ST. LOUIS AIRPORT COMMISSION. Wednesday, August 3, :00 P.M. JoAnne Wayne Conference Room

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1 ST. LOUIS AIRPORT COMMISSION Wednesday, August 3, :00 P.M. JoAnne Wayne Conference Room Members Present: Members Absent: Airport Staff: Legal Department: Guests: News Media: Mr. Bales, Mr. Esterline, Mr. McKinney, Mr. Lipman, Ms. Morrell-Charles, Mr. Nash, Mr. Sauget, Mr. Stelzer, Ms. Teitelbaum and Chairperson Hamm- Niebruegge Mr. Clark, Ms. Green, Mr. Kennedy, Mr. McNutt, Ms. Osborn, Mr. Reed, Mr. Sonderegger Beckmann, Glasener, Kinsey, Kopinski, Lea, Mason, Mays, Moppins, Pudlowski, Salarano, Slay, Spencer, Waddle and Ware Niemann, Pandolfo, Stone Faith Berger, Faith Berger Art Consultants; Stacy Crow, BSR Services; Ollie Dowell, Ollie Dowell Communications; Tony Drake, Unison Consulting; Sven Drumev, BSR Services; Jeff Fernhoff, Huntleigh, McGehee; Jim Foley, Spirit of St. Louis Airport; Candace Gordon, Comptroller s Office; Gary Pohrer, AMPCO Parking Co.; Rich Ryffel, Edward Jones; Dave Schubert, Spirit of St. Louis Airport; and Judie Wise, InMotion Ken Leiser, St. Louis Post-Dispatch Kevin Killeen, KMOX The Meeting was called to order at 2:06 p.m. 1. MINUTES A. Approval is requested for the Minutes of the Wednesday, July 6, 2011 Airport Commission Meeting. A motion for approval was made by Mr. Esterline and seconded by Mr. Stelzer. 2. ORDINANCE A. Draft ordinance transferring $13,727,769 from the Debt Service Stabilization Fund to the Revenue Fund for implementation of the Airport Use and Lease Agreement (AUA). A motion for approval was made by Bales and seconded by Mr. Stelzer. 1

2 Ms. Kopinski provided the details of this Ordinance as set out in the Executive Summary included with these agenda items and recommended approval of the motion. This Ordinance provides for the transfer of over $13.7 million dollars from the Debt Service Stabilization Fund to the Airport Revenue Fund for the mitigation of rates under the Airport Use Agreement that was previously approved by the Commission. At the end of the current fiscal year, the funds will revert back to the Debt Service Stabilization Fund. It is anticipated that a similar procedure will occur annually during the five-year term of the Airport Use Agreement. 3. FINANCE & ACCOUNTING A. Approval of the Fourth Amendment to the Professional Services Agreement with Unison Consulting, Inc. to provide Airport Business Services for the Airport. The Agreement commenced January 18, 2002 and will be extended by 32 months and 14 days and will now end on July 31, The total Contract-Not-To-Exceed amount will be increased by $800,000 from $3,036,000 to $3,836,000. This Fourth Amendment increases the total Contract-Not-To-Exceed Amount, extends the term, and incorporates the Missouri Unauthorized Aliens Law Provision. A motion for approval was made by Mr. Nash and seconded by Ms. Teitelbaum. Ms. Kopinski provided the details of the Fourth Amendment to the Professional Services Agreement as set out in the Executive Summary included with the agenda items and recommended approval of the motion. Mr. Tony Drake, of Unison Consulting, Inc., was introduced to the Commission by Ms. Kopinski. She informed the Commissioners that Unison Consulting has been advising the Airport on financial matters for many years and has been involved in the last two Airport Use and Lease Agreements. In the negotiations with the airlines that were recently concluded, Unison provided a number of financial models which facilitated an agreement with the airlines on financial terms. Recently, Lexington Insurance Company, the Airport s insurance company, agreed to take the unusual step of agreeing to allow the Airport to contract with Unison Consulting, at Lexington s expense, to be a part of the forensic accounting team reviewing the business interruption losses arising from the tornado. 4. PROPERTIES A. Airport Office Building Lease with The Boeing Company - AL-170. A motion for approval was made by Mr. Stelzer and seconded by Mr. Esterline. 2

3 Mr. Salarano provided the details of this Office Building Lease as set out in the Executive Summary included with the agenda items and recommended approval of the motion. This two-year lease covers 8,196 sq. ft. of office space in the Airport Office Building, with a oneyear option to extend the lease. The revenue will be $86,058 annually. Chairperson Hamm-Niebruegge advised the Commissioners that the Airport Office Building currently houses Airport Personnel and Trans States Airlines, which leases a portion of the building for office space. Remaining space is available and efforts to secure new tenants continue. There being no further discussion, a vote was taken and the motion carried unanimously. 4. OTHER BUSINESS A. Briefing regarding Fuel System Lease and Use Agreement [No action required] Susan Kopinski provided a briefing on the ongoing negotiations with the airlines for a new Fuel System Use and Lease Agreement. The Agreement being negotiated is to provide for a new model for the delivery of fuel and fueling services to the airlines using the Airport. The current Fuel System Use and Lease Agreement has been in effect since 1955 with Lambert Field Fueling Facilities Corporation, a wholly-owned subsidiary of Allied Aviation, Inc. ( Allied ). Allied currently leases the Fuel Farm and related facilities, all of which are owned by the City. Allied pays rent to the City for the facility, but is paid for fueling services by the airlines, not the Airport. The new fueling facilities agreement will be with a consortium formed by the airlines and have a 20-year term. This will allow the airlines to competitively bid fueling services with a number of providers and should result in significant savings for the airlines on fueling costs. Another benefit, especially important for the Airport, is that the new agreement will have provisions with current environmental language and which set out explicit contractual obligations for the airline consortium as to its obligations with regard to environmental remediation of jet fuel spills and discharges of other hazardous substances. These costs will be the consortium s responsibility, with no cost to the Airport. Negotiations on the new Agreement have been ongoing for two years. Ms Kopinski recognized three Airport employees for their significant contributions to the negotiations: Sam Waddle, Airport Properties; Joe Niemann, Airport Legal; and Joletta Golik, Airport Environmental Manager. Allied s annual rent to the Airport had been $72,000 through Under the new agreement it will continue to be $466,000 per year and adjusted every five years based on the consumer price index. Of this amount, 20% will be deposited into an escrow account to be used for future capital improvements for the fueling facility by the consoritum. The remaining 80% will be deposited into the Airport s Revenue Fund to offset landing fees. 3

4 Under the current agreement Allied is not required to post a security deposit. A security deposit of $500,000 will be required under the new agreement. The current insurance requirement is $1 million for commercial general liability, with no provision for pollution insurance. The new agreement will require $300 million in commercial general liability, and $4 million coverage per loss for pollution insurance. It is anticipated that the new Fuel System Use and Lease Agreement will be presented to the Commissioners, for their approval, at either the September or October, 2011 Commission meeting. B. Miscellaneous Chairperson Hamm-Niebruegge gave a brief update regarding the FAA reauthorization which was not passed by Congress. The Airport was not directly affected in the short term by the failure to reauthorize FAA funds. However, two reconstruction projects on Taxiway Delta and Taxiway Echo, which had previously been approved for 75% FAA funding, have been let out for bids. The bidding process will continue but the actual work on these projects will not begin without available FAA funding. The contract for the replacement of the roof on Concourse C has been awarded to C. Rallo for approximately $2.3 million. The replacement will begin within the next week. The bidding process for the glazing of windows in Terminal 1 has closed. The bids are being reviewed and the contract should be awarded in the next few weeks. A contract for replacement of the windows in the concourses has also gone out for bid. The award of that contract should take place in the next few months. Renovations to Terminal 1 have begun. Construction walls have been erected around the C/D checkpoint with signs directing passengers through the construction to the checkpoint. Arriving passengers from the D concourse now exit through the B concourse. The construction walls will remain for 3-4 months. An additional cell phone lot will be opened on the air cargo road, just east of Terminal 2, which should help alleviate some of the parking congestion in the Terminal 2 parking garage. A discussion among Commissioners then took place regarding the rates charged for long-term parking in the Terminal 2 garage. Commissioner McKinney reported on the AMAC golf tournament, which had 108 registrants and was very successful. The money raised will provide scholarships for students studying aviation. From August 6-9, 2011, the Convention and Visitors Commission is hosting the American Society of Association Executives ( ASAE ) during its annual convention in St. Louis. The ASAE, a convention-planning group, travels to various cities and makes recommendations to its clients as to which cities would be best suited to hold annual meetings. 4

5 A delegation of Chinese officials visited St. Louis for three days in July to meet with ground handlers, fueling companies and trucking companies. The meetings were successful with agreements reached between the Chinese and the respective companies. It is anticipated that the special session of the Missouri legislature will be the first week of September. If the Made In Missouri Jobs Package legislation is passed, as expected, an announcement regarding the Chinese could be made shortly thereafter. 5. NEXT MEETING Wednesday, September 7, 2011 at 2:00 P.M. 6. ADJOURNMENT The meeting adjourned at 2:38 P.M. 5