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HomeMy WebLinkAbout1990-04-12 Airport Commission SummaryKENAI AIRPORT COMMISSION April 12, 1990 - 7'00 P.M. City Hall Council Chambers Chairman Bob Summers Presiding 1 ROLL CALL Present- Summers, Ames, Dean, Knopper, Shackleton, Toppa Absent- Garnett (excused) Also Present- Mayor Williams, Councilman Measles, Airport Manager Ernst, Secretary Sumey 2. APPROVAL OF AGENDA Chairman Summers asked to delete Bob Williams and add Mayor Williams under item 3-b and exchange 3-a and 3-b so Mayor Williams could speak first. MOTION' Commissioner Knopper moved approval of the amended agenda, seconded by Commissioner Ames VOTE- Motion passed by Unanimous Consent 3. PERSONS PRESENT SCHEDULED TO BE HEARD a. Mayor Williams~ T-33 Static Display Project Mayor Williams informed the Commission that for the last four years, a project had been underway to gain a T-33 fighter jet for a static display at the vicinity of the Kenai Airport. The project has been approved and we will be getting the aircraft for sure. The National Guard will be assisting in getting the aircraft to Kenai. Col. Taylor has assured the Mayor that there is no problem. There is an expert in San Antonio on board who can assist. The local Civil Air Patrol has tentatively agreed to take on the project of restoration on their premises. We will then make arrangements to make the pedestal with perhaps our local prison officials. The City Council has a resolution accepting the T-33 on the next meeting agenda. The Council is reluctant to authorize a budget for the cost of the restoration. Rather than establish a budget for the Commission, wait until the plane arrives and then approach Council with a firm figure for the restoration and base. As far as the rest of the budget is concerned, Council would like to see a clearer picture of what the Airport Commission wants to do with future advertising, money for the July 4th program, etc. Previously, we have been handling the budget through the administrative budget throUgh Randy and would probably be the best way to do it in the future as well, however, that will be up to Council. In your proposed budget you may want to figure in some travel for two or three people, per diem, etc. KENAI AIRPORT COMMISSION April 12, 1990 Page 2 Mayor Williams further outlined some of the successful advertising such as the float plane basin and to reach out to western Alaska to inform them that we have the facilities they need and asked the Commission to come up with more ways to promote the airport. Just for information; Alaska Airlines sent a recent inquiry to people asking for what other services you would like to see at the airport and Mayor Williams answered that he would like to see jet service to Kenai. Commissioner Knopper asked how the Council feels about the T-33. Councilman Measles answered that Council asked to have administration prepare the resolution regarding the T-33 on the next agenda. Commissioner Knopper asked about the cost of the restoration, Councilman Measles answered that it would be exterior restoration mostly including the numbering and decals. It is only for static display. Chairman Summers indicated that this item will be taken up later under New Business. 3-b. Chris Eriksen Grou~ Chris Eriksen passed out a letter of introduction explaining her business. She had been approached by the Airport Manager who expressed a possible need for public relations for the airport. Ms. Eriksen explained her public relations businessi~and howshe might be of aid to the Commission. Ms. Eriksen explained that she is a former reporter and has many contacts that would prove invaluable. Thus far, Ms. Eriksen is the only public relations firm in the area. She is able to plan social events, locally or around the state. Ms. Eriksen can produce brochures, invitations, bulletins, and other types of advertising. The cost is $60 per hour. Airport Manager Ernst explained that he invited Ms. Eriksen because at the last meeting the Commission was discussing possible marketing analysis and she can not only do a study, but do the work also. Chairman Summers thanked Manager Ernst for inviting Ms. Eriksen and stated that it is one thing to come up with a plan, another to implement it. Mayor Williams stated that he had had similar thoughts about advertising. The people out north are considering a 5,000 foot gravel runway and it is their intention of gaining some of the fish haulers and it does point out that someone else is looking at hauling fish some place else. This short- circuits the businesses here in the community. I certainly don't like to see fish hauled all the way out there. We need to offer something worth while. Manager Ernst stated that after the dedication committee gives its report, if there are any advertising monies available left over that we could get Chris on board and really get a blitz going for the open house and terminal. Chairman Summers suggested that she may even be able to help° for the upcoming bicentennial. It would be great to speak to aviation history for Kenai. KENAI AIRPORT COMMISSION April 12, 1990 Page 3 Chairman Summers asked for the total budget after the projected expenses for the open house. NOTE- Commission recessed to obtain the budget figures. The Commission further discussed the budget and costs. . APPROVAL OF MINUTES March 22, 1990 MOTION- Commissioner Knopper moved for approval of the minutes, seconded by Commissioner Toppa VOTE- Motion passed by'Unanimous Consent 5. OLD BUSINESS a. Johnn~ Jackson~ Hertz Car Rental Manager Ernst reported that he was unable to meet with Commissioner Shackleton so there are figures presented from information available. (see Airport Managers Report dated April 12, 1990) The figures used for comparisons are reflective of Alaska and the rest of the United States. It is the opinion of Manager Ernst that Kenai"is."not out of line in charges. There are some things that Kenai is doing and not doing when comparing rates. Mr. Jackson used Kodiak and Valdez as examples and both are lower enplanement types by nearly 20,000. Kodiak is unique in that the terminal building is owned by Markair. The state owns the parking lot there. Valdez is unique in that the original airport terminal building was a business and wasn't designed for this use. Both are looking at review of their rates. Juneau is the most similar to our operations. Chairman Summers stated that if you look at this you can almost get a straight line graph between income and enplanement. There was some concern expressed and this gives us something to think about. The did ask us to look into this and they do express the feeling that there is some inequity. Commissioner Shackleton informed the Commission about a meeting he had attended which included rental car agencies and lease holders at the terminal space and one of the concerns they discussed was that they felt the 10% fee of the gross revenues was possibly excessive. Primarily in comparison to other lease holders in the same terminal building. None of these figures here compare with what is happening at the Kenai terminal building with other lease holders within that building. Manager Ernst answered that it was like comparing apples and oranges. For instance, the ticket counters are a flat $1.65/sq. ft. Most of the ticket counters pay approximately $1200/month for a space plus an additional fee of $ .20/1,000 over the gross landing weight. As many flights as they make KENAI AIRPORT COMMISSION April 12, 1990 Page 4 they pay in the vicinity of $2,000 to $2,500 per month in addition to the $1200 fee. As you know, the restaurant and bar were set by fee schedule set by you or a per month basis rather than a percentage of gross. Traditionally, car rental agencies are handled the way they are here. Commissioner Shackleton- This is information, I believe would be helpful in making a decision regarding whether or not the fee structure is proper for all people doing business in the terminal. Possibly we need a comparison showing the amount of business activity being conducted by these different business and the revenues that the airport terminal is collecting to compare them to see if these operators are being over charged for the privilege of conducting business in the airport terminal. If its out of proportion perhaps we could recommend some restructure. Chairman Summers- It sounds to me like something we can't handle in five minutes. If nothing else, what we have here is a perception of inequality, whether or not any equality really exists or not. I suspect we may be looking at apples and oranges, but what we need to do is find out how we can equate the two. Manager Ernst answered that he would not feel comfortable in going to Mr. Schilling to ask him what his gross income is. Chairman Summers agreed in that it was not part of the lease agreement. That would certainly be hard to do with the airlines also. The two of them are probably making over $600,000 per month but they also have maintenance on their aircraft. Commissioner Shackleton: That is an appropriate comparison, however, on the other side of the coin, some in-house comparison could possibly be of some consideration. Those are the only suggestions I had at this time. Chairman Summers: I would agree that the airport manager is correct, we worked very hard to get Mr. Schilling in there so we could get the facility we do have. At the time we didn't know it was going to be Mr. Schilling of course, but I think the issue that was brought up was valid. It is going to take some effort to focus in on the issue. When you look at these figures with the other airports we seem to be in the ballpark. I can see where they may think there needs to be some adjustments for the area. Commissioner Toppa- I think the subject warrants a Work session of its own, Chairman Summers agreed. Commissioner Ames- On this percentage, I'm from an old fashioned school and I don't really believe in charging that way. i think that we gave Mr. Schilling a chance and a rent to where he can make a profit and I don't feel that its our place to try to share his fortune. The more money he makes the more apt he is to stay there, he might even want more room or something else in this town. Charging a flat fee is, I feel the right approach, morally and legally and every other way. If I were contemplating leasing a space int he terminal it would be a big factor to me. Chairman Summers agreed, stating that that was the philosophy of the Commission when putting the lease together. Manager Ernst- The restaurant and bar weren't bid out as a percentage of gross but they could have been. We ought not to do that. To say that we are being somehow preferential is not accurate. If the car rental agents KENAI AIRPORT COMMISSION April 12, 1990 Page 5 are saying that they are paying the majority of the lease rates that's probably true, but if I had all six of those ticket counters filled up, they would be paying more. There are five car rental agencies and we added one more. If this was such an outrageous charge we wouldn't have people wanting to come in. If I built another booth, another agency would come in there, that's why the Council stopped at five for the maximum number. Chairman Summers asked about a work session. Manager Ernst explained about the budget. Commissioner Toppa stated that those contracts are negotiated at a certain point and the Commission is not involved. Commissioner Shackleton stated that when he spoke to two of the agencies they indicated dissatisfaction with the 10%. Most people felt easiest with a combination of the two to where the percentage was moderated somewhat. It could be done by modifying the square footage rate and also modifying the other end with the percentage. There are pros and cons of each system. The smaller business person could not handle the per month rate. On the other hand the percentage basis is more flexible with their earnings. Somewhere there could be a balance struck. Chairman Summers asked that Commissioner Shackleton get with the Airport Manager and develop a structured program of discussion at another date with reco~endations. A work session was tentatively scheduled for the next meeting, May 10th, pending completion of the report. 5-b. Report from O~en House Committee Commissioner Toppa reported that the committee was unable to meet March 22nd as scheduled, however, a large portion of the business was handled by phone. The date set for the open house was April 28th. A band is lined up, Mr. Schilling will do the catering, a cake will be done, and the logo chosen. The logo is a large Constellation and a modern airplane making a transition from the past to the future and will be ready by this weekend. The date of April 28th we now recognize is too short. We would be open to choosing another date. The Commission discussed a new date which would allow time for advertising and sending out invitations. The Commission discussed the budget. Councilman Measles felt it was about $4500 that Council agreed to with $3,000 left for advertising. The Commission agreed that Com~issioner Toppa wo~ld get together with Chris Eriksen to come up with a cost for brochures and invitations. The estimate is for 300 brochures which would have more detail and perhaps a small map of the terminal and 200 invitations. The Commission agreed on May 12th for the new date for the Airport Terminal Open Hou. se. Chairman Su~m~ers will meet with Commissioner Toppa and Manager Ernst by the middle of next week to go over the estimated costs. 5-c. Update on Industrial Display The display is 90% done. The bottom panels still haven't arrived, they will be a smoke mirror type. I have.no firm date when they will be here. however, I am assuming it will be within the next week or two for completion. KENAI AIRPORT COMMISSION April 12, 1990 Page 6 Marathon requested that ERA give or donate a scale model of a helicopter and that may be put in later. The idea was to suspend it so that it would look like its coming in to the pad. Commissioner Toppa informed the Commission that he did know some modelers who could make one if ERA is not able to come up with one. Commissioner Knopper also had contacts should Manager Ernst need additional help. Manager Ernst stated that the Mayor has some pictures of that platform being constructed and they could be framed and placed around the base of the model. Commissioner Ames advised the Commission that he has located a model of an old airplane that saw service in Alaska in the 1930's. It is Cobra 100 (sic) which is about the size of a single engine otter. We operated two of them out of Fairbanks hauling mail down to Magrath during the early war years and a few years prior to the war. A friend of mine in Sterling has constructed one and is about 90% complete except to cover the wings and a few details. The colors are accurate, the numbers are accurate, it is 737N, Pacific Alaska Airways, and the wing span on this is 13'7". The fuselage, from the prop to the rudder is 8' and is a truly impressive model, I've never seen better. I took some pictures of it and they thought it was a real airplane in a hangar and it was hanging from the ceiling of the fellow's garage. I asked him if he would consider displaying that at the Kenai airport and he agreed. He said he had been invited to display it in Anchorage, however, since he is living here, he would be able to see it. He has two years into it now and could have it done within three or four months. Chairman summers felt it would be a great idea for the bicentennial year. Manager Ernst stated that he like the idea, however, the ceilings in the terminal may not be high enough. It may have to be encased also. Councilman Measles suggested suspending it and then rope it off so no one would bump into it. Commissioner Toppa stated that he had seen models at eye level at airports before and that is how they are handled. Chairman Su~m~ers asked Co~issioner Ames to bring the pictures at the next meeting and the Co~ission will discuss displaying it. It is an excellent idea particularly for the bicentennial. Manager Ernst will investigate some space available for the 14' model and report at the next meeting. 5-d. Update on Training Seminar Manager Ernst reported that the Council needs a request from the Commission to bring the trainer here and it needs to go into the packet by Friday for their consideration at the next meeting. We also need to decide on a date and amend the amount to and estimated $1200. Manager Ernst gave the dates she will be available and the Commission agreed that the most commissioners will be available June 4th and set that date as the target date. Other key commission and City Council will be invited and the session will run from afternoon into the evening. MOTION: Commissioner Shackleton moved to recommend the City Council approve $1200 for expenses anticipated in producing a training seminar which will be held June 4th, seconded by Commissioner Knopper KENAI AIRPORT COMMISSION April 12, 1990 Page 7 VOTE' Manager Ernst will further discuss the times with Ms. Hale and report to the Commission. Motion passed by Unanimous Consent 6. NEW BUSINESS a. Chairman Barry Thomson of the Economic Development Commission Chairman Thomson reported that the Commission has been working on a project to put together a picture of where Kenai is going to be in the next 20 years. It sounds very ambitious, however, it is going to be limited to areas that can be identified. We are trying to come up with a population estimate for the next 20 years, if it will be larger or smaller. There have been speakers from the fishing industry, tourist industry, etc., who have discussed where their particular industry will be in the next 20 years. We have a general impression of what things will be like. From this we are also looking for opportunities for exploiting. One that comes to mind immediately is the Kenai River which is eroding badly in the downtown area. It is estimated that the bank will be in the Carrs parking lot if nothing is done about it. Several ideas have been discussed for stopping that erosion. We are not trying to identify things, that should be dOne at a certain year, however. We are just looking at potential opportunities. Although it is short notice, I would like to invite one of your members to come to our next meeting on April 26th and give us a thumbnail sketch of what he thinks will be the roll of the airport within the next 20 years. We won't nail your feet to the floor on anything that you say, but we feel there are opportunities at the airport the way it is that could be exploited. Hopefully, this final report will try to tie together all the different facilities that we have and perhaps allow the City Council and different people to move forWard in a general direction so everyone is at least vaguely going in the same direction. I think the float plane basin is a good asset, but right now it is very underdeveloped. You are going to need some good development and good infrastructure over there. Right now if someone flies in there, there are no facilities. We could capture the market for those that fly in from Anchorage. This is just my own opinion, but this is the type of thing we are interested in. What would happen if the City of Kenai put in quite a bit of money, put in a good infrastructure over there, what would that bring in. You would need rental car facilities, maintenance facilities for those people that take their aircraft to Anchorage we could corner that market. All that would generate revenues back into the City. Chairman Su~m~ers agreed to attend and invited any other Com~issioners who would be available. KENAI AIRPORT COMMISSION April 12, 1990 Page 8 Chairman Summers asked Mr. Thomson, in his opinion, where the Peninsula will be in 20 years. Mr. Thomson answered that the more the Commission looks into it, the more difficult it becomes. The Commission has looked ~into where the Permanent Fund will be in the next 20 years. We found out that the Permanent Fund will never finance government. The only thing the Fund will do is pay dividends. It is as large as it is ever going to be in terms of 1989 dollars. It will grow in the next 20 years, but in terms of purchasing power it will not be any bigger. That, in turn has thrown a spanner into the works on what is going to finance government. Oil is financing government now, however, Prudhoe Bay is disappearing in the next few years. It certainly is going to cause cut backs and most likely a state income tax. We don't think the population in Alaska is going to increase at all before the year 2000 through various studies that we've seen. If we are going to grow we are going to have to move in another direction and perhaps tourism is going to be the thing that is going to drive the peninsula in the next several years. Traditionally this community has been a bedroom community for the oil industry, particularly Prudhoe Bay. Then if you discuss ANWAR it changes the whole scenario again. The Kenai airport is one of the pivotal points not only for tourists who fly in and meet guides but there is quite a market for Asian tours who would come in groups. They have a very powerful infrastructure behind them. If we don't take the lead on that, other communities will. Mat-Su is pushing very strongly on tourism just to take away a major source of-tourists from Anchorage. I personally think that float plane basin could capture a large number of people to the southwest who normally fly into Anchorage, to get their aircraft serviced, to buy their groceries, and do all manner of things. We can short circuit that by 100 miles if we have the infrastructure in place. I think we have a good base with a large potential at the airport. Chairman Summers asked how Chairman Thomson envisioned the two commissions working together. There are a lot of commissions out there and there are times we overlap. Commissioner Toppa agreed, stating that the very ideas Mr. Thomson suggested were issues the Airport Commission has also .been discussing. Chairman Thomson felt that there were three key commissions, the EDC, Airport, and Harbor Commissions. Other commissions may be' important but are not pivotal in this particular project. Planning & Zoning won't really change what Kenai is going to look like in Kenai in the future unless it is something drastic. I could give you a super plan with what to do with your airport, but it isn't relevant but its like writing a "letter to the editor", it makes your ideas known but has very little influence. We are not trying to influence what you do with the airport but what do you think you should do with the airport and how is that going to fit in with information that is going to fit in with the Harbor Commission. .67b. Discussion- Pa~ Vehicle Parkin~ Manager Ernst stated that he is throwing this item out for discussion. There is a considerable demand on the long and short term parking and with KENAI AIRPORT COMMISSION April 12, 1990 Page 9 the demand comes maintenance problems. With every other airport it is a revenue source and we are not taking advantage of it. If we were to use $2.00 per day for 172 cars which is an average for several months, that equals $123,800 per year and this is for long term only. We certainly could make 'use of those funds. There are three different ways to operate it; the airport operates it itself, a management contract, or by concession. An overview has been provided to stimulate some ideas. There are machines made to do this for us. Chairman Summers asked for the ranges of parking fees, and are the fees different for short term and long term. Manager Ernst answered that he was just throwing out some figures and has not checked yet. Commissioner Knopper asked if the number of cars parked there was a constant figure. Manager Ernst answered that it was, that every Saturday the count was taken and this is the long term parking lot only and it was over a period of several months. By charging there will be a certain amount of people that will drop out but it will still be a boost. The Commission agreed to place this item on the agenda for the June meeting for further consideration. ~he Commission also agreed to keep the fees very low. The Commission recognizes that the parking is being abused. There are sectors of people that leave their vehicles there for several different reasons, and it provides secure extra parking. _ 6-c. Discussion- Asphalt Overlay of Alpha 1, Alpha 2 Taxiway Manager Ernst stated that the project is being done because we have the runway overlay, all the taxiways overlaid, Alpha 3 overlay and a portion of Alpha 1. The rest of Alpha 1 and Alpha 2 are that area of the airport that we did our general aviation area and has been neglected over the years. The pavement is breaking up, it is heaved, and has drainage problems. We are proposing to have Wince, Corthell, Bryson do the engineering work on it. They are already doing a master drainage study of the airport and are just about done. This would incorporate part of that drainage study so that we can put in the proper culverts now in two different areas on that taxiway. We are about $100,000 short of using that FAA grant money and if we don't come up with a project we lose it, i.e. it reverts back to the FAA and this is a good project to use it on. It will help that whole area back there so you wouldn't have to float out there to your plane or chip it out of the ice. The projected costs are $114,000. The FAA is expecting a pre- application as I had already contacted them in December. It should be done by the end of June, the contract would be awarded. Chairman Summers asked what the final bill was for the facility. Manager Ernst answered that it was $1 million and $709,000 was the projected cost. Most of those costs involved the asbestos. KENAI AIRPORT COMMISSION April 12, 1990 Page 10 MOTION' Commissioner Dean moved to request the City Council that the work on this project, seconded by Commissioner Knopper VOTE- Motion passed by Unanimous Consent 6-d, Budqet NOTE- This is an added item following discussions with Ms. Eriksen and Mayor Williams. Chairman Summers reiterated the need to submit a budget to the City Council before the budget hearing process is completed. Councilman Measles stated that the next meeting will be Monday night plus one more that has not been scheduled. Chairman Summers asked for input. The bicentennial is coming up next year, the T-33 is a project that may run into the next budget year, and any other projects that may come up. Chairman Summers asked Commissioner Toppa to discuss promotions in depth with Ms. Eriksen beyond the immediate T-33 project. See if Ms. Eriksen would be willing to give us an estimate of the T-33 costs plus beyond it. Councilman Measles agreed. The T-33 project should be a separate item outside of the budget and suggested that the promotion of the airport in general is a good idea. Chairman Summers suggested that some sort of theme such as the T-33 or the models would be a good idea. Manager Ernst agreed, stating that those ideas are what prompted him to'invite Ms. Eriksen to address the Commission. Co~issioner Toppa will return with a budget including all the items discussed for submission to the Council after review by Chairman Summers. 7. AIRPORT MANAGER' S REPORT a. Wolverine Leasin9 Manager Ernst stated that this lease has gone through the Council and Planning & Zoning Commission and comes to you at the request of Mayor Williams. Mr. Tom Thibodeau came forward to describe his plan. Currently his business is operating out of Island Lake. We are in need of a maintenance hangar and looking at running a good part of the business out the Kenai airport rather than Island Lake. In starting that up and moving in here, we are starting out with a 70' x 70' Wedgecore hangar which we hope to expand into an office arrangement in the next couple of years. It is not shown on the plan. We will have ramps, a taxiway, parking and we plan to landscape it also. With the float plane basin here and the amount of tourism that is picking up, it only makes sense to be operating out of this airport. Commissioner Toppa asked if the basin was adequate and Mr. Thibodeau answered' that it is adequate for what they have now. If given a choice, he would like to see a taxiway paralleling the takeoff area, something that ~JENAI AIRPORT COMMISSION April 12, 1990 Page 11 you could move more operations quickly through there. Manager Ernst informed the Commission that the Council had issued a special use permit to Alaska West Air for the space that used to be Penny's Travel for information. Mr. Thibodeau stated that it would not only be promoting our business, but Kenai as well. With the kind of trips that we book we plan on having a 24 hour video and slide show going on that people could view when someone isn't there. MOTION- Commissioner Ames moved to recommend to Council that the Commission concurs with Council approval of the Wolverine Lease, seconded by Commissioner Toppa VOTE' Motion passed by Unanimous Consent . COMMISSION COMMENTS & QUESTIONS a. Mr. Thibodeau is Commander of the local Civil Air Patrol who has volunteered to undertake the task of refurbishing the T-33. The Commission and Mr. Thibodeau discussed the project. Chairman Summers also invited Mr. Thibodeau to join in the bicentennial celebration with any ideas he may have from that organization. b. Mayor Williams reported on a meeting with the Russian counterparts to our FAA from Anadar. That community has an airport about the. size of ours. We talked about the economics of the airport or capitalism and they were very interested in the fact that a government entity was running a capitalistic project and making profits from it. Mayor Williams explained the systems of leasing such as the bar and restaurant. We spoke of setting up some kind of similar training here for them. We have a similar airport with the ILS, the glide slope, the necessary electronics for them to practice. This could mean, some time in the distant future, a training facility for the Russians. Mayor Williams asked Commissioner Toppa if FAA had had any similar discussions, he answered yes. They've already have planned an exchange between the controllers and supervisors to use facilities, primarily at this point, the Anchorage Center, however, they are saying that this facility would be more appropriate. Mayor Williams stated that we need to send a clear message to FAA that the City of Kenai is prepared to help in any way we can to promote that type of training and good will relations. Mayor Williams asked the Commission to pursue this further if possible. c. Commissioner Shackleton asked about the progress of the cold water recovery school. Mayor Williams explained the process to date and that the City is waiting for the outcome from the U.S. Senate. It seems to be a question of what budget it will be coming out of. KENAI AIRPORT COMMISSION April 12, 1990 Page 12 9. ADJOURNMENT There being no further business, the meeting was adjourned at 9'50 P.M. Janet A. Sumey Transcribing Secretary