July 2023 Meeting Minutes

Open­ing:

The Board Meet­ing of the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict was called to order at 9:00 a.m., July 19, 2023 by Chair Hol­ly Melzer. 

The Invo­ca­tion was giv­en by Vice Chair Sheldon.

The Pledge of Alle­giance was led by Mr. Will Cramer.

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

Chair Melz­er asked if there were any Pub­lic Com­ments. There were no Pub­lic Comments. 

Chair Melz­er asked if there were any items on the Amend­ed Agen­da, includ­ing the Con­sent Agen­da, that any Board Mem­ber would like to move to a Busi­ness Item for fur­ther dis­cus­sion, and if not, to make a motion to accept the Amend­ed Agenda.

Chair Melz­er asked that Agen­da Item 6.b. Approve Estab­lish­ment of Audit Selec­tion Com­mit­tee be moved to the Busi­ness Agen­da. Mr. Les McFat­ter made a motion to move the Item and accept the Amend­ed Agen­da with this change, and Mr. Will Cramer sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Dis­trict Admin­is­tra­tive Items:

a. Elec­tion of Officers: 

Chair Melz­er asked if there were any nom­i­na­tions for Chair.

Mr. Glen McDon­ald made a motion to retain Ms. Hol­ly Melz­er as Chair, and Vice Chair Shel­don sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Chair Melz­er asked if there were any nom­i­na­tions for Vice Chair.

Mr. Will Cramer made a motion to retain May­or Mark Shel­don as Vice Chair, and Ms. Vic­to­ria Williams sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously. 

b. Annu­al Review of Board Oper­at­ing Procedures

Legal Coun­sel informed the Board that the guide­lines have been reviewed and that no changes are need­ed to the Board Oper­at­ing Pro­ce­dures. Chair Melz­er asked the Board if there were any items that need­ed to be dis­cussed or revised. After a short dis­cus­sion, it was decid­ed that there will be no changes to the Board Oper­at­ing Procedures. 

Reports:

Mr. Park­er McClel­lan pre­sent­ed the Activ­i­ty Reports. The num­bers are up 13% over last year. The load fac­tors were real­ly good for the month of June. The Air­port has been very busy this sum­mer, but things are run­ning smooth­ly. There have been pos­i­tive com­ments from pas­sen­gers on the live music in the Ter­mi­nal. The Air­port con­tin­ues to main­tain its mar­ket share across the Region at 22%. 

Ms. Dar­lene Gor­don pre­sent­ed the Finan­cial Reports for the first 9 months of the Fis­cal Year end­ing June 30, 2023. Total cash increased $2.3 mil­lion over May. Com­pared to last year, cash increased $7 mil­lion for a total bal­ance of $42.7 mil­lion. Of that num­ber, unre­strict­ed cash is $30.1 mil­lion and restrict­ed cash is $12.6 mil­lion. In June of 2023, total lia­bil­i­ties increased $885,000. This month the increase is due to the ongo­ing con­struc­tion. Excess rev­enues over expen­di­tures to date are $13.7 mil­lion. Oper­at­ing Rev­enues account for $7.3 mil­lion with Non-Oper­at­ing Rev­enues mak­ing up the remain­ing $6.4 mil­lion. Oper­at­ing Rev­enues to date are 112% of bud­get. Every cat­e­go­ry of the bud­get is over-bud­get with the excep­tion of the Fuel Flowage Fees. Park­ing rev­enues are exceed­ing bud­get by $635,000 and are $180,000 over last year. Over­all, Total Oper­at­ing Expens­es are $800,00 under bud­get. The Air­port has hired a Pur­chas­ing and Con­tracts Man­ag­er and she will start on Monday. 

Mr. McDon­ald asked how much CARES Act monies were still left and the time­line on them. Ms. Gor­don said that the first mon­ey expires on June 2, 2024. There is enough mon­ey set aside to pay the debt ser­vice for FY23, FY24 and FY25, which is approx­i­mate­ly $4 mil­lion. There is also mon­ey set aside for Oper­at­ing Expens­es over the next 2 years. Ms. Gor­don will pro­vide bal­ances at the next Board Meeting. 

Mr. McClel­lan explained that there is an oppor­tu­ni­ty to use some of the CARES mon­ey to replace 3 of the pas­sen­ger load­ing bridges that the old­est on the Air­port. The bridges at Gate 1, Gate 2, and Gate 6 are 20 years old. The cost and avail­abil­i­ty of parts is the pri­ma­ry concern. 

Con­sent Agenda:

a. Board Meet­ing Min­utes – June 21, 2023

This Item pro­vid­ed for Board approval of the June 21, 2023 Board Meet­ing Minutes.

b. Approve Estab­lish­ment of Audit Selec­tion Committee

This Con­sent Agen­da Item was moved to Busi­ness Items.

Vice Chair Shel­don made a motion to Accept the Con­sent Agen­da, and Mr. Will Cramer sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Busi­ness Items:

a. Approve Task Order with Ricon­do and Asso­ciates – PFC Application

Mr. McClel­lan explained the process to apply for avail­able PFC mon­ey that could be used to fund the Ter­mi­nal Expansion. 

This item pro­vides for Board approval for Ricon­do & Asso­ciates to assist with the prepa­ra­tion of a Pas­sen­ger Facil­i­ty Charge (“PFC”) Appli­ca­tion for sub­mit­tal to the Fed­er­al Avi­a­tion Admin­is­tra­tion (“FAA”) for the Dis­trict to impose and use PFC rev­enues to aid in the fund­ing of the expan­sion of the Ter­mi­nal at North­west Flori­da Beach­es Inter­na­tion­al Airport.

Ricon­do and Asso­ciates has pro­vid­ed air­port con­sult­ing ser­vices to the Dis­trict for sev­er­al years, includ­ing devel­op­ing the cur­rent Air­line Use and Lease Agree­ment and assist­ing with bud­get and set­tle­ment cal­cu­la­tions. The Dis­trict has con­tin­ued to uti­lize Ricon­do and Asso­ciates on an ongo­ing basis for air­line ser­vice devel­op­ment issues, the bud­get and set­tle­ment cal­cu­la­tions, and var­i­ous oth­er finan­cial matters.

The Air­port cur­rent­ly impos­es a PFC charge of $4.50 which, at present, is the max­i­mum amount allow­able by law. The PFC is col­lect­ed by the air­lines as part of the tick­et price and remit­ted to the Air­port on a month­ly basis. The Airport’s cur­rent PFC Agree­ment with the FAA only allows the use of these funds to pay a por­tion of the debt ser­vice on the out­stand­ing two State Infra­struc­ture Bank (“SIB”) loans. Any oth­er use of PFC funds must be approved by the FAA, and requires a new application. 

The Air­port has received pre­lim­i­nary approval from the State of Flori­da Depart­ment of Trans­porta­tion for an addi­tion­al SIB Loan in the amount of $26,000,000. This loan will be used as par­tial fund­ing for the con­struc­tion of the Ter­mi­nal Expan­sion Project that is now in design. The repay­ment peri­od is twen­ty-five years with an inter­est rate of 3.8%. This PFC appli­ca­tion would request approval for the Air­port to use PFC funds to pay a por­tion of the new SIB loan in addi­tion­al to the cur­rent­ly approved FAA PFC Agreement. 

This Task Order will pro­vide assis­tance to the Air­port in the prepa­ra­tion of PFC 24 – 03 in accor­dance with 14 CFR § 158.20. Ricon­do will pro­vide the fol­low­ing services:

• Gath­er the nec­es­sary project, finan­cial, and sta­tis­ti­cal infor­ma­tion from the Authority;
• Pre­pare the required Air Car­ri­er Con­sul­ta­tion Notice for the Authority’s sig­na­ture and
• mail­ing;
• Pre­pare the required Pub­lic Notice for inclu­sion on the District’s website; 
• Ensure that all pro­ce­dur­al require­ments are met for the Air Car­ri­er Con­sul­ta­tion meeting;
• Pre­pare the application; 
• With assis­tance from the Air­port, pre­pare the response to air car­ri­er and pub­lic comments; 
• Pro­vide the com­plet­ed appli­ca­tion to the Dis­trict in a for­mat ready for exe­cu­tion and submission; 
• With assis­tance from the Dis­trict, pre­pare sup­ple­men­tal infor­ma­tion for the FAA, if required; and 
• Pre­pare the air car­ri­er notice of FAA approval.

This task will take approx­i­mate­ly ten months to com­plete and will be accel­er­at­ed where possible.

A not-to-exceed bud­get of $69,489 is pro­posed for this work effort. Fed­er­al COVID relat­ed grants will be uti­lized to fund this task order.

Mr. Glen McDon­ald made a motion to Approve the Task Order with Ricon­do and Asso­ciates – PFC Appli­ca­tion, and Vice Chair Shel­don sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

b. Approve Esca­la­tor Equip­ment Purchase

Mr. McClel­lan explained that in order to get the esca­la­tor in time to install it in off-peak sea­son, it is nec­es­sary to order it separately.

This item pro­vides for Board approval of a bid received for the acqui­si­tion of an esca­la­tor and asso­ci­at­ed equip­ment package.

As part of the Airport’s FAA Air­port Improve­ment Pro­gram project for FY 2023, a project is includ­ed to install an addi­tion­al esca­la­tor and stair­way adja­cent to the exist­ing esca­la­tor locat­ed near Gates 4 and 5 on the Con­course in order to pro­vide addi­tion­al oppor­tu­ni­ties for Gates 6 and 7. In the essence of time and con­sid­er­a­tion of long lead times for the man­u­fac­ture and deliv­ery of elevator/​escalator equip­ment, the pur­chase of the esca­la­tor was accel­er­at­ed and bid separately.

On May 21, 2023, an ​“Invi­ta­tion for Bid” was pub­licly adver­tised on Demand­star for an esca­la­tor equip­ment pack­age as pro­vid­ed for in asso­ci­at­ed spec­i­fi­ca­tions. At bid open­ing on June 29, 2023, one respon­sive bid was received from Kone, Inc.

ZHA and Staff reviewed the sin­gle bid for com­plete­ness, project intent, and com­pli­ance with FAA guide­lines, and the bid was deemed responsive.

This is a planned and bud­get­ed project includ­ed in the Airport’s FY 2023 Oper­at­ing and Cap­i­tal Bud­get and the includ­ed in the annu­al Airport’s Fed­er­al Avi­a­tion Admin­is­tra­tion Air­port Improve­ment (AIP) grant request. Upon the receipt of the grant, project costs are eli­gi­ble for reim­burse­ment under a FAA grant at an ⁹⁰⁄₁₀ ratio. 

Staff rec­om­mends the Board accep­tance of the bid for the esca­la­tor equip­ment pack­age received from Kone, Inc. in an amount of $215,000.

Mr. Glen McDon­ald made a motion to Approve the Esca­la­tor Equip­ment Pur­chase, and Ms. Vic­to­ria Williams sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

c. Approve Proof of Con­cept Agree­ment — Vidergy

Mr. McClel­lan explained the con­cept of a new tech­nol­o­gy of smart out­lets mar­ket­ed by Vider­gy, LLC that could poten­tial­ly increase air­port non-air­line rev­enues. The tech­nol­o­gy is asso­ci­at­ed with the instal­la­tion of new, smart, elec­tri­cal out­lets through­out the Ter­mi­nal that would allow for charg­ing cell­phones and tablets at no charge after the cus­tomer watch­es a short adver­tise­ment. For this Proof of Con­cept test­ing, we would uti­lize an Air­port advertisement. 

The poten­tial rev­enue source comes through the sale of adver­tis­ing to smart out­lets. Vider­gy would pay the Air­port an agreed upon fee based on the num­ber of adver­tise­ment impres­sions, and the adver­tis­er would be billed by Vider­gy on the same premise.

The Proof of Con­cept will allow Staff to see the effec­tive­ness of adver­tis­ing through this new tech­nol­o­gy. There will not be a cost passed through to pas­sen­gers or the Airport.

Addi­tion­al ben­e­fits include the abil­i­ty to com­plete sim­ple sur­veys that can be indi­vid­u­al­ized by gate or loca­tion. Vider­gy will pro­vide the out­lets at no cost dur­ing the Proof of Con­cept peri­od and the out­lets will remain cost-free if an Agree­ment is executed.

There is no bud­get impact for the Proof of Con­cept Agree­ment. If the tech­nol­o­gy proves to be effec­tive addi­tion­al non-air­line rev­enue may be real­ized. Staff rec­om­mends Board approval of the Proof of Con­cept Agree­ment with Vider­gy, LLC.

There was Board dis­cus­sion and many ques­tions were asked. The con­sen­sus was that charg­ing phones should be free for the pas­sen­gers with­out them hav­ing to lis­ten to the commercials. 

There was no motion giv­en, so the Item failed due to lack of a motion.

6.b. Approve Estab­lish­ment of Audit Selec­tion Com­mit­tee (Item from Con­sent Agenda)

This item pro­vides for the Board to estab­lish an Audi­tor Selec­tion Com­mit­tee as required in Flori­da Stat­ue 218.391. The pur­pose of the Com­mit­tee is to assist the gov­ern­ing body in select­ing an audi­tor to con­duct the required annu­al finan­cial audit.

Flori­da Statute 218.391 con­tains spe­cif­ic lan­guage regard­ing the selec­tion of an audi­tor to per­form the required annu­al finan­cial audit. The lan­guage in the Statute out­lines the process that must be fol­lowed in order to com­ply with state law. 

The Statute requires that the Dis­trict estab­lish an Audi­tor Selec­tion Com­mit­tee as part of the process, and the Com­mit­tee must con­sist of at least three mem­bers. One mem­ber of the audi­tor selec­tion com­mit­tee must be a mem­ber of the gov­ern­ing body of the Air­port, who shall serve as the Chair of the Com­mit­tee. No employ­ee may serve as a mem­ber of the Com­mit­tee, but may serve in an advi­so­ry capacity. 

The Statute requires that the Com­mit­tee will be respon­si­ble for the following: 

• Estab­lish fac­tors to use for the eval­u­a­tion of audit ser­vices to be pro­vid­ed by a cer­ti­fied pub­lic account­ing firm duly licensed under chap­ter 473 and qual­i­fied to con­duct audits in accor­dance with gov­ern­ment audit­ing stan­dards as adopt­ed by the Flori­da Board of Accountancy. 

• Pub­licly announce requests for proposals. 

• Pro­vide inter­est­ed firms with a request for proposal. 

• Eval­u­ate pro­pos­als pro­vid­ed by qual­i­fied firms. 

• Rank and rec­om­mend in order of pref­er­ence no few­er than three firms deemed to be the most high­ly qual­i­fied to per­form the required ser­vices after con­sid­er­ing the fac­tors estab­lished. If few­er than three firms respond to the request for pro­pos­al, the Com­mit­tee shall rec­om­mend such firms, as it deems to be the most high­ly qualified.

Staff and Legal Coun­sel are rec­om­mend­ing that the Board elect a Chair and at least two mem­bers of the pub­lic to serve on the Com­mit­tee. Estab­lish­ment of an Audit Selec­tion Com­mit­tee will have no impact on the bud­get. Joey Ginn, Pres­i­dent of Cen­ten­ni­al Bank, and Ben Lee, Pres­i­dent of Han­cock Whit­ney have vol­un­teered to serve as the Cit­i­zen Members. 

Vice Chair Shel­don nom­i­nat­ed Mr. Will Cramer, cur­rent Board Mem­ber, to serve as the Chair of the Audit Selec­tion Committee.

Fol­low­ing a solic­i­ta­tion for audit ser­vices, The Audit Selec­tion Com­mit­tee Chair will present the results and rank­ing of the eval­u­a­tion and a rec­om­men­da­tion to the Board for their final adoption. 

Vice Chair Shel­don made a motion to accept Mr. Ginn and Mr. Lee as Cit­i­zen Mem­bers and Mr. Cramer as Chair of the Audit Selec­tion Com­mit­tee, and to Approve the Estab­lish­ment of the Audit Selec­tion Com­mit­tee, and Mr. Glen McDon­ald sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Con­struc­tion Update (infor­ma­tion only):

a. Park­ing Lot Expansion

Com­paction is done on the Over­flow Park­ing Lot. They are wait­ing until the con­crete drainage fix­tures are in and in place. Paving will begin in the areas not affect­ed by this.

Site prep work will begin on the Long-Term Park­ing Lot and the Employ­ee Park­ing Lot in the areas that will not impact any of the exist­ing park­ing lots. The Long-Term Lot will add 540 spaces. There will be addi­tion­al improve­ments to the tem­po­rary Over­flow Lot so that it can be uti­lized bet­ter dur­ing busy holidays.

b. Ter­mi­nal Buildout

Sheetrock is going in along the con­ces­sion areas. The HVAC infra­struc­ture is being installed. The pip­ing for the fire sup­pres­sion sys­tem is being installed. The elec­tri­cal is being installed in the ceil­ing. The steel will begin arriv­ing soon and the work on the alter­na­tive exit lane for the pas­sen­gers will begin. Com­ple­tion is expect­ed dur­ing the first quar­ter of 2024.

c. Bag Make­up Expansion

This project is mov­ing along slow­ly. The loca­tion of the pow­er was not shown where it was sup­posed to be on any of the exist­ing plans and there are some changes as a result of this con­flict with the utilities. 

d. South­ern Sky Aviation

They have almost com­plet­ed the skin­ning of their first large hangar. They have start­ed the steel erec­tion of the sec­ond hangar and they are begin­ning to pour the slab for the third hangar. Their FBO Ter­mi­nal Build­ing is under con­struc­tion and mov­ing quick­ly. The project is still on schedule. 

e. Sheltair

The con­trac­tor informed Mr. McConnell that they are going to begin the steel erec­tion of the hangars. 

Plan­ning Update (infor­ma­tion only):

a. North Ter­mi­nal Expansion:

North Ter­mi­nal Design – Mr. Rick Mellin gave the Plan­ning Update on the North Ter­mi­nal Expan­sion. As of this past month ZHA has received 95% of the con­struc­tion doc­u­ments on the TSA expan­sion and ren­o­va­tion, as well as 65% of the design devel­op­ment draw­ings for the North Ter­mi­nal Expan­sion Project. Hensel Phelps has put togeth­er a report on the Ter­mi­nal Expan­sion and it is under review with ZHA. Mr. Mellin met with Lori Bates about the inte­ri­or design plans and will report on it at next month’s Board Meeting. 

Chair Melz­er asked Mr. McClel­lan for an update on the fund­ing for the Expan­sion Project. He report­ed that there is a $26 mil­lion SIB Loan that has been ten­ta­tive­ly approved. The Air­port, with Steve Southerland’s assis­tance is work­ing with the FAA on addi­tion­al funding. 

Bay EDA Update (Infor­ma­tion Only):

Mr. McClel­lan gave the Bay EDA update. Ms. Bec­ca Hardin and Mr. Ben Moor­man are in Mobile, Alaba­ma. Project Stam­per con­tin­ues to move for­ward and the Air­port is one of two loca­tions com­pet­ing for it. It is the largest incen­tive pack­age in the his­to­ry of the State of Flori­da. The com­pa­ny is review­ing the final offers and will hope­ful­ly make a choice with­in the next cou­ple of weeks. Last week Mr. McClel­lan, Ms. Hardin and Mr. Moor­man were in Que­bec City to meet with Project Maple and are hop­ing for a pos­i­tive out­come in the next few weeks. Bay EDA is com­plet­ing fol­low-ups with the com­pa­nies that they met with in Paris last month.

The Moore Agency Update (Infor­ma­tion Only):

Ms. Katie Spill­man of The Moore Agency report­ed on mar­ket­ing. She pre­sent­ed a sum­ma­ry of the ideas that were gath­ered last month dur­ing the cre­ative ses­sion that she pre­sent­ed with Ms. Jor­dan. She pre­sent­ed some inter­ac­tive pho­to op ideas to poten­tial­ly incor­po­rate into the new ter­mi­nal expan­sion design for feed­back from the Board. There was some Board dis­cus­sion about whether or not to con­tin­ue to use Pilot the Pel­i­can, and the pos­si­bil­i­ty to add some oth­er cre­ative sig­nage. The Board input was some­thing that will have a small foot­print, can pos­si­bly be changed out from time-to-time to refresh the theme, and some­thing that show­cas­es our area.

Exec­u­tive Direc­tor Report:

Mr. McClel­lan gave the Exec­u­tive Direc­tor Report. There are cur­rent­ly 11 vacant employ­ment posi­tions. The Air­port is look­ing at some cre­ative ideas to try to attract appli­cants. Next month there will be a need to fill some secu­ri­ty posi­tions due to TSA imple­ment­ing manda­to­ry ran­dom employ­ee screen­ing points by Sep­tem­ber 25, 2023. Last week there was a fire at Sheltair that was spot­ted by an Air­port Main­te­nance employ­ee. The Sheltair employ­ee was injured, but is recov­er­ing. Ear­li­er this week, there were 3 employ­ees that suf­fered from heat relat­ed issues. Two were trans­port­ed to the hos­pi­tal, one of which had a severe case. ECP Police, Fire, and Ops were all present to see that the employ­ee got the best treat­ment pos­si­ble. He rec­og­nized that the Air­port employ­ees are doing a great job look­ing out for every­one. He remind­ed every­one about the manda­to­ry Ethics Train­ing after the Board Meet­ing. The new Pur­chas­ing Man­ag­er starts on Monday. 

Ms. Williams asked about an update on the RFQ for the Design Team for the Air­port Expan­sion. Mr. McClel­lan has been trav­el­ling exten­sive­ly and said that he will be attend­ing the Flori­da Air­ports Coun­cil Annu­al Meet­ing from ⁷⁄₂₃ thru ⁷⁄₂₆. He said that he has been work­ing on the RFQ and will be mov­ing for­ward with it when he returns.

Pub­lic Comments:

There were no Pub­lic Comments.

Adjourn­ment:

The meet­ing was adjourned at approx­i­mate­ly 10:26 a.m.

Next meet­ing is sched­uled: August 23, 2023 – Board Meet­ing 9:00 a.m.

Ethics Train­ing:

The Ethics Train­ing, instruct­ed by Cole Davis of Hand Aren­dall Har­ri­son Sale, LLC was held on July 19, 2022 fol­low­ing the board meet­ing. In atten­dance were:

Board Mem­bers:

Hol­ly Melz­er, Chair

Vic­to­ria Williams

Will Cramer

Les McFat­ter

Richard McConnell

Dar­lene Gordon

Mark Adams

Scott Birge

Staff Mem­bers:

Park­er McClellan

Beth Har­less

Jim Wheat­ley

Thomas Edson

_________________________________

Lisa Brady, Exec­u­tive Assistant 

________________________________

Hol­ly Melz­er, Chair