June 2020 Meeting Minutes

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MEET­ING MINUTES

PANA­MA CITY – BAY COUN­TY AIR­PORT AND INDUS­TRI­AL DISTRICT

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Open­ing:

The Semi-Vir­tu­al Board Meet­ing of the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict was called to order at 9:01 a.m., June 24, 2020 by Chair­man Del Lee. Board mem­bers were offered the option of call­ing in via Zoom, or attend­ing the meet­ing in per­son observ­ing the CDC’s rec­om­men­da­tion of main­tain­ing a dis­tance of at least six feet from oth­ers as approved by Gov­er­nor DeSan­tis’ Exec­u­tive Order. 

The Invo­ca­tion was giv­en by Mr. Russ Mathis.

The Pledge of Alle­giance was led by Chair­man Lee.

The Exec­u­tive Sec­re­tary called the roll and indi­cat­ed all the Board mem­bers were present except Mr. Jay Tusa. Those present in per­son were Chair­man Lee, Vice Chair­man Glen McDon­ald, Mr. Math­is, Mr. James John­son, Mr. Ken Nel­son and Ms. Hol­ly Melz­er. No Board mem­bers were present virtually.

The Agen­da was pre­sent­ed to the Board. Vice Chair­man McDon­ald made a motion to accept the Agen­da. Mr. John­son sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Pre­sen­ta­tions:

The Board was pre­sent­ed with a Res­o­lu­tion rec­og­niz­ing Mr. Joseph K. Tan­nehill, Sr. who was appoint­ed to the Board in 2004 and was instru­men­tal in the relo­ca­tion of the Air­port to the cur­rent loca­tion; and in his mem­o­ry, the Res­o­lu­tion resolved that West Bay Park­way between State Road 388 and the Ter­mi­nal Com­plex would have the hon­orary des­ig­na­tion of ​“Tan­nehill Parkway.” 

Mr. Math­is made a motion to adopt the Res­o­lu­tion. Vice Chair­man McDon­ald sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously. 

Mr. Math­is read the Res­o­lu­tion, and it was pre­sent­ed to the Tan­nehill Fam­i­ly, along with a mock­up of the sign that will be installed along the roadway.

Mr. Joe K. Tan­nehill, Jr. approached the Board, remem­ber­ing how much Bay Coun­ty and this Air­port meant to his father, and thanked the Board for rec­og­niz­ing him.

Mr. Russ Math­is was pre­sent­ed with a plaque by the Board Chair­man in recog­ni­tion of his eight years of ser­vice as a Board Mem­ber, and for all he achieved while serv­ing as Board Chairman.

Mr. Ken Nel­son was pre­sent­ed with a plaque by the Board Chair­man in recog­ni­tion of his four years of ser­vice as a Board Member.

Board Chair­man Lee intro­duced May­or Mark Shel­don, appoint­ed by the Pana­ma City Beach City Coun­cil; and Mr. Will Cramer, appoint­ed by the Bay Coun­ty Board of Com­mis­sion­ers; who will begin their Air­port Author­i­ty terms as Board mem­bers at the next month’s Board Meeting.

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Reports:

Mr. Park­er McClel­lan pre­sent­ed and reviewed the Activ­i­ty Reports.

Ms. Dar­lene Nel­son pre­sent­ed and reviewed the Finan­cial Reports.

Con­sent Agenda:

1. Board Meet­ing Min­utes – May 27, 2020

This item pro­vid­ed for Board approval of the May 27, 2020 Board Meet­ing Minutes. 

1. Approve TSA Lease for Office Space

This item pro­vid­ed for Board approval of an Office Space Lease Agree­ment between the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict and the Trans­porta­tion Secu­ri­ty Admin­is­tra­tion (TSA).

In 2010, a 10-year Lease was draft­ed by Gov­ern­ment Ser­vices Admin­is­tra­tion (GSA) for space to be occu­pied by TSA in the ​“new” Air­port (ECP) which con­sist­ed of 2,618 sq. ft. of space at a rate of $36.97 per square foot per year result­ing in month­ly rent to the Dis­trict of $8,065.53. This square footage rental rate was the amount being charged at the ​“old” Air­port (PFN). The Board approved the TSA Lease Agree­ment and the Lease was executed.

Staff has been work­ing with TSA to estab­lish a new Lease for 2,789 sq. ft. of office space uti­lized in the Ter­mi­nal. The square foot rate for the space will be deter­mined annu­al­ly on Octo­ber 1 based on the approved square foot rate in the Bud­get. The rate for FY20 is $63.64 per square foot, with result­ing rent to the Dis­trict of $14,791.00 month­ly. The term has yet to be determined.

The FY20 Air­port Oper­at­ing and Cap­i­tal Improve­ment Bud­get will be pos­i­tive­ly impact­ed by the rent col­lect­ed for a total of $26,901.88, and Staff rec­om­mend­ed the Board approve the Lease between the Dis­trict and GSA, con­tin­gent upon review and approval by Air­port Counsel.

Ms. Melz­er made a motion to accept the Con­sent Agen­da, and Mr. John­son sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Busi­ness Items:

1. Approve Air­line-Air­port Lease and Use Agree­ment Extension

This item pro­vid­ed for Board approval of a 6‑month lease exten­sion with a 6‑month option to the Air­line-Air­port Lease and Use Agree­ment (Agree­ment) as a result of the COVID-19 Pan­dem­ic, and autho­riza­tion for the Chair­man or designee to exe­cute any doc­u­ments asso­ci­at­ed with Lease Exten­sion of the Air­line-Air­port Lease and Use Agree­ment, fol­low­ing sat­is­fac­to­ry legal review.

In 2015, the Airport exe­cut­ed a new Agree­ment with Delta and South­west, and in 2018, Amer­i­can and Unit­ed were added as sig­na­to­ries to this Agree­ment. The term of the Agree­ment was for 5 years end­ing Sep­tem­ber 30, 2020. The Agree­ment has worked well for both the air­lines and the Airport.

In ear­ly 2019, Staff began dis­cus­sions with all four sig­na­to­ry air­lines on a new Agree­ment. The new Agree­ment was agreed upon by all par­ties with a few excep­tions. As Staff and our con­sul­tant were final­iz­ing the new Agree­ment in February/​March 2020, there was a sig­nif­i­cant impact on the avi­a­tion indus­try, COVID-19.

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COVID-19 has had a sig­nif­i­cant adverse impact on the air­line indus­try, with pas­sen­ger vol­umes drop­ping down below 95% of the pre­vi­ous year and changes in the busi­ness mod­el in the short and long term. As a result of this eco­nom­ic insta­bil­i­ty, the Air­lines have request­ed a lease exten­sion of 6 months with an option for an addi­tion­al 6 months to eval­u­ate the indus­try and bet­ter under­stand the recovery.

The Exten­sion would be under the same terms and con­di­tions, thus allow­ing the Air­port and the Air­lines to bet­ter under­stand the finan­cial impacts of COVID-19 on their respec­tive operations.

It should be not­ed the new Agree­ment was sub­stan­tial­ly com­plete, but because of the COVID-19 impacts and the demands at the var­i­ous head­quar­ter offices as a result of COVID-19, the review process and exe­cu­tion of new agree­ments with air­ports is great­ly extend­ed. There is no impact to the FY20 Oper­at­ing Budget.

Mr. John­son made a motion to approve a 6‑month lease exten­sion with a 6‑month option to the Air­line-Air­port Lease and Use Agree­ment, and Vice Chair­man McDon­ald sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

1. Approve Lease with Nation­al Guard Lease 

The Flori­da Nation­al Guard has an Armory and Readi­ness Cen­ter locat­ed on Lisen­by Avenue near Sweet Bay (Old Air­port). The facil­i­ty is the head­quar­ters for the 1^st Bat­tal­ion – 153^rd Cav­al­ry, a mount­ed infantry force with approx­i­mate­ly 100 sol­diers and civil­ian sup­port personnel.

Fol­low­ing Hur­ri­cane Michael, the exist­ing Armory and Readi­ness Cen­ter was sig­nif­i­cant­ly dam­aged. As a result, the Flori­da Guard estab­lished a ​“Tent City” at ECP, which was used for sol­diers from oth­er units assist­ing with var­i­ous recov­ery efforts. While at ECP, Staff was approached as to the avail­abil­i­ty of land for relo­cat­ing the Armory on Lisen­by to the Air­port. Oth­er loca­tions in Pana­ma City and Bay Coun­ty were also being identified.

In late Jan­u­ary, Staff was advised the Flori­da Guard, while at the Guard Bureau Meet­ing, had deter­mined the Air­port to be their pre­ferred loca­tion in Bay Coun­ty. Staff has iden­ti­fied a loca­tion at the cor­ner of John­ny Reaver Road and West Bay Park­way, as an ide­al loca­tion that works with present and future con­di­tions at ECP. This site would allow for the cur­rent facil­i­ty require­ments as well as the addi­tion of oth­er oper­a­tional com­po­nents in the future. 

At the Feb­ru­ary 27, 2019 Board Meet­ing, the autho­riza­tion to pro­ceed was approved with a Let­ter of Intent. In late 2019, the Flori­da Guard – JAG and Hand Aren­dall led by Mr. Nick Ben­i­nate began work­ing on long-term land lease for the approx­i­mate­ly 25 acres of prop­er­ty at ECP. The lease was a com­bi­na­tion of pre­vi­ous air­port leas­es as well as excerpts from oth­er leas­es with the Flori­da Guard. The lease term is for 40 years with a 10-year option, the long term is required for fund­ing purposes.

The rental rate estab­lished in the lease was devel­oped uti­liz­ing appraisals for both the Armory on Lisen­by Avenue and the unim­proved par­cel on the Air­port, input from devel­op­ment pro­fes­sion­als and estab­lish­ing fair mar­ket val­ue over the term of the lease. The intent of agree­ment is to trans­fer own­er­ship of the Flori­da Nation­al Guard Armory and the asso­ci­at­ed land to the Dis­trict as pre­pay­ment of the lease, based on the rate estab­lished of $0.036 per square foot for 25 acres which equates to $39,204 annually. 

Addi­tion­al­ly, pri­or to mov­ing for­ward with a lease, it was required that we received approval from the FAA Com­pli­ance Office to ensure we were in com­pli­ance with our grant agree­ments. The approval was received from the FAA Air­ports Dis­trict Office – Orlan­do and the FAA Com­pli­ance Office – South­ern Region.

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The pro­posed lease will result in the pre­pay­ment of lease based on the appraisals of the Lisen­by Par­cel, and Staff rec­om­mend­ed Board approval for the Chair­man to exe­cute the lease with the Flori­da Nation­al Guard for an Armory and Readi­ness Cen­ter at ECP fol­low­ing sat­is­fac­to­ry legal review.

Vice Chair­man McDon­ald made a motion to approve the Lease with the Flori­da Nation­al Guard, and Mr. Math­is sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously. 

1. COVID-19 Update

• COVID-19 Finan­cial Update 

Mr. McClel­lan invit­ed Ms. Dar­lene Nel­son to assist him in pre­sent­ing to the Board a finan­cial fore­cast update show­ing graph­ic illus­tra­tions com­par­ing the Approved FY20 Bud­get, pro­ject­ed growth rate, cur­rent pro­jec­tions, and actu­al rev­enues and expens­es. She report­ed the Approved FY20 Bud­get includ­ed an esti­mat­ed $19.7M in rev­enues and $10.5M in expens­es, and with the pro­ject­ed growth rate applied through the end of FY20 (pro­ject­ed before the impact of COVID-19 began to affect the indus­try) rev­enues were esti­mat­ed to be $21.8M.

The cur­rent finan­cial mod­el (cal­cu­lat­ed since the onset of COVID-19 in March) shows a steep decline in pro­ject­ed rev­enues, with a revised bud­get amount of $13.6M. Month­ly rev­enues, how­ev­er, exceed­ed expens­es in May, a trend that is expect­ed to con­tin­ue through July. She report­ed the month of May actu­al rev­enues rebound­ed more than expect­ed exceed­ing expens­es by $127K.

Year-to-date oper­at­ing rev­enues are $1.3M under bud­get through May. Ms. Nel­son con­firmed this does not include any CARES Act money.

(ii) COVID-19 Airline Car­ri­er Pro­gram

Mr. McClel­lan report­ed that the Air­line Relief Pro­gram con­tin­ues to move for­ward as planned; we antic­i­pate a pay­ment for some of it the first of July with all the repay­ments com­ing back at the end of July, and every­thing being done at the end of the fis­cal year. 

(iii) COVID-19 Rental Car Relief Pro­gram

Mr. McClel­lan informed the Board that we are still not col­lect­ing the Rental Car com­pa­nies’ MAG, but we are col­lect­ing their per­cent­age because our pas­sen­gers are still down.

Items (i), (ii), and (iii) were for infor­ma­tion­al pur­pos­es only and required no for­mal Board action. 

(iv) COVID-19 Con­ces­sion Relief Pro­gram

This item pro­vid­ed an update on the impacts of the COVID-19 Pan­dem­ic on the Con­ces­sion Pro­gram includ­ing the restau­rant, news/​gift shop, park­ing, adver­tis­ing and ground transportation.

The sig­nif­i­cant reduc­tion in pas­sen­ger traf­fic has had a sub­stan­tial adverse impact on our con­ces­sions. The busi­ness mod­el uti­lized by the con­ces­sions is pas­sen­ger based.

In mid-March the Airport’s pas­sen­ger traf­fic began drop­ping, result­ing in a sig­nif­i­cant reduc­tion in the num­ber of pas­sen­gers uti­liz­ing the Air­port. In April the pas­sen­ger traf­fic was down 95%, in May 72%, and ear­ly esti­mates indi­cate a decrease of 45 – 50% for June and 20 – 25% in July. These reduc­tions have led to a sig­nif­i­cant loss in rev­enue for the con­ces­sions and as a result, they have approached the Air­port for finan­cial relief.

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As a result of the sub­stan­tial adverse effect of the COVID-19 Pan­dem­ic, Staff has imple­ment­ed or pro­pose the imple­men­ta­tion of the fol­low­ing actions;

Ground Trans­porta­tion: The reduc­tion of the fees for the Queue Con­tracts from $135 per month to $20 per month for the months of April, May, June and July. The esti­mat­ed finan­cial impact is $22,000.

Pas­sen­ger Park­ing: Case by case basis, reduc­tion of the park­ing rate by 50% from March 27, 2020 to May 1, 2020 based on COVID-19 impacts. The esti­mat­ed finan­cial impact is minimal.

Restau­rant (Food and Bev­er­age) Con­ces­sion: Waive the Min­i­mum Annu­al Guar­an­tee (MAG) for the months of April, May, June and July. The con­ces­sion­aire would con­tin­ue to pay 12% of gross rev­enues. The max­i­mum esti­mat­ed finan­cial impact is $19,400.

Gift Shop (News and Sun­dries) Con­ces­sion: Waive the Min­i­mum Annu­al Guar­an­tee (MAG) for the months of April, May, June and July. The con­ces­sion­aire would con­tin­ue to pay 12% of gross rev­enues. The max­i­mum esti­mat­ed finan­cial impact is $11,000.

Adver­tis­ing Con­ces­sion: Waive the Min­i­mum Annu­al Guar­an­tee (MAG) for the months of April, May, June and July. The con­ces­sion­aire would con­tin­ue to pay 30% of gross sales. The max­i­mum esti­mat­ed finan­cial impact is $12,500.

It should be not­ed that the rec­om­men­da­tions above were pre­vi­ous­ly approved for April and May, and this item adds June and July. The con­sol­i­da­tion allows for bet­ter track­ing of the con­tin­ued impacts of COVID-19.

The max­i­mum con­sol­i­dat­ed bud­get impact for the months of April, May, June and July is esti­mat­ed to be $64,900, and Staff rec­om­mend­ed approval of the con­tin­ued relief efforts to the con­ces­sions as presented.

Mr. Math­is made a motion to approve the Con­ces­sion Relief Pro­gram, and Ms. Melz­er sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously. 

Con­struc­tion Update (infor­ma­tion only):

Mr. Richard McConnell addressed the Board begin­ning with the Ter­mi­nal Expan­sion Update. Mr. McConnell report­ed that with the excep­tion of the sec­ond Pas­sen­ger Board­ing Bridge, the Project is pro­ceed­ing very well and is approx­i­mate­ly 80% fin­ished. He report­ed there have been some COVID-19 ven­dor-relat­ed delays, such as the doors, air con­di­tion­ing units (being installed today), and light fix­tures (delayed deliv­ery – the first item to impact the pro­ject­ed sched­ule), all of which are result­ing in code inspec­tion delays. Mr. McConnell report­ed per­ma­nent pow­er and plumb­ing have been trans­ferred to the Expan­sion, the Gate 6 Jet Bridge has been set (burnt out cir­cuit boards will be deliv­ered any day and that will put the Pas­sen­ger Board­ing Bridge into play), and stormwa­ter diver­sion pip­ing is being installed. Mr. McConnell asked ZHA’s Rick Mellin to com­ment, and Mr. Mellin addressed the Board inform­ing them that the con­trac­tor would like to have a rib­bon cut­ting cer­e­mo­ny at the next Board Meet­ing at the end of July. Mr. Mellin report­ed that the Project is going finan­cial­ly very well with approx­i­mate­ly $60K pre­vi­ous­ly bud­get­ed expect­ed to be leftover.

Mr. Mellin con­tin­ued to report on the Con­struc­tion Updates. He report­ed the Taxi­way E1 Project is almost fin­ished except for the grass, strip­ing and some sig­nage; and C.W. Roberts is mov­ing full speed and on sched­ule on the Tran­sient Apron Project by sta­bi­liz­ing the sub­grade, adding an asphalt sub-base, and final­ly a lay­er of concrete. 

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Mr. McConnell report­ed that the State Road 388 Project sur­charge on the east side has been com­plet­ed, and the final grade will be done once they remove five feet from the top for the Round­about and roads. He report­ed that on the west side, there is approx­i­mate­ly 30 days of sur­charge, and once set­tled, a lay­er on top will be removed. He said the next phase of the Round­about Project can­not begin until a por­tion of the road mov­ing west is com­plet­ed to allow for need­ed detours dur­ing the Entrance and Round­about con­struc­tion. Mr. McConnell report­ed that pow­er has been dis­trib­uted to the south side of S.R. 388 at the Entrance where a per­ma­nent over­head light will be installed. He said the work on the bridges has begun, and the Project is on schedule.

The Bay EDA Update:

Bay EDA Pres­i­dent Bec­ca Hardin addressed the Board via phone and report­ed Project Gator is mov­ing along and both it and Project Pur­ple have qual­i­fied for the Qual­i­fied Tar­get Indus­try Tax Cred­it (QTI) – which was designed to encour­age the cre­ation of high-skill jobs and encour­age the growth of cor­po­rate head­quar­ters and oth­er tar­get­ed indus­tries as a nice incen­tive. She report­ed that Bay EDA has been work­ing very close­ly with Space Flori­da and is in the file stages with the finan­cial pack­age going to the banks by the end of the week for Project Gator. She report­ed that Project Gator will offer 96 jobs and have a cap­i­tal invest­ment of $24M.

Ms. Hardin report­ed that Bay EDA is still mov­ing Project Pur­ple for­ward espe­cial­ly now that it qual­i­fied for the QTI tax cred­it. She said it will have 115 jobs and has a cap­i­tal invest­ment of $6.5M.

Ms. Hardin report­ed the third Project that Bay EDA is still push­ing for­ward and looks very promis­ing is Project Venus, an inter­na­tion­al com­pa­ny, who would have 250 jobs and has a cap­i­tal invest­ment of $65M. She said that all three Projects would require access to the Runway.

The Moore Agency Update:

Ms. Katie Spill­man of The Moore Agency report­ed via phone on their May mar­ket­ing and adver­tis­ing activ­i­ty. Ms. Spill­man report­ed that the team spent the month devel­op­ing script cre­ative for the new batch of cre­ative con­sid­er­a­tions, includ­ing the new TV com­mer­cial, eval­u­at­ing our media flight plan con­sid­er­a­tions for the remain­der of the fis­cal year com­pared to what was slat­ed, secur­ing fol­low up media oppor­tu­ni­ties as a result of the 10-year anniver­sary, and dai­ly media mon­i­tor­ing and com­mu­ni­ty engage­ment of social media. 

Ms. Spill­man report­ed that in April there were 487 air­line web­site click con­ver­sions and 153 assist­ed con­ver­sions as a result of our cam­paign; 3,314 Escape page views; 14,103 new web­site vis­i­tors; 24,472 total web­site ses­sions; 1,364,312 earned media impres­sions; and 17.9% of our sub­scribers opened the newslet­ter. She said web­site traf­fic was up 66%, organ­ic search up 124% month over month (MoM), paid search was up 57% MoM, and clicks to air­line web­sites from our page was up 168% from April.

Ms. Spill­man report­ed all dig­i­tal adver­tise­ments remain paused, but Google Paid Search con­tin­ued because it serves up ads only to those with the intent to find flight trav­el and Air­port infor­ma­tion. She said the online traf­fic increased great­ly in May with 67.34% more pageviews than in April. Ms. Spill­man report­ed over 70K views of our ECP brand­ed ani­mat­ed GIFs and stick­ers, the fun and engag­ing way for our users to share more about their expe­ri­ence at the Airport.

Ms. Spill­man report­ed Mr. McClel­lan was the fea­tured guest live on-air on WKGC-FM The Mor­ing Mix shar­ing more details about ECP’s 10^th anniver­sary and the Airport’s ECP Ready plan which out­lines new health and safe­ty pre­cau­tions to keep pas­sen­gers and employ­ees safe.

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Exec­u­tive Direc­tor Report:

Mr. McClel­lan addressed the Board and rec­og­nized Mr. Ron Jar­mon, aer­i­al pho­tog­ra­ph­er, who pro­vides the pho­tos show­ing the ongo­ing con­struc­tion Projects each month. 

Mr. McClel­lan report­ed that with more pas­sen­gers, the Projects with­out Pas­sen­gers have slowed, how­ev­er, most of the gray tiles have been replaced with those remain­ing being mapped out. He report­ed that the Flori­da Gov­er­nor announced an exec­u­tive order extend­ing Zoom meet­ings through the first of August, and invit­ed the Board to tour the Ter­mi­nal Expan­sion fol­low­ing this meeting. 

Pub­lic Comments:

There were no pub­lic comments.

Adjourn­ment:

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

________________________________ ________________________________

Kathy Gilmore, Exec­u­tive Sec­re­tary Del Lee, Chairman