[00:00:05]
GOOD AFTERNOON CALL THIS MEETING TO ORDER TODAY IS TUESDAY, APRIL 4TH YEAR 2023. IT'S FOUR O'CLOCK IN THE AFTERNOON AND WE ARE IN COUNCIL CHAMBERS AT 2 22 NORTH TENNESSEE STREET IN THE GREAT
[Proclamation for National Community Development Week]
CITY OF MCKINNEY. FIRST ORDER OF BUSINESS IS INFORMATION SHARING AND 230245 AS A PROCLAMATION FOR NATIONAL COMMUNITY DEVELOPMENT WEEK. I THINK THE COMMUNITY DEVELOPMENT STAFF WILL BE COME UP TO RECEIVE THIS.OKAY? THIS POINT. WHEREAS EACH YEAR IN MCKINNEY THE MONTH OF APRIL IS DEDICATED TO REAFFIRMING COMMITMENT TO COMMUNITY DEVELOPMENT AND FAIR EQUALITY OF OPPORTUNITY AND HOUSING. WHEREAS THE CITY OF MCKINNEY JOINS THE CDBG COALITION OF NATIONAL COMMUNITY DEVELOPMENT ASSOCIATION, WHICH INCLUDES US CONFERENCE OF MAYORS , THE NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS, THE AMERICAN PLANNING ASSOCIATION AND OTHER NATIONAL PARTNERS TO RECOGNIZE NATIONAL COMMUNITY DEVELOPMENT WEEK UNDER THE THEME BUILDING, EQUITABLE COMMUNITIES. WHEREAS MCKINNEY CELEBRATES AND RECOGNIZES THE IMPACT OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM IN THE ADDITIONAL CITY FUNDED PROGRAMS FOR HOUSING AND COMMUNITY DEVELOPMENT. EVERY DOLLAR OF CDBG LEVERAGES ANOTHER $2.80 AND OTHER FUNDING. THE PROGRAM HAS PRESERVED HOUSING, AFFORDABILITY SUPPORTED JOB CREATION IMPROVED OUR LOCAL TAX BASE, PROVIDED EMERGENCY LIVING ASSISTANCE AND ASSISTED HUNDREDS OF RESIDENTS WITH EDUCATION COUNSELING, HEALTH SERVICES, SENIOR SERVICES AND SUPPORT SERVICES TO THOSE WHO ARE HOMELESS, ABUSED OR NEGLECTED VICTIMS. AND WHEREAS OUR PROGRAMS OUR PROGRAM. FUNDS ARE INVESTED IN MCKINNEY TO MEET CRITICAL NEEDS AND LEVERAGE RESOURCES, WHEREAS THE CITY CONTINUES TO DEMONSTRATE CAPACITY TO ADMINISTER FEDERAL, STATE AND LOCAL RESOURCES TO IDENTIFY AND ADDRESS LOCAL NEEDS, WHILE AFFIRMATIVELY, FURTHERING FAIR HOUSING AS WE ACKNOWLEDGE NATIONAL FAIR HOUSING MONTH, AND WHEREAS THIS MOMENT SERVES TO ACKNOWLEDGE THE EQUITABLE IMPORTANCE OF COMMUNITY DEVELOPMENT AND HOUSING WITH THEIR PARTICIPATION FROM OUR CITIZENS, VOLUNTEERS AND COMMUNITY AND BUSINESS PARTNERSHIPS. NOW, THEREFORE, I GEORGE FULLER, MAYOR OF THE CITY OF MCKINNEY, TEXAS, DO HEREBY RECOGNIZE THE WEEK OF APRIL 10TH THROUGH 14TH 2023 AS NATIONAL COMMUNITY DEVELOPMENT WEEK IN MCKINNEY, TEXAS, WITNESSED MY HAND AND SEAL THIS FOURTH DAY OF APRIL. THANK YOU VERY MUCH. MAYOR FULLER, AND WE WANT TO THANK OUR COUNCIL FOR CONTINUING TO SUPPORT CDBG AND ALL OF OUR HOUSING COMMUNITY DEVELOPMENT PROGRAMS, AND CERTAINLY THE RESIDENTS AND OUR CITIZENS OF MCKINNEY AS WELL. THIS IS ALSO 20 YEARS OF HAVING CDBG IN MCKINNEY AND WE WANT TO THANK YOU FOR ALWAYS HAVING THE SUPPORT TO BENEFIT OUR RESIDENTS , AND WE LOOK FORWARD TO NEXT YEAR WHERE WE WILL BE CELEBRATING THE 50TH ANNIVERSARY CDBG. THANK YOU SO MUCH.
CHARLIE BEFORE WE STARTED. I THINK YOU HAD A COMMENT. YES, SIR. THANK YOU, MR MAYOR FOR THE OPPORTUNITY I WANTED TO RECOGNIZE TREVOR MENU HEARD, UH , WORKS ON OUR CITY STAFF. LAST WEEK, MOST OF YOUR CITY COUNCIL MEMBERS WENT TO AUSTIN AND MET WITH OUR LEGISLATURES AND CENTER DECK SENATORS DOWN THERE. AH UM , IN REGARD TO UPCOMING BILLS AT THE STATE LEVEL AND TREVOR MINIATURE AND WAS THERE TO MEET WITH ALL OF US. AND HIS SKILL AND CRAFTSMANSHIP AND PRESENTING THE ISSUES IN THE LIGHT, MOST FAVORABLE TO THE CITY OF MCKINNEY WAS SIMPLY UNMATCHED.
IT WAS MASTERFUL AND I WANTED TREVOR TO KNOW HOW THANKFUL THIS CITY IS TO HAVE SOMEONE OF HIS CALIBER REPRESENTING US AT THE STATE LEVEL. AND WORKING WITH US EVERY DAY. SO THANK YOU VERY MUCH FOR TREVOR MENU. PAUL YOU'VE GOT A GREAT HAND THERE. THANK YOU, MR MERRICK. I'LL SEND
[PUBLIC COMMENTS ON AGENDA ITEMS]
. ALRIGHT PUBLIC COMMENTS ON AGENDA ITEMS WE WILL START WITH HENRY OR HANK JOHNSON. WHEN YOU COME UP. YOU HAVE THREE MINUTES, SIR, WILL BE A TIMER UP TO YOUR LEFT OR TO YOUR RIGHT YOUR STATE[00:05:03]
YOUR NAME AND ADDRESS FOR THE RECORD. THAT WOULD BE GREAT. MR MAYOR, MAYOR PRO TEM AUDIBLE COUNCIL MEMBERS. I'M HANK JOHNSTON 26 27 CLUB LIKE TRAIL IN MCKINNEY. I'VE BEEN AN OWNER OF PROPERTY AND MCKINNEY FOR ALMOST 30 YEARS, HOWEVER, 20 OF THE PAST. YEARS. I'VE BEEN IN SOUTH CAROLINA UNTIL TWO YEARS AGO. WHERE I WAS A COUNCIL MEMBER AND MAYOR. IN FULL DISCLOSURE. I ALSO OWN PROPERTY SOUTH OF THE AIRPORT. I'M HERE TODAY. NOT TO SPEAK FOR OR AGAINST THE AIRPORT EXPANSION. I DON'T HAVE ENOUGH INFORMATION. THE PUBLIC DOESN'T HAVE ENOUGH INFORMATION. HOWEVER, I AM AGAINST. THE BOND ELECTION FOR THE SAME REASON. THERE'S NOT ENOUGH INFORMATION. FOR PUBLIC VOTE. ATTENDED THE OPEN HOUSE A COUPLE OF WEEKS AGO, DISAPPOINTED. THE STUDY YOU'VE COMMISSIONED IN MY OPINION DOESN'T COME CLOSE TO GIVING THE PUBLIC THE INFORMATION THAT THEY NEED. THE TRAFFIC STUDY DOESN'T CONSIDER ALL OF THE TRAFFIC ISSUES IN THE AREA. WITH ALL THE WAREHOUSE DEVELOPMENT. CURRENTLY IN PROCESS ALONG FM 5 46 PER 3 99 NOT BEING COMPLETED. THE 3 80 BYPASS NOT COMPLETED. YEP THE FLY BLUFF DOWN BLUFFTON. I MEAN , MCKINNEY MATERIAL DISCUSSES THE PROJECTED TRAVELERS COMING FROM THE COUNTIES NORTH AND EAST OF COLLIN COUNTY. THE PUBLIC NEEDS A COMPLETE PICTURE OF ALL TRAFFIC PROJECTIONS BEFORE CONSIDERING ADDITIONAL DEVELOPMENT OF THIS MAGNITUDE. HAVE ANY OF YOU TRAVELED 3 80 FROM PRINCETON IN THE MORNING. YOU OUGHT TO TRY IT SOMETIMES. TO TRY GOING HOME ON FM 5 46 AND TRY TO GET OUT OF ONE OF THE SIDE ROADS THAT'S THERE. IT'S DANGEROUS. IT'S CRITICALLY IMPORTANT THAT WE UNDERSTAND COMPLETELY. AS WELL AS WE DON'T HAVE A COMPLETE ENVIRONMENTAL IMPACT. IN THIS STUDY. IT DOESN'T CONSIDER ALL THE MARKET MIGRATORY BIRD IMPACT IN AREA, ESPECIALLY AROUND THE HERD MUSEUM. IT'S BEEN STATED THAT NOTHING'S GONNA HAPPEN WITHOUT A COMMITMENT FROM AN AIRLINE MATERIALS YOU'VE PRESENTED DISCUSS CONSTRUCTION STARTING IN 2024 2025 WITH COMPLETION IN 2026. IF YOU'RE THAT CLOSE TO HEAVEN, AN AIRLINE COMMITMENT THE PUBLIC NEEDS TO KNOW MORE. YOU DON'T HAVE TO DISCUSS WHO'S COMING OR COMMITTED. BUT WHO HAVE YOU TALKED WITH? WHAT TYPE OF FLIGHTS ARE ANTICIPATED. CONNECTORS OR DIRECTLY MAJOR AIRPORT. AIRPORT TRANSPORTATION HASN'T REACHED PRE COVID LEVEL. DFW AND LOVE FIELD, AIR TRANSPORTATION IS DOWN MORE THAN THE NATIONAL AVERAGE AND AIR TRANSPORTATION. DFW HAS POSTPONED INDEFINITELY. CONSTRUCTION OF TERMINAL F AND THE STEAD IS ADDING GET AM SORRY WE HAVE TO ABIDE BY THE BY THE TIME OF JUST SO IT'S AN EQUITABLE PRESENTATION. OKAY, THANK YOU FOR YOUR COMMENTS. AND IF YOU WOULD LIKE YOU CERTAINLY COULD GIVE THEM TO THE CITY SECRETARY OF READING IT, AND THEN WE CAN CERTAINLY ADD IT TO CLEAN IT UP AND GET IT TO HER.THANK YOU. UM IS IT BIANKA BELL OR BIANKA BELL? YES. VERY COOL. GOOD EVENING CITY COUNCIL MEMBERS. MY NAME IS DIANE CABELLA RESIDENT OF MCKINNEY. I'M HERE BEFORE YOU TODAY, VOICING CONCERNS WITH THE SCHOOL SYSTEM. I E MAILED YOU ALL BACK ON MARCH 9TH 2023 ABOUT AN INJURY THAT MY CHILD SUSTAINED AT CARDWELL ELEMENTARY DUE TO ONE OF THE STALLS THAT YOU ALL HAVE APPROVED OR SOMEONE THAT YOU ARE CONNECTED WITH HAVE APPROVED TO BE PLACED IN EACH CLASSROOM. THIS TOOL WAS THE MAIN REASON MY SON HAS, UH, A DAMAGED PERMANENT FRONT TOOTH.
THE INSURANCE THAT HE HAS WILL NOT PAY FOR IT. THE TASK RISK FUND THAT YOU ALL HAVE WILL NOT ALLOW THIS TO BE FIXED BECAUSE IT STATES IN THIS LETTER THAT I RECEIVED THAT IT IS UNFORTUNATE YOUR CHILD WAS INJURED AS A RESULT OF AN INCIDENT WHICH OCCURRED ON 2 24 23. UNDER GOVERNMENTAL IMMUNITY AND THE TEXAS CIVIL PRACTICES AND REMEDIES CODE THE CRITERIA FOR A
[00:10:06]
SCHOOL DISTRICT TO BE LIABLE ARE OF THOSE DAMAGES MUST BE CAUSED BY A DISTRICT EMPLOYEES.NEGLIGENCE UM UM DURING OPERATION OR USE OF A MOTOR VEHICLE WITHIN THE SCOPE OF EMPLOYMENT. SO THEY DENIED. UM MY REQUEST TO HAVE FUNDING. UM PAY FOR MY CHILD'S TOOTH. HE IS BEING BULLIED BECAUSE OF THE INJURY. I CANNOT PAY FOR IT. THE MCKINNEY HOUSING AUTHORITY WHERE I RESIDE, IS CURRENTLY UNDER THAT REDEVELOPMENT PHASE WHERE THEY'RE GOING TO BREAK IT DOWN, AND MY FUNDS ARE ONLY RESOURCE TO MOVE ONCE THAT HAPPENED ON THE EAST SIDE OF MCKINNEY, I NEED YOU ALL TO DO SOMETHING ABOUT IT TODAY OR MAY 1ST. I WILL HAVE A LOT OF MEMBERS IN MY COMMUNITY OUT TO MAKE SURE THAT NO ONE GETS REELECTED. UM, IN THAT IN THAT ELECTION. PLEASE HELP ME SING WHATEVER YOU CAN. I SON NEEDS IT TODAY. THAT'S ALL I HAVE TO SAY. UM WADE HINKLE.
MAYOR COUNCIL MEMBERS DID HOPE TO ACTUALLY SEE THE PRESENTATION BEFORE SPEAKING, I'M SPEAKING ON BEHALF AND ACTUALLY MORE STRONGLY ON BEHALF OF THE AIRPORT AND WHAT IT COULD DO FOR THIS CITY AND THIS REGION, UM, TO TAKE UP ON HIS COMMENTS, TERMINAL F IS BACK ON THE TABLE.
I'M SURE EVERYONE HERE KNOWS THAT THE RIGHT AMENDMENT 2025. UM STIPULATION THAT SOUTHWEST CAN NO LONGER MOVE. YOU HAVE TO MOVE IN FRONT OF THAT. I'M GLAD YOU'RE DOING SO I HOPE THAT YOU ALSO THINK ABOUT WHEN YOU EXPAND YOUR PRESENTATION TO THE PUBLIC , HIGHLIGHTING THE ADVANCES IN ENGINE TECHNOLOGY. THE ON THE ROLLS ROYCE TREND AND THE G N X ENGINES HAVE REDUCED NOISE BY 80% COMPARED TO WHAT MOST PEOPLE THINK OF AS WHAT YOU WOULD EXPERIENCE LIVING UNDERNEATH A FLIGHT PATH. BOTH ESPECIALLY DURING TAKEOFF. UM IT'S ENTIRELY PROUD. AND WHEN THE LAST IT WAS TWO MONTHS AGO, THE FIRST HYDROGEN FUEL CELL ENGINE EVER EVER TO POWER A COMMERCIAL AIRPLANE FLEW AND THERE IS A SWEDISH STARTUP THAT HAS OVER 200 ORDERS FOR AN ALL ELECTRIC AIRPLANE WITH 125 MILE RANGE THAT CAN GO TO 400 MILES WITH TURBO GENERATORS. USING GREEN FUELS SO ALL OF THE POLLUTION, ENVIRONMENTAL AND NOISE CONCERNS ARE DIFFERENT NOW IN THE 21ST CENTURY THAN THEY WERE WHEN MOST OF US GREW UP. AND I ALSO WANT TO SAY THAT WE HAVE SEEN WHAT DFW DID AS AN ECONOMIC ENGINE. FOR THE TAX VALUE. UM I FORGOT TO TELL YOU THAT I LIVE AT 21 OH, SIX FAIRWAY VISTA. INVESTED INTEREST. I LIVE IN THE NORTHEAST CORNER OF EL DORADO.
BEEN HERE 30 YEARS AND I KNOW WHAT THIS AIRPORT COULD DO IF IT IS PROPERLY PLANNED, AND, UM UTILIZED LAST COMMENT. PLEASE CONSIDER TRANSNATIONAL HIGH SPEED RAIL AS AN INTERMODAL CONNECTION TO THIS TO THIS AIRPORT IN THE FUTURE. MAKE SURE THAT YOUR LAND LAYOUT. THE BOTTOM LINE IS THE SECTION OF THE TRINITY. THE NORTHEAST CORNER IS GOING TO HAVE TO BE CASED IN, BUT THEY DID IT IN ATLANTA. THEY'VE DONE IT SUCCESSFULLY. THEY CONTAINED A MAJOR MAJOR WATERSHED AND A LOT OF THE POINTS THAT I KNOW. PEOPLE IN FAIRVIEW ARE CONCERNED ABOUT. IT'S FAIR. BUT THEY CAN BE. DISCUSSED FROM THE OTHER SIDE AND WHAT THIS WILL DO FOR MCKINNEY IF WE CAN BUILD A SECOND INTERNATIONAL AIRPORT IN 2050 ANYONE THAT OWNS LAND, NOT JUST ANYONE IN THIS ROOM THAT HAS PURCHASED LAND ANYONE THAT HAS INVESTED IN THIS COUNTY I GREW UP IN PLANO 80 FOR ANYONE WHO GREW UP HERE. THEY'RE GOING TO SEE A INCREDIBLE TRANSFORMATION, JUST LIKE THE PEOPLE IN THE MID CITIES AND GREAT FUN DID WHEN DFW EXPANDED OUT OF TIME. THANK YOU. THANK YOU SO MUCH. ALL RIGHT. THOSE ARE ALL THE PUBLIC COMMENTS I HAVE. WE'RE GOING TO NOW MOVE TO WAS THERE ANY REGULAR MEETING ITEMS THAT ANYONE COUNCIL ELECTED DISCUSS WITH STAFF WHILE THEY WERE HERE BEFORE MOVING TO OUR WORK SESSION ITEM? WE WILL
[Discuss Airport Terminal Project Financial Model]
MOVE DIRECTLY TO OUR WORK SESSION ITEM. 230246 DISCUSS AIRPORT TERMINAL PROJECT FINANCIAL MODEL HOW ARE YOU? I SAW GARY GRAHAM, GET UP IN THE BACK. I THOUGHT HE WAS ABOUT TO COME UP HERE AND I THOUGHT YOU SURE BECAUSE HE'S AN ENGINEER. I DON'T KNOW. WE'RE GETTING NEW MAYOR. MEMBERS OF COUNCIL 10 CARLY AIRPORT DIRECTOR. UH, WE HAVE A PRESENTATION ON THE[00:15:02]
FINANCIAL MODEL FOR THE AIRPORT PROPOSED PROJECT. PRESENTING TODAY WILL BE ADAM JIM BETTY.HE'S A SENIOR ADVISER WITH W. J ADVISORS. HE'S BEEN WORKING ON THE PROJECT SINCE 2021 SINCE WE STARTED LOOKING AT THE FINANCIAL STRUCTURE OF THE PROJECT, SO HE'S VERY FAMILIAR, AND WITH THAT, I'LL ASK ADAM TO COME UP AND SHARE HIS PRESENTATION. THANK YOU, KEN. EVENING COUNCIL MAYOR THANK YOU FOR THE OPPORTUNITY TO KIND OF GO IN A LITTLE FURTHER DETAIL ABOUT THINGS WE'VE DISCUSSED IN THE PAST. TODAY. UM WELL, LOOK AT THE KEY TAKEAWAYS THE FOCUS OF THIS PRESENTATIONS ON THE AIRPORT ITSELF. YOU KNOW, WE HEARD SOME GREAT COMMENTS FROM THE GUESTS ABOUT THE ECONOMIC IMPACT AND THAT OPPORTUNITY THAT WAS A SEPARATE ANALYSIS THAT WAS DONE THAT WAS ON TOP OF WHAT THE AIRPORT CAN DO BASED ON THE ASSUMPTIONS WE'RE USING HERE.
HOWEVER, THIS IS LOOKING AT WHAT THE AIRPORT CAN DO. WE'RE GOING TO TALK ABOUT THE OPERATIONS OF THE ASSUMPTIONS IN THE OPERATIONS AS WELL AS THAT THIS IS AN ALL IN APPROACH THAT INCLUDES DEBT SERVICE, SO THAT INCLUDES THE PRINCIPAL AND INTEREST PAYBACK AND WE'LL GO IN AND TALK A LITTLE BIT MORE ABOUT THE SOURCES THE USES WHAT IT MEANS AND THEN WE'LL TALK ABOUT SOME OF THE SENSITIVITIES THAT WE'VE LOOKED AT PRIOR. AND HOW THAT YOU KNOW THE GOOD AND THE BAD. OF WHAT WE'VE DONE, BUT TO MAKE SURE THAT THE CITY UNDERSTOOD THE RISK IT WAS TAKING IN THE OPPORTUNITY THAT WENT WITH IT. SOME KEY TAKEAWAYS. YOU KNOW, WE DEVELOPED A MULTI STEP PROCESS WAS USED TO DEVELOP THIS NEW TERMINAL FORECAST. WE LOOKED AT A VARIETY OF OTHER SIMILAR SIZED AIRPORTS. SO WE LOOKED AT ANYTHING THAT HAD 250,000 IMPLEMENTS TO A MILLION EMPLOYMENTS. WE LOOKED AT THEIR FINANCIAL METRICS USING 2019 AS OUR KIND OF BASE HERE BECAUSE COVID CREATED A LITTLE BIT OF NOISE WITH THAT, BUT WE TOOK THAT AS OUR STARTING POINT. AND THEN I THINK WHEN WE LOOK AT THE TRAFFIC THAT WAS DONE BY CMT, WE LOOK AT THE INTER VISTAS ECONOMIC DEVELOPMENT STUDY. AT THE END OF THE DAY, WE REALIZED ON THE AIRPORT ITSELF, YOU KNOW, THE CITY WILL HAVE TO SUPPORT A PORTION OF THOSE OPERATIONS, BUT THAT'S PRIMARILY DEBT SERVICE WHEN WE LOOK AT THE ACTUAL OPERATIONS OF THE AIRPORT, THE AIRPORT CAN PAY FOR ITSELF FROM THE OPERATING STANDPOINT, IT CAN COVER ITS GENERAL EXPENSES ON AN ANNUAL BASIS, BUT IT'S THE DEBT SERVICE THAT IS REQUIRED TO FUND THE INFRASTRUCTURE TO BUILD THIS AIRPORT FROM SCRATCH THAT IS NEEDED FOR THE CITY HELP, AND WE'LL RUN THROUGH SOME SENSITIVITIES. THAT KIND OF SHOW WHAT THAT MEANS OF TRAFFIC GOES UP BY 10% TRAFFIC DECREASES BY 10% IF YOU'RE ABLE TO MANAGE YOUR OWN EXPENSES, THERE'S A LOT OF OTHER DIFFERENT LEVELS WILL LOOK AT THAT WILL KIND OF SHOW. YOU KNOW WHAT THAT MEANS, FOR THE END ALL RESULTS. AND I THINK THE BIG THING HERE IS TRAFFIC IN THE FEDERAL FUNDING ARE REALLY THOSE KEY RISK FACTORS THAT WE'RE LOOKING AT? THAT COULD IMPACT THE RESULTS. BUT THERE'S WAYS TO MITIGATE THAT. SO WE KIND OF TALKED ABOUT THIS. I KNOW WE MENTIONED THE PROJECT TECHNICALLY IS GONNA START IN 2024. BUT WHERE WE STARTED THIS PROJECT, WE LEFT IT AT 2023 ASSUMING THAT WE FINANCE IT ALL UPFRONT, WE ASSUME THAT THE FACILITY WOULDN'T OPEN UP TO 2026. BUT THEN WE WORK CLOSELY WITH KEN AND HIS TEAM AS WELL AS LOOKING AT THOSE COMPARABLE AIRPORTS TO DEVELOP A OPERATING REVENUE AND EXPENSE PROJECTION THAT WE FELT WAS REASONABLE CONSERVATIVE BUT REASONABLE TO MAKE A DECISION. IN TERMS OF FUNDING SOURCES. WE KNOW THE BOND ELECTIONS FOR ABOUT $200 MILLION THE OVERALL PROJECT ABOUT $300 MILLION. IT'S A CUT. WE'RE EXPECTING A COMBINATION OF GEO BANDS, FEDERAL GRANTS FROM TICKET SALES TAXES AS WELL AS SOME OTHER SOURCES, INCLUDING LOW INTEREST FEDERAL TRANSPORTATION INFRASTRUCTURE LOANS. I MENTIONED PASSENGER TRAFFIC IS A KEY KIND OF INPUT TO THIS MODEL. WE TOOK CMT PREPARED IN DEPTH MARKET ANALYSIS AFTER COVID TO KIND OF UNDERSTAND THE REGION AND WHAT IS THE OPPORTUNITY? THE FORECAST RANGE FROM VERY LOW AT 178,000 PASSENGERS IN 2025 TO ABOUT VERY HIGH, WHICH IS ABOUT ALMOST 900,000 THE PARTY PASSENGERS. FOR THE FINANCIAL MODEL. WE TOOK KIND OF THE MIDDLE GROUND THERE.
WE FELT THAT WAS A FAIR AND REASONABLE APPROACH THAT WE WOULD USE, WHICH IS ABOUT 533,000 EMPLOYMENTS, AND THAT IS GROWING ABOUT 3% OVER TIME. AND IF WE LOOK AT COLLIN COUNTY IN MCKINNEY OVER THE YEARS, IT'S KIND OF RIGHT IN YOUR WE'RE EXPECTING HIGHER GROWTH THAN THAT. SO WE FELT THAT WAS ANOTHER CONSERVATIVE ESTIMATE FOR THE FORECAST. I THINK THE LAST POINT HERE AND IT'S IN THE BLUE BOXES. YOU KNOW AGAIN, I'LL REITERATE A LOT OF THE AIRLINE REVENUES DRIVEN BY THE PASSENGER BASED ON THE ASSUMPTIONS WE DO THERE, SO YOU'LL SEE WHEN WE RUN SOME SENSITIVITIES. WHAT THAT MEANS. BUT YOU KNOW IF YOU GET 10% MORE EMPLOYMENTS THAT COULD SIGNIFICANTLY HELP YOUR METRICS BY 2 TO 3 YEARS IN TERMS OF ONE, THE AIRPORTS ABLE TO PAY FOR ITSELF. SO LET'S TALK ABOUT WHAT THE SOURCES OF AIRPORT REVENUE IN SO I MENTIONED WE LOOKED AT A HOLISTIC APPROACH. WE LOOKED AT WHAT THE AIRPORTS DOING TODAY WE LOOKED AT THE NEW COMMERCIAL TERMINAL AND WE WANTED TO LOOK AT THE FULL PICTURE. SO FOR YOUR KNOWLEDGE AGAIN. AIRLINE INCLUDES YOUR LANDING FEES, SO EVERY TIME A PLANE LANDS AS WELL AS NEW TERMINAL USE FEES, SO AIRLINES WILL PAY FOR SPACE THEY'LL PAY FOR THE TICKET COUNTERS WILL PAY FOR SECURITY
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WILL PAY FOR THE BAGGAGE SPINE. THEY'LL PAY FOR OFFICE SPACE, SO WE TOOK THAT INTO CONSIDERATION.ON THE NON AIRLINE SIDE. WE LOOKED AT THINGS THAT FOR DAY ONE, WE LOOKED AT PARKING. WE LOOKED AT SOME CONCESSIONS AND WE LOOKED AT CAR RENTAL. ON EVERYBODY'S TICKET IS A PFC CHARGE. THE INTENT IS WHEN THIS PROJECT GETS APPROVED AND IT WAS, WE WOULD GO OUT FOR A PFC.
THAT HELPS REDUCE THE CITY'S REQUIREMENT BECAUSE YOU'RE ABLE TO APPLY THAT TO THE PROJECT COSTS THAT ARE ELIGIBLE BY THE FAA, AND THEN WE ALSO LOOKED AT THE EXISTING AIRPORT REVENUES BECAUSE OF THE SUCCESS OF THE AIRPORT AND KNOWING THAT'S STILL GOING TO BE OPERATIONAL. JUST DURING THIS TIME WE WANTED TO MAKE SURE WE'RE LOOKING AT EVERYTHING AND MAKING SURE WE UNDERSTOOD THAT IMPACT. GOING IN A LITTLE BIT MORE DETAIL ABOUT THE NEW TERMINAL, SO I MENTIONED AIRLINE REVENUE. UM, FOR THE MODEL ITSELF. THERE'S DIFFERENT THINGS ACROSS THE US AND HOW THIS IS ESTABLISHED. SINCE THIS IS A BRAND NEW GREENFIELD AIRPORT, WE LOOKED AT A LITTLE TOOK A LITTLE BIT DIFFERENT APPROACH. WE LOOKED AT A FIXED AND ESCALATING PASSENGER FEET TO BE DEVELOPED. MAKE SURE WE HAVE SOMETHING TO WORK WITH THE AIRLINES TO ATTRACT THEM HERE.
OUR GOAL IS TO BE SOMEWHERE IN BETWEEN WHERE LOVE FIELD IS, WHICH IS AROUND 7 TO $8 PER EMPLOYMENT. SO WE'RE DFW IS WHICH IN 2025 IS GETTING CLOSER TO THE $15 MARK. SO WE HAVE A RANGE THAT WE STARTED OFF WITH, AND WE'RE KEEPING THAT FLEXIBLE BECAUSE WE KNOW THAT IT'S GOING TO COST THE AIRLINES STARTUP MONEY TO START HERE, TOO, SO WE WANTED TO TAKE THAT IN CONSIDERATION. ON THE NON AIRLINE REVENUE SIDE. YOU KNOW, WE LOOKED AT A VARIETY OF DIFFERENT AIRPORTS THAT I MENTIONED EARLIER TO KIND OF CREATE A PER PASSENGER SPENT.
FACTORS THAT DETERMINE PASTOR SPEND IS ONE YOU KNOW YOU HAVE TO CONCESSIONAIRES WERE THREE CONCESSIONAIRES. DO YOU HAVE COVERED PARKING VERSUS OPEN PARKING? IS IT A BUSINESS TRAVELER VERSUS LEISURE TRAVELER AGAIN? WE TOOK WHAT WE SAW AT OTHER AIRPORTS ACROSS THE COUNTRY. WE TOOK KIND OF THE LOW END TO MAKE SURE THAT WE FELT COMFORTABLE THAT STARTING POINT, BUT THAT'S ANOTHER SCENARIO THAT COULD CHANGE. BASED ON WHAT ACTUALLY GOES INTO THE FACILITY AND WHAT IS ACTUALLY BUILT. HERE YOU SEE? RIGHT NOW WE'RE ASSUMING OVER THE 20 YEAR OPERATING PERIOD THAT THE AIRLINE IS THE MAJORITY OF THIS REVENUE FOR THE NEW TERMINAL WITH NON AIRLINE REPRESENTING 43. TO PUT THIS IN COMPARISON THAT'S SIMILAR SMALL HUB AVERAGES. IT'S THE OPPOSITE, BUT WE THINK OVER TIME AS A TRAFFIC DEVELOPMENT, YOU'LL SEE THAT PIE CHART, YOU KNOW, SWITCH MORE TO BEING RELIANT ON NON AIRLINE REVENUE, WHICH HELPS THE AIRLINES REDUCE THEIR COSTS. IN TERMS OF USES OF AIRPORT REVENUE. I MENTIONED WE LOOKED AT IT ALL IN APPROACH FOR THE AIRPORT HERE, AND THERE'S THREE MAIN USES. WE HAVE THE COST OF THE OPERATING EXPENSES OF THE NEW TERMINAL, SUCH AS PERSONNEL SERVICES AND CONTRACTUAL SERVICES, WHICH WILL GO INTO MORE DETAIL. WE HAVE THE EXISTING AIRPORT FACILITIES SO SIMILAR THERE'S PERSONNEL THEIR SERVICES TO SUPPLIES TO MANAGE THE G A AIRPORT THAT EXIST TODAY. AND THEN WE ALSO INCLUDED DEBTS SERVICE, SO WE HAVE AN ASSUMPTION FOR THE GEO BONDS, WORKING WITH THE FAA TO UNDERSTAND WHAT THAT WOULD LOOK LIKE IN TERMS OF PRINCIPAL AND INTEREST PAYMENTS OVER TIME. AND AS WELL AS ANY RESERVE FUNDING THAT WOULD BE REQUIRED. THE GOAL OVER TIME IS THAT THE AIRPORT BECOMES SELF SUSTAINING, AND THEY WILL BE ABLE TO ISSUE THEIR OWN BONDS, WHICH WON'T RELY ON THE GEO PORTION OF IT. LOOKING AT THE NEW TERMINAL ITSELF. THIS FOCUS IS REALLY JUST ON THE OPERATING. YOU KNOW, THEN THIS WAS A REALLY DETAILED SHEET WHERE WE LOOKED AT EVERYTHING FROM WHAT PERSONNEL NEEDS ARE IN ORDER TO OFFER COMMERCIAL SERVICES, INCLUDING FIRE AND POLICE REQUIREMENTS. WE TOOK A LOOK AT CONTRACTOR SERVICES. SO THIS IS REALLY A NEW BUCKET FOR A NEW TERMINAL. THIS IS TO MAINTAIN AND OPERATE THE FACILITY ON A DAY TO DAY BASIS, INCLUDING JANITORIAL COSTS, PARKING MANAGEMENT COSTS, TERMINAL MANAGEMENT TO MAKE SURE THAT THE LIGHTS THAT THE KIOSKS , THE BAGGAGE IS ALL WORKING PROPERLY, AS WELL AS THOSE CONVEYANCES ANY ELEVATORS OR ESCALATORS THAT MAY EXIST AND MAKING SURE THAT YOU KNOW, ON THE DAY TO DAY BASIS, THE AIRPORT SAFE AND FUNCTIONING.
AND FINALLY SUPPLIES ANY PURCHASING COMPUTERS, PARTS PAINTS, JUST MAKING SURE THAT THEY'RE ON THEIR OWN HANDS. FROM A 20 YEAR OPERATING PERIOD FORECAST. THIS IS PRETTY TYPICAL ACROSS MOST AIRPORTS OVER TIME, WHAT YOU WOULD SEE AS A FACILITY AGES, CONTRACTUAL SERVICES WILL PROBABLY GROW WHERE THE PERSONNEL WILL BE STILL BIG CHUNK OF YOUR PROBABLY ABOUT HALF OF YOUR COSTS, CONTRACTOR SERVICES WOULD GROW OVER TIME AS THE FACILITY GROWS IN AGES. SO WHAT DOES THAT MEAN? WE CREATED A BASE CASE. WE'VE TALKED ABOUT THIS, AND IN THAT BASE CASE WE WANT WE ASSUME THAT MEDIUM CASE PASTURE FORECAST. WE ASSUME THAT YOU KNOW, WE'RE ISSUING THE BONDS STARTING IN 2023, ALL IN WHICH THERE'S WAYS TO STRUCTURE THAT TO REDUCE YOUR COSTS. AS WELL AS WE HAD THOSE KIND OF ASSUMPTIONS THAT WE SET ON THE NON AIRLINE REVENUE SIDE, AS WELL AS A COST FOR THE AIRLINES THAT KIND OF GET THEIR FEET IN THE DOOR AND GENERATE THAT MARKET UP HERE. AND WHAT YOU SEE HERE IS, YOU KNOW OVER TIME THAT THE CITY WILL HAVE TO CONTRIBUTE TO THE AIRPORT BECOMES SELF SUPPORTING. HOWEVER AS I MENTIONED AND WE'LL GO A LITTLE
[00:25:04]
BIT MORE DETAILS SHORTLY A 10% INCREASE IN AIRLINE OR NOT, AIRLINE REVENUES WOULD ALLOW THAT AIRPORT TO BECOME SELF SUPPORTING APPROXIMATELY TWO YEARS EARLIER, SO RIGHT NOW WE'RE LOOKING AROUND 2048 2049. YOU KNOW, JUST A SMALL 10% INCREASE WOULD MOVE THAT UP TO 2045 2046. SO THERE'S A LOT OF DIFFERENT FACTORS THAT ARE PLAYING INTO THIS AND THE OTHER THING HERE IS REALLY WHAT THE CITY IS CONTRIBUTING TO IS THAT THAT SERVICE AND PEACE CASE VERY FAST QUESTION AHEAD, SO I WAS KIND OF ANSWERED IT. I JUST WANT TO MAKE SURE THAT IT'S UNDERSTOOD WHEN YOU SAY PROFITABLE. WE'RE NOT TALKING ABOUT THE OPERATIONS OF THE AIRPORT. THE AIRPORT WE EXPECT TO BE PROFITABLE ON OPERATION SIDE. VERY QUICKLY. CORRECT WHAT WE'RE TALKING ABOUT HERE IS DEBT SERVICE. SIMILAR TO WHEN WE ISSUED $200 MILLION, OR HALF A BILLION DOLLARS OVER THE LAST NUMBER OF YEARS FOR ROAD PROJECTS AND OTHER CAPITAL IMPROVEMENT PROJECTS. OF COURSE, WE DON'T HAVE REVENUE TO OFFSET THAT EITHER. WE PAY THAT DEBT SERVICE WE PAY SO OUR EXPERIENCE IN CAPITAL IMPROVEMENT PROJECTS HAS BEEN A CAPITAL IMPROVEMENT PROJECTS OF TRANSPORTATION PROJECT. UM, WE ARE ALWAYS PAYING THAT DEBT. THERE'S NEVER A THERE'S NEVER A PROFIT SCENARIO IN THOSE, BUT HERE WE HAVE A PROFIT SCENARIO ULTIMATELY BECAUSE WE ULTIMATELY PAY OFF DEBT, AND THEN WE HAVE REVENUES THAT COME TO THE CITY THAT WOULD DIFFERENTIATE IT FROM VIRTUALLY ALL OTHER CAPITAL IMPROVEMENT PROJECTS AND ALL OTHER BONDS WE'VE EVER VOTED ON AS A COMMUNITY WITHOUT BE ACCURATE. THAT WOULD BE THAT WOULD BE CORRECT THE RIGHT NOW WHAT THIS IS SHOWING IS JUST NOT JANUARY, ENOUGH OPERATING INCOME AT THIS TIME THE COVER THAT SERVICE BUT WHEN YOU HIT IN THIS BASE CASE SCENARIO, WE GET TO 2048. THERE'S ENOUGH OPERATING REVENUE TO COVER THE OPERATING COSTS AS WELL AS THE DEBT SERVICE AND ANY RESERVE THAT'S REQUIRED TO BE VERY DIFFERENT THAN ALL OTHER BONDS WE ISSUE ARE WE NEVER HAVE A REVENUE SITUATION WHERE WE'RE ABLE TO PAY DEBT. ULTIMATELY THAT'S EXACTLY CORRECT. THANK YOU. ANOTHER QUESTION. THERE ARE SOME GRANTS THAT WERE ELIGIBLE FOR THAT WOULD BE REIMBURSEMENT GRANTS. OR ANY OF THOSE BAKED INTO WHAT WE'RE LOOKING AT HERE ON THE SLIDE. THERE IS AN ASSUMPTION PATRICK ABOUT $60 MILLION THAT WE'VE BAKED IN.HOWEVER IF YOU LOOK AT WHAT YOU'RE ELIGIBLE FOR AND WHAT'S OUT THERE FROM AN FAA, WE'VE COME UP WITH AN INITIAL ESTIMATE ABOUT $100 MILLION ARE ACTUALLY ELIGIBLE DOESN'T MEAN YOU'RE GONNA GET $100 MILLION, BUT YOU'RE ELIGIBLE, AND WE FELT THAT BASED ON OUR CONVERSATIONS AND THE WORK DONE TO DATE BY THE TEAM. $60 MILLION IS A REASONABLE EXPECTATION THAT WE COULD ASSUME THAT WOULD BE WOULD BE ABLE TO APPLY TO THE MODEL. OKAY THANK YOU. AND I BELIEVE THERE'S STATE GRANTS AS WELL AS WELL. SO 100 MILLION IS STRICTLY WHAT WE THINK. IS FAA ELIGIBLE.
I THINK WE'VE LOOKED. YEAH OK, YEAH HAS TO RETIRE THAT DEBT. SO THAT MODEL AGAIN, WHICH I DON'T THINK WE EVER HAVE. WE DON'T EVER HAVE FUNDS THAT ARE PAYING ON ROADS THAT WE'VE DEVELOPED OR OTHER CAPITAL IMPROVEMENT PROJECTS THAT WE'VE ISSUED BONDS FOR THIS IS VERY UNIQUE. AND IN A GEO DEBTS SITUATION HERE WE HAVE MATCHING AN ELIGIBLE FUNDS THAT MIGHT REPAY DOWN THAT DEBT, SOMETHING WE DON'T EXPERIENCE ON ROADS AND OTHER PROJECTS. WE ISSUED DEAD ON CORRECT. THANK YOU. AND THE OTHER THING THAT'S NOT REFLECTED IN HERE IS THERE'S A THERE'S ADDITION AS THE AIRPORT BECOMES COMMERCIAL. THERE'S ADDITIONAL GRANTS THAT BECOME THE AIRPORT BECOMES ELIGIBLE FOR THAT'S NOT REFLECTED IN ITS MODEL, BUT THAT WOULD HELP FOR ANY CONSTRUCTION COSTS THAT MIGHT COME DOWN THE ROAD. SO YOU KNOW, PAVE THE RUNWAY TAXIWAYS, SO THERE'S OTHER OPPORTUNITY THAT'S NOT REFLECTING HERE THAT WOULD ALSO BENEFIT THE AIRPORT AND REDUCE THE NEED FOR THE CITY TO ISSUE ADDITIONAL FUNDS. NONE OF THIS IS REFLECTING THE SHE LARGE ECONOMIC IMPACT. CORRECT THIS IS LOOKING JUST AT THE AIRPORT, SO THIS EXCLUDES THE ECONOMIC IMPACT THAT SERVICES DID AND THAT TOOK A LOOK AT THAT SIMILAR PASSIONATE TRAFFIC FORECASTS AND CAME UP WITH A DIFFERENT SCENARIOS TO UNDERSTAND. OKAY HERE'S THE WAGES ANNUAL WAGES HERE IS THE TAX BENEFIT FOR THE YOU KNOW THE REGION THAT WE'VE KIND OF BROKEN DOWN. I THINK IT WAS ABOUT THREE TO $5 MILLION ON AN ANNUAL BASIS, SO THAT'S NOT REFLECTED HERE OF THAT ECONOMIC IMPACT THAT WOULD BENEFIT MCKINNEY. THANK YOU. WHAT HAPPENED IN YOUR SCENARIO BETWEEN 2030 AND 31 1 OF THE ASSUMPTIONS WE'VE MADE SPECIALLY STARTING OFFICE, THERE'S DIFFERENT WAYS TO STRUCTURE THAT THAT AND WE WORK ON THE ETHICAL WORKING CLOSELY WITH THE FAA.
THEY WOULD BE THE ONE TO GIVE US THE FINAL NUMBERS THERE. AND THE TIMING OF IT, BUT WE HAVE ASSUMED AN INTEREST ONLY PERIOD WHERE YOU'RE ONLY PAYING INTEREST ON THE BANDS THAT YOU'VE ISSUED AND THEN STARTING IN 2030, YOU PAY BOTH INTEREST AND BOND PRINCIPAL BUY SOME TIME TO GET EVERYTHING STARTED. SO YOU'RE NOT PAYING ALL THAT UP FRONT ON DAY ONE. THANK YOU. SO I THINK KIND OF GOING IN THE NEXT STEP, AND WE CAN TALK A LITTLE BIT VIOLENCE. BUT THIS WAS OUR BASE CASE. WE LOOKED AT RIETI DIFFERENT SCENARIOS. UM THEY ALL CAN IMPACT THE MODEL DIFFERENTLY. I THINK THE SENSITIVITIES THAT WE LOOKED AT THE MOST WORK TRAFFIC. THERE'S A NUMBER OF PASSENGERS. WE LOOKED AT AIRPORT EXPENSES RIGHT NOW. WE'RE KIND OF LOOKING AT A 24 7 OPERATION BECAUSE WE WANT TO UNDERSTAND WHAT THAT MEANT. BUT THERE'S DIFFERENT WAYS TO MANAGE
[00:30:04]
THAT. NON AIRLINE REVENUES I MENTIONED, YOU KNOW WE TOOK THE LOW END OF THAT. BUT FOR EXAMPLE, IF THERE IS 1/4 CONCESSION AREA, YOU MIGHT BE ABLE TO GET ANOTHER DOLLAR $2 PER PER PER PASSENGER COMING THROUGH THE FACILITIES, AND WE'LL KIND OF TALK ABOUT WHAT THAT MEANS IN TERMS OF THE OUTPUTS AND THEN FUNDING OPPORTUNITIES. I MENTIONED THE FAA IN FEDERAL GRANTS. YOU MENTIONED THE STATE GRANTS. SHOW WHAT HAPPENS IF WE WERE ABLE TO GET MAYBE AN ADDITIONAL $20 MILLION IN GRANTS AND WHAT THAT DOES TO THE RESULTS. I KNOW THERE'S A LOT ON HERE, BUT I'LL KIND OF WALK YOU GUYS THROUGH AND I THINK THE ONE THING WE WANT TO DO IS MAKE SURE YOU KNOW. NOT EVERYTHING IS GOING TO BE POSITIVE, SO WE WANTED TO SHOW BOTH NEGATIVE AND POSITIVE BECAUSE WE TOOK THE HOLISTIC APPROACH AND I KNOW WE'VE TALKED IN DETAIL WITH THE TEAM ABOUT ALL THESE DIFFERENT THINGS. SO WE HAVE OUR BASE CASE WHICH WE WERE SHOWING BEFORE, WHICH IS ON AN MPV BASIS KIND OF PUTTING IN TODAY'S DOLLARS AND $81 BENEFITE OVERALL PROJECT. ON THE OTHER HAND, A 10% DECREASE INCREASES IT A LITTLE BIT MORE. ALMOST LOOKING AT A $35 MILLION IMPACT AND TAKING OUT THE RECOVERY OF THE 2053 WHEN THOSE BONDS WOULD TECHNICALLY EXPIRE, BUT IT'S JUST KIND OF GIVES YOU AN IDEA THAT YOU KNOW TRAFFIC DOES PLAY A BIG ROLE, AT LEAST CURRENTLY IN THIS MODEL. THINGS THAT WOULD CHANGE IS THE O AND M. SO IF YOU WERE TO SEE LESS TRAFFIC, YOU PROBABLY WOULD HAVE LESS O AND M COSTS BECAUSE YOU WOULD MANAGE YOUR FACILITY DIFFERENTLY. SO WE TOOK A LOOK AT WHAT ONES THAT WE SAW 25% REDUCTION OR O AND M WE'RE ONLY OPEN 12 HOURS A DAY. WE'RE NOT OPEN 24 HOURS A DAY WAS THAT MEAN AND IT CUTS THE LOSS IN HALF AND BRINGS A BREAK EVEN HERE, UP TO 2042. WE TOOK A LOOK AT THE NON AIRLINE REVENUE IF WE GOT A DOLLAR, MORE OR A DOLLAR LESS. IT'S ABOUT A $10 MILLION IMPACT EACH WAY. AND THEN THAT KIND OF GETS INTO THAT 10% RANGE WHERE YOU'RE SEEING ABOUT A TWO YEAR DIFFERENCE IN THAT RECOVERY TIME. WE LOOKED AT GRANTS. I'M SHOWING THE NEGATIVE 20 AS WELL AS A POSITIVE 20. BUT YOU CAN SEE IT'S KIND OF IT'S ALMOST A ONE FOR ONE BECAUSE THE GRANTS HELP BUT YOU HAVE TO ISSUE UM, BUT IT IT DOES IMPROVE YOUR BREAK EVEN YEAR ABOUT 2 TO 3 YEARS. AND THEN WHAT WE THINK IS PROBABLY THE BETTER WAY TO LOOK AT IS KIND OF COMBINED INTO I MENTIONED IF, FOR EXAMPLE, YOU HAD LESS TRAFFIC. YOU PROBABLY WOULD FIND A WAY TO REDUCE YOUR GRANTS. WHAT DO WE THINK? MORE LIKELIHOOD? SO WE TOOK A LOOK AT OPERATION COST? YOU MEAN SORRY. OH, AND I'M YOUR OPERATION CAUSE I APOLOGIZE FOR THAT. SO THAT'S YOUR DAY TO DAY. THAT'S YOUR PERSONAL SERVICES YOU MIGHT NOT NEED 24 PEOPLE DAY ONE. YOU MIGHT ONLY NEED 10 PEOPLE. THEY WANT AN OVERTIME. YOU GROW THAT OWN EM. YOU MIGHT NOT NEED TO KEEP YOUR LIGHTS ON 24 7. SO YOU YOU SHUT PORTIONS OF, YOU KNOW THE LIGHTS GO OFF IN CERTAIN SECTIONS SO THAT YOU REDUCE YOUR COST THAT WAY. AND JUST REDUCING THE O AND M AND GETTING THE GRANTS THAT DRIVES THE MPV DOWN TO $20 MILLION WITH A BREAK EVEN YEAR OF 2040. UM AND THEN, IF WE INCLUDED ALL THAT YOU WOULD ACTUALLY SEE A POSITIVE OUTCOME.UM BREAKING EVEN IN 2036 OVER THE 20 YEAR PROJECT LIFE. THE KIND OF SHOW YOU WHAT THAT LOOKS LIKE. WE KIND OF WANTED TO PUT THE MAPS TOGETHER. SO THIS IS TAKING A LOOK AT THE AIRPORT.
WAS ABLE TO REDUCE ITS OWN EXPENSES AND GET THE ADDITIONAL $20 MILLION IN GRANTS. YOU WOULD IMPROVE YOUR SELF SUPPORTING AND 88 YEARS EARLIER AROUND 2040. AND YOU CAN SEE THAT CHANGE IN WHAT THAT DOES ON THE SENSITIVITY BASIS. SO I THINK THAT'S THAT'S WHAT I HAVE FOR YOU TODAY WE CAN GO A LITTLE BIT MORE INSENSITIVITIES. I CAN ANSWER ANY OTHER QUESTIONS. UM BUT I THINK JUST TO REMEMBER AS YOU POINT OUT, THIS IS LOOKING AT THE AIRPORT. IT'S A HOLISTIC APPROACH. THE OPERATIONS AT THE AIRPORT IN THE BASE CASE CAN FINANCE ITSELF. IT'S THE CITY CONTRIBUTIONS. THEY CAN MAKE SURE IT'S PAYING BACK THE INFRASTRUCTURE, UM, COSTS ASSOCIATED WITH THE DEBT SERVICE OVER TIME. IS ALSO THINK IT'S ALSO IMPORTANT TO NOTE ACTUALLY ASKING THE QUESTION BECAUSE I HAVE MADE THIS ASSUMPTION, BUT LET ME MAKE SURE I'M CORRECT.
WHEN WE TALK ABOUT THE $300 MILLION, THERE'S A LOT OF THERE'S A SIGNIFICANT AMOUNT OF THAT INFRASTRUCTURE. THAT IS THAT WOULD BE REQUIRED FOR THE AIRPORT. WITH OR WITHOUT PASSENGER SERVICE. UM THE TAXIWAY. UH SOME OF THE OTHER THE OTHER INFRASTRUCTURE ITEMS, UTILITIES AND WHATNOT. THOSE ARE THINGS ITEMS THAT ARE NEEDED FOR ANY DEVELOPMENT OF OUR AIRPORT.
ANY GROWTH? ANYTHING UH, OBVIOUSLY, WITHOUT ANY GROWTH OF THE AIRPORT, REGARDLESS OF WHETHER THAT'S PASSENGER SERVICE OR NOT, IS THAT CORRECT? MIGHT LOOK AT CANNES ON THIS ONE. JUST YES, SO IN TERMS OF DEVELOPING THE EAST SIDE, THERE'S A THERE'S A HOST OF ENABLING PROJECTS.
BAKED INTO THAT 300 MILLION, SO PARALLEL TAXIWAY ON THE EAST SIDE CONNECTIVITY OFF OF FM 5 46 APRON. PARKING ALL OF THOSE THINGS ARE GOING TO BE NEEDED FOR SOME TYPE OF A PROJECT TO DEVELOP ANY ANY TYPE OF PROJECT PROJECT. YES, SIR. AND THEN, UM , AGAIN, I JUST WANT TO REALLY
[00:35:04]
MAKE SURE THAT EVERYONE UNDERSTANDS. THAT WE ARE WHENEVER WE TALK ABOUT PROFIT.WE'RE TALKING ABOUT REPAYING ALL OF THE DEBT AS WELL. WHICH AGAIN IS A VERY UNIQUE SITUATION BECAUSE ALL OTHER CAPITAL IMPROVEMENT PROJECTS THAT WE DO ALL ROADS THAT WE DO ALL THE, UM, THE CITY HALL THAT WE DO A PARK THAT WE BUILD. THOSE ARE ITEMS THAT THERE IS NOT REVENUE SOURCES THAT ARE GENERATED TO REPAY THAT DEBT. THAT SO IT WE'RE LOOKING AT THIS. THIS IS A VERY UNIQUE SITUATION. THIS IS A CAPITAL IMPROVEMENT PROJECT THAT HAS A REVENUE STREAM, WHICH GENERALLY I ROADS DON'T WE DON'T HAVE TOBE ROADS, REVENUE STREAM PARKS GENERALLY, WE DON'T HAVE A REVENUE STREAM. UM THAT'S THAT'S THAT'S UNIQUE TO THIS PROJECT. EXACTLY CORRECT TO MAKE SURE I UNDERSTAND IT. I MEAN, A DIFFERENT MAYBE A DIFFERENT APPROACH IS KIND OF YOU HAD HOUSE THAT YOU'RE USING TO RENT OUT THAT HAS A REVENUE STREAM THAT YOU'D HAVE TO HAVE THE SAME THING. YOU HAVE YOUR OPERATING REVENUES FOR THE RENT. YOU HAVE YOUR COST TO MAINTAIN THE HOUSE AND THEN YOU HAVE YOUR MORTGAGE THAT YOU HAVE TO PAY BACK. SIMILAR COST OF THE HOUSE THAT YOU BUY THAT IS JUST GOING TO GET NOT EVER BE RENTED. HAS REVENUE CORRECT? YEAH SO JUST WANNA MAKE SURE THAT WE UNDERSTAND THAT THIS IS THIS IS LIKE A CAB IMPROVEMENT PROJECT OVER ROAD. THERE'S NOT A ECONOMIC IMPACT, GENERALLY, NOT NONE OF THIS KIND OF MAGNITUDE.
CORRECT THIS MAGNITUDE WHINY IN VIRGINIA, FOR EXAMPLE, DOESN'T GENERATE A JUST SO I UNDERSTAND . I MEAN, WITH THE AIRPORT ITSELF. IT BRINGS IN NEW JOBS IT BRINGS IN, YOU KNOW NEW TRAFFIC . YOU KNOW IF THERE'S PEOPLE WHO ARE LEISURE NEW VISITORS THAT YOU KNOW, WILL USE THE LOCAL BUSINESSES. THERE'S A LOT OF OTHER OPPORTUNITY THAT'S NOT REFLECTED IN THESE NUMBERS THAT COMES WITH THOUGHT. THAT WAS THE CASE. I WANTED JUST TO BE SURE AND ASK THE QUESTION. HMM ADAM, I'VE GOT A COUPLE OF THINGS. UM WHAT WE HEAR ABOUT THE ENVIRONMENTAL IMPACT THE ENVIRONMENTAL ASSESSMENT THAT WE WENT THROUGH, AND IT WON'T BE COMPLETED FOR A WHILE. BUT ONE OF THE THINGS THAT REALLY STRIKES ME IS THAT WE ARE A FUNCTIONING AIRPORT. THIS HAS BEEN A FUNCTIONING AIRPORT SINCE THE EARLY EIGHTIES OR 1979. WE HAVE 400 TOUCHES OR SO A DAY CURRENTLY REAL DELTA HERE IS THAT WE'RE TALKING ABOUT BUILDING A BUILDING ON THE EAST SIDE OF THIS WITH SOME OTHER INFRASTRUCTURE IN ORDER TO ACCOMMODATE PASSENGERS. WE CURRENTLY HAVE 7 30 SEVENS THAT DO OCCASIONALLY COME TO OUR AIRPORT FLY IN AND OUT. SO WHEN WE TALK ABOUT WHAT THE ENVIRONMENTAL IMPACT IS, IT'S NOT SO MUCH BUILDING AN AIRPORT . IT'S THE DELTA OF HAVING THE AIRPORT THAT WE HAVE, BUT YET ADDING PASSENGER SERVICE. IF YOU'VE LOOKED AT OTHER AIRPORTS THAT HAVE GONE FROM GENERAL AVIATION TO PASSENGER SERVICE.
WHAT CHALLENGES WITH ENVIRONMENTAL ASSESSMENT, HAVE THEY IF ANY OF THEM HAVE THE COME INTO, AND IN BECAUSE I'M TRYING TO LOOK AT WHAT ROADBLOCKS ARE REALISTIC THAT WE MIGHT BE LOOKING AT HERE BECAUSE IT DOESN'T STRIKE ME AS TOO MANY POSSIBILITIES THAT WE'RE GOING TO SEE BARRY HANDLE THAT BECAUSE I CAN BE DANGEROUS. AND THANK YOU. SORRY I'VE GOT TO RESCUE HIM FOR A MOMENT ONLY BECAUSE HE IS OUR ACCOUNTING AND FINANCIAL SIDE. CONSULTANT HE OKAY ENVIRONMENTAL ANALYSIS, BUT YOUR QUESTION OF LOOKING AT THE DELTA. THAT'S ABSOLUTELY CORRECT WHEN WE'RE STUDYING THE IMPACT OF THE AIR TERMINAL. IT'S NOT THE STUDY OF AN AIRPORT VERSUS A GREEN FIELD WHERE THERE IS NOTHING THERE. WE CURRENTLY HAVE AN AIRPORT LIKE YOU SAID THAT HAS OVER 400 OPERATIONS DAILY, INCLUDING CORPORATE AND IN PRIVATE JETS THAT TAKE OFF SO WHEN THEY'RE LOOKING AT THE NOISE ANALYSIS, IT'S IMPORTANT TO LOOK AT THE DIFFERENCE IN THE NOISE TODAY. OR THAT? WE CALL IT THE NO CHANGE NOISE ANALYSIS. MAYBE 2026 IF WE BUILD IT, COMMERCIAL TERMINAL VERSUS 2026 IF WE DON'T BUILD A COMMERCIAL, RIGHT, BUT WE'RE NOT MEASURING THE DIFFERENCE BETWEEN A 2026 COMMERCIAL TERMINAL AND THE 2026 CAL PASTOR BECAUSE THAT'S JUST NOT A REALISTIC COMPARISON. AND WE'LL LOOK AT THAT ON ALL OF THAT, FROM AIR QUALITY TO WATER TO VEHICULAR TRAFFIC WHEN WE'RE LOOKING AT FOR THIS STUDY, AND THERE WERE SOME COMMENTS EARLIER, AND THOSE ARE IMPORTANT THINGS TO UNDERSTAND IS THAT THE GLOBAL TRAFFIC AND 3 80 EVERYTHING ELSE. BUT FOR THIS STUDY, IT IS SPECIFIC TO THE IMPACT OF THIS AIRPORT SO THAT THE ADDITIONAL VEHICLES BEING GENERATED BY THE SHOES VERSUS COMEDY CORRIDOR. CURRENTLY, VERY QUESTION WAS, IT WOULD BE USEFUL IF WE KNEW OTHER AIRPORTS THAT HAVE HAD THIS METAMORPHOSIS GONE FROM G, A TWO PASSENGER AND DID ANY OF THEM BUMP INTO PROBLEMS WITH THE ENVIRONMENTAL PARTS OF IT. I'M JUST TRYING TO LOOK DOWN THE ROAD TO SEE WHAT THE THREATS ARE, IF THERE'S ANY DOWN THE ROAD ON THIS, AND I'M NOT REALLY ABLE TO IDENTIFY THEM AS I THOUGHT THROUGH THIS IT'S A GREAT POINT. I'LL BRING THAT UP WITH KEN. KEN ALMOST STOOD UP. I WAS GOING TO SAY THAT WE CAN
[00:40:06]
ABSOLUTELY GET YOU SOME EXAMPLES . I DO THAT WITH THE COUNCIL THAT WOULD BE GARVER ENGINEERING AND THEIR ENVIRONMENTAL PLANNING . OKAY BUT WE CAN ABSOLUTELY GET THAT AND I KNOW THAT WE'RE NOT ALONE IN MAKING THIS TRANSITION . THERE ARE OTHER AIRPORTS HAVE GONE THROUGH. IT COULD BE A CANARY IN A COAL MINE RIGHT IF THEY BUMPED INTO SOMETHING, I JUST LIKE TO KNOW IT. THE SECOND PART IS THAT THIS MAKE IT BACK TO YOU. CAN YOU DEMONSTRATE FOR US? WHAT BUT THE CHANGES WOULD BE BASED ON THE NUMBER OF EMPLACEMENTS THAT WE MIGHT HAVE AND HOW THAT IMPACTS AND WE TALKED A LITTLE BIT ABOUT IT ABOUT THE FINANCIAL IMPACT ON THIS, BUT WHAT DOES THAT LOOK LIKE? IF YOU COULD DIVE A LITTLE BIT DEEPER INTO IT? BECAUSE UM, YOU KNOW, WE'RE TALKING ABOUT STARTING OUT AT 12 FLIGHTS A DAY IN. AH, THAT'S NEVER REALLY STRUCK ME AS A LOT. IF INDEED, THERE IS THE DEMAND HERE FOR THIS, AND, UH I RECOGNIZE THAT THERE'S A NUMBER OF PEOPLE WHO ARE CONCERNED THAT THIS AIRPORT MIGHT FAIL. AND I DON'T WANT TO DISMISS THAT THAT YOU KNOW, SO I WANT TO SEE LESS DEMAND. BUT I'M ALSO THINKING I THINK CHANCES ARE THERE WILL BE A GREATER DEMAND HERE THEN PERHAPS WHAT WE'RE LOOKING AT. YEAH, I THINK SO. GOING BACK. ON THE TRAFFIC.THAT'S A GREAT QUESTION. YOU KNOW, THERE'S A COUPLE OF DIFFERENT WAYS WE CAN LOOK AT IT. I CAN. I CAN RUN YOU SCENARIO WE CAN LOOK AT THE HIGH CASE GO INTO YOUR DEMAND QUESTION. WE DID A QUICK TAKING THE BASE CASE, WHICH WAS THAT 533,000 EMPLOYMENT GROWTH GROWING AT 3% EACH YEAR. THAT'S 12. THAT'S YOUR 12 FLIGHTS A DAY BASE AND THERE'S FLIGHTS AND AIRCRAFT, UM, SIZE GROW OVER TIME. IF WE JUST TOOK THAT, AND WE LOOKED AT A 10% INCREASE THE TRAFFIC SAYING, OKAY, WE LIKE WE LIKE THE MID THE MID SPOT, BUT WE THINK WE'RE GOING TO 10% BETTER YOUR YOU WERE IMPROVE YOUR METRICS OVER A 20 YEAR PERIOD BY OVER $20 MILLION ON THE NPV. SO IN TODAY'S DOLLARS, WHAT WOULD BE AND YOU WOULD BRING THAT BREAK? EVEN AIRPORT UP WHERE THE AIRPORT CAN PAY FOR NOT ONLY ITS OPERATING COSTS. BUT THAT THAT SERVICE ASSOCIATED WITH THE INITIAL PROJECT TO 2045 . SO FOR EVERY 10% YOU GET ALMOST A THREE YEAR, THREE YEARS , UH, BUMP AND AT LEAST $20 MILLION BENEFIT TO THE PROJECT. OKAY AND IF WE HAVE 50% LESS DEMAND THAN WHAT WE'VE ANTICIPATED, WE HAVE 250,000. IT JUST SIMPLY EXTENDS THOSE NUMBERS OUT A LONG TIME BEFORE WE'RE ABLE TO DO IT. IT DOESN'T NECESSARILY IMPACT OUR TAX RIGHT IN THE NUTS. NOT NECESSARILY. YOU'RE QUITE A QUESTION FOR YOU TO CITY DECISION BECAUSE WE JUST TAKE US LONGER TO GRIND THROUGH THOSE THOSE BONDS SO IT DOESN'T NECESSARILY IMPACT THE IRONS TAX RATE. BUT IT JUST IS GUMS UP THE WORKS IN TERMS OF OTHER THINGS THAT WE'RE DOING, CORRECT, AND I THINK WHAT WE DID TO IS WE WORK CLOSELY WITH MARK AND HIS TEAM AND THE ONE THING THEY LOOKED AT, AND WE TOOK A LOOK AT WHAT ELSE HAVE YOU HAD AIRLINES DAY ONE. BUT THEN THEY LEFT RIGHT DOWN THE ROAD. KANSAS KANSAS CITY STILL AFFORD IT AND THE SHORT ANSWER IS MADE SURE THAT THERE WAS ENOUGH DEBT CAPACITY TO COVER THAT THAT PORTION OF THE BONDS THAT YOU GUYS ARE GOING OUT TO ISSUE SO THAT WITHOUT TOUCHING THE RIGHT SO AGAIN SIMILAR TO IF WE HAD ISSUED THOSE ON A ROAD, SOMETHING THAT WAS GENERATING, NO REVENUE, NO INCOME. WE DO THAT NOW, CORRECT. MATTER OF FACT, I THINK WE'VE REDUCED OUR TAX RATE 15.1% OVER THE LAST FIVE YEARS. I THINK IT IS, UM AND THAT'S WHERE THE ISSUING ANOTHER $175 MILLION IN DEBT OVER THE LAST NUMBER OF FIVE YEARS, FIVE OR SIX YEARS. ADAM YOU YOU MENTIONED ON THE O AND M SIDE. HOW MUCH OF I GUESS A FIXED COST. YOU HAVE IN THERE? WE HAVE A LOT OF ASSUMPTIONS ABOUT FULLY OPERATIONAL IN THERE THAT MAYBE DON'T HAVE A LOT OF VARIABILITY WHEN YOU INCREASE.
THE TRAFFIC COUNT BY 10% WHAT DOES THAT END UP DOING? TO YOUR YOUR O AND M JUST ON ITS OWN.
DOES IT DOES IT IS IT STAY THE SAME BECAUSE IT'S ALL FIXED FIXED, SO WE HAVE A FIX AND ESCALATE ESCALATING, UM, O AND M STRUCTURE AND WE WENT DOWN. SO WE LOOKED AT WHAT'S THE ADDITIONAL HEADCOUNT TO MAKE SURE YOU HAVE PART 1 39 COMPLIANCE TO ACTUALLY OFFER COMMERCIAL SERVICE. WE LOOKED AT HAVING FULL TIME POLICE AND FIRE STAFF AT THE AIRPORT. 24 7. WE LOOKED AT DIFFERENT CONTRACTUAL SERVICES ARE NEEDED FROM DAY ONE AND ESCALATING THAT STAFF OVERTIME. SO MAKING SURE THERE'S ENOUGH JANITORIAL. THERE'S ENOUGH. YOU KNOW, PEOPLE MANAGING THE PARKING LOTS OF THAT WAS A REQUIREMENT. UM STAFF THAT COULD MAKE SURE YOUR CONVEYANCES ARE WORKING 24 7, SO WE LOOKED AT OTHER CONTRACTS THERE, AND THAT'S THAT'S A FIXED COST RIGHT THERE WHERE THAT GROWS WITH ESCALATION OVER TIME. WHEN AND WHEN YOU'RE BUILDING YOUR REVENUE MODELS AND YOUR ASSUMPTIONS, YOU SAID ON THE REVENUE IT'S FLIPPED COMPARED TO OTHER AIRPORTS THAT ARE OPERATIONAL EXPENSE MODELS THAT YOU USE. THOSE ARE FAIRLY COMPARABLE TO KIND OF OTHER MARKET OR AIRPORTS LIKE THIS THAT I MEAN, YOU'RE THAT'S WHAT YOU'RE YOU'RE STARTING FROM, IS KIND OF A COMPARISON TO HOW OTHER AIRPORTS OPERATE. UM SO I
[00:45:04]
GUESS, UM. MY POINT IN GETTING TO THAT IS WE'VE WE'VE GOT SOME VARIABILITY THAT EXPENSE TO COME DOWN HERE YOU'RE SAYING FROM A. YOU'VE ASSUMED THIS KIND OF LIKE FULLY OPERATIONAL FIXED COST THERE. BUT THAT DOESN'T NECESSARILY HAVE MEAN THAT'S THE WAY WE'RE GOING TO OPERATE AT DAY ONE. CORRECT I THINK GOING BACK TO THE MAYOR'S EARLIER QUESTION. WE WANTED TO MAKE SURE YOU GUYS UNDERSTOOD YOUR KIND OF FULL RISK THERE SO THAT YOU GUYS CAN MAKE THE RIGHT BUSINESS DECISION AND UNDERSTANDING. YOU KNOW WHAT? WHAT COULD OCCUR SO THAT YOU HAD YOU HAD ALL THE FACTS IN FRONT OF YOU? I THINK ONE OF THE ASSUMPTIONS OF MY CORRECT THAT ONE OF THE ASSUMPTIONS IS, UM THAT FROM DAY ONE. FULL POLICE DEPARTMENT. INDEPENDENT FULL POLICE DEPARTMENT FULL FIRE DEPARTMENT WHEN REALITY IS THAT WE HAVE FIRE STATION FOR THAT WOULD SERVICE OF COURSE, AND WE HAVE A POLICE DEPARTMENT THAT THAT WOULD NOT REQUIRE US TO HAVE A SEPARATE FULL DEPARTMENT WITHIN THE AIRPORT GROUNDS WERE A LITTLE WE ARE. WE'RE NOT THIS REMOTE AIRPORTS SITUATED SO FAR AWAY FROM THE CITY THAT WE HAVE THE SAME REQUIREMENTS, ALTHOUGH THERE'S MIGHT BUT IS IT ACCURATE ? THAT THE MODEL THAT WE'VE PUT OUT IS REFLECTING COMPLETE DEPARTMENT POLICE HEAD TO TOE AND FIRE FOR THE AIRPORT? THAT IS NOT NATURALLY REQUIRED ON THE FRONT SIDE. THAT'S CORRECT THEM AND THEY WON AND THEY MIGHT NOT BE NEEDED. THERE'S A THING THAT MAKES A SIGNIFICANT IMPACT. YES AND IF WE LOOKED AT REALITY VERSUS CONSERVATIVE ANALYSIS. I GUESS WHAT I'M GETTING TO WITH THAT IS WE'RE USING 5 33 IS THE EXPECTED PASSENGER RIGHT IF I GUESS WE GOT THAT OTHER LOW END OPTION OF 1 78 CORRECT. ANYBODY EXPECTS THIS TO BE 1 78. WE'RE PROBABLY NOT SIGNING THE LEASES WERE PROBABLY NOT BUILDING THIS THING IF THAT'S WHAT A AIRLINE IS COMING IN. LOOKING AT THE OTHER THING THAT'S IMPORTANT, TOO. TAKE INTO CONSIDERATION IS THE TERMINAL WILL BE KIND OF RIGHT SIZE. BASED ON WHAT THE AIRLINES PROJECT SO IF IT'S 100 AND 78. 1000 PASSENGERS INSTEAD OF 533. MAYBE WE BUILD IT TO GATE TERMINAL INSTEAD OF A FOUR.SO RIGHT, ALL OF THOSE THINGS WILL BE TAKEN INTO CONSIDERATION . THESE ARE ALL ASSUMPTIONS BASED ON 533,000 CLAIMANTS. AND WHAT'S THE RIGHT SIZE TERMINAL? IF WE ADVANCE THE DISCUSSION WITH THE AIRLINES, AND IT LOOKS LIKE LESS, WE HAVE THE ABILITY TO RIGHT SIZE. THE CAPITAL PROJECT. OKAY SO IF YOU GO BACK TO THE ONE THAT SHOWS THE SECOND TO LAST ONE. YEAH THAT SHOWS WHAT A 10% INCREASE. WHAT, IF A 10% DECREASE IN THE EMPLACEMENTS? WE'VE KIND OF HEDGED AGAINST. A 10% INCREASE IS LIKELY TO VERY LIKELY A 10% DECREASE IS PROBABLY NOT LIKELY FROM THE STANDPOINT OF WE'RE GONNA WE'RE GONNA START ALTERING THINGS IF IT GETS TOO LOW, EXACTLY ON THE EXPENSE SIDE ATTEND 25. UM INCREASE IN THE O AND M. WE'VE KIND OF HEDGED AGAINST THAT. WE'RE PROBABLY NOT GOING TO SEE THAT BIG OF AN INCREASE IN OPERATIONAL EXPENSES , BUT WE MAY FIND A LOT OF SAVINGS. AND SO I GUESS WHAT I'M GETTING TO IS WHEN YOU HAVE SHOWN THIS MODEL TO US, I FEEL LIKE WE ARE VERY CONSERVATIVE ON THE REVENUE SIDE, AND WE'RE VERY CONSERVATIVE ON THE EXPENSE SIDE. WHICH LEAVES US A LOT OF ROOM TO MOVE TO IMPROVE, BUT NOT NOT A WHOLE LOT OF ROOM. WE'VE ELIMINATED A LOT OF THE RISK AND LOOKING AT THIS, AND IN FACT, THAT'S EXACTLY RIGHT IF I COULD GIVE AN ILLUSTRATIVE EXAMPLE BUT I THINK WHAT YOU'RE SAYING AND CORRECT ME IF I'M WRONG, FOR EXAMPLE, THE LIGHTS WILL BE ON IN THE AIRPORT. THE SAME. THAT WILL BE THE SAME BRIGHTNESS IN THAT AIRPORT DURING THE DAY WHETHER THERE IS 530,000 PASSENGERS A YEAR 270 THE AIR CONDITIONER, ALTHOUGH CERTAINLY SOME DELTA FOR INCREASED NUMBER OF BODIES, SOME INCREASED BODY TEMPERATURE, BUT NOT A PROGRAM TO INCREASE. SO THAT'S WHAT WE'RE TALKING ABOUT THAT THAT THAT'S WHAT I'M GETTING AT IS FROM THE IDEA THAT WE'RE GOING TO SEE AN INCREASE IN O AND M EXPENSES IN THIS THAT IS THAT 25% OVER WHAT WE'VE ESTIMATED IS EXTREMELY UNLIKELY BECAUSE WE CAN'T TURN THE LIGHTS ON FOR LONGER. BUT THE IDEA THAT WE COULD FIND A LOT OF SAVINGS AND THAT IS LIKELY BECAUSE THERE ARE THERE IS ROOM TO FIND SAVINGS IN THOSE NUMBERS THAT YOU CREATED THE SAME FOR THE REVENUE SIDE. THAT'S EXACTLY CORRECT AS KEN MENTIONED, TOO, IF YOU DID SEE A LOWER TRAFFIC THIS THIS IS ALL DYNAMIC. YOU WOULDN'T YOU WOULDN'T JUST GO OUT AND TELL. YOU KNOW, WE HAVE THESE NUMBERS. WE'RE GONNA GO FORWARD WITH IT.
YOU WOULD ADJUST ACCORDINGLY, UM, TO MAKE SURE THAT YOU WOULD MINIMIZE THE IMPACT. AND ENSURE
[00:50:01]
THAT THE AIRPORT COULD PAY AS MUCH AS POSSIBLE THAT THAT SERVICE AS SOON AS POSSIBLE. YOU HAVE ANOTHER ONE JUST I THINK I'M GOOD FOR RIGHT NOW. I'M JUST GOING TO GO BACK TO TRAFFIC FOR A SECOND, BECAUSE I KNOW IT WAS. IT WAS A COMMENT AND UNDERSTANDABLY AND I'VE HEARD IT MYSELF OUT THERE, YOU KNOW, PEOPLE CONCERNED ABOUT TRAFFIC. AND THEY'RE THE. THE CURRENT STUDY THAT WAS DONE IDENTIFYING , DO WE HAVE THE ABILITY TO HANDLE THAT TRAFFIC? NOW THAT'S WITH CURRENT ROAD CONDITIONS? OR IS THAT STUDY WAS THAT STUDY LOOKED AT 3 99 SUPER 93 99 COMPLETE 3 80 BYPASS COMPLETE EVERYTHING COMPLETE. THAT WAS I MEAN VERY LITTLE. THAT WAS PRIMARILY LOOKING AT WHAT THE REGION CAN DO FROM A POPULATION STANDPOINT, THAT WASN'T NECESSARILY LOOKING AT ALL THE ROADS AND HOW THAT MIGHT IMPACT TRAFFIC, BUT IT DID LOOK AT THE TRAFFIC GOING DOWN THE DFW AND LOVE FIELD TO UNDERSTAND THAT THAT'S GOING TO GROW OVER TIME, WHICH PUTS ADDITIONAL PRESSURE ON THOSE ROADWAYS AND MAKING ANECDOTALLY WE'VE TALKED ABOUT IN OUR INITIAL CONSERVATIVE PROJECTIONS. THERE'S 1000 CARS A DAY, POTENTIALLY AT THE AIRPORT, SPEAKING ABOUT THE INFORMATION THAT WAS SHARED WITH THE YES, YES SPECIFICALLY WAS AND THE LEVEL OF SERVICE THAT WAS SHOWN IN THAT CHART IN THAT PRESENTATION IS AVAILABLE ONLINE. THAT IS WHAT THE EXISTING ROADWAY NETWORKS, OKAY? WE WERE ANTICIPATING LOADING THAT FUTURE TRAFFIC FOR THIS AIRPORT ON THE EXISTING ROAD. WE DIDN'T ANTICIPATE. WELL WE ANTICIPATE WE DIDN'T ASSUME THAT THIS 3 93 99 EXTENSION WOULD BE IN PLACE. SO THE NUMBERS YOU SAW THE LEVEL OF SERVICE THOSE WERE WITH THE EXISTING 5 46 AND JUST HAVE SHARED THIS BEFORE. I WILL SAY IT AGAIN BECAUSE I THINK IT'S ANECDOTAL, BUT I THINK IT'S IT. KIND OF GIVE SOME PERSPECTIVE. UM YOU KNOW, 1000 CARS A DAY. THAT'S WHAT WE'RE EXPECTING. THESE PROJECTIONS WERE ABOUT TO OPEN AN HB WITH 25,000 PEOPLE IN A DAY. UM SO I , YOU KNOW, AND, OF COURSE, NO, THERE'S NO ROADWAY IMPROVEMENTS THAT WILL BE DONE THERE LIKE WE ANTICIPATE AT THE AIRPORT WITH SPUR 3 99 3 80 THE HIGHWAYS ON AND ON, BUT IT IS IMPORTANT TO THINK ABOUT WHEN WE'RE ANALYZING TRAFFIC, MAYBE PUT IT IN PERSPECTIVE OF THINGS THAT WE DEAL WITH DAY TO DAY AND WE'RE USED TO EXPERIENCING DAY TO DAY AND THEN STARTED THINKING ABOUT WHAT IS THAT? REALLY WHAT MIGHT THAT NOT NECESSARILY FEEL LIKE THEN WHEN WE'RE TALKING ABOUT THE AIRPORT OVER ON THE EASTERN QUADRANT OF THE CITY, AND NOT IN THE HEART OF A RESIDENTIAL AND HEAVILY CONGESTED AREA WHERE WE'RE GOING TO ADD A 25,000 PEOPLE IN A IN A DAY, BUT THANK YOU. THANK YOU VERY MUCH. THANK YOU. VERY HELPFUL. APPRECIATE IT . THANKS. THANK YOU. UM WE ARE NOW GOING TO WAS THERE ANY COUNCIL LIAISON UPDATES BEFORE WE MOVED TO EXECUTIVE SESSION OR WE CAN SAVE THOSE FOR REGULAR[EXECUTIVE SESSION]
SESSION IF THAT'S OKAY. I KNOW WE HAVE SOME ACTION AS WELL THAT WE WILL HAVE AFTER EXECUTIVE SESSION IN ACCORDANCE WITH TEXAS GOVERNMENT CODE SECTION 551071 CONSULTATIONS WITH ATTORNEY AND ANY WORK SESSION. SPECIAL SESSION. REGULAR SESSION AGENDA ITEM REQUIRING CONFIDENTIAL ATTORNEY CLIENT ADVICE NECESSITATED BY THE LIBERATION OF DISCUSSION SAID ITEMS SECTION 55107 TO DELIBERATIONS ABOUT REAL PROPERTY HONEY CREEK DEVELOPMENT AGREEMENT. TERM SHEET MUNICIPAL FACILITIES SECTION 55174 PERSONNEL MATTERS. CITY MANAGER ANNUAL PERFORMANCE EVALUATION 55187. DELIBERATION REGARDING ECONOMIC DEVELOPMENT MATTERS. CRAIG RANCH HOTEL LLC PROJECT 29 TUBS, MARINE ENTERTAINMENT DESTINATION AND PROJECT HEMISPHERES, AND THERE WILL BE ACTION. AFTER SESSION. D FRANKLIN OR NOT, IF THEY DIE. ALRIGHT VERY LIKE TO MOVE THAT[ACTION ON EXECUTIVE SESSION]
WE APPROVED THE PROPOSAL ON CRAIG RANGES DISCUSSED AND CRAIG RANGE HOTELS DISCUSSED AN EXECUTIVE SESSION. SECOND ALL IN FAVOR. AYE. POST. I THINK WE HAVE ANOTHER RESOLUTION OR, UM, ANOTHER ACTION. I CAN DO IT IF YOU WANT. YES PLEASE REMOVE THAT WE APPROVED THE RESOLUTION ON MILL AND OIL IS DISCUSSED IN EXECUTIVE SESSION. SECOND, WE ROSE. SORRY, OKAY? SECOND ALL IN FAVOR, ALRIGHT, PROPOSED. AND I MAKE A MOTION THAT WE APPROVE THE EMPLOYMENT AGREEMENT WITH THE CITY MANAGER AS DISCUSSED DISCUSSED IN EXECUTIVE SESSION. IN FAVOR. I OPPOSED.* This transcript was compiled from uncorrected Closed Captioning.