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Meeting Minutes for:
Finance Committee Meeting
Yuma International Airport, Conference Room
Friday, October 13, 2017 at 09:34 AM
Call to Order:
The Yuma County Airport Authority, Inc. (YCAA) Finance Committee Meeting of the Board of Directors was called to order at 9:34AM on October 13, 2017 in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding Officer was Jonathan Matheus, Chairman.
FINANCE COMMITTEE MEMBERS PRESENT WERE:
Jonathan Matheus, Committee Chairman, Treasurer
Stan Gourley, 1st Vice President
Dr. Brian Cullen, DMD, Director
FINANCE COMMITTEE MEMBERS ABSENT WERE:
Albert Gardner, Director
Linda Morgan, Secretary
ALSO PRESENT WERE:
Ronald Rice, President
Gladys Wiggins, Airport Director
Gerald Hinkle, Jr., Chief Financial Officer
Andrea Lopez, Executive Assistant
Chris Freeman, Freeman Holdings Owner
Scott Freeman, Freeman Holdings CEO
Mike Muerer, Freeman Holdings CFO
James Combs, Million Air Yuma, GM
Ken Scott, ASN Volunteer
REGULAR AGENDA
1) Finance Committee discussion and possible recommendation on Freeman Holdings’ request to amend its lease agreement with YCAA to reduce the monthly rent on Premises 4 (Love Hangar and Restrooms) to $3,250.00 for the remainder of its term.
After a brief history of the issues at hand, Ms. Wiggins described a request received from Freeman Holdings (Million Air), dated August 24, 2017 requesting additional rent relief on Premises 4. Ms. Wiggins described the correspondence which requested a reduction in monthly rent due on Premises 4 to $3,250 per month for the remaining term of the lease. Ms. Wiggins described the important points to consider including the precedent that would be set, the possible impact on future financing arrangements, and the total cost of the rent relief requested would result in an overall amount of lost revenue to approximately $1.1 Million, over the remainder of the lease terms. The presentation also included information related to Million Air’s recent sub-lease of the facility and the terms contained within that deal.
Mr. Scott Freeman and others were in attendance representing Freeman Holdings Group at the meeting. Freeman Holdings spoke of the nature of the request, how they believe the lease rent agreed to originally was above current market rates and the intention to invest further in the airports fuel farm.
After a brief discussion, the Chairman asked to go into executive session for the purpose of discussing the elements of the lease assignment being considered.
EXECUTIVE SESSION
Mr. Matheus asked for a motion to go into Executive Session as described in the agenda, Dr. Cullen so moved and Mr. Gourley seconded the motion. The motion passed unanimously.
Mr. Matheus excused the public and airport staff except for the Airport Director, Ms. Gladys Wiggins, Chief Financial Officer, Mr. Hinkle and Executive Assistant, Andrea Lopez at 10:30AM. The Committee entered into Executive Session at 10:36AM.
The Board remained in Executive Session from 10:36AM until 10:58AM.
RECONVENE REGULAR BOARD SESSION
The Board reconvened its regular session at 11:00AM.
Mr. Matheus explained to those in attendance the Committee had agreed to provide a recommendation for Board consideration of rent relief on Premises 4, if satisfactory to the principals involved, would be in the form of an additional amendment to their lease. The proposed modification to the terms of Premises for recommendation was as follows:
·Stipulate a requirement to provide evidence of an investment into the airports fuel farm consisting of at least $350,000 on or before August 31, 2022, including at least 40,000 additional gallons of fuel storage.
·Increase the term on Premises 4 for an additional five years.
·Modify monthly lease rent due on Premises 4 to $4,500 per month for the remaining term of the existing lease, increasing to $5,000 per month for those additional five years.
Mr. Matheus indicated to those in attendance these terms as well as any changes to the existing agreement would have to be authorized by the Board of Directors through a lease amendment.
The principals of Million Air in attendance indicated they were satisfied with the recommended proposal and would work with staff on the proposed language to be provided to the Board of Directors in the November meeting..
ADJOURNMENT
There being no further business before the Board, the meeting adjourned at 11:11AM.
// Approved //
Jonathan Matheus
YCAA Treasurer; YCAA Treasurer and Finance Committee Chairman | |
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