04/09/2020

Meeting Minutes for:
Finance Committee Meeting
Yuma International Airport, Conference Room
Thursday, April 09, 2020 at 04:00 PM

    Call to Order:
    The Yuma County Airport Authority, Inc. (YCAA) Finance Committee Meeting of the Board of Directors was called to order at 4:00PM on April 9, 2020 in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Eric Saltzer, Chairman.

    YCAA DIRECTORS PRESENT WERE:
    Eric Saltzer, Chairman & YCAA Treasurer
    Dean Hager, 1st Vice President
    Reetika Dhawan, Director
    Albert Gardner, Director
    Randall Nelson, Director

    YCAA DIRECTORS ABSENT WERE:
    None

    ALSO PRESENT WERE:
    Gladys Brown, Airport Director
    Gerald Hinkle, Jr., Chief Financial Officer
    Ken Scott, ASN Volunteer

    CALL TO THE PUBLIC
    There were no Public Comments.

    REGULAR AGENDA

    1) Update provided by the Airport staff regarding the status of the FY20 Budget through February and projections of the revenues/expenses through the end of FY20

    The Committee reviewed the FY20 Budget comparison for the five (5) months ending February 2020. This presentation showed that through February of 2020, the airports financial performance was ahead on revenues and included expenditures less than budgeted.

    This presentation was followed by a discussion of projected financial information lead by Ms. Brown, the Airport Director. Ms. Brown provided staff’s best analysis of what the airport may experience due to the downturn in airport activity due to the pandemic through the end of fiscal year 2020.

    The Committee discussed the extent of projected lost revenues and the nature the airport’s ability to continue utilizing its capital reserves if necessary and/or subsidies expected to be solidified in the coming weeks related to the C.A.R.E.S Act.

    2) Discussion and possible recommendation regarding proposed changes to the effective interest rate on Long Term Note #2004 with 1st Bank Yuma.

    Mr. Hinkle, Chief Financial Officer, briefed the Committee on the history of long term Note #2004 and 1st Bank Yuma’s offer to reduce the effective interest rate. Mr. Hinkle described how Note #2004, which was originally used to help fund the construction of the Joe Foss Hangar Complex, has existing terms that periodically set the interest rate at 1.00% over prime. Mr. Hinkle continued by explaining how the current effective rate interest is 6.5% based on the prime rate at the date in which it was most recently set. Since the prime rate of interest is currently only 3.25%, 1st Bank Yuma deemed a rate reduction to 5% would be helpful and offered the unsolicited proposed Change of Terms Agreement to make it happen.

    Mr. Hinkle explained to the Committee how the proposed change to the Note is obviously in our favor and is well received during these challenging times.

    The consensus of the Committee was to recommend the Board of Directors authorize the President, 1st Vice President and the Airport Director to take necessary action to execute the proposed Change in Terms Agreement.

    Mr. Saltzer, Chairman & YCAA Treasurer recused himself from the meeting.

    3) Discussion and possible recommendation to assist with the future runway paving project at the Somerton Airport.

    In the absence of Mr. Saltzer, Mr. Hager took over the meeting and introduced Ms. Brown, the Airport Director who described how in an effort to continue to promote and foster civil aviation, the Authority agreed to “provide funding for paving the main runway at Somerton Airport in exchange for a recorded easement by the Saltzer Family Trust, guaranteeing Public Use of Somerton Airport”. Action was taken to this effect on February 12, 2013 and again on May 14, 2013. The Authority worked with the late Charles Saltzer to get the necessary elements in place. On June 11, 2013 such an easement was created and recorded as agreed. As the minutes will reflect, it was known at the time the commitment was contingent upon funds being available and would not be expected for a number of years.

    Ms. Brown further explained how in the Summer of 2019, the Board authorized the expenditure of approximately $22,000 from the Airport’s FY19 budget on engineering and design work necessary to determine the estimated cost of the project and to provide materials necessary to bid the project at a later date.

    Ms. Brown continued by updating the Committee on the results of the design work and related estimated cost to construct the improvements which were described as in excess of $800,000 if constructed to FAA specifications or approximately $360,000 if paved utilizing what she described as a “County Mix” typically used on residential streets and roads. Ms. Brown described staff’s understanding of the nature of the financial support requested by the Manager of the Somerton Airport as two-thirds of the project costs or approximately $240,000.

    Eric Saltzer, the Manager of Somerton Airport had then provided a brief history of the Somerton Airport and described how the improvements would benefit the flying public. Mr. Saltzer also explained to the Committee how the current unusually low cost of oil makes this period of time most beneficial in regards to keeping the cost to construct as low as possible.

    The Committee discussed how YCAA’s contribution as described, based on the most recent cost estimate would be $240,000, and whether or not making this financial commitment would be a good idea during these uncertain times. Mr. Gardner expressed his support to move forward while other members of the Committee though committing to the participation of two-thirds of construction costs would be reasonable but would only recommend moving forward after the effects of the pandemic on YCAA’s budget had been more fully realized.

    The Committee’s consensus was to recommend the Board of Directors authorize the funding participation as described while waiting on action until further notice.

    Eric Saltzer, Chairman & YCAA Treasurer un-recused himself and rejoined the meeting.

    4) Update provided by the Airport staff regarding the consultant selection process for the design of the GA Apron Rehabilitation Project.

    Ms. Brown, the Airport Director explained the next FAA funded project on our Airport Capital Improvement Plan (ACIP) is the engineering and design of the rehabilitation the General Aviation (GA) Apron pavement which is in a varying amount of disrepair. She further described that the project will be entirely funded by the FAA at an estimated cost of $175,000.

    After describing the selection process, Ms. Brown described how it was her intention to complete the negotiation process and present a proposed consultant contract to engineer and design the improvements at the April regular Board meeting.

    The consensus of the Committee was to recommend the Board of Directors take necessary action to authorize the President, 1st Vice President and/or Airport Director to enter into the proposed agreement.

    CALL TO THE PUBLIC
    There were no Public Comments.

    ADJOURNMENT
    There being no further business before the Committee the meeting adjourned at 5:45PM.




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


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