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2000-05-05 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING WITH AIRPORT AUTHORITY, MAY 5, 2000 BOOK 27 PAGE 926 ASSEMBLY The New Hanover County Board of Connnissioners held a Special Meeting with the New Hanover County Airport Authority on Friday, May 5, 2000, at 7:30 a.m. in the Conference Room of the Wilmington International Airport, Airport Boulevard, Wilmington, North Carolina. Members present were: Connnissioner Buzz Birzenieks; Connnissioner Ted Davis, Jr.; Connnissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster; County Manager, Allen O'Neal; County Attorney, WandaM. Copley, and Clerk to the Board, Lucie F. Harrell. Airport Authority Members present were: John M. Coble; Parks L. Griffin, E. L. Mathews, Jr.; Chairman Irvin A. Roseman, Airport Director, Will Plentl; and Administrative Assistant, Janie James. Chairman Caster called the Board to order and expressed appreciation to the Airport Authority for inviting the Connnissioners to hear a status report on the activities of the Wilmington International Airport. Chairman Roseman called the Airport Authority to order and welcomed the Board of County Connnissioners. He introduced the members of the Airport Authority and Ms. Janie James, the Administrative Assistant; Jon W. Rosborough, Deputy Director; Julie Wilsey, Facilities Director; Winfield Smith, Jr., Director of Finance; and Will Plentl, Airport Director. Chairman Roseman reported on the activities of the Airport during the past year and stated that a number of steps and administrative changes have occurred that will allow Airport Director Plentl more time to focus on airport operations and recruitment of additional airlines. He also commented on the visit by President Clinton and presented a video of the event. Chairman Roseman asked if any member of the Board would like to comment on an issue pertaining to the Airport before beginning the update on airport activities. Connnissioner Birzenieks spoke on the recent failure of the Open Space and Parks Bond Referendum, and stated this action has placed a great demand on the County to provide more soccer fields. He asked if there was a possibility of using any land at the Airport for this purpose. Chairman Roseman responded that several large tracts of airport land were available that could be suitable for soccer fields. He stated that the Airport Authority would not have a problem with the County using this land for that purpose if the surrounding neighbors are informed about the use. County Manager O'Neal commented on visiting the site and stated the land will require a great deal work and expense to be developed into a soccer field. He expressed appreciation to the Airport Authority for offering the use of the land. He also said the soccer teams were not overly pleased with the location. Connnissioner Birzenieks commented on the possibility of needing the property in the future and he suggested re-visiting this issue. Connnissioner Davis suggested moving forward with developing soccer fields on the North Campus of Cape Fear Community College and securing a funding source for this project before rushing into another project. He said that he had no problem with revisiting the issue to determine if the site can be used in the future. Chairman Roseman advised that the Airport Authority would be glad to work with the Board of County Connnissioners if a site is needed for development of soccer fields. REPORT ON REVENUES AND EXPENDITURES Finance Director, Winfield Smith, presented a Statement of Revenues and Expenditures. He advised that according to the lease agreement between the Airport Authority and New Hanover NEW HANOVER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING WITH AIRPORT AUTHORITY, MAY 5, 2000 BOOK 27 PAGE 927 County, the Airport must report quarterly to the Board of County Connnissioners on the financial condition of airport operations. He presented the following report. For the 9- month period ending March 31, 2000, the revenues and expenditures are favorable in all areas. With the concern about low fares being offered by the Raleigh-Durham Airport and Myrtle Beach Airport as well as losing United Express, the revenue and expenditures are in line with the budget and the Airport is in a sound financial condition. In concluding the presentation, Mr. Smith advised that Wilmington International Airport has been able to remain competitive and stay within the projected budget, which should produce a good financial year. STATUS REPORT ON OPERATIONS OF THE AIRPORT Deputy Airport Director, Jon W. Rosborough, reported on the rapid growth of southeastern North Carolina and stated that Wilmington International Airport serves as the gateway to the entire region; therefore, this facility plays a vital role in the local and regional economy. The Airport is comprised of 1,600 acres and provides both commercial and general aviation services. There are two runways: #1735 at a length of 7,000 feet and #624 at a length of 8,000 feet. An FAA Air Traffic Control Tower is located on the site as well as one full instrumentation landing system and other navigational aids. There are three commercial airlines that serve the Airport: Delta, Midway Corporate, and US Airways. These airlines provide 25 flights daily to more than 141 cities in the United States and 21 international cities. Over 500,000 passengers are served on an annual basis. There are three full-service fixed base operators that provide general aviation with a complete range of services, including hangar storage, tie downs, aircraft services and sales, full services, flight instruction, aircraft charter rentals and repairs. A strategic plan has been prepared that is comprised of a mission statement, vision statement, and value statement. The mission is to provide quality regional air transportation services through a professional public/private partnership that is dedicated to meeting customer expectations. The Airport is open 24 hours a day, 7 days a week, 365 days a year and is staffed with 39 paid quality team oriented personnel divided in three departments: Administration, Maintenance, and Public Safety. Three employees report directly to the Airport Authority: The Airport Director, Director of Finance, and Director of Strategic Services. Out of 39 employees, 30 are trained aircraft rescue fire fighting personnel and certified as first responders. During the past week, the first responders have just completed a 2-day annual certification process. One test was a mock drill consisting of an air crash at a certain distance. The first responders were required to be on the crash scene in less than three minutes in full gear driving five vehicles to the crash scene. The Airport employees responded in 2 minutes and 10 seconds, which was an excellent performance. The Airport operates under a $3.2 million budget which is not subsidized by New Hanover County. Revenues are received from 35 different sources through lease agreements and contractual affiliations. In concluding the presentation, Mr. Rosborough stated that the connnitment of staff is to never lose focus of the mission statement. With each new service, the Airport must continue to provide quality services that encompass convenience, safety, and comfort. Connnissioner Birzenieks commented on his daughter being able to save $300 by flying into the RaleighlDurham Airport instead of the Wilmington International Airport, and he asked if more reasonable fares could be provided to encourage flights into Wilmington. Chairman Roseman responded that Midway has a round trip air fare of $100 from NEW HANOVER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING WITH AIRPORT AUTHORITY, MAY 5, 2000 BOOK 27 PAGE 928 Wilmington to Raleigh; however, many people are not aware of this fact. If people would purchase tickets in advance and stay through Saturday night, a competitive and reasonable rate can be provided for flights into Wilmington. Director Plentl explained that air fares from Wilmington are $20 to $40 higher than from Raleigh or Myrtle Beach. Wilmington is a small business market, not a vacation market. The bottom line is to keep fares competitive with other business markets, but reality is that the Wilmington International Airport will not have a low fare structure. The Administrative Staff was very concerned about United Express closing its office and the financial loss that could be experienced by the Airport; however, it was a pleasant surprise to see a 7% growth over the same month last year with one less airline. Director Plentl also spoke on the rapid growth of Midway Corporate Airlines. He advised that Midway is tripling the size of its fleet with the purchase of new 737 and 700 jets. The air industry projects that Midway will be a major airline and competitor within the next three to four years. STATUS REPORT OF ENGINEERING AND FACILITIES Ms. Julie Wilsey, Director of Engineering and Facilities, reported on improvements to the Airport and stated since J ul y 1999, the Airport has undertaken 21 capital improvement proj ects with 12 projects completed. Some of the projects have been performed with in-house maintenance staff and others through contracted services. Major projects that have been completed are the new flight information system, new baggage claim carousel, and a new roof. Three federal and five state grants were used to fund the projects with the remaining funds being allocated from revenues or reserves. In concluding the presentation, Ms. Wilsey offered to provide a list of the capital projects and stated a concentrated effort will be made to complete the remaining projects. Connnissioner Davis requested Ms. Wilsey to provide him with a list of capital projects. STATUS REPORT ON AIRPORT ACTIVITIES Director Plentl reported that international activity continues to grow. Staff is considering renovating the International Terminal, and students from Cape Fear Community College have taken this job as a project for the school year. The students are coordinating the project with federal inspection agencies and a plan will be presented to the Airport Authority that will allow the terminal to handle larger aircraft. If the project is approved by the Airport Authority, this will be a step toward eliminating the 30 passenger per aircraft restriction. Removal of this restriction will allow people clearing Customs to be counted as enplanements and charged a Passenger Facility Charge (PFC) fee which will generate more revenue for the Airport. Enplanements over the month of April were excellent. There is an increase in revenue passengers and a decrease in non-revenue passengers, who are airline personnel living here and working in other locations. Vice-Chairman Greer asked if the Airport Authority plans to increase the PFC fee. Director Plentl responded that the Authority will have to decide if the fee should be increased. The fee can be increased from $3.00 to $4.50. Since New Hanover County is a small hub, the PFC fee can be increased with entitlement and discretionary funding remaining in place. Further discussion followed on additional money being available under the new legislation for small airports. Director Plentl explained that traditionally, the Airport has received revenue in the amount of $700,000 from the PFC fee. If the Airport Authority decides to increase the fee, the revenue will increase to over $1,000,000 under the new legislation. The entitlement funding will increase from $800,000 to $1,800,000 next year. Since this additional funding will be received, the Airport will have the ability to complete capital projects. NEW HANOVER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING WITH AIRPORT AUTHORITY, MAY 5, 2000 BOOK 27 PAGE 929 Director Plentl presented a statement showing Operation Reserves of $600,000 and Maintenance and Development Reserves of $648,323. In FY 1999, the total amount of federal and state funding was $3.7 million. The projected federal and state funding for FY 2000 is $1.9 million with the possibility of receiving discretionary grants in the amount of $5 million. When the new legislation becomes effective in 2001, the guaranteed funding will be $3.3 million if the PFC fee is increased to $4.50. Under terminal renovation, Phase I is in the process of being completed as presented by Ms. Wilsey. Phase II will consist of the concourse expansion and a conference center at a projected cost of $2.5 million. Phase III will consist of the ticketing area, rental car area, rental car parking expansion, valet parking area, lobby, and paving at a projected cost of $2 million. Discussion followed on whether a decision had been made to change the primary runway. Director Plentl explained that FAA constantly changes standards. Since the Airport was constructed, the runway safety area requirement has changed. The new FAA standard requires 1,000 feet of clear space off the runway. Smith Creek is located at the end of runway #1735, which makes it difficult to provide the 1,000 additional feet because wetlands will have to be filled. If this runway is shortened by 1,000 feet, the existing business development will have to be demolished which is estimated at a cost of $35 million. The alternative is to change the primary runway from #1735 to #634. When the FAA standards are met, it is hoped that the alternative selected will provide better wind coverage under instrument conditions and provide for a safer environment with the additional 1 ,000 feet. The estimated cost for expanding a runway ranges from $5 million to $35 million. No decision has been made by the Airport Authority at this time. Discussion was held on the recent events held at the Airport and the success of the Air Show. Director Plentl advised that approximately $100,000 was spent in overtime pay to hold these events. Mr. Griffin advised that after the Azalea Festival concert, several inquiries have been received about holding other concerts. The Airport Authority has decided to limit major events to four or five per year to avoid disrupting staff. In concluding the presentation, Director Plentl offered to answer questions. Connnissioner Birzenieks complimented the Airport Authority, Airport Director and Staff for the effort given to prepare for the arrival of President Clinton, which was handled in a professional manner. He commented on the expenses incurred with preparing for this event and asked who would pay the bill and what was the projected cost. Director Plentl responded that all preparation expenses will be paid by the Airport. Staff was also informed that if the Presidential plane was damaged while on the site, the Airport would be liable. He said at this time, it is difficult to project a cost figure because of expenses incurred by the Sheriff's Department, Wilmington Police Department, Volunteer Fire Department, the Medical Center EMS, the Board of Education, who provided school buses, and full Airport staffing that will involve overtime pay as well as other agencies that were involved in preparing for the President's arrival. He stated, in his opinion, the preparation costs will be significant. Connnissioner Birzenieks stated this is another example of an unfunded mandate by the federal government. Discussion followed on drainage problems being experienced on the back side of the Airport along Blue Clay Road. Airport Director Plentl advised that discussion has been held with the FAA about this issue, and it appears FAA will review this issue from a study point of view. A Request for Proposals will be prepared to present to the Airport Authority to hire a consultant to study the drainage in this area. This study should provide accurate information to determine how to resolve the problem. Director Plentl advised that a Wilmington Aviation Day will be held in June. This will be NEW HANOVER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING WITH AIRPORT AUTHORITY, MAY 5, 2000 BOOK 27 PAGE 930 an open house event with the fixed based operators. Businesses and the public will be provided an opportunity to learn about general aviation and tour the Airport. Discussion was held on the 20-year lease between New Hanover County and the Airport. Mr. Griffin advised that as the Airport continues to grow, the Airport Authority may need to extend the lease beyond 20 years when negotiating lease contracts with companies that need more than 20 years. He said within the next few months, the Authority will discuss this issue with the Connnissioners. Airport Director Plentl informed the Board that Peter Davis has installed the first set of private hangars on the airport site. At this time, the hangars are already pre-sold, and there is discussion about additional hangars being constructed. Vice-Chairman Greer informed the Authority that he serves on the Community Growth Planning group and said there is concern about the absence of the Airport representative attending meetings. Airport Director Plentl said that due to scheduling conflicts, he had not been able to attend some meetings; however, he or an Airport representative would attend the next meeting. Mr. Griffin requested the Board of County Connnissioners to involve the Airport Authority in the City/County consolidation effort. Vice-Chairman Greer informed the Authority that he serves as Chairman of the Aviation Task Force, which is a sub-connnittee of the National Association of Counties Transportation and Telecommunications Connnittee. He offered to assist the Airport Authority with lobbying efforts on bills that are before Congress. Chairman Roseman expressed appreCiatIon to Vice-Chairman Greer for sharing this information and said it might be valuable for a trip to be made to Washington, D. C. when important legislation is before the Congress. ADJOURNMENT Chairman Caster, on behalf of the Board, expressed appreciation to the Airport Authority for inviting the Connnissioners to hear an update on airport activities. Chairman Caster adjourned the meeting at 9:05 a.m. Respectfully submitted, Lucie F. Harrell Clerk to the Board