Metropolitan Airports Commission

Transcription

1 Metropolitan Airports Commission Management and Operations Committee Regular Monthly Meeting Minutes Wednesday, May 04, :30 pm

2 REPORTS B METROPOLITAN AIRPORTS COMMISSION MANAGEMENT & OPERATIONS COMMITTEE REGULAR MEETING Wednesday,, 2:30 p.m. Room 3048A, Terminal 1-Lindbergh Minneapolis-St. Paul International Airport "CONSENT ITEMS" Call to Order A regular meeting of the Management and Operations Committee, having been duly called, was held, in Room 3048A, Terminal 1-Lindbergh, Minneapolis-St. Paul International Airport. Chair Landy called the meeting to order at 2:30 p.m. The following were in attendance: Commissioners: Staff: Others: Landy, Deal, King, McClung, Monaco, Rehkamp T.W. Anderson, T.L. Anderson, J. Hamiel, J. Nielsen, D. Probst, M. Ladd, S. Wareham, E. Johnson, B. Peters, B. Johnson, A. Bolstad, K. Mexner, E. Wilson, P. Rasmussen, M. Kilian, P. Hogan, M. Scovronski, G. Schmidt, M. Christenson, A. Irish Gordon Hoff, Minnesota Business Aviation Association (MBAA); Vivian Starr, Anoka County Aviation Association (ACAA); Pat McQuiston, Richard Sedgwick, Target; Geoff Heck, Dale Kariya, Signature Flight Support; Christopher Cape, Thunderbird Aviation OPEN FORUM The Open Forum is a portion of the Committee meeting where persons are allowed to address the Committee on subjects which are not a part of the meeting agenda. No public comments were received. AGENDA ITEMS B1. RECOMMENDATION REGARDING AMENDED COMMERCIAL CARD AGREEMENT CF 2229 Mr. Brad Johnson, Purchasing Manager, and Ms. Kim Mexner, Purchasing Coordinator, presented background on this item. MAC is currently in the fifth and final year of its Commercial Card Agreement (Pcard) with US Bank. The current contract will automatically renew in November unless staff elects to terminate. US Bank has proposed a substantially larger rebate offer if MAC signs a new three year agreement with two, one-year renewal options. MAC is the lead agency with a consortium of Airport Purchasing Group (APG) members that joined forces to maximize the benefits of a Pcard program. The agreement is solely between MAC and US Bank but allows APG members to sign their own agreement and

3 Page 2 benefit from the same rebate schedule and combined spend. This in turn increases the rebate for all consortium members. MAC has thirteen years of experience with a Pcard program and currently has 158 individual staff cardholder accounts. The program has reduced payment processing costs and allows users a faster method of acquiring goods and services. There have been no fees or interest paid using this program. During the past five years MAC has averaged $41,000 annually in rebates and the projected rebate for 2011 is $76,000 based on the proposed rebate schedule. After questions from Commissioners, staff explained the benefits of the proposed extension of this agreement, namely avoiding the costs of retraining staff card users and the costs involved with technical staff setting up a new system. After asking further questions Commissioners requested that staff research additional information and bring this item to the next M&O in June. NO ACTION TAKEN AT COMMITTEE MEETING. B2. RECOMMENDATION REGARDING JOINT POWERS AGREEMENT BREATH TESTING INSTRUMENT CF 2230 Since 2007, there has been significant debate and legal challenges regarding the CMI Intoxilyzer 5000 that the state provides to local law enforcement, including the Airport Police Department (APD), to obtain blood alcohol readings from impaired drivers. These challenges are still being debated in court, which has lead the Minnesota Department of Public Safety (DPS) to select the Datamaster DMT-G breath-testing instrument as a replacement for the CMI Intoxilyzer At the onset of court challenges related to the CMI instrument, the APD instituted a policy of requesting a blood or urine test as a means to obtain evidence relative to the individual s level of intoxication. Although this policy created better evidence for prosecution by avoiding the controversy around the CMI instrument, it also created impacts on manpower and efficiency, since these tests need to be examined by the state crime lab before the APD is able to pursue charges. In order for the Airport Police Department to receive the new Datamaster equipment, the Metropolitan Airports Commission would need to authorize the joint powers agreement with the State DPS. COMMISSIONER MONACO MOVED AND COMMISSIONER DEAL SECONDED THAT THE MANAGEMENT AND OPERATIONS COMMITTEE RECOMMEND TO THE FULL COMMISSION ADOPTION OF THE ATTACHED RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR OR HIS DESIGNEE TO ENTER INTO A JOINT POWERS AGREEMENT WITH THE STATE, AND THAT THE EXECUTIVE DIRECTOR OR A DESIGNEE BE AUTHORIZED TO EXECUTE THE NECESSARY DOCUMENTS. THE MOTION CARRIED BY UNANIMOUS VOTE.

4 Page 3 B3. PROPOSED SIGNATURE FLIGHT SUPPORT FBO LEASE EXTENSION CF 2231 Background Mr. Eric Johnson, Director Commercial Management & Airline Affairs, presented background on this item. Signature Flight Support ( Signature ) is the current Fixed Base Operator ( FBO ) at the Minneapolis-St. Paul International Airport ( MSP ). Signature originally entered into the FBO Lease agreement with MAC in January 1984 with a twenty-five year Lease term. In June 1999 the Commission approved a proposal by Signature to reinvest a minimum of $7M into the facility to construct a new passenger terminal for its General Aviation (GA) and Corporate customers in exchange for extending its Lease term by fifteen years to amortize its investment (new termination date of December 31, 2024). Recently Signature approached MAC staff again to discuss the idea of another possible Lease extension. Term and Investment Proposal After one of Signature s major corporate tenants expressed its need for a larger corporate hangar facility at MSP, Signature and its tenant have reached an agreement for the purchase of the General Dynamics hangar facility from Signature for approximately $4.7M and also the investment of another estimated $3M into the facility to convert it from a maintenance hangar to a first-class corporate hangar facility. Signature would like to extend its Lease agreement with MAC by an additional twelve years of term (proposed termination date of December 31, 2036) which would match the amortization time period for the proposed hangar purchase. Additionally, Signature is offering to reinvest approximately $7.5M into its FBO facility and associated property within the next five years. Signature is also proposing to develop a Federal Inspection Services (FIS) facility within the FBO, which will provide an operational benefit to Terminal 2-Humphrey (T2) by removing the corporate and GA international traffic from the terminal, moving it to the FBO. Revenue Proposal From a revenue generating perspective, Signature currently pays MAC a variety of rental streams; annual ground rent is approximately $555K, percent rent (currently 1.5% on gross sales and 8% on hangar/office rentals) is approximately $226K, and additional rent associated with the previous hangar sale to Cargill that would have provided percent rent to MAC is currently $51K per year and increases by 2.5% annually. Signature, as a part of this proposal, would pay additional rent for the sale of the General Dynamics hangar on the same basis as the existing additional rent. This rent would start at $44K per year which, over the proposed twenty-five year lease term, would be approximately $1.6M paid to MAC. Additionally, Signature has agreed to increase the percent rent paid to MAC on gross sales from 1.5% to 4.5% which, based on 2010 sales, means approximately an additional $47K in percent rent to MAC annually. Based on the three factors described in this memo: operational benefits at T2, meeting the future hangar needs for its corporate tenant and keeping those functions within the FBO facility, and gaining both percentage rent and reinvestment into the FBO facility, MAC staff supports this proposal and recommends it to the Committee for consideration. In response to questions from Commissioners Mr. Johnson confirmed that Signature and MAC staff met with U.S. Customs and Border Protection (CBP) on two separate occasions and believe it is very likely that the CBP will approve of this proposal and provide inspection services at the FBO. Any operator, GA or corporate, could use the

5 Page 4 new FIS facility without being charged by Signature. In terms of long term planning, staff projects that MSP will always need to provide GA service to meet the needs of larger aircraft, so it is expected that there will always be an FBO presence at MSP. COMMISSIONER REHKAMP MOVED AND COMMISSIONER MONACO SECONDED THAT THE MANAGEMENT AND OPERATIONS COMMITTEE RECOMMEND TO THE FULL COMMISSION APPROVAL OF A TWELVE-YEAR LEASE EXTENSION TO SIGNATURE FLIGHT SUPPORT S FBO LEASE WHICH WOULD INCLUDE THE REQUIREMENT FOR SIGNATURE TO INVEST A MINIMUM OF $7.5M WITHIN THE NEXT FIVE YEARS AND THAT THE EXECUTIVE DIRECTOR OR A DESIGNEE BE AUTHORIZED TO EXECUTE THE NECESSARY DOCUMENTS. THE MOTION CARRIED BY UNANIMOUS VOTE. B4. REQUEST APPROVAL TO PURCHASE SOFTWARE LICENSES, IMPLEMENTATION SERVICES, INTERFACES, AND DATA CONVERSION PROCESSES FOR POLICE RECORDS MANAGEMENT SYSTEM CF 2232 Mr. Michael Ladd, Manager Information Systems, presented background on this item. This is a request to purchase a Police Records Management System (RMS) including computer software licenses, implementation services, interfaces, data conversion processes, computer hardware, and on-going system and maintenance support services. With Commission approval, staff entered into contract negotiations in 2008 with TriTech Software Systems to replace the Public Safety Emergency Communications Center s Computer-Aided Dispatch System (CAD), the Police Records Management System, and the Police/Fire Mobile systems. However, in February 2010, TriTech Software Systems informed MAC staff that they were ending development of their planned RMS system. TriTech proposed several RMS alternatives, which MAC staff rejected. MAC requested (and received) full reimbursement of RMS costs per the contract terms. The CAD and Mobile systems were implemented in March 2010 and are being used today. In September 2010, the Commission gave staff approval to re-issue an RFP for a new Police Records Management System and reallocated $450,456 from the approved 2006 Capital Equipment budget to fund the re-issued RFP for a RMS system. Proposals were received from Law Enforcement Technology Group (LETG), Woodbury, MN; and from ProPhoenix Corp, Moorestown, NJ. Following the evaluation of each vendor s proposal, demonstrations of the proposed software, and site visits to the vendor s reference sites, the Committee s recommendation is to accept the proposal from Law Enforcement Technology Group (LETG) to manage the Police Records Management System. In response to questions from Commissioners Mr. Ladd confirmed that support costs and costs for additional work are valid and necessary. Also, when staff visited current working examples of both vendors systems, staff saw that the LETG software demonstrated capability that matched what LETG had described in their proposal submitted to staff.

6 Page 5 COMMISSIONER KING MOVED AND COMMISSIONER MONACO SECONDED THAT THE MANAGEMENT AND OPERATIONS COMMITTEE RECOMMEND TO THE FULL COMMISSION THAT: 1. THE PROPOSAL FOR A POLICE RECORDS MANAGEMENT SYSTEM FROM LAW ENFORCEMENT TECHNOLOGY GROUP (LETG) BE ACCEPTED, 2. AN AMOUNT NOT TO EXCEED $ 450, BE APPROVED FOR THE PROJECT SOFTWARE LICENSES, IMPLEMENTATION SERVICES, INTERFACES, AND DATA CONVERSION PROCESSES, AND COMPUTER HARDWARE, 3. SUPPORT SERVICES BY LETG BE PAID FOR FROM THE MAC IS DEPARTMENT S OPERATING BUDGET BEGINNING IN 2012, AND BE CONTRACTED FOR AS PROPOSED FOR THREE YEARS PLUS AN ADDITIONAL THREE SINGLE-YEAR RENEWABLE OPTIONS, AND 4. THE EXECUTIVE DIRECTOR OR HIS DESIGNEE BE AUTHORIZED TO EXECUTE THE NECESSARY DOCUMENTS. THE MOTION CARRIED BY UNANIMOUS VOTE. B5. UPDATE REGARDING THUNDERBIRD AVIATION REDEVELOPMENT AT FLYING CLOUD AIRPORT CF 2233 Mr. Evan L. Wilson, Attorney, presented background on this item. Thunderbird Aviation ( Thunderbird ) is a commercial operator at Flying Cloud Airport ( FCM ), and is pursuing redevelopment of its leasehold. Thunderbird intends to build a new terminal facility on its leasehold. In addition, the redevelopment will address outstanding issues, including: proper abandonment of a non-compliant well; connection of existing and new improvements to sewer and water; construction of a perimeter road on a portion of Thunderbird s leasehold, as provided in the Long Term Comprehensive Plan for FCM; and removal of the existing terminal building. In December, 2010, Staff received approval from the Commission to execute a Redevelopment Agreement between the Metropolitan Airports Commission and Thunderbird. The Redevelopment Agreement addresses the outstanding issues noted above, sets forth the obligations that will need to be fulfilled prior to the issuance of a new lease and extended lease term, and addresses certain provisions of the new lease. The Redevelopment Agreement was negotiated to expire on the earlier of May 1, 2011, or the termination of the lease and issuance of the new lease. At this time, the Redevelopment Agreement has not yet been executed, nor have the preconditions for a new lease been fulfilled. Staff and Thunderbird have, however, been making progress on some of the items addressed in the Redevelopment Agreement, and Thunderbird has requested an extension of the Redevelopment Agreement expiration date to July 1, The extension of the expiration date to July 1 will not materially affect any other terms or deadlines in the Redevelopment Agreement or subsequent new lease. In response to questions from Commissioners Mr. Wilson explained that staff is seeking authority to extend only the completion date of the Agreement, and this will not change any of the terms or requirements in the Redevelopment Agreement. COMMISSIONER REHKAMP MOVED AND COMMISSIONER KING SECONDED THAT THE MANAGEMENT AND OPERATIONS COMMITTEE RECOMMEND TO THE FULL COMMISSION EXECUTION OF THE REDEVELOPMENT AGREEMENT BETWEEN MAC

7 Page 6 AND THUNDERBIRD AVIATION AS DESCRIBED ABOVE; AND AUTHORIZE THE EXECUTIVE DIRECTOR OR A DESIGNEE TO EXECUTE THE NECESSARY DOCUMENTS. THE MOTION CARRIED BY UNANIMOUS VOTE. B6. FEDERAL LEGISLATIVE UPDATE CF 2234 Mitchell P. Kilian, Director of Governmental Affairs, presented background on this item. Both Senate and House Have Passed FAA Reauthorization Bills in the New Congress; Bills Now Sent to Conference Committee Multi-year legislation authorizing Federal Aviation Administration (FAA) and some DOT programs last expired in September 2007; since then Congress has passed eighteen temporary extensions of current law with the most recent set to expire on May 31. Each chamber had passed a version of this legislation last year but conference action was never completed because of objections by some individual Senators to some controversial provisions. On February 17, 2011, the full Senate approved S. 223, 87-8, virtually the same as its last year s bill. On April 4, the House of Representatives passed H.R. 658, FAA Reauthorization, mostly on a party line vote. While the last Congress bills were quite similar, this year s House bill reflects the changed priorities resulting from last November s Congressional elections. Most importantly for airport proprietors, this year s House legislation does not include any increase in the Passenger Facility Charge (PFC) that airports can now impose up to a $4.50/passenger maximum. In addition, the new House bill seeks to reduce FAA funding back to FY2008 levels. More broadly, the House and Senate versions of the FAA Reauthorization bill also provide funding for air traffic modernization, aviation research and technology, and the operations and maintenance costs of the FAA staff. New House Bill Does Not Include Any Authorization to Increase Local PFC Last year s House legislation proposed increasing the PFC maximum charge to $7.00/passenger but this proposal ran into serious problems with certain Senators and was a major issue precluding final conference action. In response, airport proprietors argued that a PFC increase is a local charge, not a Federal tax, and that the system s needs for additional airport capacity over the next decade justify a PFC increase above the current $4.50 level. Further, any increase in the PFC level would not affect the Federal deficit since it is a local, not a Federal, fee. The Senate bill only authorizes a pilot PFC program that would allow up to 6 airports to impose a higher PFC level if the airlines wouldn t have to collect it. AIP Appropriations Level May Be Substantially Less Than Authorized Amounts in Pending Bills; Administration s FY12 Budget Proposes to Eliminate Large and Medium Hubs From Future AIP Eligibility Although the above-described House bill would reduce its authorization for annual AIP funding to $3 billion, it would continue the eligibility of all current airports for AIP entitlement and discretionary funding. However, the Administration s budget for FY12 (October 2011 September 2012) proposes a substantial reduction in annual grants for AIP to $2.4 billion annually and, importantly, proposes to eliminate all large hub (MSP) and medium hub airports from future grant eligibility. In lieu thereof, the budget

8 Page 7 proposes that these larger airports be allowed to impose an up-to $7.00/passenger PFC to substitute for AIP grant funding. At this writing, it is unclear whether this proposal will be changed in light of this Congress declining to increase the current PFC level in the pending FAA Reauthorization Bills. Final Enactment This Spring Not Assured; White House Has Threatened to Veto Any FAA Reauthorization Legislation That Changes Rules for Union Elections The independent National Mediation Board recently changed its rules for calculating whether union representation had been approved by a vote of workers. For 25 years, union representation was certified with the votes of a majority of eligible workers. The newly-changed procedure, that would be overruled by the House FAA Reauthorization bill, grants union certification based on a majority of worker votes actually cast. It is unknown whether this provision will be dropped in House-Senate conference to avoid the threat of a White House veto. Also, many Western state Senators hope in conference to obtain more direct service to the slot-controlled Washington Reagan National Airport (DCA) from beyond the current 1,500 mile perimeter. There s an effort to let airlines substitute long-distance flights to close-in National Airport in lieu of existing shorter-haul flights. THIS IS AN INFORMATION ITEM ONLY; NO COMMITTEE ACTION IS REQUIRED. The meeting was adjourned at 3:39 pm.