MINUTES OF THE REGULAR MEETING OF THE

SANFORD AIRPORT AUTHORITY

HELD AT THE ORLANDO SANFORD AIRPORT

ONE RED CLEVELAND BOULEVARD, LEVEL II CONFERENCE ROOM

A.  K. SHOEMAKER DOMESTIC TERMINAL

TUESDAY, JULY 11, 2000

PRESENT: Kenneth W. Wright, Chairman

William R. Miller, Vice Chairman

Lon K. Howell, Secretary/ Treasurer

Sandra S. Glenn

Martin W. Herbenar

G. Geoffrey Longstaff

Brindley B. Pieters

Clyde H. Robertson, Jr.

Stephen H. Coover, Counsel

ABSENT: Colonel Charles H. Gibson

Victor D. White, Executive Director

Bryant Garrett, Director of Finance

Jack Dow, Director of Operations & Maintenance

STAFF PRESENT: Ray Wise, Director of Marketing

Karl Giebel, Director of Engineering

Stephanie Weidner, Assist. to Director of Properties

Jackie Cockerham, Administrative Secretary

OTHERS PRESENT: Mayor Larry A. Dale

Mike Loader, Royal Support

Bob Stroup, AOPA

Larry Sherman, US Customs

Nelson Blankenship, Jr.

Ed McNeill, Turner

Donald S. Corinna, Turner

Brenda Carey, Turner

Jim Hooper, StarPort

J. Pendergast, Jerry’s Caterers

Greg Dull, OSI

Larry Gouldthorpe, OSI

Drew Genneken, Birk-Hillman

Bill Lutrick, PBS&J

Loren Friedle, CE Avionics

Carmen Lugo

Don Philphitt

The meeting was called to order at 8:30 a.m.

1. INTRODUCTION OF GUESTS

On behalf of the Authority Board, Chairman Wright expressed heartfelt sympathy for Bryant Garrett and his family for the recent tragic death of his wife.

2. APPROVAL OF MINUTES OF THE MEETING HELD ON JUNE 6, 2000

Motion by Board Member Howell, seconded by Board Member Robertson, to approve the minutes of the meeting held on June 6, 2000.

Motion passed.

3. CONSENT AGENDA

Item A: Consider approval of Lease No. 00-14 with Whisper Jet, Inc. (formerly Orlando Aviation, Inc.) for Building #410 located at 1220 30th Street

Item B: Consider approval of Lease No. 00-17 with Bill Dowdy, O’Town Skyliters

Item C: Consider approval of Addendum A to Lease Number 99-19 with International Aviation Training-Holland, Inc., extending lease term for four months.

Item D: Consider Approval of Supplemental Joint Participation Agreement No. 1 with FDOT for Project No. 405793 1 94 01 (Westside General Aviation Ramp Rehabilitation)

Motion by Board Member Howell, seconded by Board Member Longstaff, to approve Consent Agenda Items A through D.

Motion passed.

4. DISCUSSION AGENDA

Item A: Consider Approval of Change Order #5 with Mark Construction Company for the Terminal Expansion Project

In keeping with the same format we used for last month’s board meeting, Change Order #5 with Mark Construction Company incorporates two (2) types of change items. The first category is for items that add value to the construction, in such ways as increasing the functionality or operating efficiency of the building, or by adding new spaces that will be rented-out and contribute additional lease or concession revenues, or by making the facility more customer-friendly, or by making the building more attractive, or by providing life-cycle cost enhancements to the maintenance of the facility.

In the “value added” category, each of the items on the attached sheet is identified with a “V”. The total cost increase is $54,335.00 for these items. Of that total, $24,969.00 includes items that were anticipated at the time of budget presentation, and are included as a separate line item in the overall program budget. The remaining $29,366.00 is being taken from the contingency fund. The largest single item ($24,861.00) is for the removal of unsightly and traffic-interfering old support columns in the baggage claim area.

The other category of changes includes items (identified with an “R”) that were completely unanticipated at the time of budget development, and represent items that have been uncovered during the construction process which are required to complete the

project. The total of these items is $2,177.00, and comes totally from the contingency account.

The total of this change order is $56,512.00, and all of the funds are included in the overall program budget, from both the contingency account and the upgrades line item account. Please note that there are credits for several items, which total $1,687.00.

Ray Wise advised that the Change Order Ad Hoc Committee (including Mayor Dale and Board Member Pieters) met several times in the past month with the design and program management team to review each of the items included in this change order. The committee supports the change order, and recommends its approval by the Board. Staff also recommends approval. Wise advised that Corinna and Blankenship are available to answer any questions regarding the change orders.

Board Member Miller was concerned about the cost of the hand blowers for the restrooms, and the architectural columns that are included in Change Order #5. He continues to express the Board’s frustration with the way this whole process has gone on (with change order after change order), and the things that have occurred. It is inexcusable to say that these changes were a budget cut.

Board Member Pieters advised that he has the same concerns as Board Member Miller. He advised that those value-added items were initially in the budget, but were cut out in order to stay within that budget range. Now, those items are being added back into the budget. It poses a big problem when it is done this way because most of the time there are substantial cost increases. However, in order to have a good facility, the architectural columns must be removed. He agrees with Board Member Miller and advised that at some point we should say no more value added changes.

Board Member Howell questioned who would be responsible for these value added changes?

The Chairman advised that originally in an effort to save money the columns were going to be left in place. Now, because we have money, there are columns that are critical and need to be removed. Therefore, we must pay to have the columns removed.

Board Member Robertson, Jr. questioned whether the hand dryers had been installed or whether the installation of the blowers were contingent upon Board approval?

Mayor Dale advised that the hand dryers have not been installed at this time. However, some of the items had to be done before they actually made it before the review committee, or those items would otherwise hold up construction.

Board Member Robertson, Jr. echoed the Vice Chairman’s concerns regarding continuous change orders. He suggested that the Board come up with a procedure (and put in writing) as to how future construction projects are bid. By implementing this procedure would reduce the amount of requests for change orders and value-added

changes. This would also provide protection to the Airport by becoming wiser when making decisions as to whether to spend or not spend money. He feels that if it is not wise to spend, he would rather not spend it.

Board Member Herbenar was concerned that since the total for Change Order #5 is just over $56,000, and over $30,000 of that comes from contingency funds, how much of the $1.8m would be left?

Don Corinna advised that there is approximately $900,000 left. He also stated that his team is in agreement with the Board as far as costs. As program manager of the terminal expansion project, they have evaluated the change orders. With regards to the north wall, the team felt that the price was too costly, and did not feel that we were getting the value that is demanded, therefore, decided not to accept the numbers submitted for the change orders.

Mayor Dale advised that most of the items were included in the budget as enhancement money and would not be deducted from the contingency funds. He is hopeful that we are near the end of unexpected required change orders that are to come out of contingency funds. He advised that we are probably near the end of seeing value-added change orders, as well, and does not foresee any more of significance.

Corinna advised that there could be security change orders in the future.

Mayor Dale advised that security change orders could not be avoided.

Chairman Wright thanked Board Member Pieters and Mayor Dale for their assistance on the Change Order Ad Hoc review team.

Motion by Board Member Howell, and seconded by Board Member Robertson, Jr. to approve proposed Change Order #5.

Motion passed.

Item B: Consider Approval of land lease length of term policy

For several months, we have been investigating the possibility of creating a policy that could serve as a guideline for negotiations with prospective tenants in the Commerce Park that could help us define a maximum length of years for which a land lease could be granted. We surveyed over a dozen Florida airports to see if any of them had adopted a formal policy such as this, and we found that none of them had done so. In addition, we posted a question on the Internet news line that all of the airports in the U.S. utilize. We found just a few samples that were relevant to what we were considering.

In the state of Florida, the maximum length of an aviation land lease is limited by statute to thirty (30) years. However, for non-aviation industry park leases, there doesn’t appear to be a statutory limitation. This was the primary focus of our interest. Most of the Florida airports grant a maximum of thirty (30) base years for industrial leases, but they do generally offer one or two five-to-ten year options on top of the base term.

We did find a couple of exceptions. At Fort Myers, they granted a 30-year lease with two (2) 20-year option periods to a major shopping center development at the Page Field Airport. At Daytona Beach, they granted a 30-year base lease with one (1) 15-year option period for an on-airport hotel.

Even though none of the airports we surveyed had adopted a formal written policy, many of them have informal guidelines that allow that airport management to retain flexibility during negotiations with a prospective tenant. The guiding principle in every case must be the FAA regulations with a prospective tenant. The guiding principle in every case must be the FAA regulation that requires an airport to be as financially self-sufficient as possible. We also believe that each development project should generally be considered separately based upon the unique merits of the individual project. For example, the investment made by one tenant should be given a higher “rating” and, therefore, a longer lease term if the tenant were to pay for the storm water, drainage, utility, demolition, or access roadway infrastructure improvements for the site than a tenant who pays for none of those items. We also believe that the maximum size of the parcel leased should be related to the investment made on, say, a per acre basis.

Ray Wise advised that this item is a discussion item only, and does not require a vote today. This item has been in discussion with Counsel regarding creating some type of policy or guidelines for negotiating with prospective clients interested in land leasing. Upon investigation and research of various airports, we found that there is no firm policy on land leasing.

Board Member Herbenar asked if there has ever been prospective tenants walk away because the 30-year lease was not long enough?

Ray Wise advised that there have been some instances, but there were a lot of caveats. It happens because of financing. Sometimes the prospective tenants’ requests are just not practical.

Mayor Dale advised that he received calls from several prospective tenants with complaints.

Board Member Herbenar asked if there was no policy in place when the prospective tenant showed interest, what prevented the Airport from going beyond the thirty (30) years.

Ray Wise advised that we do want the business, but we also want good business. However, if it looks like a good deal it would go before the Board for discussion.

Board Member Longstaff commented that financing is what drives this. Today, it is not unreasonable to think that one could get 30-year financing on industrial projects of a significant size. Typically, a financier wants to have a term that is at least as long as the mortgage plus about 10 years, plus preferably some options beyond that. He suggested that the Board set bookends, allow the management team to manage, then let staff manage within the bookends.

Board Member Miller agreed with Longstaff’s suggestion.

Board Member Robertson, Jr. commented that he has been asked why can’t a decent lease agreement be done? He understood that the leases were all done by scheduled options.

Discussion regarding terms of land leases ensued.

Chairman Wright requested that Ray Wise meet with Victor White and report back at the next meeting with more consistent information on land leases.

Item C: Consider Approval of Pan Am Fuel Farm Rehabilitation

Ray Wise advised that the Fuel Farm Rehabilitation Project consists of the installation of an additional 20,000-gallon above ground fuel storage tank, all requiring piping, pumps and filtration systems, and conversion of existing system to Jet-A to make a complete and operational system.

A notice of bidders was prepared and published by PBS&J and bids were required by July 7, 2000. A pre-bid conference was conducted on June 29,2000 at 10 a.m. Bids were publicly opened and read on July 7, 2000. Five bidders responded, a compilation of the bids is attached. Florida Contracting Company was the successful bidder at $73,701.00.