1 2 3 4 KERRVILLE-KERR COUNTY JOINT AIRPORT BOARD 5 Regular Meeting 6 Monday, September 15, 2014 7 8:30 a.m. 8 Airport Terminal Conference Room 9 1877 Airport Loop Road 10 Kerrville, Texas 11 12 MEMBERS PRESENT: MEMBERS ABSENT: 13 Ed Livermore Stephen King, President Bill Wood Corey Walters, Vice-President 14 Kirk Griffin 15 AIRPORT BOARD STAFF PRESENT: 16 Bruce McKenzie, Airport Manager Carole Dungan, Executive Assistant 17 18 COUNTY STAFF PRESENT: Tom Moser, Commissioner Pct. 2 19 Jonathan Letz, Commissioner Pct. 3 James Robles, Assistant Auditor 20 21 CITY STAFF PRESENT: Sandra Yarbrough, Finance Director 22 23 VISITORS: Ilse Bailey, Airport attorney 24 Barry Hodkin, Mooney International Corporation Jonas Titas, Kerrville Economic Development Corporation 25 Mark Armstrong, Kerrville Daily Times 2 1 I N D E X September 15, 2014 2 PAGE 3 CALLED TO ORDER 4 1. VISITORS FORUM 3 5 2. KERRVILLE-KERR COUNTY JOINT AIRPORT BOARD MEMBER FORUM 3 6 3. CONSENT AGENDA 7 3A Approval of July 21 Board Meeting Minutes 4 8 4. DISCUSSION AND POSSIBLE ACTION 4A Monthly Financials (July and August) 4 9 4B Mooney Lease 17 10 4C Mooney Roof Project 30 11 4D New T-hangars 33 12 4E 2015 Holiday Schedule 36 13 5. INFORMATION AND DISCUSSION: 14 5A General Update 37 15 6. EXECUTIVE SESSION -- 16 7. ADJOURNMENT 40 17 18 19 20 21 22 23 24 25 3 1 On Monday, September 15, 2014, 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. LIVERMORE: Ladies and gentlemen, let's call 8 our meeting to order. It's 8:30. 9 (Discussion off the record.) 10 MR. LIVERMORE: Bill? Bill? We're starting. 11 MR. WOOD: Got a minute yet. 12 MR. LIVERMORE: No we don't, not according to that 13 clock. 14 MR. WOOD: You got your clock set fast. 15 (Laughter.) 16 MR. LIVERMORE: We don't have an Apple watch here 17 to get us on time. This meeting will now come to order, the 18 Joint Airport Board of Kerrville and Kerr County. At this 19 time, are there any visitors who would like to speak to the 20 board? We cannot take action on these items because the Open 21 Meetings Act requires them to be posted on the agenda 72 22 hours in advance, and any such presentations will be three 23 minutes or less. Seeing none, no hands up, at this time, 24 does any member -- the same restrictions apply to this 25 segment. Does any member of the board wish to address the 4 1 board about any subject? Seeing none, we'll move on. The 2 consent agenda. Do you have anything there, Bruce? 3 MR. McKENZIE: No, sir. 4 MR. LIVERMORE: No consent agenda? 5 MR. McKENZIE: Except to approve the board minutes 6 for the meeting of July the 21st. 7 MR. LIVERMORE: I'm sorry. Do that, yeah. Okay. 8 Any question? Any discussion of the board minutes from July 9 21? You've had a chance to read them before. I'd request a 10 motion to approve those minutes. 11 MR. GRIFFIN: Motion. 12 MR. WOOD: I'll second. 13 MR. LIVERMORE: Any discussion? All in favor? 14 (The motion carried by unanimous vote, 3-0.) 15 MR. LIVERMORE: Three ayes. Monthly financials. 16 James? 17 MR. ROBLES: Morning, everyone. 18 MR. McKENZIE: Morning. 19 MR. GRIFFIN: Morning, James. 20 MR. LIVERMORE: Start with July first? Or -- 21 MR. ROBLES: Yes, we're going to do the month of 22 July. Page 1 is the balance sheet. 370,535.66 is the total 23 cash and receivables. Payables at 95,471.86. Page 2, total 24 revenue over -- total equity and revenue over expense, fund 25 balance, 275,063.80. Page 3 is our monthly revenue 5 1 statement. It's 34,000 -- 2 MR. LIVERMORE: I'd like to back up just a moment 3 to the balance sheet. I see that there's a T-hangar lease 4 receivable there of $2,600. Can someone explain that to me? 5 MR. McKENZIE: What page are you on, Ed? 6 MR. LIVERMORE: Page 1, under T-hangar leases 7 receivable. It's both months. 8 MR. ROBLES: Let me look at the detail. 9 MR. GRIFFIN: 47-103 -- 10 MR. McKENZIE: Yeah, 47-103-400. We have taken 11 deposits on all 12 of our new T-hangars -- actually, 11 of 12 them. We need a deposit for one more, but he's out of the 13 country right now. 14 MR. WOOD: I was curious about where that would 15 show up. 16 MR. McKENZIE: I don't know where the County posted 17 it in the line item, but we did receive all of our -- we've 18 gotten all this cash. 19 MR. LIVERMORE: So, that number right there are 20 prepaid? 21 MR. GRIFFIN: Well, it may be. Let's see what 22 James comes up with. 23 MR. ROBLES: I'm going to have to pull up the 24 detail on the computer. 25 MR. McKENZIE: But we have been paid for all the -- 6 1 MR. WOOD: Actually, you do have a T-hangar 2 deposits column. 3 MR. McKENZIE: Yeah, right here, T-hangar deposits, 4 $1,800. 5 MR. LIVERMORE: Mm-hmm, down below. 6 MR. McKENZIE: Unless that was just a month that 7 we're a month behind on. 8 MR. LIVERMORE: Well, it says "Leases Receivable." 9 That seems to me to indicate someone hasn't paid. Someone 10 hasn't paid now for two months. 11 MR. McKENZIE: A month behind. 12 MR. ROBLES: I think that's what it is, 'cause it 13 should go under 47-325-603, which is T-hangar lease. 14 MR. LIVERMORE: Should go where? 15 MR. ROBLES: 47-325-603, which is the T-hangar 16 lease. It's on Page 3. 17 MR. LIVERMORE: 47 -- oh. 18 MR. McKENZIE: And we are -- in our accounting 19 here, we're up to date. Everybody's up to date on their 20 payments, so this is probably lagging a month. 21 MR. ROBLES: Yeah, it should be. It hasn't posted 22 quite yet. 23 MR. McKENZIE: Just hasn't posted. 24 MR. LIVERMORE: It went on for two months, is what 25 it -- 7 1 MR. GRIFFIN: Yeah, the same number in August as 2 well. 3 MR. LIVERMORE: Uh-huh. 4 MR. McKENZIE: Well, we'll have to look that up, 5 because everybody here we're showing has paid. 6 MR. LIVERMORE: Okay. Well, check it out and see. 7 MR. GRIFFIN: Okay. 8 MR. ROBLES: Page 4, salary and benefits. 9 22,553.88. Page 5 is personnel, supplies, maintenance, 10 professional services. We had a mowing in there, but other 11 than that -- 12 MR. LIVERMORE: Where are we with mowing this year, 13 Bruce? 14 MR. McKENZIE: We're in the midst of our fifth 15 mowing right now. We started -- 16 MR. LIVERMORE: We have six in the budget? 17 MR. McKENZIE: Yes, sir. We started Wednesday on 18 this mowing; it will be the last one of this fiscal year. 19 MR. ROBLES: Page 6, 4,009.89 in contingencies. 20 Most of that's from legal, uniforms, and small tools, using 21 that money, for a total of the year of 17,023.54. Page 7 -- 22 MR. WOOD: Can I ask a question before we get off 23 that page? 24 MR. ROBLES: Sure. 25 MR. WOOD: Bruce, why do we have contingencies for 8 1 utilities? 2 MR. McKENZIE: We ran short of money in our budget 3 this year, and we moved money around three months ago, if 4 you'll recall. We had to move some money around to keep 5 everything in positive. 6 MR. WOOD: So it shows up as contingency rather 7 than just in the line item that it -- 8 MR. ROBLES: We actually have two contingency 9 accounts. We use the one out of utilities just -- we just 10 arbitrarily picked one. We also have one under professional 11 services that doesn't have a budget. We had to stick it 12 somewhere, and we just -- 13 MR. WOOD: Okay. Well, I was just curious, 'cause 14 utilities are subject to tracking every year. 15 MR. GRIFFIN: You got to remember, we didn't have 16 it in our budget, but we added Frank's hangar to where we 17 started picking up utilities for it. And I know that we 18 had -- 19 MR. McKENZIE: Which is the power. 20 MR. GRIFFIN: -- a huge bill in February. 21 MR. McKENZIE: Winter months. 22 MR. GRIFFIN: The winter months. 23 MR. WOOD: My only question is for tracking -- 24 MR. GRIFFIN: I understand. 25 MR. WOOD: -- future budget planning. Maybe it 9 1 would be better to put it under the category that it goes 2 under than have it be vague like that. But that's just a 3 comment. 4 MR. ROBLES: Really, you could set up a whole 5 different section here where, you know, we split contingency 6 out, and instead of having it under utilities or professional 7 services, it -- 8 MR. WOOD: Well, I don't have a preference. I'm 9 just -- the only point of my question is when you budget, if 10 you don't -- I mean, if you're not able to track last year, 11 you can't really forecast next year. But anyway, that's my 12 only comment. 13 MR. ROBLES: Total expenditures for the month, 14 41,451.84. Page 8 is the balance sheet -- 15 COMMISSIONER MOSER: Hey, James, where's the -- for 16 the airport monthly terminal, the revenue over/under, bottom 17 line, what page? 18 MR. ROBLES: That would be on Page 7. 19 MR. LIVERMORE: Under the third column in the 20 right -- 21 COMMISSIONER MOSER: No, that's -- that's terminal. 22 That's terminal. 23 MR. ROBLES: Oh, excuse me. Let me backtrack here. 24 MR. LIVERMORE: That's not a total -- running total 25 at the bottom of that page? 10 1 COMMISSIONER MOSER: No, that's terminal on Page 7. 2 See the top left-hand corner? Airport Terminal. 3 MR. ROBLES: That's the total for Fund 47. I don't 4 think we have anything that represents something put out for 5 the terminal. 6 COMMISSIONER MOSER: Oh, okay, so that's the total 7 for the airport. 8 MR. LIVERMORE: That's the running total. 9 COMMISSIONER MOSER: So your title is incorrect. 10 MR. ROBLES: Yeah, the title just represents the 11 utilities, I believe. 12 COMMISSIONER MOSER: Okay. So the revenue 13 over/under probably ought to be on Page 6 or something. 14 MR. ROBLES: It could be, yes. 15 COMMISSIONER MOSER: Well, I'd like to know what it 16 is. 17 MR. ROBLES: Well, it is on Page 7. The -- the 18 title at the top, the "Terminal" just represents the 19 utilities. You see that line that says, "Total 20 Expenditures"? 21 COMMISSIONER LETZ: That's the total line across. 22 COMMISSIONER MOSER: Yeah, okay. All right. All 23 right, that does not include terminal. 24 COMMISSIONER LETZ: Yeah. 25 MR. ROBLES: It should. 11 1 COMMISSIONER MOSER: Or does it? Okay, got you. 2 COMMISSIONER LETZ: All expenditures. 3 COMMISSIONER MOSER: Okay, got you. Thank you. 4 MR. ROBLES: Page 8, capital. 5 COMMISSIONER MOSER: So let me -- wait. So 6 revenue, $65,000 -- 7 MR. ROBLES: The revenue for the month was 8 34,000 -- 9 COMMISSIONER MOSER: I'm talking about total -- 10 yeah, where it runs out for the year, 65,000. Is that for 11 the -- that's for the whole year? 12 MR. ROBLES: Are you looking on Page 3? 13 COMMISSIONER MOSER: I'm looking on Page 7, James. 14 MR. ROBLES: Well, we have year-to-date revenue 15 over expenditures. 16 COMMISSIONER MOSER: Yeah. So, the 65 on Page 7 -- 17 MR. ROBLES: Yeah, we've collected 65,472 more over 18 expenditures for the year. 19 COMMISSIONER MOSER: Okay. 20 MR. ROBLES: For the month, we are in the negative. 21 COMMISSIONER MOSER: For the year, you're plus 22 65,000? 23 MR. ROBLES: That's correct. 24 COMMISSIONER MOSER: That's all I wanted to know, 25 thank you. 12 1 MR. LIVERMORE: Not to maybe bore into this too 2 much, but in effect, would that be a profit figure? 3 MR. ROBLES: You could see it that way. 4 MR. LIVERMORE: Why don't we call it profit? 5 (Laughter.) 6 MR. GRIFFIN: You can't. 7 MR. LIVERMORE: This over/under stuff gets me kind 8 of confused. 9 MR. ROBLES: You could look at it as a profit, yes. 10 COMMISSIONER MOSER: Okay. Thank you, James. 11 MS. BAILEY: Governments don't make profits; that's 12 the problem. 13 MR. LIVERMORE: They should. (Laughter.) 14 MR. ROBLES: Okay. Capital account, balance of 15 18,000 -- excuse me 111,328.06. 16 MR. LIVERMORE: How's that -- I want to ask you the 17 question that I mentioned to you earlier. Back on Page 1 and 18 this page, since they deal with the same sort of issue, tell 19 me what the difference is between our account balance for -- 20 well, we're dealing with July. I'm going to ask about 21 August, but either one, how does this compare with a year 22 ago? 23 MR. ROBLES: Okay. 24 MR. LIVERMORE: Total revenue? 25 MR. ROBLES: Exactly a year ago, Fund 47 account 13 1 balance was 337,509. 2 MR. LIVERMORE: Okay, for July? 3 MR. ROBLES: For July 31st, yes. And we are at 4 375,053 now. 5 MR. LIVERMORE: Mm-hmm. So, we're up about 35,000. 6 MR. ROBLES: That's correct. 7 MR. LIVERMORE: How about on this -- little bit 8 different perspective on the capital, but how does it 9 compare? 10 MR. ROBLES: Fund 48, last year's was 67 thousand, 11 seven. 12 MR. LIVERMORE: But that really -- Bruce, doesn't 13 that really involve just how the money comes in from TexDOT? 14 MR. McKENZIE: Yes. 15 MR. LIVERMORE: That's a totally different thing. 16 MR. ROBLES: It could be skewed, 'cause you may 17 have an expense in one month where you didn't have it last 18 year. 19 MR. LIVERMORE: Floating around a lot -- moving 20 around a lot. 21 MR. ROBLES: Okay. Page 9 is the revenues, 92 22 cents. Page 10, the expenditures, 27,570.50. Page 11, total 23 expenditures for the year, 235,533.36. We are, in general, 24 collecting more revenue over expenditures, 44,261.22 for the 25 year. Any questions on July? August, Page 1, total cash and 14 1 receivables, 387,669.64. Payables -- 2 MR. LIVERMORE: Our total again compared to a year 3 ago is still about the same relative difference? 4 MR. ROBLES: Last year it was 355,485. 5 MR. LIVERMORE: About the same, okay. 6 MR. ROBLES: Page 2, total liabilities, equity, 7 revenue over expenditures, 387,669.64. Page 3, monthly 8 revenue, 40,411.54. 9 MR. WOOD: Just a comment I have. Under lease 10 rental income, year-to-date, we're 215,000-some-odd versus 11 last year, about 180,000, so we're bringing in more money on 12 our leases. 13 MR. McKENZIE: Yes, sir. 14 MR. LIVERMORE: And that's where the Brinkman shows 15 up too, right? In that? 16 MR. McKENZIE: Brinkman, and the CPI's kick in 17 every year. 18 MR. ROBLES: Page 4, salary and benefits, 19 16,138.50. Page 5, personnel, supplies, maintenance, 20 professional services, nothing big in here. You can still 21 see we have two mowings budgeted; I think we're doing one, 22 like you say. 23 MR. McKENZIE: Yes, sir. 24 MR. ROBLES: Page 6, expenditures, 5,150.98 in 25 utilities. Page 7, total expenditures for the month, 15 1 22,853.20. Revenues over expenditures, 17,558.34. 2 COMMISSIONER MOSER: So, one month to go, and 3 really good job, Bruce and guys. 84,000 positive, so great. 4 MR. McKENZIE: Thank you. 5 MR. ROBLES: Page 8, capital account. 6 MR. WOOD: My only comment on that is, when you 7 have contingencies in there, if there's some way you can help 8 the guys try to figure out next year's budget by showing 9 actual expenditures, I think that would be helpful. 10 MR. McKENZIE: Yes, sir. 11 MR. WOOD: In the way you enter these things. 12 MR. McKENZIE: We can set it up that way. 13 MR. ROBLES: If you really wanted to, we could do 14 budget amendments, too. Move money from contingencies to the 15 line items that we're actually expensing. 16 MR. GRIFFIN: That might be -- that might be what 17 we -- 18 MR. WOOD: Well, I'm just thinking of Bruce, when 19 he tries to figure out this crystal ball for next year, and 20 it's -- to me, it's awful helpful to know what you actually 21 spent on each different expense item. 22 MR. ROBLES: We can pull out the detail and show 23 you. 24 MR. WOOD: You can always do a breakdown whenever 25 we do the budget. 16 1 MR. LIVERMORE: Well, you know, on the balance 2 sheet, the biggest -- I mean, I think it's a contingent item, 3 is the -- 4 MR. ROBLES: The severance. 5 MR. LIVERMORE: There's an $84,000 item right there 6 that may never happen. I mean, it's just -- it's really 7 contingent. 8 MR. ROBLES: Yes. 9 MR. LIVERMORE: I wonder if that's -- it kind of 10 throws a -- it's 84,000 of 95,000 of total liabilities, and 11 it's probably a sum that will never be spent. 12 MR. WOOD: You're always going to look like you're 13 $84,000 better than your budget. 14 MR. LIVERMORE: Yeah. 15 MR. ROBLES: It's something we have to account for. 16 MR. WOOD: Yeah, all right. 17 MR. ROBLES: Page 8, 62,406.52 is the account 18 balance. Page 9, here's where all the revenue kicked in. 19 286,599.13 from the TexDOT reimbursement and RAMP grant. 20 Page 10, expenditures, 335,520.67. 21 MR. LIVERMORE: And that is almost entirely in the 22 T-hangar project, isn't it, Bruce? 23 MR. ROBLES: Yes. It was 32,000 in RAMP grant. 24 MR. McKENZIE: Most of it is, yes, sir. 25 MR. GRIFFIN: We did the lights. 17 1 MR. McKENZIE: The lights. We did our signs out 2 here. 3 MR. GRIFFIN: Signs. 4 MR. McKENZIE: Several things, maintenance around 5 the airport. 6 MR. GRIFFIN: And what else was it? 7 MR. McKENZIE: H.V.A.C. 8 MR. GRIFFIN: H.V.A.C., yeah. 9 MR. ROBLES: Okay. Total expenditures, 335,520.67. 10 Expenditures over revenues, 48,921.54 for the month. 11 MR. LIVERMORE: Okay, James, thank you. Any 12 discussion? Any member of the board wish to make any further 13 comment? Questions? Anyone from the audience? I'm looking 14 at you or you. (Laughter.) He didn't know what I said, did 15 he? Still doesn't. 16 COMMISSIONER LETZ: Keep going. 17 MR. LIVERMORE: Anyway, we'll move on. May I have 18 a motion to approve the financial report? 19 MR. WOOD: I'll make a motion we approve the 20 financial -- the two financial reports. 21 MR. GRIFFIN: I'll second. 22 MR. LIVERMORE: Seconded by Kirk. All in favor? 23 (The motion carried by unanimous vote, 3-0.) 24 MR. LIVERMORE: Moving right along to the Mooney 25 lease. This is a -- this document reflects an awful lot of 18 1 thought and an awful lot of work by an awful lot of people 2 for quite a few months. I believe that it is ready for the 3 Airport Board to approve and sign it. And the City and 4 County and Mooney have had many discussions, and I think 5 we've arrived at a positive conclusion. Any other discussion 6 by anybody? 7 MS. BAILEY: I have a couple things. This one 8 that's in your packet reflects the changes not only that we 9 have made over the months, but recent review and editorial 10 changes by the City Attorney, Mike Hayes. So, he had -- I 11 made all the changes that he suggested that I thought were 12 correct, and then there were a few that he just had questions 13 on, and so I wanted to have the board address those and tell 14 me which way you wanted me to address those. The first one 15 is on Page 6, under 6.02. Our lease says that the lessee 16 shall, at its sole expense, repair and maintain leased 17 premises in the same or better condition as exists on the 18 date of the execution of the lease, normal wear and tear 19 excepted. And Mike's question was whether or not we should 20 have some kind of condition or maintenance obligation after 21 the lease term. To me, that is more appropriately addressed 22 in any renewal, but we could also put in here that any 23 renewal requires those same maintenance conditions. So, 24 that's really just a policy question, how you want to address 25 that. 19 1 MR. LIVERMORE: Well, I don't want -- I mean, this 2 thing has been negotiated between all the parties, and I 3 don't want to unbalance it again. What -- 4 MS. BAILEY: And I don't think he had a really 5 strong -- this wasn't like, you know, "I'm not going to 6 approve it without that." But he just had that written 7 question in his notes, and so I wanted to see how y'all felt 8 about it. 9 MR. WOOD: What is the term of the lease? 10 MS. BAILEY: It's -- 11 MR. McKENZIE: Twenty years. 12 MS. BAILEY: It's 20 years. 13 MR. McKENZIE: Twenty years. 14 COMMISSIONER LETZ: We'll all be gone. (Laughter.) 15 We'll all be gone at that point. 16 MR. LIVERMORE: Yeah, we'll all be gone. 17 COMMISSIONER MOSER: Speak for yourself. 18 MR. LIVERMORE: Well, my sense is that the document 19 has been negotiated -- 20 MS. BAILEY: Just leave it the way it is. 21 MR. LIVERMORE: I'm of the belief that we should 22 not try to start stirring this up. 23 COMMISSIONER MOSER: Yeah. Otherwise, it's got to 24 go back to everybody and take a look at it. 25 MS. BAILEY: Exactly. 20 1 MR. LIVERMORE: Here we go again. 2 COMMISSIONER MOSER: Right. 3 MR. LIVERMORE: I think that some awful good 4 people, including you -- 5 MS. BAILEY: Thank you. 6 MR. LIVERMORE: -- have worked on it for an awful 7 long time. We need to move this thing forward. 8 MS. BAILEY: I didn't want to submit it to you as 9 though Mike had approved it, so I wanted to make sure 10 we're -- we're now agreeing -- 11 MR. LIVERMORE: I don't mean to offend Mike either. 12 MS. BAILEY: Oh, no, I don't think he had strong 13 feelings. Like I said, he was just saying, "What about 14 this?" And on Page 7, the same thing. What we have in terms 15 of the default is that if there is a default, amounts due 16 will incur annual interest at 18 percent or the highest 17 interest rate allowed by law, whichever is less. Which is a 18 pretty standard phrase to put into a contract, so that if you 19 end up with a maximum interest of 10 percent, you aren't then 20 accused of usury because you've got 18 percent in there. So, 21 he was afraid it might cause confusion. I'm not concerned 22 about it. My recommendation is that we would leave it as-is. 23 MR. LIVERMORE: Leave it as-is. 24 MR. McKENZIE: Okay. 25 MS. BAILEY: Then, let's see. Page 16, he had two 21 1 questions. All right. The first one's on 15.01, Subsection 2 (e); this has to do with the lessee's right to terminate. It 3 says the lessee shall have the right to terminate the 4 agreement immediately upon the occurrence of one of any 5 number of events, and the last one is (e). They can 6 terminate in the event that any of the matters specified in 7 several sections materially and adversely affect their use of 8 the leased premises for the purposes that they've leased it 9 for. And if you go back and look at those sections, 10 basically I think those all relate to if any of those things 11 happen, the lessee can't really use the premises for what 12 they've leased it for, so they have a right to terminate the 13 lease. 14 COMMISSIONER MOSER: Like, what are some of those? 15 MS. BAILEY: Okay, 4.02 -- 16 MR. GRIFFIN: They can't run -- they can't run an 17 airline out of the facility. 18 MS. BAILEY: Right. If they do any of those 19 things, then they can terminate the lease. And other 20 provisions allow us also to terminate the lease, because 21 they'd be using a prohibited use. 22 MR. McKENZIE: Can't create a hazardous condition. 23 MS. BAILEY: Right. 4.03 is compliance with 24 minimum standards. If they can no longer comply with the 25 minimum standards, then they can terminate the lease, as we 22 1 could also. 7.07 and 7.08 are erecting structures that are 2 not permissible, or aerial approaches not being protected. 3 Again -- 4 MR. McKENZIE: They'll have to go through F.A.A. to 5 execute any, and they're not going to build any high-rises 6 over there, I don't think. 7 MS. BAILEY: Right. Then 16.14 is -- and I will 8 say that all of these provisions were, I think, in the 9 previous lease, so they've been -- it's been working. 10 Development of the airport. If we develop the airport in 11 such a way that they can no longer carry on their business, 12 they have the right to terminate. So, again, I would 13 recommend leaving that the same, but I just wanted to bring 14 it to your attention. 15 MR. LIVERMORE: I -- unless there's a motion to 16 make the change, I would stay the way it is. 17 MS. BAILEY: And then 16.03, the Force Majeure 18 clause that basically says neither of us will be deemed to be 19 in violation of the lease if we can't comply with our 20 obligations due to some kind of natural disaster beyond our 21 control. And then Mike suggested that we have some kind of 22 obligation in there where one party would have to give the 23 other notice to start the time clock on that. My thought is 24 that if -- if it's something that is so significant that it 25 really impairs our abilities, everybody will know what the 23 1 time clock is, if we have an earthquake or, you know, tornado 2 or something. So, I'm not concerned about that. I'd 3 recommend leaving it as-is. 4 MR. LIVERMORE: Does the board have any -- anyone 5 wish to make a change? 6 MR. GRIFFIN: I don't. 7 MR. LIVERMORE: I see none. Is that it, Ilse? 8 MS. BAILEY: Yes. And with that, I have already 9 discussed this with Mike, and he's going to ask this to be 10 placed on the City Council agenda for next -- not tomorrow, 11 but the next Tuesday, for them to bless us executing the 12 lease. I have sent it to David Jackson, Mooney's attorney, 13 and Barry's here and has heard our conversation. He did not 14 have a chance to look it over, 'cause I didn't get it to him, 15 the final lease, until Friday. But I suggest that if we 16 approve it, we approve it subject to Mooney's and David 17 Jackson's approval. I don't anticipate a problem with it, 18 but since they haven't formally blessed it yet, that would be 19 the way the motion would go. And then Bruce is going to see 20 that it gets on the Commissioners Court agenda for next 21 Monday. 22 MR. McKENZIE: It's on there. 23 MS. BAILEY: And so if we can get the blessing from 24 both of those entities and Mooney's attorney, and Mooney 25 approves it, then we can get this actually executed. 24 1 MR. McKENZIE: And actually, for clarity -- Ilse, 2 excuse me just for a second -- the board has the authority to 3 execute leases on this airport. But our board president, as 4 well as the board, has been adamant about we want this as 5 overt as possible. That's why we're bringing it to the City 6 and to the County, so everybody's on board. We just want you 7 folks to know exactly where we're at and say, "Yea, verily." 8 And Tom and I have had conversations about this before as 9 well, so that's why we're taking it to those -- 10 MR. LIVERMORE: This has been a real slog, and I'll 11 tell you, I personally really appreciate Ilse's leadership on 12 this, and Bruce's leadership. 13 MS. BAILEY: Thank you. 14 MR. LIVERMORE: And working through it on our side. 15 There's been an awful lot of other people in the city and the 16 county and Mooney who've struggled with this. It's really a 17 wonderful thing. It's -- it's been a labor getting to this 18 point, but it's time to move forward. 19 COMMISSIONER MOSER: So, you're going to approve it 20 contingent on -- 21 MR. LIVERMORE: I think we'll follow -- well, 22 depends on who's going to make a motion here, but -- 23 COMMISSIONER MOSER: Oh. 24 MR. LIVERMORE: -- I presume we would follow Ilse's 25 suggestion. Is there a motion to be made, gentlemen? 25 1 MR. GRIFFIN: Yeah. Now, do we -- one question 2 real quick. Do we -- do we need to sign it before we take it 3 to them, or do we want to wait to sign it? 4 MS. BAILEY: I think that the motion would probably 5 be that we would approve it for execution -- 6 MR. GRIFFIN: Pending -- 7 MS. BAILEY: -- pending -- 8 MR. GRIFFIN: The owner -- 9 MS. BAILEY: -- the owners' recommendation. 10 MR. GRIFFIN: Okay. 11 MS. BAILEY: And Mooney's approval. 12 MR. GRIFFIN: I just wanted to make sure we said 13 that correctly so it met their notes. 14 MR. McKENZIE: And Mooney's approval. 15 MR. GRIFFIN: And their approval. 16 MR. McKENZIE: Looks like it's good. 17 MR. WOOD: What is the board's -- what is a board 18 member's responsibility in making a motion to use this lease? 19 'Cause this is the first time I've seen it. I mean, I have 20 ultimate trust in you, that you've helped generate it. I'm 21 just saying -- maybe I should have read it before we pass it. 22 MS. BAILEY: Well, I think early on, the board 23 delegated that sort of as a committee to Kirk and Corey, and 24 so I guess what you're really saying if you approve it is 25 that you trust the committee, your -- 26 1 MR. WOOD: Exactly. 2 MS. BAILEY: -- your board committee. 'Cause we -- 3 MR. WOOD: And I do. I just want to make that 4 point, that -- 5 MR. GRIFFIN: I want Bill to have his say. Yeah, I 6 understand. 7 MR. HODKIN: Can I just -- 8 MR. LIVERMORE: Yes, sir. 9 MR. GRIFFIN: Chime in, please. 10 MR. HODKIN: Forgive me, I was overseas last week, 11 so I've not seen the latest version, but I'm assuming it's 12 just legalese changes rather than operational stuff, so 13 that's fine. What I've never seen, though, Ilse, are the 14 appendices that are called out. 15 MS. BAILEY: Well, the only significant change that 16 we made -- 17 MR. LIVERMORE: The what? 18 MR. HODKIN: The appendices. There are three, and 19 we've never seen any of those, so I'm just concerned. 20 Certainly, I need to see the appendices before I can sign 21 off. 22 MS. BAILEY: What we did, Barry, is that instead of 23 making the -- the income incentive agreement an appendix, 24 we've just said it's in Section 5.06. It now says any 25 improvements made to the leased premises using funds provided 27 1 to the lessee by owners under economic development agreements 2 entered into pursuant to Texas Local Government Code, 3 Chapters 380 or 381, or other applicable law, shall require 4 lessee to comply with all terms contained within those 5 agreements, in addition to those requirements of this 6 agreement, and a violation of the terms of any such economic 7 development agreements shall constitute a breach of this 8 lease subject to the default provisions of Article 14, just 9 as if such terms were set out in this agreement verbatim. 10 That way we can execute this before those agreements are 11 done, and we still have this lease, and then -- then those 12 can be negotiated later. 13 MR. HODKIN: Okay, that's fine. Therefore, the 14 only appendix maybe is the map. 15 MS. BAILEY: Is the map, correct. And I have -- 16 actually have a copy of that. I may even have it with me. 17 MR. HODKIN: I don't need to see it, that's fine. 18 I just wanted -- from the board's perspective, if you sign 19 off on the lease without what seem to be several appendices 20 being circulated, then that might be a problem. 21 MR. GRIFFIN: Those will be negotiated when those 22 events occur. 23 MR. HODKIN: That's fine. 24 MR. GRIFFIN: Yeah. Yeah, okay. 25 MR. HODKIN: I do appreciate the fact that the 28 1 board is, and the County and City, moving us forward again. 2 Thank you. 3 MR. GRIFFIN: Okay, let me see if I can word this 4 right. 5 MR. LIVERMORE: Subject to Ilse's correction, 6 right? 7 MR. GRIFFIN: Yeah, subject to being slapped. 8 (Laughter.) I make a motion that we press forward with 9 signature of this lease as written, and as unmodified by the 10 four comments as discussed, and we will sign it pending the 11 okay from our owners within a week's time frame. 12 MR. McKENZIE: Hopefully. 13 MR. GRIFFIN: Hopefully within a week's time frame. 14 MR. LIVERMORE: Would you accept the word -- in 15 place of "press forward,' would you accept "approval of"? 16 MR. GRIFFIN: Sure. Absolutely, yeah. 17 MR. LIVERMORE: Okay. 18 MR. GRIFFIN: Yes. 19 MR. LIVERMORE: We've pressed a long time. 20 MR. GRIFFIN: Yeah, I'll approve -- yes, okay. 21 MR. LIVERMORE: Did you get that, Kathy? 22 MR. GRIFFIN: Okay, thank you. So be it. 23 MR. LIVERMORE: Okay, we have a motion. 24 MR. McKENZIE: Is that -- 25 MS. BAILEY: Yes, sir. And you included Mooney's 29 1 approval? 2 MR. GRIFFIN: Well, and then there's subsequent 3 signatures, yeah, of course. I mean, I figured that's by 4 default. 5 MS. BAILEY: Yeah. If they -- 6 MR. GRIFFIN: If they don't sign it, we don't have 7 a lease. 8 MR. WOOD: In plain English, the board approves -- 9 MR. GRIFFIN: What's here. 10 MR. WOOD: -- submitting this lease agreement -- 11 MS. BAILEY: As the final agreement. 12 MR. WOOD: -- to Mooney. 13 MS. BAILEY: Right. 14 MR. WOOD: Subject to verification by our two 15 owners. 16 MS. BAILEY: I'd say recommendation by the two 17 owners, since we have the authority to execute it. We're 18 just seeking -- 19 MR. WOOD: Okay. 20 MS. BAILEY: -- recommendation of approval. 21 MR. WOOD: Hope you got all that. 22 MR. LIVERMORE: Is this clear? 23 THE REPORTER: As mud. (Laughter.) 24 MR. LIVERMORE: Okay. May I have a second to the 25 motion? 30 1 MR. WOOD: I second. 2 MR. LIVERMORE: Any further discussion from any 3 party here? Seeing none, let's vote. All in favor? 4 (The motion carried by unanimous vote, 3-0.) 5 MR. LIVERMORE: Three ayes, no nays. Passed. All 6 right. Well, moving right along, let's -- Bruce, can you 7 update us on the Mooney roof project? 8 MR. McKENZIE: Yes, sir. It appears that Primero 9 Engineering, Tom Kita and David Mack, should have everything 10 complete and ready to give to Barry. Probably within 7 to 10 11 days, they'll be ready to hand you the final -- all the 12 documents and all the -- everything that's contingent upon 13 how you're going to repair the hangar, and are ready for you 14 folks to take it out in the bidding process, working with 15 Primero, of course, after you visit about it. The only one 16 thing that came up last week that Tom and David both talked 17 to me about was the area over there where the Quonset hut is 18 and the Hammer House, there's some concern that there may be 19 leaded paint over there, 'cause it's so old. That's not in 20 anybody's scope of work, so I gave them permission to check 21 that to see if it has leaded paint in it. They need to know 22 so they can write the spec to give to the contractor, 'cause 23 we don't want to give it to them and then say it's got leaded 24 paint, and hit Mooney with a change order. We want to know 25 going in whether that paint is leaded or not. That was a 31 1 $600 item, the quote that we got. So, I permitted them to do 2 that so the board will know, and we're going to pay for that. 3 But we needed -- we weren't going to hold this up over one 4 lead paint sample, so I approved that to be done, and it will 5 be done this week, Barry. 6 MR. LIVERMORE: Do we need -- I doubt it, but do we 7 need to approve the expenditure? 8 MR. McKENZIE: No. No, it's just -- 9 MR. WOOD: Question. Does this document here 10 represent the cost of just putting a roof up, or is this 11 including any -- 12 MR. McKENZIE: No, sir, that's a whole lot of work; 13 that's not just the roof. That's -- 14 MR. WOOD: Okay. 15 MR. McKENZIE: -- a lot of other things. I'll give 16 you this packet. 17 MR. WOOD: So, we first were thinking that it was 18 going to be a million dollars for the roof, and now it's a 19 million, four-something for -- 20 MR. McKENZIE: Yes, sir. 21 MR. WOOD: -- fixing everything under the roof in 22 addition to putting on the roof? 23 COMMISSIONER MOSER: That's their rough order of 24 magnitude estimate. 25 MR. McKENZIE: Thank you. That's correct. But 32 1 that being said, we still -- Barry, you should have those 2 documents in 7 to 10 days. 3 COMMISSIONER MOSER: And the documents being the 4 specifications -- 5 MR. McKENZIE: The specs. Specs, yes. 6 COMMISSIONER MOSER: Those that they are 7 recommending be included in the RFP? 8 MR. GRIFFIN: It will be a specification document 9 that basically says how they got to these numbers. 10 COMMISSIONER MOSER: Right. 11 MR. GRIFFIN: That's the same one. 12 MR. McKENZIE: Yeah, that's same one we had in our 13 meeting last month. And then Mooney can take that and ferret 14 out what they would like to -- they can start their process 15 then, that's correct. That's -- there's no decisions that 16 need to be made; I just want everyone to be aware of where 17 we're at with this. 18 MR. WOOD: So, there is a document that'll have our 19 -- the Airport Board consultant's recommendations for how to 20 do this, right? 21 MR. McKENZIE: That's -- 22 COMMISSIONER MOSER: The key word is 23 "recommendation," right. 24 MR. WOOD: Okay. 25 MR. McKENZIE: That's correct. 33 1 MR. WOOD: Thank you. 2 MR. McKENZIE: Any questions? And Barry and I have 3 had numerous conversations about this, so we're tracking 4 this. 5 MR. LIVERMORE: I don't see any action that we -- 6 this is simply a briefing. 7 MR. McKENZIE: No, sir, just so the board will know 8 exactly where we're at, and everyone else. 9 MR. LIVERMORE: Anyone in the audience have any 10 questions on this? Okay. All right, let's move on. 11 T-hangars. Brief us on that, please. 12 MR. McKENZIE: Well, the buildings are complete. 13 They are completed as of last Thursday, both buildings. 14 MR. LIVERMORE: I've been down there; they look 15 good. 16 MR. McKENZIE: Both buildings are complete. The 17 electrician has pulled all the wire in to where the meters 18 will be placed. The wire's been pulled. The City's 19 inspected the electrical part; that's been approved. That's 20 all behind us. Today we're scheduled, depending on weather, 21 to pour the 3-foot sidewalk, for lack of a better word, 22 around both buildings. That's what's TexDOT requires. So, 23 the paving machine's out up next to the building; it makes a 24 lot nicer job. We were going to pour it Friday; that didn't 25 pan out. We're waiting today to see what the weather does. 34 1 MR. WOOD: Is this something Robert's doing? 2 MR. McKENZIE: One of his subs, yes, sir. 3 MR. WOOD: It's not a city -- 4 MR. McKENZIE: No, it's not a city project. 5 COMMISSIONER MOSER: So it's not really complete. 6 MR. McKENZIE: The buildings -- the structures are. 7 COMMISSIONER MOSER: So the project is not. 8 MR. McKENZIE: No. No, I said the buildings. 9 COMMISSIONER MOSER: Okay. 10 MR. McKENZIE: That's correct. 11 COMMISSIONER MOSER: Okay. 12 MR. McKENZIE: Then we -- once the sidewalks are 13 poured, then it's the paving contractor. That's the last -- 14 COMMISSIONER MOSER: When is that? 15 MR. McKENZIE: That has been subbed out; the City 16 subbed it out to Jenschke Construction Company to do that. 17 So, we're -- I know your question, and the weather now is 18 playing in this. And they told us they would be in there 19 today, but we always -- you can't, because we have to pour 20 the sidewalk in. 21 COMMISSIONER MOSER: Let me ask it this way. When 22 is it scheduled to be complete? I'm not going to say when. 23 MR. McKENZIE: Last week. 24 COMMISSIONER MOSER: Total project? 25 MR. McKENZIE: Theoretically, we were supposed to 35 1 be through next week. We thought we were going to be in 2 Labor Day, but that didn't work. 3 COMMISSIONER MOSER: Okay. So, you -- you're 4 scheduled to be complete with the project; people can start 5 moving their airplanes in in a week? 6 MR. McKENZIE: But that's not going to happen. I'm 7 a realist; I've been around the world. 8 COMMISSIONER MOSER: But I'm just saying what the 9 schedule is. That's the schedule you're working to. 10 MR. McKENZIE: That's right. 11 COMMISSIONER MOSER: Okay, got you. All right, 12 thank you. 13 MR. McKENZIE: We're trying. 14 COMMISSIONER MOSER: No, that's the schedule you're 15 working to. 16 MR. LIVERMORE: Okay. Any questions on T-hangars? 17 I notice -- 18 COMMISSIONER MOSER: And just for confirmation, so 19 they're all -- all are leased? 20 MR. McKENZIE: Yes, sir. 21 MR. WOOD: There's a waiting list. 22 MR. McKENZIE: We still have eight on a waiting 23 list. 24 COMMISSIONER MOSER: Good. Super. 25 MR. McKENZIE: Six or eight? 36 1 MS. DUNGAN: Eight. 2 MR. McKENZIE: Eight. 3 MR. LIVERMORE: I notice a lot, if not all, the 4 doors are like half open. Why is that? 5 MR. McKENZIE: We left them open about a foot, 6 every one of them, so that we don't get in the way of the 7 concrete contractor working right up next to that building. 8 We left about a 2-foot space. 9 MR. GRIFFIN: Otherwise it gets splashed all over. 10 MR. LIVERMORE: Makes perfect sense. I knew there 11 was an answer. 12 MR. GRIFFIN: And that's weather-sealed at the 13 bottom, because that weather-sealing is actually sitting on 14 the sidewalk. 15 MR. LIVERMORE: That's understandable now, okay. 16 Any other questions about T-hangars? Basically -- I mean, 17 realistically, we hope we're looking for October 1 or shortly 18 thereafter. Let's move on to holiday schedule. You have it. 19 We need to approve this. 20 MR. McKENZIE: Yes, sir. It's like it was last 21 year, except that the days -- the physical days are 22 different. The dates are -- it's the same days. It's the 23 same as it was, and has been for previous years. 24 MR. WOOD: Does it coordinate with the County's? 25 MR. McKENZIE: They get more holidays than we do. 37 1 So does the City. So, this is just -- 2 MR. WOOD: This is ours. 3 MR. McKENZIE: -- what we came up with, yes, sir. 4 MR. LIVERMORE: Okay. Would someone like to make a 5 motion to approve this, or ask questions? 6 MR. GRIFFIN: No discussion. I make a motion we 7 approve the holiday schedule as written. 8 MR. WOOD: I second. 9 MR. LIVERMORE: Let's vote. All in favor? 10 (The motion carried by unanimous vote, 3-0.) 11 MR. LIVERMORE: No nays. Bruce, do you want to -- 12 do you want to -- you have here General Update. 13 MR. McKENZIE: Yes, sir, I'd like to just mention a 14 few things, if I could, please, sir. We now have in place 15 and installed our new directional signs on the four taxi 16 lanes that approach the apron now; that project is complete. 17 We're in the midst our fifth mowing cycle right now. I had 18 the pleasure of showing four pieces of property last week to 19 a gentleman that wants to build his own hangar here, and I've 20 gone around and showed him the four that I think are one, 21 two, three, and four. I'm going to probably put this on the 22 agenda next month -- I will put it on the agenda for 23 discussion; hopefully all the board members are here. Kirk 24 and I have had several discussions about this. In case 25 you've got -- y'all have got a different idea than what I do 38 1 about where we need to place the next hangars, I just need to 2 tell you what I'm showing folks. 3 MR. WOOD: Are you following the -- 4 MR. McKENZIE: Master plan. 5 MR. WOOD: -- master plan? 6 MR. McKENZIE: Yes, sir, but I still would like for 7 you guys to know what I'm showing. 8 MR. LIVERMORE: What type of a hangar is he wanting 9 to build? 10 MR. McKENZIE: He is going to build a hangar that 11 will probably hold two airplanes, your size, like Bonanzas or 12 182's, for his -- he's got -- he is in the energy business, 13 and he lives here in Kerrville. And his offices are down in 14 South Texas, but he lives here. His airplane is in Boerne 15 now. He wants to move it to Kerrville, to build his own 16 hangar. He's hangaring in Boerne now. 17 MR. LIVERMORE: But he's only building it for -- a 18 larger hangar for two singles? 19 MR. McKENZIE: He wants to put his two airplanes in 20 there, yeah. 21 MR. LIVERMORE: Okay. 22 MR. McKENZIE: That's his plan. He's still in the 23 planning stages, but he seemed very serious. 24 MR. LIVERMORE: Would that same hangar also 25 facilitate, say, one larger plane, like a King Air? 39 1 MR. McKENZIE: Not -- because of the door he was 2 talking about, it wouldn't accommodate it because of the 3 taillight. That would be the determining fact for that. 4 MR. WOOD: Explain to me how that works again. He 5 builds the hangar at his expense on our land? 6 MR. McKENZIE: We will lease him a footprint. 7 MR. WOOD: Okay. And then he pays us on a monthly 8 basis or yearly basis? 9 MR. McKENZIE: We'll lease him a footprint with a 10 20-year lease. 11 MR. WOOD: Okay. 12 MR. McKENZIE: Either a 5-year option or a 10-year 13 option, however he wants to structure that. 14 MR. WOOD: And he owns the building? 15 MR. McKENZIE: He owns the building. Just like the 16 Brinkman hangar, we get it back. 17 MR. GRIFFIN: Just like -- 18 MR. McKENZIE: Like George's and Steve Drane's. 19 MR. WOOD: I'm still learning how the government 20 stuff works. 21 MR. LIVERMORE: Unless there is a -- 22 MR. McKENZIE: The last thing I've got -- excuse 23 me, Ed -- is the gentlemen that are on the -- ladies and 24 gentlemen that are on the Airport Planning Committee, that's 25 coming up again next month, October. So, in a week or so, 40 1 you're going to be hearing from me. If there's anything that 2 the Airport Planning Committee would like to talk about that 3 we haven't discussed in our Airport Board meetings, send me a 4 -- send me that information. I'll put it on the agenda, and 5 we'll have another Airport Planning Committee meeting if 6 anybody's got anything they want to talk about outside the -- 7 the board meeting. So, that's upcoming next month. 8 MR. LIVERMORE: Okay. 9 MR. McKENZIE: Just so everybody knows that's 10 coming. That's all I've got. 11 MR. LIVERMORE: All right. I see no reason for an 12 executive session, unless anyone else does? 13 MR. GRIFFIN: No. 14 MR. LIVERMORE: Seeing none, I'll accept a motion 15 for adjournment. 16 MR. WOOD: I make a motion we adjourn the meeting. 17 MR. GRIFFIN: I'll second that one. 18 MR. LIVERMORE: All in favor? 19 (The motion carried by unanimous vote, 3-0.) 20 MR. LIVERMORE: That's it. Thank y'all for coming. 21 (Airport Board meeting adjourned at 9:15 a.m.) 22 - - - - - - - - - - 23 24 25 41 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 16th day of September, 8 2014. 9 _______________________________ Kathy Banik, Texas CSR # 6483 10 Expiration Date: 12/31/14 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