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Home My WebLink About2014-05-15 MinutesFAYETTEVILLE EXECUTIVE AIRPORT BOARD MINUTES May 15, 2014 MEMBERS PRESENT: Darryl Riddell, Josh Mahony, Marty Burggraf, Rick Bailey Ken Haxel, Bill Corley MEMBERS ABSENT: Mike Gibbs OTHERS PRESENT: Wayne Jones-MCE; James Nicholson -Financial Coordinator; Lauren Treat -Administrative Assistant; Neal Bilbe-City Government Channel; Ray Boudreaux -Airport Director; Terry Gulley -City Transportation; Bob Hawk -Airport Director Candidate; Mark Frankum-SkyVenture Aviation; Mike Landa-FBO Hangar tenant; Rick McKinney -T Hangar tenant; Peter Nierengarten-City's Sustainability Division; Bruce Dunn -Iron Pig; Russ Smith -Flying Investments ITEM #1: Welcome. Vice Chairman Mahone. Explained that Gibbs in teaching in China. Mahony introduced airport director candidate Bob Hawk. A motion to approve the minutes was made by Marty Burggraf, and seconded by Rick Bailey. The motion carried. ITEM #3: Receivine of Reports. A. Financial Coordinator James Nicholson, Budget Report. Introduced Robert Beare, the new lead maintenance worker at the airport. Then he discussed the annual FAA certification inspection. He said the inspection went very well; there are only minor things that need to be fixed such as painting, our record keeping system, etc. He briefly talked about the airport director candidate selection process. Nicholson reported that operations have increased, yet aircraft fuel sales are down. He said price might be affecting this, but he still believes our prices are competitive. FBO fuel prices at Drake Field are only slightly higher than surrounding airports and our self - serve is very competitive, as well. Nicholson discussed target margins and market forces. He also briefly discussed the budget. Mahony asked about the DLA and the money Million Air owes us. Nicholson said he spoke to MA recently and they agreed that they owe us the money and will pay us. Nicholson said he is just waiting on the check to arrive. Gulley said we are close to asking the DLA to reimburse us directly. Nicholson said that might take longer and he doesn't think the DLA wants to do it since it is a big hassle, but that might be what it takes to get our money. B. Administrative Assistant, Lauren Treat, T -Hangar Report. Two T Hangars are available right now. Briefly discussed the Summer Bash party on the East Side. C. Wayne Jones, McClelland Engineers, Construction Report. Nothing to report regarding construction. Wayne is still waiting on the Design Only Grant from the FAA for the start of the design of the terminal apron rehab project. He announced that the annual airport cookout will be before the next board meeting on June 12. Food will be available 11:30 AM — 1 PM. Wayne invited everyone. D. Museum Executive Director Warren Jones, Museum Report. Warren reported the Museum is having about one or two weddings/receptions a month, but he doesn't normally let people have events in the Museum during June/July/August. Warren said a woman from Fair Hope, Alabama donated some of her father's artifacts to the Museum. He was a P47 fighter pilot during WWII in the Pacific who started his flight training in the White Hangar. He stopped by the Museum about a year ago and knew everything about the place. The man was a graduate of the University of Arkansas and he died last fall. His daughter donated 2 cloth maps that are in perfect condition. Jones recommended everyone check them out at the Museum when they have time. Warren mentioned that he will move back to Charlotte, NC in the next few months. The Commemorative Air Force will be back this year for Bikes, Blues & BBQ. Jones suspects this should be an even bigger event this year. Last year, the Museum had 2,500 visitors in three days - 1/3 of the years' total. E. Marketing Committee Chairman Bill Corley, Marketing Report. Briefly discussed the marketing document that Treat prepared. ITEM 94: Old Business. 1. SkyVenture new lease: Frankum presented a PowerPoint to the board. He said that 2013, he trained over 130 pilots. SkyVenture produces more pilots than any other school in Arkansas; 1 in 3 licenses that are awarded in Arkansas are from SkyVenture. He pointed out other various accomplishments SkyVenture has had over the years. Frankum explained that he invested $150,000 in property improvements to upgrade his office space. He also paid $7,500 to upgrade the office in their hangar as well as $6,000 for air units because the city did not have enough money at that time. Frankum said SkyVenture accounts for 50-60% of aircraft movements at Drake Field and they are the largest consumer of AvGas on the field. Frankum compared SkyVenture's rate to the other hangar spaces that are leased at the airport and concluded that SkyVenture pays the highest price. He further discussed the breakdown of these rent statistics. He briefly discussed how SkyVenture was not awarded grant money for hangar property improvements, unlike NFlight and South Delta. Frankum discussed the FAA airport grant assurances regulations. Riddell pointed out that the South Delta hangar was used for non -aviation purposes before they moved in. Frankum discussed fuel prices at FYV. He said he is considering purchasing his own fuel tank and buying his own fuel. Riddell pointed out that South Delta pays all of the utilities in both his office and the hangar while SkyVenture pays none. McKinney pointed out that when Frankum's business suffered during the economic downturn, the Airport Board graciously worked with him. Mahony said SkyVenture was the only tenant who received such relief. Gulley said he got the consensus from the Board that they are interested in raising SkyVenture's rates back to the pre -discounted rates. Gulley said he would achieve this originally negotiated rate by slowly raising it on a year by year basis ($1200/first year). Gulley said he would look at the value of that space before Frankum reached the original $2k/month. Gulley discussed that Frankum is interested in making a fuel deal. Nicholson previously suggested to Frankum that if he sees an upturn in his business and buys more fuel because of it, Frankum would receive a 10 cent discount on those additional gallons. More discussion about fuel costs and discounts followed. Gulley further discussed hangar and terminal rent costs that various tenants pay at Drake Field. Even at $1200/month, SkyVenture would only paying $5/sq. ft. — which still puts Frankum's cost one dollar below all of the other terminal tenants' rates. Frankum said he pays his rent on time, tries to attract people to FYV, holds AOPA meetings, etc. He said said he really wants to stay at Drake Field but he can't afford it. Gulley mentioned that Treat called various airports and asked about how they set their flight school's rent and fuel rates. She found that a high cost for terminal space was coupled with low fuel prices. More discussion followed. Gulley said the rent reduction was based on a year to year situation — it was not meant to be a permanent reduction. Gulley said he would implement a 20% rent increase over the course of the next five years. Frankum said the fuel deal is off the table and he will provide his own fuel. Gulley said the Board can advise what should be done, but the Mayor and the Chief of Staff hold the authority in this situation: Riddell said Gulley's proposal is very fair. Mahony agreed. Boudreaux commented that SkyVenture is important, but it is also important to generate revenue so the airport can continue to be self-sufficient, as the FAA wants it to be. Russ Smith of Flying Investments said that if the airport loses 40% of its traffic, the tower might go, too. McKinney said the airport will lose out if SkyVenture leaves; but he acknowledged that Gulley has viable concerns. Riddell admitted that the flight school is great, but there is a simple business decision to be made. Corley asked how much of the $150k in renovations did Frankum recover because of rent reductions. Boudreaux said he got a fair reduction in his rent. Nicholson said it was in excess of $80k in concessions. Corley said that he recovered most of his costs. More discussion followed. Corley, Mahony, and Riddell expressed their confusion regarding what Frankum actually wants. A motion to support Terry Gully in his negotiations with Mark Frankum was made by Darryl Riddell and seconded by Marty BurggraE Corley abstained because he did not fully understand; after explanation — the motion passed. ITEM #5: New Business. A. Lighting Efficiency Project: Peter Nierengarten from the City of Fayetteville's Sustainability Office discussed options to help lower the airport's operating costs. Airport utility bills are high. Total utility costs are about $80-90k a year. The utility expenditures represent about 6% of the City's utility costs. Fleming Electric demonstrated a few exterior lighting options. The suggest improvements have between a 3-5 year payback. ITEM #6: Other Business. A. Items from the Public. 1. Iron Pig — Bruce Dunn Bruce Dunn of the Iron Pig said he had 450 people participate in the race. He said everyone had a good time, even though they didn't get to run the runway. Dunn awarded former airport director Boudreaux a plaque in thanks for his support. B. Items from the Airport Board. Corley mentioned that the spigot on Hangar Building A had a freeze problem and is no longer working. Also, he said that some of the tenants would like to have the shower working. MEETING ADJOURNED AT 3:25 P.M. Darryl Riddell, Secretary Date