MUNICIPAL AIRPORT AUTHORITY
The Regular Meeting of the Municipal Airport Authority of the City of Fargo, North Dakota, was held Tuesday, March 24, 2020, at 8:00 a.m. in the Airport Boardroom.
The members present or absent were as follows:
Present:Lind, Engen, Haugen, Clark (via phone), Linn
Absent: None
Others: Bossart (via phone), Strand (via phone)
Chairman Linn presiding.
Approved the Airport Vouchers Totaling $27,974.64:
Mr. Engen moved to approve the airport vouchers totaling $27,974.64. Second by Haugen.
On the call of the roll, members Lind, Engen, Haugen, Linn voted aye. Absent and not voting: Clark (not yet joined by phone)
No member absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to TL Stroh Architects:
Mr. Engen moved to approve the individual voucher in the amount of $365.00 to TL Stroh Architects for partial payment request for architectural services in connection with the Maintenance Shop Reroofing Project.
Second by Mr. Lind.
On the call of the roll, members Lind, Engen, Haugen, Clark, Linn voted aye. No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to TL Stroh Architects:
Mr. Engen moved to approve the individual voucher in the amount of $14,720.70 to TL Stroh Architects for partial payment request for engineering services in connection with the SRE Building.
Second by Mr. Lind.
On the call of the roll, members Lind, Engen, Haugen, Clark, Linn voted aye. No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Mead & Hunt:
Mr. Engen moved to approve the individual voucher in the amount of $106,680.00 to Mead & Hunt for partial payment request for engineering services in connection with the Cargo Apron Expansion Project, AIP49.
Second by Mr. Lind.
On the call of the roll, members Lind, Engen, Haugen, Clark, Linn voted aye. No member being absent and none voting nay the motion was declared carried.
Discussed Airport Operations and Flight Schedules:
Chairman Linn stated she wants to thank Mr. Dobberstein and the airport staff, the airport tenants and vendors, contractors, etc. for doing such a great job in this difficult time. She stated all of these efforts will continue to keep our passengers safe.
Mr. Dobberstein stated as you can see the parking lot is pretty barren today. He stated load factors right now are 20% on a good day. He stated the airline schedules are ever changing. He reviewed current cancellation information and anticipated changes for April. He stated we are keeping the TSA and airport concessionaires current on information as we receive it. He stated the AAAE sent a notice this morning that major US airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights throughout the United States. He stated the exception to that will be cargo. He stated FedEx and UPS are extremely busy. He stated UPS is almost back to holiday peak activity. He stated they are also the lifeline for hospitals and testing labs across the country and across the world. He stated he does not see any decrease in cargo operations.
Mr. Dobberstein stated in the terminal building the activity is way down. He stated the TSA checkpoint is down to one lane. He stated the giftshop and restaurant are adjusting their hours to match flight schedules. He stated the restaurant is adhering to the Governor’s order on bars and restaurants. He stated the restaurant is offering grab-n-go items and both bars are closed.
Mr. Dobberstein stated the federal financial relief package will include grants and loans for airlines and their employees. He stated there is also $10 billion in funding to help airports deal with the crisis. He stated we do not know the specifics on how that funding will be allocated. He stated airports in our region with significant debt service are hurting significantly. He stated we are fortunate that we do not have an empty parking garage on which we have to pay debt service.
Mr. Dobberstein stated he has been in contact with staff members of our congressional delegation and letting them know the needs of the airports.
Mr. Dobberstein stated we do not have any debt service right now so financially we are in pretty good shape compared to a lot of airports around the country. He stated with that comes a lot of pain and suffering for our concessionaires. They are all taking a hit. He stated he has had conversations with representatives from SP Plus and they have requested an abatement of the minimum annual guarantee and go with a straight percentage of revenue. He stated that would go into effect April 1 and stay in effect until traffic significantly increased. He stated this will be reviewed on a monthly basis.
Mr. Dobberstein stated he has also reached out to all of our airline representatives. He stated he has already received requests for either an abatement or deferral on rents and charges. He stated some have indicated three or six month periods. Mr. Dobberstein stated he would recommend we offer a three month deferral of charges (terminal rent, landing fees, jetway rental, ARFF charges, security fees, etc.) for April, May and June and that we offer this to all of the airlines. He stated starting April 1 all of the charges to the airlines will be deferred for those three months. He stated that is a starting point and it could go even longer than that. He stated the relief package from the federal government may be for help to the airlines in paying their financial obligations. He stated we should expect that the airlines pay their obligations prior to April 1.
Mr. Dobberstein stated the $10 billion aid package to airports will probably look for projects that are shovel ready. He stated we are still moving forward with the Cargo Apron Expansion Project. He stated UPS confirmed yesterday that they are still moving ahead with their building project in Fargo as they do not see their business slowing down. He stated we will also be receiving bids April 7 on the SRE Building. He stated we are also moving forward with plans for the Car Rental Ready Lot at least to the point where we get bids. He stated the plan was to construct the project in July but we will rely on Mead & Hunt to determine the best time to complete that project.
Mr. Engen stated he had a couple of comments. He stated any deferment or abatement agreements should contain language that these agreements would not negate any claim on the part of the MAA should any of these entities go into bankruptcy.
Mr. Dobberstein stated we will work with Attorney Bossart on language for the agreements. He stated our current contract with SP Plus does protect us as a creditor to be eligible to get in line for their obligation. He stated SP Plus did advise us that their business interruption does not cover acts of war or viruses. He stated that is common for most business interruption insurance now.
Mr. Dobberstein stated in 2019 SP Plus paid us an average of $268,138 per month so removing the MAG monthly amount of $225,000 we will be down significantly. He stated the average revenue stream from airlines per month in 2019 was $129,300.
Mr. Dobberstein stated he and Attorney Bossart will work with legal counsel for SP Plus to get that abatement in place for April 1.
Mr. Engen moved to authorize Mr. Dobberstein and Attorney Bossart to act on our behalf to draft an agreement with SP Plus for the abatement of the minimum annual guarantee effective April 1, 2020, for the months of April, May and June, and go to a strict percentage, as allowed in the lease agreement, and that the abatement be reviewed every 30 days to determine the time of return to the MAG or to make other adjustments as necessary.
Second by Mr. Lind.
Mr. Dobberstein stated SP Plus may also qualify for some of the federal stimulus package that will be offered.
Gen. Haugen stated we are going to lose a lot of income yet we still have to keep the airport open. He stated thank goodness for our reserves.
Mr. Dobberstein stated the parking lot, car rental revenue, airlines, giftshop and restaurant in 2019 was an average of $527,636 per month. He stated the car rental agencies also have minimum guarantees but they should have no problem exceeding that $65,000 minimum. He stated the giftshop and the restaurant do not have any minimum guarantees.
Chairman Linn called for a vote on the motion.
On the call of the roll, members Lind, Engen, Haugen, Clark, Linn voted aye. No member being absent and none voting nay the motion was declared carried.
Mr. Engen moved to authorize the Executive Director to offer a three month deferral effective April 1, 2020 (April, May, June) to the airlines serving Fargo.
Second by Gen. Haugen.
On the call of the roll, members Lind, Engen, Haugen, Clark, Linn voted aye. No member being absent and none voting nay the motion was declared carried.
Other Business:
Mr. Engen asked if the fifth member the Airport PEC (Position Evaluation Committee) has been named.
Chairman Linn stated the fifth member has not been selected. She stated she talked with Mr. Don Kilander last weekend and he was going to visit with Jane Pettinger on the selection of the fifth member. She added that Don has just returned from Florida so he would be staying at home for two weeks.
Gen. Haugen stated with interest rates being so low right now the board should consider looking at borrowing funds to prevent the delay of any of our projects should there be an interruption in any of our funding for those projects. He stated we may want to consider putting out an RFP for borrowing some funds.
Chairman Linn stated that is a good thought and we can continue to discuss that.
Mr. Dobberstein stated one other matter is the special assessment deferral issue that we have been dealing with the City of Fargo on for over a year.
Attorney Bossart stated the City of Fargo agreed to the special assessment deferral for BN-16-C in November 2018. She stated she has been working with Assistant City Attorney Nancy Morris on the agreement but she has not been able to get that done. She stated Mr. Dobberstein has advised her that the MAA continues to get notices of payment due from Cass County, along with late fees.
Chairman Linn suggested we give the City a deadline of May 1 or May 15. She stated it has been a year and a half and the delays are just going to continue unless we give them a deadline.
Attorney Bossart stated all of the information has been provided and she continues to follow up.
Commission John Strand asked Attorney Bossart to copy him in on any emails and he will see what he can do to move the process along.
The meeting of the Municipal Airport Authority was adjourned until the next regular meeting to be held Tuesday, April 14, 2020.