RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE Minutes from the Meeting November 18, :00 a.m.

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1 In Attendance: RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE Minutes from the Meeting November 18, :00 a.m. Dr. Kosta Arger, Trustee* Steve Katzmann, Trustee* Rick Murdock, Trustee* Adam Mayberry, Trustee** Bob Larkin, Trustee** Jerry Hall, Trustee Bill Eck, Trustee Marily Mora, President/CEO Ann Morgan, Fennemore Craig Jones Vargas Rick Gorman, Chief Financial Officer James McCluskie, Vice President of Planning, Engineering & Environmental Management Leah Williams, Manager of Accounting Tony Osendorf, Manager of Budget & Finance Laurie Weeks, Manager of Concessions Joyce Humphrey, Manager of Purchasing & Materials Dave Lazo, Manager of Engineering & Construction Dan Bartholomew, Manager of Planning/GIS Patrick North, Senior Internal Auditor David Pittman, Director of Facilities & Maintenance Paula Murphy, Internal Auditor Chrissy Gonzales, Project Technician * Denotes Finance Committee member ** Denotes Finance Committee alternate TOPICS DISCUSSED: I. REVIEW OF MEETING MINUTES FROM SEPTEMBER 9, 2014 A motion was made by Trustee Katzmann, Seconded by Trustee Murdock, and the Committee unanimously approved the minutes from the September 9, 2014 Finance and Business Development Committee meeting. II. PUBLIC COMMENT Page 1 of 6

2 III. ITEMS TO BE PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR REVIEW AND RECOMMENDATION TO THE BOARD: A. #14(11)-56 AUTHORIZATION TO AMEND THE PRESIDENT/CEO AUTHORITY TO ENTER INTO CONTRACTS FOR THE DESIGN AND CONSTRUCTION OF THE FEDERAL INSPECTION SERVICES (FIS) FACILITY IMPROVEMENTS, EXEMPT FROM COMPETITIVE BIDDING PURSUANT TO NRS (EMERGENCY CONTRACTS), FROM AN AMOUNT NOT TO EXCEED $631,000 TO $3,750,000, WHICH SUM INCLUDES EQUIPMENT REQUIRED TO FACILITATE INTERNATIONAL AIR SERVICE OPERATIONS Staff gave a presentation requesting authorization to amend the President/CEO Authority to enter into contracts for the design and construction of the Federal Inspection Services (FIS) Facility Improvements, exempt from competitive bidding pursuant to NRS (Emergency Contracts), from an amount not to exceed $631,000 to $3,750,000, which sum includes equipment required to facilitate international air service operations. Trustee Arger inquired about the weapons cleaning and storage room, and its use by Customs and Border Protection (CBP). Staff stated that the weapons cleaning and storage room is required by the 2012 CBP technical standards, which requires all officers to be able to maintain and store their weapons in a secure safe. Trustee Arger also asked if the Reno-Tahoe Airport Authority (RTAA) is required to have a weapons cleaning and storage room. Staff stated a weapons cleaning and storage room is provided to the Airport Police. Trustee Katzmann asked whether the Federal Aviation Administration (FAA) would disapprove increasing the level of Passenger Facility Charge (PFC) funding due to the significant increase in project costs. The RTAA is asking for six (6) times the amount from the first request. Staff stated that the difference in project scope and costs are due to CBP s unwillingness to waive some of its technical standards. The FAA, who has its own technical requirements, will likely understand that the RTAA is being held to these standards and approve PFC funding for eligible project scope. Trustee Arger asked for clarification as to what would happen if the Airlines disagree with this project after consultation required due to the size of the project cost increase. Staff stated that if the airlines disagree with a project, then RTAA will be required to address the airline s concerns and the level of FAA review becomes more extensive. While the airlines don t have the ability to stop the project, the RTAA will need to make its case about why this investment will improve the safety, security, and capacity of the Reno-Tahoe International Airport (RTIA). Page 2 of 6

3 Trustee Murdock asked for clarification regarding whether the FIS construction project will be completed and the facility up and running by December 16, In addition, he requested the status of CBP approval of the landing rights for Volaris Airlines (Volaris). Staff stated that the building will be ready December 16, President/CEO Marily Mora stated that as of today, the CBP has not approved the landing rights for Volaris. Trustee Larkin asked for clarification as to why there is a difference between the $1,500,000 to $2,000,000 cost estimate presented at the Board Retreat held on October 28, 2014, and the $3,750,000 presented today. Staff stated that on October 22, 2014, the CBP finally issued its approval of the floor plan. In anticipation of the Board Retreat, the RTAA worked with the contractor to get a preliminary cost estimate based on what was known at that time. Only once the floor plan was approved could the contractor finalize their cost estimate. At the time of the Retreat, the RTAA was still negotiating with the CBP on what the final configuration of the facility would be, and what components would be part of it. For example, one of the major components unknown at the time was the requirement for emergency backup power, and the full extent of the security and Closed-Circuit Television Camera (CCTV) items. Trustee Katzmann inquired as to whether the RTAA has looked into the return investment of the $3,750,000. President/CEO Marily Mora stated that the RTAA had InterVISTAS study the economic impact of new air service on four different routes, one of them being Guadalajara. The study determined the economic impact of twice weekly air service to the local community would be $20 million per year. A motion was made by Trustee Katzmann; Seconded by Trustee Murdock and the Committee unanimously recommended this item [#14(11)-56] to the Board for information, discussion, and possible action at the upcoming Board meeting. B. #14(11)-57 APPROVAL OF REVISED PASSENGER FACILITY CHARGE (PFC) APPLICATION C-00-RNO IN THE AMOUNT OF $9,787,990 TO CONSTRUCT/ACQUIRE VARIOUS CAPITAL ASSETS FOR THE RENO-TAHOE INTERNATIONAL AIRPORT Staff gave a presentation requesting the approval of revised Passenger Facility Charge (PFC) Application C-00-RNO in the amount of $9,787,990 to construct/acquire various capital assets for the Reno-Tahoe International Airport (RTIA). Trustee Arger asked for clarification on the FAA rule that if an approved PFC project increases by more than 25%, then the Reno-Tahoe Airport Authority (RTAA) would have to reapply. Staff responded that if a project is already in an approved application, the process to obtain additional funding requires an airline consultation and a formal amendment. This process is less extensive than a new application. In regards to the Sand Storage Building, the project does not meet the 25% increase threshold going from $310,000 to $380,000, an increase of 22.6%. Page 3 of 6

4 The reason this previous approved project was required to be included in the new PFC Application #12 was the changes in work scope from new construction to remodeling an existing building at a different location. The magnitude of change was determined by the FAA to be sufficient to treat the project as a new effort, instead of amending the previously approved project. A motion was made by Trustee Murdock; Seconded by Trustee Katzmann and the Committee unanimously recommended this item [#14(11)-57] to the Board for information, discussion, and possible action at the upcoming Board meeting. IV. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR APPROVAL V. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR DISCUSSION A. THE YOUNGER AGENCY AUDIT TRUE-UP Staff gave a presentation on The Younger Agency Audit True-up. Trustee Katzmann asked for clarification as to whether the audit findings were consistent with previous financial information provided to the Board of Trustees. Staff stated the audit did not identify any changes to financial results, and the audit confirmed the numbers provided by The Younger Agency. Trustee Arger inquired as to whether the audit was done by the RTAA s current external auditor, the previous external auditor, or by the RTAA Internal Auditor. Staff stated that the audit was done by the RTAA Internal Auditor. VI. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR INFORMATION A. INVESTMENT PORTFOLIO REPORT FOR THE QUARTER ENDED SEPTEMBER 2014 Staff reported on the Investment Portfolio Report for the Quarter Ended September B. REVIEW OF OPERATING RESULTS THROUGH SEPTEMBER 2014 Staff reported on the Operating Results through September Trustee Mayberry inquired as to whether the RTAA was collecting any revenue from ride sharing companies such as Uber. Staff stated that as of today, there is no contract signed with Uber. Page 4 of 6

5 C. REVIEW OF BUDGET TRANSFERS Staff reported on the following two (2) budget transfers: (1) increase of $2,161 to replace the transformer in Hangar Six (6) at the Reno-Stead Airport; and (2) an increase of $2,706 to install a roll up door at the old tower base building. Identified savings will be the source of funding for these transfers. D. REVIEW OF CONTRACTS AND PROFESSIONAL SERVICES AGREEMENTS THROUGH OCTOBER 2014 Staff reviewed the Administrative Award of Contracts pursuant to Resolution #462 through the month of October Trustee Katzmann asked for clarification as to whether the $11,648 for Black Rock Construction is part of the $86,000 capital project approved in the FY budget to improve seven hangars and associated pavement at General Aviation (GA) West. Staff stated that is correct. Trustee Katzmann also asked for clarification on the purpose of the $27,851 to Moody Weiske Contractors for installation of a vehicle roll up door in the old tower base building. Staff stated that the RTAA will be relocating the airfield electrician maintenance shop into that building, and the roll up door is to allow large equipment to move in and out of the building. E. REVIEW OF LEGAL EXPENSES THROUGH SEPTEMBER 2014 Staff reported the Legal Budget was 17.1% expended with 25% of the budget year expired. F. REVIEW OF BOARD BUDGET THROUGH SEPTEMBER 2014 Staff reported the Board of Trustee s budget was 17.6% expended with 25% of the budget year expired. G. REVIEW OF LEGISLATIVE CONSULTANTS BUDGET THROUGH SEPTEMBER 2014 Staff reported the Legislative Consultants Budget was 24.5% expended with 25% of the budget year expired. Trustee Arger asked for clarification as to whether this budget report includes both the federal and state lobbyist. Staff stated yes it includes both efforts. Trustee Arger also inquired as to whether the federal lobbyist has been working with the CBP. President/CEO Marily Mora stated yes, that Porter Gordon Silver Page 5 of 6

6 Communication, the federal lobbyist, has been working with the CBP. Ms. Mora also stated that at the December 2014 Board meeting there will be a report from both lobbying firms. VIII. GENERAL MEMBER COMMENTS, QUESTIONS AND ITEMS FOR FUTURE COMMITTEE MEETINGS IX. PUBLIC COMMENT X. ADJOURNMENT The meeting was called to order at 9:02 a.m. and was adjourned at 11:00 a.m. KA: RG/cg Page 6 of 6