GAINESVILLE-ALACHUA COUNTY REGIONAL AIRPORT AUTHORITY Thursday, December 15, 2005 – 5:00 p.m. Gainesville Regional Airport Passenger Terminal – Lounge Area Monthly Meeting Highlights

Call to Order by the Chair Chair Jim Stringfellow called the meeting to order at 5:10 p.m. (Note: GACRAA Board members and staff assembled prior to the meeting for a group photo which was used in a New Year’s Day ad in The Gainesville Sun.)

Invocation: Chair Stringfellow delivered the invocation.

Pledge of Allegiance: Chair Stringfellow led the Pledge of Allegiance.

Authority Members Present at Roll Call: Billy Brashear, Joe Dunlap, Mac McEachern, Jon Morris, Jim Stringfellow, Colette Taylor, Kinnon Thomas and Marilyn Tubb were present. Peter Johnson was absent.

Determination of a Quorum: It was determined that a quorum was present at roll call.

Approval of Meeting Highlights for November 17, 2005 Mrs. Tubb moved approval of the meeting highlights for November 17, 2005. Mr. Thomas seconded the motion. Motion passed.

Adoption of the Agenda Mr. Thomas moved approval of the agenda. Mrs. Tubb seconded the motion. Motion passed.

Citizens’ Input Dr. Michael Lukowski, owner University Air Center (UAC), announced that General Manager Jay Curtis has decided to leave UAC to pursue other opportunities. Dr. Lukowski has hired a new General Manager, Capt. Bill Pokorny, who will start with UAC in July upon his retirement from the U.S. Navy.

Mr. Curtis stated that he enjoyed working at UAC and has been impressed with the actions of the Board and the growth of the airport over the past five (5) years.

Airport Authority Input – Non-Agenda Items - None

Consent Agenda: FY2006 DBE Contract Goal Mr. Thomas moved approval of the Consent Agenda. Mr. Dunlap seconded the motion. Motion passed. The FY2006 DBE Contract Goal of 8% was approved and staff was directed to proceed with submission of the contract goal plan to the FAA at the end of the public comment period, February 15, 2006. (Note: Upon further consultation with the FAA Civil Rights Office, the FY2006 DBE Contract Goal was reduced to 6.8%)

1 Airport Business:

Property Insurance Evaluation Mr. Crocker introduced Ms. Erica Connick, Arthur J. Gallagher Company. Mr. Crocker explained that the City of Gainesville currently carries property insurance on the airport. He stated the City’s deductible is $250,000 and the airport is not in position to absorb such a high deductible should airport property be damaged in a storm or other mishap.

Mr. Crider reported that staff has been working on risk management issues and has discovered that several buildings on airport property are not listed on the City’s insurance policy.

Ms. Connick presented property insurance quotes from Liberty Mutual Fire Insurance Co. and Florida Municipal Trust. She described the terms and differences in the quotes and coverage offered by the two insurance carriers. Ms. Connick recommended accepting the quote from Liberty Mutual Fire Insurance Co. with an annual premium of $43,746. The premium quote by Florida Municipal Trust is $77,764.

Ms. Tubb moved to accept the quote from Liberty Mutual Fire Insurance Company. Mr. Thomas seconded the motion.

A lengthy discussion followed regarding the status of the City’s insurance coverage of airport property and GACRAA's risk level under the City’s policy.

Mr. McEachern moved to defer taking action on the issue for one (1) month. Dr. Brashear seconded the motion. Motion failed 2-6.

Mr. McEachern stated that he preferred to perform independent investigation to determine the status of the City’s coverage of the airport.

Mr. McEachern stated that he preferred to consider hiring another insurance broker considering the recent discovery by the City of Gainesville that it was overcharged $1.3 million by Arthur J. Gallagher Company for its premiums.

Dr. Morris recommended assigning the insurance issue to a committee for evaluation. (Note: Chair Stringfellow referred the matter to the Facilities & Planning Committee.)

A voice vote on Mrs. Tubb’s motion to accept the quote from Liberty Mutual Fire Insurance Company followed. Motion passed 7-1 with Mr. McEachern dissenting.

Mr. Crider reported that Arthur J. Gallagher Company presented a check to the City of Gainesville and the city has determined that $10,277 of the $1.3 million refund should be forwarded to Gainesville- Alachua County Regional Airport Authority. In order to complete the transaction, the city requires that GACRAA sign a release.

Mrs. Tubb moved to authorize execution of the release, contingent on review and approval of the Attorney for the Authority, to implement the refund of $10,277. Dr. Taylor seconded the motion. Motion passed 8-0.

2 Information Items Mr. Crider reported that the Gainesville Regional Airport will offer refreshments to holiday travelers departing on the early morning flights from December 20 through 22. Ms. Danisovszky distributed copies of a press release announcing the holiday events. Mr. Crider invited Board members to volunteer to help serve refreshments.

Mr. Crider read aloud a letter from GPD Officer John Sprague commending the efforts of airport staff, Mr. Penksa and Ms. Schiemann, in rescuing “Bambi”, a cat that was trapped in a wall in the ladies restroom.

Mr. Crider announced that he received notice from the FAA that Gainesville Regional Airport will receive one of the first Wide Area Augmentation Systems (WAAS) Localizer Performance & Vertical (LPV) guidance approach systems.

Mr. Crider reported that the airport received a $2 million earmark in the 2006 Airport Improvement Program and that he and Mr. Penksa met with the FAA officials to determine if the funding can be applied to the replacement of the taxiway edge lights on Taxiway A. He noted that temporary recabling of R/W 7-25 is underway.

Mr. Crider reported that the Codification was discussed at the Alachua County Legislative Delegation Meeting on December 14 and that there appears to be a fair amount of support for the language. Mr. Crider reported that the Mayor requested an opportunity to study the revisions to the language. Mr. Stringfellow reported that the final version of the Codification Language needs to be submitted to Representative Ed Jennings, Jr. by February 13, 2006.

Mr. Crider reported that he will meet with FDOT staff to discuss the new access road from Waldo Road to the airline terminal.

Mr. McEachern asked if he could attend the FDOT meeting.

Mr. Crider stated that the meeting is a preliminary meeting with FDOT staff and preferred not to encourage Board members to attend.

Chair Stringfellow stated that if Mr. McEachern wanted to attend the meeting, he may do so.

Mr. Crider reported that US Airways began using passenger boarding bridge # 2 on 12/15/05 and that he anticipated Northwest Airlink to begin using their PBB within the following week.

Mr. Crider reported that the design of Terminal Renovation – Phase 2 is well underway with bidding to take place in February and construction to begin in April.

Mr. Crider reported that staff is awaiting a response from the St. Johns River Water Management District (SJRWMD).

Mr. Penksa stated that he was informed by Mr. Breeden that the airport may need to change some of the mitigation items previously proposed to the SJRWMD.

3 Mr. Crider reported the Air Traffic Volume and Fuel Flowage, and the Airline Load Factors for the two months ending November 30, 2005.

Finance Report Mr. Crocker reported the following results for November 30, 2005.

Nov. Year-to-Date Nov. Year-to-Date Variance Revenue Actual (2 mo.) Budget (2 mo.) Over / (Under) Total Operating Revenue $618,698.77 $627,613.11 ($8,914.34)

Nov. Year-to-Date Nov. Year-to-Date Expenses Actual Budget Over / (Under) Total Expenses $482,445.72 $553,319.18 ($70,873.46)

Income (Loss) Before Depreciation $136,253.05 G,293.93 $61,959.12 Capital Equipment $21,015.72 $0.00 $21,015.72 Net Carryover to 2007 $115,237.33 G,293.93 $40,943.40

Mr. Crocker provided explanations for the revenue and expense items having large variances to budget.

Fixed Asset Inventory Changes Mr. Crocker reported that a fixed asset physical inventory was recently completed. He reported that the airport currently has $38.6 million worth of assets listed on the books with a net book value of approximately $22 million. He reported that the airport is carrying many items no longer in inventory and that they were originally recorded at $191,499.77. After depreciation these items have a net book value of $5,217.40. These items were sold at auction, sold to UAC when they took over Flightline’s operation, used for parts on other equipment, destroyed, stolen or otherwise eliminated. Mr. Crocker distributed a list of the items that should be removed from inventory. He also distributed copies of a Complete Asset Listing which is a complete listed of all items that make up the $38.6 million in assets.

Mr. Crocker recommended adoption of Resolution 06-007 Fixed Asset Inventory Changes to authorize removal of the fixed assets that are no longer in inventory, and to approve the remaining fixed asset physical inventory as presented.

Mr. Crocker reported that in the future staff will present to the Board for approval the items that are being considered for removal from inventory.

Mr. Thomas moved to adopt Resolution 06-007 affirming Fixed Asset Physical Inventory and approval of record changes in fixed asset balances due to the disposition of assets. Dr. Taylor seconded the motion. A roll call vote followed: Dr. Brashear – aye, Mr. Dunlap – aye, Dr. Morris – aye, Dr. Taylor – aye, Mr. Thomas – aye, Mrs. Tubb – aye and Mr. Stringfellow – aye. Motion passed 7-0. Mr. McEachern was engaged in a cell phone conversation and was not available to vote.

4 Governance & Nominating Committee Report Mr. Crocker stated that the Governance & Nominating Committee met on December 5, 2005 and considered a Purchasing Policy proposed by staff. He reported that the committee recommends adoption of the proposed Purchasing Policy.

Mr. Thomas moved to adopt the Purchasing Policy as presented. Mr. Dunlap seconded the motion. Motion passed.

Business Development & Marketing Committee Report Mr. Thomas reported that the Business Development & Marketing Committee met on December 8, 2005 and considered a Business Development & Marketing Plan which has a budget of $85,201.00. He noted that this amount exceeds the approved FY2006 advertising budget by $30,501.00 and that the committee recommends adopting the proposed marketing plan and allocating the additional dollars required for its implementation to the advertising budget.

Dr. Morris recommended measuring the effectiveness of the plan by surveying awareness prior to the implementation of the marketing plan and again at the conclusion of the advertising activities.

Mr. McEachern also recommended measuring the effectiveness of the advertising activities and reported that he would send information for such measurements to Ms. Danisovszky.

Mr. Thomas moved the committee’s recommendation to adopt the proposed marketing plan and to approve additional expenditures of $30,501.00 in FY2006. Dr. Morris seconded the motion. Motion passed.

Mr. McEachern reported that his neighbors, Mr. & Mrs. David Drake, had a terrible experience recently at the airport. The Drakes arrived on a late flight, after 11 p.m., on a recent Saturday night and there were no taxicabs available. Unable to summon a cab to pick them up at the terminal, the Drakes arranged to have a cab meet them at the entrance to the airport on NE 39th Avenue. Mr. McEachern recommended that GACRAA Chair Jim Stringfellow write a letter of apology to the Drakes.

Mr. McEachern moved the following Resolution:

Whereas: 1. Ground transportation is vital to the success of Gainesville Regional Airport. 2. Several companies are in a position to serve the airport. 3. All of these companies are not presently serving the airport. 4. The companies serving the airport do not have sufficient equipment to meet peek demand. 5. The airport desires to make available sufficient ground transportation for the service of all travelers utilizing the Gainesville airport:

Therefore Be It Resolved: The governing board of the airport the Gainesville-Alachua County Regional Airport Authority (GACRAA) does encourage its CEO 1. To arrange for sufficient ground transportation to accommodate the traveling public using Gainesville Regional Airport. 2. Establish acceptable standards for the service, and 3. Create a system of easy access to service providers, and 5 4. Maintain public information accurate and up to date for travelers.

The motion was not seconded.

Mr. Crider responded by describing the activities underway by staff and the Gainesville Police Department. He reported that the City is considering adopting a citywide medallion plan which would permit all taxicabs to pick-up at the airport. He indicated that he was willing to revisit the current permit fee which is $200.00 per year per vehicle.

Chair Stringfellow indicated that he would write a letter of apology to the Drakes.

It was the consensus of most Board members that the taxicab situation needs improvement, but needs to be referred to committee or resolved by staff working with GPD.

Mr. McEachern requested that staff provide the following data: 1. How many cab companies have permits? 2. How many cabs have permits? 3. How many answer their phones 24 hours per day?

Discussion regarding taxicabs continued until Board members recommended that the Chair move on to the next agenda item.

Reynolds, Smith & Hills Task Order # 15 – Airport Rezoning Application & Adoption – Resolution # 06-008 Mr. Crider reported that the City of Gainesville zoning requires a land use map for Gainesville Regional Airport and that a new zoning map acceptable to City of Gainesville planning staff has been developed as part of the Master Plan Update for Gainesville Regional Airport. He stated that Reynolds, Smith & Hills has offered Task Order # 15 to complete the implementation of this new zoning map, to move forward with the required rezoning of the Airport property, and to present for formal adoption by the City of Gainesville. Mr. Crider recommended approval of Task Order # 15.

Mr. Thomas moved to adopt Resolution # 06-008 authorizing execution of Task Order # 15 with Reynolds, Smith & Hills, Inc. for Airport rezoning and adoption work. Dr. Taylor seconded the motion. A roll call vote followed: Mr. Dunlap – aye, Mr. McEachern – aye, Dr. Taylor – aye, Mr. Thomas – aye, Mrs. Tubb – aye, Dr. Brashear – aye, and Mr. Stringfellow – aye. Motion passed 7-0. Dr. Morris was out of the room at the time of the vote.

R.W. Armstrong Task Order # 19 – Taxiway A Lighting and Associated Electrical Vault Design - Resolution # 06-009 Mr. Crider reported that the FAA has encouraged the design and bidding of Taxiway A light improvements and recommends approval of the Task Order.

Mr. Thomas moved to adopt Resolution # 06-009 authorizing execution of Task Order # 19 with R.W. Armstrong and Associates, Inc. for Taxiway A Lighting / North Electrical Vault design. Mrs. Tubb seconded the motion. A roll call vote followed: Mr. McEachern – aye, Dr. Taylor – aye, Mr. Thomas – aye, Mrs. Tubb – aye, Dr. Brashear – aye, Mr. Dunlap – aye, and Mr. Stringfellow – aye. Motion passed 7-0. Dr. Morris was out of the room at the time of the vote. Legislative Report – Winston & Strawn 6 Mr. Crider reported that Mr. John Waits, the airports legislative lobbyist, was unable to attend the meeting because his flight from Washington, DC was canceled earlier in the day due to bad weather.

Funding Approach for Eclipse Aviation Service Facility Mr. Crocker introduced Mr. Mark Benton, Director of Finance, City of Gainesville. Mr. Crocker reported that Mr. Benton has been assisting airport staff with evaluating options for financing the Eclipse Aviation Service Facility.

Mr. Benton reported that organizations with very strong credit are best served by bidding out their financing requirements on a competitive basis. He stated that the airport, using lease revenues from a start-up company such as Eclipse Aviation, would be viewed as very risky by potential lenders. He stated that the airport would be better served by negotiating financing rates with its bank, Compass Bank.

Mr. Crocker reported that negotiating a loan with Compass Bank outside of an RFP process would be a departure from the Purchasing Policy but requested that the Board concur with this approach.

Mr. Thomas moved to endorse the negotiation with Compass Bank with the help of the City of Gainesville for a bank loan to finance the Eclipse Aviation Service Facility project. Mrs. Tubb seconded the motion. Motion passed 7-0. Dr. Taylor was out of the room at the time of the vote.

Line of Credit Authorization Mr. Crider recommended approval of Resolution # 06-010 authorizing line of credit draws from Compass Bank for payment of expenses related to the construction of an Eclipse Aviation Service Center. He stated that the amount of the draws will not exceed $500,000.00 and would be applied to costs incurred for design and bid phase services, and that reimbursements from an FDOT grant will be set aside to repay principal and interest on the line of credit.

Mr. Thomas moved to adopt Resolution # 06-010 authorizing line of credit draws from Compass Bank for payment of expenses related to the construction of an Eclipse Aviation Service Center. Mrs. Tubb seconded the motion. A roll call vote followed: Dr. Morris – aye, Mr. Thomas – aye, Mrs. Tubb – aye, Dr. Brashear – aye, Mr. Dunlap – aye, Mr. McEachern – aye, and Mr. Stringfellow – aye. Motion passed 7-0. Dr. Taylor was out of the room at the time of the vote.

Mr. Crider recommended approval of Resolution # 06-011 authorizing line of credit draws from Compass Bank for payment of expenses related to Terminal Renovation – Phase 2 work. He stated that the amount of the draws will not exceed $500,000.00 and would be applied to costs incurred, and that future PFC collection will be set aside to repay principal and interest on the line of credit.

Dr. Morris recommended that staff ensure that Terminal Renovation – Phase 2 design allows for the provision of food and beverage service in the secure passenger hold room.

Mr. Dunlap moved to adopt Resolution # 06-011 authorizing line of credit draws from Compass Bank for airline passenger Terminal Renovation - Phase 2 work. Mr. Thomas seconded the motion. A roll call vote followed: Mr. Thomas – aye, Mrs. Tubb – aye, Dr. Brashear – aye, Mr. Dunlap – aye, Mr. McEachern – aye, Dr. Morris – aye, and Mr. Stringfellow – aye. Motion passed 7-0. Dr. Taylor was out of the room at the time of the vote.

7 Mr. Crider recommended approval of Resolution # 06-012 authorizing line of credit draws from Compass Bank for a revenue guarantee payment to Northwest Airlines in accordance with an Air Service Development Agreement executed in April of 2004. He stated that the amount of the draws will not exceed $400,000.00 and that reimbursement from a USDOT Small Community Air Service Development Agreement will be set aside to repay principal and interest on the line of credit.

Mr. Thomas moved to adopt Resolution # 06-012 authorizing line of credit draws from Compass Bank for payment of revenue guarantee associated with the Air Service Development Agreement with Northwest Airlines. Mrs. Tubb seconded the motion. A roll call vote followed: Mrs. Tubb – aye, Dr. Brashear – aye, Mr. Dunlap – aye, Mr. McEachern – aye, Dr. Morris – aye, Mr. Thomas – aye, and Mr. Stringfellow – aye. Motion passed 7-0. Dr. Taylor was out of the room at the time of the vote.

Air Service Development Report – Sabre Airline Solutions Mr. Crider introduced Mr. Dan Gibbs, Sabre Airline Solutions. Mr. Gibbs is the airport’s air service development consultant.

Mr. Gibbs provided an update on the state of the airline industry. Mr. Gibbs reported that 2004 was a financially disastrous year for the airlines. In 2005, some legacy carriers would have been profitable if fuel costs were stable. He stated that the industry is still focused on cost control. Mr. Gibbs mentioned the following 2005 events:  JetBlue Airways, which he referred to as the “darling of Wall Street”, is projected to loose money in the 3rd and 4th quarters of 2005. JetBlue Airways was characterized as the most successful start-up airline since Southwest Airlines.  Delta Air Lines and Northwest Airlines both filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code as they experienced cash flow crises as a result of escalating fuel costs.  Independence Air filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.  US Airways’ slide toward liquidation was stopped by its merger with America West.  Northwest Airlines reduced service system wide.  Delta Air Lines cut 150 departures from Cincinnati and is eliminating late night service in most markets, including Gainesville. Delta Air Lines is parking 80 mainline aircraft.

Mr. Gibbs stated that the prospects in 2006 are generally not good. He stated that legacy airlines will not become profitable until the price of oil is less than $45.00 per barrel. He indicated that air fares are likely to rise as seat capacity decreases.

On the bright side, Mr. Gibbs reported that:  American Airlines generated a net profit in the 3rd quarter of 2005.  United Airlines is due to come out of bankruptcy in February 2006.  Continental Airlines may generate a net profit in 2006.

Events to watch for:  Price of fuel will determine whether the industry is profitable.  JetBlue Airways has seventeen (17) 100-seat aircraft scheduled for delivery each year for the next five (5) years, which will be deployed along the east coast and from JFK to the mid-west.  Southwest Airlines may attempt to increase service into Denver, CO, challenging United Airlines and Frontier Airlines which have major hubs at DEN. Southwest had a big presence in New Orleans and is redeploying aircraft to other markets.  AirTran Airways may add another hub, possibly Chicago Midway (MDW). 8  More legacy carriers may merge to compete with low cost carriers.

Mr. Gibbs stated that the regional carriers serving Gainesville Regional Airport are well managed.

Other: Mr. Crider expressed his concern that having Board members attend staff-level meetings with FDOT or other such parties tends to alter the nature of discussions, and that he would prefer meeting individually with Board members before or after such meetings.

Mr. Stanley noted that Board members could violate Sunshine Laws since such meetings are not publicly noticed and it is unknown how many Board members would attend.

Chair Stringfellow retracted his earlier comment regarding Mr. McEachern’s presence at an FDOT meeting regarding the new access road (see page 3).

Mr. McEachern stated that under Sunshine Law, the public has a right to follow subjects/issues from initiation to Board action.

Chair Stringfellow asked Mr. Stanley to verify Mr. McEachern’s interpretation of the Sunshine Law. He recommended that the Board act as a policy-making body and not micromanage the minutia of airport issues.

Mr. McEachern indicated that he was not satisfied with staff’s response to the Drake’s taxicab problem.

Tenant Reports - None

Airport Authority Attendance No issues to report at this time. Adjournment There being no further business, the meeting was adjourned by the Chair at 7:46 p.m.

GACRAA Monthly Meeting

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