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Meeting Minutes for:
Strategy Committee Meeting
Yuma International Airport, Conference Room
Wednesday, July 21, 2010 at 03:00 PM
Call to Order:
CALL TO ORDER
The Yuma County Airport Authority, Inc. (YCAA) Strategy Committee Meeting was called to order at 3:00 PM on July 21, 2010 in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Rob Ingold, Chairman.
YCAA MEMBERS PRESENT WERE:
Rob Ingold, Chairman
Albert Gardner, 2nd Vice President
Ed Whitehead, Treasurer
Karl Moedl, Director
Jesse Haines, Director
Mikel Smith, Director
William Gresser, President
ALSO PRESENT WERE:
Mr. Williams, Airport Director
Gerald Hinkle, Jr., Chief Financial Officer
Lynn Hall, Director of Maintenance
Gen Grosse, Corporate Account Manager
Andrea Lopez, Executive Assistant
Wayne Benesch, Airport Counsel
Steve Mohor, Million Air
Manny Garbediah, Million Air
Gill Garza, Garza Aviation
APPROVAL OF MINUTES
None
Regular Agenda
1) Discussion and recommendation on procedures for establishing and maintaining a web site for Yuma International Airport.
Mr. Williams explained that an allegation has been made to a member of our Board of Directors that our web site states that we only use Nicklaus Engineering for our engineering needs and has a link from our web site to NEI's web site with the intention of promoting their service. Additionally, in the July Board of Director's meeting a public comment was made that the Board operates in secret and does not post information on our web site about what is going on.
The Chairman of the Strategy Committee has requested a presentation about the Airport's web site in general and this question specifically. The question of how the airport contracts professional services will be addressed in the next agenda item.
Background: The Airport Administration and Operations information systems run on a computer database management system called Lotus Notes, an IBM product. The advantage of using IBM Lotus Software is that it is robust, easy to use, is web-enabled out of the box, and allows for the development of collaborative business applications. What does that mean?
It means that the work we do every day is automatically available on the web. It means we can pick and choose what we want the public to see and wrap tight security around those things that must be kept confidential. The robust part of the equation means that Lotus Notes never breaks down.
So who updates our web site? The answer is that every single employee who enters data into our database management system, essentially everyone; updates our web site, all day, every day.
IBM Lotus Domino is the server product. The Domino server provides low cost of ownership, with a security-rich platform for collaboration and business applications. IBM Lotus Notes has proven to be an easy to use, integrated desktop client. The Airport Director will provide a demonstration of these capabilities, and the information that is available to the public on our web site. It is important to keep in mind that this information is made available to the public in real time, that is, when additions and changes are made to our databases, those changes appear on our web site within minutes; all of this happens automatically. Here is a list of the information currently available on our web site.
LEASE INFORMATION FOR AND ABOUT OUR TENANTS
1. A complete compendium of all of our Lease Information including all of our lease documents and a brief summary of each lease.
2. T-Hangar Leases
3. The T-Hangar Waiting list showing the name of the person waiting and the date time when they signed up and what type of hangar they are on the list for
4. A waiting list application
5. Schematics for each type of hangar
6. A web form that our tenants can use to request Facility Maintenance that includes the last 30 days of requests and how long it took to accomplish each request
7. An introduction to our Wash Rack
AIRPORT BOARD OF DIRECTORS INFORMATION
8. A brief biography of each of our Board of Directors
9. A listing of our standing Committees and members
10. A preview of the agenda for the next Board of Director's meeting
11. A preview of the agenda for the next scheduled Committee meeting of the Board Directors
12. A compendium of the minutes of previous meetings of the Board of Directors and all Committee meetings from January 2005 to present
FINANCIAL INFORMATION
13. An overview of how we allocate resources to achieve the Board's Airport Strategy laid out by strategies, goals and objectives
14. Three years of our Previous Audits with the current year budget
15. An up to date listing of the Airport Director's current plan for Capital Outlay expenditures
AIRPORT DIRECTOR POLICIES AND DIRECTIVES
16. The Airport Director's Policy Manual
17. The Board of Director's Signature Policy for the Airport Director
18. Our current Airport Employee Handbook
INFORMATION ABOUT THE AIRLINES
19. An introduction to US Airways
20. An introduction to United Airlines
21. Up to the Minute Flight Information for arrivals and departures
INFORMATION ABOUT OUR PARTNERS
22. A brief explanation about the relationship between MCAS Yuma & YCAA
23. The current Joint Use Agreement
24. Our current Airport Master Plan
25. Our Current Minimum Standards
26. Links to our 24 hour ramp cameras
27. A history of the airport
28. An introduction of Million Air
29. Information about our Airport Terminal, Car Rental companies, Parking Information, Bus Service
30. An introduction to Republic Parking
31. Information about our Taxicab information and a little bit about our Artwork on display.
INFORMATION ABOUT OUR DEFENSE CONTRACTOR COMPLEX
32. An online schedule of who is renting what facilities in our DCC and 'Toon facilities
33. The ability to request reservations for the facilities
34. Online Testing for security badges
35. Online Training and Security Applications
36. Information about our DCC Concept
INFORMATION ABOUT HOW WE DO THINGS
37. The FAA's current approved version of our required Airport Certification Manual
38. The FAA's current approved version of our Airport Emergency Plan
39. Information about Airport Operations and how it works
40. Online classes for Driver's Training
41. Online applications to apply for a security badge
42. Information for local contractors who need to fill out an FAA Form 7460-1
43. Daily Self Inspection results for the AM and PM Aerodrome inspections with date and time of supervisor reviews
44. Our Airport e-Meeting Center
MONTHLY STATISTICS CONTAINING:
45. Monthly Enplanements for the last ten years
46. Monthly Cargo tonnage for the last fifteen years
47. Monthly Fuel Flow in gallons for the last seven years
48. Monthly Car Rental revenue for the last four years
49. Monthly International flights clearing US Customs for the last seven years
With this much information available to the public on our web site it is difficult to accept any comment that the Airport Board is being secretive.
We investigated the claim that our web site states that NEI is our only engineer or that we have a link to NEI's web site and have the following to report.
A useful tool of Lotus Notes is its ability to index entire databases so we can perform full text searches to find information. An examination of our web site revealed no links to NEI's web site.
A full text search for the name Nicklaus resulted in three hits on web pages with the name Nicklaus engineering. Two of the web pages are inactive having been archived in March of 2008 and are not viewable by the public. Both of these hits were for RFQs that the airport published and which were subsequently awarded to other engineering firms. Specifically they were for contract work at Rolle Field which was awarded to Morrison-Maierle and for a remodel of the airport terminal which was awarded to DWL Architects. The third hit was for a press release announcing the grand opening of the DCC hangar which was designed by Architecture West, a division of NEI.
The strategy committee accepted the report on the web site.
2) Discussion and recommendation to the YCAA on approving a lease extension for Mr. John Ewing.
Mr. Williams briefed that Mr. Ewing has requested a lease extension on the lease for his aircraft sales FBO. He has met with Mr. Ewing and believes providing an additional year lease in two six months segments would benefit the airport. The committee accepted this recommendation and added that performance measures must be included to ensure that a sincere effort is being made to repair and sell the aircraft that Mr. Ewing has on the airport.
The committee unanimously agreed to recommend to the Board of Directors to amend Mr. Ewing's lease to extend the termination date to December 31, 2010 with one additional six-month option to end July 31, 2011, with a 3% raise effective Feb 1, 2011, if the option is exercised, and to add a performance measure on aircraft repairs and sales.
3) Discussion and recommendation to the YCAA on the matter of T-Hangar inheritance/subleasing.
Mr. Williams briefed that In January of this year the Board of Directors made a policy decision on the question of T-Hangar inheritance. Both sides of the question were examined and the guidance at the time was very clear to staff. During the January decision process, the Airport Board looked at the question from two distinct aspects.
ANTI INHERITANCE: By policy, the T-Hangar list has always been the last word. When someone signs up on the list they are assured the list is inviolate. This is very important to people who have, in many cases, been waiting on the list for years. Knowing exactly where they stand on the list, and having confidence that the Airport is never going to "do a deal" behind their back, gives them confidence in the Airport Authority.
PRO INHERITANCE: A T-Hangar lease is valuable property. Some of our current tenants have had to wait for months, and in many cases, years, to get into the Hangar. Now that they are in, they can attach some of that value to the aircraft itself. Then, if they wish to sell their aircraft, for any reason, they can tell a prospective buyer that the T-Hangar lease goes with the aircraft, and that value makes it a much easier sale. The new owner would "Inherit" the lease. [Note: this was the recommendation of staff as it is much easier to implement and the airport is not placed in the roll of "enforcer."]
After the January discussion, the Board instructed the Airport Director to establish a policy in our minimum standards to "NOT ALLOW" T-Hangar Inheritance. If a T-Hangar tenant sells his aircraft, the new owner "MAY NOT" take over the T-hangar. The T-Hangar is leased to the tenant and that lease does not attach to the aircraft in any way. The Board further instructed staff to make an examination of current tenants to determine if they are authorized tenants. If our lease records do not match the current tenants, those individuals must be removed from the T-Hangar so it can be leased to the next person on the list.
Since that time, the staff has endeavored to carry out this policy and has taken care to do so in a professional and courteous manner. Recently, however, the question came up again on two separate occasions. First was T-Hangar 1B, leased by Mr. Brent Dana. During a routine examination of insurance records staff discovered the hangar was used for the storage of an aircraft owned by Mr. Todd Mattern.
Second concerned an available Box Hangar that opened up for a prospective tenant who is purchasing an aircraft, but the aircraft will not be here for several months. In this case, although the tenant had just gotten on the list a few days earlier, the two people above him for that specific type of hangar, exercised their turn down option and the tenant got a call from our staff, offering the hangar. In both cases a significant amount of pressure was put on Board members to grant "an exception." As it turned out, no exception was even necessary on the 2nd incident as airport policy allows a waiting period in the case of a new plane being on order.
Mr. Williams explained that the lease of a Hangar is very "personal" matter to those tenants, and in one recent case, the response had been so negative it included one of our tenants coming into the airport administration office and verbally abusing the airport's staff at a time when the Airport Director was on the airfield. Mr. Williams felt this put our employees in a difficult situation; they were being unfairly victimized for carrying out the Board's policies. In each of these cases, everyone is working very hard to be as fair and as professional as possible, but the exact opposite perception is held by some members of the GA community. This, of course, is a terribly unfair reflection on Board members who are doing everything they can to benefit that same group.
After a lengthy discussion it was agreed to leave the policy as is with a minor modification to allow a tenant to keep a hangar as long as the Lessee provides conclusive proof of ownership of some percentage of the aircraft in the hangar. This reduces the previous requirement of the 51% ownership.
4) Discussion and Recommendation to the YCAA on establishing a method of procuring professional services.
The Chairman of the Strategy Committee requested this session to discuss the airport's practices in acquiring professional contract services. Mr. Williams provided a lengthy presentation on how the airport meets the requirements of the FAA advisory circulars for consultant selection. Mr. Haines made some suggestions about who to put on the selection panels that could provide insight into local firms.
The presentation included an examination of opportunities for Yuma engineering services firms to compete for airport engineering services contracts.
One of the Yuma firms under consideration, Dahl Robbins, has a member of the firm, Mr. Jesse Haines, on the Airport Board of Directors. Mr. Williams stated that fact disqualified Dahl Robbins from consideration due to a potential conflict of interest. The Airport counsel stated that with the appropriate disclosure by Mr. Haines, and his recusal from voting on any such engineering services contract, that Dahl Robbins is eligible to respond to future airport Requests for Qualifications.
5) Discussion and recommendation to the YCAA on establishing a method of providing customer service.
The Chairman of the Strategy Committee has requested this session to discuss the Airport's current customer service practices.
Specifically, the airport director was encouraged to consider any potential inquiry by persons who might express and interest in such activities as taking over the restaurant contract when it comes up for bid, for example.
[Editor's note: Coincidentally, Mr. Todd Mattern visited the airport about three weeks ago on this very same subject and received an in depth briefing from the Chief Financial Officer on the existing restaurant contract, its remaining duration, the financial possible and quite a bit of background into the Airport's goals for the restaurant and operating procedures.]
6) Discussion and recommendation to YCAA Board of Directors concerning a request to amend the lease on the Wrong Way Hangar.
Mr. Williams briefed that on Friday, July 16, Mr. Gil Garza sent an email to the Airport Director requesting his name be pulled from consideration as a new Fuel Sales FBO and further that he desired to terminate his lease effective September 30, 2010.
The Airport Director consulted with Mr. Garza who confirmed he is not interested in becoming a Fuel Sales FBO and has advised Mr. Gamez of this fact. The issue is closed from his perspective.
More importantly, Mr. Garza is concerned about his future at the airport. His startup aircraft maintenance business is struggling and he is considering moving to a different airport. His concerns stem around his need to invest in new tools to upgrade his service capabilities. At the moment, he is making a significant investment in tools and the rent on top of that, pushes him into a money losing situation. He also needs some additional investment in the Wrong Way Hangar. Specifically, in the summer, the temperature in the hangar can exceed 135 degrees. This makes it unsuitable for avionics and other delicate, technically oriented work.
When questioned, Mr. Garza stated he would be willing to continue to try to make a go of his business if the airport could provide a little rent relief along with hangar insulation and two swamp coolers.
Airport staff recommends that we make the investment necessary to accommodate Mr. Garza's request. If we make this investment and Mr. Garza is subsequently successful the airport will benefit from his presence. If we make the investment and Mr. Garza subsequently fails, the airport will still have the benefit of the infrastructure investment.
BACKGROUND: Mr. Garza's presence is a great benefit to the Airport. His work is professional; he runs a clean shop with modern maintenance practices. He has a military background that necessarily included significant training in aviation policies and procedures. Mr. Garza's desire to invest in tools is a good sign because it will enhance his ability to provide additional maintenance services to the GA community. Mr. Garza is a qualified Airframe and Powerplant mechanic with an FAA Inspection Authorization (IA) certification.
The IA certificate is important to the airport. This certification allows qualified mechanics to perform crucial inspections on aircraft that have undergone significant maintenance. The attainment of an IA certificate greatly enhances the capabilities and responsibilities of the aircraft mechanic. The IA permits the Airframe and Powerplant (A&P) mechanic to perform a greater variety of maintenance and alterations than any other single maintenance entity.
Because of his IA certificate, Mr. Garza is authorized to perform maintenance on our Airline's aircraft that might otherwise require a extensive delays to bring in aircraft mechanics from Phoenix or Los Angeles.
Airport staff recommends replacing Mr. Garza's lease with a new lease specifically tailored to Mr. Garza's situation. A draft of this lease has been prepared for Mr. Benesch to review contingent upon the go-ahead from the Strategy Committee. The main changes to the lease would include:
1. Tailor the "Use of Premises" to only Aircraft Maintenance and associated aircraft maintenance operations.
2. Reduce the amount of his rent to $500 per month for year one and two, $750 per month for year three and four and $1,000 per month for year five. Include bi-annual reviews to determine if the "Incubator Rates" are still appropriate.
3. Install R-30 hangar insulation and two (2) large evaporative coolers.
4. Include in the lease the ability to use the five new tie downs that will be installed in front of his hangar during the GA apron rehab
The lease would be clearly written to identify this as an "incubator" model lease agreement, i.e. that it is being done to attract a specific service identified by the Board of Directors for the benefit of the airport and its users; and take care to indicate these rates are not available in a general sense.
LEGAL CONSIDERATIONS: There are specific considerations for this concept under FAA guidelines. The two most important questions are; 1) would providing below market rental rates to Mr. Garza violate our requirement to charge market rates and be self-sustaining, and 2) would providing a below market rate to Mr. Garza alone be considered an exclusive right?
The FAA Airport Compliance Manual, Order 5190.6B, states in Appendix D, "Policy Regarding Airport Rates and Charges" that:
"At some airports, market conditions may not permit an airport proprietor to establish fees that are sufficiently high to recover aeronautical costs and sufficiently low to attract and retain commercial aeronautical services. In such circumstances, an airport proprietor's decision to charge rates that are below those needed to achieve self-sustainability in order to assure that services are provided to the public is not inherently inconsistent with the obligation to make the airport as self-sustaining as possible in the circumstances."
In other words, if the Airport Authority feels that it is important to have aircraft maintenance services on the airport, and to provide those services means we have to offer below market rates to Mr. Garza, it is acceptable to do so "in order to assure that services are provided to the public."
However, would the below market rate be considered an exclusive right? Our grant assurances prohibit the airport from granting an exclusive right to a provider of aeronautical services. In answer, Order 5190.6B states, "the FAA does not consider the presence of only one provider engaged in an aeronautical activity as a violation of the exclusive rights prohibition."
On the other hand, what if another maintenance provider wants to come on the airport and get the same below market rental rates? Would the airport be required to give that new provider the same deal we are proposing to give to Mr. Garza?
Order 5190.6B examines this question in this excerpt from Chapter 8, "Exclusive Rights."
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8.7. Denying Requests by Qualified Providers.
a. Conditions for Denial. The assurance prohibiting the granting of an exclusive right does not penalize a sponsor for continuing an existing single provider when both of the following conditions exist:
(1). It can be demonstrated that it would be unreasonably costly, burdensome, or impractical for more than one entity to provide the service, and
(2). The sponsor would have to reduce the leased space that is currently being used for an aeronautical purpose by the existing provider in order to accommodate a second provider.
In the case of denying additional providers, the sponsor must have adequate justification and documentation of the facts supporting its decision acceptable to the FAA.
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In other words, the airport would not be required to offer the same deal to another provider of aircraft maintenance because 1) in our analysis the local market will only support a single provider and 2) the airport does not have another such facility to rent for this use and we are not required to force Mr. Garza to give up part of his hangar.
On the other hand, if another provider wants to come in and set up a competitive business on their own to include building their own hangar; knowing that the airport has stated that it believes the market will not support a second provider of the same service, the Airport Authority can certainly allow that new provider to try, but the airport does not have to provide the same financial incentives if the same or similar facilities are not already available.
Based on the Board of Director's often stated and long-standing goal of trying to get an aircraft maintenance provider for our airport, staff recommends the strategy committee support the proposed reduced rental rates and other infrastructure investment for Garza Aviation.
After a lengthy discussion, it was agreed to make a recommendation to the Board of Directors that Mr. Garza's lease be amended to the rate of $250 per month for the next two years, $500 per month for the following two years and then market rate in year five. Staff will develop a final proposal for the Board of Directors, based on further negotiations with Mr. Garza and a lease amendment will be prepared by staff and reviewed by Airport counsel. The effective date will be August 1.
Mr. Gardner asked a question about the potential for a 2nd FBO now that Mr. Garza is no longer interested in pursuing a fuel sales FBO operation. There was a consensus that a 2nd FBO is not likely to be financially viable on this airport; i.e. the marketplace has proven this point in that four of our last five FBO's have been bought out in a consolidation effort and the fifth went under. Additionally, Mr. Williams recounted the history at his last airport, where two FBO's, one large and one small, were in a constant battle with each other, with each denying services to the other's customers. Inevitably the airport gets the blame in these kinds of situations. Mr. Gresser commented that the same was true here, when we had SunWestern and Bet-Ko, Bet-Ko and Lux Air, Lux Air and Careflight, etc. Now, here in Yuma, we will have a single FBO, Million Air, who is recognized as the leader in the industry, and who will provide a premier brand of service to every single member of the GA community.
7) Discussion on a succession plan for the Airport Director's position.
The Chairman of the Strategy Committee requested this session to discuss the succession plan for the Airport Director.
Mr. Williams explained that his policy was to hire and train a replacement airport director because no one knows what the future holds. He explained that the Airport Certification Manual identified the Operations Officer as the automatic successor to the Airport Director's position and that this position has a training regimen in place to prepare that individual for the leadership role.
He also explained that it was understood that the ultimate succession of the Airport Director's position was at the discretion of the Board of Directors. Mr. Gardner asked if that were the case, did the Airport staff ensure that the Airport Director and Operations Director never travelled on the same aircraft and Mr. Williams said that was exactly the case for that very reason.
This concept was met with approval by the Committee. Mr. Ingold directed Mr. Williams to insure that the policy was formalized in Airport Policy Documents.
There being no further business before the committee, the meeting adjourned at 5:08 PM.
// Approved //
Craig Williams
Airport Director | |
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