2014 Annual Report

As part of the 2014 winter layup operations, a diver took the doors off near the propeller to be able to go in and fix the bow thrusters.

PORT OF MILWAUKEE

2014 ANNUAL REPORT

EGYPTIAN SALT being unloaded at Terminal 1 in December 2014 from the hold of the Sea Racer, chartered by the shipline Fednav. The fierce winter of 2013-2014, necessitated that international salt be delivered to the Port for use by private snow removal businesses.

In addition to Egypt, the Port had Seaway vessels arrive in 2014 with salt from Morocco and Venezuela.

The ships were unloaded with the collaboration of Federal Marine Terminals – Milwaukee and Kinder Morgan Bulk Terminals.

2323 S. Lincoln Memorial Dr., Milwaukee, Wisconsin 53207 Phone: (414) 286-3511, Fax: (414) 286-8506, www.milwaukee.gov/port

The Port of Milwaukee

Iron

Ashland

Bayfield Sawyer

Washburn

Burnett

Price Rusk

Taylor

Wood

Clark

Marathon

Chippewa Eau Claire Trempealeau

Juneau

Monroe

Iowa

Richland

Vernon

LaCrosse

Jackson

2014 was the 2nd best year in tonnage for steel products handled at the Port. Everything from bars, beams, coils and plate arrived either by vessel or by rail. Federal Marine Terminals, Port’s general cargo stevedore, even handled some extraordinarily large steel structural beams for building of the new Minnessota Vikings stadium.

WISCONSIN STATE LINE ILLINOIS STATE LINE

Lafayette

2

Pepin

Grant

SYIP provides youth with employment and life skills and helps them meet educational, job readiness and career exploration goals. The SYIP intern is placed in a City department such as the Port for 8 weeks.

She is 222.50 meters long and 23.12 meters wide, with a 76 meter long boom. Lakers, which are ships designed to stay eithin the Great Lakes/St. Lawrence Seaway region, can move between Milwaukee, located on the Southwestern shore of Lake Michigan, and the salt mines in Lake Huron and Lake Erie late into February. During mild winters, these vessels have navigated between these lakes all year long.

STEEL

Crawford

Mayor Tom Barrett’s Earn & Learn Summer Youth Internship Program (SYIP)

The Algoma Enterprise is unloading salt into the Kinder Morgan operated Terminal 4.

The sifting machine inside the building will separate the untreated salt into several different sizes.

It is then shipped in bulk by rail or bagged as ice melting salt for private sidewalks and driveways.

Buffalo

Mayor Tom Barrett

SALT Polk

The Port’s success is affected by many factors, but none is more important than the work of people who oversee and operate it. I thank the Port staff and the Board of Harbor Commissioners for another successful year.

Douglas

The Port of Milwaukee is a partner in the planning efforts underway in the areas in and around the harbor. That long-range planning aims to improve the area, capitalize on the natural assets, and maintain a strong commitment to commercial shipping.

Barron

In partnership with its tenants, the Port of Milwaukee is constantly making improvements.

We are investing in our rail lines, maintaining our roads, and adding new crane capacity. Right at the door to the Port, good progress is being made on the Interstate Highway 794 construction project.

A new Hoan Bridge will be in place by the end of 2015.

We are the region’s transportation and distribution center located on the southwestern shore of Lake Michigan. The Port of Milwaukee transportation options include the St. Lawrence Seaway, linking the Great Lakes to the Atlantic Ocean; inland river barge service linking to Gulf ports and the inland waterways; two major railroads, the Union Pacific and Canadian Pacific; and immediate interstate access to I-94. The Port of Milwaukee handles a diverse mix of cargoes including steel, salt, coal, limestone, bio-diesel, ethanol, cement, fertilizers, construction machinery, mining machinery, wind tower equipment, and grain.

St. Croix

I am particularly pleased with the impressive volume of steel moving through our Port in 2014. That suggests regional manufacturing is picking up, and when manufacturing is healthy, our entire economy benefits.

The Port of Milwaukee is an economic entity of city government that is governed by the seven-member Board of Harbor Commissioners, a panel appointed by Mayor Tom Barrett and confirmed by the Common Council.

It administers commercial and recreational operations on the 467 acres that make up the Port.

Dunn

The Port of Milwaukee provides a valuable resource to this City’s economy. Milwaukee is a manufacturing center, and when companies produce products, they need raw materials delivered and efficient paths to market. The Port of Milwaukee provides both.

ABOUT THE PORT OF MILWAUKEE

Pierce

A Message from Mayor Tom Barrett:

THEN

PORT OF MILWAUKEE

FINAL PORT TONNAGE SUMMARY:

NOW

(IN METRIC TONS)

2014

2013

2,402,622

2,560,838

Total Private Docks

620,035

499,702

Total Port Tonnage and Waternborne Private Docks

3,022,657

3,060,540

Total Municipal Port

Alpena The frieghter ALPENA has been a regular visitor to the LaFarge cement silo at the Port of Milwaukee each year.

With the conversion of the ST. MARY’S CHALLENGER to a tug/barge in 2014, the Alpena is now the oldest selfpropelled freighter still in regular service on the Great Lakes.

The ALPENA was launched originally as the LEON FRASER, a 639’ ore carrier, on February 28, 1942.

After 40 years of hauling iron ore, the LEON FRASER was taken out of service in 1982. In 1989, it was shortened by 120 feet and converted to a self-unloading cement carrier.

In 1991 it was renamed the ALPENA and began its current career hauling cement for LaFarge.

PORT OF MILWAUKEE

VESSEL COUNTS: 2014

2013

155

162

Foreign

47

38

Barges

23

47

6

4

945

180

American/Canadian Lakers

Cruise Ships Cruise Passengers

WIND TURBINE

Update:

The three years of running the Port’s wind turbine has reduced significant amounts of pollution and saved on energy costs. Here are the facts: COST SAVINGS: $58,197

Mining shovel being loaded for export

TOTAL ENERGY PRODUCED: 7,674 KWh (the equivilant to run 52 houses for one year) POLLUTANT OFFSETS: • 581 pounds of Nox (mono-nitrogen oxides) • 567,202 pounds of Cox (carbon dioxide) ENVIRONMENTAL EQUIVALENT: It would take 11,816 mature trees one year to reduce this amount of Cox. The amount of CO2 avoided is as much as a family car driving 653,604 miles.

2014 Annual Report

3

Eight (8) cubic meter buckets were used to unload Moroccan salt at Terminal 1.

Heavy ice surrounded the five vessels that were moored in the Port’s inner harbor in February 2014.

PORT OF MILWAUKEE

LOCAL ECONOMIC IMPACTS:

REVENUE/EXPENSES: 2014 (preliminary as of 2/25/2015)

2014

2013

OPERATING REVENUES*

$4,558,103

$4,370,586

Operating Expenses

$3,044,775

$2,937,975

NET INCOME (LOSS)

$1,513,328

$1,432,611

Personal Property Taxes

$ 480,383

$ 468,745

*Does not include Milwaukee World Festivals, Inc. The comparison of operating revenue and expenses for 2014 and 2013 excludes depreciation, debt service and interest expense.

Martin and Associates conducted a Port-wide Financial Performance study for the years 2006-2012. Results showed that the Port operated with a positive revenue stream between $2.5-$3.5 million during these years. Land rentals are comparable to Coastal bulk ports, and other Great Lakes bulk and breakbulk port land rentals.

PORT OF MILWAUKEE

LOCAL ECONOMIC IMPACT: EMPLOYMENT Direct Jobs

624

Induced Job

498

Indirect Jobs

294

Total Jobs

1,416

PERSONAL INCOME Direct

$28,674,000

Re-spending/Local Consumption

$62,136,000

Indirect

$12,020,000

Total (1,000)

$102,830,000

Captain Amy (Baribeau) Cocanour

became the Commander, Coast Guard Sector Lake Michigan in June of 2014. Her authorities and responsibilities include Captain of the Port Lake Michigan; Officer in Charge, Marine Inspection; Search and Rescue Mission Coordinator; Federal Maritime Security Coordinator; and Federal On-Scene Coordinator.

A Wisconsin native, she spent much of her early years sailing on Green Bay and Lake Winnebago.

She graduated from the Coast Guard Academy in 1992, with a Bachelor of Science in Marine Science, and earned a Masters of Marine Affairs from the University of Washington in 1998.

4 I The Port of Milwaukee

BUSINESS REVENUE

$145,827,000

LOCAL PURCHASES

$24,025,000

STATE TAXES

$11,311,000

FEDERAL TAXES

$18,509,000

Total Taxes Note: Totals may not add due to rounding.

$29,820,000

BHC ACTIONS

A SIGNIFICANT PORTION OF OUR REVENUE IS THROUGH LEASING OF REAL PROPERTY.

BEFORE

AFTER

➧ U.S. Venture lease agreement for 11.1 acres, including repainting of tanks. ➧ Approval of U.S. Venture lease amendment – adding 0.5 acres to lease agreement.

FBI/DNR PRACTICE AT THE PORT Twenty-four FBI swat team members along with Wisconsin Deparment of Natural Resources Officers practiced boarding a vessel using high-speed approaches, in preparation of the unthinkable act of terrorism/piracy.

➧ Approve Board’s continued support/commitment to the green marine certification for improved environmental performance. ➧ Approve amendment to lease agreement with Kinder Morgan Bulk Terminals for 2.3 acres.

DID YOU KNOW?

➧ Approve lease agreement with Kinder Morgan Bulk Terminals for inner harbor domes (.808 acres). ➧ Approve amendment to and extension of lease agreement with Kinder Morgan Bulk Terminals for Terminal 4 and 4A (8.610 acres). ➧ Approve Board of Harbor Commissioners support for resolution designating the Mississippi River a marine highway.

Stretch from St. Louis to Minneapolis to be known as M-35 Marine Highway Corridor

“We are excited about this designation,” says Wisconsin Department of Transportation Secretary Mark Gottlieb.

“It’s a positive step that will help planning for an integrated regional transportation network that better connects all modes of transportation.”

The five states settled on the name M-35 because I-35, the interstate highway, is a good representation of the river’s route.

The high quality fertilizer, Milorganite, is manufactured on Jones Island at the Milwaukee Metropolitan Sewerage Plant.

The fertilizer is then railed to the Port’s Terminal 4 where Kinder Morgan bags the product. Milorganite is distributed from Terminal 4 across the United States by truck. Used primarily on golf courses, the fertilizer is also a desired product for landscapers and home owners.

2014 Annual Report

5

FOREIGN FLAG OPERATORS PROVIDE THE OPPORTUNITY TO EXPORT OUR GOODS OVERSEAS

Federal Welland and Sea Racer (Fednav)

Eireborg (Wagenborg)

Isadora (Polsteam)

The main players in foreignflag operations comprise such carriers as Fednav, Canfornav, Polsteam, Spliethoff, and Wagenborg.

Niche carriers for project and heavy lift carriers have been increasing their presence, including BBC Chartering and Hansa Heavy Lift.

Milwaukee has been a port of call for all of these ship lines.

BBC Austria (BBC Chartering)

Capital Improvements:

2014 Port Tenants:

The Lake Express auto and passenger ramps that move up and down for loading were upgraded to handle another 20 years of service. The public space was expanded to include more picnic area for onlookers.

Cargill Salt, Inc.

As part of an ongoing rail improvement project, all lead tracks coming into the Port and portions of the upper classification yard were upgraded from 90 to 115 lb rail to handle modern rail car volumes.

Harbor House Restaurant

Compass Minerals Discovery World at Pier Wisconsin Federal Marine Terminals, Inc. Great Lakes Towing

LaFarge Corporation Carferry Crossing

Kinder Morgan Bulk Terminals Kinder Morgan Transload Lake Express High-Speed Ferry

Ornate metal fencing along S. Lincoln Memorial Drive continued around the Dredged Material Disposal Facility north of the Lake Express buidling. The Port Administration office, Lake Express and the Coast Guard have already beautified the area with similar fencing.

Michels Corp.

Milwaukee Art Museum Milwaukee World Festivals Portland Trucking South Harbor Terminals St. Mary’s Cement Rail Improvements

U.S. Coast Guard U.S. Navy U.S. Oil Walsh Construction

6

The Port of Milwaukee

Ward’s Welding

Cruising to Milwaukee The cruise ship Hamburg made four port calls to the Port of Milwaukee in 2014. U.S. Customs and Border Protection personnel cleared 400 passengers from the German owned vessel on two separate cruises.

The ship returned to Milwaukee two more times for day trips.

Milwaukee is one of the few ports on the Great Lakes that can safely and legally remove foreign garbage because approved incinerators or disposal sites are required.

A lot of work goes on behind the scenes to make a cruise ship call go smoothly. Tommy, Timmy, Eric, Tom, Dan and Wayne make sure generators stay running, lines are handled and all the other ship incidentals requested by the ship’s agent or Captain, are taken care of.

MICHIGA

LINE

Marinette

Ozaukee

Menominee

Oconto

Landglade

Lincoln

Forest

Oneida

Florence

Vilas

N STATE

Green Lake

Kewaunee Manitowoc

Calumet

Winnebago

Brown

Outagamie

Waupaca

Portage Waushara Marquette Columbia

Adams

Sauk

Door

In addition to promoting shipping and commerce, the Port of Milwaukee is the Grantee of Foreign Trade Zone #41 which offers economic benefits to companies involved in international trade. FTZ #41 encompasses 12 counties in Southeastern Wisconsin: Milwaukee; Rock, Walworth, Kenosha, Racine; Waukesha; Jefferson; Dodge; Fond du Lac; Sheboygan; Washington and Ozaukee counties.

2014 FTZ #41 OPERATORS: Broan Nutone

Fond du Lac

Dodge

Sheboygan

Washington

Ozaukee

Sigma-Aldrich Bentley World Packaging (general purpose FTZ warehouse)

Dane

Hospira, LLC Jefferson

Waukesha

Milwaukee

Generac

Green

Mercury Marine Racine Rock

Walworth Kenosha

CNH Industrial Americas

2014 Annual Report

7

RECOGNITION OF SERVICE: Mark Wells, Operations Manager, Kinder Morgan Terminals-Milwaukee Mark Wells is one of the people behind the scenes that keep our Port successful.

Mark doesn’t like to talk about himself, but after some prodding, he told us a little bit about himself for this annual report.

THE PORT OF MILWAUKEE BOARD OF HARBOR COMMISSIONERS

Timothy K. Hoelter, President

Commissioners:

Ronald S. San Felippo

Robert J. Bauman

Craig A. Mastantuono

Claude J. Krawczyk

Mark came to Milwaukee in early 1989, leaving a family owned construction business to start the coal moves from the Port to the Valley Power Plant. During his tenure here, Mark’s responsibilities have included operations manager – handling an average of two million tons of cargo each year, safety coordinator, equipment manager and operator, FSO (facility security officer), mentor, along with being “the Chief Cook and Bottle Washer!”

When asked of a time that stands out in his mind, Mark replied, “There are too many stories through the years to remember just a couple. There is a collage of stories and changes that run through my mind when I think about the past. All the different people that I worked with at the Port - Roy Cook (President of Milwaukee Bulk Terminals) – Meehan Seaway Terminals-Jim Konczal and Joe DiGiorgio (past Harbor Masters) and Wayne Johnson (current Harbor Master) – Erv Kehring and other crane

operators of the port. The Port office used to be where the Discovery World is presently, christening the salt dome on 1/1/1990, building the new coal barges in 1994 (I was able to sleep again not thinking that the old barges would sink overnight, ha ha), all the oil tank farms leaving. The vessel Captain use to enjoy me bringing my 3 daughters down to visit when they were little, they would be treated with all sorts of goodies.

I am not sure what retirement will bring, I always thought about moving somewhere warmer than Wisconsin. However when your kids start having kids they create a GRANDPA, and right now with a grandchild in Wisconsin and one in Minnesota I don’t see us moving South for quite some time.”

Mark isn’t planning on retiring for a few years yet, so hopefully we can get him to talk more about those Port stories he recalls.

Diane S. Diel

STAFF CHANGES: Kathleen M. Smith

Matt Gwiazdowski was hired as a Port Maintenance Technician.

Peter Hirthe was hired as Senior Trade Development Representative Long time city employee,

Kevin McClusky, retired from

Paul Vornholt, Operations & Trade Director

8

The Port of Milwaukee

the Port’s engineering department.