MBS INTERNATIONAL AIRPORT COMMISSION

 

 

March 18, 2010

 

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                   Greg Branch                   Jeff Nagel                Michael Woodley, Citizen

George J. Biltz (1:03)     Jon Lynch                      Andre R. Borrello   

Bregitte Braddock                                                Ryan Riesinger        

Darnell Earley                                                       Debbie Meisel         

Brian K. Elder                                                                                       

Eugene F. Gwizdala                                                                              Guests

Ernie Krygier                                                        Mark Wilcer, RS&H 

                                                                              Randy Morse, Andrews Hooper & Pavlik                                                                                                                              

PLEDGE OF ALLEGIANCE 

 

MINUTES:  Mr. Elder made a motion to approve the minutes of the Regular Commission Meeting held on February 18, 2010.  Mr. Adams seconded the motion.  The motion was unanimously approved by the Board.

 

At 1:03 Chairman Biltz arrived.

 

FEBRUARY 2010 WARRANTS AND CASH & INVESTMENT SUMMARIES:  Mr. Gwizdala made a motion to approve the Warrant Registers for the February Payroll Account Check Numbers 85236-85293; the February Operations and Maintenance Check Numbers 40140-40211; and the February Cash and Investment Summaries.  Mr. Krygier seconded the motion and the Board unanimously approved it.

 

PUBLIC COMMENT:  None.

 

AUDIT PRESENTATION:  Mr. Nagel stated that Randy Morse from Andrews Hooper & Pavlik was in attendance to present the 2009 financial audit for MBS Airport.  He thanked Ms. Meisel for cooperating with the auditors and having all the information ready for them since the audit was early this year.  He also appreciated the effort of the Finance Committee who took the time to attend two meetings in the same week.  They met on March 12, 2010 to discuss the audit with AHP personnel and airport staff and recommended that the audit be presented to the Airport Commission at the March meeting.

 

Mr. Morse also thanked Ms. Meisel.  The audit takes place after the books are closed and audit adjustments are made.  This makes things easier and more efficient which enables AHP to meet a tight deadline.  Mr. Morse stated that they have a very good working relationship with management but understands that they report to the Commission.  They ask many questions and require supporting detail; they do not take management’s word.  He was pleased to report that the audit went very well and there were no findings.  They gave a clean opinion which is the best opinion you can have. 

 

Mr. Morse stated that they did the annual audit, the PFC audit, and this year they were required to do a single audit on the ARRA grant.  There are specific requirements and compliance aspects that must be met.  They also make sure that certain controls are in place over the expenditures.  Mr. Morse was pleased to report that they had no findings.  He stated that this is an accomplishment when it is a new requirement and the first time it has been placed on the airport. 

 

During the audit the post retirement benefits were reviewed.  Although the GASB statement was adopted this year, the airport has been recording the liability.  This year the liability was adjusted to agree with the actuarial valuation that was performed.  Mr. Morse reviewed the disclosures.  He stated that the decision that was made years ago to record the liability lessened the impact of the GASB requirement for the airport.     

 

Mr. Morse stated assets increased which is a result of the construction happening at the airport.  The passenger traffic is down which results in a decrease on the revenue side.  Rentals have been consistent and have had increases as they come due.  Management has done an outstanding job keeping expenses under control.  Operating expenses had a seven percent decrease.  There was an operating loss, however, it was less than the previous year.

 

Mr. Morse referred to the Management Letter that points out deficiencies.  He stated that the Finance Committee should continue to be involved in the finances.  In a small organization with few employees working in accounting it is very hard to keep separation of duties.  The committee should continue meeting periodically and review the budget and monthly reports.  Mr. Morse also stated that in regards to the ARRA there were minor errors in the grant reports.  Those were discussed with management and procedures were put in place to eliminate it in the future.  It was nothing of significance.  Mr. Nagel explained the process which is required monthly and quarterly.  Mr. Morse stated that the question is did you properly spend the Federal dollars you were given and the answer is yes it was allowable.

 

Mr. Krygier made a motion to receive the 2009 financial audits.  Mr. Earley seconded and the motion passed unanimously.  Mr. Biltz stated it was a good audit and thanked staff.

 

HONEYWELL AGREEMENT:  Mr. Nagel stated that Honeywell has been providing service to MBS since 1985.  Their service includes a computerized automated energy management system for the Passenger Terminal and Administration Building.  They also provide preventative maintenance, limited component replacement and 24-hour, seven days per week emergency response service.  Honeywell has also assisted by providing additional services over the years at no charge.  The service contract benefits MBS by saving energy, reducing equipment downtime, extending equipment life and helping control the budget.  Honeywell employees are trained in the airport security requirements and have security badges which allow access anytime they need it.

 

A summary of the last two years of service includes 178 total calls to the airport of which 138 were “critical” or “emergency” and 40 were preventative maintenance.  The response time for a “critical” call is 4 hours or less while the completion time is 24 hours or less.  Of all the “critical” calls, Honeywell met these goals 100% of the time.  For “emergency” calls, the response time is 24 hours or less and completion time is 48 hours or less.  Honeywell met these goals 96.6% of the time over the past two years.

 

Also over the past two years, Honeywell has replaced a chiller compressor under the contract and worked diligently to correct another issue with the chiller which was continuously shutting the system down.

 

The overall value which Honeywell provides for both preventive maintenance and emergency repair is valuable to the airport.  A two-year extension has been negotiated to their contract at a 2 ½% increase each year, which represents $53,048 for 2010-2011 and $54,374 for 2011-2012.  The extension will take the airport near the completion of the new terminal.

 

The Finance Committee met on March 11th and recommended that a two-year extension be approved by the Airport Commission at the stated rates.  Mr. Gwizdala made a motion to approve a two-year extension of the Honeywell contract at $53,408 for 2010-2011 and $54,374 for 2011-2012 and authorization for the Airport Manager to sign the agreement.  Mr. Elder seconded.  After discussion, the motion passed unanimously.

 

AIR SERVICE/MARKETING:  Mr. Nagel stated that in November, 2009 the Commission agreed to evaluate the possibility of hiring air service/marketing assistance.  The task of reviewing a job description and following through on this process was turned over to the Personnel Committee.

 

The Personnel Committee met in December and after discussing the issue, agreed not to bring on a full-time employee.  The committee directed the Airport Manager to develop Request for Proposals and evaluate contracting for these services.

 

The RFP was drafted and sent to the Personnel Committee for review and comment and then advertised locally and placed on the MBS Airport website.  The President of the local Travel Agent Association was also notified of the opportunity and was asked to pass the word to their members.  The deadline for response was March 1, 2010.

 

Seven total responses were received.  An initial review of the submittals was completed by the Airport Manager and a follow-up meeting was held with the committee on March 9, 2010.  The completed score sheet was included in the packet.

 

The committee discussed the RFP and the submittals.  The committee preferred the submittal of Management Reporting Services/Tom Rockne Travel Services.  After discussion, it was agreed that the proposal of MRS/TRTS be presented to the full Airport Commission for approval.  It should be noted that although Mr. Rockne is based in Traverse City, mileage will not be paid for him to travel back and forth to MBS for the required meetings involved in this project.

 

The complete MRS/TRTS proposal was also included in the packet.  The proposed implementation timeline was included in their submittal in Attachment C.

 

The committee also recommends that, if approved by the Commission, that the Airport Manager and Airport Attorney work to develop a service agreement and that performance measurements be included in that agreement.

 

The proposed cost of these services is $5,500 per month.  There is money available in the Marketing/Public Relations account in the 2010 budget.  If during the course of this year a budget adjustment is needed, that will come back to the Commission.

 

Mr. Nagel thanked the Personnel Committee for their time.

 

Mr. Gwizdala made a motion to approve the Personnel Committee recommendation to approve the proposal of Management Reporting Services/Tom Rockne Travel Services for air service assistance and authorize the Airport Manager and Airport Attorney to draft a service agreement including performance measurements.  Mr. Earley seconded the motion.

 

Mr. Earley, Chairman of the Personnel Committee, stated that he hopes that this will put to rest concerns of the past and current board members and what they hear from the traveling public regarding why MBS has not been able to compete with Flint and Detroit in ridership with competitive fares.  Mr. Earley feels that a discount carrier would make a huge difference at MBS but it is complicated to secure one.  He and the committee are confident that Mr. Nagel and staff have done everything they can to address this issue.  This will determine if there is anything else the airport can be doing and will show how the airport compares to other airports in the region.  It definitely was valid to do the research.  

 

Mr. Gwizdala asked if the contract had an escape clause.  Mr. Nagel stated that there is a 60 day escape clause by either party.

 

Chairman Biltz stated that Mr. McKeag pushed this issue and the Board has recognized it from a ridership and fare standpoint.  The things that had been done with Northwest to look at fare differentials between here and Flint worked for a while but it takes persistent follow-up.  Mr. Biltz is more hopeful that if someone weekly contacts airlines it may help.  From a marketing standpoint this takes the airport in the right direction.  This is the least risk with the most gain.  He agrees on the performance measurements being included in the contract but also feels that the Marketing Committee should be kept involved to drive and direct.  He saw in the proposal how they are going to talk with the various businesses but did not see how they will talk to the leisure travelers in regards to their issues and their dynamics.  Is it purely fare differential that causes them to go to Flint or Detroit or are there other issues.  The third point is that it needs to be clarified with them that the airport wants a commitment to results as opposed to data collections.  Finding data is interesting but it needs to be used to drive forward.  The Board and Management Reporting Services/Tom Rockne Travel Services need to be on the same page as to what is required.  Mr. Biltz also wants Mr. Nagel to check with them in regard to the scope area.

 

Mr. Krygier asked if they could come to a Commission Meeting and report on a quarterly basis.  Mr. Nagel stated that his first step would be to have them meet with the Marketing Committee and then possibly the full Commission.  Mr. Gwizdala asked if they will be reporting monthly.  Mr. Nagel said at a minimum it would be monthly but plans on talking with them more frequently than that.  Mr. Gwizdala stated that each month a report could be given at the Board meeting.  Mr. Biltz stated once the contract is drawn, Management Reporting Services should come to introduce themselves and show their enthusiasm for the job.  It would help to have them stand in front of the Board and commit to what they intend to do.   

 

There being no further discussion, the motion passed unanimously.           

 

OLD BUSINESS: 

 

Radio Grant Update:  Mr. Riesinger stated that in September 2009 the Airport Commission authorized the expenditure of capital funds not to exceed $20,902 for radio equipment.  The radios have been received and personnel have been trained. Total cost of the equipment was $62,328.11.  The local 20% match of the Homeland Security grant amounted to $12, 465.62.  The new system provides excellent coverage for daily operation needs and enhanced interoperable communications with mutual aid agencies in the event of an emergency.  The system will be utilized extensively as part of the upcoming regional emergency exercise which will be taking place May 13th.  Specifics regarding the exercise will be discussed at the next Commission Meeting. 

 

Construction Process:  Mr. Nagel stated that the construction is ongoing.  Steelwork started last week and is going well.    

 

AIP Program:  Mr. Nagel stated that the Senate and the House were both debating multi-year versions of an AIP bill.  The House, as of yesterday, only passed a three month extension which extends AIP to July 3rd.  Mr. Nagel is assuming that the Senate will also pass similar legislation and then the President will sign.  This does fit in fairly well with the proposed construction schedule.  Bids are to be received in May with various phases based on where the airport stands with the different funding.  Mr. Nagel stated that there is a new manager at the Detroit Airport District Office with the FAA.  This is the third manager he has worked with from that office since the project began.  The good news is that this person was the assistant manager for the last three years and is familiar with the project.  He also attended the ground breaking ceremony.  A meeting is being scheduled to discuss funding at their request.  More information will be forthcoming.                 

 

NEW BUSINESS: Mr. Nagel stated that he had talked last month about the snow removal operation removing 9 ½ inches of snow however he failed to mention that during the storm, MBS was subject to the annual FAA Certification Safety Inspection.  Mr. Nagel asked Mr. Riesinger to report.

 

Mr. Riesinger stated that from February 8th through the 10th, the inspector was at the airport to conduct an annual inspection.  Mr. Riesinger stated that he was very happy to report that there were no discrepancies noted.  This is the airport’s fifth consecutive year with no discrepancies which is something to be proud of.  The inspection is comprehensive and includes checks of airfield markings, lighting, signage, pavements, fuel farm, fueling vehicles, airport fire department response times, airport self inspection and condition reports, maintenance records, personnel training records, wildlife hazard control procedures, and snow removal operations.  The airport had nine inches of snow while the inspector was here which is unusual for an airport inspection.  Obviously it is something that the FAA is interested in and the inspector gave the airport positive comments.  Five consecutive years is a truly a testament to the dedication and hard work of the entire staff.

 

Mr. Nagel stated that Mr. Riesinger organizes and sets up all the certification training and makes sure the airport is in compliance with the FAA regulations.              

 

Existing Terminal:  Chairman Biltz asked about the progress of the report regarding the existing terminal when the new terminal is complete.  Mr. Nagel stated that he is working with Mark Wilcer and Joe Jackson.  Mr. Wilcer stated that they are working on getting information from other projects that they have worked on to assist them.  They should be able to report in the next month or two.  Mr. Nagel stated that he planned on reporting to the Operations Committee first to be sure it is what they want.

 

ADMINISTRATIVE MATTERS:  Next regular meeting is scheduled for April 15, 2010.

 

ADJOURNMENT:  There being no further business, Mr. Krygier made a motion to adjourn.  Mr. Earley seconded and the Board unanimously passed the motion.  The meeting adjourned at 1:39 p.m.

 

 

                                                                                                                                                            Darnell Earley, Secretary