February 1, 2006
BOARD OF COMMISSIONERS
SPECIAL MEETING

Nancy Baker	Commission President
Arch Miller	Commission Vice President
Brian Wolfe	Commission Secretary
Larry Paulson	Executive Director
Todd Coleman	Deputy Executive Director
Alastair Smith	Senior Director of Marketing & Operations
Maggie Smith	Director of Finance/Auditor
Curtis Shuck	Director of Facilities
Patty Boyden	Director of Environmental Services
Lisa Lowe	Port Counsel
Dave Bartz	Schwabe Williamson & Wyatt
Laura Maffei	Schwabe Williamson & Wyatt
Brien J. Flanagan	Schwabe Williamson & Wyatt
Bob Moser	Citizen
Jonathan Nelson	The Columbian
Bruce Paris	Bank of Clark County
Richard Roche	Parametrix
Terry Belunes	Parametrix
Lee McCallister	Fruit Valley Neighborhood Association
Hutch Johnson	Cadet Manufacturing
John Dunbar	Cadet Manufacturing

ACTION ITEMS

Cadet Manufacturing Company Settlement Agreement

Commissioner Baker noted that this issue has been discussed extensively during the past year and was a topic of discussion during the executive session prior to this meeting.

Executive Director Paulson reviewed key components of the proposal, including:
(1) the proposed $24 million settlement includes a payment from two of the three insurance carriers dealing with the Cadet bankruptcy in the amount of $10 million, with $6 million of that coming from the Swan cleanup site; (2) the Port would take a judgment against Cadet in the amount of $14 million enforceable against the third carrier for the balance of the settlement; (3) the proposal would remove Cadet from the process and the Port would pursue all remaining recoveries from the other insurance carrier; (4) the Port would acquire the current Cadet site, which includes approximately 3.9 acres, and an additional seven acres of property owned by Anderson Realty LLC at fair market value in two payments, with Cadet continuing operations at the site under a property lease agreement; and, (5) the Port would work directly with the Washington State Department of Ecology and assume responsibility for environmental cleanup of the Swan and Cadet sites.

Counselor Dave Bartz gave background information on the proposed agreement and counseled that the Commission should give favorable consideration to its approval.

Executive Director Paulson mentioned that Cadet President Hutch Johnson and Cadet Attorney John Dunbar were instrumental in creating the proposed agreement, and he praised their efforts during the process.

In response to comments by Commissioner Miller, Mr. Paulson explained that, following its approval by the Port Commission, the agreement must be approved by court action and a port-related comprehensive scheme amendment. He said the proposed comprehensive scheme amendment, which would include a public hearing, would be submitted to the Commissioners at the next regular meeting.

Commissioner Wolfe concurred with Commissioners Miller and Baker that the matter should be settled so the Port can move forward with the environmental cleanup.

Hutch Johnson, Cadet President, spoke in favor of the proposal and said Cadet officials support the proposal because they are confident that the Port would do an excellent job of cleaning up the contamination of the Cadet site and maintaining good relations with the Fruit Valley Neighborhood Association.

Lee McAllister, representing the Fruit Valley Neighborhood Association, said that he had always had an excellent relationship with Hutch Johnson, at Cadet Manufacturing, and asked who would replace Mr. Johnson as his neighborhood contact. Mr. Paulson explained that according to the terms of the agreement, Mr. Johnson will remain involved in the environmental cleanup during the transition period. Mr. Paulson added that in addition to contacting Mr. Johnson regarding neighborhood issues, Mr. McCallister should feel free to contact Port Environmental Services Director Patty Boyden or him.

On motion by Commissioner Miller, seconded by Commissioner Baker, and carried unanimously, the Port of Vancouver USA Board of Commissioners authorized the Executive Director to sign the proposed settlement agreement between the Port of Vancouver USA, and Cadet Manufacturing, Inc., as presented to the Commission during its special meeting of February 1, 2006.

Request for Authorization: Marketing Trip Approval

Executive Director Paulson presented the staff report, as contained in the agenda packet, and discussed the proposal with the Commissioners. He explained that Port policy states than any individual trip with a cost estimated to exceed $25,000 must be approved by the Port of Vancouver USA Board of Commission and that he and Alastair Smith, Senior Director of Marketing, would be departing for New Zealand and Australia on February 4 and returning on February 18, 2006. He added that a member of the Marine Terminals Corporation's executive management team would accompany them.

In his request for approval, Mr. Paulson stated that personal contact with customers and leaders in the shipping industry has proven to be invaluable in maintaining contacts and promoting the use of Port facilities and services; visits to headquarters of current and potential customers is an excellent opportunity to market the enhancements and benefits gained by using the facilities at the Port of Vancouver USA; and, the value derived from new associations and the renewed contacts resulting from these calls has helped maintain and increase shipping business significantly over the past several years.

On motion by Commissioner Miller, seconded by Commissioner Wolfe, and unanimously carried, the Port of Vancouver USA Board of Commissioners approved the expenditure of approximately $32,000 to cover travel expenses for Executive Director Paulson and Sr. Director of Marketing Smith for a marketing trip to New Zealand and Australia from February 4 through 18, 2006.