-4670- MEETING OF THE BOARD OF GOVERNORS November 24, 2015 The Lehigh-Northampton Airport Authority Board of Governors convened a meeting of the Board at 12 p.m. on November 24, 2015 at the Lehigh-Northampton Airport Authority. Members Present: Anne Baum, Dean Browning, John Crampsie, Mike Dowd, Edwin Lozano, Jeffrey Matzkin, Mike Schware, and Marc Troutman. Members Absent: Jane Baker, William Berger, Bert Daday, Glenn Geissinger, Larry Hemberger, T.J. Rooney, and Christopher Werley. Staff members present: Charles Everett, Tom Stoudt, Todd Quann, Ryan Meyer, Paula Bonstein, Francis Kulka, Darren Betters, Ashley Hari and Sylvette Rivera. Also in attendance: Solicitor Robert Donchez, Mike Rosenfeld (LVGAA) and Erik Chuss (Resident). Chairman, Marc Troutman presided and called the meeting to order at 12:03 p.m. After the Pledge of Allegiance, the Chairman called the roll and noted that a quorum was present. PUBLIC COMMENT: Mike Rosenfeld (LVGAA) addressed the Board regarding the proposed general aviation advisory group and the LVGAA Holiday Party. group. Erik Chuss (Resident) addressed the Board regarding the proposed general aviation advisory APPROVAL OF MINUTES: The minutes of the October 27, 2015 Board meeting were reviewed. (#5019) RESOLVED, that the minutes of the October 27, 2015 Board meeting be accepted as presented.
-4671- REPORTS OF COMMITTEES, OFFICERS AND STAFF: A. Treasurer s Report Dean Browning / Todd Qaunn Dean Browning reported on the monthly Treasurer s Report for the period ending October 2015, a copy of this report was provided to the Board of Governors. In the month of October 2015, LVIA s Net Operating Revenues was $15,625,643. LVIA Operating Expenses was ($10,625,934). LVIA Net Income (Loss) from Operations was $4,999,709. Queen City Income (Loss) was $188,130. Braden Airpark Income (Loss) was ($29,045). Total Operational Income $5,162,926. Non-Operating Income (Expense) is 492,567. Debt Service is ($3,490,360). Income (Loss) after Non-Operating Income & Debt Service is $2,165,133. Passenger Traffic was 565,848. The Operating Account Bank balances are $2,239,946 and the PFC Account had a balance of $144,185. (#5020) RESOLVED, that the Lehigh-Northampton Airport Authority Treasurer s Report for October 2015 be accepted as presented B. Business & Finance Committee Anne Baum, Chair / Todd Quann 1.) Approval of Vultee Hangar Lease Agreement Darren Betters reported on the Vultee Hangar Lease Agreement. The Vultee Hangar Lease has expired. The City of Allentown wants to remain in the facility long term. The lease has been extended on a month to month basis. The proposed new lease is for ten (10) years with three (3) five (5) year extensions. The fiscal impact is $10,397.04 per month for the first two (2) years. The rent will increase 2.5% per year, years three (3) through ten (10) and 3.5% per year, the final fifteen (15) years. (#5021) RESOLVED, that the Lehigh-Northampton Airport Authority approve the Vultee Hangar Lease Agreement with the City of Allentown for $10,397.04/month for the first two (2) years. Rent will increase 2.5% (year s three (3) through ten (10)) and 3.5% (final fifteen (15) years) 2.) Approval of Operating Budget 2016 Todd Quann presented the proposed Operating Budget 2016. The goal of the budget is to cover minimum expenses to run the airport, cover debt service, cover additional needs, and keep
-4672- the airline rates and charges low. The budget assumptions were discussed. The 2016 budget is conservative. LNAA s net income for 2016 is $1.4 million. The difference between the 2015 and 2016 projections is $5.8 versus $5.7. The bond rate maintenance coverage required under the new agreement is $1.57 whereas it was $1.25 previously. The Cost per Enplaned (CPE) passenger is projected to decrease from $17.93 to $16.96. The CPE for Newark International Airport is $30.29 and Philadelphia International is $13.34. LVIA s landing rate (LR) per pound decreased to $5.10 and the terminal rate decreased from $70.74 to $67.18. The Full-Time Equivalents (FTE) increased from 151 to 186. The 2016 cash flow projection was discussed. (#5022) RESOLVED, that Lehigh-Northampton Airport Authority approved the Operating Budget 2016 as presented. 3.) Approval of the Airport Capital Improvement Program (ACIP) 2016-2020 Ryan Meyer presented the proposed Airport Capital Improvement Program (ACIP) 2016-2020. The total cost for capital projects is $10,109,087. LNAA s capital improvement program is 49%, FAA reimbursement is 33% and State reimbursement is 18%. The total capital budget is $4,990,742. The non-funded capital is 57%, lease payment is 28%, and FAA & State grant match is 15%. In the post litigation era, LNAA is prioritizing the projects by project type and rating (emergency, regulatory, high, medium, and low). This is in line with how the FAA rates their projects and categorizes them. Graphics of the three (3) airports depicting the capital improvement projects on the program for Lehigh Valley International Airport, Queen City Airport, and Braden Airpark were included. The main projects being considered at Lehigh Valley International Airport for FY2016 include; the main terminal roof and brick repair, parking booth replacement, the multimodal transportation center, preliminary program for cargo building, design for Runway 6/24 rehabilitation, beginning preliminary programming for the Phase III of the terminal improvements, replacement of departure escalators, and replacement of the Hangar 7 sprinkler system. The projects being considered at Queen City Airport include; the obstruction study funded by the FAA, construction of an itinerant apron, FBO lobby and facility upgrades, and bulk hangar roof repair The projects being considered at Braden Airpark include; bulk hangar roof repair, demolishing one of the old hangars, an inadvertent entry fence through PennDOT funding, and replacement of the rotating beacon.
-4673- (#5023) RESOLVED, that Lehigh-Northampton Airport Authority approved the Airport Capital Improvement Program (ACIP) 2016-2020. 4.) Approval of Lines of Credit (LOC) Todd Quann presented the Line of Credit (LOC) proposal. Lafayette Ambassador Bank has agreed to provide LNAA two (2) lines of credit to support operations. The LOC will be contingency funding that will assist LNAA with cash flow. The first one is for $1,000,000 for capital. The second one is for $2,000,000 to bridge funding for projects supported by the FAA and State grants. The interest rate for both is 1.00% above prime rate, with a maturity date of April 30, 2016. The bank s commitment is contingent upon the satisfactory opinion of bond counsel and bond trustee. (#5024) RESOLVED, that Lehigh-Northampton Airport Authority approved the Line of Credit (LOC) from Lafayette Ambassador Bank for $1,000,000 and $2,000,000. C. Executive Committee Marc Troutman, Chairman 1.) Appointment of Nominating Committee Chairman, Marc Troutman stated Jane Baker has agreed to Chair the Nominating Committee. She will be contacting several Board members to join the Committee. 2.) General Aviation Advisory Group Chairman, Marc Troutman stated that the proposed general aviation advisory group was discussed and there was a favorable outcome. He expects further review and analysis on the group. It will be discussed at the next Executive Committee meeting. Ed Lozano stated that he received the Chairman s response to the general aviation advisory group. He sees a good compromise in finding a solution. He appreciates it being moved forward in the Committee. He thanked the Board members for their positive input and constructive criticism and appreciates everyone s support. DIRECTOR S REPORT: Charles Everett stated that on the topic of Aviation Security, the U.S. State Department has issued a worldwide travel alert for U.S. Citizens travelling abroad with regards to the Russian jet bombings, Paris France terrorist attack and pending threats. During the upcoming Thanksgiving Holiday, there is expected to be 25 million people travelling by air in the United States. The
-4674- Transportation Security Administration (TSA) is imposing additional security measures. At this point, the Department of Homeland Security has not identified any credible threats in the U.S. Travelers should give themselves more time and be aware of their surroundings. On November 19, 2015, there was a labor action/strike by airline baggage handlers, cabin cleaners, ramp workers, wheelchair attendants, and janitors who work for airlines as subcontractors. This occurred in Philadelphia International, Newark International, Laguardia International, JFK, Boston, and Fort Lauderdale. It was a one day event to protest low wages. There was no related action or protest at LVIA. On December 12, 2015, LNAA is hosting a Holiday Charity Flight. United Express is the carrier donating the aircraft and crew for this event. LNAA is working with ARC of Lehigh- Northampton County, Miracle League of Northampton County and Children s Home of Easton. There will be 35 seats available for the children and they will be travelling to the North Pole. On December 16, 2015, LNAA will be partnering up with Allegiant Air to celebrate their tenth (10) anniversary here at LVIA. The Holiday Festival of Trees is planned for December 7-22, 2015. There were eight (8) tree farms that donated trees this year. The Authority has local school children decorating all of the trees. The School Holiday Concerts will take place between December 14-22, 2015. A schedule will be distributed. SOLICITOR S REPORT: Solicitor Robert Donchez deferred his report to Executive Session regarding pending litigation matters. NEW BUSINESS Charles Everett reported on the status of the Articles of Incorporation. Brad Osborne, Chair of Lehigh County Commissioners had a discussion with members of Northampton County Council. They have not yet considered the extension. They would like a joint meeting where the Authority can explain and answer any questions that both legislative bodies may have. Charles Everett reported on Drones in response to a question by the Chairman. The FAA is responsible for establishing the rules. It has been a big issue of late and because of the upcoming holidays, the FAA had a rules committee convene to make recommendations. The FAA will require that any drone over 250 grams or half pound be registered. Consumers must go online and register their drones and affix a number to the drone for the FAA to be able to track them.
-4675- Chairman, Marc Troutman stated that the legal representation issue was tabled and sent back to the Executive Committee for further review and discussion. The WBF/Fuller litigation matter is scheduled for mediation on December 3, 2015. EXECUTIVE SESSION: Upon a motion duly made and seconded, the Committee went into Executive Session at 12:43 p.m. to discuss anticipated and pending litigation matters related to real estate and the WBF/Fuller matters. p.m. Upon a motion duly made and seconded, the Board came out of Executive Session at 1:10 John Crampsie announced that a year ago, he was in an accident in Bethlehem, PA. A pedestrian walked in front of his car. The pedestrian was hit and deceased at the scene of the accident. That night, John Crampsie was tested. He had one beer prior to that incident and his blood level was.06. After a long night, the Bethlehem Police Department submitted a report to the Northampton County District Attorney. The report suggested no criminal charges be applied. Today, there was an article in the Express Times about the incident. The story implied that he received special treatment because of his position in the community. John Crampsie stated, a man did lose his life that night and that is something he has to live with for the rest of his life. He felt that he needed to share that with the Board being a member of the Lehigh-Northampton Airport Authority and will need to determine if he can continue to serve in this Authority given that situation. He will be happy to answer any questions. ADJOURNMENT Upon a motion duly made and seconded, the meeting was adjourned at 1:15 p.m. Recording Secretary