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2016-04-26 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 SPECIAL MEETING, APRIL 26, 2016 PAGE 516 ASSEMBLY The New Hanover County Board of Commissioners met for a Special Meeting with the New Hanover County Airport Authority on Tuesday, April 26, 2016, at 8:00 a.m. in the Conference Room of the Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Members present: Chairman Beth Dawson; Vice-Chairman Jonathan Barfield, Jr.; Commissioner Skip Watkins; Commissioner Woody White; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; County Attorney Wanda Copley; and Clerk to the Board Teresa Elmore. New Hanover County Airport Authority members present: Chairman Jonathan S. Crane; Thomas C. Barber II; Donna Girardot; Dan Hickman; Carter T. Lambeth; John O. Perritt III; and Tom Wolfe. Wilmington International Airport staff present: Julie Wilsey, Airport Director; Gary Broughton, Deputy Director; Robert Campbell, Finance Director; Whitney Prease, Facilities Director; Carol LeTellier, Business Development Director; and Rose Davis, Executive Assistant. Chairman Dawson and Chairman Crane called their respective Boards to order for the Special Meeting reporting that the purpose of the meeting was to hear the Annual Report of the Wilmington International Airport. Airport Director Julie Wilsey and Deputy Director Gary Broughton presented the annual report highlighting the following information on the operations, maintenance, development and existing projects of the airport:  Revenue Enplanements and Deplanements:  769,809 Passengers - 2.4% Increase  47,917 Operations - 3.8% Increase  100 Based Aircraft  ILM’s One-Stop Connections:  American and Delta provide one-stop service to the world through their network:  390 destinations within a single stop from ILM each day:  211 unique stops  2 airlines to 5 hubs and 4 international gateways  1,300 seats per day  American Airlines provides majority of service:  3 LaGuardia (LGA) flights starting in June 2016  Seasonal DCA flight returns on May 7, 2016 (Weekends only)  Additional seats to hubs of Atlanta (ATL), Philadelphia (PHL) and Charlotte (CLT)  CLT and ATL are significant hubs for our business and leisure travel  Service from ILM is convenient, hometown airport with southern hospitality  Financial Highlights for Fiscal Year Ended June 30, 2015:  Operating Revenue of $8,475,500 (4.5% increase over FY14):  83% of revenues generated within terminal building:  Parking Lot = 39%  Airlines = 25.5%  Terminal = 18.5%  General Aviation = 8.5%  Business Park = 5.8%  Other = 2.6%  Unqualified audit option on all reports:  Financial Statements  Internal Control over Financial Reporting and Compliance and Other Matters  Compliance on the Major Federal Program and the Passenger Facility Charge Program  Compliance on the Major State Program  Summary of Cash Inflows:  Federal Grants = $5,920,000 – funding for infrastructure (34.6%)  State Grants = $291,500 (1.7%)  Passenger Facility Charges = $1,547,200 (9%)  Contract Facility Charges = $884,800 (5.2%)  Summary of Cash Outflows:  Capital Assets = $9,223,600 (59.8%)  Operating Expenses = $6,194,600 (40.2%)  Excluding depreciation and amortization  Debt Summary:  International Terminal (PFC) $1,182,890  Loan agreement runs through 12/1/2020  Rental Car Facility (CFC) 4,270,000  Loan agreement runs through 6/1/2029  Total Debt as of June 30, 2015 $5,452,890 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 SPECIAL MEETING, APRIL 26, 2016 PAGE 517  Economic Impact to the State = $31 billion:  Statewide Employment in the Aircraft/Aerospace Industry = 123,000 jobs  Total ILM Economic Impact = $1.6 billion:  Employment Impact = 4,910 jobs  Payroll Impact = $83,440,000  Tax Impact = $11 Million per year:  Business Sales Tax = $6,292,000  Local Property Tax = $4,425,000  Property Tax on Based Aircraft = $616,100  2015 Facility Development Projects:  Airfield Pavements and Ramps = $13 million  Facility Renovations and Structural Improvements  Storm Water Infrastructure for Runway 24  New security fencing federal requirement from 6 foot to 8 foot fence  Closed Circuit Television (CCTV) System Upgrade – state of the art technology  2015 Items of Importance:  Airport staff of 49 employees including the leadership team of 5  Current Airline Service = American and Delta (two of four possible airlines):  Extensive domestic and international networks  Continue to work in getting a third airline and flights to Chicago and Dallas with Small Community Air Service Development (SCASD) Grant  Air Service Retention:  Visited headquarters of American Airlines (largest airline) and Delta  Attended 3 conferences  Both airlines add flights for Summer Schedule:  Shows confidence in our market  Flights to Washington, DC will be Saturday only  Good performance would lead to more days  South Ramp General Aviation Tenants:  Three FBO failures on the South Ramp  Currently 25 tenants  Minimum Standards (County code) revised to ease restrictions for new business entrants  New Specialized Aviation Service Operator (SASO) to allow a competitive alternative  Bringing in new aircraft  North Ramp General Aviation Redevelopment:  Drainage improvements  Runway Improvements  Air Wilmington Hangar:  21,000 square-foot facility with door opening of 28 feet  Ability to accommodate 3 Gulfstream IVs:  Property tax revenues on $60 million jets  $3 million investment by Air Wilmington  Runway 24 Project of $5.8 million  ILM Business Park Investing in the Future:  Infrastructure in place to accommodate businesses  Favorable location  Suitable for business recruitment in-line with Garner Report  Business Park will offset cost of operation and remain profitable  New Tenants:  Battle House (electronic/laser tag game business)  SeaHawk Aviation (repair service)  Live Oak Bank (corporate office and hanger)  Business Recruitment Efforts:  10,000 square-foot flexible space  Restaurant  Aerospace  Office  Retail  Presented Economic Impact of Airports in North Carolina Report prepared by the NCDOT Division of Aviation ADDITIONAL ITEMS OF DISCUSSION  State Representative Rick Catlin continues to pursue Foreign Trade Zone certification for the area and the County should receive certification soon through resubmission of application.  Airlines moving to using regional jets in order to be more economical. ILM able to accommodate the larger jets of 90 seats in length that would provide service to more customers. Currently some smaller jets have a 90% load factor. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 SPECIAL MEETING, APRIL 26, 2016 PAGE 518  Airport continues to negotiate for better fares; however, ILM is competitive with surrounding markets with network fares, i.e. Fayetteville, Jacksonville and close to fares in Raleigh. Low cost airlines cause the lower fares of Myrtle Beach and RDU.  Low fare carrier service is needed at the airport, but Allegiant was unable to get enough business for the Orlando flights. The ILM market is not large enough for Southwest or JetBlue.  Chicago or Dallas would qualify for a $1.2 million SCASD grant business  Customs’ facility continues to receive some international flights; however, the overflight exemption allows pilots to land at most any airport for reentry, which has slowed business. Those that do land at the airport appreciate the quick turnaround and quick refuel. It is anticipated that the PGA tournament will bring in direct charters from Canada and other international locations from golfers around the world attending the tournament.  The marketing program using the ILM logo has increased brand awareness in the community. ILM’s Facebook receives a lot of hits and has received 20,000 likes. The social media for Earth Day received good responses and the UNCW team leaving ILM for the NCAA Basketball Tournament received 632,000 views.  Brunswick and New Hanover Counties continue to use the closed runway at the airport for driving course training. The departments provide some maintenance for the road course.  American Airlines flights to Washington, DC will start May 7, 2016 for Saturday and Sunday flights and should last through the summer.  SeaHawk Aviation, a new aircraft repair business with 3 mechanics, is very successful.  The revisions to the County Code’s Minimum Standards for General Aviation will help ILM be easier to do business with and more competitive with commercial businesses.  There continues to be a shortage of pilots and discussions continue with Cape Fear Community College to get flight school classes approved by the state. Other aeronautical training courses being pursued with the college are training for robotics, drones, mechanics, and seat fabrication.  It was pointed out that airports in surrounding counties are subsidized by County governments. ILM has benefitted from selling bonds through the County and from the County’s great bond rating of AAA. The airport is a great economic development tool for the area.  A press conference will be held immediately following the meeting with AT&T announcing that the ILM Business Park would be the first international airport in the United States to be certified as “AT&T Fiber Ready.”  th Airport Authority will give the Annual Report again at the Regular Board Meeting on May 16 in order for the public to hear the report on NHCTV. ADJOURNMENT Hearing no further discussion, Chairman Dawson thanked the Airport Authority members and staff for the great report and stated that the County considers ILM to be a great economic asset. She expressed appreciation to the Authority members for their commitment and stewardship of the Airport. Chairman Crane expressed appreciation for the Commissioners attending the meeting and their support of the Airport. Chairman Dawson and Chairman Crane adjourned the meeting at 8:50 a.m. Respectfully submitted, Teresa P. Elmore Clerk to the Board Please note that the above minutes are not a verbatim record of the Special Meeting of the New Hanover County Board of Commissioners.