MBS INTERNATIONAL AIRPORT COMMISSION

 

 

November 19, 2009

 

MINUTES

                                                                           

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

 

COMMISSIONERS

 

Present                           Absent & Excused         Staff                         Other           

Tom Adams                   George J. Biltz               Jeff Nagel                Cathy Price, Midland Daily News

Bregitte Braddock         Darnell Earley                Andre R. Borrello    Jason Skidmore, Delta Air Lines

Brian K. Elder                                                       Ryan Riesinger         Angela Osmond, TSA

Eugene F. Gwizdala                                                                              Debbie Meisel         

Ernie Krygier                                                                                        

Jon Lynch                                                             Guests                     

Joyce J. Seals                                                        Mark Wilcer, RS&H

                                                                             

PLEDGE OF ALLEGIANCE 

 

MINUTES:  Mr. Krygier made a motion to approve the minutes of the Regular Commission Meeting held on October 15, 2009. Ms. Seals seconded the motion. The motion was unanimously approved by the Board.

 

OCTOBER 2009 WARRANTS AND CASH & INVESTMENT SUMMARIES:  Ms. Seals made a motion to approve the Warrant Registers for the October Payroll Account Check Numbers 84978-85032; the October Operations and Maintenance Check Numbers 39807-39888; and the October Cash and Investment Summaries.  Mr. Krygier seconded the motion and the Board unanimously approved it.

 

PUBLIC COMMENT:  None.

 

NEW CITY OF MIDLAND COMMISSIONER:  Mr. Nagel introduced Thomas Adams who was appointed to serve on the MBS Airport Commission at the regular meeting of the Midland City Council on November 9, 2009.  Mr. Adams stated that he is a lifelong resident of Midland.  He worked for Midland District Court from 1973-2003 primarily as the supervisor for the Probation Department. Since 2003 he has been manager of the Community Corrections Program through Midland County and has been involved in United Way and Big Brothers.  He is a user of MBS and looks forward to being part of the MBS Airport Commission.  Mr. Gwizdala welcomed Mr. Adams to the Board.

 

TEN-YEAR PLAN:  Mr. Nagel stated that the MBS Airport Ten-Year Capital Plan is used as an internal budgeting tool for local funds but does not commit funds for all listed projects.  Any items over $10,000 would come back to the Commission for approval.  The plan is provided for informational purposes and no formal approval is required at this time.  Ms. Seals made a motion to receive the 2010-2019 Ten-Year Plan with Mr. Elder seconding.  Ms. Braddock asked how it is determined what items go on the plan.  Mr. Nagel stated that this plan is carried forward from the prior year with changes; items that have been accomplished are deleted and new items are added.  The maintenance supervisor, fire supervisor, and operations manager submit requests to Mr. Riesinger who then filters through them prior to being added to the plan.  Mr. Nagel stated that it is an ongoing process.  There being no further questions, the motion passed unanimously. 

 

2010 BUDGET:  Mr. Nagel stated that the budget compares each account with the 2009 budget and shows the percentage difference between the two.  The 2009 year-end numbers will be presented in the annual audit.

 

The budget process for 2010 was the most difficult of the past several years due to the state of the airline industry and the overall economy.  Most expense categories have either been cut or held at 2009 levels.  The biggest budget change is in the overall size of the budget compared to past years.  This is due to the large amount of projected local expense for the ongoing terminal project.  Staff is still working with the FAA and the State to determine the amount of the 2010 AIP program.

 

The Commission has consistently pledged 20% of the terminal project which equates to approximately $10 million.  Plus the Commission has pledged about 7% of the project, or approximately $3.3 million from PFC monies.  Since the project is moving forward it was prudent to show a larger capital expense in 2010 to reflect the additional local and PFC share of the terminal project.  Once final numbers for the 2010 AIP grants are determined, the budget may need to be adjusted up or down later in the year.

 

The Finance Committee has met to review the budget and recommended that the budget be presented to the full Commission for approval.  Ms. Seals made a motion to approve the 2010 Budget with Mr. Elder seconding.  Several line items were discussed.  Mr. Elder stated that although the total budget appears to be increased by 65%, the majority of that increase is the contribution that will be made towards the new terminal.  Mr. Nagel stated that out of 63 expense accounts, 40 are at or below 2007 levels.  Staff has been trying to keep expenses under control and will be looking at options to increase revenues.  Ms. Seals stated that as part of the Finance Committee she thought that the presentation to the Finance Committee meeting was excellent.  Staff showed how they take into consideration the market, reduction of passengers and other concessions making a good case for this budget.  There being no further discussion, a vote was called.  The motion passed unanimously.

 

AIRLINE LEASE AMENDMENTS:  Mr. Nagel stated that the airline leases were extended last year for one year with no cost increase to the airlines.  The current leases expired at the end of September.  Mr. Nagel has had discussions with both Delta and United Express about a two-year extension.  Both are agreeable to the extension and both have agreed to a 3% increase in year one and a 3% increase in the second year.

 

The MBS operating costs for airlines, including landing fees and rents, are competitive.  In today’s aviation climate it is important to keep airline costs as low as possible.  A two-year extension with a 3% increase per year is reasonable and will take the airport almost to the opening of the new terminal.  This was discussed with the Finance Committee and they concurred.  Mr. Krygier made a motion to approve a two-year extension for airline leases with a 3% cost increase in the first year and 3% increase in the second and authorize the Chairman, or in his absence the Vice Chairman, to sign the lease extension.  Ms. Seals seconded and the motion passed unanimously.

 

BUILDERS RISK INSURANCE:  Mr. Nagel stated that with the start of the actual terminal construction it is important to provide builders risk insurance coverage.  This insurance protects us in case of damage during construction.  Although this coverage is sometimes carried by the general contractor, with a phased construction process the best way to protect the airport is for MBS to purchase the policy directly for the duration of the project.

 

Mr. Nagel and Ms. Meisel met with Ron Miller, President of AS Arbury Insurance.  Arbury has been the airport’s agent for numerous years and knows the airport operation well.  Ron received three quotes for coverage with the lowest being from Cincinnati at a cost of $41,348 with a $10,000 deductible.  The other two quotes were for $60,000 and $150,000 also with a $10,000 deductible.  It is Ron’s recommendation that MBS purchase the policy from Cincinnati who currently provides the airport’s property and auto coverage and are familiar with the airport. 

 

This policy was included in the 2010 budget.  The policy will be paid quarterly with the first payment to be made this year and three quarters next year.  This policy will cover through the duration of the construction project.  The cost is typically reimbursable through the FAA if the general contractor carries it.  Although the airport has budgeted for this cost, staff will attempt to seek reimbursement.  Ms. Seals stated that discussion took place at the Finance Committee meeting that there could be a transition period between various phases of the construction.  Mr. Nagel agreed and stated that if there is a delay in getting additional grant money, there could be a three or four month gap where there would not be work being done but the airport still needs to have the construction site insured.  Ms. Seal made a motion to authorize the Airport Manager to purchase builders risk insurance coverage from Cincinnati to protect the terminal construction project.  Ms. Braddock seconded and the motion passed unanimously.

 

OLD BUSINESS: 

 

AIP Funding:  Mr. Nagel stated that the Airport Improvement Program is authorized through the end of the year.  There has been some discussion in Washington regarding a multi-year bill.  Staff, along with Mark Wilcer, RS&H, continues to work with the FAA and State to submit a plan for the 2010 work on the terminal project.  It is difficult to plan when the grant dollar amount is unknown.  MBS will continue to submit for discretionary money.  Mr. Nagel went to Washington in late October and met with Congressmen Camp and Kildee and Senators Levin and Stabenow’s legislative aides about the project.  They are working on a joint letter of support to the FAA to continue to fund the terminal project with discretionary dollars.    

 

Marketing Committee:  Mr. Nagel stated that the Marketing Committee met a couple of weeks ago. Mr. Biltz appointed Ms. Braddock to the committee.  Mr. Biltz, Mr. Elder, and Ms. Braddock were in attendance.  Since Mr. Biltz was unable to attend today, Mr. Elder reported to the Board. 

Mr. Elder stated that the Marketing Committee met primarily to discuss the proposal that Mr. McKeag gave at the October commission meeting.  Prior to the committee meeting, Mr. Biltz met with Mr. McKeag to discuss the proposal.  As a result Mr. Biltz has two items that he would like the Board to consider.  The first item is considering the concept of hiring a full time marketing manager at MBS.  A few years ago the airport engaged the Boyd Group to do some market research which resulted in discussions with NWA to give fare parity compared to Flint Bishop.  It worked for a while but then people and airlines change.  It is hard to keep the parity going forward.  This would be a big job and the MBS staff could not handle it with all of the other work they do.  Mr. Biltz felt that perhaps the Airport Commission should refer this to the Personnel Committee to determine if this is a good idea and if so come up with a job description and see what the market would bear.  Mr. Elder made a motion to refer to the Personnel Committee the concept of a marketing manager.  Ms. Braddock seconded the motion.  Mr. Krygier asked if the Personnel Committee would determine whether the person would be an employee of the airport or a contractor. Mr. Nagel stated that the two options were discussed in the Marketing Committee meeting and would be discussed with the Personnel Committee.  There being no further discussion, the motion passed unanimously.          

 

Mr. Elder stated that the other issue that came from Mr. McKeag was an advisory committee that would include the three chambers of commerce, economic development entities, the Great Lakes Bay Region, and some travel agencies.  This would be a group that would consistently meet to talk about what is going on at MBS and how to market the airport overall.  This is an informational item that would be investigated by the Marketing Committee. 

 

Mr. Elder also informed the Board that a letter was received by the Great Lakes Bay Regional Alliance about changing the name of the airport.  Several issues were discussed by the Marketing Committee.  First, the FAA set the airport code as MBS.  Secondly, there has been quite a bit of money spent in marketing the airport.  At this time it is the recommendation of the Marketing Committee not to change the name of the airport.  Mr. Biltz will talk with John Lore at Great Lakes Bay Regional Alliance to tell them the concerns.  There may be some naming opportunities for the new terminal to be considered.

      

NEW BUSINESS:  None

 

ADMINISTRATIVE MATTERS:  Mr. Lynch asked about the overlay for the aerial picture.  Mark Wilcer stated that they have had six variations but have decided that they wanted to remove taxiways and roadways that are part of the project.  He stated that they are about a week away from completing it and it will be ready for the December meeting.    

 

Next regular meeting is scheduled for December 17, 2009.

 

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

 

 

                                                                                                                                                            Joyce Seals, Secretary