BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE BUDGET COMMITTEE MEETING MAY 19, 2014

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1 BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE BUDGET COMMITTEE MEETING MAY 19, 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 CHAIRMAN GREGORY R. RUSOVICH AT 1:35 P.M. ON MONDAY MAY 19, COMMITTEE MEMBERS PRESENT: MEMBERS ABSENT: STAFF: GUESTS: Gregory R. Rusovich, Committee Chairman Joseph F. Toomy, Member Daniel F. Packer, Jr., Member (left at 2:30 P.M.) William T. Bergeron, Member Michael W. Kearney, Member Scott H. Cooper, Member Robert R. Barkerding, Jr., Member G. LaGrange, President & Chief Executive Officer P. Gallwey, Chief Operating Officer B. Gussoni, Executive Counsel J. Ruckert, Director, Finance & Information Technology M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Department J. Holt, Government Consultants D. Hughes, former Board Chairman (left at 2 P.M.) A. Determination of Quorum and Call to Order Committee Chairman Rusovich determined the existence of a quorum and called the meeting to order at 1:35 P.M. B. Public Comment Chairman Rusovich called for public comment, but there was none. Page 1 of 12

2 C. Briefing and Discussion Items 1. Review of April, 2014, Financial Statement Mr. Ruckert briefed the committee regarding the March, 2014, financial statement. He distributed a report detailing the financial information, a copy of which is made part of these minutes. He announced that the month of April was the best month thus far in the fiscal year. This was caused primarily by an increase in GRT dockage. The April revenue increase was enough to push the year-to-date operating income before depreciation to an above budget position as it was running below budget through March of A full discussion on the April 2014 financial statement followed. After discussion, the committee indicated it would recommend acceptance of this month's financial statement to the Board at its next scheduled regular meeting. 2. Briefing on and Discussion of the 2015 Financial Plan Mr. Ruckert began his briefing by reminding commissioners that he had previously sent to them a mock up copy of the 2015 financial plan, a copy of which is made part of these minutes. He circulated a schedule indicating the status of financial plan preparation and briefly discussed it. He invited committee members to set up private meetings with both Mr. Gallwey and him to address any questions or concerns they may have. He announced that he would need to recalculate the 2014 budget projections for revenue concerning terminal operations because of the exceptional month in April. He also said that, because the recently announced Chiquita project will bring in approximately $350,000 in additional revenues next year, the revenue budget for Fiscal Year 2015 will need to be revised. Commissioner Toomy asked if there was a time schedule which Mr. Ruckert was targeting to have this financial plan adopted. Mr. Ruckert responded that the plan must be adopted at the June Board meeting so that the budget would be in place for the new fiscal year commencing July 1, D. Adjournment There being no further business to come before the committee, Committee Chairman Rusovich adjourned the meeting at 2:48 P.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE PROPERTY AND INSURANCE COMMITTEE MEETING Page 2 of 12

3 MAY 19, 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 2:48 P.M. ON MONDAY, MAY 19, COMMITTEE MEMBERS PRESENT: MEMBERS ABSENT: STAFF: GUEST: Michael W. Kearney, Committee Chairman Joseph F. Toomy, Member Gregory R. Rusovich, Member William T. Bergeron, Member Daniel F. Packer, Jr., Member Scott H. Cooper, Member Robert R. Barkerding, Jr., Member G. LaGrange, President & Chief Executive Officer P. Gallwey, Chief Operating Officer B. Gussoni, Executive Counsel C. Bonura, Director, Business Development P. Zimmerman, Director, Operations M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Department A. Fant, Deputy Director, Operations J. Mansour, Marketing C. Balthazar, River Works A. Determination of Quorum and Call to Order Committee Chairman Kearney determined the existence of a quorum and called the meeting to order at 2:48 P.M. B. Public Comment Committee Chairman Kearney announced that he would defer public comment if there was any until after the briefing and presentation of the items. C. Briefing and Discussion Items Page 3 of 12

4 1. Briefing on and Discussion of a Resolution Authorizing the President and Chief Executive Officer to Amend the Board s Agreements with Illinois Central Railroad Company to Accommodate the Construction of the Mississippi River Intermodal Terminal Mr. Zimmerman briefed the committee and explained that construction of the new intermodal terminal will conflict with an existing agreement between the Board and the Illinois Central Railroad. He acknowledged Ms. Fant for doing a great job working with the railroad to negotiate an amended agreement with it. Ms. Fant explained that we need to connect to the Illinois Central Railroad track and get its permission to use a small portion of its tracks. She illustrated this by using a visual aid, a copy of which is made part of these minutes. After discussion, the committee indicated it would refer this matter favorably to the entire Board at its next regularly scheduled meeting. 2. Briefing on and Discussion of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Lease with Atlantic Metrocast, Inc., at 3201 France Road for Use as a Pre-cast Concrete Pile Manufacturing Facility Because of time constraints this afternoon, Committee Chairman Kearney announced this item would be deferred until next month's meeting. 3. Briefing on and Discussion of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Lease with Star Fleet Florida Avenue, LLC, for the Florida Avenue Marshaling Yard and Adjacent Water Space for Use as a Barge Fleeting Facility Because of time constraints this afternoon, Committee Chairman Kearney announced this item would be deferred until next month's meeting. 4. Briefing on and Discussion of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Cooperative Endeavor Agreement with the State of Louisiana, the Department of Economic Development ( LED ) and Chiquita Brands International, Inc. ( Chiquita ), for a Project That Will Provide Inducements from LED to Chiquita to Relocate its Shipping Operations to the Port of New Orleans ( PNO ) for Shipping Qualifying Cargo through PNO and Grants to PNO from LED to Provide Facilities to Chiquita for a Distribution Center, Ripening Facility and Additional Refrigeration Equipment at PNO Assisted by Ms. Mansour, Mr. LaGrange addressed the committee regarding this project. He informed commissioners that the components of the cooperative endeavor agreement are a $2 million grant by the Louisiana Department of Economic Development (LED) to the Port of New Orleans as a no interest loan to be paid back over a ten-year period at $200,000 a year. The Board would use those funds for the installation of 600 reefer plugs at its Napoleon Avenue Terminal. He announced that this was a great deal because the Page 4 of 12

5 Port of New Orleans thought it was going to have to fund this project out of its capital budget. Ms. Mansour informed the committee that Chiquita is in the early stages of selecting a location on Port property for the ripening facility. She indicated that Chiquita might be interested in certain property near the terminal and warehouse district, but further explained that, in order for Chiquita to receive the $2.2 million of funding from LED, the property to be improved must be port-owned. Mr. LaGrange added that PNO property on the west bank of the Industrial Canal was also a possibility. After discussion, the committee indicated it would refer this matter favorably to the entire Board at its next regularly scheduled meeting. D. Adjournment There being no further business to come before the committee, Committee Chairman Kearney adjourned the meeting at 3:05 P.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE EXECUTIVE COMMITTEE MEETING MAY 22, 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 BY COMMITTEE CHAIRMAN DANIEL F. PACKER, JR., AT 10:02 A.M. ON THURSDAY, MAY 22, COMMITTEE MEMBERS PRESENT: STAFF: Daniel F. Packer, Jr., Chairman Joseph F. Toomy, Member Gregory R. Rusovich, Member Scott H. Cooper, Member William T. Bergeron, Member Michael W. Kearney, Member Robert R. Barkerding, Jr., Member G. LaGrange, President & Chief Executive Officer Page 5 of 12

6 P. Gallwey, Chief Operating Officer B. Gussoni, Executive Counsel B. Landry, Chief Commercial Officer J. Ruckert, Director, Finance & Information Technology M. Gresham, Executive Assistant for External Affairs M. Rubino, Staff Attorney W. Stokes, Executive Secretary N. Lopez, Legal Services GUESTS: None A. Determination of Quorum and Call to Order Chairman Packer determined the presence of a quorum and called the meeting to order at 10:02 A.M. B. Public Comment Chairman Packer called for public comment, but there was none. C. Chairman s Comments Chairman Packer had no comments. D. President & Chief Executive Officer s Comments Mr. LaGrange had no comments. E. Briefing and Discussion Items 1. Updated 2015 Financial Plan Mr. Ruckert briefed the committee regarding the updated financial plan for He stated that the month of April was much higher in revenue than what had been projected for Fiscal Year 2014 and that the updated financial plan took into account the new business from Chiquita in Fiscal Year Mr. Ruckert then made a full briefing of the updated 2015 financial plan, a copy of which is made part of these minutes. In response to the showing on the screen of a graph of Fiscal Years 2005 through projected 2015, Commissioner Kearny asked what had caused the significant decrease in expenses from 2009 to Mr. Ruckert responded that there was a reduction in staff positions. He said he did not have the exact numbers in front of him, but it was significant. He speculated that it might have been ten to twelve positions Page 6 of 12

7 and that there were cuts in training, travel, limiting it strictly to promotional purposes, and salaries were frozen as well. Commissioner Bergeron asked for an explanation why, in the new projections for Fiscal Year 2014, there was an increase of about one million dollars in revenue, yet the expense did not increase. Mr. Ruckert explained that the increase in the projections in revenue resulted from a very good month in April. However, he was satisfied with the projections for expense as it was slightly below the budget for April. He further referenced the increase in workers' compensation expenses. Mr. Gussoni answered Commissioner Bergeron s question regarding the increase in workers' compensation expenses. He explained that the Board is and has always been self-insured up to a million dollars for each workers' compensation claim. He further stated that in the last few years the Board has experienced several more serious claims which have resulted in unusually higher costs. He said that the staff has periodically weighed the Board s costs in being self-insured against the cost of obtaining workers' compensation insurance and has to this point always determined it was in the Board s best interest to remain self-insured. He said the Board's risk manager was working with the Board's broker to obtain a quote on such insurance at this time. 2. Update on State Legislation Mr. Gresham briefed the committee and passed out a handout, a copy of which is made part of these minutes. He informed everyone that the last day for final passage of bills in the legislature is next Friday at 6:00 P.M. He stated that the staff was tracking the Port Construction Priority Program funding in HB2, which is still at $19.7 million with $3.6 million remaining in capital outlay. Mr. Gresham informed the committee that they still have a commitment from Commissioner of Administration Christy Nichols in regard to funding for the Poland Avenue Cruise Terminal in the amount of $6 million. He further explained that the funds were moved up from Priority 5 to Priority 1. A full briefing and discussion of the handout followed. 3. Report on Cargo Activity Mr. Landry addressed the committee on cargo activity, stating that the month of April was very good for cargo and container volume and that it is continuing to grow. It is 3.5% higher than last year at this time. Mr. Landry informed the committee that break bulk is going through the roof. In the first part of Fiscal Year 2014, the Port's breakbulk numbers were 20% below comparable Fiscal Year 2013 figures. With the dramatic increase in volumes in the last four months, the Port is now 7.5% ahead of last year's July through April numbers. Commissioner Toomey asked why there was a spike in break bulk. Mr. Landry responded that warehouses were restocking. 4. Report on Vessel Calls Page 7 of 12

8 Mr. LaGrange addressed the committee and informed it that for January through April, 2014, the Board is one hundred ship calls ahead of last fiscal year. Last April the Board had 411 ship calls. This April, the Board has 436 ship calls. Overall, for last fiscal year, the Board had 1,733 ship calls, and this year it has had 1, Discussion of Continued Use of City Business as the Official Journal of the Board Mr. Gussoni informed the Board that in June of each year, the law requires it to adopt an official journal. He referred to legislation waiting to be signed into law by the Governor that would make The Advocate eligible to serve as the Board's official journal. He said everyone had anticipated that the law would be signed by now, but it has not. He said staff was acquiring bids from the three local newspapers which will qualify if the law is signed, but did not have all the information necessary at this time. He asked for direction from the Board as to whether they wanted rate information from all three newspapers in next month s committee meetings once he has acquired the necessary information. The commissioners directed Mr. Gussoni to give a full briefing next month once the needed information was acquired. F. Other Business Chairman Packer asked the staff if it was possible to produce the minutes in a quicker time frame. Mr. Gussoni responded that he would try to have the minutes produced at least two weeks before the next scheduled meetings. G. Adjournment There being no further business to come before the committee, Committee Chairman Packer adjourned the meeting at 11:05 A.M. BOARD OF COMMISSIONERS PORT OF NEW ORLEANS MINUTES OF THE REGULAR MEETING OF MAY 22, 2014 MEETING NO. 11, 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 Page 8 of 12

9 ORLEANS, LOUISIANA, WAS CALLED TO ORDER AT 11:15 A.M. ON THURSDAY, MAY 22, 2014, BY CHAIRMAN DANIEL F. PACKER, JR. COMMISSIONERS PRESENT: STAFF: GUESTS: 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 P. Gallwey, Chief Operating Officer B. Gussoni, Executive Counsel C. Bonura, Director of Port Development D. Keller, Director, Port Development E. Pansano, Director, Internal Audit S. Ordoyne, Executive Assistant A. Fant, Deputy Director, Operations R. Hecker, Superintendant, Harbor Police M. Rubino, Staff Attorney N. Lopez, Legal Services D. Austin, Port Development N. Polk, Communications A. Brandenburg, Internal Audit P. Herring, Internal Audit R. Aragon-Dolese, Manager, Communications D. Guarino, Port Development B. Cromartie, Engineering Department K. Price, New Orleans Terminal C. Balthazar, Riverworks E. Hansen, Cooper T. Smith L. Jemison, Jemison and Partners I. Determination of Quorum and Call to Order Board 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 and the audience in saying the Pledge of Allegiance, and he did so. III. Approval of the Minutes from the April, 2014 Meetings Page 9 of 12

10 On motion duly made by Commissioner Rusovich and seconded by Commissioner Toomy, the Board approved the minutes of its meetings of April, 2014, as previously circulated, with Commissioner Bergeron abstaining. IV. Acceptance of Financial Statement for April, 2014 On motion duly made by Commissioner Toomy and seconded by Commissioner Kearney, the Board unanimously accepted the April, 2014, Financial Statement as previously circulated. 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 Approval of a Resolution Authorizing the President and Chief Executive Officer to Amend the Board s Agreements with Illinois Central Railroad Company to Accommodate the Construction of the Mississippi River Intermodal Terminal Mr. Zimmerman addressed the Board regarding a resolution authorizing the President and Chief Executive Officer to amend the board s operating agreement, surface track agreement, and grant of servitude to the Illinois Central Railroad to allow the Board and the Illinois Central to use portions of each other s tracks so that the Board can access the Mississippi River intermodal terminal and the Illinois Central Railroad can access the Louisiana Avenue Wharf. These revisions will also extinguish unnecessary servitude and trackage rights agreements in addition to providing the Board with crossing rights for some Illinois Central Railroad tracks. Commissioner Kearney advised the Board that the Property and Insurance Committee had met and reviewed this matter with staff, and he moved for its approval. Commissioner Bergeron seconded the motion. MOTION CARRIED UNANIMOUSLY. B. Consider Approval of a Resolution Authorizing the President and Chief Executive Officer to Enter into a Cooperative Endeavor Agreement with the State of Louisiana, the Louisiana Department of Economic Development ( LED ) and Chiquita Brands International, Inc. ( Chiquita ), for a Project that Will Provide Inducements from LED to Chiquita to Relocate Its Shipping Operations to the Port of New Orleans ( PNO ) for Shipping Qualifying Cargo through the PNO and Grants to the PNO from LED to Provide Facilities to Chiquita for a Distribution Center, Ripening Facility and Additional Refrigeration Equipment at the PNO Page 10 of 12

11 Mr. Landry addressed the Board and asked for approval of a resolution authorizing the President and Chief Executive Officer to enter into a cooperative endeavor agreement with the State of Louisiana, LED, and Chiquita Brands. This agreement will allow for Chiquita to relocate its shipping operations to the Port of New Orleans and provide facilities for a distribution center, ripening facility, and additional refrigeration equipment at the Port of New Orleans. Commissioner Kearney called for questions and comments. Commissioner Rusovich commented expressing his gratitude by thanking Chiquita Brands and said this was a proud day for the Port. He further noted that this was another great example of sound cooperation for the Port of New Orleans and commended Mr. LaGrange and his staff for their hard work. Commissioner Toomey also commented that he agreed with Mr. Rusovich. In addition, he described how and what it means financially and economically to the Port of New Orleans as well as to the whole community to have Chiquita return after a long absence. Commissioner Toomey went on to say that people have told him over the past week that it sends a psychological signal which completes the return from Hurricane Katrina. It speaks volumes in some respect that the company is returning after forty years. Commissioner Kearney advised the Board that the Property and Insurance Committee had met and reviewed this matter with staff, and he moved for its approval. Commissioner Rusovich seconded the motion. MOTION CARRIED UNANIMOUSLY. VII. Report by the President and Chief Executive Officer Mr. LaGrange quoted The American Economic Development Association, which said that, for every business prospect pursued, an economic entity will land one on the average of one out of every fifty-two attempts. For the Chiquita project, we worked for its location within the port authority or economic development district. This one, we actually landed three times over a ten-year period. However, we were not able to finalize the deal the first two times. He said that this third time is the charm. It was a total team effort. He thanks the Governor of Louisiana and Stephen Moret, the Director of the Louisiana Department of Economic Development. Mr. LaGrange read an from Mr. Matt Gresham, the Port's executive assistant, regarding a woman who was attacked in the Marigny area one morning. A passerby intervened in the attack, and a nearby Harbor Police officer pursued and detained the suspect. That Harbor Police officer was Miguel James, who was at the Board meeting. Mr. LaGrange asked him to stand up to be recognized for his actions and asked the commissioners and the audience to applaud him. Page 11 of 12

12 Mr. LaGrange said he also received a letter from New Orleans Public Belt Railroad's General Manager Jeff Davis, who forwarded an that was sent to him from Dr. King, who is with the Eisenhower School - National Defense University. Dr. King s explains how a group of high-ranking military officers and civilians visited the Port s railroads a couple of weeks ago, and they invited the Port to join them. Ms. Lori Louviere and Ms. Janine Mansour of the Board's Marketing Department both spoke to this group and did a great job according to Dr. King s . Dr. King thanked them for their exceptional tour and the enlightening question-and-answer opportunity that they provided to the senior military officers, civilians, and executives of the Eisenhower School. He said this visit to the New Orleans Public Belt Railroad at the Port was a perfect culminating experience for their global travels for this academic year. VIII. Old Business There was no old business before the Board. IX. New Business Commissioner Toomey reminded everyone to go shopping at the Riverwalk, which opened earlier that day. He thanked the Howard Hughes Company for making the investment in the Riverwalk. Mr. LaGrange thanked Robert Jumonville and his staff for working closely with the Howard Hughes Company regarding Coast Guard and safety issues. Chairman Packer appointed a committee to nominate at next month's meeting a slate of officers to serve for a nine-month term. He announced that Commissioner Rusovich would serve as its chairman with Commissioners Kearney and Barkerding as members. X. Adjournment There being no further business to come before the Board, the meeting was adjourned by Chairman Packer at 11:29 A.M. NEXT MEETING: 11:00 A.M., Thursday June 26, 2014 Page 12 of 12