March 2016 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., March 23, 2016 by Chair­man Bruett.

The Invo­ca­tion was giv­en by Ms. Pat­ty Mitchell.

The Pledge of Alle­giance was led by Chair­man Bruett.

The Exec­u­tive Sec­re­tary called the roll and indi­cat­ed that all Board Mem­bers were present except Ms. Cindy Mead­ows, Mr. Del Lee and Mr. Carey Scott.

Pre­sen­ta­tion:

Mr. Kristo­pher McLane, Direc­tor of Oper­a­tions with the Pana­ma City Beach Cham­ber of Com­merce, pre­sent­ed the Board with the 2016 First Quar­ter Busi­ness Excel­lence Award.

Approval of Minutes:

The Feb­ru­ary 24, 2016 Board Meet­ing Min­utes were approved as distributed.

Reports:

Mr. McClel­lan pre­sent­ed and reviewed both the Activ­i­ty Report and the Finan­cial Report.

Con­sent Agenda:

a. Pur­chase for Spring Fertilization

This item pro­vides for Board approval for the pur­chase and appli­ca­tion of fer­til­iz­er and lime for approx­i­mate­ly 500 acres of Air­port property.

Mr. Math­is made a motion to approve the pur­chase and appli­ca­tion of fer­til­iz­er and lime from Altha Agron­o­my in the amount of $31,445.00, and autho­riza­tion for the Exec­u­tive Direc­tor to exe­cute any nec­es­sary doc­u­ments. Mr. Pilch­er sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

b. Lease Amend­ment – 646MB, LLC

This item pro­vides for Board con­sent to amend the Lease between the Dis­trict and 646MB, LLC increas­ing the amount of lease square footage by 442 square feet.

Mr. Pilch­er made a motion to approve amend­ing the Lease between the Dis­trict and 646MB, LLC increas­ing the amount of lease square footage by 442 square feet, and autho­riza­tion for the Board Chair­man or his designee to exe­cute any required doc­u­ments, fol­low­ing review by legal coun­sel. Mr. Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

c. Land Lease – 646MB, LLC

This item pro­vides for Board approval of a new Land Lease between the Dis­trict and 646MB, LLC to locate a sec­ond hangar.

Mr. Pilch­er made a motion to approve the Land Lease with 646MB, LLC, and autho­riza­tion for the Board Chair­man or his designee to exe­cute the nec­es­sary doc­u­ments con­tin­gent upon FAA approval and on 646MB, LLC obtain­ing any required per­mits. Mr. Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

d. Land Lease – James T. Lee, Sr.

This item pro­vides for Board approval of a Land Lease between the Dis­trict and James T. Lee, Sr.

Mr. Math­is made a motion to approve the Land Lease with James T. Lee, Sr., and autho­riza­tion for the Board Chair­man or his designee to exe­cute the nec­es­sary doc­u­ments con­tin­gent upon FAA approval and on Mr. Lee obtain­ing any required per­mits. Mr.

Pilch­er sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Busi­ness Items:

a. Prop­er­ty Tax Discussion

Mr. McClel­lan opened dis­cus­sion regard­ing prop­er­ty tax­es assessed by the Bay Coun­ty Tax Collector’s office on Ten­ants at the Air­port. He pro­vid­ed back­ground infor­ma­tion to the Board regard­ing the fact that the Pana­ma City – Bay Coun­ty Air­port and Indus­tri­al Dis­trict is tax exempt, and at the for­mer Pana­ma City – Bay Coun­ty Inter­na­tion­al Air­port there were no tax­es assessed to any Tenant.

Mr. McClel­lan stat­ed that he had met with Mr. Dan Sow­ell, Bay Coun­ty Tax Col­lec­tor, regard­ing the tax issue sev­er­al times and he was cur­rent­ly try­ing to work with his office regard­ing the tax­es assessed to the cor­po­rate Tenants.

Mr. Franklin Har­ri­son, the District’s legal coun­sel, advised the Board that he had spo­ken both with Mr. McClel­lan and Mr. Sow­ell regard­ing the out­stand­ing tax­es due from cor­po­rate Ten­ants. Mr. Har­ri­son stat­ed that every Ten­ant, with the excep­tion of one, had Lease Agree­ments with the Dis­trict that requires the Ten­ant to pay any tax­es assessed. He stat­ed that some of the Ten­ants had been pay­ing tax­es, and some had not.

Mr. Har­ri­son fur­ther stat­ed that there were Tax Cer­tifi­cates that had been sold on the unpaid tax­es from pri­or years. He stat­ed that for the Ten­ant not to be assessed any tax on the lease­hold, the Lease Agree­ment would have to be changed and own­er­ship of the hangar would have to go to the Air­port. He also acknowl­edged that for those Ten­ants who had been pay­ing the tax­es on time and who were not in arrears may not wish to trans­fer own­er­ship of their hangar to the Air­port, and that there would need to be a deci­sion made from each Ten­ant individually

Mr. James Finch request­ed to address the Board regard­ing the tax issue. Mr. Finch stat­ed that he was a Ten­ant at the for­mer Air­port site and nev­er paid any tax­es dur­ing his lease­hold there. He fur­ther stat­ed that he had met with Mr. Dan Sow­ell regard­ing the tax­es assessed and that he felt he should not pay tax­es on the hangar because own­er­ship belonged to the Airport.

Mr. Finch fur­ther stat­ed that he had request­ed a Lease Agree­ment from the Dis­trict sev­er­al times, but nev­er received one. He acknowl­edged that the Board had approved a Lease Agree­ment for him at the last Board Meet­ing, but he had an issue with one of the terms of the Lease Agree­ment. Mr. Finch stat­ed that he want­ed pay­ment for pipe work com­plet­ed at the Air­port in the amount of

$18,000 instead of a rent cred­it as was approved by the Board.

Mr. Finch also stat­ed that he would be will­ing to trans­fer own­er­ship of his hangar over the Air­port and work out pay­ment on the tax­es in arrears, with the Air­port bear­ing some of the respon­si­bil­i­ty of pay­ment, inas­much as he does not have a cur­rent Lease Agree­ment in effect.

Mr. McClel­lan addressed the Board and stat­ed that he had already been in con­tact with Mr. Finch regard­ing the pay­ment of the invoice for the pipe work and that the Lease Agree­ment could be amend­ed to allow for pay­ment instead of a rent credit.

Mr. John Pilch­er, Board Mem­ber, addressed the Board Chair­man regard­ing the tax issue. He stat­ed that he felt the Air­port should work with the Ten­ants regard­ing the tax­es owed and leave the deci­sion regard­ing hangar own­er­ship up to each indi­vid­ual Ten­ant. He fur­ther stat­ed that he felt the Air­port should pay the inter­est or penal­ty amounts on any Tax Cer­tifi­cates that had been sold in an effort to resolve this issue.

Mr. Till Bruett, Board Chair­man, stat­ed that he agreed with Mr. Pilch­er and that legal coun­sel and Staff need­ed to work with the Ten­ants regard­ing the Lease Agree­ments and pay­ment of the back taxes.

Fol­low­ing Board dis­cus­sion, Mr. Pilch­er made a motion to have the Air­port attor­ney con­tact the hangar own­ers regard­ing a Lease Amend­ment after all tax­es have been agreed upon and cleared up, and fur­ther that all prin­ci­pal amounts of tax­es be paid by the lease hold­er, and any inter­est due on tax cer­tifi­cates be paid by the Air­port. Mr. Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Fol­low­ing addi­tion­al Board dis­cus­sion, Mr. Pilch­er made a motion to autho­rize Staff to pay Mr. James Finch $18,000 instead of apply­ing a rent cred­it and amend the FY 2016 bud­get to reflect the pay­ment. Mr. Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

b. Ground Trans­porta­tion Rules and Reg­u­la­tions – Revisions

This item pro­vides for Board approval of the revi­sions to the Ground Trans­porta­tion Rules and Reg­u­la­tions at the Airport.

Staff recent­ly com­plet­ed an update of the Ground Trans­porta­tion Rules and Reg­u­la­tions reflect­ing for­mat­ting changes, and an update to the cur­rent ongo­ing oper­a­tions. The fol­low­ing items were addressed in the update:

• Addi­tions to Sec­tion 20.00 ​“Def­i­n­i­tions”.
• Addi­tion­al pro­ce­dur­al detail regard­ing the phys­i­cal per­mit­ting of dri­vers, com­pa­nies, and vehicles.
• Inclu­sion of an Exhib­it iden­ti­fy­ing approved stag­ing, park­ing, and queue­ing loca­tions for ground trans­porta­tion operations.
• Updat­ed Sec­tion 50.00 ​“Insur­ance Requirements”.
• Updat­ed ​“Meet/​Greet Per­son­nel” or ​“Pre-Arranged Rides” procedures.
• Updat­ed Sec­tion 70.00 ​“Vehi­cle Spec­i­fi­ca­tions” to include a require­ment for UL-rat­ed fire extin­guish­ers and first aid kits.
• Updat­ed Exhib­it B ​“Penal­ties for Violation”.

Mr. McClel­lan advised the Board that in the event Uber begins oper­at­ing from the Air­port, Staff would pre­pare an update to the Ground Trans­porta­tion Rules and Reg­u­la­tions for Board approval.

Fol­low­ing Board dis­cus­sion, Mr. Math­is made a motion to approve the revised Ground Trans­porta­tion Rules and Reg­u­la­tions with an effec­tive date of April 1, 2016. Mr. Pilch­er sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

c. FY 2015 Rates and Charges for Sig­na­to­ry Air Carriers

This item pro­vides infor­ma­tion to the Board con­cern­ing sig­na­to­ry air­line rates and charges for Fis­cal Year 2015 in accor­dance with the Air­line Use and Lease Agree­ments that went into effect Octo­ber 1, 2011.

The Air­line Use and Lease Agree­ment charges two basic rates, one for land­ing fees and one for ter­mi­nal rent. The land­ing fee rate rep­re­sents the total costs asso­ci­at­ed with oper­at­ing the air­field cost cen­ter and includes all oper­at­ing and main­te­nance costs along with debt ser­vice costs for con­struct­ing the air­field. The ter­mi­nal rental includes both the debt ser­vice and O & M costs in the ter­mi­nal com­plex cost cen­ter and is charged on a rentable square foot cal­cu­la­tion. This busi­ness frame­work also calls for a rev­enue shar­ing pro­gram with the sig­na­to­ry air­lines after all the oper­at­ing expens­es and annu­al debt ser­vice have been paid.

In con­junc­tion with the FY 2015 finan­cial audit, Staff has also final­ized rates and charges for the sig­na­to­ry air car­ri­ers and deter­mined the rev­enue shar­ing amount for FY 2015.

List­ed below are the over­all results for FY 2015:

Due to the increased num­ber of pas­sen­gers dur­ing Fis­cal Year 2015, a low­er cost per enplaned pas­sen­ger (CPE) was achieved than had been antic­i­pat­ed. This allowed Staff to increase the

amount of the Cap­i­tal Reserve to the Air­port from $100,000 to $500,000, while main­tain­ing a com­pet­i­tive CPE. The amount had been decreased at the time of bud­get prepa­ra­tion to allow the Air­port to project a more com­pet­i­tive CPE at the time of bud­get approval. As a result, Staff is request­ing an amend­ment to the FY 2015 Bud­get to increase the Cap­i­tal Reserve con­tri­bu­tion to

$500,000.

It should be not­ed that this is the final year of the incen­tive repay­ment to South­west Airlines.

Fol­low­ing Board dis­cus­sion, Mr. Math­is made a motion to approve amend­ing the FY 2015 bud­get to increase the Cap­i­tal Reserve con­tri­bu­tion from $100,000 to $500,000. Mr.

Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

d. FY 2015 Finan­cial Audit Report

This item pro­vides for Board approval and adop­tion of the Audit Report for the Fis­cal Year end­ing Sep­tem­ber 30, 2015.

Tip­ton, Mar­ler, Gar­ner & Chas­tain have recent­ly com­plet­ed the Airport’s annu­al finan­cial audit. Mr. David Tip­ton addressed the Board regard­ing the Audit Report and stat­ed there were no find­ings regard­ing vio­la­tions of pro­vi­sions of con­tracts or grant agree­ments, fraud, ille­gal acts or abuse regard­ing the Airport’s account­ing practices.

The Audit Report indi­cat­ed that the gen­er­al-pur­pose finan­cial state­ments rep­re­sent­ed the true finan­cial posi­tion of the Dis­trict and that oper­a­tions and cash flows were in accor­dance with gen­er­al­ly accept­ed account­ing prin­ci­ples and that no reportable con­di­tions were dis­closed dur­ing the audit.

Fol­low­ing Board dis­cus­sion, Mr. Math­is made a motion to adopt the Audit Report as pre­pared by Tip­ton, Mar­ler, Gar­ner & Chas­tain for the Fis­cal Year end­ing Sep­tem­ber 30, 2015. Mr. Fore­hand sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

Exec­u­tive Direc­tor Reports:

Mr. McClel­lan advised the Board that Moore Com­mu­ni­ca­tions Group would pro­vide the Board with an update regard­ing mar­ket­ing efforts at the next Board Meeting.

Mr. McClel­lan advised the Board that a Press Release would be dis­sem­i­nat­ed regard­ing Unit­ed adding addi­tion­al flights begin­ning in June. He stat­ed that Unit­ed would be bring­ing in big­ger planes and that the air­line was very hap­py with the results of the first year’s activity.

Pub­lic Comments:

No pub­lic comments.

Adjourn­ment:

The meet­ing was adjourned at approx­i­mate­ly 9:50 a.m.

Pat­ty Mitchell, Exec­u­tive Sec­re­tary Till Bruett, Chairman