The Port of Fernandina is suddenly awash in hundreds of thousands of dollars in expenses that came to light at last week’s Ocean Highway Port Authority meeting.
OHPA commissioners were made aware of the pending bills as a result of legal fees, mandated vessel inspection costs and necessary roof repairs to one of the port’s primary warehouses.
Commissioner Ray Nelson, who heads the port’s maintenance efforts, made the stunning announcement that the port’s tugboat was mandated to undergo a U.S. Coast Guard “haul out” inspection.
“There is an issue with the tugboat. There is an inspection issue under a critical deadline of Aug. 31 for a haul out inspection and if it is not done the tugboat will be taken out of service until such time as it is inspected,” Nelson told commissioners. “I know we’ve got a problem and we’re trying to work this out as quickly as possible so we don’t have any commerce interruption.”
Nelson said estimates for the inspection are between $75,000 to $100,000.
A “haul out” inspection means the tugboat will be placed in a dry dock facility and the vessel’s hull integrity reviewed by a certified Coast Guard inspector.
“Right now we’re trying to figure out the where and the when that the inspection can take place,” Nelson said.
Ironically, Nelson revealed the tugboat had recently been in dry dock at a shipyard in Palatka to have its hull repainted.
“When we had the tugboat in dry dock the Coast Guard was not notified and the inspection was never done,” Nelson said.
Port Accountant Pierre LaPorte said there currently are insufficient funds in the port’s maintenance account to pay for the “haul out” inspection.
“(On) maintenance, the first $15,000 to operator the rest to OHPA. If OHPA doesn’t have the funds and the operator still wants to use the equipment, then the operator has to put up the funds,” LaPorte explained.
The port operator, Savage Services, did not comment on the tugboat issue.
Nelson then went into the roof panels of warehouse number 3 which is one of the port’s primary storage facilities.
“We have some heavy, severe corrosion areas on the roof panels of warehouse number 3 that’s going to require some pretty quick attention,” Nelson said. “Right now we’re patching the panels but in fact we’re patching the patches. This could have a big impact on this warehouse where we store wood pulp. (We need) to get roof panels in place so we don’t have any cargo issues.”
Nelson did not give any estimates of the roof panels replacement costs.
“This is obviously a deferred maintenance issue if we’re patching patches,” said Commissioner Miriam Hill.
Port Director David Kaufman said “this goes back to OHPA not having money for maintenance.”
Roof panel replacement can cost as much as $18 per square foot.
During a review of OHPA’s financial report, Hill dug into the port’s mounting legal costs in defending several ongoing lawsuits.
She questioned LaPorte about $104,000 in unpaid legal fees.
“Because the (legal) items were getting so large we added the unpaid legal fees (to the report) just so you understand the extent of the spending. The $104,000 is unpaid legal fees. We haven’t had the cash flow to pay it yet,” LaPorte said.
One of the ongoing cases is the City of Fernandina Beach and the issue of yearly $50,000 PILOT (Payment in Lieu of Taxes) to the city. OHPA stopped making the payments in 2018 claiming the PILOT requirement with the city had expired.
OHPA’s attorney said the city was prepared to discuss a possible settlement of the case and said commissioners should plan a meeting to discuss the settlement.
The hits just keep on coming! These missteps only highlight the lack of oversight by the OPHA commissioners. It would be interesting to see what revenue the tug has been able to generate versus its costs of acquisition and operation.