27 Jul Commission Meeting Minutes 6-28-21
PORT COMMISSION OF THE PORT OF EDMONDS MINUTES OF REGULAR MEETING
(Via Zoom) June 28, 2021
Angela Harris, President
David Preston, Vice President
Steve Johnston, Secretary
Bob McChesney, Executive Director
Brandon Baker, Marina Manager
Tina Drennan, Finance Manager
Bradford Cattle, Port Attorney
CALL TO ORDER
President Harris called the meeting to order at 7:00 p.m.
PLEDGE OF ALLEGIANCE
All those in attendance participated in the Pledge of Allegiance to the American Flag.
COMMISSIONER PRESTON MOVED THAT THE CONSENT AGENDA BE APPROVED TO INCLUDE THE FOLLOWING ITEMS:
A. APPROVAL OF AGENDA
B. APPROVAL OF JUNE 14, 2021 MEETING MINUTES
C. APPROVAL OF PAYMENTS IN THE AMOUNT OF $208,165.07
COMMISSIONER FAIRES SECONDED THE MOTION, WHICH CARRIED UNANIMOUSLY.
Charles Malmgren, Edmonds, submitted a letter and asked that it be entered into the public record for the meeting. Mr. McChesney agreed to place a copy of the letter in each of the Commissioner’s boxes and then entered the following letter from Charles Malmgren into the record:
Dry Storage Dock Space
6/28/21 Commission Meeting Comment Submission
After the latest changes imposed on Dry Storage tenants in May, I paid a visit to the Port of Everett to see how their Dry Storage facility works. Port of Everett has a major tenant, Bayside Maine, with a 150-space dry stack facility running two forklifts.
A major difference between Bayside Dry Stack and Edmonds Dry Storage is the amount of on the water space dedicated to tenants. Port of Edmonds has 232 Dry Storage spaces with 20 on the water spaces, roughly 9%. Port of Everett has 150 Dry Storage spaces with 32 on the water spaces, roughly 21%. This difference is negligible during low activity times, but is gigantic during the summer months when most tenants wish to use their boats.
Everett’s 32 on the water spaces provide a buffer allowing much less contentious, more orderly launching and retrieval and extended access for early departures. They also have a flexible schedule as evidenced by the Spot Shrimp opening earlier this year: To accommodate early departures Bayside added 6:00am launching.
There are other differences between facilities which contribute to Everett’s consistent, year ‘round wait list but extensive, free dock space and flexible launching are big contributors.
Port of Edmonds is at a uniquely opportune time to increase Dry Storage on water space and I hope you will consider it.
Charles Malmgren, Dry Stack XD-106
NEW ADMINISTRATION/MAINTENANCE BUILDING LEADER IN ENERGY AND ENVIRONMENTAL DESIGN (LEED) CONSULTANT
Mr. McChesney reviewed that, on June 1st the Commission approved the action plan to pursue LEED Silver Certification, and possible Gold Certification, as well as Salmon Safe Certification, for the proposed new Administration/Maintenance Building construction. He further reviewed that Jackson Main Architecture is the main architect for the project, which includes civil, structural, electrical and geotechnical engineering disciplines. However, the contract that was approved on March 12th with Jackson Main Architecture for $127,766 did not include funding for a consultant for the LEED Certification scope of work. The proposed addendum would allow Jackson Main Architecture to hire RWDI as the LEED consultant to provide the guidance and documentation necessary for achieving LEEDS Silver Certification. It may be possible to achieve Gold Certification, but it won’t be known until the project is further along in the design and bidding process. To proceed with the approved action plan, staff is requesting approval of an addendum to the Jackson Main Architecture contract for $60,620. He noted that a detailed scope of work was attached to the Staff Report.
Mr. McChesney recommended the Commission authorize him to approve the addendum to Contract 2021-374 with Jackson Main Architecture for $60,620 to proceed with LEED Certification coordination.
Commissioner Orvis asked what is meant by the phrase, “RWDI consultant fee does not include estimated reimbursable expenses and third-party fees.” Mr. McChesney explained that, oftentimes, reimbursables (i.e. postage, copies, mileage, etc.) are not included, and RWDI would be entitled to recover these costs. In addition, he expects that a third-party commissioning agent will be required, at the Port’s expense, to reverify that the things that RWDI and Jackson Main Architecture specified as part of the project were, in fact, accomplished. He said he does not expect that this cost will be substantial.
Mr. McChesney reported that the Port took the initiative to outreach to Snohomish County Public Utility District (PUD) for assistance with energy modeling. The PUD has subcontracted out their energy modeling service to a third-party consultant, the Wildan Group, and the service will be provided to the Port at no cost. He noted that energy modeling is a fundamental requirement of LEED Certification. Commissioner Johnston asked if there would be a cost associated with the Port’s contract with the Wildan Group to complete the final Washington State Energy Code and LEED Energy Credit Compliance Model. Mr. McChesney said his understanding is that the PUD would cover this cost. The goal is to not only get the right equipment for LEED Certification, but to also get incentives and potential grants to offset the costs. Commissioner Johnston asked that staff seek clarification of that concept to make sure it is at no cost to the Port.
Mr. McChesney reported that the design team has already gone through the full LEED Checklist on a proforma basis to guide the next level of design.
COMMISSIONER JOHNSTON MOVED THAT THE COMMISSION AUTHORIZE THE AMENDED SCOPE OF WORK OF $60,620 AND TOTAL PROJECT BUDGET NOT TO EXCEED $193,996 FOR JACKSON MAIN ARCHITECTURE TO ADD RWDI FOR LEED CERTIFICATION WORK. COMMISSIONER ORVIS SECONDED THE MOTION, WHICH CARRIED UNANIMOUSLY.
CONTINUATION OF RESOLUTION NO. 20-03 DECLARING LOCAL EMERGENCY AND DELEGATION OF AUTHORITY
Mr. McChesney reported that he has taken no action under the temporary emergency delegation authority that devolved from the Covid-19 pandemic.
2022 BUDGET MEETING SCHEDULE
Ms. Drennan referred to the 2022 Proposed Budget Meeting Schedule, which was attached to the Staff Report. She noted that it may need to be adjusted when they learn the date of the candidate forum that is typically held in October for running elected officials.
Ms. Drennan advised that staff began working on the preliminary operating and capital budget expectations in June and she would like to schedule a Finance Committee meeting to discuss the baseline conditions, property taxes, and economic development budget sometime the week of August 16th. Also that week, staff will meet to discuss proposed new budget items. Items from staff are due to her by August 27th. On August 30th, the Commission will conduct a workshop to discuss the Cash Flow Model, property taxes, and the economic development budget. The budget will be due to the Executive Director on September 10th, and public notifications will be prepared the week of September 20th. The Finance Committee will meet again the week of September 27th to discuss the budgets, and the first notice of public hearing will be published in the EVERETT HERALD and MY EDMONDS NEWS on October 8th. The Commission will conduct another workshop to discuss the 2022 Preliminary Budget and accept public comment on October 11th, and a second notice of public hearing will be published on October 15th. A public hearing is tentatively scheduled for October 25th. It is anticipated that the Commission will approve the 2022 Tax Levy, Bank Excess Levy Capacity, Budget, Moorage Rates, Dry Storage Rates, and Marina Operations Fees on November 8th. Sometime between November 9th and November 19th, the Port will certify to the County Assessor for the amount of taxes to be levied, publish the final budget, and prepare the rates for publication. The tax levy resolution is due to Snohomish County on November 30th. She advised that the proposed schedule would be published on the Port’s website.
Commissioner Orvis invited Commissioners to share their thoughts and suggestions regarding the 2022 Budget with a member of the Finance Committee before August 16th.
CITY OF EDMONDS REPORT
Council Member Olsen was not present to provide a report.
EXECUTIVE DIRECTOR’S REPORT
Mr. McChesney reported that the North Portwalk and Seawall Reconstruction Project is moving forward. The target is to submit the Joint Aquatic Resources Permit Application (JARPA) in August. At the same time, they will submit an application for the local Shoreline Permit to the City of Edmonds, which will include a State Environmental Policy Act (SEPA) review. He summarized that staff is happy with the progress that is being made, and the project is on schedule. They have a very strong team of consultants to guide through the JARPA process, and they are hoping to move through the review as expeditiously as possible. However, he anticipates it will likely take 1.5 years to obtain the permit, as the review will involve a number of reviewing agencies, including the Corps of Engineers, National Oceanic and Atmospheric Administration, Department of Fish and Wildlife, Department of Ecology and Department of Natural Resources. The tribes will also have an opportunity to provide input.
Mr. McChesney advised that the LEED initiative on the new Administration/Maintenance Building Project is moving forward, and staff has been in contact with the PUD. He anticipates submitting building permit applications in late August or early September. They have received good cooperation from City of Edmonds staff, and he is confident they can move the process relatively quickly. He anticipates the project will be well into construction by this same time next year.
Commissioner Harris asked if the Port will be required to make a presentation to the City when the application is submitted. Mr. McChesney answered that the Port will submit the application packet, and City staff will review it. If all of the documents are in order, the City will issue a Letter of Completeness. There shouldn’t be any formal process that would require a presentation by the Port. However, the Port will be required to complete the SEPA Checklist and notify the public of the 30-day public comment period. Following the public comment period, it is anticipated that the Commission will authorize staff to issue a Determination of Nonsignificance (DNS). After the SEPA review is finished, the City will start its review process for the Shoreline Permit. Commissioner Johnston commented that, although unlikely, the DNS could go to a Mitigated Determination of Nonsignificance (NDNS) if there are comments that must be addressed.
Commissioner Preston asked Mr. McChesney what he anticipates the best-case timeline would be for occupying the building. Mr. McChesney said he anticipates that the building permit will be approved by the end of October, but going out to bid for a project of this size in November or December is problematic as contractors are working to close out the year. Even if they get the Building Permit in late fall, he recommended they wait to put the project out to bid until January. He expects to be under construction in March or April, and the project should be completed and the building occupied by the end of 2022.
Mr. McChesney announced that the Sea Jazz Program will start on Wednesday, July 7th and run through September 10th. He gave a shout out to Brittany Williams for taking the lead on reformulating the program. Pete Bennett, a local attorney, has taken the lead, on a pro bono basis, helping the Port organize the musicians and perfect the schedule. He said the Port’s intent is to eventually broaden the Sea Jazz Program to include other types of music beyond Jazz and to add additional performances. The idea is to make the waterfront come alive for people who are visiting the marina.
COMMISSIONER’S COMMENTS AND COMMITTEE REPORTS
Commissioner Orvis reported that he participated in a Finance Committee Meeting, where the discussion focused on financing for the North Portwalk and Seawall and Administration/Maintenance Building Projects. Ms. Drennan provided helpful information on bonding that was later provided to each of the Commissioners. She presented three options: 1) pay it all out of Port reserves, 2) pay it using all bonds, or 3) use bonds for public amenities. The Finance Committee indicated a preference for Option 1, at least for the new building. If there aren’t enough reserves to do the portwalk and seawall project, then they may need to use a combination of reserves and bonds. It is hoped the Port can obtain some grant funding, as well. He observed that the Port has worked very hard for the last 10 years to put money in the bank to pay for the big-ticket items. Now that they are in the position of needing to do a big project, the funding is in reasonably good shape.
Commissioner Orvis advised that he participated in an Economic Alliance of Snohomish County (EASC) Coffee Chats that focused on the Washington Cares Act, which is a new payroll tax that is intended to fund future long-term care. The state’s intent is to ease the Medicare payments that will need to be made in the future. If you have long-term care insurance, you can opt out of the program starting on October 1st through December 31st. The taxes will be collected starting January 1st. If your waiver hasn’t been approved by that time, your employer will have to start taking the money from your paycheck. Once the waiver is approved, the state will not refund the money to the employer, but the employer will be required to refund the money to you. The form for opting out of the program won’t be available until sometime in September.
Commissioner Preston said he participated in a meeting regarding the Washington Cares Act a few weeks ago where the State announced it would be informing employers of the act right after Labor Day. It is clear that they don’t want anyone to opt out. If too many people opt out, there won’t be enough money going into the pool, which means the tax will need to go up for those who participate and don’t have a waiver. People who move out of state will lose the benefit even if they have paid into it. While it is great they are trying to do something, it would have been better to establish some rules and guidelines and then let the private sector implement the program. Commissioner Orvis added that it takes nine years to become vested, so people who are close to retirement will pay into the program, but not get anything back.
Commissioner Harris asked if the Port would be providing any additional information or education to help its staff understand the new program and its requirements. Commissioner Orvis agreed that the Port needs to provide some assistance to its staff. However, at this time, it isn’t clear what needs to be done. He anticipates the State will receive hundreds of thousands of applications to opt out of the program, and it isn’t clear if there will be enough staff to process them before January 1st. There was no money in the bill to authorize additional staff.
Ms. Drennan commented that the State’s Employment Security Department will be managing the Washington Cares Act Program. They also manage the Paid Family Leave Act Program, which hasn’t been handled properly or well. It was two quarters in before they were able to provide the forms needed to remit the tax to them. They seriously underestimated the amount of claims they would receive.
Commissioner Faires asked if there is a reasonable chance that the State Legislature will tinker with the Washington Cares Act to clean it up and provide more detail in the next year or two. Commissioner Orvis said his understanding is that nothing more will be done. Commissioner Preston agreed, unless there is a massive push from the public, there are no plans to change anything other than increase the taxes. Again, he said claims are going to outstrip, and the actuarial numbers will need more money to fund it.
Ms. Drennan said she is keeping apprised of the issue, and staff has been alerted to the program and given as much information as is available at this time. Once she has more information, she will work with the Executive Director and Office Manager to come up with a plan.
Commissioner Orvis reported that he also participated in an EASC Coffee Chat that focused on housing. People are moving to Snohomish County, and most of them are under 35. The median income required for housing in Snohomish County is $90,000. Rents are skyrocketing due to a lack of housing opportunities and an influx of people. Lynnwood’s Mayor reported that they are 1,500 housing units short, and Everett reported a shortage of 1,500 a month. He recalled that the Growth Management Act limits the land available for development. As the population increases, there is crowding and development needs to go up. Lynnwood is built out for single-family housing, as is most of the county, and there is a great deal of community resistance for development of any other housing types. While many in Edmonds have voiced opposition to increased density, most of the concern is focused on the Edmonds Bowl area, and the proposals for increased housing density would primarily apply to the upland areas. He commented that there are a variety of ideas to address the need, but the land costs too much to develop units that are affordable. The only way around that is to construct large, multifamily complexes or subsidize housing. He summarized that the problem is regional and can’t be solved by individual cities working on their own.
Commissioner Johnston said he also attended the EASC Coffee Chat that focused on housing, where it was reported that the County is booming, with over 800,000 residents now and an expectation of well over 1 million in the next 20 years. Commissioner Faires asked if the population increase is occurring primarily in south Snohomish County, and Commissioner Johnston said it is widespread. Commissioner Orvis noted that Marysville and Arlington haven’t been designated by the Growth Management Act as part of the Urban Growth Area, and much of the land is protected. The same is true for the area east of Monroe. Commissioner Orvis recalled discussions a few years ago that the State Legislature could pre-empt local zoning and prescribe density within a certain distance of a multimodal station. If the legislature decides to go that route, the Edmonds ferry terminal, railroad station and bus terminal will be a prime location. The City should not ignore this possibility.
Commissioner Preston suggested that municipalities are getting overwhelmed in that they can’t do affordable housing like they want to because the market is driving the costs so hard and fast. Commissioner Orvis said one problem is that each City is trying to address the issue on its own, and they can’t keep up. It is difficult for them to even comprehend the extent of the problem, and this makes it hard to come up with rational solutions. They also take a tremendous amount of heat from their constituents who are opposed to denser development. Commissioner Faires observed that the people who live in the City now don’t want change, and the people who aren’t here now don’t get to vote. Unless the state or region takes on the issue and pre-empts what the City is doing, there will be no significant change. Commissioner Johnston commented that expanding accessory dwelling units (ADUs) is one housing concept that is universally popular. However, he agreed that the housing issue must be addressed on a regional basis.
Commissioners Orvis and Johnston also reported that they participated in a EASC Coffee Chat that focused on hydrogen fuel that was fascinating. Commissioner Orvis said he learned that hydrogen can be made from methane and hydraulic electricity, and they even have portable hydrolysis stations that are about the size of the Port’s new restrooms. Entities, such as ports, can make their own hydrogen fuel for their vehicles, and the Port of Tacoma has already started converting heavy equipment to hydrogen. However, he recognized that it would not be a feasible option for smaller ports. He provided a number of examples of how hydrogen fuel can be used, and also pointed out some of the places where it is already being used.
Commissioner Orvis shared a letter from Gerry O’Keefe, Washington Public Port Association (WPPA), Senior Director, Environmental Affairs. The letter pointed out that political options killed the methanol plant project that would have reduced global emissions of greenhouse gases. It also voiced concern that the Department of Ecology (DOE) has changed environmental assessment standards again and again, and policies designed to review all project proposals consistently were bent to a pre-determined result. This ad hoc rule making by the DOE is bad government. Until project creators know how projects will be reviewed for environmental impacts, Washington will send jobs elsewhere. Issues of concern to ports include: taxing authority, authority of commissioners, transportation, broadband, and port access to public works trust fund. It was noted that access to the trust fund will be based on net ecological gain, but no one knows what that means.
Commissioner Faires asked if the letter included any comment about competition between the private sector doing broadband and the competing legislative initiatives. Commissioner Orvis answered that broadband is a big deal and $411 million has been allocated to it. The rules were changed to allow smaller entities to partner on projects. The legislature also allocated significant funding for port infrastructure if it is shovel-ready. The WPPA is looking at rejuvenating committees and having them go back to providing input on proposed legislation.
Commissioner Johnston said he participated in the same meetings as Commissioner Orvis and had little to add. In addition, he attended the Finance Committee meeting.
Commissioner Faires reported that he participated in the Edmonds Economic Development Commission (EDC) meeting on June 16 where there was a long discussion on parking that obviated the potential for a parking structure at the corner of Dayton Street and Admiral Way because the lot is too small. They are getting ready to do another survey of Edmonds citizens relative to “is there a parking problem and how can it be solved.” Of particular interest to the Port, a meeting with Nicole Hughes, president of the EDC, has been set for July 1st to discuss economic and business development on the waterfront. The focus will be on the Port and the Edmonds Waterfront Center. He and Commissioner Harris will attend the meeting, along with Mr. McChesney and others. He will provide a report at the next meeting.
Commissioner Preston reported that he received an email from the Northwest Marine Trade Association (NMTA) announcing that the fall meeting will be September 30th and October 1st in Bremerton. He looks forward to attending that event.
Commissioner Preston asked Mr. Baker to report on Port activity. Mr. Baker confirmed that the marina is busy, and the crew has been doing well. Activity has been way up over the last two weekends.
Commissioner Preston commented that he is glad the Port will be considering other music genres as part of the Sea Jazz program. He voiced appreciation for Pete Bennett’s help with the event, noting that Mr. Bennett’s family are long-time residents of Edmonds.
Commissioner Preston reported that he participated in a Downtown Edmonds Merchant Association (DEMA) meeting, where it was reported that activity at the weekend Main Street events has been slow, even for restaurants. He said he attended the June 22nd City Council meeting, as well, where there has been a lot of discussion about trees. While it seems that the City Council is attempting to micro-manage trees on private properties, no one has mentioned the tens of thousands of trees that have been cut down along the Interstate 5 corridor for Sound Transit. He suggested there needs to be a better balance.
Commissioner Harris said she also attended several of the meetings that have been discussed, and she plans to attend the upcoming meeting with Nicole Hughes regarding waterfront economic and business development. She reported that she attended the Edmonds City Council’s Housing Study Session on June 24th, but she was surprised that there was no in-depth discussion. In addition, she announced that she would attend the Puget Sound Regional Council’s (PSRCs) Growth Management Policy Board Meeting on July 1st, where they will talk more about releasing the draft Regional Housing Strategy for public comment.
The Commission meeting was adjourned at 8:15 p.m.
Steve Johnston, Port Commission Secretary