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Home My WebLink About03-06-2007 Special MeetingThe Fairhope Airport Authority held a special meeting on Tuesday, March 6, 2007 at 4:00 PM at the City Administration Building, 161 N. Section Street. Present: Charles "Chuck" Zunk, Chairman; Ken Knudsen, Louis Mapp, Charles Bassett, Joe McEnerney, Mike Ford. David Bagwell, Attorney, Betty Rivenbark, Secretary. Absent: Make Baugh The minutes of the February 21, 2007 meeting were considered and duly approved as written. David Bagwell reported that as of today we are duly incorporated as Fairhope Airport Authority. David gave Chuck the official Authority seal. Report on residential development NE of runway — Chuck reported that he and Ken Knutsen had a meeting on 2/22/07 with the developer and Gregg Mims and as a result the developer agreed to change the location of some of the houses, 14 of the 80 will be relocated. He said that the development will be done in three phases and that legally they are in compliance with the height and noise ordinance and that on the plat they will be placing a restriction that nothing will be higher than 35 ft. He said further that the site plans were approved at the 3/5/07 Planning & Zoning meeting. He said there is still a significant need for us to develop a "compatible uses" plan forfor the land surrounding the airport. At this time David Bagwell telephoned E.B. Peebles and a conference call was held. Chuck said the purpose was to give everyone else on the authority the opportunity to get any questions answered they might have regarding the upcoming bond issue. He and Louis Mapp were in on a conference call yesterday with Bob Young and all his questions had been answered satisfactorily. Everyone was satisfied we are heading down the right road and Mr. Peebles answered their questions satisfactorily. Louis Mapp reported that he and Chuck attended a telephone conference call at 11:00 a.m. on Monday March 5th with all parties involved in the bond issue, including Mayor Tim Kant and Council Member Mike Ford (also a member of the Airport Authority). Louis recounted the details of that telephone conference, and noted that he had previously distributed his notes to all members of the Authority. The main points covered in the teleconference were these: Participating in the above mention conference call was Chuck Zunk, Mike Ford, David Bagwell, Tim Kant, Nancy Wilson (City of Fairhope), E.B. Peoples, Atty., Bob Young (Investment banker), Alan Zeigler and Roderick Kanter of Bradley Arant (our bond attorney's), and Tim Murphy of Allied Irish Bank. 1 Kind of the bottom line —we were told that the bond issue was structured (at the city's request) as an off balance item of the City of Fairhope—and while, according to the Appropriation Agreement, the City was only obligated to pay the debt service on the bond issue for one year —and the City had no legal obligation to pay off the bond issue —they said the City had a moral obligation —and this is what the bank (AIB) was counting on. Tim Murphy, of AIB, made it clear that they were looking to the City for repayment —and not the Airport Authority. He said if the City did not pay all of the bond payments —it would severely damage the credit rating of the City. Tim Kant made it clear that City was responsible for the repayment of this debt --and not the Airport Authority. I asked the Mayor and Mike if the City Council understood this --and they said that the Council did. NOTE: I understand there is a dcoument in the works wherein the City can "take back" the Airport after five years if they choose to. I think the City Attorney, Tut Wynne, is working on this document. Chuck Zunk made it clear to everyone that he had no reasonable expectation that the Airport Authority could service this debt. He also said that he wanted to be sure that none of the Authority members could ever be held personally responsible for the repayment of this debt —and he was assured they would not --or could not --be held responsible for this debt. I told the group that we (the Authority) wanted to be sure that everything we did would pass the newspaper test —that is —we want be totally comfortable in giving all of the details of this transaction to the news media- -if asked. Everyone agreed that we would. Another issue discussed was the tax free issue. As these bonds will be tax free instruments— we were advised by bond counsel that the proceeds from the sale of the bonds can not be used for private use. We can purchase the land —it just can't be used for private use. For example, if the Authority sold or leased 20 acres of the land to a private business --we would K either have to pay off the debt on the 20 acres —or convert the debt on the, 20 acres to taxable debt — which in today's market is about 2% higher that tax free debt. The one exception (there may be others —but this is the example they gave us) to the above is that we can lease hanger space --as long as the lease is not considered "long term" (longer than 200 days). We can also lease hanger space to public organizations such as the Alabama State Troopers and etc. --for any length of time. The 200 day lease limit only applies to private companies or individuals. Mayor Kant also made the comment that someday the City may decide to use some of this land for City recreational needs —in which case it would not effect the tax exempt bonds —as this would be considered a public use of the land —and not a private use. The question came up about extending our closing a few days --if needed. Mike Ford called Mason McGowin (the seller) and he agreed to a one week extension-- if needed. David Bagwell brought up the resolutions that it will take to enact transfer, land acquisition and financing and said that we have not seen these resolutions and believe that Tut Wynne is working on them but will touch base with him again so they will be placed on the March 14 City Council agenda. Chuck talked about the March 14th meeting and said we will be meeting back to back with the City Council and that it should be brief. He briefly talked about the contracts on the taxiway construction and said that he would like to wait until it is legal for him to sign to do so, wait until the financing is in place. A motion was made by Charlie Basset 2nd by Joe McEnerney to have Chuck sign the contract when the funding is secure. Motion passed unanimously. Chuck said that at each meeting we will have the bills listed and review them and get approval for payment. Discussion followed on placing Chuck's name on the bank account and a motion was made by Charlie Bassett, 2nd by Ken Knutsen to have Charles Zunk signature placed on card for signing 3 checks and further that this always be Ex-Officio — the Chairman and the Treasurer as they change. Motion passed unanimously. Joe reported that we have Errors and Omissions insurance as of yesterday and that we will have property and casualty by next week. Chuck brought up that regarding the land we are getting ready to buy from Mason McGowin, we should initiate annexation and suggested we do so. Mike Ford moved to initiate annexation process once we buy the land. Charlie Bassett 2"d the motion and it carried unanimously. David Bagwell handed out the final copy of the authority by-laws and suggested we formally accept them with the understanding they can/would be modified. Ken Knutsen moved to accept version presented, Charlie Bassett 2"d the motion and it carried unanimously. This led to a discussion on officers and a motion was made under the by-laws that the officers be: Chairman — Charles Zunk, Vice -Chair, Mike Baugh; Secretary/Treasurer, Joe McEnerney. Louis Mapp made the motion, Charles Bassett 2"d and motion carried unanimously. Louis Mapp and Charlie Bassett were appointed to the Law Enforcement and Security committee. Chuck said he will work with them to revise the Airport Safety and Security Plan and other duties appropriate to the committee. Chuck brought up the Street request to continue to farm Mason McGowin's land after we purchase it and discussion led to the members asking Mike Ford to get with them and tell them this would no longer be possible. But, if they have already got a crop in the ground they can in fact harvest the crop but no further farming will be allowed.. This brought up a request from Mr. Childress to continue farming land around the airport not encumbered and all felt this would be ok as long as he contracted to do so. Mike Ford will also talk to him. The motion to allow the Street's to farm in the February minutes was rescinded on motion by Charlie Bassett, 2"d by Joe McEnerney. There being no further comments meeting was duly adjourned at 5:30 PM. 4