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HomeMy WebLinkAbout2014-07-09 Minutes New Hanover County Airport Authority July 9, 2014 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING July 9, 2014 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, July 9, 2014, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chairman Barber called the meeting to order at 5:00 p.m. Airport Authority members present were Tom Barber, Chairman; John Perritt, Vice-Chairman; Jonathan Crane, Secretary; and Al Roseman. Also present were Jon Rosborough, Airport Director; Julie Wilsey, Deputy Airport Director; Jim Morton, Finance Director; Gary Broughton, Operations Director; Whitney Prease, Facilities Director; Rose Davis, Executive Assistant; Wanda Copley, New Hanover County Attorney; and Steve Bright and Amy McLane, Talbert& Bright, Inc. Also present were Joseph Pickering, Air Service Development Consultant, Mead & Hunt; Caitlen Buffkin, Marketing & Accounting Assistant; and Hal Reichardt. APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on June 4, 2014. Dr. Roseman requested it be reflected in the minutes on Page 5, in the second full paragraph, that a presentation from staff regarding a potential restaurant will be made at the August board meeting. Dr. Roseman MOVED, SECONDED by Dr. Crane, to approve the minutes of the June 4, 2014 Regular Public Meeting as amended. Upon vote, the MOTION WAS APPROVED. Mr. Lambeth was not present. Mr. Perritt abstained from the vote since he was not present at the June 4, 2014 meeting. PUBLIC COMMENTS None. SPECIAL EVENTS Mr. Broughton reported that Cirque Italia will be at the fairgrounds August 1-3. FINANCE REPORT May 2014 financials, cash report and summary of accounts. Mr. Lambeth arrived at 5:06 pm. Mr. Morton updated the Authority on property insurance coverage. Mr. Morton reported on the status of the PFC application which started in July 2012. Final th approval should be received Monday, July 12 for about $7.9 M in projects. ELECTION OF OFFICERS Chairman Barber turned the floor over to attorney Wanda Copley to preside over the election of officers. New Hanover County Airport Authority July 9, 2014 Page 2 Mrs. Copley opened the floor for nominations for the position of Chairman. Dr. Roseman nominated Dr. Crane. Dr. Crane declined the nomination. Mr. Barber nominated Mr. Perritt. Dr. Crane seconded. Upon vote, Mr. Perritt was elected Chairman. Mrs. Copley opened the floor for nominations for the position of Vice Chairman. Dr. Roseman nominated Mr. Lambeth. Mr. Barber nominated Dr. Crane. Upon vote, Dr. Crane was elected Vice Chairman. Mrs. Copley opened the floor for nominations for the position of Secretary. Mr. Perritt nominated Mr. Barber. Mr. Lambeth nominated Dr. Roseman. Dr. Roseman seconded. Upon vote, Mr. Barber was elected Secretary. Mr. Barber turned the meeting over to Chairman Perritt. Chairman Perritt recognized out-going Chairman Barber with a plaque of appreciation for his leadership for the past year. SPECIAL PRESENTATION Mr. Lambeth initiated discussion regarding the contract with Mead & Hunt and Mr. Pickering agreed to present to the Authority without a contract, with the contract being discussed later in the meeting. Mr. Pickering updated the Authority on air service developments over the past 12 months reminding the Authority that there are 4 major network carriers now: American, Delta, United and Southwest and that ILM has service with 2 of the 4 major carriers and is working with United for service. Mr. Pickering stated that due to fleet transitions with the airlines ILM will see slightly fewer frequencies on larger aircraft. Mr. P-board numbers are strong at 90% in April and May and that is an indication that the economy is recovering and people are using the service. The airlines focus on revenue gen 2002 is going in the right direction with revenues at an all time high. in the region. Mr. Pickering pointed out that low fares are a double edged sword. While Myrtle Beach has a plethora of low fare service, comparing ILM to MYR, airlines can get higher yielding traffic out of ILM for a stronger business case. Mr. Pickering reported on market performance to CLT, where load factors were down and capacity went up. Mr. Pickering indicated there are no real concerns from the airline about service from ILM to CLT. Regarding PHL performance, load factors were down but there is no real concern from the airline. From American/US Airways perspective, ILM is working well. New Hanover County Airport Authority July 9, 2014 Page 3 Regarding ATL, Mr. Pickering reported that all trends are going strong and this service is being well used with no concerns from Delta. After the fleet transition is complete, the next destination to pursue with Delta is Detroit and some of the local businesses in Wilmington would be in favor of that service. ing well and American came in Delta dropped down to weekend only Delta is pulling out of LGA so that is an opportunity for American to add a second or third round Mr. Pickering compared ILM to other like-sized markets and pointed out that ILM is well positioned relative to other airports in the region of similar size. In the southeast region as a numbers are in the black, year after year. Mr. Pickering stated that United is interested in Chicago service from ILM but the big issue right now is the fact that their regional airlines have a pilot shortage. At a recent conference, Mrs. Wilsey and Mr. Broughton had dinner with the head United planner and he encouraged them to stay in touch regarding this service. Going forward, Mr. Pickering recommended that ILM remain active since it is so competitive after all the consolidation. If we sit on the sidelines we risk being overlooked because the planning staff, the core decision makers, consists of about 6 people who get bombarded constantly by 100s of people. It is important to stay on the radar screen which is why it is so encouraging to hear United say they would like to hear from ILM on a regular basis because they are interested in talking to us more. Mr. Pickering indicated that Chicago is our highest priority, either with American or United because of the SCASDG. In response to Dr. Rose Pickering speculated that they have positioned themselves as a destination airport and they have a geographic isolation component that may make their air fares and yields higher than ILM. Chairman Perritt initiated an explanation from Mr. Pickering on how the revenues are calculated for flights that end at the hub airports and for those that make connections to other destinations from those hubs. Mr. Pickering responded that flying ILM to ATL, with ATL being the final destination, the airline gets 100% of that ticket price. For those going beyond ATL, the airline gets a prorated share. For a market like ILM to ATL the airline will say it has to be fully allocated and segment profitable. The airline takes all costs of operating the flight, the station and a percent of their overhead to each market they serve and come up with calculations to say if the market works or not and ILM is doing well to ATL. Mrs. Wilsey stated that the airline executive was also impressed that ILM had 10% of its passengers flying direct to Atlanta. She said that is very impressive for an airport in the southeast, because normally everybody is going through the ATL hub. Mr. Pickering indicated that the more local, the more profitable the segment because of full allocation. New Hanover County Airport Authority July 9, 2014 Page 4 FACILITIES Mr. Prease recommended the approval of a change order for Runway 17-35 Rehabilitation (AIP 47) with ST Wooten Corporation in the amount of $46,014.34. The additional cost is due to airline schedules which decreased overnight work hours and changes to the PAPI and REIL equipment due to FAA design standards. Chairman Perritt asked how the money was split between these issues and Mrs. McLane responded that the PAPI increase was about $6,400; the price for the REIL increase was about $700; while the bulk of the change order was the cost for the additional nighttime closures that was needed of $39,000 in round numbers. This cost is associated with 6 additional nights required because the nights were shortened substantially due to for these changes with the AIP 47 grant. Mr. Barber MOVED, SECONDED by Dr. Crane to approve the Facilities action items discussed above. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. Mr. Barber asked for an update on the south ramp remediation. Mr. Prease responded that the ection on what will be required. Mr. Prease stated there was only one area found on the south side of the existing fuel farm located at the south ramp. In response to Dr. Roseman question, Mr. Rosborough indicated that staff has attempted to communicate with the former tenant, Ken Vojta, through his attorney but has not received any communication back. Dr. Roseman initiated discussion of whether the former tenant has any liability insurance. Mr. Lambeth indicated if the tenant had coverage in effect at the time, even if it has lapsed by now, if it was in effect when the problem occurred, they would have to cover it. Dr. Crane asked Mrs. Copley if it was worth asking for reimbursement for expenses and Mrs. Copley indicated that once staff receives the final report we will. Mr. Prease stated the report should be here in the next couple of weeks. Mrs. Copley indicated we would put the former tenants and their the reports and investigate. Discussion followed about the course of action to take, timing of that action and exactly who has owned the fuel farm in the past. Dr. Roseman inquired of staff how often fuel tanks on the field are inspected and Mr. Broughton spillage, Mrs. Wilsey stated the tenants, under their SPCC, are required to inspect their own above ground tanks. Mrs. Wilsey further stated that staff inspects their sites twice a year for our SPCC but tenants are also trained and those responsibilities are in their lease. is particular site at this time, Mrs. Copley responded that the new tena liability so any responsible new tenant will request a test before taking over the property to be New Hanover County Airport Authority July 9, 2014 Page 5 sure there are no environmental problems. Mrs. Copley responded that staff started the process first in anticipation of this needing to be done. procedure that the tenant is responsible for environmental testing. If the tenant neglects to complete the testing, ILM hires an environmental consultant of record to test the site. ILM bills the tenant for all associated costs for the project. Dr. Crane MOVED, revised by Mr. Lambeth and Dr. Roseman, that the Authority authorize Mrs. Copley, upon receipt of a report that indicates the extent of the problem and who is potentially liable, to take all legal steps necessary to hold all responsible parties liable for the damages and keep the Authority notified during this process. Mr. Barber SECONDED. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. GOVERNMENT Nothing to report. MARKETING AND PUBLIC RELATIONS Mr. Morton other NC airports and the demographics of our Facebook friends. Dr. Roseman shared with the Authority that David Culp, of the Wilmington Aviation Foundation (WAF), is willing to accept donations for the Anna Pennington Memorial since the WAFis a 501(c)(3) corporation so it would be a deductible donation. Dr. Roseman also reported that Mr. Culp is willing to remove the simulator from the terminal if we need that area. Mr. Morton shared slides with the Authority showing a sketch of the proposed memorial, pictures of the potential location in the terminal and a picture of a similar display designed by Mr. Truelove. Chairman Perritt initiated discussion regarding the memorial by clarifying that it is a free standing display on the floor. Chairman Perritt stated that Anna Pennington did a lot for the aviation community but a lot of other people have too and that is a massive presentation. If it came down to wanting to create a wall of aviation fame or something down the road, just to keep in mind as we do this, that size could preclude us replicating it with other people. Dr. Crane asked if something could be done that had Anna Pennington on it but also the military history of the airport and other things that went on along the way so that it is honoring her as well as our military past. Dr. Roseman reminded the Authority that this was already voted on and the guy is working on the project. Chairman Perritt indicated he was not against the project, he just thinks the size and the scope of the project is quite imposing. Dr. Roseman pointed out that this would be something that we could add on additional sections. Chairman Perritt said he would love to see it be a bit more concise. New Hanover County Airport Authority July 9, 2014 Page 6 Dr. Roseman reported to the Authority that Martha Harlan, from New Hanover Regional Medical Center, has been volunteering on the Marketing committee and encouraged Authority members to show their appreciation of her volunteerism when they see her. PLANNING & DEVELOPMENT Mr. Morton updated the Authority on the status of building leases stating that the volleyball group is moving out of the hangar and another tenant is pending. On the Conway building, there st is a Nicholas Sparks production in there until September 1 and he is working with another group with interest in leasing the building. Regarding AAI, Mr. Morton is tentatively talking to 2 groups about leasing parts of that building. Regarding the Foreign Trade Zone, Mr. Morton reported that we have submitted all information that we need to submit for the application which is a master application from the state. The state will have a large territory for the FTZ and ILM will be a magnet site underneath that overall the week and should be submitted by the end of the week. It takes 6-8 months for approval. Mr. Morton shared a slide presentation with the Authority introducing Jeremy Phillips of Environments Unlimited Commercial Real Estate and a proposed marketing strategy to promote the Aerospace and Industrial District more effectively. Mr. Morton also shared a proposed commission fee schedule for service district parcels. Dr. Roseman initiated discussion regarding the commission fee schedule and what the standard is in North Carolina. Mr. Morton indicated he would be glad to shop it out and see. Mr. Morton stated he presented this tonight and if everyone felt good about it, we could move forward, if not, we can go back and try to come back with another propos what other airports have done that have brought in industry and Mr. Morton responded that in Kinston, 300 acres of land was given to Spirit and the construction of the building was funded by the Golden Leaf Foundation. good point about limiting our exposure. How can ILM be protected? Discussion followed about how to do that. Chairman Perritt summed up the discussions indicating the Authority would like Mr. Morton to further develop this; research on negotiability and limiting exposure and come back with a formal proposal in August. OPERATIONS REPORT Mr. Broughton updated the Authority on the impacts from Hurricane Arthur. The National Weather Service held webinars regularly to keep staff and tenants up-to-date on the storm and all tenants are invited to attend in the conference room which allows everyone to plan their day and try to minimize the impact on their operation. The airlines ran late in the day on Wednesday. The storm hit Thursday and Thursday night they were not able to get their overnight aircraft into ILM. ILM had a 2 day cancellation of 12 flights with 854 impacted seats so comparatively speaking to ot New Hanover County Airport Authority July 9, 2014 Page 7 Using charts for illustration, Mr. Broughton reported total passengers handled, seats available and customs traffic for June 2014. Mr. Broughton indicated that the decrea seats having more capacity and more flights which is why we are seeing a reduction and looking forward, we should be seeing improvement with larger aircraft coming in and giving us more seating capacity. month of June was up 46.6% and our GA traffic was up 3.2% so we are seeing some positive movement in GA and military traffic. Mr. Rosborough advised the Authority that the Air Service Development Focus Group would be meeting the following morning with 9 key business leaders attending to meet with staff and Mr. Pickering. Mr. Rosborough recommended the approval of a new contract for 1 year, July 1, 2014 June 30, 2015 with Mead & Hunt in the amount of $68,450. Dr. Roseman asked for clarification of the amount of the contract and expenses and Mr. Rosborough confirmed the contract is for $68,450 and there are estimates of the expenses in the contract. Mr. Rosborough confirmed that Mead & Hunt would not make any more than $68,450 unless ILM requests they do additional items. Mr. Barber MOVED to approve the contract with Mead & Hunt for another year, SECONDED by Dr. Crane. Discussion followed calling for positive results over the next 12 months and on details of the actual contract. Chairman Perritt encouraged staff in the future to include contracts in the agenda for review before voting on them. Dr. Roseman indicated he was for the contract but asked that the Authority be informed when there are going to be additional expenses. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. UNFINISHED BUSINESS None. NEW BUSINESS Dr. Roseman mentioned the Bonanza Fly-In in Wilmington on the second week in September and possibly doing something, like a BBQ, for them. There are 30-40 aircraft anticipated and Dr. Roseman hopes Authority members will attend some of the events. Dr. Roseman will provide a schedule of events as that gets closer. CLOSED SESSION Chairman Perritt recommended the Authority enter into closed session to consider personnel matters pursuant to G.S. §143-318.11(a)(6) and called for a motion. Mr. Barber MOVED, SECONDED by Mr. Lambeth to go into closed session to consider personnel matters. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. The Authority went into closed session at 6:55 pm. New Hanover County Airport Authority July 9, 2014 Page 8 Everyone departed the Conference Room with the exception of the Authority members and Mrs. Copley. OPEN SESSION Chairman Perritt called for a motion to return to open session. Dr. Roseman MOVED, SECONDED by Dr. Crane. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. The Authority returned to open session at 7:45 pm. There was no action taken during the closed session. ADJOURNMENT There being no further business to come before the Board, Dr. Roseman MOVED, SECONDED by Mr. Lambeth to adjourn. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. Chairman Perritt adjourned the meeting at 7:47 p.m. Prepared by: Respectfully Submitted: Rose M. Davis _______________________________ Thomas C. Barber, II, Secretary Date of Approval: August 6, 2014