1 2 3 4 KERRVILLE-KERR COUNTY JOINT AIRPORT BOARD 5 Regular Meeting 6 Monday, February 20, 2012 7 8:30 a.m. 8 Airport Terminal Conference Room 9 1877 Airport Loop Road 10 Kerrville, Texas 11 MEMBERS PRESENT: MEMBERS ABSENT: 12 Stephen King, President Tom Moser, Vice-President 13 Mark Cowden Corey Walters 14 Ed Livermore 15 AIRPORT BOARD STAFF PRESENT: 16 Bruce McKenzie, Airport Manager Laurie DeJohn-Ermey, Executive Assistant 17 18 COUNTY STAFF PRESENT: Guy Overby, Commissioner, Precinct 2 19 Jeannie Hargis, Kerr County Auditor 20 CITY STAFF PRESENT: 21 Carson Conklin, Councilperson, Place 1 Mike Erwin, Kerrville Finance Director 22 VISITORS: 23 Keith Neffendorf, Auditor Mike Wellborn, Wellborn Engineering 24 Jared Martin, Wellborn Engineering Ray Watson,, Kerr Economic Development Foundation 25 Shawna Fahrenthold, Alamo Community College District Mark Armstrong, Kerrville Daily Times 2 1 I N D E X 2 PAGE 3 CALLED TO ORDER 4 1. VISITORS FORUM 3 5 2. DISCUSSION AND POSSIBLE ACTION 2A Monthly Financials 5 6 2B Review of Draft Audit 9, 7 50 2C Request to utilize building at 1994 Airport Loop 8 by the Alamo Community College District 11, 65 9 2D New T-hangar and parking lot 11 10 2E Master Plan 88 11 2F Customs and border protection office 97 12 2G Terminal building lease rates 107 13 3. INFORMATION AND DISCUSSION 3A General update 114 14 4. EXECUTIVE SESSION 119 15 2H Airport security (executive session) --- 16 2I Mooney leases (executive session) --- 17 2J Consultation with attorney (executive session) --- 18 5. ADJOURNMENT 119 19 20 21 22 23 24 25 3 1 On Monday, February 20, 2012, at 8:30 a.m., a regular 2 meeting of the Kerrville-Kerr County Joint Airport Board was 3 held in the Airport Terminal Conference Room, Louis Schreiner 4 Field, Kerrville, Texas, and the following proceedings were 5 had in open session: 6 P R O C E E D I N G S 7 MR. MOSER: Okay, let's call this -- we've got a 8 quorum here. Let's call this meeting to order for the 9 Kerrville/Kerr County Joint Airport Board, February 20th, 10 2012, at 8:34. At this time, any person with business not 11 scheduled on the agenda -- I'm going to speak slowly -- may 12 speak with the Airport Board. No deliberation or action can 13 be taken on these items because the Open Meetings Act 14 requires an item to be posted on an agenda 72 hours before 15 the meeting. Visitors are asked to limit presentations to 16 three minutes. Is there anyone that would like to make a 17 visitor's -- 18 MR. COWDEN: He's on the way. 19 MR. MOSER: Huh? 20 MR. COWDEN: He's on the way. 21 MR. MOSER: Okay. A visitor -- during the 22 visitor's forum? 23 MR. LIVERMORE: Bruce, did you get my e-mail on -- 24 MR. MOSER: Stand by, we're on visitor's forum. 25 Anybody? Not seeing anyone, we will move on -- move on to 4 1 the agenda. Let's see. Did you have a question relative to 2 the agenda? 3 MR. LIVERMORE: Well, I sent Bruce an item last 4 night that I've been thinking about. I should have sent it 5 in earlier, but can we -- can we at least discuss it at some 6 point? 7 MR. MOSER: Not unless it's on one of these agenda 8 items. 9 MR. LIVERMORE: Can't even have a discussion? 10 MR. MOSER: No -- well, you can put it on public 11 forum -- visitor's forum. We can't take any action. 12 MR. LIVERMORE: I understand that. 13 MR. McKENZIE: Now would be the time, if Tom says 14 it's okay. 15 MR. LIVERMORE: Well, you all may recall the 16 incident that occurred out in California about a year ago, 17 where a couple by the name of King was -- oh, it was a big 18 database screw-up, and somehow or another they filed a flight 19 plan in a Cessna 172, which they had been -- these are the 20 owners of King School; they're the most well-known people in 21 aviation education. And they had -- they were doing some 22 kind of a research project, and had been loaned this airplane 23 by Cessna Aircraft Corporation. Sadly, the plane had a 24 number -- an N-number that had been reassigned to this new 25 airplane from an earlier airplane that had kind of 5 1 disappeared. No telling where it disappeared to; probably 2 south. And so when that number popped up on the flight plan, 3 I mean, all kinds of electronic signals went out to federal 4 agencies, and the next thing they knew is the Kings, when 5 they landed in Santa Barbara, were surrounded by a SWAT team 6 with drawn weapons and loaded weapons, and lucky no one got 7 killed, really. The police there did not know how to 8 interdict an airplane, and it was just a big mess, and it was 9 all over the press about a year ago, the aviation press 10 particularly. The Kings, I believe, by now have created a 11 training program for airports to use for -- with their local 12 police agencies so the police agencies will be properly 13 trained on how to interdict an airplane and not get into one 14 of these almost trigger-pulling things, and I'm simply 15 wondering if that's something we should pursue here, to see 16 if that program has been devised, has been finished, and if 17 we shouldn't have some outreach with our police so that 18 they'll really have a better idea of what to do if something 19 of that nature should ever occur. 20 MR. MOSER: Okay. 21 MR. LIVERMORE: Never has. 22 MR. MOSER: Why don't we put that on the agenda 23 next meeting. Okay. Anyone else in public forum? Moving on 24 to the posted agenda, monthly financials. Jeannie? 25 MS. HARGIS: Okay. Page 1, the balance sheet for 6 1 the general fund -- for your general fund shows assets of 2 341,079.44. Page 2 is a total amount of -- of liabilities 3 and equity; again, 341,079.44. Page 3 is the total amount of 4 revenue received year-to-date, 147,328.50. Both entities are 5 exactly matched. Page 4 is the salary page. Year-to-date, 6 46,554.78. Page 5 is the summary of the individual items -- 7 summaries, and then on Page 6, the total amount of those 8 expenses, 45,094.67. Page 7 includes the utilities for here, 9 so a total of 97,432.05 was the year-to-date expenses, 10 leaving us revenue of 49,896.45. 11 MR. MOSER: Jeannie, let me make a comment now, 12 before we get into capital. When I look at -- when I look at 13 revenue, -- 14 MS. HARGIS: Mm-hmm. 15 MR. MOSER: -- we are on schedule. Should be 16 somewhere about 60 percent remaining, which we are, just in 17 general. On expenditures, we are better than that, so I want 18 to compliment Bruce again for holding down the -- the 19 expenditures. We're ahead of schedule. Revenue is on 20 schedule, so that's on the right side of the ledger sheet. 21 So, thank you. 22 MR. COWDEN: I have a question on the management 23 contract on Page 5. 24 MS. HARGIS: Okay. The management contract, we -- 25 we billed you for one quarter. 7 1 MR. COWDEN: Okay. 2 MS. HARGIS: One quarter, and it's the actual 3 amount of the salary; we didn't take any more than that. 4 MR. COWDEN: Okay. 5 MS. HARGIS: So, it's actually less than it would 6 be. 7 MR. COWDEN: Right. 8 MS. HARGIS: Because you didn't have two people, so 9 we're only charging for the one person. 10 MR. COWDEN: Okay. 11 MS. HARGIS: So, that's for the first quarter; that 12 would be October, November, and December only. We hadn't 13 billed for that at all. 14 MR. MOSER: Okay. 15 MS. HARGIS: Page 8 is the capital. Again, your 16 assets there, 178,899.58. The same for the liabilities. 17 Page 9, we are all -- everybody's given their 25,000 except 18 for TexDOT. TexDOT actually -- as we were doing this audit, 19 the first thing we pay out of the RAMP grant, they actually 20 -- they don't really give us any money; they give us a 21 credit. So, you'll see that we don't really actually get 22 25,000 from them -- I mean 50,000. It's like there's a 23 $3,000 deduct on that. As you've been going through these 24 grants, that did become apparent. So, the revenue there is 25 50,043.40. Page 10, we have spent 5,937.50 on the RAMP grant 8 1 year-to-date. That's partially the original part of the -- 2 of the RAMP grant that you have to do. It's the software -- 3 MR. McKENZIE: It's the AWOS, and it's also the 4 stormwater pollution protection program. 5 MS. HARGIS: That TexDOT requires you have. So, 6 that's a total amount of expenses, as you'll see on Page 11, 7 giving you 44,105.90 as revenue over expenses. 8 (Mr. King joined the meeting.) 9 MS. HARGIS: Page 12 is the capital improvement 10 program. This keeps shrinking. The only project that we 11 have out there right now is the relocation of the taxiway 12 which we're waiting for completion of, and then the RAMP 13 grant. And so that leaves us with 168,851.54. The TexDOT 14 projects on Page 13, those agree with the TexDOT -- there is 15 a website, and you can pull down the grants, and these all 16 agree with that. And then -- so you can see, there's really 17 very little money left in each one of them, the ones that we 18 have outstanding. Any questions? 19 MR. MOSER: I'm going to, later on, when we -- 20 after Mike talks about the preliminary engineering and the 21 definition part of it, the T-hangar stuff, I'm going to come 22 back to the item there. You know, we had $600,000 in for 23 T-hangar improvements, and we took that out of the budget, so 24 I'll bring that back up just for discussion item when we get 25 to that portion of the agenda. Thanks, Jeannie. 9 1 MS. HARGIS: Mm-hmm. 2 MR. KING: Would you -- Bruce, did you fill that 3 propane tank up or something last month? 4 MR. McKENZIE: Yes, sir. 5 MR. KING: Okay. Trying to figure out what that -- 6 what that flame we got burning out there -- 7 MR. McKENZIE: I filled it up last month. 8 MR. KING: That's what I thought. 9 MR. MOSER: Is that -- Jeannie, is that it for the 10 monthly financials? 11 MS. HARGIS: That's it for the monthly financials. 12 MR. MOSER: Is there any discussion? Questions? 13 Do I hear a motion that we -- 14 MR. COWDEN: So moved. 15 MR. MOSER: -- approve? Second? 16 MR. WALTERS: Second. 17 MR. MOSER: Motion and second to approve. All in 18 favor? 19 (The motion carried unanimously, 5-0.) 20 MR. MOSER: Okay. You got it. 21 MR. KING: All right. Item 2B, review of the draft 22 audit. Jeannie Harris. 23 MS. HARGIS: I would prefer that the auditor 24 present this rather than myself. I think you all have -- 25 MR. KING: What? 10 1 MS. HARGIS: The auditor. He should be here. If 2 he isn't, then we'll just have to put it for approval at the 3 next, because this is really -- 4 MR. KING: He's supposed to be coming? 5 MS. HARGIS: He was supposed to, but I was not at 6 my office; I was at a conference Thursday and Friday. I did 7 talk to him on Wednesday. 8 MR. KING: Okay. 9 MR. MOSER: The only thing I would say on this item 10 is Paragraph 3 of the independent auditor report, it 11 basically says -- that summarizes it. It says, "In our 12 opinion, the financial statements referred to above present 13 fairly, in all material respects, the respective financial 14 position of the government activities, each major fund, and 15 the aggregate manage fund information of Kerrville/Kerr 16 County Joint Airport Board as of September the 30th, 2011, 17 and the respective changes in financial position and cash 18 flow, where applicable, thereof for the year then ended, in 19 conformity with accounting principles generally accepted by 20 the United States of America." It says everything is good. 21 MS. HARGIS: That's a clean opinion. That's 22 referred to as a clean opinion. 23 MR. MOSER: I just wanted to put that on the 24 record, that that's good. But thanks, Jeannie. 25 MR. KING: Pass on that? 11 1 MS. HARGIS: Yeah, because it's really not my 2 document. I prefer -- 3 MR. KING: Okay. We'll pass on that; see if he 4 shows. 5 MR. MOSER: Okay. 6 MR. KING: All right. Item 2C, request to utilize 7 building at 1994 Airport Loop by Alamo Community College 8 District. Ray Watson. 9 COMMISSIONER OVERBY: Steve, Ray is on his -- 10 en route right now. He should be here in just a moment. 11 He's running just a little behind, so if you could come back, 12 if you don't mind? 13 MR. KING: He was late like me? 14 COMMISSIONER OVERBY: He should be here any minute. 15 MR. KING: I apologize for being late. All right, 16 we'll go to -- 17 MR. MOSER: 2D. 18 MR. KING: Let me mark that. Do you have a pen? 19 MR. LIVERMORE: Stylus. 20 MR. KING: What is that? 21 MR. LIVERMORE: A stylus for an iPad. 22 MR. KING: All right. Item 2D, new T-hangar and 23 parking lot cost information. Mike Wellborn. Mike, are you 24 here? 25 MR. WELLBORN: Yes, I'm here. I may blind you; 12 1 we've got a Power Point there behind you. 2 MR. KING: Oh. 3 MR. WELLBORN: This is Jared Martin; he's going to 4 pass out some additional information for you. 5 (Discussion off the record.) 6 MR. WELLBORN: Actually, what you got there is just 7 a duplicate of this. You'll notice in the handouts we just 8 handed you, there's two of each. The reason there's two of 9 each is because we had an issue with the blotters. On one, 10 the hatching for the new pavement is too light, and the next 11 one is too dark, so you can see the contrast between the 12 two -- the two exhibits. One's exactly the same; just the 13 printing's -- 14 MR. MOSER: I'm sorry, Mike. What did -- start 15 over again? 16 MR. WELLBORN: Okay. Well, to begin with, this 17 right here, we started off with the master plan, the 18 previously approved master plan. And this is the concept 19 that was shown, the Garver master plan. 20 MR. MOSER: What is this? 21 MR. WELLBORN: Alternate Number 1. 22 MR. MOSER: Okay, all of that. Got you. 23 MR. WELLBORN: West side, Alternate Number 1 is 24 what was in the previous master plan. We started with that 25 and made a few modifications. One you can see here behind 13 1 this, this is a transparent overlay on the existing aerial. 2 That's the existing paint booth for Mooney. The design -- 3 what Bruce and I visited about, we want to keep this in 4 operation during this Phase 1 hangar project. 5 MR. MOSER: Right. 6 MR. WELLBORN: And so we moved it such that the 7 dividing line for Phase 1 is going to be somewhere right 8 around in here. 9 MR. MOSER: What you're saying is, you changed what 10 was in the master plan? 11 MR. WELLBORN: Slightly. Very slightly, just 12 shifting things over. We've got -- you can look at the 13 previous master plan again. This was previously approved, 14 west side, Alternate Number 1. The other thing that we did 15 change were these buildings right up in here. You can't see 16 the numbers. On your handouts, you can see those. Those are 17 the 40-by-60 hangars here, and the on 60-by-60 hangars here. 18 The previous master plan had those buildings 10 foot -- 19 separated by 10 feet, which is allowable. However, these are 20 spaced 30 feet apart. And the reason we made that 21 modification -- we can go back to the other scenario. The 22 reason we made this modification was that if you're at 30 23 feet separation, you do not have to do a fireproof wall. 24 MR. MOSER: Oh, good. 25 MR. WELLBORN: And so we eliminate that requirement 14 1 by doing the further separation, though we do lose one of the 2 60-by-60's and one of the 60-by-40's. 3 MR. MOSER: Hey, Mike? 4 MR. WELLBORN: Yes? 5 MR. MOSER: Get me -- get back to baseline, okay? 6 MR. WELLBORN: Yes, sir. 7 MR. MOSER: Show me where the hangars are that have 8 -- what, 30 in Phase 1? 30 T-hangars? Point to me -- show 9 me that. 10 MR. McKENZIE: Be the top right at the left of that 11 line of demarcation, just to the left. 12 MR. MOSER: It's -- 13 MR. McKENZIE: Right, these hangars here. 14 MR. MOSER: Yeah, okay. 15 MR. COWDEN: That's 30 right there? 16 MR. McKENZIE: Yes, sir. 17 MR. MOSER: So -- Mike, so for those 30 -- for 18 those Phase 1 hangars there, the step you're going to show us 19 is the flat work -- is the preliminary -- let me say it 20 different. Is the engineering definition work that you've 21 done to get to those hangars right there, right? 22 MR. WELLBORN: Right. I've got that slide next. 23 MR. MOSER: The other stuff that you're showing is, 24 "Hey, here's some other things to consider for the master 25 plan as a way to improve it"? 15 1 MR. WELLBORN: What we had to do was a start for 2 the Phase 1; we have to start to see, what will this look 3 like in the ultimate, complete picture? And then let's peel 4 away from that so we can get to Phase 1. 5 MR. MOSER: Okay. 6 MR. WELLBORN: So, that's the overall big picture. 7 MR. MOSER: Okay. 8 MR. WELLBORN: Phase 1 is we're going to go to 9 right here. This is the Phase 1. I know your attention is 10 going to be drawn to this, so we're going to go ahead and 11 start right here, if you'd like to. 12 MR. MOSER: Okay. 13 MR. WELLBORN: The Phase 1 is basically the paving 14 costs. There's two alternates. You can see the detail on 15 that if you flip to the third page in the packet that I 16 handed you. 17 MR. MOSER: Wait, wait. Before you flip, show us 18 -- show us what the paving is you're talking about with your 19 pointer. 20 MR. WELLBORN: The paving is this portion here, and 21 all this paving, this hatched area through here. 22 MR. MOSER: So, just all the way down there. Take 23 away the hangars, and all that stuff down below. 24 MR. WELLBORN: Yes. Take away the kind of 25 reddish -- 16 1 MR. MOSER: Yeah, right. 2 MR. WELLBORN: -- hangars -- 3 MR. MOSER: Got you, okay. 4 MR. WELLBORN: -- and everything, so that would be 5 all that's required. Let me start here. This light blue 6 here is the existing water line. 7 MR. MOSER: Okay. 8 MR. WELLBORN: This green line here is the existing 9 sanitary sewer. 10 MR. MOSER: Okay. There's a dashed line. 11 MR. WELLBORN: The reason I gave you the handout -- 12 you can see that better on the handout that I gave you. 13 That's the proposed sanitary sewer, this one here. 14 MR. MOSER: Okay. 15 MR. WELLBORN: So, it will actually be the third 16 sheet in that handout that I gave you. 17 MR. LIVERMORE: I'm confused, I'm sorry. 18 MR. WELLBORN: Okay. 19 MR. LIVERMORE: Bruce, let me see your pointer, 20 please. 21 MR. WELLBORN: Here. 22 MR. LIVERMORE: Or somebody, whoever's got one. 23 MR. McKENZIE: Could you get a pointer out of my 24 drawer? 25 MR. MOSER: I've got one. 17 1 MR. LIVERMORE: All right. Is this the original -- 2 the initial phase right here? 3 MR. McKENZIE: Yes -- well, that's going to be the 4 Phase 1, yes, sir. 5 MR. LIVERMORE: Just those three buildings? 6 MR. MOSER: Right. 7 MR. McKENZIE: That's correct. 8 MR. LIVERMORE: What are those down here that 9 you're talking about? 10 MR. MOSER: Phase 2. Well, that could be a Phase 11 2. I wanted to show those, because we're going to have to 12 put this pavement in. 13 MR. LIVERMORE: The paving in for that. 14 MR. WELLBORN: For that, in order to access those 15 hangars. 16 MR. LIVERMORE: Oh. 17 MR. WELLBORN: So, it's like you're going to 18 have -- 19 MR. LIVERMORE: All of the paving for under the 20 buildings, ultimately, in Phase 1? 21 MR. WELLBORN: No. 22 MR. LIVERMORE: Just a roadway? 23 MR. WELLBORN: Just the area that's gray in there, 24 that's grayed out. 25 MR. MOSER: He's -- yeah. 18 1 MR. WELLBORN: And the reason I gave you the 2 handout too is so you can see that a little bit. 3 MR. LIVERMORE: You're talking about this right 4 here? 5 MR. WELLBORN: On the handout I gave you, the one 6 you got open, it's the black area. 7 MR. LIVERMORE: Okay. 8 MR. WELLBORN: The area that's black right there. 9 MR. LIVERMORE: Well, I should have looked at that. 10 My attention was up there. I can see it better here. 11 MR. WELLBORN: Actually, that's the overall master 12 plan, but the page -- if you flip back through there a little 13 bit further -- 14 MR. KING: Is that concrete, Mike? 15 MR. WELLBORN: Well, that would be asphalt. 16 MR. KING: That's asphalt? 17 MR. WELLBORN: Yes, sir. This -- this in here, 18 there's two options. And the reason I gave you two options 19 was -- one is, this pavement, in order to serve these 20 buildings, must be fire lane type of road. City standard 21 street would cost you between -- for 2 inches of Type D over 22 4 inches of Type B, basically 6 inches of asphalt, -- 23 MR. KING: Yeah. 24 MR. WELLBORN: -- that would be roughly this cost 25 right here, 722,000, just for the paving. An alternate would 19 1 be we could reduce that by about 120,000. That would be 2 using 2 and a half inches of Type D asphalt, "D" for driving. 3 That's the surface course. Then below that, you have some 4 flex base material, which is cheaper than asphalt. And then 5 this also includes a geo-grade. Note that I do not have a 6 geotech report for this -- the distance soils here. That 7 cost will most likely be able to be reduced, because also in 8 this price I have, it's set up so that in case we get into 9 some clay materials, that we can lime-stabilize it. 10 MR. MOSER: Okay. 11 MR. WELLBORN: Most likely, you will not run into 12 that here. 13 MR. MOSER: That's why you have that in here? 14 MR. WELLBORN: Yes, sir. This is a conservative 15 number, yes, sir. 16 MR. MOSER: Okay. 17 MR. WELLBORN: Okay. The water -- any questions on 18 the paving before I go any further? 19 MR. LIVERMORE: What is the temperature -- I'm 20 thinking -- I mean, sometimes asphalt melts in hot -- in hot 21 weather. This won't do that? 22 MR. WELLBORN: No. I got -- I know a really good 23 paving expert guy, Bruce. 24 MR. McKENZIE: It won't melt. It's the same thing 25 as the taxiway runway that we just built. It's all the same. 20 1 MR. LIVERMORE: Okay. 2 MR. KING: What's the weight? 3 MR. McKENZIE: Weight-bearing capacity of this. 4 MR. WELLBORN: It's -- the fire marshal's office 5 requires -- I think it's 70 -- 6 MR. McKENZIE: 70,000. 7 MR. WELLBORN: 70,000-pound load for fire trucks. 8 These -- these airplanes out here weigh, we said on average, 9 about 2,500. 10 MR. WALTERS: What kind of -- did y'all use 6 11 inches out there, as you did in this Paving Option 1, or did 12 you y'all do something similar to that? 13 MR. McKENZIE: Out here, Corey, was 8 inches, and 14 it's got 4 inches of hot mix on it. That's why we've got a 15 70,000-pound load-bearing capacity on the new taxiway. 16 MR. WALTERS: So, that would be something closer to 17 your Option 1, wouldn't it? 18 MR. WELLBORN: Yes. Yes. 19 MR. LIVERMORE: Mike, these -- I'm sorry, excuse 20 me. 21 MR. McKENZIE: That other 2 inches of hot mix makes 22 a huge difference. Two is adequate, but when you put 4 23 inches down, your weight-bearing capacity just balloons. 24 MR. WELLBORN: That's a -- for this sake here, the 25 runway requirements will be different than -- than this 21 1 pavement requires. 2 MR. McKENZIE: Because of impact data. But that -- 3 the single engine type airplanes are going to be using the 4 T-hangars. A 172 doesn't weigh but 2,800 pounds, in round 5 figures; 3,000, maybe. 6 MR. LIVERMORE: As time goes on, single engine 7 airplanes are going to become heavier, because they're 8 getting turbine engines, and they're getting bigger. And I'm 9 thinking of some of the bigger turbo -- the big turboprop 10 singles. Will any of those be able to be -- are these 11 hangars sized for just what we know about today, or are 12 they -- I don't even know what the dimensions, say, of a 13 Meridian is, but a Meridian's got to weigh more than my 14 airplane, I believe. 15 MR. McKENZIE: A Meridian won't fit in these 16 hangars, necessarily. Well, they -- 17 MR. MOSER: They won't fit in Phase 1, but in Phase 18 2 they will, right? 19 MR. McKENZIE: These bigger hangars will take a 20 Meridian, an 850, a Socata TBM, that type of airplane, a 21 Pilatus. 22 MR. LIVERMORE: Will take a Pilatus? 23 MR. McKENZIE: The larger hangars will, not the 24 T-hangars. 25 MR. MOSER: What we're trying to do here is, number 22 1 one, with a -- and I'm going to go back, okay? This is what 2 I put together February 8, 2010. It said let's figure out 3 how to get 30 hangars at least, okay, because we got 30 4 people waiting, right? 5 MR. McKENZIE: Yes, sir. 6 MR. MOSER: Thirty people waiting for T-hangars, so 7 what we're trying to do is say, let's get off the dime, ask 8 Mike to look at this thing. Phase 1, what is the -- what's 9 the cost of infrastructure to get -- to get to Phase 1, where 10 we can capitalize on the 30 people waiting and have hangars 11 for them? Trying to get to revenue-neutral at the airport, 12 so that's what we're focusing on here. And then I think 13 later on, we're going to talk in the master plan about the 14 whole thing; you know, the larger aircraft, blah, blah, blah, 15 blah. But we don't have a waiting list for those people 16 right now, okay? 17 MR. LIVERMORE: Okay. 18 MR. MOSER: So, just -- all I'm doing is just 19 trying to put it in context. What -- 20 MR. KING: Bruce, how wide is that apron area in 21 front of the 50-by -- 22 MR. McKENZIE: Up at the top? 23 MR. KING: How wide is this pavement right there? 24 MR. McKENZIE: Should go to 80 feet, isn't it? 25 It's 80 feet. 23 1 MR. KING: Eighty feet? 'Cause I notice it goes on 2 down here in your next plan. It almost serves as a taxiway. 3 MR. McKENZIE: And it would. 4 MR. KING: It would serve as a taxiway? 5 MR. McKENZIE: Yeah. That was the -- the idea. 6 MR. KING: Is that big enough? Did y'all address 7 that? Is that wide enough for somebody to pull an airplane 8 out here, park it, and still be able to get an airplane by? 9 MR. McKENZIE: If the airplane is parked 10 perpendicular to the hangar, but if he pulls it out and turns 11 it parallel to the hangar like he's going to taxi, no. But 12 the theory there is, he's going to be taxiing out, or if 13 someone's taxiing in as well, he'll have to wait. 14 MR. WELLBORN: And those dimensions were taken from 15 what was in the previous Garver -- 16 MR. KING: Okay. 17 MR. MOSER: Yeah. Mike didn't -- wasn't really 18 focusing on redoing the master plan. 19 MR. WELLBORN: Well, we started with what y'all 20 had. 21 MR. MOSER: He's saying, what's it going to cost to 22 do this? 23 MR. McKENZIE: Get this pavement and all, get 24 people here and get them off of Peterson Farm Road, and give 25 them the utilities that they need. 24 1 MR. KING: Right. 2 MR. McKENZIE: And the hangars that they need. 3 MR. WELLBORN: Yes, sir. 4 MR. MOSER: Okay. 5 MR. COWDEN: Mike, somewhere along the way, I don't 6 know if it was in the master plan, but Joey was talking about 7 moving his self-serve fuel deal over there. I don't know. 8 Did y'all talk about that? 9 MR. WELLBORN: No, sir. 10 MR. McKENZIE: What we can do is put that -- let me 11 see your pointer, Steve. That can be placed along here or 12 along here. If, indeed, he does decide to move that, even if 13 we put new hangars here and here, if this goes away, we can 14 still put a self-serve fuel system in here. 15 MR. MOSER: That's portable, right? 16 MR. McKENZIE: Yeah. 17 MR. WELLBORN: One thing on the paving you do want 18 to note -- I'm going to go back to this -- is the master plan 19 had all this parking -- 20 MR. KING: Yeah. 21 MR. WELLBORN: -- here. That's not included here. 22 MR. MOSER: Right. 23 MR. WELLBORN: You know, we did not figure we 24 needed -- I figure you got enough area, if somebody needed to 25 park, they could park off to the side. I also want to note, 25 1 you could -- we could cut some of these costs in this area in 2 here. I believe that's also -- that's 60 feet wide. You 3 know, that's to serve in front of these hangars. We could 4 reduce some of that paving for this phase of it. But I would 5 say if you're going to put the paving there, it would be real 6 nice to come in later and just add in those hangars here. 7 That's an option -- a cost savings that we could look at as 8 well. Next thing would be the water -- the water line. 9 Again, this is the existing water line right through here. 10 The -- you know, here I got two connection points; comes up 11 here, and over at this location. 12 MR. MOSER: Oh, wow. 13 MR. WELLBORN: That's set up, and the reason being 14 is 'cause currently, the city's requirement is that you would 15 have to have a looped system. 16 MR. MOSER: Have to have what? 17 MR. WELLBORN: A looped water system. 18 MR. MOSER: Not so. 19 MR. WELLBORN: However, -- 20 MR. MOSER: Not so. 21 MR. WELLBORN: -- I think you can make the case 22 that -- 23 MR. MOSER: Not so. 24 MR. WELLBORN: -- that whole airport is served by 25 one-way feed; therefore, you may be able to eliminate -- 26 1 MR. MOSER: Right. So, did you put this in there? 2 MR. WELLBORN: I put that -- that as proposed at 3 present to meet current city requirements. We may be able to 4 get out of that. Again, I wanted to give you worst case 5 scenario. 6 MR. MOSER: Got it, all right. So, we can -- what 7 you've given us here, and that's good to go, worst case. 8 What you're saying is, that water line is not required. 9 Okay, let me just -- 10 MR. WELLBORN: Okay. 11 MR. MOSER: -- use my own terms; it's not your 12 terms. And this additional pavement here could be reduced in 13 size and cut out. You know, there's $40,000, $50,000 right 14 there. 15 MR. WELLBORN: Yes. 16 MR. MOSER: Okay. Thank you, Mike. 17 MR. WELLBORN: So, the water line, and that's set 18 up with some fire hydrants here. Go back to this Phase 2. 19 MR. MOSER: Right. 20 MR. WELLBORN: Even in the overall master plan, 21 these fires were set, because there's a fire required to be 22 within 500 feet of any point of a building, and so that's how 23 this set. Also these water meters, can you can build up to 24 10 building connections off of one 2-inch water service, so 25 I've got -- 27 1 MR. MOSER: Okay. 2 MR. WELLBORN: -- water service. 3 MR. MOSER: But you don't have that in here? 4 MR. WELLBORN: That is in there. That's -- that's 5 for this portion, not all of that portion. 6 MR. MOSER: Okay, just this portion. Let me -- 7 MR. WELLBORN: All in here. 8 MR. MOSER: Let me request something. 9 MR. WELLBORN: Yes, sir? 10 MR. MOSER: Don't confuse us with all -- tell us -- 11 what I want to do -- what I want to do is, I want to 12 understand what the costs are to get the services and things 13 we need for here, okay? I don't -- I don't want to talk 14 about a bunch of options. We can do that later, please. 15 MR. WELLBORN: For Phase 1, it'll be $236,000. We 16 could eliminate that, possibly. 17 MR. MOSER: Okay. 18 MR. WELLBORN: Sanitary sewer, 36,000. Again, 19 existing sanitary sewer up to here; proposed would be from 20 here to here. My understanding is only one of these 21 buildings will have restroom facilities. 22 MR. MOSER: Okay. 23 MR. WELLBORN: Phase -- well, I won't go into that. 24 Storm sewer, again, I gave you an allowance for 15,000 for 25 culverts that may be required under these approaches. 28 1 MR. MOSER: Mm-hmm. 2 MR. WELLBORN: And then maybe additional. If I'm 3 light anywhere, it's going to be on the storm sewer. 4 However, I've got some substantial contingency built into 5 this as well. Dry utilities; that would be mainly, like, 6 KPUB electric. That was -- I was shocked by that number. 7 And part of the reason is just to trench this out here would 8 be $36 a linear foot, was the price that I got. And the 9 reason I got that was 'cause they knew about the issues we've 10 had out here when we put in the storm sewer. 11 MR. MOSER: But this is all fill. That's all fill. 12 MR. WELLBORN: And what will happen is, we'll go 13 through and do geotech work; we'll do bore locations, cores, 14 and we'll provide that to the contractor, so if he says worst 15 case is like -- I got to put this in here, 'cause if we get 16 into that rock, he says it's expensive. That number could be 17 reduced, and he says if we don't get the rock, it's going to 18 be reduced by approximately 30 percent. 19 MR. MOSER: Can't be any rock if it's all fill, and 20 it's probably 8 feet of fill there. 21 MR. COWDEN: How deep is the sewer? 22 MR. McKENZIE: That sewer -- I'm sorry, go ahead. 23 MR. WELLBORN: It's about 6 feet. 24 MR. McKENZIE: That sewer that went under the apron 25 where we had all the problems several years ago, that sewer's 29 1 probably 18 feet deep underneath that runway -- 16 to 18 foot 2 deep. Because right back here, it's about 14 feet deep. 3 MR. WELLBORN: We extend that 16 feet in depth, so 4 if that was 18 feet at a location, we drop with a drop 5 manhole, so we're not going to -- 6 MR. McKENZIE: That is all fill. That's -- Tom's 7 correct; that's fill. 8 MR. MOSER: That's -- that's huge fill along there. 9 MR. WELLBORN: Okay. So, you can -- there's 10 another cost savings we could come in. What will happen is, 11 though, when we put this out to bid, is that we'll have these 12 core locations and we'll show those on there so the 13 contractor knows he's not gambling if he gives us a low 14 number. 15 MR. MOSER: Right. 16 MR. WELLBORN: Dry utilities; that was that. That 17 also included for if we came in and trenched this; this would 18 be a transformer in here, a transformer down in this 19 location. As we come in and put in the conduit, KPUB will 20 pull the wire and set the transformer at no cost. However, 21 you have to put in -- dig the trench and put in the conduits, 22 then come in and pull the wire. I set that up just for 23 three-phase, just because the conduit's cheap. You aren't 24 going to have to skimp there. And that added a couple extra 25 conduits for -- if somebody needed, you know, fiber or -- or 30 1 telephone or something, they could pull that through this 2 same conduit. Also, I put in some price for conduit to come 3 back along here, and leave stub-outs to each of these 4 buildings, because you don't want to have to pay for 5 trenching twice. We got that trench open. One of the neat 6 things about KPUB, they will allow you to put other dry 7 utilities in that same trench. 8 MR. MOSER: Wow, good. 9 MR. WELLBORN: And so there will be a savings to go 10 ahead and do that conduit. That is conservative. If we 11 don't get into rock; you can at least cut that down by 30 12 percent. 13 MR. MOSER: Okay. 14 MR. WELLBORN: And the miscellaneous, that's things 15 for, like, materials testing, the survey, staking, bonds the 16 contractor will require. And I gave you a substantial 17 contingency. The standard with city projects, you go 10 to 18 20 percent, 20 percent being the high end for a contingency. 19 I put in 200,000 for this for a contingency. That will cover 20 for anything that may come up. There's always something that 21 comes up that nobody thought about or you needed to add to 22 the project, but that is a substantial amount of contingency. 23 Total cost would be -- you know, 1.3 is probably overly 24 conservative. The 1.2 would be realistic. So, that's 25 figuring the construction costs about 1 million, and the 31 1 contingency would be 1.2. Engineering costs on that, a 2 conservative number would be, if you put this out to -- to, 3 you know, some engineer, which would include your 4 geotechnical, your surveying costs, and your civil design, 5 would be around 8 percent. I think that's kind of high, but 6 if you put that out, that's the kind of the going rate for 7 that. 8 MR. MOSER: Okay. 9 MR. WELLBORN: And so do you have any questions on 10 this phase before we get into the parking? 11 MR. MOSER: Okay. Before you get into parking, is 12 there any -- any questions for Mike? 13 MR. WELLBORN: Sir? 14 MR. KING: Yeah, I had a question. Mike, is there 15 sufficient -- is there enough room behind those T-hangars -- 16 behind those things to, at some point, put a road -- a road 17 down the back of it in that area there? 18 MR. MOSER: Oh, here? 19 MR. WELLBORN: Back here? 20 MR. KING: I think you're going to run into a huge 21 situation. You're utilizing a taxiway for a highway. I 22 mean, you're using -- and you're going to -- if you ever 23 build this thing completely out, you're going to have 200 24 people with cars driving down the taxiway. I mean, it's just 25 -- you know, it doesn't -- it's not bad over here in this 32 1 system, because they drive down a road until they get 99 2 percent of the way to their hangar. But you're talking about 3 utilizing a taxiway as a main highway to get to anyone's 4 T-hangar. 5 MR. McKENZIE: Behind -- excuse me. Behind those 6 down at the lower right right here, this right here, Steve, 7 there's such a dramatic elevation change between where this 8 slab on grade would be and the bottom of this, there's 9 probably a 12- to 15-foot fall there; goes to Silver -- 10 Silver Creek is right here. 11 MR. KING: Yeah. 12 MR. McKENZIE: And this just dramatically falls 13 off. You know, that could be built up, but you'd be above 14 our 10-foot chain link fence. 15 MR. KING: I understand that. 16 MR. COWDEN: We can move the chain link fence. 17 MR. KING: That's going to be -- 15, 20 years from 18 now, that's going to be -- we'll go back and go, "What the 19 heck happened here?" 20 MR. MOSER: Let me stay on the agenda item. What 21 we're trying to do is get us to here. 22 MR. KING: No, I understand. And I think you can 23 do that, use that taxiway for the first phase, but at some 24 point, you're going to have to have some way to get people 25 back there. 33 1 MR. MOSER: Yeah, good point. 2 MR. KING: I've seen it. I've been to airports 3 like -- 4 MR. MOSER: Can't do that. 5 MR. KING: -- the airport up at Northwest Regional 6 up north of Dallas. They got a million hangars there, people 7 driving all over the place. 8 MR. MOSER: Let me follow Mike Wellborn's 9 presentation with -- pass these out; hand one to her, and 10 we'll get some more copies if we need to. I did -- what I 11 want to do is pick up where we were two years ago, okay? 12 When we talked about -- pass some out to the people in the 13 audience -- how to get this airport revenue-neutral as soon 14 as we can. We've got 30 people-plus waiting for T-hangars, 15 so we went through an analysis that said let's move out on 16 this. They said before we move out on it, -- I'm reviewing 17 the bidding now -- let's complete our master plan, and with a 18 focus on the west side and where we can put the T-hangars. 19 Next step was Mike did what he did in a very short time. 20 Mike, thank you for that. You did perfect, okay? That's 21 exactly what I was looking for. 22 What I've done is, I said let's go to the next 23 step, look at the cost of construction of 30 T-hangars. Flat 24 work, I chose Mike Wellborn's 1.3 million up here, high end. 25 It's probably a little bit less than that, but let's leave it 34 1 there. The vertical work, that's -- that's the building 2 itself. I used some stuff that -- that Bruce McKenzie had. 3 Bruce, I reduced that a little bit, from 43,000 to 40,000, 4 okay? Just in today's market. 30 units, that's 1.2 million. 5 The cost share on that for the flat work, it's been indicated 6 we can get from the -- from TexDOT an 80/20, or they even 7 mentioned a 90/10, didn't they, Bruce? 8 MR. McKENZIE: Yeah. 9 MR. MOSER: But I went with an 80/20. So, for the 10 flat work, that's $260,000 that we, the airport, City or 11 County would have to come up with. The vertical 12 improvements, 1.2 million. The other day in Commissioners 13 Court, -- and, Guy, weigh in on this, or Jeannie -- there was 14 some discussion about revenue from bonds, and/or -- and I 15 guess just bonds, and whether or not that money could be used 16 for facilities like this to lease to the public. And the 17 tax -- the bond attorney that was there, I talked to him on 18 the side, and he said yes, you can. And he said in his 19 opinion -- he was going to go back and research a little bit 20 more before he said no, we couldn't do that, but he says 21 navigation districts do this all the time. They use bonds 22 like that though general -- to create boat slips and things 23 for people, and they lease them to individuals. So, I mean, 24 this is land; that's water, okay? 25 MR. LIVERMORE: Same deal. 35 1 MR. MOSER: So, it sounds like real similar, so 2 that has to be verified. But -- so I'm going to assume that 3 that type of thing could be done. So, the cost of 4 construction to owners is 1.5 million for the 30 hangars. 5 So, what's the operating expense on that? Assuming 4 percent 6 loan for 30 years, $7,200 a month, cost of money, 1.11 7 million. Total cost, 2.6 million. Annual payment, $86,000 8 to cover that debt and service. The operating expense, I 9 just assumed, Bruce, $50 per unit in that, something like 10 that, for reinsurance, blah, blah, blah. Fixing roofs, leaks 11 and so forth. So, the total operating expense for 30 12 hangars, $104,000. Operating income, assuming $400 per 13 month, okay, for 12 months, 144,000. So, there's a net 14 income per year of $40,000. So, that's kind of the bottom 15 line right there; $40,000 off of those 30 hangars. So, the 16 total net income over 30 years is 1.2 million. 17 Well, when you look at that, that doesn't look too 18 good, okay? I mean, it looks -- it looks good; it's 19 revenue-neutral that way. But if I increase the rental rates 20 5 percent every five years, -- not a big increase; that's 21 about 1 percent per year -- then that net income over 30 22 years is 1.7 million. So, it looks like -- it looks like, 23 you know, with our master plan in place, which we're going to 24 approve within the next month or so, okay, with what Mike has 25 done, with some other potential, it looks like that we can 36 1 take a -- get 25 percent of the way there on revenue-neutral 2 just for -- just for those 30 T-hangars. And we might want 3 to go more than 30; depends on what the market is. So, 4 that's -- I wanted to bring that up as part of those. 5 The reason we're pushing on Mike to get this to us 6 as quickly as he can is so we can begin to take some look at 7 this thing. I know the -- the County is looking at some bond 8 things, and I'm not proposing that we do that. We had 9 $600,000 in our budget this year; we took it out for 10 T-hangars. Maybe we ought to put a placeholder in there and 11 let the County know that this is the kind of thing that we 12 could do. They want us to be revenue-neutral. We got to -- 13 you know, we can be revenue-neutral quick or we can be 14 revenue-neutral in a bunch of years. But also in executive 15 session, I want to talk about some other ideas that I can't 16 talk about right now, 'cause it has to do with an existing 17 contract, where bottom line is I think we can be 18 revenue-neutral in two years. And I'll just leave it at 19 that. So -- 20 MR. LIVERMORE: Does the -- Tom, I've been -- 21 you've done -- this is wonderful. This is really wonderful. 22 MR. MOSER: That's back of the envelope, so you 23 can't shoot at me. 24 MR. LIVERMORE: But I've been thinking about this 25 same thing. Your -- your 1.5 million, as I understand it, is 37 1 after we have received the grant for the flat work. 2 MR. MOSER: That's correct. 3 MR. LIVERMORE: Now, does any of that grant have to 4 be paid back? 5 MR. MOSER: Well, we got to pay -- they're going -- 6 MR. McKENZIE: It's just like the taxiway, 350 -- 7 there was a 90/10 and a 95/5. We didn't have to pay it back. 8 MR. LIVERMORE: So, it's -- we don't have to assume 9 there's any payback on that. 10 MR. McKENZIE: No, sir, there's no debt service. 11 MR. MOSER: Not on 80 percent, the way I've done it 12 here. 13 MR. LIVERMORE: Okay, good. Well, then, 1.5, 14 that's for 30 hangars. What's that? That's roughly 50,000 15 per hangar. 16 MR. MOSER: Right, yeah. 17 MR. LIVERMORE: Roughly. If we -- this probably 18 isn't the time or place to go into some ancillary ideas. 19 MR. MOSER: Just take this -- this is to whet 20 everybody's appetite, saying let's -- let's -- you know, it's 21 about time we start getting serious. You know, I think we're 22 getting everything in place. You know, we've got the thing 23 pretty well scoped. It looks -- it looks like a good deal, 24 okay? There are other ways of doing it. You know, we need 25 to go back to the City and County and say, "Here, here's one 38 1 way. Here's a return on investment, or return on capital." 2 Return on capital is -- 3 MR. COWDEN: Equity, whatever. 4 MR. MOSER: Or return on equity is infinite, 'cause 5 there's no equity involved. Well, I guess 10 percent on the 6 -- or 20 percent on that, so the return on that would be 7 huge. I'll let my banker friend here determine that. But it 8 would be a really big return on -- return on equity. So, 9 with that, let me not propose any action, but I need to put 10 this on the table. Hopefully next meeting, we can get 11 serious about this. I do want to bring this to the attention 12 of -- of everybody that says that, you know, we need to -- we 13 need to communicate this. And probably, Carson and Guy, at 14 the next airport planning meeting would be a good time to do 15 that, okay, to bring this up and put it on the table. And I 16 think that's what those -- those meetings are for. 17 COUNCILMAN CONKLIN: When is the next meeting? 18 COMMISSIONER OVERBY: April? 19 MR. MOSER: I think it's in April. 20 MR. McKENZIE: Haven't determined a date yet. 21 MR. MOSER: Okay. 22 COUNCILMAN CONKLIN: Just let us know. 23 MR. LIVERMORE: Now, Tom, obviously, you've done 24 some thinking about the cost of vertical development, and you 25 believe -- 39 1 MR. MOSER: Bruce did. 2 MR. LIVERMORE: -- these are somewhat reasonable. 3 MR. MOSER: Yeah, $43,000 per unit. 4 MR. LIVERMORE: Will this -- this -- just at a 5 glance, I'd offer my comment that this is a lot more doable 6 than I was afraid of. It really is. 7 MR. MOSER: Well, I think it has to do with -- and, 8 Jeannie, you can comment on that. I think it has to do with 9 whether or not you could use the funds generated from bonds 10 for that purpose. At first, we thought maybe they couldn't, 11 but then it looks like maybe they can. 12 MS. HARGIS: We don't want to call them bonds. 13 MR. MOSER: Huh? 14 MS. HARGIS: We don't want to call them bonds. 15 MR. MOSER: Okay. 16 MS. HARGIS: Certificates of obligation. 17 MR. MOSER: Take that off. 18 MS. HARGIS: Bonds have to be voted in the county 19 or city. 20 MR. MOSER: Oh, yeah, okay. Good point, Jeannie. 21 Thank you. 22 MR. LIVERMORE: Do -- under this concept, we would 23 be forming a navigation district out here in order to -- 24 MR. MOSER: No. No. Let's just say you can use -- 25 help me, Jeannie. 40 1 MS. HARGIS: Well, we need -- 2 MR. MOSER: Public bonds for -- 3 MS. HARGIS: We have to either have the County or 4 the City sell the issue. 5 MR. MOSER: Yeah, but it's not creating any new 6 district. I just used that as an analogy. 7 MR. LIVERMORE: That was just an analogy, okay. I 8 got it. That's what I wanted to clear up. 9 MR. MOSER: Okay. I don't want to belabor this any 10 more, so any further discussion? Mike's going to go to the 11 parking lot. 12 MR. WELLBORN: All right. The parking lot 13 improvements. Of course, that's right over here in front of 14 Kerrville Aviation, this field right up in here. Kerrville 15 Aviation is right here. We are in this building. 16 MR. LIVERMORE: Oh, okay. 17 MR. WELLBORN: The -- the understanding is we 18 wanted to add 48 spaces. The 48 spaces added to this parking 19 area right in here. In order to do this, we also talked 20 about needing to get a sidewalk access from the parking area 21 down here to here. This layout is along this path, because I 22 needed to get as long a run as possible in order -- even 23 though we may not have handicapped parking spaces here, we 24 may adapt that sometime in the future. Just needed to -- I 25 cannot exceed 5 percent slope in any direction -- I'm sorry, 41 1 in the travel path direction. If I do that, then it has to 2 become a handicapped ramp, which gets costly. So, the layout 3 for a sidewalk would be not inclusive of a handicapped ramp. 4 There is a substantial grade difference from here to here, so 5 that's the reason we kind of went through with this path. 6 The -- also, in order to do this, we had -- this is 7 existing drainage system. This is the head wall on the two 8 12-inch corrugated metal pipes coming underneath with another 9 head wall here. See, there was a conflict between the 10 sidewalk and this head wall, so we had to extend the two 11 12-inch pipes here. Also, I have a culvert that comes 12 underneath this driveway, put an 18-inch pipe, that little 13 structure here, and extended this pipe here. And the reason 14 I extended this, I noticed in your -- over here, this is one 15 of the first things that you see. I noticed it. This would 16 allow us to fill this in and make this -- it wouldn't be such 17 a -- a visual -- 18 MR. MOSER: An eyesore. 19 MR. WELLBORN: -- eyesore, yes. 20 MR. LIVERMORE: Hole in the ground. 21 MR. WELLBORN: Yeah. So, this -- let us get rid of 22 that. All of that cost for storm sewer would be 23 approximately 9,000. We could cut that with some savings 24 through the contractor. Since this won't be only maintained 25 as city infrastructure, we have some various options here. 42 1 We'd let the contractor come up with some other alternatives. 2 The only other thing was some miscellaneous which included, 3 again, some staking. The retaining walls are included in the 4 paving portion over here. I'm sorry, I jumped over onto 5 this. This is where we added 12 feet. Now, when I got here 6 this morning, I came over here and made sure I pulled in 7 backwards so I could be sure and get out this time. This -- 8 adding this 12 feet here, make this a 30-foot driveway, will 9 be an ample amount of area for parking -- I'm sorry, I've got 10 some plans here. Do you have those -- if you wanted to see 11 the full set of civil, we got those completed also. Got a 12 couple sets here. That's not in that packet. Well, that's 13 48 spaces right there. 14 COMMISSIONER OVERBY: Forty-eight. And the others 15 up there, is that additional too? 16 MR. WELLBORN: Yeah, I think there's eight over in 17 this area. 18 COMMISSIONER OVERBY: So that's 56. 19 MR. WELLBORN: Right. 20 COMMISSIONER OVERBY: Fifty-six, okay. 21 MR. WELLBORN: And these are existing spaces here. 22 We're just moving this back so you can actually maneuver in 23 and out of this area. Actually, that doesn't even meet the 24 current fire lane requirements for the city, it's so narrow. 25 The minimum's -- 43 1 MR. COWDEN: Even adding that 12 doesn't get it. 2 MR. WELLBORN: Sir? 3 MR. COWDEN: Even adding the 12 -- 4 MR. WELLBORN: Adding the 12 completes it, but as 5 it's laid out right now -- 6 MR. KING: That number -- that 108 includes doing 7 something to that retaining wall? 8 MR. WELLBORN: Yes, sir. That retaining wall is 9 included in there. I set this up to -- like, the price to 10 give you an allowance to do like we did, you know, two layers 11 of stacked limestone blocks. I also left -- I wanted to note 12 this here -- left a gap in here of about 2 and a half feet, 13 2.3 inches -- I'm sorry, 2 feet -- 14 MR. LIVERMORE: How many parking places is that? 15 MR. McKENZIE: Forty-eight. 16 MR. KING: That's not counting the ones we're going 17 to gain -- 18 MR. McKENZIE: Eight up there. We're just going to 19 make them 12 -- 20 MR. LIVERMORE: That's a little over $2,000 a 21 parking space. 22 MR. WELLBORN: Yes, it came out -- if you use the 23 108, it would be, like, $2,008. If you divide by 10, you 24 figure if you rented them out for $208 a piece, that would 25 more than -- 44 1 MR. LIVERMORE: Is this primarily long-term parking 2 for people that have gone on trips, or -- I know we have a 3 lot of cars out here like that. 4 MR. KING: Yeah, we have a lot of people that park 5 here, just leave a car here. 6 MR. LIVERMORE: Yeah. 7 MR. KING: I mean, leave a car here all the time, 8 about probably 70 percent. 9 MR. LIVERMORE: Is the idea to rent them a space? 10 MR. KING: That would be a good idea. 11 MR. LIVERMORE: That's how you're going to pay for 12 that. 13 MR. WELLBORN: On a note, too, these are 14 conservative numbers. Again, if there's an option to maybe 15 have the County or City participate in doing some of the 16 construction work, that number would reduce significantly, I 17 believe. And, again, the geotech report will tell you what 18 we need. That also has got that geo-grade I talked about 19 earlier, a lime-stabilized subgrade, so this all -- this 20 number may be able to be reduced -- 21 MR. MOSER: Okay. 22 MR. WELLBORN: -- also. 23 COMMISSIONER OVERBY: What's our current total -- 24 Bruce, our parking structure that we have right now out here, 25 what do we have right now? 45 1 MR. McKENZIE: There's about 50 around here. And 2 then where they're not supposed to be parking up there in the 3 grass, there's probably 25 vehicles up through there now. 4 COMMISSIONER OVERBY: In the grass? 5 MR. McKENZIE: The slope up there. 6 COMMISSIONER OVERBY: Twenty-five parking in the 7 grass? 8 MR. McKENZIE: Well, there's 20 at least, Guy. 9 Maybe -- maybe 25. 10 COMMISSIONER OVERBY: All right. 11 MR. McKENZIE: Then they go outside our gate and 12 park up there. 13 COMMISSIONER OVERBY: Okay. 14 MR. KING: The idea with this thing was to get -- 15 to unload the parking lot here -- twofold. They're twofold. 16 This parking lot here is -- when this thing here was built, 17 they ran out of money when they were building the terminal; 18 just ran out of money, weren't able to move this hill right 19 here and move it out of the way a little bit, so they ended 20 up putting the parking spaces back over here. And if you 21 drive out there right now, there's no one parked in the first 22 two or three. If someone pulls a pickup into that spot -- 23 they were there last week. There was some guy that left his 24 truck there for about six days. You can't get around there. 25 You literally -- barely can't get around there, and you can't 46 1 back out of these parking places here. These people here 2 have trouble backing out. So, this is -- this is basically 3 just to -- to make the parking lot like it should have been 4 when it was originally built. Move it back 12, 13 feet, 5 Mike? 6 MR. WELLBORN: Twelve. 7 MR. KING: Twelve feet forward, and get our parking 8 lot back here. The other thing was that we have -- since we 9 built the terminal here, everyone has utilized -- and this 10 happens all over South Texas, all your hunters, all your 11 people with ranches that hunt, hunts and stuff. Go to any 12 airport in South Texas; they've got cars just parked -- 13 normally, they just park them off in a -- in a waste area 14 over there and just leave them over there, and most of them 15 stay there for a year -- for a year. We have a lot of people 16 that come here on the weekends and stuff, or over the 17 weekend; they leave a car here. So, what we've ended up with 18 is this whole line right here is basically full of cars that 19 are just here; they never move. They just stay here all the 20 time. They park -- and then when there's no parking places, 21 they start just parking here. And I guarantee you, right 22 now, if you go out there right now, there's probably four to 23 five cars right now that are -- people don't live here. They 24 live in Houston and they just park their car there, and they 25 leave a car there. So, what the idea was, was to try to get 47 1 some of these people out of these parking places into this 2 lot, and rent it to them, and charge them, off the top of my 3 head, $35 a month for parking over there. Corey and I were 4 just talking about it here. You could actually -- down the 5 road, if you build it right, you could cover these right in 6 here, put some covered awnings right on these middle spots 7 here; double-awning those, and you could get a little more 8 money, probably $60 a month. Corey pays $50 a month in 9 Destin, Florida for a -- for a dirt parking lot, basically. 10 MR. WALTERS: It's asphalt, but it's -- 11 MR. KING: Asphalt? 12 MR. WALTERS: Yeah, it's asphalt, but it's 13 uncovered. 14 MR. KING: How many cars in that lot? 15 MR. WALTERS: Probably 150. 16 MR. KING: 150, just -- just a parking lot. And 17 they pay 50 bucks a month over there. So, if we could -- if 18 we could get some of the these guys up here, it'll be behind 19 a gate, behind a secured gate, and I'm assuming we'll put a 20 gate here; we'll put a gate on this thing here. It will be a 21 secured parking lot for them so there won't be any vandalism. 22 We'll charge 35 bucks a month. If you do 80 percent of $35 a 23 month, which is 80 percent occupancy of 35 bucks a month, 24 it's an 18 percent return on investment. If you do about 18 25 percent R.I., there's no maintenance to it -- very little 48 1 maintenance to it. 2 COMMISSIONER OVERBY: Any lighting on it? 3 MR. KING: At present, there's no lighting on it. 4 You know, that's something -- we probably have to add some 5 lighting out there, at least in the front of it. But my -- 6 my deal with this 86,000 was -- was to try to get the City 7 and the County to cooperate on the deal, and do like they did 8 on a couple other projects we've had out here and put their 9 heads together and get them to -- let's -- we can pave that 10 thing, put base down, roll it and pave that thing for a 11 significantly less price if they'll just both get together 12 and -- 13 MR. McKENZIE: Help us. 14 MR. KING: -- help us do the project. They did 15 that -- 16 MR. COWDEN: What do we do with the existing dirt 17 that they're parking on now? Have to close that off some way 18 or another. 19 MR. KING: The one that goes up here? 20 MR. COWDEN: Yeah. 21 MR. MOSER: Just don't allow parking. 22 MR. McKENZIE: We have several large boulders we 23 can place. 24 MR. KING: Just to get them -- there is not really 25 a parking area here. Just -- what there was is a ramp up to 49 1 a fence, and people just drive up the ramp, drive up to the 2 fence and stop. And so I just think it's something that, 3 down the road, we're going to need anyway. I think you could 4 make a return -- have a really good return on investment, 5 especially when you drop the cost over here on paving. I 6 think it would -- I think you probably get that up to a 25 -- 7 20, 25 percent return on investment very easily, without -- 8 and probably even by putting in some lighting, putting in 9 some -- you know, some electric on -- we could get Mike to 10 look at some figures. 11 COMMISSIONER OVERBY: You got three-phase? 12 MR. McKENZIE: I put three-phase power in there 13 about four years ago right there. 14 MR. KING: So, we have three-phase power right 15 there, so I think we could -- I think it's a good project. 16 MR. McKENZIE: Power's there. 17 MR. LIVERMORE: From the security viewpoint -- and 18 I'm thinking of, you know, ladies -- some woman going up 19 there to get in her car; she's going to want to have it lit. 20 MR. KING: I agree. It's dark in that parking lot 21 already. We don't have any lights back in the back. Once 22 you leave the front ramp, there's no lights; it's completely 23 dark there. So, you know, I mean, I agree with you, Ed. I 24 think we can put a -- a couple of flood lights over there, 25 and maybe -- but maybe we can make them where they come on 50 1 when somebody's, you know, getting in, they come on, so we 2 can save a little electricity on it. 3 MR. LIVERMORE: Yeah. 4 MR. KING: All right. Anything else on that? 5 Questions? All right. 6 MR. MOSER: Mike, thanks. That was really good, in 7 a really short period of time. 8 MR. LIVERMORE: It was. Well done. 9 MR. MOSER: Appreciate it. 10 (Discussions off the record.) 11 MR. MOSER: I didn't do a return on investment of 12 the hangars, but return on the hangars will be, like, huge. 13 MR. KING: Yeah. 14 MR. LIVERMORE: You think we should run that number 15 real quick? 16 MR. KING: Is the auditor here yet? 17 MS. HARGIS: Yes, right here. Everybody's here. 18 MR. KING: We'll go back to Item 2B, the audit. 19 MR. NEFFENDORF: I was stuck in traffic. 20 (Laughter.) 21 MR. MOSER: Stuck in traffic. 22 MR. COWDEN: Looking for a parking place out here. 23 (Laughter.) 24 MR. NEFFENDORF: I could only go 20 miles an hour 25 for a 2-mile stretch there. 51 1 MR. KING: All right. Do we have questions on this 2 audit? What do you want to do? 3 MS. HARGIS: He usually makes the presentation. 4 MR. KING: Do you want to make a presentation on 5 the audit, how you got here and -- 6 MR. NEFFENDORF: Sorry. 7 MR. MOSER: Bottom line. 8 MR. NEFFENDORF: Bottom line, I apologize in 9 advance. The rains have been wonderful, but they've also 10 tore my sinuses up. 11 MR. MOSER: Let your sinuses run. 12 MR. NEFFENDORF: Yeah. The only thing, as usual, 13 we did the audit for the second year for the Airport Board, 14 and it's the -- basically the same format as you've seen. I 15 don't know if you want the hard copies, or you -- it's 16 basically okay. That's all the same. But, anyway, as you 17 recall, we have to follow GASB 34, since y'all are a 18 government entity. So, basically, we do two sets of 19 financial statements, one on the governmental basis, like 20 Jeannie keeps her records on, and then we convert to GASB 34 21 model, which is more like a business enterprise, where we 22 include your fixed assets and all your depreciation on your 23 fixed assets. And then there's a reconciliation between the 24 two that the auditor gets to do. So, basically, I'll just go 25 over and hit the high points. If you have any questions, you 52 1 can stop and ask me, or later if you have some questions, 2 just give me a call. 3 After the index on Page 1 is the independent 4 auditor's report. That just says we made an audit of the 5 financial statements of the Airport Board as of and for the 6 year ended September 30, 2011. In the third paragraph there, 7 we state, "In our opinion, the financial statements referred 8 to above present fairly the financial position of the Airport 9 Board as of September 30th, 2011, and the changes in 10 financial position for the year then ended." This is the 11 standard auditor's clean opinion letter, unqualified opinion. 12 After that, the management discussion and analysis pages are 13 a requirement of GASB 34. We're not required to audit it, so 14 that's why it's labeled "unaudited." It is good for your 15 readers, though; it gives a narrative summary, and gives 16 condensed financial statements that a lot of readers have 17 told me they could get more out of these four or five pages 18 than they can the following 30 pages that are after it. But, 19 anyway, I do my own highlights. 20 So, on Page 7 is the statement of net assets. That 21 would be the equivalent to a balance sheet for the Airport 22 Board. And it's done on the GASB 34 basis, so it includes 23 all your fixed assets and the rate of accumulated 24 depreciation, so you can see at the end of the year, the 25 total assets were 16,640,000. Liabilities of only 152,000, 53 1 so you have net assets, for the equivalent of stockholders 2 equity, retained earnings, of 16,487,000. So, it's a good, 3 strong financial position. Page 8 and 9 is the statement of 4 activities. This is the -- 5 MR. MOSER: One question. 6 MR. NEFFENDORF: Sure. 7 MR. MOSER: The construction in progress, 8 5 million, that's -- that's all of our improvements that we 9 have here, and -- 10 MR. NEFFENDORF: That's -- 11 MR. MOSER: -- that's been completed now? 12 MR. NEFFENDORF: Yeah, that's based on the state -- 13 you know, you had those state contracts going. 14 MR. MOSER: Okay. 15 MR. NEFFENDORF: The 0915, there's two of those, 16 and then there -- 17 MR. MOSER: Right. So, we're -- we're finished 18 with that, so -- 19 MR. NEFFENDORF: Right. 20 MR. MOSER: Okay, good enough. Okay. 21 MR. NEFFENDORF: And, you know, as usual, the State 22 is real slow in closing. We finally closed out the 08 one 23 and moved it to construction -- out of construction in 24 progress into -- 25 MR. MOSER: Okay. 54 1 MR. NEFFENDORF: -- a fixed asset. So -- 2 MR. MOSER: Good enough. Thanks. 3 MR. NEFFENDORF: Anyway, Page 8 and 9 is statement 4 of activities. This would be the equivalent of an income 5 statement for the Airport Board. As you can see, the first 6 columns, the expenses last year included depreciation for 7 681,000. Your charges for services, that's all your leases 8 and fees you receive, operating grants and contributions from 9 the county, and then the capital grants and contributions, of 10 course, is the state, TexDOT moneys. So, you had a net 11 change or net increase last year of $1,956,000. Page 10 is 12 the governmental fund balance sheet. Your two funds, of 13 course, are your general fund and capital projects. The 14 general fund net assets, 285,000. The liability is 25,000. 15 Net fund balance, 260,000. Capital projects, 187,000. 16 Assets/liabilities, 79,000, so you had a fund balance of 17 108,000. So, overall, your fund balances for the airport 18 were 368,775. 19 The next page shows the recommend reconciliation 20 from governmental to GASB 34. You take the fund balance, 21 368,775; you add the capital assets cost minus accumulated 22 depreciation. That's 13,851,000. Add back your current-year 23 capital outlays, 2,519,000. Subtract your depreciation 24 expense, 205,000. Then we have the adjustment for the 25 recording the payable for the severance pay, and you come up 55 1 with your net assets in the GASB 34 of 16,487,000. 2 MR. MOSER: Just a curiosity question. 3 MR. NEFFENDORF: Yes, sir? 4 MR. MOSER: You couldn't build this airport for 16 5 million, so the depreciation on runways and everything like 6 that, what's the basis for that? Where did that -- what was 7 the baseline amount, and when did any depreciation start? 8 MR. NEFFENDORF: Well, I guess over the years, it's 9 just the cost basis. 10 MR. MOSER: Just -- 11 MR. NEFFENDORF: Whatever they paid for it. 12 MR. COWDEN: Back in time? 13 MR. NEFFENDORF: Yeah. 14 MR. ERWIN: Start date and then through 15 depreciation. 16 MR. MOSER: So, we're good on all of those records? 17 MR. ERWIN: Right. Yeah, I have to take a look on 18 the different parts of it. 19 MR. NEFFENDORF: Yeah, it's a detailed listing 20 of -- it shows year and amount. 21 MR. MOSER: Okay. 22 MR. NEFFENDORF: I know, personally, since I've 23 been doing it with the state grants, I picked those up. 24 MR. MOSER: Okay. 25 MR. NEFFENDORF: See, it's not only what the -- 56 1 what y'all have put in. When you get those big state grants, 2 it's also what's the state -- yeah. 3 MR. MOSER: So, what is the rate of depreciation 4 on, like, all this work that we've just completed? 5 MR. NEFFENDORF: It depends on the type of asset. 6 We have a schedule, and most of the improvements and 7 buildings, I would say -- 8 MR. MOSER: Yeah, just -- 9 MR. NEFFENDORF: -- are 30 or 40 years. 10 MR. MOSER: Okay. All right, good enough. Thanks. 11 MR. NEFFENDORF: Equipment -- now, equipment -- 12 MR. MOSER: No, I was talking about the concrete 13 stuff. 14 MR. NEFFENDORF: Right. 15 MR. MOSER: Okay. All right, thank you. 16 MR. NEFFENDORF: Yes, sir. Page 12, that just 17 shows -- 18 MR. LIVERMORE: What is the purpose of depreciating 19 it? Do we fund that -- we're not funding our depreciation? 20 MR. NEFFENDORF: No. It's just a requirement to 21 show your financial statements in accordance with GASB. 22 MR. LIVERMORE: Okay. 23 MS. HARGIS: It's under GASB stuff. 24 MR. LIVERMORE: Hmm? 25 MS. HARGIS: It's GASB. They want it to be the 57 1 same as a private enterprise. 2 MR. LIVERMORE: Okay. 3 MR. MOSER: It's job security for these two guys; 4 leave them alone. 5 MR. NEFFENDORF: Right. 6 MS. HARGIS: We'd rather not have it. 7 MR. NEFFENDORF: But you bring up an interesting -- 8 you do bring up an interesting point, though, because there 9 are some governments that have started using the funded 10 depreciation accounts to set aside money. 11 MR. LIVERMORE: They're actually funding -- 12 MR. NEFFENDORF: Right. It's a good concept, 13 because that way you're building up moneys -- 14 MR. MOSER: Right. 15 MR. NEFFENDORF: -- for projects on down the road. 16 MR. MOSER: That's what the church does. 17 MR. NEFFENDORF: In accordance with a 5- to 10-year 18 capital plan, it's good -- a real good planning. 19 MR. MOSER: That's a good point. 20 MR. LIVERMORE: Well, I'm glad to see it, but I 21 just wondered, so you've answered my question. 22 MR. NEFFENDORF: So, Page 12, the revenues and 23 expenditures. Now, this is on the governmental basis, so it 24 doesn't include depreciation, and that shows the general fund 25 with revenues of 440,000; expenditures of 436, and net 58 1 increase, 4,389 after your transfers. That nets a change of 2 $1,683. Capital projects fund, that's where you got all your 3 state grants, 2,197,000. Capital outlay, 2,512,000. 4 Deficit, 314,775. Transfers in, 6,000. Net change, deficit 5 of 308,000. Then you -- as you recall, why that is, is y'all 6 had the water line project where the County and City funded 7 the moneys in the previous year, and then the expenditure 8 came in this year, so that's why you got the $300,000 deficit 9 in capital projects. But you still have a fund balance in 10 capital projects of 108,000. 11 MR. LIVERMORE: What page are you on now? 12 MR. NEFFENDORF: 12. 13 MR. LIVERMORE: Still 12? 14 MR. NEFFENDORF: So, you take that net change for 15 last year, a deficit of 310,386, to the top of Page 13. This 16 is -- again, I would reconcile governmental to GASB, add back 17 the current year capital outlays, 2,519,000; subtract 18 depreciation expense of 205,000, subtract off accrual for the 19 severance pay, 47,000, so you come up with a net change under 20 GASB 34 of 1,956,000. So, your loss on the governmental 21 basis miraculously turned to a big gain under G-34, thanks to 22 the State of Texas capital grants. Page 14 starts the notes. 23 The first part of the notes, that's just additional 24 disclosures required by generally accepted accounting 25 principles. It basically goes over what I've already 59 1 explained before about the use of GASB 34, then for your 2 individual fund statements. 3 The only notes I'd really like to point out start 4 over there on Page 16, on investments. Which the board has 5 all its deposits approved with the cash investments of Kerr 6 County, and they are in accordance with the Public Funds 7 Investment Act, and comply with that act. This is secured by 8 FDIC coverage and pledged securities, and/or the local 9 government pools are also in accordance with the local Public 10 Funds Investment Act, so your deposits meet that requirement. 11 Page 18, the capital asset activity. And, there again, that 12 just shows the major types and the ending balances for all 13 your capital assets. And, of course, last year, of course, 14 we completed -- moved out of the construction work in 15 progress that 08 state grant and the water line project, so 16 those are now moved up to improvements that are being 17 depreciated. And then it gives a summary that shows your 18 accumulated depreciation by the various categories, and then 19 the ending depreciation amounts. 20 Of course, the other notes are pretty much just 21 standard disclosure. I don't think there's anything 22 interesting there. Then we get to -- Page 21 is the required 23 supplemental information on the comparison to the budget. 24 The revenues were less than budgeted by 92,000 towards your 25 final amended budget. Expenditures were less than budgeted 60 1 by 95,000. So, overall, you had a favorable variance to the 2 budget of $62,837. Then we have -- the next part is the 3 federal -- should be your federal programs. And since y'all 4 received the moneys from state of Texas, then they are passed 5 through as a federal project. We have to include this raft 6 of reports and statements to comply with the federal 7 government mandates and the Single Audit Act. The first one 8 is the reports on internal control and on compliance and 9 other matters. And, there again, we have to state in 10 addition to our -- the regular report, we also have to audit 11 and include those items as listed there, the internal control 12 over financial reporting. And then the next page, we also 13 have to show the compliance with laws, contracts, and grants, 14 and found no instances of noncompliance. 15 And then, finally, the schedule of expenditures of 16 federal awards. We audited that as well as the regular 17 financial statements of the Airport Board and found it to be 18 in accordance with generally accepted accounting practices. 19 The other -- next report is on compliance in accordance with 20 the Single Audit Act. And, there again, we found no 21 instances of noncompliance, no major problems with internal 22 control. Then, finally, you get to the statement of 23 findings, and there were no findings or questioned costs. 24 And then the last schedule there is the schedule of 25 expenditures for the federal program. It just shows by those 61 1 projects the amounts that the state spent, and those projects 2 are listed there. The total last year was 2,124,160. 3 MR. MOSER: One comment and one question. Comment. 4 Thanks to Jeannie and Mike for keeping us in tow, and 5 everything comes out good in the final. Second thing is, 6 according to Sarbanes-Oxley, does Steve have to sign this? 7 MR. KING: I hope not. 8 MR. LIVERMORE: I was wondering that, myself. 9 MR. KING: Give me about 30 days to read it. 10 MR. NEFFENDORF: After that, within a few days, we 11 have to give you a test and see if you can come up with those 12 governmental-to-GASB adjustments. (Laughter.) There is 13 one -- I have one other letter that didn't make your packet I 14 have to hand out to you. It's not a -- it's just -- 15 MR. KING: A bill. 16 MR. NEFFENDORF: No. 17 MR. KING: It's the bill. (Laughter.) 18 MR. MOSER: Invoice. 19 MR. LIVERMORE: The invoice. 20 MR. NEFFENDORF: It's the invoice. 21 MR. KING: Invoice didn't make the packet. 22 MR. NEFFENDORF: Well, we're not that bad yet. 23 Everybody got one? 24 MR. LIVERMORE: I didn't get one. 25 MR. NEFFENDORF: Anyway, under auditing standards, 62 1 we're required to report to y'all, as the board of directors 2 of this governing body, these items as listed here. And they 3 show what our responsibility is under U.S. generally accepted 4 auditing standards. Audit findings, there were none. There 5 were no difficulties encountered in performing the audit. 6 There were no corrected or uncorrected misstatements. There 7 were no disagreements of management. And, finally, we do 8 have the recommendations. And, of course, the only one we 9 have was the TexDOT grants -- and I know y'all don't receive 10 those funds, don't pay them out, but you still should, in 11 your general ledger, record the revenues and expenditures for 12 those grants. 13 MR. MOSER: Okay. 14 MR. NEFFENDORF: And the prior-year recommendations 15 concerning fixed asset accounting and expenditure, basically 16 you've been implementing. And that's it. 17 MR. LIVERMORE: I'm sorry, what is your name? 18 MR. NEFFENDORF: Keith Neffendorf. 19 MR. LIVERMORE: You're Steve? 20 MR. NEFFENDORF: Keith. 21 MR. LIVERMORE: Okay, Keith. 22 MR. MOSER: So, Jeannie, what do we need to do to 23 include those types of -- 24 MR. NEFFENDORF: You have to call the State and 25 keep after the State. 63 1 MS. HARGIS: We don't get -- I don't get copies of 2 them, for one thing, so we need to be sure that -- if they 3 were to give them to us every 30 days, it would be great, but 4 they don't. It's real hard. We can get on the website; 5 sometimes it's current, sometimes it's not. 6 MR. MOSER: Okay. 7 MR. NEFFENDORF: I've got a lady's name down there; 8 I can give you that lady's name, and she's real good about -- 9 she provided me the -- gets me copies pretty quick. 10 MR. MOSER: Okay. All right. 11 MR. KING: All right. Do we have to approve the 12 audit? 13 MS. HARGIS: Uh-huh. 14 MR. KING: We do? Okay. Any questions? 15 MR. LIVERMORE: Is this a draft? This is a draft 16 until it's approved. 17 MS. HARGIS: Right. 18 MR. LIVERMORE: Okay. 19 MR. KING: Any questions? Motion to approve? 20 MR. MOSER: So moved. 21 MR. KING: Second? 22 MR. WALTERS: Second. 23 MR. KING: Second by Mr. Walters. Discussion? 24 None being heard, all in favor? 25 The motion carried by unanimous vote, 5-0.) 64 1 MR. KING: 5-0. 2 MR. MOSER: Good job. 3 MR. KING: Thank you. Very good presentation. 4 MR. NEFFENDORF: All right, thank you. 5 MR. McKENZIE: Appreciate it. 6 MR. NEFFENDORF: You bet. 7 MR. KING: Any questions about what happens at the 8 airport, just read that. 9 MR. NEFFENDORF: The interesting part, though, the 10 State, when they send out these -- she e-mails me a summary, 11 but by each project, and it shows, you know, when they have a 12 -- a big payment, and it's listed by projects. Well, I was 13 looking at one, and she included one, a $169,000 payment that 14 was for the same -- that cash and construction that did -- 15 under both of those. So, that took me a week to decipher 16 that out, but I finally got that straight. I told her, "Your 17 spreadsheet's wrong." She didn't believe me. 18 MR. KING: Well, thank you very much. 19 MR. NEFFENDORF: You bet. 20 MR. COWDEN: Thank you. 21 MR. NEFFENDORF: So you can -- the moral of that 22 story is, you can't always trust what the State sends you 23 either, and they're the ones that are supposed to be 24 accounting for the project, you know? 25 MR. LIVERMORE: Thank God we don't handle money 65 1 here. 2 MR. MOSER: Yeah. 3 MS. HARGIS: You do have to sign one thing. 4 MR. NEFFENDORF: There's a signature. 5 MR. MOSER: Sarbanes-Oxley? 6 MS. HARGIS: This is not Sarbanes-Oxley; this is 7 internal control. 8 MR. LIVERMORE: Let us know the cell number; we can 9 send you a letter. 10 MS. HARGIS: Sarbanes-Oxley is actually your 11 invoices. 12 MR. KING: I should have put "for the board." 13 (Multiple speakers.) 14 THE REPORTER: One at a time, please. 15 MR. KING: All right. Item -- let's move on to 16 Item -- 17 MR. MOSER: Let's see. Do you want to go back to 18 2C? 19 MR. KING: To 2C, request to utilize building at 20 1994 Airport Loop -- 21 MR. NEFFENDORF: Thank you. 22 MR. KING: Thank you very much. 23 MR. MOSER: Thank you, Keith. 24 MR. KING: By Alamo Community College District. 25 Ray, what do you have for us on this? 66 1 MR. WATSON: Yes, sir. First of all, I'd like to 2 apologize for being tardy this morning. 3 MR. MOSER: Traffic, I know. 4 MR. WATSON: Mine wasn't a traffic issue. Too many 5 meetings, so -- but I apologize for that. And I appreciate 6 the opportunity to be in front of you this morning. As many 7 of you know, we are working on the Fox Tank project, which we 8 are now expecting that to be somewhere in the 100 to 120 9 employee range. And with that, we are working with the state 10 to do a skills development grant to actually train welders 11 and fabricators in this area, and we don't have a location to 12 put them. And the -- Mr. Overby suggested that we look at 13 this building that's here, that y'all have ownership, and so 14 they came and looked at that building with Bruce's help on 15 Friday. The building does fit the needs. It would be a 16 temporary situation. What we're hoping to do is to actually 17 get the funding to -- 18 MR. MOSER: Who is the partner? 19 MR. WATSON: A.C.C.D. And Shawna Fahrenthold from 20 A.C.C.D. is here. 21 MR. MOSER: Okay. 22 MR. WATSON: And then what our hope is, is that 23 would translate into a newer facility that will be both a 24 welding fabrication work, as well as an automobile mechanics 25 type shop. So, that's what our goal is, working with the 67 1 state to create that in the future. But our immediate need 2 is -- is to get something up and running right now. They 3 would -- the state will be putting in the welding, the 4 fabrication stuff like that through a grant that they're 5 doing to A.C.C.D., and -- and then that could also be 6 utilized by K.I.S.D. as well. The problem with their current 7 facility is the way that that facility is structured, because 8 of fire codes and other issues, they cannot have any kind of 9 welding shop out there. 10 MR. MOSER: What current facility are you talking 11 about? 12 MR. WATSON: Where A.C.C.D. is located right now, 13 which is where -- 14 MS. FAHRENTHOLD: At 1012 Barnett. 15 MR. McKENZIE: Old school building over there. 16 MR. MOSER: Okay. 17 MR. WATSON: They're afraid it will burn down. 18 MR. LIVERMORE: How soon -- if we approve this and 19 it gets all the yeses, how soon will you be in action there? 20 MR. WATSON: We hope within the month. Right? 21 MS. FAHRENTHOLD: We're hopeful. 22 MR. WATSON: Our goal is to be up and running 23 within a month. 24 MR. LIVERMORE: How long do you reckon you'll be 25 using this? 68 1 MR. WATSON: Our minimum need is two years, 'cause 2 that gives us time to get state funding to get a facility 3 built for them, and actually have the time to build that 4 facility. So -- 5 MR. MOSER: This is -- the catalyst for this is Fox 6 Tank? 7 MR. WATSON: Yes, sir. Yes, sir. 8 MR. MOSER: If Fox Tank were to change their mind, 9 okay, then -- then the other thing you talked about was -- 10 was for automobile mechanics? 11 MR. WATSON: Yes, sir. 12 MR. MOSER: So, would that still be -- 13 MR. WATSON: That's still our goal. And Shawna 14 just told me a moment ago, their goal is to have a -- 15 basically, a welding shop type facility with the automobile 16 facility. 17 MR. MOSER: Okay. So, it -- you would still be -- 18 so you got two potential customers? 19 MR. WATSON: Yes. 20 MR. MOSER: Okay. Two potential customers. 21 MR. WATSON: And what this does is, this allows the 22 community college to have the type of facility to train those 23 type of personnel for our community. And right now, we do 24 not have that facility. 25 MR. MOSER: Okay. And you talked about this would 69 1 be an interim facility? 2 MR. WATSON: That is the goal. Our goal would have 3 this -- this is an interim facility. And -- 4 MR. MOSER: For how long? 5 MR. WATSON: Minimum of two years. 6 MR. MOSER: Two years? 7 MR. WATSON: Yes, sir. And then our goal is to 8 have the interim facility, and through working with the 9 County and the City together, have the state funding and 10 other funding to create a permanent facility for A.C.C.D. 11 that would actually service this type of facility. 12 MR. WALTERS: How likely is it that you would get 13 approval for state funding? 14 MR. WATSON: It's very likely, 'cause we're -- we 15 could go through economic development. There's 300 million 16 in that category, so -- 17 MR. MOSER: So, what -- what modifications to that 18 building would you have to make? 19 MR. WATSON: I'm going to have to turn that over to 20 Shawna. 21 MS. FAHRENTHOLD: You're going to have to forgive 22 me; I'm not the expert. The thing I think that we talked 23 about with Bruce is that we would need the three-phase 24 electric. 25 MR. McKENZIE: It's on this side of the road; it's 70 1 not across the road. 2 MS. FAHRENTHOLD: Okay, so it's on this side of the 3 road. We know that on the inside, there's going to need to 4 be some electrical things that need to be done to be capable 5 to handle the welders that are going to be plugged in there. 6 We understand that. And we know that that's going to be on 7 our side, and we're willing -- we're going to accept that and 8 budget that into what we need in our grant and our own budget 9 to make -- to make that work. 10 MR. LIVERMORE: That includes moving across the 11 road from this terminus that you mentioned? 12 MR. KING: We can't. We have no funding to get 13 that across there. 14 MS. FAHRENTHOLD: And if that's the case, then, you 15 know, we're going to definitely have to check into that and 16 fit it within our budget to make that happen. That was 17 something that I spoke with Guy about this morning, and we'll 18 be getting with KPUB to see what it's going to cost us to get 19 -- and I'll be working on that today. So, infrastructure 20 wise, I mean, we just know there's some electrical things 21 we're going to have to do on the inside, and we're 22 understanding and willing on that part. 23 MR. MOSER: My question -- thanks for that on the 24 three-phase. But assuming we did it, and you walk away in 25 two years, I mean, just assume that what you have done to the 71 1 building -- 2 MR. WATSON: Everything's movable. 3 MR. MOSER: Okay. 4 MR. WATSON: Only thing you're going to have to do 5 is possibly have some upgrades in electrical, but that's 6 structural. 7 MR. MOSER: So, the concept of this would be you 8 upgrade the electrical, and you put it back to original 9 condition? 10 MR. WATSON: Yes, sir. 11 MR. MOSER: Or -- 12 MR. WATSON: Basically, what you're going to have, 13 it's just like any other fabrication shop. You'll have 14 movable equipment, such as welders and fabricators, stuff 15 like that. 16 MR. MOSER: But there's no permanent -- 17 MR. WATSON: No, sir. 18 MR. LIVERMORE: What about fire retardant issues? 19 Is that you-all's responsibility also? 20 MS. FAHRENTHOLD: We discussed that some, and we 21 have some plans for ventilation, and they'll be movable. 22 MR. McKENZIE: The onus is on them to go talk to 23 the fire marshal. 24 MS. FAHRENTHOLD: Yes, and we know that. 25 MR. MOSER: And the environmental guys. 72 1 MR. KING: Corey, do we want to -- I mean, I don't 2 want y'all going in there and improving our building, and 3 then two years from now, unimproving our building, -- 4 MR. WATSON: Right. 5 MR. KING: -- and we end up with the same bad 6 building we have right now. I'm trying to figure out, is 7 there some way we can have an option to keep improvements? I 8 mean, you do this all the time. 9 MR. McKENZIE: Restrooms need to be fixed. 10 MR. KING: I don't want to sign a lease with -- 11 with you guys, and then we get nothing out of this deal as 12 far as improvements in the building. I mean, that's my -- 13 MR. WALTERS: I think anything that's -- I mean, 14 typically, anything that's removable equipment, they have -- 15 they would have probably the right to take it out. 16 MR. KING: Right. Right. 17 MR. WALTERS: But, you know, anything that they're 18 doing electrically, I mean, you probably just leave. 19 MR. WATSON: Yeah. There -- I wouldn't say -- 20 MR. MOSER: Improved restrooms and that kind of 21 stuff. 22 MR. KING: I mean, building equipment, you're going 23 to have to upgrade the whole thing to 220 there, 220 volt. 24 And we would -- when this thing is all over, it would be 25 advantageous to us to have our building at 220, and not taken 73 1 back to 110. 2 MR. WATSON: Right. 3 MS. FAHRENTHOLD: Right, and I don't see us taking 4 it back. 5 MR. KING: Exactly. That's what I want to -- 6 MR. WATSON: As far as equipment goes, the 7 equipment is bought through the skills development grant, and 8 so it is actually A.C.C.D.'s. 9 MR. KING: Yeah, and I understand, welders and 10 stuff like that. But as far as improvements made to the 11 building -- 12 MR. WALTERS: So many times, if you cut holes in 13 the roof and/or the sides and you put in ventilation fans, I 14 mean, those are all attached, so all those would remain with 15 the building after you leave. 16 MR. WATSON: That's correct, yes, sir. 17 COMMISSIONER OVERBY: Steve, I'll say this about 18 the building. You know, this has been a community need, as 19 many of you folks know, in here for welding training, for 20 automotive in the community for a long time. 21 MR. KING: Oh, yeah. 22 COMMISSIONER OVERBY: We've always struggled in 23 finding a facility to be able to do the training in, and we 24 know here we're looking at a building that was formerly under 25 the B.A. Products, as you all well know. It's been vacant 74 1 for at least three years, four years. 2 MR. KING: Yeah. 3 COMMISSIONER OVERBY: No revenue's been coming in 4 on it. The economic benefit for the community is that we can 5 get a facility -- if it can be transitioned and -- and 6 renovated into this kind of facility, the economic benefit 7 for the community is obviously the jobs that are going to be 8 created here -- 9 MR. KING: Sure. 10 COMMISSIONER OVERBY: -- in the automotive and the 11 welding. Fox Tank has just been the catalyst, you know, with 12 their numbers that are coming in, the need to get this up, 13 get this training in place. So, it's a great opportunity, 14 but we need a facility that -- to build our pipeline. And 15 the economic benefit is the job creation, keeping those 16 people here and all those things. So, there's a huge 17 economic benefit to our community. 18 MR. MOSER: Just for the record, part of the reason 19 that we couldn't rent that building is 'cause the fire 20 marshal wouldn't let us. 21 COMMISSIONER OVERBY: Right. 22 MR. MOSER: 'Cause we don't have adequate fire 23 water flow. 24 MR. KING: I agree. 25 MR. LIVERMORE: Well, you know, when we sign a 75 1 lease, are we going to -- is there some sort of -- I thought 2 you were going to get to this with your question a minute 3 ago. A legal -- is there a legal protection, a hold 4 harmless? 5 MR. WATSON: You would do an indemnity clause in 6 that lease that would put all the -- like, if someone got 7 hurt in that facility, it would be on the school. 8 MR. WALTERS: We'd have to have insurance. 9 MR. MOSER: Got to have insurance. 10 MR. WALTERS: Insurance on the building that they 11 would be providing to the airport, you know, including 12 liability and hold harmless indemnification. 13 MR. WATSON: Yeah, that -- in all leases of this 14 kind of nature, there is an indemnification clause. 15 COMMISSIONER OVERBY: I'll just say also that the 16 training facility, not only is it -- you know, Fox is the 17 primary one that we're looking at right now, but you've got 18 Frontier Truck Gear out in Center Point. They employ 58 19 folks; they need training as well. And there's a lot of 20 other opportunities with people. And automotive, we haven't 21 even touched what our need is. 22 MR. WATSON: The other thing that's interesting 23 about this project -- and I don't know if y'all know this, 24 but out of the 60 employees that Fox has already hired, about 25 20 of those are from the old Mooney -- old employees, which 76 1 has been very positive for us. 2 MR. KING: I think it's a great project. 3 MR. LIVERMORE: Could I ask Carson -- Carson, do 4 you foresee the -- we understand, because of Mr. Overby's 5 advocacy, that the County's involved here positively. Do you 6 foresee the City having any issues, or is this something 7 that's going to happen for the City too? 8 COUNCILMAN CONKLIN: Well, in terms of what? You 9 mean specifically -- 10 MR. LIVERMORE: Do you see the City approving this 11 type of use of an airport-owned facility? 12 MR. MOSER: We have to get your approval. 13 MR. McKENZIE: At no cost. 14 MR. COWDEN: At no cost; that's the catch. 15 MR. McKENZIE: That's the kicker right there. 16 COUNCILMAN CONKLIN: I'm trying to think about some 17 conversation about the deal on some similar things that came 18 up, what, several months ago. You know, given the purpose 19 that it's for, I don't see an issue with that. 20 MR. MOSER: Okay. 21 COUNCILMAN CONKLIN: The purpose being something 22 else, it could -- I could see some issues, but with this 23 circumstance and serving, you know, A.C.C.D. and Fox Tank 24 here, I don't see a problem. 25 MR. LIVERMORE: Common good. 77 1 MR. WATSON: And also, the City's already -- 2 they've already contributed -- contributed almost 100,000 to 3 the Fox Tank project. So, I mean, it's just -- 4 MR. LIVERMORE: They're on board. 5 COUNCILMAN CONKLIN: This is one more step in the 6 direction that has already been made. 7 MR. KING: Yeah. My -- I guess my feeling is that, 8 obviously, it's -- I think it's a great deal. I was on the 9 original committee that brought A.C.C.D. -- 10 MS. FAHRENTHOLD: Thank you. 11 MR. KING: -- to the city, and that was one of my 12 concerns that I had when they put the new facility in that we 13 raised the money for a facility, was that there was not a 14 trades facility available, and the K.I.S.D. has opted to bail 15 out of the trades business many years ago. And so I feel 16 like that's something that has always needed to come to 17 Kerrville, needed to be here, because everybody's not cut out 18 for college. And I think that's -- I think that's -- this is 19 all tied together with -- I heard the director of the Texas 20 Economic Development Friday make a statement that -- in 21 contrast with the mayor of San Antonio, who was pushing for 22 everybody needed a chance to go to college, and he was 23 saying, you know, we're -- our development -- as far as our 24 development in Texas, it's hindered by the lack of -- of 25 skilled labor. Skilled labor. And we're turning out a lot 78 1 of people out of college that have college degrees, but no 2 skilled -- our skilled labor force is hindering our 3 development. And this is -- this plays right into that, you 4 know. 5 COMMISSIONER OVERBY: The opportunities for Shawna, 6 you know, to be able to go to our high schools, you know, and 7 say, "Guys..." Just exactly like what you're talking about; 8 not everyone is able to go to college. Here's something you 9 can come locally and learn right now, a skill. 10 MR. KING: I'm not sure, but I believe when we were 11 doing A.A.D., I think it was 60 percent. 12 MR. LIVERMORE: Do we need a motion here? 13 MR. MOSER: I've got some more questions first. 14 MR. LIVERMORE: I'm sorry. 15 MR. MOSER: How about parking? Is there adequate 16 parking over there? 17 MS. FAHRENTHOLD: We discussed that previously on 18 Friday, and I believe that we would be okay with the parking. 19 MR. McKENZIE: How many people do you anticipate 20 will be there when you're at full capacity? 21 MS. FAHRENTHOLD: I don't know how many we would 22 have at one time. I would say maybe, at the most, 20. At 23 the most, 20. 24 MR. MOSER: That would be a good number to know as 25 we move forward and request the -- 79 1 MS. FAHRENTHOLD: That's going to depend a little 2 bit on the Workforce Solutions, on -- on hiring, and who -- 3 and who Mr. Fox hires. I mean, we can't -- you know, we can 4 say it'll be dependent on -- 5 MR. MOSER: Just a guess; it doesn't have to be a 6 commitment. 7 COMMISSIONER OVERBY: B.A. Products had, I want to 8 say, 12, 15. 9 MR. McKENZIE: Probably, but I'm just thinking 10 about -- that parking lot is not adequate to handle 20 11 vehicles, so they will have to park in the grass. Just so 12 the board knows, they're going to be overflowing into that 13 grassy area. 14 MR. MOSER: Can we -- 15 MS. FAHRENTHOLD: And it may not be 20. It may be 16 closer to 12 for two weeks, and then another 12. 17 MR. MOSER: I think you need to look at that, okay? 18 Realistically. I mean, you're projecting 100 to 120. 19 COMMISSIONER OVERBY: Total build-out. 20 MR. MOSER: I'm not going to do it for you, but 21 somebody needs to look at that and see if this has the kind 22 of parking we need, and here's what we need to do to 23 accommodate it. I don't think we need them parking in the 24 grass. That's the entrance to the airport. I don't want 25 something that looks like -- looks like a -- looks like some 80 1 other things that are out there. 2 MR. COWDEN: Yeah. 3 MR. WATSON: Right. And when you're talking about 4 120 people, you've already got 40 of those that are already 5 A.C.P. qualified, so -- 6 MR. MOSER: I'm not doing the numbers. I'm just 7 saying we ought to come up with something -- what's needed 8 for parking, and what do we need -- 9 MR. KING: The City and the County -- if we need 10 extra parking over there, I think the City and the County can 11 come together to -- 12 COMMISSIONER OVERBY: We could look at it. 13 MR. KING: -- make us an adequate parking lot we 14 could use during that period. That land over there, we're 15 not having a rush on people wanting to lease that land next 16 to us. 17 MR. MOSER: No. 18 MR. KING: I think we can work with that. 19 MR. MOSER: We ought to make that as part of our 20 recommendation. 21 MR. KING: One thing we can do -- I talked to 22 Jonathan -- Commissioner Letz about that. I would like to at 23 least make it -- make it very clear to both our owners that 24 this is the airport giving up a piece of property -- 25 MR. WATSON: Right. 81 1 MR. KING: -- that is rentable. And I want that to 2 be reflected in the record, and I want this to be reflected 3 in your discussions next year when we are looking for 4 funding, and that we are taking a $300,000 building -- 5 conservatively, $300,000 building off of our -- out of our 6 portfolio of properties to rent out here; therefore, it is a 7 -- it is a potential loss of revenue. Obviously, we have not 8 leased it in four years, but we've had issues that caused us 9 not to have it leased. It wasn't that we -- we could not 10 lease it. We've had issues up until about a year ago to 11 cause us to be unable to lease it, but it is taking revenue 12 out of our pocket -- potential revenue out of our pocket. So 13 please, when I come back to you in a year, we're having 14 funding -- funding on this thing, and you'll have -- and, you 15 know, it's been -- 16 COMMISSIONER OVERBY: We need to remember it has an 17 indirect benefit. That's what we need to remember. 18 MR. KING: Exactly right. We're throwing you guys 19 a bone. We'd like to have a little consideration at some 20 point. 21 MR. LIVERMORE: This is one of those things that we 22 hope raises the tide so all boats go up with it. 23 MR. KING: Exactly. So, next time we're before 24 you, both of you guys, looking for some -- maybe a project 25 funding or something like that, it would be nice to at least 82 1 remember that we were magnanimous. 2 COMMISSIONER OVERBY: Very good. 3 MR. COWDEN: What are the hours of -- 4 COMMISSIONER OVERBY: Point taken. 5 MR. COWDEN: -- operation? 6 MS. FAHRENTHOLD: We've been discussing that. We 7 -- at this point, at the rate that Mr. Fox is wanting to 8 hire, it might be two shifts. It might be a morning session 9 of training and an afternoon -- and an evening session of 10 training, and until we get those initial employees for him 11 that he needs to operate. He has a plant here that he's 12 getting started, and he has the plant there; till he gets 13 those to capacity, and then we're going to slow down. You 14 know, once we get those initial employees that he needs, then 15 we will slow down to the point where it would probably just 16 be a daytime training. 17 MR. LIVERMORE: What is the time period -- say a 18 student enters that does not have, say, welding skills. 19 MS. FAHRENTHOLD: Mm-hmm. 20 MR. LIVERMORE: How long does it take for them to 21 come out? 22 MS. FAHRENTHOLD: We discussed that a little bit on 23 Friday. What Mr. Fox does is kind of unique, so we would 24 just be teaching them the basic welding, and then he would 25 specialize that once you got there. And I'm sure that, like, 83 1 Frontier Gear and the other companies that we've discussed 2 have some specialized stuff, so we -- our welding expert that 3 was here on Friday told us approximately 80 hours of training 4 is what it would take to get someone -- get their basics of 5 welding down, and in order to send them on for the 6 specialized training. 7 MR. MOSER: Well, would -- the specialized 8 training, could that also be done there? 9 MS. FAHRENTHOLD: Some of it could be done there. 10 With Mr. Fox, you know, he builds the storage tanks for gas 11 and oil wells, and so that gets into some height, because 12 they're built in rings, and that building's honestly not tall 13 enough. 14 MR. MOSER: Okay, I see. 15 MS. FAHRENTHOLD: Except to support maybe one ring. 16 MR. WATSON: His center hook for his building is 17 going to be 30 feet, so -- 18 MR. MOSER: So -- but it's configuration. It's not 19 process; it's configuration. 20 MS. FAHRENTHOLD: Right. 21 MR. MOSER: Got you. 22 MR. KING: Is this going to be done typically with 23 A.C.C.D.? You guys will provide funding for -- all funding 24 for salaries for teachers and everything for all the -- 25 MS. FAHRENTHOLD: That is all written into the 84 1 grant. 2 MR. KING: All written into the grant, and somebody 3 brings the -- provides the building. What are you asking for 4 as far as lease terms? 5 MR. WATSON: A minimum of two years. That gives us 6 time to work on getting the next steps done, so a minimum of 7 two years. Then, like you were talking about, an 8 indemnification clause on that so that this board is held not 9 liable for anything. 10 MR. WALTERS: And insurance. 11 MR. KING: Insurance. 12 MR. WATSON: Yes, sir. 13 MR. MOSER: When you say insurance, they're going 14 to pay for insurance? 15 MS. FAHRENTHOLD: I'm going to have to ask Joby on 16 that. 17 MR. KING: Do we have to rent for a dollar? What's 18 the deal? 19 MR. WATSON: Have to rent it -- 20 MR. KING: For a dollar? 21 MR. WATSON: Yeah. 22 MR. KING: And other good, valuable consideration. 23 MR. WALTERS: Bruce, since she's talking about 24 going three-phase, I take it we want that underneath the 25 road? 85 1 MR. MOSER: Yeah. 2 MR. WALTERS: You don't want it going overhead. 3 MR. McKENZIE: There's a line going overhead now, 4 Corey, I believe. 5 MR. WALTERS: Oh, across? 6 MR. McKENZIE: Across; that's there now. And I 7 may -- I may stand corrected. It may be three-phase in the 8 pole that's on the north side of the road, but I think it 9 stops on our property. 10 MR. KING: I thought it was on our side. 11 MR. McKENZIE: But it may be on that side as well, 12 and it might be -- 13 MR. KING: You and I looked at it. It's got 14 three -- I think the three-phase may be on the other side of 15 the road. I'll look at it when I leave. We talked about it. 16 Okay. All right. Motion? 17 MR. LIVERMORE: Mr. Chairman, I move that this 18 board recommend to the City and the County that -- was that 19 the idea? That we need to recommend for their approval? 20 MR. MOSER: Mm-hmm. 21 MR. LIVERMORE: I move that we recommend for the 22 approval of the City Council and the County Commission the 23 use -- the leasing of this building for two-plus years for 24 one dollar, under the normal terms that we've been 25 discussing. 86 1 MR. MOSER: For two years. 2 MR. KING: I think for two years. 3 MR. LIVERMORE: For two years, okay. Two years. 4 Not two-plus, but two years. 5 MR. KING: Second? Does that work, Ray? 6 MR. COWDEN: I'll second. 7 MR. KING: Mr. Cowden seconded. Any discussion? 8 All in favor? 9 (The motion carried by unanimous vote, 5-0.) 10 MR. KING: 5-0. 11 MR. WATSON: Thank you. Appreciate it. 12 MR. KING: Anything else y'all need, let us know. 13 MR. McKENZIE: Will you present it to both the City 14 and the County? 15 MR. WATSON: I'll do both of those presentations. 16 MR. MOSER: So our recommendation, then, needs to 17 be a letter, Bruce, from the board to -- yeah. 18 MR. McKENZIE: To the governing -- to the owners. 19 MR. MOSER: Right, okay. 20 MR. McKENZIE: Yeah. 21 MS. FAHRENTHOLD: Thank you, gentlemen. 22 MR. MOSER: Thank you. 23 MR. LIVERMORE: Thank you for coming. 24 MR. KING: We appreciate it. Thanks, Ray. Thanks 25 for your work. Thanks, Guy. 87 1 MR. MOSER: Okay. So, Bruce will write the letter. 2 MR. McKENZIE: And then you're giving me 3 instructions to get with our attorney and draw up this lease, 4 correct? 5 MR. MOSER: Right. 6 MR. KING: Yeah, I think -- yeah. I think the City 7 and the County will have to vote on that, Carson, and -- the 8 City and the County's going to have to vote on this at a 9 Council meeting, I'm sure. Let those guys come up with it. 10 MR. MOSER: We need to request -- formally request 11 that they do that. 12 MR. KING: Mm-hmm. 13 MR. MOSER: So, just a letter. 14 MR. KING: Just send a letter. 15 COUNCILMAN CONKLIN: Just put it on the agenda. 16 MR. KING: Tell them -- just send them a letter, 17 tell them we approved it. 18 MR. WALTERS: Why don't we -- since we're giving -- 19 I mean, I think for us to be saddled with the legal expense 20 in this, I'm just wondering if, you know -- 21 MR. LIVERMORE: They can present a lease and -- 22 MR. WALTERS: Yeah, they can present a lease to us, 23 or we put on them that they have to pay our -- our legal -- 24 our attorney's fees on this. I think that would be 25 reasonable. 88 1 MR. MOSER: I do too. 2 MR. COWDEN: Better. 3 MR. KING: Mike can come up with a lease; he's done 4 that before. Do you think you could look at that, Carson, 5 for us? 6 COUNCILMAN CONKLIN: Sure. 7 MR. KING: Maybe get Mike to look at it. He'll 8 mark it up anyway. 9 MR. MOSER: Good point. 10 MR. KING: Okay. Anybody else need -- 11 MR. MOSER: Bottom line -- we've already approved 12 it. The bottom line is, there's no cost to us. 13 MR. WALTERS: Right. 14 MR. MOSER: For anything. It's just -- it's just 15 relinquishing potential revenue. 16 MR. KING: Next? All right. 17 MR. MOSER: For which due credit is due. 18 MR. KING: Item 2E, master plan status. 19 MR. McKENZIE: If you'll notice, you have one of 20 these brochures in your packet. This is going to be the 21 marketing -- it'll be on thicker stock paper, of course. It 22 will look basically like that. 23 MR. MOSER: But marketing was not part of our 24 master plan. 25 MR. McKENZIE: It's part of what we paid for. We 89 1 were going to go over and above with a $45,000 marketing 2 plan. 3 MR. MOSER: I see, got you. 4 MR. McKENZIE: Comes with our master plan. And I 5 think it's very nicely done. 6 MR. MOSER: Wow. 7 MR. McKENZIE: And Perry would like -- he asked me 8 if I would give y'all a copy, which, obviously, I'm doing. 9 If you'd like it tweaked any, please let me know. But -- 10 MR. COWDEN: Is this the size? 11 MR. McKENZIE: Yes. It will look -- basically, 12 it's 8 and a half by 11 folded, but it will be cardstock-type 13 paper, kind of glossy. This is just so you can look at it. 14 MR. KING: What's it for? 15 MR. McKENZIE: Just a marketing brochure that we 16 can have about our airport. 17 MR. MOSER: One thing we had some questions -- 18 well, first of all, I don't think we ought to say yea or nay 19 until we approve the marketing plan -- I mean the master 20 plan, 'cause we had some -- there were some questions we had 21 on economic impact and blah, blah, blah, blah, at our last 22 meeting which they were going to answer. So, that might 23 change some of these graphs. 24 MR. WALTERS: What -- who are we targeting with 25 this? What's the goal here? 90 1 MR. McKENZIE: The goal is to -- he explained to me 2 was to just have it on-hand in case we needed to -- because 3 the board has decided right now we don't have anything to 4 market. That's why we had a stand-down on the big marketing 5 plan. But this comes with it, Corey. That's what they're 6 trying to do, is -- 7 MR. WALTERS: I'm just trying to figure out what 8 are we trying to -- what message with this are we trying to 9 send, and who are we trying to send it to? 10 MR. McKENZIE: That's a good question. 11 MR. WALTERS: I mean, are we trying to, you know, 12 get potential people here out of San Antonio to hangar their 13 plane here? You know, or -- I mean, who are we really 14 focusing this on? I'm just wondering. There's a lot of 15 information here, and it may look like a little overkill for 16 what we're trying to use this for. 17 MR. McKENZIE: That's what -- 18 MR. WALTERS: I don't know. 19 MR. McKENZIE: -- what he wanted me to ask you. 20 MR. WALTERS: I don't think it is -- I'm just -- 21 MR. COWDEN: Who's going to read it? 22 MR. WALTERS: Who's going to read this, and what 23 are we targeting? 24 MR. KING: At first blush, it looks too busy to me. 25 Hurting my eyes reading it right now. Fortunately, I have 91 1 glasses. 2 MR. WALTERS: That is what I just want to know. 3 What -- what's the purpose? I mean, I know it's for 4 marketing, but to market to who? And -- 5 MR. COWDEN: Who's going to be interested in 6 picking this up? 7 MR. LIVERMORE: What you're really saying is, have 8 we really addressed our customers -- future customers? 9 MR. McKENZIE: Good point. 10 MR. KING: Why don't you ask who we send this to. 11 Who's going to get this? 12 MR. McKENZIE: Sure. 13 MR. MOSER: Well, but that's the part we didn't 14 fund, okay? We didn't fund the marketing aspect of the 15 master plan, so we're kind of mixing apples and oranges here. 16 This is a marketing thing that could be part of the master 17 plan. We chose not to pursue the marketing, the next phase 18 or adding to the master plan to include marketing. So, if -- 19 MR. COWDEN: Is this something we could send to -- 20 MR. MOSER: One thing we need to do is, we need to 21 finalize the master plan. So, what's -- what's -- let me go 22 back. What's our plan for that, before we get to the 23 marketing? 24 MR. McKENZIE: The master plan, as I reported last 25 month, is complete, but waiting for A.L.P. to come out of 92 1 Austin. 2 MR. MOSER: Okay. 3 MR. McKENZIE: That will then, in turn, be sent to 4 Oklahoma -- Fort Worth and then Oklahoma City for approval. 5 MR. MOSER: Do we have to wait for that? 6 MR. McKENZIE: No, you don't have to wait. 7 MR. LIVERMORE: What is "A.L.P."? 8 MR. McKENZIE: Airport Layout Plan. 9 MR. MOSER: So when can -- so if we don't have to 10 wait for that, when can we say the master plan is approved? 11 MR. McKENZIE: You can do it at the next board 12 meeting. We can put it on the agenda. 13 MR. MOSER: We need to close that out. We need to 14 say we did a master plan and it's complete. 15 MR. LIVERMORE: What -- what do we do -- I was 16 wondering while Mike Wellborn was making his presentation; he 17 said that what he was showing us didn't change much, but it 18 changed a little bit from what's shown in the master. Do we 19 have to amend the master plan -- 20 MR. McKENZIE: No, sir. 21 MR. LIVERMORE: -- in order to do things? 22 MR. McKENZIE: Here's what the board needs to 23 remember. That is exactly what it says; it's a plan. We can 24 move that around any way we want to. 25 MR. LIVERMORE: Got you. 93 1 MR. McKENZIE: It's a plan. 2 MR. LIVERMORE: Good idea -- I mean, good 3 explanation. 4 MR. MOSER: Yeah. 5 MR. LIVERMORE: Okay. 6 MR. COWDEN: Seems to me like this thing is geared 7 towards trying to move corporate aircraft. 8 MR. McKENZIE: One of the things we're trying to 9 get to come out of San Antonio. 10 MR. COWDEN: You're going to have the future 11 development plan -- 12 MR. LIVERMORE: That probably is our customer. 13 MR. McKENZIE: That's what we discussed. 14 MR. LIVERMORE: What they bring with them. 15 MR. MOSER: That's what's the -- what the master 16 plan -- 17 MR. LIVERMORE: We're going to talk a little bit 18 later about another aspect of that. 19 MR. MOSER: So, let me go back to the master plan, 20 that agenda item. Let's put that on the agenda for next 21 month, so if we've got any questions or issues -- everybody's 22 got a copy of the master plan, right? We had some questions 23 that came up relative to economic development, to make sure 24 that that's reflected in there, Bruce. If there's any 25 changes, you can send them to us, and let's see if we can't 94 1 close out the master plan and say we've got it; this is ours, 2 we approve it. Okay? And then -- then this is -- this is 3 another -- this is another item, marketing. 4 MR. KING: Why don't we all look at this thing 5 while we're gone. During the next month, let's just look at 6 this a little bit. Just at first looking at this thing, I 7 don't -- unless I know what the airport -- anything about 8 Kerrville, I'd be totally confused by looking at these maps 9 of this improvement stuff and everything. 10 MR. WALTERS: Is this thing intended to be this 11 size? 12 MR. KING: Yeah. 13 MR. McKENZIE: That would be the size. 14 MR. WALTERS: I mean, first off, just looking at 15 it, I -- I look at it and think, well, jeez, the pictures of 16 the runway and the -- you know, the improvements aren't big 17 enough. I mean, I have to get, like, a magnifying glass to 18 sit there and -- 19 MR. McKENZIE: He brought that up; the fonts need 20 to be changed. Perry's already brought that up. I've talked 21 to him about it. He agreed. 22 MR. KING: Ask him who are we marketing with this? 23 Who do we -- do we make 500 copies of it, put them in your 24 office if somebody walks in? 25 MR. LIVERMORE: I would suggest that, first, the 95 1 potential customer would be people that operate aircraft of 2 whatever type, but naturally we're really talking about the 3 larger ones, but of any type of aircraft. But number two, 4 citizens of this county and community. You know, there may 5 come some issue where we need to make a presentation to 6 Rotary or whatever. This type of information would be 7 helpful in such a -- just to help to -- you know, an airport 8 is just like anything else; it has to continue to be resold 9 to its constituents. 10 MR. MOSER: Exactly. 11 MR. LIVERMORE: And we need something that makes 12 our case to go out, 'cause if we don't have the support of 13 the people of the city and the county, even beyond the 14 Council and the Commission, we don't -- we're in trouble. 15 MR. COWDEN: Well, you know, I think of the 16 hospital gala or whatever out here is really a positive 17 thing. People -- you know, people that haven't been to the 18 airport come out here. 19 MR. LIVERMORE: Terrific. 20 MR. McKENZIE: That's going to be a big gathering. 21 MR. MOSER: On that subject, we talked about once 22 we got the master plan done, to have a road show, okay? 23 Where Steve, in particular, goes around to Rotary and Kiwanis 24 and everybody, Chamber of Commerce, and says, "Here's the 25 airport. Here's what we've done. Here's where we're going. 96 1 Here's the potential, blah, blah." Exactly the thing you're 2 talking about. So, something like this could be some 3 leave-behinds. Maybe reformat it or -- 4 MR. KING: I think we need to look at it, you know, 5 'cause my attention span is about two minutes reading 6 something. Minute and a half, actually, sometimes. 7 (Laughter.) 8 MR. MOSER: Thirty seconds, your wife said. 9 MR. KING: But it would take me 10 minutes, I 10 think, to read this. Five minutes, at least. 11 MR. MOSER: Let's look at it. 12 MR. KING: All right. 13 MR. WALTERS: There's a lot of information on here 14 that, I mean, if I'm a potential customer, I don't really 15 care too much about all these capital improvement projects 16 that you did, you know. I'm -- 17 MR. MOSER: Over the last 10 years. 18 MR. WALTERS: I want to know what do you have there 19 today? 20 MR. KING: How much is it going cost? Who do I 21 contact to get an airplane up there, and how long is your 22 runway? Do you have fuel? Are you open 24 hours a day? 23 MR. MOSER: What kind of nav system? 24 MR. KING: What kind of nav system? What landing 25 system do you have and everything? 97 1 MR. MOSER: There you go. 2 MR. KING: And -- 3 MR. LIVERMORE: What facilities are available if I 4 come here? 5 MR. KING: -- mechanics. Do you have a mechanic 6 shop? Do they offer light, medium, heavy? That's about it. 7 That's what I'm interested in, okay. 8 MR. LIVERMORE: In terms of leave-behind, I think 9 it would be good to point out how many people are employed on 10 the airport, and -- 11 MR. MOSER: Okay. 12 MR. KING: All right. The customs and border 13 protection. Bruce? 14 MR. McKENZIE: Okay. 15 MR. KING: Where are we at on this? 16 MR. McKENZIE: You asked me to contact 17 Representative Lamar Smith's office, and I did. I talked to 18 Anne Overby here, then I talked to a lady named Ashlee 19 Vinyard, who is the Representative's legislative director in 20 Washington. I spoke to her two different times. I've 21 communicated with her via e-mail. She reinforced and 22 mirrored basically what I was told in San Antonio last month 23 from the Customs/Border Patrol folks. They were very willing 24 to help us do that, and -- but she said your problem's going 25 to be the number of airports in Texas that already have a 98 1 customs office. The second issue would be -- in our 2 discussion was we're so close to Austin and San Antonio. 3 That's the other two issues that are going to be there, and 4 she reinforced that we're still going to have to pay for the 5 individual, the building, all the -- we've got to give 6 them -- we've got to hand them the keys to a completed 7 structure, is basically what it boils down to. She said 8 we'll be glad to help in that process. Before that starts, 9 the governor has got to sign off on this before we even start 10 the process. She made that real clear to me, and in a nice 11 way. Yes, sir? 12 MR. LIVERMORE: Bruce, this discussion is really 13 interesting and kind of fun, but if the -- if the people who 14 have encouraged us to get into it are really not -- if it was 15 just idle talk, there's really nothing left to talk about 16 here. And I -- I wonder if we shouldn't -- maybe you've 17 already done so -- go back and cover that ground again, and 18 just see if they're willing to put up the money. You've got 19 an idea of the money involved. 20 MR. McKENZIE: Yes, sir. 21 MR. LIVERMORE: Are they really interested in that? 22 If they're not -- 23 MR. McKENZIE: We discussed that, and it was the 24 board's desire for me to go ahead and find out what it would 25 take to do -- 99 1 MR. KING: I agree. 2 MR. McKENZIE: -- the legislative issue. We found 3 out. They were very helpful. They said we'll help you, but 4 she also explained to me that San Antonio started this 5 process in late 2005 to get a first landing designation for 6 private aircraft. There's a difference between a Part 139 7 airport with customs and a private airport with customs. San 8 Antonio wanted both for the congestion to be relieved there. 9 She said it took us two and a half years to get that through. 10 She hastened to add, "And that's when we had a Texas 11 president," and it took that long to get through. She said 12 just be aware of that when you talk to your folks. And she 13 had a great point. But -- and San Antonio now has it. And 14 here's the -- I will give you a list; it's two pages, and 15 I've marked the list. There's 25 airports in Texas that have 16 a designated airport of first landing, and there's your list 17 of those airports. 18 MR. KING: So, they have customs and -- 19 MR. McKENZIE: Yes, sir, they're there. And then 20 the -- then the second page, it starts in Amarillo and ends 21 in Sugarland. 22 MR. MOSER: Sounds like we need one. 23 MR. McKENZIE: There's 25 of them, and they're 24 across the state, you know, with the exception of Alliance, 25 of course. And we all know what Alliance is, but that's 100 1 strictly a -- 2 MR. KING: Sugarland has one? 3 MR. McKENZIE: Sugarland has one, yes, sir. So 4 does Presidio. 5 MR. KING: The airport at Presidio has one? 6 MR. COWDEN: Wow. 7 MR. KING: Where's Sugarland's? I didn't know that 8 they -- 9 MR. McKENZIE: In that -- in that building over 10 there, Steve, in their hangar, they've got a -- 11 MR. KING: In that big terminal? 12 MR. McKENZIE: Over there along their apron 13 somewhere. 14 MR. LIVERMORE: Sugarland, you're talking about? 15 MR. KING: I've never seen it. Why don't you call 16 the guy at Sugarland and ask -- you know him, don't you? 17 MR. McKENZIE: I know some guys. 18 MR. KING: Why don't you call them and ask them 19 what they had to do. They just built this terminal a year 20 and a half ago. 21 MR. WALTERS: It's interesting here, they're 22 talking about our proximity to Austin and San Antonio, but 23 they have one in McKinney, and also one in Addison and 24 Dallas, Love Field. 25 MR. McKENZIE: They've been there. That was my 101 1 question. You're right, Corey. They've been there a long 2 time. 3 MR. KING: The McKinney one is -- that's for T.I. 4 MR. McKENZIE: That's for T.I. Texas Instruments 5 flies -- they fly overseas, Asia, straight out of McKinney. 6 That's two Globals. They take those two Globals and go to 7 the Pacific Rim and back -- 8 MR. KING: They probably paid for that. 9 MR. McKENZIE: -- in the Globals, so they funded 10 that. I mean, that's -- 11 MR. WALTERS: Basically, aren't we talking about 12 the same thing? The parties who inquired about this are 13 going to have fund that. 14 MR. McKENZIE: That's my thought. I think that the 15 three or four that have inquired about this, if they have the 16 means -- and they do, but if they want to do it is the thing. 17 MR. MOSER: So, what are we talking about, cost of 18 facility and cost of operation? 19 MR. McKENZIE: Million and a half for the building. 20 You're talking about $200,000 a year to fund the employees in 21 the building. 22 MR. WALTERS: Let's go back to the building. 23 Million and a half for a building? 24 MR. McKENZIE: That's what they told me. The guy 25 in San Antonio told me $2 million. The lady in Austin, the 102 1 lady in Washington -- the lady in Washington told me about a 2 million and a half. 3 MR. LIVERMORE: There's a whole lot that goes in 4 that building. 5 MR. McKENZIE: It has -- it's quite a structure. 6 Jail cells, holding cells. 7 MR. WALTERS: Steve, would this be the same type of 8 structure they have in Del Rio? 9 MR. KING: Del Rio -- the one they built in Del 10 Rio. 11 MR. McKENZIE: That's what I'm just giving you, is 12 information that was given to me by the -- 13 MR. KING: I think at this point, why don't you go 14 back to our three candidates and tell them, look, how -- rate 15 your level of interest on a scale of one to ten, with a -- 16 with a number you're talking about. And find out whether we 17 can move on to -- 18 MR. McKENZIE: Okay. 19 MR. KING: -- fertilizing the grass or something; 20 you know, do something different. I don't want to chase this 21 thing all the way to the end, and then they go, "Oh my gosh," 22 you know. "We were thinking about putting $50,000 a piece 23 in," you know. And it's -- 24 MR. McKENZIE: Sure. 25 MR. KING: And it's not -- I just I don't know. At 103 1 some point. It's a big project. 2 MR. McKENZIE: It's expensive. 3 MR. KING: It's a big project for three people. I 4 mean, are they going to leave? 5 MR. McKENZIE: And it's part-time. 6 MR. KING: Ask them if they're going to move if we 7 don't do it. They're not leaving. 8 MR. McKENZIE: They came here. 9 MR. KING: They came here. That's what I'm getting 10 at. 11 MR. LIVERMORE: But the lady, she's not here now, 12 is she? 13 MR. McKENZIE: That's the one that's not on the 14 field. 15 MR. KING: Why don't you just find out what their 16 real level of interest is so we don't have to continue to ask 17 people questions that we -- we know we don't have the funds 18 to do it. Ask them what their real level of interest is, and 19 see if we can either get the thing off center, or whether we 20 can put it back in a box and hold it up down the road, okay? 21 MR. WALTERS: Bruce, are they -- when it comes to 22 the -- I mean, the customs employee's paid by the government, 23 right? Didn't you say that they would have to fund -- 24 MR. McKENZIE: They would -- it would have to be 25 funded. Both of the entities told me that, yes, sir. That's 104 1 what they told me. 2 MR. WALTERS: Funded by us, or are the 3 improvements -- 4 MR. McKENZIE: No, for the employees, the 5 personnel. 6 MR. KING: It would be on a call basis. They would 7 get in a car and drive up here. 8 MR. McKENZIE: We would have to pay for that. 9 MR. KING: Basically, what they do in Del Rio -- in 10 Del Rio, they don't put anybody at the border airport, but 11 when you call in to come across the border, you tell them a 12 time, and they send somebody from the -- from the -- 13 MR. McKENZIE: San Antonio. 14 MR. KING: -- from the auto -- from the 15 automobile -- from the checkpoint border crossing. They send 16 two guys from the border crossing over there, and they show 17 up there, and then they open the gate, open the door up 18 and -- 19 MR. McKENZIE: In our case, they'd come out of San 20 Antonio. 21 MR. KING: Here's something else to bear in mind. 22 Have you all cleared customs in your aircraft? 23 MR. LIVERMORE: Not from Mexico. Not in 25 years. 24 MR. KING: Have you? There's a blue box, and you 25 pull in that blue box, and we'd have to put it out there, and 105 1 it's -- 2 MR. WALTERS: You have to sit there. 3 MR. KING: Nobody moves. You know, if these folks 4 don't show up from San Antonio, nobody's getting out of that 5 airplane. 6 MR. LIVERMORE: That's right. 7 MR. KING: You are locked in that airplane. Even 8 if they're two hours late, that area can't be used. 9 MR. McKENZIE: You can't breach the area, nor can 10 they breach coming out. 11 MR. KING: Find out what their level of interest 12 is. 13 MR. McKENZIE: The area can't be breached once you 14 shut down. 15 MR. LIVERMORE: I've been through the sitting in 16 the airplane till they show up deal. 17 MR. KING: All right. 18 MR. WALTERS: One other thing. Just so that they 19 know, I mean, it's not only -- just so these parties know, 20 it's not only the cost of a million and a half dollars or so, 21 but yet they're probably going to have to reimburse us -- I 22 mean, if we -- if they come in here in their aircraft, they 23 have to, I mean, reimburse the airport for the fee for 24 charging for getting these people here? 25 MR. KING: Yeah. They already said they would have 106 1 to reimburse us; they know that. 2 MR. WALTERS: They know that? 3 MR. KING: 500 bucks -- 500 bucks a trip or 4 something. Is that what they told us? 5 MR. McKENZIE: There's a cost involved, yes. 6 MR. WALTERS: So they know that they would be -- 7 MR. KING: Yeah, they'll be on board for that. 8 MR. McKENZIE: They got me off the hook. 9 MR. MOSER: So, let me ask one other question. So, 10 what is the benefit to the airport and the community to have 11 the capability, other than having three or so customers that 12 want it? 13 MR. WALTERS: I would say, certainly, it would 14 probably -- it would enhance your marketing of the airport 15 out of San Antonio, the fact that you have a customs office 16 here. 17 MR. KING: Yeah. 18 MR. MOSER: Yeah. 19 MR. WALTERS: Somebody might choose to relocate 20 their plane here in Kerrville instead of San Antonio. 21 MR. KING: Maintenance. They fly in directly from 22 Mexico for maintenance. It's a big deal. But most of these 23 -- all of these cities on here are either on the border, or 24 they're a lot bigger than us. 25 MR. MOSER: Yeah. 107 1 MR. WALTERS: Or somebody else -- like you say in 2 McKinney, Texas, T.I. is paying for it. 3 MR. MOSER: If there's real interest, we need to go 4 to the next step and say, "Here's the potential of what the 5 benefits are to the airport and the community." 6 MR. COWDEN: You need to be pretty forward on 7 asking about the money. 8 MR. McKENZIE: Yeah. 9 MR. LIVERMORE: You're talking about coming up with 10 a half million bucks each or more. 11 MR. McKENZIE: And be willing to sign a contract. 12 We can't have a verbal; they've got to -- do you agree? 13 MR. WALTERS: Yes. 14 MR. McKENZIE: Because then we're on the hook. 15 MR. KING: All right. Find out what their level of 16 interest is. 17 MR. MOSER: There we go. 18 MR. KING: Item 2H is going to executive. Mooney 19 leases. Anything on the Mooney leases? 20 MR. McKENZIE: We need to have a discussion. 21 MR. KING: Consultation with attorney. We don't 22 have an attorney with us. 23 MR. McKENZIE: I always put that on here. 24 MR. KING: General update. 25 MR. McKENZIE: First of all, back up to 2G, Steve. 108 1 MR. KING: Oh, terminal building. I'm sorry, I 2 passed over that. 3 MR. McKENZIE: Tom and I were visiting about three 4 weeks ago, and he asked me to run the traps on that. We've 5 had -- since I've been here, five years in July, we've had 6 two events out here. And Tom brought up a good point. Do we 7 charge the people to use this facility? And we don't. 8 There's no -- but -- and the idea behind this was uniformity 9 with what the County does and the City does when they lease 10 their property. Well, the County leases the Union Church and 11 the Ag Barn. That's their two that I -- that's the only two 12 I know that they lease, right? 13 MS. HARGIS: Right. But you have to be a 501(c)(3) 14 to get it free. 15 MR. McKENZIE: Okay, thank you. Thank you. I've 16 pulled up the website -- 17 MR. MOSER: But they do lease it. 18 MR. McKENZIE: Do lease it. 19 MR. MOSER: Yeah, all right. 20 MR. McKENZIE: One of these documents is the actual 21 agreement that you sign. The other one is the rental policy 22 for the facilities. For example, the Ag Barns is, like, $250 23 if you want to use it for half a day, $500 if you want to use 24 it for one to three days. You have to clean it up. You have 25 to give a deposit. I won't go through the minutiae with you. 109 1 You know what it is. But we've had two out here -- actually, 2 three. We had another luncheon in this room the other day 3 for the hospital folks, which was really nice, and they were 4 out of here at 1:30. But we don't charge anybody now. If we 5 were to get a lot of requests for that, perhaps we could 6 address that. Tom, I don't know what you want to do. 7 MR. MOSER: Well, what I want to do is -- is I want 8 to be consistent with what the City and the County do, since 9 they own that. This is another one of their facilities, and 10 if they want us to -- to loan it to people, under some 11 conditions for free, I think so. If they want us to be 12 consistent with their rental and lease policies, even -- I 13 don't care whether the frequency is once every 10 years; I 14 just want to be consistent with what they do. I think that's 15 the only fair way to do it. Union Church is not -- I mean, 16 this is a lot nicer than Union Church, and they charge to -- 17 they charge to rent it, so I don't want to get caught by 18 somebody pointing a finger at the board and saying, "Gosh, 19 you guys are being careless." 20 MR. COWDEN: Giving away -- 21 MR. MOSER: Yeah, right. 22 MR. KING: I guess we need to talk to the owners 23 about that and see what you guys feel about that. My 24 personal opinion is -- is that any time we can have a group 25 or individual -- 110 1 MR. MOSER: Yeah. 2 MR. KING: Most of them are -- it's a 501(c). Most 3 of them are nonprofits. 4 MR. McKENZIE: It's been twice the hospital met, 5 and one evening a wine-tasting group met here for two hours. 6 MR. KING: I think when we built this building, we 7 talked about -- in the original funding for this building, we 8 talked about civic groups using this building. I'd have to 9 go back -- way back to the minutes of different meetings. I 10 wasn't even on the board, but I believe the discussions were 11 that civic groups could come out here and use this building 12 for different meetings. I think it enhances the airport, in 13 that it allows people to see the airport. And we're always 14 talking about getting people out here to the airport. 15 MR. LIVERMORE: Absolutely. 16 MR. KING: So it's the kind of deal, any time we 17 can have 25 people out here, even though they may be 18 non-aviation interested people, at least it provides them 19 with access to our facility and gives them a look at what we 20 do out here. 21 MR. MOSER: What I'm recommending is, let's 22 document what our policy is. And I have no problem -- I 100 23 percent agree; it's a good use of a, quote, public facility. 24 Let's do it for that, but let's document that that's what it 25 is and -- and get it approved, and do it so that there's not 111 1 some question. 2 MR. KING: All right. I don't have any problem 3 with that. You have a problem with that, Carson? Do you 4 think the Council will have a problem with just clarifying 5 that we're going to be allowing groups to use our building 6 and everything on a -- I mean, just on an as-needed basis? 7 You know, maybe we clarify 501(c)(3). I'd rather not -- you 8 know, we use -- heck, businesses use this office all the time 9 for meetings and stuff. We provide this office for -- 10 MR. McKENZIE: They fly in here and they come in 11 here and use this -- 12 MR. KING: Some real estate agent comes in, wants 13 to meet with some guy to look at a ranch or something like 14 that; they come in here, and we allow them to use the board 15 room. 16 MR. COWDEN: Don't you have a flight instructor or 17 someone that uses it? 18 MR. McKENZIE: Once a week, he's in here and uses 19 it. 20 MR. KING: Any problem clarifying this, Carson? 21 COUNCILMAN CONKLIN: Just for some consistency, 22 that would make sense. I see what Tom's getting at. You 23 know, the trick is going to be finding what level of activity 24 defines just free use of the facility versus having to put 25 some rental up or what-have-you, however you want to handle 112 1 it. 2 MR. KING: Right. Right. 3 COUNCILMAN CONKLIN: You guys know better than 4 anybody else. 5 MR. MOSER: Why don't we get Bruce to draft 6 something that -- what we propose to do, and run it past 7 Carson, Mike, or whoever, and say this is what we're 8 thinking, okay. And then say this is a policy we want to 9 implement, and do it. I think it's great. I mean, the 10 pictures you showed of the hospital group having their 11 luncheon in here, that's perfect. Okay. 12 MR. KING: I think we should clarify it, I agree. 13 MR. MOSER: Right, okay. 14 MR. KING: Okay. 15 MR. MOSER: So, the action is Bruce is going to 16 draft something that says -- 17 MR. KING: Kind of draft something up. We'll take 18 a look at it. Give me a call, e-mail. 19 MR. McKENZIE: I'll bring it next meeting. 20 MS. HARGIS: Keep in mind, we had to go to 21 501(c)(3) because we had too many people trying to use the 22 facility, and the expense of -- we don't keep the electricity 23 on in the Ag Barn like you do here. 24 MR. MOSER: Right. 25 MR. KING: Yeah, right. 113 1 MS. HARGIS: It's a major powering up. 2 MR. MOSER: That's a good point. 3 MS. HARGIS: And also, we -- we ask for security, 4 like when there's liquor and things of that nature, so that's 5 another thing. Even if it's a nonprofit, they have to have a 6 certified police officer here. 7 MR. MOSER: And one thing, if -- I don't know; I'm 8 sure we're covered insurance-wise, people having functions in 9 here. 10 MR. McKENZIE: What I have required the hospital to 11 do before they have the function at the airport is indemnify 12 everybody. 13 MR. MOSER: Okay, good. Perfect. 14 MR. McKENZIE: To make it real clear, indemnify the 15 City and the -- 16 MR. MOSER: That's the kind of thing we should 17 have, because I know the County has -- 18 MS. HARGIS: Our insurance does not cover it. 19 That's why you have to have this separate insurance. So, 20 each event that comes into the county has to get an insurance 21 policy that covers that event. 22 MR. MOSER: Right, okay. 23 MR. KING: Okay. 24 MR. WALTERS: I think that's just good practice. 25 Any event, they should provide you with a certificate of 114 1 insurance. 2 MR. MOSER: Absolutely. So, let's -- 3 COUNCILMAN CONKLIN: So, the document that you're 4 talking about, I think I see more purpose in outlining those 5 issues. 6 MR. MOSER: Right. 7 COUNCILMAN CONKLIN: Taking care of those 8 considerations than anything. You're talking about a couple 9 of events that have been held out here in this terminal. The 10 dollars are insignificant; it's the liability. 11 MR. MOSER: And this is not for Mark, but, you 12 know, we don't want to read about it in the paper here, the 13 Airport Board's doing this and this and this and this. Let's 14 just keep it clean. 15 MR. KING: Okay. That's fine. 16 MR. MOSER: Don't write that down, Mark. 17 MR. KING: 3A -- he'll write it down if you tell 18 him not to. 19 MR. COWDEN: Don't tell him now. 20 MR. LIVERMORE: He's writing it right now. 21 MR. MOSER: Okay, thanks. 22 MR. KING: Wasn't me, Mark. I'm not running for 23 anything. 3A, general update. 24 MR. McKENZIE: Kerrville Police Department used our 25 building at 1994 Airport Loop last week for training. They 115 1 used it for four days from about 8:00 to 5:00 every day. I 2 don't know what they did. I could hear shooting, but I 3 didn't ask. 4 MR. MOSER: Wait. Wait. Tell me -- 5 MR. McKENZIE: Paintballs, I think is what they 6 told me. Anyway, they got to use the building, which is a 7 good thing. 8 MR. MOSER: Which building? 9 MR. McKENZIE: This big 10,000 square-foot 10 building. 11 MR. KING: The one we just leased for a dollar. 12 MR. McKENZIE: The Sid Peterson Foundation project 13 is moving forward nicely. It's still scheduled to be March 14 the 31st in Hangar 5 right behind us. That's moving real 15 well. It's going to be -- they're expecting 800 at the 16 event. 17 MR. MOSER: Wow. 18 MR. McKENZIE: There will be valet parking for this 19 event, and right now we're trying to determine where we're 20 going to park all these cars. We can park them with no 21 problem if it's not raining, but if it's raining, there's 22 going to be some issues. We haven't worked through all that 23 yet, but we're -- 24 MR. LIVERMORE: Can you do what Kerrville Aviation 25 does for their annual party? Cordon off -- 116 1 MR. McKENZIE: They can't do that, because we can't 2 get a third of the -- not even 25 percent of cars out there. 3 We're going to cordon it off from the corner right here, Ed, 4 back, just because of valet -- you're going to pull up here, 5 get out of your car, then turn around and go back out, the 6 drivers will. But we have to leave the airport open. We 7 have to leave the ramp open. There was another idea come up; 8 we'll close the small runway. Well, I'm not closing the 9 runway. We can't -- we just can't do that. I've had people 10 approach me in the last month to close the runway for a drag 11 race on Sunday afternoon. I'm not closing it for that 12 either; we can't do it. 13 MR. LIVERMORE: No, don't want to get into that at 14 all. 15 MR. KING: Oh, god. Let me know if it happens. 16 MR. McKENZIE: It won't happen while I'm here. 17 MR. KING: Let me know right before that happens. 18 MR. McKENZIE: The other thing is, with the rains 19 that we had, we -- and you noticed it coming in today -- we 20 now have a stand of grass. 21 MR. LIVERMORE: Yes. 22 MR. McKENZIE: Be it meager, it's growing. The 23 water's standing. 24 MR. MOSER: Good. 25 MR. LIVERMORE: Hooray. 117 1 MR. McKENZIE: Now they've got a 70 percent stand 2 of grass. Maybe TexDOT will give them the $200,000 it's 3 holding, or whatever the amount is; it's substantial. But, 4 anyway, the grass is growing, and the erosion mats are 5 working well. 6 MR. MOSER: Good. 7 MR. KING: Okay. 8 MR. McKENZIE: So far, so good. That's all I've 9 got for that. 10 MR. MOSER: Okay. 11 MR. KING: Anybody else have anything on update? 12 MR. LIVERMORE: I have -- well, something not on 13 the agenda, but again, it's not an action item; it's just a 14 report. Am I able to utter those words? 15 MR. KING: You're on your own, buddy. Don't look 16 at me. 17 MR. LIVERMORE: Last Monday night, a friend of 18 mine, Bill Wood, and I attended the AOPA town hall meeting at 19 the San Marcos Airport. They flew in their bigwigs from 20 Washington, Craig Fuller and the rest of them, and had a 21 really, really good hour and a half presentation and 22 answering questions. But the thing that was most impressive, 23 it occurred at the new Redbird Flight Training Center over 24 there, and that outfit has again, powered by King Schools -- 25 I mentioned them earlier, King School software. They have 118 1 these new simulators for training -- basic training, and 2 these things are airline-type simulators. But they're for -- 3 they have an ability to present -- they have a panel where 4 the students sit, you know, with the stick and so forth, and 5 they can present on that panel any type you want. A Cessna 6 172 panel configuration; if you want a Beechcraft, you want a 7 Mooney, whatever, they can present it exactly like it is in 8 those airplanes. 9 MR. MOSER: Space shuttle. 10 MR. LIVERMORE: Space shuttle. And these -- and 11 these cubicles are probably -- maybe not quite as big as half 12 of this room, but they're on pneumatic -- pneumatic mounts. 13 And, I mean, if you turn, that thing turns, and if you go 14 down, it goes down. If you have turbulence, it's bouncing. 15 MR. MOSER: Six degree of freedom. 16 MR. LIVERMORE: Hmm? 17 MR. MOSER: Six degree of freedom. 18 MR. LIVERMORE: Is that what it is there? 19 Fantastic. And I've seen other efforts at similar -- out at 20 the Lufthansa training facility in Goodyear, Arizona, which I 21 thought were pretty good, but they don't stand a candle to 22 these. And that's kind of our competition now, I think. 23 That's the high bar for a competition for flight training on 24 our airport, and it's just something that someday we ought to 25 have a good discussion of. But if you're at San Marcos, it 119 1 is well worthwhile. The facility is brand-new. It is 2 spotless; you can eat off the floor. It is beautiful. It's 3 not -- not anything -- it's first class. 4 MR. KING: Well, thanks. You can put those 5 under -- those are allowable. Anything else? All right. I 6 want to thank Councilman Conklin for coming to our meeting. 7 Appreciate that. 8 MR. LIVERMORE: Glad you're here, seriously. 9 MR. COWDEN: Thank you for coming. 10 MR. KING: That was very -- 11 MR. LIVERMORE: Wonderful. 12 MR. KING: Good start. We appreciate that. We 13 really do. Do you have -- any of you have anything? Mike? 14 MR. ERWIN: No, sir. 15 MR. KING: Carson, do you have anything? All 16 right. Then we'll -- 17 MR. COWDEN: How about a five-minute break? 18 MR. KING: We're going to take a five-minute break, 19 and then we'll go into executive session. 20 (Recess was taken from 10:50 a.m. to 11:00 a.m., at which time the open session was closed, and an 21 executive session was held.) 22 - - - - - - - - - - 23 (Airport Board was adjourned at 11:48 a.m.) 24 - - - - - - - - - - 25 120 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 I, Kathy Banik, official reporter for Kerr County, 4 Texas, do hereby certify that the above and foregoing is a 5 true and complete transcription of my stenotype notes taken 6 at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 24th day of February, 8 2012. 9 _______________________________ Kathy Banik, Texas CSR # 6483 10 Expiration Date: 12/31/12 Official Court Reporter 11 Kerr County, Texas 700 Main Street 12 Kerrville, Texas 78028 Phone: 830-792-2295 13 14 15 16 17 18 19 20 21 22 23 24 25