BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE BUDGET COMMITTEE MEETING MARCH 17, 2014

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1 BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE BUDGET COMMITTEE MEETING MARCH 17, 2014 A MEETING OF THE BUDGET COMMITTEE OF THE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS, HELD IN THE PRESENTATION ROOM ON THE 4 TH FLOOR AT ITS OFFICES AT 1350 PORT OF NEW ORLEANS PLACE, NEW ORLEANS, LOUISIANA, WAS CALLED TO ORDER BY COMMITTEE CHAIRMAN GREGORY R. RUSOVICH AT 3:10 P.M. ON MONDAY MARCH 17, COMMITTEE MEMBERS PRESENT: MEMBER ABSENT: STAFF: Technology GUEST: Gregory R. Rusovich, Chairman Joseph F. Toomy, Member Daniel F. Packer, Jr., Member Michael W. Kearney, Member William T. Bergeron, Member Robert R. Barkerding, Jr., Member Scott H. Cooper, Member G. LaGrange, President & Chief Executive Officer B. Gussoni, Executive Counsel J. Ruckert, Director, Finance & Information C. Bonura, Director, Business Development M. Orlesh, Special Counsel M. Greshamaa, Director of External Affairs M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Department B. Ethridge, Executive Intern J. Holt, Government Consultants, Inc. A. Determination of Quorum and Call to Order Chairman Rusovich determined the existence of a quorum and called the meeting to order at 3:10 P.M. B. Public Comment Chairman Rusovich called for public comment, but there was none. Page 1 of 23

2 C. Briefing and Discussion Items 1. Review of February, 2014, Financial Statement Mr. Ruckert discussed the February, 2014, monthly and year-to-date performances and provided an analysis comparing Fiscal Year 2014 to Fiscal Year He went through several categories of financial data and announced that the Port had a very good month caused in part from a revenue increase in terminal operations. The Port also experienced an increase in revenue because of variable rental income from Gulf Gateway Terminals, which increased revenue by $85,000. Commissioner Kearney asked for an explanation of the increasing expenses in operations as demonstrated by $16,750,000 this year versus $15,139,000 the prior year. Mr. Ruckert explained the increases were mainly in salaries and some of this was programmed into the budget. Salaries, retirement, healthcare, and some maintenance costs have increased since Commissioner Packer asked about the cruise division, referring to the yearto-date actual being higher than the budget. Mr. Ruckert said that this is in large part caused by maintenance costs concerning some problems we have had with the HVAC system. We are also reviewing our costs for electricity because our costs have risen and there has not been a rate increase. Mr. Packer suggested that Mr. Ruckert review the energy surcharge for increases. 2. Briefing on Closeout of CDBG Grant Mr. Ruckert provided a quick briefing on the community development block grant for the New Orleans Cold Storage facility. The grant is for $23.5 million, but federal requirements dictate that the Port pay to the U.S. government some revenue generated from the facility. We have been negotiating with the Louisiana Office of Community Development/Disaster Recovery Unit (OCD/DRU) for the state to pay a portion of the amount the Board would have to pay. We believe we have negotiated a payment of approximately $37,000, but we are waiting to hear from OCD/DRU whether that amount will be acceptable to the U.S. 3. Briefing on the Need for a Financial Advisor to Evaluate a Long-Term Lease Concession Mr. Ruckert briefed the committee on the need for a financial advisor. He stated that in November, 2012, the process to select a financial advisor with expertise in public private partnerships began and was halted. At that time we thought we needed this because of the estimated cost of the Napoleon Page 2 of 23

3 Avenue intermodal project at approximately $250,000,000 to $500,000,000. We realized that we could not raise these funds either on our own or through bonding, so we decided it would be best to explore a public private partnership. Our hope in doing this is that a financial advisor could help us to evaluate the return on investment and develop a proposal attractive enough to receive bids for a long-term concession. The three finalists are PFM, Martin and Associates, and KPMG. 4. Briefing on and Discussion of the 2015 Financial Plan Process Mr. Ruckert explained the budgeting process and deadlines for such to the Board. He stated that, on March 20, the first cut is due from each division. On March 26, narratives from division directors are due. From approximately April 9 to 11, Mr. LaGrange and Mr. Gallwey will review a second cut of the budget. On April 16, we plan to have a draft budget to the Board. Then on April 21, we plan to have discussions regarding the draft budget at this committee meeting. On May 8, we are showing a mock up of the financial plan including the narratives. Then on May 19, we plan to show it to another meeting of the budget and finance committee. Finally on June 26, we anticipate the approval of the financial plan from the Board. 5. Briefing on Changes in Internal Audit Policy Ms. Pansano briefed the Board as a follow up to her presentation to the committee at its December, 2013, meeting. Ms. Pansano explained that Commissioner Toomy asked her to explore the possibility of reducing the mandatory audits to free up time for Internal Audits to spend in other areas of higher risk and reward. Ms. Pansano reviewed the different types of mandatory audits conducted (travel audits, inventory audits), the differences between the mandatory and the risk-based audits, and discussed which audits she felt more valuable than others in terms of the returns they bring. She explained that it would be better to curtail her department s mandatory review of the chief operating officer's, division directors' and executive assistants' expense reports since accounting must also review them before any payment is made. This would eliminate duplication of efforts which are not bringing a lot of return on these audits. Instead, she recommended random sample audits on a periodic basis on all levels of employees, but that there be no changes made for the chief executive officer s audit policy. She discussed the options for review of the commissioners expense reports with the possibility of shifting approval authority away from Internal Audits and also eliminating the need for audits prior to payment. With regard to the commissioners expense report, Commissioner Toomey asked what are the options as to whom we can shift approval authority. Ms. Page 3 of 23

4 Pansano explored the various options such as having a division director or one commissioner of the seven conduct the review, but admitted that this would prove difficult for such person(s) to know all the rules and regulations. The discussion ended with the consensus that the process for commissioners' expense reports would remain as it is now, given the difficulties and challenges in making this change. 6. Update of Legislation to Transfer the Harbor Police Department Retirement System (HPRS) into LASERS Meeting with Chairman Pearson Messrs. Ruckert and Orlesh briefed the Board on a meeting with Chairman Pearson regarding the bill the Board drafted with LASERS. They explained the two of the main issues that arose from the meeting concerned Chairman Pearson s staff proposals to change two major components of the legislation submitted by the Port. One of those proposed changes is to take the assets from the HPRS and put them in a denominated notational account, meaning HPRS assets would be in an account administered by LASERS, but separate from overall LASERS assets. LASERS has taken a strong position that this will not work, and we agree. Mr. Orlesh explained that one of the benefits and objectives of this process has been to combine the benefits of scale of combining all the HPRS assets with LASERS assets, which exceed a billion dollars, and let LASERS manage them. He also said that the Port s proposal would take care of costof-living increases for the HPRS once it is transferred. The other proposed change is to prohibit LASERS from providing cost of living increases for the Harbor Police plan, which we also believe is unworkable. Therefore, we have talked to Chairman Pearson and his staff, and LASERS is also working with them to sort out these issues. We are trying to get a follow-up meeting so we can get a resolution to the problem. We have also presented a white paper. Mr. Orlesh explained the various ways the Port can manage the situation. He said that if we cannot get a resolution in the House, we can resolve it in the Senate and get it back to the House for concurrence once we have the bill in the form that we like. He summed up by saying that we are optimistic we will get this done the way the Port, LASERS and the Harbor Police want it and it will be a positive for everyone concerned. Commissioner Bergeron asked who amended the bill. Mr. Orlesh said that the bill was not amended, but that legislative staff people had authored these proposed changes. 7. Briefing on Selection of a New Board Logo Page 4 of 23

5 Because of a lack of time, this item was rescheduled to be discussed at the Executive Committee meeting on Thursday, March 20. D. Adjournment There being no further business to come before the committee, Committee Chairman Rusovich adjourned the meeting at 4:30 P.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE PLANNING AND ENGINEERING COMMITTEE MEETING MARCH 17, 2014 A MEETING OF THE PLANNING AND ENGINEERING COMMITTEE OF THE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS, HELD IN THE PRESENTATION ROOM ON THE 4 TH FLOOR AT ITS OFFICES AT 1350 PORT OF NEW ORLEANS PLACE, NEW ORLEANS, LOUISIANA, WAS CALLED TO ORDER BY AD HOC CHAIRMAN WILLIAM T. BERGERON AT 2:12 P.M. ON MONDAY MARCH 17, COMMITTEE MEMBERS PRESENT: MEMBER ABSENT: STAFF: William T. Bergeron, Ad Hoc Chairman Joseph F. Toomy, Member Daniel F. Packer, Jr., Member (arrived at 2:35 P.M.) Gregory R. Rusovich, Member Michael W. Kearney, Member Robert R. Barkerding, Jr., Member Scott H. Cooper, Committee Chairman G. LaGrange, President & Chief Executive Officer B. Gussoni, Executive Counsel C. Bonura, Director, Business Development R. Jumonville, Director, Cruise & Tourism D. Keller, Director, Port Development P. Zimmerman, Director, Operations C. Dunn, Deputy Director, Port Development M. Gresham, Executive Assistant for External Affairs Page 5 of 23

6 M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Department B. Ethridge, Executive Intern GUEST: C. Balthazar, Riverworks A. Determination of Quorum and Call to Order In the absence of Committee Chairman Cooper, Board Vice Chairman Rusovich appointed Commissioner Bergeron to serve as Ad Hoc Chairman for purposes of holding this meeting only. Ad Hoc Chairman Bergeron determined the presence of a quorum and called the meeting to order at 2:12 P.M. B. Public Comment Ad Hoc Chairman Bergeron called for public comment, but there was none. C. Briefing and Discussion Items 1. Briefing on and Discussion of an Award of a Contract to K-Belle Consultants, LLC, for Perry Street Wharf Shed Siding Replacement Ms. Keller briefed the committee on the recommended award of a contract in the amount of $737,604 to K-Belle Consultants, LLC, a local DBE firm. The bid was within the budget estimate. K-Belle will be replacing all of the siding and signage at the Perry Street Wharf Shed. Commissioner Kearney asked what kind of revenue the Perry Street Wharf generates for the Port. Mr. LaGrange answered that the Port receives $397,000 total from two operations functioning at the site. Fauries Weighing pays $190,000 and Boland Marine pays $207,000. Commissioner Rusovich asked what the current use of the facility was. Mr. LaGrange answered it is a double use facility by two companies: Fauries Weighing, Inc., and Boland Marine and Industrial, Inc. Fauries uses the facility for repackaging rubber as well as rubber warehousing and Boland uses the facility for ship layup and repair. 2. Briefing on and Discussion of an Award of a Contract to Hamp s Construction, LLC, for Phase I of the Construction of Security Fencing at the Former Todd Shipyard Ms. Keller briefed the Committee that Hamp s was the lowest of six bidders with a bid within budget of $142,500. The project will take 75 days to complete. Two areas located near residential sites will be fenced later because land owners Page 6 of 23

7 presently have put private use fences on some of this property. Mr. Bonura is notifying residents to fix their fence lines. Commissioner Barkerding asked questions regarding the two gates to be constructed. He had concerns arising from a previous conversation with tenants and wanted to ensure that their needs are met. Ms. Keller stated that she understood two gates were being constructed and that the tenants' needs were satisfied. Ms. Keller further said she would verify the gate locations. 3. Briefing on and Discussion of an Award of a Contract to Hamp s Construction, LLC, for Phase IV of the Demolition of the Former Todd Shipyard Ms. Keller stated that Hamp s was the lowest of three bidders. The building in question had transformers in it, and vandals broke in and stole copper from them. In doing so, they spilled PCBs, a known carcinogenic, contaminating a drainage pit as well as some ground. Hamp s will clean up the spill and demolish the building for a price of $60, This bid fell below the pre-bid estimate. Commissioner Barkerding asked if the environmental mitigation was included in the price. Mrs. Keller responded yes. Commissioner Bergeron stated he hoped the bid was accurate and that there would be no additions to the price. Ms. Keller replied that the bid was based on drawings of the slab and that the bid is a best estimate of the quantity of concrete to be hauled away and the maximum calculation of gallons of rain water that could have been contaminated. The cost of the contaminant clean up is by the gallon. 4. Briefing on and Discussion of an Award of a Contract to C.E.C., Inc., for Replacement of Operating Strut Guide Lower Rear Wheel Assemblies at the St. Claude Avenue Bridge Ms. Keller asked the Board to consider the award of a contract to C.E.C. Inc., a company out of Lafayette, Louisiana, the lowest bidder with a bid of $46,400. This is a 45-day project because of lead times, but it should be physically worked on during one weekend. Commissioner Bergeron asked if the bridge would be left in a down or up position for the duration of the project. He was concerned with traffic in the St. Bernard area. Ms. Keller answered that the bridge would be alternated up and down during the project, restricting traffic to one lane in each direction, but the bridge would not be closed completely. Page 7 of 23

8 5. Briefing on and Discussion of an Application to the U.S. Department of Transportation for the Transportation Investment Generating Economic Recovery (TIGER VI) Grants Program for 2014 Ms. Keller announced that this is the sixth grant of this kind that the Board has worked on in six years and that the Board was very successful with TIGER III. Ms. Cathy Dunn stated that a preliminary package should be complete by the end of the month. The last day to submit the package is April 30, but she intends to submit it by April 15. Ms. Keller stated that DOTD wants to see that we are putting up no less than $10 million. She referenced the chart that shows we are asking DOTD for $20 million. She further informed the Board that DOTD wants to award less than 80% of the project. That would mean that the Board would have to pay approximately $2.4 million. In essence, DOTD wants to see the Port make a significant investment in this project. Although not on this topic, Mr. LaGrange announced that Plaquemines Parish has asked the Board for an endorsement regarding a future planning grant for its new bulk terminal. Mr. LaGrange indicated to Plaquemines Parish that he would agree to endorse its plan for a bulk terminal, not a container terminal, which is a planned expansion to carry coal, but that this is not completely agreed to yet as this Board's endorsement is contingent on Plaquemines' endorsing this Board's project, and they have agreed to do so. 6. Briefing on and Discussion of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Contract to Furnish and Install an Audio Visual Wayfinding and Information System in the Erato Street Cruise Terminal to Accommodate Carnival Cruise Line Vessels Mr. Jumonville briefed the Board regarding the award of a contract for the installation of an electronic directional system. He explained that this system is designed to support Carnival in anticipation of increased passenger capacity for the Carnival Dream scheduled to arrive at the Port on April 14. We requested bids from qualified companies and received three bid responses. We went back to them to discuss their proposals because two were above the preliminary estimates between $200,000 and $300,000. He stated that we have ironed out the problems that revolve mostly around the proprietary software system. We got them to rebid, and the lowest bid was $244,995. This bid was approximately $100,000 lower than the other two bids, so we are recommending the Board s approval to award the bid to Integrated AV Systems LLC. Carnival ultimately will pay for this cost through an increase in passenger service charges over the next three years. 7. Briefing on and Discussion of the Louisiana International Gulf Transfer Terminal (LIGTT) Page 8 of 23

9 Mr. LaGrange and the Commissioners had a conversation on this issue. Mr. Kearney asked for a LIGTT position paper, which the Board could transmit to other entities to make its position clear on this project. Mr. LaGrange said he would have the staff write a position paper to get a firm recommendation as to how the Board will move forward. D. Adjournment There being no further business to come before the committee, Ad Hoc Chairman Bergeron adjourned the meeting at 3:05 P.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE PROPERTY AND INSURANCE COMMITTEE MEETING MARCH 17, 2014 A MEETING OF THE PROPERTY AND INSURANCE COMMITTEE OF THE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS, HELD IN THE PRESENTATION ROOM ON THE 4 TH FLOOR AT ITS OFFICES AT 1350 PORT OF NEW ORLEANS PLACE, NEW ORLEANS, LOUISIANA, WAS CALLED TO ORDER BY COMMITTEE CHAIRMAN MICHAEL W. KEARNEY AT 1:40 P.M. ON MONDAY, MARCH 17, COMMITTEE MEMBERS PRESENT: MEMBER ABSENT: STAFF: Michael W. Kearney, Committee Chairman Joseph F. Toomy, Member Daniel F. Packer, Jr., Member Gregory R. Rusovich, Member (arrived at 1:50 P.M.) William T. Bergeron, Member Robert R. Barkerding, Jr., Member Scott H. Cooper, Member G. LaGrange, President & Chief Executive Officer B. Gussoni, Executive Counsel C. Bonura, Director of Business Development P. Zimmerman, Director of Operations M. Rubino, Staff Attorney Page 9 of 23

10 W. Stokes, Executive Secretary N. Lopez, Legal Department B. Ethridge, Executive Intern M. Gresham, Executive Assistant, External Affairs GUESTS: R. Kelly, Kinney & Ellinghausen (left at 1:50 P.M.) C. Kane, Adams and Reese, LLP (left at 1:50 P.M.) J. Stuckey, Phelps Dunbar, LLP (left at 1:50 P.M.) A. Determination of Quorum and Call to Order Committee Chairman Kearney determined the existence of a quorum and called the meeting to order at 1:40 P.M. B. Public Comment Committee Chairman Kearney announced that he would defer public comment until after the briefing and presentation of the items. C. Briefing and Discussion Items 1. Discussion of a Proposed Agreement Regarding Real Estate with Alvar Industries, LLC, to Develop the Mega Plastics District Mr. Bonura explained that since last month s meeting no substantial changes were made to the proposed agreement. He said a revised cost benefit analysis by Dr. Weiss had been ed to the Board and explained that it provides a more detailed breakdown of what the New Orleans Public Belt Railroad s revenues and expenses are. Mr. Gussoni asked the commissioners if they had any questions about the agreement now that they had had since last month to review the final drafts of the documents. Commissioner Bergeron asked Mr. Kane what was the status of ad valorem taxes going forward and if Alvar had obtained a 10-year state exemption. Mr. Kane said no and explained that, if the property qualifies under the state industrial tax exemption program, the improvements could qualify. This is dependent, however, on whether it fits into a certain NAICS code. Commissioner Bergeron asked why this has not been determined yet. Mr. Kane explained that there is no prequalification for the LED program. Instead, you have to qualify after your project is complete and going into utilization. At that point, LED would make the official qualification. Mr. Kane said that he believes Alvar will qualify based on conversations with LED. Commissioner Bergeron asked about any exemption for the real property. Mr. Kane said it will not be exempt. Commissioner Bergeron asked if just the improvements would qualify, and Mr. Kane said yes. Page 10 of 23

11 Commissioner Barkerding asked about the splitting of costs and fees with Alvar. He asked if the expenses for both the original and the revised cost benefit analysis by Dr. Toni Weiss are to be split equally between the Port and Alvar. Mr. Bonura said the Port and Alvar have agreed to split these expenses, which will be reconciled at the closing. Mr. Stuckey confirmed that this term was included in the written agreement. Mr. Bonura added that the split fee arrangement also includes the expenses for the survey and the appraisal. Commissioner Barkerding asked a question regarding language in the contract that requires maritime use of the property for twenty years. He articulated a hypothetical scenario in which the plastics market was doing poorly and asked if Alvar began to manufacture widgets, and if the best widgets market were out of Mobile, Alabama, whether Alvar could load widgets on trucks and ship them to Mobile for export from its manufacturing operation on this property. He stated that he was told by Alvar on March 11 that this agreement prohibits shipping to other ports from this property. He directed this question to Mr. Stuckey, who answered yes, but said that the language of the agreement is that the cargo shipped must cross the Board's docks. So they may ship from here to Mobile, but the shipment must first cross the Board's docks. From there it could be shipped domestically or internationally. 2. Briefing on and Discussion of an Award of Contract to Torgerson Forest Products Company for the Purchase of 500 Eighty-Foot Untreated Timber Piles for Use in Maintenance of the Board s Fender Systems Mr. Zimmermann briefed the Board saying this is our annual purchase of eightyfoot timber piles. We received three bids with Torgerson out of Oregon the lowest bidder. This is ten per cent higher than previous years, excluding Torgerson gave three reasons for this price increase: (1) farms which are the source of these piles have consolidated; (2) China has purchased a lot of lumber, thus driving up the cost; and (3) most rail cars specializing in transporting these types of timber piles are all located and assigned to use on the west coast. 3. Briefing on and Discussion of a Contract for Cranes Nos. 8 and 9 Re- Reeving Devices Mr. Zimmerman stated that Cranes Nos. 8 and 9 require re-reeving devices. This allows the Board to replace cables and roller bars so Board employees and terminal workers can work safely. As part of the settlement with Doosan, the Board set aside funds for the manufacture of these, and they have been designed already. It was advertised on March 7 th, and bids will open April 1 st. Estimated cost of two items is $200,000 to $300,000. Mr. Zimmerman also reminded the commissioners that the staff would be coming to them at April s Board meeting for the purchase of these devices. Page 11 of 23

12 4. Briefing on and Discussion of a Lease Amendment for Star Marine Fleeting, LLC, for Another 1,000 Feet of Barge Fleeting Space Mr. Zimmermann explained that Star Marine currently has 3,000 feet of bargefleeting space and that the company is asking for an additional 1,000 feet adjacent to its original 3,000 feet. Staff will come before the Board in April asking for approval to rent the space at the same rate that the 3,000 feet area is being rented. This is $33 a foot or approximately $33,000 a year. 5. Briefing on and Discussion of the Status of an Agreement with the Orleans Levee District to Grant a Servitude and Right-of-Way Over a Portion of the Board s Property Along the France Road Floodwall Mr. Bonura told the Board that this item primarily deals with the France Road Floodwall, which has a servitude in that area ranging from 30 feet to as much as 62 feet. He told the Board that the Orleans Levee District (the OLD) has some very inconsistent rights of way on Board property and that our goal is to get a standardized fifteen feet off the toe of the levee in order to better utilize our property and not have restrictions or encumbrances on it. Mr. Bonura said that every indication we have from the OLD is that this is the new standard. He explained that some of our properties are more encumbered than others and that we are attempting to clarify our understanding of what uses are allowed within the servitudes, who is responsible for maintenance, what kind of access the OLD requires in terms of inspecting levees, and which Board or tenant improvements are allowed or disallowed. Mr. Bonura explained that this could potentially affect the sale of property to Alvar. He said it has less significance with leased properties unless there is an improvement within the floodwall servitude. When it comes to selling property, however, we must have these floodwall servitudes clear because it is an encumbrance on the property which by law transfers with the property to the new owner. Mr. Bonura reminded the commissioners that, in the area of the Alvar property, the Board has reserved about 40 feet from the toe of the floodwall and made that an area available for future rail development. This would allow the New Orleans Public Belt Railroad to store a train there while waiting to cross the Almonaster Bridge. Mr. Bonura told the Board that there is a similar situation that staff is working on with the OLD on the Citrus Back Levee, which affects Board properties along the northern bank of the Gulf Intracoastal Waterway. Before that servitude can proceed, OLD staff must confirm that there is not an engineering reason that a larger servitude is needed in sections of the Citrus Back Levee that are earthen levees. Page 12 of 23

13 Commissioner Toomy asked if we want a fifteen-foot servitude where the floodwall is located, i.e., what are we hoping to get where they have an earthen levee. Mr. Bonura answered it is possible fifteen feet will be adequate for the OLD s needs in the Citrus Back Levee as well, but this process will clarify matters. Once approval is granted for moving forward on the France Road Floodwall, this process can serve as a model for action on the Citrus Back Levee. 6. Old Business Mr. Gussoni raised some old business from last month regarding a briefing on liability insurance renewals. He stated that he had received word late last Friday that premiums for two liability insurance policies were slightly higher than expected. Commissioner Rusovich asked which specific areas experienced an increase. Mr. Gussoni answered police professional and public official s liability. These policies came in at a rate higher than the three percent increase we projected. There was some also difficulty with the automobile insurance. However, the broker was still working on this with the underwriter, and we do not know yet for sure if it too will be higher. On another issue, Mr. LaGrange asked Mr. Gussoni for an update on remediation status of the former Bollinger Gulf Repair lease site. Mr. Gussoni stated that the staff and outside counsel met with the Louisiana DEQ on Friday, and he thinks that DEQ is going to issue a compliance order to Bollinger to clean up the site. This may take a couple of weeks. We have another official briefing scheduled for April, and we hope to have a better report at that time. D. Adjournment There being no further business to come before the committee, Committee Chairman Kearney adjourned the meeting at 2:10 P.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE EXECUTIVE COMMITTEE MEETING MARCH 20, 2014 A MEETING OF THE EXECUTIVE COMMITTEE OF THE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS, HELD IN THE PRESENTATION ROOM ON THE 4 TH FLOOR AT ITS OFFICES AT 1350 PORT OF NEW ORLEANS PLACE, NEW ORLEANS, LOUISIANA, WAS CALLED TO ORDER Page 13 of 23

14 BY CHAIRMAN DANIEL F. PACKER, JR., AT 8:40 A.M. ON THURSDAY MARCH 20, COMMITTEE MEMBERS PRESENT: STAFF: Daniel F. Packer, Jr., Chairman Joseph F. Toomy, Member Gregory R. Rusovich, Member (arrived at 9:25 A.M.) Scott H. Cooper, Member Michael W. Kearney, Member William T. Bergeron, Member Robert R. Barkerding, Jr., Member G. LaGrange, President & Chief Executive Officer B. Gussoni, Executive Counsel C. Bonura, Director, Business Development B. Landry, Chief Commercial Officer M. Gresham, Executive Assistant for External Affairs P. Matthews, Executive Assistant M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Department B. Ethridge, Executive Intern A. Determination of Quorum and Call to Order Chairman Packer determined the presence of a quorum and called the meeting to order at 8:40 A.M. B. Public Comment Chairman Packer called for public comment, but there was none. C. Chairman s Comments Chairman Packer announced that Commissioner Rusovich would be late and will arrive at approximately 9:30 A.M. and that he would hold the Executive Session portion of the meeting until then and would take other items on the agenda out of order until that time. D. President & Chief Executive Officer s Comments Mr. LaGrange had no comments. E. Briefing and Discussion Items Page 14 of 23

15 1. Briefing on and Discussion of a Resolution Amending the Board s Resolution of February 27, 2014, Authorizing the President and Chief Executive Officer to Renew the Board s Property and Liability Insurance Policies Mr. Gussoni briefed the Board on the renewal of the Board s property and liability insurance policies. He referred to materials he handed out to the committee members, a copy of which is attached and incorporated herein. He announced that, at the end of the renewal negotiations for all liability policies, the total cost to the Board was $8,600 lower than what the Board authorized last month. However, three policy premiums came in higher than the three per cent increase projection previously briefed to the Board. Those policies were the public officials liability, police professional liability, and commercial automobile liability policies. He asked the Board to make an adjustment to the previously approved resolution last month in light of these final policy premiums, which still amounted to a lower total amount than projected. Commissioner Kearny asked Mr. Gussoni to clarify the property and insurance savings. Mr. Gussoni said the total was approximately $750,000. After discussion, the commissioners indicated they would refer the matter favorably to the entire Board at the public meeting scheduled for later that morning. 2. Terry Bradshaw Video Mr. LaGrange played a short video that documented the Port of New Orleans operations and how it is a substantial player in the U.S. economy. The video is hosted by Terry Bradshaw and will air on national television. 3. Briefing on Community Outreach Program Mr. Matthews briefed the Board regarding several projects he is involved with concerning community outreach. He spoke about partnering with other organizations so that the public at large could achieve a better understanding of what goes on at the Port of New Orleans and how much it contributes to the local and national economies. He presented the committee with a list of all organizations currently working with the Port in this community outreach. A copy of his handout is incorporated herein and made a part of these minutes. He also spoke about a partnership with Rummel High School in the capacity of the Career Connectors Program, whose goal is to connect graduates with local maritime employers to launch a career in the maritime sector. The Port is also working with other high schools in the community to expand the Port s community outreach program. He distributed photographs taken by students Page 15 of 23

16 from NOCCA. The photographs, taken at the Port s terminals and other properties, will be displayed at a photo gala in the 1 st floor auditorium. He then spoke about setting up networking events in the future, partnering with Country Day and Ben Franklin High Schools. Mr. Matthews further announced that he was working on a Port of New Orleans Maritime Workforce Summit tentatively set for October, Briefing on Selection of a New Board Logo Mr. Landry presented the two logo options selected since the past presentation, but indicated the one logo that was chosen. He said that the old logo had served the Port well. However, it does not translate well in the use of electronic media. Commissioner Kearney suggested that, given the Board s budgetary restraints, he believes the Board should defer on the decision to change the logo at this time. Mr. Toomy responded by suggesting that the Board should move forward because implementation is where the cost is, not adoption. Mr. Rusovich suggested that we roll it out to a large audience in a positive manner. Mr. Cooper said that the rollout of the logo could be done in conjunction with community outreach. Commissioner Bergeron asked if the staff had any idea of the costs to implement the transition to the new logo. Mr. Landry responded that Internal Audits conducted a quick study for Mr. Gallwey and concluded that a lot of the expenses would for business cards and letterhead, but that much of this will not be done at one time, but rather it would be phased in. Mr. Landry said that even logos on automobiles are just stickers and the cost is not too great. The single largest expense would be implementing the new logo on the cranes, and he stated that the cost to repaint the logo is approximately $5,000. Mr. Landry said some inexpensive changes can take place now, however. After hearing the comments of the other committee members, Mr. Bergeron said he might support it. Mr. Packer said he would like to have a good feel for the costs to roll out the logo overall, and Mr. Landry said he would provide that information to the committee. Commissioner Packer said that he is in agreement with going forward with a new logo and that it should be unveiled at a new event. Mr. LaGrange suggested that it be done at the Critical Commodities Conference (CCC) to make a good showing and draw media attention. Mr. Gresham reminded the committee that we can get news coverage and that they should not forget that social media coverage is free and many people get their information this way. Mr. Toomy recapped by stating that it appears that all the committee members agree with the new logo and that it be rolled out at the CCC from April 16 to 18. Page 16 of 23

17 5. Report on Cargo Activity Mr. Landry announced two things. First, the numbers for February, 2014, were down compared to January. However, when you consider that it was a short month and there were two extra holidays in February, the numbers were still very strong. Second, he said we have seen our first pieces of project cargo moving. Coastal Cargo handled some cargo heading to Iowa. Commissioner Rusovich said that we should make as big a splash about this as we can and get the message out. 6. Executive Session At 9:30 A.M., a motion was made by Commissioner Cooper and seconded by Commissioner Rusovich to go into Executive Session to discuss and evaluate the performance of the Board s President and Chief Executive Officer. All Board staff except Mr. LaGrange left the room at this time and returned when the Executive Session ended. At 10:50 A.M., a motion was made by Commissioner Kearney to end the Executive Session and return to the open meeting. The motion was seconded by Commissioner Barkerding, and the Executive Session ended at that time. 7. Briefing and Discussion of a Resolution Authorizing the Board s Chairman to Enter into an Amendment to the Board s Employment Contract with its President and Chief Executive Officer After brief discussion, Commissioner Packer announced that the Board would amend the president and chief executive officer s employment contract to make it for a full three-year term beginning on April 1, 2014, and to provide for an annual performance review before the cost-of-living adjustment becomes effective on October 1 of each contract year. 8. Report on Vessel Calls Mr. LaGrange announced that, for the months of January and February, 2014, the Port had experienced a greater volume of vessel calls at 875 compared to 867 for the corresponding months in F. Other Business There was no old or new business discussed. G. Adjournment Page 17 of 23

18 There being no further business to come before the committee, Committee Chairman Packer adjourned the meeting at 11:10 A.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE REGULAR MEETING OF MARCH 20, 2014 MEETING NO. 9, FISCAL YEAR 2014, A REGULAR MEETING OF THE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS, HELD IN THE MAIN AUDITORIUM AT ITS OFFICES AT 1350 PORT OF NEW ORLEANS PLACE, NEW ORLEANS, LOUISIANA, WAS CALLED TO ORDER AT 11:15 A.M. ON THURSDAY MARCH 20, 2014, BY CHAIRMAN DANIEL F. PACKER, JR. COMMISSIONERS PRESENT: STAFF: Technology Daniel F. Packer, Jr., Chairman Gregory R. Rusovich, Vice-Chairman Scott H. Cooper, Secretary-Treasurer Joseph F. Toomy, Member William T. Bergeron, Member Michael W. Kearney, Member Robert R. Barkerding, Jr., Member G. LaGrange, President & Chief Executive Officer B. Gussoni, Executive Counsel D. Keller, Director of Port Development E. Pansano, Director, Internal Audit J. Ruckert, Director of Finance & Information S. Ordoyne, Executive Assistant J. Lynch, General Counsel A. Fant, Deputy Director, Operations J. Cefalu, Deputy Director, Cruise & Tourism G. Hager, Director, Human Resources T. Martin, Manager, Services M. Rubino, Staff Attorney N. Lopez, Legal Services Page 18 of 23

19 D. Austin, Engineering S. Gauthier, Cruise & Tourism N. Polk, Communications P. Grandpre, Deputy Director, Communications B. Cromartie, Engineering GUESTS: K. Mirambell, K-Belle K. Calkins, New Orleans Terminal C. Kane, Adams & Reese LLP C. Balthazar, River Works I. Determination of Quorum and Call to Order Chairman Packer determined the presence of a quorum and called the meeting to order at 11:15 A.M. II. Pledge of Allegiance Board Chairman Packer asked Commissioner Barkerding to lead the Board in saying the Pledge of Allegiance, and Commissioner Barkerding did so. III. Approval of the Minutes from the February, 2014 Meetings. On motion duly made by Commissioner Rusovich and seconded by Commissioner Cooper, the Board unanimously approved the minutes of its meetings of February, 2014, as previously circulated. MOTION CARRIED UNANIMOUSLY. IV. Acceptance of Financial Statement for February 2014 On motion duly made by Commissioner Rusovich and seconded by Commissioner Toomy, the Board unanimously accepted the February, 2014, Financial Statement. MOTION CARRIED UNANIMOUSLY. V. Public Comment Board Chairman Packer announced that the meeting was open to the public and asked if any member of the public present would like to comment. There were no requests to address the Board. VI. Actions Required A. Consider Award of a Contract to K-Belle Consultants, LLC, for Perry Street Wharf Shed Siding Replacement Page 19 of 23

20 Ms. Keller recommended approval of an award of a contract in the amount of $737,604 to K-Belle Consultants, LLC. The bid was within the budget estimate. K-Belle will replace all siding and signage at the Perry Street Wharf Shed. Commissioner Cooper advised the Board that the Planning and Engineering Committee had met and reviewed the award of contract with staff, and he moved its approval. Commissioner Rusovich seconded the motion. MOTION CARRIED UNANIMOUSLY. B. Consider Award of a Contract to Hamp s Construction, LLC, for Phase I of the Construction of Security Fencing at the Former Todd Shipyard Ms. Keller recommended approval of an award of a contract to Hamp s Construction, LLC, which was the lowest of six bidders and within the budget. Commissioner Cooper advised the Board that the Planning and Engineering Committee had met and reviewed the award of contract with staff, and he moved its approval. Commissioner Barkerding seconded the motion. MOTION CARRIED UNANIMOUSLY. C. Consider Award of a Contract to Hamp s Construction, LLC, for Phase IV of the Demolition of the Former Todd Shipyard Ms. Keller recommended the approval of an award of a contract to Hamp s Construction, LLC, the lowest of three bidders. This bid fell below the pre-bid estimate. Commissioner Cooper advised the Board that the Planning and Engineering Committee had reviewed the award of contract with staff, and he moved its approval. Commissioner Toomy seconded the motion. MOTION CARRIED UNANIMOUSLY. D. Consider Award of a Contract to C.E.C., Inc., for Replacement of Operating Strut Guide Lower Rear Wheel Assemblies at the St. Claude Avenue Bridge Ms. Keller recommended the approval of an award of a contract to C.E.C., Inc., of Lafayette, Louisiana, the lowest bidder, for replacement of operating strut guide lower rear wheel assemblies at the St. Claude Avenue Bridge. Commissioner Cooper advised the Board that the Planning and Engineering Committee had reviewed the award of contract with staff, and he moved its approval. Commissioner Rusovich seconded the motion. MOTION CARRIED UNANIMOUSLY. Page 20 of 23

21 E. Consider Approval of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Contract to Furnish and Install an Audio Visual Wayfinding and Information System in the Erato Street Cruise Terminal to Accommodate Carnival Cruise Line Vessels Mr. Jumonville recommended the approval of a resolution authorizing the President and Chief Executive Officer to enter into a contract with Integrated AV Systems, LLC. This bid was approximately $100,000 lower than two other bids. Commissioner Cooper advised the Board that the Planning and Engineering Committee had reviewed this matter with staff, and he moved its approval. Commissioner Kearney seconded the motion. MOTION CARRIED UNANIMOUSLY. F. Consider Award of a Contract to Torgerson Forest Products Company for the Purchase of 500 Eighty-Foot Untreated Timber Piles for Use in Maintenance of the Board s Fender Systems Mr. Zimmermann recommended approval of an award of a contract to Torgerson Forest Products Company for the Board s annual purchase of eighty-foot timber piles. The Port received three bids, and Torgerson out of Oregon was the lowest bidder with a bid of $633 for each timber pile. Commissioner Kearney advised the Board that the Property and Insurance Committee had reviewed the award of contract with staff, and he moved its approval. Commissioner Cooper seconded the Motion. MOTION CARRIED UNANIMOUSLY. G. Consider Approval of a Resolution Amending the Board s Resolution of February 27, 2014, Authorizing the President and Chief Executive Officer to Renew the Board s Property and Liability Insurance Policies Mr. Gussoni recommended approval of a resolution amending the Board s resolution of February 27, 2014, advising the Board that the public officials and commercial automobile liability insurance premiums had come in at slightly higher rates than the ones authorized last month and staff needed their approval to bind the policies at the final premium rates. Commissioner Rusovich advised the Board that the Executive Committee had met and reviewed the amending resolution with staff, and he moved its adoption. Commissioner Barkerding seconded the motion. MOTION CARRIED UNANIMOUSLY. Page 21 of 23

22 H. Consider Approval of a Resolution Authorizing the Board s Chairman to Enter into an Amendment to the Board s Employment Contract with its President and Chief Executive Officer Commissioner Rusovich asked the Board for its approval of a resolution authorizing the Board's Chairman to amend its employment contract in accordance with the resolution presented to the Board. Commissioner Rusovich moved for adoption of the resolution as presented. Commissioner Cooper seconded. MOTION CARRIED UNANIMOUSLY. VII. Report by the President and Chief Executive Officer Mr. LaGrange reminded the Board of the upcoming Critical Commodities Conference to be held on April 15, He stated that we are one of the cofounders of the event and it has really grown in the past few years. The Board's Chief Commercial Officer Bobby Landry and Commissioner Cooper have played a major role in this event. Mr. LaGrange announced that ship calls for the months of January and February were up in 2014 over the corresponding months in 2013, with 875 ship calls year to date as compared to 867 year to date in The budget and finance report showed a healthy month in February because of a large amount of break bulk and project cargo received by Coastal Cargo Company. He announced that the container terminals continue to do well also. He said that last week he attended a conference with Mr. Jumonville and Mr. Cefalu that included many of the cruise ship executives, and he feels that overall this was one of the better conferences he has ever attended. He ended by thanking the staff for their hard work and recognized Mr. Paul Matthews for his impressive work in initiating community relations for the Port as reported in the committee meeting that morning. VIII. Old Business Commissioner Toomy took this opportunity to reflect on the Board s decision to extend Mr. LaGrange s employment contract and thanked Mr. LaGrange for his hard work as well as the Port s staff for their work. IX. New Business Mr. Gussoni announced the intention of the Board of Commissioners of the Port of New Orleans to enter into an Agreement Regarding Real Estate with Alvar Industries, LLC, to transfer property pursuant to La. R.S. 33: and Page 22 of 23

23 that the resolution authorizing the property transfer will be considered at the next regularly scheduled meeting. X. Adjournment There being no further business to come before the Board, the meeting was adjourned by Chairman Packer at 11:30 A.M. NEXT MEETING: 11:00 A.M., Monday, April 28, 2014 Page 23 of 23