Riverbend Marine Service Auction

Friday, March 2, 2012

Port of Hueneme Tenants Pursued for Back Taxes

Ventura County, California’s treasurer and tax collector says he’s going after multiple tenant businesses at the Port of Hueneme who collectively owe more than a million dollars in back property taxes.

Treasurer-tax collector Steve Hintz told the Ventura County Star newspaper this week that his office is targeting high value, multiple year delinquencies.

In all, Hintz said, about $1.3 million in back taxes is owed by businesses operating at the port. The largest such debt by far, according to Hintz, is owed by Longview, Wash.-based Brusco Tug & Barge Co., which is delinquent on about $842,800 in unsecured property taxes, which are assessed against the value of assets not secured to the land, such as boats and equipment.

Brusco Tug hasn’t paid the taxes since 2002, Hintz told the newspaper.

Owner Bo Brusco, however, has said there’s a long-standing disagreement with county officials regarding whether two of the company’s tugs are exempt from property taxes. He said an escrow account has been set up to cover the debt, pending an appeal regarding the tax status of the boats.

Under California law, users of port property in California are all subject to the same taxes. Some counties, however, differ on tax law interpretation. This typically results in differences in tax assessment amounts among ports throughout the state.

Port of LA Receives Climate Award From EPA


The Port of Los Angeles has been named an inaugural recipient of the US Environmental Protection Agency’s Climate Leadership Awards, which recognize businesses and organizations that show outstanding leadership in response to climate change.

The EPA recognized LA in its supply chain leadership category, pointing out the port’s greenhouse gas reduction goals, comprehensive air quality tracking, GHG inventories and emissions management.

The environmental agency particularly commended the port for its 2006 adoption of a green leasing policy that includes environmental requirements in tenant lease agreements, including air emission controls, water, stormwater and sediment quality assessments, and energy audits on terminal buildings to identify energy savings.

“This award is testament to the City of Los Angeles’ and the port’s ongoing efforts to effectively balance economic growth and sustainable business practices,” LA Mayor Antonio Villaraigosa said.

The Climate Leadership Award was given in conjunction with the Association of Climate Change Officers, the Center for Climate and Energy Solutions and The Climate Registry. Other companies also receiving awards included IBM, Ford Motor Co. and Gap Inc.

“I commend The Port of Los Angeles on its exemplary leadership in cutting carbon pollution that harms our climate and threatens our health,” Gina McCarthy, an assistant administrator for EPA’s Office of Air and Radiation, said.

“The Port of Los Angeles and all of our Climate Leadership Award winners demonstrate that organizations who are taking action to mitigate climate change are also operating more efficiently, more innovatively and more competitively,” McCarthy said.

Port of Seattle to Sell Rail Segment

At a special meeting Feb. 28 in the city of Kirkland, the Port of Seattle Commission officially declared a 5.75-mile section of the Eastside Rail Corridor as surplus that is no longer needed for port district purposes, and unanimously voted to sell it to the city for $5 million.

The property is a portion of the Woodinville Subdivision rail corridor, which the port bought from Burlington Northern-Santa Fe railroad in December 2009.

The portion approved for sale starts in the city of Bellevue near the Kirkland/Bellevue border, and extends north of Totem Lake to 132nd Avenue NE, also known as Slater Avenue, in the Kirkland city limits.

During the Feb. 28 meeting, the commission approved a first reading of the resolution authorizing the sale; a vote on a second and final reading is expected to take place in a few weeks.

Kirkland’s City Council approved a purchase agreement with the port in December 2011. The city says it intends to remove the existing rails and redevelop the line for use as a bicycling and pedestrian trail as well as a light transportation corridor.

Port commissioner John Creighton, who grew up in east King County and went to high school near the tracks in Bellevue, said during the special meeting that he was strongly in favor of the sale.

“I think we’ve achieved a great result. It is preserved for the public,” he said of the rail segment. “I remain committed to having this corridor remain for dual use.”

The transaction is expected to close by mid-April, according to the port.

California Senator Pitches Permanent Bunker Fuel Tax Exemption

California State Sen. Alan Lowenthal (D-Long Beach) has introduced legislation to permanently eliminate a partial sales tax on the purchase of marine fuel in California.

Lowenthal’s bill, SB 1243, which was introduced Feb. 24, would make a current tax exemption permanent by eliminating the current expiration date of Jan. 1, 2014. Under the exemption, California doesn’t tax fuel that’s purchased within the state but consumed outside of its waters.

“No other maritime port in the US currently charges sales tax on marine fuel,” Lowenthal said in a statement announcing the bill. “This is about protecting California jobs and keeping California ports competitive.”

Bunker fuel, like most products sold in California, is subject to the state’s sales tax. But for competitive reasons, California currently offers a partial sales tax exemption on maritime fuel sales.

The current exemption, which requires renewals every five years, has expired twice before, in 1992 and 2002. According to the state Legislative Analyst, the previous temporary expirations caused marine fuel sales statewide to drop almost 50 percent.

“We’ve seen on two occasions that removing this sales tax exemption will cost our region,” Lowenthal said.

Part of the senator’s argument for eliminating the tax altogether is that it impacts the competitiveness of California ports. Fuel accounts for an estimated 30 percent to 45 percent of the cost of operating a vessel in international commerce.

The addition of the full sales tax on marine fuel can virtually eliminate a vessel’s operating profits, according to the senator, and de-incentivize the purchase of marine fuel in California.

Lowenthal also says eliminating the tax altogether would “protect hundreds of high-paying blue collar jobs” on waterfronts throughout the state.

As the legislation’s currently written, it would go into effect immediately if passed. The legislation could be a tough sell however, since it would require cash-strapped California to willingly give up potentially millions of dollars in sales tax revenue.

In January, Gov. Jerry Brown proposed a 2012-2013 state budget that cuts spending and raises taxes to help close a $9.2 billion budget gap.

Thursday, March 1, 2012

California Senator Pitches Permanent Bunker Fuel Tax Exemption

California State Sen. Alan Lowenthal (D-Long Beach) has introduced legislation to permanently eliminate a partial sales tax on the purchase of marine fuel in California.

Lowenthal’s bill, SB 1243, which was introduced Feb. 24, would make a current tax exemption permanent by eliminating the current expiration date of Jan. 1, 2014. Under the exemption, California doesn’t tax fuel that’s purchased within the state but consumed outside of its waters.

“No other maritime port in the US currently charges sales tax on marine fuel,” Lowenthal said in a statement announcing the bill. “This is about protecting California jobs and keeping California ports competitive.”

Bunker fuel, like most products sold in California, is subject to the state’s sales tax. But for competitive reasons, California currently offers a partial sales tax exemption on maritime fuel sales.

The current exemption, which requires renewals every five years, has expired twice before, in 1992 and 2002. According to the state Legislative Analyst, the previous temporary expirations caused marine fuel sales statewide to drop almost 50 percent.

“We’ve seen on two occasions that removing this sales tax exemption will cost our region,” Lowenthal said.

Part of the senator’s argument for eliminating the tax altogether is that it impacts the competitiveness of California ports. Fuel accounts for an estimated 30 percent to 45 percent of the cost of operating a vessel in international commerce.

The addition of the full sales tax on marine fuel can virtually eliminate a vessel’s operating profits, according to the senator, and de-incentivize the purchase of marine fuel in California.

Lowenthal also says eliminating the tax altogether would “protect hundreds of high-paying blue collar jobs” on waterfronts throughout the state.

As the legislation’s currently written, it would go into effect immediately if passed. The legislation could be a tough sell however, since it would require cash-strapped California to willingly give up potentially millions of dollars in sales tax revenue.

In January, Gov. Jerry Brown proposed a 2012-2013 state budget that cuts spending and raises taxes to help close a $9.2 billion budget gap.

Port of Seattle to Sell Rail Segment

At a special meeting Feb. 28 in the city of Kirkland, the Port of Seattle Commission officially declared a 5.75-mile section of the Eastside Rail Corridor as surplus that is no longer needed for port district purposes, and unanimously voted to sell it to the city for $5 million.

The property is a portion of the Woodinville Subdivision rail corridor, which the port bought from Burlington Northern-Santa Fe railroad in December 2009.

The portion approved for sale starts in the city of Bellevue near the Kirkland/Bellevue border, and extends north of Totem Lake to 132nd Avenue NE, also known as Slater Avenue, in the Kirkland city limits.

During the Feb. 28 meeting, the commission approved a first reading of the resolution authorizing the sale; a vote on a second and final reading is expected to take place in a few weeks.

Kirkland’s City Council approved a purchase agreement with the port in December 2011. The city says it intends to remove the existing rails and redevelop the line for use as a bicycling and pedestrian trail as well as a light transportation corridor.

Port commissioner John Creighton, who grew up in east King County and went to high school near the tracks in Bellevue, said during the special meeting that he was strongly in favor of the sale.

“I think we’ve achieved a great result. It is preserved for the public,” he said of the rail segment. “I remain committed to having this corridor remain for dual use.”
The transaction is expected to close by mid-April, according to the port.

Port of LA Receives Climate Award From EPA

The Port of Los Angeles has been named an inaugural recipient of the US Environmental Protection Agency’s Climate Leadership Awards, which recognize businesses and organizations that show outstanding leadership in response to climate change.

The EPA recognized LA in its supply chain leadership category, pointing out the port’s greenhouse gas reduction goals, comprehensive air quality tracking, GHG inventories and emissions management.

The environmental agency particularly commended the port for its 2006 adoption of a green leasing policy that includes environmental requirements in tenant lease agreements, including air emission controls, water, stormwater and sediment quality assessments, and energy audits on terminal buildings to identify energy savings.

“This award is testament to the City of Los Angeles’ and the port’s ongoing efforts to effectively balance economic growth and sustainable business practices,” LA Mayor Antonio Villaraigosa said.

The Climate Leadership Award was given in conjunction with the Association of Climate Change Officers, the Center for Climate and Energy Solutions and The Climate Registry. Other companies also receiving awards included IBM, Ford Motor Co. and Gap Inc.

“I commend The Port of Los Angeles on its exemplary leadership in cutting carbon pollution that harms our climate and threatens our health,” Gina McCarthy, an assistant administrator for EPA’s Office of Air and Radiation, said.

“The Port of Los Angeles and all of our Climate Leadership Award winners demonstrate that organizations who are taking action to mitigate climate change are also operating more efficiently, more innovatively and more competitively,” McCarthy said.

Port of Hueneme Tenants Pursued for Back Taxes

Ventura County, California’s treasurer and tax collector says he’s going after multiple tenant businesses at the Port of Hueneme who collectively owe more than a million dollars in back property taxes.

Treasurer-tax collector Steve Hintz told the Ventura County Star newspaper this week that his office is targeting high value, multiple year delinquencies.

In all, Hintz said, about $1.3 million in back taxes is owed by businesses operating at the port. The largest such debt by far, according to Hintz, is owed by Longview, Wash.-based Brusco Tug & Barge Co., which is delinquent on about $842,800 in unsecured property taxes, which are assessed against the value of assets not secured to the land, such as boats and equipment.

Brusco Tug hasn’t paid the taxes since 2002, Hintz told the newspaper.

Owner Bo Brusco, however, has said there’s a long-standing disagreement with county officials regarding whether two of the company’s tugs are exempt from property taxes. He said an escrow account has been set up to cover the debt, pending an appeal regarding the tax status of the boats.

Under California law, users of port property in California are all subject to the same taxes. Some counties, however, differ on tax law interpretation. This typically results in differences in tax assessment amounts among ports throughout the state.

Tuesday, February 28, 2012

GreenPacific Conference 2012: The Push Toward Zero Emissions

By Mark Edward Nero
mark.nero@pacmar.com

The many challenges facing the marine transport industry’s implementation of green technology, and potential solutions to those challenges, were discussed by a wide array of industry experts during the third annual GreenPacific Conference last month in Long Beach, California.

During the conference, which was held Jan. 17-18 and attracted about 100 attendees, the over-arching topic was zero emissions technology. More than a dozen speakers addressed issues associated with it during six panel discussions, which examined its promises, and challenges, pending projects, fixed rail applications, legal and regulatory implications, among other topics. Those in attendance acknowledged that the term “zero emissions” actually currently means no local emissions, as much of the electricity to power port projects still produces emissions at the source of generation.

“What we’re seeing is a march toward zero emissions,” Thomas Jelenic, the assistant director of environmental affairs and planning for the Port of Long Beach said during a panel discussion on container handling and shore power projects at container terminals.

“We’re looking at a complete shift in the way that terminals do business in the future,” Jelenic said.

During a panel discussion on promises and challenges, Visionary Intermodal Products & Solutions President & CEO Tom Kelly said that the march toward zero emissions on the docks can be aided through concerted strategies that include better controlling equipment inside and around terminals, such as lift equipment, trucks, trains and ships.

Less movement with fewer vehicles is also a key, he said, and can be accomplished through better organization of container stacking operations and more on-dock rail.

Kelly also talked about a potential future wherein commuter trains would be filled with cargo instead of passengers, and the majority of containers would be removed from the public highway system via a system that would operate like the existing conveyor systems in distribution centers.

Within 60 miles of a marine terminal, electric conveyance vehicles would move containers to substations, and the substations would transfer the containers to trucks for final delivery.

“This can all be done,” Kelly said. “There’s nothing preventing it from happening except money, space and the willingness to make it happen.”

During the conference’s on-road technology panel, Port of LA air quality environmental supervisor Kevin Maggay said his port can act as a regional catalyst for zero emissions, but that it’s only part of the solution.

“When people think of goods movement, they think of the port only, which is not the case. There is the entire logistics network out there,” he said. “But if something can be done here at the port, then it can be done at a lot of other places. But we can’t do it alone. We need to develop partnerships with other agencies with the same goals.”

Those other agencies, including the regional air quality district and state Air Resources Board should work together on solutions, Maggay said.

“All of these agencies have zero emission initiatives and we need to work together to find regional solutions,” he said. “I think a worst case scenario would be if each of these agencies invested and developed into separate technologies that don’t work together and we end up with a patchwork of technologies. Collaboration is key.”

Zero emissions tech has been on the front burner at the adjoining ports of Los Angeles and Long Beach for some time now. The site, which is one of the busiest complexes in the world, is also consequently, one of the biggest fixed station sources of air in the western US, due to the high volumes of ship, truck and train traffic that pass through it.

To help combat that, the Port of LA has adopted goals of reducing diesel particulate matter in the San Pedro Bay area by 72 percent compared to 2005 levels by 2014. It is also aiming to decrease sulfur oxide levels by 93 percent and nitrogen oxide levels by 22 percent, also by 2014.

Last July, as part of its anti-pollution efforts, the Los Angeles and Long Beach ports jointly adopted a joint zero emission technology development program, which seeks to identify, evaluate and test early-stage zero emission tech for port operations.

Among the early projects is a test of a prototype hybrid-electric drayage truck developed by Volvo. Also, funding for a technology demonstration of a zero-emission rail application that could be retrofitted into the existing infrastructure is in the works and could go before the ports this spring.

“This is really an exciting time to be working in technology, to be working for the ports,” Maggay said during his presentation. “Who knows what’s going to happen, but it’s going to be exciting.”

During a panel on fixed rail applications, Ken James of the computer engineering department at California State University, Long Beach, talked about his university’s history of working on innovations in freight movement, beginning with magnetic levitation in 2003.

The University sponsors a research and development center, the Center for Commercial Deployment of Transportation Technologies, which deals with maritime transportation issues. Among the lessons learned through the CCDOTT, James said, were that new technology must be “seamless.”

“If it doesn’t operate the same as a ship, truck or train, but cheaper, nobody wants it,” he said. The rule also applies to facilities, personnel and even supporting structure, he said, but gave one exception.

“Public pressure for cleaner, safer transport and the accompanying regulatory mandates can overcome ‘cheaper,’ but it still has to operate like a truck ore train,” he said.

Among the other pieces of knowledge learned, according to James, were that any form of new infrastructure, such high-speed rail, is too expensive to be feasible, and that current investment in road and rail infrastructure should be leveraged by new technologies.

And those new technologies, he said, should utilize road and rail and not try to transform them.

Also during the fixed rail panel, Kirk Marckwald, founder and principal of California Environmental Associates, a San Francisco-based environmental management and regulatory compliance company, cautioned that care must be taken when implementing any new rail emissions equipment.

“We need to ensure that any technology introduced does not compromise the safety, velocity, cargo throughput, economic competitiveness or reliability of the goods movement system,” he said.

During a panel discussion with terminal operators regarding existing zero emission container handling projects and shore power projects at Southern California container terminals, the Port of Long Beach’s Jelenic said that the percentage of port emissions generated by cargo handling equipment was starting to rise again due to the percentages of other emission sources at the port falling. This, he predicted, would lead to more governmental regulatory measures.

“Cargo-handling equipment went from 15 percent to four percent, now it’s starting to creep back up. As we all know, the nail that sticks up is the one that gets hammered,” he said. “And I think that will lead us toward zero emissions.”

Also during the operators panel, Bob Clark, the environmental affairs director for shipping outfit APL, talked about the headway his company has made regarding the use of shore power at the line’s West Coast terminal calls.

Under regulations issued by the California Air Resources Board, three years ago, 50 percent of a fleet’s visits to a port in the state must be shore-power visits and the total auxiliary engine power generated by the fleet’s ships while docked has to be reduced by 50 percent, starting Jan. 1, 2014.

The regulation increases to 70 percent of visits and a 70 percent reduction in 2017, and 80 percent by 2020.

APL was ahead of the curve when it officially launched shoreside power at the Port of Oakland in March 2011. The company also plans to implement the technology at three berths at the Port of Los Angeles’ Pier 300 in 2013 and an additional Pier 300 berth in 2014.

Retrofitting a single terminal costs about $4 million, according to Clark, and vessel retrofits are another $2 million. The problem, he said, it that APL estimates it will take 23 years to recoup in fuel and other savings the amount it takes to retrofit a single terminal.

“A 23-year payback is not very good,” he said. “We need partnerships to pay for this.”

Audits Find Violations at Seattle, Ilwaco Ports

The ports of Seattle and Ilwaco were both dinged for state law violations found under reviews recently made public by the Washington state auditor’s office.

The office of auditor Brian Sonntag revealed last week that it found three major violations at the Port of Seattle: the unauthorized providing of over $13 million to a school district for construction and operation of a high school; unauthorized usage of port credit cards by harbor commissioners; and unauthorized use of port labor.

Regarding the money to the school district, the auditor’s office found that $13.6 million given by the port for the construction of Aviation High School in the Highline School District had been actually earmarked for noise mitigation projects at other schools, and technically should have not been used to help build the prep school, which is scheduled to open in 2013.

The issue of misuse of credit cards by port commissioners had already been explored over the past two years by local media outlets, but the official state finding was that the five commissioners engaged in a total of 52 transactions totaling $2,990 between Jan. 1, 2010 and Aug. 31, 2011 that were not related to port business.

This was out of a total of $74,816 in total charges.

The unauthorized expenses included “personal meals, other personal charges, and expenses to extend port- sponsored trips or to modify the itinerary to accommodate non-port activities,” according to the audit report.

The port was later reimbursed for all charges.

Auditors also found that the port broke Washington state law requiring it to determine whether any construction project exceeding $40,000 can be accomplished less expensively by contracting out rather than using day labor.

For five projects, the auditor’s report states, the port was unable to provide documentation showing that it did this evaluation.

“While the port is not required to contract the work out even if it is more expensive to perform the work in-house,” the report states, “it should maintain documentation on why it awarded projects to port labor crews.”

The concern of the auditor’s office was that without evaluating whether it is less costly to contract the work out than performing the work in-house, the port’s at risk of over-paying for public works projects. The office also recommended that the port establish operating policies and procedures to ensure that it complies with state law regarding the use of port labor on public works projects.

A separate report found the Port of Ilwaco “did not follow state bid laws, limiting competition and not ensuring it received the best possible price.”

Of the two public works plans examined by the state, a parking lot project and construction of a boat yard, neither was awarded through state bid laws. As it turns out, however, both projects were completed for significantly less than the budgeted amounts.

The Ilwaco audit covered the period of Jan. 1, 2008 to Dec. 31, 2010.

Permits Filed for Longview Coal Export Facility

Millennium Bulk Terminals, which is now engaged in the cleanup and redevelopment of a former Alcoa aluminum smelter site in Cowlitz County, Washington, has submitted paperwork to start the process of building a coal export facility on the site.

The 416-acre location near the Port of Longview hasn’t been in use since it was decommissioned more than a decade ago. Millennium leased the land from Northwest Alloys in January 2011.

“Millennium has been working closely with local and state agencies as we move through the first step to permit a world-class import-export facility,” Ken Miller, Millennium’s President and CEO, said. “We are committed to developing and operating the safest and cleanest port facility possible.”

Millennium has filed for an aquatic resources permit with the US Army Corps of Engineers, a water quality certification from the Washington State Department of Ecology and shoreline development and conditional use permits with Cowlitz County.

If the project ultimately receives approval, building of the coal export terminal would occur in two stages, according to Millennium. Upon completion of the first stage, the facility’s capacity would be 25 million metric tons of coal per year.

Stage two would raise the capacity to 44 million metric tons, with most if not all of it going from the Western United States to Pacific Rim energy markets.

Millennium says it expects to invest $400 million during the development of the first stage of the coal export terminal and a total of $600 million at full build out.

According to an economic analysis by Seattle-based research firm Berk Consulting, revitalization of the site would result in 2,650 direct and indirect jobs during construction and 300 direct and indirect permanent jobs once the facility reaches full capacity.

Berk estimates that over a 30-year period, Millennium would generate $235 million in local and state revenues from the terminal.

Long Beach Approves Middle Harbor Lease

The Port of Long Beach’s Board of Harbor Commissioners on Feb. 27 voted unanimously to approve a 40 year, $4.6 billion lease for its presently under construction Middle Harbor Development Project.

The approval means that Hong Kong-based Orient Overseas Container Line and its subsidiary, Long Beach Container Terminal, can assume full control of the 300-plus acre property once renovations are complete by the end of the decade.

“I’m really excited to be part of this board at the time that this is being put into place. I think OOCL has shown itself already to be a good citizen in our community,” commission president Susan Anderson Wise said at the time of the vote. “To be able to enter this lease with them, which is really the future of the Port of Long Beach, I think it’s everything coming together, so this is really terrific.”

The Middle Harbor Redevelopment Project, which has been underway since spring 2011, combines two aging shipping terminals, Pier E and Pier F, into one modern terminal for the purpose of improving cargo-movement efficiency and reduction of environmental hazards.

LBCT has occupied Pier F since 1986.

The nine-year, $1.2 billion construction project upgrades wharfs, water access and storage area; as well as add a greatly expanded on-dock rail yard. The port says the project’s expected to cut air pollution and add thousands of jobs to the economy.

The port’s finance committee approved the deal Jan. 24.

Due to a technicality, the lease must still go through a second reading by the board before it becomes official. That reading’s tentatively planned for the board’s March 12 meeting.

Port of San Diego Wins Purchasing Award

For the third straight year, the Port of San Diego has received an Achievement of Excellence in Procurement award from the National Purchasing Institute.

The Achievement of Excellence in Procurement Award measures benchmark excellence in innovation, professionalism, e-procurement, productivity and leadership attributes of procurement departments.

“The award speaks to the Procurement Services Department’s dedication to continuous improvement, excellent customer service, professional standards of integrity and fairness, and best practices in facilitating public procurement and materials management,” Board of Port Commissioners Chair Lou Smith said in a statement.

San Diego’s Procurement Services staff is responsible for buying everything from office supplies to information technology equipment to fleet and police vehicles and heavy equipment, like cranes and fork lifts.

Purchased materials support the port’s administrative functions, as well as the maritime, law enforcement and maintenance operations throughout the port.

In winning the 2011 award, the port again joins a small group of organizations recognized nationally for excellence in procurement. San Diego’s one of just 26 special district agencies throughout the country to receive the award.

The award is sponsored by 11 professional purchasing associations, including the California Association of Public Purchasing Officers and the National Institute of Governmental Purchasing.