executive director’s report to the - port of...

EXECUTIVE DIRECTOR’S REPORT TO THE

PORT OF PORTLAND COMMISSION FOR FEBRUARY 2015

SAFETY REPORT

There were 13 incidents in January 2015, which was an increase compared to January 2014 when there were 11. Monthly Report of Injury Incidents Administrative There was one non-recordable incident:

1. An employee struck his wrist against the door while exiting a fleet vehicle. Aviation There were two recordable incidents with one lost time incident and four non-recordable incidents:

1. An employee was moving boxes back to the baggage handling system workshop following a rebuild. The boxes were the same size and shape, and the boxes lifted previously were light in weight. The employee then lifted a box that was unexpectedly very heavy, causing strain to the abdomen. The employee will be coached on proper lifting techniques, including assessing the load before lifting it. The lead will contact the parts supplier about labeling the contents of the boxes.

2. An employee was pruning trees in the employee parking lot and stepped on a piece of wood on the ground causing him to twist his ankle. All maintenance work groups were reminded to remain aware of their surroundings to avoid slip/trip hazards.

3. While investigating a vehicle crash scene, an employee bumped into a section of broken perimeter road fencing and sustained an abrasion to the forehead. It is recognized that emergency situations, like crash scenes, can create hazardous conditions for personnel to navigate during an investigation. Officers will be reminded to assess the area prior to entry in order to avoid injury.

4. An employee sustained multiple injuries while attempting to return a combative subject to a patrol car while at the Hooper Detox facility. No recommended action.

5. While taking an intoxicated suspect into custody and attempting to place him in handcuffs, the suspect grabbed the employee’s hand. The employee sustained bruising/contusions to the hand and fingers. No recommended action.

6. An employee experienced chest pain while sitting at her desk. No recommended action.

2

Marine

There were three non-recordable incidents:

1. An employee strained his shoulder while turning on the drive breaker in the machine house of Crane 6381. No recommended action. This type of industrial circuit breaker is large and contains a very stiff, internal mechanical spring. A significant amount of physical force is required to activate this breaker.

2. An employee attempted to close a security gate that was off its track, making it difficult to close. It took considerable effort to close the gate and the gate rolled over the employee’s foot. The gate has been repaired and readjusted to ensure proper operation. A recommendation has been made to Port maintenance management staff to establish a preventive maintenance schedule for this type of gate.

3. An employee lifted a manhole cover lift device into the back of a pickup, causing strain to the shoulder. A smaller and lighter model of the manhole cover lift device will be purchased. Maintenance crews have been briefed on the incident and were reminded to request help when lifting awkward, heavy equipment or materials.

Navigation There were two recordable incidents with one lost time incident and one non-recordable incident:

1. An employee experienced dizziness and nausea while on shift. The employee had cut two galvanized shackles earlier in the shift. The employee was also receiving care for an ear condition that could potentially cause vertigo. As a precaution the employee was transported to the emergency room for evaluation and was released to full duty. This incident reportedly is non-work related so does not constitute a lost time incident.

2. An employee disposed of an old tarp in a garbage dumpster causing strain to the shoulder. Employees were reminded to request assistance when lifting heavy objects or use mechanical means to move bulky items.

3. An employee hooked a buoy eye with a pike pole and had swung the hook out as the eye was grabbed. The employee did not accurately time the swing and height of the hook. The hook, coming back at the employee, struck the employee in the head. The employee sustained a laceration next to the eye. The crew discussed the hazards associated with retrieving buoy pendants and were reminded to maintain positive contact or place the caught hook at waist level.

5

Recordable and DART Rate Charts The Days Away, Restrictions and Transfers (DART) and Recordable Rate tables are used for bench marking data. The Oregon Occupational Safety and Health Association’s (OR-OSHA) comparative industry group statistics, which track recordable injuries, illnesses and DART rates, are the best benchmarking data available. Recordable incidents are injuries or illnesses resulting in medical treatment beyond first aid. DART incidents are injuries or illnesses that result in days away from work or restricted work duties and are a subset of Recordable incidents. Please note that OSHA recordable and DART rates are based on number of cases only (normalized at 200,000 hours) and DART rates do not take into account the actual number of lost or modified days that are incurred (normalized at 180 days).

AVIATION REPORT Southwest Airlines announced two new non-stop year-round, once-daily destinations from Portland International Airport (PDX). Service to Dallas Love Field will begin on April 8, and service to Orange County will begin on August 10.

January passenger volumes increased 2.0 percent compared to January 2014. Seat capacity decreased 3.2 percent with the load factor increasing 4.1 points to 80.4. This is the first January in PDX history that reported a load factor over 80 percent.

Passengers per Month

6

January cargo volumes were flat compared to January 2014. FedEx volumes increased 1.1 percent to 9,756 tons, while UPS volumes declined 2.9 percent to 5,524 tons.

Air Cargo Tons per Month

7

Parking revenue increased 15.3 percent over January 2014 due to the April 2014 rate increase, as well as an increase in overall parking activity when compared with the previous year:

• Parking transactions increased 4.1 percent;

• Average overnight occupancy increased 10.2 percent; and

• Economy lot shuttle bus passenger loads increased 10.1 percent.

On a side note, seeding and 22,000 plantings were completed for the Economy Lot Tree Replacement project.

Parking Revenue by Lot

8

In this first month of concessions transition, combined retail, food and beverage, and services operations reported a 5.4 percent, or $50,000, rent decrease on the month, against a 2.0 percent passenger increase. The performance will improve as additional new operators open.

Concessions Revenue

9

Rental car operations reported a 2.4 percent, or $34,000, rent increase on the month over last year, against a passenger increase of 2.0 percent. Alamo, Budget, Hertz and Thrifty all reported rent increases over last, while all other operators reported rents at minimum annual guarantees.

Aviation Environmental Operations

Bird strike: Six Northern Pintails were struck during takeoff on January 7, 2015, and ingested into a 757 engine. The result was substantial damage at an approximated cost of $6,000,000.

CAPITAL GRANTS

Marine Staff submitted a reimbursement request to Oregon Department of Transportation (ODOT) for the ConnectOregon III –Terminal 6 Crane Upgrade project in the amount of $32,673 (Agreement No. 26915). Staff submitted a reimbursement request to ODOT for the ConnectOregon IV – Terminal 6 Wharf Optimization project in the amount of $1,109 (Agreement No. 28695). Troutdale Airport Staff submitted a reimbursement request to ODOT for the I-84 Troutdale Interchange – Graham Drive/Swigert Way Improvement project (Agreement No. 28368) in the amount of $159,968.

Rental Car Revenue

10

MARINE & INDUSTRIAL DEVELOPMENT REPORT

The figures in the table below show change relative to the prior year.

January 2015 Fiscal Year-to-Date

Total Tonnage -7.6% 0.8% Containers (TEU) -48.0% -14.4% Import Full Containers -36.7% -11.6% Export Full Containers -57.6% -29.0% Breakbulk -86.6% -69.9% Autos -21.9% -7.4% Mineral Bulk 0.9% 12.6% Grain 18.5% 14.0%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2015 16,427 16,427

Mo/Mo % Change -22%

CY/CY % Change -22%

0

5,000

10,000

15,000

20,000

25,000

30,000

Jan 2014 Jul Jan 2015 Jul

# of UnitsAutomobile - Exports and Imports

11

Containers Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2015 4,352 4,352

Mo/Mo % Change -48%

CY/CY % Change -48%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


# of MovesContainers & TEUs - Terminal 6 Exports (in TEUs)

Imports (in TEUs)

Ttl # of Containers

Total Bulks

000's of Short Tons Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2015 828 828

Mo/Mo % Change 8%

CY/CY % Change 8%

0

100,000

200,000

300,000

400,000

500,000

600,000


Short TonsBulk Cargoes Mineral Bulks

Grain

12


2015 37 37

Mo/Mo % Change -21%

CY/CY % Change -21%

0

10

20

30

40

50

60


# of Vessel CallsMonthly Vessel Calls Ttl.


2015 493 493

Mo/Mo % Change -33%

CY/CY % Change -33%

0

500

1,000


# of Moves Barge Moves - Terminal 6

13

Operations The $140 million Canpotex expansion project at Terminal 5 is underway; contractors are onsite and have started the initial project prep work. Environmental The environmental due diligence phase of the Pembina project has begun and site tours for City of Portland staff, Portland Development Commission, State Representative Lew Fredericks and State Senator Chip Shields were completed.

PROJECT COMPLETION REPORT

The following construction contract, previously awarded by the Commission, has been completed: Landside Microsurfacing – PDX

Approved by Port Commission May 14, 2014

Contract Award Amount $542,365.00

Authorized Contract Amendments $24,324.80

Quantity Underruns ($610.50)

Final Contract Amount $566,079.30

REAL ESTATE TRANSACTIONS EXECUTED PURSUANT TO DELEG ATED AUTHORITY USA-DOD-NGB – Military Construction Cooperative Agreement (MCCA)

Location: PDX

Term: Effective February 2, 2015

Use: This MCCA between the Port and the National Guard Bureau will provide funding for work performed by the Port to relocate the base boundary fence.

Multnomah County Drainage District No. 1 – Easement

Location: PDX

Term: Effective January 27, 2015

Use: Easement for access to the Columbia Slough.

City of Portland – Intergovernmental Agreement

Location: PDX

Term: February 11, 2015 to May 31, 2016

Use: Allows the Port to utilize, as a sub-recipient of the City of Portland, grant funding from the Urban Areas Security Initiative Grant for the period of October 1, 2014 through May 31, 2016.

14

Pollin Hotels II, LLC – Permit and Right of Entry

Location: PDX

Term: February 19, 2015 to February 22, 2015

Use: Allows Pollin Hotels access to Port property for an event attended by guests of Pollin at the Sheraton Hotel.

FedEx Ground Package System – First Amendment to Permit and Right of Entry

Location: Troutdale Reynolds Industrial Park


Use: Amend and update the permit to extend the term and correct an error in Section 2.2.

Bro-Dogs Airport LLC – Food Cart Permit

Location: PDX

Term: March 1, 2015 to August 31, 2015

Use: Short-term permit for a food cart in the Oregon Market at PDX

Aurora Mills Architectural Salvage – Sixth Amendment to Permit and Right of Entry

Location: Gresham Vista Business Park


Use: This amendment extends the permit and allows Aurora Mills Architectural Salvage to deconstruct and salvage building materials from the barn and sheds located on the property.

PDXCurrent Year-to-Date Annual Year-to-Date Actual Amounts

AdoptedBudget

ActualAmounts

%Variance

AdoptedBudget

CurrentYear

PriorYear

%Variance

Total Passengers (in millions) 9.5 9.6 0.9% 15.9 9.6 9.2 4.0%Landed Weight (Sig & Non Sig lbs. in millions) 5.9 5.8 -1.6% 9.9 5.8 5.8 0.0%Operations N/A 111,910 N/A N/A 111,910 109,936 1.8%

Parking Transactions: Valet N/A 6,970 N/A N/A 6,970 5,776 20.7%Parking Transactions: Long-term (P2) Garage N/A 194,783 N/A N/A 194,783 179,152 8.7%Parking Transactions: Garage N/A 778,484 N/A N/A 778,484 761,096 2.3%Parking Transactions: Economy Lot N/A 234,253 N/A N/A 234,253 215,300 8.8%Parking Transactions: Total N/A 1,214,490 N/A N/A 1,214,490 1,161,324 4.6%Cost per Enplaned Passenger (Rent & Landing Fees) 9.94$

AIRLINE COST CENTER (ACC) (in millions)Airline Rent, Landing Fees & Other $58.6 $59.0 0.7% $99.6 $59.0 $57.5 2.6%Retail, Food & Beverage 7.3 7.5 2.7% 13.1 7.5 7.6 -1.3%Other Non-Airline 2.8 3.1 10.7% 4.7 3.1 2.3 34.8%TOTAL REVENUE $68.7 $69.6 1.3% $117.4 $69.6 $67.4 3.3%

Personnel Services $19.5 $19.1 -2.1% $33.1 $19.1 $18.4 3.8%Materials, Services & Other 24.9 24.7 -0.8% 42.9 24.7 23.4 5.6%TOTAL EXPENSES $44.4 $43.8 -1.4% $76.0 $43.8 $41.8 4.8%

Debt Service & Coverage $24.2 $24.2 0.0% $41.5 $24.2 $24.2 0.0%less: Interest Income 0.0 0.0 0.0 0.0 0.0 0.0%TOTAL NON-OPERATING $24.2 $24.2 0.0% $41.5 $24.2 $24.2 0.0%

SURPLUS/(DEFICIT) $0.1 $1.6 1500.0% ($0.1) $1.6 $1.4 14.3%

PORT COST CENTER (PCC) (in millions)Parking $32.3 $33.3 3.1% $56.3 $33.3 $30.0 11.0%Rental Cars 12.2 12.6 3.3% 18.7 12.6 11.9 5.9%Other 11.7 11.9 1.7% 19.5 11.9 11.3 5.3%TOTAL REVENUE $56.2 $57.8 2.8% $94.5 $57.8 $53.2 8.6%

Personnel Services $8.2 $7.9 -3.7% $13.8 $7.9 $7.6 3.9%Materials, Services & Other 14.8 14.2 -4.1% 24.8 14.2 13.3 6.8%TOTAL EXPENSES $23.0 $22.1 -3.9% $38.6 $22.1 $20.9 5.7%

Debt Service & Coverage $10.4 $10.4 0.0% $17.9 $10.4 $10.3 1.0%less: Interest Income (0.3) (0.3) 0.0% (0.5) (0.3) (0.6) -50.0%TOTAL NON-OPERATING $10.1 $10.1 0.0% $17.4 $10.1 $9.7 4.1%

LESS: REVENUE SHARING $5.9 $5.9 0.0% $10.1 $5.9 $5.6 5.4%

INCOME $17.2 $19.7 14.5% $28.4 $19.7 $17.0 15.9%

General AviationCurrent Year-to-Date Annual Year-to-Date Actual Amounts

AdoptedBudget

ActualAmounts

%Variance

AdoptedBudget

Current Year Prior Year

%Variance

TOTAL REVENUE 2,220,705 2,069,424 -6.8% 3,589,291 $2,069,424 $1,833,694 12.9%TOTAL EXPENSE 2,207,301 2,524,415 14.4% 3,612,940 2,524,415 1,896,446 33.1%OPERATING INCOME (EXCL. DEPR) $13,404 ($454,991) 3494.5% ($23,649) ($454,991) ($62,752) 625.1%

COMMENTS:

AVIATION DIVISIONFINANCIAL REPORT

January 2015

BUDGET - This report compares actual amounts against the adopted budget.

Activity• Passenger traffic exceeded the prior year by 4.0% and parking transactions by 4.6%. Landed weight is flat.

Airline Cost Center (ACC)• Airline rents and landing fees are approximately $400K higher than budget primarily due to higher than expected common use rentals (up ~$300K).

• Retail and Food and Beverage revenues are approximately $200K higher than budget, primarily due to higher than expected retail concessions (up ~$400K) offset by lower food and beverage revenues (down ~$200K).

• Other non-airline revenues are approximately $300K higher than budget, primarily due to higher than expected advertising revenues (up ~$120K). Other positive variances include: an unbudgeted reimbursement from the Oregon Air National Guard for their share of FY14 deicing costs (up ~$40K), non-airline terminal rent revenues and maintenance reimbursements (up ~$60K), and higher Ord-389 landings (up ~$30K).

Port Cost Center (PCC)• Parking and Rental Car revenues are approximately $1.0M and $400K higher than budget respectively due to higher than projected passenger

levels.

• Other Port Cost Center revenues are approximately $200K higher than budget, primarily due to higher than budgeted Air Trans Center rent (up ~$100K) and Hotel Revenues (up ~$110K).

Airline and Port Cost Centers• Personnel Services are approximately $700K lower than budget (~$400K in ACC and ~$300K in PCC), due to lower Police and Administration costs

primarily related to vacancies.

• Materials and Services expenses are approximately $800K lower than budget (~$200K in ACC and ~$600K in PCC), due to the timing of parking management fees and various environmental expenses. Additionally, the Port has received environmental credits totaling $275K, mostly related to insurance policy recovery payments related to the McBride Slough remedial investigation expenses and Jet Fuel Contamination expenses.

General Aviation• Revenues are approximately $150K under budget. An FAA tree removal grant was budgeted for July (at $100K) and has not been received.

• Expenses are approximately $320K over budget primarily due to higher than expected: outside legal fees (up ~$100K), equipment repair (up ~$55K), and drainage fees (up ~$40K).

INDUSTRIAL DEVELOPMENT Annual(Includes Land Use Planning) Adopted

Budget Actual

Amounts Variance

Adopted Budget

CurrentYear

PriorYear

Variance

Operating Revenues $2.3 $2.2 ($0.1) $3.5 $2.2 $2.2 $0.0Land Sales 0.0 0.0 0.0 6.2 0.0 0.1 (0.1)Operating Expenses 4.7 3.7 (1.0) 7.9 3.7 4.7 (1.0)Cost of Property Sold 0.0 0.0 0.0 3.8 0.0 0.1 (0.1)OIBD (Op Income Before Depreciation) ($2.4) ($1.5) $0.9 ($2.0 ) ($1.5) ($2.5) $1.0Depreciation 0.5 0.4 (0.1) 0.8 0.4 0.4 0.0OPERATING INCOME/(LOSS) ($2.9) ($1.9) $1.0 ($2.8) ($1.9) ($2.9) $1.0

NAVIGATION Annual

VOLUMES Adopted Budget

Actual Amounts

Variance Adopted Budget

CurrentYear

PriorYear

Variance

Dredging Days 116 114 (1.7%) 132 114 78 46.2%Cubic Yards Dredged 2,537,250 2,537,250 1,987,724 27.6%

Operating Revenues $9.3 $11.3 $2.0 $14.4 $11.3 $7.6 $3.7Operating Expenses 8.0 9.8 1.8 12.3 9.8 7.0 2.8OIBD (Op Income Before Depreciation) $1.3 $1.5 $0.2 $2.1 $1 .5 $0.6 $0.9Depreciation 1.7 1.1 (0.6) 2.9 1.1 1.0 0.1OPERATING INCOME/(LOSS) ($0.4) $0.4 $0.8 ($0.8) $0.4 ($0.4) $0.8

Note: Totals may not add due to rounding.

COMMENTS:

GENERAL FUNDFINANCIAL REPORT

January 2015

Year-to-Date Actual Amounts

Current Year-to-Date Year-to-Date Actual Amounts

Current Year-to-Date

INDUSTRIAL DEVELOPMENT

Operating revenues are in line with the adopted budget. Operating expenses are almost $1.0M under budget, with the largest variances listed below:

• Lower than anticipated services received from Engineering (interdepartmental transfers; $246K).

• Timing of consulting and outside services expenses for industrial land readiness studies; an alternatives analysis for Graham Road elevation and Troutdale Airport Runway 7-25 rehabilitation projects; and environmental expenses for Hayden Island and invasive species monitoring at multiple sites (~$304K).

• Personnel services are $207K under budget due to position vacancies.

NAVIGATION

YTD dredging days are only two less than budgeted. However, total operating expenses before depreciation are $1.8M over budget. Labor, materials and supplies, and repairs and renewal expenses are over budget by ~ $2.1M. This is partially offset by (1) lower than budgeted contractual costs ($120K) due to the timing of water quality monitoring expenses and (2) lower than budgeted fuel costs ($445K) due to improved fuel efficiency as a result of the repower. It seems like labor and materials and supplies costs should be tracking more closely to the budget since actual dredging days are only two less than what was budgeted. However, there has been significant down time required for dredge pump and turbo/engine repairs. The department relied on overtime to make up for the down time, driving up YTD labor costs . Dredging will continue through the end of February, which is much later than a typical dredging season and what was assumed when the FY 2014-15 budget was developed.

Depreciation is ~ $600K less than budgeted due to a delay in capitalization (start of depreciation) for the dry dock and related assets and also

Contracts Over $50,000 Pursuant to Delegated Author ity

Monthly Report for February 2015 (January Activity)

TitleRequestor

DepartmentVendor Name

P.O. Amount

Purchase electronic billing Software as a Service.

Information Technology

Thomson Reuters West

$58,800

Purchase replacement pump impeller for the Dredge Oregon .

Navigation Hagler Systems $76,970

Obtain services to rebuild the swing gear box for Dredge Oregon .

Navigation Lufkin Industries, Inc.

$83,412

Obtain administration services for Flexible Spending Accounts and Continuing Health Coverage (COBRA).

Human Resources Benefithelp Solutions

$150,000

Obtain technical support services for financial and related software applications.


Oracle America, Inc.

$155,660

Obtain design services for the Runway 13R/31L Rehabilitation Project at Hillsboro Airport.

Engineering Project Development

Century West Engineering Corp.

$245,812

New Purchases

APPROVAL LIMITS (Administrative Policy 7.2.3)

All expenditures require management approval:

BUDGET Approval by managers in an amount delegated by Directors $ 0 - $ 25,000

APPROVAL Approval by Directors $ 25,001 - $250,000

Approval by Executive Director $ 250,001 +

Contracting authority is limited to the following:

CONTRACTING Directors Up to $ 10,000

APPROVAL Buyers Up to $ 50,000

Manager of Contracts & Procurement Up to $ 250,000*

Executive Director Up to $ 500,000*And any amount approved by Commission

Purchase additional security network equipment for the Access Control System Replacement Project.


Mountain States Networking

$276,940

Obtain crane mechanical maintenance services at Marine Terminals 2 and 6.

Marine Operations Harbor Industrial Services Corp.

$3,554,000

TitleRequestor


Original Amount

Previous Changes to

Contract

Current Change to Contract

New Contract Total

Administrative action to add funds to obtain continued usage of the computer aided dispatch system.


City of Portland $9,820 $95,536 $95,536 $200,892

Amendment No. 15 to obtain construction support services for the Troutdale Reynolds Industrial Park, Phase 2.


Cardno, Inc. $249,967 $631,504 $98,179 $979,650

TitleRequestor


Original Task Order Amount

Previous Changes to Task

Order

Current Change to Task Order

New Task Order Total

Total Contract Activity -

All Task Orders

Amendment no.1 to task order against contract No. 767 to obtain additional services for the corporate seismic risk assessment project.


HNTB Corporation

$249,952 $50,006 $299,958 $896,405

Task order against contract No. 831 to obtain hydrographic surveying services in support of dredging projects.

Engineering Design Services

David Evans & Associates, Inc.

$63,527 $63,527 $380,153

Task order against contract No. 864 to obtain construction support services for the Vehicle and Equipment Storage Facility Project.


ZGF Architects LLP

$97,272 $97,272 $590,038

Contracts in this category are initially awarded wi th a specific work scope and an identified not-to-e xceed project total.

Items in this category are issued against contracts that were initially awarded with no specific work scope or product quantity identified (e.g., "requir ements" or "on-call" contracts). These contracts establish pricing or r ates for products or work that may be needed over a stated term. Estimated quantities may be identifi ed, but no guarantee of actual contract compensation or work is made. C ontract durations may be short-term or for multiple years with optional renewal/extension terms.

New Task Orders and Changes to Task Orders Against Non-Project Specific Contracts

Change Orders and Amendments to Project-Specific Co ntracts

Task order against contract No. 866 to obtain design services for space modifications related to the redevelopment of the PDX North Ramp Area.


MWA Architects, Inc.

$98,089 $98,089 $217,487

Task order against contract No. 660 to purchase low-sulfur diesel fuel for the Dredge Oregon .

Navigation Rainier Petroleum Corporation

$122,016 $122,016 $4,528,314

Task order against contract No. 867 to obtain design and construction support for the PDX Concourse C Service Elevator Project.


DBC Architecture, Inc.

$149,860 $149,860 $285,451

Task order against contract No. 744 to obtain project management inspection services.


URS Corporation $163,542 $163,542 $866,799

TitleRequestor


Original Task Order Amount

Previous Changes to Task

Order

Current Change to Task Order

New Task Order Total

Total Contract Activity -

All Task Orders

Task order against contract No. 734 to obtain temporary services.


Teksystem, Inc. $163,200 $163,200 $673,684

Items in this category are issued against contracts for contracted workforce services (e.g., worker le asing contracts and temporary staffing contracts). At the outset, these contracts typically specify an initial cost or hour ly rate and an estimate of total required hours to fulfill the Port’s needs, but they may not provide for the immediate deployment of personnel.

New Task Orders and Changes to Task Orders Against Supplemental Workforce Contracts

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