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2013-01-09 AA Meeting Minutes New Hanover County Airport Authority January 9, 2013 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING January 9, 2013 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, January 9, 2013, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chairman Kays called the meeting to order at 5:00 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; Rose Davis, Executive Assistant; and Wanda Copley, New Hanover County Attorney. Guests present included Connell from the public; Sam Alberti and Steven Bielec from ILM staff. Steve Bright and Amy McLane of Talbert & Bright, Inc. arrived after the meeting was called to order but before any action was taken. APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on December 5, 2012. Mr. Lambeth MOVED, SECONDED by Mr. Lennon, to approve the minutes of the December 5, 2012 Regular Public Meeting as submitted. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. PUBLIC INTRODUCTIONS Dr. Kays welcuest. SPECIAL INTRODUCTIONS Mr. ; Officers, who has been with ILM since February of 2012, Public Safety Office Dispatcher, who has been with ILM since June of 2012. Dr. Kays and the Authority members welcomed the new employees. After introductions, Officer Alberti and Mr. Bielec left the meeting. SPECIAL EVENTS Mr. Broughton indicated there were no special events to discuss at this meeting. Mr. Morton stated the Azalea Festival has contacted him concerning having the Circus at ILM. question, Mr. Morton responded that the Azalea Festival pays $1,000 a day over the 4 day period. New Hanover County Airport Authority January 9, 2013 Page 2 FINANCE REPORT Mr. Morton reviewed actual revenue and expenses for the month of November. and summary of accounts for the month of November. Seized Morton stated that security has not recovered any ceased funds in years and in the past those funds had to be designated for Public Safety or Police expenses and any funds collected in the past have been expended. Mr. Morton provided an update on the Passenger Facility Charge Application. Staff met with the th airlines on December 19 and the airlines had no objections to any of the projects. A brief discussion followed about FAA approval of these projects and how projects were chosen for this application and Mr. Morton responded that cash flow limits the number of projects chosen. Mr. th Morton indicated that ILM should get notification of FAA approval around June 8 and should be able to start collections in August. Regarding the Rental Car Facility, Mr. Morton has been working with the county on the loan discussed last month. should be th presented to the county commissioners on February 4. Mr. Morton asked for Authority approval to go to the county to borrow $4.5 M for the Rental Car Facility. Dr. Roseman initiated a brief discussion of the need for this facility since much of this planning took place before he rejoined the Authority and staff responded. Discussion followed about other buildings on site available for rent, the fuel farm and whether or not ILM should get into the fueling business. Mr. Rosborough stated that the airport should not get into the fueling business as it would be in direct competition with the FBOs. Mr. Morton requested a motion for the Authority to authorize ILM to borrow up to $4.5 M for the funding of the Rental Car Facility. Mr. Lambeth MOVED and before it was seconded, Mr. Lennon AMENDED the motion to clearly state that the county would be paid back, in full, with interest. Mr. Barber then SECONDED the motion as amended. The MOTION WAS APPROVED UNANIMOUSLY. Mr. Morton reported that the Cape Fear Volleyball Association was interested in renting the old Signatech hangar for a short term with the understanding that if an aviation group comes in, they will need to vacate the facility. Rent would be $5,000 per month with a 30 day cancellation. After some discussion, Mr. Barber MOVED, SECONDED by Mr. Lennon to approve the lease of the hangar as discussed above. The MOTION WAS APPROVED UNANIMOUSLY. FACILITIES Mrs. Wilsey provided a recap of the projects completed in 2012 which included the rehab of TWY A, D & H with new pavement, the storm water pond, airfield drainage work (partial), Gate 7 Bridge, Con-Way Trucking roof, VA Facility and the burn pit remediation. New Hanover County Airport Authority January 9, 2013 Page 3 Mrs. Wilsey provided a summary of the AIP Grants active with the FAA. FY Amount To Date % Active Projects Grant FY09 AIP 42 4,531,629 4,219,736 93 Airfield Drainage FY10 AIP 43 2,988,108 2,764,033 93 RWY 24 Ditch Design FY11 AIP 44 8,117,372 3,884,335 48 TWY BCJ&G/TWY AD&H LEDs FY12 AIP 45 4,452,490 840,984 19 RWY 17 Extension FY12 AIP 46 949,403 599,598 63 Kerr Ave Fence 21,039,002 12,308,686 Mrs. Wilsey gave an overview of 2013 projects including current airfield projects: RWY 17 Extension (Ph 1), TWY A, D & H LED Lights, and Kerr Avenue Fence; summer/fall airfield projects: RWY 17 Extension (Ph II), TWY B, C, J & G, RWY 17-35 Rehabilitation, RWY 24 Ditch (Design), and Air Wilmington Hangar; and landside projects: Water Project, Storm Water Pretreatment, Rental Car Facilities, Rental Car Pipeline, Demo Old Rental Car Facilities, and Flex Building. Dr. Roseman initiated a discussion about ILM owned properties and properties adjacent to the airport and staff responded. GOVERNMENT Mr. Rosborough provided an update on state government ppointment of Brigadier General Anthony Tata as Secretary of the Department of Transportation. On the national level, Richard Hudson, a freshman Republican from NC, was named chair of the House Homeland Security Subcommittee on Transportation Security which has oversight responsibilities for TSA. Mr. Rosborough noted that he hopes to meet Representative Hudson when he goes to Washington for the AAAE Legislative Conference in March. MARKETING AND PUBLIC RELATIONS Mr. Morton reported he had just received word from the county that the interest rate on the loan approved above would be 2.25% on a 10 year note. Mr. Morton updated the Authority on the social media status, indicating that Facebook had an 11.7% increase this month and Twitter had a 26.6% increase. Mr. Morton noted that Google Analytics reported ILM picked up 13% activity on the website. Mr. Morton indicated that several radio interviews have been scheduled with Mr. Rosborough 99, Modern Rock, Sunny New Hanover County Airport Authority January 9, 2013 Page 4 and ESPN. Mr. Barber has agreed to join Mr. Rosborough for these interviews. Additional thth interviews are scheduled on the 15 and 25 with the Chad Adams and Tyler Cralle shows. Mr. Morton reported that staff sent out a request for proposals to advertising agencies on January th 8, 2013, asking for written proposals by January 25. Presentations will be scheduled for st January 29 31. Dr. Roseman initiated a discussion about having the agencies make presentations before the board. There was some discussion about presentations being done to the marketing committee versus the board and it was agreed that staff would report on the response received from the agencies before this decision was made. Mr. Morton stated that it is important that whoever listens to the presentations, listens to them all to be fair to the group. Dr. Roseman reported on a telephone call he received regarding the customs facility charging a $75.00 fee and the impact that might have on custom business. Mr. Rosborough stated the custom fee is a maintenance fee to maintain the facility. Discussion followed about the expense involved in disposing of international waste and that it has to be treated as medical waste and ILM pays for that. Mrs. Wilsey reported that the international waste bill for the month of December was $5,300 which was for 17 tubs at $285 per tub. PLANNING & DEVELOPMENT Mr. Morton reported that staff is underway with the hotel feasibility study and the gentleman met with Mr. Lennon, Mr. Barber and staff on Tuesday. Staff should have a report back on that in the next couple of weeks. In response to an inquiry from Mr. Lennon regarding the civil work with Paramounte, Mr. Morton reported they are underway and awaiting the permit for the pretreatment swale and should be bidding that soon. Mr. Morton indicated there had been discussion about putting an RFP together for a gas station/convenience store to be located on the landside of the airport property. Mr. Morton notified the Authority that Con-Way Trucking will not be renewing their lease in July and staff will begin marketing that facility. OPERATIONS REPORT Using charts for illustration, Mr. Broughton December, including fuel price comparisons, fuel flowage amounts, airfare comparisons with MYR and RDU, total passengers handled and total seats available. , source and qualityof gas and ways to prevent repeated non-compliance with lease terms. Dr. Roseman reported the last time he flew into ILM he visited Aero Service and inquired about gas prices and if they gave a discount for local based aircraft and they do. Discussion continued about fuel prices in smaller airports with self-fueling, over-head expenses, New Hanover County Airport Authority January 9, 2013 Page 5 requirements and regulations. gas sold by Air Wilmington last month, Mr. Broughton responded that Air Wilmington sold 73,163 gallons of low lead year-to-date and Aero Service sold 26,290. Air Wilmington took in 58 loads of fuel in December or 8,000 gallons a load. Jet fuel for Air Wilmington was 1,936,733 gallons year-to-date. Mr. Broughton indicated that fuel flowage for November was 212,893 gallons, which was down .7% from last year. Mr. Broughton reported the total number of passengers handled in December was 60,911, which is 7.7 % less than December 2011 and 5% less than December 2010; and the total passengers handled year-to-date was 795,912, which is down 1.2 % versus 2011. December 2012 was 84% and our year-to-date load factor is 83.6%. Mr. Broughton reported the total number of seats available during the month of Decemberwas 37,232, down 11% from December 2011. Year-to-date available seats are up .1% so there were 444 more seats for the year versus 2011. All 3 airlines increased capacity. Delta increased to a 120 seat DC-9 in September; US Airways increased capacity by adding an Airbus 319 with 124 seats and two 737s with 144 seats each; Allegiant reconfigured some of their aircraft by putting in a 166 seat MD83 from time to time. This increase helped offset the loss of capacity from American Eagle and the LaGuardia aircraft. Mr. Broughton traffic using US Customs statistics for December: 309 aircraft were cleared, which was 3.7% less than December 2011; and 1,088 people were cleared, which was 5.4% less than December 2011. Year-to-date, US Customs has cleared 1,754 aircraft, which was 8.9% less than 2011, and 8,969 people, which is 11.3% less than 2011. Mr. Lennon mentioned an online article in the Greater Wilmington Business email today that provide the board with statistics before they are provided to the media so they can be aware before they see these articles. Mr. Rosborough responded that staff would make sure the board has the final statistics before they go out to the media. Mr. Lennon initiated a discussion about th that he knows of at least 6 people who are flying US Airways instead of Delta to New York due to timing and cost. Mr. Rosborough indicated our numbers to LGA are not good in comparison to previous years and that is our #1 destination. Discussion continued about flights to LGA from ILM and from CLT. Mr. Broughton indicated he looked at US Airways fares for the first half of the year versus Delta fares and Delta was charging about 51% more, however, when he checked the Delta fare to LGA for the first part of this month it was $300 roundtrip and US Airways fare was $335 roundtrip. Mr. Lennon pointed out for business fares it is 40% more. Amy McLane left the meeting at approximately 6:20 pm. In responsfor an update on Orlando flights, Mr. Broughton reported th that Allegiant is going to suspend service for the last two flights in January through February 16 New Hanover County Airport Authority January 9, 2013 Page 6 thth and then resume from February 16 through April 16. In April Allegiant will suspend service again until early June. Currently Allegiant is flying out on Wednesday and Saturday at 11:45 am which will change in January to a 6:40 pm inbound flight and a 7:20 pm outbound flight and in June the days will change to Thursday and Sunday. Mr. Rosborough reported that staff received thank you cards from employees Mr. Rosborough announced that ILM received the Airport News and Training Network (ANTN) Digicast ATSI Airport Award of Training Excellence for 2012. Mr. Broughton shared that this is a program where all departments of the airport can go online and take training courses which count Part 139 FAA required training in many cases. As a small hub, based on 10 users of the equipment, they expect 500 videos to be watched and in the first 6 months ILM employees watched over 2000 videos. ILM has employees that have seen between 300 and 400 videos in the first 6 months. Mr. Rosborough reported on an article from the aviation consultants, the Boyd Group, with their forecast for 2013 which is no traffic growth and a projected 2% decrease. The Boyd Group says that the 4 pillars driving the airlines for 2013 appear to be no traffic growth, fewer frequency in flights, less capacity and financial stability. On the status of the American and US Airways potential merger, Mr. Rosborough reported that it appears both airlines are getting closer to making this a reality. It is anticipated that this merger should take place sometime in January. According to experts, including Boyd, American and US Airways need to merge in order to survive and that . Mr. Rosborough reviewed the results of a recent economic impact study of aviation on the state. The NC Department of Aviation engaged the services of the Institute for Transportation Research and Education (ITRE) at NC State University to do the study. This most recent study th was for all the airports in North Carolina and they reported that ILM came in 5 place with a $461 M economic impact for southeast North Carolina. Mr. Rosborough reported that ILM hired ITRE to do an independent report a few years ago and at that time the report showed total economic impact was $641,463,200 which is about a $200 M more than the state study. The reason for that difference is because ILM did an individual study where ITRE contacted local area businesses and looked at employment impact, payroll impact, and the propertytax impact. When ITRE did the study for the state, which started in 2011, ITRE used a generic formula for commercial airports provided by the FAA. ITRE did not do an in depth analysis for each airport in the state and as a result there was a variance in economic impact between the two numbers. The study ILM contracted with ITRE was more detailed and more actual. ITEMS BY THE PUBLIC There were no comments from the public. New Hanover County Airport Authority January 9, 2013 Page 7 OLD BUSINESS Dr. Kays continued a discussion from previous meetings about retaining a consultant to help with an Organizational Assessment. Staff received a final proposal from Mead & Hunt and Dr. Kays explained that Mead & Hunt would be looking at the existing organizational/operational structure and providing a succession plan to assess and look at all options available to do what is best for the airport in finding a replacement for Mr. Rosborough, who plans to retire at the end of CY 2014. A lengthy discussion followed regarding the scope of what Mead & Hunt would be retained to do, the benefits to the board and ILM in the future, and each board member expressed their interests or concerns about moving forward with an Organizational Assessment. There was also discussion about the quote for services and requests for modifications. F proposal provided that expenses do not exceed at this time $15,200 and that these expenses be total, including everything. There being no immediate second, discussion followed regarding the restated the motion to accept the proposal as long as it shall not exceed $15,200 and Mr. Lennon SECONDED the motion. The vote was 4 to 1 with Dr. Kays, Mr. Barber, Mr. Lennon and Dr. Roseman voting for and Mr. Lambeth voting against. the motion included wording that Mead & Hunt would be paid at the end of their services, it was agreed by all that it was okay to add that to the motion. NEW BUSINESS There was no new business for discussion at this meeting. ADJOURNMENT There being no further business to come before the Board, Mr. Lambeth MOVED, SECONDED by Mr. Barber to adjourn. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. Chairman Kays adjourned the meeting at 7:50 p.m. Prepared by: Respectfully Submitted: Rose M. Davis _______________________________ John D. Lennon, Secretary