MBS INTERNATIONAL AIRPORT COMMISSION

 

May 21, 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      

George J. Biltz            Hollis H. McKeag     Jeff Nagel                John Palen, Midland Issues

Kenneth W. Distler                                        Andre R. Borrello    Jason Skidmore, Mesaba/Delta (1:25)

Darnell Earley                                                Ryan Riesinger         Angela Osmond, TSA (1:25)

Brian K. Elder                                                Debbie Meisel         

Eugene F. Gwizdala                                                                             

Ernie Krygier                                                 Guests                     

Jon Lynch                                                      Mark Wilcer, RS&H

Joyce J. Seals                                                                                 

 

PLEDGE OF ALLEGIANCE 

 

Chairman Distler stated that everyone received a packet at their seat to be added to the Commission packet.  He asked that Mr. Nagel explain what is included in this packet.  Mr. Nagel stated that there are additional exhibits supporting the documents that were sent out in the original packet.  These exhibits are based on the bids for the stimulus grant project which were originally due on Friday, May 15.  The pre-bid meeting was held on May 1st.  There were about 80 people in attendance.  Over 70 sets of plans were issued for the projects.  There were numerous questions and requests for information.  Mark Wilcer and RS&H have been working non-stop and were able to issue three addendums to the plans and specifications to answer all of the questions.  Mr. Nagel stated that he met with the Operations Committee and explained that the bid opening was going to be moved to Tuesday, May 19th.  With the date being changed the numbers were not able be in the Commission packets.  However, by delaying the opening, the questions were able to be answered for the bidders which resulted in better bids.  The timing for these projects in the stimulus grant is tight.  The numbers need to be presented to the Board and then Mr. Nagel will be emailing the numbers to the FAA today.  They will then be drafting the grant application.  More detail will be given as each exhibit is discussed.

 

MINUTES:  Mr. Gwizdala made a motion to approve the minutes of the Regular Commission Meeting held on April 16, 2009 and the Special Commission Meeting held May 4, 2009.  Mr. Krygier seconded the motion.  The motion was unanimously approved by the Board.   

 

APRIL 2009 WARRANTS AND CASH & INVESTMENT SUMMARIES:  Mr. Gwizdala made a motion to approve the Warrant Registers for the April Payroll Account Check Numbers 84597-84653; the April Operations and Maintenance Check Numbers 39339-39422; and the April Cash and Investment Summaries.  Mr. Biltz seconded the motion and the Board unanimously approved it.

 

PUBLIC COMMENT:  None

 

ELECTION OF OFFICERS:  Mr. Nagel stated that Mr. McKeag, the current Vice-Chairman was unable to attend today’s meeting due to a family medical issue.  Mr. McKeag spoke to Mr. Nagel and Chairman Distler stating that although he has served as Vice-Chairman of the Commission he respectfully requests that he not be in the nomination process as an officer for the Commission.  Mr. McKeag’s term for the Midland City Council expires this fall and therefore he will be off the Airport Commission later this fall.  He plans to complete his term and hopefully will be back next month.

 

Mr. Nagel stated that the following officers were elected in May 2008, which was the second full term for all three officers; Ken Distler, Chairman; Hollis McKeag, Vice-Chairman; and Gene Gwizdala, Secretary.

 

The By-Laws state that “no commissioner shall serve for more than two (2) consecutive one (1) year terms,” therefore a new set of officers should be elected.  Also, according to the By-Laws, each governmental entity must be represented by holding an officer position.

 

Mr. Gwizdala made a motion to nominate George Biltz as Chairman.  Mr. Elder seconded.  There being no further nominations, the motion passed unanimously.  Dr. Distler thanked Mr. Biltz for accepting the position.  The next few years will be interesting and challenging for the Commission.

 

Mr. Krygier made a motion to nominate Eugene Gwizdala for Vice-Chairman.  Mr. Biltz seconded. There being no further nominations, the motion passed unanimously.

 

Mr. Gwizdala made a motion to nominate Ken Distler for Secretary.  Mr. Biltz seconded.  There being no further nominations, the motion passed unanimously.        

 

The Airport Manager is designated as the Assistant Secretary and Treasurer.

 

Mr. Biltz on behalf of the Commission presented a gavel to Dr. Distler and thanked him for all the time he has given while being Chairman.  Mr. Biltz asked Dr. Distler to chair the balance of the meeting.  Dr. Distler accepted the gavel and stated that it has been an absolute pleasure to work with the Board.  He has been on the Board for several years and never worked with such a diverse and professional group.  He especially likes the committee format and the good attendance.

 

MEETING SCHEDULE:  During the annual meeting in May, the Commission approves the schedule for regular Commission meetings for the next year.  The following schedule sets the date on the third Thursday of each month:

 

             June 18, 2009                            October 15, 2009                       February 18, 2010

             July 16, 2009                             November 19, 2009                   March 18, 2010

             August 20, 2009                        December 17, 2009                    April 15, 2010

             September 17, 2009                   January 21, 2010                        May 20, 2010

The MBS International Airport Commission meets at 1:00 p.m. in the Commission Board Room, second floor of the Passenger Terminal, 8600 Garfield Road, Freeland, Michigan.

 

Mr. Gwizdala made a motion to approve the schedule of regular meeting dates.  Ms. Seals seconded and the motion passed unanimously. 

 

LAND ACQUISITION SETTLEMENT:  Mr. Nagel stated that at a Special Commission meeting held on Monday, May 4, 2009, the Commission voted to accept the recommendation of our attorney for a land acquisition settlement.  In part, the Settlement Agreement calls for payment of $1,230,000 less what has previously been paid by MBS.  The net payment is $773,750.

 

On Tuesday, May 5, 2009 the settlement was formally accepted in court.  The final document has been drafted by Boris Yakima and requires signature.  Mr. Krygier made a motion to authorize the Chairman to execute the documents related to the land acquisition litigation settlement and also authorize the Airport Manager to make the required payment.  Mr. Gwizdala seconded the motion. 

 

Mr. Earley asked if the project is on time and about the vacating of the property.  Mr. Nagel stated that the owner has been off the property for quite a while.  Payment needs to be made in 30 days.  The Notice to Proceed for the next phase of the construction almost went parallel to the trial.  A day or two after the trial, the houses and barns started coming down.  The project is on schedule.  Mr. Earley thanked Mr. Nagel and staff for good work on a very difficult issue.  The integrity and effort speaks for itself in terms of the airport’s needs and the efforts to compensate the land owner and make him whole as well. 

 

Mr. Krygier asked if the question regarding the access for a road was resolved.  Mr. Nagel stated that when the necessity was challenged a 12 foot strip of property from the owners back 40 acres out to Garfield Road was released to him.  Part of the settlement is that he wants access on the airport property to allow his equipment to construct a crushed driveway out to Garfield Road.  This was reviewed by RS&H and Mr. Yakima.  It was decided to give him a time frame of May 1-July 1 with conditions that it not interfere with the airport’s work, that Mr. Nagel be notified ahead of time, and that Mr. Krauss repair any damage to the airport’s property.  It has been going very well.  No additional property or easement has been granted.

 

Ms. Seals wanted to reflect that the amount of the settlement includes all legal costs.  Mr. Nagel stated that the $1,230,000 is all inclusive of the statutory requirements, property value, Mr. Krauss’ required attorney fees, the expert witness fees, and the statutory interest.  When those costs are deducted from the total, the property value is estimated at about $950,000.  Going into trial the airport’s number was about a half million and his was a little over two million for the property only. Ms. Seals complimented the transaction.  There being no further discussion, the Board passed the motion unanimously.

 

SSP LEASE AMENDMENT:  Mr. Nagel stated that SSP America is the tenant which operates the food court, gift shop, game room and the Skyroom facility.  The company has been at MBS, under a variety of names, for many years.  This is a very good arrangement for the airport as it brings several businesses under one lease.

 

Due to the severe economic downturn, business has been slowed in all areas of their operation.  SSP is looking for rent adjustment for a temporary period of time.

 

MBS is fortunate to have a company like SSP at MBS.  They only have two contracts which include a gift shop and MBS is the only airport which includes catering.  SSP has spent the last few years making dramatic improvements to the Skyroom including new tables and chairs, a new dance floor, and new lighting up the spiral staircase.  They are also prepared to put an additional $15,000 worth of improvements in.

 

MBS has demonstrated willingness to support SSP in the past and should continue to do so.  The current contract calls for 5% of gross with a minimal annual guarantee of $45,000.  The proposed temporary amendment to the SSP contract would enact the following costs through the end of 2009, when the contract will be reevaluated.

 

Monthly Gross Sales                                                   % to MBS

0 - $40,000                                                                       0%

$40,000 - $60,000                                                            5%

$60,000 +                                                                         8%

 

This arrangement allows SSP the much-needed flexibility to continue to improve their operation.  Mr. Nagel stated that this was discussed with the Finance Committee and they agree with this proposal.  Mr. Gwizdala made a motion to approve a temporary amendment to the SSP lease allowing for the sliding percentage of gross sales through the remainder of 2009 and authorize the Chairman to sign the amendment.  Ms. Seals seconded the motion.  Mr. Elder on behalf of the Finance Committee stated that this plan is a good compromise and only a temporary measure.  When things are better nationwide this may not be in place.  There being further discussion the motion carried.

 

RCAG/ASOS RELOCATION:  Mr. Nagel stated that a major part of the terminal project is the relocation of the RCAG and ASOS equipment.  The Commission has approved two Reimbursable Agreements with the FAA to provide their services.  RS&H has designed the new facility under their master design contract.

 

A pre-bid meeting was held on May 1, 2009 and bids were received on Tuesday, May 19, 2009 for the construction of the new site and demolition of the old facility.  The following four bids were opened and read:

 

-        LA Construction                                             $935,631.90

-        J. Ranck Electric                                             $847,250.70

-        E & L Construction                                        $838,236.40

-        Hallmark Construction                                    $737,660.00

 

The engineers estimate for this project was $1.3 million.  RS&H has evaluated the bids and has recommended approval of the Hallmark Construction bid of $737,660.00.  FAA has stated that everyone is getting very good bids and in particular MBS received very good bids. 

 

It should be noted that this portion of the work was originally scheduled to be paid for with PFC Application #6.  However, this work has been determined to be eligible under the ARRA Grant which is Project #4009 because it is an enabling project of the foundation of the building.  All the work should begin mid July.  Mr. Wilcer stated that they want to get the RCAG moving very quickly since it is part of the stimulus grant, hopefully by July 15th or sooner.  Mr. Nagel stated that the FAA will take all the numbers today and complete the grant application.  The final grant should be received for the Chairman’s signature by mid June.  Thirty days after the grant is executed the Notice to Proceed should be issued.  Mr. Earley made a motion to accept the recommendation of RS&H to approve the bid of Hallmark Construction for the amount of $737,660.00 and authorize the Chairman, or in the absence of the Chairman the Vice-Chairman, to sign all related documents for this contract.  Mr. Gwizdala seconded the motion. 

 

Mr. Krygier asked if Hallmark was a local firm.  Mr. Nagel stated that they are located in Traverse City.  The nearest local firm that bid on the project was J. Ranck Electric that is located in Mt. Pleasant. 

 

Mr. Biltz asked if this project comes out of the original stimulus grant amount or over and above the amount.  Mr. Nagel stated originally this project was a PFC project or an AIP project but since the bids have come in substantially under the estimate there is now room for it to be included in the stimulus grant.  Sixteen or seventeen million dollars worth of projects were submitted for the stimulus grant. The bids came back with a total of $11.6 million.  By the RCAG project moving from PFC to the stimulus grant, it will allow the PFC dollars to be used for another portion of the terminal project by applying for a new PFC application.  Mr. Biltz asked if there is any way that the balance of the stimulus grant can be used.  Mr. Nagel stated that the $1.1 million will not be used since bidding would not be able to be done in order to meet the stimulus requirements.  Mr. Biltz asked if nationwide the bids are coming in so good there would be unused stimulus dollars and would a second round of stimulus grants be awarded.  Mr. Nagel stated that was discussed in-house but the FAA has not admitted to that.  Mr. Earley stated that other agencies are discussing that also.

 

Mr. Nagel stated that a few weeks ago he discussed with RS&H what items would need to be pulled out when the bids would be high but then the bids came in low.  Mr. Wilcer stated he heard from the contracting community that this is the worst business conditions in 30 years in Michigan.  RS&H have not seen numbers like this since 1999-2000. 

 

Ms. Seals stated that this is a good problem to have.  The alternative would have been deciding what to take out of the project versus adding another.  The airport needs to be prepared to submit for any additional funding. 

 

Mr. Lynch said that it is important to note that between the engineer’s estimate and the bid price there is roughly a savings of a half million dollars.  He is very pleased to see the due diligence of RS&H to consult with the bidder to ensure that all of the technical aspects of the bid have been fulfilled. 

 

There being no further discussion the Board passed the motion unanimously.      

 

PHASE III TERMINAL CONSTRUCTION BIDS (GRANT #4009):  Mr. Nagel stated that as discussed at the April Commission meeting, MBS was awarded an FAA Discretionary Grant through the American Recovery and Reinvestment Act (ARRA).

 

Bids for this work were originally due on May 15, 2009.  However, due to the number of interested parties and the volume of questions RS&H received, the bid date was adjusted to May 19, 2009.  It should be noted that any potential change order for this project will be 100% local funds.  Therefore, it is important to provide as accurate information as possible to all potential bidders.

 

Plans and specifications were developed with several alternatives to best take advantage of the grant and the current bidding climate.  All bids included the following work items:

 

-        Concrete Foundation

-        Steel

-        Building Systems including boiler, chiller, generator and furniture (all with delayed delivery)

-        Access Road

 

There were a total of 11 bidders for this project.  The engineers estimate for this portion of the project was $12.1 million.  The three low bidders were:

 

            Commercial Contracting Corporation                         $7,107,316

            Wolgast                                                                       $7,352,000

            Gerace                                                                         $7,392,000

 

The high bid was:

 

            Champagne & Marx                                                    $8,811,351

 

Based on a review of all bids received, the recommendation of RS&H is to award the contract to Commercial Contracting Corporation in the amount of $7,107,316.00.  Mr. Biltz made a motion to accept the recommendation of RS&H to approve the bid of Commercial Contracting Corporation in the amount of $7,107,316.00 for Phase III Terminal Construction and authorize the Chairman, or in the absence of the Chairman the Vice-Chairman, to sign all related documents for this contract.  Mr. Gwizdala seconded.

 

Mr. Nagel stated that Commercial Contracting Corporation is located in Auburn Hills, Michigan.  Ms. Seals asked if the airport has a policy in regards to local bidding preference or percentage.  Mr. Nagel stated that MBS follows the FAA guidelines to meet the FAA standards for grants.  The standards for the stimulus grant are more specific.  Mr. Nagel stated that the FAA does not allow airports to have a preference.  Mr. Gwizdala asked if the bids submitted are using prevailing wage.  Mr. Nagel stated that all FAA grants issued in the stimulus are required to pay Davis-Bacon prevailing wages.  There being no further discussion, the motion passed unanimously. 

 

PASSENGER BOARDING BRIDGES (GRANT #4009):  Mr. Nagel stated that as discussed at the April Commission meeting, part of the ARRA Grant was to include the purchase of passenger boarding bridges for the new terminal.

 

RS&H designed the bid package and bids were originally due on May 15, 2009.  However, due to the number of questions from bidders and in an effort to provide the most accurate plans and specifications, the bid date was moved to May 19, 2009.  It should be noted that any potential change order for this project will be 100% local funds, so it is prudent to allow as much time as possible for bidders to prepare their bids.

 

Two bids were received and read:

 

-        JBT Technology                                  $2,172,382

-        ThyssenKrup                                       $2,099,857

 

The engineers estimate for this project was $2.37 million.  Mr. Nagel stated they had looked at buying three new bridges and using one of the existing bridges.  These numbers reflect buying four new bridges which is better for the airport.  After reviewing all information, the recommendation from RS&H is to approve the bid of ThyssenKrup in the amount of $2,099,857.   Mr. Nagel stated that JBT Technology is in Utah and ThyssenKrup is in Fort Worth, TX. 

 

Mr. Gwizdala made a motion to accept the recommendation of RS&H to approve the bid of ThyssenKrup in the amount of $2,099,857.00 and authorize the Chairman, or in the absence of the Chairman the Vice-Chairman, to sign all related documents.  Mr. Krygier seconded the motion.  Dr. Distler asked if the Performance Bond was included in the bid.  Mr. Nagel stated that yes it is included.  Mr. Wilcer stated that anyone that is storing any of the bid building systems are required to be in an approved warehouse and in addition extended warranties are taken out.  There being no further discussion, the Board unanimously passed the motion.

 

Mr. Biltz asked whether terminal seating was included in one of the projects in Grant #4009.  Mr. Nagel stated that there was an allowance included in Phase III Terminal Construction under Building Systems.  The seating was not a separate bid. 

 

RS&H CONSTRUCTION ADMINISTRATION CONTRACT (GRANT #4009):  Mr. Nagel stated that the design fees for RS&H to prepare the plans and specifications for projects listed in Grant #4009 are included in the master agreement the airport has with RS&H.  However, as done in the past, a contract amendment is needed with RS&H to cover their construction administration for Phase III Terminal Construction, Passenger Boarding Bridge and the RCAG Relocation.

 

RS&H has prepared an amendment to their contract which covers these fees.  Mr. Nagel sent the amendment to the MBS State Project Manager for her review and comment.  The total amount of this amendment is $1,652,379.00.  This cost also includes Township and State inspection requirements, inspection costs by the Township and utility companies and all required testing by FAA.  This number is larger than anticipated because the RCAG/ASOS was added to this grant and the construction administration for that portion of the project is also included. 

 

Mr. Gwizdala made a motion to approve the Amendment of the RS&H contract to cover Construction Administration fees for projects listed in Grant #4009 and authorize the Chairman, or in the absence of the Chairman the Vice-Chairman, to sign the related documents.  Ms. Seals seconded the motion.  Mr. Earley stated that it would have been helpful if the costs would have been listed for the various items since it is a sizeable number.  Mr. Nagel referred to Mr. Wilcer for more detail.  Mr. Wilcer stated that there is significant cost for certification inspections for utility and codes with this phase of the project.  In addition, there is quite a bit of time involved in moving the RCAG and ASOS systems, coordinating with the FAA.  There are also costs associated with taking delivery of the building systems being bid.  Mr. Nagel assured the Commission that these dollars are in the five-year plan and have been programmed as part of the project.  Mr. Wilcer apologized and took responsibility for not providing a cost breakdown of this contract.  The Commission was reminded that the contract is subject to review by the State Project Manager and the FAA.   

 

OLD BUSINESS:  

 

Terminal Enhancement:  Mr. Nagel asked Mr. Riesinger to update the Commission on the Terminal Enhancement.  The project is 100% complete.  SPACE did a very good job in project management.  It is a very nice improvement.  Mr. Riesinger also stated that information about the terminal construction project will be placed in various locations in the current terminal to keep people informed.     

 

Runway Friction Tester:  Mr. Riesinger informed the Board that specifications have been prepared in-house and an advertisement will be placed to receive bids for a new runway friction tester.  The current unit is a 1994 Dodge Caravan that is beyond its useful life.  The unit is a specialized vehicle that has a small fifth wheel that drops down and measures the friction of a pavement surface in winter conditions.  The number is reported to the Air Traffic Control Tower and the pilots.  This tells them what type of condition they are about to encounter on the pavement surface.  This is a very critical piece of equipment to ensure that the runways are kept safe in winter weather.  The date to receive bids is June 5th.  The bids will be reviewed and a recommendation will be brought to the June Commission Meeting.  This is a PFC project and is estimated at $190,000. 

 

Annual Live Fire Training:  Mr. Riesinger announced that tomorrow is the live fire training.  A mobile unit from Battle Creek Community College comes to the airport so the MBS fire fighters can do live fire training with the airport equipment.  The event starts at 10:00 a.m.  The Commissioners can contact the office if they would like to view the training. 

      

NEW BUSINESS: 

 

Mesaba Manager:  Mr. Nagel asked Angela Osmond of TSA to introduce Jason Skidmore who is the new Delta/Mesaba manager.  Jason is taking over as Mesaba ground handling manager beginning June 2nd. 

 

AIP Projects:  Mr. Nagel stated that he was notified yesterday that the FAA has released the money for the AIP Part B program.  The preliminary number from the FAA is $2.4 million.  Staff will apply for reimbursement of the land purchase and RS&H will be working to find a project that fits the overall terminal project to present to the FAA. 

 

Investments:  Mr. Nagel thanked the Finance Committee for meeting several times.  The Airport Investment Policy and airport investments were reviewed.  At this time there is no formal recommendation for a change.  The Committee did offer some comments. 

 

Financial conditions have definitely changed over the last two or three years.  The airport has been saving for years to be able to proceed with capital improvements including the new terminal.   Interest returns have been lower than anticipated but the principal balance has been maintained which is very important as the terminal project goes forward.            

 

ADMINISTRATIVE MATTERS:  Dr. Distler stated that there are a number of individuals that feel that the purpose of the terminal project is to improve the passenger count.  He feels that it would behoove the Commission to get the word out that the purpose of the terminal project is not a marketing strategy to improve passenger count however it is one of the goals.  The purpose is to replace a terminal that has outlived its usefulness, is obsolete, and cannot be repaired efficiently at a reasonable cost.  Dr. Distler stated that as Commissioners they need to get the word out that this project is necessary because it is replacing an obsolete terminal and stop the rumor that this project is to enhance the enplanements. 

 

Dr. Distler thanked the Commissioners for their support over the last two years and wished Mr. Biltz luck over the next year which will be very exciting.        

 

Next regular meeting is scheduled for June 18, 2009.

 

ADJOURNMENT:  There being no further business, Mr. Gwizdala made a motion to adjourn.  Mr. Krygier seconded and the Board unanimously passed the motion.  The meeting adjourned at 1:51 p.m.

 

 

                                                                                                                                                            Ken Distler, Secretary