1 1 2 3 4 5 6 KERRVILLE-KERR COUNTY JOINT AIRPORT BOARD 7 Regular Meeting 8 Tuesday, January 19, 2016 9 8:30 a.m. 10 Airport Terminal Conference Room 11 1877 Airport Loop Road 12 Kerrville, Texas 13 MEMBERS PRESENT: Stephen King, President 14 Corey Walters, Vice-President Ed Livermore 15 Bill Wood Kirk Griffin 16 AIRPORT BOARD STAFF PRESENT: 17 Bruce McKenzie, Airport Manager Carole Dungan, Executive Assistant 18 Patrick O'Fiel, Attorney 19 COUNTY STAFF PRESENT: Tom Moser, Commissioner Pct. 2 20 Jonathan Letz, Commissioner Pct. 3 Brenda Doss, Auditor 21 James Robles, Assistant Auditor 22 CITY STAFF PRESENT: Jack Pratt, Mayor 23 Sandra Yarbrough, Finance Director 24 VISITORS PRESENT: Robert Dutton, Mooney Aircraft 25 Brenda Beaty, Pressler, Thompson and Company GADDIS COURT REPORTING 210-681-5851 2 1 I N D E X 2 January 19, 2016 3 CALL TO ORDER 4 1. VISITORS FORUM 3 5 2. KERRVILLE-KERR COUNTY JOINT AIRPORT BOARD MEMBER FORUM 3 6 3. CONSENT AGENDA 7 3A. Approval of December 16, 2015 Board Meeting Minutes 6 8 4. DISCUSSION AND POSSIBLE ACTION 9 4A. Monthly Financials December - (James Robles) 6 10 4B. 2015 Audit Report - (Brenda Beaty, CPA) 9 11 4C. Interlocal Agreement Committee (Airport Board) - Steve King 18 12 4D. Martin Marietta Quarry - (Bruce McKenzie) 24 13 4E. Building 19 (Paint Hangar) Upgrades and paving 14 - (Bruce McKenzie) 36 15 4F. Airport Authority - (Patrick O'Fiel) 63 16 5. INFORMATION AND DISCUSSION 5A. General Update 66 17 6. EXECUTIVE SESSION -- 18 7. ADJOURNMENT 80 19 20 21 22 23 24 25 GADDIS COURT REPORTING 210-681-5851 3 1 On Tuesday, January 19, 2016, at 8:30 a.m., a 2 regular meeting of the Kerrville-Kerr County Joint Airport 3 Board was held in the Airport Terminal Conference Room, Louis 4 Schreiner Field, Kerrville, Texas, and the following 5 proceedings were had in open session: 6 P R O C E E D I N G S 7 MR. KING: I'll call this meeting to order of 8 the Kerrville - Kerr County Joint Airport Board, July 19th, 9 2016. 10 Call to order. Item 1, Visitors Forum. At this 11 time, any person with business not scheduled on the agenda may 12 speak with the Board. No deliberation or action may be taken 13 on these items because the Open Meetings Act requires for them 14 to be posted 72 hours before the meeting. Visitors are asked 15 to limit their presentation to three minutes. 16 Anyone? 17 Item 2, the Kerr County Joint Airport Board 18 Forum. At this time any member of the Joint -- the Kerrville 19 Joint Airport Board may speak to the Board or the public 20 present on any matter not scheduled on the agenda. No 21 deliberation or formal action may be taken on the items 22 because of the Open Meetings Act requires it be posted for 72 23 hours before the meeting. 24 Did you have anything? 25 MR. LIVERMORE: Oh, I was just going to -- I GADDIS COURT REPORTING 210-681-5851 4 1 think back on January 12th I had sent a memo through Bruce to 2 everybody of just kind of a general discussion. The thing is 3 a page and a half; I'm not going to read it to you because I 4 think you've already all read it. 5 But it's just -- you know, general aviation is 6 reaching kind of a critical point, I think, nationally, and I 7 think it all -- personally it all started several years ago 8 when the FAA, which used to have as part of its mission to 9 promote aviation, when that was removed from their mission 10 statement, I think the FAA's attitude has obviously turned. 11 And they're more now into regulation and policing and that 12 sort of thing and not promoting, and as a result, some things 13 were beginning to happen as was -- has been encouraged by that 14 around the country. And I gave you an example or two in here. 15 But we just need to always be in mind that our 16 actions can -- because we're part of a national system and our 17 actions can have broader implications, just like Santa Monica 18 and places like that, and Santa Barbara here, I believe. 19 And anyway, it's -- y'all have the memo and you 20 know what I'm talking about. 21 And I think we are very helpful here, by the 22 way. I'm not -- I think our footing is very positive -- 23 MR. KING: Thank you. 24 MR. LIVERMORE: -- with our owners and 25 everybody. GADDIS COURT REPORTING 210-681-5851 5 1 MR. KING: Thanks, Mr. Livermore. 2 Where is your memo? Did you include it? 3 MR. LIVERMORE: I don't know if it was included 4 or not. 5 MR. McKENZIE: It's not in the back. 6 MR. LIVERMORE: I have a copy of it. 7 MR. KING: Okay. 8 MR. LIVERMORE: You've got it on your e-mail. 9 MR. KING: Okay. All right. Item -- anybody 10 else? 11 No one else. 12 MR. LIVERMORE: Oh. Well, I have kind of a 13 slight addendum to that. 14 I've got some other friends -- I've got a friend 15 in Australia -- he was here last February and stayed with 16 us -- and he was talking about such things as -- that can be 17 very negative to general aviation are ramp fees, landing fees, 18 et cetera. And at their small -- he has an E55 Baron and at 19 their small airport in Australia, landing fees -- the fees 20 vary a lot depending on which airport. And over the years, 21 for instance, in 2007 landing at Tamworth VFR cost $13.54 a 22 landing. In 2010 it was $56.87. At his home airport -- and 23 I'm not sure where that is -- $26 per landing and 33 if you 24 talk to the tower and are in a control room. 25 Isn't that astounding? GADDIS COURT REPORTING 210-681-5851 6 1 That's -- that killed -- that will kill general 2 aviation, and it pretty much has in Australia. And by the -- 3 it's even worse in Europe. Europe is much higher than that. 4 MR. KING: Anybody else? 5 None being heard. 6 Item 3, Consent Agenda. All items listed below 7 within the consent agenda are considered routine by the Board 8 and will be enacted in one motion. There will not be separate 9 discussion on the items unless a Board Member or a citizen 10 requests, in which event the item will be removed from the 11 general order of business and considered in its normal 12 sequence. 13 Approval of the two -- December 16th, 2015, 14 minutes of the Board. 15 MR. LIVERMORE: So move. 16 MR. KING: Second? 17 MR. WALTERS: Second. 18 MR. KING: Discussion? 19 None being heard. 20 All in favor? 21 Opposed? 22 (The motion carried by unanimous vote, 5-0) 23 MR. KING: Five-Zero. 24 Item 4, Discussion and Possible Action, the 25 Financials by James. GADDIS COURT REPORTING 210-681-5851 7 1 MR. ROBLES: Good morning, everyone. 2 There's not much out of the ordinary in terms of 3 the billing cycle in this one. Pretty typical bills. 4 I think it's nice to note that as a third of 5 the -- or a quarter of the way through the year we've 6 collected over 30 percent of the revenue, and I've only spent 7 about 15 percent of the expenditure budget. 8 MR. KING: Say that again. 9 MR. ROBLES: We've collected 30 percent of our 10 revenue. 11 MR. KING: Okay. 12 MR. ROBLES: And have only spent about 13 15 percent of our expenditure budget. 14 MR. KING: Okay. 15 MAYOR PRATT: Say that one more time. 16 (Laughter) 17 MR. KING: Anybody have any questions? 18 MR. WOOD: Well, just a comment. 19 At this time last year there had been a mowing 20 cycle and this year there hasn't. So -- 21 MR. McKENZIE: Correct. 22 MR. WOOD: -- that's $7,500. 23 MR. LIVERMORE: I think you got that in late the 24 last year, didn't you? 25 MR. McKENZIE: Yes, sir. GADDIS COURT REPORTING 210-681-5851 8 1 MR. LIVERMORE: Yeah. 2 MR. WOOD: Plus, we don't have all of the 3 professional services that we had when we were doing all of 4 the work. 5 MR. McKENZIE: Correct. 6 MR. LIVERMORE: Are you talking about the roof 7 and all of that? 8 MR. WOOD: Anything we needed a lawyer for. 9 MR. LIVERMORE: Oh. You're talking about 10 professional. Excuse me. I thought you were talking about 11 the... 12 MR. WOOD: Well, they're all professionals. 13 MR. LIVERMORE: Yeah, they are. And you'd be 14 one; is that right? 15 MR. KING: Any -- any other questions or 16 comments on the financials? 17 MR. WALTERS: I make a motion that we approve 18 the December financials. 19 MR. KING: Second? 20 MR. WOOD: I second. 21 MR. KING: Discussion? 22 None being heard. 23 All in favor? 24 Opposed? 25 (The motion carried by unanimous vote, 5-0) GADDIS COURT REPORTING 210-681-5851 9 1 MR. KING: It's five-zero. 2 All right. That was simple. 3 Item -- oh. Item 4B the audit. The 2015 audit 4 report. Brenda -- Brenda Beaty. 5 MS. BEATY: Good morning. 6 MR. KING: Good morning. 7 MR. LIVERMORE: Good morning. 8 MR. GRIFFIN: Morning. 9 MR. WALTERS: Good morning. 10 MR. WOOD: Morning. 11 MR. McKENZIE: Welcome. 12 MS. MEATY: Thank you. 13 If you will turn to your yellow book. Page 1 is 14 our independent auditor's report. And this format is pretty 15 much the same as it's been in the past. We have, in ascent, 16 two opinions in here; one on the government-wide financial 17 statements and one on the fund financial statements. So the 18 opinions are on the bottom of page 1. And in our opinion the 19 financial statement presents fairly the financial position of 20 the government activities and the general fund, and the 21 capital projects fund. And that is an unmodified or a claimed 22 opinion, and that is what you want. 23 Pages 3 through 6 is management discussion and 24 analysis. It is unaudited. I will go over a couple of 25 comments in here. The first item that's bulleted under GADDIS COURT REPORTING 210-681-5851 10 1 financial highlights talks about the cost that the city and 2 county have contributed. 47,478 each for operations. $25,000 3 each for the routine airport maintenance program grant match. 4 And 500,000 each for the reconstruction of roofs on the Mooney 5 International buildings. 6 And the last bullet, of course, has the airport 7 has no outstanding debts, so that's, of course, always a 8 positive. 9 The -- pages 4 and 5 you can look at information 10 that compares the current year to the prior year. No where 11 else in the report is there going to be any type of 12 comparative analysis like that. 13 But I will move on to the first report that we 14 do an opinion on; it's on page 7. 15 MR. LIVERMORE: Let -- let me ask you a 16 question. 17 MS. BEATY: Sure. 18 MR. LIVERMORE: It's on page 3. I guess you 19 would call it "little arrow point number three" there. 20 Airport's net position increased by $710,000 as a result of 21 operations and $806,000 as a result of prior period of time 22 adjustments. 23 So whenever -- I guess the inclusion of 24 land would have been -- I'm asking both you and Bruce, because 25 you might not be aware of this inside thing. Does that GADDIS COURT REPORTING 210-681-5851 11 1 include the land we received from the Industrial Board? 2 MR. McKENZIE: It does. We found -- not "we." 3 Brenda found another section of land that wasn't included in 4 the last year's audit. 5 MR. LIVERMORE: Oh, wow. 6 MR. McKENZIE: So that increased it as well. 7 MR. LIVERMORE: Well done, Brenda. 8 MS. BEATY: And we'll talk about that more. 9 MR. MORROW: It was a little -- a little sliver, 10 but it increased it. 11 MS. BEATY: It was from the Kerrville Economic 12 Development Foundation, 5.606 acres y'all got in, like, August 13 of 2013. 14 MR. LIVERMORE: Yeah, I remember that. Okay. 15 And then the Brinkman building when we retain- 16 -- rather when we re-attained control from the rental view 17 point from the contract, that -- that increased our net worth 18 also. 19 MS. BEATY: Yes. 20 MR. LIVERMORE: So are you saying that our net 21 went up a million five? 22 MS. BEATY: Yes. Yes. 23 MR. LIVERMORE: The total of these two? 24 MS. BEATY: Uh-huh. 25 MR. KING: Look on page 4. GADDIS COURT REPORTING 210-681-5851 12 1 MS. BEATY: Yeah. 2 MR. KING: It's 18 million -- 18,396 from 3 16,879. 4 MR. LIVERMORE: Okay. Thank you. 5 MS. BEATY: Okay. Moving on to page 7 is the 6 statement of net position, which is actually your balance 7 sheet, and this is on a government-wide basis and so it 8 includes all of your assets, your buildings and your land, and 9 that's netted depreciation and all of your liabilities. So 10 your net position is now $18,396,225. And that is equivalent 11 to on a business basis your stock holders equity or your 12 retained earnings. 13 So, once again, with no debt that's, you know, a 14 wonderful position to be in. 15 Pages 8 and 9, and this is where you will see 16 the adjustment pop out again. We had expenses of 821,721, and 17 that's the first column there. That does include depreciation 18 of $482,415. 19 So -- and then your charges for services, which 20 is your revenue; that's all of your lease income from the land 21 or T-hangers or terminals. 22 And then you had operating grants and 23 contributions. That number is actually the 47,478 from each 24 the city and the county. 25 And the next column is your capital grants and GADDIS COURT REPORTING 210-681-5851 13 1 contributions. That's the million dollars, $500,000 each from 2 the city and the county, for the Mooney roof reconstruction, 3 as well as 25,000 each for the RAMP grant. And then the 4 additional amount is 49,689, which actually came from your 5 TxDOT aviation grant. 6 So if you look at the column, those across, you 7 did have a net increase in changing that position of 710,265. 8 We added a little bit of interest in Ms. Lainey's (phonetic) 9 revenue to get 710,428. And then when we do add the prior 10 period adjustments, which includes the land, the building, and 11 the improvements, less depreciation, it came to the 806,360, 12 for your total net position of 18 thousand -- 18,396,225. 13 MR. LIVERMORE: And where -- what does that 14 specifically compare with last year? 15 MS. BEATY: If you go back on -- 16 MR. KING: Four. 17 MS. BEATY: -- page 4, it was 16 million 879. 18 MR. LIVERMORE: It's how much? 19 MR. WALTERS: 16,879. 20 MR. WOOD: That's the million and a half we're 21 talking about. 22 MR. LIVERMORE: Okay. Well -- so a million and 23 a half on -- let's see, that's about -- about an eight percent 24 increase, isn't it, in the year? Isn't that right? I just 25 ran that in my head. GADDIS COURT REPORTING 210-681-5851 14 1 MS. BEATY: Page 10 then has your governmental 2 funds balance sheet. So it included the general fund, the 3 capital projects fund, and then the total. And y'all had 4 assets on the general fund of 398,515, liabilities of 67,066, 5 which gave you a net fund balance of 331,449. The same thing 6 if we go to capital projects you had assets of 419,212, 7 liabilities of 66,546, which leaves the fund balance of 8 352,666, and a total fund balance of 684,115. 9 I will go over a couple of things. We did 10 increase the lease deposits and other current liabilities. 11 That's part of the -- one of the adjustments that we made for 12 $5,000, which we will go into. So that's a little bit of a 13 change. 14 If you take the 684,115 on page 10 and bring 15 that up to page 11, then we do a reconciliation to get from 16 the governmental funds back to the government-wide financial 17 statements. And as you can see, the biggest change there is 18 adding your fixed assets and net of your depreciation. And 19 that prior period adjustment is also listed there -- it's the 20 fourth item -- the 5.606 acre tract of land and the Brinkman 21 Hanger and surrounding improvements. So those are the two big 22 items that are helping to increase your net position. 23 And on page 12 is the revenues -- statement of 24 revenues and expenditures on a governmental fund basis. 25 Again, you have the general fund and the capital projects GADDIS COURT REPORTING 210-681-5851 15 1 fund. You had revenues in the general fund of 432,344, 2 expenditures of 351,426, so you a net change in fund balance 3 of $80,918. The capital projects fund you, of course, got the 4 million 99,689 from your grants from the city, county and 5 TxDOT. And then you had capital outlay, which is pretty much 6 your RAMP grant construction and your construction and 7 progress on the Mooney roof, for a total change in fund 8 balance of 296,610, which leaves a total fund balance of 9 377,528. And page 12 takes the 377,528 and reconciles back to 10 the change in that position on governmental activities, which 11 is pretty much your capital outlay less your depreciation. 12 Okay. Page 15 through 18 is the notes, so I'll 13 go over just a couple of the notes. Page 18, number 2-A is 14 your cash, and your cash is, of course, pooled with Kerr 15 County cash, and Kerr County then takes care of your 16 compliance with the Public Funds Investment Act. 17 And page 20, note B, this is where we tried to 18 break it out so you can easily see what the additions were for 19 the current year, as well as the prior period adjustments. 20 You can see in the buildings and the land and the 21 improvements, we've got the 22,818, which is the land, the 22 5.606 acres, the building 709,600 under prior period 23 adjustment is actually the Brinkman Hanger, and then the 24 improvements relate to the carport, concrete flatwork, and 25 asphalt paving. And then the increase is actually the 99,378 GADDIS COURT REPORTING 210-681-5851 16 1 was your 2015 RAMP grant, the machinery and equipment. I 2 believe y'all bought a small tractor for 12,120. And so that 3 kind of points out your -- and, of course, the 703,817 is the 4 construction and progress on the Mooney roof. Breaking that 5 out. 6 Note C pretty much talks about your retirement 7 plan. And again, the employees here are combined with Kerr 8 County under the Texas County and District Retirement System. 9 So the county takes care of your retirement plan. Y'all did 10 have annual pension costs for the airport of $18,241 for the 11 year. 12 And then the last note, again, I'll just point 13 out, is J where we go over those prior period adjustments 14 again. That was kind of... 15 On page 25 we have a required schedule. It's 16 your general fund, budget and actual. You did have a negative 17 variance on rents. I think that's primarily related to the 18 COLA adjustments that y'all did during the year. On the 19 expenditure side, you did have a positive variance of 52,638, 20 which gave you a net change of 16,118 to budget positive. 21 There was one prior period adjustment, and that's what I 22 alluded to earlier, we had deposits for the T-hangers and some 23 other deposits that we had included in revenue in prior years. 24 We brought those back to a liability this year. So you still 25 had a positive variance to your budget of $10,608. GADDIS COURT REPORTING 210-681-5851 17 1 The last opinion there is our government 2 auditing standards opinion. We have no comments. So it is 3 also an unmodified or a clean opinion. 4 And then there's a -- one additional letter that 5 we wrote, and it's a required writing, if we had any 6 difficulties encountered with management or anything like 7 that. We, of course, did not. Corrected and uncorrected 8 mistakes -- misstatements of -- if we found anything, the 9 county made the adjustment, so there's nothing there to report 10 either. 11 So everything was good. It was a fun audit. It 12 was very interesting. 13 MR. WOOD: So we can keep James? 14 MS. BEATY: Yes. 15 (Laughter) 16 MS. BEATY: That's Brenda's decision but, yes. 17 Another Brenda. Not mine. 18 MR. WOOD: Well done. 19 MS. BEATY: Any questions for me? 20 MR. KING: Thank you. 21 MR. LIVERMORE: Appreciate it. 22 MR. WALTERS: Thank you. 23 MR. GRIFFIN: Thank you. 24 MR. WALTERS: Thank you. 25 MR. KING: Any questions by the Board or any GADDIS COURT REPORTING 210-681-5851 18 1 comments? 2 Nothing being heard -- 3 MR. WOOD: Well, I would like to just say that a 4 good audit like this reflects on the airport management and on 5 the accounting. So, way to go, guys. 6 MR. KING: Do we have to approve that? 7 MS. BEATY: Yes. 8 MR. KING: We need to approve that, don't we? 9 Okay. Need a motion to approve the 2015 audit 10 report. 11 MR. LIVERMORE: I will so move. 12 MR. KING: Mr. Livermore. Second? 13 MR. WALTERS: Second. 14 MR. KING: By Mr. Walters. 15 Any discussion? 16 None being heard. All in favor? 17 (The motion carried by unanimous vote, 5-0) 18 MR. KING: Five-zero. 19 MR. LIVERMORE: I think it's pretty astounding 20 that our net worth was that positive. I really do. 21 MR. WOOD: What struck me is that we all have 22 the responsibility of managing 18 million dollars. 23 MR. LIVERMORE: Uh-huh. Yeah. Kind of brings 24 it into focus, doesn't it, Bill? 25 MR. WOOD: Try not to make any mistakes. GADDIS COURT REPORTING 210-681-5851 19 1 MR. KING: Item 4C, the Interlocal Agreement 2 Committee (Airport Board). 3 This is on the agenda because I believe the 4 Interlocal Agreement expires in -- 5 MR. McKENZIE: September. 6 MR. KING: -- September. 7 MR. McKENZIE: Yes, sir. 8 MR. KING: And I wanted to put two on board -- I 9 wanted to put two people representing the Board and any 10 discussions that will be had towards that Interlocal 11 Agreement. I would assume they will have some discussions 12 prior to September I would think. Wouldn't you? 13 COMMISSIONER LETZ: I would hope so. 14 MR. KING: I would hope so. 15 COMMISSIONER LETZ: Probably April. 16 MR. KING: April or so? 17 COMMISSIONER LETZ: April or May. Something 18 like that. 19 MR. KING: So -- 20 MAYOR PRATT: Maybe March. 21 MR. KING: All right. I would like to be 22 involved in that discussion. And I'm looking for one more 23 volunteer who would be interested in discussing the Interlocal 24 Agreement. 25 COMMISSIONER MOSER: Don't everyone jump up. GADDIS COURT REPORTING 210-681-5851 20 1 MR. LIVERMORE: I'll be glad to do it. 2 MR. KING: Okay. Mr. Livermore and I will be 3 the representatives of the airport. 4 And I would say one thing on that, the 5 Interlocal Agreement for the public is -- that's our 6 governing -- governing agreement that we use to manage the 7 airport for the county and the city. This Board has been 8 through a -- quite a few irrit- -- how do you say that? 9 COMMISSIONER MOSER: Iterations. 10 MR. KING: Iterations. I've been on some of 11 them. I've been around some of them. I've seen some of them. 12 This one seems like the best that I've ever seen. There's -- 13 several of them were terrible. Some of them were illegal. 14 Some of them -- some of them had to be disbanded because they 15 were not the right -- they couldn't be done that way. 16 So I just -- I hope that both our owners are 17 happy with the performance of this Board. This is a unique 18 Board to the city and the county. It's, I guess, the only 19 board -- it's the only board -- yeah. The EIC is a -- it's a 20 corporation, correct? 21 MAYOR PRATT: That is correct. 22 COMMISSIONER MOSER: Yes. 23 MR. KING: It's a corporation. It's the only 24 board that has authority, aut- -- has authority within itself 25 and the city. And our owners only have approval of the GADDIS COURT REPORTING 210-681-5851 21 1 budget. 2 And I've -- I think I can speak for -- I know 3 for myself, this Board is -- has been one of the most 4 successful boards, I think, in this county and the city. And 5 I believe if you just look back -- just go back six years and 6 see how much money this airport was costing the city -- the 7 taxpayers -- not the city and county -- the taxpayers of 8 Kerrville and Kerr County. And I think you can probably see 9 that some of those other makeups and some of those other 10 operations we had running this Board was not quite as 11 successful as this particular Board. 12 And I'm not taking credit for that. I'm just 13 saying that this Board is -- is a very unique Board and it's 14 made up -- in its makeup and it does perform a very important 15 task, and it has goals and those goals are being met. And I 16 would -- I think it would be a shame if this -- if either one 17 of our owners had any desires to change the way this is 18 operating. 19 COMMISSIONER MOSER: I think just for -- for 20 clarification you're talking about some of the boards in the 21 past that didn't work as smoothly, I'm going to put it in that 22 category. That was prior to -- prior to the establishment of 23 the -- this type of board, right? 24 MR. KING: Exactly. Oh, yeah. 25 COMMISSIONER MOSER: Yeah. That wasn't clear. GADDIS COURT REPORTING 210-681-5851 22 1 That's when it was an advisory committee. 2 MR. LIVERMORE: Uh-huh. 3 COMMISSIONER MOSER: And the city and county had 4 their ore in the water in every decision. And since it's been 5 an autonomous board -- 6 MR. KING: Exactly. 7 COMMISSIONER MOSER: -- I think it's worked 8 perfectly -- not perfectly, but it's worked extremely well and 9 it keeps getting better. 10 And one thing I think to note is this Board has 11 always had the benefit of filling vacancies with skills that 12 are needed as opposed to popularity contests like a lot of 13 elected positions in boards and so forth. 14 So I just echo everything you said. 15 MR. LIVERMORE: One thing that I would like to 16 say is that I -- I think every year -- you know, we learn from 17 what we're doing, and the next year it gets a little better. 18 And it's been an evolutionary process. 19 The -- I think a big, big compliment to this 20 whole three-legged process that we have here -- the city, 21 county and Airport Board -- is the approval of -- what was 22 it -- a half a million dollars each for Mooney? 23 COMMISSIONER MOSER: Uh-huh. 24 MR. LIVERMORE: That was a big step for both 25 owners. And I think that thing really went down fairly GADDIS COURT REPORTING 210-681-5851 23 1 smoothly and was negotiated well. And to me that was kind of 2 a little bit of a litmus test that the process seems to work. 3 COMMISSIONER MOSER: Uh-huh. 4 MR. LIVERMORE: And that you all have confidence 5 in what we're trying to do. 6 So I do think it's an evolutionary process and 7 every year we try to get a little better. Trying to get y'all 8 out of the check-writing era. 9 MAYOR PRATT: That would be nice. And it has 10 been nice to be less. 11 MR. WALTERS: I do have a question. Does the 12 fact that the airport has got 18 -- in excess of 18 million in 13 assets with no debt help in the bond rating for the county and 14 the city? 15 MAYOR PRATT: It -- 16 MR. WALTERS: Or help to the -- to the bottom 17 line of your financial worth? 18 MAYOR PRATT: Let me see if I can answer it that 19 way -- this way. Anything the (unintelligible) board does 20 reflects -- or those accounting numbers are included in the 21 city's. Anything this board does is -- 22 UNIDENTIFIED PERSON: It's part of our audit. 23 MAYOR PRATT: It's part of our audit, but only 24 half of it -- 25 MR. WALTERS: I understand. GADDIS COURT REPORTING 210-681-5851 24 1 MAYOR PRATT: If you take the 500,000 that we 2 both put in, that's a million -- there's a million of your 3 increase right there in your asset. 4 MR. LIVERMORE: Uh-huh. 5 MAYOR PRATT: Okay. 6 COMMISSIONER LETZ: But the answer is "yes." I 7 mean a positive -- if it's positive here, it's positive to 8 us -- both of us. If it's negative, it's negative. 9 So, yes, the better run this airport is, the 10 better it is for both the city and the county. 11 MR. WALTERS: I thought so. Thank you. 12 MAYOR PRATT: Absolutely. 13 MR. KING: Thank you, Corey. I appreciate that. 14 Any other comments or questions on this? 15 All right. Well, then, Mr. Livermore and I will 16 man that committee for -- or represent that committee from the 17 airport's point of view. And our owners will hopefully give 18 us notification prior to those meetings so we can -- 19 COMMISSIONER LETZ: We meet when you are out of 20 town. 21 MR. KING: Do what? I probably will be out of 22 town for that. 23 (Laughter) 24 MR. KING: All right. Thank you very much. 25 Item 4D, Martin Marietta Quarry - (Bruce). GADDIS COURT REPORTING 210-681-5851 25 1 First of all, let me -- I want -- this -- this 2 is a hot -- this is a hot item in the county and the city 3 right now. I've attended meetings with the county and the 4 city on this. I want to be clear that the airport -- the only 5 position the airport has in this is that we -- we look at this 6 as a -- how it affects the airport. 7 MR. LIVERMORE: Safety. 8 MR. KING: Safety. And whether it's violating 9 anything that our -- we have owners, the city and the county, 10 but we also have owners in the federal government. We took -- 11 we've taken grant money, federal -- federal grant money on 12 this airport, and once you take federal grant money you become 13 a ward of the state almost basically. I mean they have -- 14 they've got a -- they've got a -- they have a say-so in 15 everything that happens out here and they have the ultimate 16 say-so -- 17 MR. WOOD: They have a dog in the fight. 18 MR. KING: -- because it was their money. And 19 it's been proven in court cases throughout the United States 20 that if you want to get free, pay them back. And that's the 21 only way to do it. 22 MR. LIVERMORE: Uh-huh. 23 MR. KING: If you want -- if you want -- if you 24 don't want the federal government having a say-so in your 25 airport, you write them a check. And the checks are very GADDIS COURT REPORTING 210-681-5851 26 1 large usually. 2 COMMISSIONER MOSER: It's mill- -- just for the 3 records it's -- I don't know how -- I forgot -- 4 MR. LIVERMORE: Millions. 5 COMMISSIONER MOSER: It's millions if we don't 6 agree -- 7 MR. KING: Exactly. 8 COMMISSIONER MOSER: -- or satisfy their 9 requirements, we owe them many millions of dollars. 10 MR. KING: Exactly. 11 So we look at it from -- an issue like this, we 12 look at it -- the airport looks at it from a safety issue, and 13 then we ask our -- our -- we ask for guidance from TxDOT -- 14 the Aviation Department of TxDOT. Which Texas is a block 15 grant state, so the FAA basically puts TxDOT in charge of 16 distributing all of the funds for all of the money that comes 17 from Washington, it goes into TxDOT and TxDOT spreads it out 18 and everything. 19 But the FAA still maintains all of the 20 approaches -- they maintain all of our approaches and they 21 still basically own those and take care of them. And they -- 22 and they value those approaches. I'll tell you, they value 23 those approaches. 24 And so we looked at it from that point of view 25 to see whether the quarry had any affect on safety, whether it GADDIS COURT REPORTING 210-681-5851 27 1 would affect the approaches. We got an opinion from TxDOT -- 2 from the FAA by way of TxDOT. And then our -- 3 MR. McKENZIE: Our consulting engineer. 4 MR. KING: -- consulting engineer -- we talked 5 to our consulting engineer to see if the quarry would have any 6 affect on that, on -- by -- on any operations out here. And 7 pretty much, do you want to take that, Bruce? 8 MR. McKENZIE: I would be glad to. 9 In our -- in our due diligence regarding the 10 quarry, as Steve referred to as to the approaches is what we 11 were concerned with, and mainly the approach to 1-2 -- runway 12 1-2. TxDOT has said -- their Engineering Department has said 13 they see no issue with that at this time. It doesn't affect 14 the part 77, which is -- has to do with the approaches for 15 those of you who are not familiar with part 77. It's out of 16 the trapezoid, if you will, on the departure and the approach. 17 They said that it appeared that they were in good stead. 18 Our -- our consulting engineer, which is Garber, 19 their engineering -- two of their engineers studied this as 20 well and said they see no issue regarding it affecting the 21 airport adversely. They -- as far as penetrations go on the 22 approaches, it -- there is none. 23 I had a title search done on that property to 24 see if there were any abrogation easements out there; there 25 are none. So I got that from the Kerr County Title -- I mean GADDIS COURT REPORTING 210-681-5851 28 1 Kerr County Abstract ran the title searches on all of that. 2 What I was -- and we were going to do this 3 anyway and visit about it. I was going to request it, but 4 both TxDOT and Bill Gunn at TxDOT recommended this, as well as 5 our engineer at Garber, that the Martin Marietta company, that 6 those folks run a -- file for a construction permit, a 74-60 7 is what it's called -- construction permit through the FAA. 8 It's a one page -- it's a pretty simple form of getting a 9 construction permit and that way we will all know that it's 10 clear. But that onus would be on them to acquire that permit. 11 And I will be glad to help them, but I'm sure that they've got 12 floors of attorneys that may have already done this. But if 13 they haven't, we need to request that. And perhaps, 14 Commissioner Moser, at your town meeting that might be the 15 place to -- 16 COMMISSIONER MOSER: Uh-huh. 17 MR. McKENZIE: I'll let you kind of quarterback 18 this. 19 COMMISSIONER MOSER: I would -- on that subject, 20 at the town hall meeting, I would appreciate it if you would 21 be there and just say what you just said. 22 MR. McKENZIE: Uh-huh. Okay. 23 COMMISSIONER MOSER: I think that they've 24 probably already applied for those permits from what I can 25 tell. So our objective is -- is to communicate everything GADDIS COURT REPORTING 210-681-5851 29 1 that we see as a community that we have the authority to do 2 anything about and encourage them to do everything that they 3 can to minimize the impact by putting big berms along the 4 road, by making sure dust is controlled. Especially for the 5 things that Ed and you guys have brought up about dust and -- 6 and the ingestion of dust into aircraft engines. 7 MR. McKENZIE: Sure. 8 COMMISSIONER MOSER: So I think they're going to 9 be receptive to that, and all other things of water and 10 contamination and water maintenance and management. So, I 11 think they're doing that. Okay. So -- but if you could be 12 there -- 13 MR. McKENZIE: Absolutely. 14 COMMISSIONER MOSER: I'll have the agenda out 15 today. 16 MR. McKENZIE: Sure. 17 MR. LIVERMORE: I would like to also just add, 18 the Mayor the other night made a good comment -- inclusion in 19 his overall comments about the highway out here. I think you 20 said that any -- we cannot allow -- 21 MAYOR PRATT: Turn lights. 22 MR. LIVERMORE: -- anything on our side of the 23 highway -- 24 COMMISSIONER MOSER: That's what Steve said. 25 MR. McKENZIE: No. I did some research on that GADDIS COURT REPORTING 210-681-5851 30 1 and we're going to end up with some real issues if they move 2 this side of that highway -- if we move the north side of the 3 highway, but not up at Martin Marietta. I'm talking about at 4 James Avery. 5 COMMISSIONER MOSER: Oh, I see. 6 MR. McKENZIE: That's where the issue is. Up 7 there, we're not -- that's not an issue. 8 COMMISSIONER MOSER: Okay. 9 MR. LIVERMORE: Oh, that's news. 10 MR. McKENZIE: It's right here. If they're 11 going to make a turn lane or any adjustment to that highway, 12 we need to put it -- make sure that they do it on the south 13 side of the road. 14 MR. LIVERMORE: But -- but Martin Marietta is 15 not under that. 16 MR. McKENZIE: No, that's out -- that's too 17 far -- too far out. 18 And to continue and to come to a conclusion on 19 this, we just need to make sure that they -- they file for the 20 74-60, and they will and it will -- the rendering will come 21 back within three weeks; it usually always does. Any time we 22 even build a fence around here or a sign, I file one of these. 23 COMMISSIONER MOSER: Okay. 24 MR. McKENZIE: And the issue with this is 25 penetrations going vertical. GADDIS COURT REPORTING 210-681-5851 31 1 COMMISSIONER MOSER: Sure. 2 MR. McKENZIE: That's what they're concerned 3 about. That obviously is not -- and the second thing I heard 4 talked about is the dust. There's going to be a little dust. 5 There's a little dust with everything. But that's a 6 wet-washing operation and I think everybody here knows that 7 now. There's no primary crusher over there. If that was a 8 crushing -- a jaw crusher over there that was a primary, there 9 would be a dust issue. 10 MR. WALTERS: Do they have -- 11 MR. McKENZIE: But that's sand and gravel. 12 MR. WALTERS: Do they have the crushing at the 13 Martin Marietta to the north? 14 MR. McKENZIE: To my knowledge, Corey, that's 15 all washing. It's a four-deck screen and they're breaking the 16 sand and gravel. 17 MR. WALTERS: Okay. 18 MR. McKENZIE: They're sand and gravel there. 19 They're not after rock -- to crush rock for asphalt. They're 20 after sand and gravel for concrete. 21 COMMISSIONER MOSER: Just so everybody will 22 know, the objective of the town hall meeting is to have Martin 23 Marietta tell everything that they plan to do, which they're 24 going to do. Okay. And they'll talk about every aspect of 25 their operation. GADDIS COURT REPORTING 210-681-5851 32 1 And we're going to have TxDOT speak and TCEQ 2 there to speak. We're going to have the flood plain manager. 3 We're going to have the Airport Board. The city is invited to 4 be there and -- and say what they want to say. And then to 5 have the public ask any and all questions that they want to. 6 So all of that -- all of that stuff will -- will 7 be there. So... 8 MR. WALTERS: I thought at our last Board 9 meeting when we talked about this subject, it was discussed -- 10 or I think maybe -- Tom, did you make a comment that they were 11 going to take material from this location over here on -- on 12 the new operation and move it down to do something else with 13 it on -- 14 COMMISSIONER MOSER: That's some of their 15 preliminary plans and that's what they will show. It was 16 preliminary then. So now I think they've -- they've got all 17 of their plans together and they will have a -- you know, a 18 PowerPoint presentation on what they're going to do and how 19 they're going to do it. 20 But that's what they said at that time is -- is 21 to minimize the dust, okay, and any operations as Bruce is 22 describing, that they would -- their thought was at that time 23 to truck it down to the other facility and do with it there 24 what they're doing right now. So they're going to change that 25 operation. GADDIS COURT REPORTING 210-681-5851 33 1 MR. WALTERS: Did I read correctly that -- and I 2 don't know if it was accurately reported. The paper said that 3 they were ultimately going to close the existing location 4 and -- and move all of their operations to the new one. 5 COMMISSIONER MOSER: I'll -- I'll let them 6 answer that. 7 MAYOR PRATT: The way I understand it, as of 8 now, is that their crush -- their rock crushing operations at 9 Center Point, they will transport -- 10 MR. WALTERS: Right. 11 MAYOR PRATT: -- their diggings to crush it 12 there. 13 COMMISSIONER MOSER: And that's preliminary. 14 MR. WALTERS: Did anybody else read it in the 15 article that talked about -- that was reported by the 16 Kerrville Daily Times that they were going to -- to ultimately 17 or eventually close that operation going towards Center Point? 18 COMMISSIONER MOSER: What they're going to -- 19 they may continue to -- as Jack said, they may continue to do 20 some of their -- their improvements to the gravel that they 21 take out -- whatever that is -- they're going to deplete, 22 okay -- in the not too distant future they're going to deplete 23 all of their gravel resources down there, so that's the reason 24 they're -- they're moving to the other 200 acres to the west. 25 MR. WALTERS: Okay. GADDIS COURT REPORTING 210-681-5851 34 1 COMMISSIONER MOSER: Now whether or not they 2 continue to sell from there and have an office there and crush 3 and sort and do whatever they do to gravel, I don't know. 4 I'll let them speak to that. 5 MR. WALTERS: Maybe they'll explain that at the 6 town -- 7 COMMISSIONER MOSER: They will explain that. 8 MR. McKENZIE: So it's -- the penetrations is 9 what the 74-60 will address. And it shouldn't be an issue 10 with that because if you will notice right now when you drive 11 down the road, there are some 40-foot oak trees right out in 12 the middle of that pasture. There's a whole row of them. 13 There's 40-plus. Because if you look at the power poles, some 14 of them are taller than the power poles. So, I'm just looking 15 at it from the road. So I don't think -- well, our engineer 16 said it wouldn't be an issue. So... 17 COMMISSIONER MOSER: Okay. 18 MR. McKENZIE: A point was brought up -- I don't 19 -- how much do you want me to go into this, Steve? 20 MR. LIVERMORE: Let's share information. 21 MR. KING: Go ahead. 22 MR. McKENZIE: There was a concern about water 23 and a habitat for wildlife. And that's a concern. It is. 24 But conversely, if you will look around at all of the airports 25 in the United States that have water around them or right at GADDIS COURT REPORTING 210-681-5851 35 1 the end of their runway, it's pretty phenomenal, especially if 2 you look in Florida. The other place is -- probably 3 collectively in this room, all of us have landed at Love Field 4 hundreds of times. Some of us flying ourselves. And if you 5 land on 1-3 right or 1-3 you -- that, like, is not 200 feet 6 from the end of the roadway. So -- 7 MR. LIVERMORE: True. 8 MR. McKENZIE: And that's been there for 9 decades. 10 So just to kind of address the water issue. I 11 mean, I'm not -- 12 COMMISSIONER MOSER: You're concerned about 13 water (unintelligible). 14 MR. McKENZIE: I'm not pro or con. I'm just 15 stating the fact and that's a fact. 16 Other than that, Steve, I don't have anything 17 else. 18 COMMISSIONER MOSER: I would also -- just to cut 19 to the chase and expedite things, I would encourage you to 20 contact Martin Marietta directly, okay, about the 74-60, just 21 to make sure that they know about it. 22 MR. McKENZIE: Is that all right? 23 MR. KING: Yeah. I have the girl's number that 24 does -- 25 COMMISSIONER MOSER: Okay. GADDIS COURT REPORTING 210-681-5851 36 1 MR. KING: -- the public relations -- the head 2 of the public relations department. I have her card. 3 MR. McKENZIE: I would be happy to. That's a 4 great idea. 5 COMMISSIONER MOSER: Just go for it. 6 MR. McKENZIE: Okay. 7 MR. LIVERMORE: That -- does -- by doing that, I 8 guess they're really protecting themselves from future 9 objections that might arise for unapproved constructions. And 10 that doesn't really affect us. It really affects their right 11 to do that -- do something there; is that correct? 12 MR. McKENZIE: Yes, sir. Yes, sir. And 13 something that parallels this, and we all -- 14 MR. LIVERMORE: But we all get drug into the 15 fight at that time. 16 MR. McKENZIE: When we -- Our Lady of the Hills, 17 is that the high school up there? 18 UNIDENTIFIED SPEAKER: Our Lady of the Hills. 19 MR. McKENZIE: Okay. When they built that, they 20 came down here and visited with me about it. And I directed 21 them and helped them file a 74-60 because they were going up. 22 And it passed -- they were fine. So just as a point of 23 reference. 24 COMMISSIONER MOSER: Okay. Good. 25 MR. KING: Anybody else have anything else on GADDIS COURT REPORTING 210-681-5851 37 1 that? 2 Okay. Item 4E, Building 19 (Paint Hanger) 3 Upgrades and paving. Bruce? 4 MR. McKENZIE: Thank you, Steve. 5 This is a spread sheet, and I'm -- all of the 6 data is on it. I'm not going to read it to you and do like 7 some folks do with a PowerPoint and read it all to you. This 8 is three ways we can turn that paint hanger into a productive, 9 possibly money-making operation. Leave it like it is now and 10 build a road and lease it for T-hangers. We can take the 11 walls out, build the roads and all the ancillary things that 12 we need to do and store aircraft in it. Or do all of the 13 above and bring the electrical up to code. The cost is 14 48,000, 73, and 103. 15 The ROI's -- these are all approximations, 16 gentlemen. I'm pretty close on the material. And this is 17 taking some assumptions. One of the assumptions is that our 18 owners will do the road work and the paving for us, and I'm 19 assuming we're using $3.18 a square foot. I had to arrive at 20 some -- some assumptions before I could move forward with 21 this. So, that's where I derived my numbers. I used the 22 numbers that we use now. 23 So that being said, if you want -- 24 COMMISSIONER MOSER: What's you're ROI? 25 MR. McKENZIE: -- to digest this. GADDIS COURT REPORTING 210-681-5851 38 1 It's -- well, if we just use it for T-hangers 2 and build the roads, it's about three -- three-and-a-half 3 years. 4 COMMISSIONER MOSER: Okay. 5 MR. McKENZIE: And if we take the walls out and 6 just store in it, it's two-and-a-half years. 7 COMMISSIONER MOSER: Uh-huh. 8 MR. McKENZIE: And if we do everything, which is 9 going to cost about $103,000 of materials, it will take about 10 three years and three months, something like that, because 11 we're going to be getting more -- 12 COMMISSIONER MOSER: Can you -- what's -- what's 13 the annual revenue with those ROI's and those investments? 14 MR. McKENZIE: 31,000 -- it's $14,400 if we just 15 use it for a T-hanger. 16 COMMISSIONER MOSER: Okay. 17 MR. McKENZIE: If we open it up, it's $31,800. 18 MR. WOOD: Do you have this sheet? 19 COMMISSIONER MOSER: Maybe it's in the sheets. 20 UNIDENTIFIED SPEAKER: It has it all down there. 21 COMMISSIONER MOSER: I'm sorry. I apologize. 22 MR. McKENZIE: It's $31,800 and that's -- 23 COMMISSIONER MOSER: Thank you, Bill. 24 MR. WOOD: You're welcome. 25 MR. McKENZIE: -- under the assumption of $3.18 GADDIS COURT REPORTING 210-681-5851 39 1 a square foot. 2 MR. LIVERMORE: So the difference is there's 2.3 3 years versus roughly 3.3 years -- or 3.25. Is -- there's just 4 less work to be done -- 5 MR. McKENZIE: Yes, sir. 6 MR. LIVERMORE: -- in the middle -- middle 7 option. 8 MR. McKENZIE: Yes, sir. 9 MR. KING: Could you walk me through each one of 10 those scenarios? A T-hanger. How do you make a T-hanger out 11 of a square building? 12 MR. McKENZIE: Because it's already cut up into 13 four -- 14 MR. KING: So you're going to leave the walls 15 and just -- so when you say T-hanger, you're going to rent it 16 out -- 17 MR. McKENZIE: Yes, sir. 18 MR. KING: -- you're going to basically rent it 19 out as a partitioned hanger. 20 MR. McKENZIE: Put a single -- 21 MR. KING: Have four -- 22 MR. McKENZIE: Just put four airplanes in there. 23 MR. KING: So four different -- four different 24 guests could rent -- 25 MR. McKENZIE: Yes, sir. GADDIS COURT REPORTING 210-681-5851 40 1 MR. KING: -- each little spot. 2 MR. McKENZIE: Correct. 3 MR. KING: Correct? 4 MR. McKENZIE: Yes, sir. 5 MR. KING: And who pays for the electricity? We 6 do? 7 MR. McKENZIE: That would be -- they're going to 8 have -- I assumed that they would pay for the electricity. 9 MR. KING: Okay. Okay. 10 MR. LIVERMORE: In all instances? 11 MR. McKENZIE: Yes. Yes. 12 MR. LIVERMORE: I mean the T-hanger people 13 aren't going to pay for any -- 14 MR. McKENZIE: Here's why. Because of the 15 Brinkman Hanger, we learned that we need to let them pay for 16 the electricity. 17 MR. LIVERMORE: Yeah. 18 MR. McKENZIE: We learned a lesson there. 19 MAYOR PRATT: Are you going to put a meter on 20 each one of the -- 21 MR. McKENZIE: We'll have to. 22 MAYOR PRATT: That's the only way you could do 23 it. 24 MR. McKENZIE: We would have to. 25 MAYOR PRATT: How does that -- GADDIS COURT REPORTING 210-681-5851 41 1 MR. LIVERMORE: I'm sorry. I thought you 2 said -- I thought you were talking about paying for the 3 construction of any electricity. You're talking about the 4 monthly bill. 5 MR. McKENZIE: Yes, sir. The monthly bill. 6 MR. LIVERMORE: Yeah. 7 MR. McKENZIE: And right now we pay the monthly 8 bill on the T-hangers here, which is, what, $20 a month or 9 something? 10 MS. DUNCAN: Yeah. 11 MAYOR PRATT: So, therefore, you would have an 12 increase of rent, theoretically, if you did T-hangers there 13 because they would be paying -- paying their own electricity 14 versus we pay the electricity on the 12 -- or on the others. 15 MR. McKENZIE: And I increased them each $25 a 16 month on that Paint Hanger and that's why -- 17 MR. KING: What do -- what do we do on the 18 Brinkman Hanger? Who's paying for the electricity there? 19 MR. McKENZIE: We do. That's over in another 20 three-and-a-half years I hope. 21 MR. WOOD: I mean, most of the T-hangers hardly 22 use any. Turn the light on once a month. 23 MR. McKENZIE: Twenty to thirty dollars a month. 24 MR. WOOD: It's minimal. So what -- what's 25 going on with Brinkman? Is that -- are they using a lot more GADDIS COURT REPORTING 210-681-5851 42 1 electricity? 2 MR. McKENZIE: There's air conditioners down 3 there. One of our tenants has an office and -- what do you 4 call it, Kirk? 5 MR. KING: A spa? 6 MR. McKENZIE: Basically. 7 MR. LIVERMORE: A what? 8 MR. KING: I don't know what it is. I've never 9 seen it. 10 MR. GRIFFIN: I know what you're talking about. 11 It's got -- 12 MR. McKENZIE: It's got a nice facility in 13 there. I mean, it's a very comfortable place for passengers 14 to wait and -- 15 MR. KING: A waiting room. 16 MR. McKENZIE: There you go. Thank you. 17 MR. KING: Or lounge. Lounge. 18 MR. McKENZIE: And the power stays -- the air 19 conditioner stays on in there and the heater. It's -- it's 20 climate controlled. I mean, it runs all the time. 21 COMMISSIONER MOSER: So, Bruce, on your -- where 22 it's an open hanger, that's -- that's the better cash flow and 23 better return on investment. 24 MR. McKENZIE: Uh-huh. 25 COMMISSIONER MOSER: Is that -- if you do that, GADDIS COURT REPORTING 210-681-5851 43 1 can that still be -- can you still put four aircraft in there 2 if you wanted to? 3 MR. McKENZIE: You can probably put more in 4 there because you've got the walls out. 5 COMMISSIONER MOSER: Okay. You can still do it, 6 they just wouldn't have the privacy -- 7 MR. McKENZIE: Yes, sir. 8 COMMISSIONER MOSER: -- of a -- of their own 9 hanger. 10 MR. LIVERMORE: Then you have -- then you might 11 have to have someone pulling them in and out. 12 MR. McKENZIE: That's where I was going. 13 MR. WALTERS: As far as the four individual 14 units, the doors are in good shape, the hanger doors? 15 MR. McKENZIE: They work, Corey. 16 MR. WALTERS: They work. 17 MR. McKENZIE: They open and close. They're 50 18 years old, but they open and close. 19 MR. GRIFFIN: They close real easy. 20 MR. WALTERS: Are they automated? 21 MR. GRIFFIN: No. 22 MR. McKENZIE: No, you just -- but they're 23 pretty easy to push open. It's not a -- it's a good question. 24 But there doesn't seem to be an issue with them. We've opened 25 all of them. GADDIS COURT REPORTING 210-681-5851 44 1 MAYOR PRATT: If that's -- 2 MR. GRIFFIN: We were over there a month ago. 3 MAYOR PRATT: If that's the case, you have the 4 difference between the doors there and the different -- the 5 way they operate, you may -- there may be an argument made 6 that that should be less rent compared to the -- 7 MR. McKENZIE: That's up to -- well -- 8 MAYOR PRATT: Just saying. 9 MR. McKENZIE: Our sliding doors are 275 on our 10 T-hangers here. 11 MR. GRIFFIN: Yeah. These hangers are bigger. 12 So essentially it's just -- it would be a bigger version of 13 our old T-hangers, and we're charging 275. So we're talking 14 300. 15 MR. McKENZIE: To pay -- 16 MR. GRIFFIN: And you can get a lot bigger 17 airplane in. So... 18 MR. WALTERS: Bruce, which -- 19 MR. McKENZIE: Sir? 20 MR. WALTERS: -- under which scenario do you 21 feel like we have an immediate demand and an immediate user? 22 MR. McKENZIE: We -- we now have -- we had 23 another gentleman walk in yesterday and gave us a deposit. So 24 we've got 14 or 15 on our waiting list now. 25 COMMISSIONER MOSER: Golly. GADDIS COURT REPORTING 210-681-5851 45 1 MR. McKENZIE: And -- 2 MR. LIVERMORE: With deposits. 3 MR. McKENZIE: Yes, sir. 4 MS. DUNCAN: With deposits. 5 MR. McKENZIE: And we -- we have been told by 6 one of our tenants, and he was in this meeting, and he said he 7 would pay us the going rate of 3.18 a square foot if we indeed 8 made it a maintenance hanger and brought it up to -- to code. 9 MR. GRIFFIN: Brought the electrical up to code. 10 MR. McKENZIE: Now, if the gentleman will put 11 that in writing, maybe that's something to look at. Like 12 Commissioner Moser said, it may be something that we -- 13 MR. WALTERS: Was that under Dave Bryant's 14 proposal? 15 MR. McKENZIE: Yes, sir. 16 MR. WALTERS: Okay. 17 MR. LIVERMORE: Does Rizo -- what's happened to 18 Rizo? 19 MR. McKENZIE: I spoke to them last week to see 20 if they wanted on the agenda and they are not yet ready to 21 present their business plan. He's still talking to 22 contractors. I understand two more contractors need to come 23 and look at this site and give him an artist rendering and a 24 price -- an approximate cost to build a hanger like he needs. 25 MR. LIVERMORE: Okay. GADDIS COURT REPORTING 210-681-5851 46 1 MR. WALTERS: And then it seems like to me -- I 2 mean, let's just say you had a discussion with Dave and got a 3 commitment from him for a proposal for item three as the 4 maintenance hanger. The question is, and it seems like -- and 5 we've got -- and we see the pay back here. Obviously I don't 6 think we have in our budget to make the improvements to these 7 items, so it's really a city and a county question. 8 COMMISSIONER MOSER: Uh-huh. 9 MR. WALTERS: Would y'all be willing to fund 10 half each of the -- 11 COMMISSIONER MOSER: We would sure entertain it, 12 yeah. Yeah. I think -- I think coming forward -- that's what 13 we said before. You know, come forward with a proposal and -- 14 and we'll certainly entertain it. I can't commit. 15 MR. WOOD: I was going to comment that besides 16 the numbers that Bruce has put down -- and thanks for doing a 17 good job on that -- there's some intangible benefits to 18 opening up that part of the airport for the taxiways. 19 Also, if we had somebody doing maintenance, and 20 I don't know if -- if Dave would be this -- the right guy for 21 this, but if we had other services offered at the airport that 22 previously were not offered, that's a benefit as well. 23 COMMISSIONER MOSER: Absolutely. And -- and the 24 other thing to not forget is we, the city, county and Airport 25 Board, let Mooney go to hell in a handbasket -- GADDIS COURT REPORTING 210-681-5851 47 1 MR. KING: Right. 2 COMMISSIONER MOSER: -- by not paying attention 3 to it. And this thing is going to do the same. Okay. So 4 it's up to the property owners, the owner -- the city and the 5 county to do something with the stuff that they own. Okay. 6 And rather than just -- you know, we've got the responsibility 7 to take care of the building. 8 MR. WALTERS: Well, I -- you know, I'm not 9 asking -- I don't think the Board is asking here for a 10 commitment. 11 COMMISSIONER MOSER: Right. 12 MR. WALTERS: But I'm just asking that based on 13 the numbers that you see, from both the county and the city, 14 do you feel like you would look upon it favorably? 15 COMMISSIONER MOSER: Yes. 16 MR. WALTERS: Because if you don't, there's no 17 point in us continuing any further. 18 COMMISSIONER MOSER: Yes, we would look at it 19 favorably. 20 MAYOR PRATT: We'd look at it favorably 21 depending on what year you're going to try to put it in. It 22 makes a big difference. We're working on -- on '17 right now. 23 And a few months down the road, the closer we get to October, 24 we're going to be looking at '18. 25 MR. WALTERS: Well, I think we're probably -- GADDIS COURT REPORTING 210-681-5851 48 1 you know, we're just in January now, so I can certainly see 2 that if we were to get a commitment from Dave Bryant, or even 3 if we -- and let's say we didn't, that we would go ahead and 4 maybe look to make it, you know -- move that hanger in the 5 direction of a T-hanger. So it probably would be in 2000 -- 6 this year. 7 COMMISSIONER MOSER: Yeah, I -- you know, I -- 8 MAYOR PRATT: Not '16. 9 MR. LIVERMORE: It's not a lot of money. 10 MR. WOOD: Another -- 11 MAYOR PRATT: Not in '16. 12 COMMISSIONER MOSER: Yeah, in '16. 13 MR. WALTERS: Why not? 14 MAYOR PRATT: Well, first of all, our budget is 15 already done for '16. 16 MR. WALTERS: Okay. So are you saying that we 17 can't even entertain this until '17? 18 MAYOR PRATT: We can entertain it, but I'm 19 telling you that this -- we have to look and see where the 20 money is going to come from. 21 MR. WALTERS: Okay. Well, I guess -- 22 COMMISSIONER MOSER: And that's the same, we'd 23 have to see where the money is going to come from. 24 MR. KING: Sure. 25 MR. WALTERS: So the answer is if y'all want to GADDIS COURT REPORTING 210-681-5851 49 1 do any of these three, you cannot do it this year in 2016? 2 COMMISSIONER MOSER: That's not true. 3 MAYOR PRATT: That's not what I said. 4 MR. WALTERS: I'm just asking. 5 MAYOR PRATT: I said that we would have to look 6 and see where the money was going to come from. 7 MR. WALTERS: Okay. 8 MR. LIVERMORE: The good news is it's not a 9 budget-busting number. 10 COMMISSIONER MOSER: The simple answer is we 11 haven't considered. 12 MR. WALTERS: Sure. 13 COMMISSIONER MOSER: We consider things all the 14 time like this. 15 MR. WALTERS: Okay. 16 COMMISSIONER MOSER: Okay. As needed. 17 So I think what you need to do is put it on the 18 table -- 19 MR. WALTERS: Right. 20 COMMISSIONER MOSER: -- for us, let us look at 21 the pros and the cons, the same way with the city, and see 22 what we can do now, this year or next year or whenever. Okay. 23 But we've got a responsibility to do something. Okay. And I 24 don't know if this -- there's all kind of things that Brenda 25 doesn't let us do; she's that kind of person. GADDIS COURT REPORTING 210-681-5851 50 1 (Laughter) 2 MR. WALTERS: Well, I'm just -- and it sounded 3 adversarial and I'm not trying to put you on the spot. I'm 4 just trying to get an idea of what our options are and when. 5 MAYOR PRATT: I can say that the city looks upon 6 anything that brings in additional revenue very favorably. 7 MR. WALTERS: Okay. 8 MAYOR PRATT: Okay. But there's also some 9 situations where right now we have some assets that need dire 10 attention that were not on this year's budget. 11 MR. WALTERS: Sure. 12 MAYOR PRATT: Do I feel like that this would 13 supercede that? I doubt with counsel that it would. 14 MR. WALTERS: Okay. 15 MAYOR PRATT: Okay. I'm trying to -- to be 16 honest here -- 17 MR. WALTERS: And that's what we want. 18 MAYOR PRATT: -- and very realistic. That, you 19 know, it's -- it's -- it depends on how much money and where 20 it's going to come from. 21 COMMISSIONER MOSER: There you go. 22 MR. WALTERS: And I appreciate that. That's all 23 we're trying to get an idea of is what can we do and when. 24 MAYOR PRATT: Yeah. 25 MR. WALTERS: And I appreciate that. That gives GADDIS COURT REPORTING 210-681-5851 51 1 us a little help with our direction. 2 COMMISSIONER MOSER: It's really simple. Bring 3 it forward as soon as you can. 4 MR. WALTERS: Yeah. 5 COMMISSIONER MOSER: And I think Jack would 6 agree with that. The sooner -- the sooner we see it, the 7 sooner we -- 8 MAYOR PRATT: I can give you an example. We're 9 going in -- we're going into budget workshop the first week in 10 February -- well, the first of February -- the first part of 11 February. 12 MR. WALTERS: Right. 13 MAYOR PRATT: So once we get through that 14 workshop and that's done, that's the '17 budget. 15 MR. WALTERS: Okay. 16 MAYOR PRATT: Okay. 17 COMMISSIONER MOSER: Bring it forward as soon as 18 possible. 19 MR. WOOD: Let me -- 20 MR. WALTERS: Thank you very much. 21 MR. WOOD: Let me ask a question or point out 22 something I think -- and you correct me if I'm wrong. If we 23 went ahead with Option 1, that -- that would -- anything we do 24 there would not impact a later decision to do Option 2 or 25 Option 3. GADDIS COURT REPORTING 210-681-5851 52 1 MR. McKENZIE: No. 2 MR. GRIFFIN: Right. 3 MR. WOOD: So if you wanted to get started on 4 the simplest one with the least amount of money, the 5 T-hangers, you could. And later on, if you wanted to use 6 Options 2 or 3 -- 7 MR. GRIFFIN: And the -- and the supporting data 8 there is we've got 14 people looking for hangers right now. 9 COMMISSIONER MOSER: Very good. 10 MR. GRIFFIN: So we can probably get four to use 11 that facility. 12 MR. McKENZIE: If we get a road put in there. 13 MR. WOOD: And if we build more T-hangers in 14 subsequent years we can open that building up for -- 15 MR. McKENZIE: Exactly. 16 MR. WOOD: -- maintenance. 17 MR. LIVERMORE: That's a good idea. 18 COMMISSIONER MOSER: Good suggestion. Good 19 idea. 20 MR. KING: Except you have to kick those people 21 out. 22 MR. WOOD: If they had some nicer T-hangers to 23 move into they might. But you're right. 24 MAYOR PRATT: Corey, just a reminder, our -- our 25 year -- our financial year is October 1. So -- GADDIS COURT REPORTING 210-681-5851 53 1 MR. WALTERS: Right. 2 MR. KING: Right. 3 MAYOR PRATT: Not January 1. 4 MR. WALTERS: Right. 5 COMMISSIONER MOSER: Everybody's is. 6 MR. KING: We're not -- but we're not talking -- 7 I mean, how much is y'all's budget a year? What's your budget 8 a year, Tom? 9 COMMISSIONER MOSER: 20 million plus. 10 MR. KING: What's your budget? 11 UNIDENTIFIED SPEAKER: 23 million. 12 MR. LIVERMORE: This isn't a budget buster. 13 MR. KING: A 43 million dollar budget and we're 14 talking -- 15 COMMISSIONER MOSER: Look, just -- just bring it 16 forward. 17 MR. KING: I go to a lot of meetings. 18 COMMISSIONER MOSER: I'll speak for -- out of 19 place. We've got flexibility. 20 UNIDENTIFIED SPEAKER: Let's do it. 21 MR. KING: Everybody has a little flexibility. 22 MR. WOOD: We need to forward something to them. 23 MR. McKENZIE: We'll forward something to you. 24 MR. KING: Absolutely. 25 One question, Bruce: Where is the material GADDIS COURT REPORTING 210-681-5851 54 1 costs for these roads? Is that in here? 2 MR. McKENZIE: Yes, sir. 3 MR. GRIFFIN: It's in the -- 4 MR. KING: We had talked about -- 5 MR. McKENZIE: It's what it is. It says -- 6 MR. KING: We -- let me just throw this scenario 7 out to you. We had talked about maybe taking supply -- in the 8 past we've done this with projects where we've taken -- we 9 paid for the material, okay -- 10 MR. McKENZIE: Right. 11 MR. KING: -- out of our contingency. We have 12 some -- we don't have any projects on the horizon that are 13 going to take away from our cash balance -- 14 MR. McKENZIE: No, sir. 15 MR. KING: -- and stuff like that. So, you 16 know, if you took -- in any of these scenarios, if you took -- 17 if you let the airport pay for the materials, and then -- I 18 was just looking at Scenario 2. If you went with -- the 19 difference between Scenario 2 and Scenario 3 is one year's 20 rent. It's basically the year of -- in other words -- 21 MR. LIVERMORE: Uh-huh. 22 MR. KING: -- the difference between 2 and 3 is 23 one year's rent. 24 If you ask -- let's say you did have someone who 25 said I want -- I'd love to put a maintenance hanger in there. GADDIS COURT REPORTING 210-681-5851 55 1 You know, if you asked them to forward you one year's rent -- 2 prepay one year's rent, you basically cover the difference 3 between Scenario 2 and 3. 4 MR. McKENZIE: Right. 5 MR. KING: And then with the -- the airport 6 paying for the materials -- and I don't know what the 7 materials are in this thing. Do you know how much the 8 materials are? Which one of those are -- 9 MR. LIVERMORE: Well, they're 31,000 I think. 10 MR. KING: 31,000? 11 MR. LIVERMORE: I think. Is that right? 12 MR. GRIFFIN: Yeah. Repave apron and -- 13 UNIDENTIFIED SPEAKER: 41,000. 14 MR. LIVERMORE: Well, there's a little more in 15 the third one. 16 MR. KING: Now you're down to about $70,000 -- 17 excuse me. You're down to about 20 or $30,000. I mean 18 there's several scenarios you can work this through -- 19 MR. McKENZIE: That's right. 20 MR. KING: -- that reduce the cost to the city 21 and the county down to 15 or $20,000 a person -- let's say 25 22 even. So let's -- let's look at a couple of different 23 scenarios. Let's see if we can get -- first of all, let's see 24 if we can get a commitment on Level 3 to see -- if there's no 25 commitment on level 3, then we move to level -- do we -- we GADDIS COURT REPORTING 210-681-5851 56 1 look at 2 and 1. 2 MR. LIVERMORE: I don't think 2 is -- in my 3 estimation 2 would kind of be Option 3 because we're going to 4 have to have somebody pulling planes in and out. 5 MR. KING: Well, I don't -- I don't think 6 that's -- that's completely true. If someone -- I think in 7 Option 3 you're going to get aircraft storage in Option 3. 8 It's not only going to be maintenance. It's going to have 9 aircraft storage in it. I know of at least two or three 10 airplanes that probably would depart for that area over there 11 if -- if it became a maintenance facility, and there's 12 probably a few more that would depart. So there would be -- 13 you would -- you would be easing the congestion over on this 14 side of the facility here and -- and making room for other 15 airplanes or having the option -- I mean I just know in 16 discussions with -- with Dave on the maintenance hanger, I 17 mean, it would not be a complete maintenance hanger. It would 18 have -- 19 MR. WALTERS: Have storage. 20 MR. KING: I mean he would move his airplane 21 over there I know for sure, his Hawker, and would probably 22 move a few more over there. So it probably would alleviate 23 some of the congestion and open up some spots for some of 24 those people that are on lists and stuff like that. 25 MAYOR PRATT: Can I ask a question here? GADDIS COURT REPORTING 210-681-5851 57 1 MR. KING: Yeah. 2 MAYOR PRATT: On your cost there when you talk 3 about maintenance, have you run that through the city for 4 re-purposing and what it would cost? 5 MR. McKENZIE: No, I have not. 6 MAYOR PRATT: Because when you put in 7 maintenance, you're probably looking at a fire extinguisher. 8 MR. McKENZIE: The reason I -- well, it's just 9 10,000 -- 10 MR. KING: It's not -- it doesn't have to be 11 sprinkler. 12 MR. McKENZIE: It doesn't have to be sprinkler. 13 MR. LIVERMORE: If it's under 12,000 I think is 14 the cut off. 15 MR. McKENZIE: I put together, Mayor, what the 16 Board -- you know, what they asked me to do. But I'm not 17 going that direction until somebody -- for example, if this 18 one gentleman says, "I'm interested," then I'm going to point 19 him to City Hall and say, "Okay. You need to go talk to the 20 Fire Marshal." 21 MAYOR PRATT: Okay. I just wanted to make sure 22 that that could be added cost because of re-purposing of the 23 building. 24 MR. McKENZIE: And it will be, I'm quite sure, 25 for a myriad of reasons. GADDIS COURT REPORTING 210-681-5851 58 1 MR. KING: But we've talked -- we've discussed 2 this with him before and it's basically the electrical is the 3 biggest problem. 4 MR. McKENZIE: Yes. 5 MR. KING: Bringing the electrical up to -- 6 MR. McKENZIE: Up to code. And I've got that in 7 here. 8 MAYOR PRATT: Okay. 9 MR. KING: And we went through the same thing 10 with the -- 11 MAYOR PRATT: I just wanted to make sure that 12 the -- 13 MR. McKENZIE: I learned my lesson the last 14 time. Once we get it set, then point them down there. 15 MR. KING: We've been down that road many times. 16 MR. McKENZIE: We have got that -- good point. 17 MR. KING: I think that's a good point, but I 18 don't think the cost -- the electrical costs are built 19 into this -- into this figure. 20 MR. McKENZIE: The third one. 21 MR. KING: They're in the third one. And the 22 electrical costs are the -- the majority of it. 23 So let's -- let's -- let's get together and do a 24 couple of scenarios, Bruce, as far as how we can fund this 25 now. You know, what -- what the different funding mechanisms GADDIS COURT REPORTING 210-681-5851 59 1 would be. Like I said, if we -- first of all, we could talk 2 to somebody and see if anybody is interested in Number 3. 3 MR. McKENZIE: That's the first thing. Okay. 4 MR. KING: And if that goes away, then we'll 5 just -- then we'll look at 1 and 2. 6 MR. McKENZIE: Okay. 7 COMMISSIONER MOSER: Bring -- bring it forward. 8 MR. KING: And then we'll decide what we want to 9 do. 10 COMMISSIONER MOSER: If nothing else, you can 11 bring it forward for discussion -- 12 MR. KING: Discussion. 13 COMMISSIONER MOSER: -- even if we don't take 14 any action. 15 MR. KING: I mean, it's -- it's a little 16 different than most projects that the city and the county do 17 in that -- and I guess that's just because we do different 18 business out here a little bit different. We're not in the 19 bus- -- we're in the business of supplying a need to our 20 customers, fixed -- filling a need for our customers. But 21 we're also in the business of making revenue. You know, most 22 all of our projects try to be revenue generated. We generate 23 revenue off of buildings, off of fuel sales, off of everything 24 like that. And so I think when we bring a project to the city 25 and the county, it's taking a -- an asset that the city and GADDIS COURT REPORTING 210-681-5851 60 1 the county own, and we're offering to put revenue on it. 2 COMMISSIONER MOSER: Absolutely. 3 MR. KING: So I don't think the -- 4 COMMISSIONER MOSER: I think to put it in 5 perspective, the city and county together -- what did we pay? 6 74,000 -- contributed 74,000 this year. 7 MR. WALTERS: Combined. 8 COMMISSIONER MOSER: Combined. So this is 9 approximately reducing that by half on the way to zero in a 10 hurry. 11 MR. KING: Exactly. 12 MR. LIVERMORE: That's a good point. 13 MR. KING: Okay. We'll get something together 14 for you guys and at least we can debate it in open -- 15 MR. LIVERMORE: That's a good point. 16 MR. KING: -- in open session. 17 MAYOR PRATT: Can I add one more thing? 18 MR. KING: Yeah. 19 MAYOR PRATT: I would like to also see -- 20 because we had talked -- or you had talked about adding 12 21 more T-hangers, or X-number of T-hangers. Will you still have 22 the funds to do that if you spent the funds -- if you -- you 23 know, if you paid for your portion of that? 24 MR. KING: Oh, I think so. 25 MAYOR PRATT: How is it going to -- I know. But GADDIS COURT REPORTING 210-681-5851 61 1 I -- I guess where I'm coming from is I need to see something 2 on paper rather than words. 3 MR. KING: Yeah. I mean our cash balance we -- 4 I think we've -- we've been able to fund $100,000 for the -- 5 MR. McKENZIE: We've got about $300,000 in cash. 6 MR. KING: We funded $100,000 for the roof 7 project and we paid for the consultant on that -- 8 MR. McKENZIE: That's correct. 9 MR. KING: -- out of our pocket. That didn't 10 come from the city or the county. We funded -- we're funding 11 the -- the materials for the taxiways and stuff over here at 12 Mooney. 13 MR. McKENZIE: The paving. 14 MR. KING: The paving and everything. 15 MAYOR PRATT: I'm not questioning all of that. 16 I'm just saying -- 17 MR. KING: And we have more -- more cash in 18 there than we did -- when we did all that. 19 MR. LIVERMORE: He just wanted to make sure we 20 think of that, too. 21 MAYOR PRATT: I didn't want to put that at risk 22 of not being done. 23 MR. KING: Hey, I agree a hundred percent. But 24 also, you know, a bird in the hand is -- 25 COMMISSIONER MOSER: Worth two in the bush. GADDIS COURT REPORTING 210-681-5851 62 1 MR. KING: -- worth 20 in a bush. 2 MR. WOOD: How long do we have to wait for TxDOT 3 if we want to do more T-hangers? 4 UNIDENTIFIED SPEAKER: Two years. 5 MR. McKENZIE: Well, we can do it -- if we've 6 got the money it -- 7 COMMISSIONER MOSER: Go the TxDOT approach. 8 MR. McKENZIE: So -- 9 MR. KING: Yeah. 10 MR. McKENZIE: We will -- I didn't want to get 11 off on that road because it's not on the agenda. 12 MR. KING: Okay. Anyway, that's -- those are 13 all good points. We'll get something together and figure out 14 what the best proposal to make to the city -- and we may make 15 two different proposals under two scenarios for you guys. 16 COMMISSIONER MOSER: Sure. 17 MR. KING: And let you kind of look at it 18 because of the -- with the return on the investments. 19 COMMISSIONER MOSER: Good work, Bruce. 20 MR. McKENZIE: Thank you. 21 MR. LIVERMORE: Do we have to wait until the 22 next meeting to make such a proposal or can we empower -- 23 MR. KING: We can get Bruce, with direction from 24 members, I believe, can -- you know, what we're looking at, 25 Bruce. I'm trying to figure out where we could -- just GADDIS COURT REPORTING 210-681-5851 63 1 different -- different financing -- 2 MR. McKENZIE: I would like for a board member 3 to -- to sit down and tell me what -- how you want to do this. 4 MR. KING: Okay. 5 MR. McKENZIE: Before -- and then -- because I 6 can't present to the two governing bodies until I know what 7 the -- the issues of the Board are exactly. 8 MR. LIVERMORE: You're pretty good at that. 9 MR. KING: Well, stop in and visit. 10 MR. WOOD: Take Kirk. 11 MR. LIVERMORE: Kirk is pretty good at this. 12 (Laughter) 13 MR. KING: Well, I'll give you my opinions on 14 it. 15 MR. WOOD: Get your plan and e-mail the rest of 16 them. 17 MR. McKENZIE: Yeah. Yeah. 18 MR. KING: And Kirk can do the same thing. Any 19 of the Board members can give an idea. 20 MR. McKENZIE: Okay. 21 MR. KING: Just don't e-mail each other. 22 MR. McKENZIE: Yeah. Just e-mail me. 23 Thank y'all. 24 THE COURT: Okay. Item 4F, the Airport 25 Authority. GADDIS COURT REPORTING 210-681-5851 64 1 Someone had -- I don't know where it even came 2 from. Someone had asked about that at one of our last 3 meetings about the Airport Authority. And many years -- how 4 many years ago? 5 MR. McKENZIE: 1970. 6 MR. GRIFFIN: 1970. 7 MR. KING: 1970. '70? 8 MR. McKENZIE: Yes, sir. May of 1970. 9 MR. KING: Wow. That's a long time ago. 10 MR. O'FIEL: They had an election. I think it 11 passed by 54 percent of the providers. It just took 37 years 12 before they populated it. There was some issue with that 13 between -- with what the city thought, what the county 14 thought. Rex Emerson, then acting County Attorney requested 15 an AG opinion from Greg Abbott. They responded and said the 16 Airport Authority is good, it's valid, continue forward. 17 MR. KING: Right. 18 MR. LIVERMORE: So it still is -- 19 MR. KING: I think the question was -- was -- 20 we're only -- we're only one of two cities, I believe, in the 21 State of Texas -- 22 MR. McKENZIE: I think we're the only one. 23 MR. KING: -- that hasn't ever populated theirs. 24 I mean there's an Airport Authority obviously down in San 25 Antonio and Dallas and everything else. But with -- I think GADDIS COURT REPORTING 210-681-5851 65 1 the question was whether it was still in effect or whether it 2 would have to be put back to a vote of the people; is that 3 correct? 4 MR. O'FIEL: Right. I think the argument was 5 since it wasn't populated that -- 6 MR. KING: And when you say "populated," you 7 mean they -- there's certain criteria. You had to -- you had 8 to establish a board -- 9 MR. O'FIEL: Uh-huh. 10 MR. KING: -- certain things that had to be 11 done. 12 MR. O'FIEL: Uh-huh. 13 MR. KING: But since that wasn't done, the 14 question was whether it all went away. 15 MR. O'FIEL: Right. It does not. 16 MR. KING: But it did not go away. 17 MR. O'FIEL: Right. 18 MR. KING: It is still there and it's still -- 19 COMMISSIONER MOSER: Still viable? Is that what 20 you're saying? 21 MR. KING: It's still viable. It's still 22 sitting out there -- as far as the State of Texas is 23 concerned, it's still sitting there. And since it was 24 approved by the citizens, it's still a -- a -- an active -- an 25 active -- it's an authority that's not ever been put into act. GADDIS COURT REPORTING 210-681-5851 66 1 Correct? 2 MR. O'FIEL: Correct. 3 MR. KING: So I thought our owners might want to 4 know that in case something ever happens. 5 Okay. Thank you, Patrick. I appreciate it. 6 Any comments? 7 COMMISSIONER MOSER: So, Patrick, that was in 8 1970? 9 MR. O'FIEL: Yes, sir. Here's the AG opinion if 10 you want those numbers. GA -- Greg Abbott -- 0621. Requested 11 back in 2008. 12 COMMISSIONER MOSER: Okay. Thank you. 13 MR. KING: Okay. Item 5A, General Update. 14 MR. McKENZIE: This last week we replaced -- as 15 you recall, a little over a year ago we put the solar 16 reflecting taxiway lights up. We had about seven of them go 17 out, out of a couple of hundred. And the gentleman that put 18 them in came back this week and made -- fixed -- fixed them 19 all back. Met his warranty commitment. 20 MR. KING: How long -- was that it, a one-year 21 warranty? 22 MR. McKENZIE: It's a year. 23 But they've done amazingly well so far. But 24 they -- they work well at night. And those of you that's been 25 out here at night and flown in -- GADDIS COURT REPORTING 210-681-5851 67 1 MR. WALTERS: What's the life of those? 2 MR. McKENZIE: About six years is what they're 3 telling us. 4 MR. WALTERS: Okay. 5 MR. McKENZIE: Six to seven. Right in there. 6 We had some problems with one of the doors out 7 at the Brinkman Hanger. It ended up being an electrical 8 relay. It was on the opposite side from you, Corey. And we 9 got that repaired last week. So that's working again. 10 I got a terminal door on this end -- on the west 11 end that's broken; the closing mechanism is leaking and the 12 door is slamming, so that's why you see the sign on the door 13 right now. But the parts are ordered and they should be here 14 within a week or two. 15 I've been asked if we can move the February 15th 16 meeting to February the 17th, which is on a Wednesday. If 17 that would fit -- 18 MR. LIVERMORE: I'm out that entire week, so 19 those two dates are -- neither one are good for me. 20 MR. McKENZIE: Anybody else have an issue to 21 moving it to Wednesday at 8:30 rather than Monday? On the 22 17th. 23 COMMISSIONER MOSER: Yeah, that's not a problem 24 with the county. 25 MR. McKENZIE: Wednesday's are usually good. GADDIS COURT REPORTING 210-681-5851 68 1 MR. KING: That's a Wednesday? The 17th is a 2 Wednesday? 3 MR. McKENZIE: Wednesday on the 17th. Yes, sir. 4 MR. KING: I'll have to get back with you. 5 MR. LIVERMORE: Is there any chance of moving it 6 to the next week? 7 MR. McKENZIE: It's the pleasure of the Board. 8 MR. KING: The 15th is President's Day. That's 9 why you're moving it? 10 MR. WALTERS: I requested -- I was going to be 11 out on the 15th. I asked -- 12 MR. KING: I think a lot of people will be out 13 on the 15. 14 MR. WALTERS: Yeah. 15 MR. KING: I'll be out on the 15th, too, I'm 16 sure. 17 MR. WALTERS: So that's why I asked if we could 18 move it to the 17th. 19 MR. KING: Yeah. 20 MR. WOOD: That's not a bad idea to check the 21 calendar and see if any of these Mondays fall on a holiday. 22 MR. McKENZIE: That's why I asked on the last 23 meeting if we could have this meeting on a Monday, too. But 24 some things came up. You know, it's -- 25 MR. KING: Why don't we tentatively set it for GADDIS COURT REPORTING 210-681-5851 69 1 the 17th and everyone can check their calendar. I just need 2 to check with my wife and see if I have anything down. 3 COMMISSIONER MOSER: See if you're going to be 4 in the country. 5 MR. O'FIEL: If you move it to the next 6 Wednesday, I won't be available. 7 MR. McKENZIE: The 24th? 8 MR. O'FIEL: Right. If y'all need me. 9 MR. McKENZIE: On the 24th you won't be? 10 MR. O'FIEL: Will not. 11 MR. McKENZIE: But you are on the 17th? 12 MR. LIVERMORE: Is there any consideration for 13 the 22nd? Is that a -- 14 MR. KING: I don't know. 15 MR. McKENZIE: I'm here. It's up to y'all. 16 MR. LIVERMORE: How -- how does the 22nd or the 17 23rd look? Either one. 18 MR. WALTERS: 22nd is not good for me. 19 MR. LIVERMORE: Okay. Well, I'll take a lower 20 priority for that month because you guys accommodated me this 21 month. 22 MR. McKENZIE: Okay. So set it for the 17th? 23 MR. KING: Set it for the 17th right now and let 24 me check -- I'll see. I'll give you an e-mail. 25 MR. McKENZIE: Okay. And like I say -- like I GADDIS COURT REPORTING 210-681-5851 70 1 alluded to earlier when there was a question -- I think it was 2 from Ed -- about Mr. Rizo. 3 MR. LIVERMORE: Uh-huh. 4 MR. McKENZIE: He's still working on his 5 business plan. 6 MR. LIVERMORE: So he hasn't gone away. 7 MR. McKENZIE: Not to my knowledge. 8 MR. LIVERMORE: Okay. 9 MR. KING: Okay. 10 MR. McKENZIE: That's all I have, Steve. 11 MR. KING: What about with the Mooney roof? I 12 see the Mooney guy here. 13 MR. McKENZIE: They're still -- they're telling 14 me they're shooting for 1 April to be out. Is that reasonable 15 to you? 16 MR. DUTTON: I've really not seen a solid end 17 date. 18 MR. McKENZIE: I can see them up there right now 19 working. 20 MR. DUTTON: I've not got a solid end date. 21 Scott Boyle (phonetic) sends me a weekly "What did I do last 22 week and what am I doing this week." It's just ongoing right 23 now is all I can say. 24 MR. KING: So what's y'all's -- how is your 25 feeling over there? Is it -- GADDIS COURT REPORTING 210-681-5851 71 1 MR. DUTTON: It's moving along. 2 MR. KING: Are they moving too fast for you, you 3 think? 4 MR. DUTTON: No. It's moving along slowly is 5 what it's doing. 6 MR. KING: Slowly? 7 MR. DUTTON: Yeah. 8 MAYOR PRATT: Well, we had a lot of rain this 9 year that we didn't expect, too. 10 MR. KING: Right. 11 MR. LIVERMORE: Good year to test that new roof. 12 MR. DUTTON: They're working on the large 13 service center hanger right now. 14 MR. KING: They're working on which one? The 15 service center hanger? 16 MR. McKENZIE: Yeah. You can see them up there 17 right now. 18 MR. DUTTON: They have done a good job on quite 19 a few of the buildings there and were dry. You know, we had 20 some rain -- 21 MR. KING: Yeah. I was going to ask you, so 22 when the rains came on the buildings that they've done -- 23 MR. DUTTON: They were dry. 24 MR. KING: They were dry? 25 MR. DUTTON: Yeah. GADDIS COURT REPORTING 210-681-5851 72 1 MR. McKENZIE: It worked out well? 2 MR. DUTTON: Yeah. 3 MR. KING: It was all dry. How about the hammer 4 house? Is it finished? 5 MR. DUTTON: Yeah. 6 MR. KING: And it's dry? 7 MR. DUTTON: It's dry. 8 MR. McKENZIE: We're getting there. 9 MR. DUTTON: Yeah, it's getting there. We 10 appreciate it. 11 MR. McKENZIE: We're getting there. Because I 12 know you're waiting on the paving. I have some materials 13 stockpiled over there already, but I can't -- I don't want to 14 do anything until those guys get out of town. They'll tear it 15 all up after they pave it. 16 MAYOR PRATT: Also the temperature, too. 17 MR. DUTTON: A couple of weeks on the service 18 center and then I can get -- then the area should be safe to 19 pave. 20 MR. McKENZIE: And I'll -- we'll stay in touch 21 with everyone. 22 MAYOR PRATT: And, you know, if you finish in 23 April, that's -- that's about when the temperature is at the 24 temperature for paving. It's too cold to pave now. 25 MR. KING: Exactly. GADDIS COURT REPORTING 210-681-5851 73 1 So everything else is okay over there? 2 MR. DUTTON: Yeah. 3 MR. KING: Y'all are happy with the work so far 4 that's been done? 5 MR. DUTTON: Yeah. 6 MR. WOOD: Have you maximized your employees 7 now? 8 MR. DUTTON: We're up to 161 right now. 9 MULTIPLE SPEAKERS: Wow. 10 MR. KING: And I saw you flew the -- 11 MR. DUTTON: The M-10? 12 MR. KING: -- the M-10 flew. 13 MR. DUTTON: Flew in California, yeah. 14 MR. KING: I saw pictures of it flying. 15 COMMISSIONER MOSER: Oh, really? Fantastic. 16 MR. KING: What are you flying -- what are you 17 flying here next week? Tom sent me an e-mail last night. 18 MR. DUTTON: There's going to be an 19 announcement. It will be February. We've got product 20 development that's going on. 21 MR. KING: Oh, I know. Okay. So they're going 22 to fly that thing? Okay. 23 MR. DUTTON: I really can't talk too much about 24 it to be honest. 25 But, no, there's a lot of good stuff going on. GADDIS COURT REPORTING 210-681-5851 74 1 I go out to California to our Chino plant every month with Tom 2 and what have you. 3 MR. KING: Uh-huh. 4 MR. DUTTON: And we're actually doing work here 5 now in support of that facility in California, making parts 6 and pieces. And the plan is to bring that product here in 7 about another year and a half and start an assembly line here. 8 MR. LIVERMORE: That's a product that doesn't 9 exist? 10 MR. KING: No, no. This is the M-10. 11 MR. LIVERMORE: Oh, okay. 12 MR. DUTTON: It's an M-10 that's in development. 13 We've just done one flight so far. 14 MR. KING: Right. 15 So what about -- 16 COMMISSIONER MOSER: When did you fly it? 17 MR. DUTTON: The 23rd of December. 18 COMMISSIONER MOSER: The 23rd of December. 19 Okay. 20 MR. KING: Yeah. I saw a You Tube video of it. 21 It looked really nice. 22 MR. DUTTON: Yeah. 23 MR. KING: Okay. That's interesting and good 24 news. 25 MR. LIVERMORE: Any -- any news on future -- on GADDIS COURT REPORTING 210-681-5851 75 1 this -- I'll call it the plastic plant. I know that's not the 2 material. 3 MR. DUTTON: The composite -- 4 MR. LIVERMORE: Composite. Yeah. 5 MR. DUTTON: -- facility here? 6 MR. LIVERMORE: Yeah. 7 MR. DUTTON: Well, the -- you know, the M-20, 8 which we build currently here, has some composites on it. We 9 have subcontracted some of that. I just hired a master's 10 degree level composites manufacturing engineer and we're going 11 to start developing what we have here to improve it. We're 12 not sure whether we will expand into a composite building just 13 yet. We may subcontract some of those parts and just do 14 assembly here. 15 MR. KING: Right. 16 MR. DUTTON: Because there's also a plan to 17 duplicate some assembly in China as well. 18 MR. KING: Sure. Thank you very much for the 19 update. I appreciate it. 20 MR. WOOD: You heard what we're talking about on 21 Building 19. 22 MR. DUTTON: Yeah. 23 MR. WOOD: And trying to use it. Is that going 24 to impact you guys at all? 25 MR. DUTTON: Well, it drew my attention there GADDIS COURT REPORTING 210-681-5851 76 1 because one of the big problems that we have at Mooney right 2 now is that we don't have our own paint shop for painting 3 airplanes. We send them over to Hondo to Corrigan or we send 4 them to a little place called Specialized Aero in San Marcos. 5 It used to be Tejas. 6 MR. KING: Right. 7 MR. DUTTON: And we've had a rash of quality 8 problems where we get the plane back and we have to fly it 9 back for sanding down and repainting and stuff. We're looking 10 at other paint shops in San Angelo and one in Waco, as well, 11 to use. Ideally, though, once our production rate gets to 12 where it needs to be, we need to have something here. 13 MR. WOOD: So do you want to be Option 4 on our 14 Building 19? 15 MR. DUTTON: Well -- 16 COMMISSIONER MOSER: On that subject, one of the 17 things that -- that Tom -- when I brought this up, they said 18 we hope that you don't -- we don't want to influence you on 19 paint area but we hope you don't do something that would 20 preclude us in the long range. So that's something to 21 consider as you look at those options, you know, tearing out 22 all of the -- tearing out the walls is not going to -- of 23 course, you can put them back in the long term, too. 24 MR. DUTTON: That building would need a real big 25 overhaul to become a paint shop. GADDIS COURT REPORTING 210-681-5851 77 1 COMMISSIONER MOSER: Okay. All right. 2 MR. WOOD: I just thought I'd bring it up. 3 MR. DUTTON: It's a good point. 4 I actually walked over and took a look at it a 5 while back thinking about whether we could use that 6 possibly -- I think what we would do, though, is do a fresh 7 building over there. Take an existing building and -- 8 MR. WOOD: It would probably cost less. 9 MR. DUTTON: It may well do. 10 MAYOR PRATT: Fix a pad and built off the pad. 11 MR. DUTTON: Or even more preferably might be to 12 partner with someone who wants to put a paint shop here. 13 MR. WOOD: Well, that would be good, too. That 14 would be good for the airport. 15 MR. DUTTON: Because our assembly rate now -- we 16 just ramped up our assembly rate because we're expecting some 17 good things to happen once we've announced some product 18 improvements. We need to be sending an aircraft to the paint 19 shop every two weeks. 20 MR. KING: Wow. 21 MR. McKENZIE: Two a month. 22 MR. DUTTON: And we are struggling right now to 23 get on the schedule with Corrigan and Specialized Aero. And, 24 you know, if we don't have our window to get in there, that 25 delays that airplane being completed. GADDIS COURT REPORTING 210-681-5851 78 1 MR. WOOD: How busy are the Corrigan brothers? 2 MR. KING: Very busy. 3 MR. DUTTON: Very busy. 4 MR. WOOD: Maybe they need a second location. 5 MR. DUTTON: Well, I was over there talking to 6 the Corrigan brothers a while back and they said, hey, if you 7 guys ever thought about putting in something here, they would 8 like to be, you know, a share of that. 9 It's difficult. 10 MR. KING: They thought about building -- at one 11 time they thought about building a hanger specifically for -- 12 MR. DUTTON: Yeah. 13 MR. KING: -- a single engine aircraft to build 14 -- to paint just a small aircraft in it. 15 MR. DUTTON: And I heard the other day that they 16 were thinking about getting that actually completed. 17 MR. KING: Yeah. 18 MR. DUTTON: I think when Mooney hibernated, 19 they stayed off that plan. 20 MR. KING: Yeah. Well, they've got to deal with 21 the TBMs out of California now. They're painting a ton of 22 those TBMs over there. 23 MR. DUTTON: A Mooney M-20 is about $17,000 to 24 paint. Some of the bigger aircraft, like this airplane out 25 here, you know, you're talking about 60, 70, 80,000 to paint. GADDIS COURT REPORTING 210-681-5851 79 1 So we're kind of low on the priority list. But they do a good 2 job though. 3 MR. KING: They do a great job. Yeah. 4 MR. LIVERMORE: In your -- in a perfect world, 5 would you rather contract that out or take it into house 6 again? 7 MR. DUTTON: We would like it in house. We 8 could -- we could turn the airplane quicker and probably do a 9 better quality job on it ourselves. 10 MAYOR PRATT: You also don't have to worry about 11 the ferrying trouble. 12 MR. LIVERMORE: The what? 13 MAYOR PRATT: Ferrying the aircraft. 14 MR. DUTTON: Flying them back and to. You know, 15 we fly them out there and then we have to send the little 16 plane to pick it up. Two pilots. It's a mess. 17 MR. KING: It's a mess. 18 MR. DUTTON: And then the other thing is the 19 weather, of course. You know, we flew to San Marcos the other 20 week to drop an airplane off and we had to turn back because 21 of the fog. You know, things like that. 22 MR. KING: That's really crazy. 23 MR. DUTTON: Yeah. We would like to do it on 24 site if we could. 25 MR. KING: Thank you very much for your update. GADDIS COURT REPORTING 210-681-5851 80 1 I appreciate it. 2 Anybody else have anything else? 3 All right. All in favor of -- a motion to 4 adjourn? 5 MR. WOOD: I move we adjourn. 6 MR. KING: Second? 7 MR. LIVERMORE: Second. 8 THE COURT: All in favor. 9 (The motion carried by unanimous vote, 5-0) 10 MR. KING: We're adjourned at 9:45. 11 Thank you, ma'am. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 GADDIS COURT REPORTING 210-681-5851 81 1 STATE OF TEXAS * 2 COUNTY OF KERR * 3 I, SANDRA RANDLE JACKSON, Certified Shorthand 4 Reporter for the State of Texas, do hereby certify that the 5 above and foregoing contains a true and correct transcription 6 of my stenotype notes taken at the time and place heretofore 7 set forth. 8 WITNESS MY OFFICIAL HAND this the 27th day of 9 January, 2016. 10 11 /s/ Sandra Randle Jackson Sandra Randle Jackson 12 Texas CSR #3478 P.O. Box 505 13 Junction, Texas 76849 512-618-8271 14 CSR No. 3478 Expires: 12-31-16 15 16 17 18 19 20 21 22 23 24 25 GADDIS COURT REPORTING 210-681-5851