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