2011-08-02 Council Airport Committee Minutes
City Council Airport Committee
Tuesday, August 2, 2011
Meeting Minutes
After determining that a quorum was present, the City Council Airport Committee of the City of
Denton, Texas, convened in a regular meeting, on Tuesday, August 2, 2011, at 3:00 p.m. in the
City Hall Conference Room at City Hall, 215 E. McKinney Street, Denton, Texas.
PRESENT:
Council Member Jim Engelbrecht, Mayor Pro Tem Pete Kamp, and
Council Member Chris Watts.
STAFF PRESENT:
George Campbell, City Manager; Bryan Langley, Chief Financial
Officer; John Knight, Deputy Attorney; Mark Nelson, Director of
Transportation; Quentin Hix, Airport Manager; and Theresa
Jaworski, Recording Secretary.
The meeting was called to order at 3:02 p.m. by Council Member Engelbrecht.
Item 1: Consider approval of minutes from the meeting held on July 19, 2011.
Mayor Pro Tem Pete Kamp motioned to approve the minutes followed by a second by Council
Member Chris Watts. The motion carried unanimously.
Item 2: Receive reports by citizens and other interested persons.
With no reports by citizens or other interested persons, Council Member Engelbrecht turned the
Item 3: Receive a report, hold a discussion and provide staff direction regarding ad
valorem tax revenue received from property located at Denton Airport.
Quentin Hix, Airport Manager, gave a report on the ad valorem tax revenue received from
property located at Denton Airport. The information (in draft form) identified property
improvements owned by individuals at Denton Airport currently on the Denton County
Appraisal District (DCAD) Tax Roll. Preliminary calculations indicate the total appraised
property value for buildings and improvements is $10,659,254. Applying a City ad valorem tax
rate of $0.68975 per $100 of appraised value yields tax revenue of $73,522. Information
continues to be accessed from several sources and is being reconciled and documented by
Airport staff. There are also properties that are tax exempt. In addition to the taxable value of
privately owned buildings and improvements at Denton Airport, information is also being
compiled for business personal property (aircraft, et. al.) rendered to DCAD and will be provided
upon completion.
Council Member Engelbrecht asked if DCAD is involved with where the aircraft is based.
A discussion followed concerning the registration and identification of aircraft. Hix pointed out
that while the City cooperates with DCAD, there are no specific City efforts to work with them
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in this area. Identification and maintenance is a voluntary thing, not something that has to be
registered with the Airport but they do have to register with the FAA.
Mark Nelson, Director of Transportation, added that the exception is some of the larger leases
that require an annual report of aircraft that includes registration, based at the Denton Airport.
Council Member Watts asked if there are regulations requiring owners to register the aircraft
locall are we prohibited from including an agreement that
requires registration of the aircraft in a future lease?
registration in the United States in an effort to get a true accounting of all active aircraft. The
FAA followed the cancellations with a period of time to register your plane.
Mayor Pro Tem Kamp asked about the consequences for not registering an airplane.
Knight responded that violation and penalties to the aircraft owner would probably be monetary
and substantial.
Langley offered to gather as much information on who is included on
what actions can be taken within the scope of the law, and bring that information back to
Committee for further discussion.
Council Member Watts suggested that the Committee not abandon a regulatory mechanism that
could strengthen the message of the need to know what is being housed at the Airport.
Also, is there evaluations, to know how
they assess values and how often and the accuracy of the assessments?
With such a finite, local area, perhaps they could do a more accurate assessment. Or have we
done our own analysis of these improvement values to see if they are in line with market value,
outside of having to get appraisals?
Hix answered that staff has not gathered information to verify. There is a requirement when a
ground lease is issued that a certain improvement must be completed within a certain period of
time.
Nelson added that on an annual basis, DCAD will send out appraisers to review building permits
to identify new improvements.
Langley proposed that staff facilitate a meeting with DCAD and discuss their process of
evaluating the improvements to reach a sense of confidence in the values and information
provided without addressing a specific business and better understand how they arrive at the
assessments.
Council Member Watts added that if improvements have occurred at the hangars
been picked up by the tax rolls, we need to make sure there is a mechan
to do that. If so, what is their process? Could they be missing property that should be included?
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Knight added that he was unsure whether or not we have a say in how they assess certain
property but would find out and get back to the Committee.
Engelbrecht asked if Knight would check with the FAA as well. There may or may not be a state
law requiring registration, the FAA would want to tighten up requirements for national security
reasons. I would like to see us proceed in working towards an inventory of every aircraft at the
Airport, for our benefit.
Hix assured Engelbrecht that the information that has been gathered will be applied towards a
complete inventory of aircraft at the Airport
Council Member Engelbrecht asked if the aircraft in Hangar 10 is off the tax rolls because they
are part of a museum inventory.
Hix answered that he did not know but the tax rolls could be checked to see if the aircraft in
Hangar 10 is included or not.
Item 4: Receive a report, hold a discussion and provide staff direction regarding
development of a property management portfolio for each of the Denton Airport property
leases.
Hix explained that this item is in response to the Crequest for more information
about the property management process and property portfolio as identified in the SAMI report
as it addresses the reversion clause.
The total square footage of property under lease is 2,294,802, with an average annual lease rate
of $0.132 per square foot. The current market value ranges from $0.1934 per square foot up to
$0.25 to $0.27 per square foot. Due to the age of the leases, CPI adjustments, and other factors,
our average lease rate is below market. There was some discussion that any efforts made to
benefit the existing lease holders in renegotiating leases, for more favorable term on options such
as the reversion clause, could increase that average lease rate.
rate of $0.01 per square foot for current leases would yield additional annual revenue of $22,948
for the Airport. This is one of the possibilities, once we determine how to create reversion
clauses from this point forward.
This report gives us an opportunity to show a lot of the information that is available on each of
the leases. A recent meeting with Bill Dyer of SAMI Management, demonstrated the software
that Addison uses. This software would be a good management tool in working with the leases.
Mr. Dyer will advise the best consulting service to assist us in determining the most cost
effective software for our leases.
Mayor Pro Tem Kamp asked about the average market value for leases.
Hix replied that staff surveyed other airports e. Market value
ranges from $0.1934 per square foot up to $0.25 to $0.27 per square foot. As we look to
updating the 2003 Master Plan, it would be wise to have a market analysis to determine the
ground lease rate.
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Nelson added that location is a key role in that we compete with smaller rural airports like
Decatur and the larger suburban airports in the area. If you place the rate too high, the smaller
aircraft will move to the airports that would offer the same options at a lower price.
Council Member Watts asked for information on the Airport leases that will be eligible for
reversionary clause options.
The Committee reviewed Exhibit 2 that listed the first three leases scheduled to mature and their
specific dates.
The Airport Committee of the Denton City Councilconvened in a Closed Meeting to
consider specific items when these items are listed below under the Closed Meeting section
of this agenda. When items for consideration are not listed under the Closed Meeting
section of the agenda, the Airport Committee of the Denton City Councilwill not conduct a
Closed Meeting and will convene at the time listed above for its regular or special called
meeting. The Airport Committee of the Denton City Councilreserves the right to adjourn
into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551
of the TEXAS GOVERNMENT CODE, as amended, as set forth below.
1. Closed Meeting:
A. Deliberations regarding Real Property - Under Texas Government Code Section
551.072; Consultation with Attorneys - Under Texas Government Code Section
551.071.
1. Discuss, deliberate, and receive information from staff and provide staff with direction
pertaining to the lease or value of real property located at 910 Aeronca, a tract of land being
approximately 23,915 square feet or 0.508 acres, in the T. Toby Survey, Abstract No. 1285
in the City and County of Denton, Texas where the deliberation of same in an open meeting
would have a detrimental effect on the position of the governmental body in negotiations
with lease of the tract referenced above where a public discussion of these legal matters
City Council under the Texas Rules of Disciplinary Conduct of the State Bar of Texas , or
ition in any administrative proceedings or potential
litigation.
ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A
CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS
HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551,
EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN
IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF
§551.086 OF THE TEXAS GOVERNMENT CODE (THE PUBLIC POWER
AIRPORT COMMITTEE OF THE DENTON CITY COUNCIL
RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR
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(THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING
AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING
ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE
TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-
551.086 OF THE TEXAS OPEN MEETINGS ACT.
Committee reconvened in an Open Meeting at 4:04 p.m.
There was no final action, decision, or vote on a matter deliberated in the Closed Meeting.
1)Official Action, if necessary, on Closed Meeting item(s) under §§551.071-551.088 of the
Texas Government Code, as amended.
2)Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the
Airport Committee of the Denton City Council or the public with specific factual
information or recitation of policy, or accept a proposal to place the matter on the
agenda for an upcoming meeting.
AND
Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of
community interest regarding which no action will be taken, to include: expressions of
thanks, congratulations, or condolence; information regarding holiday schedules; an
honorary or salutary recognition of a public official, public employee, or other citizen; a
reminder about an upcoming event organized or sponsored by the governing body;
information regarding a social, ceremonial, or community event organized or sponsored
by an entity other than the governing body that was attended or is scheduled to be
attended by a member of the governing body or an official or employee of the
municipality; or an announcement involving an imminent threat to the public health
and safety of people in the municipality that has arisen after the posting of the agenda.
With no further business to address, Committee adjourned at 4:05 p.m.
____________________________________________
JIM ENGELBRECHT
COMMITTEE CHAIR
CITY OF DENTON
___________________________________________
THERESA JAWORSKI
RECORDING SECRETARY
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