Muskegon County Airport Advisory Committee

Tuesday, March 6, 2018 12:00 Noon Airport Terminal Lake Room

Agenda

1. Call to Order

2. Approval of Minutes – February 6, 2018

3. Informational Items

a. Airport Manager’s Report – March 2018

4. Action Items

a. Approval of Charter Operator Rates & Fees

5. Old Business

6. New Business

7. Adjournment

Airport Advisory Committee Members Robert Gustason (Public) – Term Exp. 12/31/19 Terry Boer (Business Park) – Term Exp. 12/31/18 Brandon Popps (Private) – Term Exp. 12/31/18 Anthony Chandler (Norton Shores) – Term Exp. 12/31/19 Robert Scolnik (Commissioner) – Term Exp. 12/31/18 Rich Houtteman (Private) – Term Exp. 12/31/19 Rillastine Wilkins (Commissioner) – Term by Virtue of Office Kenneth Mahoney (Commissioner) – Term Exp. 12/31/18 Cindy Larson (Chamber) – Term Exp. 12/31/17 David Kendall (Public) – Term Exp. 12/31/19 Vacant (Business Park)

Muskegon County Airport  99 Sinclair Drive  Muskegon, MI 49441  231-798-4596

Muskegon County Airport Airport Advisory Committee

Lake Michigan Room February 6, 2018 Muskegon County Airport

CALL TO ORDER

The Airport Advisory Committee meeting was called to order at 12:04 pm

Present: Anthony Chandler, Rich Houtteman, Dave Kendall, Ken Mahoney, Bob Scolnik, Rillastine Wilkins

Excused: None

Staff: Rita Bierman, Dianne Hoofman, Bob Lukens, Jeff Tripp

Guests: None

APPROVAL OF MINUTES

A motion was made by Wilkins, supported by Chandler to approve the Minutes of January 9, 2018, as written. Motion Carried.

INFORMATIONAL ITEMS

The Airport Manager’s Report was included in the packets distributed to the Committee prior to the meeting. The various activities and projects were discussed.

SkyWest’s new flight schedule starts February 15 and the second Saturday flight starts on February 17. SkyWest’s new lease rates began February 1, 2018.

The March Laughlin charter is sold out.

The design work for the upgrades to the Terminal security checkpoint and baggage screening areas is complete. Staff will solicit quotes now for the construction phase.

The next Airport triennial emergency plan exercise planning meeting is scheduled for February 7, 2018.

Airport Advisory Committee February 6, 2018

ACTION ITEMS

Approval to acquire ARFF vehicle. A motion was made by Chandler, supported by Wilkins to recommend approval of the acquisition of a surplus Airport Rescue and Firefighting vehicle, at no charge, from the Michigan Department of Natural Resources. Motion Carried.

Approval of Utility Easement with Consumers Energy. A motion was made by Mahoney, supported by Chandler to recommend approval of a utility easement between the County of Muskegon and Consumers Energy for FAA electrical upgrades. Motion Carried.

OLD BUSINESS

None

NEW BUSINESS

None

ADJOURNMENT

There being no further business to come before the Airport Advisory Committee, the meeting adjourned at 12:58 pm.

AIRPORT MANAGER’S REPORT March 6, 2018

1. /Charter Operations Report – January 2018

The air service operations reports for January are included as Attachments 1, 2 and 3. In January, SkyWest enplaned 1,117 passengers and deplaned 934 passengers for a total passenger count of 2,051 and a Load Factor of 34%. During calendar year 2017 the airline handled 36,884 total passengers (+1% over CY2016) with 18,714 enplanements and 18,170 deplanements and a Load Factor of 53%. For the January 2016 to January 2017 period, the flight completion rate is 94% (734 scheduled/42 cancelled).

2. Air Service & Charter Programs

A. SkyWest Muskegon Station Named 2017 Tier 4 Station of the Year.

The Muskegon SkyWest Airlines station has been named the U.S. Domestic – Tier 4 Quality First Award winner for 2017. The Muskegon station won the 2017 1st Quarter award and has been ranked as one of the Tier 4’s top-5 stations (serving less than 40,860 customers annually) the remaining three quarters. This award is a reflection on the level of professionalism and dedication to customer service by the SkyWest staff.

B. Airline Service Schedule. The new daily flight schedule commenced February 15 with a new morning flight departure time of 10:16 AM and an evening departure of 5:59 PM. The additional second Saturday flight started on February 17.

C. United Air Fare Special to . For a limited time through April 11, 2018, customers can save with discounted rates for one-way travel to/from Muskegon to Chicago O’Hare on United Airlines. Travel must be completed by June 6, 2018.

We also want to thank the marketing staff at SkyWest Airlines for their help in creating the digital ads for use on the airport webpage, Twitter, and Facebook accounts.

D. Casino Flights.

Laughlin, NV - Sun Country Airlines. Next trip March 15-18 (Sold Out).

Atlantic City – S & S Casino Tours. Next trip May 13-16 $279 per person. This time, the flight will only operate from Muskegon rather than stop at other as the first flight in December did. We will continue to push for additional charter flights on a more frequent basis.

E. Charter Marketing & Outreach Program. Staff continues outreach efforts to other leisure charter companies to try and add vacation destination charters or alternate casino destinations.

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3. Airport Capital Improvement Program / Grant Program

A. 6/24 Rehabilitation (Design Phase). Staff met with the C&S Engineers, MDOT Aeronautics, and FAA staff on March 1 to finalize the project plans and have everything ready to advertise for bids subject to notice of receipt of federal funding from the U.S. Department of Transportation.

B. Terminal Security Checkpoint and Baggage Screening improvements. Staff is soliciting proposals from contractors to complete the work.

C. Air Service Marketing Grant. The Airport submitted our annual request to MDOT for the maximum allowable $10,000 grant to assist with air service marketing efforts. We are awaiting final notice of award.

D. Capital Improvement & Equipment Grant. The Airport submitted our annual request to MDOT for the maximum allowable $10,000 grant to assist with additional terminal facility upgrades. Receipt of this grant is subject to availability of funds from MDOT. We are awaiting final notice of award.

4. Economic Development

A. Airport Restaurant. Staff is continuing to work with an experienced food & beverage operator to start operations in the terminal. The principles are currently doing their due diligence and are working to complete their business plan. Staff is cautiously optimistic this will ultimately come to fruition and continue to work with the principles to make this a reality.

B. Solar Development. The Airport has been contacted about the possibility of leasing approximately 7.5 acres of land contained in the runway protection zone for Runway 32. This land is located on the south side of Grand Haven Road and a solar facility is a compatible use. This potential project is only at the initial exploratory stage.

C. Michigan Aerospace Industry Luncheon. The Airport Manager and the County Economic Development Coordinator attended this luncheon on February 28. The purpose of this luncheon is to meet and discover opportunities in Michigan for aviation/aerospace businesses to expand their business in the growing aerospace industry. Members from the Aerospace Industry Association of Michigan (AIAM) Board of Directors and subject matter experts were on hand to discuss industry trends and how Michigan's innovative companies can support the supply chain.

5. Airport Public Relations, Marketing & Advertising

A. No update.

6. Airport Administration, Operations, and Maintenance Programs

A. Airport Triennial Emergency Plan Exercise. The Airport is required to conduct a full-scale emergency plan exercise once every three years. The airport is planning for the next drill in September 2018. We are working with various County-wide resources to plan and conduct the drill.

B. Use of Firefighting Foam at Muskegon County Airport. The Michigan Department of Environmental Quality is reaching out to airports that have historically used firefighting foam as part of routine fire protection and safety practices. Certain types of firefighting foam (e.g. aqueous film forming foam or “AFFF”) contain per- and polyfluoroalkyl substances (PFAS), and, more specifically the hazardous substances perflurooctanic acid (PFOA) or perflurooctanesulfonic acid (PFOS).

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As of January 10, 2018, groundwater criteria for drinking water protection for PFOA and PFOS were established by DEQ under the authority of Part 201, Environmental Remediation, of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (NREPA). DEQ has requested the airport provide information relating to the historical use of PFAS-containing substances at the Airport.

If the information provided to DEQ indicates the likely release of PFOA or PFOS to the environment at levels above the established Part 201 criteria (70 parts per trillion), the DEQ will request a work plan be submitted describing proposed actions to define the nature and extent of PFOA/PFOS and to conduct response activities as necessary to protect public health and the environment.

C. FAA Navigational Procedure Update. Between December 23, 2016 and January 16, 2017, SkyWest was forced to cancel 16 roundtrip flights due to issues relating to navigational aids (NAVAIDS) and lack of secondary navigation equipment carried on SkyWest aircraft. The ground-based navigation system (VOR - VHF omnidirectional radio range) is a type of short-range radio navigation system for aircraft to determine their position and stay on course by receiving radio signals transmitted by a network of fixed ground radio beacons. Muskegon’s two VOR’s, which are owned and operated by FAA, are scheduled to be removed from service in the near future (by 2025).

SkyWest Airlines is mandated by Federal Aviation Regulation (FAR) Part 121.349 which requires navigational redundancy of the flight management system (FMS) capabilities, which the CRJ-200 aircraft currently used do not have. The requirement for a back-up FMS is that, in the event of failure of the primary FMS, pilots are able to revert to ground-based navigation (VOR’s).

Because MKG’s VOR’s were unusable, there were no ground-based approach procedures available; therefore, the airline could not legally operate to/from MKG unless under visual flight rules that require a minimum (cloud) ceiling of 1,700 feet to provide for visual clearance of obstacles/terrain if the single FMS fails. Airport staff worked non-stop to coordinate with the FAA lines of business (air traffic, tech ops, procedures, etc.), SkyWest, and United Airlines personnel to determine what the issues were and to find solutions to allow the airline to return to normal operations in weather conditions.

Ultimately, a number of solutions where proposed leading to SkyWest developing a flight procedure to use the VICTORY VOR (located southeast of Grand Rapids Airport) effective Monday, January 16, 2017. This new procedure allowed the airline to resume normal flight operations. Long-term issues to be resolved include the FAA developing a new instrument procedures based on the VICTORY VOR and the airlines upgrading their navigational equipment when aircraft go in for “C Check” level maintenance.

The FAA is completing work on the new procedures with a planned effective publish date of May 24, 2018.

7. Federal & State Legislative Issues

A. Federal Budget. Lawmakers continue talks with the administration to try to reach a deal on spending limits for the current and the next fiscal year. The final decisions on the fiscal year 2018 spending levels will determine the fate of a bipartisan proposal to increase the Passenger Facility Charge (PFC) and funding for TSA Law Enforcement Officer (LEO) reimbursement grants.

B. Michigan Legislature. House Bills 4350 (H-1) and 4351 (H-1) to amend the Use Tax Act and the General Sales Tax Act, respectively, to exempt from taxation the sale of parts and materials, except shop equipment or fuel, affixed or to be affixed to an aircraft is currently still in the Senate Transportation Committee. The bills would delete current language exempting the sale of parts and materials affixed to an aircraft that is owned or used by a domestic air carrier or affixed to an aircraft that leaves the State and is not based or registered in Michigan. On January 25, the bills were placed on the order of Third Reading of Bills; no additional information is available at this time.

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C. Michigan Legislature. Senate Bills 626 and 627 to amend the Aeronautics Code and Part 801 (Marine Safety) of the Natural Resources and Environmental Protection Act, respectively, to give the Michigan Aeronautics Commission authority over the operation of seaplanes on the waters of the State is still in committee. The bill was read a first and second time by title and referred to the Committee on Transportation in October 2017; no additional information is available at this time.

D. MBAA & MAAE Legislative Luncheon. The Airport Manager will be attending the annual Michigan Business Aircraft Association (MBAA) and Michigan Association of Airport Executives (MAAE) Legislative Day & Luncheon on Wednesday, March 14 at the state capital. This is an opportunity to meet with legislators and their staff to help discuss and educate on the positive aspects that aviation/aerospace play in the local, state and regional economies.

8. Action Items

The Airport is planning to bring the following item(s) to the Board of Commissioners in March:

 Approval of Charter Operator Rates & Fees

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Muskegon County Airport Operations Report

Calendar Year 2018

PASSENGER ACTIVITY AIRCRAFT OPERATIONS CARGO

Avail Comm Load Vs. Air Carrier/ General Vs. Vs. Seats Pass Factor Enplaned Deplaned Total CY2017 Charter Aviation Military Total CY2017 Pounds CY2017

JANUARY 5,624 1905 34% 1117 934 2051 -4% 183 1083 4 1270 24% 10262 1257% FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

YTD TOTALS 5624 1905 34% 1117 934 2051 -4% 183 1083 4 1270 24% 10262 1257%

H:\Bierman\MONTHLY REPORTS\Airport Statistical Reports\2018\Monthly Reports CY2018, Ops Report, 2/7/2018 Muskegon County Airport Passenger Activity

4500

3969 4000

3728 3500 3178 3319 2911 3000

2500 2702 2522 2135 2216 2175 2000 2101

# of Passengers # of Passengers 1742 1500 1581

1000

500 306 316 310 312 316 320 314 324 226

0 000 0

Month

United

02/07/2018 Charters AIRLINE PERFORMANCE 13-Month Period January 2016 through January 2017

UNITED SCH CAN PER January 2017 58 14 76% February 2017 52 1 98% March 2017 59 3 95% April 2017 55 1 98% May 2017 58 1 98% June 2017 56 3 95% July 2017 57 3 95% August 2017 58 5 91% September 2017 55 0 100% October 2017 58 1 98% November 2017 56 1 98% December 2017 54 4 93% January 2018 58 5 91%

Total 734 42 94%

SCH = Scheduled Flights CAN = Cancelled Flights (Weather and Other) PER = Percentage of Scheduled Flights Flown

Source: Monthly Airline Station Reports

H:\Bierman\MONTHLY REPORTS\Airport Statistical Reports\2018\Monthly Reports CY2018, Airline Performance, 2/7/2018 REQUEST FOR BOARD CONSIDERATION-COUNTY OF MUSKEGON

COMMITTEE BUDGETED NON-BUDGETED PARTIALLY BUDGETED TRANSPORTATION X

REQUESTING DEPARTMENT COMMITTEE DATE REQUESTOR SIGNATURE AIRPORT 03/15/18 ROBERT LUKENS

SUMMARY OF REQUEST (GENERAL DESCRIPTION, FINANCING, OTHER OPERATIONAL IMPACT, POSSIBLE ALTERNATIVES)

The Airport is requesting Board approval for a proposed modification to the Airport Rates and Fees Schedule to add new charter operator rates and fees. Fundamental to the goal to operate and maintain the Airport as a self-sustaining enterprise fund to the greatest extent possible, is to ensure the Airport is charging rates and fees consistent with existing leases, agreements and policies as well as recovering administrative & operational costs whenever possible.

The Charter Operator Rates and Fees will be charged to charter flights operating from the terminal to ensure the airport is recovering costs for the use of the facility, staff support, and required fire and police coverage.

SUGGESTED MOTION (STATE EXACTLY AS IT SHOULD APPEAR IN THE MINUTES)

Move to approve the Charter Operator Rates and Fees and modify the Airport Rates and Fees Schedule.

ADMINISTRATIVE ANALYSIS (AS APPLICABLE)

HUMAN RESOURCES ANALYSIS: FINANCE & MANAGEMENT ANALYSIS:

CORPORATE COUNSEL ANALYSIS: ADMINISTRATOR RECOMMENDATION:

If motion originates from a Statutory Board, Authority or Advisory Committee, please provide the date the motion was approved by that Board/Authority/Committee 03/06/18

AGENDA DATE: AGENDA NO.: BOARD DATE: PAGE NO. 03/15/18 TR18/03-XX 03/22/18

Revised 2/27/18

99 Sinclair Drive Muskegon, MI 49441 (231) 798-4596 Fax (231) 798-7728 [email protected] www.flymkg.com

Charter Operator Rates, Fees & Charges

The Airport works aggressively to keep its rates and fees as low as possible for the benefit of airlines and charter operators operating at MKG and for our customers. The airport’s rates and fees are intended to assist with adequate cost recovery to ensure MKG operates safely and efficiently while maintaining a solid financial base.

Air carriers may operate as a Signatory or a Non-Signatory. Signatory airlines enter into a fixed term agreement with the Airport and gain a variety of benefits. Non-Signatory airlines operate limited or seasonal service and generally do not enter into a signatory agreement. Rates and Fees are adjusted on at least an annual basis (October 1 through September 30) or as needed.

Rates and Charges

Signatory Airline Landing Rate $0.95/1000 lbs. Non-Signatory Landing Rate $1.25/1000 lbs.

Signatory Airline Safety & Security Fee (ARFF/LEO) $75.00 (2 hours; $50 each additional hour) Non-Signatory Airline Safety & Security Fee (ARFF/LEO)* $200.00 (2 hours; $50 each additional hour) * if required

Airport Staff Afterhours Call Out Fee* $75.00 per hour * For charters operating from the FBO ramp only; otherwise the call out fee is covered by the terminal facility fee - per turn charge

Passenger Facility Charge (PFC) $4.50 per enplaned passenger

Terminal Facility Fees – Per Turn Charge

These rates are applicable for charter operators that use the terminal facilities. The charter operator’s selected Ground Services Operator will coordinate with the Airport for use of terminal facilities.

In/Outbound flight: 1 ticket position, gate with loading bridge, baggage system, and the Safety & Security fee (not including extra hours if needed).

Category Flat Fee 1 $ 250.00 2 $ 500.00 3 $1,000.00

Aircraft Class Categories Category of Seats / Class Aircraft Examples 1 1 – 30 B1900, Embraer 110, Cessna Caravan 2 31 – 90 CRJ200/700/900, ERJ 135/145/175, Q400, 328 Jet 3 91 – 200+ B717, B737, B757, B767, A319, A320, A321

H:\Budget\Rates & Fees\FY18 Airport Rates & Fees Methodology_Charter Operators_DRAFT 02-23-18.docx

99 Sinclair Drive Muskegon, MI 49441 (231) 798-4596 Fax (231) 798-7728 [email protected] www.flymkg.com

Charter Operator Rates, Fees & Charges (Non-Signatory)

EXAMPLE – Category 1: EMB-110 @13,000 MGLW with 18 passengers

Non-Signatory Landing Fee 13,000 MGLW x $1.25/1000 lbs $ 16.25

Terminal Use Fee Flat Rate (includes ARFF/LEO fee) $ 250.00 $ 266.25

EXAMPLE – Category 2: CRJ200 @47,000 MGLW with 50 passengers

Non-Signatory Landing Fee 47,000 MGLW x $1.25/1000 lbs $ 58.75

Terminal Use Fee Flat Rate (includes ARFF/LEO fee) $500.00 $558.75

EXAMPLE – Category 3: B737-800 @150,000 MGLW with 150 passengers

Non-Signatory Landing Fee 150,000 MGLW x $1.25/1000 lbs $ 187.50

Terminal Use Fee Flat Rate (includes ARFF/LEO fee) $1,000.00 $1,187.50

H:\Budget\Rates & Fees\FY18 Airport Rates & Fees Methodology_Charter Operators_EXAMPLE_02-26-18.docx