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HomeMy WebLinkAbout2011-02-23 Airport Committee Minutes Meeting Agenda City of Bangor Airport Committee Meeting City Council Chambers rd 3 Floor February 23, 2011 4:00 The following City councilors were in attendance: Gerry Palmer, Nelson Durgin, Pat Blanchette and Charles Longo. The following City staff were also in attendance, Airport Director, Rebecca Hupp and Marketing Manager Risteen Bahr. Councilor Palmer opened the meeting. Agenda: 1. Marketing Report. A). Industry Update/Air Service Development Activities- Marketing Director, Risteen Bahr indicated that the price of crude oil is going up and most airlines have raised fares up to $20 to $40 per ticket. The demand for travel is still strong. Discussion/Questions: Councilor Durgin asked what that means as a percentage of air fare out of Bangor. Bahr replied that the Industry fares are $370.00 and that approximately 50% of the fare goes to cover fuel expense. The Airport’s control over ticket prices is very minimal. The Airport has not heard from United yet regarding the Small Community Air Service Development Grant proposal and whether or not they intend to implement DC or Chicago service. The Airport will be attending an airline networking event in March for 2-3 days to discuss potential air service opportunities. B) Passenger Statistics for January- Marketing Director, Risteen Bahr, stated that the year is off to a good start with an 8.9% increase over last January. She noted a slight downturn in Allegiant traffic but they still had a 90% load factor. U.S. Airways increased capacity significantly. Market share has shifted. U.S. Airways now has the highest market share at 47%. C) Business Development Activities/Events-Airport Director, Rebecca Hupp explained that the Airport sent representatives to the Schedulers and Dispatchers Conference held in Savannah, GA in February. There were 382 exhibitors. Customers reported that BGR has the greatest catering and fastest turn around. We will be going to another tradeshow in Farnbough UK at the end of the month. Discussion/Questions: Councilor Palmer- who are our chief competitors? Hupp responded Pease, Gander, Fargo and Duluth. 2. Discussion regarding Join use Agreement with the Air National Guard Airport Director Hupp, explained about eighteen months ago, the Airport briefed the Council regarding the negotiation of a Joint Use Agreement between the Airport and the Air National Guard. The Maine Air National Guard initially requested to extend the existing Joint Use Agreement for one year as the existing agreement expired on September 30, 2009, which the Council approved. Subsequently, the Guard Bureau determined they could not execute an extension and we have been operating under the terms of the prior agreement. The National Guard Bureau has adopted a template for Joint Use Agreements that provides a standard format for calculating any payment that would be due to the Airport. The template and the formula for calculating payments to the Airport takes the cost for maintaining and operating the airfield and the ANG’s use of the facilities as percentage of total use and then subtracts the value of Aircraft Rescue and Fire Fighting (ARFF) (cost to the Airport if they did not provide it). The provisions for cost sharing and equipment use for snow removal have been incorporated into a separate Memorandum of Understanding that is reviewed annually. The Airport and the Guard Bureau have not been able to reach an agreement regarding the provision for providing a credit for ARFF. Under the proposed agreement, the Air National Guard does not agree to meet the Airport’s FAA requirements, which is critical to our Airport Operating Certificate. The military and the FAA have been working to come to an agreement on fire fighting training requirements and reciprocity. Both the FAA and military agree in principle that the military training and staffing requirements meet or exceed the FAA standard. They have both also agreed to suspend FAA inspections of DOD facilities. However, this does not change the Airport’s regulatory requirements regarding ARFF in order to maintain our Airport Certification. It appears the FAA and DOD are in the process of finalizing an agreement to accept DOD Fire Fighting however there are specifics that need to be resolved. Director Hupp reviewed a memo outlining the proposed language, the potential issues with the proposal and the Airport’s proposal. Discussion/Questions: Councilor Durgin- The National Guard providing Aircraft Rescue and Fire Fighting will save the city significant monies in salary and benefits. Losing it would put a burden on the city. Rebecca will continue to work on this issue and follow up with the Congressional delegation if appropriate. 5. Review of Airport’s Strategic Planning Initiatives. Airport Director Hupp reported, the Airport has updated the Airport’s strategic Plan. It is concentrated on 5 specific items. People, Business Development, Operational Excellence, Economic Development/Community partnerships and Assessment and Future Preparedness. Director Hupp provided a handout that outlined the Airport’s Strategic Initiatives, Goals, and Objectives. Discussion/Questions: Councilor Durgin stated that during the 2010 Fiscal year audit, it was noted that Bangor International Airport’s financial condition is excellent, the Auditor praised how the Airport was run. Councilor Blanchette commented about going through old scrap books when the City took over the Airport. She indicated that the decision that the Councilors made back then was a complete success. She said that the Airport has a reputation to being open during the worst storms, and that our runway is always open. Councilor Longo stated that the handout was a very nice, it was a good job by Risteen. He asked who the handout will be issued to, Hupp responded, stakeholders, different divisions, Airport Community Council, and different groups. Councilor Blanchette- will you use this at Trade shows? Hupp responded at the local trade shows and maybe we will put it on the Web Site. 3) Approval of Ground Handling Agreement- Director Hupp explained BaseOps International has requested we establish a Third Party Handler Agreement to solidify our business relationship. This agreement would formalize past practices. Since BaseOps is a publicly traded company, they are being required to now have these agreements in place. Also, it will help to ensure adherence to the processes and procedures officiated by the U.S. Treasury Department for international trip support services. Discussion/Questions: Councilor Blanchette- Recommended the item for approval and Councilor Durgin Seconded it. 4) Agreement Regarding Purchase of FBO Software Director Hupp explained that in 2006, the Airport issued an RFP for development of a combined front desk FBO application and fuel accounting software. This was a cost shared venture between the Airport and ExxonMobil. After a review of the various proposals and presentations, it was decided to issue the award to Cornerstone Logic, owned and operated by Mr. John Nelson. A major contributor to this award was the ability of Mr. Nelson to modify and program the software to meet the Bangor Airport’s needs, as Bangor’s operations are significantly different than the majority of FBO/Airports. Due to the complexity, common, “off the shelf” versions of FBO software will not work for the Bangor operation. Although no definitive delivery date was in the contract, the project had a target of summer 2007 for completion. Prior to completion and delivery of the final product, in early 2007, Mr. John Nelson entered into an agreement to sell Cornerstone Logic to Universal Weather and Aviation, a full service Flight Support, Ground Handling, Fuel reseller, who the Airport had a long standing business relationship with. Although they were not experienced with software development, they were keeping Mr. Nelson onboard to lead and complete the project. This transition produced a delay, however after getting Universal up to speed on the project, plans continued and development resumed. Subsequently, Universal and Mr. Nelson parted ways approximately 3 months later, leaving Universal the task of learning the specific programming developed for Bangor, as well as continuing and completing additional programming requirements. Universal used internal staff as well as contracting with independent programmers, however this caused significant delays in the project as there was time needed for Universal programmers to become familiar with specific Bangor requirements, including tax reporting, flight identification, etc. A revised project launch date was scheduled for summer of 2008, however as the date approached and testing was completed, significant deficiencies were discovered and the program was unable to meet Bangor needs. Universal continued to work with Bangor, applying additional resources and time over the next six months trying to meet Bangor expectations. As work was being done, the Airport received notice from ExxonMobil that they were ending their relationship as jet fuel supplier and in the first quarter of 2009, the Airport informed Universal that a hold needed to be put on the project. A change in fuel supplier had the potential to change the Bangor operation and would impact the software requirements. It was determined that no additional programming should be completed until the operation requirements could be established and the fuel supply transition was completed. While the fuel transition was taking place, Universal Aviation decided the software application business was not a good fit for their core operation and sold the business to former employees of Cornerstone Logic, now operating as FBO Plus. Universal, however, retained the rights to the Bangor application, in order to try and help us reach a conclusion. Options were discussed, including having the new owners, FBO Plus, continue to develop a standalone program for Bangor, however they did not want to support more than one version of their software. It was also determined that Universal Aviation would not have the ongoing expertise to finish development and continue to support a Bangor specific software package. Given these circumstances, it was decided it would be in the Airport’s best interest to end the project and seek out new alternatives for the fuel accounting and FBO front desk software. The Airport is currently utilizing equipment purchased for this project, including fuel truck meters and the tank farm Varec system and is seeing efficiencies in fuel tracking and reporting. It is anticipated that these products will be used for future applications as well. Universal has agreed to reimburse the Airport for software related outlays totaling $28,157.61. This would be accomplished through a 50% reimbursement upon agreement and the remaining 50% no later than 6 months after. In addition, Universal would be willing to provide marketing support at no cost to the Airport, including feature ads on their website, booth support at trade shows, trip planner advertising, etc. As the Airport has established and enjoyed a very good historical business partnership with Universal and recognizing there was good faith effort put into the project on both sides, the recommendation is to accept the offer and terminate the project in order to pursue alternatives for fuel/FBO software. Discussion/Questions: Councilor Blanchette- verified the amount of reimbursement and asked if we are at drawing boards to get another software program. Hupp responded we are have the software and we just need to have the license agreement. Councilor Durgin- FBO Software can we get a tech person to modify the software? Hupp- the software is PRG software and they do FBO software and we do work with this person. Motion to approve-Councilor Durgin and seconded by Councilor Blanchette it was seconded. Meeting adjourned.