AIRPORT AUTHORITY BOARD OF TRUSTEES

Transcription

1 AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE Minutes from the Meeting of June 13, 2008 IN ATTENDANCE: Larry Harvey, Chairman of the Finance & Business Development Committee* Joe Mayer, Trustee* Randi Thompson, Trustee* Mary Simmons, Trustee* Krys T. Bart, President and CEO Marily Mora, Deputy Executive Director Joan Dees, Sr. Director of Finance & Administration Hal Bostic, Sr. Director of Operations & Public Safety Mark Witsoe, Properties Manager David Pittman, Director of Facilities & Maintenance Chris Horton, Manager of Finance Leah Williams, Accounting Manager Julie Sternberg, Benefits Coordinator Tony Osendorf, Sr. Financial Analyst Patrick North, Sr. Internal Auditor Fritzi A. Witsoe, Interim Sr. Internal Auditor Dave Lazo, Manager of Engineering and Construction Liz Younger, Pres. EYA *Denotes Finance Committee member Note: The official minutes of the Finance Committee meetings are maintained on magnetic tape used to record the proceedings. The following is provided as a reference to the subject matter and conclusions reached from the discussion. Topics Discussed: I. Review of Prior Meeting s Minutes The minutes from the prior meeting of the Finance and Business Development Committee, June 13, 2008, were accepted by the Committee. II. Items to be presented to the Finance and Business Development Committee for review and recommendation to the Board: A. #08(06)-33 Resolution No. 484: A Resolution Amending Resolution No. 479, A Master Fee Resolution Setting Forth Airport Rates and Charges for FY Pursuant to Adopted FY Budget Staff reviewed the rates and charges in place as a result of the budget for FY The Master Fee Resolution is amended during the fiscal year when there are changes to the rates and charges and receives updates on an annual basis to coincide with the budget process. The changes incorporated in this year s resolution included an increase in tenant and crew parking fees, an increase in the charge for parking in a handicap zone, a new charge for Staff Assistance for International Arrivals, an increase in the cost to provide a copy of a police report, and a new Reno-Stead Airport fee for helicopter ramp use. 1

2 All of the items in the Master Fee Resolution were accounted for in the preparation of the FY budget with the exception of two new items: 1) Annual parking revenue increases, estimated at $139,250 as a result of flight crew members that park in the crew lot at Terminal Way and Plumb Lane and the Long-Term Surface Lot; and, 2) The Ramp Tie-Down for Helicopters charge of $5 at Reno-Stead airport that may generate an estimated $45 per night during the fire season of June through October. B. #08(06)-36 APPROVAL OF A WORKER S COMPENSATION INSURANCE PROGRAM FOR FY WITH AMERICAN INSURANCE GROUP (AIG) AVIATION Staff reported that the Airport Authority s current fully insured worker s compensation insurance policy provided through American Insurance Group (AIG) aviation will expire June 30, Staff provided an overview of the competitive bid process that was conducted in March 2008, by the Airport Authority s insurance Broker of Record, Wells Fargo Insurance Services. Approximately nine carriers were contacted to discuss worker s compensation coverage for the Authority. The majority of those carriers contacted declined to submit bids due to three major undesirable risk factors; concentration of risk, terrorist attack risk, and Nevada s generous heart and lung statutes related to Police and Fire employees. Wells Fargo Insurance Services again examined the feasibility of the Authority to implement a self-insured program. Self insuring the Authority s worker s compensation program was estimated to be well above the fully insured quotes and posed significant risk not present with a fully insured program. Staff reported that the Airport Authority s current carrier, (AIG), provided the most competitive quote, with a renewal premium of $358,698, which represented a decrease of $43,253 (10.76%) compared to the current annual premium of $401,951 for FY C. #08(06)-37 ADOPTION OF RENO-TAHOE AIRPORT AUTHORITY FY LIABILITY AND PROPERTY INSURANCE PROGRAM AND APPROVAL OF PREMIUMS Staff reviewed the history of Marsh USA, Inc., as the RTAA s Broker of Record for property and liability insurance, referencing Board Memo 05(03)- 24, March 10, The RTAA consented to the assignment of the broker agreement initially to Acordia, and later Wells Fargo Insurance Services of Nevada. Wells Fargo began in March 2008, to market the Authority s insurance coverage. Staff reviewed a schedule summarizing all of the Authority s insurance coverage s, premiums, and insurers. Staff noted a FY increase in the Property Values due to the addition of the new fire station building. Because 2

3 of the soft insurance market, the renewal premiums for the Authority s existing insurance coverage total $1,022,835, a 3% reduction from the year. The insurance premiums paid for from Operations and Maintenance funds are decreasing 6% to $979,075 from amounts. Based on the quotes received, the total insurance premiums for FY insurance coverage will be $1,022,835, which is less than the budgeted amount of $1,083,133. Even with coverage improvements, the amount budgeted for FY is less than the premiums paid for the current year. The item was unanimously recommended for approval at the upcoming Board meeting. D. #08(06)38 ADOPTION OF TRAVEL GUIDELINES FOR THE RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES Chairman Harvey discussed adoption of the Travel Policy guidelines proposed by the Board to further implement more definitive travel guidelines for the Board of Trustees. Chairman Harvey reviewed the reductions in travel allowance and travel by the Board of Trustees. The Board determined it necessary to make some minor adjustments for baggage handling and baggage tip dollar amounts in response to many of the airlines implementing a handling fee of a few dollars, which does not include gratuity. It was determined that the baggage handling fee implemented by the airline would be part of the ticket price; not to be confused with Baggage tips which were resolved to be the gratuity, per bag, that is in addition to the baggage handling fee imposed by the airlines. It was discovered that under Section II(f)(1)(c), in the Resolution to Establish an Amended Travel Policy for the RTAA and in the Board of Trustees Travel Rules and Guidelines, under Miscellaneous Expenses (letter d), it should read, Meal tips not to exceed 20% of meal cost. The fiscal impact of the adoption of Travel Policy guidelines is not quantifiable at this time. It is reasonable to assume that the reduction in the Board travel budget, combined with the decrease in travel by the Trustees, may result in a cost savings. The Board Treasurer and Internal Auditor will track the current projected expenses and report to the Board Chair. III. Items presented to the Finance and Business Development Committee for approval: A. Review and approve changes to the Advertising Rate Card presented by The Younger Agency, advertising agency of record Ms. Younger reviewed the changes to the Advertising Rate Card for FY A request for shorter term contracts, less than the typical annual year term, to include a 12% rate increase for each item within the package was discussed. This would facilitate advertising needs for special events and allow new advertisers the opportunity to test the program. Ms. Younger reviewed her request for a decrease in pricing for three, low 3

4 visibility, framed wall banners; two located in the baggage claim area and one on the south concourse, to get those advertising spots sold. The final change was a reduction in pricing for the billboard, located just south of the airport entrance, which resulted in a sell almost immediately. Ms. Younger reported that the Airport Authority will receive approximately $1million in revenue as a result of her FY advertising contract. She anticipates that advertising will experience some fallout in the upcoming year as a result of the current economy; which has resulted in a significant decline in the real estate market. The Committee unanimously approved the Advertising Rate Card for FY B. Review and approve changes to the Rental Rate Card for the Airport Warehousing and Park to Travel Facility Staff discussed the proposed changes to selected rates at the Airport Warehousing and Park to Travel Facility. It has been observed that the mini-storage unit rates have not been increased in more than five years and the rates are much lower than the current market. Staff proposed a $5 increase on the small units (5X10) and a $10 increase on the larger units (10X10). The Park to Travel Facility will see a proposed increase in the daily rate from $5 to $7, offer a new weekly rate of $45.50/wk, and see an increase of $15 that will apply to the monthly rate. Staff reported that the net income from this operation flows into the Other category in the budget and serves to increase revenue sharing, which lowers the Signatory air carrier landing fee in the following year. Staff anticipates a 16% increase this year; exceeding the 5% projected increase that was proposed at the budget presentation last year. The Committee will remain updated on the progress and the Capital improvement projects for next year, to include paving and roof work. Staff confirmed that the occupancy is better than 90% on most everything with the exception of the 5X10 s. It was noted that the whole mini-storage industry has moved away from the 5X10 product. The Committee unanimously approved the FY Rental Rate Card for the Airport Warehousing and Park to Travel Facility. IV. Items presented to the Finance and Business Development Committee for discussion: A. There were no items. V. Items presented to the Finance and Business Development Committee for information: A. PFC 8 Amendment 3 for ABC Project and Access Control System Project Staff reviewed the various project changes that became necessary to the final design of the ABC Project and the changes made to limit the impact of the project on the operation, through the construction of the temporary facility. Staff added a new Access Control System Project to the application; funded at approximately $10M, with an estimated $8M of that total already in place with Federal grants. Staff noted that this application will be reviewed with the airlines at a June meeting. The official airline PFC consultation meeting will take place later in July and this item will come before the Board for consideration in August. 4

5 B. Review of Operating Results through April 2008 Staff reported that the airport is 0.8% under budget in operating revenues and 6.8% under budget in operating expenses. Total landed weights for the ten-month period ending April 30, 2008 are 6.3% under budget or 211,506,000 pounds. Landing fees were budgeted for signatory airlines at $2.03 per 1,000 lbs. Based on actual activity through April, the landing fee rate should be $1.94 per 1,000 lbs. The budgeted cost per enplaned passenger is $5.57, and based on actual activity through April 2008, the cost per enplaned passenger is $5.32. Airline rents are under budget by 8.1% based on activity through April The budgeted average rental rate is $62.64 psfpa, and based on the actual requirement, the average rental rate should be $57.54 psfpa. Non-airline revenues are 0.5% over budget. C. Review of Budget Transfers (if any) Staff reported the unbudgeted fixed asset or capital project transfers. The Airport Police Department transferred $10,790 from Machinery & Equipment to Machinery & Equipment; savings from another fixed asset within the same category was used to purchase two (2) Segways. D. Review of Contracts and Professional Service Agreements through May 2008 The Committee, along with staff, reviewed the Administrative Award of Contracts pursuant to Resolution #462 through the month of May The Committee had no additional questions. E. Review of Legal Expenses through May 2008 Staff reported payments made toward legal costs that were expended through the month of May The Authority is currently over budget based on actual expenditures for FY with 92% of the budget year expired. Staff noted that approximately $61,000 in legal expenditures will be reallocated to the Airport Baggage Check-in project. The legal budget is anticipated to meet the budgeted amount at year-end. F. Review of Board Budget to date May 2008 Staff reported that May represents 92% of the budget year, actual costs are 84% of the total budget. Staff provided an overview of the annual projected amounts and calculated variances to the annual budget. All account classifications are anticipated to meet or arrive below the budgeted amount at year-end; with the exception of Administrative Expenses which are currently projected to be slightly over budget at year-end. Staff provided an overview of the assumptions that were the basis for the projected amounts. VI. Public Comment Staff, per the request of Trustee Mayer, confirmed the occupancy rate for the 5X10 storage units located at Airport Mini-warehouse to be 54% occupied with 46% vacant. VII. Adjournment The meeting was adjourned at 2:00PM LH:JD:PN/fw 5