MUNICIPAL AIRPORT AUTHORITY
The Regular Meeting of the Municipal Airport Authority of the City of Fargo, North Dakota, was held Tuesday, February 9, 2021 at 8:00 a.m. in the Airport Boardroom.
The members present or absent were as follows:
Present: Haugen, Engen, Cosgriff, Linn, Lind
Absent: None
Others: Bossart, Strand (via zoom)
Chairman Lind presiding.
Approved the Minutes of the Regular Meeting of the Municipal Airport Authority Held January 12, 2021 and the Annual Meeting Held January 26, 2021:
Ms. Linn moved to approve the minutes of the Regular Meeting of the Municipal Airport Authority held January 12, 2021 and the Annual Meeting held January 26, 2021.
Second by Gen. Haugen.
All members present voted aye and the motion was declared carried.
Approved the Airport Vouchers Totaling $179,886.88:
Mr. Engen moved to approve the airport vouchers totaling $179,886.88.
Second by Ms. Linn.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind 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 $1,341.25 to TL Stroh Architects for partial payment request for architectural services (testing services) in connection with the SRE Building Project.
Second by Gen. Haugen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind 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 $4,295.00 to TL Stroh Architects for partial payment request for architectural services (construction administration) for the SRE Building Project.
Second by Gen. Haugen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Northern Improvement Company:
Mr. Engen moved to approve the individual voucher in the amount of $58,522.50 to Northern Improvement Company for Partial Payment Request #6 for construction of the Cargo Apron Expansion Project, Phase IV (ASUP50).
Second by Gen. Haugen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved the Individual Voucher to Flint Communications:
Mr. Engen moved to approve the individual voucher in the amount of $14,330.72 to Flint Communications for partial payment request for 2021 Airport Marketing Program.
Second by Gen. Haugen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Received Communication from Mead & Hunt Regarding Proposed Consulting Services for Street and Apron Light Replacement Project:
The proposed Consulting Services Agreement from Mead & Hunt for the Street and Apron Lighting Replacement Project (2021) was received and filed without objection.
Mr. Dobberstein stated we discussed this project at the last meeting. He stated this project would replace the existing high pressure sodium lighting systems in the north general aviation area and the Westside Terminal apron with LED fixtures. He stated the scope of services provided by this contract would be design and bidding services as well as construction services. He stated Mead & Hunt is proposing a fee of $20,350 for design and bidding services, and a maximum cost of $5,800 for construction services.
Mr. Jeff Klein, Mead & Hunt, was recognized and stated this project would be eligible for some type of federal funding so it is necessary to follow all of those requirements.
Gen. Haugen moved to approve entering into a contract with Mead & Hunt for consulting services as outlined for the Street & Apron Lighting Replacement Project.
Second by Mr. Engen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Received Change Order #3 to Rickard Electric for an Increase of $3,204.23 for Changes to the Electrical Portion of the SRE Building Project:
Mr. Dobberstein stated this change order includes one item for the new building and one for the existing building. He stated the change in the new building for an increase of $1,605.75 is to change the receptacles shown on the plans as standard receptacles to CFCI per NEC and local inspector’s guidelines. He stated the change to the existing building for an increase of $1,598.48 is for demolition that was needed in the existing maintenance building to make way for changes to doors and the passage into the addition.
Ms. Linn moved to approve Change Order #3 for an increase of $3,204.23 to Rickard Electric for the electrical portion of the SRE Building Project.
Second by Gen. Haugen.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Approved Request from ND Aviation Association Requesting Sponsorship of Fly-ND Virtual Conference, March 8-9, 2021 (Formerly the Upper Midwest Aviation Symposium):
Mr. Dobberstein stated our sponsorship history for this conference is $5,000 when the conference is held in Fargo and $2,000 when it is held in another city in North Dakota. He stated this year the conference is virtual and he is recommending the $2,000 sponsorship.
Ms. Linn moved to approve the $2,000 sponsorship of the 2021 Fly-ND Conference.
Second by Mr. Engen.
On the call of the roll, members Haugen, Engen, Clark, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Received Communication from Reliance Leasing, Inc. Requesting a Waiver of Minimum Annual Guarantees for CY2020 and CY2021:
The communication (no date) from Dani Arnold, Vice President, Avis/Budget, was received and filed without objection.
Mr. Dobberstein stated there were some verbal conversations with our car rental agencies early on in the virus situation regarding the minimum annual guarantee (MAG). He stated the MAG for CY2020 was $65,000. He stated the car rental agencies pay 10% of their gross revenue in accordance with their lease agreements. He stated when we received those early inquiries we decided to wait and see how the year went and fortunately all of the agencies exceeded the MAG, with the exception of Budget/Payless. He stated they were $15,353.56 short. He stated Ms. Arnold is requesting a waiver of the MAG for 2020 and 2021. He stated we will not know until early January of 2022 how they come out for 2021. He stated we are optimistic traffic will pick up and they will all meet the MAG which increases to $70,000 in 2021.
Mr. Dobberstein stated there is a federal grant in process for airports across the country to compensate for MAGs that are not met. He stated we have not yet seen the final details of this grant. He stated he believes the grant will allow us to be reimbursed for this difference. He stated there is also a possibility that we may pick up some of the MAG in place for the parking lot up until July 1, 2020, when we changed to a management contract.
Mr. Dobberstein stated to answer someone’s question earlier, we do not have any other concessionaires with MAGs.
Mr. Cosgriff asked how we would means test this to make sure it was related to the pandemic as opposed to poor business practices.
Mr. Dobberstein stated he feels it was probably due to lack of passenger traffic. He stated with car rental agencies it is mainly the consumer’s choice which agency they use.
Chairman Lind stated Ms. Arnold did mention in her letter that Avis and Budget are owned by the same parent company and they pushed what business there was over to the Avis brand, so Budget was affected the most.
Ms. Linn stated she can understand Mr. Cosgriff’s comment but we have not had any issues surface in past financial reviews with their business practices. She stated this is a pandemic and maybe we should be observant and cautious going forward to make certain that is not the case.
Mr. Cosgriff stated his concern is more from a competitive standpoint.
Mr. Dobberstein stated these agencies are really at the mercy of the Avis/Budget corporate group.
Chairman Lind stated given the enormous drop in traffic he would be in favor of granting the waiver for 2020 but not yet for 2021. He stated we can cross that bridge if we come to it.
Gen. Haugen moved to approve the request for a waiver of the minimum guarantee for 2020 only, and that it be extended to all of the car rental agencies.
Second by Ms. Linn.
On the call of the roll, members Haugen, Engen, Cosgriff, Linn, Lind voted aye.
No member being absent and none voting nay the motion was declared carried.
Received Update Regarding Property Sale to Mathern:
Attorney Bossart was recognized and stated she does not have much more to report on the property sale to Terry and Patricia Mathern. She stated she has prepared the Quit Claim Deed. She stated she also drafted a letter to the FAA verifying that no federal funds were used to purchase the property and that it was donated. She stated they have continually been following up with Cass County Abstract but have heard nothing and that is the hold up on this process.
Received Update Regarding Property Tax Exempt Status of Pay Parking Lot Areas:
Mr. Dobberstein stated when we changed our agreement with SP Plus for the pay parking lots effective July 1, 2020, from a lease agreement to a management contract, he believes the property would now be exempt from property taxes. He stated he submitted a request to the city assessor and he in turn passed it on to the city attorney’s office but we have heard nothing. He stated Attorney Bossart has had some conversations with Assistant City Attorney, Nancy Morris.
Attorney Bossart stated the original concession agreement was prepared by SP Plus. She stated in the agreement is specifically talks about it not being a leasehold interest but in another section it stated the concessionaire will be responsible for all taxes. She stated two portions of this agreement contradict each other. She stated SP Plus has been paying the property taxes in the past. She stated regular leasehold interest language we have in other leases is not contained in this agreement. She stated she would say there is an argument to be made that it should be exempt, but the pattern and practice has been that they have been paying the taxes. She stated she reviewed the management agreement and it does not contain the term “lease.” She stated Nancy Morris has asked her to give her position in writing. She added that it is her position that the management agreement was signed effective July 1, 2020, and any property taxes for 2020 should be prorated prior to that date and not beyond that date.
Airport Construction and Security Update:
Mr. Terry Stroh, TL Stroh Architects, was recognized (via zoom) and stated we are in the painting process in the new building. He stated there should be permanent power and heat to the new building next week. He stated the majority of the overhead doors are operational. He stated all of the materials to finish the project are on site and they are not waiting for anything else to arrive.
He stated the original schedule was to be done by the end of February but we are just a couple of weeks behind that so we are looking at the middle of March.
Mr. Dobberstein stated the TSA issued a security directive last week mandating that masks be worn at all times on airport property, unless you are consuming food or beverage. He stated they are talking about $1,500 fines. He stated the TSA did consult with the Fargo Police Department should we need assistance with escorting someone off the premises who does not comply. He added that the same directive applies to other transportation facilities around the country.
Mr. Dobberstein stated at the last meeting we discussed project funding. He stated we currently have a little over $2.4 million in 2021 AIP entitlements. He stated he and Jeff Klein, Mead & Hunt, have been working with the FAA to allow us to take $330,429 (15% maximum allowed) to amend Grant 51 awarded to us last year for the cargo apron. He stated we are still waiting for some final information to come from the FAA. He stated the balance (approximately $2.1 million) would then be carried over to start to pool some funds for the replacement/reconstruction/rehabilitation of the Westside Terminal ramp.
Other Business:
Chairman Lind asked for an update on the Airport Position Evaluation Committee.
Ms. Linn stated at the last meeting on January 8, there were very specific motions on the positions being reviewed. She stated there has been some misunderstanding from the City of Fargo’s perspective on the APEC and the MOU. She stated it looks like we will be having one more meeting to finalize these positions in the next week or so. She stated it has been a very interesting experience and the committee members have worked very cooperatively together.
Gen. Haugen stated he would like to revisit the subject of the mask mandate. He stated there are a lot of areas on that airport that have nothing to do with the TSA.
Darren Anderson, Assistant Director, was recognized and stated there are still a lot of questions and answers going back and forth regarding this directive.
Gen. Haugen stated it seems there are a lot of things implied in this directive but not a lot of specifics. He stated our employees need to know when and if they need to be wearing masks.
Chairman Lind read the following statement:
The Municipal Airport Authority of the City of Fargo, North Dakota will meet in Executive Session to receive an update regarding on-going discussions between designated representatives of the Authority and the City as those relate to the relationship between the two political subdivisions, including an amendment to the Memorandum of Understanding signed by the parties in January 2020. These discussions have financial implications and an open meeting of these discussions, strategy and direction by the Chairman and/or the Authority’s attorney, would create an adverse fiscal effect on the bargaining position of the Authority.
This Executive Session has been authorized pursuant to North Dakota Century Code §44-04-19(9).
Ms. Linn moved the Airport Authority move into Executive Session.
Second by Mr. Engen.
All members present voted aye and the motion was declared carried.
Time at recess was 8:33 a.m.
The Executive Session began at 8:35 a.m. and ended at 9:40 a.m.
The Regular Meeting reconvened at 9:45 a.m.
Mr. Cosgriff now absent.
Chairman Lind stated during the Executive Session the MAA voted to work with the COF to amend the MOU and continue to negotiate with them as need. He stated we look forward to continuing our relationship with the City of Fargo.
Mr. Engen moved to adjourn the meeting of the Municipal Airport Authority until the next Regular Meeting to be held Tuesday, February 23, 2021.
Second by Gen. Haugen.
All members present voted and none voting nay the motion was declared carried.
Time at adjournment was 9:46 a.m.