December 20, 2007




The meeting was held in the Airport Commission Board Room, 8600 Garfield Road, Freeland, Michigan 48623.Chairman Kenneth Distler called the meeting to order at 1:00 p.m.Roll was called by Debbie Meisel.




Present†††††††††††††††††††††††††††††††† Absent & Excused††††††††††††††††† Other††

Patrick H. Beson††††††††††††††††† Hollis H. McKeag†††††††††††††††††† John Palen, Midland Issues

George J. Biltz†††††††† ††††† ††††††††††††††††††††††††††††††††††††††††††††††††††††† Boris Yakima, Mohaghan, LoPrete, McDonald,

Kenneth W. Distler†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Yakima, Grenke & McCarthy

Darnell Earley††††††††††††††††††††† Staff††††††††††††††††††††††††††††††††††††††† Angela Cole, Dow Corning Corp.

Brian K. Elder†††††††††††††††† †††† Jeff Nagel†††††††††††††††††††††††††††††† Duane Goslin Dow Corning Corp.

Eugene F. Gwizdala††††††††††† ††††††††††††††††††††††††††††††††††††††††††††††† A. T. Lippert††††† Jarrod Erpelding, Dow Corning Corp.††††††††††††††††††††††††††††††††

Jon Lynch††††††††††††††† ††††††† †††† Ryan Riesinger††††††††††††††††††††††† Kurt Welsh, Dow Corning Corp.††††††††††

Joyce J. Seals†††††††††††††††††† †††† Debbie Meisel†††††† ††††††††††††††††† Marti Willett, Dow Corning Corp.

†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Ryan Stanton, Bay City Times

†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Angela Osmond, TSA††††††††††††††

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Rich Bostwick, NWA

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Cheryl Wade, Midland Daily News

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Wilma Kasten, Citizen



Dr. Distler introduced Joyce Seals, Mayor of Saginaw, as a new member of the commission.The board welcomed her.



MINUTES:Mr. Gwizdala made a motion to approve the minutes of the Regular Commission Meeting held on October 18, 2007.Mr. Biltz seconded the motion.The motion was unanimously approved by the Board.


OCTOBER 2007 &NOVEMBER 2007 WARRANT AND CASH & INVESTMENT SUMMARY:Mr. Gwizdala made a motion to approve the Warrant Registers for the October Payroll Account Check Numbers 83426-83481 and November Payroll Account Numbers 83482-83540; the October Operations and Maintenance Check Numbers 37934-38009 and November Operations and Maintenance Check Number 38010-38082; and the October and November Cash and Investment Summary.Ms. Seals seconded the motion and the Board unanimously approved it.




DOW CORNING LEASE AMENDMENT:Mr. Nagel stated that the FAA has approved the Dow Corning hangar project from an airspace standpoint and construction of the hangar continues.The lease, which was approved on June 1, 2007, has several conditions with corresponding timeframes.Dow Corning has requested a second amendment to their lease which extends these timeframes to better meet their needs.The amendment also clarifies the language regarding permits for the project.


Mr. Gwizdala made a motion to approve the second amendment for the Dow Corning lease and authorize the Chairman to sign with Mr. Elder seconding.Mr. Biltz abstained from voting.The motion unanimously carried.


DOW CORNING HANGAR PLANS:Mr. Nagel stated that Dow Corning has requested approval from the Airport Commission of the final hangar plans.This approval does not constitute a waiver of permits required from various entities; however, it is required by the lease.A copy of the plans was available at the commission meeting.


Mr. Gwizdala made a motion stating Dow Corning has requested approval of its final plans as provided in Article IV, Section 1.A of the agreement and lease of premises.This approval is granted without waiver of any of the requirements or obligations of Dow Corning as provided in Article IV, Section 1.C of the agreement and lease, or waiver of compliance requirements specified in the FAA letter to Mr. Kurt Welsh dated November 8, 2007.Ms. Seals seconded.Mr. Biltz abstained from voting.The motion unanimously carried.


PROPERY ACQUISITION UPDATE:Mr. Nagel stated that at the September 20, 2007 meeting, the commission passed a Resolution approving a Declaration of Taking in order to proceed with the property acquisition.Since that time, both sides have discussed various courses of action.On December 3, 2007 an agreement was reached to allow Mr. Krauss to maintain some of his property and in return the challenge of necessity would be dropped.


Boris Yakima, who has served as the commission special counsel, explained that the total acreage was not needed for the new terminal; however, the piece that was not needed would have been landlocked and by Michigan law the airport was required to take the entire parcel.An agreement was made that if Mr. Krauss wanted to keep the furthest north piece of property the airport agreed to give him a 12 foot width access strip back to the property.Mr. Krauss also agreed that he would not claim any damages to this property by MBS taking part of the property.That agreement has been placed on record in court.The judge could be signing an official order today to that effect.An amended offer will be made to Mr. Krauss in the amount of $463,000 compared to the original offer of $606,000.The cost to make and maintain the access strip is Mr. Kraussí responsibility.Mr. Yakima stated that once the paper process is completed the airport will own and have possession of the property.Even though the issue of how much property will be purchased has been resolved, the issue over price has not.Mr. Yakima said that he would expect a future court hearing to take place regarding the final purchase price of the property. Mr. Krauss will be allowed to stay in his home for six months.†† ††††


An Amended Declaration of Taking which requires commission approval is required to amend the airportís complaint and keep the process moving forward.An updated property survey is in progress and based on that, the Amended Declaration will be modified to meet the actual boundaries of the survey.Mr. Earley made a motion to approve the following Resolution:


BE IT RESOLVED, that the attorneys for the MBS International Airport Commission are hereby authorized and directed to take whatever steps are necessary for the acquisition of said property and property interests including the commencement and prosecution of condemnation proceedings under Michigan law for the acquisition of said property and to sign all documents and pleadings necessary for such litigation, and Kenneth W. Distler, Chairman of the Commission, is hereby authorized to sign an Amended Declaration of Taking for the acquisition of said properties, and the Airport Manager is authorized to complete the financial transactions required in accordance with State and Federal law.


Mr. Gwizdala seconded.The motion unanimously carried.


SAGINAW COUNTY SHERIFF DEPARTMENT AGREEMENT:Mr. Nagel stated that the current law enforcement agreement between MBS and the Saginaw County Sheriff Department expires on December 31, 2007.Mr. Nagel has met with representatives from the Department to discuss an extension to the agreement.The agreement covers the cost of providing a Deputy at MBS for 16 hours per day seven days per week.Overtime, if needed, is billed extra.The current cost per year is $300,132 or $25,011 per month.


The proposed contract amounts are: 2008††††† $310,824annual$25,902monthly

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† 2009††††† $326,412annual††† $27,201monthly

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† 2010††††† $343,200annual††† $28,600monthly


These are actual costs associated with providing these services.All county contracts must be self-sufficient and not subsidized by the county general fund.


The county does an excellent job of meeting the requirements of the contract.They have an adequate number of trained deputies to meet MBSí needs and cover vacation, sick time, etc.They also participate in additional duties such as emergency exercises, tabletop scenarios and VIP visits.Mr. Nagel stated that this was discussed with the Finance Committee.Mr. Gwizdala made a motion to approve the new rates for the fifth addendum for the Saginaw County Sheriff Department Agreement and authorization for the Chairman to sign with Mr. Biltz seconding.The motion passed unanimously.


COMPASS AIRLINE AGREEMENT:Mr. Nagel stated that Compass Airline is a wholly-owned subsidiary of Northwest Airlines flying regional jet aircraft as a Northwest Airline affiliate.Compass provides seamless service similar to Mesaba and Pinnacle.Northwest has contacted Mr. Nagel about Compass flying into MBS and they have requested an operating agreement similar to Mesaba, Pinnacle and the United Express partners.Compass flies Embrear 175 regional jets that have 12 first class seats and 64 coach seats for a total of 76.This is a little smaller than the DC9s that Northwest is beginning to replace but a very nice aircraft.Service begins January 6, 2008.


Mr. Gwizdala made a motion to approve an operating agreement with Compass Airlines and authorization for the Chairman to sign with Mr. Biltz seconding.Following a brief question and answer period with Rich Bostwick, Northwest Airlines, the motion passed unanimously.


FAA REIMBURSABLE AGREEMENT:Mr. Nagel stated that part of the site preparation for the new terminal includes relocating the Remote Control Air to Ground (RCAG) radio antennas and Automated Surface Observation System (ASOS).Both items have been included in the five-year plan and included in the terminal cost estimates.The estimated cost to move this equipment is $1,000,000 and would be reimbursed to the airport through an FAA grant.


The equipment is located on MBS as part of an FAA master lease for various FAA equipment.The airport receives no rent for this land.The existing master lease is set to expire in late 2009 and staff is discussing with the FAA as to who is responsible for the costs associated with moving this equipment.


In either case, the first step in this process is site evaluation, preliminary engineering and planning and site selection.To accomplish this, the airport must contract with FAA engineers.This first phase of the project will cost $44,275.The cost is paid in advance by MBS then a FAA grant will be applied for in 2008 for 95% federal reimbursement.Mr. Nagelís recommendation is to move forward with this phase to get the preliminary work accomplished rather than risk further delay later in the project.Signing the Reimbursable Agreement does not commit MBS to pay the full cost of relocation.The issue of the master lease must be resolved before Mr. Nagel would recommend that step.This agreement only covers all preliminary work needed to begin the process of moving the equipment.Mr. Nagel stated that this agenda item was discussed with the Finance Committee.


Mr. Gwizdala made a motion to approve the FAA Reimbursable Agreement, authorization for the Chairman to sign, and payment of the $44,275 to the FAA.Ms. Seals seconded the motion.After brief discussion the motion passed unanimously.


FIVE-YEAR PLAN:Mr. Nagel stated that each year MBS is required to submit a Five-Year Capital Improvement Plan to the FAA.The plan lists AIP projects for the upcoming year plus planned projects for the next four years.The plan is required by the State and the FAA to assist with future funding needs.


Mr. Nagel presented two versions of the 2008-2012 five-year plan for 2008.One version uses only entitlement money for 2008 while the other includes FAA discretionary funds for 2008. MBS will submit two AIP applications for projects listed in 2008, one with FAA discretionary money and one without.Mr. Nagel met with the FAA and the State and both entities recommend a dual submittal for 2008.This will greatly enhance MBSí chances of obtaining discretionary funding if and when it becomes available.


This five-year plan is a carryover from last year and it is critical to maintain a consistent program to ensure the best opportunity to receive FAA discretionary money.As with past plans, a motion to approve this plan does not commit the commission to these projects. Each year, the commission must pass a Resolution for that yearís project.This plan serves as a planning document.It is quite possible that the airportís 2008 projects would need multiple Resolutions depending on the timing of funding and availability of discretionary money.In either case, it is important to use these planning tools to submit the AIP application through the State to the FAA.


Mr. Nagel explained that reauthorization of the FAA for AIP has not been passed by Congress in Washington.The FAA budget has been operating under continuing resolution since the first of the fiscal year which was October.Eleven budgets were just approved through the House and the Senate.One of those budgets was the FAA budget which authorizes the FAA to continue to collect taxes and fees until the end of February for the AIP program but does not grant the FAA the authority to issue any airport grants for 2008.That will be discussed when Congress reconvenes in January.Mr. Nagel stated that he is confident that the FAA will issue a grant sometime in 2008.Submitting two plans will put MBS in a good position for discretionary funds when AIP is approved.


Mr. Gwizdala made a motion to approve both versions of the MBS Five-Year Plan.Ms. Seals seconded the motion.


TEN-YEAR PLAN:Mr. Nagel stated that the Ten-Year Capital Plan is used as an internal budgeting tool and does not commit funds for all listed projects.The plan is provided for informational purposes and no formal approval is required at this time.Mr. Nagel has discussed the plan with the Finance Committee.Mr. Gwizdala made a motion to receive the 2008-2017 Ten Year Plan.Mr. Biltz seconded and the motion passed unanimously.


2008 BUDGET:Mr. Nagel stated that the budget compares each account with the 2007 budget and shows the percentage difference between the two.The 2007 year-end numbers will be presented in the annual audit.


The Finance Committee has met to review the budget and recommended that the budget be presented to the full commission for approval.Mr. Nagel reviewed some of the line items.He stated that in the personnel fringes he used the same number as last year since he is currently in union negotiations and health care is the main topic.Mr. Biltz stated that overall personnel costs are large portion of the total expenses.Looking at wages across Michigan a 6% increase is out of proportion and out of line.Mr. Nagel stated that comparing our number of employees to other airports, MBS is very lean.Mr. Biltz asked that the budget numbers for personnel be researched for the last five years.Mr. Lynch asked that the number also include actual cost versus budget numbers.Mr. Nagel will comprise the numbers and present them to the Personnel Committee.


Mr. Gwizdala made a motion to approve the 2008 Budget with Mr. Beson seconding.Mr. Elder on behalf of the Finance Committee stated that Mr. Nagel was very meticulous explaining the budget to the Finance Committee.Mr. Elder explained that the budget is closer to $5 million since the budget includes the land acquisition.Mr. Gwizdala asked for a roll call vote.Ms. Meisel called roll; Patrick Beson, yes; George Biltz, yes; Kenneth Distler, yes; Darnell Earley, yes; Brian Elder, yes; Eugene Gwizdala, yes; Jon Lynch, yes; Joyce Seals, yes.Motion carried.

AIR SERVICE GRANT:Mr. Nagel stated that MBS applied for and received a 2008 DOT Small Community Air Service Grant.The DOT requires a turnaround of the grant prior to December 30, 2007.Mr. Nagel summarized the grant.


††††††††††† Funding:††††††††††††††††††††† Total Project†††††††††††††††††††††††† $600,000

††††††††††† ††††††††††††††††††††††††††††††††††† Maximum Federal Share††††† $500,000

††††††††††† ††††††††††††††††††††††††††††††††††† Local Share††††††††††††††††††††††††† $100,000


Mr. Nagel stated that of the local share the three local chambers of commerce, the three local economic development organizations, and three visitor and convention bureaus have pledged $35,000.The MBS local share of $65,000 is included in the marketing 2008 budget.


Mr. Nagel stated that the use of the grant is to recruit a new airline to provide new nonstop service to a new hub, introduce competitive air service in the community with the goal of lowering fares, and market air service.All monthly costs will be submitted to DOT which will reimburse at 83.33%.The DOT is to approve airline agreements, revenue guarantees, marketing efforts, and consultant contracts.The grant expires December 2010 with options by DOT and MBS to terminate sooner.MBS is to submit quarterly progress reports to the DOT.


Mr. Nagel explained that MBS is very fortunate to receive this grant.Since MBS does not collect local tax money, this is an excellent way to assist the airportís air service efforts.Mr. Lippert, The Boyd Group, and Mr. Nagel have all reviewed the grant and Mr. Lippert will need to sign it.


Mr. Gwizdala made a motion to approve the DOT Small Community Air Service Grant and authorize the Chairman to sign related paperwork.Ms. Seals seconded the motion.Discussion took place.Mr. Nagel explained that any proposals for additional air service will be taken to the Marketing Committee.The goal is to bring more options to the mid Michigan area.The vote was taken and the motion passed unanimously.


OLD BUSINESS: Mr. Nagel stated that the wireless internet has been installed.Proposals were received and Pilgrim Technology was awarded the account.The start-up costs were under $2,000 and there will be a small monthly fee but this will allow the wireless to be free to the users. This system will work with national accounts and also with Boingo which is the system that Dow uses.Pilgrim Technology will monitor offsite 24/7.The contract is for one year.


Mr. Riesinger explained that the airport had applied for a grant for radios but staff was informed that the grant was not approved.MBS definitely qualifies and it is a viable project however there is a limited amount of funds.Some of the radios are budgeted in 2008.†† Staff will continue to monitor any other grants available.


Mr. Riesinger stated that the airfield construction work has been completed just in time for the winter weather.Mr. Nagel stated that he appreciated all of Mr. Riesingerís work with the construction project.He had excellent communication with the tenants.Umbrellas were purchased for the passengers in case of inclement weather to get out to the aircraft.


Mr. Earley stated that he has received all of the responses back in regards to the managerís evaluation.He is currently in the process of compiling the information.It is Mr. Earleyís intent to call the committee together before the next meeting.


NEW BUSINESS:Mr. Nagel stated that he had received a couple of calls from commissioners inquiring about flight status and condition of the airport due to the last storm last weekend.Mr. Nagel explained that MBS has two shifts of maintenance Monday through Friday during the winter.Snow removal on the weekends is done on overtime.There are seven maintenance workers, two mechanics, and a supervisor.Three custodians handle snow blowing and shoveling if front of the terminal building.They were all called in at various times over the weekend.About 109 hours of overtime was used to combat the storm.High speed brooms were used right away which keeps the friction numbers and braking action numbers high throughout the event.One runway, taxiway and ramp were kept open.There were some cancelled flights reported.Mr. Nagel researched and found that four out of six flights from Detroit to MBS were cancelled.The other airports cancellations were proportionate to MBS.One of the MBS cancellations stated airport conditions.Mr. Nagel checked with Rich Bostwick and it was not airport conditions here but could have been the departing airport or the airport prior.The maintenance crew did a great job keeping the airport open.


Dr. Distler stated that he was traveling during the storm.He stated that flights were landing in Detroit but he did see that on the opposite side of the terminal there was a ramp full of RJs.Once in the terminal he checked his next flight to MBS and found it was delayed two hours.NWA kept reporting that weather conditions were canceling the flight.His assumption was that since aircraft was landing in Detroit, the weather conditions were at MBS.Dr. Distler stated that there are people that will not fly out of MBS because of how many times they have had flights cancelled.They get tired of renting cars.This airport was open when the flight was cancelled.Dr. Distler stated that he will talk with Rich Bostwick regarding this situation.Mr. Biltz stated that this should be questioned and NWA should have an answer.†††††††††††††††


ADMINISTRATIVE MATTERS:Dr. Distler wished everyone a nice holiday.Next regular meeting is scheduled for January 17, 2008.


ADJOURNMENT:There being no further business, Mr. Biltz made a motion to adjourn.Mr. Gwizdala seconded and the board unanimously passed the motion.The meeting adjourned at 2:20 p.m.




††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† ††††††††††††††††††††††† ††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Eugene F. Gwizdala, Secretary