04/14/2020

Meeting Minutes for:
April Board Meeting
Yuma International Airport, Conference Room
Tuesday, April 14, 2020 at 04:00 PM

    Call to Order:
    The Yuma County Airport Authority, Inc. (YCAA) Regular Meeting of the Board of Directors was called to order at 4:00PM on April 14, 2020 in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Bill Craft, President.

    YCAA DIRECTORS PRESENT WERE:
    Bill Craft, President
    Dean Hager, 1st Vice President
    Linda Morgan, 2nd Vice President (attended the meeting telephonically and via Zoom)
    Eric Saltzer, Treasurer
    Russell Jones, Secretary
    Dr. Brian Cullen, DMD, Director
    Reetika Dhawan, Director (attended the meeting telephonically and via Zoom)
    William Fox, Director (attended the meeting telephonically and via Zoom)
    Albert Gardner, Director
    Randall Nelson, Director (attended the meeting telephonically and via Zoom)

    YCAA DIRECTORS ABSENT WERE:
    Juan Guzman, Director

    ALSO PRESENT WERE:
    Gladys Brown, Airport Director
    Gerald Hinkle, Jr., Chief Financial Officer
    Minda Davy, Airport Legal Counsel (attended the meeting telephonically and via Zoom)
    Ken Scott, ASN Volunteer

    CALL TO THE PUBLIC
    There were no Public Comments.

    APPROVAL OF MINUTES
    The President called for a motion to approve the minutes of the March 10, 2020 Regular Board Meeting. Mr. Jones so moved. Dr. Cullen seconded the motion. Motion passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    The President called for a motion to approve the minutes of the March 19, 2020 Special Board Meeting. Mr. Gardner so moved. Dr. Cullen seconded the motion. Motion passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    COMMITTEE REPORTS
    1) Finance Committee Chair Eric Saltzer and 1st VP Dean Hager provided a summary of the April 9, 2020 Finance Committee Meeting which included:

    -Overview of FY20 Budget
    Mr. Saltzer described the Committees review of the Airports budget status through February 2020 as well as a projection through the remainder of the fiscal year which showed a significant revenue shortfall between $600,000 and $700,000 depending on whether or not American Airlines is granted relief.

    -Note #2004
    Mr. Saltzer described how the Committee reviewed the propose changes to Note #2004 and recommended that the Board provide authorization to move forward.

    -Somerton Airport Paving Proposal
    Mr. Hager described how the Committee reviewed the updated information concerning the cost to pave the Somerton Airport runway and described the Committee’s support to accept both the proposed cost allocation percentage of 2/3 YCAA and 1/3 Somerton Airport, as well as the proposed “not to exceed” participation level of $240,000. Mr. Hager described the Committee’s recommendation to move forward with the project once the Airport’s CARES act grant funding is in place.

    -Consultant Selection for the Design of the GA Apron Rehabilitation Project
    Mr. Saltzer described the Committee’s recommendation that the Board authorize the Airport to enter into a professional services with Nicklaus Engineering, Inc. as proposed and upon receipt of related grant funding.

    REGULAR AGENDA
    1) Discussion and possible action to temporarily suspend the YCAA Bylaws regarding Section I, Electronic Attendance, specific to allowing the YCAA Board of Directors to convene an Executive Session with electronic attendance.

    Ms. Davy, Airport Legal Counsel described how in light of the COVID19 pandemic, some directors are participating in this meeting electronically, which includes an agenda item that may call for an Executive Session. Ms. Davy explained that Arizona open meeting law does not prohibit public agencies from having executive sessions with electronic attendance; however, the YCAA’s Bylaws specifically prohibit it. Ms. Davy described how the Board could, without amending the Bylaws, temporarily suspend that single provision from its Bylaws to allow for an executive session with electronic attendance. Specifically, it is just the last sentence of Section I of the Bylaws. The purpose behind this would be in light of the COVID-19 pandemic, so that the YCAA Board can conduct its business under the current circumstances.

    Mr. Gardner expressed his opinion that the change was not necessary. After a brief discussion, Mr. Craft called for a motion to temporarily suspend solely the provision from the YCAA Bylaws, specifically the last sentence of Section I, regarding electronic attendance for executive session, until September 30, 2020, or such earlier time as determined by the YCAA Board in light of the COVID-19 pandemic. Mr. Hager so moved. Mr. Jones seconded the motion. There were nine votes of aye. Mr. Gardner voted nay. The motion passed by majority.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed:
    Mr. Gardner

    2) Monthly report by Chief Financial Officer on current financial status.

    Mr. Hinkle, Chief Financial Officer briefed the Board on our current financial status.

    3) Discussion and possible action to authorize the YCAA President, 1st Vice-President, Airport Director, or their designated representative to execute a Change in Terms Agreement with 1st Bank Yuma which would reduce to the effective interest rate on Long Term Note #2004 with 1st Bank Yuma.

    Mr. Hinkle, Chief Financial Officer, briefed the Committee on the history of long term Note #2004 and 1st Bank Yuma’s offer to reduce the effective interest rate. Mr. Hinkle continued by explaining how the current effective rate interest is 6.5% based on the prime rate at the date in which it was most recently set. Since the prime rate of interest is currently only 3.25%, 1st Bank Yuma deemed a rate reduction to 5% would be helpful and offered the unsolicited proposed Change of Terms Agreement to make it happen.

    Mr. Hinkle explained to the Board how the proposed change to the Note is obviously in our favor and is well received during these challenging times.

    Mr. Craft called for a motion to authorize the YCAA President, Vice-President, Airport Director, or their designated representative to execute a Change in Terms Agreement with 1st Bank Yuma which would reduce to the effective interest rate on Long Term Note #2004 with 1st Bank Yuma. Mr. Gardner so moved. Dr. Cullen seconded the motion. The motion passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    Mr. Saltzer, YCAA Treasurer recused himself from the meeting.

    4) Discussion and possible action to reimburse the Saltzer Family Trust two thirds of the cost to pave the runway at Somerton Airport, upon completion of the improvements.

    Ms. Brown, the Airport Director, described that in an effort to continue to promote and foster civil aviation, the Authority agreed to “provide funding for paving the main runway at Somerton Airport in exchange for a recorded easement by the Saltzer Family Trust, guaranteeing Public Use of Somerton Airport”. She explained action was contingent upon funds being available.

    Ms. Brown further explained how after funding the design of the improvements in the Summer of 2019 paid by the YCAA, a cost estimate was established depending on nature of the improvements. The most cost estimate was in excess of $800,000 paved in accordance with FAA specifications or $360,000 if a more typical “County Mix” commonly used for residential streets was used.

    Mr. Hager described his support for the allocation of costs between the Somerton Airport & the Airport Authority as proposed by Mr. Saltzer the Manager of Somerton Airport. This proposed cost allocation would result in the Airport Authority funding 2/3’s of the cost and Somerton Airport 1/3. Mr. Hager described how the current low cost of oil makes this the ideal time to undertake such a project. Mr. Hager also described how the Finance Committee recommended accepting the proposed cost allocation along with a “not to exceed” limitation but move forward after we determine if the Airport would receive a CARES grant.

    Mr. Gardner stated not actually funding the project at this point. His understanding is the Board will commit that YCAA will fund it at some point when it appears to be the right time for the budget. He expressed he liked the amendment crafted in which the Board is agreeing to do 2/3 after review by legal counsel and time frame to put it into the budget. Mr. Gardner proposed the Board pass this amendment and then decide when to fund it.

    Mr. Craft asked for a motion to authorize the FY20 off-budget expenditure of 2/3 of the total cost to pave Runway 17-35 at the Somerton Airport, as described, through cost reimbursement to the Saltzer Family Trust, upon completion of the improvements, not to exceed $240,000, upon final review by legal counsel. Mr. Jones so moved. Mr. Hager seconded the motion. The Board had further discussion on the timeframe and industry standards. Mr. Craft called for the vote. The motion passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    Mr. Saltzer, YCAA Treasurer rejoined the meeting.

    5) Discussion and possible action to authorize the YCAA President, Airport Director, or their designated representative to execute a consultant contract with Nicklaus Engineering, Inc. for engineering services related to the GA Apron Rehabilitation Project in an amount not to exceed $175,000, contingent upon the Authority receiving FAA Grant Funding for the project and upon Airport Staff and Airport Legal Counsel review.

    Ms. Brown, the Airport Director described the next FAA funded project on our Airport Capital Improvement Plan (ACIP), the engineering and design of the rehabilitation the General Aviation (GA) Apron pavement which is in a varying amount of disrepair. She further described that the project will be entirely funded by the FAA at an estimated cost of $175,000.
    Ms. Brown explained staff has undergone the required consultant selection process over the past few months resulting in the selection of Nicklaus Engineering, Inc. as the most qualified respondent to our Request for Proposals. The selection process has been approved by the FAA and airport staff has completed fee negotiations, which included obtaining an independent fee estimate from an independent consultant in order to establish that the agreed upon fee is reasonable, as required by the FAA. Mr. Brown shared the professional services fee will be less than the $175,000.

    Mr. Craft called for a motion to authorize the President, Airport Director or their representative to execute a consultant contract with Nicklaus Engineering, Inc. for engineering services related to the GA Apron Rehabilitation Project in an amount not to exceed $175,000, contingent upon the Authority receiving FAA Grant Funding for the project and upon staff and legal review. Mr. Jones so moved. Mr. Hager seconded the motion. The vote passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    6) Presentation and update regarding current construction projects, associated contracts, grant status, general aviation, marketing efforts, terminal improvements, aviation conferences, meetings and items of interest with the city and county or other federal or state agencies. This will include, but is not limited to, additional information, FAA and ADOT grant updates, an overview of projects underway, airport operations, Rolle Airfield, airline recruitment and retention efforts, general aviation, future events, and other Airport business.

    Ms. Brown, Airport Director, provided a presentation on the operational status of the airfield. She then briefed the Board on the status of airfield operations to include the runways and taxiways, airline updates, CARES Act funding, car rental challenges, marketing and community outreach over the past month.

    7) Discussion and possible action to authorize the YCAA President, Airport Director, or their designated representative to enter into an agreement which would allow the waiver or deferral of rents and landing fees due from American Airlines for the months of April, May and June of 2020, and/or an amendment to the existing Sub-Lease and License Agreement with American Airlines, due to the unprecedented events currently taking place nationally which is directly impacting all lines of business, contingent upon final review and approval by Airport Staff and Airport Legal Counsel.

    Ms. Brown the Airport Director described the status of lease negotiations with American Airlines, as well as recently received guidance from the FAA on March 28, 2020. This guidance included the following:

    - There is no authority that would allow an airport to waive landing fees and terminal rents and that any such request should be discussed with the FAA in order to avoid a violation of grant assurances
    - The deferral of rents and fees, if adequately justified, is not likely to violate FAA’s grant assurances presuming reasonable rates of interest are applied, such as Treasury Note rates and they are applied fairly to similarly situated businesses.

    Ms. Brown described how our initial offer to financial relief in return for an extended lease term may be reasonable since it can be directly tied to a unique negotiation, but we would have to obtain concurrence from the FAA. Since the FAA has deemed the deferral of rents and fees, the Authority is being asked to determine if this is a direction they would like to be taken in case it is of value.

    Mr. Craft called for a motion to authorize the YCAA President, Airport Director, or their designated representative to enter into an agreement which would allow the deferral of rents for the months of May and June of 2020 of the 2nd Quarter from American Airlines, due to the unprecedented events currently taking place nationally which is directly impacting all lines of business, contingent upon final review and approval by Airport Staff, the FAA and Airport Legal Counsel. Mr. Jones so moved. Mr. Gardner seconded the motion. The motion passed unanimously.

    Votes in Favor:
    Mr. Craft
    Mr. Hager
    Ms. Morgan
    Mr. Saltzer
    Mr. Jones
    Mr. Gardner
    Dr. Cullen
    Mr. Nelson
    Mr. Fox
    Ms. Dhawan

    Votes Opposed: None

    MILITARY LIAISON
    There was no Military Liaison in attendance.

    CALL TO THE PUBLIC
    There were no Public Comments.

    ADJOURNMENT
    There being no further business before the Board the meeting adjourned at 5:23PM.



    // Approved //
    Russell Jones
    Secretary Yuma County Airport Authority; Strategic Planning Committee Chairman
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