ST. LOUIS AIRPORT COMMISSION. Wednesday, October 1, :00 P.M. Lindbergh Conference Room
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1 ST. LOUIS AIRPORT COMMISSION Wednesday, October 1, :00 P.M. Lindbergh Conference Room Members Present: Members Absent: Vacancies: Airport Staff: Legal Department: Mr. Conway, Ms. Fowler, Mr. Fitzgerald, Ms. Green, Mr. Hrabko, Mr. Jenkins, Ms. Osborn, Mr. Reed, Mr. Sauget, Mr. Stelzer, Ms. Teitelbaum, Mr. White and Chairperson Hamm-Niebruegge Mr. Lipman, Mr. Nemanick Two Bales, Beckmann, Conner, Glasener, Gooding, Kinsey, Kopinski, Lea, Ramos, Ryan, Salarano, Spencer, Stoffel Pandolfo, Kismer, Molitor Guests: Lorenzo Boyd, Stifel, Nicolaus; Ollie Dowell, Ollie Dowell Communications; Maurice Falls, Board of Aldermen; Jeff Fernhoff, Huntleigh McGehee; Candice Gordon, Comptroller s Office; Alonzo R. Pena, BIAC; Barry Stolz, Hanson Professional Services News Media: Ken Leiser, Post-Dispatch The Meeting was called to order at 2:07 P.M. 1. MINUTES Approval is requested for the Minutes of the Wednesday, September 3, 2014 Airport Commission Meeting. A motion for approval was made by Mr. Reed and seconded by Mr. Stelzer. 2. ORDINANCES A. Draft Ordinance authorizing an Eighth Supplemental Appropriation in the total amount of $519,300 from the Airport Development Fund into the Airport Schedule F CIP Project Ordinance A motion for approval was made by Mr. Reed and seconded by Mr. Hrabko. Ms. Kopinski provided the details of the Ordinance as set out in the Executive Summary included 1
2 This Ordinance authorizes the 8 th Supplemental Appropriation of $519,300 from the Airport Development Fund to cover the costs of generators in the Airport Office Building. Of this amount, $400,000 will be for a new generator, which will supplement the existing generator. The remaining $119,300 will cover a previous generator project. Upon review of the previous generator project, it was discovered that a certain portion of the project cost, approximately $119,300, would not be eligible for funding through PFCs and would need to be funded from the Airport Development Fund ( ADF ). A discussion then took place regarding the implications of the balance of the ADF falling below $20 million. It was explained that under the current Airport Use Agreement ( AUA ), any Capital Improvement project in excess of $100,000 must have the Majority-In Interest ( MII ) approval of the Signatory Airlines. If the ADF is $20 million or more in unencumbered funds, and the Signatory Airlines do not approve a Capital Improvement project, the Airport must wait one year and then may go forward with the Capital Improvement project without MII approval. However, if the ADF is below $20 million, the Airport may not proceed with a Capital Improvement project without MII approval. There are certain Capital Improvement projects that do not require MII approval such as emergency repair, replacement or improvements or Capital Improvement projects required to comply with federal, state, or local laws or regulations. Also, in the event that funds in the ADF were insufficient for an emergency project(s), the Airport s Debt Service Stabilization Fund could be used, but only with approval of the Comptroller. Ms. Kopinski explained that under the Airport s AUA approximately $2.4 Million to $2.5 Million of the Airport non-aeronautical revenue is transferred into the ADF each year. Upon further discussion, a vote was taken and the motion carried unanimously. B. Draft Ordinance authorizing a public works and improvement program at the Airport (the Airfield, Building & Environs Projects ) consisting of capital improvement projects to and for the terminal complexes, concourses, parking facilities, taxiways, runways, and associated Airport buildings, structures, facilities, roadways, driveways and environs, as more fully described in Section One of the Draft Ordinance and Exhibit A thereto entitled Fiscal Year 2015 Project/Equipment List, at a total estimated cost of $30,000,000. This Draft Ordinance authorizes an initial appropriation of $13,287,271 from the Airport Development Fund to be expended on the Airfield, Building & Environs Projects. A motion for approval was made by Mr. Reed and seconded by Mr. Sauget. Ms. Kopinski provided the details of the Ordinance as set out in the Executive Summary included This $13,287,271 will fund 26 capital improvement projects that were deemed to be essential for the safety and efficient operation of the Airport during Fiscal Year
3 A discussion then took place regarding the approval process for capital improvement projects. Each Airport department submits a request for any project/equipment that they deem necessary. A committee reviews these requests and determines which are essential. Any projects over $100,000 are submitted to the signatory airlines for MII approval. Upon the airlines approval, the draft ordinance authorizing the projects is prepared and submitted for the recommendation and approval of the Airport Commission, the City s Board of Public Service and the Board of Estimate and Apportionment. Finally, the Airport begins the legislative process with the City s Board of Aldermen. After the legislative process is complete, the procurement process through the City s Board of Public Service begins. After further discussion, a vote was taken and the motion carried unanimously. C. Draft Ordinance authorizing the transfer of up to $2,050,000 from the Airport Debt Service Stabilization Fund to the Airport Development Fund to make funds available during the fiscal year beginning July 1, 2014, for certain emergency replacements and repairs to Airport buildings, terminals, structures, equipment and environs damaged by fire line and water line breaks or ruptures and the emergency replacement and repair of a fire main at the Airport as more fully described on Exhibit A entitled Project List of Emergency Repair & Replacement Projects. A motion for approval was made by Mr. Reed and seconded by Ms. Green. Ms. Kopinski and Mr. Beckmann provided the details of the Ordinance as set out in the Executive Summary included These funds will cover the repair and replacement of fire lines and water lines recently damaged in various areas of the Airport, as well as the restoration of any property receiving water damage. The Airport has hired a forensic engineer to investigate possible causes of the ruptures. Representatives of Missouri Water Company have been meeting with Airport personnel and the forensic engineer to investigate the causes of the ruptures, but no definitive causes have been determined. However, if a recent change in operations implemented by Missouri Water Company is causing the issue, the Airport could look to them for part of the damages. After further discussion, a vote was taken and the motion carried unanimously. D. Draft Ordinance authorizing a supplemental appropriation and set apart in the amount of $1,078,022 from the Airport Development Fund to the Annual Budget established under Ordinance No approved June 27, 2014 for the fiscal year beginning July 1, 2014 and ending June 30, 2015, for current expenses of the Airport as detailed in Exhibit 1. A motion for approval was made by Mr. Reed and seconded by Ms. Green. Ms. Kopinski provided the details of the Ordinance as set out in the Executive Summary included 3
4 These funds will cover the evaluation of the damages, the services of the forensic engineer, cleanup and demolition, environmental work and the hiring of security for the buildings while repairs are being completed. There being no further discussion, a vote was taken and the motion carried unanimously. E. Draft Ordinance authorizing a public works and improvement program at the Airport (the Emergency Building & Environs Projects ) consisting of capital improvement projects for the emergency replacement and restoration of certain Airport equipment, structures, buildings, and environs damaged by fire line and water line breaks or ruptures and the emergency replacement of an underground fire main at the Airport, more fully described in Exhibit A entitled Emergency CIP Project List. The total estimated cost for the Emergency Building and Environs Projects is $971,978. This Draft Ordinance authorizes an initial appropriation of $971,978 from the Airport Development Fund to be expended on the Emergency Building & Environs Projects. A motion for approval was made by Mr. Hrabko and seconded by Mr. Reed. Ms. Kopinski provided the details of the Ordinance as set out in the Executive Summary included The projects covered by this Ordinance are the replacement of the 8 fire line in Terminal 1 and the restoration of the Airport Office Building due to the water damage recently experienced. F. Draft Ordinance authorizing the Director of Airports and the Comptroller to enter into and execute for the City of St. Louis ( St. Louis ) an Agreement and Contract of Sale ( Agreement ) between St. Louis and NorthPark Partners, LLC ( NorthPark ) as set out in Attachment 1. The Agreement provides for the sale of the St. Louis Property (approximately acres) to NorthPark and for the sale of the NorthPark Property (approximately.35 acres) to St. Louis. A motion for approval was made by Mr. Jenkins and seconded by Mr. Reed. Mr. Salarano provided the details of the Ordinance as set out in the Executive Summary included This Ordinance authorizes 3 transactions: 1) the sale of acres of Airport property to NorthPark; 2) the purchase of approximately.35 acres by the Airport from NorthPark; and 3) the granting by the City of a non-exclusive easement to NorthPark over approximately 6 acres of Airport land. 4
5 The purchase prices are as follows: $225,000 for the purchase of the acres (paid by NorthPark); $17,700 for the.35 acres (paid by the Airport); and $10,000 annually for the easement fee (paid by NorthPark). Following a discussion regarding the planned use of this acres being purchased by NorthPark Partners, the Chairperson advised that the planned use for has not yet been announced publically by NorthPark. After further discussion, a vote was taken and the motion carried with Commissioner Fowler abstaining. G. Draft Ordinance authorizing the Director of Airports and the Comptroller to enter into and execute on behalf of the City a Dual Customs Agreement AL-353 ( Agreement ), between the City and Brownsville International Air Cargo, Inc., d/b/a Bi-National Air Cargo Terminals ( BIAC ), substantially in the form set out in Attachment 1 to the draft ordinance. The Agreement memorializes the City s and BIAC s mutual understanding and commitments to each other for cooperation to obtain approval for, establish and develop a Dual Customs cargo facility at the Airport. A motion for approval was made by Mr. Reed and seconded by Mr. Sauget. Mr. Salarano provided the details of the Ordinance as set out in the Executive Summary included This Dual Customs Agreement is a joint effort by the Airport and BIAC to gain approval of both the US and United Mexican government agencies for the establishment and operation of a Dual Customs facility, wherein US Customs officials will provide on-site clearance for air cargo incoming from Mexico and United Mexican States customs officials will provide on-site preclearance services for out-going air cargo destined for Mexico. The Agreement sets out the City s and BIAC s mutual understanding and commitments to each other for cooperation to obtain approval for, establish, and develop a Dual Customs cargo facility at the Airport. Under the Agreement, BIAC is obligated to prepare all the studies, analyses, and applications that may be necessary to obtain approvals from the relevant U.SA. and Mexican authorities for the establishment and operation of Dual Customs at the Airport. BIAC is also required to coordinate and attend all necessary meetings with U.S.A. and Mexican authorities and negotiate the necessary approvals. The City is committing to reasonably assist and support BIAC s efforts. The Agreement grants certain rights to and requires BIAC to develop, construct and provide appropriate space and facilities at the Airport to accommodate the Dual Customs Services upon the Airport obtaining the required approvals from the U.S.A. and Mexico authorities. In addition, the Agreement grants, allows, and requires BIAC to offer certain other aeronautical and nonaeronautical services and facilities to air cargo operators at the Airport, subject to the provisions of the Agreement. 5
6 Upon the successful implementation of Dual Customs, BIAC also will have right to provide certain Dual Customs Ancillary Services consisting of general air cargo handling services, including services and associated facilities necessary for the loading, unloading, processing, and warehousing of cargo subject to Mexican customs preclearance that is part of Dual Customs. In addition, BIAC will have the right to provide certain FBO Services. Under the Agreement the City is required to negotiate exclusively and solely with BIAC for space at the Airport to accommodate the Dual Customs services, BIAC s Dual Customs Ancillary Services, and BIAC s FBO Services. In addition, the City is required going forward, grant to no one else the right to develop, construct, and provide space and facilities at the Airport to accommodate Dual Customs services or Mexican customs preclearance services or the right to offer Dual Customs Ancillary Services. The Agreement also provides that the City and BIAC will negotiate over the terms of one or more long term lease agreements for space at the Airport to accommodate Dual Customs services and, to the extent space is available, BIAC s own Dual Customs Ancillary Services and FBO services adjacent to the Dual Customs space. The basic terms of such long term leases are set out in the Agreement. Finally, the Agreement provides that concurrently with its execution, the City and BIAC will enter into first right of refusal ( FRR ) agreements for space in Cargo City and the eastern portion of the Northern Tract. These are the areas of the Airport in which BIAC envisions developing and building the facilities for Dual Customs services (initially in Cargo City and more permanently in the eastern portion of the Northern Tract), BIAC s Dual Customs Ancillary Services, and BIAC s FBO Services, and the additional space to accommodate other international cargo enterprises. The FRR agreement for Cargo City is restated and amended and terminates the previous FRR Cargo City agreement. The FRR agreement for the Northern Tract (East Site) encompasses approximately 48 acres and includes Buildings 1, 2, and 3. Both spaces are currently vacant and have been for some time. The terms of both FRR agreements are the same as the term of the Agreement: three years with up to two consecutive one-year option terms and, like the Agreement, automatically terminate if the request for Dual Customs services is denied by relevant U.S.A. and Mexico governmental authorities. Upon further discussion, a vote was taken and the motion carried unanimously. 3. PLANNING & DEVELOPMENT Award and approval of a Service Agreement to Banks & Banks Landscaping, Inc. to provide Tree Removal Services for the Airport. The Agreement will commence on November 11, 2014 and will expire on November 10, The total Contract Not-To-Exceed Amount will be $150,000. A motion for approval was made by Mr. Reed and seconded by Mr. Stelzer. 6
7 Commissioner Conway left the meeting at this time. Mr. Beckmann provided the details of the Service Agreement as set out in the Executive Summary included This 3-year Agreement covers the necessary removal of trees from property owned by the Airport. This contractor began as a minority subcontractor to another contractor and has done well enough to now bid for the contract itself. The contractor consists of 99.5% minority (MBE) and.5% women (WBE) participation and far exceeds the requirement for Airport contracts. 4. PROPERTIES A. Space Permit with Airport Terminals Services, Inc. (AL-350) A motion for approval was made by Mr. Reed and seconded by Mr. Jenkins. Mr. Salarano provided the details of the Space Permit as set out in the Executive Summary included This Space Permit covers 3,059 sq. feet of space located on Shops Road behind Terminal 1. Annual revenue to the Airport will be $33, B. Lease Agreement with Airport Terminal Services, Inc. (AL-341) A motion for approval was made by Mr. Reed and seconded by Mr. Hrabko. Mr. Salarano provided the details of the Lease Agreement as set out in the Executive Summary included This Lease Agreement is for three years and provides for space on which to place an above-ground jet fuel storage tank. Annual revenue to the Airport will be $1, After further discussion, a vote was taken and the motion carried unanimously. C. First Amendment to Lease Agreement with Airport Terminal Services, Inc. (AL- 220) ( ATS ) A motion for approval was made by Mr. Stelzer and seconded by Mr. Reed. Mr. Salarano provided the details of the First Amendment to Lease Agreement as set out in the Executive Summary included 7
8 ATS operates a Jet Center, providing terminal, parking and ramp services to general aviation customers. This First Amendment provides for a one-year extension to the term of the Agreement up to October 31, There are no other changes to the Agreement. D. On-Airport Passenger Vehicle Rental Concession Agreements with: The Hertz Corporation (AL-271) Avis Rent a Car Company of St. Louis d/b/a Avis Rent a Car (AL-272) Enterprise Leasing Company of St. Louis d/b/a National Rent a Car (AL- 273) Enterprise Leasing Company of St. Louis d/b/a Enterprise Rent a Car (AL- 274) Budget Rent a Car System d/b/a Budget Rent a Car (AL-275) Enterprise Leasing Company of St. Louis d/b/a Alamo Rent a Car (AL- 276) C&J Rental, Inc. d/b/a Thrifty Car Rental (AL-277) A motion for approval was made by Mr. Reed and seconded by Ms. Green. Mr. Salarano provided the details of the On-Airport Passenger Vehicle Rental Concession Agreements as set out in the Executive Summary included with the agenda items and recommended approval of the motion. Approval is being requested for seven separate Rental Car Agreements. The terms of the Agreements are sustainably the same except for the designated Premises, the Minimum Annual Guarantee (MAG) amounts, and the required performance and payment bond requirements. These Agreements are for five years and cover the rental counters in Terminal 1 and the shuttle bus spots on the driveways of Terminals 1 and 2. Revenue to the Airport is the greater of either a minimum annual guarantee or 10% of the gross receipts. After further discussion, a vote was taken and the motion carried with Commissioner White and Commissioner Fitzgerald abstaining. 6. OTHER BUSINESS Enplanements are up 1.2% for the year. Concessions for the month of August, 2014 are up 5.6% over August, Sales per enplanement for 2014 are up 7.6% over the same time period in Mr. Ron Stella, of Newport, Rhode Island, has been hired as the new Assistant Director of Operations. He possesses considerable knowledge and experience in airfield and snow removal operations and will begin Monday, October 13,
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