Airport Authority - April 25, 2017 Minutes
The Regular Meeting of the Municipal Airport Authority of the City of Fargo, North Dakota, was held Tuesday, April 25, 2017 at 8:00 am in the Airport Boardroom.
The members present or absent were as follows:
Present: Clark, Linn, Kilander, Haugen (via phone), Blazek
Absent: None
Others: Bossart, Gehrig, Pawluk
Chairman Blazek presiding.
Chairman Blazek introduced and welcomed the newly appointed board member, Tammy Linn. He stated with no communication from the City of Fargo or the mayor, we are assuming that Mr. Ken Pawluk's term is not being renewed. He stated it brings him great pain that the process happened the way it did. He stated he thought lessons were learned after the way Gen. Macdonald's exit was handled but clearly, that is not the case.
Chairman Blazek stated Mr. Pawluk served with great distinction on this board for 21 years, which is almost half the time the Airport Authority has been in existence. He stated the things Mr. Pawluk brought to this authority over the years have been unmeasurable in terms of value. He stated Mr. Pawluk has made him a much better authority member by the questions he has asked and by the way he has conducted business for the airport. He stated Mr. Pawluk's passions for theairport and its operations are second to none and asked Mr. Pawluk not to let that passion burn out. He stated he would like Mr. Pawluk to consider reapplying to the authority at some time in the future.
Mr. Pawluk thanked Chairman Blazek for his kind words. He stated when he was appointed to the Airport Authority by Mayor Furness in 1996 it seemed that the south general aviation area was pretty much designated to be vacated or to not be maintained and all general aviation activity would be moved to the north general aviation area. He stated now looking at the revitalized south general aviation area and the corporate aviation in the north general aviation area, as well as expansion of commercial flights, the addition to the terminal building, airfield surface replacement and improvements; we have done a lot in the last 21 years. He stated it has been an honor to be part of it and to serve with each of the board members. He stated we have grown to be friends and he has appreciated the opportunity to serve.
Mr. Pawluk now absent.
Approved the Minutes of the Regular Meeting of the Municipal Airport Authority Held March 28, 2017:
The minutes of the Regular Meeting of the Municipal Airport Authority held March 28, 2017, were approved without objection.
Approved the Airport Vouchers Totaling $62,424.34:
Mr. Kilander moved to approve the airport vouchers totaling $62,424.34.
Second by Dr. Clark.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Cougar Tree Care:
Dr. Clark moved to approve the individual voucher in the amount of $95,000.00 to Cougar Tree Care for Partial Payment Request #1 for Phase II of the Shelterbelt Renovation Project.
Second by Mr. Kilander.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Flint Communications:
Dr. Clark moved to approve the individual voucher in the amount of $6,313.55 to Flint Communications for partial payment request for 2017 Airport Marketing Program.
Second by Mr. Kilander.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Mead & Hunt:
Dr. Clark moved to approve the individual voucher in the amount of $3,415.70 to Mead & Hunt for partial payment request for engineering services in connection with the Terminal Taxiway and Taxiway A3 Reconstruction Project, AIP46.
Second by Mr. Kilander.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Mead & Hunt:
Dr. Clark moved to approve the individual voucher in the amount of $80,040.00 to Mead & Hunt for partial payment request for engineering services in connection with the Taxiway A & A1 Reconstruction - Design, Project AIP47.
Second by Mr. Kilander.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Mead & Hunt:
Dr. Clark moved to approve the individual voucher in the amount of $12,934.85 to Mead & Hunt for partial payment request for engineering services in connection with the Taxiway A
Reconstruction Project, AIP45.
Second by Mr. Kilander.
On the call of the roll, members Clark, Linn, Kilander, Haugen, Blazek voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved Final Ground Lease Agreement with MDC, Inc. for Cargo Hangar Project:
Mr. Dobberstein stated this proposed ground lease is exactly the same document as the ground lease we have with MDC, Inc. for the Federal Express facilities. He stated the concept of this lease was approved by the board some time ago but we have been waiting for square footage amounts and legal descriptions. He stated this is the hangar MDC is constructing to be leased to Corporate Air. He stated the initial term of the lease is 15 years with four (4) five-year options for a total of 35 years which was the term requested due to financing.
Dr. Clark moved to approve the final Ground Lease agreement with MDC Fargo 2, LLC.
Second by Mr. Kilander.
All members present voted aye and the motion was declared carried.
Approved Consent to Sublease between MDC, Inc. and Corporate Air:
Mr. Dobberstein stated the Ground Lease with MDC, Inc. requires a Consent to Sublease in order to MDC to sublease the proposed hangar to Corporate Air. Mr. Kilander moved to approve the Consent to Sublease between MDC, Inc. and Corporate Air.
Second by Dr. Clark.
All members present voted aye and the motion was declared carried.
Reviewed Airport Certificate of Deposit Renewal for Parking Construction and Maintenance Fund:
Mr. Dobberstein stated the airport's Certificate of Deposit with First International Bank in which we have our Parking Construction and Maintenance Fund came due on April 8. He stated rather than renew the CD the board decided at our March 6 to hold the funds in a money market account at First International Bank until such time as we know what funds will be needed for parking improvements, etc.
Mr. Dobberstein stated Mr. Kent Costin, Director of Finance, City of Fargo, is here today to present some other investment options in conjunction with the City of Fargo. Mr. Costin was recognized and stated this visit is a follow-up to some information provided to the Airport Authority last year on some changes the City of Fargo has made with its investment
policies. He stated because of the almost non-existent returns on investments over the past several years the city looked more closely at the North Dakota Century Code (NDCC 21-06) which contains all of legal requirements regarding authorized investments. He stated the City of Fargo is also a Home Rule Charter city so we have the ability to move beyond and outside of the scope of the century code if we create an ordinance that allows us to do something different.
He stated what we did was add a couple of classes of assets to our investment mix. He stated there is a little bit morerisk but moderate and tightly controlled by our investment advisors. He stated the city modified its Home Rule Charter (Section 30108) which allowed it to invest in corporate bonds. He stated that change resulted in about half a percent increase over what they were getting. He stated this is only a partial allocation of the entire portfolio.
Mr. Costin stated he thinks there has been some confusion about the research that was done on whether or not the Airport Authority could also participate in this type of investment. He stated Mr. Dobberstein received an opinion from Attorney Gary Stewart about a year ago but that may havereferred to deposits rather than investments. He stated it was Mr. Stewart's opinion that the type of investments we are discussing today did not meet the qualifications set in the Century Code. He stated the City's authority and ability to use these types of investments is clearly prescribed and they have used them for a number of years now and have had no problem with the investments.
Mr. Costin stated this investment pool option is still open to the Airport Authority. He stated the 2018 budget process begins soon and he has asked for a projected yield calculation. He provided a copy of the 2017 Projected Yield Calculation to the board members. He added that he believes the Airport Authority could enhance its income by becoming part of this investment pool.
Chairman Blazek stated we would need to do that legal research on whether or not the Airport Authority is eligible to participate under the City of Fargo's Home Rule Charter. He stated we need to make certain we are following all FAA guidelines and requirements. He stated the three priorities the Airport Authority has for its investments are: 1) absolutely no principal risk to taxpayers' dollars, 2) clear every regulatory bar that has been set, and 3) earn the highest rate of return possible.
Mr. Dobberstein stated the airport funds cannot be co-mingled with the City's funds, they must be accounted for separately and we have been doing that for years. The accounting system the City uses works great. He stated every penny the airport earns must go toward the airport. He stated that is the number one priority as far as the FAA's policy on revenue diversion. He stated if we choose to adopt the City's investment policy and the Airport Authorities Act of North Dakota allows us to do that we could invest funds with the City's investment program.
Mr. Dobberstein stated during our last bond issue process in 2007 we were advised by Mr. David Macillivray, Springstead Investments, that an airport our size should have reserves of a minimum of $12-$15 million. He stated he is not opposed to this PFM proposal by the City of Fargo. He stated it is just a matter of meeting FAA requirements.
Chairman Blazek stated the PFM program does pose the risk of principal degradation. Mr. Costin stated that is true but his answer to that is that we are hiring professionals to watch
over the funds. He stated he just wanted to give the authority members the details and give them something to consider.
Chairman Blazek thanked Mr. Costin and stated the service they perform for the Airport Authority is very valuable. Attorney Bossart stated she would look into whether the Airport Authority can operate under the City of Fargo's Home Rule Charter and if that answer were yes then we would have to see that it meets with all of the FAA requirements. She stated she would touch base with City Attorney Erik Johnson on the matter.
Received Update on Century Link Easement Request to Provide Services to Cargo Area:
Mr. Dobberstein stated this item was before us last fall when FedEx was in the process of opening their facility but was tabled by Century Link because FedEx had found a temporary solution with another server. He stated the item is now back on the table because FedEx has requested that the project move forward. He stated we are just waiting for a legal description for the easement. He stated once that is available we will have an easement before the board for approval.
Received Update on Proposed South General Aviation Area Hangar Project:
Mr. Dobberstein stated Mr. Rick Berg and Mr. David Sahl, Bravo Sierra Aero, LLC, were not able to be at the meeting today. He stated they are working on an environmental assessment for their proposed hangar project because we knew going into the project that there had been underground fuel tanks on the north side of the hangar. He stated he is not able to find any indication of contamination when the tanks were removed in 1989. He stated the soil borings that Mr. Berg had taken indicates a fuel tank and some soil that needs to be dealt with.
Mr. Dobberstein stated he has made inquiries to the ND Petroleum Tank Release Compensation Fund. He stated the underground tanks were removed prior to this release fund
being set up by the state in 1989. He stated another possibility for assistance is the Leaking Underground Storage Tanks Program.
Mr. Dobberstein stated when Mr. Berg moves forward with this hangar project he will be looking to the Airport Authority to take care of whatever hazardous waste that needs to be removed to accommodate the construction of his hangar. He stated he will continue to look for options. Mr. Kilander stated no matter what the problem turns out to be it has to be remediated and it seems to be our problem since it is our land.
Chairman Blazek stated technically we do not have to remove any contamination. He stated there are active contamination sites all around the city. Mr. Kilander stated he feels it is incumbent upon us to remove any known contamination. Chairman Blazek stated he feels we need to first determine the extent of any contamination. Mr. Dobberstein stated this is informational only at this time until we can get more information.
Reviewed Terminal Area Master Plan Concepts:
Mr. Dobberstein stated at the last meeting the board requested that we review the concepts for the terminal area which are in the Airport Master Plan Update. He stated our master plan has been submitted to the FAA for their review but has been delay due to staffing issues in the Bismarck office.
Mr. Dobberstein presented a layout of the terminal area which shows the terminal building and its proposed expansion, as well as the various parking lots. He stated an 1,800 space parking structure is shown in the plan. He stated the plan also shows proposed expansions of the various parking lots (economy, car rental, employee parking lot). He stated we show terminal expansion options both to the north and to the east and right now we would favor the next expansion to the east, which would cause the least disruption. He showed another plan which included an elevated walkway which could extend south over the crossover road.
Chairman Blazek asked when we would be looking at an expansion of the maintenance shop. Mr. Dobberstein stated he would like to see that done in the next couple of years. He stated right now we are parking some equipment outside. He stated if it is not an expansion of the existing building it would be an additional cold storage building. Mr. Dobberstein stated there are other chapters of the Airport Master Plan which we can review at future meetings.
Chairman Blazek asked that we review the North General Aviation Area, including the cargo apron side with the Guard expansion. In answer to a question from Gen. Haugen, Mr. Dobberstein stated we have learned that our Airport Master Plan Update has been assigned to someone in the FAA's Minneapolis office and wemay know more in a couple of weeks.
Construction and Security Update:
Mr. Dobberstein stated once we know what the federal funding situation will be in congress we will know more about our construction projects for this year. Mr. Jeff Klein, Mead & Hunt, was recognized and stated the project this year is the reconstruction of the remainder of Taxiway A and A-1. He stated the plans and specifications are complete and currently with the FAA pending their review. He stated the plans for the cargo apron expansion to accommodate Corporate Air and the taxilane extension in the North General Aviation Area to accommodate a new hangar proposed have also been completed.
Mr. Klein stated Northern Improvement has started on the punch list items remaining from last year's construction projects. Mr. Klein stated any project at the airport has to go through an environmental determination. He stated documentation has been submitted for the taxilane extension and the cargo apron complex. He stated they reached out to the National Resources Conservation Service (NRCS) to confirm that there were not any wetland sites on the project area and their research agreed. He stated the documentation was provided to the FAA but they were not satisfied and said we would need to check with the Corps of Engineers. He stated right now we are still in the assessment process and we should hopefully know something soon. He stated until the matter is settled Corporate Air is not able to start constructing their hangar.
Mr. Darren Anderson was recognized and stated the TSA is conducting their ergonomic study of the EDS room. He stated because of an increase of back injuries to TSA employees they will be raising their machines which will require raising the conveyors into the room and will be looking to the airport for some participation in the cost as we own the conveyors. Mr. Dobberstein stated due to city building codes the Fargo Air Museum has to build an addition for restrooms on the west side of the hangar. He stated Mead & Hunt outlined all of the legal descriptions for the hangars surrounding the museum. He stated we found that some of the legal descriptions for those hangars were wrong and need to be revised. He stated the main finding that came out of this is that the legal description the city shows for the ABHN hangar west of the museum is wrong and the actual description is much smaller so there is no impediment to the air museum putting this addition on their hangar. He stated we have not yet received the request from the Fargo Air Museum.
Other Business:
Attorney Bossart gave a brief update on the deed restrictions she has been working on for airport property. She stated she submitted her draft restrictions to the FAA and they have given their approval. She stated she is working with Nancy Morris, Assistant City Attorney, and has advised her the Airport Authority wants to move forward and get these deed restrictions in place.
Mr. Dobberstein briefed the board on an upcoming staffing situation at the Fargo Air Traffic Control Tower.
Ms. Linn now absent.
Chairman Blazek stated he would like to establish a compensation review team. He stated Mr. Pawluk and Mr. Kilander served on this team last year and he is recommending that he and Ms. Linn comprise that team. There were no objections from the board members.
The meeting of the Municipal Airport Authority was adjourned until the next Regular Meeting to be held Tuesday, May 23, 2017 at 8:00 a.m.
Time at adjournment was 9:21 a.m.