28 May Special Commission Meeting Minutes 5-11-20
PORT COMMISSION OF THE PORT OF EDMONDS MINUTES OF SPECIAL MEETING
(Via Zoom) May 11, 2020
Jim Orvis, President
Angela Harris, Vice President
David Preston, Secretary
Bob McChesney, Executive Director
Marla Kempf, Deputy Director
Tina Drennan, Finance Manager
Renae Ebel, Administrative Assistant
Karin Michaud, Office Manager
Brittany Williams, Manager of Properties and Marketing
Bradford Cattle, Port Attorney
CALL TO ORDER
President Orvis called the special meeting to order at 1:00 p.m. The meeting was immediately adjourned to an executive session. The business portion of the meeting was reconvened at 2:00 p.m.
Commissioner Orvis announced that the Commission recessed into an Executive Session pursuant to RCW 42.30.110(1)(g) to review the performance of a public employee. He advised that no action was taken at the Executive Session.
PLEDGE OF ALLEGIANCE
All those in attendance participated in the Pledge of Allegiance to the American Flag.
COMMISSIONER FAIRES MOVED THAT THE CONSENT AGENDA BE APPROVED TO INCLUDE THE FOLLOWING ITEMS:
A. APPROVAL OF AGENDA
B. APPROVAL OF APRIL 27, 2020 MEETING MINUTES
C. APPROVAL OF PAYMENTS IN THE AMOUNT OF $1,430,720.49
COMMISSIONER PRESTON SECONDED THE MOTION, WHICH CARRIED UNANIMOUSLY.
James Thompson, Executive Director, Washington Public Port Association (WPPA), reported that the WPPA is continuing to deliver services to its members remotely. They are anticipating a legislative session, perhaps as soon as late June, to cut the budget and take on some policy bills, and the WPPA is working to develop a response to the items that might be discussed at the session. The Legislative Committee will be meeting together soon. He encouraged the Port staff and the Commissioners to contact him via email or telephone if they need assistance.
Commissioner Faires recalled that the Legislature gave special emergency powers to Governor Inslee. He asked if there has been any formal action contrary to the actions of the governor. Mr. Thompson responded that the governor has the ability to declare an emergency for 30 days. He also has the ability to make proclamations that can relax state statutes. The ones that most directly effect ports are related to the Open Public Meetings Act, the Open Public Records Act, and an extension for filing financial records by local governments, like ports. The proclamations extend through May 31st; and further extensions require approval from the democrats and republicans of both the house and senate. The WPPA has asked that the three proclamations to be extended to July 1st. Doing so would take pressure off of ports to complete financial reporting obligations when people can’t come into the office, and it would also give ports the ability to continue to hold virtual public meetings, as necessary.
Ms. Williams announced that the Commission did not receive any public comments via the public comments email address.
PUBLIC HEARING ON THE PUBLIC ACCESS PLAN
Commissioner Orvis opened the public hearing for the Port’s Public Access Plan, the Comprehensive Scheme of Harbor Improvements, and the Capital Budget. Mr. Cattle briefly addressed the nature of the public hearing in relation to the governor’s recent proclamations that effect the way local jurisdictions do business. In particular, Proclamation 2028 allows local jurisdictions, including ports, to conduct meetings remotely. However, they can only do so to conduct matters that are necessary and routine or matters necessary to respond to the Covid-19 pandemic. He emphasized that the subject of the public hearing is a necessary and routine matter. It is time sensitive and cannot wait until the governor has lifted the proclamation. The Port is seeking grant funding, and the application deadline is approaching. The Port Commission regularly conducts public hearings for amendments to its Comprehensive Scheme of Harbor Improvements, as well as its Capital budget. Therefore, the subject of the hearing would qualify for both the necessary component and the routine component.
Mr. McChesney clarified that the Port doesn’t have a pending grant application submittal at this time. The subject of the hearing is an enablement required by the Recreation and Conservation Office (RCO) in order to qualify for potential future grant applications, and the deadline is June 1st. The deadline has already been extended twice, so there is a time imperative attached to the proposal.
Ms. Drennan announced that the public hearing was advertised in the newspaper on May 1st as a public hearing on Zoom, and the packet has been on the Port’s website since May 1st, as well. Ordinarily, the Port would hold a public hearing with testimony in person. However, as the Port has adopted Covid-19 social distancing and the RCO’s deadline is June 1st, the public hearing must be held remotely. The public will have an opportunity to make comments on any element of the Public Access Plan, Comprehensive Scheme of Harbor Improvements and Capital Budget via Zoom. The public was also invited to email their comments, which could be read into the record.
Ms. Drennan said the subject of the hearing is a proposal to add the Public Access Plan that was presented to the Commission in November to the Comprehensive Scheme of Harbor Improvements and to add the proposed projects to the Capital Budget. She advised that comments from the public should be taken into consideration by the Commission.
Ms. Williams indicated that no written comments were submitted via email and no one indicated a desire to comment via Zoom. Commissioner Orvis pointed out that a number of people commented throughout the Public Access Plan process, and the current plan reflects the comments and desires of a significant number of tenants and citizens.
Commissioner Orvis closed the public hearing.
RESOLUTION NO. 20-02, AMENDING THE PORT’S COMPREHENSIVE SCHEME OF HARBOR IMPROVEMENTS AND THE CAPITAL BUDGET
COMMISSIONER FAIRES MOVED THAT THE COMMISSION APPROVE RESOLUTION NO. 20-02, AMENDING THE PORT’S COMPREHENSIVE SCHEME OF HARBOR IMPROVEMENTS AND THE CAPITAL BUDGET. COMMISSIONER JOHNSTON SECONDED THE MOTION.
Commissioner Faires commented that the implementation schedule in the Public Access Plan will be impacted by the Covid-19 pandemic, and flexibility will be required moving forward. The plan would remain the same, but the speed of implementation will be impacted by the direct effects of Covid-19 on the Port’s budget and the indirect effect on priorities. Mr. McChesney explained that the RCO requires that the specific projects identified in the Public Access Plan be itemized in the Capital Budget, but it is not a commitment to maintain that schedule going forward.
Commissioner Orvis observed that the vast majority of the actions in the Public Access Plan are recurring projects that could be done overtime even without grant funding. Most of the projects identified in the plan are cosmetic and maintenance related. Mr. McChesney agreed that the projects are primarily modernization and refurbishment of existing facilities.
THE MOTION CARRIED UNANIMOUSLY.
COVID-19 FINANCIAL FORECAST
Mr. McChesney advised that staff has been working to measure the potential impacts of the Covid-19 closure, including financial impacts. The report is a first look at what the Port might anticipate, recognizing that the assumptions are broad and subject to change as time goes by.
Ms. Drennan explained that, in response to Covid-19 cases in the United States and the models, Governor Inslee issued a stay-at-home order effective March 23rd, and the Port temporarily discontinued providing services such as launching vessels, selling fuel, hauling vessels to the boatyard, and returning them to the water. Approximately one-fifth of the working population in Washington has been either laid off or furloughed. She further explained that the State and Port closures have affected Port revenues and may continue to do so, as some businesses have not been allowed to open. The Port may see reduced revenues from boating tenants and customers if they have to cut their expenses. The Port has offered rent deferral to its commercial tenants, so that won’t likely impact revenues, but some tenants may decide not to renew their leases.
Mr. Drennan referred to the Port forecast showing the details of the Port as a whole and the Marina, Rental Property and Overhead forecasts showing the possible revenues and expenses for 2020. The notes that were also attached to the Staff Report show the assumptions for the forecasted amounts. She summarized that it appears the Covid-19 pandemic will have the most effect on marina revenues. She reviewed the documents, specifically noting the following:
• Permanent Moorage. A 3% vacancy was budgeted, and she assumed the vacancy might reach 8% if tenants lose their jobs and have to cut their expenses. This increased vacancy will impact environmental and electrical fees, as well.
• Workyard. She assumed revenue would be about 70% of the 2019 revenue due to closures.
• Fuel Sales. The cost of fuel is now a lot less that what the Port paid for the fuel currently in the tanks. She assumed the difference between the sales and costs will be 10% instead of 25%.
• Launcher. She assumed an April to June closure and then 75% activity for the remainder of the year.
• Miscellaneous. She assumed that miscellaneous revenues would be about 50% of the 2019 total.
• Guest Moorage. She assumed that guest moorage revenues would be about 70% of the 2019 total.
• Passenger Fees. Puget Sound Express went out in March but not in April. She doesn’t know if they will go out in May either. Even if they can go out, they can only accommodate 50% of the boat capacity. She assumed that passenger fees would be 50% of the 2019 total.
• Dry Storage. She budgeted an 11% vacancy, and she assumed a 20% vacancy. In April, the Port charged at the pay-per-move rate, which was quite a bit lower than the regular rate, because the tenants didn’t have access to their boats. The assumption is that the 2nd quarter would remain all off-peak rates.
• Parking. She assumed 50% of 2019 totals.
• Travelift. She assumed 70% of 2019 totals.
• Late Fee Waivers. She assumed there would be additional late fee waivers.
• Bad Debt Expense. She assumed that this expense could double.
• Business Taxes. She assumed that business taxes would decrease due to the decrease in activity.
• Employee Benefits. She assumed they would only hire 50% of the seasonal staff.
• Repair and Maintenance. She assumed no gutter replacement of $75,000, no roads and parking lot resurfacing at Harbor Square for $50,000, and a 50% reduction in projects to implement the Public Access Plan.
• Rental Property Revenue. She assumed a 5% decrease in revenue for Harbor Square and a 10% decrease for rental properties on the west side of Admiral Way.
• Insurance. She assumed the Port may see an additional 10% increase in insurance. Insurance runs from September to August.
• Commuter Parking. She assumed that because a lot of people aren’t going to work, the demand for commuter parking will decrease.
• Meals. She assumed a 25% decrease.
• Work-at-Home Capabilities. She assumed an increase of $15,000 for work-at-home capabilities. Laptops were purchased so that administrative staff could work from home.
• Travel. She assumed a 50% reduction in travel expenses due to social distancing. Staff and Commissioners may not be able to travel to conferences, as they have done in the past.
• Interest Income. She assumed a 25% reduction due to the decrease in interest rates. She purchased a lot of non-callable bonds, but the callable ones are being called as soon as it is possible.
Mr. McChesney asked Ms. Drennan to share what she believes the Port can expect as far as a reduction of net income overall. Ms. Drennan responded that the budgeted net income was $2,338,000. Based on the forecast, she anticipates it will be $1,634,000, which equates to a reduction of about $700,000. Mr. McChesney commented that staff is doing everything it can to watch dollars, deferring some capital expenses. For example, he would not recommend they go forward with the Travelift ramp replacement project in 2020. Some of the remodel projects can be deferred, as well.
Commissioner Preston suggested that staff should present an updated forecast in mid-August. Mr. McChesney agreed and noted that would be in line with the beginning of the budget process.
Commissioner Faires observed that, at this time, the Port is just beginning to sort out what reality might emerge. He said he anticipates that the forecast presented by staff is a little on the conservative side, which is exactly as it should be right now. He suggested the Port should not make any strategic changes until they have a better understanding of the impacts.
Commissioner Orvis cautioned against making the decision now to put off all capital projects. He commented that, as businesses start to recover, the Port may be able to move forward with capital projects at a lower cost than might be possible a year from now. The Port has cash to do some of their capital projects, and they should be capitalizing on opportunities to get projects done at a lower cost. Commissioner Faires agreed and commented that moving forward with capital projects would also help from the standpoint of getting people back to work.
Commissioner Johnston asked if there has been an uptick in sales since the fuel dock has been reopened. Ms. Kempf answered that unleaded fuel sales have increased and it is nearly time to order more fuel. Diesel sales are still down because the primary purchaser (Puget Sound Express) is not currently operating. Commissioner Johnston suggested they consider increasing the staffing level at the fuel dock to expand beyond dock-and-pay customers only.
REVIEW AND DISCUSSION OF RESOLUTION NO. 20-03, COVID-19 EMERGENCY DECLARATION, RESOLUTION 20-03 FOR REVIEW AND DISCUSSION
Mr. McChesney reported that there have been no emergency actions taken by him or staff that haven’t already been approved by the Commission. Staff has been abiding by the plans put forward and subsequently modified. The emergency resolution was warranted and staff has abided by it.
Commissioner Faires expressed his belief that the plan currently in place is working. He would rather be a bit conservative than too aggressive. He doesn’t want any of the Port’s staff or tenants to contract Covid-19. He agrees with Governor Inslee’s approach, as well as the actions taken by the Port that go a bit beyond what the Governor’s mandate required. The Port is doing a good job of balancing the economy of the businesses at the Port, as well as the safety of tenants and employees. Going forward, he would be in favor of opening up a bit more to support the economic well-being of the community.
Mr. McChesney gave a shout out to all Port staff, and particularly Marina Operations Staff, for holding down the fort. At the last meeting, staff presented Phase 1 of a soft-opening plan and is now proposing a Phase 2 plan.
Ms. Kempf presented staff’s proposal for operational adjustments and service expansions beginning May 17th. She said the proposed changes reflect the Port’s current staffing capability with no seasonal positions hired. She reviewed the proposed plan as follows:
• Staffing. Currently, staff members are physically at the facility 3 days of their 4-day work week. The proposed plan calls for an alternating work week, with staff back 4 days one week and 3 days the next week. Because the office space is small, they need to rotate staff to accommodate the required social distancing. They are hoping to make offers for at least 2 or 3 seasonal staff starting June 1st, in hopes that the Port will be fully operational by that time.
• Dry Storage. The current scenario will remain in place through May. Hours of operation will be 7:00 a.m. to 2:00 p.m., and moves will be by appointment only. Boats will be placed on every other washdown to maintain physical distancing. Off-season rates will remain in place until May 31st. Full operational hours will be offered starting on June 1st, and peak season rates will apply.
• Public Launch. The public launch will be open to the tenants and public from 7 a.m. to 5 p.m., by appointment only, with the last reservation being at 4:45 p.m. Only debit and credit card payments will be accepted, with no cash transactions. Protective measures are in place to allow staff to assist customers at the Marina Operations window.
• Fuel Dock. Pay-at-the-pump service will continue to be available 24 hours a day. Staff can start training tenants and issuing fuel cards to tenants at specific times (Tuesdays, Fridays and Sundays at 10 a.m., 11 a.m., 12 p.m. and 1 p.m.) As of May 17th, the fuel dock will be opened to everyone on limited days and hours (Friday through Sunday 8 a.m. to 4 p.m.) The fuel house door will remain closed and payment will be via credit and debit cards through the window only.
• Travelift and Boatyard. The Travelift hours will be Monday through Wednesday from 9 a.m. to 2 p.m. by appointment only for both haul outs and drop ins. Credit and debit cards will be the only method of payment for customers who are not tenants with accounts. Boatyard access will be granted daily from 7 a.m. to 5 p.m. Beginning May 17th, we will be charging boatyard days at 50% to everyone in the yard because of the limited hours.
• Moorage and Marina Office. Business will be conducted through the south window behind the protective guard. Only debit and credit card payments will be accepted.
• Sign Ups. We have been trying to do sign ups remotely. We will continue to use a hybrid approach where most are done remotely, with some done at the front window.
Ms. Kempf reported that, since March 1st, the Port has done 33 moorage assignments. There have been 21 terminations in water moorage and 7 in dry storage, and 13 were directly related to the pandemic. As of today, there are 15 vacant spaces in water moorage, and there are 13 pending sign ups. Dry storage has 34 vacant spaces, with 28 in the 21’11” category. Of the 34 vacant spaces, they have 10 pending sign ups.
Mr. McChesney expressed his belief that the proposed Phase 2 plan represents a reasonable way to move forward with safety of the employees and customers in mind.
Commissioner Faires observed that the proposed Phase 2 Plan appears to be conservatively aggressive. He asked how the Port will know if it is pushing too hard. What parameters will staff be monitoring? Mr. McChesney pointed out that the Port has been directly affected by the City’s decision to open the parks. Visitors must go through the Port to access Marina Beach Park, and this past weekend is a great example of what can happen. Not everyone follows the social distancing and mask recommendations, and this puts Port employees in jeopardy. He discussed this concern with Mayor Nelson last week. He said it would be hard for him to imagine a situation where the Port is pushing too hard to open. Staff feels obligated to open the Port as quickly as is safe and reasonable. They want to exercise the facilities and engage with customers.
Commissioner Orvis asked if vendors would have priority access to the Travelift so they aren’t displaced in the process of opening the marina. He also suggested they consider excluding the public from certain areas, particularly around boat launching, where staff has to be working but there is currently very little control over pedestrian traffic. Mr. McChesney said staff has considered this option but determined it isn’t practical to put up barriers to public ingress and egress. Even closing down the public plaza is not possible without putting up fence panels. Staff has concluded that crowd control is not something the Port can easily do without creating more visible disruption. It is the Port’s responsibility to educate and inform its employees on how to stay safe and avoid situations where they may come in contact with the public. However, the intent is to keep the public restrooms closed for the foreseeable future.
Commissioner Faires agreed that the Port has a responsibility to keep staff safe. However, they also have a shared responsibility to keep the public safe at the public port that offers public amenities. He recognized this would be difficult, but he felt it was the Port’s job to make sure visitors are moving along and behaving appropriately while enjoying the public amenities at the Port. Mr. McChesney agreed in principle but was not sure how the Port could enforce that from a practical standpoint.
Commissioner Preston observed that most people are self-regulating. He said he supports the Phase 2 Plan and doesn’t believe it is too aggressive based on what other ports are already doing. Commissioner Johnston also voiced support for the Phase 2 Plan. He suggested that the best results will come from allowing the staff professionals to implement, observe and correct as they go through the process. Commissioner Harris said she would also defer to the staff knowing the right thing to do.
Commissioner Orvis summarized that the Commission is in general agreement with the Phase 2 Plan. They support continuing with the resolution as modified by staff.
EXECUTIVE DIRECTOR’S REPORT
Mr. McChesney thanked the Commissioners for their support in moving forward through this difficult time. Port staff has been working very hard, paying attention to figure out ways to make the best out of a very sad and bad situation.
Mr. McChesney reported that the Harbor Square Building 3 Project is ongoing, but the four change orders previously approved by the Commission are starting to run over. The primary reason is the Covid-19 pandemic. Contractors have to abide by strict rules for distancing and personal protective equipment, and this slows production down by as much as 25% to 30%. This will have a material effect on the final cost of the project, and staff will provide a full report at the next meeting. He commended Ms. Williams for her good work with tenants to minimize disruptions and listen to and address their concerns.
COMMISSIONER’S COMMENTS AND COMMITTEE REPORTS
Commissioner Faires asked about the status of the engineering report on North Marina Boardwalk. This information will be important to consider as they move forward with implementation of the Public Access Plan. Mr. McChesney said he expects the Commissioners to have it in hand before the next meeting. The physical inspection by the outside engineer has been conducted and staff is waiting for the draft report.
Commissioner Preston announced that he would participate in the WPPA Webinar on May 12th. He said he has participated in the recent Downtown Edmonds Merchant Association’s virtual meetings and has enjoyed hearing what the merchants are doing to adjust to the Covid-19 requirements. Lastly, he asked that staff provide a link on the Port’s Facebook page to a Maritime Career Exploration Webinar on June 3rd, which was recently advertised on My Edmonds News. It is important to get kids and young adults aware of the benefits of the maritime industry.
Commissioner Harris reported that she attended the Economic Alliance of Snohomish County’s introduction seminar last week.
Commissioner Johnston gave a shout out to staff for staying flexible and meeting the crisis with great affect. He also advised that the Environmental Committee Meeting would be postponed until late May or early June.
James Thompson, Executive Director, WPPA, commented that the Commission runs a good meeting and did a good job of documenting its actions to make sure they are consistent with the Governor’s order and giving public notice for people to respond.
Susan Paine, Edmonds City Council, said that as part of her comments at the next City Council meeting, she will remind everyone that they need to mask up and mind distance when moving around people who are working.
The Commission meeting was adjourned at 3:06 p.m.
David Preston, Port Commission Secretary