PORT COMMISSION MEETING APRIL 27, 2021– AGENDA 1 Tuesday, April 27, 2021 PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

9:15 a.m. 111 East Loop North Houston, TX 77029

A. CALL TO ORDER

B. CHAIRMAN'S REMARKS 1. Governance, legislative, policy, and operational matters

C. APPROVAL OF MINUTES 1. Special Port Commission Public Meeting - March 11, 2021

2. Port Commission Public Meeting - March 23, 2021

D. STAFF REPORTS 1. Summary of selected financial and operational matters

E. APPEARANCES 1. Public Comment

F. EXECUTIVE Awards, Amendments & Change Orders 1. Consideration and possible action to approve a Founding Park Partner sponsorship level of $250,000 a year to support the Houston Parks Board 50/50 Park Partners Plan, in a total amount not to exceed $1,000,000.

2. Enter into a professional services contract with Brown Consulting for state governmental policy consulting and support in an amount not to exceed $66,000.

3. Enter into a professional services contract with Michael Toomey for state governmental policy consulting and support in an amount not to exceed $66,000.

4. Amend the professional services agreement with the TC&B/GBA joint venture of AECOM Technical Services Inc. and Gahagan & Bryant Associates, Inc. to perform a supplemental economic study based on the Houston Ship Channel Expansion Channel Improvement Project (Project 11) Final Integrated Feasibility Report and Environmental Impact Statement, in an amount not to exceed $125,000.

2 General 5. Approve the new Minority- and Woman-Owned Business Enterprise Development Policy and the Amended and Restated Small Business Development Policy.

G. COMMERCIAL Leases 1. Authorize a second amendment to the Lease Agreement for an additional three-year term with Cooper/Ports America, LLC, for approximately 15.56 acres out of the Port Authority’s Block 19 at Northside Turning Basin effective no earlier than July 1, 2021, at an annual base rent of $592,608 with a 3% annual increase.

2. Authorize a fourth amendment to the Lease Agreement for an additional one-year term with Cooper/Ports America, LLC, for approximately 3.20 acres which includes Warehouse 21-A, the apron adjacent to Warehouse 21-A, an additional open area of approximately 57,210 sq. ft., and a rail spur of approximately 500 linear ft., out of the Port Authority’s Block 21 at Northside Turning Basin, effective no earlier than June 1, 2021, at an annual base rent of $89,837.

3. Authorize an amendment to the Lease Agreement for an additional five-year term with Texas Brine Company, LLC, for approximately 2.91 acres out of the Port Authority’s Block 5 at Rosa Allen effective no earlier than August 1, 2021, at an annual base rent of $63,435 with a 3% annual increase.

H. FINANCE Awards, Amendments & Change Orders 1. Award a three-year contract, with an additional one-year option, to Universal Industrial Supply, to provide safety personal protective equipment (PPE) and vending machines (for dispensing PPE), at Barbours Cut Terminal, Bayport Container Terminal, and the Turning Basin Terminal, and additional safety equipment, in an amount not to exceed $400,000.

General 2. Approve the Port Authority’s fiscal year 2020 Comprehensive Annual Financial Report.

3. Adopt a Statement of Objectives and Policy for the Port Authority 401(a) Defined Contribution and 457(b) Deferred Compensation Plans (DC Plans).

4. Adopt a Revenue Bond Debt Policy and Procedures for the Port Authority.

5. Adopt a Disclosure Policy and Procedures for the Port Authority.

I. INFRASTRUCTURE Awards, Amendments & Change Orders 1. Approve staff’s ranking of vendors and award a professional services contract in an amount not to exceed $460,900 for the "u-shaped property" pre-development design in the vicinity of the Bayport Container Terminal to the top-ranked proposers: staff ranking – first, Lockwood, Andrews and Newnam, Inc.; second, Halff Associates, Inc.; and third, Cobb, Fendley & Associates, Inc.

3 2. Approve staff's ranking of vendors and award a construction contract in an amount not to exceed $5,950,000 for Beltway 8 site preparation to the top-ranked proposer: staff ranking - first, R & T Ellis Excavating, Inc.; second, Spaw Glass Civil Construction, Inc.; and third, Standard Constructors, Inc.

3. Award an environmental consulting services agreement to InControl Technologies, LLC, the sole source provider, to conduct a non-aqueous phase liquid recovery operation at Port Authority property at the Turning Basin Terminal in an amount not to exceed $299,685.

4. Amend the professional services contract with Lockwood, Andrews & Newnam, Inc. for re- design services and construction/bid phase services for the rail spur at Bayport Container Terminal Phase 2 in an amount not to exceed $243,260.

5. Amend a professional services contract with HDR Engineering, Inc. for construction management services for the Beltway 8 site preparation project for the Houston Ship Channel Expansion Channel Improvement Project in an amount not to exceed $55,000.

6. Amend the professional services contract with CAVU International 1, LLC for continuous improvement, process execution checklists development, and operational excellence facilitation in an additional amount not to exceed $276,000.

7. Approve a change order with McCarthy Building Companies, Inc. to perform additional work associated with the rehabilitation of Wharf 3, construction of electrical infrastructure, and lighter aboard ship (LASH) dock demolition at Barbours Cut Terminal in an amount not to exceed $73,835.

General 8. Enter into a purchase agreement with Lower Brazos River Mitigation Bank to purchase wetland mitigation credits in order to satisfy mitigation requirements for property on the north side of the Bayport Channel in an amount not to exceed $200,000.

9. Provide the Port Authority’s required cost share, in an amount not to exceed of $7,500,000, and amend the Project Management Plan to support the U.S. Army Corps of Engineers for (i) construction of the Dollar Reef oyster mitigation feature, and (ii) construction oversight of the Port Authority-led construction packages for the Houston Ship Channel Expansion Channel Improvement Project.

10.Authorize an agreement with CenterPoint Energy to sell surplus equipment to the Port Authority for an amount not to exceed $8,000; and reconstruct electrical infrastructure for an amount not to exceed $42,611 at Barbours Cut Terminal, for a total amount not to exceed $50,611.

Permits/Licenses/Pipeline Easements 11. Approve the renewal of the following expiring Port Authority licenses for new ten-year terms: CenterPoint Energy Houston Electric, LLC, CenterPoint Energy Intrastate Pipeline, Inc, CenterPoint Energy Resources Corp, CenterPoint Energy Resources Corp d/b/a CenterPoint Energy Texas Gas Operations, ExxonMobil Pipeline Company, Kinder Morgan 2-Mile, LLC, Kinder Morgan Crude & Condensate LLC, Kinder Morgan Tejas Pipeline LLC, Kinder Morgan Texas Pipeline LLC, and Lone Star NFL Mont Belvieu LP.

4 12. Issue a transmission line license to Southwestern Bell Telephone Company for one telecommunication cable over the railroad line adjacent to George Altvater Boulevard at Barbours Cut Terminal.

13. Issue a marine construction permit to Timtom Land Holdings, LLC to perform dock rehabilitation on an existing structure to remove existing monopiles and add new monopiles in the San Jacinto River.

14. Issue a marine construction permit to Cargill, Inc. to deepen its existing berths to -46.5 feet Mean Lower Low Water and authorize the rehabilitation of its existing dock structure in the Houston Ship Channel.

15. Amend a pipeline license issued to Equistar Chemicals, LP to remove the existing pipeline and relocate a new pipeline to a greater depth across Cedar Bayou.

16. Amend a transmission line license to CenterPoint Energy Houston Electric, LLC to add an additional fiber optic line over the Southside Mainline railroad right-of way.

Leases 17. Approve a private adjacency barge fleeting lease agreement with and issue a marine construction permit to SJI Group, LLC for approximately 12.95 acres of submerged lands in the Alexander Island Barge Channel at a monthly rental amount of $3,885 for a ten-year term.

J. OPERATIONS Awards, Amendments & Change Orders 1. Award a contract to Davey Coach Sales, Inc. for the purchase of two used shuttle buses for Bayport Container Terminal in an amount not to exceed $87,100.

2. Award a two-year contract to Marine Tekno Services LLC for repair services to radiators, air, and fuel coolers for terminal equipment at Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal in an amount not to exceed $300,000.

3. Award a three-year contract to Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA, the sole source provider, for the purchase of spare and replacement Pintsch Bubenzer brake parts for wharf and rubber tyred gantry cranes at Barbours Cut Terminal and Bayport Container Terminal in an amount not to exceed $1,500,000.

4. Issue a purchase order to Caldwell Country Chevrolet for the purchase of forty-five vehicles needed by the Barbours Cut Terminal, Bayport Container Terminal, Central Maintenance, Safety, Project and Construction Management, Security, and Port Police departments, using Local Government Purchasing Cooperative's BuyBoard, a cooperative purchase program, in a total amount not to exceed $1,448,000.

5. Authorize additional purchase order funding for continuing pandemic response services with Ambassador Services, LLC for $720,000.

6. Ratify emergency purchase orders to Anixter, Inc. for purchase of electrical cables in an amount not to exceed $1,036,020 for Bayport Container Terminal and to Power Line Solutions, Inc. for purchase of installation and electrical contracting work at Bayport Container Terminal in an amount not to exceed $1,000,936.

5 7. Authorize payment to Navis LLC for annual maintenance services for the Marine Terminal Management Software System for Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal in an amount not to exceed $773,268.

General 8. Approve a new Subrule 118 to Tariff 14 for a charge of $65.74 for every container lifted at the ramp point from or to a rail car to or from a chassis.

9. Approve a twenty-year lease with C&C Houston Bayport of a 21.53-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $36,687.12 per month with a right of first refusal for the adjacent 8.29 acre tract.

10. Approve a ten-year lease with CMC Americas LLC of a 22.52-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $ 38,374.08 per month, with two options each to extend the term five years, exercisable at Tenant’s sole option.

11. Approve a second amendment to the lease between the Port Authority and Lansing Trade Group, LLC for the Houston Public Grain Elevator No. 2, for an extension term of one-year to commence no earlier than June 1, 2021, for a rental rate of $103,000 per month.

K. PEOPLE 1. No items.

L. PORT SECURITY AND EMERGENCY OPERATIONS Awards, Amendments & Change Orders 1. Amend the existing purchase order to Motorola Solutions for the purchase of land mobile radio equipment including radios, batteries, chargers, related hardware, and accessories for the Operations, Port Security, and Emergency Operations Departments using the Houston-Galveston Area Council’s cooperative purchase program, in an amount not to exceed $150,000.

M. TECHNOLOGY Awards, Amendments & Change Orders 1. Issue a purchase order to Netsync Network Solutions for purchase of VMware annual software licensing and software support to the Port Authority’s existing Information Technology infrastructure, using Texas Department of Information Resources’ cooperative purchase program, in an amount not to exceed $125,000.

N. RECESS OPEN MEETING AND CONVENE EXECUTIVE SESSION 1. Consultation with Attorneys (Section 551.071, Texas Open Meetings Act), including consultation regarding (a) Kozlowski, et al v. Buck et al, and (b) proposed amendment to the agreement for legal services with Lynette Fons.

2. Real Estate (Section 551.072, Texas Open Meetings Act)

3. Economic Development Negotiations or Incentives (Section 551.087, Texas Open Meetings Act)

4. Employment and Evaluation of Public Employees (Section 551.074, Texas Open Meetings Act)

6 5. Security-Related Matters (Sections 418.175-418.183 of the Texas Government Code, and Section 551.076, Texas Open Meetings Act)

6. Adjourn Executive Session

O. RECONVENE OPEN MEETING 1. Announce any items from Executive Session requiring Port Commission action

P. ADJOURN MEETING 1. Next Meeting Requested - May 25, 2021

2. Adjourn Port Commission Meeting

7 F. EXECUTIVE

Subject 1. Consideration and possible action to approve a Founding Park Partner sponsorship level of $250,000 a year to support the Houston Parks Board 50/50 Park Partners Plan, in a total amount not to exceed $1,000,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, consideration and possible action to approve a Founding Park Partner sponsorship level of $250,000 a year to support the Houston Parks Board 50/50 Park Partners Plan, in a total amount not to exceed $1,000,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region) STRATEGIC GOAL #3 - PARTNERSHIPS (Develop and Strengthen External Partnerships)

Category: Awards, Amendments & Change Orders

Department: Executive

Staff Contact: Leslie Herbst

Background: Led by the Office of the Mayor, Houston Parks & Recreation Department, Greater Houston Partnership, and Houston Parks Board, the mission of the 50/50 Park Partners plan is to improve City of Houston neighborhood parks. This initiative brings together fifty private businesses through monetary contributions, in-kind support, ideas, and volunteers, for improvements to fifty neighborhood parks, and seeks to create long-term relationships for sustained impact between businesses, communities, and parks, and improve the quality of life for Houstonians for decades to come.

50/50 Park Partners is based on three founding principles:

1. Park Equity: Neighborhood parks are selected and improved based on need and citywide distribution. 2. Community Engagement: Improvements, projects, and volunteer support are responsive to the community and focus on existing parks. 3. Long-term Sustainable Impact: The 50/50 Park Partners initiative provides a multi-year investment, starting a long-term partnership between businesses, neighborhood parks and the community.

Representatives of the Houston Parks Board gave a formal presentation to the Community Relations Committee at its March 23, 2021 meeting and requested funding, to support the development and improvement of Houston parks, greenways, and public spaces. The Port Authority's sponsorship of the 50/50 Park Partners Plan would specifically support parks within the City of Houston that are in the vicinity of Port Authority facilities.

Staff Evaluation/Justification: Accordingly, staff requests that the Port Commission consider support for the Houston Parks Board 50/50 Park Partners Plan at the Founding Park Partner sponsorship level of $250,000 a year in a total amount not to exceed $1,000,000.

8 9 F. EXECUTIVE

Subject 2. Enter into a professional services contract with Brown Consulting for state governmental policy consulting and support in an amount not to exceed $66,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to enter into a one year professional services contract with Brown Consulting in an amount not to exceed $66,000, effective April 1, 2021, and further authorize the Executive Director to do any and all things in his opinion reasonable for necessary to give effect to the foregoing. Category: Awards, Amendments & Change Orders

Department: Government Relations

Staff Contact: Cam Spencer

Background: The Port Authority currently contracts with Brown Consulting to consult on state policy priorities, assist in developing strategic plans and objectives, and facilitate effective communication with government officials and their staffs.

Staff Evaluation/Justification: Staff recommends that the Port Commission authorize a new twelve-month contract with Brown Consulting for continued state consulting and support services.

10 11 F. EXECUTIVE

Subject 3. Enter into a professional services contract with Michael Toomey for state governmental policy consulting and support in an amount not to exceed $66,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to enter into a one year professional services contract with Michael Toomey in an amount not to exceed $66,000, effective April 1, 2021, and further authorize the Executive Director to do any and all things in his opinion reasonable for necessary to give effect to the foregoing. Category: Awards, Amendments & Change Orders

Department: Government Relations

Staff Contact: Cam Spencer

Background: The Port Authority currently contracts with Michael Toomey to consult on state policy priorities, assist in developing strategic plans and objectives, and facilitate effective communication with government officials and their staffs.

Staff Evaluation/Justification: Staff recommends that the Port Commission authorize a new twelve-month contract with Mr. Toomey for continued state consulting and support services.

12 13 F. EXECUTIVE

Subject 4. Amend the professional services agreement with the TC&B/GBA joint venture of AECOM Technical Services Inc. and Gahagan & Bryant Associates, Inc. to perform a supplemental economic study based on the Houston Ship Channel Expansion Channel Improvement Project (Project 11) Final Integrated Feasibility Report and Environmental Impact Statement, in an amount not to exceed $125,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to amend the professional services agreement with the TC&B/GBA joint venture of AECOM Technical Services Inc. and Gahagan & Bryant Associates, Inc. to perform a supplemental economic study based on the Houston Ship Channel Expansion Channel Improvement Project (Project 11) Final Integrated Feasibility Report and Environmental Impact Statement, in an amount not to exceed $125,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Awards, Amendments & Change Orders

Department: Executive

Staff Contact: Erik Eriksson

Background: Following the Port Commission meeting of January 5, 2021, the Port Authority intensified its analysis of the proposal by ship channel industry members to finance the promised industry portion of the Project 11 local cost share. Industry has proposed a harbor fee assessed by the Port Authority and paid by vessels transiting the ship channel to generate these funds.

The Port Authority has retained outside counsel to provide detailed legal guidance on the requirements of 33 U.S.C.A. §2236, which would govern such a harbor fee. In particular, the statute requires that the fee be proportional to the benefit each vessel receives from the project. To comply with that requirement, a supplemental economic study has been started, to help gauge the benefits each vessel receives from Project 11.

Port Authority staff has hired the TC&B/GBA joint venture to assist with the initial work of this study, based on the existing 2019 U.S. Army Corps of Engineers Feasibility Study for Project 11. The joint venture economic staff has extensive experience working with the Army Corps of Engineers HarborSym model, and in 2019 and 2020 performed several Project 11 analyses on behalf of the Port Authority using the HarborSym tool.

Staff Evaluation/Justification: Staff has determined that the funding requested is required to continue the study. Accordingly, staff recommends approval.

14 15 F. EXECUTIVE

Subject 5. Approve the new Minority- and Woman-Owned Business Enterprise Development Policy and the Amended and Restated Small Business Development Policy.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Recommended Action The Port Commission, at its April 27, 2021 meeting, approve the new Minority- and Woman-Owned Business Enterprise Development Policy and the Amended and Restated Small Business Development Policy, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Executive

Staff Contact: Erik Eriksson

Background: The Port Commission, at its March 23, 2021 meeting, reorganized the Port Commission’s Procurement and Small Business Development Task Force and renamed it as the Business Equity Committee (Committee). Among other duties, the Committee has the responsibility to: (i) evaluate and advise on updates of the Port Authority Small Business Development Program policies and procedures as necessary; (ii) recommend and assist in the adoption of business equity measures in Port Authority contracting, beyond the existing Small Business Development Program; and (iii) advise regarding other small business development and procurement matters.

The Small Business Development Program (the “Small Business Program”) adopted in 2001 provided for a coordinated plan of activities and procedures to encourage local small business participation, and created opportunities in Port Authority procurement and contracting. The Small Business Program’s guiding document, the “Port of Houston Authority Small Business Development Program Policy and Procedures,” was issued in 2001. Although that document has been updated several times, the Port Authority desires to update Small Business Program documents and bring them into compliance with current Port Authority standards for policy material; the first step in this process is to establish a separate and clear policy.

At the direction of the Port Commission, the Port Authority, also desiring to include race- and gender- conscious elements in its contracting process when appropriate, is taking measures that are narrowly tailored to help ameliorate disparities in the participation of minority- and woman-owned business enterprises in Port Authority contracting.

Based on best practices the Port Authority would adopt a new Minority-and Woman owned Business Enterprise initiative maintain its Small Business Program at least for the near future. To assure transparency each program would have separate and distinct participation goals.

Staff Evaluation/Justification: At its March 31, 2021 meeting, the Committee considered action authorizing a new Minority- and Woman- Owned Business Enterprise Development Policy and updating the Small Business Development Program policy documents.

The proposed new Minority- and Woman-Owned Business Enterprise Development Policy (the “MWBE Policy”) sets out the purpose for and background of the policy, establishes a program to administer the

16 policy, and provides enforcement mechanisms to ensure compliance. The MWBE Policy sets thirty percent as an initial overall total aspirational goal for the participation of MWBEs in eligible contracts.

The proposed Amended and Restated Small Business Development Policy (the “Small Business Policy”) reaffirms or sets out the principles by which the Small Business Program shall be guided, assigns responsibilities based on recent staff reorganizations, revises terminology, and aligns with the Port Authority mission statement and current Port Authority policy management.

Following its review and discussion, the Committee acted to recommend that the Port Commission approve the amended Small Business Policy and to instruct staff to bring to the Port Commission a request to consider and approve the MWBE Policy. Accordingly, staff recommends that the Port Commission approve the Amended and Restated Small Business Development Policy in substantively the form attached as Exhibit B and Minority- and Woman-Owned Business Enterprise Development Policy in substantively the form attached as Exhibit A.

17 Draft – April 14, 2021

Port of Houston Authority Minority- and Woman-Owned Business Enterprise Development Policy

______, 2021

I. Purpose.

The purpose of this Minority- and Woman-Owned Business Enterprise Development Policy (the “Policy”) is to establish the Port of Houston Authority Minority- and Woman-Owned Business Enterprise Development Program (the “Program”), set out principles guiding the Program, and authorize and assign responsibilities for carrying out its requirements.

II. Policy Statements.

A. It is the long-standing policy of the Port of Houston Authority (the “Non- Discrimination Mandate”) to prohibit discrimination based on race, color, sex, religion, national or ethnic origin, age, or disability, and including any other status protected by applicable law, in all operations at the Port Authority, including the award of, or participation in, Port Authority contracts.

B. The Port Authority is committed to equal opportunity for small, minority- and woman-owned businesses to participate in the award and performance of Port Authority contracts.

C. It is the policy of the Port Authority to ensure competitive business opportunities for small, minority- and woman-owned business enterprises in the award and performance of Port Authority contracts and abolish barriers to full participation in Port Authority contracts by all persons, regardless of race, ethnicity, or sex.

D. It is the policy of the Port Authority to promote commerce and business diversity by supporting the development of small, minority- and woman-owned businesses.

III. Background.

A. The Port of Houston Authority Small Business Development Program, effective January 1, 2002, was adopted by the Port Commission as the coordinated program of activities and procedures for encouraging local small business participation and creating opportunities in Port Authority procurement and contracting.

B. The Port Commission, in furtherance of the policies and commitments as set forth in its Policy Statements above and desiring to include race- and gender-conscious elements to the Port Authority’s contracting process, if appropriate, awarded to Griffin & Strong, P.C., a contract to perform disparity study research to meet the requirements of strict constitutional scrutiny required by the United States Supreme Court in City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).

C. A summary of research conducted in connection with the “Port of Houston

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Authority 2020 Disparity Study” prepared by Griffin & Strong, P.C. (the “Draft Disparity Study”) was presented to the Port Commission, the governing body of the Port Authority, on December 8, 2020, and among other things the draft research indicated disparities between the availability of minority- and woman-owned business enterprises (“M/WBEs”), and the utilization by the Port Authority of those M/WBEs seeking to do business with the Port Authority.

D. The Draft Disparity Study recommended measures to assist the Port Authority’s efforts to help ensure that all qualified firms within the Port Authority’s relevant marketplace would be given the opportunity to successfully conduct business with the Port Authority.

E. The State of Texas, Harris County, and the City of Houston have also conducted disparity studies which have established that M/WBEs or historically underutilized businesses in the applicable jurisdiction’s market area experience disparities in access to the jurisdiction’s contracts.

F. These studies have each recommended that the applicable jurisdiction employ measures to address their findings, and each jurisdiction has adopted programs to do so.

G. The Port Authority is similarly committed to implementing and maintaining a contracting program in conformance with the City of Richmond v. J.A. Croson Co. decision and applicable law, including employing measures that are narrowly tailored to help ameliorate disparities in the participation of minority- and woman-owned business enterprises in Port Authority contracting.

IV. Definitions.

When used in this Policy, the following terms shall have the following meanings:

A. “Aspirational Goal” means the Port Authority’s overall total target for the participation of M/WBEs in Eligible Contracts, as determined by the Port Commission from time to time, expressed as the percentage that the Port Authority strives to achieve, of Contract amounts awarded and committed to M/WBEs compared to total amounts awarded in Eligible Contracts.

B. “Availability” means the pool of Businesses ready, willing, and able to perform the applicable Contract or Commercially Useful Function, including, where special qualifications are necessary, qualified to undertake the particular portion of the work of the Contract task or Commercially Useful Function.

C. “Bid” means a Bidder’s response to a solicitation for bids, proposals, or statements of qualifications for a Contract that is at least partially funded by the Port Authority.

D. “Bidder” means an individual, a business enterprise, including a sole proprietorship, a partnership, a corporation, a not-for-profit corporation, a limited liability

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company, or any other entity which has submitted a Bid in response to a Port Authority solicitation, regardless of the procurement method employed by the Port Authority or the type of goods or services sought.

E. “Business,” or “Business Enterprise” means a for-profit (i) sole proprietorship or (ii) entity, with a place of business located in the United States.

F. “Business Equity Division” means the Port Authority division or the successor Port Authority division responsible for the Program.

G. “Business Equity Division Head” means the senior-most staff leader of the Business Equity Division.

H. “Certified” means a MBE, WBE, or DBE (as each such group is defined herein) that has the applicable certification from an authorized certifying agency as recognized and approved by the Port Authority from time to time.

I. “Commercially Useful Function” means Contract work that a Business controls and executes or for which it is directly responsible for executing by actually performing, managing, and supervising the work, including negotiating price, determining quality and quantity, ordering, installing, and paying for materials, supplies, and services as applicable.

J. “Committee” means the Port Commission Business Equity Committee, or the successor Port Commission committee or task force carrying out Program responsibilities as provided herein.

K. “Compliance” means that the applicable Port Authority department, or Business, properly implements the requirements of this Policy and the Program.

L. “Contract” means a mutually-binding legal relationship, or any modification thereof, obligating the vendor to furnish services and/or materials and supplies to the Port Authority and the Port Authority to pay for them, and excluding any lease of real property, agreement with or payment to other governmental entity (including any cooperative purchase program purchase), employer/employee relationship, utility agreement, settlement agreement, or agreement with any not-for-profit entity.

M. “Contract Goal” means the goal or requirement for participation of MBEs and/or WBEs applicable to a specific Eligible Contract solicitation, based on the percentage Availability of MBEs and/or WBEs to perform the specific weighted scopes of work of the entire Contract, the Port Authority’s utilization of MBEs and WBEs to date, the Port Authority’s progress towards meeting the Aspirational Goal, and other relevant factors.

N. “Contractor” means any Business that enters into a Contract with the Port

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Authority, and includes members of any Joint Venture comprising such Business.

O. “DBE” means a Business as defined in the regulations governing the federal Disadvantaged Business Enterprise program, currently set forth in 49 C.F.R. Part 26, as amended.

P. “Draft Disparity Study” means the draft report titled “Port of Houston Authority 2020 Disparity Study” prepared by Griffin & Strong, P.C.

Q. “Eligible Contract” means a Contract, in an amount expected to exceed $50,000 (or any other amount as currently authorized under Texas Water Code Section 60.403(a) for routine purchases or contracts) (i) subject to the requirements of this Program and to which a Contract Goal may be applied, and (ii) not including Excluded Contracts and Exempted Contracts, as defined herein.

R. “Enrolled M/WBE” means a Certified MBE, WBE, or DBE that has completed the Port Authority’s Enrollment Process and has received a confirmation from the Port Authority of its status as an Enrolled M/WBE in the Program.

S. “Enrollment Process” means the process by which a Certified MBE, WBE, or DBE becomes an Enrolled M/WBE, permitting its participation in an Eligible Contract to be counted toward the Aspirational Goal and a Contract Goal.

T. “Excluded Contract” is a Contract not subject to this Policy because it is:

• Purchase of an item that can be obtained only from one source, as provided under the Texas Water Code Section 60.412(a)(7); • All or partially state- or federally-funded, and may be subject to other requirements in connection with such funding; • Awarded pursuant to a procurement for which consideration of such status is prohibited by law; or • Not a Contract as defined herein.

M/WBEs are encouraged to Bid on an Excluded Contract, but there is no individual participation Contract Goal for such Excluded Contract.

U. “Exempted Contract” is a Contract for which the owner’s status as an MBE, WBE, or DBE is not considered as a selection criterion because the Business Equity Division Head, in consultation with the User Group, has determined that it meets one or more of the following criteria:

• A public or administrative emergency exists that requires the goods or services to be provided with unusual immediacy;

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• The goods or services are of such a specialized, technical, or unique nature that the pool of qualified contractors is so limited (and there is not reasonable opportunity for subcontracting) that a selection process that formally considers the Bidder’s status as an MBE, WBE, or DBE is not reasonable; • A selection process that considers the Bidder’s status as an MBE, WBE, or DBE would: o Impose an unwarranted economic burden or risk on the Port Authority; o Unduly delay acquisition of the goods or services; or o Otherwise not be in the best interest of the Port Authority (e.g. purchases for which the Port Authority intends to seek reimbursement from a third party); or o Market research, past experience, or the Availability of local, qualified MBEs, WBEs, or DBEs for providing the goods or services indicate that negligible or no such Bidder participation would be obtained.

M/WBEs are encouraged to Bid on an Exempted Contract, but there is no individual participation Contract Goal for such Exempted Contract.

V. “Good Faith Efforts” means efforts to achieve an MBE or WBE participation goal which efforts, by their scope, intensity, and appropriateness, can reasonably be expected to fulfill the applicable Program requirement.

W. “Joint Venture” means an association of an MBE and/or WBE and one or more other firms to carry out a single, for-profit business enterprise, for which the parties combine their property, capital, efforts, skills, and/or knowledge, and in which the MBE or WBE is wholly responsible for a distinct, clearly defined portion of the work of the Contract or Commercially Useful Function, and the share of which in the capital contribution, control, management, risks, and profits of the joint venture are commensurate with its ownership interest.

X. “Manual” means the Port Authority Minority- and Woman-Owned Business Enterprise Program Standards and Procedures Manual, detailing the Program and the standards and procedures for implementation of the Policy and the Program.

Y. “Marketplace” means Harris, Montgomery, Fort Bend, Galveston, and Brazoria counties.

Z. “Minority Person” means a citizen or lawful permanent resident of the United States who is a member of one of the following socially and economically-disadvantaged groups:

1. “Black Americans,” which includes persons having origins in any of the Black racial groups of Africa;

2. “Hispanic Americans,” which includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;

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3. “Native Americans,” which includes persons who are enrolled members of a federally or State recognized Indian tribe, Alaska Natives, or Native Hawaiians; or

4. “Asian Americans,” which includes “Asian-Pacific Americans,” i.e. persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories of the Pacific Islands (Republic of Palau), Republic of the Northern Marianas Islands, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, Nauru, Federated States of Micronesia, or Hong Kong; or “Subcontinent Asian Americans,” i.e. persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal, or Sri Lanka.

AA. “MBE” (Minority-Owned Business Enterprise) means a Business that is at least 51% Owned by one or more Minority Persons, or for which at least 51% of the equity is Owned by one or more Minority Persons, and both the management and daily business operations are carried out and controlled by one or more of the Minority Persons who own it.

BB. “M/WBEs” means MBEs and WBEs.

CC. “Owned” means the status of having all the customary incidents of ownership of a Business, including control and disposition and sharing in all risks and profits commensurate with the degree of ownership interest.

DD. “Port Authority” means the Port of Houston Authority of Harris County, Texas, a political subdivision.

EE. “Port Commission” means the governing body of the Port Authority.

FF. “Prime Contractor” means a Contractor that is awarded a Contract and is obligated to perform the Contract, including coordinating all the work of that Contract and purchasing all materials and performing services required thereunder, or contracting with Subcontractors to do so.

GG. “Procurement Services” means the Port Authority department generally responsible for acquiring goods and services for the Port Authority.

HH. “Program” means the Minority- and Woman-Owned Business Enterprise Program established by this Policy.

II. “SBDP” means the Port of Houston Authority Small Business Development Program.

JJ. “Subcontractor” means a party that enters into a subcontract agreement with a

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Prime Contractor to perform work or provide materials under a Contract.

KK. “User Group” means the Port Authority division, department, or other staff group that has or shares responsibility for the procuring and administering of a Contract subject to the Program.

LL. “Utilization Plan” means the plan, in the form specified by the Port Authority, which must be submitted by a Bidder listing the M/WBEs that the Bidder intends to use in the performance of a Contract, the scopes of the work of such M/WBEs, and the dollar values and/or the percentages of the work to be performed by such M/WBEs.

MM. “WBE” (Woman-Owned Business Enterprise) means a Business that is at least 51% Owned by one or more female American citizens, or for which at least 51% of the equity is Owned by one or more female American citizens, and both the management and daily business operations are carried out and controlled by one or more of the female American citizens who own it.

V. Program Established.

A. The Port Commission hereby adopts the Program and directs the Port Authority to designate the Business Equity Division responsible for carrying out the Program as described herein. Such Business Equity Division shall also be responsible for carrying out the Port Authority’s SBDP in conjunction with the Program.

B. The Port Commission finds that the Program supports (i) the Port Authority’s statutory mandates to acquire, construct, operate, and develop waterways, facilities, and other aids, for the operation, development, or in aid of navigation and commerce of the ports and waterways within its jurisdiction, (ii) the Port Authority’s mission to “Move the world and drive regional prosperity,” and (iii) the Port Authority’s strategic objectives to “Develop and Strengthen External Partnerships” and “Create Better Value for the Region.”

C. It is the responsibility of all Port Authority employees, divisions, departments, and groups to be aware of this Policy and Program, and to support the Policy and Program to the greatest extent appropriate to the role of such employee, division, department, and group.

VI. Aspirational Goal.

The Port Authority hereby establishes the following Aspirational Goal for the Program:

30% of all Eligible Contract amounts should be paid to Enrolled M/WBEs by the Port Authority.

The Port Commission reserves the right to amend or update such Aspirational Goal from time to time.

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VII. Program Administration.

A. Business Equity Division Responsibilities.

1. The Business Equity Division shall have primary responsibility for the implementation and administration of the Program and all other Port Authority contracting diversity, equity, and training programs, including without limitation working with User Groups to implement the goals and objectives of the Program. In the absence of a contrary directive by the Executive Director, the Business Equity Division Head is responsible for this Policy’s implementation and interpretation.

2. The Business Equity Division shall formulate, propose, and implement the Manual, setting forth rules and regulations for the development, implementation, administration, and monitoring of the Program, and may prepare and update other standards and procedures consistent with this Policy for administration of staff services related to the Program. The Manual and all other standards and procedures developed by staff shall not contain restrictions on the authority of the Port Commission or impose obligations on the Port Commission.

3. The Business Equity Division Head or his or her designee shall periodically report to the Port Commission and Committee regarding the operations and achievements of the Program.

4. The Business Equity Division Head or his or her designee shall periodically evaluate the effectiveness of this Policy and the Program and recommend updates as needed to the Port Commission and Committee.

5. The Business Equity Division shall work in cooperation with the Port Authority’s Grants Programs Manager in administering or partially administering state- or federally-funded contracts, including United States Department of Transportation-assisted contracts incorporating the requirements of the DBE program pursuant to 49 C.F.R. Part 26, where the Port Authority is either a direct recipient of United States Department of Transportation funds or is a subrecipient of such funding through another entity.

B. Program Roles and Responsibilities for User Groups.

1. Each User Group is particularly responsible for promoting, supporting, and assisting in carrying out the Program, in addition to the general responsibility of Port Authority staff to do so, and for exercising specific functions in support of the Program, as well as any other function(s) deemed necessary by the Business Equity Division to implement the goals and objectives of the Program.

2. To reduce barriers to MBE and WBE participation in Port Authority

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procurements, all User Groups requesting Bids on behalf of the Port Authority shall:

a. Designate a departmental coordinator or designee, or multiple coordinators or designees, who shall be the point of contact for monitoring and reporting Compliance in the Business Equity Division.

Evaluate anticipated solicitations to unbundle items or services, where feasible, to permit Bids on quantities or scopes of work less than the total, or the performance of discreet portions of the project. “Unbundling” means a process whereby a Contract is divided into smaller parts to provide Enrolled M/WBEs better access and reduce barriers to Port Authority procurement opportunities. Unbundling can be divided into two types, horizontal and vertical. Horizontal unbundling divides the Contract into multiple lots. Vertical unbundling divides each lot into different phases of the procurement process, where each of the phases offers new opportunity for M/WBE participation.

b. Establish schedules for submitting Bids with adequate time frames for identifying and contacting M/WBEs qualified to submit Bids or participate in Contracts.

c. Arrange time schedules for Bid response due dates and presentations to facilitate the participation of Prime Contractors and Subcontractors qualified to submit Bids or participate in Contracts.

d. Review insurance, experience, and other award evaluations factors to facilitate the participation by M/WBEs and other small firms, while no more burdensome than necessary to protect the Port Authority’s interests.

e. Manage Contracts in a consistent manner, to assure Compliance with the Program.

f. Assist in the compilation of Contract data for M/WBE Availability and utilization.

g. Assist and support the Business Equity Division by helping ensure that the Prime Contractor provides all necessary documents and information to close out the Contract in order to provide a final accounting for Subcontractor participation on the Contract, including M/WBE participation.

h. Assist and participate in training on the Program (including User Group leadership, project managers, buyers, and Program coordinators).

i. Assist and participate in workshops, trade fairs, outreach seminars, and other efforts organized by the Business Equity Division and others to help identify and increase the participation of M/WBEs in Contracts.

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j. Assist and participate in classes, training programs, and other efforts organized by the Business Equity Division and others to help to increase Availability and train and mentor M/WBEs to help increase their participation in Contracts.

VIII. Race- and Gender-Neutral Measures to Ensure Equal Opportunities for all Contractors and Subcontractors.

A. Suggested Measures. In order to implement the Program, the Port Authority shall develop and use race- and gender-neutral measures to the maximum feasible extent. These measures may include, but are not limited to:

1. Providing timely information, including through the Port Authority’s electronic procurement system and social media, on Port Authority contracting procedures, Bid preparation, specific Contract opportunities, and competencies sought in Port Authority Contract solicitations.

2. Holding pre-Bid conferences, where appropriate, to explain Contract opportunities and to encourage Prime Contractors to use available qualified MBEs and WBEs.

3. Arranging time schedules for Bid response due dates and presentations to facilitate the participation of Prime Contractors and Subcontractors qualified to submit Bids or participate in Contracts.

4. Establishing schedules for submitting Bids with adequate time frames for Bidders to identify and contact M/WBEs and other small businesses qualified to participate in the procurement, and for non-Certified Bidders to solicit quotes from MBE and WBE Subcontractors.

5. Segmenting procurements, where feasible, to facilitate the participation of MBEs, WBEs, and other small businesses.

6. Reviewing retainage, bonding, and insurance requirements and their application to Bid evaluations, to eliminate unnecessary barriers to contracting with the Port Authority.

7. Authorizing, where appropriate, mobilization payments to Prime Contractors and requiring that Subcontractors be remitted their proportionate share of mobilization funds, to eliminate unnecessary barriers to contracting with the Port Authority.

8. Adopting prompt payment procedures, including contractually requiring that Prime Contractors promptly pay Subcontractors, investigating complaints or charges of excessive delay in payments, and enforcing statutory and contractual prompt payment provisions.

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9. Reaching out to and providing training, mentorship, and development assistance to M/WBEs and other small businesses, to increase their Availability and the number of Enrolled M/WBEs, and support their maximum participation in Contracts.

10. Providing training seminars on the technical aspects of preparing a Bid in response to a Port Authority solicitation, and education and other assistance in areas that may provide barriers to participation, such as obtaining bonding and financing, bid estimation, safety requirements, and quality control.

11. Collecting information from all Prime Contractors on applicable Contracts, detailing the quotes received from all Subcontractors for such Contracts and the payments to Subcontractors utilized by Prime Contractors on such Contracts.

12. Investigating complaints of discrimination against M/WBEs and/or referring them to the appropriate authorities for investigation.

B. Additional Measures. The Business Equity Division Head should work with User Groups to adopt additional measures as warranted.

IX. Race- and Gender-Conscious Measures to Implement the Program.

A. Eligibility. To be eligible to be counted as an MBE or WBE towards a Contract Goal, the firm must be Certified at the time of Bid submission and become an Enrolled M/WBE no later than the date of award. The Port Authority shall make available on its website and through other means a list of certifying agencies recognized and approved by the Port Authority from time to time.

B. Contract Goals. The Business Equity Division Head, in consultation with the applicable User Group, shall establish a Contract Goal for each Eligible Contract. Such determination shall be made in accordance with governing law and the Port Authority’s Procurement Policy, and shall be based upon the Availability of at least three Enrolled MBEs or three Enrolled WBEs to perform the anticipated scopes of work of the entire Contract, the Port Authority’s utilization of MBEs and WBEs to date, the Port Authority’s progress towards meeting the Aspirational Goal, and other relevant factors including the type of commodity or service procured, the procurement method used, and other Port Authority requirements.

C. Counting MBE and WBE Participation Towards Contract Goals.

1. A Bidder may achieve the Contract Goal by: (i) its own status as an MBE or WBE; (ii) entering into a Joint Venture with one or more MBEs and/or WBEs; (iii) subcontracting, at any tier, a portion of the work to one or more MBEs and/or WBEs; (iv) directly purchasing materials or services from one or more MBEs and/or WBEs; or (v) any combination of the above.

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2. When the Port Authority solicits Eligible Contracts using a procurement method with goal- (or target-) oriented scoring of M/WBE participation, the solicitation document should provide that each proposer is awarded points based upon its proposed level of M/WBE participation, as compared to the Contract Goal.

3. When the Port Authority solicits Eligible Contracts using a request for competitive sealed bid or other procurement method with a “pass/fail” Contract Goal, the solicitation document should provide that a bidder or proposer must meet the Contract Goal or its Bid will be considered non-responsive.

4. When an MBE or WBE participates in a Contract, the Port Authority shall count only the payment for the work actually performed by the MBE or WBE toward the Contract Goal.

5. Only payments to an MBE or WBE that is performing a Commercially Useful Function shall be counted towards the Contract Goal.

6. Procedures and standards for counting the participation of qualified MBEs and WBEs towards a Contract Goal may additionally be provided for in the Manual.

D. Utilization Plans.

1. Utilization Plans and other Compliance documents must be submitted as provided in the procurement solicitation, and the failure to do so may render the Bid non- responsive. The Business Equity Division shall review each Bid submission to determine if it meets the Program and applicable solicitation requirements.

2. Each Bidder shall submit with its Bid a completed Utilization Plan, affirmed as correct and identifying the Businesses proposed to participate in the Contract in order to meet the Contract Goal, the type of work or service each Business would perform, the Contract amount to be paid to each Business, and such other information as provided for in the Manual.

3. The Utilization Plan shall include each Bidder’s commitment to (i) meeting or exceeding the Contract Goal set forth in the solicitation or (ii) demonstrating its Good Faith Efforts to do so.

4. Each Bidder shall submit at the time specified in the solicitation, a letter of intent for each MBE and WBE firm specified in the Bid response, affirmed as correct by the parties thereto, and evidence that each such MBE and WBE is Certified.

5. A Bidder may request a partial or total reduction of the Contract Goal, in the manner and form as specified in the Manual, based on its Good Faith Efforts to meet the

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Contract Goal. In the event a non-M/WBE Business was selected by a Bidder for work on the Contract instead of an MBE or WBE, the documentation of Good Faith Efforts shall include evidence of each non-M/WBE, MBE, and WBE Business proposal quote submitted to the Bidder in connection with the Bid.

6. In the event any non-M/WBE, or purported MBE or WBE other than those listed on the Utilization Plan, is performing work or providing materials and/or equipment in place of those listed on the applicable Utilization Plan, following notice to the Prime Contractor, the Port Authority may exercise remedies and penalties as provided by the Program and Manual.

E. Additional Performance Compliance Measures.

1. The successful Bidder shall submit reports of its progress towards meeting the Contract Goal and Compliance with other Program requirements, in the form and at the time specified in the solicitation or as otherwise directed by the Port Authority.

2. Subject to amendments as approved by the Port Authority, the Contract Goal obligation extends to all Contract work covered by change orders regardless of the contracting tier, and the obligation to make Good Faith Efforts to meet the Contract Goal extends to the entire performance of the Contract.

3. Port Authority Program contract compliance analysts and auditors, or their designees, should have reasonable access to the Contractor’s and Subcontractor’s books and records to help determine Compliance with the Contract Goal commitment and other Policy and Program requirements.

X. Enforcement and Sanctions for Non-Compliance.

A. Operational Integrity. The Program shall maintain a high level of operational integrity. The Port Authority does not allow violations of policies, standards, or procedures that harm the integrity of the Program, and may enforce sanctions to address such violations.

B. Authorization. The Port Commission authorizes sanctions against any Business that violates the provisions of this Policy, the Manual, its Contract(s), or any other document adopted to implement this Policy or Program.

1. Such violations shall include, but are not limited to, violation of the Port Authority’s Non-Discrimination Mandate, falsification or misrepresentation of a Business as Certified or as an Enrolled M/WBE, failure of a Business to perform a Commercially Useful Function in connection with the applicable Contract, or any other violation of the terms of the Contract, this Policy, the Manual, or applicable Port Authority requirement.

2. Such sanctions may consist of measures up to and including Contract

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Termination, suspension from status as an Enrolled M/WBE for a period of up to three (3) years, and debarment from contracting with the Port Authority for a period of up to two (2) years.

3. The Port Authority may determine that sanctions imposed against a Business shall also apply personally to all those persons with control or knowledge of the acts and omissions that give rise to the sanctions.

C. Enforcement and Investigation Provisions.

1. The Port Authority should include, in each applicable solicitation and/or Contract, provisions stating that the failure by the Business to carry out the requirements of the Program may: (i) be a breach of the Contract; (ii) result in termination of the Contract; (iii) result in denying or limiting credit towards the Contract Goal; (iv) result in withholding progress payments; (v) trigger required payment of liquidated damages; (vi) result in debarment or suspension from future Contract opportunities; and/or (vii) result in other remedies.

2. Solicitations and/or Contracts should additionally provide for reasonable access to books and records of Contractors, and require Contractors to provide reasonable access to books and records of Subcontractors, to support the Port Authority’s investigations, determinations, and enforcement of Compliance with the Program.

D. Hearings. The Manual shall provide for the Port Authority to conduct a hearing to consider whether the alleged misconduct provides grounds for the Port Authority to sanction a Business participating in the Program, and to issue sanctions if appropriate.

1. The Port Commission hereby delegates authority to the Executive Director to select a hearing officer to conduct any such hearing and impose appropriate sanctions.

2. The Manual shall provide for the details of the processes and procedures for such hearings, including but not limited to notice, conduct, issuance of decisions, and appeals.

E. Appeals.

1. Any sanction hereunder may be appealed to the Executive Director.

2. A sanction hereunder that involves suspension from status as an Enrolled M/WBE may be appealed to the Committee. The Committee may require that the appeal be heard by the Executive Director before being brought before the Committee.

3. A sanction that involves debarment may be appealed to the Port Commission. The Port Commission may require that the appeal be heard by either the Executive Director or the Committee before being brought before the Port Commission.

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4. Appeals before the Executive Director, Committee, or Port Commission shall be limited to determining whether the sanctions imposed should be upheld based on evidence presented at the initial hearing.

XI. Port Commission Authority Reserved.

Port Authority procurement, including the consideration of M/WBE participation as a selection criterion, is under the sole control of the Port Commission, which approves and oversees Port Authority expenditures in conformity with Texas law, including the Texas Water Code and adopted policies. This Policy does not constrain the discretion and authority of the Port Commission, which may amend this Policy at any time for any reason.

XII. Policy and Program Authority.

A. Statutory Authority.

1. Texas Water Code, Chapters 60, 61, and 62

2. Texas Government Code, Chapter 2254

3. Texas Special District Local Laws Code, Chapter 5007

B. Port Commission Policies.

1. Amended and Restated Bylaws of the Port Commission

2. Second Amended and Restated Code of Ethics

3. Charter of the Procurement and Small Business Development Task Force

4. Procurement Policy

5. The Strategic Plan of the Port Authority as in effect from time to time

C. Savings Clause. If any provision of this Policy is inconsistent in whole or in part with Texas or federal law, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable or shall be deemed excised from this Policy as may be required, and this Policy shall be deemed restated as if such provision had been originally incorporated herein as so modified or restricted or excised.

XIII. Non-binding Statement of Intent.

This Policy, the Program, and any standards and procedures established to implement them, are

32 Draft – April 14, 2021 Port of Houston Authority Minority- and Woman-Owned Business Enterprise Development Policy ______, 2021 Page 16 nonbinding statements of intent, which do not create in any person a property interest in a potential award or contract, do not constitute a contractual obligation of the Port Authority to others, and do not waive any of the Port Authority’s immunities under law, including the Port Authority’s immunity from suit and its immunity from liability. Nothing in this Policy or in the Program prohibits the Port Authority from rejecting any and/or all Bids received in response to a procurement solicitation. The Port Authority reserves the right to assert every defense to any claim that is available to it under law.

XIV. Adoption and Review.

A. This Policy was adopted by the Port Commission on , 2021, as evidenced by Minute Number 2021- - , and is effective as of the date of adoption.

B. The Committee or the Port Commission may, from time to time, evaluate the effectiveness of this Policy and the Program and recommend updates as needed.

Policy Owner: Executive Policy Version: Original

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Port of Houston Authority Amended and Restated Small Business Development Policy

______2021

I. Purpose.

The Port of Houston Authority of Harris County, Texas (the “Port Authority”) desires to continue its previously-authorized small business development program (the “Program”). The purpose of this Amended and Restated Small Business Development Policy (the “Policy”) is to restate and reaffirm the principles and policy by which the Program shall be guided, and to amend and restate Program authority and responsibilities.

II. Policy Statements.

A. It is the long-standing policy of the Port Authority (the “Non-Discrimination Mandate”) to prohibit discrimination based on race, color, sex, religion, national or ethnic origin, age, or disability, and including any other status protected by applicable law, in all operations at the Port Authority including the award of, or participation in, Port Authority contracts.

B. It is the policy of the Port Authority to ensure competitive business opportunities for small and local business enterprises in the award and performance of Port Authority contracts and abolish barriers to full participation in Port Authority contracts by all persons, regardless of race, ethnicity, or sex.

C. The Port Authority is committed to equal opportunity for small and local businesses to participate in the award and performance of Port Authority contracts.

D. It is the policy of the Port Authority to promote commerce and business diversity by supporting the development of small businesses.

III. Background; Superseding Effect.

A. The Port of Houston Authority Small Business Development Program (the “Program”) effective January 1, 2002 was adopted by the Port Commission as the coordinated program of activities and procedures for encouraging local small business participation and creating opportunities in Port Authority procurement and contracting.

B. The Port Commission finds that the Program supports (i) the Port Authority’s statutory mandates to acquire, construct, operate, and develop waterways, facilities, and other aids, for the operation, development, or in aid of navigation and commerce of the ports and waterways within its jurisdiction, (ii) the Port Authority’s mission to “Move the world and drive regional prosperity,” and (iii) the Port Authority’s strategic objectives to “Develop and Strengthen External Partnerships” and “Create Better Value for the Region.”

C. The Program’s original guiding document, the “Port of Houston Authority Small Business Development Program Policy and Procedures” was issued in 2001 and subsequently

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updated several times (as amended, the “Port of Houston Authority Small Business Development Program Policy and Procedures (Revised)”).

D. In order to carry out the purposes described above, this Policy shall supersede the policy measures set forth in the Port of Houston Authority Small Business Development Program Policy and Procedures (Revised), and Port Authority staff is hereby authorized to prepare the Manual (as defined below) to supersede the procedural measures set forth in the Port of Houston Authority Small Business Development Program Policy and Procedures (Revised) and bring them into compliance with current Port Authority standards.

IV. Definitions.

A. “Certified Small Business” means a business that meets small business requirements as certified by a Port Authority-approved entity applying the same .

B. “Commercially Useful Function” means contract work that a business controls and executes or for which it is directly responsible for executing, by actually performing, managing, and supervising the work, including negotiating price, determining quality and quantity, ordering, installing, and paying for materials, supplies, and services as applicable.

C. “Committee” means the Port Commission Business Equity Committee, or the successor Port Commission committee or task force carrying out Program responsibilities as provided herein.

D. “Contract” means a mutually-binding legal relationship, or any modification thereof, obligating the vendor to furnish services and/or materials and supplies to the Port Authority and the Port Authority to pay for them, and excluding any lease of real property, agreement with or payment to other governmental entity (including any cooperative purchase program purchase), employer/employee relationship, utility agreement, settlement agreement, or agreement with any not-for-profit entity.

E. “Contract Goal” means the goal or requirement for participation of Enrolled Small Businesses applicable to a specific solicitation, the Port Authority’s utilization of Enrolled Small Businesses to date, the Port Authority’s progress towards meeting the Organizational Program Goal (as described in Section VI), and other relevant factors.

F. “Division” means the Port Authority division responsible for the Program.

G. “Enrolled Small Business” means a Certified Small Business that meets the additional small (revenue, number of employees, owner net worth) and local business presence requirements set out in the Manual (as defined below), has completed the Port Authority’s enrollment process, and has received a confirmation from the Port Authority of its status as an Enrolled Small Business in the Port Authority’s Program.

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H. “Manual” means the Port Authority Small Business Development Program Standards and Procedures Manual, detailing the Program and the standards and procedures for implementation of the Policy and the Program. The Manual, when adopted, shall replace and supersede the document titled “Port of Houston Authority Small Business Development Program Policy and Procedures (Revised).”

I. “Organizational Program Goal” means the Port Authority’s overall total target for the participation of small business in Port Authority Contracts, as determined by the Port Commission from time to time, expressed as the percentage that the Port Authority strives to achieve, of Contract amounts awarded and committed or paid to Enrolled Small Businesses compared to the total amounts awarded in Program eligible Contracts.

V. Program Principles.

A. Race- and Gender-Neutral. The Program shall operate in a race- and gender-neutral manner.

B. Nondiscrimination Mandate. It is the policy of the Port Authority to enforce the Non-Discrimination Mandate and prohibit discrimination, as set out in Section II(A) above. Contractors and/or Enrolled Small Businesses that violate this Non-discrimination Mandate in Port Authority procurements or other operations of the Program shall be subject to sanctions.

C. Operational Integrity. The Program shall maintain a high level of operational integrity. The Port Authority does not allow violations of policies, standards, or procedures that harm the integrity of the Program, and may enforce sanctions to address such violations.

D. Dispute Resolution. The Program shall include procedures for dispute resolution, including grievance procedures and procedures for resolution of disputes between a contractor and a small business.

VI. Organizational Program Goal.

The Port Commission hereby establishes the Organizational Program Goal of thirty‐five (35%) percent. The Port Commission reserves the right to amend or update such Organizational Program Goal from time to time.

VII. Staff Responsibilities.

A. The Port Commission directs the Port Authority to designate the Division responsible for carrying out the Program as described herein. Such Division shall also be responsible for carrying out the Port Authority’s Minority- and Woman-Owned Business Enterprise Development Program in conjunction with the Program.

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B. Delegation. The Division shall have primary responsibility for the implementation and administration of the Program. In the absence of a contrary directive by the Executive Director, the senior-most staff leader of the Division is responsible for this Policy’s implementation and interpretation.

C. Standards and Procedures. The Division shall formulate, propose, and implement the Manual, setting forth rules and regulations for the development, implementation, administration, and monitoring of the Program, and may prepare and update other standards and procedures consistent with this Policy for administration of staff services related to the Program. The Manual and all other standards and procedures developed by staff shall not contain restrictions on the authority of the Port Commission or impose obligations on the Port Commission.

D. Periodic Small Business Development Reports. The senior-most staff leader of the Division or his or her designee shall periodically (i) report to the Port Commission regarding the operations and achievements of the Program, and (ii) evaluate the effectiveness of this Policy and the Program and recommend updates as needed to the Port Commission and the Committee.

VIII. Small Business Participation in Procurements.

A. Determination of Participation. The determination of whether small business participation will be considered in a specific procurement, and the manner in which such small business participation will be considered, shall be made in accordance with governing law, the Port Authority’s Procurement Policy, and Port Authority requirements. Such determination of whether a Contract is Program-eligible is based on all relevant factors including the type of commodity or service procured, the procurement method used, and the availability of Enrolled Small Businesses.

B. Evaluation of Participation.

1. When the Port Authority solicits Program-eligible Contracts using a procurement method with goal- (or target-) oriented scoring of small business participation, the solicitation document should provide that each proposer is awarded points based upon its proposed level of small business participation.

2. When the Port Authority solicits Program-eligible Contracts using a request for competitive sealed bid or other procurement method with a “pass/fail” small business requirement, the solicitation document should provide that a bidder or proposer must meet the required level of small business participation or its bid will be considered non-responsive.

3. Notwithstanding Sections VIII(B)(1) and (2), the Port Commission delegates to the Executive Director or his designee the authority to determine specific procedures and standards for whether and how small business participation may be evaluated in particular

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procurements.

IX. Enforcement and Sanctions for Non-Compliance.

A. Authorization. The Port Commission authorizes sanctions against any business participating in the Program that violates the provisions of this Policy, the Manual, its Contract(s), or any other document adopted to implement this Policy or Program.

1. Such violations shall include, but are not limited to, violation of the Port Authority’s Non-Discrimination Mandate, falsification or misrepresentation of a business as a Certified or an Enrolled Small Business, failure of a business to perform a Commercially Useful Function in connection with the applicable Contract, or any other violation of the terms of the Contract, this Policy, the Manual, or applicable Port Authority requirement.

2. Such sanctions may consist of measures up to and including Contract termination, suspension from status as an Enrolled Small Business for a period of up to three (3) years, and debarment from contracting with the Port Authority for a period of up to two (2) years.

3. The Port Authority may determine that sanctions imposed against a business shall also apply personally to all those persons with control or knowledge of the acts and omissions that give rise to the sanctions.

B. Enforcement and Investigation Provisions.

1. The Port Authority should include, in each applicable solicitation and/or Contract, provisions stating that the failure by the business to carry out the requirements of the Program may: (i) be a breach of the Contract; (ii) result in termination of the Contract; (iii) result in denying or limiting credit towards the Contract Goal; (iv) result in withholding progress payments; (v) trigger required payment of liquidated damages; (vi) result in debarment or suspension from future contract opportunities; and/or (vii) result in other remedies.

2. Solicitations and/or Contracts should additionally provide for reasonable access to books and records of contractors, and require contractors to provide reasonable access to books and records of subcontractors, to support the Port Authority’s investigations, determinations, and enforcement of compliance with the Program.

C. Hearings. The Manual shall provide for the Port Authority to conduct a hearing to consider whether the alleged misconduct provides grounds for the Port Authority to sanction a business participating in the Program, and to issue sanctions if appropriate.

1. The Port Commission hereby delegates authority to the Executive Director to select a hearing officer to conduct any such hearing and impose appropriate sanctions.

38 Port of Houston Authority Draft – April 14, 2021 Amended and Restated Small Business Development Policy ______, 2021 Page 6

2. The Manual shall provide for the details of the processes and procedures for such hearings, including but not limited to notice, conduct, issuance of decisions, and appeals.

D. Appeals.

1. Any sanction hereunder may be appealed to the Executive Director.

2. A sanction hereunder that involves suspension from status as an Enrolled Small Business may be appealed to the Committee. The Committee may require that the appeal be heard by the Executive Director before being brought before the Committee.

3. A sanction that involves debarment may be appealed to the Port Commission. The Port Commission may require that the appeal be heard by either the Executive Director or the Committee before being brought before the Port Commission.

4. Appeals before the Executive Director, Committee, or Port Commission shall be limited to determining whether the sanctions imposed should be upheld based on evidence presented at the initial hearing.

X. Port Commission Authority Reserved.

Port Authority procurement, including the consideration of small business participation as a selection criterion, is under the sole control of the Port Commission, which approves and oversees Port Authority expenditures in conformity with the Texas law, including the Texas Water Code and adopted policies. This Policy does not constrain the discretion and authority of the Port Commission, which may amend this Policy at any time for any reason.

XI. Policy and Program Authority.

A. Statutory.

1. Texas Water Code, Chapters 60, 61, and 62

2. Texas Government Code, Chapter 2254

3. Texas Special District Local Laws Code, Chapter 5007

B. Port Commission-enacted.

1. Amended and Restated Bylaws of the Port Commission

2. Second Amended and Restated Code of Ethics

39 Port of Houston Authority Draft – April 14, 2021 Amended and Restated Small Business Development Policy ______, 2021 Page 7

3. Charter of the Procurement and Small Business Development Task Force

4. Procurement Policy

5. Local Preference Procurement Program and Policy

6. Local Preference Standards

7. Approval of a Small Business Development Program, described in Minute No. 2001-0529-35

C. Savings Clause. If any provision of this Policy is inconsistent in whole or in part with Texas or federal law, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable or shall be deemed excised from this Policy as may be required, and this Policy shall be deemed restated as if such provision had been originally incorporated herein as so modified or restricted or excised.

D. Supersedes Prior Policies.

1. This Policy supersedes and replaces any prior policies adopted by the Port Commission regarding participation by small business enterprises in Port Authority procurements and contracts, including prior Small Business Development and Local Preference Procurement Program policies, and including any policies contained in prior Program documents.

2. This Policy does not supersede or replace the Port Authority Minority and Women-Owned Business Enterprise Policy adopted by the Port Commission by Minute Number 2021- - .

XII. Non-binding Statement of Intent.

This Policy, the Program, and any standards and procedures established to implement them, are nonbinding statements of intent, which do not create in any person a property interest in a potential award or contract, do not constitute a contractual obligation of the Port Authority to others, and do not waive any of the Port Authority’s immunities under law, including the Port Authority’s immunity from suit and its immunity from liability. Nothing in this Policy or in the Program prohibits the Port Authority from rejecting any and/or all proposals or bids received in response to a procurement solicitation. The Port Authority reserves the right to assert every defense to any claim that is available to it under law.

XIII. Adoption and Review.

A. This Policy was adopted by the Port Commission on , 2021, as evidenced by Minute Number 2021- - , and is effective as of the date of adoption.

40 Port of Houston Authority Draft – April 14, 2021 Amended and Restated Small Business Development Policy ______, 2021 Page 8

B. The Committee or the Port Commission may, from time to time, evaluate the effectiveness of this Policy and the Program and recommend updates as needed.

Policy Owner: Executive Policy Version: Original

41 G. COMMERCIAL

Subject 1. Authorize a second amendment to the Lease Agreement for an additional three-year term with Cooper/Ports America, LLC, for approximately 15.56 acres out of the Port Authority’s Block 19 at Northside Turning Basin effective no earlier than July 1, 2021, at an annual base rent of $592,608 with a 3% annual increase.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize a second amendment to the Lease Agreement for an additional three-year term with Cooper/Ports America, LLC, for approximately 15.56 acres out of the Port Authority’s Block 19 at Northside Turning Basin effective no earlier than July 1, 2021, at an annual base rent of $592,608 with an annual 3% increase, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region) Strategic Objective 4d. - Support sustainable growth of Port Houston and the greater Port

Category Leases

Department: Real Estate

Staff Contact: R. D. Tanner

Background: By Minute No. 2016-0628-13, the Port Commission authorized the Port Authority and Shippers Stevedoring Company to enter into a five-year lease term of approximately 15.56 acres at the Northside Turning Basin. Subsequently, by Minute No. 2016-0927-57, the Port Commission authorized a change of control from Shippers Stevedoring Co. to Cooper/Ports America, LLC. Cooper/Ports America, LLC has now requested that the Port Authority extend the lease for a three-year term. The rate would include an annual 3% rental increase over the prior year rate.

Cooper/Ports America, LLC and its predicessor has been on the property since 2006. The property is used for container and chassis operations and other services related to handling of general cargo including wind power equipment that crosses Port Authority docks.

Staff Evaluation/Justification: Staff recommends approvalof the proposed Second Amendment to the lease agreement.

42 43 G. COMMERCIAL

Subject 2. Authorize a fourth amendment to the Lease Agreement for an additional one-year term with Cooper/Ports America, LLC, for approximately 3.20 acres which includes Warehouse 21-A, the apron adjacent to Warehouse 21-A, an additional open area of approximately 57,210 sq. ft., and a rail spur of approximately 500 linear ft., out of the Port Authority’s Block 21 at Northside Turning Basin, effective no earlier than June 1, 2021, at an annual base rent of $89,837.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize a fourth amendment to the Lease Agreement for an additional one-year term with Cooper/Ports America, LLC, for approximately 3.20 acres which includes Warehouse 21-A, the apron adjacent to Warehouse 21-A, an additional open area of approximately 57,210 sq. ft., and a rail spur of approximately 500 linear ft., out of the Port Authority’s Block 21 at Northside Turning Basin, effective no earlier than June 1, 2021, at an annual base rent of $89,837, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region) Strategic Objective 4d. - Support sustainable growth of Port Houston and the greater Port

Category: Leases

Department: Real Estate

Staff Contact: R. D. Tanner

Background: By Minute No. 2020-0428-13, the Port Commission authorized the Port Authority and Cooper/Ports America, LLC to enter into a third amendment to the lease of approximately 3.20 acres at the Northside Turning Basin Block 21, which includes Warehouse 21-A (approximately 50,000 sq. ft.), the apron area adjacent to Warehouse 21-A (approximately 12,500 sq. ft.), an additional open area (approximately 57,210 sq. ft.), and a rail spur (approximately 500 linear ft.), for an additional one-year term. The property is used for handling project and break-bulk cargo.

CT Stevedoring Inc. d/b/a Cooper/T. Smith Stevedoring Company and its successor Cooper/Ports America, LLC have leased the property since 2011.

Staff Evaluation/Justification: Staff recommends approval of the proposed fourth amendment to the lease agreement.

44 45 G. COMMERCIAL

Subject 3. Authorize an amendment to the Lease Agreement for an additional five- year term with Texas Brine Company, LLC, for approximately 2.91 acres out of the Port Authority’s Block 5 at Rosa Allen effective no earlier than August 1, 2021, at an annual base rent of $63,435 with a 3% annual increase.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize an amendment to the Lease Agreement for an additional five-year term with Texas Brine Company, LLC, for approximately 2.91 acres out of the Port Authority’s Block 5 at Rosa Allen effective no earlier than August 1, 2021, at an annual base rent of $63,435 with a 3% annual increase, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region) Strategic Objective 4d. - Support sustainable growth of Port Houston and the greater Port

Category: Leases

Department: Real Estate

Staff Contact: R. D. Tanner

Background: By Minute No. 2016-0628-14, the Port Commission authorized the Port Authority and Texas Brine Company, LLC to enter into a five-year lease term of approximately 2.91 acres out of the Port Authority’s Block 5 at Rosa Allen. Texas Brine Company, LLC has now requested that the Port Authority extend the lease for a five- year term. The rate would include an annual 3% rental increase over the prior year rate.

Texas Brine Company, LLC has been on the property since 1976. The property is used for a brine transfer pit and tank for brine pipeline operations.

Staff Evaluation/Justification: Staff recommends approval of the proposed amendment to the lease agreement.

46 47 H. FINANCE

Subject 1. Award a three-year contract, with an additional one-year option, to Universal Industrial Supply, to provide safety personal protective equipment (PPE) and vending machines (for dispensing PPE), at Barbours Cut Terminal, Bayport Container Terminal, and the Turning Basin Terminal, and additional safety equipment, in an amount not to exceed $400,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Recommended Action Recommended Action The Port Commission, at its April 27, 2021 meeting, award a three-year contract, with an additional one-year option, to Universal Industrial Supply, to provide safety personal protective equipment (PPE) and vending machines (for dispensing PPE) at Barbours Cut Terminal, Bayport Container Terminal, and the Turning Basin Terminal, and additional safety equipment, in an amount not to exceed $400,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region)

Category: Awards, Amendments & Change Orders

Department: Risk Management

Staff Contact: Norma Essary

Background: The Port Authority notified vendors regarding its request for proposals (RFPs) for PPE and vending machines for Barbours Cut Terminal, Bayport Container Terminal, and the Turning Basin Terminal, and the purchase of additional safety equipment, using the Port Authority’s BuySpeed Eprocurement System, and the project was advertised on the Port Authority’s website and in a local newspaper. Twenty-three vendors downloaded the project materials from BuySpeed.

Staff Evaluation/Justification: On January 11, 2021, four RFP responses were received and opened. The responses were reviewed and evaluated by staff in accordance with the selection criteria published in the RFP. Staff identified Universal Industrial Supply as providing best value for the required services.

Following staff Executive Committee review, staff recommends that the Port Commission award a contract to Universal Industrial Supply as described above.

48 49 H. FINANCE

Subject 2. Approve the Port Authority’s fiscal year 2020 Comprehensive Annual Financial Report.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Recommended Action The Port Commission, at its April 27, 2021 meeting, approve the fiscal year 2020 Comprehensive Annual Financial Report, including the Report of Independent Public Accountants prepared by BKD, LLP dated April 26, 2021, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Accounting

Staff Contact: Curtis Duncan

Background: Texas Water Code, Sections 49.191 and 60.002, requires the Port Authority to secure an annual audit by a certified public accountant or a public accountant holding a license from the Texas State Board of Public Accountancy. In addition, Texas Water Code, Section 49.194, requires the Port Authority’s governing body to approve the audit report annually and ensure that a copy of the report is submitted with an accompanying filing affidavit to the Executive Director of the Texas Commission on Environmental Quality (TCEQ) within 135 days after the close of the Port Authority's fiscal year.

By Minute No. 2020-0730-12, the Port Commission approved staff’s ranking of vendors and awarded a professional services contract for professional auditing services for the fiscal year ending 2020, with options to renew for two additional one-year terms to BKD, LLP to conduct that audit.

Staff Evaluation/Justification: BKD, LLP has now completed its audit of the Port Authority’s financial statements for the fiscal year ended December 31, 2020.

Staff has provided the Port Commission with the latest draft of the Port Authority’s fiscal year 2020 Comprehensive Annual Financial Report, which includes the Report of Independent Public Accountants prepared by BKD, LLP dated April 26, 2021.

The Audit Committee and staff recommend that the Port Commission formally approve the 2020 Comprehensive Annual Financial Report, whereupon the Executive Director of the Port Authority would submit the report, a long with the required filing affidavit, to the Executive Director of the TCEQ.

50 51 H. FINANCE

Subject 3. Adopt a Statement of Objectives and Policy for the Port Authority 401(a) Defined Contribution and 457(b) Deferred Compensation Plans (DC Plans).

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, adopt a Statement of Objectives and Policy for the Port of Houston Authority 401(a) Defined Contribution and 457(b) Deferred Compensation Plans, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region)

Category: General

Department: Treasury

Staff Contact: Roland Gonzalez

Background: By adoption of the 457(b) National Association of Counties Deferred Compensation Plan (Minute No. 1982- 0510-36), and Minute Nos. 2012-0404-02 and 2012-0724-25, the Port Commission has authorized the establishment of Defined Contribution 401(a) and Deferred Compensation 457(b) Plans (Plans) for Port Authority employees.

As the combined balances within the 401(a) and 457(b) plans total $5.6 million and $59.0 million respectively as of December 31, 2020, and, as the Port Commission endeavors to at least annually review the Investment Policy for the pension and OPEB plans, a similar "best practice" should be implemented for the Plans.

Staff Evaluation/Justification: Staff, the Port Authority’s pension consultant, AndCo Consulting, LLC, and the Port Authority’s outside retirement counsel, Haynes and Boone, LLP, propose adopting a Statement of Objectives and Policy for the Plans (Policy) for the following reasons: Adopting the Policy is considered a best practice. Administration of many of the provisions of the Plans is intended to be guided by the provisions of the Texas Government Code which, in Section 802.203, includes fiduciary requirements that are drafted and interpreted in parallel with the fiduciary requirements in ERISA Section 404. The Department of Labor (DOL) states in Interpretive Bulletin (IB) 2016-1 that, “the maintenance by an employee benefit plan of a statement of investment policy designed to further the purposes of the plan and its funding policy is consistent with the fiduciary obligations [in ERISA Section 404].” The purpose of the Policy is to establish the investment structure for the Plans and to adopt a set of guidelines for the selection and periodic evaluation and monitoring of each Plan’s investment options, per best practice.

The proposed Policy complies with applicable statutes, including all applicable state and federal laws and regulations governing Internal Revenue Code (IRC) §457(b) and IRC §401(a) plans, including Chapter 802 of the Texas Government Code, to the extent applicable.

The Pension and Benefits Committee and staff recommend that the Port Commission adopt a Statement of Objectives and Policy for the Port of Houston Authority 401(a) Defined Contribution and 457(b) Deferred Compensation Plans, as proposed.

52 Draft

P ORT OF H OUSTON A UTHORITY D EFERRED C OMPENSATION AND D EFINED C ONTRIBUTION P LANS

STATEMENT OF OBJECTIVES AND POLICY

PORT COMMISSION ADOPTED APRIL 27, 2021

MINUTE 2021-0427-

53 TABLE OF CONTENTS

I. PREAMBLE ...... 3

II. PURPOSE OF POLICY STATEMENT ...... 4

III. OVERVIEW AND OBJECTIVES OF THE PLANS AND INVESTMENT STRUCTURE ...... 5

IV. RESPONSIBILITIES ...... 7

V. INVESTMENT OPTION SELECTION & EVALUATION ...... 10

VI. INVESTMENT OPTION REMOVAL & MAPPING ...... 13

VII. ADDITIONAL PROVISIONS ...... 14

VIII. DEFFINTIONS ...... 15

EXHIBIT A – INVESTMENT OPTIONS ...... 17

2 4846-4669-3584 v.10 54 I. PREAMBLE

The Port of Houston Authority 457(b) Deferred Compensation Plan (the “457(b) Plan”) and the Port of Houston Authority Defined Contribution Plan (the “401(a) Plan”) are defined contribution retirement plans established and maintained by the Port of Houston Authority of Harris County, Texas (the “Sponsor”). The 401(a) Plan and 457(b) Plan are referred to herein each as a “Plan” and together as the “Plans”.

The Plans provide retirement benefits to eligible employees of the Sponsor and their beneficiaries.

The Plans are intended to fully comply with all applicable state and federal laws and regulations governing Internal Revenue Code (“IRC”) §457(b) and IRC §401(a) plans, including Chapter 802 of the Texas Government Code, to the extent applicable. As governmental plans, the Plans are not subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) although many of the provisions of the Plans are guided by the provisions of ERISA.

3 4846-4669-3584 v.10 55 II. PURPOSE OF POLICY STATEMENT

The Port Commission of the Port of Houston Authority (the “Commission”) has adopted this Statement of Objectives and Policy (“Policy”) on behalf of the Sponsor, and directs that it apply to the Sponsor, the Plans’ administrators, Investment Consultants (as described in Section IV below), and others acting on behalf of, or under the direction of, the Commission with respect to the Plans.

The purpose of the Policy is to establish the investment structure for the Plans and to adopt a set of guidelines for the selection and periodic evaluation and monitoring of each Plan’s Investment Options (“Option”) that are made available to the employees and retirees who participate in the Plans (the “Participants”). This Policy is intended to ensure that the Options are provided in accordance with the general Fiduciary principles of prudence and diversification.

This Policy guides how the Commission will discharge its obligations to prudently select investment alternatives, periodically monitor and evaluate those alternatives and, based on such periodic evaluations, determine whether each Option should continue to be made available to the Participants. To guide the Commission in selecting, monitoring, reviewing and adding or changing Plan investments, this Policy:

 describes the Options available under the Plans;  establishes investment guidelines for the selection of Options and diversification of assets;  specifies the criteria for evaluating the performance of the selected Options; and  defines the responsibilities of the Commission as to the selection and monitoring of Options.

A current list of the Options and their style objectives and benchmarks is set forth on EXHIBIT A.

These guidelines do not constitute a contract or a statement of mandatory requirements, but are instead an explanation of the general principles established for the selection and retention of the Options. When considering Options, the Commission determines the relative importance to be given to each of the general principles set forth in these guidelines and may consider other factors in addition to those described in these guidelines. This Policy is not intended to restrict or limit the discretion, control, or authority of the Commission, nor of any Fiduciary of either Plan to whom such discretion, control, or authority has been delegated, to make decisions that are deemed to be in the best interest of Participants as circumstances may require.

4 4846-4669-3584 v.10 56 III. OVERVIEW AND OBJECTIVES OF THE PLANS AND INVESTMENT STRUCTURE

Overview of the Plans

The Plans are vehicles through which Participants may accumulate assets to provide for a portion of their retirement savings.

 The Plans are established for the exclusive benefit of the Participants.  The Participants bear the ultimate risk and responsibility for their investment elections in the Options, and the investment performance of their individual accounts in the Plans over time.  The Plans are intended to permit each Participant to direct the investment of his or her individual account in the Plans in one or more of the Options.

Overview of the Plans’ Investment Structures

The investment structure of the Plans allows each Participant to create an investment portfolio by allocating his or her account balance between and among the Options. These Options include a diversified mix of investment funds reflecting different levels of risk and potential return, including Target Date Funds that enable Participants to direct the investment of their accounts into a single diversified vehicle that is designed to be consistent with their time horizons and/or risk tolerances.

Should a Plan Participant fail to exercise full and independent investment authority with respect to any contributions allocated to the Participant’s account, all contributions will be invested in the Plan’s “Qualified Default Investment Alternative” (“QDIA”), which is currently the appropriate Target Date Fund based on Participant’s date of birth and projected retirement at the Plan’s normal retirement date.

Objectives of Plans’ Investment Structure

The objectives of the investment structure of the Plans are as follows:

 to provide Participants with access to investments in the key Asset Classes available in the marketplace;

 to provide Participants with access to a series of Target Date Funds which (1) allocate a Participant’s assets among several Asset Classes, and (2) offer the Participant a diversified portfolio using an Asset Allocation glide path which reduces equity risk as the Participant approaches retirement age;

 to provide Participants with diverse Options in terms of Asset Classes offered [factors relevant to diversification of Asset Classes include investment style (e.g., active versus passive or growth versus value), market capitalization

5 4846-4669-3584 v.10 57 (e.g., large, medium, and small), and the nature of the specific Option offered (e.g., global versus domestic or well-diversified fund versus a specialty fund)];

 to provide each Participant with the ability to construct an investment portfolio consistent with his or her individual risk and return objectives; and

 to provide a QDIA that is diversified and which Derisks the Participant’s portfolio as the Participant nears retirement age.

To accomplish the objectives of the investment structure, this Policy establishes (1) investment standards for the Options offered to Participants and (2) formal criteria to monitor and evaluate the performance and risk characteristics of the investment managers for the Options.

Although the Plans are not subject to ERISA, as similar to the provisions set forth in ERISA Section 404(c), the Plans shall:

 Provide Participants at least three Options from which to choose, with different risk/return profiles;  Provide Participants with access to sufficient information to assist each Participant to make informed selections of Options; and  Permit Participants to change Options daily.

Proxy voting for mutual fund shares shall be passed through to Participants in accordance with the Service Provider/Record Keeper agreement or other applicable document.

6 4846-4669-3584 v.10 58 IV. RESPONSIBILITIES

Participants: Each Participant is best positioned to make decisions regarding the allocation of his or her Plan account balance among the various Options offered by the Plans in order to best achieve his or her investment and retirement goals. As a result, the amount to be invested in each Option, if any, shall be determined by each Plan Participant.

Each Participant will bear the sole risk for the investment results from the Options chosen by the Participant.

Each Participant should educate himself/herself as necessary to make sound investment decisions. This education may include, but is not limited to, review of materials provided by the Plans, the Service Provider/Record Keeper, investment managers and/or Investment Consultants.

Commission: The Commission, as the governing body of the Sponsor, has certain Fiduciary responsibilities for the Plans.

The Commission is responsible for this Statement of Objectives and Policy.

The Commission is authorized to consult with staff and independent experts, and may retain consultants, investment advisors, and other service providers (including any Plan administrator, and the Service Provider/Record Keeper and Investment Consultant) to assist in performing its duties, including selection of the Plans’ Investment Options.

The Commission is responsible for (1) selecting and monitoring the number and types of Options and the Asset Classes offered under the Plans and (2) making changes in the Options available under the Plans, each as deemed to be necessary or appropriate in its discretion.

The Commission periodically evaluates the performance and expenses of the Options in consultation with the Investment Consultant.

The Commission periodically establishes investment guidelines for the Options and evaluates the Investment Manager's performance for each Option.

The Commission periodically reviews the Plans’ service providers’ performance and the fees charged for such services.

The Commission receives periodic briefings from the Plan's Investment Consultant regarding the investment performance of the Options and the expenses being charged for such Options.

7 4846-4669-3584 v.10 59 Pension and Benefits Committee: The Commission may designate the Pension and Benefits Committee (or other committee or task force) to provide advice and recommendations to the Commission and to assist the Commission in performing its responsibilities set forth above. If the Pension and Benefits Committee has not been formally appointed, then the Commission shall serve as the Pension and Benefits Committee for purposes of this Policy.

Periodically, but not less often than once a year, the Pension and Benefits Committee will meet to review the following:

A. The continued adherence of this Policy to the investment objectives of the Plans as described below. B. The adherence to this Policy by those acting under the direction of the Commission with respect to the Plans. C. Comments and concerns expressed by Participants relating to the Options. D. Information regarding eligible Sponsor employees, including demographics, participation, contribution rates, and Participants’ use of the Options. E. The reasonableness of the fees and expenses incurred by the Plans and the Options. F. Whether any changes are needed to be made to the Policy, Plans administration, Participant services, or Options.

The Pension and Benefits Committee may discuss factors similar to those set forth above with regard to the Service Provider/Record Keeper (as described below), Investment Consultants, and others acting with respect to the Plans.

Service Provider/Record Keeper: The Service Provider/Record Keeper selected by the Commission is responsible for implementing Participants’ investment elections, such as changes in Option choices or Asset Allocation, and allocating Participants’ contributions and account balances among the available Options in accordance with such elections. The Service Provider/Record Keeper is also responsible for maintaining accurate and up-to-date account records for all individual Participants in the Plans. These records include daily valuations of each Participant’s aggregate account balance and investment in each Option.

The Service Provider/Record Keeper may from time to time (1) communicate to Participants that they are responsible for the investment of their own Plan accounts and (2) be responsible for providing each Participant with access to reasonably sufficient information to select and manage their investments. The information and services provided shall include enrollment, education, exchanges, transfers, distributions, periodic statements, and any others that may be further defined in the agreement between the Service Provider/Record Keeper and the Sponsor.

The Service Provider/Record Keeper may from time to time provide ongoing education seminars and meetings to Participants, covering relevant investment

8 4846-4669-3584 v.10 60 and retirement savings topics. The Service Provider/Record Keeper shall not provide specific investment advice to Participants.

Investment Consultant: The Investment Consultant shall assist the Plans in developing appropriate investment policies and guidelines for the Plans, recommending Options to be offered to Participants, and providing ongoing monitoring and review of the Options. The Investment Consultant shall provide periodic reports outlining the investment performance of each Option, information as provided herein, and any further information or services that may be specified in the agreement between the Investment Consultant and Sponsor.

9 4846-4669-3584 v.10 61 V. INVESTMENT OPTION SELECTION & EVALUATION

The following characteristics may be considered in selecting and monitoring Options, whether offered as a stand-alone Option, and/or as a fund included in a portfolio Option:

A. Manager tenure and corporate stability. The manager’s tenure as well as the corporate stability of the company offering a particular investment vehicle should be considered and evaluated before it is provided to Participants as an Option, and shall continue to be periodically evaluated if it is provided as an Option. In general, the Option’s manager must have a three-year track record managing the specific Option in order for that vehicle to be considered as an Option offering. Investment Manager change, significant turnover of the responsible portfolio management team, and/or adverse developments at the fund company responsible for an Option may warrant heightened scrutiny as described below.

B. Manager, style, asset, and process consistency. The manager, style, asset level, and process consistency of particular investment vehicle shall be considered and evaluated before it is provided to Participants as an Option, and shall continue to be periodically evaluated if provided as an Option. Any management turnover, substantial style drift, significant asset flows, or investment process change at the fund company responsible for an existing Option may warrant review of such Option.

C. Investment costs and management fees. The overall costs and ongoing management fees of current Options, as well as new Options under consideration, shall be considered and evaluated to determine whether they are reasonable when compared to other similar and comparable investment vehicles.

D. Performance and risk measures. In addition to the qualitative criteria detailed above, the ongoing performance (net of fees) and risk profile of each Option shall be considered and evaluated using the following quantitative criteria in which ranks are defined to span first percentile to one hundredth percentile, with the first percentile representing the best performance and one hundredth percentile representing the worst performance:

1. Whether its return over four consecutive quarters of performance is more than the appropriate benchmark, and its rank is above the 75th percentile of the appropriate peer group. 2. Whether its performance over the five and ten-year trailing periods exceeds the appropriate benchmark. 3. Whether its performance over the five and ten-year trailing periods ranks in the top 50th percentile of the appropriate peer group.

10 4846-4669-3584 v.10 62 4. Whether its Sharpe ratio over the five and ten-year trailing period ranks in the top 50th percentile of the appropriate peer group. The Sharpe ratio is defined as an investment’s excess return (over the risk-free rate) divided by the standard deviation (risk) of the excess return. 5. Whether it shows positive Alpha over the five and ten-year trailing period relative to the appropriate benchmark. Alpha is a measure of risk-adjusted performance that represents the portion of an investment’s historical performance that is not explained by movements in the benchmark index.

The Commission should endeavor to monitor the performance of the Options using the criteria described in items A through D on a quarterly basis. These reviews should evaluate each Option’s performance with regard to these evaluation criteria, as well as the Option’s position in the overall menu of available Options.

While the review structure contained above can be used for the evaluation of most Options, this framework should not be considered to be an exhaustive set of criteria by which any Option may be evaluated.

Moreover, there are instances where Options offered to Participants cannot be evaluated using one or more of the criteria provided by this framework. As such, the Commission recognizes the need to adopt a flexible approach when analyzing the success of the Plans’ index, money market, stable value, and target date (or risk-based lifecycle) Options, since traditional methods of benchmarking returns may not fully assess the effectiveness or fully gauge the risks of these types of Options. While all Options should be reviewed within the context of their risk/reward profiles, different qualitative and quantitative factors may receive greater emphasis when evaluating the Options.

To assist with this ongoing monitoring process, the Investment Consultant shall provide periodic reports on the performance of each Option and include an evaluation matrix that identifies each Option as (i) passing (“green”), (ii) failing four quarters or less (“yellow”), or (iii) failing for more than four quarters (“red”), with recommendations in connection with the performance and risk measures described under item D above, and/or additional criteria where appropriate and applicable.

Options evaluation matrices are intended to aid the Commission in identifying those Options that may warrant increased monitoring before becoming subject to removal as detailed in SECTION VI of this Policy. However, the matrices are not intended to establish an exclusive decision-making process by which Options may be selected for replacement, but rather a working tool intended to document the dialogue and examination of Options by the Commission on an ongoing basis. As each situation for potential replacement is unique, the appropriate length of time during which an Option may continue to fall short of

11 4846-4669-3584 v.10 63 any criteria in its evaluation matrix before being replaced will be evaluated on a case-by-case basis.

The Commission, with the assistance of the Investment Consultant, shall select an appropriate QDIA Option for each Plan. The Commission shall review each Plan’s QDIA on an ongoing basis for suitability and, in this respect, will reference the Department of Labor Regulations regarding QDIAs. Each Plan's current QDIA is identified in EXHIBIT A.

12 4846-4669-3584 v.10 64 VI. INVESTMENT OPTION REMOVAL & MAPPING

The ongoing suitability of an Option in the Plan shall be periodically reviewed using the Option evaluation matrix and/or other appropriate criteria.

Based on advice and/or a recommendation received from the Investment Consultant, the Commission shall have the final discretion regarding whether to retain or replace any Option. The ultimate decision to remove/replace an Option shall be made when the Commission believes such removal/replacement is in the best interests of a Plan and its Participants. Any decision to remove an Option shall be made on an individual basis with respect to the particular Option.

Without limiting the foregoing, an Option may be removed when it is determined that:

A. Its performance over an appropriate timeframe cannot be supported or explained by market conditions or other reasonable considerations; B. It is determined to be reasonably uncertain that such Option will achieve its performance and risk objectives in the future; or C. Qualitative or other issues of concern over an appropriate timeframe exist that cannot be timely or adequately remedied.

The Sponsor shall endeavor to notify Participants of discontinuation of an Option at least 30 days prior to the effective date. The notice shall inform Participants that Participant assets in, and future contribution allocations to, the discontinued Option will be mapped to an alternative Option unless a Participant provides other instructions to the Service Provider/Record Keeper.

Following notification of the removal of an Option in which Participants have a balance or future contribution allocation, absent Participant election of a substitute Option, the following procedures will be applied to mapping Participant assets to other Options.

A. The Plan will map Participant assets in, and future contribution allocations to, the discontinued Option to an existing or new Option that is reasonably similar in terms of risk and return characteristics of the discontinued Option. Unless presented with clear evidence to the contrary, Options within the same Asset Class should be considered as being reasonably similar in terms of risk and return characteristics; or B. The Plan will map Participant assets and future contribution allocations in the discontinued Option to the appropriate QDIA for the Plan.

The decision to map Participants to an Option that is reasonably similar in terms of risk and return characteristics to the discontinued Option, or to the appropriate QDIA, shall be made on a case-by-case basis, as deemed to be in the best interests of the Participants under the prevailing circumstances.

13 4846-4669-3584 v.10 65

VII. ADDITIONAL PROVISIONS

Interpreting the Policy

The Commission shall have the authority and discretion to interpret, implement and administer this Policy at any time, including, without limitation, making any final decisions to select, remove or replace any Option available under a Plan.

Amending the Policy

These guidelines will be updated by the Treasury department and reviewed by the Commission at appropriate periodic intervals and as circumstances may warrant. This Policy may be amended from time to time by the Commission to reflect changes in the capital markets, Participants’ objectives, or other factors that are relevant to a Plan, all as deemed appropriate by the Commission in its discretion.

Plan Document Controls

Notwithstanding any other provision of this Policy, if any term or condition of the Policy expressly conflicts with any term or condition in a Plan, the term or condition of the Plan will control and govern.

14 4846-4669-3584 v.10 66

VIII. DEFFINTIONS

401(a) A tax-deferred retirement savings plan defined by subsection 401(a) of the Internal Revenue Code which allows for contributions by the employer. Contribution amounts, eligibility, and vesting schedule are all determined by the employer.

457(b) A tax-deferred retirement savings plan defined by subsection 457(b) of the Internal Revenue Code which allows for contributions by the employee. Contribution amounts are determined by the employee.

Asset Allocation Process by which the total plan is divided among the different asset classes.

Asset Class Categories of investments that include equity securities, fixed income securities and cash equivalents.

Commission The Port Commission of the Port of Houston Authority of Harris County, Texas, which shall serve as the governing body responsible for administration of the Plan as specified by applicable state or local law or ordinance.

Derisk Process of reducing capital appreciation-oriented investments and increasing capital preservation-oriented assets. I.e. reducing stocks and increasing bonds.

ERISA The Employee Retirement Income Security Act of 1974, any amendments thereto, and any regulations issued pertaining to ERISA.

Fiduciary Any individual or group of individuals as defined in applicable Texas law and, to the extent not inconsistent with applicable Texas law, ERISA, section 3(21)(a).

Investment Consultant The firm employed to consult on matters relating to the effective management of the Plan.

Investment Manager An entity appointed in accordance with Section 802.204, Texas Government Code, that provides investment advice and/or manages investments for a fee. All Investment Managers shall be registered with the Securities and Exchange Commission and abide by the rules of the Investment Advisers Act of 1940.

Investment Options The mutual funds and other investment vehicles offered in the Plan available for Participants to invest their contributions in.

Participant Employee, or previous employee, who is eligible to take part in the Plan.

15 4846-4669-3584 v.10 67 Pension and Benefits Committee The committee appointed by the Commission pursuant to the Plan, which may serve as an advisor to the Commission and provide recommendations to the Commission from time to time concerning the administration and management of the Plan. If no committee is formally appointed, then the Commission shall serve as the Pension and Benefits Committee for purposes of this Policy.

Qualified Default Investment Alternative “QDIA” An investment vehicle that may be used for retirement plan contributions in the absence of direction from the plan Participant. Qualified default investment alternatives were defined in the Pension Protection Act of 2006 and are limited to target date funds or life-cycle funds, balanced accounts, or professionally managed accounts.

[Exhibit A follows.]

16 4846-4669-3584 v.10 68 EXHIBIT A – INVESTMENT OPTIONS

The following funds are current 457(b) Plan Options offered by the Plan to its Participants.

Fund Option Style Objective Peer Group Benchmark

Domestic Equity Funds DFA Large Cap Value Large Cap Value Russell 1000 Value Large Cap Core Vanguard 500 Large Cap Core S&P 500 Index MFS Large Cap Growth Large Cap Growth Russell 1000 Growth Vanguard Mid Cap Mid Cap Core Index Mid Cap CRSP US Mid Cap Touchstone Mid Cap Growth Mid Cap Growth Russell Mid Cap Growth American Beacon Small Cap Value Small Cap Value Russel 2000 Value Small Cap Core Vanguard Small Cap Small Cap CRSP US Small Cap Index Goldman Sachs Small Cap Growth Small Cap Growth Russell 2000 Growth

International / Global Equity Funds FTSE Global ex USA All Vanguard Total International International Index International Large Cap Cap American Funds EuroPacific International Core International Large Cap MSCI AC World ex USA

Fixed Income / Stable Value Funds Broad Market Core Fixed Vanguard Total Bond Domestic Bond Index Blmbg. Barc. U.S. Agg Income Domestic Core+ Broad Market Core+ Fixed Western Asset Blmbg. Barc. U.S. Agg Bond Income Guaranteed Interest Nationwide Fixed Account - - Contract Nationwide Government Money 90 Day U.S. Treasury Money Market U.S. Taxable Money Market Market Fund Bill

Target Date Funds (QDIA Option) Morningstar Category American Funds Target Date Mixed-Asset Target Target-Date

17 4846-4669-3584 v.10 69 The following funds are current 401(a) Plan Options offered by the Plan to its Participants.

Fund Option Style Objective Peer Group Benchmark

Domestic Equity Funds DFA Large Cap Value Large Cap Value Russell 1000 Value Large Cap Core Vanguard 500 Large Cap Core S&P 500 Index MFS Large Cap Growth Large Cap Growth Russell 1000 Growth Vanguard Mid Cap Mid Cap Core Index Mid Cap CRSP US Mid Cap Touchstone Mid Cap Growth Mid Cap Growth Russell Mid Cap Growth American Beacon Small Cap Value Small Cap Value Russel 2000 Value Small Cap Core Vanguard Small Cap Small Cap CRSP US Small Cap Index Goldman Sachs Small Cap Growth Small Cap Growth Russell 2000 Growth

International / Global Equity Funds FTSE Global ex USA All Vanguard Total International International Index International Large Cap Cap American Funds EuroPacific International Core International Large Cap MSCI AC World ex USA

Fixed Income / Stable Value Funds Broad Market Core Fixed Vanguard Total Bond Domestic Bond Index Blmbg. Barc. U.S. Agg Income Domestic Core+ Broad Market Core+ Fixed Western Asset Blmbg. Barc. U.S. Agg Bond Income Nationwide Government Money 90 Day U.S. Treasury Money Market U.S. Taxable Money Market Market Fund Bill

Target Date Funds (QDIA Option) Morningstar Category American Funds Target Date Mixed-Asset Target Target-Date

[End of Exhibit A.]

18 4846-4669-3584 v.10 70 71 H. FINANCE

Subject 4. Adopt a Revenue Bond Debt Policy and Procedures for the Port Authority.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, adopt a Revenue Bond Debt Policy and Procedures for the Port of Houston Authority, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region)

Category: General

Department: Treasury

Staff Contact: Roland Gonzalez / Tim Finley

Background: The Port Authority is committed to best practices in financial management, transparency, and maintaining the financial strength and flexibility of the Port Authority as it relates to full and timely repayment of all financial obligations.

By Minute No. 2018-1113-03, the Port Commission approved a Master Resolution establishing a financing system, authorizing the issuance of Port Authority senior lien obligations and junior lien obligations, granting security and establishing funds and accounts for the payment of obligations' and approved a First Supplemental Resolution establishing the Port Authority Senior Lien Variable Rate Revolving Note Program.

Staff Evaluation/Justification: Staff anticipates that the Port Commission may authorize and approve the issuance of revenue-supported debt to finance construction and other related costs associated with Project 11. Accordingly, the purpose of this proposed policy is to establish guidelines and a framework for the issuance and management of the Port Authority's operating revenue debt; this policy would not address ad valorem tax debt. This policy is intended to lend assurance to rating agencies, investors and lenders that the Port Authority is well managed and therefore more likely to meet its debt obligations.

The proposed debt policy would address all potential Port Authority funding needs including those for capital equipment, port facility improvements, and channel improvement projects through the issuance of long- term, medium term, and short term revenue-supported financing vehicles. Staff, the Port Authority’s financial advisor (PFM Financial Advisors LLC) and bond counsel (Bracewell LLP) drafted this debt policy. The Audit Committee and staff recommend that the Port Commission adopt a debt policy, as proposed.

72 Draft Port of Houston Authority

Revenue Bond Debt Policy and Procedures

Port Commission Adopted on April 27, 2021

Minute No. 2021-0427-

73

Table of Contents

DEBT POLICY ...... 3 Purpose ...... 3 Review ...... 3 Best Interest of PHA ...... 3 Definitions ...... 3 Financial Planning and Debt Issuance Policy ...... 5 Debt Service Coverage Targets and Limits ...... 6 Method of Sale Evaluation ...... 6 Debt Structure ...... 7 Bond Proceeds Expenditures, Reimbursements, Reinvestment, and Arbitrage Rebate ...... 8 Debt Refunding ...... 9 Credit Enhancement and Liquidity ...... 9 Reserve and Unrestricted Cash Target ...... 9 Ongoing Reporting Requirements ...... 10

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DEBT POLICY

This Debt Policy (the “Policy”) is adopted by the Port Commission, as the governing body of the Port of Houston Authority of Harris County, Texas (the “Authority”, “PHA”) effective April 27, 2021.

Purpose

The purpose of this Policy is to establish guidelines and a framework for the issuance and management of PHA's operating revenue debt. This policy does not address ad valorem tax debt. PHA is committed to consistent, best practices financial management, including maintaining the financial strength and flexibility of PHA and the full and timely repayment of all financial obligations. Debt transactions that violate any terms of existing documents including Bond Resolutions, Loan Agreements, Note Agreements, bond insurance policies, and state and federal laws will not be considered. PHA will be open to recommendations or ideas for any proposed transaction as well as variations from the following guidelines provided that such variation must be fully examined in conjunction with PHA's advisors and justified to the Port Commission. This policy does not address or govern PHA’s engagement in Interest Rate Swaps or Public- Private-Partnerships.

Review

This Policy will be updated by the Treasury department and reviewed by the Port Commission no less than once every (2) two years and any changes to this Policy will be presented to the Audit Committee for its review and recommendation for adoption by the Port Commission. This Policy will also be made available on the PHA’s website: https://porthouston.com/financial-transparency/

Best Interest of PHA

Although adherence to this policy is desirable, deviations from the policy may be appropriate at times to address: (i) changing financial goals; (ii) emerging financial products/debt structures; and/or (iii) unique market opportunities. Consequently, the general best interests of PHA will supersede any provision of the policy.

Definitions

Unless the context requires otherwise, the following terms and phrases used in this Policy shall mean the following:

“Arbitrage Earnings” means investment earnings on bond proceeds and certain related funds that exceed the bond yield.

“Arbitrage Rebate Spend Down Test” means the 6-month, 18-month, and 2-year spending exceptions to arbitrage rebate.

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“Bond Resolutions” means the document or documents in which PHA authorizes the issuance and sale of municipal securities.

“Port Commission” means the governing body of the Port of Houston Authority of Harris County, Texas.

“Competitive Sale” means a method of sale requesting underwriters to submit a firm offer to purchase a new issue of municipal securities. The issuer awards the municipal securities to the “winning” underwriter or syndicate presenting a bid complying with the terms of a Notice of Sale that provides the lowest interest rate cost according to stipulated criteria set forth in the Notice of Sale.

“Debt Service Coverage Ratio” means the ratio of pledged revenues available annually to pay debt service divided by the annual debt service requirement.

“Direct Placement” means a loan to PHA from a banking institution or another lender.

“FINANCIAL ACCOUNTING PROCEDURES BOND FUND ACCOUNTING - ARBITRAGE LIABILITY” means the procedures of the same name reviewed by the Audit Committee April 26, 2021.

“Interest Rate Swap” means a specific derivative contract entered into by an issuer or obligor with a swap provider to exchange periodic interest payments. Typically, one party agrees to make payments to the other based upon a fixed rate of interest in exchange for payments based upon a variable rate.

“Loan Agreements” means agreements between PHA and a loan provider setting forth the general terms of such loan.

“Master Resolution” means the resolution adopted by Port of Houston Authority of Harris County, Texas dated November 13, 2018 that establishes a financing system, authorizes the issuance of Port of Houston Authority Senior Lien Obligations and Junior Lien Obligations, provides for Credit Agreements and Hedge Agreements, grants security and establishes funds and accounts for the payment of obligations and makes other provisions regarding such obligations and matter incident thereto.

“Negotiated Sale” means the sale of a new issue of municipal securities by an issuer directly to an underwriter or underwriting syndicate selected by the issuer. A negotiated sale is distinguished from a sale by competitive bid, which requires public bidding by the underwriters. Among the primary points of negotiation for an issuer are the coupon rates, yields, call features and purchase price of the issue.

“Note Agreements” means agreements between PHA and a note provider setting forth the general terms of such note.

“Post-Sale Summary and Analysis” means the work product prepared by the Financial 4

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Advisor that documents the pricing of the bonds relative to other similar transactions priced at or near the time of PHA’s bond sale, the true interest cost of the sale and the date of the verbal award.

“Registered Municipal Advisor” means a financial advisor registered as a municipal advisor with the Securities Exchange Commission and the Municipal Securities Rulemaking Board as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

“Supplemental Resolution” means an agreement entered into by PHA that supplements the Master Resolution.

“Unrestricted Days Cash on Hand” means available liquidity divided by annual operating expenses, then multiplied by 365.

Financial Planning and Debt Issuance Policy

PHA will retain the services of engineering and other consultants to work with staff to obtain independent professional advice on the acquisition, construction, operation, and management of the port facilities projects. In addition to other duties, staff and consultants will prepare cost and revenue estimates for all port facilities projects.

PHA will retain the services of a Registered Municipal Advisor to serve in capacity as Financial Advisor to assist in performance of the tasks set forth in this policy.

In consultation with the Financial Advisor, PHA will develop, maintain, and update, as appropriate, comprehensive financial planning models as tools in developing a financing plan for existing and proposed port facilities projects. PHA will annually review its capital plans and adjust them as necessary in order to comply with the annual debt coverage commitments. The Port Commission reviews and approves the annual capital budget.

Financial Planning Models will incorporate longer-term capital improvements and the following elements, in addition to other factors: 1. Operating revenue projections from PHA's finance staff or alternative revenue projection scenarios, 2. Projected Operations and Maintenance expenses and Renewal and Replacement Expenses along with required deposits to all reserves, if any, 3. Existing debt service requirements, 4. Estimated additional debt service requirements, 5. Estimated investment income, and 6. Unrestricted cash balances targets.

Long-term debt will be used to finance capital projects and certain equipment where it is cost effective, prudent or otherwise determined to be in the best interest of PHA. Long-term debt, which includes capital lease financings, will not be used to fund PHA's operations. The weighted average maturity of the long-term debt issued by PHA to finance an asset or project will not 5

77 exceed the weighted average economic life of the bond financed assets by more than 120%.

Medium-term or "put" bonds will be used judiciously and only after careful analysis and discussion of the interest rate and rollover risks involved.

Variable rate debt may be issued in various forms - e.g., variable rate demand bonds, commercial paper, direct purchase note programs, and bank lines. A minimum of 80% of revenue indebtedness should be fixed rate debt. The amount of unhedged variable rate debt generally should not exceed 10% of outstanding debt for any PHA’s revenue indebtedness. The amount of hedged variable rate debt generally should not exceed 10% of outstanding debt for any PHA’s revenue indebtedness. Available but undrawn commercial paper, direct purchase note programs, and bank lines are not counted in the above percentages.

Short-term variable rate debt in the form of revolving or direct purchase notes, commercial paper, and/or bank lines may be used as the means by which PHA can let construction contracts and, when used in this manner, may exceed the limits described above.

Debt Service Coverage Targets and Limits

The amount of bonds to be issued is limited by the Bond Resolution and the respective Supplemental Resolutions approved thereunder that govern the debt issuance and covenants contained therein, including, but not limited to, the rate covenant and additional bonds test. Target debt service coverage levels, leverage ratios and liquidity metrics will be set based on PHA’s financial model and the requirements for cash flow after debt service necessary to fund the portion of the CIP that is expected to be paid from cash. The PHA will target the maintenance of a minimum Debt Service Coverage Ratio of 3.0x for senior lien revenue bonds, consistent with rating agency guidance for “AA” category credit ratings. In addition, PHA will take into consideration the most recent rating agency guidance to ensure minimum “A” category credit ratings are attained on all senior lien revenue bonds and all junior lien revenue bonds.

Method of Sale Evaluation

With the goal of obtaining the lowest cost of capital and completing a successful transaction, for each transaction recommended, the Chief Financial Officer, with advice from the Financial Advisor, will undertake an analysis to determine the recommended method of sale, including Competitive Sale, Negotiated Sale, or Direct Placement.

The evaluation will take into consideration, among other factors the following considerations as outlined in the Government Finance Officers' Association (GFOA) best practice recommendations: 1. Expected credit rating of bonds being issued, 2. Strength of revenue stream, 3. Structure of bonds and potential need for extensive explanation to the bond market, 4. Disclosure requirements for various methods of sale, 5. Use of insurance or other credit enhancement, and 6

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6. Other factors that staff, in consultation with the Financial Advisor, believes favor the use of one method over the other.

The evaluation will be shared with the Audit Committee and a recommendation as to the method of sale will be presented.

Should PHA select the use of a Negotiated Sale, the following guidelines will be followed to increase the likelihood of a successful transaction and fully documented Negotiated Sale process: 1. Underwriters will be selected through a formal Request for Qualifications (RFQ) process in accordance with PHA's Procurement Policies either on a deal-by-deal basis or as part of a pool of underwriters for a specified term. Exceptions may be made when in the best interest of PHA such as when time is of the essence. 2. PHA's Financial Advisor will advise PHA on all aspects of the sale, including but not limited to structuring, disclosure preparation and bond pricing. 3. Staff and the Financial Advisor will make a recommendation for lead underwriting firm and all participating co-senior and co-manager firms based on: i. results of most recent RFQ selection, ii. firm's contribution to development of strategies for transaction, iii. demonstrated ability of firm to successfully underwrite similar transactions, and iv. previous work assigned to firm under current RFQ selection. 4. Staff and the Financial Advisor will review all orders for bonds during pricing to understand investor interest and best negotiate a final coupon and yield scale for the bonds. 5. The Financial Advisor will prepare a Post-Sale Summary and Analysis that documents the pricing of the bonds relative to other similar transactions priced at or near the time of PHA’s bond sale and record the true interest cost of the sale and the date of the verbal award. The analysis will be shared with the Audit Committee.

Should a Direct Placement be recommended, staff and the Financial Advisor will undertake a competitive process for selecting the Direct Placement counterparty to ensure PHA's objectives are met at the lowest cost of capital. Such process ideally would include a formal RFQ or solicitation of pricing indications, as appropriate.

Debt Structure

Debt structures will be determined in consultation with the PHA Chief Financial Officer.

PHA staff will engage the Audit Committee at the appropriate time for guidance on proposed debt issuances and will maintain contact with the Audit Committee throughout the debt issuance process, providing transaction overviews and materials to the Audit Committee in a timely manner.

PHA may utilize various debt structures to accomplish its financing goals, including but 7

79 not limited to, the use of premium bonds, discount bonds, capital appreciation bonds, convertible capital appreciation bonds, bond anticipation notes, commercial paper, direct purchase note programs, bank loans, variable rate and multimodal bonds and capitalized interest, when appropriate in order to achieve the goals provided in this Debt Policy.

With the goal of obtaining the optimal results for PHA, including the lowest cost of capital and/or maximum project proceeds for each transaction recommended, the Chief Financial Officer, with advice from the Financial Advisor, will undertake an analysis to determine the recommended coupon and call option structure. 1. Coupon rates generally should be designed to achieve the lowest cost of capital, but PHA may consider future call option value when evaluating the costs of capital, and PHA may consider the amount of bond proceeds produced by the transaction when determining the preferred coupon structure. 2. Call provisions for PHA bond issues will be made as short as possible consistent with the lowest interest cost to PHA and credit market acceptability, taking into consideration the option value of such call provisions. 3. When practical and cost efficient, all PHA bonds should be callable at par.

PHA will consider Interest Rate Swap transactions only as they relate to its debt management program and not as an investment instrument. No swap transaction should impair the outstanding uninsured bond rating of PHA’s rated obligations. To the extent PHA determines that consideration of Interest Rate Swaps is warranted, PHA will establish a formal Interest Rate Swap policy.

Bond Proceeds Expenditures, Reimbursements, Reinvestment, and Arbitrage Rebate

With the goal of obtaining the optimal results for PHA, the Chief Financial Officer, with advice from the Financial Advisor, will review the projects being financed and expected expenditure schedules in order to undertake an analysis to determine which Arbitrage Rebate Spend Down Tests can be met with corresponding proceeds reinvestment strategies. 1. PHA generally will strive to issue bonds for project costs expected to be expended in a manner consistent with the two-year spend down test; however, the proceeds reinvestment environment may be considered if Arbitrage Earnings are unlikely. 2. PHA will seek to adopt bond reimbursement resolutions in a timely manner such that cash expenditures for eligible project costs can be reimbursed from bond proceeds. Reimbursement resolutions can greatly enhance the ability to meet spend down tests and minimize any Arbitrage Rebate considerations. 3. Bond proceeds not immediately reimbursed or spent on project costs should be invested within the parameters of PHA’s investment policy. 4. PHA will take all steps needed to ensure compliance with the Port’s existing FINANCIAL ACCOUNTING PROCEDURES BOND FUND ACCOUNTING - ARBITRAGE LIABILITY for tax-exempt bonds, including all arbitrage rebate regulatory requirements.

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Debt Refunding

PHA staff and the Financial Advisor will monitor the municipal bond market for opportunities to obtain interest savings by refunding or refinancing outstanding debt. As a general rule, the present value savings of a particular refunding should equal or exceed 3% of the refunded maturities and not materially extend the maturity of the outstanding debt. For an advance refunding a higher minimum savings threshold should be required, depending on how soon the bonds may be called. However, in order to meet certain restructuring or risk management goals, PHA may elect to lower the present value savings threshold for any individual transaction. In addition to the foregoing, the PHA may elect to issue refunding bonds in order to provide for long-term financing of commercial paper, direct purchase notes or other short-term debt without showing debt service savings. Additionally, the PHA may issue fixed rate refunding bonds for the purpose of refinancing variable rate bonds, bonds with balloon maturities or bonds with put features without showing debt service savings.

Credit Enhancement and Liquidity

Bond insurance, surety policies, letters of credit, liquidity facilities and other credit enhancements will be used when it provides economic savings or risk management opportunities for PHA. Letters of credit, liquidity facilities or other credit facilities may expose PHA to bank provider risk. In those instances, bank providers should not possess long term credit ratings lower than "A2/A/A" and short-term ratings lower than "P-1/A-1/Fl" from Moody's Investors Services, Standard and Poor's Corporation and Fitch Ratings, respectively.

Reserve and Unrestricted Cash Target

PHA recognizes that adequate liquidity and reserves address potential variability in revenues and provide resources for unforeseen expenditures. The Master Resolution and Supplemental Resolutions will establish funding requirements for any debt service reserve funds that will become part of the pledge to bond holders.

For debt service reserve funds required under a Supplemental Resolution, PHA may fund from bond proceeds, deposits of available cash, or use a credit instrument to satisfy the reserve requirements. PHA and its Financial Advisor will evaluate the relative cost of the credit instrument.

PHA has funded a significant amount of capital investment from net revenues and strives to maintain its facilities in good working order. PHA will ensure the adequacy of funding for renewal and replacement projects before capital expansion projects.

In addition to any reserves the PHA may establish by policy or other action by the Port Commission, the PHA will target the maintenance of a minimum of 125 Days’ Unrestricted Cash on Hand, to provide internal liquidity for operations and additional support of debt service. Credit Objectives

It is PHA's intent to achieve and maintain “AA” category credit ratings on its outstanding 9

81 and proposed revenue bond issues. PHA will maintain long-term debt ratings from at least two of the bond rating agencies, which are currently Moody's Investors Service, Standard and Poor's Corporation, Fitch Ratings, and Kroll Bond Ratings Agency. PHA may discontinue the use of ratings from any agency which currently rates the debt of PHA if, based on advice from PHA's Financial Advisor and underwriting team, the discontinuance of such rating will not adversely affect the rates that can be achieved in selling PHA's debt without such rating. PHA may issue non-rated debt when deemed in the best interest of PHA, for example a bank loan Direct Placement.

PHA's Chief Financial Officer will maintain frequent, but at a minimum annual, communications with the credit rating agencies that currently assign ratings to PHA's various debt obligations, and bond insurers that currently enhance any of PHA's various debt obligations. This effort will include providing periodic updates on PHA's general financial condition along with coordinating meetings and presentations, as necessary, in conjunction with a new debt issuance.

PHA's Chief Financial Officer will consider, in conjunction with the Financial Advisor and Counsel, elements of an investor relations program that may be designed to keep present and future investors in PHA's debt fully informed on current developments related to PHA and its long-term debt.

Ongoing Reporting Requirements

At least once each year, the Chief Financial Officer will provide the Audit Committee and the Port Commission a report on the status of PHA’s debt. At a minimum, the report must include: 1. Amount and percentage of total debt by security type, 2. Any changes in ratings, including ratings of credit enhancers and swap counterparties, 3. Current mark-to-market value of all interest rate exchange agreements, if applicable, and 4. Historical rate performance for all variable rate bonds, if applicable.

PHA's Chief Financial Officer, with the assistance of the Financial Advisor, will be responsible for analyzing any unsolicited proposals received relative to debt issues, responding to the proposal as appropriate, and recommending to the Audit Committee any action to be taken in a timely manner.

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82 83 H. FINANCE

Subject 5. Adopt a Disclosure Policy and Procedures for the Port Authority.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, adopt a Disclosure Policy and Procedures for the Port Authority, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region)

Category: General

Department: Treasury

Staff Contact: Roland Gonzalez / Tim Finley

Background: By Minute Nos. 2009-1215-27, 2011-0823-10, 2015-0623-19, 2018-0517-13, and 2020-0520-15 the Port Commission has most recently approved orders authorizing the sale of Port of Houston Authority of Harris County, Texas Unlimited Tax Refunding Bonds, and the current outstanding principal outstanding for all remaining Port of Houston Authority of Harris County, Texas unlimited tax refunding bonds is $492.4 million.

Staff currently tracks, reports, and files disclosure events regarding this debt, however without current formal delegation of authority by the Port Commission.

Staff Evaluation/Justification: Staff and the Port Authority’s bond counsel (Bracewell LLP) and financial advisor (PFM Financial Advisors LLC) drafted this Disclosure Policy to:

Formally delegate authority to staff for required disclosure compliance with adequate procedures in place to do so; Provide specific requirements for the Port Authority to speak with the “market” to comply with federal securities law, Organize and formalize offering documents and Comprehensive Annual Financial Report (CAFR) disclosure review and approval by staff, Establish a working group to facilitate disclosure across the Port Authority, Help satisfy all obligations undertaken pursuant to the Port Authority’s continuing disclosure agreements, and Promote recognized disclosure best practices for the Port Authority.

The Audit Committee and staff recommend that the Port Commission adopt a Disclosure Policy and Procedures as proposed.

84 Draft Port of Houston Authority

Disclosure Policy and Procedures

Port Commission Adopted on April 27, 2021

Minute No. 2021-0427-

Page | 1

85 Draft

TABLE OF CONTENTS

DISCLOSURE POLICY ...... 3

PURPOSE AND INTENT ...... 3

DEFINITIONS ...... 3

DISCLOSURE WORKING GROUP ...... 5

DISCLOSURE PROCEDURES ...... 6

UPDATING PROCEDURES ...... 17

PERIODIC TRAINING ...... 18

INTERNAL USE ONLY ...... 18

EXHIBIT A ...... 19

Page | 2

86 Draft

DISCLOSURE POLICY

This Disclosure Policy (the “Procedures”) is adopted by the Port Commission, as the governing body of the Port of Houston Authority of Harris County, Texas (the “Authority”, “PHA”) effective April 27, 2021.

PURPOSE AND INTENT

It is the stated policy and objective of the Authority to (i) ensure that the Authority’s financial disclosures are fair and accurate, and comply with all applicable securities laws, (ii) satisfy in a timely manner all contractual obligations undertaken pursuant to the Authority’s Continuing Disclosure Undertakings (as defined herein), and (iii) promote best practices relating to financial disclosures by the Authority.

The Port Commission has approved these Procedures for the purpose of establishing, maintaining, and evidencing compliance with internal procedures, promoting compliance with securities laws, documenting the process for preparing and reviewing Disclosure Documents, and assisting the Authority in complying with its Continuing Disclosure Undertakings.

DEFINITIONS

Capitalized terms used in these Procedures shall have the meanings set forth below:

“Audited Financial Statements” means the audited financial statements of the Authority.

“Auditor” means the independent outside auditor retained by the Authority to conduct an annual audit of the Authority and prepare a report thereon.

“Bond Counsel” means an attorney or law firm retained to provide an opinion regarding the validity of the bonds or other municipal securities described in the Offering Documents.

“CAFR” means the comprehensive annual financial reports of the Authority.

“Continuing Disclosure Undertakings” means the Authority’s contractual obligations relating to its outstanding securities entered into to permit the underwriters of such securities to comply with the Rule.

“Continuing Disclosure Undertakings Master List” means a current list of each Continuing Disclosure Undertaking of the Authority, for both ad valorem tax bonds and revenue bonds, identified by name of the issue covered and the CUSIP numbers associated therewith, for which the Authority remains obligated to advance funds to pay or support the municipal securities covered, together with a description of the annual financial information and operating data for such Continuing Disclosure Undertaking (which tables are typically included in the CAFR), the date on or before which the annual Page | 3

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financial information and operating data and Audited Financial Statements must be filed, a description of information required in any notice of a failure to file the annual financial information and operating data and Audited Financial Statements, and a description of each event for which notice must be filed and whether the event must be filed in a timely manner or within ten business days of the occurrence of the event.

“Contributors” means those Authority staff members and officials involved in preparing or approving the Disclosure Documents or additional staff members assigned by the DWG Chair or identified to the DWG Chair by a director or manager of a department, or other unit of the Authority, to assist with the review or preparation of one or more sections of a Disclosure Document.

“Disclosure Counsel” means any law firm retained by the Authority to provide advice to the Authority with respect to the Authority’s obligations under federal securities law.

“Disclosure Document” means any of the Authority’s documents and materials prepared, issued, or distributed in connection with the Authority’s disclosure obligations under applicable federal securities laws or that could potentially subject the Authority to liability under applicable federal securities laws, and shall include, but not be limited to, the following: the Offering Documents; the CAFR (or a separate filing of annual financial information and operating data); any filing made by the Authority with EMMA pursuant to Continuing Disclosure Undertakings, including an Event Notice; any voluntary filing made by the Authority that is filed on EMMA; rating agency presentations; and any other document that is reviewed and approved in accordance with these Procedures.

“Disclosure Working Group” or “DWG” means the Authority’s (i) Chief Financial Officer, (ii) Chief Legal Officer, (iii) Director, Treasury, (iv) Manager, Treasury, (v) Controller, and (vi) Manager, Accounting, or the designee of any of the foregoing.

“Disclosure Working Group Chair” or “DWG Chair” means the Chief Financial Officer (or the person acting in the capacity of the Chief Financial Officer), or a designee authorized by the Chief Financial Officer to act on his or her behalf.

“EMMA” means the Electronic Municipal Market Access system maintained by the MSRB.

“Event Notice” means a notice for any of the events listed in the Rule.

“Financial Advisor” means an individual or firm providing financial advice to the Authority, including a municipal advisor.

“Financial Obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) guarantee of (A) or (B). The term Financial Obligation does not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. The terms used in the definition of

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Financial Obligation have the meanings ascribed to them in 83 F.R. 44700 (Aug. 31, 2018).

“Financial Obligations Master List” means a list of the Authority’s existing Financial Obligations. The Financial Obligations Master List should include for each Financial Obligation listed such terms of the Financial Obligation as may be necessary to comply with the information reporting requirements of event (15) under the Rule and monitoring requirements of event (16) under the Rule. The Financial Obligations Master List should be updated on a continuing basis upon incurrence of each new Financial Obligation or modification of an existing Financial Obligation.

“Financing Group” means the members of the DWG, Bond Counsel, Disclosure Counsel, the Financial Advisor, the Underwriter, counsel to the Underwriter, and any other party engaged by the Authority to assist in the offer, placement, and sale of the bonds or municipal securities described in an Offering Document.

“MSRB” means the Municipal Securities Rulemaking Board.

“Offering Documents” means all preliminary and final official statements, offering memoranda and other materials prepared by or for the Authority, together with any amendments or supplements thereto, for use in connection with the offering of notes, bonds, other municipal securities, or other obligations of the Authority subject to the antifraud provisions of federal securities law.

“Periodic Training” means periodic disclosure training for staff and officials of the Authority involved in preparing or approving the Disclosure Documents.

“Port Commission” means the governing body of the Authority.

“Required Date” means the latest date or dates after the end of the Authority’s fiscal year when the Audited Financial Statements and CAFR are required to be filed with the MSRB under the Authority’s Continuing Disclosure Undertakings, as identified by the Continuing Disclosure Undertakings Master List.

“Rule” means Securities and Exchange Commission Rule 15c2-12, adopted pursuant to the Securities Exchange Act of 1934, 17 CFR § 240.15c2-12, as amended from time to time.

“Underwriter” means the broker, dealer, or municipal securities dealer offering or placing the bonds or other municipal securities described in the Offering Documents to or with investors.

DISCLOSURE WORKING GROUP

A. DWG CHAIR RESPONSIBILITIES

The DWG Chair is responsible for oversight of compliance with these Procedures. The DWG Chair is the leader of the DWG. Page | 5

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The DWG Chair may designate staff or consult or engage the Financial Advisor, Bond Counsel, Disclosure Counsel, or other professional to assist in the execution of his or her responsibilities under these Procedures.

B. DWG RESPONSIBILITIES

The DWG is responsible for compliance with these Procedures and promoting compliance with federal securities laws.

The DWG shall meet (which meeting may be by phone or electronic means) upon the request of the DWG Chair in order to fulfill its obligations under these Procedures. The DWG shall also meet (which meeting may be by phone or electronic means) prior to the posting of any Disclosure Document relating to the issuance of bonds. The DWG is encouraged to provide suggestions to improve these Procedures and the Disclosure Documents. The DWG may consult with Bond Counsel, Disclosure Counsel, the Financial Advisor, and the Auditor as necessary in connection with carrying out their obligations under these procedures.

Contributors, staff, and officials must cooperate with the DWG and provide the DWG with any information, assurances or certifications that it deems necessary to ensure that the Disclosure Documents are accurate and complete in all material respects.

DISCLOSURE PROCEDURES

A. PRIMARY DISCLOSURE

The following process will be used in connection with reviewing the form and content of Offering Documents and any supplements thereto.

1. DWG CHAIR

 The DWG Chair will coordinate with the members of the DWG to: (i) ensure that all appropriate members of the DWG are included on the distribution lists of the Financing Group, (ii) assign portions of the Offering Documents, including appendices, to members of the DWG or Contributors with responsibility for the financial information or operating data described therein, and (iii) assign relevant portions of the Offering Document to Bond Counsel (such as disclosure describing the bond order or bond resolution) for review.

2. OFFERING DOCUMENT REVIEW PROCESS

 Unless the Authority has contracted with another party to provide such services, the Disclosure Counsel will prepare the initial draft of the Offering Document for review by the DWG and Financing Group and

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manage the incorporation of comments to the Offering Document received from the DWG, Contributors and the Financing Group.

 The Director, Treasury, with the assistance of the Financial Advisor, if necessary, will be responsible for compiling the financial information and operating data contained in the tables in the Offering Document and assigning such information and operating data to the members of Authority’s staff with responsibility for such financial information or operating data for review and comment.

 If the Offering Document will be a “final official statement” as defined in the Rule, the Director, Treasury will be responsible for coordinating a review of the Authority’s compliance with its Continuing Disclosure Undertakings for the past five years and reviewing the information regarding the same in the Offering Document. Such review shall include a review of the Continuing Disclosure Master List, the Financial Obligation Master List, and the Authority’s filings with EMMA for the preceding five years to determine whether any failures to comply have occurred. The DWG will consider any identified failures to comply and may consult with Bond Counsel and/or Disclosure Counsel, if necessary, regarding whether the disclosure of any such failures is required in the Offering Document and the contents of any such disclosure. To the extent practicable, remedial filings with respect to any such failures to file shall be prepared and filed in accordance with these Procedures.

 The Authority’s Chief Legal Officer, or his or her designee, will review and, if necessary, consult with Authority staff and other consultants or attorneys regarding disclosures contained in the Offering Document related to litigation, ongoing investigations and other general legal matters affecting the Authority.

 The Chief Financial Officer, or his or her designee, with the assistance of the DWG, will be available to respond to diligence questions during the preparation of the Offering Documents.

 Bond Counsel will review and comment on disclosures related to the bond order or bond resolution authorizing the debt obligations, the description of the continuing disclosure undertaking, and federal income tax considerations contained in the Offering Document.

 The DWG will consult with Contributors and other appropriate Authority officials, the Auditor, the Financial Advisor, Bond Counsel, Disclosure Counsel and other outside consultants, if necessary, regarding the disclosure in the Offering Documents.

 The DWG must approve the final version of an Offering Document prior to the approval or execution of the Offering Document by the DWG Chair Page | 7

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or other Authority Official or the posting or distribution of the Offering Document when such approval or execution is not required. Before final approval, the DWG must determine that the material facts described therein are consistent with those known to the DWG, and that the final version of the Offering Document (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects.

 Approval of an Offering Document shall be evidenced by written sign-off (which may be delivered by e-mail) from each member of the DWG with responsibility for the disclosure provided in the Offering Document. The DWG Chair should retain the written sign-offs received from such members of the DWG in accordance with the Authority’s records retention policy. In circumstances in which approval or execution by the Authority or an Authority official other than the DWG Chair is not required, the DWG Chair will authorize the distribution of the Offering Document.

 If requested by the Port Commission or any Authority official signing the Offering Document or approving its use, the DWG Chair will certify that (i) the Offering Document has been prepared in accordance with these Procedures and (ii) to the knowledge of the DWG and the DWG Chair, the Offering Document is accurate and complete in all material respects and does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading. This process may occur with respect to: (1) posting or other distribution of (i) a preliminary Offering Document, and the deeming final thereof, (ii) a final Offering Document, and (iii) any supplement or amendment to a preliminary or final Offering Document, and (2) execution of (i) any purchase agreement or (ii) closing document by an Authority official containing a representation, warranty, or certification that the Offering Document is accurate and complete in all material respects and does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading.

B. CONTINUING DISCLOSURE

In connection with the issuance of municipal securities, the Authority has entered into (and in the future may enter into) Continuing Disclosure Undertakings for the benefit of the holders and beneficial owners of the municipal securities of each such issuance, as required by the Underwriters in accordance with the Rule. The Authority is required to comply with these Continuing Disclosure Undertakings for so long as it remains obligated to advance funds to pay or support the

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municipal securities covered by the respective Continuing Disclosure Undertaking.

Under the Continuing Disclosure Undertakings, the Authority is obligated to provide (1) annual financial information consisting of (i) Audited Financial Statements and (ii) the annual financial information and operating information identified in the Continuing Disclosure Undertakings on or before the dates specified in the Continuing Disclosure Undertakings, and notice of any failure to provide such annual financial information, and (2) in a timely manner, notice of any of the events specified in the Continuing Disclosure Undertaking to the MSRB by means of the EMMA system. The Authority typically provides the identified annual financial information and operating data in tables included in the CAFR rather than a separate annual report.

The Director, Treasury (or individual executing the responsibilities of the Director, Treasury) will maintain the Continuing Disclosure Undertakings Master List of the Authority.

1. Audited Financial Statements

 The Chief Financial Officer, or his or her designee, will work with relevant officials of the Authority to assure that the engagement letter with the Auditor requires completion and delivery by the Auditor of the Authority’s annual Audited Financial Statements with sufficient time to permit the presentation to and acceptance by the Authority of the Audited Financial Statements and for the DWG to review and incorporate data and other information provided therein into the annual financial information and operating data prior to the respective Required Date.

 The Chief Financial Officer, or his or her designee, will arrange for the filing of the Audited Financial Statements with EMMA upon availability or together with the annual financial information and operating data, (which is typically incorporated in the CAFR), provided such filing occurs on or before the respective Required Date. The Chief Financial Officer or his or her designee shall be responsible for confirming that such filings have been made.

 If the Audited Financial Statements are not available by the Required Date, the Chief Financial Officer will (i) if required under the Authority’s Continuing Disclosure Undertakings, arrange for the review by the DWG and filing of unaudited financial statements with such cautionary statements and disclaimers as may be appropriate on or before the Required Date or as soon as practicable thereafter, and (ii) coordinate – with the assistance of Bond Counsel, Disclosure Counsel, and the Financial Advisor, if necessary – for the drafting of and the filing of an Event Notice, in conformity with the failure to file Page | 9

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notice provisions of the Continuing Disclosure Undertakings, stating that the Audited Financial Statements are not yet available and will not be filed by the Required Date. When the Audited Financial Statements become available, the Chief Financial Officer shall make arrangements for the filing of such Audited Financial Statements on EMMA and confirm that such filling was made.

2. ANNUAL FINANCIAL INFORMATION AND OPERATING DATA – CAFR TABLES

 The Chief Financial Officer will schedule with the DWG the preparation and drafting of the annual financial information and operating data required to be presented on an annual basis in time for the incorporation of such information into the CAFR so that the CAFR may be filed on or before the Required Date.

 The Chief Financial Officer will assign portions of the draft financial information and operating data, as appropriate, to DWG members and Contributors with responsibility for the financial information or operating data described therein.

 The DWG will review, comment on, and revise the initial and any subsequent drafts of the annual financial information and operating data and the CAFR; check, confirm and include or incorporate by reference, as appropriate, information contained in the Audited Financial Statements, and such other reports as required; and consult with appropriate staff and officials, the Auditor, Bond Counsel, Disclosure Counsel, the Financial Advisor and other outside consultants, if necessary, regarding the disclosure in the annual financial information and operating data presented in the CAFR.

 The DWG will confirm that all of the financial information and operating data required under the Authority’s Continuing Disclosure Undertakings is included in the CAFR and must approve of the final version of the CAFR (unless the Authority chooses to provide such information in a separate report to be filed on EMMA, in which case the information must be approved and filed in the same manner as if it were included in the CAFR). Before final approval, the DWG must determine that the material facts described therein are consistent with those known to the DWG, and that the final version of the CAFR (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects.

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DWG with responsibility for the disclosure provided in the CAFR. The DWG Chair should retain the written sign-offs received from such members of the DWG in in accordance with the Authority’s records retention policy.

 If the annual financial information and operating data required to be filed under the Continuing Disclosure Undertakings is not available by the Required Date (for example, if the CAFR is not ready to be filed by the Required Date and tables with the required annual financial information and operating data are not separately filed), the Chief Financial Officer shall coordinate – with the assistance of Bond Counsel, Disclosure Counsel and the Financial Advisor, if necessary – for the drafting of and the filing of an Event Notice, in conformity with the failure to file notice provisions of the Continuing Disclosure Undertakings, stating that the annual financial information and operating data is not yet available and will not be filed by the Required Date. When the annual financial information and operating data becomes available, the Chief Financial Officer shall make arrangements for the filing of such Audited Financial Statements on EMMA and confirm that such filling was made.

3. Event Notices

In its Continuing Disclosure Undertakings, the Authority is obligated to file notices of certain events on EMMA in a timely manner (in certain undertakings within ten business days) after the occurrence of the event, as set forth in the Continuing Disclosure Undertakings Master List. While the list of required event notices required under the Authority’s Continuing Disclosure Undertakings has varied with changes in the Rule, a copy of the events for which event notices are required under the Authority’s most recent Continuing Disclosure Undertakings and reflecting the amendments to the Rule that became effective in 2019 is attached hereto as Exhibit A.

A. Event Notices – General

 Each member of the DWG is expected to have an understanding of the events listed in the Continuing Disclosure Undertakings, as described in the Continuing Disclosure Undertakings Master List.

 At all times a DWG member is required to notify the DWG Chair if he or she becomes aware of any event or potential for the occurrence of an event described in the Continuing Disclosure Undertakings Master List that may require the filing of an Event Notice.

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 The DWG shall identify Authority departments responsible for information relating to the Authority’s Continuing Disclosure Undertakings and Event Notices. The DWG shall require all departments in the Authority to promptly notify the DWG regarding the occurrence of any event or the potential occurrence of an event triggering a requirement to file an Event Notice.

 Upon notification of the occurrence of an event or potential occurrence of an event that may require filing of an Event Notice, the DWG Chair will confer with members of the DWG – and may additionally confer with Authority staff, Bond Counsel, Disclosure Counsel, the Financial Advisor and other outside consultants, if necessary – to determine whether an event has occurred and, if necessary, draft or assign the drafting of the Event Notice in sufficient time to allow the Authority to meet its continuing disclosure obligations described in the Continuing Disclosure Undertakings Master List.

 The DWG Chair will provide the DWG with a draft of the Event Notice and the DWG will review, revise, and comment on initial and revised drafts of the Event Notice. The DWG will consult with Contributors and other appropriate Authority staff and officials, the Auditor, Bond Counsel, the Financial Advisor and/or other outside consultants they deem necessary regarding the Event Notice.

 Before final approval, the DWG must determine that the material facts described in the Event Notice are consistent with those known to the DWG, and that the final version of the Event Notice (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects.

 Prior to releasing the Event Notice, the DWG Chair must receive written sign-off (which may be delivered by email) from each member of the DWG with responsibility for the disclosure provided in the Event Notice. The DWG Chair should retain the written sign-offs received from such members of the DWG in accordance with the Authority’s records retention policy.

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 If the DWG becomes aware of an Event Notice that was not filed, the DWG Chair will follow the process described above to promptly file such Event Notice.

B. Event Notices – Financial Obligations

Beginning February 27, 2019, in connection with any primary offering subject to the Rule, the Authority will be required to include in Continuing Disclosure Undertakings an agreement to file, not in excess of ten business days, an Event Notice for: (15) incurrence of a Financial Obligation of the Authority, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Authority, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Authority, any of which reflect financial difficulties. The terms used in events (15) and (16) shall have the meanings ascribed to them in 83 F.R. 44700 (Aug. 31, 2018).

 Each member of the DWG is expected to have an understanding of new events (15) and (16) under the Rule.

 The DWG will be responsible for: (i) identifying existing material Financial Obligations; (ii) tracking new material Financial Obligations, including amendments thereto; and (iii) monitoring Financial Obligations for events which may reflect financial difficulties. The DWG may, as it deems appropriate, consult with Bond Counsel, Disclosure Counsel, the Auditor, and other outside consultants in connection with such activities.

 To assist in monitoring compliance with new events (15) and (16), the DWG Chair and the DWG will create the Financial Obligations Master List. The DWG may, as it deems appropriate, consult with Bond Counsel, Disclosure Counsel, the Auditor and other outside consultants in connection with the preparation of the Financial Obligations Master List.

 The Director, Treasury, or his or her designee, will maintain and update the Financial Obligations Master List, and may retain a Financial Advisor or other outside consultants, as may be necessary, to effectively maintain and continuously update such Master List as well as to make all filings required to be made by the Authority under the Continuing Disclosure Undertakings.

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 The Director, Treasury, or his or her designee, shall review Authority agenda items in order to identify potential Financial Obligations (or a modification of an existing Financial Obligation) and shall follow-up with the individual responsible for the agenda item to determine if the item rises to the level of disclosure. For purposes of this section, at a minimum, items to be considered by the DWG as a potential “Financial Obligation” shall include, but are not limited to:

1. A debt obligation; 2. A derivative instrument entered into in connection with or pledged as security or a source of payment for, an existing or planned debt obligation; 3. A guarantee of (1) or (2); 4. A financing agreement, financing lease or energy savings performance contract where the Authority effectively borrows money at a rate of interest for the purchase of vehicles and equipment and pays back such borrowing over a number of years; 5. A line of credit, credit agreement or commercial paper program; and 6. Any other instrument that contains “debt-like” features or terms.

 The DWG shall review all potential Financial Obligations for materiality and recommend to the DWG chair whether filing is required. For purposes of this section, a determination as to the materiality of a potential Financial Obligation involves a determination as to whether a financial obligation or the terms of a financial obligation, if they affect security holders, would be important, to the total mix of information made available to a reasonable investor when making an investment decision.

 At all times the DWG members are required to notify the DWG Chair if they become aware of the occurrence or potential occurrence of events, amendments or new agreements, or other items that would constitute new events (15) and (16) under the Rule. If a DWG member provides such notice or the DWG Chair otherwise becomes aware of such actual or potential event, the DWG Chair will follow the steps under “Section IV(B)(3)(A) Event Notices – General” of these Procedures in determining whether an event has occurred and, if necessary, the drafting and filing of the Event Notice and related record-keeping.

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C. VOLUNTARY FILINGS WITH EMMA

 If Authority staff or officials desire to file a voluntary disclosure filing on EMMA, the staff or officials must make a request to the DWG Chair describing the reason for providing a voluntary disclosure. The DWG Chair will coordinate with the DWG – and may additionally consult with Bond Counsel, Disclosure Counsel, and the Financial Advisor, if necessary – to determine whether a voluntary filing is appropriate and, if so, draft or assign the drafting of the voluntary disclosure filing.

 The DWG Chair will provide the DWG with a draft of the voluntary filing and the DWG will review, revise, and comment on initial and revised drafts of the voluntary filing. The DWG will consult with Contributors and other appropriate Authority staff and officials, the Auditor, the Financial Advisor, Bond Counsel, Disclosure Counsel, and other outside consultants, if necessary, regarding the voluntary filing.

 The DWG must approve of the final version of the voluntary filing. Before final approval, the DWG must determine that the material facts described therein are consistent with those known to the DWG, and that the final version of the voluntary filing (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects.

 Approval of a voluntary filing shall be evidenced by written sign-off (which may be delivered by e-mail) from each member of the DWG with responsibility for the disclosure provided in the voluntary filing. Upon receipt of sign-off from such members of the DWG, the DWG Chair shall file the voluntary filing with EMMA. The DWG Chair should retain the written sign- offs received from members of the DWG in in accordance with the Authority’s records retention policy.

D. RATING AGENCY PRESENTATIONS

 In the event officials of the Authority are to make a presentation to a rating agency relating to the rating of outstanding or proposed municipal securities, the DWG Chair will assign portions of the draft rating agency presentation to DWG members and Contributors with responsibility for the financial and other information to be provided therein.

 The DWG will consult with Contributors and other appropriate Authority staff and officials regarding the disclosure in the rating agency presentation. The DWG may also consult with the Auditor, the Financial Advisor, Bond Counsel, Disclosure Counsel, and other outside consultants, if necessary, regarding the disclosure in the rating agency presentation.

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 The DWG must approve the final version of any rating agency presentation prior to delivery to a rating agency. Before final approval, the DWG must determine that the material facts described therein are consistent with those known to the DWG, and that the final version of the rating agency presentation (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects.

 Approval of a rating agency presentation shall be evidenced by written sign- off (which may be delivered by e-mail) from each member of the DWG with responsibility for the disclosure provided in the rating agency presentation. Upon receipt of sign-off from such members of the DWG, the DWG Chair shall provide the rating agency presentation to the rating agency. The DWG Chair should retain the written sign-offs received from members of the DWG in the in accordance with the Authority’s records retention policy.

E. Investor Presentations

 In the event a presentation is to be made to prospective investors with respect to an offering of municipal securities of the Authority or to investors with respect to outstanding municipal securities of the Authority, the DWG Chair will assign portions of the draft investor presentation to DWG members and Contributors with responsibility for the financial and other information to be provided therein and to Bond Counsel, Disclosure Counsel, Underwriter, and the Financial Advisor, as the DWG deems appropriate.

 The DWG will consult with Contributors and other appropriate Authority staff and officials, the Auditor and other outside consultants, if necessary. The DWG will review, revise, and comment on initial and revised drafts of the investor presentation.

 Before final approval, the DWG must determine (A) that the material facts described therein are consistent with those known to the DWG, and that the final version of the investor presentation (1) does not make any untrue statement of a material fact or omit any material fact necessary to make the statements made therein, in light of the circumstances in which they are made, not misleading, and (2) is accurate and complete in all material respects, and (B), in the case of (1) an investor presentation to potential investors in an offering of municipal securities of the Authority, that the presentation is limited to information provided in the Offering Document and (2) an investor presentation to investors of outstanding municipal securities of the Authority, that the presentation is limited to information about the Authority available on EMMA.

 The DWG must approve the final version of any investor presentation prior to presentation to investors. Approval of an investor presentation shall be

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evidenced by written sign-off (which may be delivered by e-mail) from each Representative with responsibility for the disclosure provided in the investor presentation. The DWG Chair should retain the written sign-offs received from members of the DWG in the in accordance with the Authority’s records retention policy.

F. Website Disclosures

• If the Authority is posting financial and operating information to the Authority’s website, the Chief Financial Officer will assign portions of such information to the members of Authority staff or consultants with responsibility for the Authority’s financial information or operating data described therein for review and comment prior to posting such materials unless such materials have previously been reviewed in accordance with these Disclosure Procedures.

• Disclosure Documents should only be posted on areas of the Authority’s website designed and approved by DWG for posting of such documents. The areas of the Authority’s website where Disclosure Documents may be posted should include appropriate disclaimers and warnings that the information has not and will not be updated. The DWG may also consider the inclusion of viewer acknowledgements or other limiting features to the extent they deem such features useful or necessary. The DWG may consult with Bond Counsel or Disclosure Counsel in connection with any such designations or determinations.

• Routine information and data, including financial, budgetary, and operating data generally made available to the public by the Authority may be posted on a portion of the Authority’s website allocated to such information, provided the portion of the website clearly provides a disclaimer, approved by DWG, warning viewers that the information presented has not been prepared for and is not presented for consideration as disclosure to investors, and directs viewers seeking investor disclosure to the Authority’s information available on EMMA.

• Posting information to the Authority’s website alone is not sufficient to comply with the Authority’s Continuing Disclosure Undertakings described herein; such information must also be filed on EMMA.

UPDATING PROCEDURES

 It is the intention of the Authority to modify or amend these Procedures in the future in order to comply with any changes in legal or regulatory requirements to the extent such changes may apply to the Authority and its obligations, or improve the realization of the purpose and intent of these Procedures. In addition, the DWG, the DWG Chair, and any official or staff involved in preparing or approving the Disclosure Documents may at any time recommend an amendment to the Procedures.

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PERIODIC TRAINING

 The Authority will provide Periodic Training for members of the DWG participating in the preparation or approval of any Offering Document or the dissemination of any Disclosure Documents.

 The Periodic Training should generally include an overview of these Procedures, the disclosure obligations of the Authority under federal and state securities laws, and the responsibilities and potential liabilities of the staff and officials involved in preparing or approving the Disclosure Documents.

 The DWG Chair will keep a record of those that attend the Periodic Training and maintain such record in accordance with these Procedures.

INTERNAL USE ONLY

 These Procedures are intended for internal use only and are not intended to establish any duties in favor of or rights of any person other than the Authority.

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Exhibit A

Example Event Notice Requirements (Reflecting Amendments to the Rule that Became Effective on February 27, 2019)

Event Notices.

(a) The Authority shall provide the following to the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the occurrence of the event, notice of any of the following events with respect to the Bonds:

(1) Principal and interest payment delinquencies;

(2) Non-payment related defaults, if material;

(3) Unscheduled draws on debt service reserves reflecting financial difficulties;

(4) Unscheduled draws on credit enhancements reflecting financial difficulties;

(5) Substitution of credit or liquidity providers, or their failure to perform;

(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

(7) Modifications to rights of the holders of the Bonds, if material;

(8) Bond calls, if material, and tender offers;

(9) Defeasances;

(10) Release, substitution, or sale of property securing repayment of the Bonds, if material;

(11) Rating changes;

(12) Bankruptcy, insolvency, receivership or similar event of the Authority;

Note to paragraph 12: For the purposes of the event identified in paragraph 12 of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Authority in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Authority, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Authority.

(13) The consummation of a merger, consolidation, or acquisition involving the Authority or the sale of all or substantially all of the assets of the Authority, other than in the ordinary Page | 19

103 Draft

course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

(14) Appointment of successor or additional trustee or the change of name of a trustee, if material;

(15) Incurrence of a Financial Obligation of the Authority, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Authority, any of which affect security holders, if material; and

(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Authority, any of which reflect financial difficulties.

Note to paragraphs (15) and (16): For purposes of the events identified in paragraphs (15) and (16) of this section and in the definition of Financial Obligation, the Authority intends the words used in such paragraphs to have the meanings ascribed to them in SEC Release No. 34-83885 dated August 20, 2018 (the “2018 Release”) and any further written guidance provided by the SEC or its staff with respect to the amendments to the Rule effected by the 2018 Release.”

The Authority shall provide to the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner, notice of a failure by the Authority to provide financial information and operating data (i.e. the annual financial information and operating data and Audited Financial Statements) in accordance with the requirements of the applicable Order or Resolution. All documents provided to the MSRB should be accompanied by identifying information as prescribed by the MSRB.

Additionally, if the Authority changes its fiscal year, it must notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the Authority otherwise would be required to provide its annual financial information and operating data and Audited Financial Statements.

DM-#6294077.6

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104 105 I. INFRASTRUCTURE

Subject 1. Approve staff’s ranking of vendors and award a professional services contract in an amount not to exceed $460,900 for the "u-shaped property" pre-development design in the vicinity of the Bayport Container Terminal to the top-ranked proposers: staff ranking – first, Lockwood, Andrews and Newnam, Inc.; second, Halff Associates, Inc.; and third, Cobb, Fendley & Associates, Inc.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting: (a) approve staff’s ranking of vendors, based on the selection criteria, in the following order – first, Andrews and Newnam, Inc.; second, Halff Associates, Inc.; and third, Cobb, Fendley & Associates, Inc.; (b) award a professional services contract to Lockwood, Andrews and Newnam, Inc., the top-ranked proposer for the "u-shaped property" pre-development design in the vicinity of the Bayport Container Terminal in an amount not to exceed $460,900; (c) grant authority, if a contract cannot be negotiated with the first-ranked vendor, to formally, and in writing, end negotiations with that vendor and proceed to the next vendor in the order of ranking until a contract is reached or all proposals are rejected; and (d) further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Project and Construction Management

Staff Contact: Roger H. Hoh, P.E.

Background: This project consists of the following:

1. Produce plans and specifications required to develop approximately 64 acres of the "u-shaped property" (near the southeast corner of the intersection of Hwy 146 and Port Road in the vicinity of the Bayport Container Terminal). 2. Address storm water mitigation/detention, as well as site drainage requirements. 3. Prepare a drainage analysis in accordance with requirements of the Harris County Flood Control District, the City of Pasadena Department of Public Works Design Manual, and any other applicable jurisdictions. 4. Prepare an interim grading and drainage plan with temporary storm water drainage features, based on an geotechnical recommendation for fill placement strategy, compaction, and possible stabilization.

The Port Authority notified vendors regarding its request for qualifications (RFQs) using the Port Authority’s BuySpeed Eprocurement System and the project was advertised on the Port Authority’s website and in a local newspaper. Twenty-six vendors downloaded the project materials from BuySpeed.

106 Staff Evaluation/Justification: On November 11, 2020, nine RFQ responses were received and opened. The responses were reviewed and evaluated by staff in accordance with the selection criteria published in the RFQ. Staff identified the following vendors, listed in order of ranking, as most qualified to provide the required analysis and design services:

Lockwood, Andrews, and Newnam, Inc. Halff Associates, Inc. Cobb, Fendley & Associates, Inc.

Following staff Executive Committee review, staff recommends that the Port Commission award a contract to Lockwood, Andrews and Newnam, Inc. for the "u-shaped property" pre-development design in the vicinity of the Bayport Container Terminal, and act as otherwise described above.

107 I. INFRASTRUCTURE

Subject 2. Approve staff's ranking of vendors and award a construction contract in an amount not to exceed $5,950,000 for Beltway 8 site preparation to the top-ranked proposer: staff ranking - first, R & T Ellis Excavating, Inc.; second, Spaw Glass Civil Construction, Inc.; and third, Standard Constructors, Inc.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting: (a) approve staff's ranking of the vendors providing best value to the Port Authority, based on the selection criteria, in the following order - first, R & T Ellis Excavating, Inc.; second, Spaw Glass Civil Construction, Inc.; and third, Standard Constructors, Inc.; (b) award a construction contract to R & T Ellis Excavating, Inc. for Beltway 8 site preparation, in an amount not to exceed $5,950,000; (c) grant authority, if a contract cannot be negotiated with the first-ranked vendor, to formally, and in writing, end negotiations with that vendor and proceed to the next vendor in the order of ranking until a contract is reached or all proposals are rejected; and (d) further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Awards, Amendments & Change Orders

Department: Channel Improvement

Staff Contact: Lori Brownell

Background: This project would prepare the Port Authority’s Beltway 8 site for use as a one-time dredged materials placement area to support deepening and widening of the Houston Ship Channel Expansion Channel Improvement Project (Project 11). The project includes construction of a temporary access road, clearing and grubbing of vegetative materials, and demolition of existing concrete structures and roadways.

The Port Authority notified vendors regarding its request for competitive sealed proposals (CSPs) using the Port Authority's BuySpeed Eprocurement System. The project was advertised on the Port Authority's website and in a local newspaper. Forty-seven vendors downloaded the project materials from BuySpeed.

Staff Evaluation/Justification: On March 17, 2021, six CSPs were received, opened, and publicly read. The responses were reviewed and evaluated by staff in accordance with the published selection criteria. Following staff Executive Committee review, staff identified the following vendors, listed in order of ranking, as providing the best value for the required services:

R & T Ellis Excavating, Inc. Spaw Glass Civil Construction, Inc. Standard Constructors, Inc.

Staff recommends that the Port Commission award a contract to R & T Ellis Excavating, Inc. and act as otherwise described above.

108 109 I. INFRASTRUCTURE

Subject 3. Award an environmental consulting services agreement to InControl Technologies, LLC, the sole source provider, to conduct a non-aqueous phase liquid recovery operation at Port Authority property at the Turning Basin Terminal in an amount not to exceed $299,685.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, award an environmental consulting services agreement to InControl Technologies, LLC, the sole source provider, to conduct a non-aqueous phase liquid (NAPL) recovery operation at Port Authority property at the Turning Basin Terminal in an amount not to exceed $299,685, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals Strategic Objective 4a. - Implement an innovative environmental leadership strategy

Category: Awards, Amendments & Change Orders

Department: Environmental Affairs

Staff Contact: Trae Camble

Background: A 4.48 acre property located on the south side of the Turning Basin is a leased Port Authority property with a legacy contaminated groundwater plume, generated from underground storage fuel tanks. Since December 2014, the Port Authority and InControl Technologies LLC, have worked on site delineation of the contamination plume and developed the appropriate Texas Commission on Environmental Quality (TCEQ) action plans for the non-aqueous phase liquid (NAPL) recovery. The objective of this project would be to address NAPL groundwater contamination at the 4.48-acre property by installing additional monitoring wells and recovery wells; conducting mobile dual phase extraction events; conducting field sampling and analyzing data; and submitting semi-annual reports to the TCEQ.

Section 60.412 of the Water Code provides that a purchase for an item that can be obtained only from one source is exempt from certain procurement requirements of the Water Code. Port Authority staff has received a written statement from the consulting service and InControl Technologies, LLC is the sole source to conduct a NAPL recovery at the 4.48 acre Port Authority property at the Turning Basin Terminal.

Staff Evaluation/Justification: Based on the size and thickness of the plume, the Port Authority would address the TCEQ’s recommendations to take a more aggressive approach to recover the NAPL contamination to the maximum practical extent. InControl Technologies, LLC, has continued to be the site subject-matter experts with ongoing TCEQ required monitoring, NAPL plume delineation, and correspondences with TCEQ on behalf of the Port Authority.

Staff recommends the Port Commission award an environmental consulting services agreement to InControl Technologies, LLC to conduct a NAPL recovery at the 4.48 acre Port Authority property located at the Turning Basin Terminal.

110 111 I. INFRASTRUCTURE

Subject 4. Amend the professional services contract with Lockwood, Andrews & Newnam, Inc. for re-design services and construction/bid phase services for the rail spur at Bayport Container Terminal Phase 2 in an amount not to exceed $243,260.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve an amendment to the professional services contract with Lockwood, Andrews & Newnam, Inc. for continued re-design services and construction/bid phase services for the rail spur at Bayport Container Terminal Phase 2 in an amount not to exceed $243,260, and authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Project and Construction Management

Staff Contact: Roger H. Hoh, P.E.

Background: By Minute No. 2021-0223-22, the Port Commission awarded a professional services contract to Lockwood, Andrews & Newnam, Inc. for preliminary re-design services for the rail spur at Bayport Container Terminal Phase 2.

This is the first amendment to this re-design contract.

This proposed amendment would consist of:

Complete the re-design package to construct the Rail Spur at Bayport Phase 2 Construction Phase Services

Staff Evaluation/Justification: Staff has reviewed Lockwood, Andrews & Newnam, Inc.'s proposal and found it to be fair and reasonable.

Staff recommends the Port Commission approve the amendment of the professional services contract with Lockwood, Andrews & Newnam, Inc.

112 113 I. INFRASTRUCTURE

Subject 5. Amend a professional services contract with HDR Engineering, Inc. for construction management services for the Beltway 8 site preparation project for the Houston Ship Channel Expansion Channel Improvement Project in an amount not to exceed $55,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to amend a professional services contract with HDR Engineering, Inc. for construction management services of the Beltway 8 site preparation project for the Houston Ship Channel Expansion Channel Improvement Project (Project) in an amount not to exceed $55,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Channel Improvement

Staff Contact: Lori Brownell

Background: By Minute No. 2019-1111-06, the Port Commission awarded a contract under Port Authority File No. 2019- 0349, to HDR Engineering, Inc. (HDR) to perform professional services for engineering, design, project coordination, and other general assistance for the Houston Ship Channel Expansion Channel Improvement Project (Project 11). The site would be prepared for eventual construction of the dredged material placement area and receipt of material from the Project 11.

This proposed scope amendment would (1) add professional engineering services for construction management of the Beltway 8 site preparation project (i.e., clearing, grubbing, and concrete demolition) and (2) increase the total contract in an amount not to exceed $55,000.

Staff Evaluation/Justification: As the Engineer of Record, HDR prepared the design and bid package for the Beltway 8 site preparation project and accordingly is the most qualified firm to provide the professional services to manage and support the site preparation aetindies.

Staff has reviewed the amendment, found it to be fair and reasonable, and recommends approval.

114 115 I. INFRASTRUCTURE

Subject 6. Amend the professional services contract with CAVU International 1, LLC for continuous improvement, process execution checklists development, and operational excellence facilitation in an additional amount not to exceed $276,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, award a professional services contract to CAVU International 1, LLC for continuous improvement, process execution checklists development, and operational excellence facilitation in an additional amount not to exceed $276,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Infrastructure

Staff Contact: Rich Byrnes

Background: In December 2017, the Port Authority issued a purchase order for $23,250 to CAVU International 1, LLC (CAVU) for diagnostic work, which engaged senior leadership and staff in Project and Construction Management (PCM) and other departments, to define priorities for continuous improvement. The diagnostic focused on PCM’s team, major job functions, and key processes, and identified opportunities for better standardization, usability, quality, discipline, and reliability.

By Minute No. 2018-0518-00, the Port Commission approved an amendment with CAVU to perform additional services for the Infrastructure Division and PCM department, which manage about 115 projects at any given time, which are in various phases of development from conceptual design through construction and hand-over, and which involve approximately $100-200 million in total contract value. The stated aspirations of those groups include delivering superior capital efficiency and effectiveness by developing “world-class” skilled people and efficient processes and systems. This goal requires continuous improvement and diligent focus on execution.

This contract is intended to accelerate progress through active facilitation, identification, and prioritization of process improvements and associated behaviors, and implementation of the same.

By Minute No. 2020-0128-28, the Port Commission approved an amendment with CAVU for additional services including infrastructure and commercial divisions Continuous performance improvement.

The prior engagements have been deemed to succeed in improving ownership, accountability, and measurement of work processes as well as a positive influence on company culture and common vocabulary of continuous improvement. Continuous improvement is a port-wide organizational goal, and therefore expanding these techniques to other divisions is the logical next step, thus this current amendment is to extend effort to be applied in the Infrastructure, Commercial, People, and Finance Divisions.

116 CAVU is a global provider of services applying proven leadership and operational excellence fundamentals from military and industrial frameworks to complex operating teams, to improve their process performance, compliance, and execution.

Based on the initial diagnostic, CAVU has designed a continuous performance improvement solution that combines:

Expectations setting and alignment, Continuous improvement prioritization, process refinement, and application of “LEAN-Sigma” principles, Process execution critical checklist development and performance indicators, Situation awareness teamwork and related team behavior's development, and Sustaining support and execution mentoring.

Staff Evaluation/Justification: This program is expected to result in a more resilient, collaborative, and effective organization fueled by a strong focus on accountability and ownership.

Staff recommends that the Port Commission authorize the Port Authority to continue to engage the services of CAVU for the next phase of this continuous improvement program.

117 I. INFRASTRUCTURE

Subject 7. Approve a change order with McCarthy Building Companies, Inc. to perform additional work associated with the rehabilitation of Wharf 3, construction of electrical infrastructure, and lighter aboard ship (LASH) dock demolition at Barbours Cut Terminal in an amount not to exceed $73,835.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve a change order with McCarthy Building Companies, Inc. to perform additional work associated with the rehabilitation of Wharf 3, construction of electrical infrastructure, and lighter aboard ship (LASH) dock demolition at Barbours Cut Terminal in an amount not to exceed $73,835, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Project and Construction Management

Staff Contact: Roger H. Hoh, P.E.

Background: By Minute No. 2019-0423-21, the Port Commission awarded a construction contract to McCarthy Building Companies, Inc. for the construction of the rehabilitation of Wharf 3, construction of electrical infrastructure, and lighter aboard ship (LASH) dock demolition at Barbours Cut Terminal.

This $73,835 change order is the sixth change order to this contract for a total change order value to date of $799,932, which represents an increase of 1.21% to the original contract value. The total small business goal for this project is 16%.

This change order includes the following items:

Additional work to accommodate proposed fiber optic installation in an existing conduit pathway at the C6 Gate Operations building. Additional work to install multi-mode fiber optic infrastructure needed to accommodate the future wharf cranes that will be relocated from Bayport Container Terminal. Additional work to remove blockages in an existing communication manhole to allow for the proposed fiber optic installation. Purchase and installation of updated network equipment that aligns with current Port Authority Information Technology standards. Purchase and installation of a potable water flushing device for the wharf utility vault, for periodic flushing and maintaining water quality. Additional work to demolish and reconstruct an existing access manhole, which is original to the wharf structure and no longer structurally sound.

Staff Evaluation/Justification: Port Authority staff has reviewed the proposal submitted by McCarthy Building Companies, Inc. and found it to be fair and reasonable. Therefore, staff recommends that the Port Commission authorize this change order.

118 119 I. INFRASTRUCTURE

Subject 8. Enter into a purchase agreement with Lower Brazos River Mitigation Bank to purchase wetland mitigation credits in order to satisfy mitigation requirements for property on the north side of the Bayport Channel in an amount not to exceed $200,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to negotiate and enter into a purchase agreement with Lower Brazos River Mitigation Bank to facilitate the purchase of wetland mitigation credits in order to satisfy mitigation requirements for property on the north side of the Bayport Channel in an amount not to exceed $200,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: General

Department: Environmental Affairs

Staff Contact: Trae Camble

Background: The Port Authority is seeking to purchase wetland mitigation credits to satisfy federal regulations in order to impact Port Authority-owned property in association with The Houston Ship Channel Expansion Channel Improvement Project (Project 11). This action, along with various others, would allow the property to be utilized as necessary as part of the overall Project 11 design.

Staff Evaluation/Justification: Port Authority staff has been in contact with numerous mitigation banks around the region in order to secure the required credits for this project. The Lower Brazos River Mitigation Bank had the best options available along with a sufficient amount for specific needs. Because of the project’s location, the number of banks with applicable credits is greatly reduced.

Staff recommends the Port Commission authorize the Port Authority to negotiate and enter into a Purchase Agreement with Lower Brazos River Mitigation Bank for mitigation credits.

120 121 I. INFRASTRUCTURE

Subject 9. Provide the Port Authority’s required cost share, in an amount not to exceed of $7,500,000, and amend the Project Management Plan to support the U.S. Army Corps of Engineers for (i) construction of the Dollar Reef oyster mitigation feature, and (ii) construction oversight of the Port Authority-led construction packages for the Houston Ship Channel Expansion Channel Improvement Project.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize staff to provide the Port Authority’s required cost share, in an amount not to exceed of $7,500,000, and amend the Project Management Plan to support the U.S. Army Corps of Engineers for (i) construction of the Dollar Reef oyster mitigation feature, and (ii) construction oversight of the Port Authority-led construction packages for the Houston Ship Channel Expansion Channel Improvement Project (Project), and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Channel Improvement

Staff Contact: Lori Brownell

Background: The Water Resources Development Act of 2020, passed by Congress in December 2020, authorized the Houston Ship Channel Expansion Channel Improvement Project (Project 11). In January 2021, the federal government appropriated $19.5 million in funding for construction of the first federal contract, for Dollar Reef oyster mitigation. This contract includes the necessary oyster reef mitigation for the National Economic Development portion — Segments 1A, 2, and 3 — of Project 11.

With the federal appropriation of funds for $19.5 million, a 75% (federal) and 25% (non-federal) cost share requirement, and an engineer’s cost estimate now prepared at the 100% design stage, the Port Authority’s cost share total is an amount expected not to exceed of $7,500,000.

The U.S. Army Corps of Engineers (USACE) and the Port Authority are working to amend the July 2020 project management plan (PMP) to include the (i) USACE-led construction and Port Authority cost share for Dollar Reef oyster mitigation and (ii) USACE construction oversight of the Port Authority-led construction packages for Project 11.

Staff Evaluation/Justification: To maintain an accelerated project schedule, it is important to execute this authorization for the required USACE cost share (limited to the Dollar Reef oyster mitigation work) and necessary modifications to the PMP as soon as possible.

Staff recommends the Port Commission authorize the Port Authority to support the required cost share and amended PMP with the USACE, as described above.

122 123 I. INFRASTRUCTURE

Subject 10. Authorize an agreement with CenterPoint Energy to sell surplus equipment to the Port Authority for an amount not to exceed $8,000; and reconstruct electrical infrastructure for an amount not to exceed $42,611 at Barbours Cut Terminal, for a total amount not to exceed $50,611.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize an agreement with CenterPoint Energy to sell surplus equipment to the Port Authority for an amount not to exceed $8,000; and reconstruct electrical infrastructure for an amount not to exceed $42,611 at Barbours Cut Terminal, for a total amount not to exceed $50,611, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Channel Improvement

Staff Contact: Lori Brownell

Background: The Water Resources Development Act of 2020, passed by Congress in December 2020, authorized the Houston Ship Channel Expansion Channel Improvement Project (Project 11).

CenterPoint Energy (CenterPoint) provides the electrical supply infrastructure to the Port Authority. Some of the CenterPoint infrastructure (specific to Morgan's Point) will need to be reconfigured to allow Project 11 to proceed, while continuing electrical service to Barbours Cut Terminal, including the fire barracks.

This project includes purchase of CenterPoint infrastructure by the Port Authority, to be reconfigured for Port Authority use. The project also includes services and equipment necessary for CenterPoint to properly terminate existing infrastructure and reconfigure existing and new equipment to assure continued electrical service to the Port Authority. Once reconfiguration is complete, the existing easement will be released by CenterPoint to allow Project 11 to proceed in this vicinity.

Providing lands and easements for Project 11 implementation is a Port Authority responsibility.

Staff Evaluation/Justification: Staff has reviewed the proposed scope and price and found it fair and reasonable.

124 125 I. INFRASTRUCTURE

Subject 11. Approve the renewal of the following expiring Port Authority licenses for new ten-year terms: CenterPoint Energy Houston Electric, LLC, CenterPoint Energy Intrastate Pipeline, Inc, CenterPoint Energy Resources Corp, CenterPoint Energy Resources Corp d/b/a CenterPoint Energy Texas Gas Operations, ExxonMobil Pipeline Company, Kinder Morgan 2-Mile, LLC, Kinder Morgan Crude & Condensate LLC, Kinder Morgan Tejas Pipeline LLC, Kinder Morgan Texas Pipeline LLC, and Lone Star NFL Mont Belvieu LP.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to approve the renewal of the following expiring licenses for new ten-year terms: CenterPoint Energy Houston Electric, LLC, CenterPoint Energy Intrastate Pipeline, Inc, CenterPoint Energy Resources Corp, CenterPoint Energy Resources Corp d/b/a CenterPoint Energy Texas Gas Operations, ExxonMobil Pipeline Company, Kinder Morgan 2-Mile, LLC, Kinder Morgan Crude & Condensate LLC, Kinder Morgan Tejas Pipeline LLC, Kinder Morgan Texas Pipeline LLC, and Lone Star NFL Mont Belvieu LP, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: The pipeline licensees listed below have applied to renew their licenses:

Company File No. License Fee CenterPoint Energy Houston Electric, LLC 2000-0221 $1,709 CenterPoint Energy Intrastate Pipeline, Inc 2000-0216 $6,363 CenterPoint Energy Resources Corp 2001-0054 $0 CenterPoint Energy Resources Corp d/b/a CenterPoint 2000-0220 $5,302 Energy Texas Gas Operations CenterPoint Energy Resources Corp d/b/a CenterPoint 2000-0251 $0 Energy Texas Gas Operations ExxonMobil Pipeline Company 1992-0092 $5,302 ExxonMobil Pipeline Company 1997-0190 $1,018,363 Kinder Morgan 2-Mile, LLC 2001-0106 $15,200 Kinder Morgan Crude & Condensate LLC 2011-0376 $161,005 Kinder Morgan Tejas Pipeline LLC 2001-0345 $135,696 Kinder Morgan Tejas Pipeline LLC 2001-0394 $6,363 Kinder Morgan Texas Pipeline LLC 2001-0208 $8,837 Kinder Morgan Texas Pipeline LLC 2007-0429 $165,529 Lone Star NGL Mont Belvieu LP 2001-0182 $83,662 Total $1,613,331

126 Staff Evaluation/Justification: The applications were reviewed and approved by the Port Authority’s Channel Operations department and the Port Terminal Railroad Association when applicable. The licenses are to be renewed subject to the Port Authority’s usual terms and conditions.

Staff recommends approval.

127 I. INFRASTRUCTURE

Subject 12. Issue a transmission line license to Southwestern Bell Telephone Company for one telecommunication cable over the railroad line adjacent to George Altvater Boulevard at Barbours Cut Terminal.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to issue a transmission line license to Southwestern Bell Telephone Company for one telecommunication cable over the railroad line adjacent to George Altvater Boulevard at Barbours Cut Terminal, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: Southwestern Bell Telephone Company, Port Authority File No. 2021-0068, has applied for a transmission line license for one telecommunication cable over the railroad line adjacent to George Altvater Boulevard at Barbours Cut Terminal, in the John Hunter Survey, A-35.

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department and the Port Terminal Railroad Association. The license is subject to the Port Authority’s usual terms and conditions. The $675 application fee and the $2,500 as-built deposit have been paid. Staff recommends the license fee be waived since this project would provide service to a Port Authority’s tenant, Texas Stevedoring Services.

Staff recommends approval.

128 129 I. INFRASTRUCTURE

Subject 13. Issue a marine construction permit to Timtom Land Holdings, LLC to perform dock rehabilitation on an existing structure to remove existing monopiles and add new monopiles in the San Jacinto River.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to issue a marine construction permit to Timtom Land Holdings, LLC to perform dock rehabilitation on an existing structure remove existing monopiles and add new monopiles in the San Jacinto River, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: Timtom Land Holdings, LLC, Port Authority File No. 2021-0071, has applied for a marine construction permit to perform dock rehabilitation on an existing structure to remove existing monopiles and add new monopiles in the San Jacinto River, in the J. Harrell Survey, A-330. The existing dock/deck would be rebuilt to the same specifications as the existing facility. Ten monopiles are proposed to be installed and over 100 monopiles would be removed. No dredging or grading activities are proposed at this time.

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department. The permit is subject to the Port Authority’s usual terms and conditions. The $675 application fee and the $2,500 as-built deposit have been paid.

Staff recommends approval.

130 131 I. INFRASTRUCTURE

Subject 14. Issue a marine construction permit to Cargill, Inc. to deepen its existing berths to -46.5 feet Mean Lower Low Water and authorize the rehabilitation of its existing dock structure in the Houston Ship Channel.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

Access Public

Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to issue a marine construction permit to Cargill, Inc. to deepen its existing berths to -46.5 feet Mean Lower Low Water and authorize the rehabilitation of its existing dock structure in the Houston Ship Channel, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: Cargill Inc., Port Authority File No. 2021-0089, has applied for a marine construction permit to deepen its existing berths to -46.5 feet Mean Lower Low Water (MLLW) and authorize the rehabilitation of its existing dock structure in the Houston Ship Channel, in the William Harris and D. Carpenter Survey, A-28. The rehabilitation of the existing dock was started in June 2016 and was completed in September 2017. The existing berths will be deepened from -43.5 feet MLLW to -46.5 feet MLLW to support larger vessels and shipping operations

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department. The permit is subject to the Port Authority’s usual terms and conditions. The $675 application fee and the $2,500 as-built deposit have been paid.

Staff recommends approval.

132 133 I. INFRASTRUCTURE

Subject 15. Amend a pipeline license issued to Equistar Chemicals, LP to remove the existing pipeline and relocate a new pipeline to a greater depth across Cedar Bayou.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to amend a pipeline license issued to Equistar Chemicals, LP to remove the existing pipeline and relocate a new pipeline to a greater depth across Cedar Bayou, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: Equistar Chemicals, LP, Port Authority File No. 1999-0055, has applied to amend a pipeline license to remove the existing pipeline and relocate a new pipeline to a greater depth across Cedar Bayou, in the William Scott Survey, A-65.

The new pipeline would follow the same path as the previously authorized pipeline but at a greater depth, to accommodate the U.S. Army Corps of Engineers channel improvement project for Cedar Bayou.

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department. The license is subject to the Port Authority’s usual terms and conditions and at a fee of $419. The $675 application fee and the $2,500 as-built deposit have been paid.

Staff recommends approval.

134 135 I. INFRASTRUCTURE

Subject 16. Amend a transmission line license to CenterPoint Energy Houston Electric, LLC to add an additional fiber optic line over the Southside Mainline railroad right-of way.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to amend a transmission line license to CenterPoint Energy Houston Electric, LLC to add an additional fiber optic line over the Southside Mainline railroad right-of-way, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Permits/Licenses/Pipeline Easements

Department: Channel Operations

Staff Contact: Garry McMahan

Background: CenterPoint Energy Houston Electric, LLC (CenterPoint), Port Authority File No. 2013-0013, has applied to amend a transmission line license to add an additional fiber optic line over the Southside Mainline railroad right-of-way, in the GM Patrick Survey, A-624. The new fiber line would be used for CenterPoint operations and reliability purposes.

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department and the Port Terminal Railroad Association. The license is subject to the Port Authority’s usual terms and conditions and at a fee of $328. The $675 application fee and the $2,500 as-built deposit have been paid.

Staff recommends approval.

136 137 I. INFRASTRUCTURE

Subject 17. Approve a private adjacency barge fleeting lease agreement with and issue a marine construction permit to SJI Group, LLC for approximately 12.95 acres of submerged lands in the Alexander Island Barge Channel at a monthly rental amount of $3,885 for a ten-year term.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize the Port Authority to approve a private adjacency barge fleeting lease agreement and a marine construction permit with SJI Group, LLC for approximately 12.95 acres of submerged lands in the Alexander Island Barge Channel at a monthly rental amount of $3,885 for a ten-year term, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Leases

Department: Channel Operations

Staff Contact: Garry McMahan

Background: SJI Group, LLC, Port Authority File No. 2019-0255, has applied for a private adjacency submerged lands lease agreement and a marine construction permit for approximately 12.95 acres of barge fleeting in the Alexander Island Barge Channel.

Staff Evaluation/Justification: The application was reviewed and approved by the Port Authority’s Channel Operations department. The lease would be entered into pursuant to the Port Authority’s submerged lands lease terms and conditions for a rental amount of $3,885 per month for a ten-year term, pursuant to the fee schedule for private adjacency submerged lands leases set by the Port Commission. The lease agreement is to be issued subject to the Port Authority’s usual terms and conditions.

Staff recommends approval.

138 139 J. OPERATIONS

Subject 1. Award a contract to Davey Coach Sales, Inc. for the purchase of two used shuttle buses for Bayport Container Terminal in an amount not to exceed $87,100.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, award a contract to Davey Coach Sales, Inc. for the purchase of two used shuttle buses for Bayport Container Terminal in the amount not to exceed $87,100, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Maintenance

Staff Contact: Paulo Soares

Background: The Port Authority currently owns two 15-passenger vans operating at Bayport Container Terminal. These vans are 2011 and 2016 models and have limited useful life remaining, needing much maintenance to maintain their functionality. These vehicles transport 10 to 15 operators to/from the Administration building and rubber tyred gantry (RTG) cranes three times daily, resulting in a high level of wear to the vehicle engine and interior. According, staff recommends that these vans be replaced with shuttle vans, to allow for easier entry/exit by users.

The Port Authority notified vendors regarding its request for proposals (RFP) using the Port Authority's BuySpeed Eprocurement System and the project was advertised on the Port Authority's website and in a local newspaper. Ten vendors downloaded the project materials from BuySpeed.

Staff Evaluation/Justification: On April 27, 2021, three RFPs were received. The responses were reviewed and evaluated by staff in accordance with the published selection criteria.

Following staff Executive Committee review, staff recommends that the Port Authority award a contract to Davey Coach Sales, Inc. and act as otherwise described above.

140 141 J. OPERATIONS

Subject 2. Award a two-year contract to Marine Tekno Services LLC for repair services to radiators, air, and fuel coolers for terminal equipment at Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal in an amount not to exceed $300,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, award a two-year contract to Marine Tekno Services LLC for repair services for radiators, air, and fuel coolers for terminal equipment at Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal in an amount not to exceed $300,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Maintenance

Staff Contact: Paulo Soares

Background: By Minute No. 2019-0129-27, the Port Commission awarded a two-year contract to DWGSR, Inc. dba Don's Radiator Shop in the amount of $200,000 for repair services to radiator, air, and fuel coolers for terminal equipment at Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal. Repairs to radiators, air, and fuel coolers are needed to maintain Port Authority assets and meet operational demands at all three facilities. The Port Authority currently owns one-hundred and seven rubber tyred gantry (RTG) cranes and hundreds of terminal equipment items that periodically require repair services under this contract.

The Port Authority notified vendors regarding its request for competitive sealed bids (CSBs) using the Port Authority’s BuySpeed Procurement System, and the project was advertised on the Port Authority’s website and in a local newspaper. Five vendors downloaded the project materials from BuySpeed.

Staff Evaluation/Justification: On March 17, 2021, three CSB responses were received and opened. The responses were reviewed and evaluated by staff in accordance with the published selection criteria in the CSB.

Following staff Executive Committee review, staff recommends that the Port Authority award a two-year contract to Marine Tekno Services LLC, the responsible bidder submitting the lowest and best bid, for repair services to radiators, air, and fuel coolers for terminal equipment at Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal.

142 143 J. OPERATIONS

Subject 3. Award a three-year contract to Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA, the sole source provider, for the purchase of spare and replacement Pintsch Bubenzer brake parts for wharf and rubber tyred gantry cranes at Barbours Cut Terminal and Bayport Container Terminal in an amount not to exceed $1,500,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, award a three-year contract to Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA, the sole source provider, for the purchase of spare and replacement Pintsch Bubenzer brake parts for wharf and rubber tyred gantry (RTG) cranes at Barbours Cut Terminal and Bayport Container Terminal, in an amount not to exceed $1,500,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Maintenance

Staff Contact: Paulo Soares

Background: By Minute No. 2018-0130-39, the Port Commission awarded a three-year contract to Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA in the amount of $1,200,000 for the purchase of spare and replacement Pintsch Bubenzer brake parts for wharf and rubber tyred gantry (RTG) cranes at Barbours Cut Terminal and Bayport Container Terminal. The Port Authority currently owns twenty-four wharf and one hundred and seven RTG cranes in operation at both terminals that are equipped with Pintsch Bubenzer brakes for various crane functions such as gantry, trolley, main hoist, and boom hoist.

Additionally, three wharf and nine RTG cranes are scheduled to arrive at Bayport Container Terminal in 2021. These cranes are also equipped with Pintsch Bubenzer brakes.

The ability to expedite procurement of spare and replacement brake parts for these cranes is critical to efficient terminal operations. Replacement and spare parts would be purchased through this contract as needed to properly maintain these cranes and minimize operational downtime.

Section 60.412 of the Water Code provides that a purchase for an item that can be obtained only from one source is exempt from certain procurement requirements of the Water Code. Port Authority staff has received a written statement from the manufacturer confirming that Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA is the sole authorized source of replacement Pintsch Bubenzer brake parts in the United States.

Staff Evaluation/Justification: Staff recommends the Port Commission approve entering into a new three-year contract with Bubenzer Bremsen America, LLC dba Pintsch Bubenzer USA for the purchase of spare and replacement Pintsch Bubenzer brake parts for wharf and RTG cranes effective May 1, 2021.

144

145 J. OPERATIONS

Subject 4. Issue a purchase order to Caldwell Country Chevrolet for the purchase of forty-five vehicles needed by the Barbours Cut Terminal, Bayport Container Terminal, Central Maintenance, Safety, Project and Construction Management, Security, and Port Police departments, using Local Government Purchasing Cooperative's BuyBoard, a cooperative purchase program, in a total amount not to exceed $1,448,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, issue a purchase order to Caldwell Country Chevrolet for the purchase of forty-five vehicles needed by the Barbours Cut Terminal, Bayport Container Terminal, Central Maintenance, Safety, Project and Construction Management, Security, and Port Police departments, using Local Government Purchasing Cooperative's BuyBoard, a cooperative purchase program, in a total amount not to exceed $1,448,000, determine that this procurement method provides the best value to the Port Authority, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: Award, Amendments & Change Orders

Department: Maintenance

Staff Contact: Paulo Soares

Background: The Central Maintenance department, with recommendations from the Barbours Cut Terminal, Bayport Container Terminal, Safety, Project and Construction Management, Security, and Port Police departments has prepared specifications for new and replacement vehicles to promote a safe work environment and cost-effective operations. Staff believes that a total of forty-five vehicles will be needed for 2021, including twenty-two units for Barbours Cut Terminal (depts. 127 and 128), eight for Bayport Container Terminal (dept. 131), five for Central Maintenance, one for Safety, four for Project and Construction Management, two for Security, and three for Port Police.

The Local Government Purchasing Cooperative (Cooperative) is an administrative agency of cooperating local governments and its BuyBoard purchasing program may be used for this purchase.

The Director of Procurement Services has determined that procuring these vehicles through the BuyBoard program is the method that both satisfies competitive purchase requirements and provides the best value to the Port Authority.

Staff Evaluation/Justification: Staff has compared vehicle prices obtained from local and non-local dealerships, taking into consideration the statutory competitive procurement requirements, and has also determined that purchasing these vehicles using the cooperative purchasing program of BuyBoard provides the best value to the Port Authority. BuyBoard websites list several pre-approved dealerships, and staff has reviewed the vehicle specifications from these providers, and determined that Caldwell Country Chevrolet is the vendor with the best price for vehicles and meets the Port Authority's requirements.

Staff recommends that the Port Commission approve a purchase order to Caldwell Country Chevrolet for the purchase of forty-five Chevrolet vehicles.

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147 J. OPERATIONS

Subject 5. Authorize additional purchase order funding for continuing pandemic response services with Ambassador Services, LLC for $720,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize additional purchase order funding for continuing pandemic response services with Ambassador Services, LLC for $720,000, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Port Operations

Staff Contact: Paulo Soares

Background: The COVID-19 pandemic continues to impact Port Authority operations and employees and require staff to make emergency purchases.

Water Code Section 60.4035(a)(1) permits the Executive Director and authorized officers to make emergency purchases and contracts in amounts that exceed $50,000 if necessary to, among other things, “to preserve or protect the public health and safety of the residents of the district.” As the Port Commission has been advised, Port Authority staff has concluded that this statute permits these COVID-19 procurements without the customary competitive procedures or prior to Port Commission approval, and staff has endeavored to notify the Port Commission within forty-eight hours of such purchases as required.

At its April and May 2020 meetings, the Port Commission ratified previous COVID-19 emergency procurements that totaled more than $50,000. Additional emergency funding has followed.

Ambassador Services, LLC provides general cleaning services at the container terminals pursuant to two contracts totaling $800,000 that were previously approved by the Port Commission. Since mid-March 2020, additional services have been provided by the firm on a weekly basis, for disinfecting and sanitizing both facilities. To continue these services:

At the May 20, 2020 meeting the Port Commission approved an additional $560,000; At the July 30, 2020 meeting the Port Commission authorized an additional $450,000; At the September 29, 2020 meeting the Port Commission authorized an additional $600,000; At the November 10, 2020 meeting the Port Commission authorized an additional $450,000;and At the January 26, 2021 meeting the Port Commission authorized an additional $750,000.

Staff Evaluation/Justification: Accordingly, with the continuing need for emergency services related to the Port Authority’s COVID-19 response efforts, staff requests that the Port Commission authorize the following additional purchase order amount:

Ambassador Services, LLC - $720,000 for disinfecting and sanitizing.

148 This request would help Port Operations continue to procure these emergency services reliably and efficiently through the end of July. However, the nature of emergency management and the duration of this specific pandemic response are unpredictable, hence future requests for additional funding may be required.

149 J. OPERATIONS

Subject 6. Ratify emergency purchase orders to Anixter, Inc. for purchase of electrical cables in an amount not to exceed $1,036,020 for Bayport Container Terminal and to Power Line Solutions, Inc. for purchase of installation and electrical contracting work at Bayport Container Terminal in an amount not to exceed $1,000,936.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, ratify emergency purchase orders to Anixter, Inc. for purchase of electrical cables in an amount not to exceed $1,036,020 for Bayport Container Terminal and to Power Line Solutions, Inc. for purchase of installation and electrical contracting work at Bayport Container Terminal in an amount not to exceed $1,000,936, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Port Operations

Staff Contact: Paulo Soares

Background: Water Code Section 60.4035 permits the Executive Director and authorized officers to make emergency purchases and contracts in amounts that exceed $50,000 without the customary competitive procedures or prior to Port Commission approval if necessary to, among other things, preserve the property of the district in the case of a public calamity and repair unforeseen damage to the property of the district, provided that staff has endeavored to notify the Port Commission within forty-eight hours of such purchases as required.

Bayport Container Terminal was designed with three electrical loops that supply power to wharf cranes (six cranes per loop) and two electrical loops that supply power to all terminal buildings, gates, and high mast lighting. These five loops originate at the 138KV substation in the vicinity and are routed underground to various electrical switches throughout the terminal. These loops, when in operation, provide redundancy to power distribution at Bayport.

Prior to the winter storm that took place in February 2021, the Port Authority had lost use of one loop supplying power to the wharf cranes and one loop supplying power to the terminal buildings, due to damage to the underground cables. Without such redundancy, terminal operation bacame significantly exposed to power outages.

As Texas faced record-low temperatures this February, unanticipated blackouts afflicted millions of Texans, including the Port Authority. During the winter storm, a second of the three crane loops was lost due to a short circuit. As a result, six wharf cranes were without power from February 16 through March 1, severely impacting the Port Authority’s ability to provide service to its customers.

The unprecedented February 2021 power crisis alerted staff to the possibility of an unanticipated power outage outside of hurricane season and the need to immediately restore redundancy in the electrical loops

150 serving the wharf cranes and buildings at Bayport Container Terminal. Following this event, staff worked quickly and diligently to verify the proper route of the necessary replacement loops and the amount of cable required for purchase.

Port Authority staff obtained estimates both for electrical contractor work, and to purchase an electrical cable. As a result, staff arranged for Anixter, Inc. to supply the needed electrical cable for a proposed amount of $1,036,020, and for Power Line Solutions, Inc. to do the necessary installation and electrical contracting work at a proposed amount of $1,000,936. Staff contacted these vendors because they currently have formal contracts with the Port Authority, competitively bid and previously approved by the Port Commission by Minutes Nos. 2018-0925-45 (Anixter, Inc.) and 2020-0128-45 (Power Line Solutions, Inc.).

Staff Evaluation/Justification: Staff informs the Port Commission that purchase orders to Anixter, Inc. in the total amount of $1,036,020, to supply the Port Authority with electrical cables, and to Power Line Solutions, Inc. in the total amount of $1,000,939, for electrical contracting have been issued in accordance with Water Code Section 60.4035. Accordigly, staff requests that the Port Commission ratify these purchase orders.

151 J. OPERATIONS

Subject 7. Authorize payment to Navis LLC for annual maintenance services for the Marine Terminal Management Software System for Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal in an amount not to exceed $773,268.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, authorize payment to Navis LLC for annual maintenance services for the Marine Terminal Management Software System for Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal pursuant to the current contract between Navis LLC and the Port Authority, for a one-year term beginning July 1, 2021 in an amount not to exceed $773,268, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: Awards, Amendments & Change Orders

Department: Operations

Staff Contact: Jeff Davis

Background: By Minute No. 2001-0326-32, a contract (Contract) was awarded to Navis LLC to provide for the implementation and maintenance of a marine terminal management software system (Management Software System) for use at Port Authority terminals. The Management Software System is currently used by the Operations Department to manage the Port Authority’s Barbours Cut Terminal, Bayport Container Terminal, Turning Basin Terminal, and by the Accounting Department for billing at these terminals. Since expiration of the initial one-year maintenance term, the Port Commission has approved each subsequent annual maintenance renewal. The current annual maintenance term is due to expire on June 30, 2021.

Staff Evaluation/Justification: The Contract describes the year-to-year maintenance services that are required to be performed and sets forth the maintenance fee for each one-year maintenance term. The maintenance fee for each one-year term is based upon the combined annual through-put (TEU) at the container terminals and tonnage for the general cargo facilities for the immediately preceding year, plus six fixed amounts associated to additional licensed software modules. Staff has been advised that based upon the through-put for the immediately preceding year, the maintenance fee for July 1, 2021 through June 30, 2022 will be in an amount not to exceed $773,268.

Staff recommends the Port Commission authorize payment to Navic LLC for annual maintenance services for the Marine Terminal Management Software System for Barbours Cut Terminal, Bayport Container Terminal, and Turning Basin Terminal.

152 153 J. OPERATIONS

Subject 8. Approve a new Subrule 118 to Tariff 14 for a charge of $65.74 for every container lifted at the ramp point from or to a rail car to or from a chassis.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve a new Subrule 118 to Tariff 14 for a charge of $65.74 for every container lifted at the ramp point from or to a rail car to or from a chassis and make related adjustments to Subrule 104 to delete obsolete language, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: General

Department: Operations

Staff Contact: Jeff Davis

Background: In connection with the intended future development of intermodal rail service at Barbours Cut Terminal, staff recommends a charge of $65.74 for every container lifted at the ramp point from or to a rail car to or from a chassis. The chassis shall be supplied by the party ordering the service.

Staff Evaluation/Justification: Staff recommends the Port Commission approve the above on the terms described.

154 155 J. OPERATIONS

Subject 9. Approve a twenty-year lease with C&C Houston Bayport of a 21.53-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $36,687.12 per month with a right of first refusal for the adjacent 8.29 acre tract.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve a twenty-year lease with a commencement date of May 1, 2021 with C&C Houston Bayport (Tenant) of a 21.53-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $36,687.12 per month ($1,704 per acre per month), with a right of refusal for the adjacent 8.29 acre tract, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals STRATEGIC GOAL #2 - INFRASTRUCTURE (Optimize Infrastructure and Channel Capacity to Serve the Region)

Category: General

Department: Operations

Staff Contact: Jeff Davis

Background: Tenant would use the leased premises to serve as an empty handling container/chassis and maintenance and repair yard.

A future amendment to this lease is expected to be presented to the Port Commission for connection of utilities by C&C Bayport Houston, with reimbursement by the Port Authority.

Staff Evaluation/Justification: Staff recommends the Port Commission approve the above on the terms described.

156 157 J. OPERATIONS

Subject 10. Approve a ten-year lease with CMC Americas LLC of a 22.52-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $ 38,374.08 per month, with two options each to extend the term five years, exercisable at Tenant’s sole option.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve a ten-year lease with CMC Americas LLC (Tenant) of a 22.52-acre parcel of land at Bayport Container Terminal Complex south of Port Road for a rental amount of $ 38,374.08 per month, and with two options each to extend the term five years, exercisable at the Tenant’s sole option, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Operations

Staff Contact: Jeff Davis

Background: Tenant would use the leased premises to serve as an empty handling container/chassis and maintenance and repair yard.

A future amendment to this lease is expected to be presented to the Port Commission for connection of utilities by CMC Americas LLC with reimbursement by the Port Authority.

Staff Evaluation/Justification: Staff recommends the Port Commission approve the above on the terms described.

158 159 J. OPERATIONS

Subject 11. Approve a second amendment to the lease between the Port Authority and Lansing Trade Group, LLC for the Houston Public Grain Elevator No. 2, for an extension term of one-year to commence no earlier than June 1, 2021, for a rental rate of $103,000 per month.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, approve a second amendment to the lease between the Port Authority and Lansing Trade Group, LLC, for the Houston Public Grain Elevator No. 2, extending the lease for an additional one-year term to commence no earlier than June 1, 2021, for a rental rate of $103,000 per month, providing for payment by the Port Authority of up to $500,000 per year for certain capital improvements, providing for an abatement of $30,000 per month for certain capital improvements, updating the list of capital improvements listed in the lease, and providing for an optional one-year extension option (with a rental rate of $106,090 per month), and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing. Category: General

Department: Operations

Staff Contact: Jeff Davis

Background: The lease (Port Authority File No. 2018-0150) was previously amended on June 1, 2020, and is currently scheduled to expire on May 31, 2021.

Staff Evaluation/Justification: Staff recommends the Port Commission approve the above amendment on the terms described.

160 161 L. PORT SECURITY AND EMERGENCY OPERATIONS

Subject 1. Amend the existing purchase order to Motorola Solutions for the purchase of land mobile radio equipment including radios, batteries, chargers, related hardware, and accessories for the Operations, Port Security, and Emergency Operations Departments using the Houston- Galveston Area Council’s cooperative purchase program, in an amount not to exceed $150,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, amend a purchase order to Motorola Solutions for purchase of land mobile radio equipment including radios, batteries, chargers, related hardware, and accessories for the Operations, Port Security, and Emergency Operations Departments using the Houston-Galveston Area Council’s cooperative purchase program, in an amount not to exceed $150,000, determine that this procurement method provides the best value to the Port Authority, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals Strategic Objective 2c. - Enhance efficiency and resilience through innovative technology and other means STRATEGIC GOAL #4 - STEWARDSHIP (Create Greater Value for the Region) Strategic Objective 4b. - Prepare for disruptive events and mitigate their impact

Category: Awards, Amendments, & Change Orders

Department: Emergency Management

Staff Contact: Colin Rizzo

Background: Motorola Land Mobile Radio (LMR) equipment, including handheld, mobile, and base stations, are used daily by Port Authority maintenance and operations personnel, crane operators, and clerks to accomplish their tasks in a safe and efficient manner. The Port Security and Emergency Operations division, including contract security, police, and fire departments, also use Motorola LMR equipment to maintain security at all terminals and respond to incidents and other emergencies. As the vast majority of the approximately 1,000 radios are Motorola products, Motorola parts and accessories are required to service the LMR equipment.

Staff Evaluation/Justification: The Houston-Galveston Area Council (H-GAC) cooperative purchasing program was established in 1973 pursuant to the Texas Interlocal Cooperation Act to enable governmental entities to obtain purchasing services that offer expedited procurement, volume purchasing discounts, contract administration, and research services. All products and services offered by H-GAC have been subjected to competitive procurement processes in accordance with statutory requirements. By Minute No. 99-1129-29, the Port Commission authorized the Port Authority to enter into an Interlocal Agreement with H-GAC to participate in its cooperative purchasing program.

The Director of Procurement Services has determined that using H-GAC cooperative purchasing program for this procurement provides best value to the Port Authority, and Motorola Solutions was determined by staff to best provide the products sought using H-GAC pricing. This equipment will be provided by Motorola Solutions under the pricing schedule obtained from that vendor’s contract RA05-18.

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Accordingly, staff recommends that the Port Commission approve this best value determination and contract.

163 M. TECHNOLOGY

Subject 1. Issue a purchase order to Netsync Network Solutions for purchase of VMware annual software licensing and software support to the Port Authority’s existing Information Technology infrastructure, using Texas Department of Information Resources’ cooperative purchase program, in an amount not to exceed $125,000.

Meeting Apr 27, 2021 - PORT COMMISSION OF THE PORT OF HOUSTON AUTHORITY

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Type Action

Recommended Action The Port Commission, at its April 27, 2021 meeting, issue a purchase order to Netsync Network Solutions for the purchase and renewal of a one-year contract for annual VMware licensing and support, using Texas Department of Information Resources’ cooperative purchase program, in an amount not to exceed $125,000, determine that this procurement method provides the best value to the Port Authority, and further authorize the Executive Director to do any and all things in his opinion reasonable or necessary to give effect to the foregoing.

Goals Strategic Objective 4d. - Support sustainable growth of Port Houston and the greater Port Strategic Objective 2c. - Enhance efficiency and resilience through innovative technology and other means

Category: Awards, Amendments & Change Orders

Department: Information Technology

Staff Contact: Ron Farrow

Background: The Port Authority is seeking to obtain renewal of licenses and maintenance for VMware, a software for server and client virtualization. Virtualization allows the Information Technology (IT) Department to reduce hardware expenses and benefit from centralized management of servers that the Port Authority relies on to complete its daily tasks. This includes Navis (N4), automated gate operating system and OCR portal, SharePort, and many other business critical services. IT has been utilizing VMware software for over ten years in support of the Port Authority's virtual technology environment and considers the technology reliable and proven. It is critical to renew these licenses (and maintenance/support) in order to minimize business disruptions.

Staff Evaluation/Justification: The Texas Department of Information Resources (DIR) is a department of the State of Texas, and has cooperative purchasing programs which may be used by the Port Authority, and the Director of Procurement Services has determined that procuring VMWare licences and maintenance through the DIR purchasing program is the method that both satisfies competitive purchase requirements and provides best value to the Port Authority.

The IT department has determined that the best availability, price, and contract term for the item needed is provided by Netsync Network Solutions under the pricing schedule obtained from that vendor’s contract with DIR, and is therefore recommending this purchase.

Accordingly, staff recommends that the Port Commission approve this best value determination and contract.

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