An insurance rate increase at the airport and repairs at the Bellingham Shipping Terminal were among the main points of interest at the Port of Bellingham Commission regular meeting on July 9, 2019.
The public meeting began at 4:30 pm. Board President Ken Bell, Vice President Bobby Briscoe and Secretary Michael Shepard were all present with Shepard attending by phone.
First Public Comment Period –
Whatcom County resident and private pilot Jeffery Lustick spoke about rising insurance rates at Bellingham International Airport. He said a new policy will require renters of tie-downs and tee-hangers to purchase a $2-million general liability insurance policy, and that would double what he currently has to pay. He urged the commission to consider deferring the policy for a while to look at the numbers and look at the impact on pilot/owners. “I would hate to see people have to leave the airport because they just feel they can’t meet the insurance requirement,” Lustick said.
Karen Smith, president of the Chuckanut Flying Club, told commissioners she is also worried about the new insurance requirements at Bellingham International Airport. She asked them to consider the impact that higher rates will have on non-profit clubs that use the airport.
Eleven items were on the consent agenda. Item E was pulled and moved to Action Item 7. The following items (except Item E) were approved on a 3-0 vote:
A. Approve the minutes of the June 18, 2019, regular meeting.
B. Approve Amendment to the 2019 Capital Budget.
C. Approve the 2020 budget schedule.
D. Authorize the Executive Director to enter into an insurance contract and authorize payment for the renewal of the Port’s Property and Crime Insurance coverage for the period from July 1, 2019 through July 1, 2020.
E. Authorize the Executive Director to execute a Professional Services Agreement Amendment with Pacific Surveying and Engineering to complete bid and permit documents for the All American Marine Storage Yard and Hilton Avenue Improvement Project. This item was pulled and moved to Action Item 7.
F. Authorize the Executive Director to execute a purchase agreement with Strider Construction of Bellingham, WA, for the Squalicum Harbor Dock Box Purchase.
G. Approve the Lease Amendment #2 with the State of Alaska, Alaska Marine Highway System, located at the Bellingham Cruise Terminal.
H. Approve the Modification of Lease between the Port of Bellingham and H & I Holdings, LLC for premises on Squalicum Way.
I. Approve Modification of Airport Lease(s) between the Port of Bellingham and Bayside Hangar LLC (16); and a modification between the Port of Bellingham and Canyon Industries Inc. (20).
J. Approve an Airport Ground Lease with Alto Condominium Association at the Bellingham International Airport.
K. Authorize the Executive Director to execute the following documents in connection with Cohanim Bellwether LLC and Lombardi’s in Bellingham, LLC – Consent to Sublease Agreement, Subordination and Non-Disturbance Agreement, and Trademark Licensing Agreement.
Commissioner Bell asked about Consent Agenda Item G which would amend the lease agreement with the Alaska Marine Highway System (AMHS) for property at the Cruise Terminal. Up until May 2019, the AMHS had been contracting with Puglia Engineering to provide line-handling and ramp-tending services for the ferry system. But now Puglia has gone bankrupt and shut down, and AMHS is asking the Port to retain local longshoremen to provide those services until it can come up with a long-term plan. This agreement allows the Port to directly hire longshoremen from ILWU Local 7 to provide these services for AMHS. Commissioner Bell asked if taking on payroll also meant taking on the liability for those employees. Port Executive Rob Fix explained that if the longshoremen have an accident they would be covered by United States Longshore and Harbor Workers’ Insurance, but if they make a mistake and hurt somebody else, then that would be under the Port’s general liability.
Commissioner Briscoe thanked Port staff that went to Alaska and spoke on Whatcom County’s behalf to keep ferry service in Bellingham. The Alaska Marine Highway System is facing major budget cuts and for a while it looked like the ferry route to Bellingham could end. Alaska legislators have decided to continue the route to Bellingham through the winter but a smaller ferry will be used and voyages will be reduced.
UPDATE: The Alaska Department of Transportation has released a draft winter schedule for the Alaska Marine Highway System.
Action Items –
Item 1: Authorize the Executive Director to authorize the Port of Bellingham to enter into an Exclusive Negotiating Agreement between Millworks LLC and the Port of Bellingham for the 3-acre Lignin Parcel in the Waterfront District.
Environmental Programs Director Brian Gouran said with this agreement, the Port would take the parcel off the market while they work on a Memorandum of Understanding with Millworks. He said demolition of the existing buildings on the site is planned for fall or winter of 2019.
2. Authorize the Executive Director to execute a contract with Massana Construction of Gig Harbor, WA for the Bellingham Shipping Terminal Repairs Project – Phase III.
Jennifer Allen, Project Engineer for the Port, said this phase of the terminal repair project completes the steel pile repairs in the North Terminal, replaces the bull rail throughout the terminal, and removes the existing conveyor structure in the North Terminal. This phase of the project will start in August 2019 and should be completed in January 2020. Five contractors submitted bids ranging from $1,078,495 to $1,865,118, and Massana Construction was the responsible contractor with the lowest responsive bid.
Commissioner Briscoe asked why there was a nearly $800,000 difference between the lowest and highest bids. Allen said there was a wide range in what the contractors were charging for things like the shutdown time and the pile jacketing. Senior Project Engineer Greg Nicoll said they’ve seen a similar spread of bids for other projects that require pile jackets. Commissioner Bell said the fact that a non-local contractor was able to provide the lowest bid “makes you go ‘what?'”
Commissioner Briscoe said he believes these repairs are good investments because the shipping terminal historically generates a lot of revenue when it’s up and running. Executive Director Fix said the shipping terminal has the potential to do somewhere between $3-to-5-million a year in revenue if they start getting consistent business. He said the Port is watching the backlog of ships in Vancouver and Seattle, and it’s just a matter of time before one of those shipping lines calls Bellingham home.
3. Authorize the Executive Director to execute a contract with S.E.A. Construction, LLC for Shoreline Storm Damage Repairs. During the March 2016 storm event, various sections of shoreline along Bellingham Bay, extending from Marine Park to Squalicum Creek, incurred minor damage. These repairs generally consist of removal of existing bank armoring, placement of filter rock and placement of new and reused armor rock to reconstruct the banks in the various locations.
Project Engineer Jennifer Allen said the project will start in August 2019 and should be completed in mid-February 2020. Commissioner Shepard asked if they were “future-proofing” this construction: “Are we building this to last or are we just repairing it back to the previous standard it was at.” Allen said the filter material below the large armor rock was previously undersized but the new one will be sized appropriately. Shepard says we will continue to see these sort of damages occur as we experience more significant storm events and higher water levels in the future.
4. Authorize the Executive Director to execute an amendment to the existing Professional Services Agreement with Moffat & Nichol for the Bellingham Shipping Terminal Repair Projects – Phase III project.
Moffatt and Nichol prepared the design documents for Phase I of the BST Repair Project which included repairing timber piles and replacing old structural components. After those repairs were completed in early 2016, Moffatt and Nichol’s contract was amended to include design and permitting of the Phase III repairs. This latest amendment to their contract expands their scope to include construction administration support services.
Commissioners had no questions.
5. Authorize the Executive Director to execute a Professional Services Agreement with WSP, Inc. (formerly Berger Abam) for alternative analysis and preliminary design for the Blaine Harbor Sawtooth Pier Modifications project.
Senior Project Engineer Greg Nicoll described the history of the pier and three alternatives for repairing and updating it. When the pier was originally constructed, the slips were sized to fit the fishing vessels that were used at the time but fishing vessels have gotten significantly wider since then. This agreement would have provided an analysis of the three alternatives and the costs associated with each one. The pier is about 60 years old and had a typical useful life of 30 years. Nicoll said a possible fourth option would be to fully replace the pier, but exploring that option isn’t included in this contract.
Commissioners expressed a lot of interest in fully replacing the pier. Briscoe said if they decide to build a new pier they shouldn’t spend money on other designs they’re not going to use. Port Executive Rob Fix said he would prefer to design a new pier, but fixing the existing pier would take 3-to-5 years whereas building a new one would take more like 5-to-10 years. Commissioner Bell said when you look at the cost of maintaining the pier over time, they might as well build a new one.
“We could put a whole box of band-aids on that thing and it’s not going to quit bleeding,” Briscoe waxed poetic.
Nicoll said a new pier could last 50 years. Commissioners decided the best way to move forward was to vote down this agreement and start over with the option to replace the pier included in the analysis. Fix said staff would bring forward a new action item in September.
Item failed with all 3 commissioners voting no.
Second Public Comment Period –
New aircraft owner and airport hangar tenant Lyle Jansma spoke about the new insurance requirements at the airport. He said the airport has been integral part of his life and every little expense is important. Jansma asked commissioners what is the reason for this increase and why it is needed.
More Action Items
6. Authorize the Executive Director to execute a Professional Services Agreement (PSA) with Mead & Hunt to provide engineering consulting services for the Airport Runway Safety project.
The northeast corner of the Bellingham International Airport’s Runway Safety Area (RSA) does not meet required dimensional and grading design standards established by the FAA. Approximately 1,700 square feet of the required area is outside of the airport’s property line and is located within the I-5 right-of-way. After much evaluation and study, the Port and other government agencies decided that their preferred way to satisfy the FAA requirements was to extend the RSA into the I-5 right-of-way and build an earthen embankment. FAA will reimburse 90 percent of the costs. Construction is anticipated to begin in 2020.
“This has to be done because the FAA tells us it has to be done even though it may be silly and makes no sense,” Commissioner Bell summarized. “But they’re going to pay for it, and they’re going to tell us to do it, and we have to do it.”
“A massive amount of time and effort and money for a very little scrap of dirt,” Shepard said.
7. (Formerly Consent Agenda Item E) Authorize the Executive Director to execute a Professional Services Agreement Amendment with Pacific Surveying and Engineering (PS&E) to complete bid and permit documents for the All-American Marine Storage Yard and Hilton Ave. Improvement Project.
In response to a request from All-American Marine (AAM), the Port wants to build a parking area and storage yard on it’s property across the street from AAM’s existing manufacturing facility on Hilton Ave. The City of Bellingham (City) requires this development project to include approximately 400 linear feet of street frontage improvements along the northwestern side of Hilton Ave. In compliance with the City’s street standards, these improvements will add on-street parking, a concrete curb and gutter, and landscaping. (In 2016, the Port completed the required improvements on the southeastern side of Hilton Ave, including landscaping, a 10-foot sidewalk, curb, gutter, and two driving lanes.)
PS&E has completed its 30% design of the proposed frontage improvements and storage yard. This contract amendment would allow PS&E to incorporate feedback from the City, Port, and tenant in order to complete all of the documents necessary to permit the project and solicit public works bids.
Project Engineer Jon Gibson said the sidewalks and street improvements could be extended farther west down Hilton Ave. if desired. Executive Director Fix said Port staff have talked with the tenants there and neither were in favor of extending the improvements as it would interrupt their operations.
Other Business –
Commissioner Shepard talked about the airport insurance rate increase. He said the increased seems larger than expected, and he would like more information on the impact this will have on airport tenants.
Executive Director Fix said the airport is requiring $2-million in general liability insurance which is easy to obtain. He said some of the public comments they heard were about aircraft insurance which is different. Fix said he would like to see some quotes of exactly how much the monthly rates will increase. Commissioner Bell said he would also like to see some hard numbers on what the actual impact will be.
The Port’s Business and Commerce Committee gave a presentation on ways to help solve the housing crisis to the Whatcom County Council earlier on July 9th. Commissioner Shepard asked for an update on the presentation from Don Goldberg, who has been chairing the committee. Goldberg said the committee was looking for the council to be more open to what they recommended. The Business and Commerce Committee is a group of some of the largest employers in Whatcom County who have been meeting at the request of the County Council. Goldberg said the committee is trying to make it very clear that not only are businesses having a hard time growing here, but there are many businesses that are choosing not to come here because of the housing crisis. He said they’re looking for solution-driven answers, not roadblocks to why it can’t be done.
Commissioner Bell said some of the zoning laws in the county are antiquated, and the committee’s recommendation was to have an independent group look at the values of our community and possibly start over with zoning laws based on what can be done today. The recommendation was not well received by the council. Bell said he walked out of the meeting, and was disappointed to see a lot of resistance and push back to the ideas that were presented. Commissioner Briscoe said it’s disheartening that the committee was disregarded.
Goldberg said the committee’s message was heard and they don’t plan on stopping. He said the housing crisis is an issue that is occurring in all seven cities within the county, so the county should take a leading role on helping solve the crisis.