RENO-TAHOE AIRPORT AUTHORITY BRIEF OF MINUTES MEETING OF THE BOARD OF TRUSTEES September 10, 2015 9:00 a.m. MEMBERS PRESENT Andy Wirth, Chair Rick Murdock, Vice Chair Jerry Hall, Treasurer Nat Carasali, Secretary Bill Eck Lisa Gianoli Adam Mayberry Jenifer Rose Jessica Sferrazza ALSO PRESENT Marily M. Mora, A.A.E. President/CEO Dean Schultz, A.A.E. Executive Vice President/COO Ann Morgan General Counsel Claire Johnson Clerk of the Board MEMBERS ABSENT/EXCUSED None The Board of Trustees met in the Board Room, Airport Authority Administrative Offices, Reno-Tahoe International Airport, Reno, Nevada. Chair Andy Wirth called the meeting to order. The Pledge of Allegiance was recited. III. PRESENTATIONS AND AWARDS A. Employee, Tenant and Special Recognitions Mike Scott, Vice President of Operations & Public Safety, briefly described the components of the 2015 Part 139 Inspection that was recently conducted on August 3 6, 2015. He announced that the Airport passed the annual inspection with flying colors, and retained its Part 139 Certification, which allows it to continue to operate as a commercial air carrier airport. Mr. Scott recognized the key departments involved in the inspection, specifically the Airport Rescue and Firefighting team, Airfield Maintenance team and Airfield Operations team. Mr. Scott ended by thanking Reno-Tahoe Airport Authority (RTAA) staff from all departments, as in some way, all staff contribute to the mission of the Airport and play a role in supporting the Part 139 certification for this airfield. B. Introduction of New, Promoted and Retired Employees Dean Schultz, Executive Vice President/COO, introduced the new RTAA K9 team canine Bruno and his handler Officer Shannon Edison. Next, Mr. Schultz introduced three new employees who recently joined the RTAA Joshua Stagliano, Airport Police Officer, Vinnie Vasquez, Airfield Maintenance Worker, and Ana Chacon, Airport Communications Specialist. Lastly, Mr. Schultz congratulated Rebecca Venis on her promotion to Manager of Air Service Development and Marketing.
Page 2 of 7 At this point, Chair Wirth acknowledged City of Reno Councilwoman Naomi Duerr, as being present in the audience. C. Tenant Communication Tina Iftiger, Vice President of Airport Economic Development, introduced Knute Knudson, Vice President of Business Development for International Game Technology (IGT). Mr. Knudson who is locally based in Reno, is the senior executive that the Airport works with at IGT. Ms. Iftiger mentioned that Mr. Knudson is a former member of the Community Outreach Committee (COC), and therefore very familiar with the Airport. Mr. Knudson provided a brief overview of the new IGT, referencing their recent merger with GTECH, the largest global lottery business. The merger results in the formation of a worldwide organization with 13,000 employees. He stated that IGT is a topline revenue company of approximately $6.3B annually and is now organized into four (4) divisions North America Division, International Division, Lottery Division North America, and Italy Division. IGT is headquartered in London, England with major offices in Reno and Las Vegas, Nevada, Providence, RI, and Rome, Italy. Mr. Knudson said the operation in Reno is growing and improving with significant investments being made. Some of IGT s manufacturing operations are being relocated here, and there will be substantial improvements made in terms of the numbers of people and functions occurring in Reno. Trustee Carasali asked how many new jobs will be created over the next five (5) years. Mr. Knudson responded that there is capacity within IGT s production capability here in Reno, and therefore much of the work will be absorbed within the existing production capability. He further stated that the specific number of new jobs will evolve over time. IV. PUBLIC COMMENT (limited to 3 minutes) Naomi Duerr, City of Reno Councilwoman representing Ward 2, and an alternate liaison to the Airport Authority, asked to speak under the public comment section of the agenda. She indicated she is also the liaison to the Arts and Culture Commission and the Art Town Board for the City of Reno. In that capacity, Ms. Duerr had the opportunity to attend Burning Man. She commented on the kickoff at the Airport with the Burning Man art exhibit, and indicated she has been recruiting other art displays for the Airport. She specifically referenced the Pinhole Camera project, which is where photographs of the art and people on the playa are taken through a pinhole in a round cylinder using photographic paper. Ms. Duerr said the results are amazing and those spearheading the project are looking for new venues, so she suggested the Airport. Next, Ms. Duerr mentioned Burning Man s economic impact to the region and said she plans to hone in on what the economic impact actually is by working with the Airport, the Economic Development Authority of Western Nevada (EDAWN), and others in the community. Next, Ms. Duerr discussed the Reno City Council meeting held the previous evening. A portion of the council meeting was concerning an issue surrounding the Meadow Wood Mall expansion and the lighted sign that is to be erected for the new cinema being built as part of the expansion. The sign height originally approved by the City Planning Commission was to be 60 feet. Members of the General Aviation (GA) community appealed the height of the sign and were found to have standing on this issue. The conclusion at the end of the meeting is that the City Council set a requirement for the sign be lowered to 46 feet, which is the height of the parapet of the building, and the lighting intensity of the sign will have to be approved by the Federal Aviation Administration (FAA).
Page 3 of 7 Finally, Ms. Duerr mentioned Virginia Lake, which is one of 86 parks in Reno, and one that has a large bird population. Among other issues, the City Council has received concerns about potential bird strikes with aircraft, specifically from the Virginia Lake bird population. Ms. Duerr met with RTAA staff to discuss this issue. She stated that there are many ponds and bodies of water located to the east and west of the Airport, and that the challenges with strikes occur from birds flying across the Airport in both directions. Chair Wirth thanked Ms. Duerr for her update. Trustee Sferrazza thanked RTAA staff for attending the City Council meeting. V. APPROVAL OF MINUTES On motion by Trustee Mayberry, seconded by Trustee Murdock, which motion duly carried by unanimous vote, the Board approved the minutes from the Board of Trustees meeting of August 13, 2015. VI. VII. APPROVAL OF AGENDA On motion by Trustee Hall, seconded by Trustee Murdock, which motion duly carried by unanimous vote, the Board approved the September 10, 2015 Board of Trustees meeting agenda. COMMITTEE / LIAISON REPORTS Committee / Liaison reports were given by: A. Finance and Business Development Committee Trustee Jerry Hall B. Planning and Construction Committee Trustee Adam Mayberry C. Airport Noise Advisory Panel Trustee Jenifer Rose D. Community Outreach Committee (COC) Trustee Jessica Sferrazza E. Stead Liaison Trustee Bill Eck F. RSCVA Board Trustee Nat Carasali G. Air Service Liaison Trustee Rick Murdock H. The Chamber Reno Sparks Northern NV Marily Mora (RTAA) I. Reno-Tahoe International Airport Users Committee Trustee Adam Mayberry Chair Wirth asked Ms. Mora to provide a brief update on the recent Boyd Aviation Conference held in Las Vegas. Ms. Mora indicated that this conference is attended by many CEOs of top airlines. Though there is not much opportunity to interact with the airline CEOs, there were a lot of insights gained on specific airlines plans for the future, what s in the pipeline for manufacturing aircraft, and the changes in aircraft going forward. Ms. Mora stated that this is definitely a conference that the RTAA would like to bring to Reno and a good part of her effort was put into meeting with Mike and Marion Boyd to discuss this possibility. The conference brings high level airline executives in attendance at the event, and Ms. Mora feels hosting it in Reno would be a good opportunity to showcase the community. Staff will follow up on this idea, as well as on the intelligence gained with regard to where the various airlines are going in the future. Trustee Carasali asked Ms. Mora if she feels there is any chance of the Chamber of Commerce becoming a financial supporter of the Regional Air Service Corporation (RASC). Ms. Mora responded that there is a meeting planned with The Abbi Agency who is the project manager for
Page 4 of 7 RASC to discuss next steps with the business community. Over the last couple of years, there have been conversations with the Chamber about a financial partnership in air service, but until now it has been a partnership primarily focused on communication about new air service. The next step with RASC is to involve the business community. Trustee Carasali further asked about the possibility of tacking a surcharge onto Chamber member fees that strictly goes to air service development. Ms. Mora said that the leadership on that would be through RASC, but all ideas should be put on the table and vetted through the Chamber. Chair Wirth expressed his agreement and support with Trustee Carasali s thoughts on the need to gain more direct financial support from the business community. VIII. IX. CONSENT ITEMS FOR BOARD ACTION A. None. ITEMS FOR BOARD INFORMATION, DISCUSSION AND POSSIBLE ACTION A. #15(09)-35 Authorization for the President/CEO to Negotiate Final Terms and Execute a 5-Year Nonexclusive Gaming Concession License with International Game Technology PLC Commencing on December 1, 2015 Trustee Hall commented that a number of questions were asked during staff s presentation of this item at the Finance & Business Development Committee meeting and that committee members were satisfied with the responses provided. Trustee Rose reiterated the importance of a formal RFP being advertised at the conclusion of this 5-year term. On motion by Trustee Hall, seconded by Trustee Carasali, which motion was duly carried by unanimous vote, the Board approved Agenda Item #15(09)-35 as follows: Authorized the President/CEO to Negotiate Final Terms and Execute a 5-Year Nonexclusive Gaming Concession License with International Game Technology PLC Commencing on December 1, 2015 B. #15(09)-36 Adoption of Resolution No. 526 to Authorize the Issuance of the Reno-Tahoe Airport Authority s Airport Revenue Refunding Bond, Series 2015, not to Exceed the Aggregate Principal Amount of $22,000,000, Award the Purchase of the 2015 Bond to BBVA Compass Bank, and Authorize the President/CEO, or her Designee, to Negotiate and Execute any Documents Relating Thereto Ms. Mora referenced the extensive presentation provided by staff at the Finance & Business Development Committee meeting. Several Trustees commented favorably on the selection process and complimented the staff on their work and efforts on this item. Chair Wirth inquired as to what the London Integrated Offer Rate (LIBOR) plus basis point spread is on the loan. Rick Gorman, Chief Financial Officer, responded it is 1.46 above 65% of LIBOR, and provided further explanation of how the Airport s tax exempt status is figured into the rate. Mr. Gorman also noted that should the Board adopt the resolution, the interest rate will be locked in at today s rate which is approximately 2.71%.
Page 5 of 7 On motion by Trustee Carasali, seconded by Trustee Murdock, which motion was duly carried by unanimous vote, the Board approved Agenda Item #15(09)-36 as follows: Adopted Resolution No. 526 to Authorize the Issuance of the Reno-Tahoe Airport Authority s Airport Revenue Refunding Bond, Series 2015, not to Exceed the Aggregate Principal Amount of $22,000,000, Award the Purchase of the 2015 Bond to BBVA Compass Bank, and Authorize the President/CEO, or her Designee, to Negotiate and Execute any Documents Relating Thereto Ms. Mora acknowledged the fact that three Trustees participated on the selection committee, they being Trustees Rose and Gianoli, and Trustee Hall, Board Treasurer. X. ITEMS FOR BOARD INFORMATION AND DISCUSSION A. Presentation 1. Brian Kulpin, Vice President of Marketing and Public Affairs, and Rebecca Venis, Manager of Air Service Development and Marketing, presented an in depth update on the RTAA s Community Outreach Campaign. Mr. Kulpin began the presentation by referring to the RTAA s 5-year Strategic Plan which focuses on engaging the customers, community, business and tourism industry, and Airport stakeholders. He discussed changes in the airline industry over the past 4-5 years that have negatively impacted airports across the nation. Specifically at Reno-Tahoe International Airport (RTIA), industry mergers and consolidations resulted in a loss of 36% of passengers and nearly 38% of flights. Because of what happened with the economy, airlines went from a market share oriented business model to being all about profit. Flights were taken from airports in the west like Reno, Boise, San Jose, Tucson, and Oakland, and moved to the east coast where there is a higher profit margin. The change in the industry has transformed the way airports operate and today there is limited ability for an airport to influence air service growth. Mr. Kulpin stated that community outreach is the key for how to change this paradigm. Approximately one year ago in July 2014, the RTAA introduced a new approach to air service. The new approach focuses on developing community partnerships that can be leveraged to reduce the risk to airlines for investing in new service to the Reno-Tahoe region. A Ski Lake Tahoe Summit for air service was held, bringing together key representatives from the lake and the valley. RTAA staff gave a presentation at the summit, which focused on how the strength of community partnerships could change the air service paradigm and attract new air service to this region. Mr. Kulpin said the partnership between jetblue and this community is a perfect example and demonstrates the power of the new approach. Next, Ms. Venis stated that during the past year, the RTAA has created a network of partners that can be called upon in advertising new air service and supporting current routes. The network is currently made up of the Airport, RASC, the tourism industry, and the ski industry, as well as the business community through partnerships with EDAWN and the Chamber of Commerce. Ms. Venis continued by providing an overview of the creation, structure and membership of RASC, and she pointed out that RASC is an entity that no other community has. In the past year, RASC has incorporated, developed bylaws, and changed their voting structure, allowing them to be a much more nimble organization in support of air service in the region. Recently, RASC underwent a strategic planning process, looking at how they could
Page 6 of 7 best align with the goals of the Airport and with what s happening in the industry, and how to go forward to bring the community together even more. Three key things came out of the strategic planning process: 1). A mission statement to grow and sustain business and leisure air service for the Reno-Tahoe region, 2). That funds will be used to provide a tool box of resources for growing and maintaining air service, and 3). A focus will be placed on growing their membership and revenue base with business community outreach. Next, Ms. Venis described two examples during the last year that have pulled the community together utilizing the new approach to air service. The first is related to the new air service on jetblue and the two phase approach that was put in place. The second is related to sustaining air service and how community partners came together to support and work with Alaska Airlines on a strategy to retime what was a struggling nonstop flight to San Jose. Mr. Kulpin continued the presentation by describing what next steps are needed to continue the momentum. It will require continued year-round support of new and current flights within the primary and secondary catchment areas of the RTIA from everybody including the City of Reno, the City of Sparks, the County, all the tourism partners, and business. The RTAA will be launching a year-round awareness and outreach program that will educate key influencers in business and tourism and civic partners on the importance of air service to the region. Ms. Venis brought the presentation to a close by outlining the components of the outreach program, including the expansion of the communications network of key influencers. She described the new STEPPS (S=Social Currency; T=Triggers; E=Emotion; P=Public; P=Practical; S=Stories) content strategy, which includes action steps aimed at deepening the involvement and loyalty of the network. Lastly, Ms. Venis introduced the new Air Service 101 training program that will launch in late September 2015 and will be delivered throughout the year. A discussion followed regarding air service, the new initiatives, and various other ideas and suggestions from the Trustees regarding additional ways to incentivize and encourage the use of air service in our region. B. Board Meeting Schedule Chair Wirth referred to the schedule of upcoming meetings and made special mention of the upcoming 2015 Board Retreat, stating that he intends on hosting an outstanding retreat at Squaw Valley. 1. October 6, 2015 9:00 am Finance & Business Development Committee Meeting 2. October 6, 2015 10:00 am Planning & Construction Committee Meeting 3. October 8, 2015 9:00 am Board of Trustees Meeting 4. November 3, 2015 8:30 am Board of Trustees Retreat Meeting Room at Squaw Valley 5. November 10, 2015 9:00 am Finance & Business Development Committee Meeting 6. November 10, 2015 10:00 am Planning & Construction Committee Meeting 7. November 12, 2015 9:00 am Board of Trustees Meeting
Page 7 of 7 C. President/CEO s Report Ms. Mora referred the Trustees to the written President/CEO s Report included in their Board binders. She specifically referred to the announcement of a public workshop on General Aviation (GA) Minimum Standards which is scheduled for Thursday, October 28, 2015 at 5:00 pm in the RTAA River Room. Ms. Mora also stated that tomorrow being 9/11, it is the tradition of the Airport to announce a moment of silence throughout the Terminal at the time that the Twin Towers were hit and that a commemorative wreath will be displayed at the entrance to the Terminal. D. General Board Comments, Questions, and Items for Future Board Meetings Chair Wirth asked each Trustee for any comments, questions or items for future Board meetings that they may have. Trustee Eck mentioned the tragic accident that occurred at the Air Races in 2011, and acknowledged the RTAA s Aircraft Rescue and Fire Fighting (ARFF) team and the many lives that were saved due their quick response. There were no further comments. XI. XII. PUBLIC COMMENT None. ADJOURNMENT There being no further business, the meeting was adjourned at 10:47 am. Chair Andy Wirth ATTEST: Secretary Nat Carasali