Park. The annual pass and fee structure will be reviewed by staff. The Spit parking area may be improved this spring and Harlan suggested the annual pass and daily parking fees be applied to that area to recover costs and better regulate the area. Harlan stated staff will be meeting later in the week to discuss the enforcement of rules and regulations on the waterfront properties through an ordinance, and will report at the next regular meeting. The cruisedock revenue is down due to the downturn in tourism and reduced stops by the vessels. Improvements to the dock will be part of the future waterfront development and may be eligible for leveraged grant dollars.

Harlan reviewed the options for the Expo Center and the Integrated Technology Center. Technology continues to change and high-speed access options have increased since the feasibility study. Hood River Electric Co-op will be completing its installation of fiber optic to the waterfront this year. Harlan would like to meet soon with the stakeholders to reassess the ITC concept and to discuss plans for a tech center. The federal funds appropriated for the project are for equipment and a fiber optic Point of Presence (POP) and could be located anywhere. The Expo Center can be part of any new waterfront plan, including office space as a corporate headquarters for existing Hood River companies.

In regards to the industrial buildings on the waterfront, Heelside recently vacated the UTS building and there is interest in that space. The upper floor has been offered to the college at roughly half the market price as an interim facility. Western Power utilities have been lower than expected and the storage space rented now almost covers the expense.

4. Diamond Complex: Harlan said the Columbia Building purchase is moving ahead and that DaKine did not exercise its right of first refusal. As discussed, Art Larsen is moving out of his space and Humanities Software should be moved to Wasco Business Park by early next year. Those changes will allow DaKine full occupancy of the building, with the exception of the basement. The Port's policy is to replace one revenue asset with another and the Wasco Business Park development will be in compliance with that policy. Big 7 is almost completely leased with the addition of Gorge Networks on the top floor.

5. Wasco Street/John Weber Business Parks: The Real Estate Committee reviewed the RFPs for Architectural Services for the design and construction of a new building for Humanities Software with their recommendation being DiLoreto Architects. Harlan will be negotiating a pre-lease with Humanities no later than when the schematic design is completed. The traffic light issue was discussed; Harlan stated the City will pursue a Local Improvement District (LID) applying to nearby property owners, as well as ODOT's Immediate Opportunity Funds. CAT still wishes to relocate to Wasco. Harlan stated the Commission may want to pursue the current Wal-Mart property if it is vacated. The Commission discussed the current demand for light industrial property and felt a demand study with realtor involvement may be beneficial to our future planning. JWBP now has four lots available for purchase.

6. Airport: The Master Plan is scheduled to be completed in September of 2003. There is currently $405,000 in FAA grants available to the Port, with the $27,000 AWOS project coming out of that. The Airport zone needs analysis especially in regards to the upcoming Windmaster Corner project. Another issue for future planning will be any rezoning of airport land for industrial use.

7. Property Acquisition: Providing room to grow for current Port tenants and other local companies needs to be a central consideration of any discussion of the Port's property acquisition priorities, stated Harlan. Properties discussed for possible acquisition included the Hanel Lower Mill Site.
Five-Year Capital Plan: The Commission reviewed the Five-Year Capital Plan draft with proposed capital items and then revised schedules and amounts. Linda Shames will prepare the Plan for the Budget Committee that will meet next month.

President Lyons then called the Commission into regular session at 4:50 p.m.

A. APPROVAL OF MINUTES:

Motion: Move to approve the February 13, February 20, March 4, 2003 minutes.
Move: Bohn
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Lyons and Streich
MOTION CARRIED

B. SDAO Lawsuit: Harlan and Shames explained that Special Districts Association of Oregon is asking for support by resolution and $150 payment toward their lawsuit regarding the PERS Board's failure to abide by Judge Paul Lipscomb's ruling to recalculate employer rates.

Motion: Move to authorize and support the Special Districts Association of Oregon to file an appeal on the Port's behalf, through outside counsel, from the rate increase received from PERS.

Move: Duckwall
Second: Bohn
Vote: Aye: Bohn, Duckwall, Hosford, Lyons and Streich
MOTION CARRIED

C. Humanities Software Architectural Services:

Motion: Move to authorize staff to finalize the contract with DiLoreto Architects for time and materials not to exceed $112,000 for the architectural design of the Humanities Software building at Wasco Business Park.
Move: Duckwall
Second: Streich
Vote: Aye: Bohn, Duckwall, Hosford, Lyons and Streich
MOTION CARRIED

D. HNTB Contract: Because of the federal funds appropriated for the redecking project, HNTB will require additional work on the contract bid and documents.

Motion: Move to approve the payment to HNTB for Supplemental Agreement No. 5 for the Bridge Redecking Project in the amount of $19,622.00.
Move: Streich
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Lyons and Streich
MOTION CARRIED

E. Budget Committee: There are three vacancies on the Budget Committee; two expired terms and one vacancy due to Hoby Streich's appointment to the Commission.

Motion: Move to direct staff to ask current Budget Committee members and if not interested to advertise for replacements.

Move: Streich
Second: Bohn
Vote: Aye: Bohn, Duckwall, Hosford, Lyons and Streich
MOTION CARRIED

F. Executive Director Contract Negotiations: Because David Harlan's contract expires July 31, 2003, the Commission will need to complete an evaluation and then appoint a committee to review the contract. President Lyons asked the Commission to complete the scoring sheet for the evaluation based on the Port's adopted Standards, Criteria, and Policy Objectives and either mail or fax it to him before March 28. The evaluation will be held in Executive Session at a future date.

Meeting was adjourned at 5:00 p.m.