MUNICIPAL AIRPORT AUTHORITY

The Annual Meeting of the Municipal Airport Authority was held Tuesday, January 28, 2020 at 8:00 a.m. in the Airport Boardroom.

The members present or absent were as follows:
Present: Linn, Engen (via phone), Clark, Haugen
Absent: Lind
Others: Bossart, Strand, Piepkorn

Chairman Haugen presiding.

Chairman Haugen recognized a few visitors to the meeting today, City Commissioner John Strand, West Fargo Mayor Bernie Dardis and Cass County Commissioner Ken Pawluk.

Approved the Airport Vouchers Totaling $149,594.22:
Dr. Clark moved to approve the airport vouchers totaling $149,594.22 Second by Ms. Linn.
On the call of the roll, members Linn, Engen, Clark, Haugen voted aye. Absent and not voting: Lind
The motion was declared carried.

Approved the Individual Voucher to TL Stroh Architects:
Ms. Linn moved to approve the individual voucher in the amount of $6,935.00 to TL Stroh Architects for partial payment request for architectural services in connection with the SRE Building Project.
Second by Dr. Clark.
On the call of the roll, members Linn, Engen, Clark, Haugen voted aye. Absent and not voting: Lind
The motion was declared carried.

Approved the Individual Voucher to Mead & Hunt:
Ms. Linn moved to approve the individual voucher in the amount of $66,880.00 to Mead & Hunt for partial payment request for engineering services in connection with the Cargo Apron Expansion Project.
Second by Dr. Clark.
On the call of the roll, members Linn, Engen, Clark, Haugen vote aye. Absent and not voting: Lind
The motion was declared carried.

Approved the Individual Voucher to Mead & Hunt:
Ms. Linn moved to approve the individual voucher in the amount of $8,440.00 to Mead & Hunt for partial payment request for engineering services in connection with the Car Rental Lot Reconstruction Project.
Second by Dr. Clark.
On the call of the roll, members Linn, Engen, Clark, Haugen voted aye, Absent and not voting: Lind
The motion was declared carried.

Approved the Individual Voucher to the Foreign-Trade Zone Corporation:
Ms. Linn moved to approve the individual voucher in the amount of $350.00 to the Foreign-Trade Zone Corporation for consulting fees in connection with the Foreign-Trade Zone.
Second by Dr. Clark.
On the call of the roll, members Linn, Engen, Clark, Haugen voted aye. Absent and not voting: Lind
The motion was declared carried.

Discussed Proposed Airport Investment Accounts with First International Bank & Trust:
Chairman Haugen stated we met recently with representatives of First International Bank and the COF Finance Department. He asked Mr. Engen for any comments from the meeting.
Mr. Engen stated the current rate of return and what we can get with First International are far enough apart that we need to take advantage of it while it exists. He stated hopefully the City can look at using the leverage of other institutions to get a better rate of return as well.

Chairman Haugen stated we have a fiduciary responsibility to get the best rate of return on the airport’s money. He stated this was an item of discussion in mediation and we spent a lot of time on the topic. He added we are facing a lot of construction in the near future.

Mr. Dobberstein stated Mr. Steve Blazek and his team from First International are here today and we have been working with them on getting the accounts set up. He stated this will be investing funds we have right now in a Wells Fargo account which will be moved into savings/investment accounts at First International to get the higher rate of return. He stated we will continue to feed the checking account at Wells Fargo to pay our expenses.

Ms. Linn was recognized and stated as a former banker she, as well as other board members, conducted deep research into the proposals from the four banks. She stated a couple of those financial institutions rose to the top, but by far the proposal from First International Bank provided the highest rate of return and that will be very beneficial to the airport.

Received SP Plus Parking and Transportation Survey for December 2019:
The SP Plus Parking and Transportation Survey for December 2019 was distributed to the board members.

Mr. Dobberstein stated this is the sixth parking and transportation survey SP Plus has conducted for us. He stated during these surveys they are here for two days, from the first flight in the morning until the last flight departs, and they approach every person they can in the area of the escalator and stairway. He stated they are able to capture information from more than 50% of passengers in a day. He stated the questions include; how did you arrive at the airport, where do you live, and is the primary purpose of your travel business or leisure? He stated SP Plus will continue to do these studies as we have found the information very valuable to the airport for planning.

Chairman Haugen stated one thing he noticed in the last few surveys was the steady increase in passengers using TNC’s (Transportation Network Companies).

Mr. Dobberstein stated we were three votes short in the last legislative session of getting legislation to allow airports to collect a pickup or drop-off fee from TNC's, which they are willing to pay. We are able to designate the area those vehicles can be staged and if they are not within that geofence their phone aps do not work.

Ms. Linn stated when we started these studies, one of the things we wanted to see was the impact of the passengers being dropped off at the airport compared to those parking at the airport. She stated a lot of other airports across the country have had a higher impact from TNC's than we have. She stated we are aware of a lot of local companies that will not reimburse employees for parking at the airport but will only pay for a TNC.

Received Update on MOU:
Chairman Haugen stated he is not going to bore everyone with the entire MOU but he would like to review some of the highlights. He stated he would like to thank Dr. Clark, Mr. Engen and Attorney Bossart for all of their work during the mediation. He also thanked Mr. Strand for his role in the mediation.

Chairman Haugen stated the MOU is signed and basically the first part of the document reviews the history of the creation of the Municipal Airport Authority. He stated there is a section that reviews NDCC 2-06 and the state statute covering hiring of employees of an Airport Authority. He stated one of the most contentious issues was the matter of the employees at the airport and whether they are Airport employee or City employees. He distributed copies of an IRS document explaining Professional Employer Organizations (PEOs) and the related employment tax responsibilities. He stated the Airport Authority is the Common Law Employer (CLE) who outsourcests payroll and related tax duties to a third party payer, which in our case is the City of Fargo. He stated the document also states that the person who is not the CLE but is considered the employer because it has exclusive control of the payment of wages is sometimes referred to as the “statutory employer”. He stated the COF uses its EIN for payroll processing for the client (MAA). He stated he just wants everyone to understand the angst we went through trying to resolve whether the employees at the airport work for the City or for the Airport Authority. He stated this was a long exercise and very difficult. He stated this IRS handout may help to understand the issue.

Chairman Haugen stated one section that is new and different is the creation of an Airport Position Evaluation Committee. He stated the MAA has fallen under the City’s PEC and the City Commission had override authority over that committee. He stated the new Airport PEC will have two members from the COF (one commissioner and one other person) and the MAA will have two members (one board member and one other person) and the two non-MAA and non-COF persons will select a fifth individual agreeable to those two to serve on the committee. He stated this Airport PEC will review personnel actions and pay adjustments. He stated hopefully the committee will be finalized in February and we will start with a review of the Airport Fire Department. He stated neither the Airport Authority nor the City Commission will have veto power over decisions made by the Airport PEC.

Chairman Haugen stated the MOU also covered financial/administration and accounting services. He stated we have a great deal of construction coming up and our reserves will be moved to First International Bank to get a much better rate of return. He stated the FAA is very concerned about revenue diversion when airport funds are not kept separate from other funds.

Chairman Haugen stated the cost of hiring the COF to perform these vendor services, based on the centralized services formula which was recently approved by the FAA, for CY2017 was $107,009 and we have not yet received the amounts for 2018 and 2019.

Mr. Strand was recognized and stated we are revisiting that after recent discussions and hopefully they should have some better numbers for that.

Chairman Haugen stated the FAA does need to approve those amounts each year.

Chairman Haugen stated the MOU addresses cooperation between the COF and the MAA. He stated there are a great number of things we work on together.

Chairman Haugen asked if anyone had any further comments.
With no further comments, Chairman Haugen stated he would again like to thank everyone involved for all of their work.

Elected Chairman of the Municipal Airport Authority for Calendar Year 2020, as per Bylaws:
Dr. Clark moved to elect Tammy Linn Chairman of the Municipal Airport Authority for calendar year 2020, as per bylaws.
Second by Mr. Engen.
On the call of the roll, members Linn, Engen, Clark, Haugen voted aye. Absent and not voting: Lind
The motion was declared carried.

Adopted Resolution of Appreciation to Outgoing Chairman, Gen. Michael J. Haugen:
Chairman Linn stated a lot of people do not know the impact and the amount of work put in by this gentleman over the past many years. She stated especially this past six months he has worked tirelessly. She stated she recalls getting texts and e-mails on airport issues all hours of the day or night. She stated his knowledge of aviation and the background knowledge in government and many other areas is so valuable and she is so thankful to have him as a member of this board.

Dr. Clark offered the following resolution and moved its adoption:

WHEREAS, Gen. Michael J. Haugen, has just completed a year as Chairman of the Municipal Airport Authority of the City of Fargo, North Dakota, and
WHEREAS, The past year, which was the 50th year of existence of the Municipal Airport Authority, in many ways proved to be one of its most difficult and trying years of the 50, and
WHEREAS, Gen. Haugen has labored diligently and given unsparingly of his time in serving as Chairman of the Municipal Airport Authority, leading the board and the staff of the airport through an extremely difficult period of time with the utmost of professionalism and integrity, and
WHEREAS, The members of the Municipal Airport Authority would like to extend their sincere appreciation to Gen. Haugen for his leadership and dedication during his chairmanship.
NOW, THEREFORE BE IT RESOLVED, That the Municipal Airport Authority does hereby commend Gen. Haugen for his effective efforts on behalf of the Municipal Airport Authority and Hector International Airport.
BE IT FURTHER RESOLVED, That this resolution be inscribed upon the permanent minutes of the Municipal Airport Authority and a certified copy of the herein resolution be forwarded to Gen. Michael J. Haugen.

Second by Mr. Engen.
On the call of the roll, members Linn, Engen, Clark voted aye. Haugen abstained.
Absent and not voting: Lind
The resolution was declared to have been duly passed and adopted.

Airport Construction and Security Update:
Mr. Jeff Klein, Mead & Hunt, was recognized and stated they are on the home stretch on the plans for the Cargo Apron Expansion. He stated within the next week or so he should have a refined cost estimate for the board. He stated right now he is estimating $18 million.

Mr. Klein stated late last week Mead & Hunt had a conference call with representatives from FedEx to discuss the study to upgrade to the CAT II approach. He stated this is essentially advanced navigational equipment to lower the visibility minimums for aircraft to land during adverse weather conditions. He stated initially we sent out a user survey and did not get a lot of compelling evidence to users that they really truly needed this instrumentation. He stated we then took it a step further and set up this conference call with FedEx to get their feedback so that we could include the documentation in our study. He stated in a nutshell they said yes, it would be nice, but they don’t really need it because missed flights are such a rarity in Fargo. He stated they will complete their report and submit it to the FAA and they will probably determine it is not justified. He added that the cargo operators were the ones initially pushing this project.

Gen. Haugen stated he thinks it was a good thing we looked at this because of the number of cargo operators flying into Fargo. He stated we are not below minimums that often to justify the cost of the project.

Mr. Klein stated it would be huge investment ($3-$4 million) for little gain and the FAA indicated right out of the gate that they would not be able to support it.

Mr. Dobberstein added that FedEx did share with us that their aircraft are equipped with newer technology that allows them to land in lower ceilings.

Mr. Klein distributed all of the PFC eligible projects included in PFC Application #9, which is almost complete and ready to submit to the FAA. He stated the 37 items total $10,044,478.

Gen. Haugen moved to adjourn the meeting until the next Regular Meeting to be held Tuesday, February 11, 2020.
Second by Dr. Clark.
All members present voted aye and the motion was declared carried. Time at adjournment was 8:35 a.m.