2008 annual report Striving for Peak Performance Bags of rice are hoisted by a crane. i A tugboat assists a ship as it heads to sea.

ii TABLE OF CONTENTS

2. 2008: Striving for Peak Performance

5. Shipping Activities: New Cargo from Trading Partners

6. e Longest Direct Ship-to-Rail Facility in the Western U.S.

9. Port Tenants Continue Expansion of Facilities

10. New Environmental Programs Implemented

13. Olympic Athletes Train at Port

14. Security Operations Enhanced with new Systems & Training

17. Port Hosts Community Events & Dignitaries

18. 2008 in Review: Port Statistics

26. Port of Stockton Team 2008

Coiled steel. 27. Contact Information

1 2008: STRIVING FOR PEAK PERFORMANCE

We are very pleased to report that during system improving their effi ciency, while recently pollution control technologies. The Port also 2008, the Port of Stockton’s long-term efforts dredged docks are proving to be quite popular with provided leadership in removing invasive plants to establish a broad, diversified foundation of importers and exporters. is has resulted in the from our waterways, and expanded the Owl Nest maritime activity and property development has Port hosting 172 vessels in 2008, an average of Box Program which provides an environmentally resulted in a private sector investment exceeding almost one every other day, with the Port trading friendly and cost effective method of rodent $340 million in recently completed projects. with more than 55 countries around the world. control, among many other activities. is diversifi cation has greatly helped the Port e Port’s eff orts to attract green industries In conclusion, after 75 years of operation, the to weather the recent dramatic changes in our and green jobs have also reaped great dividends future remains very bright for the Port of Stockton, economy as construction-oriented cargos such for our community. Ships carrying windmill “California’s Heartland Port”. Active negotiations as cement and steel imports have decreased as towers to the Port from Vietnam increased from on a wide variety of projects representing private regional projects have slowed. just seven ships in 2007 to 30 ships in 2008, sector investment of more than $735 million are However, an additional operating year of significantly adding to the family-wage dock, proceeding. Also continuing are port dredging, port-initiated infrastructure improvements has rail and yard jobs. Also in 2008, the nationally rail, electrical, road, and sewer infrastructure supported eff orts to attract and maintain the non- recognized Community Fuels biodiesel plant was projects. ese investments will provide signifi cant construction dependant tenants and the jobs they completed, and the Pacifi c Ethanol production dockside, construction, and long-term job oppor- bring to our community. For example, the recently facility also inaugurated operations. ese activities tunities for our community. ese port-initiated opened two-mile direct ship-to-rail facility at the combined have resulted in the creation of more “stimulus projects” will proceed without taxing Port, the largest such facility in the Western than 300 “green” family-wage jobs. the citizens of the Stockton Port District while United States, contributed to a 44 percent increase In addition, the environmental impacts of we successfully compete with many West Coast in rail activity. Meanwhile, the Port of Stockton port operations were signifi cantly improved as old ports that actually tax their citizens. Expressway provides our tenants with a direct cargo-handling equipment was retired in favor of We hope you enjoy our 2008 annual report: connection to the state and federal highway new equipment or updated using the latest in air “Striving for Peak Performance.”

W. Ronald Coale Gary Christopherson Elizabeth Blanchard Ronald J. Ferrario Chairman Vice-Chairman Commissioner Commissioner

Steven A. Herum Robert V. Kavanaugh Sam L. “Butch” Toccoli Richard Aschieris Commissioner Commissioner Commissioner Port Director

2 Commissioner Elizabeth Blanchard, Chairman W. Ronald Coale, Commissioner Ronald J. Ferrario Stockton Port District Board of Commissioners and Port Director: R O T C E R I D T R O P D N A S R E N O I S S I M M O C F O D R A O B T C I R T S I D T R O P N O T K C O T S Aschieris, Vice-Chairman Gary Christopherson, Commissioner Robert V. Kavanaugh, Commissioner Steven A. Herum 3 3

(front row, left to right) (back row, left to right) Commissioner Sam L. “Butch” Toccoli, Port Director Richard

© Turner Photographics, Rich Turner Sunset at the Port of Stockton.

4 SHIPPING ACTIVITIES: NEW CARGO FROM TRADING PARTNERS

Shipping activities at the Port of Stockton at the Port. ese components were manufactured in cooled off during 2008, after shattering a variety of Vietnam and and were bound for destinations records the year before. e regional slow-down in in Kansas, Texas and Wisconsin. e lengthy com- home construction in 2008 presented some new ponents were unloaded from their ships directly to challenges to the Port, with the demand declining dockside flat rail cars. The Port offers the longest for cement, steel, lumber and other construction- direct ship-to-rail facility in the Western United oriented products. However, the Port was successful States. replacing these cargos with a dramatic 329 percent Sulfur and rice exports continued to be the increase in windmill segments imports. In addition, primary commodities leaving the Port of Stockton the continuing investment in rail infrastructure has during 2008, with the Port exporting more than resulted in rail usage increasing by 44 percent. 227,000 tons of sulfur and more than 155,000 In 2008, a total of 172 vessels called on the tons of California bagged rice, the highest Port during the calendar year, nearly a vessel tonnage in the past three years. every other day. Also in 2008, West Coast longshore More than 270,000 metric tons of liquid workers ratifi ed a new six-year contract with fertilizer arrived at the Port, representing the Pacifi c Maritime Association of waterfront the largest imported commodity. Cement employers following bargaining that lasted for ship ments dropped to 268,834 metric tons as more than eight months. e new pact covers the construction industry continued its decline. Other some 65,000 longshore workers and marine clerks, large incoming cargos received during 2008 included members of the International Longshore and Warehouse anhydrous ammonia, molasses, steel products and Union, at 29 West Coast ports. e PMA represents large components for the construction of alternative- 71 domestic and international carriers, terminal power wind turbine parts. operators and stevedoring companies operating at However, the maritime highlight in 2008 was the those ports. 30 ships carrying windmill components that docked

5 THE LONGEST DIRECT SHIP-TO-RAIL FACILITY IN THE WESTERN U.S.

More than 30 ships arrived at the Port of Stockton cargos also made use of these and during 2008 carrying alternative energy wind tower other key dock facilities. During components using the longest ship-to-rail facility on 2008, 13 vessels called on the East the West Coast. Each weighing up to 60 tons, these Complex with their heavy and fl at components were destined to be assembled into wind cargos totaling 5,781 metric tons. energy towers rising more than 260 feet above ground ese project cargos consisted of at wind farms located throughout the Midwest. e items such as generators, cooling Port of Stockton’s 12,000 feet of dockside rail allows towers and evaporators used for the the tower segments to be unloaded directly onto fl at generation of electric power and large tank vessels rail cars, signifi cantly reducing handling costs. used by regional oil refineries and chemical plants. e Port is an excellent gateway for these cargos Unit weights for some of these components were more due to the many rail connections into the Midwest. than 300 tons. When completed, these components The rail cars are put together in what is called a are expected to begin producing up to 201 megawatts “unit train”, which is a single source, single destination of electricity. e Port has also partnered with the train that goes straight from the Port of Stockton private sector to provide the required specialized to the project sites. e Meridian Way Wind Farm equipment such as heavy haul railcars and multi-axel near Concordia, Kansas is among several new wind truck trailers to deliver the cargo to their final energy projects being built in the state with windmill destinations. Given the multi-faceted capabilities of seg ments shipped through the Port of Stockton. In the docks and overland infrastructure supporting addition to Kansas, windmill components arriving at the Port facilities, the Port of Stockton is now the Port have also been delivered to Texas, Wisconsin, recognized as a premier west coast gateway for and Illinois. handling these oversized, heavy and expensive project In addition to the direct use of windmill com- cargo components. ponents using the Port’s ship-to-rail, other project

6 Windmill components on the Port’s two mile direct ship-to-rail facility.

7 Construction at Yara North America’s dry bulk fertilizer facility.

8 PORT TENANTS CONTINUE EXPANSION OF FACILITIES

Yara North America Expands The Port is attracting attention from biofuels Yara North America plans to build a bulk dry producers because of its transportation links, specif- fertilizer storage and distribution center capable of ically two major railroads providing connections to storing up to 80,000 tons of fertilizer at the Port. e the Midwest as well as worldwide maritime shipping. company will also have the option to use existing adjacent buildings on Rough and Ready Island for H.J. Baker Facility Grand Opening additional expansion. In September of 2008, H.J. Baker & Bro., Inc., hosted Yara currently moves about 75,000 tons of dry a grand opening ribbon cutting of its new facility at bulk fertilizer a year, and the new facility is expected the Port of Stockton. e new facility will to double capacity within two or three allow the company to continue to provide years of opening. e Port of Stockton is top quality sulphur-based fertilizers to uniquely suited to efficiently handle dry customers in the region and will also allow bulk fertilizers, and its central location is them to reach international customers more ideal for distribution to a variety of Western effi ciently. States. Following the completion of the new Port of Stockton distribution center, most of the Pacifi c Ethanol Begins Operation company’s dry fertilizer storage and distribution In October, Pacifi c Ethanol, Inc., began operations operations will shift to the Port. and has the capacity to produce 60 million gallons of ethanol a year. e $140 million facility employs e Port Attracts More Biofuel Plants the equivalent of 40 full-time employees. It uses corn During 2008, US BioDiesel Group LLC, a biodiesel to produce motor fuel for the California market as refi ning and trading startup announced plans to build well as byproducts for sale as cattle feed. The Port a refi ning plant at the Port. It would be the second leased 30 acres to Pacifi c Ethanol for the plant, which biodiesel plant and the third biofuel facility at the will process 21 million bushels of corn per year, Port of Stockton, where Pacific Ethanol Stockton producing both ethanol and 500,000 tons of wet LLC is building an ethanol refi nery and Community distiller’s grains, which can be sold as cattle feed to Fuels is installing biodiesel production equipment. dairies and feedlots.

9 NEW ENVIRONMENTAL PROGRAMS IMPLEMENTED

The Port of Stockton continues to establish far, the Port has installed 15 itself as an environmental leader in San Joaquin barn owl nest boxes. Anecdotal County and to set an example for conducting evidence suggests that the barn business in a responsible and sustainable manner. owls are having a signifi cant impact 2008 was an exciting year as the Port continued on the rodent population and are its environmental stewardship and implemented a very effective, environmentally new environmental programs. friendly, and cost-eff ective method of rodent control. Arundo Eradication and Native Habitat Protection Repowering/Replacing Old Arundo is an invasive, non-native plant that resembles Diesel Powered Equipment bamboo, which spreads rapidly and quickly displaces In an effort to reduce harmful air emissions, the valuable native riparian habitats which species depend Port is in the process of updating its diesel powered on for their survival. e Port’s Arundo Eradication equipment. is process involves retiring old “dirty” Program goal for 2008 and 2009 is to effectively equipment and replacing them with new clean or low remove all colonies of Arundo along the waterways emission equipment. To further this eff ort, the Port surrounding the Port, without the use of chemicals, provides guidance and assistance to its tenants on so that native vegetation has the opportunity to ways to update their equipment and truck fl eets to establish itself to provide habitat for fi sh and wildlife reduce harmful emissions. of the region. Healthy Air Living Port of Stockton’s Owl Nest Boxes e Port adopted a resolution to support the San In 2006, the Port launched its Barn Owl Nest Joaquin Valley Air Pollution Control District’s Box Program. e program valley-wide initiative to clean our air. is program goal is to enhance the barn encompasses a year-round approach to weaving choices owl population by providing into the fabrics of our lives on a daily basis that results suitable nesting locations in cleaner air and therefore better health for the throughout the Port. Thus Valley’s residents.

10 Ships pass through San Francisco Bay on their way to the Port of Stockton.

11 An Olympic athlete trains at the Port of Stockton.

12 PORT PROVIDES TRAINING FACILITIES FOR OLYMPIC ATHLETES

During 2008, some of the top track and fi eld Among the athletes participating athletes in the country trained for the Olympics in the training were Olympic gold at facilities provided by the Port of Stockton. The medal winner Stephanie Brown- previous year, the athletes trained at a remote location Trafton; Amy Acuff , a four-time in Isleton. e group’s rental property was sold and Olympian in the ; Suzy ultimately signed a rent-free, one-year lease with the Powell-Roos, a three-time Olympian Port of Stockton in order to complete their training. in the discus; Brad Walker, the 2007 e athletes then moved truckloads of cumbersome world champion in the pole vault and equipment from Isleton on January 25 and were up current American record holder; and , and running three days later. who won the Olympic Silver Medal in the heptathlon Building 812 on Rough and Ready Island provided at the Beijing games. In all, eleven athletes who trained the athletes with 40,000 square feet of space at the Port of Stockton competed at the Olympic to train under the supervision of Coach Dan Games in Beijing. e athletes, who had no fi nan- Pfaff , who has coached elite Olympic athletes cial support from their national dele ga tions, at several top American universities, including accepted donations and raised funds to cover University of Texas at Austin and University expenses. Many athletes shared living expenses of Florida. The facility is equipped with a and worked side jobs to support themselves. pole vault runway and pit, a high jump pit, weight- Following the Beijing games, the group’s coach lifting equipment, two 90-meter sprinting lanes, Dan Pfaff took a position with the United States and a throwing area. Daily activities included weight Olympic Committee. Several athletes have continued training, sprinting, plyometrics, jumping and vaulting. to train at the facility, and some are preparing for In May 2008, more than 30 athletes were preparing the World Championships in , in at the Port’s facilities for Olympic trials in June. August 2009.

13 SECURITY OPERATIONS ENHANCED WITH NEW SYSTEMS & TRAINING

Protecting America’s ports and goods supply chain winning Canine Unit compli- is critical to the safety and growth of the United States ments the overall security for economy. American ports handle 95 percent of all the Port and the surrounding overseas cargo, providing billions of dollars worth of community. commodities and products that must be protected. Automated access control During 2008, the Port of Stockton continued gates and the remotely moni- its commitment to comply with the United States tored video camera system provides for quick response Department of Homeland Security and United to breaches of security. ey also provide for quick States Coast Guard regulations by improving over- and timely processing of persons needing access to all port security. The focus has been to enhance the secure maritime facilities on a 24-hour, seven security through improved access control, perimeter days-per-week schedule. e digitally recorded video security, remotely operated video surveillance, increased system also provides the ability to observe, record, internal security, and the training of port employees and review activities captured by the cameras. and port tenants. Security however does not come without a price. The Port focused on educating its tenants and e Port of Stockton has invested operating revenues business partners for the implementation of the and grant funding to achieve this goal. Also, like other Transportation Worker Identifi cation Card (TWIC) ports in our nation, increases in operational funding program mandated by the U.S. Department of required security fee assessments, and state/federal Homeland Security beginning in March of 2009. grant funding to sustain long-term security goals. e addition of new Port businesses provides an Over the course of the year, all of the critical ever changing face to challenge the security providers. security requirements and challenges were met on e Port of Stockton has continued to meet the time and as prescribed by law. e Port of Stockton is challenges by enhancing the police force through the in full compliance with applicable regulations and training and profi ciency testing of its academy-trained is providing optimum security for the Port of Stockton officers and security technicians. The Port’s award and its clientele.

14 The Port Police patrol the Port 24 hours a day.

15 Olympic pole vaulter Brad Walker clears the bar while training at the Port.

16 PORT HOSTS COMMUNITY EVENTS & DIGNITARIES

75th Anniversary 2007 annual report “California’s Heartland Port” On the evening of February 2, 2008, the actual 75th which received the American Association of Port anniversary of the Port of Stockton, the Port hosted Authorities highest honor known as the “Award of the opening night celebration “Diamond on the Delta: Excellence” later in the year. 75 Years of the Port of Stockton” a six-week public exhibit tracing the 75 year history of the Port of Association of Pacifi c Ports Stockton at the Haggin Museum in Stockton. The The Port of Stockton hosted the Annual Meeting event was attended by more than 300 dignitaries, port of the Association of Pacifi c Ports, an organization of tenants, employees and members of the public. Food ports from throughout the Pacific Rim in August, stations representing some of the Port’s trading 2008. The conference was attended by 150 repre- partners were located throughout the museum sentatives from more than 30 ports. Delegates and a brief program was held in the Museum’s from Pacifi c Rim ports of Guam, Taiwan, North Hall recognizing the contributions Saipan, Mexico, Alaska, , American of many people through out the years who Samoa, and California, among other places, have made the Port the job-generator it has participated in a combination of business become today. meetings and locally-hosted social events, which included a Stockton Ports baseball game, tour of Lodi State of the City wineries, and a visit to Murphys, California. e Port hosted the Greater Stockton Chamber of Commerce’s annual State of the City event, attended Chamber Mixer by more than 1,000 people, including elected offi cials, As part of the 75th Anniversary cele bra tion, the members of the business community, and the general Port hosted a mixer for nearly 300 leaders public. In addition to the featured address by Mayor of the local business com munity. Held at Ed Chavez, the audience also heard from Port the Commander’s House on Rough and Director and Chamber President Richard Aschieris, Ready Island, attendees were acquainted and from Port Commission Chairman W. Ronald with the Port’s role in the community, Coale who delivered a “State of the Port” message to environmental efforts, and future plans the assembled group. e Port also premiered the to bring more jobs to the community.

17 2008 IN REVIEW: PORT STATISTICS

TOTAL WATERBORNE TONNAGE FOR CALIFORNIA SMALL PORTS

San Diego 3,142,691

Stockton 2,098,684

Redwood City 1,487,064

San Francisco 1,362,694

Hueneme 1,269,462

Sacramento 852,849

Humboldt 522,604

Richmond 331,604

18 Dock warehouse with steel coils.

19 Spools of steel are unloaded.

20 2008 IN REVIEW: PORT STATISTICS

OUTBOUND TRADING PARTNERS INBOUND TRADING PARTNERS Total Tonnage: 431,923 Metric Tons Total Tonnage: 1,306,193 Metric Tons

Japan China 155,628 315,236 Trinidad 248,235 Norway Brazil 106,939 84,783 105,436 Mexico 86,252 76,616 Taiwan 81,876 Thailand 59,940 China South America 51,192 55,384 52,491 Vietnam Turkey 37,072 47,551 Korea 30,603 Egypt India 28,115 14,730 Chile 20,788 New Zealand 2,609 Other Other 1,423 75,217

21 2008 IN REVIEW: PORT STATISTICS

INBOUND COMMODITIES OUTBOUND COMMODITIES Total Tonnage: 1,306,192 Metric Tons Total Tonnage: 431,922 Metric Tons

Liquid Sulphur Fertilizer 227,033 271,571 Cement 268,834 Anhydrous Ammonia 227,914 Molasses 200,188 Bagged Rice 155,628 Steel Products 125,841

Windmills 77,622 Bagged/Bulk Fertilizer 59,228 Bulk Rice Barite 47,551 38,040

Bulk Rice 29,986

Project Cargo 4,359

Lumber/ Other Pebbles 1,710 2,609

22 Rice at dockside warehouse.

23 The commander’s house is host to many community events.

24 2008 IN REVIEW: PORT STATISTICS

CARGO TYPES & PROPERTY LEASING REVENUE CENTERS Total Revenues: $31,878,401 Total Revenues: $31,878,401

Property Property Management Management $15,750,049 $15,750,049

Terminal General $12,900,843 Cargo $7,275,372

Warehouse $1,323,583 Dry Bulk Cargo $4,442,039 Other $871,458

Liquid Bulk Cargo $2,507,015 Interest $560,109

Grant Other Revenue $1,903,926 $472,359

25 PORT OF STOCKTON TEAM 2008

EXECUTIVE COMMERCIAL Gary Johnston Bodie Gonsales, Tyler Moua Richard Aschieris, EXCHANGE CLUB Joe Luke Assistant Superintendent Kerry Nicholas Port Director Beverly McConnell, Bob Myers Randy Jerwa, Tony Novaresi Jeff Kaspar, Commercial Exchange Ricardo Navarro Assistant Superintendent Allen Standley Club & Special Events Deputy Port Director, Eric Osterlie Mike Miller, Lacy Biglow Manager Properties and Alex Perez Assistant Superintendent Janice Dias Environmental , Charles Piggee Jeff Vine, Fritz Encluna Cheryl Taylor, Golf Professional Assistant Superintendent Vern Ragsdale David McConnell Deputy Port Director, Linda Cook Pete Ramirez, Jr. Leslee Rogers Finance and ENVIRONMENTAL Larry Lockmiller* AND REGULATORY Joe Rhodd Darrel Wade Administration Kyle Moutray AFFAIRS Steve Trindade Wally Wallick Mark Tollini, Daniel Bautista Deputy Port Director, Jeff Wingfi eld, Manager, David Zendejas Cecilio Gomez Trade and Operations Environmental & PROPERTY Eduardo Gomez Yvonne Ishimoto, Regulatory Affairs HUMAN RESOURCES MANAGEMENT Assistant to the Director/ Jason Cashman Christeen Ferree, Human Victor Gomez Steve Escobar, Manager, Secretary to the Board Rita Koehnen Resources Manager Michael Lopez Port Real Estate Misty Escobar Katie Cowan Alfredo Maya & Properties Development Victoria Lucero FACILITIES Melanie Rodriguez Giovanni Maya MAINTENANCE AND Everardo Mendoza Debbie Calli Barbara Snyder CONSTRUCTION INFORMATION Raul Montanez Gary Gentry, Director of TECHNOLOGY PURCHASING AND ACCOUNTING Facilities Maintenance Sam Montanez GENERAL SERVICES Dianna Baker, Controller and Construction Jim Cooper, Information Samuel Montanez Technology Manager Erin Potter, Purchasing Michelle Bowling, Tim Loveland, Facilities David Rodriguez and General Services Myra Lang Assistant Controller Maintenance and Manager Dennis LeClert Jeannine Anchartechahar Construction Manager/ PORT POLICE Judy Baumann Esmeralda Correa Safety Offi cer George F. Lerner, Jr., Melissa Honey MARKETING Chief of Police Rita Hernandez Jazoé Smith Kara McKinney Kristy Krause Juan Villanueva William P. Lewicki, Steve Nichols, Lieutenant Director of Marketing Maria Perez Scott Ballard Mike Archibeque SPECIAL PROJECTS Bob Belmont Jim May Jan Perryman OPERATIONS Henry McKay, Gary Capehart Jim Mitchell Special Projects Manager Chris Mountjoy, Noel Aviles Steve Cookerly Terminal Superintendent Suzanne Craig David Gentry Mike Tyler, * 2008 Employee of the Randall Hawley Operations Manager Billy Hutton Year Kazuo Higashi Jill McAuliffe, Timothy Ivey Mike Holmes Accounts Manager Rick LeChuga

26 P.O. Box 2089, Stockton, CA 95201-2089 • 2201 West Washington Street, Stockton, CA 95203 www.portofstockton.com E-mail: [email protected] • (209) 946-0246 • (800) 334-3213 • Fax: (209) 465-7244

The Port of Stockton received the prestigious AWARD OF EXCELLENCE for its 2007 Annual Report by the American Association of Port Authorities at its 2008 awards competition. There were only two Awards of Excellence given for Annual Reports in 2008 throughout the U.S and Canada. The Government Finance Offi cers Association of the United States and Canada has awarded the Stockton Port District with a CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING for the Port’s comprehensive annual fi nancial report for the 2008 fi scal year. This was the eighth consecutive year that the Port Stockton District has achieved this prestigious award. We would appreciate your opinion about this year’s Annual Report. Our web site, www.portofstockton.com, has a Feedback link on the Annual Reports web page. Please send us your comments and questions. Design & Production by Cummings Design + Advertising Printing by Parks Printing All images, unless otherwise noted, © 2008, Phil Di Marino, ColorNet, Inc. © 2009 Port of Stockton All Rights Reserved Printed with soy inks on recycled paper

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