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HomeMy WebLinkAboutMinutes Airport Board - 06/13/2007 JEGULAR MEETING MINUTES CORPUS CHRISTI INTERNATIONAL AIRPORT SO TR_EE CEIVED1000 INTERNATIONAL DRIVE AVIATION ADMINISTRATIVE CONFERENCE ROFE810 2010 CORPUS CHRISTI,TEXAS CORAUSCHRISTI ,]UNE 13T ,2007 3:30 P.M.INTERNAT90NAL AIRPORT Y SECRETARY' mr BOARD MEMBERS Jerry Kane, Chairman Don Feferman,Member Frank"Rocco"Montesano, Vice-Chair William Dodge,Member J.C. Ayala,Member Jesse Olivares,Member Glenn E. Lyons,Member Jay Wise,Member Sylvia Whitmore,Member Sam Susser,Member Ed Hicks, Sr.,Advisory Member AIRPORT STAFF Ron Massey, Interim Director of Aviation Debra Keller,Asst. Director of Aviation Adelle Ives,Management Assistant I. Call to Order The meeting was called to order by Vice-Chair Montesano at 3:30 p.m. A quorum was present. Mr.Massey stated that Assistant Director Keller is out of town on City business and would be attending this meeting. II. Approval of the minutes for the May 9'h regular meeting of the Airport Board. Vice-Chair Montesano called for approval of the meeting minutes for May 9a'. Board member Susser moved to approve the minutes. Board member Wise seconded. Vice-Chair Montesano called for discussion. Vice-Chair Montesano called for clarification of discussion regarding the Airport Capital Reserve Fund. He asked for the balance of this fund. Mr. Mario Tapia, Finance Manager for the Airport, stated that at year-end 107-`08,the balance is approximately$800,000. Vice-Chair Montesano stated that on page 4 the discussion regarding the FAA's matching funds was confusing. He felt that it should read, "increasing the finds required for the grant." He did not feel that it was necessary to correct, but he wanted to clarify the issue. Vice-Chair Montesano called the question and the Board unanimously approved the minutes. III. Action Item: a. Motion to recommend a Resolution authorizing the City Manager or his designee to accept Federal Aviation Administration Grant Number 3-48-0051-039-2007 in an amount not to exceed 58,447,719 to Rehabilitate West GA Apron, Phase H, Rehabilitate Taxiway Systems, Phase I, and Rehabilitate Taxiway Lighting Systems,Phase I; Improve Airport Drainage Area VI,Phase I at Corpus Christi International Airport, Corpus Christi, Texas. b. Motion to recommend an Ordinance appropriating $3,914,214 from the Federal Aviation Administration Grant No. 3-48-0051-39-2007 in the No. 3020 Airport Capital Improvement Fund for the Rehabilitation of west GA Apron, Phase II, Rehabilitation of Taxiway Systems, Phase I, Airport Drainage Improvements, Phase Vi, and Rehabilitate Taxiway Lighting Systems, Phase I at Corpus Christi International Airport, Corpus Christi, Texas; amending Corpus Clu—)InternationalAirpoH Board Agenda June 13,2007 Page 2 of 9 FY2006-2007 Capital Budget adopted by Ordinance No. 026997 to increase appropriations by $3,914,214;and Declaring an Emergency. c. Motion to recommend a Resolution authorizing the City Manager or his designee to execute Amendment No. 3 to Federal Aviation Administration Grant No. 3-48-0051-037-2005 to extend the scope of the grant to include Runway 13131 Rehabilitation — Phase II, Runway 17135 Shoulders And Blast Pads,Airport Drainage Improvements—Phase IV, Terminal Apron, and West GA Apron at Corpus Christi International Airport. d. Motion to recommend an Ordinance appropriating $392,073 in the Airport Capital Reserve Fund 4611; transferring and appropriating $392,073 into the Airport CIP Fund — Capital Reserve Fund 3020A to Rehabilitate West GA Apron, Phase II; Improve Airport Drainage Improvements, Phase VI at Corpus Christi International Airport, Corpus Christi, Texas; amending FY 2006-07 Operating Budget adopted by Ordinance No.026908 to increase appropriations by $392,073; amending FY 2006-2007 Capital Budget adopted by Ordinance No. 026997 to increase appropriations by$392,073; and Declaring an Emergency. e. Motion to recommend authorizing the City Manager,or his designee, to execute a construction contract with Bay Limited of Corpus Christi, Texas in an amount not to exceed $7,441,437.75 for the Corpus Christi International Airport West General Aviation Apron Rehabilitation and Drainage Phase V Improvements. Interim Director, Ron Massey, explained that currently, the Airport has two open grants with the FAA, Grant 37 and Grant 38. The prior grant, Grant 36, has been closed out. Grant 39 is what is anticipated to be the amount of funding that the FAA will make available to the Airport over the next two fiscal years based on federal funding legislation. This grant will be at the 95%to 5%match. He added that Item "b"is an ordinance for City Council to appropriate the spending authority that they have given the Airport against Grant 39. The FAA anticipates funding $8.4 million; but, at this time, they are advising us that$3.9 million is available for spending on designated projects. In the previous grants, Grant 37 and Grant 38, the money has been appropriated for the authorized projects. Mr. Massey continued by explaining that Item"c"is an amendment to Grant 37 to include the authorized use of monies of this grant for the actual reconstruction of the apron. He added that approximately $529,000 of funds in the grant are not going to be needed for the previously stated purpose and, with this Resolution, this funding has been authorized by the FAA to be used to extend the scope of Grant 37 to include Rehabilitation of the West GA Apron,Phase II, Rehabilitation of Taxiway Systems, Phase I, Airport Drainage Improvements, Phase VI, and Rehabilitate Taxiway Lighting Systems,Phase 1. Board member Olivarez questioned whether this fund balance was due to some of the projects being completed under budget. Mr. Massey responded that there was a combination of reasons for this fluid balance including inspection costs and contracts awarded with the stipulations of "not to exceed"terminology. He added that the largest amount in this balance was due in part to the problems that occurred when Runway 13131 collapsed while doing the directional drilling. Grant 37 is being amended for funding of the West GA Apron with these Corpus Ch)._.t}International Airport Board Agenda June 13,2007 Page 3 of 9 funds. Board member Susser questioned whether there were any aspects of Grant 37 that were not accomplished leaving surplus funds in this Grant. Mr.Massey responded that this scope of the original grant was completed and closed out. He added that the FAA Project Manager for the Airport, Marcelino Sanchez, is on-property to inspect projects periodically. Board member Feferman questioned whether the actual contract price was reduced because of the problems experienced in the directional drilling under Runway 13131. Mr. Massey replied affirmatively. Board member Wise questioned whether this funding was additional monies or would this be taken away from any future appropriations. Mr. Massey responded that this would not affect future funding. He added that due to this extension of the scope of Grant 37, CCIA is prepared for future funding should monies from the FAA become available. Mr. Massey clarified the FAA funding for CCIA to the Board by stating that the cost of the construction contract would be funded from three grants, Grant 37, 38 & 39. Discussion followed on grant funding and the on-going projects. Vice-Chair Montesano called for a motion on Item "a". Board member Susser moved for approval of this item.Board member Olivares seconded and the motion carried. Vice-Chair Montesano called for a motion on Item "b". Board member Susser moved to approve this item. Board member Feferman seconded and the motion carried. Vice-Chair Montesano called for a motion on Item "c". Board member Wise moved to approve this item. Board member Susser seconded and the motion carried. Vice-Chair Montesano called for a motion on Item "d". Board member Susser moved to approve this item. Board member Olivares seconded and the motion carried. Vice-Chair Montesano called for a motion on Item"e". Mr.Massey,in response to a question from the Board at the last meeting, explained the bidding process for this project. He presented a hand-out to the Board of a tally sheet which showed two bidders for this project. The two bidders were Bay and Kiewit. Board member Susser questioned Mr. Massey on whether time parameters were put into the bidding of this project. W. Massey responded that provisions are worked into the contract for the number of workdays with provisions for liquidated damages; but, in lieu of collecting on liquidated damages, usually the contractor is agreeable to provide additional work. This is the manner that the City deals with this issue rather than collecting liquidated damages. He added that in his experience in contracting by governmental entities, it is usually not as successful in collecting liquidated damages because the Courts asks to demonstrate the loss and the City will lose money in inspection costs alone. Board member Susser felt that this issue would probably not go to Court as this is a contractual matter since the number of work days were not adhered to by the contractor as written into the contract. Vice-Chair Montesano also questioned the wide variance in the bid prices from each of the bidders. Mr.Massey explained that,as this is Bay's third contract in a row at the Airport, they understand Airport operations and may have a sub-contractor that is already providing services pertinent to the Airport; and, he felt that Bay will just extend the sub-contractor's contract Corpus Chr'Jinternational Airport Board Agenda June 13,2007 Page 4 of 9 should they be awarded the bid. Mr. Massey also added that contractors utilized various strategies in determining their bids. Board member Feferman questioned how many contractors were invited to bid on this project. Mr. Massey stated that he did not have that information on the number of invitations sent out for this project. He stated he would find out this information and report back to the Board. Board member Olivares questioned whether Bay's price was already agreed upon. Mr. Massey stated that Bay's price is based on quantities. The design engineer provided the bid sheet with the quantities of each item as part of the bid package. He added that as this is FAA funding, any change orders would require going to the FAA Project Manager for approval. Vice-Chair Montesano called the question. Board member Feferman moved to approve this item. Board member Ayala seconded and the motion carried. Mr.Massey added that staff would also be going to City Council for approval on a contract for geotechnical testing with PSI in the amount of$70,907. Board member Lyons questioned whether this would be funded with Grant 37 funding. Mr. Massey responded that this would be in addition to Grant 37 funding. As this was not on this meeting's agenda, Asst. City Attorney Wendy Ogden, recommended the Board not vote on this issue. Mr. Massey wanted to advise the Board that this issue that would be going before City Council. Discussion Items: a. Discussion on recommendation from the Airport Board's Sub-Committee regarding the Mercury Air Center Lease Proposal. Vice-Chair Montesano reviewed the recommendations by the Board's Sub-Committee on this issue. He stated that the matter of regularly scheduled lease rental price increases had not been addressed by the Airport in the past despite the inclusion of a clause written within the lease to allow for annual increases. Board member Susser commented that the leases had not been administered as the Board would have preferred. Vice-Chair Montesano felt that, in the past, revenue was not an issue as oil and gas production was on the rise at the Airport. Since that time, oil and gas production has decreased and the options for increasing revenue are limited. The Board feels that maximizing the current leased properties would be beneficial in order to assure future revenues for the Airport. He continued by stating the existing leases include a CPI, cost price index, formula and the recommendation of the Sub-Committee is to base the lease on the value of the property based upon this formula. He also stated that a property value assessment was recommended to be obtained; and, from that assessment, a percentage return would be determined. Board member Susser, as a member of the Sub-Committee, proposed to Mercury that the Airport would hire an independent appraiser for the purpose of appraisal of the Mercury site. He added that if Mercury would like to hire an appraiser, it would be acceptable. Should these two appraisals not agree, then the Board agrees to have the two appraisers hire a third appraiser who would be the final determining factor on the value of the property. At that point, Mercury would have the option to either accept or decline the assessment. If Mercury does not accept the appraisal results, the lease would then go out for bid. He also added that Mercury, as a long-term tenant,deserves the first option,but he also added his concern that the Airport receive a realistic value for available assets set and enforced. corpus Chr wri Internadonal irport Board Agenda June 13,2047 Page S of 9 Vice-Chair Montesano added that since Mercury's lease continues for another two years, Mrs. Keller would be working on bringing the leases current for both FBO's with respect to rates based upon the CPI increases that should be have been enforced up to the present time. This would not be a retroactive, but rather an enforcement of the increased rates from this point on for the duration of the current leases. As for the proposal from Mercury regarding capital improvements to their existing facility, the consensus of the committee is to hold off going out for bids if Mercury agrees to an 8%return based upon property value. If this is not acceptable, negotiations could be done on the differences or, at that point, staff would move towards going out for an RFP. He added the Sub-Committee's surprise that nothing had been done to increase rates on these leases for some time. Mr. Massey commented that the Committee's intention was to have staff move forward with the rate increases on the lease as soon as possible, but staff is researching whether these increases would jeopardize FAA funding for the West GA ramp repairs. He added that it has been found that this practice has been done at other locations; and, it has been determined that federal funding of construction was not jeopardized. Staff is ready to move forward with enforcing the increase in rates for the FBO's. Vice-Chair Montesano commented that the exact amount of increase had not yet been determined. Mr. Massey added that Mrs.Keller is worldng on this aspect and he would update the Board upon her return. Vice-Chair Montesano apologized to Mr. Gravell, from Mercury Air Centers,for not sharing this information with him any sooner as no actual figures had been calculated. In the course of this deliberation, Vice Chair Montesano added that the Sub- Committee has determined that another type of lease should be implemented in the future. Board member Susser felt that since the rent had not been adjusted annually as the Airport was entitled to do and Mercury was obligated to pay,Mercury stood to benefit the most since they will not be responsible for the Airport's loss of revenue from possible past rate increases. Vice-Chair Montesano stated that there were two issues at hand. One issue is to bring current leases up to date with respect to rates; and, the second issue is to have future leases written differently than the current leases. He also added that should Mercury agree to continue with their capital improvements, the Airport would not consider going out for an RFP if Mercury agrees to pay the up-to-date lease rates based on a fair market value. Board member Feferman questioned whether Mr. Gravell was aware of the recommendations of the Sub- Committee. Mr. Gravell responded that he was unaware of these recommendations. Board member Susser suggested Mr. Gravell find out whether his corporate office would agree to these recommendations. Vice-Chair felt that once figures could be obtained a better decision could be made. Board member Susser was adamant that the Airport obtain a fair market return on a fair market value. Vice-Chair Montesano opened the floor for discussion on the Sub-Committee's recommendations. He reiterated the Sub-Committee's recommendation to have a fair market return at 8% applied to the lease based upon appraisals that the Board and Mercury agree with. He added that this was the Board's recommendation to Airport staff. Board member Wise � Corpus Chi A International Airport Board Agenda June 13,2007 Page 6 of 9 questioned that since the Airport is looking to maximize revenue what about the possibility should the appraisal not be as high as thought. Vice-Chair Montesano stated he felt this was very unlikely to happen based upon the findings of the Sub-Committee. Mr. Gravell felt that until actual figures could be provided by staff, he had nothing to take back to his corporate office for a decision. Mr.Massey extended his appreciation to the Board for the time they took to work on this issue. He will be conveying this information to the City Manager and stated that he would advise Debra, upon her return, to have the lease rates current. Board member Susser added that the tenants also needed to be notified of the changes. b. Discussion of Airport Smoking Policy for the Terminal and Commercial Apron Areas Vice Chair Montesano called for discussion on this issue. Mr.Massey added that a designated smoking area was proposed to be on the right-hand side upon exiting the baggage area. Board member Lyons felt that the smoking area needed to be away from the entrances or exits where anyone entering or exiting the building would have no choice by to walk through the smoke. He added that at his office building in Dallas smokers had to go 20 yards at the other end of the parking lot to smoke. He felt it was offensive for anyone to have to walls through the smoke upon entering or exiting the building. Mr. Massey commented that at present, the Airport does not have a policy in place for this issue. Board member Feferman questioned whether there had been complaints regarding the smoke. Mr. Massey stated that there were some complaints. He added that at City Hall designated smoking areas are away from the entrances. Board member Lyons felt strongly that a smoking policy moving the area away from entrances and exits should be established by the Board. Board member Wise questioned whether there is a designated smoking area for employees. Mr. Massey responded that currently Airport employees smoke where the general public smokes. He added that this is also intended to limit smoking to the areas in and around the terminal and on the commercial ramps. Board member Lyons felt another option would be to make the Airport could be made a smoke-free building. Board member Wise felt that the far ends of the Airport building would be the best option. He added that employees would also utilize these areas as well. Discussion was heard on the specifics of prevailing winds and the flow of foot traffic. Board member Susser questioned the number of employees smoking. Staff responded there is a small number of Airport employees who smoke, but several of the tenants have employees that smoke. Board member Susser stated that he would also like to have the Airport become a smoke-free building. Vice-Chair Montesano stated that the Board's recommendation would be to have the smoking areas designated away from the entrances. c. Discussion on the regular meeting date of the Airport Board. Mr. Massey stated that it was a minor item, but the list of Boards according to the City Secretary's Office, lists the Airport Board meeting on the third Wednesday as opposed to the second Wednesday. The Board recommended to change the Airport Board's meeting date to Corpus Christi International Airport Board Agenda June 13,200.E Page 7 of 9 be the second Wednesday of each month. Mr. Massey stated he would advise the City Secretary's office to make the change. V. Director's Report a. Budget Update Mr. Massey requested Mario Tapia, Finance Manager, to update the Board on the proposed 07-08 budget. Mr. Tapia stated there were no changes in the proposed budget and that it would be going before City Council the 26th of June. Mr. Massey asked to address the Wi-Fi expenses on the budget. He stated the reason that MIS's allocation was increased this year from last was because last year they used part of their fund balance. They are an internal service fund; and, as that, they are only to recover their costs through departmental funding. The year before last,they ended their year with a balance so last year's expenses were partially covered by this fund balance. This year, they ended the year meeting expenses malting the charges to the Airport more of what would normally be charged As for allocations from MIS, Mr. Massey stated that allocations are based upon the type of service provided and each is computed differently such as per employee or a budgeted percentage; but it is uniform throughout the City. He added that the only other charge is for Wi-Fi which is a new expense that has been added to get the departments that are paying for Wi-Fi, utilize the services as part of the contract with Earthlink. The City will be looking at what services are needed which include some of the Wi-Fi services that are no longer provided free of charge to the public at the Airport. Board member Feferman questioned that since the Airport is paying for Wi-Fi and the public at the Airport will pay for use of Wi-Fi,is that paying twice for the same service. Mr. Massey stated that because of the contract with Earthlink, the Airport and the Convention Center were excluded from being designated a"hot spot". He added that a fee would be paid for use of an area as a"hot spot" and customers to that area would use Wi-Fi free of charge. He also stated that there are two different systems working, the system the Airport offices use for business use and then there is the use of the general public. The public will be charged $3.95 for an hour of Wi-Fi use or$7.95 for a day or$15.95 for a three-day pass. He also added that if they are an Earthlink wireless customer in their home, they will have that same access at the Airport as well. He stated that the City is looking at using a kiosk within the Airport for internet use. Board member Feferman questioned whether this would a free service or if there would be a charge for use of the kiosk. Mr. Massey felt that it would be an issue to look into in combination with the development of the Business Center in the terminal. Board member Susser questioned whether the Airport offices utilized the wireless system. Mr. Massey stated that everyone in the Administrative offices is hard-wired. He added that wireless could be utilized by staff in the outlying buildings. Board member Susser questioned whether the Airport is paying Earthlink for this service. Mr. Massey stated that the City is paying for this service and the Airport's allocation to MIS pays indirectly for Wi-Fi services. Board member Susser stated that the City should have negotiated for free use of this service for City purposes. Mr. Massey added that the City also negotiated to commit to buying a j COgW Ch►wli International Airport Board Agenda June 13,2007 Page 8 of 9 certain amount of services every year. He added that this is the solution for year one of the contract with Earthlink and the City will be looking into the type of services to extend to Airport customers in the coming years. Vice-Chair Montesano questioned the status of the slant drilling. Mr. Massey stated there is a City Ordinance that requires anyone drilling within the city limits to acquire a permit from the Gas Department. The limits of the lease and what is being drilled for are also taken into consideration. If direction drilling is being done, the limits of the lease are reviewed to ensure the drilling company does not go outside the limits of the lease. Board member Susser questioned whether there is a lease with the City for a zone below 10,000 feet. He is aware of an individual who has property adjoining Airport property who is about to sign a lease. He added that several properties are involved in the lease and they are pooling it off and the Airport's property will be pooled along with the group. He added that they are looking for three zones above 7,000 feet which will not be under the Airport,but they are also looking for drilling below 10,000 feet which would be under the Airport. Board member Susser clarified that pooling is different from directional drilling. Pooling would be unitizing anyone within a certain number of feet to automatically be pooled. He stated that the drilling would be done by Del Mar Resources from Austin, Texas and the contact person is Mr. Ferrell. He did not believe that there is any mal-intention, but he wanted to make staff aware of this issue. Mr. Massey reported to the Board that ExpressJet is unable at this time to get the information requested by the Board on the number of passengers using ExpressJet from Corpus Christi. Mr.Massey stated that the May GAR is reflective of ExpressJet's numbers. Board member Susser questioned whether this information was in response to his question at the last meeting. Mr.Massey stated that the information in the Board's notebooks comes from a leakage study done from August 2003 through August 2005 for seven zip codes within the City. This information is a partial response to give an idea to the Board of the numbers of passengers flying from Corpus Christi. Mr. Massey added that this type of information is not easily accessible and that a company specializing in this type of reporting would need to be contracted for this information. Staff mentioned that it is necessary to be specific in the type of request for information. Board member Susser stated that he is wanting to get this information to see about getting air service development for the west coast. He feels that there are several small airlines that could provide service to the west coast. Vice-Chair Montesano stated that each airline is aware of their numbers flying to the west. Board member Susser is requesting that this information be provided including contracting a firm for this purpose. Mr. Massey stated that staff would research this topic further. b. General Activity Report The Board reviewed the information on this report. c. Parking Revenue Report The Board reviewed the information on this report. Vice-Chair Montesano stated that the report was very healthy. Corpus Christi International Airport Board Agenda June 13,2007 page 9 of 9 d. Construction update I& Massey stated that there is little change with the project for Runway 17135. He added that they anticipate being completed by mid-August e. Discussion of Smarte Carte concession rate increase Mr. Massey stated that this company is requesting a price increase from $2 to $3. Board member Susser stated that after looking at the contract, Smarte Carte has a right to raise their prices with the Airport getting 10% of their revenue. He added that staff should consent on their request if they put a rack within the hold room where passengers deplane. Mr. Massey stated that staff would research this issue. f. Response to the Board's inquiries from the last meeting Vice-Chair Montesano stated that most of the inquiries were responded to by Mr. Massey. Mr. Massey added that the only other update he wanted to present to the Board was the issue with Scannell Properties. He reported that Scannell has opted to extend their lease for another six months due to the rise in interest in the property in the International Business Centre. At present, Scannell has the opportunity to market and build on the sites at IBC. Board member Susser questioned whether they had exclusive rights to do this. Wendy Ogden, Asst. City Attorney, stated that this was their second option period,which is nine months long, and their services are exclusive. VI. Board Business a. Board absences Vice-Chair Montesano called for a motion to excuse Chair Kane, Board members Wilson and Dodge. Board member Lyons moved to excuse those Board members who were absent at this meeting. Board member Feferman seconded and the motion passed. VII. Adjournment As there was no further business, Vice-Chair Montesano called for a motion to adjourn. Board member Susser moved to adjourn. Board member Lyons seconded and the meeting adjourned at 5:05 p.m.