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2011-03-30 Agenda Review New Hanover County Airport Authority March 30, 2011 Page 1 NEW HANOVER COUNTY AIRPORT" AUTHORITY AGENDA REVIEW MEETING March 30, 2011 ASSEMBLY The New Hanover County Airport Authority met for Agenda Review on Wednesday, March 30, 2011, at 4 :09 p.m., in the Executive Conference Room at wil nin International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Airport Authority members present were Paul Burton, Chairman; Robert Rippy, vice - Chairman ( via teleconference), John Lennon, Secretary; Charles Kays and Harry Stovall. Also present were Jon Rosborough, Airport Director; Julie Wilsey, Deputy Airport Director; Jim Morton, �-i7 1'1 �7 Y"1 J L� �Y Y�L�ft 'f1Y"'• i"Y^N �[ "I UU-11WILI, k_J %,i aLIVIIZO Yy III HI 1 Y`/Z1't lti� r`1 rt s+r'1'F7 !Zri ! �7s ►lt F►f l ! .1 x'1 !1Y r .s+rt h rti �e rti ray i - ri n �rr w rti rvrw.. - .LliGtiAL.L I.a11 Lr4,LLJI %.J Gal d i� li trL.LtJI 7 C y 1 I QaS13, 1 'QL LI1. 1V aIlCtc UUl Sandra Routh, Executive Assistant; Wanda Copley, New Hanover County Attorney; Richard Masters, The Masters Group, Inc.; and Amy McLane, Talbert & Bright, Inc. Chairman Burton called the meeting to order and announced that the purpose of the meeting was to discuss the agenda for the Authority's March 30, 2011, Regular Public Meeting. AGENDA ITEMS Special Events: Mr. Rosborough announced that Mr. Ron Cumin, Air Show Coordinator, was invited to attend the Agenda Review meeting to report on the upcoming air show. while waiting for Mr. Cumrn, Mr. Broughton reported the air show was still on schedule. He said he heard from Major Johnson that, barring any unforeseen circumstances, he plans to be here with a C -17. Mr. Broughton stated he and Cary Taylor spoke with the Air Boss, and a schedule of the acts is still unavailable. He explained that the Air Boss is supposed to be combining the air show schedule with the airlines' flight schedules. And, Mr. Broughton said the Air Boss assured there were no plans to impact the airlines' schedules. Mr. Broughton described his concerns about three specific flights that could be impacted due to restrictions involving the aerobatic safety box, which is a sterile area where no movement is allowed (including loading/unloading passengers on airline flights) during jet team acts. Mr. Broughton stated ILM personnel had contacted the homes and businesses in the surrounding area that would be impacted by air show maneuvers. He said there were four homes that will have to be evacuated during certain acts, because they are inside the aerobatic box. A discussion ensued between Authority members, Mr. Broughton and Mr. Rosborough concerning the air show's impact on commercial flights and passengers. Mr. Mot stated expenses for the upcoming air show have increased over past air shows. For example, because NCDOT cannot provide barricades /road closings due to budget restrictions, private contractors will have to be utilized; smoke oil has increased in price, and many other cost increases. Mr. Morton informed Authority members that Chairman Burton had been approving air show purchase orders within his level of authority, but there were some additional purchase orders that would require Authority members' review /approval. At this time, Mr. Morton, stated there were about $311,000 in expected air show expenses, 90% of which were contracts, and only 30 tickets had been sold through Er- Tickets and $174 sold through B B &T banks. He reported CE provided a $30,000 sponsorship. Mr. Morton stated he would be asking for approval of $40,000 in air show marketing, $35,000 in fuel for Air Wilmington, $10,600 for hotel accommodations, and other miscellaneous air show costs during the Regular New :Hanover County Airport Authority March 30, 20 11 Page 2 Meetinor. Some discussion ensued between Authority members and staff concerning various events taking place in Wilmington and surrounding areas, which conflict with the air show. Mr. Gumm arrived at 4:24 p.m., and Mr. Rosborough briefed him on what had been reported thus far. Mr. Gumm gave an overview of the air show, stating the air show would begin at noon on Saturday and Sunday, April 16.17, but the exact time of each act had not been set, because the Air Boss had not finished with the schedule. He said the KC -135 had cancelled due to deployment. He stated there would be a mini -air show at the Sponsors Party on Friday night, April 15, and an Authority member or designee would be needed to thank the air show sponsors and to welcome all the airmen. He said the 12,000 sq. ft. aerobatic box had been reduced to O fAfAn -`f- . _ h R .. wa ... T - .& rr 7 _ "- __7 _ _ y a _ L L _ �_ I . 'I _ , _ -1 r[l _, . o, Vvv bLI . I L, - AJ iVIU1 L.111 ]-,U L11U1 �I1I g J I ..0 al W ay wo 111LU .I10 L .I IMU. LU De D.tU[JKeU Oil UUr Ilg aerobatic acts. He reported losing three major sponsors and about four mid -level sponsors this year due to finances; however, GE stepped up with a large $30,000 sponsorship. They also are purchasing about $42,000 in food tickets and $32,000 in air show tickets to give to their employees. Mr. Gumm said about 33,000 children's tickets were given away to students in New Hanover, Pender and Brunswick counties. Children s s tickets must be accompanied by a paying adult. He reported the air shove website had to be expanded twice due to the amount of visitors. Mr. Gumm stated advertising was out in every market in the four - county area, and within the next 1 days, the local media will be saturated with air show advertising. Mr. Gumm explained that 'SECT had always been a sponsor; however their news department, programming department, and marketing department are managed separately now, and the air show received no free advertising this year. A brief discussion ensued between Authority members and Mr. Gumm about air show sponsorships, and he explained that he would be willing to work with any potential sponsor to customize their sponsorship package. He summarized by stating the air show schedule would be completed and e- mailed to staff within the next week. In response to a question from fir. Rosborough, Mr. Gumm stated the Sponsors Party would begin at 7:00 p.m. Mr. Steve Bright, Talbert & Bright, Inc., arrived at 4:32 p.m. In reference to special events, Mr. Morton stated there would be a Boy Scout Camporee at the airport on May 6 - and they will be working on their .Aviation Merit Badge. Mr. Morton said the circus would be held at the airport during Azalea Festival week. Also, he reported there would be an Honor Flight on Wednesday, .April 20. Finance Report: Mr. Morton reviewed February financial items, stating it was a great month as expenses came in under budget. He passed out copies of the proposed budget for FY 2012 to Authority members, and asked them to review it and call him with any questions /concerns they may have before the next meeting. At the next Authority meeting, Mr. Morton stated the budget would be submitted for approval to advertise for public review for 30 days, with final approval scheduled for the Authority meeting at the beginning of June. He said the FY 2012 budget is approximately a 3.5 increase over the FY 2011 budget. stating the increase was due to incorporating the maintenance of an additional ILS, testing for storm water runoff as required by D. NR. and factoring in for normal increases in salaries, etc. He pointed out the Capital budget was included on the last two pages, and asked Authority members to call hint with any questions they mi ght have. New Hanover County .Airport Authority March 30, 20 11 Page 3 Mr. Dorton reported he -net with the agencies that responded to the rental car bid advertised several weeks ago, and they all expressed how difficult it was to go through the bidding process with their corporate structures, and inquired whether the airport would consider going through a negotiated method. Mr. Morton pointed out that past matters of contention, i.e., location of counters, rental car parking, etc., were no longer problematic. In discussing service center facilities, Mr. Morton stated that .Avis doesn't need one, and Enterprise Holdings (Alamo, National, and Enterprise) indicated they would want to work out of one building. This would reduce the number of facilities needed to be built to three from the fire initially planned, substantially reducing the cost of that project. Mr. Morton stated that neither Mrs. Copley nor the consultant had any issues or concerns about the negotiated method. He said three other airports have used this method, and it worked out well. Mr. Morton proposed that Authority members withdraw the public bid, in order to use the negotiated method with incumbents and s,l.�w- ,- .�+<nr� r 1 1..n..........., T7. wf��. 'X /rte. f -1 _y_ ���_ -I ._I_ L,_ I a .L: ILC: IJA I6Q. %_A1allIthalI -D U1 LVII GI�I�GU ,till s. LU JLUY W11CUICI S11C dul'CCU WI.L11 MIS McLHOU LO establish rental car facilities at ILM, and she said she did agree with the negotiated method. Mr. Morton said it would be a better deal for ILM to use the negotiated method. Mr. Morton said he had a resolution for Authority members' approval in the Regular Meeting to implement a Contract Facility Charge (CFC) as a part of a new contract with the rental car agencies beginning no later than July l st, imposing a $3.75 per contract day CFC on all rental car contracts. He stated ILM was looking at borrowing $5 M or less to build the rental car facilities, and the CFC would generate $800,000 per year. The debt service on $5 M, over 15 years at 6% interest is about $500,000 per year. Mr. Morton said hat leaves about $300,000 per year to put towards a rental car deck for future parking expansion for rental cars and the public. In response to Mr. Lennon's question about the rental car bidding process vs. the negotiated method, Mr. Morton stated by putting the bid out for rental car agencies, it helped to flush out any company that wants do business at the airport, so everyone has a fair chance. In response to Mr. Lennon's question about an alternative to borrowing money from the county to build the rental car facilities, fir. Morton responded that the airport could borrow the money from the bank, and he said he had some preliminary discussions with the bank, and it is possible to borrow from the bank at a fair rate. 'fir. Morton stated the TSA's five -year lease with ILM for their rental space inside the terminal building was up for renewal, and he has negotiated a five -year renewal lease at $30,220 per year, representing a 3 annual increase, that will be on the agenda for Authority m embers' approval at the Regular Meeting. Mr. Dorton reported that he is moving forward with the lease with AirLink and Sable for the former Signatech hangar on the opposite side of the airfield. Facilities: Mrs. Wilsey stated she had several action sterns for Authority members' approval at the Regular Meeting. The first action item for approval is a contract for $6,750 with Ken Weeden &.Associates, a local DBE consultant, for a three-year DBE goal development program. The FAA has changed how they do this; it used to be every year, but now it's once every three years. The second action item for approval is an authorization of $12,000 to purchase six new benches for the airport terminal's front curb. In response to Chairman Burton's suggestion, Mr. New Hanover County Airport Authority March 30, 2011 Pabe 4 Prease stated that maintenance staff had tried sandblasting and repainting certain areas, but the paint flaked off within a couple of months. He stated the original powder coating on the benches presents a problem when trying to sandblast and repaint. Mrs. Wilsey explained that the benches are commercial grade, because they must withstand more abuse in a public environment. The third action item for approval is a contract for $27,000 with GeniSys to upgrade ILM's Executive Conference Room equipment. She stated there is an opportunity for ILM's conference room to become a demonstration model for video conferencing. Chairman Burton stated he was not certain how ILM would utilize this equipment, and he was reluctant to approve this expenditure for a demonstration. In response to Mr. Lennon's question about revenue received from conference room rental, Mrs. Wilsey stated it was not very much at this time. Mr. Rosborough stated the city and county are not charged to use the conference room. However, we charge $400 for a full day and $250 for a half-day when a group rents the room. Mr. Lennon suggested it digit be interesting to find out how many law firms in the area would do depositions in ILM's conference room if they had video conferencing capability. Mrs. Wilsey stated that GeniSys believes there is a market in this area for video conferencing; but, until you actually have the capability and demonstrate how well it works, it's hard to do a market analysis. Chairman Burton expressed his concern that several years from now, the equipment could be purchased for half of what it's selling for now. Mr. Morton pointed out that one piece of equipment is worth $40,000, and Polycom would be providing it to ILM at their cost ($8,800) for demonstration to potential customers all along the East Coast. Mr. Lennon requested staff come back to Authority members with some ways that ELM might be able to generate revenue from this expenditure. Dr. Days asked if staff knew of any resources that might be interested in using this technology. Mrs. Wilsey responded that GeniSys may be able to provide some insight. The fourth action item for approval is a Change order with Barnes & Powell for $3,330, to resolve are issue with the installation of some of the signs involving the LED Guidance Sign Project. Mrs. Wilsey reported that the Airport Boulevard Rehabilitation Project was winding down; the contractor was doing some final landscaping and finishing up with the lighting and controls. She stated replacement of the Rescue Base Roof had been put on hold and will begin the first week of April. Mrs. Wilsey said the Runway 6 -24 PAPI Project was still awaiting guidance from the FAA on the design modification. The Parking Lot Project contract was being signed by the contractor, and when it was returned, Mrs. Wilsey stated she would get the Authority's signatures and set up a pre - construction conference to develop a construction schedule. Mrs. Wilsey reported that staff met with Cape Pear Community College and local law enforcement agencies who use the pavement on the east side of airport property ( "training area ") for driver training to discuss the pavement condition and safety concerns, and to request their financial support for repairs or risk having to find another place to train. She stated they had no other area to do this type of training, so Mr. Prease obtained a repair estimate for $38,000 - $40,000 from Barnhill Contracting. The five agencies have agreed to get approval to provide $8,000 each, and have asked ILM to contract with Barnhill to bet the work done; they will pay ILM, and then ILM will pay Barnhill. Mrs. Wilsey pointed out that the $40,000 repair fix would allow these agencies to continue training for the next 24 -36 months, which is time enough for the agencies to determine whether they can support financing a full overlay, the ultimate repair fix for the training area. She stated the contract with Barnhill would require Authority members' approval. Since this area is not an active movement area it is not eligible for grant reimbursement. Mrs. Wilsey stated staff's time would be ILM's only investment in this project, but ILM receives mutual aid from the New Hanover County Airport Authority March 30, 2011 Page 5 agencies involved. Mr. Rosborough pointed out that part of ILM's Perimeter Road is in the training area, so there is an advantage to keeping up the maintenance of that pavement. In response to Mr. Lennon's question, Mrs. Wilsey stated the DBE Goal .Development contract with Ken weeden & Associates was for a three -year period and would not have to be renewed from year to year. Government: There were no items for discussion. Marketing and Public Relations: Mr. Morton discussed how ILM was incorporating advertisement of the new Washington, DC flight into current media by adding a scrolling banner to the bottom of the television ad, adding some additional language to the end of the existing I dUlU spUL, i1SLaijung a u guar Sign 01-1 Me Dag gage De R ana a static sign inside the term nai, adding a banner on the website that flips between DC and Chicago, and sending out e -mail blasts to addresses collected through ILM's website. Mr. Morton said staff was working on filming a new television advertisement and recording a new radio spot highlighting the new Chicago Bight using the same actress who appeared in the current advertisement. He stated he's still doing the newsletters appearing in the Greater Wilmington Business Journal. Mr. Morton reported staff is putting together a ceremony to commemorate the inaugural flight to Chicago. Planning and Development: fir. Morton reported that ILM had closed on the property at the end of old wrightsboro Road, which is in ILM's PFC acquisition zone. In response to Mr. Lennon' s question, Mr. Morton stated that installation of the lift station was underway, and it is expected to be substantially finished by May 13. Operations Report: Using charts for illustration, Mr. Broughton discussed airport statistics for the month of March, including fuel price comparisons, fuel flowage amounts, airfare comparisons with MYR and R.DU, and total passengers handled. He stated the load factor for March was 85%. He stated the total passengers handled for the year is up 5.7% over last year. Directors Report: Mr. Rosborough introduced Mr. Masters, ILM's .Air Service Consultant to give his quarterly report to Authority members. Mr. Masters updated Authority members on hove ILM staff worked with American Airlines to acquire the nonstop Chicago flight, which begins on July 2. He stated with the addition of American .Airlines, ILM is "sold out," and the only way to improve future air service would be to work with the incumbent carriers. Mr. fasters reported that he and Mr. Rosborough attended Network USA, an air service development conference March 74, in Austin, Texas, and they interviewed with ten airlines. He said all of the airlines were impressed with ILM, and several airlines seemed interested. Mr. Masters stated he and Mr. Rosborough visited with US Airways March 17, in Tempe, Arizona, and spoke with them about expanding the current service. Mr. Masters briefly reviewed the progress of ILM's air service development since 2001, stating there was little, if any, room for air carrier expansion after American .Airlines comes on board; in order to continue to grow, more terminal space and gate space would be needed. Mr. Masters commented that after American Airlines comes on board, ILM may be too busy to be able to put on future air shows. He said most commercial airports have stopped putting on air shoves, so as not to inconvenience their customers. particularly those with international flight connections. New Hanover County Airport Authority March 30, 2011 Page 6 Mr. Stovall and Dr. Kays asked about South Florida air service, and Mr. Masters and Mr. Rosborough responded that South Florida was a destination they were actively marketing. Mr. Burton questioned where ILM stood in relation to Asheville Regional Airport (AVL), and Mr. Rosborough responded that ILM is the fourth largest Forth Carolina airport behind Charlotte, Raleigh - Durham and Piedmont Triad in Greensboro. He said ILM's passenger statistics surpassed AVL several years ago. Mr. Rosborough expounded on Mr. Masters comments concerning space and expansion, stating ILM currently has eight gates and ticket counter areas for four airlines. He said ILM staff is very pleased to get American Airlines, its fourth carrier. He commented that ILM's Capital Improvement plan (CIP) is updated every five years, and staff will be looking at reviewing 1-Al lung -i in ange plan, as wen as uuiiig a er a L i gale s uuy WILD 1Avl s engineer oI recoru, Talbert & Bright. He said staff has consistently appealed to ILM's existing carriers to expand current and new air service. Mr. Rosborough said American Airlines conducted a site visit recently; however, since there are only going to be two flights per day initially, they will probably not be bringing in their own staff. He stated American Airlines' IT representative commented that ILM's electrical room was the cleanest he had ever seen. Mr. Rosborough said he expects more site visits within the next two months. He said Mr. Morton was working on a ceremony for the Chicago inaugural flight on July 2. Mr. Rosborough stated the Washington DC weekend flight, which began on March 5, had been difficult to promote, and it got off to a slow start. However, he commented that since Mr. Dorton had started aggressively marketing the flight and working with the Convention and Visitors Bureau, the load factor had risen to approximately 60%. Mr. Rosborough explained the New Hanover County Commissioners specifically wanted an Authority member to conduct ILM's annual b lefing to them on May 16, and suggested Chairman Burton conduct the 10- minute presentation reviewing ILM's projects and achievements throughout the past year. Mr. Rosborough reported that on March 29, he and Mr. Broughton traveled with Commissioner Catlin and Chris Coudriet, Assistant County Manager, to Raleigh to visit with the Longistics Group to discuss the FI Z. Mr. Broughton stated the purpose of this trip was to research how ILM would go about designating the airport and its business park as an F 'FZ. He said to activate the FIFZ, ILM would need a secure facility /area to warehouse, and if the FTZ is not activated within 24 months, the FTZ designation is voided. Chairman Burton commented the FI'Z was a 40 -year old concept whose time has come and gone, and ILM staff should not waste any time or money to pursue it. Mr. Rosborough said that Dwayne Long, Chairman of the Longtistics Croup, told them ILM would need to have a client/shipper in place in order to make it worthwhile to apply for the FTZ designation; however, Mr. Long's vice Chairman respectfully disagreed with that strategy and said a ILM did not need to have a client in place prior to the application process. Mr. Rosborough stated the purpose of the Longistics Group was to evaluate possible FTZ areas and match up clients to that area. Some discussion ensued between Authority New Hanover County Airport Authority March 30, 2011 Page 7 members and staff about the significance of ILM becoming an FTZ. The consensus of Authority members was that ILM should continue to market the FTZ, but until there is an interested client, ILM should not expend any more time or money to pursue the FTZ concept. For the Authority's May 4th board meeting, Mr. Rosborough stated he and Mr. Morton would be out of town visiting Allegiant Air during its Airports Conference. Mr. Rippy said he would be out of town, also. Authority members and staff agreed to reschedule the next board meeting on Tuesday, May 3, at 4:00 p.m. Dr. Days had a concern about the annual presentation to the New Hanover County Commissioners, and Mrs. Copley advised that staff should contact the County Manager (who sets the agenda) to request ILL. be placed first on the agenda at 9:00 a.m. ADJOURNMENT There being no further business to come before the Board, Chairman Burton adjourned the meeting at 5:56 p.m. Prepared by: Respectfully Submitted: Sandy Routh John D. Kennon, Secretary