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HomeMy WebLinkAbout1996-12-12 Airport Commission Summary KENAI AIRPORT COMMISSION AGENDA December 12, 1996 at 7 p.m. Kenai City Library Conference Room Chairman Tom Thibodeau 1. Roll Call 2. Approval of Agenda 3. Approval of Minutes November 14, 1996 4. Persons Present Scheduled to be Heard 5. Old Business a. Car Rental Requests b. Restaurant RFP Timeline .6. New Business 7. Airport Manager's Report 8. Commission Comments and Questions 9. Persons Present Not Scheduled To Be Heard 10. Information Items a. City Council Agenda (11/1 3/96) 11. Adjournment * * * NOTE MEETING LOCATION* * * Agenda Dec 1 2.doc KENAI AIRPORT COMMISSION December 12, 1996 * * * Minutes* * * 1. Roll Call Members present: Members absent: Others present: Bonnie Koerber, Henry Knackstedt, Sandra Hudson, Jim Bielefeld, Barbara Edwards, Ron Holloway, Tom Thibodeau None Councilman Ray Measles, Administrative Assistant Marilyn Kebschull, Airport Manager Randy Ernst 2. Approval of Agenda HOLLOWAY MOVED TO APPROVE AGENDA. MOTION SECONDED BY KNACKSTEDT. AGENDA APPROVED. 3. Approval o'f Minutes November 14, 1996 EDWARDS MOVED TO APPROVE MINUTES. HOLLOWAY SECONDED THE MOTION. ~MINUTES APPROVED. 4. Persons Present Scheduled to be Heard 5. Old Business ,, a, Car Rental Requests Thibodeau noted that the packet contains two letters, one from Dan Van Zee of Hertz and one from Bonnie Koerber of Budget who wish to rent the two unoccupied spots at the airport. Thibodeau stated the Commission needed to discuss this situation. Ernst upd.ated the Commission on Payless. Ernst stated they are gone and the city is trying to contact Michael Routt to get a letter of cancellation. Ernst noted that if they don't get it they will have to proceed by serving with public notice which will take a mini'mum of 30 days. Ernst stated he did not believe the space would be available u.ntil February or March. Ernst noted they have paid the lease space until the end of June. Ernst stated if the city is out anything, they may not be because in discussions with the other car rental agencies they pick up the business. Ernst stated he d,oesn't feel there is a great urgency. Ernst stated he felt it would be good to get a plan to present to council. Ernst stated he is reluctant to have an agency on either side expand and leave one small. Ernst stated the first decision is to decide how many agencies to maintain. If the Commission can come to a consensus on what the market will bear, and if it is three maybe Avis should be included. Knackstedt stated it sounds like Hertz wanted two slots. Ernst stated that Koerber had also wanted two spots. Thibodeau stated he has talked with Mr. Van Zee and he would be happy if it was split in three. Thibodeau stated he felt the commission should discuss the number of agencies and address that first. Koerber handed out information to the members which noted her feeling that the market cannot support five agencies. Koerber stated they would like to see three major car rental agencies. Thibodeau stated they have had quite a turn over. Thibodeau stated looking at the community you don't see a lot of businesses going out of business and new businesses coming in. Thibodeau stated he feels this is a good way for a community to continue to grow. Thibodeau stated looking at the rental agencies there appears to be a steady turn over adding he feels this is because no one is really making a living over there, especially to sustain five agencies. Thibodeau noted that with Payless it was only four agencies and they just pulled out and haven't paid since July. Thibodeau stated he talked to the Borough and there is back sales tax owed. Thibodeau noted the city is losing out on their share of the sales tax and that the employees haven't been paid and are suing. Thibodeau stated he 'thinks they should try to get in back to a solid base. Thibodeau stated he would like to hear other's thoughts. Knackstedt .stated that from the car rental agencies' point of view it would be best to make tl~e:m strong. Knackstedt stated he looked at the figures from Ernst showing the enplanement versus the ten percent, and that when they went from five to four it wasn't a detriment to the city. Knackstedt stated that he feels if you have fewer companies that probably the rates will go up a little bit and the city will make more ~money. Knackstedt stated he assumes they will have the same number of rentals. Minutes Dec 'i! 2...doc Page 2 December 12, 19'96 Thibodeau stated he agreed with Knackstedt adding comments on the benefits of fewer rental agencies. Holloway stated that looking at numbers from our airport in comparison with Juneau and Anchorage they aren't handling it real well either. Knackstedt stated that it appears that the two rental agencies that want to expand are willing to pay for the extra square footage and renovation. Bielefeld stated he feels strongly that the city ought to support the businesses we have. Bielefeld commented that there has been a tendency by the city and the council to bring in more business to the detriment of others. Bielefeld noted this has happened many times in the past. Bielefeld stated he feels we should take care of those who are here now. Koerber commenting on Thibodeau's statement about Payless dropping their prices, that all the agencies had to drop prices to compete and everyone lost. This included the city's share of the revenue. Hudson stated she agrees with the idea of reduction. Thibodeau stated he feels they need to make a resolution of policy--Ernst stated it will be a recommendation to council. Thibodeau stated he thinks what they need to do then, noting he has seen that Koerber and Van Zee want to rent the space but thinks Avis needs to be aware of this. Thibodeau stated all three agencies could be invited to the January meeting to discuss how it could be accomplished. Thibodeau stated if Avis wants to participate and have three equal spots. Thibodeau added he feels this is the way to go. Thibodeau stated that in the meantime he thinks the Commission should visit the airport and look at the spaces and see what they think needs to be done to renovate the area. Knackstedt asked Ernst what his thoughts were one this. Ernst stated his concern would be that dropping to three would be the reduction of the price of the rental car was beneficial to the general public even if it isn't ultimately beneficial to the city as far as commissions go. Ernst stated this was a point to consider. Ernst stated he doesn't have any heartburn with reducing to three agencies, in fact it makes his job easier. Ernst stated he has been looking at ticket counters as he has traveled. Ernst stated that basically the size of the Kenai counters may be a little small but basically they have what Kenai has. Ernst noted the counters were just renovated in March. The carpet is a year and a half old. Ernst stated that the Commission should have the consensus now, such as go with the three. The Commission will contact the three. Ernst stated he would probably make the recommendation to council for their January meeting stating you think that three rental agencies are all that is needed and you would like to pursue contacting the Minutes Dec 12.doc Page 3 December 12, 1996 agencies about renovating the space. council's next packet. Ernst reiterated he would not put it in Holloway asked Koerber about the time frame adding that they would be getting this taken care of by March or April. Koerber stated they usually don't get busy until June. Ernst stated they would have to move fairly quickly and they may want to wait until next fall to renovate. Ernst noted that if council agrees to three agencies it wouldn't be detrimental to the agencies to wait for the extra space. Ernst stated that with regard to the renovation, if for whatever reason, one or all of you decide you don't want to do the renovation, at that point it might be prudent, if you can't get a consensus, to figure out what to do that other space. Ernst stated he feels they should remain the same size. Measles stated he didn't think it was necessary that the spaces remain one size and asked if Avis had shown an interest. Ernst stated he feels confident if Hertz and Budget on either side of them expand, they will say, "Wait." Ernst noted that Avis may not know the space was even available. Measles stated if they were not interested you do see different size car rental spots all over. Measles stated you could have two large ones on each end. Ernst stated he was just thinking about the future for rental of equal size spaces. Ernst noted he thought they had drawn lots for the spaces that were there. Koerber commented that she felt it would look nicer if they were all the same. Thibodeau stated he didn't want to approach Avis until the Commission had a consensus. Thibodeau added he thinks now would be the time. Thibodeau asked Measles if he felt council would like to see a total package to the council on how to accomplish the change to three agencies. Measles stated he feels the timing would be critical adding he would hate to see it put off to fall with the space just sitting there all through the summer. Measles noted they can't start anything until they get the letter to free up the space. Measles noted that legally he has the space until June. Ernst stated the problem is finding him to serve him and that is a 30 day ordeal. Edwards asked if he couldn't be found. Ernst stated he has left a message with an individual in town who he contacts to contact him to let him know that the city wants a release. Ernst stated he has been told he will not give the release. Thibodeau asked if the approach is that if he gives the release that everything will be dropped. Ernst stated the legal standpoint is to just release the space and not attempt legal action. Thibodeau asked if the city would just take their losses. Ernst stated that the other agencies pick up the business when he is gone. Thibodeau stated he was talking about the rentals he had made before he left. Measles stated you will lose that anyway but the borough will continue to attempt to collect the sales tax. Edwards questioned why it couldn't be canceled if he is in Minutes Dec 1 2.doc Page 4 December 12, 1996 breach of contract. Ernst stated if he can't be served, you cannot cancel the lease. Ernst noted this has been turned over to the legal department. Discussion about what happens if Routt doesn't give back the lease and what else could be done. Thibodeau stated if they take a vote tonight that the Commission feels it should be limited to three car rental agencies and then come up with a way to divide the space, then they could decide if they want to meet with the agencies next month. Measles stated he thinks they should proceed as Ernst suggested to recommend to council to stay with three car rental agencies. Measles stated they could state in the recommendation that two of the three agencies have shown an interest in the spaces and that the Commission would like to follow through and talk to all three agencies. Measles stated they could do that next month but at least then they would be putting the council on notice that the Airport Commission is recommending three car rental agencies at the airport. Measles noted that if for some reason they say no, they want five, then there would be no need to meet with the agencies. Ernst stated he didn't want the Commission to feel confined to the one meeting a month. Ernst noted if they need a special meeting to do extra work, they could feel free to hold more than one meeting. Measles noted it could be a work session to meeting with the rental agencies and not an official meeting. KNACKSTEDT PROPOSE A RECOMMENDATION TO CITY COUNCIL TO REDUCE THE NUMBER OF CAR RENTAL SPACES FROM FIVE TO THREE AND THAT TWO OF THE CAR AGENCIES HAVE EXPRESSED INTEREST IN OCCUPYING THE ADJACENT SPACE. HOLLOWAY ASKED IF HE UNDERSTOOD KNACKSTEDT THAT THEY WERE RECOMMENDING LIMITING IT TO THREE. HOLLOWAY SECONDED MOTION. VOTE: HOLLOWAY YES KNACKSTEDT YES BIELEFELD YES EDWARDS YES EDWARDS YES KOERBER ABSTAIN HUDSON YES THIBODEAU YES MOTION PASSED--6 YES, ONE ABSTENTION. Ernst and Measles agreed that it may be better to put this on the council agenda for the first meeting in January. Thibodeau asked if any additional comments. None. Minutes Dec 1 2.doc Page 5 December 1 2, 1996 b. Restaurant RFP Timeline Thibodeau drew attention to the timeline in the packet. Ernst stated it will be in this meeting's packet for council noting there had not been a quorum at the last council meeting. Ernst stated the timeline has been adjusted to reflect the change. Ernst stated it will be a hasty process. Thibodeau asked if the Commission needed to approve the timeline and Ernst stated they had approved it and it was basically an informational item. 6. New Business Thibodeau reported no new business. Edwards asked to report on the possibility of jet traffic from the last meeting. Edwards reported on the contacts she had made with travel agencies regarding jet traffic. Edwards noted she has talked to a lot of travel agencies and hasn't gotten a lot of input from them. Easy Travel advised they don't keep that information on file and they would check with their Anchorage office and suggested the commission go directly to the airline. Measles questioned if the airlines would have the information on where passengers originated. Edwards stated that the agency told her the majority of the people they book go south. Knackstedt stated he spoke with a relative who is in the business and was told airlines are .required to track ten percent of their passengers from point of origin to final destination. This is for the FAA. Measles stated that only works if they are connecting flights. Knackstedt noted 87 percent are flying ERA which are probably connecting to Alaska Airlines and out. Knackstedt stated the information was available from the FAA. Hudson agreed to do some research. Hudson stated she had spoken to several airlines but it was more along the lines of checking on the runway and they felt it was not adequate to bring in traffic. Hudson stated they also mentioned there are services that are not offered in Kenai and they will not even think about coming in to Kenai. Hudson stated she spoke to all the international ones, UPS, Northwest Cargo, Polar Air, Fed Ex, Atlas, Evergreen. Edwards commented those are mostly cargo and not passenger jets. Hudson stated the passenger jets would not respond. Edwards commented they have done their paperwork. Minutes Dec 12.doc Page 6 December 12, 1996 Bielefeld stated that they all fly 747's and Alaska runs 737's. Bielefeld stated that he can say for a fact that 7500 feet isn't enough for a loaded 737 with fuel for Seattle. Bielefeld stated it is fine for Dutch Harbor. Edwards questioned if on the return they could drop passengers off with less fuel. Bielefeld stated they could do that. Bielefeld commented on the fact that airlines run on a hub and spoke system. Bielefeid commented that only a few airlines run on a linear system, Southwest being one. Knackstedt stated he felt if we had the population base it would help. Ernst commented he felt if there was a reason for them to come here they would have done so a long time ago. Discussion about past jet traffic into Kenai. Measles said the idea about using this as a return stop and pick up passengers headed to Seattle through Anchorage. Measles stated that way they would always be coming in light on fuel. Bielefeld stated that makes sense. Measles stated airlines like Alaska are not going to consider something like this that is why they have connections with the commuter planes. Comments that Reno Air would be the type airline to contact for providing service to Kenai. Thibodeau asked how close the Kenai Airport is to being long enough to accommodating jet service as far as the runway is concerned. Bielefeld stated he could figure it out for the 737. Measles stated it probably isn't that far off. Thibodeau asked about the new airline, the 700, and Bielefeld stated he doesn't have any information on that plane. Discussion on what it would take to extend runway. Ernst stated it would be an expensive project and would involve a lot of aspects. Thibodeau noted it was council that asked and in order to answer they would need to get an approximation of numbers. Edwards stated that her concern is like with the car rental agencies, bringing in another plane will hurt those currently in business. Measles commented that his concern is when he sees tickets advertised round trip to Seattle for $145 and ERA was advertising some seats for $1 36. Bielefeld stated there is another consideration and that would be the security required. Bielefeld noted that would be a headache for Ernst as well as for the commuters. Bielefeld gave examples of the difficulties of landing in airports with security. Ernst noted it is an involved situation. Knackstedt asked if it was someone in council who came up with the number of seven passengers. Measles stated it was the Mayor. Minutes Dec 1 2.doc Page 7 December 12, 1996 Thibodeau stated it appears the consensus that at this time not to look into it too much further and there probably won't be jet traffic in the next 1 5 years. Knackstedt commented unless something else would draw them in. Measles stated if they have a reason to come in they will come in with the 7500 feet runway. Bielefeld noted that they will approach the city. Measles stated when they wanted to come in before they just came in and took care of everything. Koerber asked why they left. Discussion on what happened to the earlier jet traffic. Knackstedt asked if the security was different for freight or charters? Ernst stated that they don't fall under the same regulations and it is done all the time with ARCO jets. Ernst stated agrees with what Thibodeau said, that there just doesn't appear to be a consensus to pursue this any further. Measles stated he didn't think there was a reason to spend considerable time on it. Agreement not to pursue this further unless directed. 7. Airport Manager's Report Ernst passed out enplanements figures for November. Ernst noted they had opened the bids for the Fire Training Center. Ernst stated the engineers estimate was $3,420,000 and the bid came in at $3,190,000. Ernst reported it was from Symtron Systems out of New Jersey. Ernst stated there were additive alternatives. Those estimates were higher. The first alternate was galley fire, the engineers estimate was $70,000, the lavatory fire $70,000, and the fuel leak fire was ~ 100,000. Ernst stated respectively the bide came in at $1 00,000, $100,000, $45,000. Ernst stated that recommendation will go to the council for the 1 8t~. Ernst noted that Symtron was the only bidder. Ernst stated that Symtron will get with Morrison and Maierle to get hard numbers for FAA by mid-February. Ernst stated they hope to break ground by mid-June. Knackstedt commented that it was a good engineering estimate. it may go a little over the $8.2 million. Ernst stated that Ernst stated there was a meeting today in Anchorage on the environmental on the Fire Training Center and the EPA, DEC and Corps of Engineers didn't have any problems with it. Simultaneously, we are moving with the environmental on the new taxiway extension and the new grass strip. Ernst stated they have at least a $10 million project going for this summer. Ernst reported they are proceeding with getting the full grant instead of going for two years. Measles stated he is more comfortable with that. Minutes Dec 1 2.doc Page 8 December 12, 1996 Knackstedt asked if working on the float plane basin will have an effect on operations there. Ernst stated he wouldn't think so noting they are waiting on the engineering. Ernst reported that Wince, Corthell, Bryson is doing that. Ernst advised that Keith Holland will be in charge while he is gone and can provide any help needed. Ernst stated he will be back on the 17th and to work on the 20th of January. 8. Commission Comments and Questions Knackstedt asked what happened to the rotating beacon. Ernst stated they blew a shaft and they just got a replacement that does not fit. The right one should be here tomorrow or the next day. 8. Persons Present Not Scheduled To Be Heard 8. Information Items a. City Council Agenda (11/13/96) 11. Adjournment Meeting adjourned at approximately 8 p.m. Resp~ctfully submitted: / Ma¥ilyr~ Kebschuli Administrative Assistant Minutes Dec 12.doc Page 9 December 12, 1996