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Home My WebLink About2012-12-11Town of Nantucket NANTUCKET MEMORIAL AIRPORT 14 Airport Road Nantucket Island, Massachusetts 02554 RECEIVED w ?013 AN 14 P9 10 35 Thomas M. Rafter, A.A.E., Airport Manager /'� Comm rssion�CY• .1' Phone: (508)325 -5300 Danielw.D 1UC4FmT TOWN CLERK Fax: (508) 325 -5306 Arthur D. Gasbamr, Vice Chan David C. Gray, Sr. Sonny Raichlen Jeanette Topham AIRPORT COMMISSION MEETING 12/11/12 The meeting was called to order at 4:00 PM by Chairman Daniel W. Drake with the following Commissioners present, Vice Chair Arthur D. Gasbarro, Sonny Raichlen and Jeanette Topham. David C. Gray, Sr. was absent. The meeting took place in the I" Floor Community Meeting Room at the Public Safety Facility, 4 Fairgrounds Road. Also, present were Thomas M. Rafter, Airport Manager, Elizabeth Gibson, Town Manager, Rick Holland of Kopelman & Paige (Legal Counsel), Mike losefek of Architectural Consulting Group (OPM) and Janine Torres, Office Manager. The Commission M/S/P Unanimously approval of the Agenda with the FYI4 Budget topic to be held prior to the GA Building Discussion. The Commission M/S/P to enter into executive session, to reconvene in open session, by the following roll call vote to discuss litigation strategy with respect to imminent and likely litigation involving the General Aviation and Administration Building Project, because an open discussion will have a detrimental effect on the Town's strategy and position in such litigation. Chairman Dan Drake - Aye Vice Chair Arthur Gasbarm — Aye Jeanette Topham — Aye Sonny Raichlen - Aye Chairman Drake reconvened open session at 5:01 PM. Mr. Holland, Mr. Josefek and Ms. Torres left the meeting. Ashley Christ, Business Manager and Debra Crooks, Finance Assistant joined the meeting. Mr. Drake announced Commissioner Gray was air lifted to Mass General last night and wished him a quick recovery. Mr. Drake announced the meeting was being recorded 112012 -1 FY2014 Budget Discussion and Certified Retained Earnings Town Manager, Libby Gibson joined the discussion to clarify the budget process: Ms. Gibson announced she erroneously included the Airport's Capital projects as a portion of the $6.6 million of Free Cash in the General Fund as was reported at the 12/5/12 Board of Selectman (BOS) meeting. She corrected herself by announcing the Free Cash amount has nothing to do with Airport funds. Ms. Gibson will correct her presentation to the BOS as well as inform the newspaper of the error. Discussion moved to the definition and use of "Fund Balance". Ms. Gibson read the DOR definition of fund balance as "the difference between assets & liabilities reported in a governmental fund, also known as Fund Equity". Ms. Gibson reported it should not be used in preparing a budget; it is a "below the line" figure. Mr. Drake interjected it has been listed in every budget document supplied by the Town he has seen. Ms. Gibson responded it has been included only to show what may be available but is not incorporated into the budget numbers. Mr. Gasbarro pointed out it is listed as "Budgeted use of Fond Balance" on reports created by the Finance Department. Mr. Gibson believes it should read Budgeted use of Retained Earnings and will seek clarification. Discussion moved to the Airports Certified Retained Earnings (RE) of $1.79M. RE cannot be utilized until appropriated at Annual Town Meeting (ATM). Mr. Drake reviewed the options for use of RE: • Allocate to FY13 deficit • Allocate a portion to repay the Town • Apply towards FYI Budget • Establish a Reserve Line Item Ms. Gibson noted the Airport's FYI Expenses are almost $8M and projected Revenue's are approximately $63M. RE are enough to cover this shortfall with a small balance remaining. If a "reserve budgeted line item" is added to the FY14 Budget, it cannot be used towards FY13 adjustments or rolled over, except as part of future Retained Earnings Certification. Ms. Gibson suggested establishing a budget to allow the Airport to operate and does not want a repayment to the Town to get in the way. Mr. Drake noted the Airport after FY13 will owe the Town $16M and feels strongly a plan should be established to repay the Town. Ms. Gibson confirmed Mr. Rafters understanding that a repayment has to be budgeted. Discussion moved to the timing of drafting Articles for ATM where not only the FY14 will be voted upon but amendments to FYI 3 budget as well. Open Encumbrances were discussed and how they affect the budget. Prior FY Encumbrances that are not zeroed out by September 30th of the following year are deducted from Retained Earnings amount per DOR regulation. The Airport had $700K of Encumbrances carried over to FY13. Any unspent Encumbrances that are subsequently closed will be included in future retained earnings. Encumbrances do not affect "Actual" numbers. It needs to be verified if Encumbrances are included in the Expense Figures. Airport Commission Minutes 12/11/12 Page 2 of 4 After brief discussion, Mr. Rafter was asked to change the format reflecting the three subsidies from the Town under Operating Revenue which should net out to the $13M in Retained Earnings, minus the projected deficit of $1.3, showing an excess of approximately $400K for Mr. Rafter to make recommendations to the Commission on how the excess should be allocated. Discussion moved to Debt Service. Mr. Drake noted changes to the $8M in short tern debt discussed with the Finance Department aren't reflected in the Debt Service scheduled provided by the Treasurer. For example, $3M for the General Aviation building was to be rolled into long term debt. Additionally a significant amount of short term debt will be retired through reimbursements or because it is not needed. On balance, this should provide a significant reduction in debt service. After further discussion, Mr. Rafter will meet with the Treasurer to go over the requested changes and clarify who is responsible to initiate those changes. The subject of budgeting for Union Negotiations was discussed. Ms. Gibson noted the Town includes a line item to cover any negotiated cost of living increases. Mr. Rafter felt them was already a line item in payroll expenses that can be used for this purpose. Mr. Drake asked if the Airport will receive credit towards the amount the Airport contributes to the Bamstable County Retirement (BCR) Program now that three highly compensated employees have retired. Mr. Gibson explained not until BCR performs an Actuarial Study, typically done every two years; however, if the employees are drawing their retirement, the Airport will continue to be assessed that amount. Mr. Gasbaro noted previously discussions assigned a separate line item for the B &K Noise software as "Flight Tracking" from the "Environmental Services" line item. Mr. Gasbaro asked for clarification on the note related to the Electricity line item was for the Energy Audit, not a light program. Mr. Rafter added the Energy Audit itself has expanded and this amount reflects only the portion associated with the lighting changes proposed. Mr. Drake thanked Ms. Gibson for attending. Ms. Gibson departed at 5:45pm. Pending Leases/ Contracts Mr. Drake explained an Amendment to the OPM contract with Architectural Consulting Group was required to enable payment for the additional services listed in the original contract. This amount completes the contract through October 31, 2012. Another amendment is being drafted to cover the Liquidated Damages portion of the project which began November 1'. The Commission M /$ /P Unanimously to approve Amendment 1 for $16,200 with Architectural Consulting Group LLC. GA/Administration Building Project Mr. Rafter had nothing new to report. Mr. Drake asked if Mr. Rafter had any other updates. Mr. Rafter noted he sent the Personnel Sub - Committee a comparison of administrative personnel policies to be reviewed; and dates need to be established to begin Union negotiations. Mr. Drake asked it be put on the next Agenda. Commissioners Comments None. Airport Commission Minutes 12/11/12 Page 3 of 4 Public Comment None. Meeting Adjourned at 5:50 PM. Respectfully Submitted, -(�-,k,t & UO,_ Debra A. Crooks, Recorder Master List of Documents 12/11/12 Agenda Architectural Consulting Group Amendment #1 Draft FY2014 Budget -STM (Handout) Airport Commission Minutes 12/11/12 Page of