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2014-01-08 Minutes New Hanover County Airport Authority January 8, 2014 Page 1 NEW HANOVER COUNTY AIRPORT AUTHORITY REGULAR PUBLIC MEETING January 8, 2014 CALL TO ORDER The New Hanover County Airport Authority met on Wednesday, January 8, 2014, at Wilmington International Airport, 1740 Airport Boulevard, Wilmington, North Carolina. Chairman Barber called the meeting to order at 5:00 p.m. Airport Authority members present were Tom Barber, Chairman; John Perritt, Vice-Chairman; Jonathan Crane, 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; Wanda Copley, New Hanover County Attorney; and Steve Bright and Amy McLane, Talbert & Bright, Inc. Guests present were Caitlin Dineen, Ryan Evans, Chris Sikes, Ken Vojta, Bill Cherry, John APPROVAL OF MINUTES The Authority has reviewed the minutes of the Regular Public Meeting on December 4, 2013. Mr. Lambeth MOVED, SECONDED by Dr. Roseman, to approve the minutes of the December 4, 2013 Regular Public Meeting as submitted. Upon vote, the MOTION WAS APPROVED UNANIMOUSLY. PUBLIC COMMENTS Chairman Barber turned the floor over to Chris Sikes who had requested to address the Authority. Mr. Sikes hand-delivered a letter, signed by Gerry Tremblay, General Manager, to Authority members at the beginning of the meeting and referred to it in his comments. Based on his interpretation of the Federal Aviation Regulations listed in the letter, the letter demanded that Air Wilmington and/or its associates and partners be denied the opportunity to participate in the RFP for General Aviation services dated December 10, 2013. comments primarily focused on exclusive rights and grant assurances. Mr. Sikes then posed the question: What can we do to grow aviation? and then indicated that two things that the airport can do that come to his mind from a general aviation pilot standpoint, are to stop closing the runways for months on end and to reduce fuel prices. Chairman Barber turned the floor over to Mr. Vojta to address the Authority. Mr. Vojta stated he was here tonight to talk about the RFP and encouraged the Authority to compare the last two RFPs to look for bias and discrimination and referred to the rules required when the airport accepts federal funding. Mr. Vojta indicated that he has a stack of letters to Mr. Rosborough concerning inequities in the field and the biggest one being fuel trucks. Mr. Vojta stated that his lease gives him full access to the runways and taxiways but he has to buy insurance and license plates for his fuel trucks and New Hanover County Airport Authority January 8, 2014 Page 2 t drive his fuel trucks on the airport RWYs and TWYs. Mr. Vojta stated this was very expensive. Mr. Vojta asked the Authority again to compare the two RFPs indicating his belief that the first RFP was written in such a manner that only one person, the owner of Air Wilmington, could benefit from it. Mr. Vojta referred to the new RFP indicating it required $2M for a 5 year lease and then an additional expenditure of $500,000 and asked what the real reason for the new RFP was. Mr. Barber interrupted Mr. Vojta to clarify that the new RFP required $100,000 per year up to 5 years and that there was no $2M requirement from. Mr. Vojta asked Mr. Tremblay to help him out and Mr. Tremblay stated it was in the ILM FBO Minimum Standards. Dr. Crane also clarified that it was $100,000 per year and said if someone misunderstood it, he was sorry about the misunderstanding but there is no way in the world that it would be $2.5 M over 5 years. Mr. Barber said he appreciate Authority wants to do the right thing. Mr. Barber stated he heard what Mr. Vojta said about comparing the RFPs and that the Authority would do that but the Authority and staff have extended offers to both Mr. Vojta and Mr. Tremblay to meet with Mr. Rosborough and Mr. Barber to discuss any questions about the RFP and the offers have been declined. Mr. Tremblay indicated that he was telephoned about a meeting and that he asked what the purpose of the meeting was and if there was an agenda so that they could be prepared for the meeting. Mr. Tremblay said it sounded like a set-up. Dr. Crane stated for the record that the purpose of that meeting was solely to assist Aero Services in understanding the RFP and realizing the options that are occurring in the RFP. It was to try and clarify misunderstandings. Mr. Tremblay stated that was not what was told to him. Mr. Broughton addressed the Authority saying he spoke to Mr. Tremblay personally and indicated he told Mr. Tremblay that Mr. Barber and Mr. Rosborough wanted to sit down with both the incumbent FBOs and answer any questions they might have on the RFP. Mr. Broughton said Mr. Tremblay told him that Mr. Rosborough him feel comfortable and that he wanted to talk to his attorney and therefore he Mr. Barber re-extended the invitation to meet. Mr. Tremblay asked when they could meet and Mr. Barber asked him to call Mr. Rosborough and schedule it. Mr. Tremblay asked if they could meet at Aero Service and Dr. Roseman asked Mr. Vojta who the principals are in Aero Services and Mr. Barber also asked who owns Aero Services. Mr. Vojta said he owns controlling interest and he contracted with Mr. Tremblay to manage it. Mr. Vojta said he had to get away a little bit. Dr. Roseman asked when he said he owns control, he owns the majority of the stock and Mr. Vojta said he just said that he owns controlling interest. New Hanover County Airport Authority January 8, 2014 Page 3 Mr. Vojta said he owns the stock and the lease and contracted with Mr. Tremblay company to manage it. Mr. Barber asked again if he was the owner of Aero Service and Mr. Vojta said of ISO Aero Service, yes sir. Mr. Barber asked what the name of business was and Mr. Tremblay responded WFC Management. Mr. Barber asked if WFC Management was a company Mr. Vojta hired to manage his business and Mr. Vojta said yes sir, we work together. Mr. Vojta said he was told that was explained to the Authority numerous times. Mr. Rosborough addressed the Authority regarding Aero Service not receiving any communication, stating that he wrote a letter to Mr. Tremblay and to Mr. Vojta, regarding coming together. Mr. Rosborough indicated that he and Mr. Barber wanted to meet to go over the RFP process and answer any questions. Mr. Rosborough said this request was in writing and he wanted to get that on record. Mr. Tremblay stated that the phone call did happen. Mr. Rosborough asked if he received the letter and Mr. Tremblay said that he did but Mr. Vojta said he did not. Mr. Barber referred to the minutes recorded from the October meeting and indicated what was said regarding ownership of Aero Service . Mr. Barber th read from the October 30 minutes the following excerpt: Mr. Barber asked Mr. Sikes who owns Aero Services and Mr. Sikes replied that Aero Services is owned by Gerry and Ann Tremblay with Ann Tremblay owning 51% and Gerry owning 49%. Mr. Barber stated that is just one more bag of worms that just got opened because that is another violation of the lease as he understands it. Mr. Barber said the Airport Authority has to approve that and Dr. t for a fact. Mr. Barber gave a heads up that he would like for someone to approach the Director of the airport and tell him what happened to the current leaseholder, which is Ken Vojta. Mr. Tremblay said that Ken is the current leaseholder and that Mr. Tremblay is running the business for ISO Aero Services. Mr. Barber clarified that Ken Vojta has the lease but Gerry Tremblay is the owner and they agreed. Mr. Tremblay said that he owns the equipment and Mr. Vojta leases it from him. Mr. Barber said that was a whole other legal matter that we have to figure out. Mr. Vojta said he was not there but he thought it had been clarified before. Mr. Barber indicated the Authority was a bit concerned. Mr. Vojta asked to go on and Mr. Barber indicated he could go on for another minute. Discussion followed about the procedure for getting on the agenda versus making public comments and it was clarified that in order to be on the agenda it requires 9 days notice before the meeting but public comments are allowed without notice with a 3 minute time limit. Dr. Roseman spoke up and said Mr. Vojta has spoken more than 3 minutes and told him to go ahead and finish up. New Hanover County Airport Authority January 8, 2014 Page 4 Mr. Vojta stated it has been 20 years of deception and what he perceives as favoritism which he has documented in letters. Mr. Vojta again asked the Authority to compare the RFPs looking for favoritism. Mr. Vojta stated that there were many things he imagined the Authority was never aware of and thanked them for their time. SPECIAL EVENTS There were no special events to discuss. SPECIAL PRESENTATION with Mead & Hunt. Mr. Pickering addressed the Authority and shared a power point presentation on commercial air service development, what his efforts on behalf of ILM have been, where ILM is going and some of the key issues in the industry. Mr. Pickering commented on how the airline industry has evolved indicating that Southwest Airlines is currently the largest domestic airline (until American/US Airways merger), followed closely be Delta. Mr. Pickering stated that communities like Wilmington often ask when will Southwest come into our airport and the answer is, they are not. Their fleet and pilot scope clauses fit communities of our size. Mr. Pickering pointed out that ILM has two of the big four airlines (new American and Delta) who control the majority of the capacity in this country serving our community and that is a good thing. Mr. Pickering discussed a slide showing load factors and stated that planes are full at 80+%. Mr. -tick while our load factor has taken a little dip from where it was tracking pretty well with the industry. In reference to domestic schedules, Mr. Pickering pointed out that the commercial aviation industry is on a slow to no growth mode since the great recession in 2008. Regarding air service development, Mr. Pickering said a strong proposal to get them interested in starting a new market like the Chicago service that ILM had. In terms of new service potential, it is not what a community wants or needs that drives the process but whether there is a viable revenue opportunity for an airline consistent with its strategies, fleets and competitive objectives. In respect to airline mergers and industry consolidation over the last decade and specifically the American/US Airways merger, Mr. Pickering stated that he is optimistic about the impact it will have on Wilmington in general. According to Mr. Pickering, the good news for ILM is that the senior VP of Planning is from the US Airways side so they have a good understanding of the Wilmington market. We now have a much broader network with more hubs which is very good for our passengers. The next logical point for them to serve is Chicago. This could open opportunities for Wilmington. A key for communities is connectivity to the global air transportation network. Mr. Pickering stated that US Airways will be switching global alliances from Star Alliance to One World. ILM has 5 international gateways today in its service which is really good th business passengers. If we get Chicago, that will open up a 6 international gateway. This New Hanover County Airport Authority January 8, 2014 Page 5 merger will benefit Wilmington in terms of the global alliance because under Star Alliance with US Airways, to get internationally you have to essentially double connect if you go via their other partners. The airlines moving over under the American merger to One World, means those double connects turn into single connects because you are tying into this broader global network. This provides a more efficient and user friendly connection for our passengers. fleet changes going on. They are looking to improve their product and moving away from smaller regional jets to larger ones and what that means for ILM is dual class configuration with a first class option. Their big focus for Wilmington in the short term is upgrading Atlanta from the smaller aircraft to the larger ones and they have gotten creative in that they purchased a refinery since fuel is the largest line item for airlines. Regarding United, Mr. Pickering stated they are following similar trend of moving towards larger aircraft. ILM continues to talk to them because they have the right type of airplane to serve our market. ILM secured flight to Dulles and they were doing well with good load factors and US Airways put a flight right on top of them and ran them out of business and they closed down. Mr. Pickering commented on the competitiveness of the industry and that the local Washington market probably enough, in reality, to support both DCA and Dulles. Mr. Pickering indicated we have been talking to United about Chicago service because of the strong ridership that was in place before when American was serving it or possibly Newark for international connections, as well. Mr. Pickering stated we continue to talk to Frontier and that they are showing interest in the Wilmington market due to the west coast business destinations and the amount of traffic going to LA because of the ties with the film industry. They thought this might work over Denver. Regarding Allegiant, Mr. Pickering stated we still talk to them because of the FIS facility about potential international service and they are looking to launch into Mexico and the Caribbean in 2014/2015 and there are very few airports around the country that have the type of facility that we have so that is a competitive advantage for ILM. Mr. Pickering stated that Jet hub is in New York but they also have been ramping up in Boston which is a favorable market for ILM so we are talking to them about potential service. Spirit is based in Ft. Lauderdale but they are unlikely, since they have such a large investment in Myrtle Beach, SC, to move that type of service to ILM. Mr. Pickering stated that other issues affecting some operations are pending shortage of pilots due to regulatory changes and fleet changes from small aircraft to larger ones. The airlines are driving this through capacity discipline-100 seat aircraft, the new standard going forward, your chances of getting additional service is low. The good news for ILM is the retention/diversion study indicates that our market has some potential so part of the ongoing work that he does in conjunction with staff is to meet with the airlines and New Hanover County Airport Authority January 8, 2014 Page 6 make that strong pitch as to why ILM is large enough community to support this transition to next generation of aircraft because that is where the industry is heading. Mr. Pickering pointed out that the community expectations and what the airlines are looking for often differ and we are always trying to find that balance point. What the airport has control of is reasonable rental and landing rates, keeping the operation convenient and eliminating the hassle Mr. Pickering stated what we are working to do is set ourselves apart. Competition for air service has gotten more intense. ILM has 5 gateways to hub airports, and now has largest airline in American after the merger with US Airways and under that merger, likely some potential opportunities and benefits. ILM currently has a good level of service but we think we can build on it. Mr. Pickering, in talking about the percent of seats filled out of ILM versus industry average, stated the most important factor for airlines is revenue generation, and our track record going back to 2002 is positive. We know from economic development reports that the region is growing and the airlines are looking at this revenue generation. Regarding the passenger diversion study, Mr. Pickering talked about our defined core air service catchment area. These are the people most likely to use this airport regularly. In the study, we found that the market is larger than the number of people that get on planes out of Wilmington. ILM is retaining about 64% of the people in that defined catchment area that travel and that is a pretty good number. When people do drive, for the most part they are driving to RDU, due to greater level of service, lower fares and more non-stops. Our task is to work on getting those people to use this facility as opposed to driving to RDU. Numbers gathered from this study also help in talking to the airlines about potential service, route forecasts and profitability potential for the airlines. Updating the Authority on the Small Community Air Service Development Grant, Mr. Pickering indicated the paperwork should be here soon. This grant helps ILM with our business case, our incentive offerings and helps us stand apart and distinguishes us from others. The plan for this grant was focused on reinstating the Chicago service among other options of Dallas or Houston. In 2 weeks we have a meeting set up with American airlines at the Mead & Hunt annual Air Service Development conference. American had indicated they would be supportive if ILM went after the SCASDG. Mr. Pickering said air service development should be looked at like a marathon, not a sprint. It takes time to develop the opportunities. Mr. Pickering stated that ILM should focus on promoting the use of this facility, existing service in this environment and keeping what you have and then strategically looking at what else makes sense. Mr. Pickering stated ILM should keep costs in line, make people aware of what services are here, reach out to the business community, brainstorm outreach through the chamber and others to get more people involved in air service development, and tie into that economic development. New Hanover County Airport Authority January 8, 2014 Page 7 Mr. Barber asked the Authority to consider ILM becoming one of the presenting sponsors at the Power Breakfast Series which meets four times a year with every business in Wilmington attending. This could be a good marketing opportunity. Mr. Barber asked how do we touch all the other companies that are out there and try to get them not to drive to RDU? Dr. Roseman asked that the power point presentation be sent out to the Authority members. Mr. Pickering respondi outreach and indicated we are open to ideas. Mr. Barber stated he still wanted to do a 5K run down one of the runways. Mr. Rosborough commented on the sponsorship and the opportunity it would give us to speak for 15 minutes promoting ILM and sharing information. He suggested that when there are panels, ILM could have someone sitting on the panel for the discussions on economic development because we are a key economic engine for this community. Discussion followed about ways to promote ILM within the community through speaking engagements, billboards, the effect the plane size changes will have on ILM, the potential of getting United service at ILM and potential service to southern Florida. FINANCE REPORT November financials, cash report and summary of accounts. Mr. Morton stated the FY2015 budget process is beginning and he will provide a timeline next month for budget approval. Mr. Morton reported that parking revenue for the calendar year was up 1.68% over 2012. FACILITIES Approve Easement Purchase Price for 3201 North Kerr Avenue (AIP49) - Action Item: Mrs. Wilsey asked the Authority to approve an easement cost for the property in the amount of $52,650. This new easement value is based on the appraisal completed in December. It is the sixth and final easement to acquire for the FAA project. Purchase 2 New Vehicles on State Contract - Action Item: Mrs. Wilsey asked the Authority to approve the purchase of two trucks on state contract. These vehicles are on the replacement plan and in the FY14 capital budget. Costs include radios, light kits, heavy duty undercarriage, electrical system, extended warranty, and other accessories. After some discussion, Dr. Crane MOVED to purchase the 2 new vehicles and if there is an extended warranty, go forward on that and to approve the easement purchase at 3201 North Kerr Avenue, SECONDED by Mr. Lambeth. The MOTION WAS APPROVED UNANIMOUSLY. Mrs. Wilsey reported she has the amended easement for the Blue Clay Road Force Main for signature by the Chairman. New Hanover County Airport Authority January 8, 2014 Page 8 Mrs. Wilsey stated she has the slide show and the report from the terminal capacity team meeting if anyone wants a copy. n regarding the rental car facility and the request for additional time, Mrs. Wilsey stated they have a specified number of contract days and there is a process outlined for average weather days for this location and we had a very wet season. Monteith is authorized to ask for additional time with justification. There are liquidated damages in the contract. It is not a penalty per day, we only charge them if we have additional costs th because of unreasonable delays. Mrs. Wilsey stated February 5 is the expected date of completion. GOVERNMENT Mr. Rosborough reported that the Federal government passed the budget with the TSA continuing to staff the exit lanes. Mr. Broughton stated staff has notified Securitas Security Services that ILM would not need their services. th Mr. Broughton, reporting on the TSA Pre-check, stated it started on December 15 and it dedicates one of our two lanes to the pre-check which is, right now, randomly selected through the airline process. Mr. Broughton said those passengers selected for pre-check have a reduced security check and it speeds up the process of getting them through. Passengers can upgrade to permanent status with an $85 fee that covers 5 years. There will be a local enrollment center opening at Shipyard Boulevard once they receive software from TSA and that is anticipated some time in January. Mr. Barber asked staff to get the word out once the local enrollment center opens. Mr. Rosborough stated TSA is working very aggressively on pre-check and making it more focused on the customer. MARKETING AND PUBLIC RELATIONS Mr. Morton reported regarding the Power Breakfasts, that through the years staff has selectively picked certain meetings that would be a good fit for ILM to do sponsorships but we can certainly look at doing a major sponsorship going forward. There was some discussion about who would be attending Sun N Fun in April. Mr. Morton reported monthly television spots at 790 per month and radio spots are 200 per month in Jacksonville, New Hanover and surrounding areas. Dr. Roseman initiated a discussion about the Smarte Carts and the possibility of putting them out complementary as a public service. As requested at the December meeting, Mr. Broughton reported on the Norfolk customs fees indicating that they have no customs fee and no customs facility. They rent an office space in the cargo building and staff is shared with the ports. In FY2012, they handled 129 aircraft and in FY2013, 124 aircraft as compared to our 1,700. They were down 3.9% compared to our FY which was up .5%. They have an international gate in the terminal that if a scheduled carrier New Hanover County Airport Authority January 8, 2014 Page 9 comes in, they have to send customs to them. Discussion followed about the FAA allowing overflys instead of having to go to the closest customs facility and the effect it has on ILM and Mr. Broughton reported that Customs indicated there is no way to track the numbers. Mr. Morton, going back to the Smarte Cart discussion, reported that ILM makes about $2000 per year on the carts and Dr. Crane asked that Mr. Morton look at our options and report back next month. PLANNING & DEVELOPMENT Mr. Morton reported that construction is underway on Phase 1 of the Business Park and that estimates were received to make the AAI building more marketable. Mr. Perritt stated the AAI building seems perfect for the movie studios and Mr. Morton responded that the film studio has toured the building in the past. Mr. Morton reported that staff continues to market the other properties available for lease and that there is continued interest in the Conway building. OPERATIONS REPORT Using charts for illustration, Mr. Broughton reported total passengers handled, seats available and customs traffic for December. Mr. Broughton updated the Authority on the USO indicating that John Falkenbury with the USO North Carolina sent a list of questions for the survey and staff has narrowed that down to about six questions. Ideally we are trying to determine how many military we have and if they would use the USO facility when they come through. Mr. Broughton reported that the Ambassador program is going to a 3 tiered program where we have navigators that are out in the airport talking with customers, as well as those that stay behind the counter to answer the phones and bringing in Comfort Canines periodically to help with passenger stress. Mr. Broughton advised the Authority of the autism program we are starting based on Wings for Autism and ILM has already had one young man come out. This gives these families a chance to do a practice run before actually taking a flight. This young man then made the trip to Little Rock without incident. Staff is looking into expanding that program. There are 15 families interested in going through the program. Mr. Rosborough stated his main item was the Air Service Development presentation by Joseph Pickering. Regarding the SCASDG, that was also discussed earlier, the Grant should be arriving soon for signature. ring responded that ILM will have to sign some paperwork saying that we accept the grant and get that back to them in a short time. Mr. Pickering indicated that the matching portions from the community are only paid out when we actually have a deal with an airline. New Hanover County Airport Authority January 8, 2014 Page 10 Mr. Lambeth MOVED that the Authority accept and meet the requirements of the Small Community Air Service Development Grant, SECONDED by Dr. Crane. The MOTION WAS APPROVED UNANIMOUSLY. Mr. Rosborough reported on the American/US Airways merger that currently they are consolidating their traveler benefits and being aggressive with their customer service and branding. UNFINISHED BUSINESS There was no unfinished business. NEW BUSINESS There was no new business. Dr. Crane MOVED for the Authority to go into recess for a dinner break, SECONDED by Mr. Perritt. THE MOTION WAS APPROVED UNANIMOUSLY. Chairman Barber called the meeting back to order at 7:37 pm. CLOSED SESSION The Chairman called the Authority into CLOSED SESSION under General Statute NCGS 143- 318.11(a)(6). Mr. Lambeth MOVED, SECONDED by Mr. Perritt for the Authority to go into closed session to discuss a personnel matter. THE MOTION WAS APPROVED UNANIMOUSLY. The Authority went into closed session at 7:40 pm. All staff members and guests left the board room at this time. Remaining in the closed session were Airport Authority members Tom Barber, John Perritt, Jonathan Crane, Al Roseman and Carter Lambeth and attorney, Wanda Copley. Mr. Perritt MOVED, SECONDED by Mr. Lambeth for the Authority to return to open session. THE MOTION WAS APPROVED UNANIMOUSLY. The Authority returned to open session at 8:20 pm. Mr. Roseman MOVED, SECONDED by Mr. Lambeth for the Airport Authority to conduct a national search for Airport Director. The advertisement will be placed on the AAAE website. THE MOTION WAS APPROVED UNANIMOUSLY. ADJOURNMENT There being no further business to come before the Board, Chairman Barber adjourned the meeting at approximately 8:25 p.m. Prepared by: Respectfully Submitted: Rose M. Davis _______________________________ Dr. Jonathan S. Crane, Secretary Date of Approval: February 5, 2014