MBS INTERNATIONAL AIRPORT COMMISSION

 

March 19, 2009

 

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 1:00 p.m.  Roll was called by Debbie Meisel.

 

COMMISSIONERS

 

Present                           Absent & Excused         Staff                         Other           

Kenneth W. Distler        George J. Biltz               Jeff Nagel                Cheryl Wade, Midland Daily News

Brian K. Elder                Darnell Earley                Andre R. Borrello    Melanie Bierlein, Citizen

Eugene F. Gwizdala                                                                               Ryan Riesinger         John Palen, Midland Issues

Ernie Krygier                                                         Debbie Meisel          Paul Wyche, Saginaw News

Jon Lynch                                                                                             

Hollis H. McKeag                                                 Guests                     

Joyce J. Seals                                                        T. I. Defore, Gilbert, Smith, & Borrello

                                                                              Randy Morse, Andrews Hooper & Pavlik

 
PLEDGE OF ALLEGIANCE 

 

MINUTES:  Mr. Gwizdala made a motion to approve the minutes of the Regular Commission Meeting held on February 19, 2009.  Mr. Krygier seconded the motion.  The motion was unanimously approved by the Board.   

 

FEBRUARY 2009 WARRANTS AND CASH & INVESTMENT SUMMARIES:  Mr. Gwizdala made a motion to approve the Warrant Registers for the February Payroll Account Check Numbers 84483-84540; the February Operations and Maintenance Check Numbers 39181-39257; and the February Cash and Investment Summaries.  Ms. Seals seconded the motion and the Board unanimously approved it.

 

PUBLIC COMMENT:  Melanie Bierlein, a student at SVSU, stated that she is currently taking a political science class and was at the meeting to observe.

 

AUDIT PRESENTATION:  Mr. Nagel stated that the Finance Committee met and reviewed the audit last week.  He then introduced Randy Morse from Andrews Hooper & Pavlik. 

 

Mr. Morse thanked the staff for their cooperation with the audit.  He stated that there are required communications that were all affirmative, no issues, substance, and everything went well.  A letter of recommendation was given with a few minor recommendations; there were no significant deficiencies in internal control.  They have given the airport a clean opinion.  He stated that CD rates were low resulting in less interest income and snow fall for 2008 was significant which resulted in additional overtime.  There was an increase in net assets of just under $1.5 million.  Mr. Morse stated that discussion took place at the Finance Committee meeting that investments should be looked at since the rates are low at the banks to see if there are other investments that have the potential of a higher return but yet safe.  AHP has an investment advisor that Mr. Nagel has spoken to.  Information will be brought back to the Commission. 

 

Mr. Morse stated that the post retirement benefit GASB requirement is required for next year.  Currently there is an actuarial being prepared.  Besides this requirement there is currently nothing of significance required in the Standards that has an impact on the airport however the economy this year could impact the airport.

        

Mr. McKeag, Chairman of the Finance Committee stated that the interest income was down $289,000, a sizeable mount.  The other important item is that the funds are deposited in three banks and should the airport lose one of the banks the balance would be insured for $250,000.  He stated that the committee is exploring options to still invest in the three banks but have it insured.  Another Finance Meeting will be held to discuss the results. 

 

Mr. Elder, also on the Finance Committee stated that the audit was clean and non-qualified.  He also stated that the committee is looking at trying to get a higher yield on investments.  He stated that a few years ago the Finance Committee reviewed the investments and found that there are parameters that the airport has to operate inside of that does not allow some of the investment vehicles that result in a higher rate. 

 

Chairman Distler stated that the Finance Committee reviewed the investments when Mr. Elder came on the Board, and realized what constraints there were.  Some changes were made.  Chairman Distler stated that the Finance Committee did a great job and stated that the committee structure works exceptionally positive.  There are four committees and each committee has one member from each community.  All of the committees have done an exceptionally good job this year working with Bolger & Battle, selecting a new attorney, upgrading the passenger terminal and other projects.  Chairman Distler thanked all of the committee members and urged the commission to keep the committee appointments the same for 2009-2010.

 

Mr. Nagel thanked Mr. Morse for his comments regarding the overall state of the economy.  He also thinks not only discretionary dollars but also business travel is something that needs to be watched.  Mr. Nagel gave his thanks to Ms. Meisel for all the work she did involved in the audit.  The auditors are very complimentary to the staff. 

 

There being no further discussion, Mr. Gwizdala made a motion to receive the 2008 financial audit.  Ms. Seals seconded and the motion passed unanimously.

 

ADMINISTRATION BUILDING OFFICE LEASE:  Mr. Nagel stated that Peckham Engineering has leased an office in the MBS Administration Building for a number of years.  The lease had been on month-to-month terms and Mr. Peckham informed Mr. Nagel that they intended to vacate the office.

 

RS&H has expressed an interest in leasing this office through the duration of the terminal project.  Joe Jackson, the airport’s RS&H Project Officer, has received approval to enter a 12-month lease with the airport for the space.  The current rate in the Administration Building is $15.05 per square foot.  This would equate to a monthly rent for RS&H of $346.15.

 

This is an excellent opportunity to increase the rental revenue and keep all of the available space in the Administration Building occupied.  Mr. Nagel stated that this had been discussed with the Finance Committee and they agree with the recommendation.

 

Mr. Gwizdala made a motion to approve a 12-month lease with RS&H for office space in the Administration Building and authorize the Chairman to sign the related documents.  Mr. Krygier seconded and the Board passed the motion unanimously.

 

STANDARD PARKING AMENDMENT #9:  Mr. Nagel stated that Standard Parking has managed the parking lot since 1965.  The original contract states that the contractor can raise the parking rates with approval from the Airport Manager which cannot be unreasonably withheld.  Past rate increases have come before the Commission in the form of lease amendments.  The last time rates were adjusted was in 2006.  Prior to 2006, the rates were last adjusted in 1996.  When the adjustment was made in 2006, it was discussed that rates should be reviewed every two to three years.

 

Looking at parking rates throughout the State, it is apparent that the MBS rates need to be adjusted. Below is a chart comparing the MBS current rates to both Flint and Lansing as well as the proposed rates.

 

SHORT-TERM

 

MBS (Current)

MBS (Proposed)

Lansing

Flint

 

15 min. or less free

$.75 each ˝ hour

$10.00 daily max

15 min. or less free

$1.00 each ˝ hour

$11.00 daily max

15 min. or less free

$1.50 each additional ˝ hour

$12.00 daily max

 

$1.00 each ˝ hour

$20.00 daily max

 

LONG-TERM

 

MBS (Current)

MBS (Proposed)

Lansing

Flint

 

$1.00 each hour

$5.00 daily max

$25.00 weekly max

$2.00 each hour

$6.00 daily max

$36.00 weekly max

$2.00 each hour

$8.50 daily max

$42.50 weekly max

$2.00 each hour

$7.00 daily max

$49.00 weekly max

 

 

Mr. Nagel stated that these increases are justified but keep MBS competitive for the passengers.  He also stated that this had been discussed with the Finance Committee and they agree with the recommendation.  Mr. Gwizdala made a motion to approve Amendment #9 for the Standard Parking agreement and authorize the Chairman to sign.  Ms. Seals seconded and the motion passed unanimously.

 

OLD BUSINESS:  

 

AIP and Stimulus:  Mr. Nagel stated that the application and the grant have been completed for the AIP 2009 Part A Program.  A Part B Program has not been announced by FAA because Congress has not extended AIP beyond the end of March.  The House and Senate have both recently approved a temporary measure which extends AIP through the end of the fiscal year for the government.  It will be voted on and signed hopefully by the end of March. If there is a Part B Program the airport will apply for Federal dollars for the project.  Mr. Nagel stated that there has been some encouragement for a multi-year AIP bill.

 

Mr. Nagel reported on the potential economic recovery or stimulus dollars.  He had hoped the airport would have heard by the end of February if it had qualified.  AIP received $1.1 billion of the total $800 billion stimulus.  There have been two airports in the entire country that have reported grants.  MBS has not heard either way but are still preparing in anticipation of an award. 

 

Terminal Enhancement:  Mr. Nagel stated that he had worked with Mr. Borrello and Space, Inc. to develop a contract that included the bid specifications.  It has been signed by all parties.  The materials have been ordered.  Mr. Nagel asked Mr. Riesinger to update the Board in regards to the construction.  Mr. Riesinger stated that a pre-construction meeting is scheduled for next week.  There will be ongoing progress meetings throughout the project with the tenants and the contractors. Work will also begin next week.  Work to be done is in the public area and includes paint, carpeting, vinyl flooring and entrance tiles.  Several ticket counters and car rental counters will receive new fronts.  There will also be new garbage receptacles and outdoor seating.  Majority of the work will be completed overnight to minimize the impact of on passengers and tenants.  The project is expected to take about two months to complete.

 

NEW BUSINESS: 

 

Assignment of farm lease:  Mr. Nagel stated that he had received a request from one of the farmers that has a lease to assign his rights to his brother.  Mr. Borrello reviewed the lease and this is allowed.  A letter was drafted authorizing the assignment since this does not require Commission approval.  Rates, charges, and terms will remain the same.  Mr. Nagel stated that Mr. Borrello found that if the lease would go into default the airport can go back to the original leasee. 

 

FAA Annual Certification Inspection:  Mr. Nagel asked Mr. Riesinger to report.  Mr. Riesinger stated that the certification inspector was in last week over a three day period.  This is done annually to ensure compliance with applicable FAA regulations as they relate to airport operations.  The inspector does day and night inspections of the airfield to check pavement conditions, pavement markings, lighting systems, safety areas, etc.  There was also a timed fire response drill to ensure that the firefighters can make it to the designated locations within three minutes from the alarm.  All airport records including daily self-inspection logs, training reports, and any NOTAMs issued were reviewed. 

 

Mr. Riesinger was happy to report that there were no discrepancies noted, and this is now the fourth consecutive year without any discrepancies.  This is a testament to the priorities and dedication of the Fire and Maintenance personnel and the entire staff should be proud of this accomplishment. 

 

Mr. Nagel stated that the auditor compliments the staff when they come in for the audit, and it is nice to hear compliments from the FAA safety inspector about the quality of operation during the FAA out brief.  The out brief includes Mr. Riesinger, the operations manager, the ARFF supervisor and the maintenance supervisor.  Budgetary issues in terms of maintenance of the pavement have been difficult however, they have done a good job prioritizing what areas need painting or crack sealing.  Four years in a row without any discrepancies is something to be proud of.

 

ADMINISTRATIVE MATTERS:  Ms. Seals stated that she has been appointed to a panel to discuss the reauthorization of transportation and had been to Washington, D. C.  Discussions took place with Congressman Kilde with some issues the city has.  They are looking to modernize and update the law.  She stated that if there is anything in particular that the airport needs to be in the law, now is the time for the Board to make suggestions and recommendations because they are just starting the discussions.  She stated that she is a part of the National organization that is working on various aspects.  Next month she will be returning to Washington where she will be participating in talks for one day and then will go to Capitol Hill to do some lobbying about what their issues are, what needs to be fixed and brought up to date. 

 

Mr. Nagel stated that his biggest issue is multi-year airport funding.  A multi-year bill would keep airport funding consistent.  It has been year to year for the last couple of years and in 2009 it was actually six months and six months.  It is very difficult to plan projects a year at a time when the funding level is unknown from year to year. 

 

Discussion took place in regards to a chart that shows the passenger traffic and the seat availability.  Mr. Lynch had requested this at a previous meeting.  The data comes from the airline managers so depending if it is received in a timely manner will determine if it will make it into the packet each month.

 

Next regular meeting is scheduled for April 16, 2009. 

 

ADJOURNMENT:  There being no further business, Mr. Gwizdala made a motion to adjourn.  Mr. Elder seconded and the Board unanimously passed the motion.  The meeting adjourned at 1:28 p.m.

 

 

                                                                                                                                                            Eugene F. Gwizdala, Secretary