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2012-10-03 Regular Meeting New Hanover County Airport Authority October 3, 2012 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING October 3,2012 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, October 3, 2012, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chaiiman Kays called the meeting to order at 4:04 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; and Steve Bright and Amy McLane, Talbert & Bright, Inc. Also present for introduction were new staff members Kenny Smith, Operations Specialist; Caitlen White, Marketing/Accounting Assistant; Jacquelyn Yellin-Mungo, Accounting Assistant; and Rose Davis, Executive Assistant. APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on September 5, 2012. Mr. Lennon MOVED, SECONDED by Mr. Lambeth, to approve the minutes of the September 5, 2012 Regular Public Meeting as submitted. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. HAIL AND FAREWELL Mr. Rosborough introduced Kenny Smith, Operations Specialist, who works in Operations with Gary Broughton and Gary Taylor. Mr. Morton introduced his new staff members, Caitlen White, Marketing and Accounting Assistant and Jacquelyn Yellin-Mungo, Accounting Assistant. Mr. Rosborough then announced the retirement of Sandra Routh, Executive Assistant and introduced Rose Davis as her replacement. The Authority members expressed how much Sandy was appreciated and that she would be greatly missed and welcomed the new employees. After introduction, Mr. Smith, Ms. White and Ms. Yellin-Mungo departed the meeting. SPECIAL EVENTS Gary Broughton announced that the FAA mandated AEP Tabletop Drill is scheduled for October 11, 2012 at 2 pm in the Executive Conference Room. Also of interest this month is the New Hanover County Fair and Expo from October 25 — November 3, 2012. New Hanover County Airport Authority October 3, 2012 Page 2 Chairman Kays asked staff to check the status of the special event on Wednesday night before the fair opens. FINANCE REPORT Mr. Morton reviewed actual revenue and expenses for the month of August indicating that this was the first reporting in the new budget, and it was a very favorable month. In response to Mr. Lambeth's question, Mr. Morton stated the financial report covered two months—July and August. In response to Mr. Barber's question, Mr. Morton stated salaries were lower than forecasted because the actual figure is a summary of all departments. In response to Mr. Lennon's question about position openings, Mr. Broughton stated he had an opening for a Dispatcher. In response to Mr. Lennon's question, Mr. Morton stated Economic Development was over budget because of additional expenses for air service development in July, and the line item should balance out over the next couple of months. Mr. Morton reviewed ILM's cash report and summary of accounts for the month of August. In response to Chairman Kays' question, Mr. Morton stated that the funds for the Business Park operating account come from land side development, everything excluding aviation. Dr. Roseman suggested a more detailed read-out on that line item. Mr. Morton reported that the annual audit was completed on Friday and sent to the County before the deadline. It is in draft form and pending publication. Mr. Morton noted that there were no unusual findings or any new issues to report. FACILITIES Mrs. Wilsey discussed one action item for Authority members' approval, including: • Approval to make a mitigation payment to State of North Carolina in the amount of $78,110 on the Kerr Avenue Fence Project (AIP 46) to impact 214 linear feet of stream bed. This is necessary to install the fence across the stream. The cost is already included in the AIP Grant budget. After some discussion, Mr. Lambeth MOVED, SECONDED by Mr. Barber to approve the Facilities action item discussed above. The MOTION WAS APPROVED UNANIMOUSLY. Mrs. Wilsey updated Authority members on current projects: • ES&J plans to start work October 15th on the Kerr Avenue Fence Project (AIP 46). • Barnhill issued a notice to proceed on the TWY B, C, J and G Paved Shoulders Project(AIP 44) and started this week. There will be a winter shut-down of that project from December- New Hanover County Airport Authority October 3, 2012 Page 3 March, and runway and taxiway closures need to be coordinated with RWY 17 project. • S.T. Wooten, the paving contractor for the RWY 17 Extension Project (AIP 45), started work on September 17th, and the project is on schedule. • The architect produced a colored rendering of the proposed design of the new Rental Car Maintenance Facility (CFC) which blends with the current ILM architectural standards. • Paramounte Engineering has prepared a model of the Secondary Water Source Project (NCDOT Grant). They have proposed a 12 in. line. The next step is to go to the CFPUA for approval. NCDOT Aviation, which is funding 90% of this project, will be here in November to review the proposal. • All parties involved with the Force Main Easement have come to a verbal agreement and are working to get the written documents prepared and signed by all parties. • The engineer and contractor for Air Wilmington's Hangar construction are working on the permit process at this time. In follow-up to Mr. Lennon's request for information last month on the return on investment with the LED lights, Mrs. Wilsey explained that based on calculations, and the fact that ILM pays 5% on a federal project; the return on investment for LED lights is less than 3 months. Currently there are 85 LED taxiway lights on the airfield, and after the TWY B Project is completed, ILM's airfield lights will be 60% LED. ILM will save about $15,000 per year in operating costs when all 477 of the taxiway lights are changed to LED. Mrs. Wilsey reported that she and Mr. Bright will be meeting with FAA grant writers on October 11`h in Atlanta to discuss TT,M's Capital Improvement Program for the next 5 years in an effort to get projects locked in before transition to the Memphis FAA ADO. GOVERNMENT Mr. Rosborough reported Congress approved a 6-month Continuing Resolution (CR) to keep the government operating financially through March 27, 2013. As part of the CR, AIP funding was approved for that 6 month period. Mr. Rosborough also reported that TSA's Pre-check Program was doing well. After being in effect for only a few months, IAD (Dulles) is being added. This now brings 26 airports participating in this program. The TSA is implementing this program at the largest airports first. The airlines participating in this program include American, United, Delta and US Airways. Their frequent fliers go through a background check process to avoid security lines. He commented the TSA would continue to add airports if this program proves to be successful, but due to our size, it will take a long time to reach ILM. MARKETING AND PUBLIC RELATIONS Mr. Morton updated Authority members on recent creative print advertisements appearing in regional papers focusing on the military in Jacksonville/Onslow County, WIT MA magazine, and New Hanover County Airport Authority October 3, 2012 Page 4 a local surfing magazine. He indicated staff would be researching costs to advertise on the outenuost perimeter of TTM's catchment area. Mr. Morton reported that ILM's social media numbers are increasing as Ms. White continues to promote reasons to fly ILM on Facebook and Twitter. Mr. Morton reported that he is exploring joint ventures with Wilmington's Convention and Visitors Bureau's Marketing Vice President to focus on the DC and Philadelphia areas. Dr. Roseman commented that he would like staff to send all written customer feedback to Authority members the marketing committee for review. (Corrected 11/7/12) Dr. Roseman initiated a brief discussion regarding changes in the Tailwind restaurant facility no longer being accessible before the security checkpoint. Mr. Morton reported pre-security restaurant hours had changed recently extending service later in the evening hours. Mr. Lennon initiated a brief discussion about the long lines going through TSA security checkpoints, particularly on early morning flights. Mr. Broughton indicated staff was working with the TSA to discuss their staffing issues and improving customer service by keeping the lines flowing smoothly. Dr. Roseman suggested having two TSA employees checking IDs. PLANNING & DEVELOPMENT Mr. Morton reported working with Paramounte Engineers to expand the layout for the proposed Business Park. He displayed the layout which shows new roads, Class A brick buildings, Class B facilities which can be offices or hybrid areas, and parcels along the railroad tracks or with access to the runways that could be aviation service related, warehouses or light industrial or distribution centers. He identified where the Rental Car Maintenance facility would be located. Mr. Morton explained this expanded layout could be used as a selling tool going forward. At the request of Mr. Lennon, Mr. Morton presented rough Engineer estimates of the costs to proceed with the project, including stoil!i water treatment, site work, road work and building construction. Following a discussion about the estimated costs to develop pad-ready parcels with the potential to attract a hotel to the Business Park, Mr. Lennon MOVED that Authority members instruct staff to provide a contract for approval at the next meeting for the design and permitting process to develop the Business Park infrastructure. Dr. Roseman asked that Mr. Lennon amend his motion to include that the contract not exceed $50,000. Amending his motion, Mr. Lennon MOVED, SECONDED by Dr. Roseman, that staff engage the engineer design team to finalize the design and documents required for permitting Business Park infrastructure [A. Offsite stormwater pretreatment swales; B. Offsite storm drain improvements; C. Offsite roadway improvements; D. Offsite streetscaping with irrigation; and E. Alternate—offsite utility improvements] in an amount not to exceed $50,000. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. New Hanover County Airport Authority October 3, 2012 Page 5 There was a brief discussion regarding what Paramounte was originally retained to do for ILM and whether this action would require a new selection process or whether this process could be tied to the previous selection process. It was determined that Mrs. Copley would need to review the Request for Proposal (RFP) and consult with Mr. Morton to determine the legality of moving forward with Paramounte under the current selection process. Dr. Roseman MOVED, SECONDED by Mr. Lennon, to authorize the chairman to approve the contract with the consent of Authority members after Mrs. Copley's review. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. OPERATIONS REPORT Using charts for illustration, Mr. Broughton reported ILM's airport statistics for the month of September, including fuel price comparisons, fuel flowage amounts, airfare comparisons with MYR and RDU, total passengers handled and total seats available. Mr. Broughton indicated that fuel flowage was up 23% from last year and that this was tied primarily to an increase in military traffic, including KC 135s, Harriers and helicopters that refueled here. In response to a request from last month's meeting for the percentage of fuel that Avgas represented, Mr. Broughton indicated it was 5.4% of total fuel. There was a brief discussion about airfare costs and complaints received about Delta's LGA airfare, compared to what US Airways formerly charged. Mr. Broughton reported the total number of passengers handled in September was 65,468, which is 5% less than September 2011 and 10.4% less than September 2010; and the total passengers handled year-to-date was 604,797, which is 1.2% more than the year-to-date statistics for September 2011. ILM's load factor for September 2012 was 88%. Mr. Broughton reported the total number of seats available during the month of September was 37,199, down 5% from September 2011, or approximately 2,153 seats. Year-to-date available seats are up 4.4%. Mr. Broughton reported ILM's international traffic using US Customs statistics for September: 43 aircraft were cleared, which was 17% less than September 2011; and 195 persons were cleared, which was 32.9% less than September 2011. Year-to-date, US Customs has cleared 1,239 aircraft, which was 10.5% less than 2011, and 6,819 persons, which is 13% less than 2011. At the Authority's request, Mr. Broughton reported that he had asked the Port Director to check other similar sized GA facilities for customs, and he checked 5 airports up and down the East coast and reported they are all down about 10%. New Hanover County Airport Authority October 3, 2012 Page 6 In response to Dr. Roseman's request for a cost comparison, Mr. Broughton responded that Fort Lauderdale charges $3.30 per person; Executive charges no fees but they are supported by the City; St. Lucie charges no fees; Naples was the highest with anywhere from$50 for clearing a single engine to $400 for jets; Palm Beach had no fee; and Orlando Executive charges $3.00 per person and the FBO collects that. Mr. Broughton reported that the New Hanover County Commissioners approved the changes to the Aviation Chapter of the County Code on September 17. One of those changes was the removal of the dollar amount for civil penalties. Of particular concern to the Authority were Vehicle Pedestrian Deviation Incursions (VPD) and how they are handled going forward. Mr. Broughton reported that from 1995-2005 IT.M only had 6 incursions and in 2006 a former policy was reinstated prohibiting fuel trucks from crossing the runways and taxiways and that eliminated all of our VPDs until the one in October 2011, in which the FAA found no violation to the airport on FAR 139. Current policy, upon violation, is to suspend all privileges on the airport pending ILM and FAA investigation; retrain the employee, if the employee is staying; and if FAA does find a penalty and assesses it to the airport, it is passed on to the violator, be it a tenant or employee. If no violation is found, staff will look at each incursion on a case by case basis and take into consideration the severity of the incursion, past history of the tenant or individual and their incursion records and if determination is made staff would suggest an amount to the Board that could be issued by the airport as a civil penalty for that violation. DIRECTOR'S REPORT In Mr. Rosborough's aviation update he reported there will be major changes in the aviation sector due to the economy and world events. Due to mergers there will be fewer airlines. The trend today is not so much airlines going to a community providing service, but airlines providing service to communities that can support international traffic through their hubs. Not all small airports with commercial service today are going to retain commercial air service in the next 5 years. However, those small airports that lose air service will have access within a reasonable distance. Regionalization is the new wave in recent years, so staff is trying to make sure IT,M is positioned to be that regional market. Some of the things looked at are international gateways to Europe, and ILM currently has 5 of them to include Charlotte, Atlanta, New York, Washington, DC and Philadelphia. Airlines are looking at changing their fleets and strategies, not by adding new flights, but by adjusting capacity and focusing on revenue and what it contributes to the bottom line. It is about profitability and getting enough passengers to cover the costs of that aircraft. There is a projection in the aviation sector that there is going to be a slowdown in passenger growth. FAA and other forecasts are projecting for the next 5 years, thru 2017, less than 2% growth per year on average across the country for airports. The bottom line is the aviation industry is looking at how they can best control that. They can control capacity, fares and expenses but they can't control the cost of fuel. The airports that are going to retain service are the airports that contribute to the bottom line and contribute to that international service. The airport's role is going to be changing. Mr. Rosborough reported on the status of the American Airlines-US Airways merger, stating nothing had changed since the last meeting. Negotiations with the pilots and US Air flight attendants aren't going well. US Air has yet to negotiate with their American West pilots after 7 years. They have to get those issues resolved before that merger takes place. New Hanover County Airport Authority October 3, 2012 Page 7 Mr. Rosborough stated that the last quarter and first quarter of the calendar year are the slowest quarters of the year. There will be no new flights added to Wilmington or anywhere else for the next two quarters. If ILM adds anything, it would likely be in the spring, and staff is pushing for Chicago and DCA full time. Mr. Rosborough reviewed the ILM Strategic Plan which was adopted in 2001 and revised periodically with the last revision being in August of 2012. ILM's goal is to develop a clear and organized strategic airport management and development plan that enables ILM to achieve its mission, values, and vision. It is very important to articulate not only our role as an airport today but more importantly where we want to be tomorrow. There are 11 components that cover our mission, credo, assumptions, financial plan, resource and staffing plan and marketing plan, to name a few. There are numerous assumptions made and Mr. Rosborough focused on four of them. Mr. Rosborough indicated how key the ILM Strategic Plan is in Business Planning and Development and how it can be used to attract business, industrial or commercial clients. The action steps to meet this objective include assessing infrastructure issues and the impact on industrial development plans, identify sectors of land space and determine types of business development to locate in each sector, identify tax abatement advantages to prospective tenants and assess the feasibility of locating an FTZ at ILM. The ILM Strategic Plan is what staff uses to go forward into the future. Mr. Rosborough reported that he received a letter from a gift shop customer that was pleased with service received from both a Delta employee and a Tailwind employee. At ILM we look at our team beyond the 46 employees to include everyone that works at the airport, including tenants and airline employees. Mr. Rosborough reported that three County staff, Chris Coudriet, Tim Burgess and Avril Pinder, toured one of the County's greatest assets on September 11: ILM. They were at ILM approximately 3 hours, focusing on the proposed hotel location and the Business Park. Mr. Rosborough advised the Board that there was an alert II today about 2:30 pm. One of our own aircraft, a Delta flight, was unable to lower its flaps. There were 49 people on board and it landed safely. An item not on the calendars attached to the agenda is the Christmas party which is scheduled for December 12. This party will include County Commissoners, Board members, staff and spouses and more info!iliation will be sent out about that soon. In recent news there were 3 military personnel killed from NC and one of them was from Wilmington, Sgt. Thomas Jefferson Butler, IV. The soldiers' families were flown to Dover to receive the bodies and Sgt. Butler's family returned to Wilmington on a commercial US Air flight this afternoon. A representative from the National Guard in Raleigh met the family at ILM and used the Small Conference Room for a private meeting. The body did not come in at this time, and we don't know when it will be coming to Wilmington. New Hanover County Airport Authority October 3, 2012 Page 8 ITEMS BY THE PUBLIC There were no comments from the public. OLD BUSINESS There was no unfinished business for discussion at this meeting. NEW BUSINESS Dr. Roseman MOVED, SECONDED by Mr. Lambeth, that Airport Authority Regular Public meetings begin at 5 pm instead of 4 pm. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. ADJOURNMENT There being no further business to come before the Board, Mr. Barber MOVED, SECONDED by Mr. Lennon to adjourn. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. Chairman Kays adjourned the meeting at 5:45 p.m. Prepared by: Respectfully Submitted: Rose M. Davis John D. Lennon, Secretary