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2012-09-05 Council Airport Committee Minutes City Council Airport Committee Tuesday, September 5, 2012 Draft Meeting Minutes After determining that a quorum was present, the Airport Committee of the Denton City Council convened in a regular meeting on Tuesday, September 5, 2012, at 4:00 p.m. in the City Hall Conference Room, 215 E. McKinney Street, Denton, Texas. PRESENT: Council Member and Chair, Jim Engelbrecht; Mayor Pro Tem Pete Kamp and Council Member Chris Watts. STAFF PRESENT: Assistant City Manager, Jon Fortune, arrived at 4:06pm; Aviation Director, Quentin Hix; Airport Administrative Assistant and Recording Secretary, Julie Mullins; and, Real Estate Specialist, Pamela England. OTHERS PRESENT : Chairman of the Airport Advisory Board, Bob Eames arrived 4:07 p.m.; and, President of U.S. Aviation Services, Jeff Soules. The meeting was called to order at 4:05p.m.by Council Member Engelbrecht. 1)Consider approval of minutes from the meeting held on May 8, 2012. Council Member Chris Watts motioned to approve the minutes followed by a second by Mayor Pro Tem Pete Kamp. The motion carried unanimously. 2)Receive a report, hold a discussion and consider a recommendation to the City Council regarding adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Fifth Amendment to an Airport lease agreement approved by Ordinance 2009-018 dated January 6, 2009 and amended by Ordinance 2009-323 dated December 15, 2009 and amended by Ordinance 2010-193 dated August 17, 2010 and amended by Ordinance 2012-056 dated March 6, 2012 and amended by Ordinance 2012-057 dated March 6, 2012 between the City of Denton, Texas and Sykes-Vaughn Investments, LLC, which includes among other provisions the right to sell aviation fuel to the public for a fuel flowage fee and to provide commercial hangar and tie-down service at the Denton Airport for real property located at 4600 Aviation Director Quentin Hix explained the addition to a new ramp previously leased to Sykes- Vaughan Investments. Mr. Hix indicated the original ramp improvement was approved by the City Council in March as a 30,000 square foot ramp, which the Airport constructed and then leased to Sykes-Vaughan Investment. While constructing the ramp, Mr. Soules met with Airport Management and asked for additional space. Airport Management reconfigured the construction th plan and increased the ramp to 41,400 square feet total. Mr. Hix said this 5 Amendment to the Sykes-Vaughan FBO Lease will increase the ramp lease to the full square footage constructed, and, the lease already includes an eleven percent (11%) tie down commission if customer owned aircraft are placed on the ramp. 1 Mayor Pro Tem Pete Kamp motioned to approve the lease to City Council followed by a second by Council Member Chris Watts. The motion carried unanimously. 3)Receive a report, hold a discussion and consider a recommendation to the City Council regarding adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Commercial Operator Lease Agreement between the City of Denton, Texas and HTA Aviation for approximately 26,055 square feet of land located at 4910 Lockheed Lane at the Denton Airport; and, providing an effective date. Aviation Director Quentin Hix presented a new lease requested by HTA Aviation from the Denton Airport. HTA Aviation is an avionics service and aircraft maintenance business. Their corporate headquarters will be moving to Denton from Spinks Airport, with personal aircraft stored at Denton Airport. They are currently a tenant of Nebrig Associates with a smaller aircraft. HTA Aviation will construct a 10,400 square foot hangar with aircraft ramp. The proposed improvements on this 26,055 square foot lot will include the hangar, 11,700 square feet of concrete paved aircraft ramp and 2,990 square feet of paved parking area. This is the first improvement in a large open area at the Airport where the ground elevation provided no access to taxiways until the City drainage department completed an extensive re-grading project. The utilities will be looped through this area to provide service to HTA Aviation and other planned development of hangars. Council Member Chris Watts motioned to recommend the lease to the City Council followed by a second from Mayor Pro Tem Pete Kamp. The motion carried unanimously. 4)Receive a report, hold a discussion and provide staff direction regarding an Airport Fund investment policy for negotiating improved property leases at Denton Airport; Aviation Director Quentin Hix explained the Airport Fund investment policy for negotiating leases at the Denton Airport. The one page document which summarizes the Public/Private Partnership Investment Policy establishes guidelines for staff to negotiate leases of improved property in order to generate additional revenue for Airport operations. The guidelines include the following: (1): One A private entity considered for participation with the Airport to develop property improvements or to lease Airport improved property must provide proof of financial performances and annual financial statements, annual corporate reports or an audited financial pro-forma. (2): Two A lease of improved property must generate a minimum of capital recovery amortized over a twenty (20) year period with a four-and-one-quarter percent (4.25%) annual return on investment. (3): Three Cash flow from any lease of improved property should produce an amount equal to a range of twenty-five percent (25%) to fifty percent (50%) additional revenue over the amortized investment recovery. (4): Four The calculated payback period from cash flow of funds invested based upon a twenty (20) year amortization plus an operating margin will be eight (8) to twelve (12) years, depending 2 on the size of investment, projected ongoing maintenance cost risk of success for the business venture. (5): Five Projects which match the investment policy established by the City Council will be presented by City Staff directly to the City Council for consideration. All leases which include an investment in property improvements will go through the City Council for approval. These guidelines give Airport Staff a reference for negotiation of Airport leases. No action was taken by the Council Airport Committee at this time. 5)Receive a report, hold a discussion and provide staff direction regarding a Denton Airport Branding/Marketing Study authorized by the Economic Development Partnership Board; The Economic Development Partnership Board (EDPB) appointed a task force which came up with a recommendation for a new Airport name, logo, tag line, and anthem. The EDPB recommendation will be presented at the next EDPB meeting to make a recommendation which th. will be presented to the City Council on October 5 This is a report and request for feedback to be shared with the task force. There was a discussion with the Airport Advisory Board and some Members liked the name some did not. The EDPB will decide if they want to change any part of task force recommendation. Following a general discussion of Airport branding, no action was taken by the Council Airport Committee. The Airport Committee of the Denton City Councilwill convene 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. Council Airport Committee went into Closed Session at 4:27 p.m. 6)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 potential purchase of two tracts of land, located in the David Davis Survey, Abstract Number 356, Denton, County, Texas, and located generally along the west side of Tom Cole Road, directly across Tom Cole Road 3 regarding legal issues associated with the potential acquisition of the real property described above, where a public discussion of these legal matters would conflict Airport Committee of the Denton City Councilunder the Texas Disciplinary Rules of legal position in any potential litigation. 2)Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a tract of land, located in the J. McDonald Survey, Abstract Number 873, Denton, County, Texas, and located generally west of the south west end of the Denton Municipal Airport. potential acquisition of the real property described above, where a public discussion of these legal matters would conflic attorneys to the City of Denton and the Airport Committee of the Denton City Councilunder the Texas Disciplinary Rules of Professional Conduct of the State potential litigation. Following the completion of the Closed Session, the Board will reconvene in Open Session to consider the following: 7)Official Action, if necessary, on Closed Meeting item(s) under §§551.071-551.088 of the Texas Government Code, as amended. 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. Council Airport Committee re-convened in Open Meeting at 4:50 p.m. with no action taken. Adjournment: 8)With no further business to address, the Council Airport Committee adjourned at 4:50 p.m. 4