FEDERAL AVIATION ADMINISTRATION AIRPORT PRIVATIZATION PILOT PROGRAM PERMIT SAN JUAN, PUERTO RICO DATE: SEPTEMBER 28th, 2012, 8:00am-6:00pm PLACE: VERDANZA HOTEL ISLA VERDE, PUERTO RICO ENGLISH VERSION OF MORNING SESSION Chairman: RANDALL FIERTZ Transcription: Aledawi Figueroa Martínez Unedited Version Transcription and Translation by Smile Again Learning Center, Corp. Participant PAGE Randall Fiertz ------------------------------------------------------------------------- 3 Elizabeth Newman ------------------------------------------------------------------ 4 Randall Fiertz ------------------------------------------------------------------------- 7 Emmet McCann ---------------------------------------------------------------------- 9 Adolfo Castro ------------------------------------------------------------------------ 12 Agustín Arellano -------------------------------------------------------------------- 14 Kenneth McClintock ---------------------------------------------------------------- 16 Luis Rivera Marín ------------------------------------------------------------------- 18 Juan Carlos Batlle ------------------------------------------------------------------ 21 Hector Ivan Santos ----------------------------------------------------------------- 23 Anthony Tirri ------------------------------------------------------------------------- 26 David Alvarez ------------------------------------------------------------------------ 29 Juan Comulada -------------------------------------------------------------------- 32 Arnaldo Deleo ----------------------------------------------------------------------- 35 Jaime López ------------------------------------------------------------------------- 37 Mario González --------------------------------------------------------------------- 40 Ruben Hernández Gregorate ---------------------------------------------------- 42 José Pérez Riera ------------------------------------------------------------------- 45 Luis Vega Ramos------------------------------------------------------------------- 49 Juan de León ------------------------------------------------------------------------ 52 Edgar Sierra ------------------------------------------------------------------------- 53 Jaime Perelló ------------------------------------------------------------------------ 55 Mario Pabón ------------------------------------------------------------------------- 58 Charlie Hernández ----------------------------------------------------------------- 61 Alejandro Alvelo--------------------------------------------------------------------- 63 Pedro Pierluisi ----------------------------------------------------------------------- 65 Astrid Rosario Ortíz ---------------------------------------------------------------- 71 Armando Montero González ----------------------------------------------------- 76 Alfonso Fernández ----------------------------------------------------------------- 79 Benjamín Acosta Badke ---------------------------------------------------------- 82 Kevin Costello ----------------------------------------------------------------------- 84 Pablo Figueroa ---------------------------------------------------------------------- 86 Randall Fiertz ------------------------------------------------------------------------ 89 Carlee Cellar ------------------------------------------------------------------------- 89 Unedited Version Transcription and Translation by Smile Again Learning Center, Corp. (8:01am) Randall Fiertz: All right. We’re going to get started in five minutes. Evidently, there’s a bit of a line outside so we’ll give people five more minutes. Ah, in the meantime just if people need the headsets, I mean we will have simultaneous translation, ah obviously depending on the language of the speaker. But the headsets are available at the front, if you want to make use of them. (8:06am) We’re gonna get started. For our close to on-time departure. Good morning, ladies and gentlemen I’d like to welcome all of you to the public meeting, concerning the Puerto Rico Ports Authority’s application for participation of the Luis Muñoz Marín International Airport in the FAA’s Airport Privatization Program. The program was established by Congress in 1996 to permit the sale and lease of publicly own airports to private-own operators. The law may be found in the US code 49 USC Section 47134. The objective of the program is to determine if private investment and capital can be attracted to airport development through innovative financial arrangements. The administrator may grant exemptions from certain federal statutory and regulatory requirements for up to ten airports to encourage privatization on a limited number of airports as a test of the benefits of private sector operation of airports. The purpose of this meeting is to solicit public comment on the final application. Because the final application is presently before the Federal Aviation Administration for a decision, we will not be able to discuss the application or the pending agency decision at this time. I’d like to introduce the members of the panel; Unedited Version Transcription and Translation by Smile Again Learning Center, Corp. to my immediate left is James Cole, Deputy General Counsel Office of the General Counsel Department of Transportation. On my right is Elizabeth Newman, Attorney Advisor Office of the Chief Counsel FAA. On her right is Nancy Kessler, Office of Assistant General Counsel for Environmental Civil Rights and General Law Department of Transportation and on the far left is Mr. José Baquero the Federal Security Director for Luis Muñoz Marín International Airport Transportation Security Administration Department of Home Land Security. We also have Mr. Kevin Willis standing, he is Manager Airport Compliance Division at FAA and Kevin will be filling in if anyone of us needs to step off the panel for a moment to ensure that we have a full participation. My name is Randy Fiertz and Director of the Office of Airport Compliance and Management Analysis at FAA and I will serve as the chairperson of this meeting. And at this time I’d like to call on Elizabeth Newman, the FAA Attorney Advisor for the FAA to provide a brief description of the program. Elizabeth Newman: Thank you Randy. Good Morning. The Airport Privatization Pilot Program permits the sale or lease of public- use airports to the private sector with some restrictions. Air Carrier airports cannot be sold. General aviation airports can be sold or leased. The Federal Aviation Administration’s Reauthorization expanded the program to 10 airports but only one large hub can participate. Title 49 of the United States Code, section 47134, authorizes the Federal Aviation Administration to permit the public sponsor to –permits the FAA to grant an exemption to airport sponsor from federal requirements to permit the public sponsor -- to retain and use proceeds from the sale or lease of the airport for other than airport purposes, to grant an exemption to the public sponsor to waive any Unedited Version Transcription and Translation by Smile Again Learning Center, Corp. obligation of the public sponsor to repay grant funds, and grant an exemption to the purchaser or lessee from the revenue use requirements to permit the private operator to earn compensation from the operation of the airport. The private operator is subject to all federal requirements and obligations currently imposed on the exiting public owner and must continue to operate the airport as a public use airport. Private operator must demonstrate how they will comply with nine statutory conditions outlined in the statute to the satisfaction of the Secretary. The nine conditions must also be included in the lease. These conditions are: The airport will continue to be available for public use on reasonable terms and conditions and without unjust discrimination. The operation of the airport will not be interrupted in the event of a private operator’s financial difficulty, insolvency or bankruptcy. The private operator will maintain, improve, and modernize the airport facilities through capital investments and will maintain a capital improvement plan for carrying out airport maintenance, improvements and modernization. Charges to air carriers will not increase faster than the rate of inflation unless a higher amount is approved by 65 percent of the air carriers using the airport. Fee increases for general aviation aircraft owners will not exceed those imposed on air carriers. The private operator will maintain safety and security at the airport at the highest possible levels. The private operator will mitigate noise impacts to the same extent as at a public airport. The private operator will mitigate adverse environmental impacts to the same extent as at a public airport. The transaction will not abrogate by sale or lease any collective bargaining agreement that covers airport employees and is in effect on the date of the sale or lease of the airport. FAA must also ensure that the interests of general aviation users of the airport are not adversely affected, and must Unedited Version Transcription and Translation by Smile Again Learning Center, Corp. find that the approval of the application will not result in unfair and deceptive practices or unfair methods of competition. As a part of the application process, the private operator must provide a description of its financial resources for operating the airport, its airport management experience, and its capability of complying with the public sponsor’s existing grant assurances.