08/30/2019

Meeting Minutes for:
Finance Committee Meeting
Yuma International Airport, Conference Room
Friday, August 30, 2019 at 12:04 PM

    Call to Order:
    The Yuma County Airport Authority, Inc. (YCAA) Finance Committee Meeting of the Board of Directors was called to order at 12:04PM on August 30, 2019 in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Eric Saltzer Committee Chairman.

    YCAA FINANCE COMMITTEE MEMBERS PRESENT WERE:
    Eric Saltzer, Treasurer and Chairman
    Albert Gardner, 1st Vice President
    Linda Morgan, 2nd Vice President (exited the meeting at 1:45PM)

    YCAA FINANCE COMMITTEE MEMBERS ABSENT WERE:
    None

    ALSO PRESENT WERE:
    Gladys Brown, Airport Director
    Gerald Hinkle, Jr., Chief Financial Officer
    Minda Davy, Airport Legal Counsel

    CALL TO THE PUBLIC
    There was no Public Comments.

    REGULAR AGENDA

    1) August 30, 2019 Finance Committee discussion and overview of FY19 Budget in the Final Quarter.

    Ms. Brown presented the FY19 Budget through July 2019 or ten months into our fiscal year. The presentation of revenues and expenses, compared to budget will be presented to the Board of Directors at the September 10, 2019. After a brief discussion of a few items of interest, the Committee expressed their understanding of the airports financial situation through July.

    2) August 30, 2019 Finance Committee discussion and possible recommendation regarding the Sublease and License Agreement, operational and financial status of AQST Space Systems Group, LLC.

    Ms. Brown presented a brief history AQST’s tenancy at the airport which began with the lease of Suite #1 of the Joe Foss Hangar Facility in September of 2018 and resulted in their lease of the entire facility in March of 2019. Ms. Brown continued with a description of their difficulty in keeping their account current, the issuance of a few Notices of Default and their ultimate request to “cancel” their lease. Ms. Brown further informed the Committee of the Strategic Planning Committee meeting held to address this topic on August 14, 2019 and their recommendations. Since that meeting, amounts due, yet unpaid have increased and AQST has made a written request to re-structure their lease. Staff informed the committee of the situation and provide a list of options that can be utilized to protect the Authority’s interest as well as assist them in their quest to achieve success.

    After discussion on the topic, Mr. Gardner expressed his concerns that AQST has been collecting rents from the sublease of Suite #2 to Jacobs Technologies but has not passed those funds along to YCAA even though a significant balance exists. Mr. Gardner continued with the recommendation that the Board of Directors consider a negotiated modification of their lease to include provisions that would move control of Suite #2, including the Jacobs Sublease and its revenues back to the YCAA, while allowing AQST to remain in Suite #1 with some form of reduced lease rent on the following conditions:

    -Their account be brought current.
    -Any sublease revenues from Suite #1 be paid directly to the YCAA rather than to AQST.

    Ms. Davy, corporate legal counsel suggested that any agreement contain provisions that increase the amount of security held to offset possible future lease rent defaults. Ms. Brown informed the Committee that the Strategic Planning Committee would meet again in regards to AQST and both Committee’s will have an opportunity to provide a recommendation to the Board of Directors for direction at the September regular meeting.

    3) August 30, 2019 Finance Committee discussion and possible recommendation on the Proposed FY20 Budget for the Yuma County Airport Authority.

    The committee reviewed the Proposed FY20 Budget in some detail starting with an overview of the expected revenues and expenses. The Committee first went over the proposed personnel costs, in detail. Ms. Brown presented the proposed changes in personnel compensation as compared to the previous fiscal year which reflected significant increases in compensation for what she called our “Foundation Employees”. All employees on the lower end of the pay scale are scheduled to have increases well over the typical 2% to 3% cost of living adjustments in an attempt to normalize our lower end pay scales to become competitive and reflect the ever increasing Arizona minimum wage. After the Committee completed this portion of the proposed budget, Ms. Morgan left the meeting at 1:45pm.

    Mr. Hinkle, the Airport Authority’s CFO then provided a detailed review of the remaining elements of the Proposed FY20 Budget. After describing the two percent proposed lease rent increases for all GA Hangar and Shaded Tie Down facilities Mr. Gardner expressed concern. Mr. Gardner described the nature of tenants occupying the small and medium T-Hangars, as well as Shaded Tie Downs, and suggested that the budget remove all proposed rent increases on those tenants.

    The Committee agreed unanimously to recommend the FY20 Proposed Budget for authorization at the September regular meeting with the exception of removing the proposed lease rent increases for the small and medium hangars in the Northwest and Hero Hangar facilities, as well as the Shaded Tie Downs.

    ADJOURNMENT
    There being no further business before the Board the meeting adjourned at 2:40PM.



    // Approved //
    Eric Saltzer
    Treasurer Yuma County Airport Authority; Finance Committee Chairman
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