Metropolitan Airports Commission

Transcription

1 Metropolitan Airports Commission Finance and Administration Regular Monthly Meeting Minutes Monday, November 05, :30 am

2 REPORTS A METROPOLITAN AIRPORTS COMMISSION FINANCE & ADMINISTRATION COMMITTEE REGULAR MEETING Monday,, 9:30 a.m. Room 3048A, Terminal 1-Lindbergh Minneapolis-St. Paul International Airport "CONSENT ITEMS" Call to Order A regular meeting of the Finance and Administration Committee, having been duly called, was held Monday,, in Room 3048A, Terminal 1-Lindbergh, Minneapolis-St. Paul International Airport. Chair Geisler called the meeting to order at 9:35 a.m. The following were in attendance: Commissioners: Staff: Others: Geisler, Landy, McClung, Mencel, Rehkamp, King, Monaco, Chair Boivin J. Hamiel, D. Probst, T. Anderson, S. Busch, R. Fuhrmann, B. Schauer, K. Schaefer, J. Courteau, G. Warren, M. Willis, A. Sasse, J. Laurent, E. Johnson, D. Ruch, S. Wareham, P. Hogan, G. Kane, L. Sorensen D. Paauwe, Piper Jaffray; G. Hoff, MBAA; H. Moody, J. Davidman, Delta Air Lines OPEN FORUM The Open Forum is a portion of the Committee meeting where persons are allowed to address the Committee on subjects which are not a part of the meeting agenda. No public comments were received. A1. REPORTS C.F. 73 a. 3 rd Quarter Budget Variance Report Commissioner Monaco asked staff to comment on the parking revenue variances for the months July through September. Mr. Schauer indicated that projections for parking revenue are made based on forecasted passenger information from various sources. Discussion followed with regard to the accuracy of parking revenue projections and how it impacts the budget. Staff explained the parking operation at MSP in terms of overflow and closure. Commissioner Landy expressed concern about losing market share to off-site parking companies. Mr. Schauer explained that the budget projected a growth in passengers at 1.25%. However, year-to-date passenger growth is flat which has resulted in a slightly under budget amount in parking revenue. Prior to the budget presentation, Mr. Schauer updated the Committee on October parking statistics which showed an increase in transactions from October, 2011 up 3% and an increase in the hours of parking of 4% which will result in bringing the numbers back to the projected budget figures.

3 Page 2 COMMISSIONER LANDY MOVED AND COMMISSIONER REHKAMP SECONDED TO RECOMMEND TO THE FULL COMMISSION APPROVAL OF THE BUDGET VARIANCE REPORT AND AUTHORIZE EXPENDITURES IN THESE CATEGORIES UP TO THE BUDGETED OR FORECASTED BUDGET AMOUNTS. THE MOTION CARRIED BY UNANIMOUS VOTE. b. Statements of Revenues and Expenses and Changes in Net Unrestricted Cash September 2012 c. Accounts Receivable Summary d. Investment Portfolio Report e. Air Carriers Passenger Facility Charges Report f. Commission Travel Report/July, August, September 2012 THE ABOVE ITEMS WERE INFORMATIONAL ONLY; NO COMMITTEE ACTION WAS REQUESTED. 2. PROPOSED 2013 MAC INTERNAL AUDIT DEPARTMENT ANNUAL PLAN C.F. 74 Mike Willis, Assistant Director Internal Audit, presented the proposed 2013 MAC Internal Audit Department Annual Plan. The overview included the following: Overall Audit Objectives Internal Audit Essentials Audit Approach 2013 Audit Project Areas Ongoing Data Testing Alan Sasse, Information Systems Audit Coordinator, reviewed the specific areas of focus within the 2013 IT Audit Plan. He stated that Internal Audit also assists the external auditors, BKD, with the annual Information Technology audit. A question was raised with regard to whether landed weight information from airlines serving MSP is accurate. Mr. Willis responded that Internal Audit has not focused on landing weight information inasmuch as airline rates and charges are set at a level designed to recover MAC costs and any audit of airline charges would not result in increased revenue to MAC. He noted that the Commission s Finance Department reviews this information. Chair Boivin referenced a recent audit conducted at Metropolitan Washington Airports Authority and he suggested that Internal Audit review this report to determine if anything more needs to be incorporated in the Annual Plan for Commissioner King stated he was pleased to see the IT audits, particularly with regard to system processes, business continuity and access controls as he felt it is important to audit these areas. A recap of how audit areas are determined was requested for future audit plans. Mr. Willis stated that Internal Audit assigns risk levels based on past audit information in addition to information gained from MAC Staff and outside of the MAC. In addition, continuous data testing improves focus and identifies potential issues before they develop.

4 Page 3 Commissioner Landy advised that Internal Audit closely review the new 2013 Reliever Airports model to ensure accurate data upon implementation. Mr. Willis responded that Internal Audit staff will be working closely with the Reliever Airport staff. Executive Director/CEO Hamiel noted that Internal Audit has substantially improved the audit function by developing a detailed analytical technology based assessment of risks which goes beyond auditing financial data. Staff was asked whether the areas of focus change from year to year. Mr. Willis reported that it is the objective of Internal Audit to focus on those areas with elevated risk. Other areas which require further analysis and review are included as appropriate. Commissioner Monaco requested that Staff provide to the Commission the proposed list of audit areas for 2014 to allow Commissioner comment and review. Chair Geisler supported the continuous auditing concept as it opens up opportunities for identifying exceptions and trends with information beyond financial analysis. He requested that Internal Audit provide updates in this regard. COMMISSIONER REHKAMP MOVED AND CHAIR BOIVIN SECONDED TO RECOMMEND TO THE FULL COMMISSION APPROVAL OF THE 2013 MAC INTERNAL AUDIT DEPARTMENT ANNUAL PLAN. THE MOTION CARRIED BY UNANIMOUS VOTE SERIES B REFUNDING SUMMARY C.F. 75 Steve Busch, Vice President Finance and Administration, reported that the Series 2012B Bonds (refunding the remaining portion of the 2003A Bonds) were priced on October 22, The co-senior underwriters on this transaction were Piper Jaffray & Co. and Wells Fargo. The transaction resulted in significant Net Present Value Savings of $5.27 million or 10.9% of the refunded par amount. He commended the exceptional team which included MAC Staff members Bob Schauer and Ed Podnieks; Diane Paauwe, Piper Jaffray (lead underwriter) and Paul Rebholz, Wells Fargo. The timing for this refunding was very favorable as there were no other airport issues available on the sale date. This also resulted in very favorable rates on the taxable portion (2012A). He noted that the Commission s solid reputation resulted in the bond issue as being significantly oversubscribed (more buyers than bonds available). THIS ITEM WAS INFORMATIONAL ONLY; NO COMMITTEE ACTION WAS REQUESTED. 4. DRAFT 2013 OPERATING BUDGET UPDATE C.F. 76 Bob Schauer, Director Finance, noted that there were no significant revisions to the draft of the 2013 Operating Budget which had been presented in October. He reported that the only questions raised by the airlines at the October 11 AAAC meeting were with regard to the assumptions used in the Personnel budget. The airlines requested no significant revisions to the budget. Mr. Schauer provided updates on revenue and expense projections and reviewed the major changes from the September version of the budget as follows. Operating Revenues - Increased T-2 lobby fees (Airline Rates and Charges) as a result of increasing activity of Southwest, Spirit and Sun Country based on year-to-date 2012 data. Concessions revenue decreased by $267,000 as a result of current year-to-date analysis of activity.

5 Page 4 Operating Expenses There is a decrease in Personnel attributed to increasing the vacancy factor to coincide with historical patterns. In Professional Services there is an increase of $54,000 to update the secured card access distribution drawings; an increase of $70,000 for electrical engineering oversight for preventative maintenance of electrical vaults; and a decrease in various areas of $15,000 based on the latest available data. Operating Service/Expenses The increase is related to software maintenance required for the accounting system used by the Commission which was omitted from the September version of the budget. In Maintenance there was a reduction in the cost of equipment parts. Non-Operating Revenue (Expenses) Other Non-Operating Revenue, Self-Liquidating Income increased $540,000 due to Delta payments for G Concourse improvements. Debt Service General Airport Revenue Bond Requirement - There is a reduction of $2.7 million due to updated construction amounts and interest rates. Other Six Month Reserve Transfer As operating expenses are reduced, the amount needed to fund the six month transfer is reduced. Commissioner Monaco asked how those airports with rates lower than MSP were able to achieve the lower cost per enplaned passenger among large hub airports. MSP is ranked No. 8 among the 27 U.S. airports listed in terms of cost per enplanement. Mr. Schauer responded that each of the airports with lower fees are located in the southern part of the U.S. (with the exception of Salt Lake City which has no debt) resulting in reduced operating expenses as they do not require snow removal. Discussion continued with regard to the questions raised at the Airline meeting relative to personnel and the vacancy factor. Mr. Schauer provided an explanation of how the vacancy factor is determined within the budget projections. Commissioner Monaco requested that at a future meeting staff provide an explanation for those line items with more substantial variances between 2012 and Staff will present the final 2013 Budget to the Committee at the December 3 meeting with final approval at the December 17 Commission meeting. THIS ITEM WAS INFORMATIONAL ONLY; NO COMMITTEE ACTION WAS REQUESTED. The meeting was adjourned at 10:31 a.m.