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1999-03-10 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF SPECIAL MEETING WITH AIRPORT AUTHORITYPAGE 130 MARCH 10, 1999 ASSEMBLY The New Hanover County Board of Commissioners held a Special Meeting with the Airport Authority on Wednesday, March 10, 1999, at 7:30 a.m. in the Conference Room of the Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Members present were: Commissioner Buzz Birzenieks; Commissioner Ted Davis, Jr.; Commissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster; Deputy County Manager, Andrew J. Atkinson; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell. Authority Members presented were: Chairman Parks L. Griffin; John M. Coble; Carter Tate Lambeth; E. L. Mathews, Jr.; Irvin A. Roseman, DDS; Airport Director, Will Plentl; and Janie James, Executive Administrative Assistant. Chairman Caster and Chairman Griffin called their respective boards to order. Chairman Griffin welcomed the Board of County Commissioners and he commented on the importance of continuing the good working relationship between the Authority and the Board. He requested Airport Director, Will Plentl, to present a brief report on the activities of the Airport. Director Plentl presented the following summary of activities at the Wilmington International Airport. International Activity Aircraft cleared in January, 1999- 173 28.1% over January 1998 Aircraft cleared year to date- 173 28.1% over YTD 1998 Persons cleared in January, 1999-1,077 22.0% over January 1998 Persons cleared year to date-1,077 22.0% over YTD Enplaned Passenger Activity - January US Airways-9,7524.8% under January 1998 Passengers year to date-9,75248% under YTD 1998 ASA-3,25410.6% over January 1998 Passengers year to date3,25410.6% over YTD 1998 United Express-1,154 Passengers year to date-1,154 Midway/Corporate- 505117.7% over January 1998 Passengers year to date- 505117.7% over YTD 1998 Total Revenue Passenger- 14,6659.3% over January 1998 Passengers year to date- 14,6659.3% over YTD 1998 Total Non-Revenue Passengers1,4542.5% over January 198 Passengers year to date-1,4542.5% over YTD 1998 Total All Passengers- 16,1198.6% over January 1998 Passengers year to date- 16,1198.6% over YTD 1998 Director Plentl reported the percentages of increase indicate the increased activity at the Airport during the past year. The large percentage increase in the international activity is NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF SPECIAL MEETING WITH AIRPORT AUTHORITYPAGE 131 MARCH 10, 1999 associated with federal inspection services. The increased percentage in total passengers is positive and significant to the Airport. In reviewing the flight schedule, it is important to note the increase in daily flights. Before the start of 1998, there were 19 flights per day and as of this date there are 25 flights per day. This increase is the result of Midway/Corporate adding an additional flight, U. S. Airways adding an additional flight, bringing in United Express and Midway/Corporate. As indicated on the flight schedule, the frequency of flights differ on weekdays and Saturdays and Sundays. Normally, travel is light on Saturdays with more travel during weekdays and Sundays. The following statement was presented showing funds available for projects: Uncommitted Cash$1,577,833 Operations Reserve 600,000 Maintenance & Development Reserve 12/98 604,695 $2,782,528 FY 1999 - Projected Federal and State Funds Available PFC - Annual Receipts (estimated for 4 months)$ 209,236 N. C. State Grant (FY 1998-99) 400,000 FAA Grants - Entitlement (FY 1999 697,985 FAA Grants - Discretionary (FY 1999) ? _________ Total Available Funds FY 1999$1, 277,221 FY 2000 PFC - Annual Estimate$ 627,710 N. C. Sate Grant (FY 2000) 200,000 FAA Grants (Full year FY 2000) 887,200 Budget Development Funds (FY 2000)? __________ Total Available FY 200 (6/30/00)$1,714,910 Funds Available for Projects Through 6/30/00$5,774,659 Annualized Future Funds for Project Financing$1,714,910 Director Plentl advised that the level of funding for FAA entitlements shown at $667,985 was not the normal amount of available funding. This program will expire March 31, 1999; therefore, funding was provided for only three quarters of the year. If the program is renewed, the Airport could receive more money. At this time, there is no way to determine the amount of discretionary funding that will be received by the Airport. It is felt that by the end of the month the Airport will receive a $2,000,000 grant to redo the grading structure under pavements. Commissioner Davis commented on the Operations Reserve of $600,000, and he asked how many months could the Airport operate on this reserve. Director Plentl responded the Airport could operate for a period of three to four months. Commissioner Birzenieks requested a figure on the amount of revenue generated from parking fees? Director Plentl responded that parking was a significant source of revenue. He said that approximately $750,000 was generated in parking revenue during the past year. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF SPECIAL MEETING WITH AIRPORT AUTHORITYPAGE 132 MARCH 10, 1999 Vice-Chairman Greer commented on the $2.72 Passenger Facility Charge (PFC) and he asked what happens to the remaining 28 cents, and will the Airport be penalized for charging the fee through a reduction in entitlement funds? Director Plentl responded the airlines receive a fee for collecting the PFC. After reviewing the averages of the categories excluded, it was decided to use a $2.72 PFC figure in budget projections instead of the full $3.00. With reference to being penalized for charging the PFC, a medium or large hub would have to relinquish some entitlement funding. Since the Wilmington International Airport is a small hub, the PFC can be collected and the full entitlement funding will be received. Vice-Chairman Greer reported on reading that Congress would probably increase the $3.00 PFC to $6.00, and he noted that enactment of this legislation would triple the amount of money collected in previous years. Director Plentl spoke in support of the legislation and stated that Congressman Shuster had introduced HR 1000 which proposes an increase in the PFC to $6.00. Also, there is a provision in the bill which will triple the entitlement received at the Airport. If this bill is enacted, the Airport will receive approximately $2,500,000 per year in entitlement and $1,600,000 from the $6.00 PFC. This additional funding will enable the Airport to meet its capital needs. Director Plentl presented the following schedule for the Airport Terminal renovation during FY 1999-2001: Phase I$ 742,205 Roof Replacement Installation of another Baggage Claim Area Carpet Replacement Program for the Terminal Phase II$1,566,250 Concourse Expansion Conference Center Lobby Phase III$1,566,250 Ticketing Area Rental Car Area Rental Car parking Expansion Valet Parking Area TOTAL$3,874,705 Director Plentl presented the proposed Capital Improvement Program for FY 1999 - FY 2005 was presented. He advised that renovating the Airport Terminal would be the primary project for FY 1999. One issue that must be addressed by the Airport Authority is whether to switch the primary runway from 17/35 to 6/24. Runway 17/35 has restrictions in terms of expansion because of the Smith Creek at one end and extensive development at the other end. If the primary runway is switched to 6/24, this process will involve land acquisition, extension of the runway, and installing instrumentation at both ends of 6/24. The project will cost approximately $12,000,000 phased in over a period of time. Currently, the Airport has only one instrument landing system, which is not sufficient for an airport of this size. Director Plentl presented the 1997-98 Activity Report of the Wilmington International Airport. He spoke on being concerned about a decrease in cargo, but stated after discussing this matter with an UPS representative, it was found that this agency was carrying its cargo by truck to Raleigh instead of by air. This explained the decrease in the cargo figures. He also reported the NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF SPECIAL MEETING WITH AIRPORT AUTHORITYPAGE 133 MARCH 10, 1999 Aviation Division of the N. C. Department of Transportation commissioned a survey of air passenger travel at each of the 14 commercial airports in North Carolina, and he presented a draft of the 1997- 98 Air Passenger Survey conducted on the Wilmington International Airport during the period of October 1997 through September 1998. He commented on the following points of interests and he encouraged the County Commissioners to read the report: (1)Even though Wilmington is known as a vacation area, 55% of air travel is related to business trips. Approximately 24% is for visiting family or friends, and 11.4% is for recreation/vacation. This is why the fare structure is designed for business travel. (2)Approximately 58.2% of air travel in Wilmington consists of 1-person groups, and 27.5% consists of 2-person groups. (3)The median household income of passengers using the Wilmington International Airport is $81,980, which is substantially more than the national median family income of $43,000. More than 7.5% of Wilmington travelers have household incomes over $140,000. (4)More than 50% of persons using the Wilmington International Airport were dropped off and did not use Airport parking lots. Of the 97% who used parking lots, approximately 3% have their cars driven away. (5)The major concerns about the Wilmington International Airport were flight frequency (58.8%), lack of restaurants (13.5%) and airfares (10.8%). Comments about waiting areas and baggage claim accounted for about 8.6% of complaints. In concluding his presentation, Director Plentl informed the Board that two FAA grants should be received before the end of March and he stated once the grant documents arrive, he would be contacting the County Manager to arrange for Board approval. Chairman Griffin requested Director Plentl to report on the Y2K status of the Airport. Director Plentl reported the security system cannot be dated beyond 1999, and some maintenance systems in the buildings are not in compliance. The security system will be upgraded, and staff is trying to determine if the maintenance system should be fixed for a period of 3 to 4 years or upgraded into the 21st century. Also, individual computers and software packages will be impacted and need to be upgraded. The most disturbing issue to the traveling public will be the flight information display systems showing schedules. There are major problems with these systems, and they will be replaced. Commissioner Birzenieks asked if any notification had been received on a direct flight from Wilmington to New York. Director Plentl reported that nothing new had occurred; however, the carrier continues to express an interest in this flight. It appears the carrier is busy with other issues at this time. Also, there is interest from a carrier with more service to the mid-west. In order to attract carriers, the Airport should switch from turbo-props to regional jets. Once this occurs, the Airport will have all jet service throughout the air system. Currently, the Airport provides good service to four hubs, which is excellent for an airport of our size. Vice-Chairman Greer asked if personnel in Customs was being spread thin with the increase in international travel and the State Ports. Director Plentl responded that employees in Customs were being spread thin because of the increased traffic; however, they are pleased with the business. Customs has requested the Airport to provide a more user friendly facility. Staff is in the process of trying to comply and has placed rocking chairs in the facility. Once the facility is upgraded, it will be marketed as one of the nicest Customs facilities in the country. Presently, many persons using Customs want information about NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27 MINUTES OF SPECIAL MEETING WITH AIRPORT AUTHORITYPAGE 134 MARCH 10, 1999 Wilmington and the vicinity. After discussion with the Chamber of Commerce and Convention and Visitors Bureau, a business booth will be placed in the Customs facility with videos on the community and information about attractions and the local economy. Discussion was held on the upcoming air show. Mr. John Coble, Chairman of the aviation event, reported the Carolinas Air Expo would be held on September 24, 25, and 26, 1999. He advised that the scope had changed from an air show to an aviation event. On Friday, September 24, 1999, there will be a significant display of aircraft presence at the Airport and a large event for the sponsors and aviators will be held on Friday night. There will be public music concert on the field and a fire works display. Also, a truck with three jet engines will provide rides at 285 miles per hour. Chairman Caster has already volunteered to participate. On Saturday, September 25, 1999, a great air show will be held. This air show has been so impressive that the International Conference of Air Shows Board of Directors has planned to hold its board meeting in Wilmington on this weekend. There will be antique cars and NASCAR events. Since more people attend NASCAR events than any other event, the air show will have a NASCAR presence. The Blue Angles will be here on Friday and Saturday. Tickets will be sold to the public to attend a dinner at the movie studio to meet the Blue Angles. The Carolina Air Tours will be in town, and there will air acrobatic shows with the greatest air acrobatics in the world. In closing, Mr. Coble informed the Board that VIP packages will be prepared for the County Commissioners to attend the events. He also informed the Board that Airport Director Plentl is on the Centennial Committee to hold the Year 2003 event at the Wilmington International Airport. Commissioner Birzenieks inquired as to how the facility would look in 10 years. Chairman Griffin responded that a Master Plan was in place through the year 2015. He stated a major issue was land acquisition to secure protection for the Airport. With the escalating cost of land, this issue needs to be addressed. Director Plentl agreed with Chairman Griffin and stated that land acquisition is of significant importance in order to secure space for needed facilities. It is unlikely the Airport will become a major hub, but focus will be placed on customer needs, and the Airport will continue to grow. Chairman Griffin expressed appreciation to the Board of County Commissioners for attending the meeting. Chairman Caster, on behalf of the Board, expressed appreciation to the Airport Authority and Director Plentl for the informative briefing. Chairman Caster and Chairman Griffin adjourned their respective boards at 8:45 a.m. Respectfully submitted, Lucie F. Harrell Clerk to the Board