BOARD OF DIRECTORS MEETING. Minutes of July 20, 2016

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1 BOARD OF DIRECTORS MEETING Minutes of July 20, 2016 The regular meeting of the Board of Directors was held in the first floor Conference Rooms 1A, 1B and 1C at 1 Aviation Circle. The Chairman called the meeting to order at 9:00 a.m. Thirteen Directors were present during the meeting: William Shaw McDermott, Chairman Barbara Lang Warner H. Session, Vice Chairman A. Bradley Mims Earl Adams, Jr. Thorn Pozen C. Charles Caputo William E. Sudow Michael A. Curto Nina Mitchell Wells Anthony H. Griffin Joslyn N. Williams Katherine K. Hanley The Secretary and Executive Management were present: John E. Potter, President and Chief Executive Officer Margaret E. McKeough, Executive Vice President and Chief Operating Officer Jerome L. Davis, Executive Vice President and Chief Revenue Officer I. MINUTES OF THE JUNE 15, 2016 BOARD OF DIRECTORS MEETING The Chairman called for the approval of the Minutes of the June 15, 2016 Board of Directors Meeting, which were unanimously adopted.

2 II. COMMITTEE REPORTS a. Business Administration Committee Warner Session, Co- Chair Mr. Session reported that the Business Administration Committee had met that morning. The Committee had approved four staff recommendations -- an agreement for the Metropolitan Washington Airports Authority (Airports Authority) to reimburse Delta Air Lines (Delta) for Hangar 10 improvements, an enabling project for the construction of the New North Concourse at Ronald Reagan Washington National Airport (Reagan National); an award of a contract to supply solid runway deicer at both Airports; an award of contracts for unarmed security guard services at Washington Dulles International Airport (Dulles International) and the Dulles Toll Road (DTR) Administration Building; and an award of a sole source contract to the District of Columbia's Water and Sewer Authority to furnish sanitary sewage service for Dulles International. Mr. Session stated that he would offer the resolutions later in the day s meeting. b. Dulles Corridor Committee Kate Hanley, Co-Chair Ms. Hanley reported that the Dulles Corridor Committee had met June 15. The Committee had concurred with the pre-solicitation terms for snow removal services for the DTR. Staff had presented the quarterly Dulles Corridor Metrorail Project cost and schedule update for Phase 1 and the Dulles Corridor Metrorail Project monthly cost and schedule update for Phase 2, as of April 30. c. Finance Committee Earl Adams, Co-Chair Mr. Adams reported that the Finance Committee had met June 15. Staff had presented the Financial Advisors Reports and the monthly financial reports for both enterprises. d. Human Resources Committee Joslyn N. Williams, Co-Chair Mr. Williams reported that the Human Resources Committee had just ended its special meeting. The Committee had approved the staff recommendation to amend the Airports Authority Statement of Functions. Mr. Williams stated that he would offer a motion later in the day s meeting.

3 e. Risk Management Committee Barbara Lang, Co-Chair Ms. Lang reported that the Risk Management Committee had last met June 15. GKA, P.C. had presented its communications with the Committee for the year ended December 31, The Committee had also met in executive session to further discuss the communications and the audits of the Airports Authority retirement plans and matters that involve proprietary or confidential information of vendors or of the Airports Authority. f. Strategic Development Committee Nina Mitchell Wells, Co- Chair Ms. Wells reported that the Strategic Development Committee had met that morning. The Committee had approved two staff recommendations: approval of Loudoun County's request for an easement across Dulles International for improvements to Carters School Road and approval of an amendment to the Airport Use Agreement and Premises Lease (Airport Use and Lease Agreement) for Dulles International. Ms. Wells stated that she would offer the resolutions later in the day s meeting. III. INFORMATION ITEMS a. President s Report Mr. Potter reported that Airports Authority staff, airline partners, the Transportation Security Administration (TSA), U.S. Customs and Border Protection (CBP), concessions, and ground transportation providers are working closely together to serve the record number of travelers during a busy summer travel season. Mr. Potter also reported that the Airports Authority worked collaboratively with the Washington Metropolitan Area Transit Authority (WMATA) during the period of track closures at Reagan National to make the alternative services as seamless as possible for passengers. He further reported that the track closures at Reagan National had ended, and the additional WMATA bus service and other options to get passengers around the repair zones had worked well. Mr. Potter stated that passengers had been very complimentary of the alternative services and information provided by the Airport and WMATA employees to help them to navigate the disruptions. He thanked and congratulated Airports Authority staff, Paul Wiedefeld, WMATA s General Manager and

4 Chief Executive Officer, and WMATA staff who helped to ensure that the Airport s customers continued to have a good travel experience during the period of track closures. Mr. Potter referenced the amendment to the Airport Use and Lease Agreement that the Strategic Development Committee had approved that day. He stated that the Board would consider the amendment later in the meeting to extend the agreement for Dulles International through 2024, consistent with the terms for Reagan National. He emphasized that the amendment, which is an example of another successful partnership, would affirm United Airlines (United) hub operation at Dulles International, which is very important to the Airport's future. Mr. Potter reported that the terms of the amendment will also satisfy an important requirement from the Commonwealth of Virginia as it relates to the $50 million in financial assistance over the next two years, which was approved by the Virginia General Assembly and signed by Governor McAuliffe. He thanked United and all the other Dulles airline partners for their spirit of collaboration and confidence in the Airport. Additionally, Mr. Potter congratulated the partners and Margaret McKeough on this accomplishment. To further acknowledge the Commonwealth's support of Dulles International, Mr. Potter reported that Governor McAuliffe and several Northern Virginia General Assembly members would hold a ceremony the following day at Dulles International to highlight the $50 million assistance package and the contribution that the Airport makes to the regional economy. He hoped that Directors would attend the event. Mr. Potter also reported that Congress had approved a one-year extension of the Federal Aviation Administration (FAA) Reauthorization Bill, which does not include additional slots or beyond-perimeter flights at Reagan National. He thanked the members of the Virginia and District of Columbia delegations for their strong bipartisan support on the important issue. Mr. Potter reported that the FAA Reauthorization Bill includes provisions relating to airport security, including expansion of the TSA pre-check program, enhancing security screening processes for passengers, baggage and cargo, as well as further strengthening security in the non-public areas of the Airport. Mr. Potter explained that these enhancements are particularly important in the aftermath of recent airport attacks in Belgium and Turkey as the airport industry works vigilantly together to ensure the safety and security of passengers and employees. He noted that Ms. McKeough would offer additional details

5 about the FAA Reauthorization Bill later in the day s Executive Vice President s report. Mr. Potter reported that the Airports Authority continues to address the increased community concerns about aircraft noise. As most were aware, he stated that the communities along the Potomac and Anacostia River flight paths, used by planes serving Reagan National, are represented in a working group established by the Airports Authority to ensure broad regional participation. The group is working with the FAA and the airlines to identify potential ways to mitigate noise. Mr. Potter noted that elected officials, including members of Congress and leaders of surrounding counties, are becoming more involved in aircraft noise. He stated that Reagan National had recently served as a venue for a community meeting hosted by Congressman Don Beyer and leaders of Alexandria and Fairfax Counties for citizens to voice their concerns to the FAA. Additionally, Ms. McKeough and members of the Airports Authority team met with Rushern Baker, Prince George s County Executive, and a committee of the Fairfax County Board of Supervisors to provide an update on the working group's progress and information on the noise issue. Mr. Potter thanked Directors Earl Adams and Brad Mims for their support in this effort, including their participation in a meeting to be held the following day with Prince George's County officials. He noted that Ms. McKeough would provide additional information on noise later in the meeting. Mr. Potter shared the cover story in the current edition of CIO Magazine, one of the major trade publications of the Information Technology (IT) industry. He reported that the Magazine s edition recognized its Chief Information Officer (CIO) 100 honorees at major companies and agencies that are on the leading edge of innovation and are advancing their organizations capabilities in the IT area. Goutam Kundu, Airports Authority CIO, was recognized for leading the efforts to consolidate Reagan National and Dulles International Airports information sources to better serve the traveling public and to enhance revenue. Mr. Potter stated that Mr. Kundu's efforts include the Airports Authority s new website featuring a 360-degree virtual wayfinding and other advancements. He noted that the new website is designed to make the Airports information, including flight data, baggage information, security wait times, and concession information, easily and readily accessible to customers using a variety of devices. The Magazine cited Mr. Kundu and other honorees for having a keen awareness of the importance of the

6 customer experience. Mr. Potter thanked and congratulated Mr. Kundu and his team for the well-deserved recognition. Mr. Potter also recognized Greg Cohen, a key member of the Airports Authority s management team who served in a number of important capacities, most recently as the Acting Deputy Vice President for Corporate Risk and Strategy. Mr. Cohen had informed management that he would leave the Airports Authority to pursue a new career opportunity. Mr. Potter thanked Mr. Cohen for his enormous contribution to the Airports Authority and wished him the best in his future endeavors. Mr. Cohen received a round of applause. Mr. Potter reviewed the highlights from the June 16 ceremony of Reagan National s 75th anniversary to honor the history of the great Airport. More than 300 people attended the ceremony, and FAA Administrator Michael Huerta and Doug Parker, CEO of American Airlines (American), spoke about Reagan National's legacy of service and its importance to the region and to the aviation industry. Mr. Potter thanked the attendees, as well as the Airports Authority staff and the Aero Club of Washington for organizing such an appropriate tribute. With respect to the SafeTrack program for Reagan National and the Yellow Line of the Metrorail that connects it, Chairman McDermott inquired as to whether additional service delays or reductions were planned. Mr. Potter responded that in terms of the SafeTrack program impacting the Reagan National Metrorail station, only a concentrated three-week period was planned. He noted, however, other actions that may impact the traveling public would occur over the next year. b. Executive Vice Presidents Reports Ms. McKeough reviewed some of the highlights of the airport securityrelated provisions included in the recently-passed FAA Reauthorization Bill. She noted that a number of continuing, evolving changes would possibly occur. Ms. McKeough stated that the FAA Reauthorization Bill obligated all airports and the TSA to focus more on four issues. She stated that the first two issues relate to current operating conditions that are likely in response to the industry s challenge with TSA security wait times experienced by travelers around the country earlier in the year. Within 90 days of approval of the FAA Reauthorization Bill, one of the new provisions will obligate TSA to present and publish standards to allow the private sector to become more involved in the enrollment of individuals in the pre-check program. Currently, passengers can only

7 access pre-check vetting, registration, and membership by interacting with the TSA directly. Ms. McKeough stated that the provision will involve the private sector more in the enrollment process, with a goal of attracting a larger volume of individuals in the pre-check eligibility category. She noted that changes will likely occur within the next couple of months in an attempt to increase the number of users in the security lanes and make it easier for customers to become involved in the precheck program through various avenues, other than just direct interaction with the TSA. Ms. McKeough reported that the second issue is an obligation for TSA to review its staffing model at the local level for deploying existing resources at airports and to aggressively involve the airlines and airports to collaboratively review the ideal staffing model for security checkpoints that are currently being used. Ms. McKeough also reported that two of the issues will address potential changes to the existing protocol. The first involves direction to the TSA to revisit some of the rules that apply to the eligibility of individuals receiving security credentials and the type of decisions and thought process used to grant them access at the airport. Ms. McKeough stated that TSA will revisit the existing rules regarding access controls of where badged persons can traverse within the airport and offer potential recommendations for future enhancement. Ms. McKeough reported that the fourth issue involves security checkpoints, which will be the most visible to the traveling public. She stated that there is a general recognition of the need to evolve the current security checkpoints with more innovative technology and processing. Specifically, TSA has been challenged to help develop future protocols to address industry needs. In the recently-passed bill, TSA has been tasked to initiate pilot programs across the country to partner with airports and airlines to use different concepts to improve future security screening checkpoints at airports on a trial basis. Ms. McKeough reported that Delta announced a partnership with TSA to initiate a pilot program for one lane at the Hartsfield-Jackson Atlanta International Airport. Similarly, American recently announced an agreement to help fund and partner with TSA to initiate other pilots at the American hub airports. Ms. McKeough stated that the Airports Authority s first opportunity to evolve its checkpoints as the industry progresses will be the new security checkpoint facilities being built at Reagan National as part of the Capital Program. She noted that the Airports Authority will stay engaged with

8 TSA and the airlines at both Airports throughout the summer and will have more information to share with the Board in September. Ms. McKeough noted that while Reagan National and Dulles International will not likely be selected as pilots in the short term, it is not a concern as both Airports will be strategically positioned as the industry evolves. Ms. McKeough reported that the Community Noise Roundtable (Roundtable) continues to meet monthly with representatives of the community and the FAA. She stated that the Roundtable has successfully drawn the attention of many of the local governments in the area. Ms. McKeough noted that she had recently addressed the Fairfax County Board concerning noise issues affecting Fairfax County residents. She reported that the conversation was well received, and Chairman Bulova is expected to schedule a formal action of the Fairfax County Board regarding noise to announce its support and endorsement of the Roundtable s ongoing work. As previously mentioned by Mr. Potter, Ms. McKeough reported that Directors Adams and Mims, along with several Airports Authority staff, would meet with Prince George s County officials the following day to discuss the Roundtable s current focus, which is very much focused on how flight movements affect communities in Alexandria, the southern part of Fairfax County, Mount Vernon, and Prince George's County. She noted that a group of residents on the west [east incorrectly noted] side of the river has requested that the FAA consider changing the southern routes that could potentially impact on other communities. Ms. McKeough stated that she believed that the discussion of the south flow will be one of the first tests of how well the region can unite to cause change that is effective for everyone involved. She reported that the Roundtable meetings will continue throughout the summer and updates will be provided from the Fairfax and Prince George's Counties meetings as they progress. Ms. McKeough advised that a transaction had been completed regarding Landmark Aviation, which is one of the Airports Authority s fixed-base operator (FBO) tenants at Dulles International. She noted that Landmark Aviation had been acquired by Signature Aviation (Signature), its competitor. Ms. McKeough explained that as part of the Department of Justice review of the transaction, Signature was required to divest a number of Landmark facilities across the United States, including the most significant-sized facility at Dulles International. She reported that the consent to the assignment had been completed. The provision of FBO services contract at Dulles International was purchased by KSL

9 Capital Partners (KSL), which is a private equity firm that has partnered with Ross Aviation, a well-established FBO operator in the industry. Ms. McKeough noted that the recent acquisition poses no new substantive business changes for the Airports Authority. Mr. Caputo observed that the ramp access gates that allow authorized users to move from the DTR onto the Dulles Access Highway are continually broken. As a result, drivers are able to bypass the main toll plaza charges by entering the Dulles Access Highway because there are no barricades to prevent entry. Ms. McKeough acknowledged that there have been a number of new challenges for this long-standing infrastructure. She explained that the ramps allow quick access to public transportation buses or emergency vehicles from the DTR to the Dulles Access Highway. While the access has been available for more than 10 years, the arms that allow access to the ramps have been breaking recently on a frequent basis. Chris Browne, Vice President and Airport Manager, had informed Ms. McKeough that the broken arms are sometimes replaced as often as six times per day. In addition to requesting that the contractor, TransCore, provide different technology to prevent the barrier from being easily broken, different signs will be displayed en route to the ramps to ensure that the public is informed that they are not intended for public use. In the interim, the Airports Authority s public safety team will strategically position law enforcement vehicles to serve as a deterrent. Ms. McKeough stated that the Airports Authority is devoting full attention to the issue and that cameras had been installed so that staff can gain a better understanding of the recent cause since the exiting protocol had worked very successfully for a number of years. Mr. Sudow asked Ms. McKeough about pilot projects she would recommend to improve the security wait lines at Reagan National and Dulles International. Ms. McKeough stated that the Airports Authority always strives for improvements. She clarified that the pilot programs that TSA is implementing are for concepts it had already developed to improve the security lanes. Ms. McKeough noted that most of the references she made were for capital-intensive projects and require a reconfiguration of space, some of which the airlines would help to fund if they perceived the projects to be advantageous for them. Mr. Potter added that Ms. McKeough had had a conversation with the TSA Administrator. He stated that the Airports Authority s focus is to ensure that all of the new security checkpoints at Reagan National would be equipped with the latest technology.

10 Mr. Sudow inquired whether similar actions in terms of a broader use of current technology will also be expected at Dulles International, or could other improvements also occur. Mr. Potter stated that he believed that the area of focus will continue to be on the pre-check program since it has a dramatic impact on the security lanes. While he believed that sufficient lanes existed at Dulles International, Mr. Potter stated that the challenge is for as many passengers as possible to pass efficiently through the lanes. Mr. Potter reported that Mr. Browne and Paul Malandrino, Vice President and Airport Manager, are working closely with the Federal Security Directors (FSDs), and they have been given some latitude in terms of staffing. He stated that he believed that the collaborative partnership with the FSDs is the reason that neither Reagan National nor Dulles International will serve as test sites, which is a positive result. He reported that the Airports Authority will continue to encourage its customers to consider enrolling in the pre-check program. With regard to Landmark, Mr. Sudow asked if Ross assets were considered in addition to its operational assets. Ms. McKeough responded affirmatively and noted that financial assets had been a large part of the Airports Authority s due diligence because of the significant amount of the contract award. She stated that KSL s assets are approximately $10 billion as a company, and several billion dollars are specifically allocated to the recent FBO umbrella investment. Mr. Mims noted that the FAA Reauthorization Bill provides for a one-year extension. He inquired whether the Airports Authority has taken a stand on the privatization of the air traffic control operation as staff continues to advocate for a full extension. Mr. Potter stated that the Airports Authority would not take a formal stand but noted that he is a member of the FAA Management Advisory Committee and that the Airports Authority s views would be shared in appropriate venues. With respect to the new security protocols in the FAA Reauthorization Bill, Mr. Session inquired whether management anticipates that a competitive procurement product would be included as a part of the collaboration and coordination efforts with TSA. Ms. McKeough stated that she did not anticipate that to be the case at the present time. Mr. Potter noted that TSA owns the equipment; therefore, it can be deployed as needed. Mr. Session inquired whether the security requirements for general aviation flights into Reagan National that were put in place as a result of

11 the September 11, 2001 events are still applicable, to which Ms. McKeough responded affirmatively. Mr. Session requested that staff provide a brief summary in regard to the lobbying efforts to support the increase in Passenger Facility Charges (PFCs), as well as its value directly related to Dulles International. Mr. Potter stated that airports across America continue to advocate for an adjustment to the PFC. He explained that PFCs have been in place for more than a decade at the current levels, and that they would need to be doubled to retain the same buying value from an inflation standpoint. Mr. Potter stated that President Obama has been a strong advocate of upgrading the infrastructure of America and that the Administration has included an increase in PFCs in the Appropriations Bill for the last four or five years. Mr. Potter reported that the Airports Authority will continue to advocate for an increase in PFCs. He stated that the PFCs are viewed as a tax instead of a fee and that Airports Authority staff continues its efforts to educate the congressional constituents. Mr. Potter further explained that only projects where PFCs are used require the approval of the FAA, which ultimately allows the airlines and others to have input into the use of the funds. He stated that an increase in PFCs would help both Airports tremendously in terms of some of the projects that have been discussed, as well as some of the Airports future needs. Mr. Session asked that staff provide a specific example of how the PFCs contribute to the projects underway at Dulles International. Mr. Potter reported that PFCs had been used to construct Concourse B/C terminals, as well as the garages at Reagan National. The ability to use PFCs will soon expire because the debt related to those projects had been paid. Future PFCs will be applied to a large portion of the expenses of the construction of a New North Concourse at Reagan National, including the relocation of the security checkpoints to make National Hall secure. Mr. Potter stated that the use of PFCs was a critical element in discussions with the airlines about projects included in the new Airport Use and Lease Agreement. Mr. Davis reported that the Revenue Office, along with help from other Airports Authority offices, including Operations, Engineering, IT, and Human Resources, continue to make a great impact by performing in a manner that results in solid travel experiences for the customers.

12 In June, non-airline revenue increased approximately 11 percent or $3.4 million over the prior period. Mr. Davis reported that June marked the third consecutive month that non-airline revenue exceeded the revenue collected from airlines marking the achievement of the team goal that the Revenue Office set nearly two years ago when the office was first established. While the non-airline revenue increase did not necessarily suggest a trend over the long term, Mr. Davis stated that it demonstrated the potential outcome when all of the appropriate revenue categories are performing well. Mr. Davis also reported that transportation-related revenue increased approximately 9 percent or $8.2 million year-to-date. He stated that terminal revenue increased 9 percent or $2.4 million year-to-date, and business-to-business revenue increased 15 percent or $6.1 million yearto-date. In an ongoing effort to develop, sustain, and deliver increased revenue, the revenue team recognizes that innovative thinking is required and that best practices must be explored. Mr. Davis reported that the revenue team and Victor Hoskins, Director of Arlington Economic Development (AED), had met with one of the world's leading global incubators and seed funds, 1776, which helps engineer the success of many of the world's most promising start-up companies. He stated that 1776 has three locations, including Washington and Arlington, and two additional locations are currently under development in New York and Dubai. Mr. Davis noted that 1776 has helped approximately 600 start-up companies by connecting them with more than 500 mentors. The organization focuses on the critical sectors of education, health, energy, smart cities, transportation, food, security, and money. Mr. Davis explained that 1776 has chosen challenging, government-dominated markets because of its roots in Washington, D.C., and its proprietary connections, insights, and tools that can be used to drive massive-scale revenue growth. Mr. Davis stated that the Airports Authority and 1776 may provide benefits to each other. In the last few weeks, Dulles International, along with CBP, enabled the use of a mobile passport control application that offers U.S. citizens returning to the country a faster process through customs. Mr. Davis noted that the mobile application was developed by Airside Mobile, which is part of the 1776 incubator. The Airports Authority is promoting usage of the application to its customers through its website, radio advertisements, and handouts in the Airport. Mr. Davis also presented other ways that the Airports Authority plans to

13 engage with 1776, such as co-hosting a roundtable event with AED to provide an opportunity for the Airports Authority s revenue team to present, discuss, and brainstorm revenue ideas to propel growth. Mr. Davis reported that members of the Airports Authority s revenue team will visit Dallas/Fort Worth International and Denver International Airports, both of which are highly-regarded in the industry with respect to revenue development. The team plans to explore innovation across a variety of areas, including terminal concessions, digital revenue development, marketing, customer service, and technology-based enhancements. Mr. Davis reported that he would brief the Board on the team s findings at the September Board Meeting. Mr. Davis also reported that several news outlets highlighted a study released by the Physicians Committee for Responsible Medicine that discussed the quantity and quality of food selections for vegans at the nation's busiest airports. The top 24 airports were ranked in terms of food offerings by restaurants that feature vegetarian meals that do not contain animal products. Mr. Davis noted that the articles revealed that there is an increased preference for healthy dining alternatives in airports and other public venues, and the stories noted that a number of U.S. airports, including Reagan National and Dulles International, are heeding the call. He stated that Reagan National and Dulles International ranked six and eight, respectively. As part of the overall effort to drive the customer service experience at both Airports, Mr. Davis congratulated the Airports Authority s concessions team, as well as the individual restaurants at Reagan National and Dulles International for tracking customers needs and desires and for responding by adapting restaurant menus and food preparation practices. Mr. Adams shared his personal experience with 1776 and stated that he believed the organization performs well at leveraging the new thriving economy throughout the region. He stated that he was pleased that the Airports Authority is engaged in activity with Mr. Adams noted that the 1776 offices have beautiful views of Reagan National, and he recommended that the Airports Authority host events at those offices to highlight and showcase the Airport. Mr. Davis stated that the 1776 offices included a facility that would accommodate a maximum of 300 people in the event a decision is made to host an Airports Authorityrelated event at those offices.

14 Mr. Caputo inquired about the potential revenue associated with the provision of cables that would run through property on Dulles International to support the growth of the large data centers in the commercial sectors in Fairfax and Loudoun Counties. He inquired as to the scope of revenues that the Airports Authority may have already received as well as future revenue possibilities. Mr. Davis responded that while the Airports Authority currently profits from such venture, staff has begun to explore opportunities to determine the range of possibilities. He stated that Mr. Potter requested that he task the real estate team to proactively explore revenue potential regarding fiber cables. Mr. Davis stated that the Airports Authority s intent is to develop an internal strategy around dark fiber and ultimately be in a position where it can market the provision to commercial companies and pursue other opportunities. As staff is able to determine the financial implications associated with the provision of fiber cable, Mr. Davis stated that he would provide an update in the future about the Airports Authority s robust strategy. Chairman McDermott requested future reports about the progress. Mr. Sudow recognized that space is quite constrained at Reagan National until the additions are completed, and he observed the congestion at the Delta gates in terms of access to coffee and other concessions, particularly during the busiest period of shuttle traffic. He inquired as to whether the subject area could be reconfigured or space added to provide additional options for passengers. Mr. Davis stated that staff is constantly exploring space options in terms of concessions. Additionally, the Airports Authority s concessions team, MarketPlace Development, is working closely with the operations team to explore ways to reconfigure space on a constant basis. Mr. Davis explained that due to the variance in the number of passengers that come through the Airport, it is difficult to permanently resolve the space constraint issues. Mr. Sudow observed that potential revenue opportunities may also be lost because passengers dismiss existing food options in that area of the terminal. Mr. Davis agreed and stated that despite the increased amount of concession options that are now available, more opportunities can be provided. However, adequate space must be allotted to allow a passage for the passengers to reach their destinations. Mr. Sudow suggested that kiosks could possibly be used in the area prior to United s gates that would offer passengers concession options before they reach the Delta gates, to which Mr. Davis agreed.

15 IV. NEW BUSINESS a. Recommendation to Approve an Agreement for the Airports Authority to Reimburse Delta Air Lines for Hangar Tenant Improvements An Enabling Project for Construction of the New North Concourse at Ronald Reagan Washington National Airport Mr. Session moved the adoption of the following resolution, which was unanimously approved: WHEREAS, Demolition of certain hangars, and the relocation of airline leased facilities currently located in those hangars, are enabling projects necessary in order to start construction of the New North Concourse; WHEREAS, As a result of the demolition of the hangars, Delta Airlines (Delta) will be relocating from Hangar 4 to Hangar 3; WHEREAS, Staff has recommended that a reimbursement agreement be entered with Delta under which the airline will design and construct necessary modifications as a result of its relocation from Hangar 4 to leased space in Hangar 3; WHEREAS, Funding for this reimbursement agreement in an amount not to exceed $300,000, is included in the approved 2016 Capital Construction Program budget; WHEREAS, Delta will be obligated under the agreement to obtain competition for the design and construction services; WHEREAS, Delta will be obligated under the agreement to achieve the Airports Authority s Local Disadvantaged Business Enterprise participation goal of 25 percent; WHEREAS, Delta will be required to submit originals of all paid invoices with a detailed accounting of the payments before the Airports Authority issues reimbursements; WHEREAS, Delta will ensure that title to the improvements will vest in the Airports Authority immediately upon substantial completion and acceptance by the Airports Authority; now, therefore, be it

16 RESOLVED, That the President and Chief Executive Officer is authorized and directed to enter into an agreement with Delta pursuant to which the Airports Authority will reimburse American in an amount not to exceed $300,000, for the design and construction of necessary modifications associated with Delta s relocation from Hangar 4 to Hangar 3 at Reagan National consistent with the terms presented to the Business Administration Committee at its July 20, 2016 meeting. The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper. b. Recommendation to Award a Contract to Supply Runway Deicer at Ronald Reagan Washington National and Washington Dulles International Airports Mr. Session moved the adoption of the following resolution, which was unanimously approved: WHEREAS, In October 2015, staff presented a pre-solicitation paper to the Business Administration Committee regarding purchase of the supply of solid runway deicer (Sodium Formate) for both Airports; WHEREAS, Ronald Reagan Washington National Airport (Reagan National) and Washington Dulles International Airport (Dulles International) are required to only use a solid runway deicer approved by the Federal Aviation Administration (FAA) as defined in the FAA Advisory Circular 150/ C Airport Winter Safety and Operation; WHEREAS, On July 20, the Business Administration Committee received the results of the competitive solicitation and the evaluation of the firms that responded to the RFP, and recommended that the Board of Directors approve the selection of Nachurs Alpine Solutions Industrial; now, therefore, be it RESOLVED, That the selection of Nachurs Alpine Solutions Industrial to supply solid runway deicer at both Airports for a

17 term of two years, with three one-year options, at an estimated cost of $8.5 million is approved; and 2. That the President and Chief Executive Officer is authorized and directed to enter into a contract for a two-year base period and three one-year options, with Nachurs Alpine Solutions Industrial, consistent with the terms presented to the Business Administration Committee at its July 20, 2016 Meeting. The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper. c. Recommendation to Award Contracts for Unarmed Security Guard Services at Washington Dulles International Airport and the Dulles Toll Road Administration Building Consistent with the statement at the day s Business Administration Committee Meeting, Mr. Pozen reported that he had a conflict of interest as that term is defined in the Code of Ethics for Members of the Board of Directors, which is found at Section 3(e)(vi)(3), in this matter, because one of the proponents is a client of one of his partners. He noted that his firm does receive less than three percent of its gross income from this client. Mr. Pozen stated that he had consulted with the Airports Authority s Ethics Officer, Naomi Klaus, and had been advised that he has an apparent conflict, not an actual conflict. After discussing this apparent conflict with Ms. Klaus, Mr. Pozen stated that he had determined and declared that he is able to participate in the Board's consideration of awarding contracts for unarmed security guard services fairly and objectively in the interest of the Airports Authority, notwithstanding the appearance of that conflict. Mr. Session then moved the adoption of the following resolution, which was unanimously approved: WHEREAS, Transportation Security Administration Regulations and Directives require airport operators to monitor and control access to secure parts of the facility; WHEREAS, The current contract for unarmed security guard services at Washington Dulles International Airport (Dulles

18 International) and the Dulles Toll Road (DTR) Administration Building is scheduled to expire September 30, 2016; WHEREAS, The Business Administration Committee concurred with the pre-solicitation terms for the issuance of a Request for Proposals for these services at its July 15, 2015 meeting; WHEREAS, The solicitation was advertised on January 20, 2016 as a single solicitation allowing for the award of two separate contracts, one for Dulles International and one for the DTR Administration Building; WHEREAS, as a result of the evaluation of the proposals, the Source Selection Committee recommended that both contracts be awarded to HSS Incorporated; WHEREAS, the Business Administration Committee is satisfied with the results of the procurement process, as presented at its July 20, 2016 meeting; now, therefore, be it RESOLVED, That the President and Chief Executive Officer is authorized and directed to enter into two contracts, one for Dulles International and one for the DTR Administration Building, each with three-year base periods with two one-year option periods, with HSS Incorporated for the provision of unarmed security guard services consistent with the terms presented to the Business Administration Committee at its July 20, 2016 meeting. The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper. d. Recommendation to Award a Sole Source Contract to District of Columbia Water and Sewer Authority to Furnish Sanitary Sewerage Service for Washington Dulles International Airport Mr. Session moved the adoption of the following resolution, which was unanimously approved by all 13 Directors present: WHEREAS, The Potomac Interceptor (PI) Sewerage System was built as a result of the enactment of Public Law

19 (the Act), which authorized the District of Columbia to plan, construct, operate, and maintain a sanitary sewer to connect Washington Dulles International Airport (Dulles International) to the Washington, D.C. sewer system; WHEREAS, The Act stipulated that the sewer should be of sufficient capacity to provide service for Dulles International and for the expected growth and development in the adjacent areas in Virginia and Maryland; WHEREAS, Since 1987, the Airports Authority has executed multi-year contracts with the District of Columbia Water and Sewer Authority, which is the only practical provider with the existing infrastructure required for disposing of sewage for Dulles International; WHEREAS, The proposed contract with the District of Columbia Water and Sewer Authority will provide a three-year base with two three-year options at an estimated rate of $3,901 per million gallons with a total estimated contract value (including options) of approximately $11.2 million; WHEREAS, This sole source contract is permitted, with proper justification, under the Airports Authority Contracting Manual, Section (3)(d) Utility Services and Supplies; WHEREAS, In accordance with the Airports Authority Contracting Manual, Section 2.9.3, public notice advising of the intent to award a sole source contract to the District of Columbia Water and Sewer Authority was posted for 15 days on the Airports Authority s website prior to presenting this matter for Committee approval, and during that period no firm offered a statement of capabilities to furnish sanitary sewerage service for Dulles International; RESOLVED, That the President and Chief Executive Officer is authorized to enter into a sole source contract with District of Columbia Water and Sewer Authority to furnish sanitary sewerage service for Dulles International, consistent with the terms presented to the Business Administration Committee at its July 20, 2016 meeting.

20 The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper. e. Recommendation to Approve Loudoun County Request for Easement across Washington Dulles International Airport Ms. Wells moved the adoption of the following resolution, which was unanimously approved: WHEREAS, Carters School Road is a public road, a portion of which lies on the Airports Authority s Western Lands at Washington Dulles International Airport (Dulles International); WHEREAS, Pro Logis, L.P. (Pro Logis) proposes to develop approximately 82 acres adjacent to the Western Lands along the west side of Carters School Road for industrial and automobile storage uses, both of which are compatible surrounding land uses for the Airport; WHEREAS, As part of its development plan for the property, and the special exception application required by Loudoun County for the automobile storage use, Pro Logis proposes to improve Carters School Road; WHEREAS, A permanent easement is required over thin strips of the Western Lands along Carters School Road in order to construct these improvements; WHEREAS, The property within the easement will become part of the improved Carters School Road; WHEREAS, The Airports Authority will initially grant an easement for 1,200 feet of roadway improvements and, upon Loudoun County s grant of a special exception permit for the automobile storage use, will grant an additional easement for the remaining 2,450 feet of roadway improvements for a total easement area of approximately 1.35 acres; WHEREAS, An approval of an easement not to exceed 1.55 acres is requested to accommodate potential changes as the final engineering is completed;

21 WHEREAS, The completed improvements will become part of the existing public right of way and will benefit the Airports Authority and future development of the Western Lands by providing a roadway that conforms to Virginia Department of Transportation standards and will serve as an improved access point to the Western Lands from Route 606; WHEREAS, The Strategic Development Committee has reviewed the proposed easement, as presented by staff at its July 20, 2016 meeting, and recommended that it should be granted at no cost; now, therefore be it RESOLVED, That the President and Chief Executive Officer is authorized and directed to execute a permanent easement across Airports Authority property for improvements to Carter School Road located at Dulles International in favor of Loudoun County, Virginia, as identified in detail in the documents presented to the Board of Directors at its July 2016 meeting. The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper. f. Recommendation to Approve an Amendment to the Airport Use Agreement and Premises Lease for Washington Dulles International Airport Ms. Wells moved the adoption of the following resolution, which was unanimously approved: WHEREAS, The current Airport Use Agreement and Premises Lease between the Airports Authority and the domestic and international airlines operating at Washington Dulles International Airport ( Dulles International ) expires on December 31, 2017 ( Dulles International Agreement ); WHEREAS, The current Airport Use Agreement and Premises Lease between the Airports Authority and the domestic and international airlines operating at Ronald Reagan Washington National Airport ( Reagan National ) expires on December 31, 2024 ( Reagan National Agreement );

22 WHEREAS, Over the past few months, representatives of the Airports Authority and major airlines operating at Dulles International have discussed the advisability of extending the term of the Dulles International Agreement to coincide with the term of the Reagan National Agreement, and have determined such an extension to be a prudent course of action; WHEREAS, These representatives have reached agreement on an amendment to the Dulles International Agreement which would extend the term of the agreement through December 31, 2024; WHEREAS, This proposed amendment, which is attached to this resolution, has been presented to the Strategic Development Committee, and the Committee has approved the amendment and recommended that the Board of Directors also approve it and authorize its execution by the President and Chief Executive Officer; now, therefore, be it RESOLVED, That the amendment to the Dulles International Agreement, in the form attached to this resolution, is approved; 2. That the President and Chief Executive Officer is authorized to execute this amendment to the Dulles International Agreement between the Airports Authority and each of the airlines operating at Dulles International which has executed or indicated an intent to execute the amendment; and 3. That this resolution shall be effective upon its adoption. The final resolution filed in the Board of Directors Office includes a copy of the staff recommendation paper and Attachment A and Exhibits. g. Recommendation to Amend the Airports Authority Statement of Functions Mr. Williams offered a motion to amend the Airports Authority Statement of Functions, which was unanimously approved.

23 h. Recommendation to Approve the Selection of the Vice President for Marketing & Consumer Strategy Mr. Davis announced that Chryssa Westerlund had been selected as the Vice President for Marketing & Consumer Strategy. Mr. Williams offered a motion to approve the selection of Ms. Westerlund as Vice President for Marketing, which was unanimously approved. V. UNFINISHED BUSINESS There was not any unfinished business. VI. OTHER BUSINESS & ADJOURNMENT Chairman McDermott announced that the August Committee and Board Meetings were canceled. The next scheduled meetings would be held on Wednesday, September 21. There was not any other business. The Meeting was thereupon adjourned at 9:58 a.m. Respectfully submitted: Monica R. Hargrove Vice President and Secretary