Jun 17, 2020 Airport Advisory Board on 2020-06-17 1:00 PM (SPECIAL CALLED MEETING)

Welcome to the special call meeting of the City of Denton Airport Advisory Board on Wednesday, June the 17th, 2020. And we are doing this live on Zoom. All of our members are here. And anyway, we'd like to ask that they keep their system muted unless they have a need to speak. And so we do have some comment cards, one comment card, one on the phone. But the first item of business that we will consider is approval of minutes of our March 11, 2020 meeting. Hopefully everyone has had a chance to review those. And can someone make a motion that we approve those minutes? So Ed is signaling that he makes a motion to approve the minutes. I have a second for that. I'll second. It's Lauren. Okay, Lauren. Second from Lauren. And so all those in favor, I guess say aye or hold up your hand. Aye. All right. So next item on the agenda is receive a special report, hold a discussion, and provide staff direction on airport rules and regulations Section 5-11 for fuel storage tanks. This item is related to individual airport hangar owners that wish to have fuel at their location at their hangar. And maybe we're going to consider changing some of the rules that are currently in place. And I'd like to turn this over to airport manager Scott Gray to kind of update us and kind of explain this a little bit more. Good afternoon, Chairman, members of the board. This item, if you may recall, at the last meeting, we had this item, and then it was delayed, obviously, because of COVID. We wanted to bring it back instead of it as an action item, bring it back again, just to kind of reset now that we're having meetings again, start the process over. So Chase Patterson is going to give a presentation as we did the last time about this item, and then we can go ahead and answer any other questions that the board may have. All right, Mr. Chairman, members of the board, as you may recall, like Scott said from our meeting in March, this is regarding the self-fueling ordinance that was passed back in 2008. That ordinance provided guidelines for conducting self-fueling and specified things such as tank size, minimum gallons pumped per year, the fee and insurance, as well as some environmental requirements. We did include this information in our regulatory rewrite process, as it was stated in the ordinance. Earlier this year, early this year, we as staff were contacted by a tenant on the airport MedTrans regarding the ability to conduct some self-fueling out of a smaller tank, specifically a 1500 gallon jet skid tank. We did inform them of the current ordinance activity, and they requested that they could be given an exemption of some sort under their unique operating circumstances. They operate 24 hours doing various training, night activities and things like that. Staff did contact the FAA with some questions about providing such exemptions. FAA did indicate that providing that exemption could be a grand insurance violation. They also indicated that the current ordinance as written seemed problematic in their eyes, and their suggestion was to repeal that this ordinance that we currently have and then put these new regulations in our airport rules and regs. So based on the FAA direction, we provided revised language for our FBOs input. Now we do not, now both of course, not want any undue competition or anything like that. Very clear that we must allow self-fueling if requested. We did look at other area airports. Most of them did have the... So, also included is the actual ordinance from 2008, and then in the next couple of pages are some changes that we are looking at making. Now with the minimum of 96,000 gallons that was proposed in that 2008 ordinance, we are looking to completely get rid of that minimum requirement. We were unable to find any background on why that was necessarily the requirement, and there weren't any FAA regulations or anything requiring that much fuel per year. We did add a few things in here, such as the time they should provide their fuel reports when self-fueling, also a summary report of those gallons delivered to that self-fueling location. Those are some of the same requirements we require of our FBO currently. We also had put in there that they pay the appropriate fee for the... That's in the airport rules and regs, or the airport rates, I apologize, which would be 22 cents for private fueling. And then they would also have to go ahead and complete their own stormwater prevention plan, and then make sure that they have their SBCC as well, which is a spill prevention containment control prior to doing some of these fueling activities. So that's just a quick background of some of the changes that we made. I'll turn it over to Scott if he has anything else to add. Thanks, Chase. Again, we have to bring this back in accordance with our new regulations. This is just an informational item, so we will bring it back at the next board meeting. If the board desires to have an option to vote on it at that time, we can word it accordingly. If additional information is necessary, we can certainly postpone again, gather additional data and information if the board is desiring that. In accordance with our new rules, we will have to post it in advance of the next meeting and make that available to everybody before the rule would actually go into effect 15 days after the vote of the board. So with that, we'd certainly be happy to answer any questions. I do understand that we did get one written comment, and then there was one individual on the phone on the side. Okay, so is this the proper time to take the call on the phone? If you're on the phone, you're welcome to speak to us. Please state your name. Yes, this is Brian Walker. Hi, Brian. Good to hear from you. Yes, you too. I must have a delay in my video here. I'm still hearing Scott talk a little bit, but I assume everybody can hear me okay? Yeah, yes, we can go right ahead. Okay, great. Well, first of all, thank you to the advisory board and airport administration for taking my call today. I don't speak very often, and then having to do it under these circumstances is definitely unique, to say the least. I did want to say, you know, I'm speaking on a fuel storage tank agenda item. I know it's an informational item, so I appreciate you taking time to listen to this. I do agree completely with the airport administration's findings that, you know, we must allow it. I do have some concerns about the revisions to the way it's written now, and allow me to provide a little background on that. I'll start at 30,000 feet and kind of dive down to the runway there, maybe on the new runway is where we'll end up. So FBOs are the backbone of any general aviation airport, right? And if you have a healthy FBO, you have a healthy airport. And then you say, well, what's a healthy FBO, right? That's one that can provide the appropriate amount of employees, the training for those employees, the equipment necessary to move aircraft and fuel them, the facilities to store them, and the amenities that all of our high net worth individuals, which are our customers, command, right? In order to support this, the industry standard, if you talk to any of the major FBO chains, is a minimum of 1 million gallons of retail fuel at that airport per FBO. Well, as you all may be aware, we have a second FBO coming online very soon. And if you look here at Benton and extrapolate the non-retail fuel, we're far below the 2 million gallon kind of industry standard needed. The reason I say that is because it's diluting the market for both FBOs. It's putting a strain on not just us, but the new FBO that's coming in to remain healthy. So how does that relate to self-fueling? Well, that's an even bigger significant loss of revenue for both FBOs or 10 FBOs, doesn't matter how many you have. And to become an FBO, you know, we had to make a significant investment to have the fuel that we're providing to our customers. And then again, those things I just mentioned, our employees, the training, equipment, facilities, et cetera. Another FBO would have those same significant investment requirements. Now diving down a little more, about 15,000 feet. If you look, I believe in a conversation in some of the paperwork, the FAA said our 96,000 gallon requirement to sell fuel currently is arbitrary number, and I agree with that. However, I would also say that our 1,500 gallon tank size is also an arbitrary number for a tank. So what I'm recommending that we look at before we finalize this change is first, I want to reference a white paper that I found on the McKinney airport. Now this was back in 2012, and I actually worked at that airport at the time, and I remember this. And their recommendation and their conclusion in this white paper, which I'm happy to share this white paper, there's more information in it if anybody wants to see it, but was to do not actively promote self-fueling, right? When prospects ask about self-fueling at Collin County Regional Airport was the name back then. Ensure they understand the conditions they must meet to be a self-fueling operator. And then the second recommendation that I have that you consider is that we change that 1,500 gallon tank requirement to 12,000 gallons, just like the FBOs have to adhere to to be an FBO, and our existing self-fueling operation, Nebrigan Associates, he has 12,000 gallon tanks as well. And finally, I think in the background on the agenda information sheet in the fourth paragraph there, comparison to other area airports have indicated that regulations typically require a 10,000 gallon tank. So we're close to that at the 12,000 gallon tank requirement. And that would kind of eliminate any of the small one-offs to do it, because if we, and I'm not saying we don't allow smaller tanks, but the last piece of that is if we do, and it's less than 12,000 gallons, that I think we should have some requirement in there that they work with the FBO. I mean, of course I would love it to be mine, but if it's the other FBO, so be it. That's fair competition. And then allow the FBOs to fuel those smaller tanks in 1,500 gallon sizes or something like that. Because if we don't, we're opening up ourselves to a lot of ambitious issues, right? The environmental issues alone, with having random tanks all over the airport, you know, are we sure we can police that? Have the airport staff there to police it and ensure they're putting the right type of fuel in there? Is it being properly vetted? And is it being, the quality control being checked and made sure it's there? You know, it's going to be lost revenue, in my opinion, for the city and the airport if we allow that to happen. Because, you know, the administrative costs alone of trying to manage all of those tanks can be excessive. Anyway, that's my two cents on the item, and I appreciate your time and hope you'll consider those. Okay, well thank you. Do we, does management have any comments in regard to that at this point? Mr. Chairman, members of the board, thanks. Thank you for taking that call. The written statement that was received was very similar in the fact of asking the board to consider the operator to purchase from the FBO. We will reach out to the FAA to confirm that particular question. My guess is that the FAA is going to say we don't have that ability to make that requirement upon the operator. They should be able to purchase the fuel from wherever they choose to. But we will certainly ask if it is an option, then we will bring back some additional language to the board and share it with our FBOs to see if they're comfortable with that, or not, if the FAA says we cannot. In regards to some of the sizes of the tank, I certainly understand that, I believe, as was stated in the AIS, 10,000 gallons is fairly common in other area airports. So we can certainly take a look at that if there's some flexibility of smaller tanks being FBO-fueled. Other tanks can be fueled by whichever vendor they'd like. That may be an option for us to be able to move forward. But we will reach out to the compliance officers to make sure we have the right information to present to the board. If we have some additional changes, we will bring that next month. And we can certainly write the item to allow the board to choose to vote if they wish, or take more comments and postpone a vote to the following meeting. So we can make sure that happens for the next meeting. Okay. Does any of the other board members have any questions or comments at this time? Hearing none, I guess we will move forward. Thank you again, Brian. And we will continue to discuss this and research to make sure we get a good recommendation when we finally get to that point. So if there's no other comments or questions regarding this, we'll move on to the next item, which is item AAB20-014, Receiver Report, Hold a Discussion on the Impacts of the COVID-19 on the Airport. Manager Gray or is Chase going to handle this one? Mr. Chairman, I will I will do the presentation. So give me just a moment as I pull up the presentation. Okay, so everybody should be able to see the presentation now. The purpose of this item this afternoon is just to kind of bring the board up to speed on what has been happening at the airport relevant to the COVID-19 impacts. First of all, you know, the city has been under a COVID restriction since mid-March. At such time, many of the city buildings and services were suspended or closed at the time, including the terminal building has been closed to the public since the early mid-March. Federal, state, local declarations or actions have impacted travel to and from not only our airport, but any airport based on some federal regulations in some state, which are typically from the governor. The impacts of COVID-19 has been significant on the aviation industry, as I'm sure most of you have seen in the news, relevant to passenger service, mainly, but it has also impacted general service, general aviation airports like ours, resulting in reduction in operations, fuel flowage, changes in capital projects and budgets. And I'll be covering those here shortly. And then the federal government did pass a recovery funding that is available to the airport and I will cover that as well. So first is the airport facilities and staffing. As I mentioned, the airport terminal building was closed to the public and remains closed at this time since March 20th. And we've had a reduced presence of staff at the airport. All the administration staff is currently telecommuting. We do periodically go to the airport for paperwork and whatnot, but for the most part, we're operating away from the airport environment from the admin staff and management staff. We do have an operations staff person present seven days a week, as we've had in the past. But we also have our maintenance staff assisting in city-wide mowing efforts. So our two maintenance staff members are assisting in other areas of the city. In return, we have staff from parks and recs come and assist us in various mowing efforts at the airport to get them done quicker as well. So this is a pretty busy slide. So let me kind of just go over the operational portions of this and what you can see has happened. The top left box there is the operations for the month of March and then April, May below it, and then just a summary off to the right there. What I wanted to draw your attention to here is, you know, this started in March. We had an operational change between March of last year and March of this year of a reduction of 23 percent in operations, approximately 3,000 operations over that time just in March, and a year-to-date reduction of about 8 percent. So we had just started seeing a little bit of the reduction in March, and then if you move on to April, you can see that we actually had an increase in operations, and one would wonder why we would see that if we said we were having reductions as a result of COVID. Actually, what happened here in between those months is we actually had increased operations and VFR operations, both local and itinerant, mainly from the flight school. So the flight school activity actually increased in April compared to last year by some percentage points, whichever line you're looking at there, but we had a significant loss in the amount of IFR itinerant. Overall, we ended up with a 3.3 percent increase in operations, which is actually exceptional considering most of the other airports in the Metroplex have seen a significant reduction, which moves us into May. And again, you can see we had another increase, approximately 13.5 percent, again, most of which in the VFR and local, which would be pretty much the flight training or aircraft arriving VFR to our airport. We certainly had a little bit better showing in the IFR attendance. I think we started to get activity coming back in May, and we would anticipate here in June that we will start seeing the numbers start to come back to what we had last year, and then have an overall either break even to last year or slightly higher. As you can see by the time we get to May, the overall year-to-day change is just about 2 percent less, and I think we're making strides into bringing that back. Moving on to fuel flowage. Again, this one is a month behind from the ops, so the top box there is February, then March and April. You can see that we had about 14, 15 percent less fuel in February, and then when you get to March, you can see the significant change there, down to 33 percent, and then obviously going down to April, 46 percent. You can see the significance in April of the jet fuel, which is primarily the corporate aircraft, down 67 percent, whereas Avgas was up 5.5 percent, which would correlate to those increased operations in the flight school training aircraft. Overall, fuel is down currently at about 18.4 percent. In discussions with the FBO, they were probably down as much as 80 percent at some points and 60 percent, but they did indicate that it is starting to turn around. We would expect the May numbers to hopefully start showing that indication that the fuel sales are starting to go back to somewhat normal. This is just a breakdown by year, by month, just to kind of give an indication. So, if you look at April's numbers and Avgas, fairly close significant drop there in the jet fuel. The next impact area was capital projects at the airport, and following the onset of COVID, many of the capital projects, either funded by Tax.org or the city, were either delayed or postponed or even canceled, depending upon the impacts that that may have. A couple of bullet points there about some of the projects, and Chase will cover these in the construction report later on this afternoon. But the West Parallel Runway Lighting Project, you recall, that project should have already been underway, but it was delayed by Tax.org. It has subsequently been awarded, and that project should hopefully start off here in the next couple of months for construction. The proximity card access control system, that was delayed. However, it has been completed to date, and again, Chase will provide more details. The Airport Road Rehabilitation Project was also delayed. It is actually underway at this time. And then the conference room upgrades, that particular project was canceled at this time, and we're going to see if we can come back to that at a later date, once we get past some of the budget restrictions. Leads us into the airport budget impacts. Just wanted to touch upon some of these, what's been proposed. Again, we will have to go through the budget process for next year. For the current year, it's more of a cost savings analysis. So the first is revenues. We have three major categories for our revenues, lease revenues, which really hasn't been impacted that much. Those are certainly, as part of their lease, required for submittal. Fuel revenues were down about 66 percent, and fuel revenues are about $47,000. And lastly, our percentage revenues, which is the 12 percent of hanger or tie down that's collected by the FBO. That is also down about 64 percent, about $31,000, again, would correlate with less transient traffic coming to the airport. So you can see we're approximately $80,000 below in revenue to date. From the operational expenses side, we do have some cost savings measures that were put into place. So if we have open contracts or we had certain things that we had anticipated doing, if it wasn't absolutely necessary for safety, security to do, we've postponed those and then had a cost savings of about 5 percent or $64,000 reduction. We have proposed a reduction for next year's budget, and again, that has to go through a city council review process. I believe the council will be being briefed at a high level of the city's overall budget on the 30th of this month, and then departments will be submitting various budget items. Right now, we're looking at about a 6 percent reduction in our proposed budget for next year based on this year's base budget, so about a $72,000 reduction. I wanted to move into federal funding that has been made available. The CARES Act or the Coronavirus Aid, Relief, and Economic Security Act was signed into law by the president in late March, included $10 billion in funding for economic relief for airports across the country, so all types of airports, not just general aviation. I wanted to talk a little bit about the ones that have some impact on our airport, which is 100 percent funding on 2020 airport improvement grants. There's a large amount of money that's available, but basically what was done was if there was a scheduled grant being awarded to an airport, normally at a 90/10, so 90 percent federal, 10 percent local match, those are automatically being funded at 100 percent share for federal. So for us, DTO, we were programmed to receive about $400,000 for the design of the primary runway repairs, so not having to provide our $40,000 portion of that, that's being covered by a DFA. There was another $100 million available to general aviation airports. It's based on the category of the NIPIAS that you are in. There's four or five categories, the highest being national, which is what Denton Enterprise Airport is. They did a formula to determine the amount of money that the general aviation airports would receive. Out of that formula, we are going to receive an additional $157,000 in funding. That funding, unlike our AIP grants, can be used for any lawful purpose for the use of airport revenue. So what that means is it not only can be used for capital, it can also be used for operational expenses, which typically grants from the FAA or tech stock cannot be. So this one has a lot more broad use for it, can be used for payroll, can be used to buy supplies, can be used for capital projects as necessary. That money has not been released to us yet, but we have to inform tech stock what we are going to propose to use that, and we have not formulated that at this time. I did want to touch upon this, which is really under the purview of the economic development department, but it is significant for some of our tenants. There was also $349 million available in the payroll protection program to businesses through the Small Business Administration. So small businesses with less than $500 million, which is pretty much all of our businesses at the airport, can get a loan to cover two and a half times their average monthly payroll. They would get loan payments deferred for six months. One of the key provisions of the PPP program was that if they met certain conditions, kept a certain number of employees they had before COVID hit, that actually the loan would be forgiven. So it would be -- it would be -- wouldn't have to be paid back. So that's a real high-level look at that, whether there's any funding remaining in that program or other funding opportunities for our tenants to explore, we recommend that you reach out to the city's economic development department at that phone number, and they would certainly help guide you through the various funding options that are available. So with that, we can open it up to questions. I'll stop sharing so we can go back to the screen. Okay. All right. Does any of the board members have any comments or questions? Arun? Hi. So the initial numbers in the first two slides are the operations and the fuel numbers. Do you think that -- how would the discussion about the tanks, which we had earlier, do you think that will have any impact on those numbers? Either a yes or a no on that decision. See if I understand your question. So seeing the numbers that I just presented, if we were to have the self-fueling tank issue that we talked about, would that have any impact on those numbers? My guess is probably not. MedTrans -- MedTrans continue to operate for the most part during COVID, and they will continue to do so whether they have a tank or they don't have a tank. They have training requirements that they have to meet. Now, that said, as they may get busier or possibly expand at their location, they could have more operations and then, obviously, fuel sales. But as we talked about in the previous item, they've asked for a 1,500-gallon tank. In the scheme of things, the 1.7 million gallons that are pumped roughly, that's a pretty small percentage of what they're going to pump over time for the year. Okay. Thank you. Any other board members have any questions or comments? Okay, very good. Thank you for that report on how the COVID-19 is affecting our airport. So I guess the next item is we move on to staff reports. Is Chase going to handle this? Is that kind of what we normally get in those reports, Chase? Yes, Mr. Chairman. We are going to go over the construction report side unless there are any questions regarding the operations report that Scott kind of touched on in his presentation. So if there's no questions on the operations reports, we'll move right on to construction. So the first project on the list there is the West parallel runway lighting. That project has been awarded to the contractor and does involve installation of runway lighting and signage as well as a new electrical vault for those regulators that control all of our airfield lighting. All of the current regulators that are in the bottom of the tower will be moved into this new vault and everything in one central location. We expect that project to get started in mid to late July. That's still the case. Due to COVID, that has, like Scott mentioned, been pushed back a little bit. The procurement process for some of these items has been pretty slow. But we do expect mid to late July, unless we hear anything different at this point. It is going to be an 82-day project that's expected to be completed in mid-October. We will have some runway closures during that time, mainly for the West parallel runway that we're working on and then we'll complete certain items such as changing designators and repainting as night work as much as possible. Then we're going to move down to the proximity card access. So as everyone knows, we have been in the process of getting that completed. All of our gates do have the access control system installed. We've now completed the installation of cameras at every automated vehicle gate as well as that wireless access to allow staff to make those changes or make adjustments in real time from the computer instead of having to go out and do that in the field. Another note I wanted to touch on on this project, we were able to bring a lot of this work in-house and save a significant amount on the project. I don't have the number in front of me, but we were able to get this done mainly by city tech services staff. So they helped out a bunch during this project. We're currently working on a procedure for administrative staff to be able to give out these cards to folks that need to come in or drop off paperwork and stuff like that. We'll be working on that over the next couple of weeks and expect to hopefully return in some capacity to do that in early to mid-July. Then I'll move down to the airport roads project. So we did begin the internal construction of the airport roads on the south end of the airport on June 1st. Now this project involves all repairs to some extent to every road on the south end of the airport. They started with the closure of John Carroll. That was started, like I said, Monday, June 1st and are currently working on John Carroll and a portion of Skylane. Now that project is expected to take at least three months, so again October time frame is when we expect completion of that project. So we'll continue to update the board on this project as well as the West Parallel Runway project as more things occur. Go ahead, Mr. Chairman. Yes, well thank you. Does any of the board members have any comments or questions? If you haven't been to the airport lately, it is a flurry of activity out there, especially where they're rebuilding the roads. They've got pretty much the existing road is gone now, so they're in the process of stabilizing a good base and bringing that back. So that's going to be a benefit to us, especially where they're getting the heavy fuel trucks and bringing in the fuel to the to the fuel, larger fuel tanks there. So if nothing else, let's see, I think that pretty much winds things down. Let's see, the airport committee, are we, how are we standing on that, Mr. Manager? Has anything been sent to the city council airport committee lately? Certainly, Mr. Chairman, members of the board. There were a number of things that have been completed, I think, since our last airport board meeting. There were four collateral assignment of leases for Sykes-Bond investment for four of their leasehold areas that were all approved by the council. There were also completed the lease assignment from one of our existing tenants to a new tenant, which was approved by the council. And then there was a third amendment to the knee break lease regarding the use of the fuel farm. And then a consent to a consent to a sublease agreement of that fuel farm to US Trinity Aviation that was also approved by the council on the ninth. We do have one item pending collateral assignment associated with that lease assignment that took place. It was, it was scheduled for the 23rd. That meeting has been canceled. We're working on getting that meeting rescheduled to meet the to meet with the CAC before it goes to council. We're hoping to have that here in the next week. And then it will go to the next council meeting won't be till towards the end of July. There'll be a three week break in July. Okay, I know council has approved that fuel agreement with Nibrig from US or from Trinity Aviation to them. Have they actually started any operation yet? Or they commissioned to do that? Or is there still something that's got to be worked out? They have not formally requested to start. They have the ability to they've met all the requirements, but I'm guessing it will be several weeks before they will notify us when they're ready to open. And we'll let them go. Very good. Well, that brings us to item three concluding items, which is our opportunity to request anything we want to put on the agenda for the next meeting. And so does any of the board members have anything they they wish to request that we consider at a future meeting or any questions you have about some of the things that have been on our agenda at this point? Any any comments from the board members? Mr Chairman, I do have one item as we talked about during the regulatory rewrite process over a number of meetings last year that was passed by the council in February. And as part of that, all of our businesses are required to get airport business permits. As chase alluded to, we're working on processes to be able to accept paperwork since we can't have people in the terminal building and start processing that one of the requirements is that those airport business permits after administrative approval are ratified by the board. As we talked about during the process, those entities that are already at the airport businesses that existed, although they're invited to come to the board meeting and introduce themselves to the board and explain what they're going to do, they're not required to do so. But we will still bring their permits before the board to ratify them as we get them. We do have one new, which is the one we just talked about for the airport, the new airports FBO. One of the snags that we have is the chapter three requires that those ratifications be at a regularly scheduled meeting. So we're working to find out if we can get back to the regular schedule, whether it be via video or live for the next meeting. And if we do, there'll be additional items on your agenda for the specifics or ratifications of those permits that we've processed. So far, so far, we've only processed one, we've got three others that are in the works, and I'm sure we'll start to get more as we send the letters out asking folks to submit. So just want to give you a heads up that that is a process that will have to take place. We're working through that issue of a regularly scheduled meeting at which time when we do have one, we'll have whatever we have available and brought forward to the board. Okay, very good. Well, it's not hearing anything from our board members or saying hands up. Yes, Arun. So why can't we have the regular, not in person, but similar Zoom meeting on the regular timings? We're actually working to see if we can facilitate a regularly scheduled airport board meeting on Zoom. There's internal confusion on times that meetings can start and support services. So we're looking into that now to see if we can actually have our regularly 530 meeting. And if that happens, then the next meeting very well could be via Zoom and be at our regular time and date. Okay, thank you. Okay, very good. All right. Well, thank you all for your time and we appreciate the public input we received from the two FBOs. And if there's no further business from anybody, we will consider this meeting adjourned at 1 46 p.m. Thank you. Thank you.