MINUTES FROM THE REGULAR MEETING
OF THE PORT OF HOODSPORT COMMISSION
October 8, 2008
Call to Order: 9:35am Adjourned: 12:35pm
Roll Call: Commissioner Benavente
Commissioner Hamlin
Commissioner Wyatt
Staff Present: Rich McEachin, Exec. Director
Terry Veitz, Admin. Asst.
Approval of Agenda: Commissioner Wyatt made a motion to approve the October 8, 2008 regular meeting agenda as presented. Commissioner Hamlin made the second, passed unanimously.
Public: Tim Sheldon, County Commissioner, related the concerns he was hearing from the public regarding purchase of the building, purchase price, terms, return on investment, and encumbering future Commissions. He also stated his concerns with past
Port activities such as purchase of used furniture, the price of the old dock sale, and Commissioner time sheets being inaccurately calculated. He stated
he felt that the Commission should cease other Port work and deal with the State Auditor issues.
Mike Petz, citizen, thanked the Commissioner for the response letter from the Executive Director, but he feels the building purchase is still a concern. Mr. Petz provided the Commission with a copy of a return on investment analysis he prepared.
Don LeMaster, PDA representative, stated that he is the seller of the building and he provided the Port with the building operating data. He stated that Mr. Petz’s analysis didn’t include a reversion scenario, which would change his findings substantially.
Tom Sheldon, citizen, related the potential issues related to a private landlord vs. public landlord. He stated that a public landlord must charge a private lessee or renter, excise tax at a rate of 12.84%.
Jean Claude Paris, citizen, requested that the Port initiate a professionally done analysis so the public has better calculations regarding the purchase of the building. He further requested several financial documents regarding the Ports operations.
Kathy Fertitta, citizen, asked what the reason was gor the Port to have an office. Commissioner Benavente explained that besides the need to do day to day business, the EAB meets there monthly, the Commission at least twice monthly, and the PDA meets twice monthly. Dick Patterson, citizen, further stated that the Port is the only organization that locally represents the tax payers. The Port is able to bring taxes back to the community via the County.
Tom Sheldon, citizen, stated that he wants to see the best use of tax money. He agreed that the Port needs the office space, but renting space or owning a building is the question. Kathy Fertitta asked why the Port hasn’t looked at other buildings. Commissioner Benavente explained the plans of previous years in which the Port would own a building and make any open office space an incubator scenario. The plan
today is the same plan as previous years.
Jack Janda, citizen, stated his concerns related to Tim Sheldon’s allegations related to Commissioners time sheets and feels it needs to be cleared up. Commissioner Benavente related that the issues are being addressed and whatever the outcome, he will do what is necessary. He further stated he was not the only one and there was never an intent to do
wrong. Dick Patterson related that he also did his time sheets incorrectly, but it would be corrected.
Exec. Director McEachin stated that it appears the incorrectness of time sheets has been going on for years with the Commissioners and it was not known it was incorrect until recently pointed out by the State Auditor.
Tim Sheldon related that they need to talk more about the building purchase. He added his concerns regarding the Port budget. Tax revenues will go down.
Kathy Fertitta asked who suggested that the Port purchase the building and Don LeMaster related that he owns the building and that he made the suggestion.
Gary Carlberg, Potlatch Municipal Water representative, related that they charge a $300 per year assessment for capital improvements. He further added that though it hasn’t been formally approved yet, a membership fee for building owners is being discussed and it would be $3,000 up front. The Port should include those costs in their building purchase and budget analysis.
Steve Pottle, MFA, asked about the feasibility study and if the Commission would be making a decision on the bids they received. Commissioner Benavente explained that the issue would be discussed later in the meeting agenda.
Mike Petz requested that the Commission relate the status of the building purchase and asked how the public can be assured that their questions and concerns will be answered. Commissioner Benavente related that an updated appraisal had been received, but all Commissioners hadn’t had the opportunity to review it. They also need to talk further with the accountant and legal counsel. He further related that the seller had agreed to
an extension of the contract time limits.
Jack Janda asked if Commissioner Wyatt and/or Commissioner Hamlin had any comments on what they had heard regarding the building purchase. Commissioner Hamlin stated that he felt it would be inappropriate to comment without review of all the current information. He further stated that the Port needs a facility for meetings and for the avenue it provides the public to address the Port. He stated that the current building does meet the needs of the Port, whatever the decision may be, to
rent, lease or own.
Don LeMaster related that when he represented the Port regarding real estate matters, he was asked to look at potential properties. I offered my building to expedite that request. I felt the offer gave the Port a good building, a good price and good terms. Commissioner Benavente added that Port had opportunities in the past to purchase a building and it never happened. Funding has always been difficult and owner financing within
the current terms is worth looking at.
Commissioner Reports:
Commissioners Benavente, Hamlin and Wyatt had no reports.
Executive Director Report: Executive Director McEachin reported that most of his
recent work is included in the lengthy agenda. He also reported that he is working with
the State Auditor to provide requested information. He is also providing information for an audit that had not been requested since 2004. He will be providing information to the Auditor for years 2005, 2006, and 2007.
Consent Agenda:
Minutes: Commissioner Hamlin made a motion to approve the minutes of September 24, 2008 as referenced. Commissioner Wyatt made the second, passed unanimously.
Vouchers: Commissioner Wyatt made a motion to approve vouchers 10 – 1, pages 1 and 2. Commissioner Hamlin made the second, passed unanimously.
Old Business:
1. Executive Director McEachin explained that the feasibility study was required to go
forth with grant acquisition for Port projects. The Port received 3 bids on the RFP at $32,000, $35,000, and $50,000. There is a 50% match if the CERB grant is obtained.
Executive Director McEachin added that 25% of the Port match can be in-kind, which would be his time and pay and the other 25% required is cash. Commissioner Benavente related that the match within the Port budget is very important. A representative from Maul, Foster, Alongi, stated that if selected, their company will work with the Port within the budget to complete the study. Commissioner Hamlin made a motion to proceed with the CERB grant acquisition at the $50,000 level. Commissioner Wyatt made the second, passed unanimously. The Commissioners felt that they didn’t need to select a specific contractor at this time from the three RFP’s received.
2. Lodging Tax Event Funding: Executive Director McEachin asked the Commission if they had any events that they would like to put forth in a request for lodging tax funds. The Commissioners had no events to put forth.
New Business: Executive Director McEachin related to the Commission that the contract before them was for legal services and introduced Art Blauvelt, attorney at law from the firm of Ingram, Zelasko & Goodwin. Mr. Blauvelt gave the Commission information regarding his credentials. Commissioner Hamlin made a motion to have the Port enter into the contract and authorize the Executive Director to sign the contract. Commissioner Wyatt made the second, passed unanimously.
Recess: Commissioner Benavente called for a recess of the regular meeting at 11:07am.
Reconvene: At 11:24am, the Regular meeting reconvened. At 11:25am, Commissioner Wyatt made a motion to recess the Regular meeting and convene into the Public Hearing. Commissioner Hamlin made the second, passed unanimously.
Public Hearing:
1. Proposed 2008 Supplemental Budget: Executive Director McEachin related that the supplemental budget reflects changes that have occurred since the original budget was approved. He added that it also includes $50,000 from the investment pool for the down payment on the building purchase if the Commission should decide to complete the purchase. He further related that as of July 31st, the investment pool has a balance of $273,000. Kathy Fertitta stated that she understood that the Port can’t operate the car wash, but can lease it out. Commissioner Benavente stated that was true, but there are lots of things to look at with the purchase of the building. Kathy further asked how much the Exec. Director was paid and Exec. Director McEachin stated that he was a contractor with the Port at $36,000 per year. He added that the Administrative Assistant was also a contractor with an annual pay of approximately $12,000. Kathy questioned lodging, mileage, per diem, and the purchase of furniture. She further asked what other expenses have been paid regarding the purchase of the building. Executive Director McEachin related that the Port paid half of the appraisal costs and $5,000 down. If the Port goes forth with the purchase, they would pay another $50,000 at closing. Kathy related that she felt the $50,000 would be better spent on the Restroom project, not purchase of the building. Jean Claude Paris, Jack Janda, Mike Petz, and Gary Carlsberg all spoke in agreement with Kathy’s statement regarding the building purchase and the use of the $50,000. Commissioner Benavente stated how much he appreciated the public input, for the Commission can’t always know what the public is thinking. Don LeMaster related that he chaired the EAB for 4 years and public participation is only now coming forth. He urged people to join the EAB to have a more formal means of communicating and working with the Port Commission. Kathy stated that the per diem issue had been aired earlier and asked if the $9,400 under Commissions was for each. Commissioner Benavente stated that each Commissioner is budgeted at $9,400 as a ceiling amount. It is not a yearly salary, but is a not to exceed budgeted amount to cover per diems. Gary Carlberg stated that he was interested in attending the EAB meetings and asked when and what time they are held. Commissioner Benavente stated the EAB meets on the 2nd Wednesday of each month at 8am at the Port office. Jack Janda related his concerns as to whether public comments made earlier in the meeting regarding the budget and/or purchase of the building need to be put forth again for the purpose of the Public Hearing. He wanted to be assured that the public comments under Public Communication would be considered testimony during this hearing. Art Blauvelt, attorney at law, stated that it is presumed that the Commission account for all public input when making decisions, however, under the Open Public Meetings Act, there is no obligation to take public comments, it is the sole decision of the Commission whether to solicit public comments. Kathy asked if the Commission felt the $500 in the budget for Legal Services was adequate, since Mr. Blauvelt charges $180 per hour. Executive Director McEachin stated that he has factored an increase in the preliminary budget for 2009, but if a further adjustment needs to be made in 2008, the Commission can make another amendment. Commissioner Benavente asked if there was further public comment for the purposes of the Public Hearing regarding the 2008 Supplemental Budget and there was none.
2.Discussion regarding citizen concerns with the Port: The public had entered numerous concerns into the meeting record during Public Communications and the Public Hearing regarding the budget, thus this agenda item was felt to be repetitious. No further discussion was entered.
At 11:53am, Commissioner Hamlin made a motion to adjourn the Public Hearing and reconvene the Regular meeting. Commissioner Wyatt made the second, passed unanimously.
New Business (Continued):
1. Amendment to the Building Purchase and Sales Agreement: Exec. Commissioner Wyatt recused himself from discussion and/or action in regard to this issue on the agenda. Director McEachin related to the Commission that he sought legal advice from Art Blauvelt in regards to this issue. Mr. Blauvelt related details of the Port’s abilities when purchasing property. Port’s can purchase and/or lease property and Port’s have Economic Development authorization. He further related his concerns with the current contract due to it being a deed of trust, not a real estate contract. Under RCW 53.08.010, Port’s can purchase property with cash or deferred payments for no more than 20 years, thus a real estate contract is the proper avenue. The proposed amendment to the current contract would change the contract to a real estate contract, not a deed of trust. The extension of time has already been agreed upon, but an amendment to page 4 of 5 has also been agreed to by the seller. This amendment would allow the Port to lease and/or rent portions of the property without consent of the seller. Commissioner Benavente stated that more time needs to be taken to sort out concerns, but the issue before the Commission is only a modification to the current agreement for the correct language. Kathy Fertitta stated that she felt the Port should not approve the amendment and get out of it now. She further asked if there was an escape clause. Art Blauvelt explained that there are remedies, but he would not discussed them out of Executive Session. Jack Zanda stated that the Board should not approve the contract amendment and they should table it. Jean Claude Paris agreed. Don LeMaster stated that it is the law that requires the amendments be done. Kathy commented that she didn’t feel the original contract was valid, so it gives the Port an out. Commissioner Benavente stated that his interest was to correct the errors in the original contract to make it right, but after hearing several comments, Commissioner Benavente suggested that the Commission Table the issue at this point for further review and consideration. Commissioner Hamlin concurred with Commissioner Benavente. Commissioner Hamlin made a motion to Table the issue. Commissioner Benavente made a second. Commissioner Hamlin and Benavente voted in favor of Tabling the issue. Commissioner Wyatt abstained.
2. Resolution to approve the proposed 2008 Supplemental Budget: Commissioner Wyatt recused himself from discussion and/or action in regard to this issue on the agenda. Executive Director McEachin read the Resolution by Title. Commissioner Hamlin made a motion to approve the 2008 Supplemental Budget as drafted and presented. Commissioner Benavente made a second. Commissioner Hamlin and Benavente voted in favor of the Resolution. Commissioner Wyatt abstained.
3. Discussion/Direction regarding the 2009 Preliminary Budget: Executive Director McEachin related that he provide the Commission with 3 budget scenarios. All three have a negative ending balance. He also suggested that the Port consider making a request for REET funds from the County to offset grant match costs. Commissioner Benavente related that it was difficult for the Port with such limited resources. An Exec. Dir is paid to research and acquire grants, but we may not have the funding for the required match. Exec. Director McEachin stated that he has a 90 day clause in his contract and if it were the Commissions desire, he would put forth his resignation to become effective January 1, 2009. He related that his annual contract of $36,000 would help with the ending balance deficit in each of the 3 scenarios presented. Jean Claude Paris stated that the Port needs to invest in the people, especially the Executive Director, who has demonstrated his abilities in a very professional manner. Mike Petz asked what the reserves can be used for. The Exec. Dir. responded that the investment pool funds can be used for anything. Mr. Petz asked that the Commissioners not buy the building, pay for the Exec. Dir. position and match for grants. Kathy stated that the Port needs the people and they should continue to rent the office space, not purchase the building. Commissioner Hamlin made a motion to Table the decision until the next meeting. Commissioner Wyatt made a second, passed unanimously.
4. Resolution authorizing the Exec. Director to apply for an RCO grant: Exec. Director McEachin read the Resolution by Title. He related to the Commission that the application had already been made and he was scheduled to make a presentation in Olympia tomorrow for the grant. Commissioner Wyatt made a motion to approve the Resolution as read. Commissioner Hamlin made a second, passed unanimously.
Adjourn: Commissioner Benavente adjourned the meeting at 12:35pm
Minutes Approved: October 22, 2008
_________________________ _______________________ ______________________
Commissioner Benavente Commissioner Hamlin Commissioner Wyatt