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2012-08-01 Regular Meeting New Hanover County Airport Authority August 1, 2012 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING August 1,2012 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, August 1, 2012, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chairman Kays called the meeting to order at 4:05 p.m. Airport Authority members present were Charles Kays, Chairman; Tom Barber, Vice-Chairman; John Lennon, Secretary; Carter Lambeth; 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; Sandra Routh, Executive Assistant; Wanda Copley, New Hanover County Attorney; Richard Masters, The Masters Group, Inc.; and Steve Bright and Amy McLane, Talbert & Bright, Inc. APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on July 11, 2012. Dr. Roseman requested that the members of the Nominating Committee be listed on the first page where then Chairman Lennon announced the proposed slate of officers for Fiscal Year 2013. There was a brief discussion about the paragraph on page 4 under the "Government" section in reference to the status of the NC Bill about Airport Authority members serving at the will of the New Hanover County Board of Commissioners. Mr. Lennon MOVED, SECONDED by Dr. Roseman, to approve the minutes of the July 11, 2012 Regular Public Meeting as amended. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. ITEMS BY THE PUBLIC There were no comments from the public. SPECIAL EVENTS There were no special events to discuss at this meeting. FINANCE REPORT Mr. Morton reviewed actual revenue and expenses for the month of June in relation to the year- to-date budget, commenting that this was actually a fiscal year-end report. Mr. Morton stated that ILM had a successful year. Mr. Morton reviewed ILM's cash report for the month of June. Mr. Morton reviewed ILM's summary of accounts for the month of June. Mr. Morton discussed the increased revenue from rental car sales and associated the increase to bringing Enterprise on board at ILM. In follow-up to Authority members' questions and concerns, Mr. Morton discussed a CFC cash flow analysis in relation to debt repayment to construct a Rental Car Service Center. He New Hanover County Airport Authority August 1, 2012 Page 2 concluded that this debt service plan was very conservative. He also discussed the pros and cons of ILM self-financing a loan to construct the facility. In response to Dr. Roseman's question from a previous meeting, Mr. Morton discussed insurance paid by ILM on buildings relinquished by Air Wilmington at the end of their lease in 2005. Mr. Morton responded to Dr. Roseman's inquiries in reference to the interest/credits received on ILM's General Operating Account and other interest-bearing accounts. FACILITIES Mrs. Wilsey discussed several action items for Authority members' approval, including: 1. A contract with Four Seasons in the not-to-exceed amount of$25,500 to demolish two houses and four outbuildings. The properties were purchased using PFC funds, making the demolition PFC eligible. 2. A contract with S.T. Wooten in the amount of$3,731,556.44 for the Runway 17 Extension Project. The contract would be approved on the condition of receipt of ILM's FAA AIP grant. 3. Authorization for Authority Chairman to accept any and all FAA grants offered before the next Airport Authority meeting in September 2012. 4. A Work Authorization in the amount of$41,700 for Paramounte Engineering to design a Secondary Water System. Mr. Lambeth MOVED, SECONDED by Dr. Roseman, to approve the Facilities' action items discussed above. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. GOVERNMENT Mr. Rosborough reported the NC Legislature allowed the Asheville Regional Airport to change from a city government commission to an independent airport authority under NC General Statutes. similar to ILM. Mr. Rosborough commented that Congress approved a Continuing Resolution to continue government operations for six months through the upcoming election process. MARKETING AND PUBLIC RELATIONS Mr. Morton reported that ILM's marketing continues to focus on Delta's LGA flight, which has reported an 86% load factor. Dr. Roseman suggested more signage was needed at ILM's Information Desk. A discussion ensued about the duties of volunteers, culminating with Chairman Kays' suggestion that young people, i.e., boy/girl scouts, high school students, etc., be considered for volunteer opportunities at ILM. New Hanover County Airport Authority August 1, 2012 Page 3 Secretary Lennon commented that he had received several complaints concerning the scheduled times of Delta's new LGA flight. Mr. Rosborough responded that he had received similar complaints about the hour difference from US Airways' first departing morning flight. He stated that staff was working with Delta on this issue. PLANNING & DEVELOPMENT Mr. Morton updated Authority members in reference to a proposed flex-space building for ILM's Business Park, stating that all the utilities were in place, except for storm water treatment and retention. He commented that Paramounte Engineering had a tentative proposal for DENR to review before moving forward with a design for storm water permitting. In response to Dr. Roseman's question, Mr. Morton stated pre-security food service would be available by mid-August 2012. There was a discussion among Authority members and staff about the food service permitting process and the selection of food/drinks that will be available to customers at the Tailwind Express pre-security kiosk. OPERATIONS REPORT Using charts for illustration, Mr. Broughton reported ILM's airport statistics for the month of July, including fuel price comparisons, fuel flowage amounts, airfare comparisons with MYR and RDU, and total passengers handled. Because official numbers were not yet available, Mr. Broughton estimated the total number of passengers handled in July was 75,068, which would be 5.5% less than July 2011; and the total passengers handled year-to-date was 470,809, which would be 3.5% more than the year-to-date statistics for July 2011. ILM's load factor for July 2012 was 89.2%. Mr. Broughton reported ILM's international traffic using US Customs statistics for July: 77 aircraft were cleared, which was 14.4% less than July 2011; and 434 persons were cleared, which was 4.2% less than July 2011. Year-to-date, US Customs has cleared 1,116 aircraft, which was 12% less than 2011, and 6,168 persons, which is 14.2% less than 2011. In response to Dr. Roseman's question, Mr. Morton responded that ILM's revenue derived from US Customs facility ramp fees collected through the FBOs was approximately $106,000. Mr. Broughton reported the total number of seats available during the month of July was 42,068, down 3.3% from July 2011, or approximately 1,042 seats. This decrease was primarily due to the loss of American Airlines' Chicago flight. There was a brief discussion between Mr. Lambeth and Mr. Masters concerning American Airlines returning to ILM after its bankruptcy reorganization. Dr. Roseman initiated a discussion among Authority members and staff about the collection of US Customs facility ramp fees in relation to General Aviation traffic at ILM, suggesting that lowering or eliminating the fee would encourage more traffic. Mr. Morton stated that the ramp fees were used for the operation and maintenance of the US Customs facility. ILM seeks only to New Hanover County Airport Authority August 1, 2012 Page 4 break even on the operating costs of the US Customs facility and receives no local, state or federal government subsidization. Upon conclusion of the discussion, the consensus was that fuel costs and the current economy were the root causes for declining General Aviation traffic, not only at ILM, but all over the United States. Mr. Broughton reported that Allegiant Air would be suspending their flight operations, as they have done every year, from August 11th through October 4th. DIRECTOR'S REPORT Mr. Rosborough turned the floor over to Mr. Masters to give his quarterly air service report to Authority members. Mr. Masters reported that this past quarter was a busy one, trying to fill the void left by American Airlines. He and Mr. Rosborough met with 7 different airlines and made 13 different presentations, which includes ILM's existing carriers—US Airways, Delta and Allegiant Air. Mr. Masters described his strategies to promote enhanced/additional air service at ILM with its existing carriers, as well as new carriers. He reminded Authority members that even though these air carriers will not make any commitments upon meeting with them, at least they have the data to make an informed decision about adding or enhancing existing air service at ILM when they are ready to do so. Mr. Masters discussed air fares, commenting that the air fares offered by the existing carriers at ILM are very reasonable. He summarized by stating his priorities were to replace ILM's Chicago service, to acquire daily Washington, DC service, and to establish South Florida service. Mr. Rosborough followed-up by stating that in promoting new air service, he and Mr. Masters always approach ILM's existing air carriers first in regard to a target destination, and if they express no interest, then he and Mr. Masters go to new air carriers to promote that destination. He reported that Comair, which is a Delta Connection carrier, was going out of business, and their regional jets will be melted down or used for parts over the next four years. Mr. Rosborough explained the balance that must be maintained between airfare costs and sustaining ILM's air service, commenting that ILM's primary objective is to maintain its existing service. He stated that a lot of factors go into maintaining that balance. He and Mr. Masters reported that Delta had purchased additional aircraft, including 88 Boeing 717s, a 120-passenger, two-class service, which will eventually be used at ILM. Mr. Rosborough discussed the possible merger between US Airways and American Airlines, commenting this would be a favorable move for ILM. In response to Dr. Roseman's suggestion to promote Washington Dulles International (IAD) air service, Mr. Masters stated that he and Mr. Rosborough had looked into promoting IAD service in the past, and they would have no problem if ILM were to get Dulles service. However, Reagan National (DCA) was generally considered more accessible for business travelers and passengers visiting US government offices. Mr. Rosborough reported on the ILM Arrivals Lounge and new seating areas inside the terminal for ILM's "meeters and greeters." New Hanover County Airport Authority August 1, 2012 Page 5 Mr. Rosborough discussed the status of the update of the Aviation Chapter 8 of the New Hanover County Code, commenting that Commissioner Thompson had some questions and due to schedule conflicts, the approval process was delayed. There was a brief discussion about Commissioner Thompson's questions and the changes to the code. Secretary Lennon suggested the Authority extend a formal invitation to Commissioner Thompson to attend the September meeting to pose any questions he would like. Chairman Kays asked Mr. Broughton to meet with Commissioner Thompson to answer his questions. Chairman Kays inquired about the status of the FAA-ADO transfer from Atlanta to Memphis. Mr. Rosborough responded the transfer was going to happen. However, there was an initiative moving forward to keep North Carolina's commercial airports with the Atlanta ADO and to have the General Aviation airports move to the Memphis ADO, and he had been asked to lead this initiative. There was a discussion between Authority members and Mr. Rosborough. Authority members supported Mr. Rosborough in moving forward with this strategy. UNFINISHED BUSINESS There was no unfinished business for discussion at this meeting. NEW BUSINESS During the course of the meeting, Chairman Kays announced the following committee assignments: Finance—Mr. Lambeth Facilities — Vice-Chairman Barber Government—Chairman Kays Marketing—Dr. Roseman Planning and Development—Secretary Lennon 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 Kays adjourned the meeting at 5:25 p.m. Prepared by: Respectfully Submitted: Sandra Routh John D. Lennon, Secretary