GROSSE ILE MUNICIPAL AIRPORT



GROSSE ILE MUNICIPAL AIRPORT

AIRPORT COMMERCE PARK COMMISSION

GROSSE ILE TOWNSHIP 2ND FLOOR BOARD ROOM

Tuesday, February 17, 2009

REGULAR MEETING – 7:00 PM

PRESENT: Peter Kantz (Liaison), Chris Mans, Jim Weaks (Vice Chairman), Ron Moran (Chairman)

EXCUSED: Gregg Barton, Walter Stoll

ALSO PRESENT: Derek Thiel (Airfield/Commerce Park Manager), Pam Broomall (Airport Advisory Committee)

1. Pledge of Allegiance

2. Call to Order:

Moran called the meeting to order at 7:30 p.m. in the Grosse Ile Township Hall, 2nd Floor Board room.

3. Approval of Agenda – additions/deletions:

No action

4. Approval/Correction to Minutes - Regular meeting of January 20, 2009.

Weaks motioned to approve the meeting minutes of January 20, 2009 as presented with support from Kantz. Moran abstained. Ayes from Weaks, Kantz, and Mans. Motion Carried.

5. Airport Management Privatization

Moran: Introduced Mr. Tom Burkhart and Mr. John Russman.

Tom Burkhart: Stated that he believed that there may be an advantage financially in privatizing the management and operation of the Airport via a contract with a private management company. He and Mr. Russman came to the meeting, not to go into specifics as to how they may be able to provide this service to the Township, but to see if there was interest from the Commission to research this idea. Mr. Burkhart stated he thought the Township could benefit from privatization through anticipated cost savings. He added that Mr. Russman could take over the management and operation of the Airport resulting in benefits to the Township of lower costs while allowing Mr. Russman’s business to succeed through free or reduced rent.

Stated he would need to know what would be required of a privatized company to provide this service. He added that he would have a competitive advantage because of living in close proximity to the Airport and knowing what issues airports have with the surrounding residential community.

Weaks: Questioned the scope of their idea and if it incorporated both the Commerce Park and the Airport.

Burkhart: Stated it could be structured either way.

Weaks: Questioned the duration of the contract.

Burkhart: Stated he viewed the best length being 10 years.

Russman: Stated the most important thing in his mind was “What does the City of Grosse Ile Want.”

Kantz: Questioned Mr. Russman about his company and its size.

Russman: He replied that his business was vintage aircraft refurbishing. He employees three part-time contractual employees and requires less than 2,000 square feet of hangar space.

Kantz: Stated he believed the CPC was interested in looking at the idea of privatization, but needed to have a strategy on moving forward in addressing this idea. In his opinion, this strategy should include the scope of the privatization, qualifications required of a privatization firm, and finally requirements of privatization.

Moran: Stated that the Commission needs to do its due diligence in researching this idea. He added that prior to developing an RFP, the Commission would need to decide if this is the best thing for the Airport. He went on to say that if the CPC did formulate an RFP, Mr. Burkhart and Mr. Russman would be notified.

6. Financial Reports:

Motion made by Kantz with support from Weaks to receive and place on file the January 2009 financial reports as submitted. All ayes. Motion carried.

Thiel: Stated that the numbers regarding expenditures and revenues are misaligned a little due to capital expenditures. Stated that when adjusted, revenues were over expenditures by approximately 2%.

7. Manager’s Report:

a. Knapp’s Island Alpacas Lease Assignment

Thiel: Stated that the business has been sold to Gibraltar Bay Alpacas. The transaction has been completed and the back taxes and rent have been paid.

b. Iverson Industries – Brokerage and Update

Thiel: Stated that an agreement for brokerage services has been executed with Winston-Traitel Realty for buildings 61, 62, and 63. The original agreement was with Colliers International, but due to personnel changes at Colliers, the brokerage company was changed. Thiel added that an agreement was signed between the Airport and the auctioneer company (who purchased the machinery owned by the bank) for the leasing of all of the facilities through the middle of March at an established rate plus utility costs.

Moran: Questioned if the tax abatement has been revoked.

Thiel: Confirmed that it had.

Kantz: Stated that the agreement was in effect until the end of the March. Questioned what happens at the end of March if they are still in the facility.

Thiel: Stated that the agreement would remain in effect until they vacate the facility.

Kantz: Wanted stricter language or a separate agreement referring to what level of clean “broom clean “ is and a security deposit to insure the property is left in clean condition.

Thiel: Stated he would look into it.

Moran: Stated that the agreement has a provision allowing the charging of property taxes if

the auction company and bank do not comply with the parameters of the agreement.

Weaks: Questioned if all of the funds associated with the agreement come back to the Airport.

Thiel: Correct.

Weaks: Inquired as to whether the Commission should have been involved in negotiating this agreement and what authority the Township Treasurer had in executing this agreement.

Kantz: Stated the Treasurer had the authority on the tax issue, but as far as the rent goes, the Commission should have been involved. Recommended the Commission adopt a resolution supporting and approving this arrangement.

Weaks motioned to approve the agreement as presented between Williams & Lipton Company, Monroe Bank and Trust, and Grosse Ile Municipal Airport for the temporary lease arrangement for Buildings 61, 62, and 63. Support provided by Mans. All Ayes. Motion Carried.

Kantz: Commended the Township Treasurer for his hard work in negotiating this agreement.

c. Great Lakes Aviation Expo: January 30 – 31, 2009

Thiel: Thanked the Airport Advisory Committee for their assistance with the event. He added that the event went well and received good traffic making the event a success and worth the cost.

d. Annual Report

Thiel: Stated that included in the packet was an annual report that goes in the front of the Township annual budget. A copy was included in the packet and if any Commissioners had any recommended changes to the report, they should let him know.

Moran: Recommended that the annual report should also state that both the Commerce Park Road project and Taxiway projects were completed on time and under budget.

8. Action Items

a. Brooklynair Lease

Weaks motioned that the Airport Commerce Park Commission approve a lease between Brooklynair and Grosse Ile Municipal Airport based upon the terms and conditions outlined in the attached lease. Approval is contingent upon approval by the Township’s legal counsel and Airport insurance carrier. Support provided by Kantz. All Ayes. Motion Carried.

Thiel: Asked that the Commissioners see attached proposal letter for terms and conditions of lease agreement. Insurance requirements mandated in the ease will be reviewed with the Airport’s insurance carrier prior to lease signature.

b. Brooklynair Operating Agreement

Weaks motioned that the Airport Commerce Park Commission hereby approves the General Operating Agreement between Grosse Ile Municipal Airport and Brooklynair based upon a recommendation by the Grosse Ile Airfield/Commerce Park Manager. Support provided by Mans. All Ayes. Motion Carried.

Thiel: Stated that the following is an operating agreement allowing Brooklynair to conduct commercial operations at Grosse Ile Municipal Airport contingent upon Brooklynair providing the following:

• A statement that Brooklynair is in compliance with the Airport Operating Standards for Commercial Operations, including a description of how those services are provided if they are contracted out.

• If Brooklynair is not in compliance with the minimum standards, then a waiver, in writing, should state the reason and the duration of time for which they are requesting the waiver.

• Offer aircraft rental and/or flight training.

• Lease 150 sq. ft. of office space (with a waiver from the minimum standards section 1100.4, which mandates 500 square feet must be rented).

• Maintain a current operating agreement with the Airport with an annual operating fee of $200.

• Provide fueling for aircraft on the field under a separate airport fueling agreement with a waiver from Section 1100.3 of the minimum standards (as Brooklyn Air wouldn’t be operating as a fixed based operator).

• Operator must provide at a minimum, personnel on duty between the hours of 08:00 through 17:00 local, seven days a week (with the exception of Easter, Thanksgiving Day and Christmas Day where Operator must be available on a call out basis).

• Operator must have a suitable on-site inventory of pilot supplies available for sale.

• Operators shall provide liability and property damage insurance coverage pertaining to their specific activities in the amounts required under current insurance protection policies. All such Operators shall comply with the following where applicable:

1. Name the Township of Grosse Ile and the Grosse Ile Municipal Airport on policies as an additional insured.

2. Require each insurance company to provide the Grosse Ile Airport with proof of insurance and thirty (30) days minimum notice prior to cancellation or discontinuance of any insurance coverage.

3. Maintain worker's Compensation insurance as required by the State of Michigan, and provide proof of coverage to Airport Management.

• Operator will pay airport all outstanding rent associated with their accounts totaling $11,219,07 by September 2009.

• Starting February 2009, all tenants of Brooklynair located in Hangar 2 (hangar space) would pay the Airport rent at the rate of $200/single engine, $250/twin engine (may fluctuate based upon the size of the twin). Heat will not be provided in Hangar 2.

Kantz: Questioned if we had determined how we were going to handle the movement of aircraft on the field.

Thiel: Stated that the Airport would end up having to hire an individual to move aircraft around the Aircraft. Stated that this way aircraft movement on the field would be provided while still maintaining the appropriate insurance coverage.

Kantz: Questioned who is moving aircraft today and whom would be moving them until this policy is adopted.

Thiel: Stated Brooklynair would be until the expiration of their hangar keeper policy. Stated he was unsure of when that policy expired.

Kantz: Recommended a special meeting be set up, if necessary, to establish that policy.

c. Brooklynair Fueling Agreement

Mans motioned that the Grosse Ile Airport Commerce Park Commission hereby approves the Fueler Operating Agreement between Grosse Ile Municipal Airport and Brooklynair contingent upon approval by the Airport’s insurance carrier and legal counsel. Support provided by Kantz. All Ayes. Motion Carried.

Thiel: Stated that this action would allow the issuance of fuel cards to Brooklynair in accordance with the Fueler Operating Agreement included in your packet.

d. Sydeline Lease Approval

Kantz motioned that based upon a recommendation by the Grosse Ile Airfield/Commerce Park Manager, the Grosse Ile Airport Commerce Park Commission hereby approves lease(s) between Grosse Ile Airport and Sydeline Corp. for Building #47 (3,680 sq. ft) and approximately 21,740 sq. ft. of outside storage space at the established market rate of $ .14 per square foot/year. Lease approval(s) are contingent on approval by the Township’s legal counsel. Support provided by Weaks. All Ayes. Motion Carried.

Thiel: Sydeline Corp. has been a long-term tenant of Grosse Ile Airport and has always had an excellent payment history. The lease between GIMA and Sydeline expired on August 2007. Since that time, the tenant has been on a month-to-month basis. The newly negotiated rate represents a 30+% discount from the current rental rate for year one and a 20+% discount for year two of the lease. Justification for this decrease in rent is due to tenant- financed improvements on the facility completed by the tenant despite not being mandated in the lease.

e. Elite Endeavors Agreement

Kantz motioned that the Grosse Ile Airport Commerce Park Commission hereby enters in a contract with Elite Endeavors Event Management Company to manage the 2009 Grosse Ile Duathlon to be held Saturday, August 29, 2009. The signature, of the contract, by Grosse Ile Municipal Airport will be contingent on prior review by the Airport’s legal counsel. Support provided by Weaks. All Ayes. Motion Carried.

Thiel: The following is a resolution by the Grosse Ile Commerce Park Commission to hire Elite Endeavors to manage the 2009 Grosse Ile Duathlon. Details of the agreement are listed in the attached document outlining responsibilities and financial arrangements. The attached document will be referenced in a formal contract between Grosse Ile Municipal Airport and Elite Endeavors once both documents are merged by legal counsel.

Kantz: Mentioned that the terms of the agreement are similar to last year with some minor changes to the revenue splits and responsibilities. Mentioned that the event can use volunteers as well as sponsors.

f. Budget Recommendation

Weaks motioned that the Grosse Ile Commerce Park Commission hereby adopts a resolution of support for the proposed Airfield/Commerce Park budget for fiscal year 2009-2010. Support provided by Mans. All Ayes. Motion Carried.

Thiel: The following is a resolution of support for the proposed fiscal year 2009-2010 Airfield/Commerce Park budget. The proposed budget will be up for approval at the Township Board’s Annual Meeting, March 28, 2009. A copy of the proposed budget is attached as well as budget history from the past five fiscal years. In this proposed budget the Airport/Commerce Park has shaved approximately $212,245 from expenditures. This primarily came from the transfer of Caryn Johnson to the Township Finance Department and over $150,000 in cuts to discretionary operating expenditures. This budget assumes no revenue from either buildings 61, 62, or 63 and accounts for the winterization of both facilities. Because the managers are required to submit a balanced budget, the revenue shortfall ($127,755) has been pulled from capital reserves. After the 2.5% share of the taxiway project has been paid to the state, Thiel anticipates having approximately $500,000 in this account. Thiel added that the $340,000+ loss in revenue from the loss of Iverson is severely missed. Thiel wanted to stress that the Airport is currently operating with a staff of three paid individuals (manager and two maintenance personnel). This is the same airport that four years ago employed seven full-time paid employees. Thiel stated he is extremely proud that the Airport continues to function at its current level with these cuts in personnel.

Moran: Stated that there has been a 57% decrease in staff and cuts to costs are at their maximum. Stated that the next step is to generate additional revenue.

Weaks: Highlighted the importance in minimizing overtime costs, maximize costs, and limiting discretionary income. Stated the Airport/Commerce Park should pursue additional cost savings such as energy saving measures. Weaks also questioned workers compensation costs.

9. Sub-Committee Reports:

None

10. Discussion Items:

None

11. Chairman’s Report:

Moran: Stated that we are feeling the economic impact here at the Airport that the rest of the country is feeling and we are doing everything we can to make the best out of a bad situation.

12. Public Comment:

Broomall: Stated the AAC would help out with the Duathlon this year. Questioned if the courtesy car would remain available.

Thiel: Stated it would remain available.

Broomall: Stated she was concerned about Mr. Burkhart and Mr. Russman’s proposal because it did not list any details, had no plan for funding, and no specifics. Stated that her experience with privatized aviation services is that it drives up the cost of being at the airport for the tenant, provides no benefit to the Airport, and was wondering what the benefit to the pilot community would be. Stated that if the current Airport Manager is doing a good job, what is the reason to privatize.

Kantz: Stated that he believed that both Mr. Russman and Mr. Burkhart were only interested in knowing if the Airport was interested in the idea and with the state of the economy the CPC has to take a look at all options. Stated the CPC would not actively pursue this unless it made sense.

Broomall: Inquired as to the purpose of this being to generate funds for the Township. Stated she didn’t think that could be done by privatizing the Airport. Stated she didn’t think the same level of work could be completed for any lower cost.

Moran: Stated that the CPC has not decided to privatize the Airport, but will look into the idea.

Broomall: Requested that the AAC be involved in the discussion.

Ernie Horvath: Stated the meeting was well run and that the pace was good. Questioned if the Airport bid out its insurance, how many policies we have, and who is the carrier. He also inquired about the process for bidding out insurance and how often does it take place.

Thiel: Stated the Airport has two separate policies, one for liability insurance and one for facilities. He added that the Township handles the building insurance and the aviation liability is handled by the Airport, which is bid out every year through a broker.

Horvath: Questioned if the idea of using some of the large industrial buildings in the Commerce Park could be used for alternative uses such as filmmaking.

Moran: Stated that the CPC was interested in leasing out the facilities for any purpose that was consistent with the zoning regulations of the Township.

Ron Janowski: Questioned how much the Commissions get involved in forming the strategy and planning for the Airfield and Commerce Park. Questioned how up to speed the Commission is on the issues associated with the Commerce Park. Questioned if the Commission was aware of the deficiencies associated with Iverson’s water bill. Questioned why the roads project would have gone forward if the CPC knew there were deficiencies in utility and rental payments. Commented that he was dissatisfied with the design of the roads project. Questioned if options for the Tennis Center were considered before the Tennis Center (as it is today) was put in place. Questioned if the CPC or AAC has put together any requests for funding from the Federal Stimulus Plan.

Kantz: Stated that the CPC and AAC are actively involved in pretty much every decision made regarding the Airfield and Commerce Park and the CPC, within the first six month of existence, ran the Airport with the help of Township staff. Stated that many of the issues associated with the Tennis Center pre-date the CPC. He added that the marketing of the Iverson facilities will be advertised via a broker and we are in the initial stages of researching additional advertising avenues and uses for those facilities.

Moran: Stated that the CPC is heavily involved in the establishment of priorities, planning, and decision-making associated with the Airport and Commerce Park. In regards to Iverson’s arrearages, most tenants at the Airfield get behind from time to time. Stated that many meetings were held regarding arrearages associated with Iverson and payment plans regarding rent were established. Stated that CPC members talk to the Airport Manager on a weekly if not daily basis.

Weaks: Stated that the two-hour monthly meetings pale in comparison to the hours put in prior to the meetings establishing priorities, discussing options and researching issues. He added that on a yearly basis, the CPC assists in formulating new budgets, and on a monthly basis reviews financials, meetings with tenants, etc. Weaks stated that the CPC has members with many assets that each brings to the table.

Kantz: Stated that the roads project was developed through a collaboration of the DPS Commission, CPC, Township Board, and Township engineers. The road design was established based upon budget, tenant needs, and future needs.

Janowski: Stated that he was not happy with the road design and the amount of work completed.

Kantz: Stated that if we had an unlimited budget all roads would have been paved and all issues addressed, but that the reality of things is that we do not have an unlimited budget and thus have to do the best we can with what the resources we have. Kantz offered to meet with Janowski to discuss his issues if he was interested in doing so.

Moran: Thanked Mr. Janowski for his comments and recommended that if Mr. Janowski had any additional ideas in regards to revenue generating ideas for the Airfield/Commerce Park, he would like Mr. Janowski to pass them along.

13. Adjournment:

Motion to adjourn by Weaks with support from Kantz at 9:00 p.m. All Ayes. Motion Carried.[pic][pic]

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