BOARD MEMBERS PRESENT: Jon Savage; Russell Hahn; Heather Tow-Yick; Christopher Little; Michael Traficante
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1 MINUTES OF MEETING RHODE ISLAND AIRPORT CORPORATION BOARD OF DIRECTORS THURSDAY, JANUARY 11, 2018 AT 4:00 PM IN THE MARY BRENNAN BOARD ROOM T. F. GREEN AIRPORT 2000 POST ROAD, WARWICK, RHODE ISLAND The meeting of the Rhode Island Airport Corporation () Board of Directors was called to order by Chair, Jonathan Savage at 4:03 p.m., in the Mary Brennan Board Room at 2000 Post Road, Warwick, Rhode Island, in accordance with the notice duly posted pursuant to the Open Meetings Act (R.I.G.L et seq.). BOARD MEMBERS PRESENT: Jon Savage; Russell Hahn; Heather Tow-Yick; Christopher Little; Michael Traficante BOARD MEMBERS ABSENT: Deborah Thomas; Gregory Pizzuti ALSO PRESENT: Iftikhar Ahmad, President and CEO, and those members listed on the attendance sheet attached hereto. 1. Approval of the Minutes: A motion was made by Mr. Traficante to approve the minutes of the Board of Director s Meeting of November 29, The motion was seconded by Ms. Tow-Yick. 2. Open Forum: Mr. Savage asked if anyone present wanted to speak in Open Forum. No one came forward. 3. Report from the President and CEO: Mr. Ahmad presented the President and CEO Report and reported on the following: Mr. Ahmad stated November 2018 passenger enplanements are up by 21.5%. Since the seat capacity had gone up by 20.6%, this means that the load factors went up in November. Mr. Ahmad noted this dynamic is the result of airlines actively competing right now with each other. This brings the November FYTD to 14%. Mr. Ahmad stated for the fiscal year to date through October, the airlines cost is down by 7.4% and the non-airline revenue is up by 22.78%. This is in line with our business strategy. Mr. Ahmad stated our marketing campaigns are ongoing. After the completion of the Patriots trip giveaway, we rolled into our advertising campaign promoting T. F. Green on the Patriots website, radio ads and on the ribbon board at Gillette Stadium 1
2 (in-stadium signage). Mr. Ahmad noted these promotions are great opportunities to promote T. F. Green as the official airport of the New England Patriots. Mr. Ahmad stated will be meeting with Standard & Poor s and Moody s rating agencies this month in preparation for them to prepare ratings for the upcoming InterLink refunding bonds. Mr. Ahmad noted as part of these meetings and updates, we will be providing both agencies with tours of the InterLink facility. Mr. Ahmad stated is prepared to displace two of the four runway thresholds at Westerly Airport, which will remain displaced until the vegetative obstructions are removed from the approach surfaces. Mr. Ahmad noted we have advertised and awarded the paint removal of existing paint markings and painting of the temporary displacement markings to a contractor. The lighting modifications will be performed by our own in-house electricians. Mr. Ahmad stated the threshold displacements are scheduled to be completed the end of the month, weather permitting. Mr. Ahmad stated the snow team performed exceptionally well during the recent storm event that left over 14 inches of snow in less than 11 hours. Although the majority of flights were cancelled due to the weather conditions, the team continued to work throughout the storm to keep the runway clear of accumulating snow and ice. Mr. Ahmad noted the high winds gusting over 40 knots following the storm kept the snow team busy chasing wind-blown drifting snow on the runways up to two days following the event. Mr. Ahmad recognized representatives from our snow team, Guy DeCristofaro, Steve Golderese and Lew Pickering. Mr. Ahmad stated Mr. Andrade and Mr. Poirier also spoke on television regarding the storm and they did a great job. Mr. Ahmad stated two of the four electricians were instrumental in addressing the primary runway edge light power outage that occurred on December 23 rd by isolating the location of the problem and getting the runway lights temporarily operational. Joe Pesaturo and Leo Allen worked tirelessly in the extreme cold weather on the days to follow troubleshooting the below ground cables to identify the cause for the outage, which was ultimately unidentifiable due to the cables either being stuck in damaged conduit or due to direct burial. Mr. Ahmad noted the emergency response for this event took place in the offices on the third floor while the runway was closed. Mr. Ahmad stated would like to present a presidential proclamation to Northstar Aviation on behalf of the board and staff members to recognize their extraordinary efforts to support PVD. Mr. Ahmad noted there was a complimentary and letter sent to Northstar from Norwegian about their performance. This speaks to the team s ability to get stuff done quickly. Mr. Ahmad read the presidential proclamation to Northstar Aviation. Department Updates: (a) Airport operations report update 2
3 Mr. Andrade noted that there were increases in both daily carrier seats and daily departures in October and November Mr. Andrade stated that all categories in the airline passenger activity were up noting a double-digit increase. (b) Airport financial update Mr. Schattle noted there is a continuation of recent trends and a reduction in airline costs. The airline revenue for the month of October was reduced by 5.04% and non-airline revenue was up by 25.76% as compared to the prior year. Mr. Schattle noted the operating revenues increased by 12.14% noting increases in parking revenue and nonairline rent with the introduction of additional cargo service. Mr. Schattle noted there was a slight increase in the overall operating expenses and the federal government section includes the the cost related to Customs and Border Protection staffing of the FIS facility. Mr. Schattle noted that the operating income from the general aviation airports increased over the prior year. Mr. Schattle noted the air service marketing line item will show additional activity in coming months. Mr. Schattle noted the Passenger Facility Charges (PFC) and discussed the variances for the InterLink Facility which include the benefits from the Rental Car Agreement amendment that became effective at the beginning of the year. Mr. Schattle noted the year to date trends continue and further discussed the revenues and expenses. Fiscal year to date airline revenue was down 7.40% and nonairline revenue was up 22.78% as compared to the prior year. Mr. Schattle noted that the year to date operating expenses were up approximately 3.12% and included efforts to decrease overtime and the federal FIS costs. Mr. Traficante asked about the City of Warwick line item and PILOT. Mr. Schattle answered the municipal services are included based on $500,000 per year. (c) Overtime update Mr. Andrade noted there is a continued decrease in overtime. Mr. Andrade provided a department break down of overtime. (d) Water station enhancements update Mr. Andrade provided an overview of the new water stations that will be replacing the current water fountains. Mr. Andrade noted there will be three stations purchased and the installation work will be done in-house. (e) Westerly update Mr. Andrade provided an update on the threshold displacement at Westerly Airport noting the background steps taken until this point. Mr. Andrade noted this project is to mitigate safety concerns until the trees can be cleared. Mr. Ahmad stated that had opposition from the neighborhood but the town confirmed its desire to maintain the runways at their current size and in order to do this the trees need to be cleared. Mr. Little 3
4 asked what the status was of the restraining order. Ms. Jacques noted there is a preliminary injunction in place until a full trial on the matter occurs. (f) PVD master plan update Mr. Porter provided an update on the status of the master plan with diagrams of the element process with milestones and forecasts. Mr. Porter noted the inventory milestone is almost done and that the work has been performed in-house. Mr. Porter identified the VOR as a constraint to building any structures and future aircraft parking in specific areas and noted needs to work to get that equipment decommissioned. (g) HMS Host update Mr. Schattle noted there have been concession issues with operations and customer service here at the airport. There were complaints received through social media and HMS Host was asked to immediately respond to complaints and to send representatives today to speak to the Board. Mr. Schattle introduced Mr. Bryan Loden, the Vice President, Business Development and Mr. Rich Kinley, the Vice President, Operations. Mr. Loden addressed the Board and noted there were missteps taken with operations and HMS Host believes they have let down and they have let themselves down. Mr. Loden noted HMS Host has put together a team to fix issues immediately and Mr. Kinley will explain this in more detail. Mr. Kinley addressed the Board and listed a few of the issues that needed immediate attention involving customer service, including long lines, opening times, staffing and management oversite. Mr. Kinley explained they have brought a team to help with oversite and training and they have established an action plan to address these issues with the local team and. He stated that in the past HMS Host said it would do something about the issues and they did not follow through. Mr. Savage noted his appreciation for HMS Host s candor but there was no excuse that the situation is at this point and explained that if there is no immediate improvement, will make changes. Mr. Savage explained that these issues affect our reputation and we have had enormous success in all areas but concessions. Mr. Savage asked that Mr. Loden and Mr. Kinley attend the February Board meeting to give an update on real performance data and overnight changes and explained that the Board will receive daily reports and everyone is alerted to this issue. Ms. Tow-Yick asked about how HMS Host will measure its performance, what the expectations are for wait time during peak hours and whether they increase staffing to meet the demand a peak times to ensure acceptable wait time. Mr. Kinley noted they are looking at peak hours and confirm this is a sense of urgency. He confirmed the staffing need to be changed and they are monitoring the open and close times daily. Mr. Loden answered the reported transactions are every half hour and there may be a line. Ms. Tow-Yick asked about what the number of transactions are per hour. Mr. Loden answered the standard is 55 transactions per half hour. Mr. Little noted his concern with our measurement to other airports when it comes to concession options and explained would like to see what the business plan is to be sure it fits in our future plans and they are successful. Mr. Loden noted there are immediate issues that need to be addressed before redevelopment but they have started to work on these. 4
5 Mr. Savage reiterated this process needs to be addressed with real urgency. Mr. Traficante asked if vendors on site feel a sense of urgency and what is their attitude. Mr. Loden answered that Dunkin Donuts is involved and working with HMS Host. 4. Action Items: (a) Approval to execute a construction contract for the demolition of eight commercial properties surrounding T. F. Green Airport with AA Asbestos Abatement Co. Inc. in the amount of $268,380. Mr. Porter noted there are eight vacant properties surrounding the airport that are beyond their useful life and need to be demolished. Mr. Hahn confirmed that there would not be an overrun in cost. Mr. Porter confirmed there would not be an overrun in cost. A motion was made by Mr. Hahn and seconded by Mr. Little to approve the recommendation. The motion was passed unanimously. (b) Approval to execute an insurance contract with Blue Cross Blue Shield of Rhode Island for employee health insurance coverage effective February 1, 2018 in the approximate amount of $2,160,905. Mr. Little recused himself and stepped away from the table. Ms. Penta provided an update on health care claims and costs and noted in the collective bargaining agreement healthcare has to be with Blue Cross Blue Shield or an equivalent and of the three proposals received, Blue Cross Blue Shield of Rhode Island was the best option. A motion was made by Mr. Traficante and seconded by Ms. Tow-Yick to approve the recommendation. The motion was passed unanimously. (c) Approval to continue under the current agreement with Delta Dental of Rhode Island in the approximate amount of $145,225 for one year of employee dental insurance. Ms. Penta provided an update on the current contract with Delta Dental of Rhode Island and noted the contract provided for an increase of up to 9% in its last year. Ms. Penta noted that there would be a penalty of three months of premiums to break the contract. That cost would outweigh any possible savings from another carrier, therefore, continuing the contract with Delta Dental of Rhode Island at a 9% increase is recommended. A motion was made by Mr. Little and seconded by Mr. Hahn to approve the recommendation. 5
6 The motion was passed unanimously. 5. Executive Session: At approximately 4:58 p.m., a motion was made by Ms. Tow-Yick and seconded by Mr. Little to go into Executive Session for the purpose of discussing the following items: The Board will seek to go into Executive Session for the following stated purposes: (a) (b) (c) (d) (e) Motion to approve the minutes of the executive session held November 29, (a), (2) and (7); and Investment of public funds where premature disclosure would be detrimental to the public interest (Air Service Development and Marketing)(Executive Search Services) (a)(7); and Discussion related to one public litigation matter (Harriett Kniffer, Trustee of the Harriet Chappell Moore Foundation, et al. v. and RIDOT) (a)(2); and Discussion related to the acquisition or lease of real property for public purposes, or of the disposition of publicly held property wherein advanced public information would be detrimental to the interest of the public (a)(5); Motion to Return to Open Session. By the following roll call vote the motion was passed unanimously. YEAS: NAYS: ABSTAIN: Christopher Little Heather Tow-Yick Jon Savage Russell Hahn Michael Traficante None None At approximately 6:16 pm, a motion was made by Mr. Traficante and seconded by Mr. Hahn to return to Open Session. The motion passed unanimously. 6. Post Executive Session Actions and Announcements: (a) Motion to Seal the Minutes of the Executive Session Held on January 11,
7 A motion was made by Ms. Tow-Yick and seconded by Mr. Little to seal the minutes of the Executive Session in accordance with R.I.G.L By the following roll call vote the motion was passed unanimously. YEAS: NAYS: Christopher Little Heather Tow-Yick Jon Savage Russell Hahn Michael Traficante None (b) Report on Actions Taken in Executive Session. During the Executive Session, a motion was made Mr. Hahn and seconded by Mr. Traficante to approve the sealed minutes of the Executive Session held on November 29, The motion was passed unanimously. During the Executive Session, a motion was made by Mr. Hahn and seconded by Mr. Traficante to approve a second task order with Korn Ferry for executive search services in an amount not to exceed $100,000. The motion was passed unanimously. 7. Future Meetings: The next Board Meeting will be held on Thursday, February 8, 2018 at 4:00 pm in the Mary Brennan Board Room, T. F. Green Airport, Warwick, Rhode Island. 8. Adjournment: Mr. Traficante moved to adjourn at approximately 6:17 pm. Mr. Hahn seconded the motion. The motion was passed unanimously. Respectfully submitted, Jon Savage, Chair Rhode Island Airport Corporation 7
8 PUBLIC ATTENDANCE SHEET RHODE ISLAND AIRPORT CORPORATION MEETING OF THE BOARD OF DIRECTORS THURSDAY, JANUARY 11, 2018 NAME Brian Schattle Alan Andrade Alicia Seabury Donna Melone Sherri Ann Penta Timothy Pimental Annette Jacques Dan Porter David Cloutier Eric Seabury Doug Dansereau Jeff Wiggin Steve Cahill Randy Costa Paul McDonough Leo Messier Guy DeCristofaro Lew Pickering Steve Golderese Joe Pesaturo Leo Allen AFFILIATION 8
9 PUBLIC ATTENDANCE SHEET RHODE ISLAND AIRPORT CORPORATION MEETING OF THE BOARD OF DIRECTORS THURSDAY, JANUARY 11, 2018 NAME Julie Marron Frank Zammiello Paul Smith Susan Baisley Rich Kinley Bryan Loden Tim Slaney Younces Abuirmeleh Cindy Endicott Bob Goff Hannah Barnard AFFILIATION Rigaboa Northstar Northstar Northstar HMS Host HMS Host HMS Host HMS Host HMS Host New England Parking ProPark 9
10 The minutes of the Executive Session of the Board Meeting January 11, 2018 have been sealed in accordance with R.I.G.L
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