Minutes of the Airport Commission Meeting of June 18, 2002 SECTION ITEM TITLE NUMBER PAGE A. CALL TO ORDER: 3 B. ROLL CALL: 3

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1 Minutes of the Airport Commission Meeting of June 18, 2002 CALENDAR AGENDA RESOLUTION SECTION ITEM TITLE NUMBER PAGE A. CALL TO ORDER: 3 B. ROLL CALL: 3 C. ADOPTION OF MINUTES: Regular meeting of June 4, D. ANNOUNCEMENT BY SECRETARY: 3 E. ITEMS INITIATED BY COMMISSIONER: Mr. Ed Gomez, Director, TSA 3-4 F. ITEMS RELATING TO ADMINISTRATION, OPERATIONS & MAINTENANCE: 1. Modification No. 5 to Contract 4240 for Phase II Environmental Impact Studies for the Runway Reconfiguration Program - URS Corporation Authorization to Issue a Request for Proposals for Management Audits Amendment to the Domestic Terminals Food and Beverage Program Lease G. CONSENT CALENDAR OF ROUTINE ADMINISTRATIVE MATTERS: 4. Authorization for a Six-Month Trial of Zoom Systems, Inc. s Vending Kiosks in the In-Transit Lounges of the International Terminal Authorization for a Pre-Proposal Conference for a Professional/Collegiate Team Sports Theme Store in Lease in Terminal Authorization for a Pre-Proposal Conference for Boarding Area F Gifts and Souvenirs Kiosk Lease Minutes, June 18, 2002, Page 1

2 7. Modification No. 2 to Information Booth Program Contract - Polaris/TRG Joint Venture Replacement Agreement for Childcare Services at Palcare between SFO and San Mateo County Airport Shuttle Bus Agreement Contract with the Corporation of The Fine Arts Museums of San Francisco Settlement of Unlitigated and Litigated Claims for Fiscal Year 2000/ Proposed Exhibition Program Schedule for FY 2002/ H. NEW BUSINESS: 9 I. CORRESPONDENCE: 9 J. CLOSED SESSION: Potential Litigation 9-10 K. ADJOURNMENT: 10 Minutes, June 18, 2002, Page 2

3 AIRPORT COMMISSION MEETING MINUTES June 18, 2002 A. CALL TO ORDER: The regular meeting of the Airport Commission was called to order at 9:00 AM in Room 400, City Hall, San Francisco, CA. B. ROLL CALL: Present: Absent: Hon. Larry Mazzola, Vice President Hon. Michael S. Strunsky Hon. Caryl Ito Hon. Henry E. Berman, President Hon. Linda S. Crayton C. ADOPTION OF MINUTES: The minutes of the regular meeting of June 4, 2002 were adopted unanimously. No D. ANNOUNCEMENT BY SECRETARY: In accordance with the Brown Act, Jean Caramatti, Commission Secretary announced unanimous adoption of Resolution No regarding the settlement of an unlitigated claim of United Airlines in the amount of $25, at the closed session of June 4, E. ITEMS INITIATED BY COMMISSIONERS: Commissioner Mazzola introduced Mr. Ed Gomez, Director, Transportation Safety Administration (TSA). Minutes, June 18, 2002, Page 3

4 Mr. Gomez said that he was pleased to be in San Francisco... a world class city with a world class airport. The TSA sees SFO as one of the industry leaders. SFO takes a proactive approach in anticipating the kinds of things that need to be done, particularly after 9/11. He thanked Mr. Martin and his staff for welcoming him and his staff to the Airport. An extremely use and efficient partnership has been forged and we should be able handle whatever problems come up. He knows that the Commission takes great pride in SFO. He vowed that all of their resources will be available to work with the Airport and to keep the staff appraised of whatever Federal regulations come along so that SFO can anticipate what it will need to comply with those new regulations. San Francisco will receive the best explosive detection system devices as well as other detection equipment necessary to meet our goal of screening all baggage by November. He thanked the Commission for welcoming him and said he would always be available. Commissioner Mazzola welcomed Mr. Gomez and pledged to work with him. F. ITEMS RELATING TO ADMINISTRATION, OPERATIONS & MAINTENANCE: Item No. 1 was moved by Commissioner Strunsky and seconded by Commissioner Ito. The vote to approve was unanimous. 1. Modification No. 5 to Contract No for Phase II Environmental Impact Studies for the Runway Reconfiguration Program - URS Corporation - $5,291,558 No Resolution approving Modification No. 5 to Contract No with URS Corp. for additional technical analyses to compete preparation of SFO s proposed Runway Reconfiguration Program Draft EIS document in an amount not to exceed $5,291,558, and direct the Commission Secretary to request Board of Supervisors approval pursuant to Charter Section Mr. Stuart Sunshine, Director, Airfield Development Bureau, said that in 1999 the FAA and the City s Office of Environmental Review, the lead agencies for the Environmental Impact Study (EIS) and the Environmental

5 Impact Report (EIR), selected URS to perform the environmental studies necessary for the preparation of the environmental documents. The Commission awarded the initial contract for baseline studies in June 1999 and expanded the scope in subsequent modifications to include the detailed technical analyses of the potential runway reconfiguration alternatives, and assessment of potential mitigation sites. In early 2002, the FAA and Airport staff explored the possibility of obtaining Federal funding for the completion of studies and the preparation of the draft environmental documents. As a result, on March 5, 2002, the Commission approved Modification No. 4 to provide the contract interim funding while the FAA processed the grant application. In April the FAA approved the grant and the Commission approved its acceptance on April 29. This Modification incorporates the Grant into the contract. The amount represents the 75% Federal share for this program. Due to Federal funding, the contract is subject to Federal DBE regulations. In Modifications 4 and 5 the DBE participation level is at 14%, exceeding the 10% goal established for the Federally funded portion of the contract. The Commission was presented with an amended resolution for Item No. 2. Item No. 2 was moved by Commissioner Strunsky and seconded by Commissioner Ito. The vote to approve was unanimous. 2. Authorization to Issue a Request-for-Proposals for Management Audits No Resolution authorizing issuance of a Requestfor-Proposals for Management Audits of the Airfield Development Bureau and the Tenant/Employee Parking Program. Mr. John Martin, Airport Director, explained that there is a substitute resolution which calls for an Airport-wide management audit, as well as targeted management audits which will go into greater detail in specific areas. We will return to the Commission at a later date to provide more detail on the specific scope of the audits. Consistent with the Administrative Code and City Charter requirements on competitive bidding, a Request for Proposals will be issued. We believe a number of firms will be interested in this contracting opportunity. Minutes, June 18, 2002, Page 5

6 Commissioner Strunsky said that it is important to have a diversity of proposals from competent firms with experience in management audits of large operations. Mr. Martin anticipated interest from both accounting firms and management consulting firms. Commissioner Ito supported the resolution and said that our fiscal accountability has been transparent. She believed the public will be pleased to see how responsible our staff has been in terms of fiscal matters. Ms. Ellen Blair, Save the Bay, asked if this would be in addition to the City audit, or, why this resolution instead of the City audit. Mr. Martin said that Mr. Bob Rhoades, Deputy Director of Business and Finance could answer Ms. Blair s questions after the meeting. Item No. 3 was moved by Commissioner Ito and seconded by Commissioner Strunsky. The vote to approve was unanimous. 3. Amendment to the Domestic Terminals Food and Beverage Program Lease No Resolution amending the Request for Qualifications to allow newly formed entities to participate in the Domestic Terminals Food and Beverage Program Lease requirements. Mr. Bob Rhoades, Deputy Director, Business and Finance explained that at its last meeting the Commission approved the minimum qualifications requirements and the general business terms for the Domestic Terminal Food and Beverage Lease and authorized staff to conduct a pre-qualifications conference. Within the conditions of that approval was the stipulation that companies, individuals or partnerships could not form new entities in order to participate. After further review staff believes that new entities should be allowed so that we have product participation. It will also provide opportunities for smaller companies unable to qualify on their own to partner with a larger company in order to participate. We are recommending approval to allow newly formed entities of corporations, individuals or partnerships to participate in the qualifications process. Commissioner Strunsky asked how a majority partner is defined. Mr. Rhoades responded that we view it as 51%. A 51% stakeholder in the new entity must demonstrate that they meet all of the requirements. This will be a very complicated program and it is important that the majority partner have the requisite experience to be successful. Minutes, June 18, 2002, Page 6

7 Commissioner Strunsky wanted to avoid problems we have seen in minority contracting situations. He wanted to make sure that the minority partner receives his or her return on capital. Mr. Rhoades responded that this is not an operator situation; it is purely developer. The operators will be local businesses. Only 20% of the facilities will be open to food and beverage operators outside of the Bay Area. The 51% stakeholder must be a true developer who meets all of the qualifications. G. CONSENT CALENDAR OF ROUTINE ADMINISTRATIVE MATTERS: The Consent Calendar, Item Nos. 4 through 12, was moved by Commissioner Strunsky and seconded by Commissioner Ito. The vote to approve was unanimous. 4. Authorization for a Six-Month Trial of Zoom Systems, Inc. s Vending Kiosks in the In-Transit Lounges of the International Terminal No Resolution approving the proposed six-month trial of Zoom Systems, Inc. s Vending Kiosks in the In-Transit Lounges of the International Terminal. Commissioner Ito asked for information on the revenue generated at Pittsburgh Airport. Mr. Rhoades said that he will forward that information This is sophisticated equipment designed to go into areas such as in-transit lounges where cash or foreign currency exchange is not readily available. Mr. Gower Smith, Zoom Systems, said that their company is headquartered in San Francisco. They have had wonderful success with this technology. They had $20 million in equity investment to develop and test the technology. They have installations in JFK, Pittsburgh, Raleigh Durham, Orlando and Los Vegas done in partnership with WHSmith. The systems are built into store fronts to fill off-hour needs. They often drive traffic into the stores and don t actually serve a complete transaction. They are experiencing about two transactions a day in Raleigh-Durham. It varies depending on location. They are seeing a lot of repeat consumer acceptance. A better model for the installation is the hotel stores... Hilton, Sheraton, Ramada. They experience about transactions per day with revenues running about $1,500 to $2,000 per month... about three times what the average vending system Minutes, June 18, 2002, Page 7

8 would yield. The types of products provided are typically photo and pharmacy... there about 100 products in the assortment... snacks, food, travel items, convenience items, personal care items. They can also provide gifts and souvenir items. This six month trial period will allow them to determine what types of products are accepted and work with Airport staff to gear the product assortment to the needs of the traveler. The Hilton at Fisherman s Wharf is a good example. The system provides for an online secured transaction and accommodates a credit or debit card. All of the data is transmitted back to the central data center. Commissioner Ito asked what kind of servicing the equipment receives. Mr. Smith responded that it is monitored and pushes out alerts on performance and stock level. Maintenance is handled locally. 5. Authorization for a Pre-Proposal Conference for a Professional/ Collegiate Team Sports Theme Store in Lease Terminal 3 No Resolution approving proposed proposal requirements and lease specifications, and authorizing staff to conduct a pre-proposal conference for the Terminal 3 Professional/ Collegiate Team Sports Theme Store Lease. Commissioner Strunsky asked if CalStar can bid on this under the settlement agreement. Mr. Rhoades responded that CalStar is not prohibited from bidding on any new opportunity. 6. Authorization for a Pre-Proposal Conference for Boarding Area F Gifts and Souvenirs Kiosk Lease, a Disadvantaged Business Enterprise (DBE) Set- Aside No Resolution approving the proposed minimum qualification requirements and lease specifications, and authorizing staff to conduct a pre-proposal conference for the Boarding Area F Gifts and Souvenirs Kiosk Lease, a Disadvantaged Business Enterprise Minutes, June 18, 2002, Page 8

9 Set-Aside. 7. Modification No. 2 to Information Booth Program Contract - Polaris/TRG Joint Venture No Modification No. 2 to existing agreement providing Director with discretionary authority to implement the contract renewal date at any time between July 1, 2002 and September 15, 2002 and to request Controller to utilize carry-over funds to maintain existing programs during this period. 8. Replacement Agreement for Childcare Services at PALCARE between San Francisco International Airport and San Mateo County No Resolution authorizing a replacement Agreement between San Mateo County and San Francisco International Airport for use of previously escrowed funds for childcare slots (132) reserved for Airport employees for Fiscal Year 2002/2003. Ms. Nirmala Dillman, Palcare thanked the Commission and staff for their efforts with regard to Palcare and the difficult cuts that had to be made. They are strong and serving many Airport families and hope to continue do so in the future. Mr. Martin said that he appreciated Palcare s efforts in serving the Airport community and hopes that funding can be added to Palcare in the future. 9. Airport Shuttle Bus Agreement No Resolution approving a new rate for shuttle bus service for the year commencing January 1, Mr. Eric Johnson, Airport Express said that due to the poor economy they oppose any new rate increase for the Airport shuttle bus service. Minutes, June 18, 2002, Page 9

10 10. Contract with the Corporation of The Fine Arts Museums of San Francisco - $162,000 No Resolution approving a contract for $162,000 with the Corporation of the Fine Arts Museums of San Francisco (COFAM) for the purpose of providing technical assistance and implementing temporary exhibitions at the San Francisco International Airport for the period July 1, 2002 to June 30, Settlement of Unlitigated and Litigated Claims for Fiscal Year 2000/01 No Resolution ratifying the settlement of unlitigated and litigated claims in amounts under $10,000 each for Fiscal Year 2000/0, for a total amount of $60, Proposed Exhibition Program Schedule for FY 2002/03 No Resolution approving the Exhibition Program Schedule, San Francisco Airport Museum, for FY 2002/03. H. NEW BUSINESS: This is the Public Comment section of the calendar. Individuals may address the Commission on any topic within the jurisdiction of the Airport Commission for a period of up to three (3) minutes. Please fill out a Request to Speak form located on the table next to the speaker s microphone, and submit it to the Commission Secretary. There were no requests to speak from the public. I. CORRESPONDENCE: There was no discussion by the Commission. Minutes, June 18, 2002, Page 10

11 J. CLOSED SESSION: Discussion and vote pursuant to Sunshine Ordinance Section on whether to conduct a Closed Session. The Airport Commission will go into closed session in accordance with Government Code Section (b)(1) to confer with legal counsel regarding potential litigation. The Commission voted unanimously to go into closed session. The public meeting was recessed at 9:25 A.M. and the closed session began. Discussion and vote pursuant to Brown Act Section and Sunshine Ordinance Section on whether to disclose action taken or discussions held in Closed Session. The Commission reconvened its public session at 9:48 A.M. The Commission determined that it was not in the public interest to disclose the nature of the closed session and voted unanimously not to disclose it. L. ADJOURNMENT: There being no further calendared business before the Commission the meeting adjourned at 9:49 A.M. Jean Caramatti Commission Secretary Minutes, June 18, 2002, Page 11