Minutes of November 2, 2004 
Port of Hood River Commission Strategic Planning Work Session
Regular Meeting
Expo Center Conference Room
 11:00 A.M.

Present: Commissioners Sherry Bohn, Don Hosford, Fred Duckwall, Hoby Streich and Kathy Watson; from staff, David Harlan, Mike Doke, Linda Shames and Linda Hull
Others: Chris Gann, Linda Maddox

Media: None

President Sherry Bohn called the fall strategic planning work session to order at 11:05 a.m. for the purpose of reviewing property/asset performance and other issues for the Port of Hood River and with the regular session to immediately follow.

1. Introductions/Strategic Planning Overview: Executive Director David Harlan asked the Commission to think about its long-term asset management strategies in the context of the eventuality and implications of decreased bridge revenues, if and when a new bridge is built within the next 20 years. The Port's goal continues to be to reduce its reliance on bridge revenues to support current assets and to expand revenues from its operations. Harlan reported the City approved the mixed-use Waterfront Zone last evening. He stated the waterfront property development has potential to replace other subsidized assets and that its income could be used for other economic development projects. However, the strategic plan calls for a ten-year land inventory to provide for small business expansion and to prioritize local companies to retain jobs, and Harlan believes these strategies need to receive higher priority. The Port has offers in hand for the remaining Wasco Business Park property. As the Port's largest property holding, the waterfront property has been tied up for over 10 years in the public zoning process. Because the Port has focused primarily on this property, other land acquisitions critical to existing business expansion have not been pursued. Both the County and the State's economic development strategies prioritize industrial shovel-ready land and Harlan asked the Commission to evaluate its strategies for long-term economic development of the Port District.

2. Return on Investment (ROI)/Fiscal Policies: Finance Manager Linda Shames reported on the following performance of assets:

BRIDGE: The bridge redecking project is almost done-seven months early-and the first bond payment is due December 1, 2004. Striping the center lane is the last task to be done and they are waiting for the delivery of the materials. The rumble strip delineation testing is inconclusive; the engineers believe people will get used to the new appearance and feel of the bridge and will adjust their driving over time. The reflectors on the guardrails are installed. The reduced revenue due to the periodic lifting of tolls will be offset by the early completion. HNTB has recommended several maintenance tasks be done annually and staff is developing a schedule for this work. The toll plaza remodel will cost approximately $3 million and has been discussed with ODOT as a partial solution to the congestion problem on I-84. Shames reported the Port's reliance on bridge revenues to fund operations is increasing, from 66% in 1999 to 74% in 2004, contrary to the requirements of the strategic plan. Much of this increase is due to the continued waterfront planning expenses, and these expenses will also become part of the development costs of the vacant land.

DIAMOND INDUSTRIAL: Big 7 Building is the last remaining property of the Diamond Fruit Complex redevelopment project. The community college's Technology Center investment was $566,000; all but $244,000 was paid for by grants obtained by the Port. The college agreed to pay $52,000 and the rest will be paid by the Port. The college lease is subsidized now but scheduled for increases over the next three years. If the college builds in the near future, their remodeled space will be easily marketed at a higher rate. If the goal is to privatize the building, the investment will be recaptured. Parking remains problematic for tenants and students. Commissioner Bohn reported that many buildings in the surrounding area are taking advantage of the NoaNet fiber access. Harlan said the building is functionally obsolete for industrial use but good office/light industrial space. Shames believes the property could easily achieve the 4-6% ROI goal in the future.

WATERFRONT COMPLEX: UTS Portsite's second floor is available for lease to a single user although it is poor warehouse and manufacturing space. It has been cobbled together for many tenants, needs ADA retrofit, and the City waste water treatment plant's odor remains a problem. ROI on Homeshield's building is 8%. Cruiseship dock revenue remains flat although next year Columbia Queen will be back. Expo Center remains a financial problem with uses limited and charges maximized for the exhibit hall. The Event Site traffic was down, but the revenue remained the same with the $1 daily fee increase. Increased recreational use was observed at the Hook, Spit and Marina Beach where no fees are charged. Commissioner Watson stated that the Commission should analyze new uses of the properties that may help the bottom line. Commissioner Duckwall stated if the Expo Center, for example, has value to the whole community that help must come from all entities. Harlan stated other communities use tourism hotel/motel taxes to fund exposition centers (e.g., Seaside, Pendleton). Duckwall believes the waterfront master plan should include these under-performing assets and the Commission should not make a decision on any of them until that process is completed. Watson said the new 1% tourism tax should be investigated to see if a proposal and request for dollars would be appropriate. Commissioner Bohn asked that Shames prepare an expense breakdown for both the Expo and the Marina so they can see details. Bohn said she attended a meeting of City, County, Chamber and Port regarding using tourism dollars for supporting the Expo Center about three years ago and felt there was resistance at that time, but felt the situation might be viewed differently today.

MARINA PARK/MARINA: Shames reported there is no change in the Marina Park assets; the two commercial buildings continue to do well; however, they do not support the park operations. The small annual increases in moorage rates are starting to achieve a level that will sustain the marina for minor improvements. Mid Columbia Marina will be moving out soon and that building will need upgrading investment. Electrical usage in the marina is absorbed due to the lack of individual meters. Staff was directed to investigate cost to install a new metering mechanism. Harlan stated there has been low interest in the Marina Planning Committee and will wait until the spring to pull that together. Commissioner Bohn asked if there was room to expand long-boat slips. Staff will explore the options and report back to the Commission on its feasibility.

AIRPORT: Revenues/expenses remain constant. Three of the eleven on the hangar waiting list are local.

JWBP: The Timber Building is a positive cash flow asset with no debt. There are four lots left to develop, but have development challenges. The house on the life estate needs roof repair.

WASCO BUSINESS PARK: The property is shovel-ready with two more offers to consider. It will be a positive cash-flow within ten years. This underscores the fact that there is a lack of light industrial land in the region.

Shames said the Port would need $10 million invested with a 3% return to cover the current subsidized assets. It comes down to strategy: how to pay for everything and how to meet economic development and financial goals.

President Bohn recessed the work session at 12:45 p.m. for lunch. At 1:15 p.m., President Bohn called the work session back into order.

3. Asset Management and Mix:
Bridge: Executive Director Harlan stated the challenge the Commission faces is maintaining the bridge as if it needs to last 40-50 years while at the same time plan for potential loss of revenue should a new structure be built in 20 years. Commissioner Bohn asked if Harlan would like direction from the Commission on a 20-year asset replacement plan? Attorney Jaques said it is most likely that politically the two states and federal government will build the next bridge although public-private models are currently being constructed. Harlan said that replacement property to acquire is limited in this region and it takes time to build assets on vacant land that will produce a revenue stream within 20 years. Harlan will be meeting with ODOT to discuss the toll plaza-automated toll project in conjunction with the frontage road and I-84 congestion problem.
Marina Park: Commissioner Bohn asked if staff could find out an estimate of what the beach restoration would cost. Harlan said staff would contact the engineers that worked on the prior project to obtain an analysis. Harlan stated the Marina Planning Committee needs to research the feasibility of modifying and/or building new assets to cover park costs and the 30-year life costs of the existing buildings. Harlan said staff would investigate a new electric metering system and fuel dock system.
Waterfront Recreational: (Spit, Event Site, Hook)
Harlan asked the Commission about RV uses at the Event Site. Commissioner Bohn said the Waterfront Recreation Committee could discuss this issue again at its fall "after the season" meeting to be scheduled and thought that CGWA and the Kiteboard Association should also be invited. The cruise dock has security issues that may alter the slack water beach entry area as proposed by the waterfront zone.
Expo Center: The Expo Center building continues to be subsidized but its use could be changed in a short timeframe. Commissioner Duckwall felt that the Commission first needs to see what its use would be in a waterfront master plan. Commissioner Bohn is hesitant to shift its use until then as well. The Second Street road alignment may also be dependent upon this building's use. Harlan reported that ODOT extended its permit until December 31, 2005. To date, there are 23 bookings in the building for 2005.
Big 7 Building: Parking for tenants and students is a problem and Commissioner Bohn wants to have a meeting with the Port, City, and Sprint. Urban Renewal is a possibility for creating a new parking lot for this area.
Industrial Development: The building for Humanities Software in Wasco Business Park should be completed by May of 2005. There are offers on all parcels. Homeshield is growing rapidly and needs new space; retaining the firm in Hood River County is limited because of the very limited supply of industrial land. John Weber Business Park has only four small lots remaining; the county is not planning on additional industrial land inventory in the area due to public controversy. Staff will be exploring any available industrial lands to pursue in the Port District, realizing that this is a parallel course with waterfront development.
Airport: Harlan reported the updated Airport Layout Plan is done with preliminary approval from Federal Aviation Administration (FAA). There is the issue of taking the master plan to the County planning process for approval. Mike Doke stated the Airport Advisory Committee felt a consultant would be helpful to guide this process to alleviate misunderstandings. Commissioner Duckwall suggested Doke take it to Planner Eric Walker first as a courtesy. The Orcutt property is available again and Doke will poll the Airport Committee to see if it would be feasible to acquire. The Port is upgrading its runway lighting system with FAA grant funds this year.
Waterfront Development: Harlan reported that the on site visit with Ned Vaivoda was productive and believes Vaivoda could help focus the Commission on refining its important issues and help facilitate the visualization of the development. There is no tax increment financing district or tool to help pay for the public amenities although the Port proposed this mechanism to the City. Commissioner Watson felt that with the conceptual plan in hand, perhaps the City would be more receptive to another presentation by Mr. Tashman. There is also another referendum proposed to stop the Goal 5 ordinance on the waterfront. The IGA for the park will delineate the issues of ownership, process, timing, design, operations, and reversion. Zoning Lot 6 as open space means it will be less valuable for matching grant funds. Harlan stated the Port should limit its future financial exposure and responsibility for development of the park.
4. Federal Funding Priorities/Five-Year Capital Plan:
Harlan reported the lobbying projects will be identified in the County's Needs & Issues for next year. The Port's Toll Plaza Project will be submitted.
5. Other Policy Issues:
Email: Commissioners Duckwall and Hosford volunteered to participate in a working group to look at other email policies from public entities. Linda Hull will obtain other policies for review. Commissioner Watson asked about having informational copies of background materials available to the public during meetings and if that fits with public records law.
Real Estate Commission/Fees: The Real Estate Committee will discuss this issue at their next meeting and report back to the full Commission.
Staffing: The Diamond Fruit Complex redevelopment project had a project manager; is one needed for the waterfront development project? Staff will meet to discuss work load and repositioning of tasks.

At 4:20 p.m., President Bohn called a short recess.
1. CALL TO ORDER: President Bohn called the regular session to order at 4:30 p.m. Executive Director David Harlan requested an additional agenda Action Item regarding a change order for the bridge project.

2. PUBLIC COMMENT: None.

3. APPROVAL OF MINUTES:
Motion: Move to approve the October 20, 2004 (work/regular session) meeting minutes.
Move: Duckwall
Second: Streich
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

4. INFORMATION-COMMUNICATIONS:
a) Executive Director:
Harlan reported the Waterfront Development Agreement schedule would include a November 8 meeting with the consultants as well as a work session prior to the regular November 16 meeting. It is hoped that William Smith will be available to meet with the Commission on December 10.

5. ACTION ITEMS:
a) Humanities Building Change Orders regarding water service, electrical service and manhole installation required to complete the project:
Motion: Move to approve change orders 2, 3, and 4 for the Wasco Street Office Building in the amount of $5,792.40.
Move: Hosford
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

b) The removal of a piece of concrete is required to complete installation of the quad rail system approach to the bridge, not identified in the specifications.
Motion: Move to approve Bridge Change Order 7 in the amount of $825.00.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

c) Accounts Payable:
Motion: Move to approve the purchase of a John Deere 5325 Utility Tractor for maintenance in the amount of $30,800.
Move: Duckwall
Second: Watson
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

President Bohn appointed Kathy Watson to the Community Relations Committee replacing Hoby Streich. Bohn then appointed Hoby Streich to the internal Finance Committee.

6. ANNOUNCEMENTS:
a) Mike Doke will be contacting the Commission to coordinate a tour of the properties, especially designed for new Commission members.
b) Staff will plan a Bridge Redecking Project completion party for commuters and staff before the crew leaves.

7. EXECUTIVE SESSION: President Bohn called the Commission into Executive Session at 4:50 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 5:40 p.m. No action was taken as a result of Executive Session.

8. ADJOURN: President Bohn adjourned the meeting at 5:45 p.m.

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Minutes of November 16, 2004
Regular Session Meeting
Port of Hood River Commission
Expo Center Conference Room, 5:00 P.M.

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

Absent: None

Media: None

President Sherry Bohn called the Commission into regular session at 5:15 p.m. upon conclusion of Executive Session. No action was taken as a result of Executive Session.

1. CALL TO ORDER: President Bohn called the regular session to order at 5:15 p.m. Audience members included Linda Maddox, and Bob Francis, Hood River City Manager. President Bohn publicly thanked Finance Manager Linda Shames for securing the bonding for the Interstate Bridge Redecking Project. Commissioner Hosford was wished a belated Happy Birthday by Commissioner Watson.

2. PUBLIC COMMENT: None.

3. APPROVAL OF MINUTES:

Motion: Move to approve the November 2, 2004 (work/regular session) meeting minutes.
Move: Duckwall
Second: Streich
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

4. INFORMATION-COMMUNICATIONS:

a) Executive Director:
· Bridge Update: Executive Director Harlan reported the bridge redecking project is nearly complete, and the remaining night closures will focus on centerline striping and signage. Highway signage advising motorists of the project will remain in place until the project is 100% complete. Commissioner Hosford commended Port staff for a well-managed project, with Executive Director Harlan adding this thanks not only to staff, but the entire project management and construction team.
· Waterfront Recreational: The committee will meet at 3:00 p.m. on Wednesday, December 1, 2004 at the Expo Center conference room to discuss the 2004 season and coming events for 2005.
· Waterfront Planning: Executive Director Harlan commented that he hoped a meeting with City Manager Bob Francis and City Attorney Alexandra Sosnkowski to discuss the Waterfront Park Intergovernmental Agreement could be scheduled prior to Attorney Jaques leaving town for the Thanksgiving holiday. President Bohn asked Francis about the City's rush to formalize the Port's donation of Lot 6? Francis commented that people are anxious for the park to become reality, and that the Hood River Valley Parks and Recreation District is now a player, so it was Francis' opinion that there was no reason for the Port to hold onto the property and that the Port should act in good faith to work with the City by transferring the land as a donation. Francis stated that he had no agenda other than to get the park process moving forward. Commissioner Watson stated the Port and City should work as collaboratively as possible.
· Big7/Diamond Cannery: Executive Director Harlan reported that Tech Center change orders would be discussed as Action Items on the agenda, and that Marketing Manager Mike Doke had moderated a tenant meeting on parking issues.
· Wasco Business Park: Executive Director Harlan reported that a $6,000 grant had been issued by the Mt. Hood Economic Alliance that will be used by Humanities Software for moving assistance next spring. Harlan reported the construction schedule would be tight but that the weather has thus far not affected the project. Commissioner Streich questioned the justification of the proposed Action Item expenditure for Wasco Building Construction Management as projects are engineered and go through an approval process prior to any work being started. Mike Doke, who has been attending weekly construction meetings, commented that Marc Betts of DiLoreto Architects has proven to be an invaluable asset not only to the Port but also to contractor Don Betz of Betz Construction. The Commission was reminded that plans on paper could be very different from the reality of the actual construction progress. Doke stated his opinion that approval of the Action Item would be a good investment of the Port's money.
Doke also requested a meeting of the Real Estate Committee to consider offers that have been received on remaining Wasco Street parcels.
· Airport: Based on discussions at previous meetings, there was Commission consensus that T-hangar rates at the Ken Jernstedt Airfield would be adjusted annually based on the Consumer Price Index (CPI); therefore, rates for 2005 will increase by 3%.
· Other: None.

b) Other:
· Real Estate Committee: President Bohn had no further comments to add from the Executive Work Session discussions. Commissioner Streich asked for a status report on Port Marina Park tenant Mid-Columbia Marina. Marketing Manager Mike Doke reported that owner Jim Drennen is on a month-to-month lease and that rumors on the street indicate an April 2005 move to his new location on West Cascade Avenue. Doke commented the Port has several leads on prospective tenants.
· Pacific Northwest Waterways Association (PNWA): Executive Director Harlan and Commissioner Hosford attended the PNWA annual meeting in Portland on November 3-5. Harlan reported that future federal appropriations would be tough. Commissioner Hosford will participate in the annual PNWA "Mission to Washington" this coming February, but Harlan commented this would be Hosford's last trip since Hosford has indicated he would not be running for re-election when his term expires June 30, 2005. Harlan stated it would be an expensive trip, but suggested the other Commissioners check their schedules and advise staff if one of them would be interested in going to Washington, D.C. to transition into Hosford's replacement as the Port Commission's PNWA organizational appointment.

5. ACTION ITEMS:

a) Tech Center Change Orders:

Motion: Move to approve Tech Center Change Orders 6 through 14 in the amount of $5,428.
Discussion: Change Order #13, for walls painted that did not call for paint, was authorized by the College and will be negotiated with them.
Move: Hosford
Second: Watson
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

b) Interstate Bridge Change Orders: Finance Manager Linda Shames noted the redecking project came in $126,000 under the project bid.

Motion: Move to ratify the Finance Committee's approval of Bridge Change Orders 6, and 8 through 12, in the amount of $40,128.50.
Move: Duckwall
Second: Streich
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

c) Wasco Building Construction Management:

Motion: Move to approve an additional $12,600 for the Wasco Street Office Building construction administration services to be billed on an hourly basis as work is performed by DiLoreto Architects, LLC.
Move: Watson
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

d) Marina Rate Increase: Executive Director Harlan reported the proposed 3% increase for 2005 moorage rates is in alignment with the current Consumer Price Index adjustment, and that the Ports of Cascade Locks and The Dalles are considering similar CPI adjustments.

Motion: Move to authorize a CPI adjustment (3% rounded rates) for 2005 moorage.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

e) Airport Master Plan: Staff is recommending the Airport Master Plan be taken through the process for adoption into the county's transportation and comprehensive plans. Whether or not the county adopts the Airport Master Plan the Port's ability to gain Federal Aviation Administration funding for the airport will not be affected. By going through this process, Marketing Manager Mike Doke noted the county would have a greater understanding of the Port's plans for the airport as the county develops its own plans for the airport neighborhood. David Miller of Century West Engineering, who was hired by the Oregon Department of Aviation to update the Ken Jernstedt Airfield Master Plan, has indicated he would be available to assist the Port by attending County Planning Commission, and County Commissioner meetings to answer questions and advocate for the County's adoption of the Airport Master Plan. Doke informed the Commission that he anticipated two Planning Commission, and two Commissioners meetings.

Motion: Move to retain David Miller of Century West Engineering to assist Port staff in taking the Airport Master Plan through the county process, at a budget of $700 per meeting.
Move: Streich
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

f) Accounts Payable: None.

6. ANNOUNCEMENTS: None.

7. ADJOURN: President Bohn adjourned the meeting at 5:50 p.m.