Okaloosa County BOCC — April 7, 2015 — ACAC Minutes - February 24 2015

MINUTES AIRPORT COMPATIBILITY ADVISORY COMMITTEE (ACAC) MEETING FEBRUARY 24, 2015 10:00 AM DESTIN CITY HALL BOARDROOM 1. Call To Order: Vice Chair Pati Stapleton called the meeting to order on Tuesday, February 24, 2015, at 10:00 a.m. in the Destin City Hall Boardroom. 2. Roll Call: Citv of Destin Representatives City of Destin Staff Jan Barr City Clerk Rey Bailey Pati Stapleton Planning Manager Ashley Grana Tony Diez Okaloosa County Representatives Okaloosa County Staff Present Jim Link Airports Director Sunil Harman Armand 1zzo Deputy Director of Airports Mike Stenson Absent William Phillips, Okaloosa County Larry Greene, Eglin AFB 3. Election of Chairman and Vice-Chairman The committee agreed to defer election of new chairman and vice-chairman to the next meeting 4. New Business: A. Status of Contracts — Destin Jet/Vertol Systems Okaloosa County Airports Director Sunil Harman provided the following statement relating to the County’s negotiations with Destin Jet/Vertol. e Destin Jet has desire to acquire ownership in Regal Air through a negotiated settlement agreement. e Proposed settlement agreement was presented to the Board of County Commissioners (BOCC) as an agenda item in October 2014. There were certain concessions in that agreement including increasing revenues for the Department of Airport through the fuel flowage fees that Destin Jet pays, but also some concessions with regards to Vertol and their operations; specifically the MI-8 Helicopters they use for training purposes. Destin Jet has advised the County they could no longer proceed with the negotiated settlement agreement and could no longer negotiate on behalf of Vertol citing a clear separation between Destin Jet and Vertol. Vertol had previously conceded to the following conditions during initial negotiations: o No rotorcraft or rotary-wing (helicopter) operations (engine running) on the Destin Jet’s north leasehold ramp between the hours of 10:30 p.m. and 8:00 am., 7 days a week o Relocate all helicopter operations at all times to the south ramp within five years. Vertol withdrew from the negotiations because they felt these concessions were excessive and unnecessary and were burdensome in their ability to conduct business; and that Destin Jet should not have presented these conditions as negotiation items. BOCC did not act on the proposed negotiated settlement agreement and instead sent it back for the County Attorney to work with the attorneys of the involved parties and finalize the agreement in legal documents. Destin Jet has agreed to increase the fuel flowage fees at Destin Jet by 50 percent from 5 cents a gallon to 7.5 cents a gallon. Regal Air of Destin, which Destin Jet wanted to assume, will go from 6 cents a gallon to 7.5 cents a gallon; which is a 25 percent increase. This would result in approximately $175, 000 additional dollars in the course of 5 years in revenue. Reasons for the negotiations were FAA opined this was a permissible activity as it did not create economic discrimination and there was no exclusivity guaranteed to a single operator because they operate one FBO. It is becoming more common and more prevalent because of mergers and acquisitions of FBOs. It would enable Destin Jet to operate both locations as FBOs under the same brand so there is no misunderstanding from a consumer standpoint that there are competing FBOs. The County Attorney felt the County was vulnerable in litigation because they already have a lease. The County has negotiated the best agreement they could with Destin Jet, and it would be presented to BOCC next month. FAA essentially has remained silent on the issue because they believe this is a lease administration matter and not a regulatory or grant-compliance matter. The Department of Airport has had no communications with Vertol. Negotiations between the County Attorney and Vertol’s attorney have reached an impasse. Vertol contends it is grand-fathered for it has been at the airport for ov