Loading...
HomeMy WebLinkAbout1995-11-16 Airport Committee MinutesAIRPORT COMMITTEE MEETING THURSDAY, NOVEMBER 16, 1995 AIRPORT ADMINISTRATION OFFICE Present: Don Soucy, Member James Tyler, Member David Leen, Member Ed Barrett, City Manager Bob 2iagelaar, Airport Director Norman Heitman, Assist. City Attorney The meeting was Opened by Don Soucy at 11:45 IN. David Leen moved to go into Executive Session re legal issue. James Tyler seconded. Session was terminated at 12:00 Noon. Regular session was opened at 12:07 PM. Agenda items were taken up in sequence (as attached)._ A1. Off -Promise Motor Vehicle Rental Business. The Airport Director explained that the policy t0 charge off -premise vehicle rental businesses a 5% override on gross sales (minus certain exclusions) had been in effect for several years. He further stated that as a result of one company's refusal to execute the appropriate agreement he did not believe that it was appro- priate to Charge the override to any of the operators. This, in turn, creates inequity as on -premise operators are paying the full l0% override. For that reason he had asked the Assistant City Solicitor to initiate the necessary procedures to make the override enforceable by City ordinance. Mr. Miegelaar further explained that similar policies are in effect at over 100 other U.S. airports and that the legality has been court tested. He sees the measure as very necessary so as to ensure full revenue realization by the airport at a time when other funding sources, which have been traditionally relied upon, are rapidly dwindling. He indicated that a failure to seek revenues from clearly identifiable airport related sources could easily lead t0 a need for local public subsidies in the future; something that he firmly believes should be avoided. He stated that it is the policy of most public airports to seek supporting revenues from its users, the air travelers and the private service providers. Mr. Tom Toys, who identified himself as the principal of Hefflefinger, Inc., a rental car company operating out of the Union Street Texaco station spoke next and urged the Committee no to institute the policy. He explained that he has provided off -premise car rental services at Bangor for 23 years and that he has been able to do so only by offering a lower price. He indicated that many passengers prefer to pay lower rates for off - airport agency vehicles. He further stated that on -airport agencies enjoy benefits at no or at low cost, such as office facilities and car parking privileges. Mr. Toye stated that the 5t override is essentially a tax that is unwarranted. He cited several documents, including a USDOT analysis, that he believes offer evidence as to the discriminatory effect of off -premise overrides. Mr. 2iegelaar responded that a at a 5t override, Mr. Toys would continue to enjoy cost savings o a - irport operators and that on -airport operators pay full market rates for their facilities in addition to their 10% overrides. He acknowledged that the car ready -lot parking slots probably do not yet reflect market rates as those charges had been newly instituted and needed some time to be phased in. Councilor Soucy indicated that certain language in the USDOT publication referred to by Mr. Toys seemed to reflect the view that off -airport overrides appeared to have little or no impact upon business levels. Mr. Mark England, representing Enterprise Car Rental spoke up next, in support of Mr. Toys's views. He stated that only 1% of his activity appears to be airport related and suggested that a minimum activity level be established before an override would kick in. Mr. Scott Lampher of Budget Rent-A-Car spoke next and stated that he was in support of the off -premise override. As a paying concessionaire, contributing $120,000 annually to the airport, he believes all agencies should pay an equal 10%. Even at 5% he believes there could be an incentive for his company to move off - airport as only 508 of his overall activity is truly airport related. He further stated that off -airport agreements should contain audit clauses, similar to on -airport agreements. Mr. 2iegelaar commented that Budget Rent-A-Car is a Maine owned franchise (at BTA) and that its success demonstrates that locally owned companies can compete in an on -airport location with a lot override. As such he believes that the 5% override policy should not pose an obstacle for other local operators with less general overhead. The Committee, upon brief discussion, voted unanimously to recommend passage of the item by the City Council. 02. Ground Transportation Policy. The Airport Director next presented the finalized version of the Ground Transportation Policy as discussed in the previous Committee Meeting. The final version contains specific fee and insurance requirements. Mr. Toys pointed out that the policy contained a requirement for car rental courtesy vehicle which would be difficult to comply with as it - was essentially applicable to taxis only. He suggested that final action be deferred until a review meeting could be sched- uled for all operators. Mr. Heitmann responded by saying that the policy was based on policies established in other locations as diverse as Vermont and California and that while there may be small modifications required, it was a fairly standardized policy for airports such as Bangor. The Airport Director indicated he would be prepared to schedule a meeting with operators and that any problematic issues could be subsequently altered by amendment. He believed that from a security and liability perspective it would be preferable to have the policy in place. The committee voted unanimously to authorize implementation of the policy as presented. 03. Armory/Naval Reserve Center. Mr. Heitman and Mr. Barrett presented the Committee with an overview of the proposed swap, between the Airport and Parks/Recreation Departments, of the Armory and Naval Reserve Centers. The rationale is that the Armory, obtained by the Airport Department through a land swap with the U.S. Defense Department, is far more suitable for the Parks/Recreation Department. It is also larger and more valuable which will necessitate financial compensation to the Airport Department for a balance of approximately $300,000. The Naval Reserve Center offers the potential for development but not likely in the immediate future. Upon questioning by the Committee, Mr. Barrett explained that the reimbursement of the Airport Dept. s required by Federal law, inasmuch as all airport revenues must be used for continued airport development. He suggested that this be done through a lease -purchase arrangement over a is - year time period. In response to a further question, Mr. Heitmann agreed to have the values of land and improvements for the Armory re -checked and to further brief the Committee or Council at a future time. /6. Convention and Visitors' Bureau Membership. Mr. Ziegelaar proposed that the Airport Department become a full-fledged member of the Convention and Visitors' Bureau at $1200 per year. He further suggested a one-time supplementary fee of $1,000 to assist the CVB with its participationin the New England/USA marketing campaign. He explained that the membership would help local hotels to help recapture the substantially increased advertising expenditures at the airport (up 1008+). He stated that the membership will directly benefit the airport as the CVB markets the airport in conjunction with its convention sales efforts, adding that clear proof of such results already existed. The additional $1,000 would assist the CVB in its participation with air service oriented promotions organized by the New England/USA group. The aim is to generate individual cation travel to Bangor in conjunction with the carriers serving the airport. Councilor Leen asked how much the airport's advertising revenues were expected to increase. The Airport Director responded that revenues would grow from $35,000 to $65,000 - $75,000 per year, adding that this was another example of the Airport Department's effort to offset funding reductions elsewhere. The Committee unanimously agreed to sup- port the membership and the one-time additional contribution. S. Amending Chapter II, Article 35 of the Laws and ordinances of the City of Bangor - Airport Department. Mr. Heitmann would authorize the Airport Director to seek reimbursement of any fine incurred by the Airport Department as a consequence of law solations by third parties and would further enable the Police Department to issue citations with associated fines up to $100 for violations observed by the Airport Department. Me Committee voted unanimously to recommend passage by the full City council. The meeting was adjourned at 1:30 PM