MBS INTERNATIONAL AIRPORT COMMISSION

 

July 17, 2008

 

MINUTES

                                                                           

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 1:15 p.m.  Roll was called by Debbie Meisel.

 

COMMISSIONERS

 

Present                           Absent & Excused      Staff                      Other     

George J. Biltz               Brian K. Elder             Jeff Nagel             John Palen, Midland Issues

Kenneth W. Distler        Eugene F. Gwizdala   A. T. Lippert         Cheryl Wade, Midland Daily News

Darnell Earley                Joyce J. Seals              Ryan Riesinger      Paul Wyche, Saginaw News

Ernie Krygier                                                     Debbie Meisel      

Jon Lynch                                                                                       

Hollis H. McKeag                                              Guests

                                                                           Joe Jackson, RS&H

                                                                           Mark Wilcer, RS&H

                                                                                                        

PLEDGE OF ALLEGIANCE 

 

MINUTES:  Mr. Krygier made a motion to approve the minutes of the Regular Commission Meeting held on June 17, 2008.  Mr. Biltz seconded the motion.  The motion was unanimously approved by the Board.

 

JUNE 2008 WARRANT AND CASH & INVESTMENT SUMMARY:  Mr. Krygier made a motion to approve the Warrant Registers for the June Payroll Account Check Numbers 83917-83973; the June Operations and Maintenance Check Numbers 38534-38620; and the June Cash and Investment Summary.  Mr. Earley seconded the motion and the Board unanimously approved it.

 

PUBLIC COMMENT:  None.

 

FARM LEASES:  The final two farm leases expire at the end of the year.  According to the lease, an extension must be agreed to prior to the end of August.  The two farmers with expiring leases have indicated they would like to continue, which is good for the airport.  Last year four other farmers were renewed using a brand new lease.  The rate increased 5% with a 3-year term.  Keeping with FAA requirements, Mr. Nagel would like to offer the two remaining farmers similar terms and conditions for renewal.  Mr. Krygier made a motion to approve new three-year leases for those farm leases expiring in 2008 with a 5% cost increase.  Mr. Biltz seconded and the motion passed unanimously.

 

RS&H CONTRACT AMENDMENT/AIP PROJECT #3808:  The contract for RS&H to design the terminal was approved by the Airport Commission in May, 2007.

 

It has become apparent moving through this process that additional items should be included in this contract.  This could be done as an appendix to the agreement or by using a substitute agreement in its entirety.  Using a revised agreement is the preferred method as it easily facilitates all of the changes into one basic agreement.

 

The new contract has been expanded to add the schematic design phase of work.  It also expands the scope of services to bring the airside civil engineering work and landside civil engineering work all the way through bidding.  The new agreement also adds two special services to the scope and those are assistance with relocation of the FAA equipment (RCAG) and additional assistance with FAA funding.  All of the additions provide for a more productive design and bidding process.  These changes have been discussed with the Operations Committee which recommends approval of the revised contract.

 

These changes add $1,266,127 to the original amount bringing the total to $3,524,000.  This increase will not impact the total design fees estimated for the complete project.  It should also be noted that unlike construction contracts, RS&H was selected through an FAA-required qualification based process and not through a bidding process.  Mr. Nagel has reviewed the contract and Mr. Lippert has reviewed and approved it as to form.  The contract is also subject to review and approval from the MBS State Project Manager.

 

These costs are eligible for FAA funding and an FAA grant application will be submitted prior to the FAA deadline of July 31, 2008.  Because of the ongoing FAA reauthorization and multiple continuing resolutions for the 2008 AIP program, Mr. Nagel did not have a final grant authorization amount as of this date.

 

The FAA could only allocate a portion of entitlement dollars this year because the FAA Airport Improvement Program (AIP) was not fully reauthorized.  MBS applied for, and received, an earlier grant for $1.6 million.  That application process needed to be completed by June 1, 2008.

 

Congress has now passed another temporary extension to the AIP program and has released additional entitlement money.  This application needs to be submitted to the FAA by July 31, 2008.  To take advantage of this extension, an application for the revised RS&H design contract will be submitted.

 

Mr. Biltz made a motion to approve the revised RS&H contract for terminal design, approve the attached Resolution for Project #3808, and authorization for the Chairman to sign the related documents. 

 

RESOLUTION

(AIP Grant #3808)

 

RESOLUTION ADOPTING AND APPROVING THE EXECUTION OF THE GRANT APPLICATION, GRANT AND ALL RELATED DOCUMENTS BY THE MBS AIRPORT COMMISSION, A SPECIAL STATUTORY BODY, ACTING AS SPONSOR FOR THE CITY OF MIDLAND, CITY OF SAGINAW, AND COUNTY OF BAY, MICHIGAN, AND THE UNITED STATES OF AMERICA, FEDERAL AVIATION ADMINISTRATION, FOR THE PURPOSE OF OBTAINING FEDERAL AID FOR THE DEVELOPMENT OF THE MBS INTERNATIONAL AIRPORT, UNDER PROJECT NO. 3-26-0083-3808.

 

BE IT RESOLVED by the members of the MBS International Airport Commission,

Freeland, Michigan:

 

Section I.  That MBS International Airport Commission, on behalf of the City of Midland, the City of Saginaw and the County of Bay, Michigan, shall submit a Grant Application and enter into a Grant Agreement for the development of the MBS International Airport, and that such Grant Documents shall be set forth hereinbelow:

 

Section II.  That the Chairman or Vice-Chairman of the MBS International Airport Commission, is hereby authorized and directed to execute said Grant Application, Grant Agreement, and all other related documents in (4) copies on behalf of the City of Midland, City of Saginaw, and County of Bay, Michigan, and the Airport Manager is hereby authorized and directed to impress the official seal and to attest said execution:

 

Section III.  That the Grant Application/Agreement referred to as Project 3-26-0083-3808.

 

Mr. Krygier seconded and the motion passed unanimously.

 

COLLECTIVE BARGAINING AGREEMENT:  During Mr. Nagel’s employment review in 2006, one of the goals the Commission set was “negotiate a new collective bargaining agreement for MBS union employees.  A negotiation strategy should be established with the assistance of the MBS Personnel Committee”.  Mr. Nagel met with the committee prior to starting negotiations back in June of 2007.  The goal was to focus on the increase in benefit costs and in particular, the rising cost of health care.

 

Mr. Nagel has met several times with the committee and kept them informed as to the progress of negotiations.  The committee last met on May 22, 2008 to review the latest contract proposal.  With committee concurrence, that proposal was presented to the union on June 4, 2008.  After discussion, the union leadership agreed to take the proposal to the members for a vote.  Two separate union meetings were held to discuss the contract proposal.  The proposal was accepted, by vote, during the second union meeting.  Mr. Nagel continued to keep the Personnel Committee informed as the union moved through this process.

 

This contract proposal is the result of months of negotiating with union representation.  Through this process the employees have agreed to share some of the financial burden related to health care costs. The change in pension will also provide future cost savings by capping the defined benefit program and installing the hybrid program for new hires.

 

The Personnel Committee endorsed and the union voted to accept the contract proposal dated June 4, 2008.

 

MBS AIRPORT

UNION CONTRACT PROPOSAL

JUNE 4, 2008

 

1.  Term of the Agreement:  Three (3) years, September 9, 2007 to September 8, 2010.

 

2.  Article 17:  Adopt new Uniform Policy dated June 9, 2006.

3.  Article 31, Section 3:  Add the following language, “Lieutenant pay for ARFF shall be $.45 per hour worked as a Lieutenant.  Employee acting as a Lieutenant is appointed by the ARFF Supervisor.  Management reserves the right to end Lieutenant assignments at anytime.”

4.  Article 33, Holidays Section 2:  Change one and one-half (1 ˝) times the regular rate to two (2) times the regular rate for call-in on holidays.

Note:  This benefit is not retroactive and shall begin on the date of contract execution.

5.  Article 32 Vacations, Section 3, Time for Vacation Leave of Absence (e) ARFF:  Modify ARFF employees to utilize two 12-hour blocks of vacation per calendar year, subject to same approval process as 24-hour vacation day.

6.  Article 36 Insurance and Retirement Plan, Section 1:  Replace paragraph (c) with the following language, “Effective April 2009, on the first payday of April each year of the contract, each current employee who remains on the airport health insurance program shall receive a $100 payment to be used for hearing care.”

7.  Article 36 Insurance and Retirement Plan, Section 1, paragraph (6):  Modify to read as follows, “Effective November 1, 2008, MBS Airport Commission shall provide Blue Cross/Blue Shield PPO 2 with a 10/40 drug card.”

8.  Article 36 Insurance and Retirement Plan, add the following language:  “Effective September 1, 2008, all newly hired employees will be enrolled in the MERS Hybrid Pension Plan.  The program will consist of a 1.25% multiplier and 3% employer contribution.  The employee has the option of adding to the defined contribution portion of the plan.

9.  Article 27 Minimum Wage Rates:  Increase all classifications by the following:

September 9, 2007 – September 8, 2008                3%
September 9, 2008 – September 8, 2009                3%
September 9, 2009 – September 8, 2010                3%


Mr. Nagel thanked the Personnel Committee which consists of Mr. Earley, Mr. Lynch, and Mr. Krygier who took over from Mr. Beson.  The committee was an excellent resource with two city managers participating.  Mr. Nagel referred to Mr. Earley, Chairman of the committee. 

 

Mr. Earley stated that it was a very thorough process and that they touched on all of the issues.  The proposals were arrived at by the airport’s ability to pay in the future with the continuing rise in the cost of doing business.  The collective bargaining process can be a challenge.  It is difficult to continue to provide the same level of services when the demands for those services have actually increased.  Mr. Earley stated that he feels the employees will feel that they have been treated fairly and that is important but cost containment will have to be used going forward.  He also stated that cost containment will be something he will be looking at periodically during his tenure at MBS.  Mr. Earley stated that Mr. Nagel did a good job with the proposal.

 

Mr. Lynch stated that he feels it is a good contract that takes into account the financial realities in the future and is a step in the right direction. 

 

Mr. Earley made a motion to approve the union contract proposal as presented with Mr. McKeag seconding.  Chairman Distler thanked the committee for their expertise in helping reach this proposal.  The Board passed the motion unanimously. 

 

OLD BUSINESS:  Mr. Nagel stated that Congress extended the AIP reauthorization for an additional three months.  The additional grant is approximately $1.1 million.  The application will be made based on the resolution that was passed.  

 

Delta and Northwest continue to work on the merger.  According to the Wall Street Journal, leadership changes were announced for their team moving forward.

 

Dr. Distler asked about airports with flights cancelled.  Mr. Nagel stated that Lansing is losing Delta service to Cincinnati later this fall and previously lost Atlanta service.  Kalamazoo will be losing United Express to Chicago later this fall.  Flint previous lost the Las Vegas flight with Air Tran.  Mr. Nagel stated that he also thought Flint was losing Dallas/Fort Worth and that they may be losing one segment to Chicago by American Eagle.  It’s a very tough market now.

  

NEW BUSINESS:  Mr. Nagel stated that Mike Boyd has an air service conference that he has attended in the past.  Mr. Nagel informed the board that he may attend this year because of the way the industry has been going in the last several months.  Mr. Nagel stated that when he went to visit Northwest, they not only spoke highly of Mike Boyd but also of the conference.

 

Mr. Nagel informed the board that MBS uses a potassium acetate liquid deicing chemical.  This program was started a couple of years ago and a storage tank is onsite.  MBS received word that because of raw materials and the price of potassium hydroxide, supplies were going to be very limited this year.  They could hold a price for MBS Airport at $6.00 per gallon which is substantially higher than the price of last year at just under $3.00.  Ordering 4,000 gallons at $6.00 per gallon is $24,000 and is over Mr. Nagel’s $10,000 limit.  This news was received the day after last month’s Commission Meeting.  Mr. Nagel spoke with Mr. Lippert who had originally drafted the recommendation and motion a couple of years ago lifting Mr. Nagel’s expense limit to $10,000.  This is not necessarily a discretionary item needed to keep the airport open, operating, and safe.  Mr. Nagel also spoke with Chairman Distler, not for approval but to keep him informed.  The order was placed and on July 1st the price was increased to about $8.00 per gallon. 

 

Mr. Nagel stated that he wants to review the expenses and possibly meet with the Finance Committee to reevaluate his authorization amount.  Mr. Biltz stated that an emergency escalation process may be something that could be looked into where one or two members of the board could approve if necessary.  A proposal will be brought back to the board.

 

ADMINISTRATIVE MATTERS:  Chairman Distler asked if there was a date for the ground breaking.  Mr. Nagel stated that MBS has received all paperwork for the grant.  RS&H continues to work through the township process in terms of permitting and routing.  It appears that the issues are very close to being solved with the township.  There is always a lag between when the bid is received and when the work starts because the Board has to approve the bid, the numbers need to get to the State, then to the FAA, and paperwork needs to be completed.  It can take two to three months before a Notice to Proceed is issued.  The project is still being pushed to begin yet this year.

 

Mr. Lynch reported to the Board that Mr. Nagel will be appearing at the Midland City Council Meeting on Monday night to update the council with what is happening at MBS.

 

Next regular meeting is scheduled for August 21, 2008. 

 

ADJOURNMENT:  There being no further business, Mr. Krygier made a motion to adjourn.  Mr. Biltz seconded and the Board unanimously passed the motion.  The meeting adjourned at 1:33 p.m.

 

 

                                                                                                                                                            Eugene F. Gwizdala, Secretary