COMMISSION WORK SESSION AGENDA at Port of Port Angeles

March 21, 2017 9:00 AM

*Time Specific – Executive Session from 12:00 - 2:30 PM

I. CALL TO ORDER/PLEDGE OF ALLEGIANCE II. EARLY PUBLIC COMMENT SESSION (total session up to 10 minutes) III. DISCUSSION/QUESTIONS FOR AFTERNOON REGULAR MEETING

IV. WORK SESSION TOPICS

A. Time Specific 9:00 AM – 10:30 AM - State of Barging Industry Presentation by BST Associates and Pat Cohn with Pacific Terminals

B. 2017 Community Partner Program Applicant Presentations (pg. 1)

C. WPPA Legislative Committee update V. FUTURE AGENDA TOPICS

A. Work Session (pg. 2)

B. Business Meeting (pg. 3) VI. PUBLIC COMMENT SESSION (total session up to 20 minutes) VII. EXECUTIVE SESSION - The Board may recess into Executive Session for

those purposes authorized under Chapter 42.30 RCW, the Open Public Meetings Act.

VIII. ADJOURN

RULES FOR ATTENDING COMMISSION MEETING

• Signs, placards, and noise making devices including musical instruments are prohibited.

• Disruptive behavior by audience members is inappropriate and may result in removal.

• Loud comments, clapping, and booing may be considered disruptive and result in removal at the discretion of the Chair.

RULES FOR SPEAKING AT A COMMISSION MEETING

• Members of the public wishing to address the Board on general items may do so during the designated times on the agenda or when recognized by the Chair.

• Time allotted to each speaker is determined by the Chair and, in general, is limited to 3 minutes.

• Total time planned for each public comment period is 20 minutes, subject to change by the Chair.

• All comments should be made from the speaker’s rostrum and any individual making comments shall first state their name and address for the official record.

• Speakers should not comment more than once per meeting unless their comments pertain to a new topic they have not previously spoken about.

• In the event of a contentious topic with multiple speakers, the Chair will attempt to provide equal time for both sides.

BST Associates March 21, 2017

Define short sea shipping ◦ America’s Marine Highway System

Port of Port Angeles Studies ◦ 1992 ◦ 1999

Key Findings Examples

Barge Feasibility Study 2

Barge Feasibility Study 3

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M-495

M-29

M-146

Barge Feasibility Study 4

• Needs: • Move freight from origin to final

destination • Predictability and reliability • Reasonable transit time • On-time delivery • Service hours & frequency • Reasonable cost • Probability of getting space when needed • Probability of damage-free delivery • Security • Shipping convenience:

• Pick-up, drop-off, terminal locations, accessibility

• Services: bills of lading, insurance, tracking, etc.

• Environmental compatibility • Information: timely, correct, complete

Shippers and consignees are basically indifferent to mode choice or route, as long as their needs and concerns are met.

BST Associates 5

Barging opportunities require the following: ◦ Large Volumes ◦ Infrastructure ◦ Distance

Key Benefits: ◦ Cheaper freight rates Assuming above requirements have been met

◦ Reduction of public roadway degradation & traffic ◦ Fuel efficiency

Limitations: ◦ Cargo velocity ◦ Infrastructure ◦ Small volumes

Barge Feasibility Study 6

Seaspan, Presentation to BC Truckers Assn, 2015

Railroad barges connected Port Angeles through Port Townsend to Seattle and beyond.

The two barges in this service could handle 15 cars.

Foss Tug provided tug service for the barges.

Deferred maintenance led to shutdown in 1984.

BST Associates 7

BST Associates 8

Barge Feasibility Study 9

for the Port of Port Angeles By BST Associates

August 1992

Study Purpose ◦ Port of Port Angeles: Promote efficient transportation network for local

businesses. Stimulate economic activity on the Olympic Peninsula. ◦ Port of Tacoma: Efficient systems to move cargo to/from international

shipping facilities. ◦ The ports jointly sponsored this study to examine

the demand for a barge system between the Olympic Peninsula, Vancouver Island and Lower Puget Sound.

BST Associates 10

Traffic evaluated: ◦ Time sensitive products such as consumer goods,

groceries and fisheries products. Requires daily service which is provided by ferry and

highway to the Olympic Peninsula and by ferry and truck/rail barge service to Vancouver Island.

Level of service that cannot be matched by weekly or bi-weekly barge service.

◦ Bulk cargoes such as limestone, sand and gravel, clay and chemicals. Bulk cargoes move in very large volumes. The size and characteristics of these movements make them

incompatible with scheduled breakbulk and/or container barge service.

◦ Forest products offer the greatest market potential for barge service.

BST Associates 11

Olympic Peninsula Service Interest is High. ◦ Potential accounts interested if it is less costly

than existing service. ◦ Forest products mills are diverse and include

lumber, pulp, paper and plywood production. Need Anchor Tenant ◦ Daishowa is constructing a de-inking facility at

Port Angeles. The company plans to receive waste paper from primarily North American sources. The company supported rail-barge service to handle

these inbound and outbound shipments.

BST Associates 12

Lumber exporters interested in service: ◦ Olympic Wood ◦ Sanshin ◦ Allen Forest Products

Other interested parties in Port Angeles: ◦ Rayonier ◦ Kply

BST Associates 13

Interest in service from Olympic Peninsula to Vancouver and Vancouver Island. ◦ Kply Veneer from Vancouver Island mills. ◦ Rayonier Servicing Canadian accounts. ◦ Daishowa Waste paper from Canada. ◦ Port Townsend Paper Exporting via Vancouver and Nanaimo for specific

trade routes.

BST Associates 14

Total Market Size ◦ Olympic Peninsula - Lumber, Pulp, Paper, Plywood Approximately 459,000 tons per year ◦ Vancouver Island to U.S. - Lumber, Pulp, Paper Approximately 112,000 tons per year

Barge capture rate expected: ◦ Low = 100,000 tons per year ◦ High = 120,000 tons per year

BST Associates 15

Types of service: ◦ Rail-barge ◦ Ro-ro barge

(250’, 350’) ◦ Container barge

(250’) ◦ Oil rig supply

boat Locations: ◦ Port Angeles: Daishowa Port of Port

Angeles ◦ Port of Tacoma

BST Associates 16

Seaspan Terminal in Delta, B.C.

Cost estimates for facilities: ◦ Rail-barge facility ~ $4.4 million per

location ◦ Ro-ro barge facility ~ $3.7 million per

location New facility not

competitive with existing truck service: ◦ Main factors: Port charges, Labor costs.

BST Associates 17

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Barge Feasibility Study 18

for the Port of Port Angeles By BST Associates

February 2000

Since the 1992 Study, economic conditions changed in the Clallam County area, including: ◦ Introduction of two new mills: Portac Crown Pacific ◦ Development of log shipping by barge.

Port of Port Angeles determined that the barge feasibility study should be updated.

BST Associates 19

Reviewed 1992 Study market findings ◦ Re-surveyed firms.

The primary users expected to be forest product manufacturers. ◦ There is strong interest in a barge facility by Daishowa ◦ Other mills expressed less interest.

Ranges of potential throughput: ◦ Low Volume - 100,000 tons per year, ◦ High Volume –150,000 tons per year.

BST Associates 20

Barge Feasibility Study 21

Most cost-effective means to ship products from the Olympic Peninsula to Puget Sound, especially Tacoma, which is a key transfer point.

Road distance between Port Angeles and Tacoma is 110 miles (2.5 hour trip)

Current Rates (2000) ◦ $315 per truckload, ◦ Estimated rate per ton is ~ $15

Barge Terminals:

Barge Options ◦ Rail barge facility Cost $3.0 to $3.5 million.

◦ Container or breakbulk barge facility Cost $2.1 to $2.4 million.

Warehouse: ◦ Daishowa evaluating new

warehouse Lease at Tacoma Not enough room at mill

◦ 100,000 square foot building Cost $5.7 million.

Selection between Sites ◦ Congestion at Daishowa

site would complicate rail siding and warehouse.

◦ Port site considered more efficient for construction of the barge system and warehouse.

Barge Feasibility Study 22

Barge Feasibility Study 23

Barge service can be competitive with truck, especially rail and breakbulk if it is part of an existing system. ◦ Requires lower

port tariff rates ◦ Requires grants

for construction Results are

better at higher throughputs.

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BST Associates 24

Market is limited in size ◦ Focus on forest products Shippers have different needs Anchor tenant (Daishowa) Some firms now out of business Solid waste considered market opportunity later

Proximity of Port Angeles to Tacoma is challenging for barge service ◦ Truck service is available and cost-effective Similar problem to sustain air service ◦ Truck drivers could be displaced

Type of service ◦ Public versus private location, operation ◦ Type of operation important

Infrastructure ◦ Construction costs increasing Grant programs include environmental benefits Some older trucks are being banned from Ports of

Seattle and Tacoma. ◦ Port charges ◦ May be an option for multi-use of facility Ship repair Commercial vessels moorage

BST Associates 26

Public Private Partnership ◦ Private sector ◦ Marad and other govt. agencies

Financial viability ◦ Barge can be cost-effective with key assumptions ◦ Key considerations: Labor impacts (union vs. non-union) Port charges (as stated) too high Grants for infrastructure

BST Associates 28

BST Associates 29

Data source: Freight Analysis Framework Data, Federal Highway Administration (FHWA). Notes: Percentages may not add to 100 due to rounding. 1 The most recent year for which data is available. 2 A unit of freight transportation representing a ton of freight moved one mile.

Washington, 48%

California, 33%

Foreign, 14%

Other Domestic,

3%

Hawaii, 2% Oregon, 1%

BST Associates 30

~48% of Alaskan trade by water is with Washington State: ship and barge.

Port of Tacoma Alaska Business Strategy 2014 BST Associates 31

BST Associates 32

Foreign, 61%

California, 24%

Washington, 7%

Alaska, 6% Islands, 1% Oregon, 1%

~7% of Hawaiian trade by water is with Washington State: ship and barge.

Service between Schwartz Bay and Nanaimo to Delta

Current operating fleet numbers three ships and four ATB tug/barge units Around 700 trailers/day Move approximately 60% of all products consumed on Vancouver Island

BST Associates 33

BST Associates 34

2017 Community Partner Program Application Matrix for 3/21/17 Commission Meeting

Previous CPP Organization Name Project Sector Amount

RequestedMax Funds Requested

Min Funds Acceptable

Approved Funding % Funded

Other Financial Support

1 year Captain Joseph House Foundation Paint the exterior of facility Public Education and Tourism Promotion $12,500.00 $12,500.00 $12,500.00 0% Yes

2 years Concerned Citizens of Forks 2 job development employees Job development & training $10,000.00 $10,000.00 $6,000.00 0% Yes

No National Marine Sanctuary Foundation Marine Discovery Center Predesign Completion

Public Education & Awareness, Tourism Promotion, Economic Development

$20,000.00 $20,000.00 $17,000.00 0% Yes

No New Leash on Life Service dog related costs for disabled veterans Economic Development $2,000.00 $2,000.00 $1,000.00 0% Yes

No Northwest Cooperative Development Center

Training and tech assistance for WA Coast Works Sustainable Small Business Competition

Economic Development $10,000.00 $15,000.00 $5,000.00 0% Yes

No Olympic Culinary Loop Olympic Coast Marine Awareness, Appreciation and Action Campaign

Public Education & Tourism promotion $3,000.00 $3,000.00 $1,000.00 0% Yes

No Olympic Peninsula Bicycle AllianceWebsite and mobile app development for olympicpeninsulacycling.com / Tour de Lavender biking event

Tourism promotion $5,000.00 $5,000.00 $5,000.00 0% Yes

1 year Peninsula Trails Coaltion Trail Signs for Olympic Discovery Trail Tourism promotion $19,000.00 $19,000.00 $13,000.00 0% Yes

No Port Angeles Arts Council Port Angeles Mural Conservation Tourism promotion & Public Education $5,000.00 $5,000.00 $2,500.00 0% Yes

2 years Port Angeles Downtown Association Advertising and marketing of the "Arts & Draughts" beer and wine festival

Economic Development and Tourism Promotion $6,000.00 $8,000.00 $3,000.00 0% Yes

2 years Port Angeles Downtown Association Downtown banner installation Tourism promotion $3,342.00 $3,342.00 $3,342.00 0% Yes

2 years Port Angeles Marathon Association Marathon video creation, social media posts and advertising Tourism promotion $4,500.00 $4,500.00 $4,500.00 0% Yes

1 year Port Angeles Regional Chamber of Commerce 4th of July Community Celebration Tourism promotion $8,000.00 $10,000.00 $6,000.00 0% Yes

1 year Port Angeles Regional Chamber of Commerce Concerts on the Pier Tourism promotion $3,000.00 $6,000.00 $1,500.00 0% Yes

1 year Port Angeles Regional Chamber of Commerce Port Angeles Holiday Festival Tourism promotion $10,000.00 $15,000.00 $5,000.00 0% Yes

1 year* Sequim Logging Show Community event Tourism promotion & Public Education $2,000.00 $2,000.00 $2,000.00 0% Yes

No Surfrider FoundationSani-cans for remote beach access points on Strait of Juan de Fuca coastline

Tourism promotion $2,400.00 $2,400.00 $1,800.00 0% Yes

1 year The Answer For Youth (TAFY) "Grow and Go" program Public Education and Awareness $15,000.00 $15,000.00 $15,000.00 0% Yes

No WSU Clallam County Extension"Entrepreneurial Mindset" and "Financial Roadmap" workshop series and "Ideas for Action Exchange" network

Economic Development $10,296.55 $10,296.55 $10,296.55 0% Yes

Total $151,038.55 $168,038.55 $115,438.55 $0.00

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Future Agenda Items – Work Session (9:00 a.m. unless otherwise noted)

3/21/2017 Commission Meeting April 4, 2017

• Website redesign update • Fishing fleet study (Commissioner McAleer) • Avigation easement update • T3 maintenance dredging discussion

April 24, 2017 (Joint meeting with Clallam County BOCC)

• EDC, SBDC and CRTC first quarter reports

Future • Governance: Delegation of Authority, Employee Handbook and resolutions • Lease Policy Considerations (Chris Riffle) • Lease rate setting process and publication of rates • CLT Construction Event Planning (Timber Advisory Committee) • Master plan "Vision" of different Port properties (purchase and sale opportunities) • Consultant contract template review and process for commission guidance • Analysis of Business Lines—Q1 or Q2 2017 • POPA Promotional Video (March 31, 2017 deadline) • Commission meeting in Forks?

Future Joint Meetings

• Some meetings could be with staff and one commissioner. • Special Meetings: Joint meeting with other public agencies in each district

o Share strategic direction and key goals for each entity o Cross-public entity effort (Council of Governments); set 1 to 3 top community goals o Clallam County (4/24*, 7/17 and 10/16)

Quarterly Reports: EDC Report, SBDC Report, CRTC updates Timber Advisory Committee, FIA Master Plan update, MTIP update, Emergency

preparedness planning o City of Forks: Timber Advisory Committee, Timber Arrearages, CLT, invite DNR to meeting

and to tour the forests, DNR report, ONRC update o Port of Port Townsend (host one meeting at each port): maritime efforts, marinas,

airport (tour for POPA), CRTC (tour for POPT), NOP RC&D update

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Future Agenda Items – Special Commission Business Meeting 3/21/17 Commission Meeting

2:30pm April 4, 2017 April 24, 2017

• Annual Lease Policy Report • 4th Quarter Financial Report

Announcements

• Mass Timber Conference March 26-28, 2017 Portland, OR • Olympic Logging Conference April 26-28, 2017 Victoria, B.C. • WPPA Spring Meeting May 17-19, 2017 Cle Elum, WA

Future

• Special Meetings: Joint meeting with Lower Elwha Klallam Tribe • Environmental Management System (EMS) • CRTC Term Lease 2220 W 18th Street • Peninsula College Term Lease at 2220 W 18th Street

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