Board and Budget Workshop Meeting Minutes September 8, 2023

Open­ing:

The Board Meet­ing of the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict was called to order at 10:00 a.m., Sep­tem­ber 8, 2023 by Act­ing Chair Will Cramer. 

The Invo­ca­tion was giv­en by Chair Will Cramer.

The Pledge of Alle­giance was led by Mr. Les McFatter.

Roll was called. In atten­dance were: Mr. Les McFat­ter, Ms. Vic­to­ria Williams, Mr. Glen McDon­ald, and Chair Will Cramer.

Mr. McClel­lan asked the Board to vote for approval of Remote Par­tic­i­pa­tion, allow­ing Ms. Hol­ly Melz­er to par­tic­i­pate and vote in the Board Meet­ing remote­ly via ZOOM.

Mr. Glen McDon­ald made a motion to Approve Remote Par­tic­i­pa­tion, and Mr. McFat­ter sec­ond­ed the motion. 

Roll was called. In atten­dance were: Mr. Les McFat­ter, Ms. Vic­to­ria Williams, Mr. Glen McDon­ald, and Chair Will Cramer.

The motion passed unanimously.

Chair Will Cramer asked if there were any Pub­lic Com­ments. There were no Pub­lic Comments. 

Chair Will Cramer asked if there were any items on the Agen­da, that any Board Mem­ber would like to move or fur­ther dis­cuss, and if not, to make a motion to accept the Agenda.

Mr. Glen McDon­ald made a motion to Accept the Agen­da, and Ms. Vic­to­ria Williams sec­ond­ed the motion. 

Roll was called. In atten­dance were: Mr. Les McFat­ter, Ms. Vic­to­ria Williams, Mr. Glen McDon­ald, Ms. Hol­ly Melz­er (via ZOOM), and Chair Will Cramer.

The motion passed unanimously.

Busi­ness Items:

a. Accept FAA CARES Grant Offer for Pas­sen­ger Board­ing Bridges

Mr. McClel­lan explained that, there is an oppor­tu­ni­ty to pur­chase new Pas­sen­ger Board­ing Bridges through FAA Grant monies. The Air­port has been spend­ing a great deal of mon­ey repair­ing the cur­rent board­ing bridges and they need to be replaced. The Air­port was required to ask for a Devel­op­ment Adden­dum and filed a grant request with FAA that was accepted. 

As part of the Coro­n­avirus Aid, Relief, and Eco­nom­ic Secu­ri­ty Act (CARES) of 2020, the Air­port accept­ed a grant to assist in off­set­ting antic­i­pat­ed reduc­tions in rev­enue as a result of the Coro­n­avirus pan­dem­ic. The grant was to be used only for pur­pos­es relat­ed to the Air­port. In order to use CARES funds for con­struc­tion projects, it is a require­ment that the spon­sor sub­mit an appli­ca­tion for a grant adden­dum. In May 2023, a Devel­op­ment Adden­dum to the grant was sub­mit­ted to the FAA request­ing to allo­cate CARES funds to the pur­chase of three (3) pas­sen­ger board­ing bridges to be used at the Air­port. This FAA Grant Offer rep­re­sents the approval of that allo­ca­tion of CARES funds. Project item is:

- Improve Ter­mi­nal Build­ing (Acquire three (3) replace­ment pas­sen­ger board­ing bridges)

Total costs for the three (3) pas­sen­ger board­ing bridges is $3,032,550 and the project is reim­bursable under this FAA Grant at 100%.

Staff rec­om­mends accep­tance of the FAA CARES Act Air­port Grant Agree­ment Devel­op­ment Adden­dum Project #3 – 12-0159 – 043-2023 dat­ed August 25, 2023 for three (3) pas­sen­ger board­ing bridges as out­lined above.

Mr. Glen McDon­ald made a motion to Accept the FAA CARES Grant Offer for Pas­sen­ger Board­ing Bridges, and Chair Will Cramer sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

b. Approve Pur­chase – Pas­sen­ger Board­ing Bridges – JBT Aerotech Corporation

Mr. McClel­lan explained that there was a pub­lic bid adver­tised for the new Pas­sen­ger Board­ing Bridges in which 2 bids were received. The Air­port would like to accept the com­pet­i­tive bid from JBT Aerotech Cor­po­ra­tion for the pur­chase of the new bridges. 

This pur­chase pro­vides for replace­ment of three (3) pas­sen­ger board­ing bridges cur­rent­ly locat­ed on gates 1, 2 and 6 at the Ter­mi­nal Build­ing. The exist­ing bridges to be replaced are cur­rent­ly in excess of twen­ty (20) years old. One (1) bridge, man­u­fac­tured in 1992, was ini­tial­ly used at Pana­ma City/​Bay Coun­ty Inter­na­tion­al Air­port (PFN) and was sub­se­quent­ly trans­ferred to North­west Flori­da Beach­es Inter­na­tion­al Air­port (ECP) when it opened in 2010. The oth­er two (2) bridges, man­u­fac­tured in 1987 and reman­u­fac­tured in 2012, were installed in 2012 as part of the new Air­port con­struc­tion. Dis­cus­sions with main­te­nance and man­u­fac­tur­er per­son­nel indi­cate the cur­rent bridges are well beyond use­ful life with replace­ment parts being increas­ing­ly dif­fi­cult to find and acquire. Con­tin­ued growth in air­port pas­sen­ger activ­i­ty has iden­ti­fied the need to replace these three (3) bridges.

In May 2023, an ​“Invi­ta­tion for Bid” was pub­licly adver­tised for three (3), replace­ment pas­sen­ger board­ing bridges. At bid open­ing on June 1, 2023, two respon­sive bids were received as follows:

- JBT Aerotech Cor­po­ra­tion. — $3,032,550

- TK Air­port Solu­tions, Inc. — $3,116,256

This pur­chase pro­vides for man­u­fac­ture, deliv­ery, instal­la­tion, and train­ing for three (3) new bridges and will com­plete replace­ment of all aging pas­sen­ger board­ing bridges at the Airport.

This pur­chase will be includ­ed in the FY 2024 Air­port Oper­at­ing and Cap­i­tal Bud­get and a will be fund­ed through the FAA CARES Act Air­port Grant Agree­ment Devel­op­ment Adden­dum Project #3 – 12-0159 – 043-2023 at 100%. 

The CARES fund­ing is avail­able through the re-allo­ca­tion of the Ter­mi­nal Design project CARES fund­ing in order to ensure the time­ly and com­plete use of the Grant. 

Staff rec­om­mends Board approval of the pur­chase of three (3) pas­sen­ger board­ing bridges in an amount not to exceed $3,032,550.

Ms. Vic­to­ria Williams made a motion to Approve the Pur­chase of the Pas­sen­ger Board­ing Bridges – JBT Aerotech Cor­po­ra­tion, and Chair Will Cramer sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

c. Approve Air Traf­fic Con­trol Tow­er Radio Replace­ment – AGC Sys­tems, Inc.

Mr. McClel­lan explained that the radios and com­mu­ni­ca­tions equip­ment at the Air Traf­fic Con­trol Tow­er are 13 years old and need to be replaced.

Under terms of the Fed­er­al Avi­a­tion Admin­is­tra­tion Con­tract Tow­er Pro­gram, the Air­port owns and main­tains the Air Traf­fic Con­trol Tow­er facil­i­ties locat­ed at ECP. As such the Air­port is required to main­tain a list of required oper­a­tional equip­ment which includes all air-to-ground com­mu­ni­ca­tions and sup­port equip­ment. Recent dis­cus­sions with FAA Tech­ni­cal Oper­a­tions per­son­nel indi­cate sup­port for exist­ing radios and radio sup­port equip­ment is becom­ing increas­ing­ly hard­er to obtain and replace­ment is rec­om­mend­ed by 2025 at the latest.

In July 2023, an ​“Invi­ta­tion for Bid” was pub­licly adver­tised for Air Traf­fic Con­trol Tow­er Radio Replace­ment. At bid open­ing on August 14, 2023, one respon­sive bid was received. The receipt of one bid was not unan­tic­i­pat­ed in light of the spe­cial­iza­tion required to install, ser­vice and main­tain this type of equip­ment. The bid was received from:

- ACG Sys­tems, Inc. — $468,860

This pur­chase pro­vides for acqui­si­tion, instal­la­tion, con­fig­ur­ing and com­mis­sion­ing of replace­ment VHF and UHF air-to-ground trans­ceivers, Auto­mat­ed Ter­mi­nal Infor­ma­tion Ser­vice (ATIS) com­mu­ni­ca­tion trans­ceiv­er, Auto­mat­ed Dig­i­tal Log­ging Recorder sys­tem, con­trol soft­ware, instal­la­tion hard­ware and term war­ran­ty agreement.

This pur­chase will be includ­ed in the Airport’s FY 2024 Oper­at­ing and Cap­i­tal Bud­get. It will be paid with a com­bi­na­tion of fund­ing from FAA AIP Grant #3 – 12-0159 – 042-2023 for 90% and from COVID-19 ACRGP Grant funds for 10% of the eli­gi­ble items which total $442,860. The option­al extend­ed war­ran­ty cost of $26,000 is not cov­ered by the AIP Grant and will be fund­ed with avail­able Air­port funds. 

Staff rec­om­mends Board approval of the pur­chase of Replace­ment Radios and com­mu­ni­ca­tions equip­ment from ACG Sys­tems, Inc., in an amount not to exceed $468,860.

Mr. Glen McDon­ald made a motion to Approve Air Traf­fic Con­trol Tow­er Radio Replace­ment – AGC Sys­tems, Inc., and Ms. Vic­to­ria Williams sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

d. Approve Term Sheet with Tri­umph Gulf Coast, Inc. for Project Maple

Mr. McClel­lan, along with the Board, has been work­ing with Bay EDA since April 2021 to bring a Cana­da-based com­pa­ny referred to as Project Maple to ECP as one of their new locations.

The Staff and the Bay Eco­nom­ic Devel­op­ment Alliance (Bay EDA) have been work­ing on Project Maple since April 2022. Project Maple is a main­te­nance, repair and over­haul (MRO) com­pa­ny that will be expand­ing their MRO ser­vices to the Unit­ed States and ECP. The total cost of the project which includes an approx­i­mate­ly 100,000 s.f. hangar is esti­mat­ed at approx­i­mate­ly $25 mil­lion dol­lars and includes a Tri­umph Gulf Coast grant request of $11.25 mil­lion dollars. 

The Term Sheet sum­ma­rizes the basic terms with Tri­umph Gulf Coast, Inc. as part of the award of a grant to the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict and Space Flori­da. The Term Sheet is non-bind­ing and will be uti­lized to devel­op the Grant Award Doc­u­men­ta­tion that will be pre­sent­ed for approval at a lat­er date.

Addi­tion­al­ly, Staff has been work­ing with legal coun­sel on the Term Sheet, Grant Agree­ment, Lease and Sub-lease for Project Maple. There is no bud­getary impact. 

Staff rec­om­mends Board approval of the Term Sheet with Tri­umph Gulf Coast, Inc. for Project Maple.

Mr. Les McFat­ter made a motion to Approve the Term Sheet with Tri­umph Gulf Coast, Inc. for Project Maple, and Mr. Glen McDon­ald sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Pro­posed Board Bud­get Presentation:

The draft FY24 Oper­at­ing & Cap­i­tal Bud­get was pre­vi­ous­ly pro­vid­ed to the Board for their review in prepa­ra­tion for this discussion.

Mr. Park­er McClel­lan pre­sent­ed the Activ­i­ty Reports. The Air­port is up by about 8% over last year for the month of August and has had the best cal­en­dar year to date and con­tin­ues to grow. Mar­ket Share is between 20 – 24%. He antic­i­pates an 8% increase. There has been sig­nif­i­cant growth since the Air­port opened in 2010, and con­sid­er­ing what our com­mu­ni­ty has been through over the last 5 years makes it quite remarkable.

Ms. Dar­lene Gor­don reviewed the finan­cials from the August 23, 2023 Board Meet­ing. Unre­strict­ed Cash is $3.6 mil­lion. Restrict­ed Cash is $12.7 mil­lion. Total Cash as of July 31, 2023 is $43.4 mil­lion, which is an increase of $6.9 mil­lion over last year. Total Cap­i­tal Assets are $420 mil­lion. SIB Loans account for $31.5 mil­lion of Lia­bil­i­ties with oth­er Lia­bil­i­ties total­ing $1.8 mil­lion. Excess Rev­enues Over Expens­es are $15.9 mil­lion, of which Oper­at­ing makes up $8.7 mil­lion, and Non-Oper­at­ing at $7.2 mil­lion; up $ 2.4 mil­lion over the same time last year.

The recap of Rev­enues and Expens­es for July 2023 show the Rental Cars at $6.2 mil­lion, which equates to $620,000 for the Air­port. Year to date, the Land­ing Fees are high­er than the bud­get due to big­ger planes. Park­ing is doing well at $3.8 mil­lion. Total Oper­at­ing Expens­es are doing well at near­ly 10% under bud­get. The $15.9 mil­lion in Total Excess Rev­enues reflects the best year that the Air­port has ever reported.

Mr. McClel­lan advised lat­er this year the Staff will present a rec­om­men­da­tion to the Board of two 2‑year options that will be pre­sent­ed to the Air­lines in Decem­ber 2023 for the Air­line Lease and Use Agree­ment that expires in Sep­tem­ber 2024. 

Ms. Gor­don explained the Air­line Set­tle­ment num­ber and how it is cal­cu­lat­ed. Rev­enue Share is split at 50% between the Air­port and the Air­lines. This allows the Air­lines to share in the Airport’s suc­cess. Over the last 9 years, this num­ber has grown at an aver­age of 1.5% annu­al­ly and has remained under bud­get. All of the Air­lines have increased their Land­ing Weights over the last year. Gen­er­al Avi­a­tion is up over last year due to the addi­tion of South­ern Sky Aviation.

The largest increase in expens­es from FY24 to FY23 is $826,000 in per­son­nel. The break­downs are: New per­son­nel increased $503,000, Oper­a­tions increased $241,000, there was an 8.75% increase in employ­ee insur­ance at $76,000, and a 5% base salary adjust­ment increase at $229,000.

Util­i­ties are up $88,000; Prop­er­ty and Lia­bil­i­ty Insur­ance is 2.9% of the total bud­get with an increase of 25%. Sup­plies, mate­ri­als, equip­ment, vehi­cles, fuel and oth­er cap­i­tal items added $82,000. Jan­i­to­r­i­al ser­vices are up 13.6% per the contract. 

Num­bers of per­son­nel for FY24 are: Oper­a­tions ‑15, Police — 25, Fire Depart­ment ‑15, Main­te­nance ‑18, Admin­is­tra­tion — 5, and the Exec­u­tive Team — 3. Mr. McClel­lan pre­sent­ed the new Orga­ni­za­tion­al Chart with the addi­tion of 1 Main­te­nance Per­son, 2 Oper­a­tions Agents, and 8 Part-time Oper­a­tions Agents for the new Employ­ee Screen­ing Process required by TSA. 

Mr. Richard McConnell went over some antic­i­pat­ed pur­chas­es for the upcom­ing year to include replace­ment items such as hot water heaters, trans­fer switch­es for the air­field light­ing, LED Street Lights and LED Light­ing. The new secu­ri­ty doors, a new Audio/​Video Sys­tem for the Board Room, new radios for the Air Traf­fic Con­trol Tow­er, and a set of Pas­sen­ger Stair­way will be pur­chased over the next year. Light­ning strikes have become a prob­lem, so Surge Pro­tec­tion for the Park­ing Lots is need­ed. Oth­er items were the devel­op­ment of a Safe­ty Man­age­ment Sys­tem, a Com­mon Use Sys­tem, and Fiber to con­nect to Bay County’s Emer­gency Man­age­ment Sys­tem and their Crim­i­nal Depart­ment Sys­tem. Also, in the bud­get are two new all-elec­tric shut­tles for the over­flow Park­ing Lot and light­ed mes­sage boards to alert pas­sen­gers when the park­ing is full, as well as new fuel pumps. 

Mr. McClel­lan dis­cussed the upcom­ing Cap­i­tal Devel­op­ment Projects: Envi­ron­men­tal Mit­i­ga­tion, pro­cure­ment of the new esca­la­tor, three new pas­sen­ger board­ing bridges, the taxi lane tie-in for South­ern Sky, the pos­si­bil­i­ty of adding three T‑Hangars, an Envi­ron­men­tal Assess­ment, the Loop Road Improve­ments for the Ter­mi­nal Expan­sion, and the two Bay EDA Project Stam­per and Project Maple. 

Ms. Gor­don reviewed the Airport’s debt bal­ance of $30.9 mil­lion with an annu­al pay­ment of $2.6 mil­lion and inter­est rates are good. Rates and Charges are $64.80 this year, which is only 34 cents more than last year. Debt ser­vice is being payed by COVID Funds. 

Mr. McClel­lan added that the Air­port is still able to be very com­pet­i­tive for the Air­lines and able to grow and enhance the pas­sen­ger expe­ri­ence. He remind­ed the Board that the COVID monies received con­tin­ue to make a dif­fer­ence, so next year, when those funds are exhaust­ed; there will be a sig­nif­i­cant change in the Budget.

The Board Bud­get Pre­sen­ta­tion pro­vid­ed for a review and dis­cus­sion of the pro­posed FY24 Oper­at­ing & Cap­i­tal Bud­get and required no for­mal action by the Board. For­mal approval of the final Bud­get will be con­sid­ered at the Sep­tem­ber 27, 2023 Board Meeting.

Con­struc­tion Update

Mr. McConnell gave a Con­struc­tion Update. The final lay­er of asphalt is being added to the Over­flow Park­ing Lot. The light­ing and Point of Sale Equip­ment is installed and oper­a­tional. Ground cuts will be done next week. The chains are being replaced. Once the accep­tance inspec­tion is com­plete, mobi­liza­tion will begin on Long-Term and Employ­ee Lots. The Change of Con­di­tion was approved for the Out­bound Bag­gage Area. The stormwa­ter and san­i­tary sew­er has been com­plet­ed and the plumb­ing con­trac­tor is installing the final con­nec­tions. Final com­paction will be com­plet­ed next week and con­crete work should begin. The final change to the con­fig­u­ra­tion of the belt sys­tem has been turned in and a lot of the equip­ment for the bag­gage sys­tem is already in pro­duc­tion and on order. The sprin­kler sys­tem for the North ter­mi­nal build­out is com­plete. The dam­aged fire pro­tec­tion pipes are being replaced. The low-volt­age sys­tems are being roughed in. HVAC will begin to be installed next week. The plumber is prepar­ing to install the restroom fix­tures. Steel was deliv­ered today. The plan for relo­cat­ing the TSA Check­point exit lane will be pre­sent­ed today. The FAA is fin­ish­ing up the final touch­es of the 388 Round­about Project. He antic­i­pat­ed the Park­ing Expan­sion Project to be com­plet­ed by ear­ly November.

Adjourn­ment:

The meet­ing was adjourned at approx­i­mate­ly 11:45 a.m.

Next meet­ing is sched­uled: Sep­tem­ber 27, 2023 – Board Meet­ing 9:00 a.m.

_________________________________ ________________________________

Lisa Brady, Exec­u­tive Assis­tant Will Cramer, Chair