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HomeMy WebLinkAbout2013-09-12 MinutesFAYETTEVILLE EXECUTIVE AIRPORT BOARD MINUTES September 12, 2013 MEMBERS PRESENT: Bob Nickle, Josh Mahony, Bill Corley, Mike Gibbs, Ken Haxel, Marty Burggraf MEMBERS ABSENT: Rick Bailey OTHERS PRESENT: Rick McKinney -tenant; Jeffry Gates -Arkansas A&M Museum, Wayne Jones-MCE; Joel Walsh -NWA Times; Warren Jones -Arkansas A&M Museum; James Nicholson -Financial Coordinator; Lauren Treat -Administrative Assistant; Mike Bowman -Tower; Ben Pollock -The City Wire; Pete Mastroianni-Mil lion Air; Don Marr - City of Fayetteville; Greg Carter -tenant ITEM #1: Welcome. Chairman Nickle. ITEM #2: Approval of the Airport Board Minutes of the June 13, 2013 meeting. A motion to approve the minutes was made by Mike Gibbs, and seconded by Marty Burggraf. The motion carried. ITEM #3: Receiving of Reports. A. Director Boudreaux, Aviation Director. August was unusually hot and wet, and not the greatest month in operations or fuel. The cut in military flights after the sequester hit has affected operations numbers. Fuel sales were down in August by about 8,000 gallons and some base customers did not buy as much fuel as in the past. Boudreaux said he is unsure of the exact cause of the lower fuel sales this month, but operations are still ahead by 7 percent. Ken Haxel (University of Arkansas' pilot) said he went to Kansas City last Monday and bought gas for $3.58/gallon + tax = $4.07. Haxel said he also filled up recently in Dallas at Love Field. Boudreaux asked the Board to look at the fuel costs sheet in the packet, and admitted one reason for our lower fuel sales is our higher price. He discussed one customer's complaint about the Game Day shuttle not getting close enough to the stadium. Boudreaux had the drop off point changed to the Union. He reported no change regarding the contract towers. At the end of this month, we will be at FY2014 and we still do not know exactly what will happen. All of construction projects at the airport are going well and Boudreaux said he is close to a resolution with Loomacres / FAA for the Wildlife Hazard Assessment. Boudreaux said the DLA contract is finally squared away. Unfortunately, the DLA had still been paying Million Air but we are now in the process of getting that situation rectified. B. Financial Coordinator James Nicholson, Budget Report. Reported the airport is still ahead of last year with numbers not too far off previous years' operations and fuel sales for the month of August. Nicholson said his end of year estimate is now a little less than he initially predicted (about 4,000 gallons less). All in all, Nicholson said the airport is still making it by okay. Regarding FBO fuel sales, the variance on the margin is about a third less than what was planned for budget -wise. He said the various types of fuel sales (contract fuel and military fuel) are dragging down our margin. Boudreaux said last month the contract fuel margin was raised by 10 cents, so it has improved. However, the market pressure is to have a low fuel price for both base and itinerant customers. Nicholson said we are trying to find our sweet spot, but it is not going to lie where our original target margin was. Our fuel prices are a little high locally, but still relatively average for the region. Nicholson mentioned even though we had disgruntled attendee on game day, many people seemed to be pleased with how it went. The team worked well together to ensure everything went smoothly. Nicholson said the airport will eventually get the DLA money. Even though the DLA is the one who made the mistake, the process of taking the money back could take a very long time. Boudreaux said Million Air is cooperating well and he does not have any concern right now. He said he expects we will receive the money directly from Million Air in the near future. Nicholson has filed a request with DFAS to investigate why our payments are going to Million Air. Nicholson said the airport is still trying to stay at the $500,000 cash mark. The hangar project will bring that account down a bit, but it should be made up with FBO sales. Boudreaux noted that the revenue/expense statement minus the start up cost shows that the FBO is doing okay. C. Administrative Assistant, Lauren Treat, T -Hangar Report. Reported all hangars are full with five rented for storage. Mentioned the handful of new tenants the airport has gained over the last month. Boudreaux said he believes within a year we might be able to get back to having all hangars full with aircraft, though the aircraft inventory in NWA is lower than it was in the past. D. Wayne Jones, McClelland Engineers, Construction Report. Wayne said NFlight hangar project is moving along well; the process of completing the floors is underway and most of the electrical conduit is in. They intend to insulate walls and prepare for sheet rocking within the next couple of weeks. Boudreaux said Nflight is prepared to pay their rent as of the first of the year. Boudreaux asked Wayne if there anything he needs to get started on for the apron project for next year. Wayne said we need to ensure the FAA program manager is on board for a design grant and how much that grant amount will be. He said work/repair of the apron will not be cheap. Corley mentioned a bump where the seam of the concrete ends and the asphalt begins. Wayne said the expansion/contraction of the concrete asphalt just keeps lifting it back up. Boudreaux said he will have a couple guys from Transportation come over with the milling machine and patch up the holes. E. Museum Executive Director Warren Jones, Museum Report. Warren said the AOPA meeting was last night at the Museum and there were about 150 people in attendance. Warren said he and some of the museum volunteers have been flying the Stinson around to other cities and giving rides, but they will no longer go anywhere further than 200 miles away due to expensive fuel prices. Warren said Bikes, Blues, Barbeque, & Bombers is coming together. The festival will be a much larger affair than it has in the past because of the bombers. He said there will be a fly -by over Dickson St. which should attract a lot of attention. F. Marketing Committee Chairman Bill Corley, Marketing Report. Corley said he has done some research on his own in advance of reconnecting the marketing team. He said the team will take a more tactical approach this time. The City disagreed with our target audience/segmentation (which was jet traffic) and they want the FBO to be all things to all people. ITEM #4: Old Business. No old business was on the agenda, but Nickle asked Pete Mastroianni (former GM of Million Air) if he had any comments regarding military traffic. Mastroianni said students get to choose the route for their cross countries. But everyone is limited on the out and backs. Boudreaux said his point of contact for the C130s told him that a lot of students simply do not have the opportunity to fly this far. Five hour trips have been cut to three; three hour trips have been cut to two; etc. ITEM #5: New Business. A. T Hangar Rent Increase It has been four years since there has been any increase in rent rates. In the past, rent was raised every two years with the change of CPI + 1%. In 2009, the Board reviewed the figures and it was agreed that the rent would not be raised due to the recession. Two years later, it was agreed upon again that the rent would not be increased due to the economic situation. Nickle said operating costs have not gone down and the airport now has the FBO to run. Boudreaux said if there is any increase, it would be modest. He also pointed out that none of the surrounding airports have changed their rates in recent years. Gibbs said as long there are hangars without aircraft (five for storage right now), he does not see a reason to increase rent cost. Corley said if hangar rates are raised, the pilots might go away and then the amount of storage hangars will increase. Mahony said he does not have a problem with raising the price somewhat, but he does understand the point Gibbs made. Boudreaux said the administration does not necessarily have a recommendation and he certainly does not want to run anyone off the airport. Corley asked if we are looking to raise rent in order to offset losses by the FBO. Nickle said no — the rent increase would be to help out the airport in general. For example, the airport needs extra money to repair equipment when it breaks. Boudreaux discussed how he first raised the rent when he began working at Drake Field years ago. He said the modest increase helped out a lot. Boudreaux said it was at that point that the Board enacted a proposition to match inflation which included raising rent with the formula. Rick McKinney (T Hangar tenant) said the Board should consider raising the rent cost for storage tenants since they do not buy fuel like the aircraft owners. Burggraf agreed with him. McKinney also pointed out that there are no long term loyalty benefits at Drake Field. He has rented a hangar here for 20 years and he does not receive any kind of discount. McKinney said the highest fuel prices he pays are in Fayetteville. Additionally, he said if the Board raises the rent, then he will raise some maintenance issues with his hangar. Gibbs asked if there is any reason why the airport could not charge two different prices (one price for storage, one for tenants with aircraft). Boudreaux said the whole reason we even started the storage hangars is because we had an alarming rate of hangars vacated and they helped the airport generate revenue. Nickle said the Board might consider an increase on all the hangars — however, if the hangar tenant has an aircraft and buys gas, they yiillwreceive a rebate. Nickle encouraged East Side tenants to please contact a Board and share their thoughts on the matter. Feedback will be discussed it at the next meeting. ITEM #6: Other Business. A. Items from the Public. McKinney said the Board should address the issue of gas prices at self serve. Boudreaux said our fuel cost at the tank is $4.46. That does not include sales tax or a flowage fee (additional 70 cents). The state local tax is then added. The airport is earning very little (besides the 10 cents maintenance up -cost). Boudreaux said he will follow up with the fuel cost subject; he does not want to be the highest price in our region. B. Items from the Airport Board. Nickle encouraged the Board members to read Boudreaux's business forecast. Gibbs asked about the tenants on the delinquent rent list. Boudreaux said he would rather give those tenants time to pay the airport directly rather than involve Collections since that would result in the airport only receiving half of the collected payments. Corley asked the Board if anything would prevent the airport from selling advertising space in the terminal. Boudreaux said it has been done in the past. Corley said this is something the Marketing Committee will discuss at their next meeting.