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2013-04-03 Minutes Final New Hanover County Airport Authority April 3, 2013 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING April 3, 2013 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, April 3, 2013, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chairman Kays called the meeting to order at 5:08 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 Steve Bright, Talbert&Bright, Inc. Guests present: Gerry Tremblay of Aero Service. APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on March 6, 2013. Mr. Barber MOVED, SECONDED by Mr. Lennon, to approve the minutes of the March 6, 2013 Regular Public Meeting as submitted. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. SPECIAL EVENTS Mr. Broughton reported that the Cole Bros. Circus will be at ILM April 11 — 14, 2013 as part of the NC Azalea Festival. Dr. Roseman announced that the EAA is having a fly-in at Aero Service at 10 am on Saturday, April 6th. Mr. Tremblay added it is "Spring into Aviation" and everyone is invited to attend. Mr. Broughton further reported that on Thursday, March 28, 2013, the remains of Lance Cpl. Mason Vanderwork came in to ILM on Delta. Lance Cpl. Vanderwork was one of the marines killed in the accident at the Hawthorne Army Depot in Nevada. Wanda Copley, New Hanover County Attorney arrived at 5:14 pm. CLOSED SESSION Chairman Kays called Authority members to go into CLOSED SESSION to discuss a personnel matter pursuant to NCGS 143-318.11(a)(6). Mr. Barber MOVED, SECONDED by Mr. Lambeth to go into CLOSED SESSION. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. Chairman Kays called the meeting to closed session at 5:15 pm and requested Airport Authority members, Mr. Rosborough, and Mrs. Copley stay, all others were dismissed. RETURN TO REGULAR MEETING Dr. Roseman MOVED, SECONDED by Mr. Lambeth to return to Regular Meeting. Upon vote the MOTION WAS APPROVED UNANIMOUSLY. Chairman Kays returned to regular New Hanover County Airport Authority April 3, 2013 Page 2 meeting at 6:05 pm following a brief break. Chairman Kays noted that during the closed session, Authority members discussed a personnel matter and no action was taken. FINANCE REPORT Mr. Morton reviewed actual revenue and expenses for the month of February. Mr. Morton reviewed ILM's cash report and summary of accounts for the month of February. Mr. Morton presented copies of the FY 2014 Proposed Budget and made a formal budget presentation providing more detail and information for the board. After review and discussion Mr. Morton indicated that this is a draft budget for 30 day review and comment from the board. Staff will seek board approval of the budget for public review at May's board meeting with final approval of the budget being at the June board meeting. FACILITIES Mrs. Wilsey discussed one action item for Authority members' approval: • Approval of a contract for environmental consulting with Catlin Engineers and Scientists on an on-call basis. Actual expenditures will be approved on a project by project basis. After some discussion, Mr. Lambeth MOVED, SECONDED by Mr. Lennon to approve the Facilities action item discussed above. The MOTION WAS APPROVED UNANIMOUSLY. Mrs. Wilsey updated Authority members on current projects. The two airfield projects will restart on April 15. That will start the 85 day closure of RWY 17-35 with a tentative opening date of July 9. Bidding for the rental car facility is April 26 and ECC will start the rental car pipeline project on April 15. The rental car facility contract should be ready to award in May. The storm water treatment swales are complete except for some minor seeding and we are working with contractor to finish everything. Regarding the avigation easements, 5 of the 6 landowners have signed the Right of Entry (ROE) form. Staff will locate the 6th landowner for permission to get on their property. The secondary water project will be out to bid on April 30th That project will be awarded in June, pending the NCDOT grant paperwork. Mrs. Wilsey reported that Rick Catlin is working on legislation that would allow airports to cut trees on their property. This started as a local bill but is intended for all North Carolina airports to expedite tree cutting for safety on airport property without a local permit. GOVERNMENT Mr. Rosborough reported that the TSA is allowing Wounded Warriors to join the expedited screening process under pre check and that pre check is now happening at RDU. Mr. Rosborough discussed sequestration from an airport basis and indicated locally we have had no harm or negative impact as of this time or in the immediate future. Airlines here and on a national basis have no plans to cancel flights because of sequestration as of this time. New Hanover County Airport Authority April 3, 2013 Page 3 Mr. Broughton reported that starting on April 21", each employee at the ATC tower will be required to be furloughed 8 hours every 2 weeks. The tower manager assured staff that with the furloughs there would be no operational impacts at ILM. The tower has 17 controllers, 5 trainees, and 2 supervisors. Mr. Rosborough shared information regarding the AAE Legislative Conference he recently attended in DC and the main topics were sequestration from a national basis, the tower closings and the cap on PFC rates. AAAE and ACI-NI have been trying to increase the current $4.50 cap on the PFC rates for the past 10 years and the airlines are against raising the cap due to the perceived negative impact on their bottom lines and increasing airfares. If the airports and airlines cannot come together on this issue then the federal government isn't going to be making any changes. From an airport operator's standpoint, these projects funded by the PFC are for the benefit of both the airport and the airlines. Mr. Rosborough indicated he is on the ALA (Airport Legislative Alliance) committee to help resolve this matter and has been asked to prepare some possible options for future consideration. Reporting on the Metropolitan Statistical Area(MSA), Mr. Rosborough indicated that Brunswick County was recently placed into the Myrtle Beach, SC MSA. There has been a lot of push from both state and local officials requesting this decision be reversed and Brunswick County be placed back into Wilmington's MSA. This removal has negative consequences to our community from an economic development standpoint and indirectly for ILM because the more people that move into our MSA will help us to attract more passengers and hopefully more airlines. Dr. Kays recessed the meeting for a brief 5 minute break from 6:50 — 6:55 pm. MARKETING AND PUBLIC RELATIONS Mr. Morton reported to the board on the reference checks performed by staff on the 3 advertising agencies that presented to the board last month. In response to Dr. Kays' request for a snapshot of spending or economics based on the RFP to the advertising agencies, Mr. Morton prepared an ad buy comparison of the 3 agencies and shared that with the board. Discussion followed about ILM's marketing strategy, target areas, leakage, the advertising agencies' creativity and the direction the board wants to take with advertising. After a lengthy discussion Mr. Lennon MOVED that ILM contract with Fourth Day Advertising for 1 year provided that staff meet with Fourth Day to discuss the creative aspect. The motion was SECONDED by Mr. Barber. The MOTION WAS APPROVED with Dr. Kays, Mr. Barber, Mr. Lennon and Mr. Lambeth voting for. Dr. Roseman abstained from the vote, but on advisement from Mrs. Copley, changed his vote to against, stating for the record that he felt the decision should be made by the new board in July. During the discussion Mr. Lennon asked that staff determine the pricing for a leakage study to determine where we are losing passengers and Mr. Barber asked staff to look into the creative and social media aspects of the Akron airport. New Hanover County Airport Authority April 3, 2013 Page 4 Mr. Morton reported that staff held a Facebook contest offering a give away of two Avett Brothers tickets for the Azalea Festival and in 20 hours there were over 225,000 posts. PLANNING& DEVELOPMENT Mr. Morton reported that staff received the Hotel Feasibility Study and he provided copies of the executive summary and will forward the full study to the board for review. The conclusion is that there is justification for ILM to pursue a hotel for the business park and that this study can be a tool for staff to use in marketing the business park. In response to Dr. Kay's question, Mr. Morton indicated that now we can contact hotels or use a broker and put out an RFP to find someone to represent ILM to make those contacts with different hotels and groups. Mr. Barber MOVED that staff create an RFP for a broker to assist ILM in finding a hotel for the business park. Mr. Lennon AMENDED that motion for 2 separate brokers, one for the hotel and a separate broker for preleasing on the flex building. Mr. Lennon SECONDED the amended motion. The MOTION WAS APPROVED UNANIMOUSLY. Mr. Morton updated the board on the business park improvements and shared the capital expenses for developing the flex space and getting this area pad ready. There was discussion about the marketing benefits of completing some of the roadwork and having the flex building pad ready. Mr. Lennon initiated a discussion about the benefits of a master Traffic Impact Analysis (TIA) indicating that it would cost money but would provide the staff with information regarding future requirements. Then the master TIA can be used by the traffic engineering consultant in talks with the DOT about phasing in the improvements as the business park is developed. Staff could use the projected cost information in negotiating leases and determining who is responsible for the expense. Mr. Lennon stated the estimate quoted from Davenport for a master TIA was $26,000. Dr. Kays MOVED that staff do a master Traffic Impact Analysis for the business park. The motion was AMENDED and SECONDED by Mr. Lennon to include a cap of$26,000 for the master TIA. The MOTION WAS APPROVED UNANIMOUSLY. Mr. Lennon stated that when the consultant takes the TIA to the DOT to negotiate phases, that aspect will probably be on an hourly rate. Dr. Roseman updated the board on the two marketing matters that he is involved with. One, regarding the hangar on the east side currently rented out for volleyball, Dr. Roseman stated that he had an inquiry about renting that hangar but the potential tenant wanted to park cars in there as well as an airplane and the Fire Marshall said no. Dr. Roseman indicated he believes the county's interpretation was incorrect and he has approached the county and they are reassessing that now. New Hanover County Airport Authority April 3, 2013 Page 5 There was discussion about ILM's policy on vehicles in the hangar following the state Fire Code and NFPA and Mr. Broughton reported that he contacted other airports as well and their interpretations are all the same—no vehicles with airplanes allowed in the hangars. A discussion followed about insurance coverage on leased properties and whether or not our insurance company should be involved. Mr. Morton stated that currently ILM provides insurance on all buildings owned and leased by ILM but if a tenant builds the building, they own it, and they insure it. Dr. Roseman stated his second marketing matter is that he has been contacted by a tricking firm in Raleigh interested in the Conway Freight building and asked if staff was willing to make modifications on that building if necessary. Mr. Rosborough responded that staff can make modifications depending on what the agreement is and Mr. Morton has been handling that from a property manager's standpoint. Dr. Roseman further stated that this tricking firm may need additional security or refrigeration. In response to Dr. Roseman's question about ILM providing security, Mr. Rosborough said it depends on what we negotiate for the lease rate but ILM will charge extra for security. OPERATIONS REPORT Using charts for illustration, Mr. Broughton reported ILM's airport statistics for the month of March, 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 for February was 244,987 gallons which was up 11.6%versus February of last year. Mr. Broughton reported the total number of passengers handled in March was 65,541, which is down 3.8%from March 2012 and up 2.7%from March 2011; and the total passengers handled year-to-date was 170,970, which is down 5.1%versus 2012 and up .4%versus 2011. ILM's load factor for March 2013 was 78.1%. Mr. Broughton reported the total number of seats available during the month of March was 41,366, down 1.8%from March 2012, or approximately 763 seats. Year-to-date available seats are down 8.2%versus last year. Mr. Broughton reported ILM's international traffic using US Customs statistics for March: 279 aircraft were cleared, which was up 20.7%from 2012; and 1,548 persons were cleared, which was up 27.4%from 2012. Year-to-date, US Customs has cleared 688 aircraft, which was up 6.5%from 2012, and 3,781 people cleared, which is up 4.1%from 2012. Mr. Broughton also reported on the FAA's proposed decommissioning of the TACAN portion of the ILM VORTAC. The TACAN is the Tactical Air Navigation system which is used by the military aircraft for bearing and distance to the station. ILM staff has written a letter, our FBOs have written letters, and the military from Camp Lejeune and Cherry Point have written letters asking that the TACAN be upgraded rather than decommissioned. It is very important to the military to have this with the Harrier and Prowler training that goes on in North Carolina and the New Hanover County Airport Authority April 3, 2013 Page 6 fuel contract that Air Wilmington has. In response to Mr. Barber's question, Mr. Broughton responded that the VOR and DME will be upgraded. If we lose the TACAN, a lot of the military traffic could go away. According to the Marine staff we met with on April 2, the cost to redo the paperwork and the flip charts would be higher than the cost to upgrade the TACAN. Mr. Broughton reported he understood it was approximately $37,000 to upgrade the TACAN equipment. Discussion followed about the potential loss of income to ILM if the TACAN is decommissioned and whether or not ILM should agree to maintain or replace the TACAN in order to keep it active. Dr. Kays asked staff to monitor the situation and Mr. Broughton indicated staff would follow up and check on options and have an answer before the TACAN is decommissioned. DIRECTOR'S REPORT Mr. Rosborough reported that the American/US Airways merger is moving in the right direction from our standpoint. The bankruptcy court approved it but there are other hurdles that have to be overcome. It is estimated the combined equity of that merger would be $11 billion which would make it the largest air carrier in the US. In response to Mr. Lambeth's question about Chicago service, Mr. Rosborough replied that he was hoping the merger would help ILM get Chicago service back. American did say they pulled out of ILM prematurely and that ILM was a good market. Mr. Rosborough updated the board on the FTZ committee that he and Mr. Barber serve on with Rick Catlin, which is called the Foreign Trade Zone Promotion Council (FTZPC). The purpose of the FTZPC is to enhance international business interests and promote international trade into this community. The New Hanover County Commissioners annual presentation will be on April 22, 2013 at the Historic Courthouse downtown. ILM has 15 minutes to present an annual report and Dr. Kays, as Airport Authority Chairman, will make the presentation. All board members and staff are encouraged to be present. Regarding the Wilmington Aviation Foundation (WAF), and the board's request for review of the Master Plan for a possible location for the museum, Mr. Rosborough reported that at this time the only space available would be on the east side of the airfield. The advantage of being on the east side is a separate roadway coming into the airport property. ILM doesn't have any buildings available for WAF at the present time but may in the future when, and if, a second FBO is approved and located on the west side of the airport as outlined in ILM's GA Master Plan. This would vacate the space where Aero Service is currently located. This location was proposed several years ago by the Airport Authority and staff thinks that is the best location if it is decided to do something with the Wilmington Aviation Foundation. Lastly, Mr. Rosborough discussed air service development and Dick Masters' retirement in June of 2013. Dr. Kays had asked Mr. Rosborough, Mr. Barber and Mr. Masters to identify and meet with viable air service development consultants that could replace Mr. Masters. Seven consultants were identified and considered and four were interviewed. The two finalists that were looked at closely were Mead &Hunt, out of Atlanta, that performed the Operational New Hanover County Airport Authority April 3, 2013 Page 7 Assessment, and Seabury Aviation Group, out of Washington, DC. Mr. Rosborough indicated all proposals included a True Market Demand Analysis which basically is a leakage study identifying how many passengers in our catchment area use other competing airports. Mr. Rosborough reported that after reviewing each consultant's scope of work, references, and fees, it is the recommendation of staff that ILM select Mead &Hunt as its air service development consultant for a period of 1 year. Discussion followed about the transition period between Mr. Masters and the new group and Mr. Rosborough recommended the new group start in May and that there be an overlap between the two consultants to insure a seamless transition. Mr. Lennon MOVED, SECONDED by Mr. Barber, to retain Mead &Hunt as our air service consultants for a contract not to exceed 1 year and total compensation, inclusive of travel, not to exceed $100,000.00. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. ITEMS BY THE PUBLIC There was no comment from the public. OLD BUSINESS There was no old business. NEW BUSINESS There was no new business. 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 8:02 p.m. Prepared by: Respectfully Submitted: Rose M. Davis John D. Lennon, Secretary