September 2018 Special Budget Workshop Meeting Minutes

Open­ing:

The Spe­cial Board Meet­ing of the Pana­ma City-Bay Coun­ty Air­port and Indus­tri­al Dis­trict was called to order at 9:00 a.m., Sep­tem­ber 5, 2018 by Chair­man Lee.

The Invo­ca­tion was giv­en by Ms. Rhon­da March­man. The Pledge of Alle­giance was led by Chair­man Lee.

The Exec­u­tive Sec­re­tary called the roll and indi­cat­ed that all Board Mem­bers were present except Mr. John­son and Mr. Nelson.

Busi­ness Item:

a. Accept FAA AIP Grant Offer for Ter­mi­nal Apron Repair Project

This item pro­vides for Board accep­tance of an FAA Grant Offer for use of Enti­tle­ment Funds that pro­vides fund­ing for repair of the Air­port Ter­mi­nal Apron.

The Grant will be used to fund a repair project involv­ing a sec­tion of pave­ment along the concrete/​asphalt tran­si­tion edge of the Ter­mi­nal Apron. The Project will repair a por­tion of the Ter­mi­nal Apron where the pave­ment tran­si­tions from con­crete to asphalt. The Project will remove a 20-foot wide, 1,580-foot long, sec­tion of the asphalt pave­ment that has failed due to heavy use and will replace the sec­tion with a more resilient, poly­mer, asphalt that will bet­ter accom­mo­date the load trans­fer between the two pave­ment types.

b. Accept FAA AIP Grant Offer for Ter­mi­nal Apron Expan­sion Project

This item pro­vides for Board accep­tance of an FAA Grant Offer for use of Enti­tle­ment Funds that pro­vides fund­ing for expan­sion of the Air­port Ter­mi­nal Apron.

The Grant will be used to fund a ter­mi­nal apron expan­sion at the Air­port. The project will expand the air ter­mi­nal air­craft apron by approx­i­mate­ly 154,800 square feet in order to accom­mo­date increased air car­ri­er air­craft size and frequency.

c. Accept FAA AIP Grant Offer to Con­duct an Air­port Mas­ter Plan Update

This item pro­vides for accep­tance of a FAA Grant Offer for use of Enti­tle­ment Funds for an update to the Air­port Mas­ter Plan for the North­west Flori­da Beach­es Inter­na­tion­al Airport.

In 2015, the Air­port com­plet­ed the first FAA-Spon­sored Air­port Mas­ter Plan Study. Since com­ple­tion of that Study the Air­port has expe­ri­enced sig­nif­i­cant growth and oper­a­tional changes thus dri­ving the need to update the orig­i­nal Air­port Mas­ter Plan. With con­cur­rence from the FAA, this Grant will sup­port a project to update the Air­port Mas­ter Plan. The Project is antic­i­pat­ed to take 18 to 24 months to com­plete. An Air­port Mas­ter Plan is con­sid­ered to be the pri­ma­ry plan­ning doc­u­ment uti­lized by local, state and fed­er­al agen­cies as a guide for future pro­gram­ming and devel­op­ment of an airport.

Fol­low­ing Board dis­cus­sion, Mr. Math­is made a motion to accept all three busi­ness items. Mr. Tusa sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

d. Accept Bid Pro­pos­al for Raised Ter­mi­nal Cross­walks and Pond­ing Project

This item pro­vides for the accep­tance of a bid from GAC Con­trac­tors, Inc. to per­form work to rem­e­dy stormwa­ter pond­ing at Ter­mi­nal Entrance Crosswalks.

Exist­ing con­di­tions includ­ing orig­i­nal pave­ment instal­la­tion and set­tling, side­walks, down­spouts, and recur­rent rain lev­els are cre­at­ing a nui­sance at two pri­ma­ry access point cross­walks to the Ter­mi­nal Build­ing. This nui­sance includes major pond­ing, up to 4” deep and 20’ cir­cum­fer­ence at the North Taxi Queue, and two small­er areas, up to 1” deep and 3’ cir­cum­fer­ence at the cov­ered walk­way. Although the areas are under roof, sig­nif­i­cant water accu­mu­lates from adja­cent paved areas.

Fol­low­ing Board dis­cus­sion, Mr. Tusa made a motion to accept the bid for the raised Ter­mi­nal cross­walks and pond­ing project. Mr. Math­is sec­ond­ed the motion. The vote was tak­en and the motion passed unanimously.

The Spe­cial Board Meet­ing end­ed at approx­i­mate­ly 9:13 a.m., and the Board moved into the Bud­get Work­shop at that time.

e. FY 2019 Oper­at­ing and Cap­i­tal Improve­ment Budget

The draft FY2019 Oper­at­ing and Cap­i­tal Improve­ment Bud­get was pre­vi­ous­ly pro­vid­ed to the Board for their review in prepa­ra­tion for this discussion.

Mr. McClel­lan and Ms. Nel­son reviewed the pro­ject­ed oper­at­ing rev­enues and oper­at­ing expens­es for the upcom­ing fis­cal year. The oper­at­ing rev­enues include funds that will be pri­mar­i­ly received from the air­line fees and charges, con­ces­sions, pub­lic park­ing, car rentals, gen­er­al avi­a­tion, space rentals and build­ing rentals.

The pro­ject­ed oper­at­ing expens­es include per­son­nel costs, pro­fes­sion­al ser­vices, sup­plies and mate­ri­als, util­i­ties, insur­ance, and oth­er expens­es nec­es­sary to main­tain the Airport’s operations.

Over­all, total oper­at­ing rev­enues are pro­ject­ed at $13,907,872, which equates to $918,513, or 7.1% more than bud­get. The major­i­ty of the increas­es in rev­enue are due to the addi­tion of Amer­i­can Air­lines and to the increased num­ber of Sat­ur­day flights by South­west Air­lines. The FY 2019 bud­get­ed oper­at­ing rev­enues are pro­ject­ed to increase by $1,057,125, or 8.1% from the FY 2018 Bud­get, which is pri­mar­i­ly due to the increase in pas­sen­gers and air­line traf­fic pro­ject­ed by the air­lines. Oper­at­ing rev­enues are approx­i­mate­ly 1.0% greater in FY 2019 than the pro­ject­ed rev­enues for FY 2018. This increase is low­er than expect­ed due to a low­er land­ing fee, which equates to less rev­enues col­lect­ed from the air­lines for land­ing fees.

Over­all, the FY 2018 pro­ject­ed oper­at­ing expens­es are $358,181, or 4.6%, less than bud­get. The oper­at­ing expens­es in the FY 2019 Bud­get are 4.6% more than the FY 2018 Bud­get, rep­re­sent­ing an increase of $363,032. The FY 2019 Oper­at­ing Expense Bud­get is 9.5%, or $721,213, over the pro­ject­ed FY 2018 oper­at­ing expens­es. The FY 2019 Bud­get reflects an amount which will pro­vide for the effi­cient oper­a­tion of the Air­port and will pro­vide the nec­es­sary resources to meet our estab­lished goals for the upcom­ing year. Increase in both pas­sen­gers and activ­i­ty at the Air­port result in both addi­tion­al rev­enues as well as increased oper­at­ing expenses.

The main focus of the Cap­i­tal Improve­ment Pro­gram, which is fund­ed through the use of Fed­er­al Air­port Improve­ment Pro­gram grants, Flori­da Depart­ment of Trans­porta­tion grants, Fed­er­al Emer­gency Man­age­ment Agency funds, State Emer­gency Response Team funds, Tri­umph Gulf Coast grants, and Air­port funds, cen­ters on eco­nom­ic devel­op­ment projects, ter­mi­nal and apron expan­sion, con­tin­ued devel­op­ment of the envi­ron­men­tal mit­i­ga­tion pro­gram, reha­bil­i­ta­tion of the ter­mi­nal ramp, and a mas­ter plan update. Addi­tion­al­ly, the Dis­trict is apply­ing to Tri­umph for grants to fund a new 7,500 foot cross­wind runway.

Vice Chair­man McDon­ald ques­tioned the 4% increase in the Park­ing Rev­enue totals for FY 18 Pro­ject­ed and FY 19 Pro­posed Bud­get, con­sid­er­ing the antic­i­pat­ed 22.5% increase in pas­sen­ger vol­umes. Chair­man Lee con­curred that we are under bud­get­ing rev­enues and over bud­get­ing expens­es, and asked that we bud­get more close­ly by approach­ing rev­enues more aggres­sive­ly, and by includ­ing more future plan­ning on the expense side.

Ms. Sims asked Staff to do a Salary Study com­par­ing oth­er air­ports and local cities/​companies, to see if more than the rec­om­mend­ed 5% merit/​cost of liv­ing pool is war­rant­ed to recruit prospects with the best tal­ent, and to bring ECP up to a more com­pet­i­tive lev­el with oth­er companies.

Ms. Sims asked Staff to inves­ti­gate a Well­ness Program.

Ms. Sims also asked what it would cost, and the time­line, to move or spread out the dirt pile as soon as pos­si­ble to improve the appear­ance of the Air­port, and bring it to the Board for a vote.

Ms. Sims asked how, with the pas­sen­ger counts and rev­enue num­bers being up, expens­es are pro­ject­ed to be down. Vice Chair­man McDon­ald agreed that the pas­sen­ger vol­umes vs. the total num­ber of pas­sen­gers, as shown in the Bud­get, were con­fus­ing. Mr. McClel­lan explained that in the avi­a­tion indus­try, we use ​“land­ing weights” not ​“pas­sen­ger counts” when bud­get­ing, because with larg­er air­craft, fre­quen­cy decreas­es, and that we would pro­vide bet­ter per­for­mance met­rics and repack­age them to help bet­ter describe the numbers.

This Bud­get Work­shop pro­vid­ed for a review and dis­cus­sion of the pro­posed FY 2019 Oper­at­ing and Cap­i­tal Improve­ment Bud­get and required no for­mal action by the Board. For­mal approval of the final bud­get will be con­sid­ered at the Sep­tem­ber 26, 2018 Board Meeting.

Adjourn­ment:

The Bud­get Work­shop was adjourned at approx­i­mate­ly 11:50 a.m. (CST).

Kathy Gilmore, Exec­u­tive Sec­re­tary Del Lee, Chairman