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HomeMy WebLinkAboutMinutes Airport Board - 10/20/2010 1"'�iC�.rCI V CI4J JAN 0 5 2011 REGULAR MEETING MINUTES MY SOECE CORPUS CHRISTI INTERNATIONAL AIRPORT BOAR c�U, �� 1000 INTERNATIONAL DRIVE tFTf'6RNRPIONAL AIRPORT AVIATION BOARD ROOM �►�+� CORPUS CHRISTI,TEXAS Cityof OCTOBER 20Th, 2010,3:30 P.M. CCoor BOARD MEMBERS Ed Hicks, Sr., Chairman Jay Wise, Vice-chairman Jesse Olivares, Member George Richard, Member Richard Drilling, Member Chad Magill, Member Rosle Collin, Member Adam Nuse, Member Jeff Kane, Member Bill McCord, Member Don Fefermen, Special Advisor CITY STAFF Fred Segundo, Director of Aviation Enrique H. Castillo,Asst. Director of Aviation Adelle Ives, Management Assistant Esmeralda Salazar, Management Assistant Gary Williams, Facilities Manager Mario Tapia, Finance &Admin Manager Carl Gross, Operations Manager John Hyland, Chief of Public Safety Kim Bridger, PR & Mkt. Coordinator Elizabeth Hundley, Legal Dept. 1. Call to Order The meeting was called to order by Chairman Hicks at 3:31 p.m. A quorum was present. II. Approval of the minutes for the August lath, 2010, regular meeting of the Airport Board Chairman Hicks called for approval of the minutes from the August 18th, 2010, regular meeting of the Airport Board. Vice-chair Wise moved to approve the minutes as written. Board member Kane seconded and the motion carried. Ili. Approval of Board member absences for the August lath, 2010, Board meeting Chairman Hicks called for a motion to excuse absent Board members Richard and Nuse from the August board meeting. Board member Kane moved to excuse both Board member Richard and Nuse from the August board meeting. Vice-chair Wise seconded and the motion carried. IV. Public Comment* None. V. Corpus Christi Convention Visitors Bureau Presentation and Discussion of Corpus Christi as a Vacation Destination Chairman Hicks turned the floor over to Keith Arnold for a presentation regarding Corpus Christi being designated as a Vacation Destination. Mr. Arnold briefed the Board on his 4 Corpus Christi International Airport Board Agenda October 2dh 2010 Page 2 of 6 organization's work with the Airport's three airlines. With Continental, Mr. Arnold stated that his organization is participating In Meeting Works which Is a group incentive program. The program gives major discount off published fares with 20 or more travelers. This will work with larger groups as well. This program also offers a rewards program for the meeting planner which is a great incentive. Continental also designated Corpus Christi as a Vacation Designation -- Leisure Travel. He also reported that Corpus Christi Is the only beach destination In Texas listed on Continental Airlines as a Vacation Destination. He added that this designation is an elite and difficult designation to secure. With respect to American Airlines, Mr. Arnold reported that he is working with Roger Barsamian, National Business Development Manager with American Airlines Regional Network on a partnership for group and meeting discounts. He anticipates that nine or more travelers from any point flying Into Corpus Christi within a three or four day window will qualify as a group. American Airlines also offered partnership opportunities for Ad and Trade. He also reported that American does not have a Vacation Destination designation but Corpus Christi will be listed on their website along with hotels for Leisure Travel. Mr. Arnold continued by reporting that Corpus Christi became a Vacation Destination for Southwest Airlines since the spring of 2010. He continued by stating that he is working to secure group market travel. Becoming a vacation destination with Southwest broadens the marketing reach and opens the opportunity to attract the larger conventions and sports events with more flights. Questions and discussion was heard by the Board. L Presentation and Discussion of Southwest Airlines AirTran acquisition and other Air Service Development Chairman Hicks turned the floor over to Asst. Director Enrique Castillo who briefed the board on the developments regarding Southwest Airlines acquiring AlrTran. He began by stating that this merger would make Southwest Airlines the largest airline in the world. He continued by stating that this would benefit CCIA by making Houston Bus h/lntercontinental the hub to South America for United/Continental. This will impact CCIA with more opportunities for air service and growth. He felt that United/Continental could bring flights to Denver and Chicago. He mentions that these locations because they are the top 5 markets that were noted In the recent 0&D study done for CCIA. He added that because of Southwest's 25% expected growth within the next 12 to 18 months, they will have a bigger presence in the Atlanta hub. He felt that the load factors for the Corpus Christi/Houston Hobby flight could Increase load factors should Southwest bring in some of the A€rTran 717 aircrafts to fly this route. He added that an O&D study would need to be conducted for possible routes to the east coast. Mr. Castillo continued by stating that international flights may be a better possibility since AirTran now has a current flight to Cancun. With the FIS rehabilitation, the number of Mi Corpus Christi International Airport Board Agenda October 20"',2010 Page 3 of 6 passengers cleared per hour will increase to 250. He added that general aviation offers customs clearance at both FBO's. He concluded by stating that he is working closely with Sabre Aviation in developing strategies to increase air service in Corpus Christi. Director Segundo advised the board that a fact sheet was Included in their meeting packets regarding A€rTran to answer any operational questions them may have. Questions and discussion was heard by the Board. Vll. Presentation and Discussion of West FBO timeline and implementation Director Segundo began a presentation of the timeline regarding the West FBO timeline and implementation. He did note that once the tmeline reaches current actions discussion will be limited due to confidentiality requirements. Asst. Director Castillo began by stating that in October, 2009, staff identified that the FBO lease would be expiring and began steps towards renegotiating the lease. During that time and with the implementation of a one-year lease extension, staff began a six-month period of good-faith negotiations with Atlantic Aviation. Between October 2009 and May 2010, research began towards re-writing the Airport's Minimum Standards. Business terms were developed and presented to Atlantic Aviation in February/March, 2010. Mr. Castillo reminded the Board that Atlantic did not agree with the new business terms. He reminded that the west FBO will change management from a concession based agreement to a management agreement. Services will remain the same at the FBO, with the exception that the facilities have reverted back to the city and will be managed by a third-party contractor with the revenues produced will be kept within the community. Mr. Castillo continued by stating that Draft 2 of the business terms and conditions was issued and sent back to Atlantic Aviation and did not come to an agreement. At that time, three options were developed to manage the west FBO: The first option was increasing more employees to run the west FBO but this option was not cost-effective; the second option was to create an L.L.C. to run the west FBO but this option is not allowed under the laws of the State of Texas; and, the third option was to hire a third-party contractor to manage the day-to-day operations of the facility. Executive staff made a recommendation to the Board to proceed with a management-type agreement utilizing a publicly opened process for a Request for Qualifications (RFQ) in the selection of the contractor for this purpose. When the RFQ closed, Atlantic decided not to submit a proposal to continue operation of the facility because the business terms set out by the Airport did not fit Atlantic's business model. Corpus Christi international Airport Board .Agenda October 2(P,2010 Page 4 of 6 In the RFQ process, EAS was selected to manage the west FBO. Two issues were brought up by current tenants at a stakeholders meeting with respect to EAS' experience in managing an FBO and fuel pricing. Executive staff, in working with EAS and the FBO current tenants, held another stakeholders meeting to address the concerns brought up. In that meeting, the thoroughness of EAS' Statement of Qualifications presentation left no questions for the stakeholders present. Mr. Castillo continued by stating that staff contacted an airport in Appleton, Wisconsin, who recently went through the same type of FBO situation with EAS. In August, 2010, the Appleton Airport provided a document with CCIA staff who shared it with the City Finance and Legal Departments in order to tailor it to fit CCIA. The intent was to have a document In place with EAS by October 14, 2010, when the first, one-year extension would expire. The document was not ready prior to the expiration deadline so a short-term, three-month extension was extended to Atlantic Aviation's lease which expires January 14, 2011. At this time, staff is continuing to work with EAS and Appleton, Wisconsin, has successfully executed their agreement and Implemented their operation. Staff conducted a third stakeholders meeting where their concerns regarding rates continued to be heard. At that time, staff agreed to grant a freeze of the current tenants' existing rates and charges for six-months. Staff has also contacted the existing fuel supplier In order to have them submit a proposal in order to provide a seamless transition. A proposal has also been reviewed for new ground support equipment that would be in place before the January 14th, 2011 deadline. Mr. Castillo conveyed to the Board that the goal of Airport staff is committed to not raising rates and charges for a period of six months, but also provide stability to the current tenants of the west FHO with respect to customer service. Staff is strongly encouraging EAS to utilize existing personnel in order to better serve the current tenants. Mr. Castillo the goal of the airport is to award and present a three-part contract by November 9th, 2010 for a management agreement for EAS, the lease of the ground support equipment and a fuel supply agreement by January 14'h, 2011, ensuring a seamless transition. He requested the support of the Board and asked that if there are any questions to contact Airport staff. Director Segundo added that all meetings regarding these negotiations have been sanctioned by the City Manager who is aware of all actions being taken. Discussion was heard by the Board regarding this matter. EXECUTIVE SESSION; PUBLIC NOTICE Is given that the Airport Board may elect to go Into executive session at any time during the meeting In order to discuss any matters listed on the agenda, when authorized by the provisions of the Open Meetings Act, Chapter 551 of the Texas F Corpus Christi International Airport Board Agenda October 20"',2010 Page 5 of B Government Code, and that the Airport Board specifically expects to go Into executive session on the following matters. In the event the Airport Board elects to go into executive session regarding an agenda item, the section or sections of the Open Meetings Act authorizing the executive session will be publicly announced by the presiding officer. VIII. Executive Session under Texas Government Code Section 551.072 regarding Fixed Based Operators Management Services negotiations. The Airport Board present and Airport staff went into Executive Session at 4:25 p.m. and, after some discussion regarding the legal issues, ended the executive session at 4;30 p.m. REGULAR AGENDA: IX. Discussion of Monthly Reports a. Financial Report Mario Tapia, Finance Manager, briefed the Board on the Airport's financial status. He began by reporting that in September, we are 2.4% up from last September on passenger enplanements. He Is hopeful that this trend will continue to increase. b. Parking Revenue Report Mr. Tapia continued with his financial report with the parking revenues which have Increased 3% from August and with two weeks in October, we are up 10% over the same period. He reported that there is more activity. He also added that he is closely watching the debt service ratio. Mr. Tapia continued by reporting the Customer Facility Charges for the RAC's has currently collected $247,000. It is somewhat short of the projections, but he is confident the funds will be available to fund the architectural work necessary for the QTA. c. General Activity Report (GAR) Director Segundo reported that enplanements are up 2.4% from October 2009 and for the year up 5.1% down. d. quarterly Fuel Report—3`d Qtr 2010 Director Segundo reported that there was no variation on the price of fuel from our two FBO's. In Texas, CCIA is on the same price range as San Antonio and other larger airports. He commented that the smaller airports had lower prices. The pricing was reflected of both AVGas and Jet A fuel. X. Discussion of Director's Report a, Construction Project Update Grace Gonzalez, CCIA's Major Projects Engineer, began her briefing by stating that the FIS Rehab project will issued the Notice To Proceed on October 1518 and the 1' Corpus Christi International Airport Board Agenda October 20"',2010 Page 6 of 6 contractor has begun to mobilize. The expected completion date of this project is April 2011. She continued by reporting that the Airfield Equipment and Maintenance Facility is 100% complete and the punch list items are being executed. Ms. Gonzalez also briefed the Board that the project to widen Taxiway Bravo 4 is 100% complete and a punch list of items is also being executed. She concluded by reporting that the project contract amounts are $11,291,331.11 with the actual monies spent at$6,346,073.80. i, identify Items to be placed on next Airport Board Agenda Assist. Director stated that November's meeting should be held at the new Maintenance Facility. The consensus of the Board agreed. x11. Adjournment As there was no further business, Chairman Hicks called for a motion to adjourn. Board member Richard moved to adjourn and Board member Kane seconded. The motion carried. The meeting adjourned at 5:01 p.m.