MINUTES OF THE PORT OF BELLINGHAM COMMISSION MEETING HELD TUESDAY OCTOBER 16, 2018 HARBOR CENTER ROOM 1801 ROEDER AVENUE, BELLINGHAM, WASHINGTON

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1 MINUTES OF THE PORT OF BELLINGHAM COMMISSION MEETING HELD TUESDAY OCTOBER 16, 2018 HARBOR CENTER ROOM 1801 ROEDER AVENUE, BELLINGHAM, WASHINGTON Present: Staff: Commissioners: President Vice President Secretary Rob Fix Sunil Harman Don Goldberg Brian Gouran Adam Fulton Tamara Sobjack Elizabeth Monahan Shirley Me Fearin Gina Stark Jonathan Perout Anthony Ammirati Jon Gibson Adrienne Hegedus Chris dark Brady Scott Frank Chmelik Diane McClain Ken Bell Bobby Briscoe Michael Shepard Executive Director Aviation Director Economic Development Director Environmental, Planning Director Facilities Director Finance Director, Auditor Human Resources Director Real Estate Director Communication & Research Coordinator Airport Terminal Operations Supervisor Contracts Administrator Project Engineer Environmental Specialist Marine Terminals Business Dev Mngr Real Estate Representative Port Legal Counsel Executive Secretary 3:00 p.m. - OPEN PUBLIC MEETING, ROLL CALL, RECESS TO EXECUTIVE SESSION, Commission President Bell called the meeting to order at approximately 3:00 p.m. For the roll call, Commissioners Bell, Briscoe and Shepard were present. Pursuant to RCW (1) (i), the meeting was immediately recessed to executive session to discuss pending litigation. It was announced the session was expected to last 1.5 hour and the Commission would return to reconvene the public meeting at 4:30 with no action be taken by the Commission during the executive session. 4:30 p.m. - RECONVENE PUBLIC MEETING, ROLL CALL At approximately 4:30 p.m., Commission President Bell closed the executive session and reconvened the public meeting. For the roll call, all 3 Commissioners were present. PUBLIC COMMENT PERIOD- Darren Williams (Whatcom County resident and Longshoreman, ILWU Local 7) praised the Port for working well with Ports America and voiced support for Action Item No. 4 on the agenda: Approve a Service Contract between the West Coast Terminal and Stevedore Company, Inc., and the Port of Bellingham covering specific stevedore services at the Bellingham Shipping Terminal. CONSENT AGENDA

2 Page 2 Motion: Approve Consent Agenda items A-E. A. Approve the minutes of the October 2, 2018 regular and October 3, 2018 special Commission meetings. B. Approve a Harbor Land Lease between the Port of Bellingham and Drayton Harbor Oyster Company for premises in Blaine, Washington. C. Approve the Modification of Lease between the Port of Bellingham and Boundary Fish Company for premises at the Blaine Marine Industrial Area. D. Renewal and Modification of Lease between the Port of Bellingham and Bella Marina LLC, a limited liability company, d/b/a Nicki's Bella Marina located in the Squalicum Esplanade Building. E. Authorize the Executive Director to execute Amendment No. 4 to Professional Services Agreement with Ashton Engineering Inc. for the next phase of permitting assistance for the I & J Waterway Fit-Up Pier and Float project in the amount of $27,424 plus a 10% contingency for a revised total authorized amount of $346,204. Discussion: The Commission opted to pull item B from the consent agenda for a separate discussion and vote. Motion amended (Approve Consent Agenda items A -H, with the exception of item B)i approved with 3-0 vote. PRESENTATIONS 2019 Budget Update and Financial Presentation- Finance Director Tamara Sobjack provided an overview of the Port's 3rd quarter Stormwater program. All training and recordkeeping remain in compliance and sample results are within permit limits. Safety program: There were 2 recordable injuries; recordable incident rate: 2.06, 0 lost work days. Public Disclosure: 31 Public Records Requests received in 3rd quarter; 111 year to date. Staff time: hours, Costs: $25,000. Risk Management: There have been no major incidents through 3rd Quarter, no new incidents at all reported for or against the Port in the 3rd Qtr. Open Claims for the Port remain a 2016 windstorm property damage insurance claim. Open claims against the Port include a few slip and falls reported in first quarter of 2018). Finance Director Tamara Sobjack provided an overview of the Port's 3rd quarter financial results highlighting the Port's Balance Sheet, Current Investments, 3rd quarter Operating (Aviation, Marinas, Terminals, Real Estate, Overhead) and Public Priority division revenues and expenses year to date vs. budget and projected vs budget. The Commission discussed estimated tax revenue and rates for 2019 and a 1% increase in base tax. Commissioner Briscoe stated he was not comfortable presenting any increases to the Whatcom County taxpayers. The taxes received are used to support GO debt payments, environmental program costs, public priorities program costs and capital and the waterfront development. The Commission will discuss again at

3 Page3 an upcoming Port commission meeting. Ms. Sobjack presented the largest Capital Projects planned for 2019, projected cash flow and unfunded capital projects. The Next Steps to adopting the Port's 2019 Strategic Budget include making the draft document available for public review October 22, 2018, public comment to be taken during 2 public hearings November 6 and 20, and the final budget document presented to the Commission for adoption on November 20, 2018 Events and Public Parks Update- Communication and Research Coordinator Gina Stark provided an overview of the economic benefit to having private events in public parks. Ms. Stark explained the research method used included surveying multiple municipalities of similar makeup and population, both inside and outside the state of Washington, with a focus on dollars spent by consumers and jobs depending on parks and recreation activities, revenues to businesses as a result of those activities such as the food, gas and lodging establishments, retail/sporting goods stores, misc. amusement and recreation activities/ industries. In addition to the positives, the survey provided information on the negative impact of large events on the local community citing noise, traffic, alcohol use and community members opposed to closing public spaces for private events. The Commission asked to receive a copy of the presentation and survey results for further consideration. ACTION ITEMS 1. AWARD BID TO DORMAKABA USA, INC. TO MANUFACTURE AND INSTALL AUTOMATED SECURE EXIT LANE AT BLI. Motion: Authorize the Executive Director to execute a contract with Dormakaba USA, Inc. to manufacture and install a double Automated Secure Exit Lane (ASEL) at the Bellingham International Airport (BLI). Discussion: Airport Terminal Operations Supervisor Jonathan Perout explained that the Transportation Security Administration (TSA) requires the airport to secure the commercial terminal from unauthorized access into the terminal through the exit lane. TSA is currently funding TSA personnel to provide this security approximately hours a day while the TSA Checkpoint is open. The Port is responsible for funding and contracting private security to guard the door while the TSA checkpoint is closed. Port staff is recommending the Port purchase Automated Secure Exit Lane (ASEL) technology to provide the necessary security, eliminating the need and cost for a guard to secure the exit lane. PUBLIC COMMENT PERIOD- No one participated in the second public comment period. 2. BLAINE HARBOR SETTLEMENT MONITORING PROJECT Motion: Authorize the Executive Director to execute Change Order No. 1 to the Public Works contract with Faber Construction, Inc. in the amount of $32, for a revised total contract amount of $332,

4 Page 4 Discussion: Facilities Director Adam Fulton reported that the commission approved Resolution No. 1358A in 2017 authorizing the Executive Director to approve public works projects estimated under $300,000, via the utilization of a Small Works Roster. Port staff has chosen to lower that threshold and bring projects estimated over $250,000 to the Commission for approval to avoid any possible perception of misusing the small works roster contracting mechanism. Mr. Fulton introduced Contracts Administrator Anthony Ammirati to explain the Port's public works contract formal bid process and to provide an update on the successful use of a Small Works Roster. Project Engineer Jon Gibson added the use of the small works roster tool was very beneficial in awarding the contract for the Blaine Webhouse No. 1 Preloading project. Mr. Gibson presented an overview of the project, the scope of work necessary to address preload settlement issues prior to preparing a foundation for a new building. Faber Construction Inc. was the responsible bidder with the lowest responsive bid and a contract was executed in August The proposed change order will provide excavation and disposal of soil discovered to be structurally unsuitable and then replaced with several yards of temporary preload and permanent structural fill. 3. INTERAGENCY AGREEMENT WITH DEPARTMENT OF ENTERPRISE SERVICES ENERGY PROGRAM Motion: Authorize the Executive Director to execute an Interagency Agreement with Washington State Department of Enterprise Services Energy Program (DES) to provide contract management services for renewable energy production projects i.e. solar panel installation at the Bellingham Cruise Terminal. Discussion: Environmental Specialist Adrienne Hegedus presented an overview of the 4 step Bellingham Cruise Terminal (BCT) Proposed Solar Project and explained the purpose of the project and proposed agreement would be to promote renewable energy and assist the Port in completion of a grant application for up to 50% of the project costs funded through the Department of Commerce. The proposed agreement with the Washington State Department of Enterprise Services Energy Programs allows for contracting with an energy services company that would provide professional expertise for the proposed installation of solar panels at the Bellingham Cruise Terminal (BCT). The first step is a feasibility audit (at no cost to the Port). Based on the results of the audit, an Energy Services Proposal would be submitted to the Commission for approval. 4. SERVICE CONTRACT BETWEEN WEST COAST TERMINAL AND STEVEDORE INC., AND THE PORT OF BELLINGHAM Motion: Approve a Service Contract between the West Coast Terminal and Stevedore Company, Inc., and the Port of Bellingham covering specific stevedore services at the Bellingham Shipping Terminal.

5 Page 5 Discussion: Marine Terminals Business Development Manager Chris dark explained the terms of the proposed Operating Agreement between the Port and West Coast Terminal and Stevedore, Inc. d/b/a Ports America. During a specified term of service, the contract would allow West Coast Terminal and Stevedore Company, Inc. (Washington State division of Ports America) exclusive stevedoring rights for ocean vessel discharging and unloading of specified international and domestic origin products/cargoes at the Bellingham Shipping Terminal (BST). The Commission asked about the exclusivity of the contract and Mr. dark further explained the details of the agreement and introduced Paul DeBolt and Bart Goedhard from Ports America present to answer any questions. ILWU Representative Darren Williams, Local 7 was also present and offered his support earlier in the public comment portion of the meeting. 5. FOREIGN TRADE ZONE #129 DESIGNATION AND ACTIVATION FOR BELLINGHAM SHIPPING TERMINAL. Motion: Authorize the Executive Director to engage law firm of Lamb & Lerch, in consultation and coordination with Port general counsel, to apply for Designation and Activation of Foreign Trade Zone #129 which will cover areas in the Bellingham Shipping Terminal and Log Pond area. Fees for this service are in the amount of $15,000 plus a 15% contingency for a total authorized amount of $17,250. Half of these costs will be borne by Ports America. Discussion: Marine Terminals Business Development Manager Chris dark explained that much of the cargo expected to be unloaded at the Bellingham Shipping Terminal by Ports America will be ultimately conveyed to Canada and as such, the Port has received numerous requests for a designated Foreign Trade Zone (FTZ) at the BST and Log Pond area enabling customers to store their goods without having to pay USA import duties and taxes. 6. CHERRY POINT INDUSTRIAL DEVELOPMENT DISTRICT UPDATE & FEASIBILITY STUDY FOR WHATCOM INTERNATIONAL BUSINESS PARK AT CHERRY POINT Motion; Authorize the Executive Director to execute a Sole Source contract with Heartland LLC to update the Cherry Point Industrial Development District (IDD) study prepared by Heartland LLC in 1998 and to analyze the feasibility of developing a large scale, multi-phase business/industrial park that can attract new investment and jobs to Whatcom County. Discussion: Economic Development Director Don Goldberg explained that in 1998, the Port paid Heartland LLC of Seattle, Washington, $250,000 to prepare a feasibility study on the development of the Cherry Point Industrial area. In order to update the knowledge and scope of work obtained earlier, the Port is proposing a sole source contract with Heartland LLC for $75,000 to receive a new report that will reflect changed conditions since 1998, involve document collection and review, market assessment,

6 Page 6 updated mapping and boundary review, financial analysis, and suggested comprehensive strategy for executing next steps. Mr. Goldberg added Whatcom County Public Utilities District (PUD) is planning to contribute up to $50,000 toward the cost of this study. 7. DRAYTON HARBOR OYSTER COMPANY LLC- HARBOR LAND LEASE Motion: Approve a Harbor Land Lease between the Port of Bellingham and Drayton Harbor Oyster Company for premises in Blaine Washington Discussion: Because this is a new lease, Commissioner Briscoe requested it be pulled earlier from the Consent Agenda for discussion as an action item. Real Estate Representative Brady Scott explained the terms of a new proposed lease with Drayton Harbor Oyster Company for approximately 2,700 square feet at the Blaine End Pier extension including Fender Pile and Water area to be used in aquaculture, including moorage of vessels and a floating upwelling system (FLUPSY) to support oyster production and related aquaculture operations. The lease would commence on November 1, Mr. Scott introduced owner Steve Seymour to provide a brief explanation on the FLUPSY and oyster cultivation. All three Commissioners voted in favor, Commissioner Shepard suggested providing signage as an educational opportunity. OTHER BUSINESS The upcoming advisory committee meeting schedule was announced. The Commission briefly discussed SeaFeast continuation, status of future grants /funding sponsorships and the Port's use of preloading dirt for future use in the storage area. PUBLIC COMMENT PERIOD- No one participated in the second public comment period. ADJOURN With no further business, the meeting was adjourned at approximately 6:56 p.m. ^^A^7/^T(0^^ esident i-^ Secretefty