HomeMy WebLinkAboutCommittee of the Whole May 4 19992
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WHATCOM COUNTY COUNCIL
Committee Of The Whole
May 4, 1999
The meeting was called to order at 6:00 p.m. by Council Vice -Chair Tom Brown in the
Council Committee Room, 311 Grand Avenue, Bellingham, Washington.
Also Present:
Kathy Sutter
L. Ward Nelson
Connie Hoag
Barbara Brenner (5 minutes late)
Robert Imhof (10 late)
Absent:
Marlene Dawson
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16 1. JIM DARLING, PORT OF BELLINGHAM, TO UPDATE THE COUNCIL
17 REGARDING PROJECTS PLANNED FOR 1999 AND DIRECTION FOR FUTURE
18 PORT PROJECTS AND PARTNERSHIPS (AB99 -159)
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20 Jim Darling, Port of Bellingham, presented a slide show. He stated that the Port has gone
21 through a process of strategic planning. They developed a plan for the future. They do business
22 plans every year. They are not obligated to do anything under any statute. The law allows the
23 Port to do certain activities, but doesn't require them to do anything. They recently reviewed the
24 Port's importance in the community. There are four areas that they play a role in the County.
25 One area is public transportation terminals for boats, planes, and trains. Another area is large -
26 scale real estate development projects. A third area the stewardship of Whatcom water funds,
27 particularly marine water funds. The stewardship is to either environmentally protect the
28 waterfront or to use the waterfront and capitalizing on that resource. The fourth area is
29 infrastructure development. This year, they are going to clarify the role they play in
30 infrastructure development.
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32 Brenner stated that there was a presentation earlier in the day about the marine resources
33 committee. She mentioned the Port because they have an incentive to develop property. She
34 suggested that the Port work with the County on environmental near -shore issues.
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36 Darling gave a history of the Port of Bellingham and explained the Port's structure.
37 There are three elected Port commissioners. They appoint him as the Executive Director, and he
38 retains the remaining staff. There are six operating divisions, including administrative support,
39 facilities management, aviation, marinas, marine terminals, and properties.
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41 Brenner questioned whether there are any advisory committees besides the Airport
42 Advisory Committee. Darling stated that the marina division has an advisory committee.
43 Marine terminals had an ad hoc committee.
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45 Brenner questioned the percentage of the property tax the Port gets for their budget.
46 Darling stated that their total operating income, not including interest, is about $15 million per
47 year. Of that, property taxes are about $4 million. 3% - 4% of the property taxes goes to the
48 Port. They cover their entire overhead on the four operating divisions, aviation, marinas, marine
49 terminals, and properties. The aviation division includes commercial, general, and military
Committee of the Whole, 5/4/99, Page 1
I aviation. They are always looking for new air carrier services. They have passed on a number of
2 air cargo companies because they want to fly in during the middle of the night. They are still
3 looking for commercial carriers to Portland, San Francisco, and Chicago. The problem is that
4 every small city airline is after the airlines. In three to five years, there will be regional jets that
5 are fuel efficient and quiet.
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7 Their fastest growing line of business is properties in prime real estate. They are one of
8 the largest real estate operators in the County. They rent raw ground and buildings. They went
9 into real estate for a number of reasons. One is that it provides income. Also, they have unique
10 properties to augment, such as the airport or marinas. A third reason is that they can do
11 something unique in certain areas, such as the industrial park in Sumas.
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13 Brenner questioned whether the cogeneration plant is on Port property. Darling stated
14 that they are talking to the Port about Port property. It will be a combination of multiple
15 property owners.
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17 Hoag questioned why the Port is in real estate development. The City of Sumas has said
18 they feel like they are competing with the Port for attracting businesses. Darling stated that they
19 went to Sumas at their invitation in the mid- 1980's. Because of the flood plain, Sumas wasn't
20 able to get grants to resolve the flood plain issues so they can develop the industrial park. The
21 Port had the support of the City of Sumas. They have a better ability to develop real estate than
22 cities typically do. The Port is involved in real estate because it generates income. The law
23 allows the Port to develop real estate. That is typically a role that a lot of Ports have played. In
24 the State of Washington, Ports are economic development engines for their local communities.
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26 Brown stated that the Port basically builds the infrastructure to bring business into the
27 community.
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29 Darling stated that, in unique situations, they are able to bring in federal grants. They
30 wanted to develop complementary businesses to areas such as the airport and the marina.
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32 Hoag stated that she has heard objections about the Port developing inland because the
33 Port ends up competing with the private entities. She questioned about whether the 71 ports in
34 the State do developments inland. Darling stated that they do. They are all over the State.
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36 Sutter stated that a Port includes an airport, not just water ports.
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38 Nelson stated that it means port of entry.
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40 Brenner questioned whether all airports are owned by Port Districts. Darling stated that
41 there are some city -owned airports. Darling stated that his theory on why 25% of the nation's
42 Port Districts are in Washington State is because the State has fairly restrictive constitutional
43 laws about what the local government can do. Municipalities in other states can back
44 development. The State recognized a need for that ability, so they gave the power to the Port
45 Districts. Port Districts have blossomed all over the State in communities where they needed a
46 government arm to do what cities and counties in other states can do.
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Committee of the Whole, 5/4/99, Page 2
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Darling stated that the third area includes the marine terminals. The ferry terminal is
exploding in ridership. The Alaska ferry, train, and private ferries haul about 100,000 people per
year.
Brenner questioned whether the Alaska ferry has been good for Whatcom County.
Darling stated that it has been very good. That facility is booked almost every weekend of the
year for weddings and community events. It is a nice facility.
The cargo division has been the cash cow for the Port for decades. It is very lucrative. It
has provided most of the capital for the Port since 1920. They are under a great deal of stress
right now because of the Asian economy and container cargo. There are three types of cargo:
container, bulk, and break -bulk, which is stuff that is on pallets or in big bags instead of in a
container. There were 10 million tons of break -bulk cargos in the Puget Sound 12 years ago.
Today there are about 700,000. The rest of it has gone into containers. All the break -bulk Ports
are starting to decline in their handling of material. That includes Port Townsend, Port Angeles,
and Anacortes. The County is fortunate that there is Georgia - Pacific (G -P) and Intalco. The
Asian economy has created a problem because the U.S. is buying stuff and then shipping empty
containers back because they are not buying anything from the U.S. The container companies
are trying to steal the Port customers. However, the Port has such a good relationship with G -P
that they have opted to stay with the Port.
Brenner questioned how container companies can offer services cheaper than the Port.
Darling stated that they are underwriting their rates to only pay for the fuel on the ship.
Darling stated that they are the largest marina operator in the State. They have 2,500
slips. They are seeing a change from commercial to recreational boats.
Hoag stated that she had a complaint about the Port raising their moorage rates,
especially in Blaine. Darling explained how Ports are traditionally run. Ports never made any
money, so they had to transfuse property taxes into their funding equation. In 1994, the Port
Commission stated they were unfairly underwriting their rental rates to commercial operators.
They decided to get the revenues up to market level or break even. The marinas and airport
break even and the property and cargo divisions went to market level. They reduced expenses by
40 %. They have changed the way they do things. The four operating businesses take care of
themselves. They questioned whether they should continue to collect property taxes. The
Commission stated that there was a legitimate governmental function for them to do, including
the environmental clean up of Bellingham Bay, economic development for the County, and
public amenities on the Port property.
Brenner suggested that they drop economic development and public amenities because
the local jurisdictions can do that, and only concentrate on environmental clean up. Then they
wouldn't have to collect property taxes. Darling stated that they have considered that option, but
they would need to drive up rates, lower costs, and develop more real estate. They are in the
process of doing that now. Moorage rates five years ago were about half of the cost of
maintaining the slip. The reality is that it cost about $4 per foot to run a slip. What happened
was that half of the property taxes they received was going to subsidize someone's yacht. The
Commission decided that was not good public policy. They directed the Port to raise the rates.
Committee of the Whole, 5/4/99, Page 3
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Hoag stated that it is not all yachts in the marina. The majority is smaller pleasure craft.
A lot of businesses in the County make their money off of those customers and charters. When
they start impacting those businesses, they impact the economy.
Brown stated that there are a lot of boats that sit there year- around and are never used.
There is no reason for the taxpayers to subsidize a citizen parking a boat.
Brenner stated that, eventually, all they would have would be the high -end corporations
as the users. It would eliminate the diversity.
Hoag stated that a part of what the County does is subsidizing parks. The smaller boats
are recreation for those people.
Sutter stated that the parks are for everyone.
Imhof stated that anyone can go to a park. He can't go to the marina and pick out a boat
to take out.
Darling stated that the Port discussed these issues. There is a waiting list to get a slip in
the marina. It is more of a private facility.
Moving on, Darling stated that they are about 3% of the property tax bill. In 1994, they
began taking less than they are authorized to collect. They are only taking 80 %. In the public
transportation terminals in 1999 they will do some repairs to the airport terminals, build a de-
icing facility at the airport, and more runway lighting.
Hoag stated that there isn't any free parking available for drop -off traffic. Darling stated
that it was hard to control the traffic.
Darling stated that the real estate projects include the Tom Glenn spit hotel and buildings.
They welcome the private sector to come and build. They are building a new boating center at
Squalicum. 1801 Bakerview, the old ice arena, is being remodeled. It will be leased out soon.
Brenner questioned whether they do long -term leases so that people know what to expect.
Darling stated that they have leases up to 75 years.
They are going to build another building at the airport. The west side of the airport will
be developed. On the waterfront in Blaine, they will make improvements to the waterfront park.
In Bellingham, they will improve Marine Park and Zuanich Park. They are building a small pier
in Fairhaven.
Brown questioned whether there are sewage problems at the Blaine marina. Darling
stated that Drayton Harbor has had problems. It is not exclusively at the marina.
Hoag stated that the marina has a high count of pollutants.
Brown questioned whether there is any mitigation. Darling stated that they have tested
all of their pipes. There are problems with boaters in the harbor because there is a zero discharge
policy.
Committee of the Whole, 5/4/99, Page 4
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Brown is glad that they are doing the de -icing at the airport.
Darling stated that they are taking the lead on the Bellingham Bay clean up project.
Hoag suggested a pedestrian dock in the Blaine and Birch -Bay areas. Darling stated that
they can do that type of project. They are doing three efforts, including Birch -Bay, Pt. Roberts,
and the Mt. Baker Foothill areas to help those communities from a grass -roots level figure out
where they want to go.
Brenner questioned whether there is any discussion about a ferry to Pt. Roberts. Darling
stated that they did a feasibility study that showed there wasn't enough ridership. They continue
to request from the State a connection between Bellingham and the San Juan Islands. The State
wants to eliminate the Anacortes to Sydney B.C. ferry run because they want to transport
Washington citizens, not tourists. That run makes the most sense to privatize. However,
Anacortes wants that run because it is the most profitable. There is some tension about the issue.
2. DISCUSSION WITH SENIOR DEPUTY PROSECUTOR DANIEL GIBSON
REGARDING POTENTIAL PENDING LITIGATION (AB99 -018)
This item was withdrawn from the agenda.
3. DISCUSSION WITH SENIOR DEPUTY PROSECUTOR KAREN FRAKES
REGARDING GMA ISUES (AB99 -018)
Imhof moved to go into executive session to discuss this item.
Motion carried unanimously.
ADJOURN
The meeting adjourned at approximately 7:00 p.m.
Jill Nixon, Minutes Transcription
These minutes were approved by Council on June 29 , 1999.
ATTEST: WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Dana Brown - Davis, Council Clerk Marlene Dawson, Council Chair
Committee of the Whole, 5/4/99, Page 5