Commerce Park Commission Meeting Minutes – June 15, 2009
DRAFT
GROSSE ILE MUNICIPAL AIRPORT
AIRPORT COMMERCE PARK COMMISSION
GROSSE ILE TOWNSHIP 2ND FLOOR CONFERENCE ROOM
Monday, June 15, 2009
REGULAR MEETING – 7:00 PM
PRESENT: Peter Kantz (Liaison), Chris Mans, Jim Weaks (Vice Chairman), Ron Moran
(Chairman), Walter Stoll, Gregg Barton
EXCUSED:
ALSO PRESENT: Derek Thiel (Airfield/Commerce Park Manager) Tim Michalak (Airport Intern)
1. Pledge of Allegiance
2. Call to Order:
Moran called the meeting to order at 7:00 p.m. in the Grosse Ile Township Hall, 2nd Floor
Conference Room.
3. Approval of Agenda – additions/deletions: Kantz motioned to approve the agenda as
presented with support from Weaks. All Ayes. Motion Carried.
4. Approval/Correction to Minutes - Regular meeting of May 18, 2009. Weaks motioned to
approve the meeting minutes of May 18 as presented with support from Kantz. All Ayes.
Motion Carried.
5. Financial Reports:
May 2009
Thiel: Adjustments to outstanding invoices from $90,000 to $80,000 due to finance software,
some items were double counted. May revenues at 17.61%, expenditures at 11.78%. Still
working out bugs in overdue invoices.
Weaks: Cash changed by $30,000, more than billing.
Thiel: Revenues were over expenditures.
Weaks: Referencing aging report, are you saying there is nothing over 30days?
Thiel: There are some accounts on payment plans. This can be explained that anything over
90days got transferred into current. Issue with software transfer.
Stoll: Is there any reason we don’t have renters pay automatically from their checking account?
Thiel: If they elect to do it.
Stoll: Why don’t we make that a requirement?
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Commerce Park Commission Meeting Minutes – June 15, 2009
Thiel: It is elective so they have control over their accounts. We could try to make it a condition
of a lease. About 40% t-hangars and 10% other tenants are in payment plans.
Moran: I don’t see how we could make this a requirement at this time. We can suggest it, but
can’t require it.
Kantz: When is this accounting issue going to be worked out?
Thiel: I will check in on that
Stoll: We do have a policy for past due?
Thiel: I can get you that report.
Barton: Is there special terms for the auctioneer?
Thiel: Utilities bills were coming in late. So we held off invoicing. All are in, and they issued a
check for $21,000. The difference between the $21,000 and $31,000 they owe us they wanted us
to cover with their $10,000 deposit. Township had an issue with that because they applied
deposit against the rent, but may need that deposit to clean up. As condition of cashing check,
the auctioneer would be released of all obligations. So we currently are holding the check. I
expect to get payment.
Moran: Any idea of the outstanding items costs?
Thiel: They have a piece of machinery that should be gone soon. $3,000 at most, mostly just
house-keeping. The only big outstanding issue are the too pits.
Weaks: Is there a master list of what needs to be done?
Thiel: I went through with Kantz, and Township Treasurer. I sent that list to them a month ago.
They want to do a walk through again to verify if it was the result of the Auction Company or
Iverson.
Weaks: Any other year-end adjustments?
Thiel: The audit is starting right now. I am not aware of any.
Motion made by Weaks with support from Mans to receive and place on file the May 2009
financial report as submitted. All ayes. Motion carried.
6. Manager’s Report:
a. Commerce Park Road Weight Limit Ordinance
Thiel: Township Board adopted this ordinance. Requires a month of publishing. Doesn’t
become effective until July. I just wanted you guys to know it passed. It was a joint effort
between DPS Commission, LSL Planning, Airport Office. It ended up being an amendment
from an ordinance on file.
Moran: Who does enforcement?
Thiel: Police Department.
Kantz: When they work on Groh Rd. and Meridian intersection, are they going to use this a the
alternate route.
Thiel: we had a meeting this morning for alternate routes. They are using the Commerce Park,
and the main route is going to be down Intrepid to Saratoga, and Midway out. And going east on
Groh you would use Rucker.
Moran: How long is that project going to last?
Thiel: Two weeks.
b. Grosse Ile Island Fest Recap
Thiel: I would like to thank everyone involved. Island Fest was a great success this year, with
a lot of that attributed to the help of the interns, Tim and Jessica.
Moran: When you say it was a success, is that measured by the amount of people, or money
made?
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Commerce Park Commission Meeting Minutes – June 15, 2009
Thiel: The financials haven’t come in yet, but it measured by the amount of people.
Moran: Anyone have any counts?
Thiel: The initial numbers I got says that attendance was up. The vendors that the Airport had,
had their best year they ever had. Complaints were down. Airport wasn’t hurt financially
from event.
Kantz: Derek, can you explain how the Airport makes money off the event.
Thiel: We don’t make money off of it. But it costs us in personnel time. We are happy if we
break even. I believe that we did this year. Overtime costs are a big part. We get a chunk of
the profit of the airplane and helicopter rides. The township has a $1,200 allowance for aircraft
related activities, because we give the guys that come in to give helicopter and plane rides
hotel rooms and rental cars. We generally never make money.
Kantz: The number of booths in Hangar 1 was up. Weather was great. One of the better
Island Fests.
c. Airport Management Privatization RFQ
Thiel: we put together an advertisement for Airport management. I spoke with the Township
Manager, he informed me because it was an issue of changing the way the township does
business with one of it departments that it would have to go to the Township Board prior to
advertising. So the next step is to go to the Commerce Park Commission to vote to pass it
along to the Township Board, who can vote yay or nay on it. Bigger policy changes have to go
in front of the Township Board.
Moran: I would like to go out of order, make discussion item 9 a part of what we are doing
right now.
Weaks: Does the Airport have study sessions with the Township Board?
Kantz: Never had one. We have had limited sessions discussing small items.
Weaks: I think we are mixed in where we need to go. Last thing I want to do is to recommend
it, and they shoot it down. Derek and I put together information, picking 2 private airports, 2
public airports. I developed what kind of attributes should be used, such as length,
capabilities, services, volumes, and what is their structure, and staffing levels. In reality the
results are mixed in how they are run, and what is their key revenue producer. Fuel sales
seemed to be key of revenue. In terms of volume, we are at low end of airport volume, but that
could be a characteristic of our location. Ann Arbor had small staff, but had ten times fuel
volume we do. Seven items listed at the bottom of document. See benchmark study
attachment. Our transient traffic is at the low end. Our structure has 3 people, low end. My
conclusion is that there is no compelling reason to seek privatization. Our goal wasn’t to do
nationwide survey, so we tried to find similar and local airports.
Thiel: I think assumptions and data looks good. When Weaks sent it out, the community
population has a big impact. More population, more individuals who fly. Social-economic
status was not really taken into consideration. If there is more businesses around airport, more
business traffic. Private airport managers were not interested in giving any information about
their operation, especially when it came to profit and financing. If the Township had private
enterprise, they may have trouble getting the openness they currently have.
Moran: When it says privatized airport, does that mean it’s a government owned, but privately
managed.
Thiel: All are government owned privately managed.
Moran: is there a way to increase fuel sales?
Thiel: depends upon price, amount of traffic you get, if there is a draw, you’ll get more fuel
sales.
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Commerce Park Commission Meeting Minutes – June 15, 2009
Moran: assuming we don’t have a draw, would decreasing the cost of fuel bring more pilots.
Thiel: I think it’s a factor in the difference between the competition. Keep in mind the margin
of profit for fuel is low. Unless we can get the cost of the fuel farm down, or change providers
to get the cost down. You get a lot of business traffic in Ann Arbor, such as U of M, who uses
a lot of Jet A for their helicopter. If you can get an anchor tenant, your fuel sales are going to
be higher.
Moran: Has Tom Burkhart called you?
Thiel: I haven’t talked to Tom since the last meeting he was at.
Moran: Then I would assume this is not a high priority for him.
Stoll: Is there such a thing as a ‘destination airport’?
Thiel: Sure. If you have people going to a specific place may fly in. Such as Sandusky,
people go there for Cedar Point. The Airport Advisory committee is trying to get some
regulations involving airspace lax to increase traffic.
Stoll: Does anyone fly to Put in Bay on Charter basis?
Thiel: Brooklynair used to. There is a company that operates out of Ohio, they fly in and pick
up and take you somewhere, but it is more costly.
Moran: I think we need to make a decision here tonight and get it off our list of things to do.
And if we decide to do this, Derek needs to approach Dale and Board to move things forward.
If not, lets stop wasting our time, and move on.
Stoll: Do we agree with Dale’s thought process? Do we have to take it to the Board?
Thiel: It is my understanding that we have to.
Kantz: We do not have to do it for an RFQ. But we would have to have a strong case to prove
to the Board that it would benefit. I don’t see the business case for it right now.
Weaks: The Airport Advisory Committee take a look at this at all?
Thiel: Al Anderson and some other members were informed when the process of looking into
it started and they said it was something that they may be interested in getting more
information about, but they have not voted on it.
Stoll: The original thought process is that if we can make the Airport even instead of losing
money, which would be the reason to do it. But we no information that would show us it
would happen, and we haven’t talked to enough people to know that it would happen.
Thiel: Companies that are involved in airport management are much larger airports because of
the opportunity of generating revenue. If we could do better with revenue, the company would
do the same. If we can’t do it, why can’t we.
Moran: If I understand, we do not want to go forward with the RFQ, unless Berkhart has some
sort of issue. We should bring him in and have him give us some idea of what he is talking
about.
Thiel: We could come up to him and say, we have these qualifications requirements, can you
meet these? If we would advertise, this is what we would advertise.
Moran: We should be paying attention to everyone, not just Berkhart. We should look at it to
see if it is the right thing to do for the Airport, not is it the right because Berkhart wants it.
Stoll: Can we shelve it and bring it back up again when more information comes in.
Moran: I want a motion on record that we made a decision, and give reasons.
Motion to table until further information is available by Weaks, supported by Stoll. All ayes.
Motion Carried
d. Grosse Ile Airport Snow Removal Equipment Bid
Thiel: In our 5-year plan that was adopted after the FAA funding cycle had us going out for a
bid. The FAA gives us $100,000 to do work on the airfield or buy equipment. The Airport has
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Commerce Park Commission Meeting Minutes – June 15, 2009
to cover a 2.5% share. This piece of equipment is slated for this year. The Airport does not
receive additional discretionary funding is on 3 or 4 year cycle, which is how we paid for
taxiway project. This year our entitlement plan has us getting a piece of snow-removal
equipment. Our airport engineers who put together the bid for piece of equipment that they,
the Airport Office, and Maintenance department believe would meet our needs for snow
removal for now and the next 5-10 years. This is for a bi-directional tractor. The schedule is
attached. We need to get the piece of equipment before snowfall. It is my feeling as well at
Maintenance department’s feeling that all the snow removal needs would be met, and would
provide other benefits above and beyond snow removal. Bi-directional means that it can be
operated from either end, by spinning the seat. It can operate both accessories from both ends.
Jim had some questions prior to the meeting as to why we need a bi-directional tractor over a
font-end loader. They are fairly similar to structure. On a front-end loader, everything needs
to be operated from the front, except the backhoe. Bi-directional does all these things work on
both ends. It can also be used to mow grass. Bi-directional allows for hydraulics from the
center portion of the unit, which allows us to boom mounted mower, allowing us to reach over
fencing. We have the ability to just turn their seat around, instead of going back to the shop to
swap accessories. They do this a lot, especially around the lights. As far as pricing
differences, to get comparable unit your looking at $90,000, while the unit we have specked
out for bi-directional is $120,000. The airport already has a loader-backhoe, so we do not want
to duplicate. The Township is on tab for 2.5% of the $120,000. Many airport across the state
use this machine. New Holland is, as far as we know, the only manufacturer of a bi-directions
tractor. We got the competition for the bid between the dealers. There are dealers for the
accessories as well, for the sweeper, blower. Per the FAA, 85% of the tractor has to be made
in the USA, which this unit would qualify for. URS handles all the bidding, and specs. We
hope to take delivery by the end of October.
Weaks: I believe if you took off the word bi-directional, it would invite more manufacturers,
because having that as a requirement automatically excludes some manufacturers, and I don’t
think that is the right thing to do. I would like to know what the other airports are using the
piece of equipment for.
Thiel: About a month ago, Tim, Myself, and Maintenance department went up to Grand
Rapids and we checked out their units, which they use for snow removal and cutting grass,
which is what we want to use our unit for. It utilizes these purposes. When you get into bidirectional that is actually a key benefit/component of the tractor.
Weaks: I find that incredibly hard to believe. You don’t bi-directional snowplow, its pretty
much one way. Do we have the expertise to do the maintenance on these things?
Thiel: Once we purchase the unit, it becomes our responsibility to maintain. So we want
lower operational costs. In the specs there is included service packages that must be included
with the unit, which includes common ware items. It covers the first 2 years the unit. We
increased the dealer distance from the Airport, limited to an 8-mile distance from the Airport to
keep the service issue in mind. We do currently run New Holland tractors, and maintenance is
familiar with the machinery. There are two New Holland service centers near by.
Weaks: From my stint in Riverview running a landfill for 12 years, the staff would want
Caterpillar tractors. They would write the specs to exclude everyone else. It was never fair or
objective bid. The operators liked the Cats, but it wasn’t the in the best interest of the taxpayer
to exclude some one. You write the spec so tight that you’re only going to for that one. The
bi-directional is the same thing. If this was more generic. If we narrow this so we r competing
dealer to dealer, it doesn’t make any sense. And there may be people out there that could come
back with a lower cost, better service package. We can’t just exclude people.
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Thiel: From my standpoint, a bi-directional tractor suites our needs the best. I don’t believe
we are precluding anyone from bidding if they can produce a bi-directional tractor that meets
these specs.
Weaks: But you precluded them when you say bi-directional.
Thiel: It’s not a unit that everyone makes. We would just spec it out, and that would be the
case. But there pretty much is one bi-directional tractor maker. It is an unfortunate reality, but
it is reality.
Weaks: That’s why your staff and I am not. Cops used to come to us all the time: ‘we need
Expeditions, we need all these big vehicles’ because we need them for certain areas we go.
But they needed a Crown Vic, and a F-150. It creates tension between what the staff wants,
who want the best. Versus what is available, tax payer dollars. You take out ‘bi-directional’,
you have my agreement.
Thiel: I see what your talking about. My guys like Case, because they have a Case loader.
And how DPS likes Cats. Each person has his or her preference. That did not factor into our
decision. We wanted something that could accomplish what we wanted it to do, and make sure
we had a unit that met the most amount of needs that we had, and this was the unit that did
that.
Weaks: I understand it from a staff’s perspective, but I believe that we need to have a more
open bid.
Stoll: Do we know that two pieces of equipment wont do both jobs? Would it be better to
have two?
Thiel: the funding is for one piece of equipment, not two, so the funding limitations prevent us
from doing that.
Kantz: The grant specifically says snow remove equipment.
Thiel: We are planning on using this for mowing. The FAA just issued a circular that these
pieces of equipment used for snow removal, can be used for other uses as long as it doesn’t
degrade the unit, and they considering mowing to not degrade the unit because it is better to be
mowing rather than sitting for 8 months out of the year.
Kantz: How do we use it as a mower?
Thiel: it requires a mower deck. The other portion of this, the bid is structured, when some
one bids on this unit they have the ability to price things a certain way. URS is making it clear
to the bidders that the tractor portion is being covered by FAA grant, while the mower deck to
see the cost. The bidders are to understand the difference between the mower deck and the
FAA funded tractor. This gives us the ability to get mower deck at lower cost combing it with
the tractor. You are looking at a $4,000- $6,000 less on the mower deck than you would
normally see. URS has done it before, and it is included just to check the price. The mower
deck is a total different issue. There is no doubt the department needs an additional mower
deck, it’s just an issue if we can afford it right now. It is an opportunity that would allow us to
get something we will need in the future at a lower cost.
Stoll: This is a articulating mower deck?
Thiel: No, it is a bat-wing mower deck. This is a tow behind mower. This unit can be utilized
to pull our existing mower deck. It’s advertised to come in the beginning of July.
Kantz: So when the quotes come in, how are we going to decide what is the low quote?
Thiel: it’s a line-item bid, so they would bid on each individual thing.
Kantz: What if some guy is highest on the tractor, but lowest on the mower deck?
Thiel: It depends, we would have to look at the bid requirements that the State and FAA put
out.
Stoll: How is that process handled at our end? Are we going to have a meeting?
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Commerce Park Commission Meeting Minutes – June 15, 2009
Thiel: It will be opened up downstairs, read allowed, the engineers and the airport will get
together and determine which is the lower bidder, or which one suits our needs the best. If you
don’t take the lowest bidder, you have to have a good reason. The FAA and State need to give
their approval. There are three different players; there are the State, the FAA, and we. The
state is the FAA in Michigan.
Stoll: So this commission has no say so once we pass this?
Thiel: As far as the mower deck is concerned, you have 100% authority over that. A far as the
tractor is concerned, the State is going to recommend yes, and we are going to recommend yes.
Kantz: The mower deck isn’t really a part of the bid.
Thiel: It is part of the bid. It is listed in there to get the prices. There is no obligation to buy.
Kantz: With the bidder thinking we are getting mower deck too, is that really a good bid
process?
Thiel: There is no cost to find out the cost of the mower deck.
Weaks: I understand from a staff’s perspective, but I think we are heading down the wrong
path. I think the right thing is to get rid of the bi-directional.
Stoll: You don’t know for sure that there is some one else that makes a bi-directional tractor.
There may be 2 or 3 companies.
Thiel: We selected a type of equipment that met our needs the best, and that was a bidirectional tractor meets my needs the best. I don’t care if some other company comes in and
meets our needs. It doesn’t have to be a New Holland. Granted these specs are like a New
Holland. The specs don’t have to be exactly met; they can go above and beyond. Maybe Cat
or Case can do it, or some one I have never heard of.
Weaks: But you are eliminating them because of the requirement of the bi-directional tractor.
Barton: can we write a preference into it, to not exclude anyone else?
Thiel: We could put out two different bids.
Weaks: I think some one other than a bi-directional tractor manufacturer needs a fair shot.
Thiel: if there tractor can do what a bi-directional tractor can do that’s fine.
Stoll: He doesn’t want bi-directional necessarily.
Mans: Put bi-directional or equivalent.
Moran: If you look at this, in reality it is 2.5% of our money. The rest of the money is coming
from a grant. So if something is $100,000 or a $120,000, paying 2.5% of the difference. Are
you OK with bi-directional or equivalent?
Kantz: Bi-directional isn’t a trade name; it just describes the function of the vehicle. I don’t
have a problem with bi-directional. At this time there is apparently only one manufacturer, but
if this is the type of tractor that the State, URS, the FAA, and us say we need, I would say bidirectional.
Action to Submit Bid as presented motioned by Kantz, supported by . Moran, Kantz,
Mans, Barton Ayes. Stoll and Weaks No. Motion Carried.
7. Action Items
a. Building 70 Lease Approval
Thiel: Currently that portion of that building is office space with a couple bathrooms. It has
been vacant for about 3 ½ years. In the meantime the Commerce Park has been paying utilities
on it. Over the past few months we have been approached about this building. This is the first
one to sign a memorandum. This is a landscaping business, and plans on putting in sliding door
of north side the building. And is going to need 300 sq ft outdoor storage space per township
zoning. He has expressed interest in more outdoor storage space, but would require another
lease. He is planning on requesting immediate occupancy of the facility.
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Commerce Park Commission Meeting Minutes – June 15, 2009
Moran: Under the owners responsibilities, any more information on the sidewalk that needs to
be installed such as the cost.
Thiel: It has already been completed for $200. The purchase order had already been signed
because of another possible tenant.
Moran: You haven’t given him any indication that we are going to give him any outside storage.
Thiel: yes, we talked about the possibility, and how it may or may not be located in that area.
Weaks: What’s his credit worthiness?
Thiel: We didn’t do a reference check or credit check, but we can make it a requirement for the
lease. He is a member of the GI Fire Department, and leases another building on West Jefferson
for his primary business.
Kantz: When will the utilities be separated?
Thiel: Last Thursday they came out to check the cost of separating the meters. I would expect to
get that back soon so we can make decision. We talked about having three separate meters for
the building, but it was still in question. You wanted me to research cost, and I will get the costs
this week.
Kantz: Can’t we give Derek (Thiel) permission to use a certain amount of money to do the
meters and not to exceed it so we don’t have to wait a month.
Thiel: It was about $3,000.
Kantz: Could give him $3,500.
Action to accept Lease and Management Agreement as presented, and Motion authorize the
Manager to not exceed $3,500 for meters (utilities separation), motioned by Weaks, supported
by Stoll. All ayes. Motion Carried
b. Hangar 1/ T-Hangar Incentive Program
Thiel: I wanted to bring some sort of incentive to get people in T-Hangars. We currently have 12 open.
After the 6 months, we would make more money because of the increase in rent if they are in T-Hangars.
The Airport Advisory Committee expressed interest. Usually Hangar 1 is easier to fill due to lower rates.
The intent would be only Hangar 1 tenants.
Weaks: We may need to put a time restriction on this one.
Thiel: They have to sign for full year, but get a deal the first 6 months. Offer it for 30 days.
Motion to enact Hangar1/ T Hangar Incentive Program by Mans, supported by Weaks. All ayes.
Motion carried.
8. Sub-Committee Reports:
a. Grosse Ile Duathlon
Kantz: There was a bug on the online sign up; we are extending the offer until June 21st. To get
the package, you have to turn in your confirmation to Derek or I and we can get you the package.
Update online and have public service announcement. 5 have registered, most people wait until
last minute.
b. Michigan Jets
Thiel: The 8th and 9th of August is Michigan Jets. We need some volunteers for that. Same crew
as the past couple of years
9. Discussion Items:
a. Airport Privatization Benchmarking Study
Reference: Managers report- c. Airport Management Privatization RFQ
11. Chairman’s Report:
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Commerce Park Commission Meeting Minutes – June 15, 2009
Moran: We need to start thinking long term about issues that we will have because of the empty
Iverson building. We have money for a couple years, but we can go through that really fast. We
need to put a plan in place.
Thiel: We are trying to bring tenants in. We have some ideas for short-term relief. We will
minimize our drawing out of the fund balance for this year
Kantz: We need to address the Tennis Center. We are not in the Tennis Business.
12. Public Comment:
None
13. Adjournment:
Motion to adjourn by Weaks with support from Barton at 8:37p.m. All Ayes. Motion
Carried.
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