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2019-06-06 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JUNE 6, 2019 PAGE 307 ASSEMBLY The New Hanover County Board of Commissioners met for a Special Meeting with the New Hanover County Airport Authority on Thursday, June 6, 2019, at 8:15 a.m. in the Conference Room of the Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Members present: Chairman Jonathan Barfield, Jr.; Vice-Chairwoman Julia Olson-Boseman; Commissioner Patricia Kusek; and Commissioner Rob Zapple. Commissioner Woody White was absent. Staff present: County Manager Chris Coudriet; County Attorney Wanda Copley; and Clerk to the Board Kymberleigh G. Crowell. New Hanover County Airport Authority members present: Chair Donna Girardot; Thomas C. Barber, II; Carter Lambeth; Dan Hickman; Harry Stovall, III; Frank Spruill Thompson; W. Lee Williams; and Thomas Wolfe. Wilmington International Airport staff present: Julie Wilsey, Airport Director; Gary Broughton, Deputy Director; Robert Campbell, Finance Director; Granseur Dick, Planning and Development; Carol LeTellier, Business Development Director; Gary Taylor, Operations Manager; Tammy Kiel, Facilities Manager; and Rose Davis, Executive Assistant. Chairman Barfield and Chair Girardot called their respective Boards to order for the Special Meeting reporting that the purpose of the meeting is to hear the Annual Report of the Wilmington International Airport. Chair Girardot stated that the Wilmington International Airport (ILM) is self-sufficient, it does not come to the County to be included in the budget, and produces revenue for the taxpayers. It has been another good year, the passenger load has been increased, there are larger and increased flights out of the airport, destinations have increased, and the operations in the business parks have increased. A request has been made of the North Carolina General Assembly again this year to provide $75 million in funding for commercial budgets in both House and Senate budgets and has moved to conference committee. What is being considered is recurring funding. In a two-year funding cycle, ILM would receive approximately $5.2 million dollars each year. At the federal level, the House Appropriations Committee has passed its FY2020 Transportation HUD Appropriations Budget. It would provide full funding for the airport improvement program (AIP) at $3.35 billion and an extra $500 million in general fund revenues specifically for AIP discretionary. 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:  2018 Economic Impact Study of Wilmington International Airport (ILM):  Business revenue: $1.8 billion  Jobs supported: 12,960  Personal income: $456 million  State and local taxes: $66.8 million  Operations (annual): 57,830  Population within 30 minutes of the airport: 273,500  Based aircraft: 100  2019 Spring/Summer Flights:  A record number of destinations, seats, and opportunities to travel:  Three network airlines provide 310 destinations worldwide with one stop  Eight non-stop destinations; six are international gateways  Nine flights in the morning fleet launch (April - June)  Larger aircraft scheduled for CLT, ATL = more seats and leg room  Delta’s summer non-stop to LGA returns for the third year  American’s summer non-stop to ORD returns for the second year  New markets (Dallas, Chicago, and Washington, DC) continue to mature  Finance Activity versus Airport Activity:  Net operation income: $4,325,377 (increase of 16.6% versus 2017)  Operating revenue: $11,422,590 (increase of 11.8% versus 2017)  Operating expense: $7,097,213 (increase of 9.1% versus 2017)  Key Drivers: 2018 2017 Change Total Passengers Enplaned +11.8% 934,058 836,589 11.7% Increase Deplaned +11.5% Parking Revenue $4,213,975 $3,896,766 8.1% Increase Commission Revenue $1,881,703 $1,451,647 29.6% Increase  Phased Growth and Investments:  Terminal Expansion Project: $60 million:  Contract 1 (complete): NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JUNE 6, 2019 PAGE 308  $1.7 million in construction by Monteith  Funds – state allocations  Temporary bag conveyors  Completed March 2019  Contract 2 (under construction):  $9.3 million construction by Monteith  Funds – state allocations and local  C2: Outbound bag rooms and expanded ticket lobby/airline offices  Notice to Proceed: April 1, 2019 with completion June 2020  Contract 3 (upcoming):  $40 million construction estimate  Funds – FAA, state, and airport reserves  Approximately 80,000 square feet of additional terminal space including:  Expanded TSA checkpoint area; expanded gate area; new boarding bridges; expanded concessions areas; expanded baggage claim; and new airline operations areas  Bidding: August 6, 2019  Notice to Proceed: November 1, 2019 with completion November 2022  Other Active Construction Projects:  North General Aviation (GA) ramp development:  $1.8 million project – Wells Bros.  Funds – NC State Transportation Improvement Project (STIP) grant  Realign Flight Line Drive and Anna Pennington Drive, utilities, new GA aircraft wash rack  Completing September 2019  New terminal roof:  $2.3 million base bid by Monteith  Funds – FEMA, passenger facility charge  New terminal roof membrane and flashing, new “curtain wall” windows for atrium and upper level  Estimated notice to proceed June 2019 to October 2019  Hurricane Florence rehab:  $640,000 Project by Gregory Construction Company  Funds – FEMA and insurance  Repair walls, ceilings, and floors to pre-storm condition  Notice to proceed June 10, 2019 to October 2019  General Aviation Successes:  Modern Aviation completed first year at ILM:  Air Wilmington was first location  Two others US locations added  All American Aviation Services:  New tenant in flex building  Training simulator arrived: March 2019  141 certified flight school: April  Hurricane Florence Activity/Impacts/Recovery:  Hurricane Florence Damages were $2,242,844:  Other structures: $133,286 with a repair timeline of December 2019  Drainage mitigation: $750,000 with a repair timeline of mid-2020 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JUNE 6, 2019 PAGE 309  Perimeter fence: $93,887 with repairs completed  Tenant buildings: $249,423 with a repair timeline of August 2019  Main terminal: $1,016,248 with a repair timeline of October 2019  Reimbursements to date: $259,491  New Tenants and Businesses:  Flex building is fully leased with the last two spaces working on interior up fit:  rd Scratch on 23; Toshiba; Enterprise; Shaw Real Estate, LLC; KBT Realty; All America Aviation Services; and Superior Mechanical Incorporated  Annual revenue for FY2020 will be $164,826.93  Two new landside businesses since last year: Few Moves Moving Company and Fat Cat Pottery  New revenue from the two landside businesses will be $136,770.00  Grand total in revenue per year: $301,596.93  ILM Business Park:  Target: Airport Hotel  Concepts: service station and convenience store; 134,260 square foot building that is 36-foot clear height, 225-feet building depth, and 54-foot x 40-foot column spacing  Leases beyond 30 years will need extension of airport lease with the county.  ILMs’ Front Page News/Events:  Increased media exposure (July 1, 2018-June 30, 2019 with reports pulled 5/22/19):  Ad value (news): $3.91 million  Potential reach (news): 423.14 million  Total media exposure (news and social): 4.1 thousand which is an increase by 173%  Key Media Coverage 2018/2019:  Taking Flight: record passengers and parking; strong revenue; Part 141 flight school; new tenants; and terminal expansion GENERAL DISCUSSION In response to questions about future plans for jet fuel supply for events such as a hurricane, Director Wilsey stated that she has been working Chief Strategy Officer Beth Schrader on long-term solutions. There is no dedicated fuel pipeline as there is at the Raleigh-Durham (RDU) airport. Fuel has to be trucked in. She does not think it is feasible to have a pipeline and there is uncertainty that the port can dedicate a tank for jet “A” fuel. One of the long term solutions would be to put a larger jet “A” fuel farm on the airport. This would allow additional fuel supplies to be stored at the airport in preparation for a storm. For this year, extra fuel trucks will be prepositioned. There are also other strategic plans being worked on such as handling generators. In response to Board questions, Finance Director Campbell stated that the ILM staff is working closely with FEMA. With the exception of the main terminal project and drainage mitigation project, most of the other projects are in process or have been submitted to FEMA for reimbursement. Approximately $259,000 has been reimbursed to date, but there is still a few hundred thousand dollars that has not been released as the information is still under FEMA review. With the exception of the two projects he just mentioned, the hope is to have the other reimbursements in the new few months. The drainage mitigation project will entail an environmental study and it will be at least a year out before the project is completed. Then reimbursement can be sought. The main terminal project just started this month, it will take a few months to complete, and once submitted will take a few months to receive reimbursement. FEMA is confident that it will cover what the insurance does not. FEMA guidance has to be followed which is also part of the delay. There is $4 million in operational reserves. Regarding businesses having to do a land-lease, Director Wilsey stated that depending on who you speak with, some companies do push back on a land-lease option. However, there is good interest in an airport hotel with a land-lease option. In response to Board questions, Director Wilsey stated that Uber, Lyft, and local cabs are all providing service at the airport. Local cabs pay a quarterly permit fee. Uber and Lyft have signed contracts with ILM and pay per pickup. Across the country, airports are seeing a decline in parking due to Uber and Lyft, but it has not been seen NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JUNE 6, 2019 PAGE 310 at ILM. Parking is still growing at ILM. There is a master plan in process about parking and it will take a full year to finish. The plan will help guide ILM on how to address being able to provide enough parking. A brief discussion was held about ILM being considered a business airport. Efforts are being made to expand into the leisure market. Director Wilsey stated that ILM has an 83% to 84% load factor for airport capacity, so there is room for growth. Myrtle Beach airport has over two million passengers and is a different market in comparison to ILM. It is a leisure market rather than a business market like ILM. ADJOURNMENT Hearing no further discussion, Chairman Barfield thanked the Airport Authority members and staff for the report. Chairman Barfield and Chair Girardot adjourned the meeting at 8:59 a.m. Respectfully submitted, Kymberleigh G. Crowell 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.